Saturn Oil & Gas Inc. · TSX:SOIL
Saturn Oil & Gas — Investor Presentation (August 2024)
48 slides from Saturn Oil & Gas's investor presentation, August 2024
Slide 1: Corporate Presentation
Corporate Presentation TSX: SOIL FSE: SMKA OTCQX: OILSF August 2024
Slide 2: Disclaimer
DISCLAIMER This presentation is for informational purposes only and is not intended as a solicitation or offering of securities of Saturn Oil & Gas Inc. (“Saturn” or the “Company") in any jurisdiction. The material presented is not intended to modify, qualify, supplement or amend information disclos
Slide 3: Company Overview
COMPANY OVERVIEW TSX: SOIL FSE: SMKA OTCQX: OILSF 3
Slide 4: Saturn's Free Cash Flow Strategy
SATURN’S FREE CASH FLOW STRATEGY Saturn’s Quarterly Production History and Forecast (MBoe/d) 38 - 40 MBoe/d Next 12 Months (NTM) forecasted average daily production1 38-40 30.1 $620 - 658 M Adjusted EBITDA forecast for NTM2 G uidance 26.3 26.9 26.4 26.0 17.8 $0.94 – $1.12 Free funds flow per share f
Slide 5: Battrum and Flat Lake Acquisition, Closed June 14, 2024
BATTRUM AND FLAT LAKE ACQUISITION, CLOSED JUNE 14, 2024 $535M 13,000 boe/d 96% 2.1x Net Cash Increased oil production +50% Crude Oil and NGLs Cash Flow Attractive Acquisition Metrics1 Refinancing of Debt Structure Q1 Cash Recycle U$650M Note Offering - 9.625% Coupon Mmboe Cost $ / boe Netback2 Ratio
Slide 6: Saturn's 4th Major Acquisition Extends Core SK Assets
SATURN’S 4TH MAJOR ACQUISITION EXTENDS CORE SK ASSETS Battrum and Flat Lake Assets Are Contiguous to Saturn’s Core Saskatchewan Land Base and Were Acquired at an Attractive Valuation Low decline, oil weighted production Attractive purchase price, immediately enhances scale and margins accretive to k
Slide 7: Operational Snapshot – Core Areas
OPERATIONAL SNAPSHOT – 3 CORE AREAS Saturn is a Low Decline, Light Oil Operator in Established and Highly Delineated Canadian Basins Southeast Saskatchewan >2,160 ◼ High rate of return, abundant seismic coverage, large scale infrastructure Total Net Locations ◼ New development area (OHML Bakken) ◼ F
Slide 8: Corporate Profile | Financial and Operational
CORPORATE PROFILE | TSX: SOIL FSE: SMKA OTCQX: OILSF FINANCIAL Shares Outstanding (Basic) 204.0 M Options, RSUs & PSUs 6.4 M Warrants 13.9 M Option & Warrant Exercise Proceeds $47.6 M Basic Market Capitalization (@$2.65/sh) $540.6 M Net Debt1 $792.2 M Enterprise Value (EV) $1.33 B Adjusted EBITDA OF
Slide 9: Saturn Success in Optimizing Margins
SATURN SUCCESS IN OPTIMIZING MARGINS Operating & Transportation Cost1 ($/boe) Robust Operating Netback, Net Derivatives ($/boe)1,2 $30 23% $90 $100 Operating Netback, Net of Derivatives (C$/boe)1,2 27.96 2021 to 2023 25.28 $80 $90 $20 21.61 $78.00 $80 $70 $10 $70 $60 68% WTI Price (USD) $0 Operat
Slide 10: Saturn is a Leading Light Oil, Low Decline Producer
SATURN IS A LEADING LIGHT OIL, LOW DECLINE PRODUCER Low Decline, Light Oil Weighted, Low Royalty, Emissions Focused E&P Operator in Prolific Canadian Basins Saskatchewan Gross 1Q24 Production1 140 128 Heavy Oil ◼ Fourth largest oil producer in Saskatchewan Light Oil 2% 11% Gross Production (Mboe/d)
Slide 11: Saturn Acquisition and Leverage History
SATURN ACQUISITION AND LEVERAGE HISTORY Saturn Has Had Strong Success With Accretive Acquisitions With Strong Free Cash Flow Last Quarter Production (Mboe/d) June 2024 Battrum Flat Lake Acquisition $890M term debt Feb. 2023 Ridgeback Acquisition $100M bought deal equity financing $375M term debt 13,
Slide 12: Strong Outperformance in Core Areas
STRONG OUTPERFORMANCE IN CORE AREAS Track Record of Success + 2,160 Horizontal Development Well Locations = 20 years of Sustainable Development Saturn drilled 46 Gross (43.8 Net) Operated Wells in 2023 With Outstanding Initial Production Rates 4 12% 350 Wells Initial 30 Days Production (IP30 Boe/d)
