Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (January 2024)
38 slides from Birchcliff Energy's investor presentation, January 2024
Slide 1: Corporate Presentation
CORPORATE PRESENTATION January 2024
Slide 2: Corporate Snapshot: Birchcliff Overview
CORPORATE SNAPSHOT BIRCHCLIFF OVERVIEW SELECT 2024 GUIDANCE(1) BIRCHCLIFF IS A DIVIDEND-PAYING PURE ALBERTA MONTNEY/DOIG RESOURCE PLAY PRODUCER Average production 74,000 – 77,000 boe/d Adjusted funds flow(2) $340 million F&D capital expenditures $240 – $260 million Free funds flow(2) $80 – $100 mill
Slide 3: Why Invest in Birchcliff
CORPORATE SNAPSHOT WHY INVEST IN BIRCHCLIFF WORLD-CLASS ASSET BASE OPERATIONAL EXPERTISE High-quality, multi-decade inventory in Pouce Coupe and Gordondale Executive and management teams with a proven track record Emerging Elmworth asset base provides significant resource upside aligned with strong
Slide 4: 2024 Outlook: Capital Program Details
2024 OUTLOOK CAPITAL PROGRAM DETAILS(1) 2024 F&D Capital Expenditures by Classification 2024 Pouce Coupe/Gordondale Pad Locations 2024 Program Classification Capital (millions) 2024 Pre-spend Pouce Coupe Gas Plant DCCET(2)(3) $190 – $195 Gordondale Gas Plant Facilities and Infrastructure $15 – $20 (
Slide 5: Natural Gas Marketing and Diversification
2024 OUTLOOK NATURAL GAS MARKETING AND DIVERSIFICATION(1) AECO AECO $2.50 ($0.04) 17% DIVERSIFIED ($0.33) $2.13 MARKET EXPOSURE Dawn 44% NO FIXED Dawn $3.53 PRICE ($0.20) Alliance ($1.26) COMMODITY $2.07 2% HEDGES Alliance $2.88 ($0.04) ($0.43) Pricing Hub Henry Hub Dif. Henry $2.41 Forecasted Annua
Slide 6: Five-Year Outlook: Disciplined Production Growth
FIVE-YEAR OUTLOOK(1) DISCIPLINED PRODUCTION GROWTH AND CAPITAL DISCIPLINE ENHANCES PROFITABILITY MAINTAIN STRONG DELIVER SIGNIFICANT FULLY UTILIZE EXISTING KEY THEMES: BALANCE SHEET SHAREHOLDER RETURNS INFRASTRUCTURE F&D Capital Spending: $500 90,000 2024E – 2026E: $240 – $300 million 87,500 2027E –
Slide 7: Five-Year Outlook: Free Funds Flow Focused
FIVE-YEAR OUTLOOK(1) FREE FUNDS FLOW FOCUSED MAINTAIN STRONG DELIVER SIGNIFICANT FULLY UTILIZE EXISTING KEY THEMES: BALANCE SHEET SHAREHOLDER RETURNS INFRASTRUCTURE CUMULATIVE FREE FUNDS FLOW(2)(3) $1,000 ▪ Potential cumulative adjusted funds flow(2) of approximately $2.4 Potential cumulative free f
Slide 8: Focused on Sustainable Shareholder Returns
FOCUSED ON SUSTAINABLE SHAREHOLDER RETURNS SIGNIFICANT COMMON SHARE DIVIDENDS DECLARED SINCE Q1 2017 CUMULATIVE COMMON SHARE DIVIDENDS(1) $450 $400 Over $410 million in common share $350 dividends(1) declared since Q1 2017 $300 Focused on maintaining a strong $250 balance sheet – approved a sustaina
Slide 9: Birchcliff's Montney/Doig Resource Play
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY Large contiguous land blocks consisting of 373.7 net sections as at December 31, 2022, including the Pouce Coupe, Gordondale and Elmworth areas. Extensive Montney/Doig portfolio provides commodity cycle optimizat
Slide 10: Massive Multi-Interval Land Position
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG MASSIVE MULTI-INTERVAL LAND POSITION JANUARY 2024 10
Slide 11: Birchcliff Montney/Doig Hexastack
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG BIRCHCLIFF MONTNEY/DOIG HEXASTACK • Resource density: Stacked resource up to 300 metres thick. • Large areal extent: Extends over 50,000 square miles. • Exceptional “fracability”: Low clay content, low Poisson’s Ratio and high Young’s
Slide 12: 2024 Capital Program Major Themes
2024 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY MAJOR THEMES 2024 Capital Program Major Themes ▪ The program is focused on locations with high rate-of-return, attractive 2024 Pad Locations paybacks and high capital efficiencies. ▪ Level-loaded program utilizing 2 rigs, bringing onstream 29 wells fro
Slide 13: D&C Continuous Improvement
BIRCHCLIFF’S MONTNEY/DOIG RESOURCEPERFORMANCE D&C CONTINOUS PLAY IMPROVEMENT 09-04/02-27 PAD AVERAGE VS. TIER 0 CAPPED TYPE CURVE(1) The recent 09-04 (7 wells) and 02-27 (2 wells) pad average is outperforming the Tier 0 capped type curve and continues to show strong, sustained production 1) Tier 0 C
