Cardinal Energy Ltd. · TSX:CJ
Cardinal Energy — Q1 2021 Earnings Presentation
28 slides from Cardinal Energy's earnings presentation, May 2021
Slide 1: Corporate Presentation May 2021
TSX: CJ May 2021 Corporate Presentation
Slide 2: 2021 Q1 Highlights
2021 Q1 Highlights Generated $16.1 million of adjusted funds flow, an 8% increase over the same period in 2020 and a 19% increase over the prior quarter. Excluding realized hedging losses, adjusted funds flow was $30 million; Maintained discipline while executing a $9.5 million capital program f
Slide 3: Q1 2021 Highlights
Q1 2021 Highlights Q4 2020 2020 Q1 2021 Production Boe/d 18,625 18,442 18,385 Adjusted funds flow $ mm 13.6 43.8 16.1 Basic and diluted per share ($ per share) 0.12 0.39 0.12 Net bank debt $ mm 202.4 201.6 Convertible debentures $ mm 28.2 - Secured notes $ mm 16.2 16.8 Net debt $ mm 246.8 218.4 Capi
Slide 4: May 2021 Revised Capital Budget
May 2021 Revised Capital Budget Capital Category 2021 Original May Updated Change Budget Budget ($mm) ($mm) ($mm) Drilling Program (8 wells) - 11.3 11.3 Pipeline/Facility Maintenance and 15.6 17.8 2.2 Optimization Recomplete + Workovers 8.1 9.8 1.7 Corporate/Acquisitions/Other 3.1 7.4 4.4 26.8 46.3
Slide 5: 2021 Original Budget versus Revised Budget
2021 Original Budget versus Revised Budget 2021 Original Budget 2021 Revised Budget Change % Production Boe/d 17,751 18,594 5 Adjusted funds flow $ mm 74.8 108.8 45 Basic per share ($ per share) 0.61 0.77 26 Diluted per share ($ per share) 0.55 0.7 27 Net bank debt $ mm 161.2 149.7 (7) Convertible d
Slide 6: Budget and Upside Assumptions and Sensitivities
Budget and Upside Assumptions and Sensitivities 2021 Budget Assumptions 2021 Sensitivities Original Revised Adjusted Funds Flow ($ mm) Budget Budget Δ US$1 WTI 3.3 WTI $ US/bbl 52.00 60.00 Δ US$1 WCS Differential 2.3 WCS Differential $ US/bbl (13.50) (11.00) Δ US$1 MSW Differential 1.1 Dividends $ U
Slide 7: Debt Repayment Scenarios
Debt Repayment Scenarios WTI Adjusted Capital/ARO Potential Net Debt Closing Net Bank ($/bbl) Funds Flow ($ mm) Repayment Debt ($ mm) ($ mm) ($ mm) $40(1) 42.6 51.3 (11.8) 215.9 $50(1) 75.7 51.3 (44.9) 182.8 Dividends NCIB $60 108.8 51.3 (78) 149.7 $70(1) 141.9 51.3 (111.1) 116.6 $80(1) 175.0 51.3 (
Slide 8: 2021 Current Hedging
2021 Current Hedging Product Q2 Q3 Q4 WTI - Volume (bbl/d) 6,000 2,500 1,500 - Avg Price (CAD$) $56.42 $57.10 $55.83 - % of production 38% 16% 10% WCS Differential - Volume (bbl/d) 2,000 - - - Avg Price (CAD$) ($16.18) - - - % of production 24% - - Natural Gas - Volume (mcf/d) 11,000 11,000 11,000 -
Slide 9: Significant Torque to Oil Prices
Significant Torque to Oil Prices 25% 20% 15% 10% 5% 0% TVE CR LXE BIR TOU TPZ CJ CPG FRU ATH ARX AAV POU PIPE KEL SRX NVA PSK PEY VII % change in 2021 estimated cash flow (+$5/bb change in WTI). Source: RBC Capital Markets 9 | Cardinal Energy Ltd. | TSX: CJ
Slide 10: Corporate Production
Corporate Production No new wells drilled since Q1 2020 Predictable production with very low decline Positive impact of R&M initiatives 10 | Cardinal Energy Ltd. | TSX: CJ
Slide 11: North Operating Area
North Operating Area 2021 Forecast 2021 Average Production: 5,980 boe/d Oil Price $60 (USD/bbl) NOI $36.3 FCF $27.8 House Mountain Legacy waterflood supported low decline light oil Mitsue Legacy waterflood supported low decline light oil 2022 Clearwater activity Grande Prairie Recently
Slide 12: North – House Mountain Acquisition
North – House Mountain Acquisition Low decline, long life, high netback light oil HMU #1 Q1 Acquisition interests in 2 operated House Mountain units HMU#1 : from 56.6% to 65.9% (+9.2%) HMU#2 : from 61.7% to 87.0% (+21.3%) HMU #2 Net production +175 bbls/d PDP reserves +855 mboe 12 | Card
Slide 13: North - Elmworth – Dunvegan Light Oil Development
North - Elmworth – Dunvegan Light Oil Development Well defined, shallow (1250m) Dunvegan sandstone Strong results from most recent drilling programs 2 wells planned for 2H 2021 (50% wi) Economic Summary Per Well $60US/bbl WTI, $2.80/mcf AECO Capex (DCET) $2.4MM IP365 (boepd) 125 EUR (Mboe) 266
Slide 14: North - Nipisi Clearwater Conventional Heavy Oil
North - Nipisi Clearwater Conventional Heavy Oil Evaluating first block to develop in 2022 12-17 88 14 | Cardinal Energy Ltd. | TSX: CJ Phase 1 drilling Follow up pads
Slide 15: North - Nipisi Clearwater Upcoming Activity