Slide 13: 2023 vs. 2024 Drilling Outperformance
2023 VS. 2024 DRILLING OUTPERFORMANCE SE Saskatchewan 200 Conventional 800 Central Alberta Cardium 4 33% Wells 180 160 Above Type Curve IP30 700 29% 710 600 Above Type Curve IP30 140 5 500 IP30 (Boe/d) IP30 (Boe/d) 120 100 16 Wells 400 80 Wells 104 5 84 300 Wells 60 200 263 40 Capital 100 Efficienci
Slide 14: Net Asset Value
NET ASSET VALUE Saturn Shares Are Backed With 3 Years of Quality Growth and Solid Asset Value1 Year End 2023 (Pro Forma)1 Three Year Finding, Development & Acquisition (FD&A) $ millions PDP Proved P+P Cash Flows PV 10% Pre Tax1 $2,288 $2,960 $4,079 Net Debt2 (792) (792) (792) Net Asset Value 1,496 2
Slide 15: Next 12 Months Guidance
NEXT 12 MONTHS GUIDANCE Key Assumptions NTM July 1, 2024 – June 30, 2025 WTI Oil Price $USD / Bbl $80 FX $USD / $CDN 1.35 AECO $CDN / mcf $2.75 698 - 736 MSW to WTI $USD / Bbl $3.00 620 - 658 Production boe/d 38,000 – 40,000 -78 502 - 540 -85 -33 85% of Budget Adjusted 1.8x ~$2.55 to EBITDA1 EV/ /sh
Slide 16: Peer Comparison & Research Coverage
PEER COMPARISON & RESEARCH COVERAGE Canaccord Genuity Inc. Research Eight Capital Research 2025E Free Cash Flow Yield1 2025E EV/DACF2 Avg: 3.5x Avg: 16% Firm Analyst Rating Target Price Target Return Canaccord Genuity Inc. Mike Mueller | mmueller@cgf.com Buy $4.50 70% Eight Capital, Canada Christoph
Slide 17: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Highly Delineated and Technically Understood Light Oil Weighted Assets in Prolific Canadian Basins Enhance Operational Control 2 Resilient Reserve Base with Attractive, Low Risk Inventory Supporting Over 20 Years of Development 3 Strong Operational Outperformance in Core Area
Slide 18: Head Office, Executive Officers and Directors
TSX: SOIL FSE: SMKA OTCQX: OILSF Head Office Executive Officers Directors Saturn Oil & Gas Inc. John Jeffrey, Chief Executive Officer & Director John Jeffrey, CEO & Director Suite 2800, 525 – 8th Ave SW Scott Sanborn, Chief Financial Officer Grant MacKenzie, CLO & Director Calgary, AB T2P 1G1 Justin
Slide 19: Appendix: Technical Overview of Key Plays
APPENDIX: TECHNICAL OVERVIEW OF KEY PLAYS TSX: SOIL FSE: SMKA OTCQX: OILSF 19
Slide 20: Southeast Saskatchewan: Consolidation
SOUTHEAST SASKATCHEWAN: CONSOLIDATION Multi-Zone Light Oil Development ▪ 21,400 boe/d1 (96% oil & NGLs) Southeast Saskatchewan ▪ Strategic control of the area’s robust infrastructure ▪ Strategic gas processing facility expands netbacks 2021 - Oxbow ▪ Over 20 years of booked and unbooked drilling inv
Slide 21: SE Saskatchewan: Bakken Resource Play
SE SASKATCHEWAN: BAKKEN RESOURCE PLAY New Drilling Technique: ▪ Open Hole Multi-Lateral (OHML) wells open the Bakken fairway for extended development ▪ Up to 8 horizontal legs per well, producing strong industry results: median IP30 of 147 bbl/d ▪ Saturn drilled 2, 100% WI, OHML wells in 2023 with a
Slide 22: SE Saskatchewan: Manor Spearfish
SE SASKATCHEWAN: MANOR SPEARFISH Multi-Zone Development: ▪ Spearfish, new play development in 2023 ▪ IP30 89.0 bbls/d light oil1 → 16% above Type Curve Manor Area ▪ 6 wells on production in Q3 2023 ▪ Up to 5 follow up locations in 2024 ▪ 31 net booked locations2 Spearfish IP30 Production Plot 100 95
Slide 23: SE Saskatchewan: Flat Lake Oungre
SE SASKATCHEWAN: FLAT LAKE OUNGRE Oungre Highlights: ▪ Large inventory of identified de-risked drilling locations ▪ Shoal and intershoal deposition provide ideal environment for 100 48 carbonate resource play Unbooked net Oungre Booked net Oungre development drilling development drilling ▪ Water inj
Slide 24: SE Saskatchewan: Flat Lake PP Bakken