Slide 14: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW Q3 2023 average production of 52,011 boe/d(1), with a natural gas weighting of 89%. Proven asset in development phase, with large, low-risk multi-decade drilling inventory. Wells show high initial deliverability, low terminal declines and
Slide 15: Pouce Coupe Deloitte Tier 0 Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE DELOITTE TIER 0 TYPE CURVE(1) 4000 Rate of Return (%) WTI (US$/bbl) 3500 $70.00 $80.00 $90.00 $100.00 $2.00 115 137 159 184 (C$/GJ) AECO 3000 $3.00 162 187 213 241 $4.00 212 240 269 300 Sales Gas Rate (Mcf/d) 2500 $5.00 266 296 328 363 NPV10 ($MM)
Slide 16: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW Q3 2023 average production of 22,042 boe/d(1) with an oil, condensate & NGLs weighting of 37%. Low base production decline requires less incremental wells to keep infrastructure full. Strategic infrastructure with deep-cut liquids recovery
Slide 17: Gordondale Deloitte Low GOR Halo Oil Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE DELOITTE LOW GOR HALO OIL TYPE CURVE(1) 500 Rate of Return (%) 450 WTI (US$/bbl) $70.00 $80.00 $90.00 $100.00 400 $2.00 167 217 271 329 (C$/GJ) AECO $3.00 195 248 305 367 350 $4.00 223 279 339 403 $5.00 251 310 373 440 Oil Rate (bbl/d) 300 NPV10 ($M
Slide 18: Elmworth Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY ELMWORTH OVERVIEW Elmworth land block includes approximately 140 net contiguous sections of prolific Montney/Doig inventory. As part of Birchcliff’s future growth plans for Elmworth, it has initiated the formal planning for a proposed 100% owned and operated n
Slide 19: 2022YE Corporate Reserves
2022YE CORPORATE RESERVES(1) SIGNIFICANT RESERVES VOLUME AND VALUE GROWTH 1,200,000 $9,000 PDP Reserves Birchcliff added 35.6 MMboe 1,100,000 1P Reserves of PDP reserves in 2022, $8,000 2P Reserves 1,000,000 which reflects a PDP PDP NPV10 reserves replacement of $7,000 900,000 1P NPV10 127%(2) 2P NP
Slide 20: Focused on ESG Excellence: Environmental
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE PEER EMISSIONS METRICS(1)(2)(3)(4)(5)(6) ENVIRONMENTAL Peer GHG Emissions Intensity Metrics 3,500,000 0.060 3,000,000 0.050 Carbon sequestration at the Pouce Coupe Gas Plant is over 72,000 tonnes 2,500,000 of CO2 injected as of December 31, 0.040 20
Slide 21: Focused on ESG Excellence: Social and Governance
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE SOCIAL Major supporter of STARS Air Ambulance and the United Way of Calgary, raising more than $4 million for the organizations to-date. In 2022, participated in 45 engagement sessions with local Indigenous communities and investing over $120,000 in
Slide 22: Canadian West Coast LNG Opportunity
CANADIAN WEST COAST LNG OPPORTUNITY BIRCHCLIFF’S ACTIVE ROLE SUPPLYING THE WORLD WITH CLEAN LNG Environmental Benefits of Canadian LNG LNG is critical in the transition to a low-carbon economy, as it displaces higher carbon fuels like coal and oil and provides a backstop to intermittent renewables s
Slide 23: Western Canadian LNG Landscape
CANADIAN WEST COAST LNG OPPORTUNITY(1) WESTERN CANADIAN LNG LANDSCAPE Birchcliff’s participation in the Ksi Lisims/Rockies LNG Ksi Lisims LNG (Floating) project provides future direct exposure to global LNG 12 MTPA (1.7 Bcf/d) Environmental Assessment pricing Phase Canada West Coast LNG Projects (Pr
Slide 24: Appendix
BIRCHCLIFF ENERGY APPENDIX JANUARY 2024 24
Slide 25: Production History
PRODUCTION HISTORY SIGNIFICANT GROWTH SINCE INCEPTION 90,000 77,977 78,520 75,500 – 80,000 76,401 76,925 74,000 – 77,096 76,000 77,000 70,000 67,963 Average Production (boe/d) 60,000 49,236 50,000 38,950 40,000 33,734 30,000 25,829 22,802 20,000 18,136 13,079 11,216 10,148 10,000 6,711 5,368 2,793 0
Slide 26: Historical Profitability
HISTORICAL PROFITABILITY PROVEN TRACK RECORD AS A LOW-COST PRODUCER Profitability Breakdown: 5 Year 2018 2019 2020 2021 2022 Average(4) Average AECO (CDN$/GJ) $1.42 $1.67 $2.11 $3.44 $5.04 $2.74 Average WTI (US$/bbl) $64.77 $57.03 $38.91 $68.70 $94.31 $64.74 P&NG Revenue ($/Mcfe)(1) $3.68 $3.59 $3.1