North - Nipisi Clearwater Upcoming Activity Initial Cardinal Clearwater activity currently planned for 2022 Up to 12 potential 4-6 leg Hz multilaterals per zone in first block to be developed 500+ bbls/d long term sustainable production potential Strong primary development economics Close
Slide 16: North – Charlie Lake Long Term Potential
North – Charlie Lake Long Term Potential D H R10 R9 R8 R7W6 Cardinal Lands are located offsetting recent industry activity D T75 H H T75 H 15,800 gross acres (~70% average working interest) D D D No near term land expiries D D D T74 T74 H Legacy vertical and horizontal producers on and/or of
Slide 17: Central Operating Area
Central Operating Area 2021 Forecast 2021 Average Production: 4,534 boe/d Oil Price $60 (USD/bbl) NOI $47.9 FCF $39.0 Legacy waterflood supported conventional medium and heavy oil Ongoing R&M investment Secondary zone development potential 17 | Cardinal Energy Ltd. | TSX: CJ
Slide 18: Central – Irma - Sparky A Secondary Zone Development
Central – Irma - Sparky A Secondary Zone Development SPARKY B SPARKY A Initial test Area (ha) ~1400 ~750 Avg. Net Pay (m) ~3.0 ~2.5 Avg. Porosity (%) ~28% ~25% OOIP (MMbbls) ~41.9 ~11.5 (internal estimate) Sparky A Cum Prod (MMbbls) ~19.1 - prospect (through 2021/02) Current Production ~500 - (barre
Slide 19: Central - Chauvin Rex Channel
Central - Chauvin Rex Channel Well defined productive Rex channel 9 leg multilateral planned 8 mmbo in place 220 mbo recovered to date Current aggregate production : ~22 bbls/d Analogous to recent 2016-2020 competitor activity Economic Summary Rex Channel Irma $60US/bbl WTI, $2.80/mcf Sp
Slide 20: South Operating Area
South Operating Area 2021 Forecast 2021 Average Production: 5,018 boe/d Oil Price $60 (USD/bbl) NOI $46.6 FCF $32.2 Conventional medium and heavy oil and natural gas Multiple high deliverability locations identified for future development 20 | Cardinal Energy Ltd. | TSX: CJ
Slide 21: South – Bantry, Tide Lake, Duchess Ongoing Development
South – Bantry, Tide Lake, Duchess Ongoing Development 2021 2H planned activity – 1 Tide Lake Ellerslie hz, 1 Glauc channel Glauc Ch test Economic Summary Glauc Ch Ellerslie $60US/bbl WTI, $2.80/mcf AECO 9-36 2-25 Capex (DCET) $2.0MM $1.6MM IP365 (boepd) 199 198 Ellerslie EUR (Mboe) 244 236 test I
Slide 22: Saskatchewan Operating Area
Saskatchewan Operating Area 2021 Forecast 2021 Average Production: 3,062 bo/d Oil Price $60 (USD/bbl) NOI $37.0 FCF $26.7 Long term very low decline oil production Established CCS-EOR CO2 flood over ~1/3 of asset Material CO2 Sequestration ~ 5 MT to date, >200 kT annually 22 | Cardinal Energy
Slide 23: Midale – Initiate Phase 1 Development Plan
Midale – Initiate Phase 1 Development Plan Drill 2 WAG injectors targeted in under pressured Marly zone within existing EOR patterns Economic Summary Per Well $60US/bbl WTI, $2.80/mcf AECO Capex (DCET) Gross $1.7MM Peak IP365 (boepd) 99 EUR (Mboe) 234 IRR 76% Payout (years) 2.0 2021 Drills Full ph
Slide 24: Midale – Carbon Sequestration / CO2 Rollout
Midale – Carbon Sequestration / CO2 Rollout ~ 5 Million tonnes of CO2 sequestered to date CO2 Sequestration and Oil Production 500,000 10 24 active or suspended WAG injectors New injectors deferred since 2017 due to: 400,000 8 Avg. Annual Unit Prod (Mbbls/d) Est Annual CO2 Sequestered (t) De
Slide 25: Drilling Inventory Breakdown
Drilling Inventory Breakdown Cardinal Growth/Maintenance Drilling Drill Ready Tier 1 Tier 2 Follow ups Focus of drilling investment is the production maintenance South 51 35 and growth in existing areas where Cardinal owns and Central 37 90 operates infrastructure. North 40 65 At $55 WTI, all dr
Slide 26: Liability Reduction
Liability Reduction Committed Budget $5 million of Cardinal’s capital budget has been committed to Asset Retirement Obligations (ARO) Since 2016 to April 2021, 433 wells and 37 facilities have been abandoned. Cardinal is Cardinal is a voluntary participant in the AER’s anticipating ~ 200 wells a
Slide 27: Advisory
Advisory Note Regarding Forward Looking Statements performance of existing and future wells, the success of our exploration expressed in, or implied by, these forward-looking statements and, and development activities, the sufficiency and timing of budgeted capital accordingly, no assurance can be g
Slide 28: Advisory
Advisory This presentation contains metrics commonly used in the oil and natural the characteristics of the reservoir and therefore these is more uncertainty current decommissioning obligation and current lease liabilities). "Net gas industry which have been prepared by management, such as "netback"