SE SASKATCHEWAN: FLAT LAKE PP BAKKEN Pre-Pressured Bakken Highlights: ▪ Highly economic wells with rates of return over 100% for majority of locations ▪ Over 80% of “Pre-Pressured” Bakken inventory comprises locations with estimated EURs between 100-275 Mbbl ▪ Recent well results from PP Bakken well
Slide 25: SE Saskatchewan: Torquay Resource Play
SE SASKATCHEWAN: TORQUAY RESOURCE PLAY Torquay Highlights: ▪ Favorable economic locations come from the development of 2 mile Torquay locations ▪ Torquay reservoir is predominately uniform across the fairway, supporting resource play development ▪ Available crown land in Torquay Fairway to spur futu
Slide 26: West Saskatchewan: Consolidation
WEST SASKATCHEWAN: CONSOLIDATION Multi-Zone Light Oil Development ▪ 8,200 boe/d1 (96% oil & NGLs) West Saskatchewan ▪ Viking resource play with deep inventory and repeatability ▪ Roseray & Success with high recovery factor waterflood 2020 – Viking North ▪ Shaunavon resource play with unbooked reserv
Slide 27: West Saskatchewan: Viking
WEST SASKATCHEWAN: VIKING Viking Highlights ▪ Historical company experience continues to produce and exceed peers ▪ >200 de-risked locations with strategic facilities offering blending upside ▪ 32 wells drilled in 2022 (100% WI): IP30 93.7 bbls/d Viking Area ▪ 12 wells drilled in 2023 (100% WI): IP3
Slide 28: West Saskatchewan: Battrum Roseray & Success
WEST SASKATCHEWAN: BATTRUM ROSERAY & SUCCESS Stacked oil-charged zones with low decline primary and secondary production with meaningful upside opportunity ▪ Success and Roseray are laterally extensive across both units, with ▪ several remaining locations identified Expected to provide the greatest
Slide 29: West Saskatchewan: Battrum Shaunavon
WEST SASKATCHEWAN: BATTRUM SHAUNAVON Large inventory potential with proven offsets and recent development ▪ In 2023, there were 5 Lower Shaunavon Battrum Shaunavon Area wells drilled that further delineated a local 33 resource play Booked net U/L Shaunavon development drilling ▪ Saturn’s highest qua
Slide 30: Central Alberta: Cardium Resource Play
CENTRAL ALBERTA: CARDIUM RESOURCE PLAY Cardium Highlights ▪ Well defined light oil fairway, predictable reservoir characteristics and long-term, stable production ▪ 114 booked net locations, 124 unbooked net locations for over 20 years of inventory Lochend Area ▪ 3 Lochend ERH wells and 2 West Pembi
Slide 31: Central Alberta
CENTRAL ALBERTA Kaybob – Montney Highlights 4 wells drilled in Q3 2024 with 18 production adds expected in Booked locations1 September 2024 4 Un-booked locations1 5 Years of inventory 28,400 Net acres, 100% WI 1,780 Boe/d, 35-45o API light oil 4 Wells drilled in 2023 1) Net locations, See disclaimer
Slide 32: Appendix: Debt Coverage Overview
APPENDIX: DEBT COVERAGE OVERVIEW TSX: SOIL FSE: SMKA OTCQX: OILSF 32
Slide 33: Summary of Notes Issue and Financial Policies
SUMMARY OF NOTES ISSUE AND FINANCIAL POLICIES US$ 650 million Aggregate Principal Amount of 5 Year Notes, Issued June 14, 2024 ◼ Coupon 9.625%; Interest Pay Dates June 15 and December 15, Maturity Date June 15, 2029 ◼ Mandatory Quarterly Prepayment, the Company will redeem 2.5% original principal am
Slide 34: Reserve Coverage and Hedging Protection
6 RESERVE COVERAGE AND HEDGING PROTECTION Saturn’s Proved Reserves and Risk Management Strategy Provide Ample Debt Coverage and Enhance Cash Flow Resiliency and Stability Reserve Coverage for Indicative Oil Hedging Planned Key Debt Metrics CAD $890 MM Notes as % of Net Oil Production 10.8 8.8 5.2 To
Slide 35: Appendix: Acquisition Details
APPENDIX: ACQUISITION DETAILS TSX: SOIL FSE: SMKA OTCQX: OILSF 35
Slide 36: High Quality Inventory Supports Attractive Returns and Extends Inventory Life
HIGH QUALITY INVENTORY SUPPORTS ATTRACTIVE RETURNS AND EXTENDS INVENTORY LIFE Saturn Has an Attractive Portfolio of Producing Assets and Premium Inventory That Competes for Capital Pro Forma PDP Reserves Pro Forma Net Undeveloped Pro Forma Tier 1 Drilling (mmboe) Locations Inventory 105 2,160 44 780