Slide 27: Corporate Information
CORPORATE INFORMATION EXECUTIVE TEAM DIRECTORS BANK SYNDICATE Chris Carlsen Jeff Tonken The Bank of Nova Scotia President and Chief Executive Officer Chairman of the Board HSBC Bank Canada National Bank of Canada Bruno Geremia Dennis Dawson Canadian Imperial Bank of Commerce Executive Vice President
Slide 28: Corporate Information
CORPORATE INFORMATION MANAGEMENT TEAM HEAD OFFICE Gates Aurigemma Tam Nguyen Suite 1000, 600 – 3rd Avenue S.W. Manager, General Accounting Manager of Marketing Calgary, Alberta T2P 0G5 Phone: 403-261-6401 Jesse Doenz Landon Poffenroth Controller and Investor Relations Manager Montney Asset Manager S
Slide 29: Advisories: Definitions
ADVISORIES DEFINITIONS Deloitte Deloitte LLP, independent qualified reserves evaluator Gordondale Gas Plant AltaGas’ deep-cut sour gas processing facility in Gordondale NI 52-112 National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure Pouce Coupe Gas Plant Birchcliff’s 100% own
Slide 30: Advisories: Non-GAAP and Other Financial Measures
ADVISORIES NON-GAAP AND OTHER FINANCIAL MEASURES This presentation uses various “non-GAAP financial measures”, “non-GAAP ratios”, and “capital management measures” (as such terms are defined in NI 52-112), which are described in further detail below. Non-GAAP Financial Measures NI 52-112 defines a n
Slide 31: Advisories
ADVISORIES Birchcliff has disclosed in this presentation forecasts of adjusted funds flow, free funds flow and excess free funds flow for the period from 2024 to 2028, which are forward-looking non-GAAP financial measures. The equivalent historical non- GAAP financial measures are adjusted funds flo
Slide 32: Advisories
ADVISORIES Total Debt to Forward Annual Adjusted Funds Flow Birchcliff calculates “total debt to forward annual adjusted funds flow” as total debt at the end of the respective year divided by the anticipated annual adjusted funds flow for the immediately following year. Management believes that tota
Slide 33: Advisories
ADVISORIES Deloitte prepared the 2022 Reserves Report. In addition, Deloitte and/or McDaniel & Associates Consultants Ltd. (or their predecessors) prepared reserves evaluations in respect of Birchcliff’s oil and natural gas properties for the previous years disclosed herein. Such evaluations were pr
Slide 34: Advisories
ADVISORIES • Reserves replacement is calculated by dividing PDP reserves additions before production by total annual production in the applicable period. Reserves replacement may be used as a measure of the Corporation’s sustainability and its ability to replace its PDP, proved or proved plus probab
Slide 35: Advisories: Forward-Looking Statements
ADVISORIES FORWARD-LOOKING STATEMENTS Certain statements contained in this presentation constitute forward‐looking statements and forward-looking information (collectively referred to as “forward‐looking statements”) within the meaning of applicable Canadian securities laws. The forward-looking stat
Slide 36: Advisories
ADVISORIES • Birchcliff’s anticipation that, on an annualized basis, the forward-looking non-GAAP financial measures for adjusted funds flow, free funds flow and excess free funds flow disclosed herein will be lower than their respective historical amounts for the twelve months ended December 31, 20
Slide 37: Advisories
ADVISORIES • With respect to Birchcliff’s updated Five-Year Outlook, such outlook assumes the following commodity prices and exchange rate: an average WTI price of US$75.00/bbl; an average WTI-MSW differential of CDN$5.45/bbl in 2024 and CDN$4.00/bbl in 2025 to 2028; an average AECO price of CDN$2.5
Slide 38: Advisories
ADVISORIES Birchcliff’s actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of both known and unknown risks and uncertainties including, but not limited to: the risks posed by pandemics (including COVID-19), epidemi
Birchcliff Energy — Investor Presentation (January 2024) on 6ix