Slide 37: Infrastructure and Marketing Overview
INFRASTRUCTURE AND MARKETING OVERVIEW Established Network of Regional Pipelines with Offtake to Attractive Markets Supports Current Production and Enables Future Growth SW SK / Battrum - Egress SE SK – Production (-Δ46%) Saturn Core Area Advantage 300,000 >100 key facilities with over 5,000 kms of p
Slide 38: Impact of Flat Lake & Battrum Acquisition
IMPACT OF FLAT LAKE & BATTRUM ACQUISITION Flat Lake and Battrum Acquisition Increases Saturn’s Production, Financial Scale, and Proved Reserves NTM Production (mboe/d) NTM % Oil Q1 2024 Annualized Net Operating 39.0 NTM % Liquids: 81 % 86 % Income ($mm)¹ $ 586 78 % 26.4 $ 387 74 % Saturn Status Quo
Slide 39: Appendix: Corporate Details
APPENDIX: CORPORATE DETAILS TSX: SOIL FSE: SMKA OTCQX: OILSF 39
Slide 40: Environment, Social & Governance
ENVIRONMENT, SOCIAL & GOVERNANCE Dedicated to Full Cycle Sustainability and Responsible Operations Environment Saturn’s Mission • Released inaugural Sustainability Report outlining our approach to climate-related risks and opportunities “Saturn aims to lead the oil • Aligned with the Task Force on C
Slide 41: Our Team
MANAGEMENT Our Team Y OGas A Long History of Value Creation in the Oil and U R S UProduction B T I T L E H E R ESpace John Jeffrey Scott Sanborn Justin Kaufmann Grant Mackenzie Kevin Smith Jamie Kuntz Chief Executive Officer Chief Financial Officer Chief Development Officer Chief Legal Officer VP Co
Slide 42: Directors
DIRECTORS Sound Governance and Strategic Oversight John Jeffrey, MBA, BA Dr. Thomas Gutschlag ▪ Former CFO and founding partner of Axiom Group ▪ Chairman, Cofounder and former CEO/CFO of Deutsche Rohstoff AG, a public company listed on the ▪ Strong background in operations and finance with successfu
Slide 43: Corporate Profile
CORPORATE PROFILE TSX: SOIL FSE: SMKA OTCQX: OILSF 2024 Year to Date1 Current Share Structure Average Daily Trade Volume Basic Millions Thousands TSX 180.6 Shares Outstanding 204.0 Other Canada 266.8 Options & Warrants Millions Expiry Date Strike Price Proceeds ($M) Germany 46.6 Options, PSUs and RS
Slide 44: Saturn's Community Involvement
SATURN’S COMMUNITY INVOLVEMENT Community Involvement and Charitable Donations Ronald McDonald House Charities At Saturn, we believe in building relationships that benefit everyone involved. We foster In 2023, Saturn donated $25,000 to Ronald McDonald House Charities to collaboration, listen to the i
Slide 45: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures In this presentation and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These n
Slide 46: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Reserve Assumptions: Reserve evaluation calculations are based on data and expected future production volumes as provided by third party independent evaluators Ryder Scott Company (the “Ryder Scott Report”) for year end December 31, 2023. It should not be assumed th
Slide 47: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Supplemental Information for Battrum and Flat Lake Acquisition, Closed June 14, 2024 Supplimental Information Regarding Reserves of Saskatchewan Asset Acquisition 1 Light and Natural Gas Conventional Barrels of Oil Pro forma Q1 2024 production based Medium Oil Heavy
Slide 48: Head Office, Executive Officers and Directors
TSX: SOIL FSE: SMKA OTCQX: OILSF Head Office Executive Officers Directors Saturn Oil & Gas Inc. John Jeffrey, Chief Executive Officer & Director John Jeffrey, CEO & Director Suite 2800, 525 – 8th Ave SW Scott Sanborn, Chief Financial Officer Grant MacKenzie, CLO & Director Calgary, AB T2P 1G1 Justin
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