26 slides from Paramount Resources Ltd. Class A's investor presentation, June 2019
Slide 1: Corporate Presentation
Corporate Presentation June 2019
Slide 2: Advisories
Advisories • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount", "PRL" or the "Company") and its future plans and operations, this presentation contains certain forward- looking information and statements. • The projections, estimates and forecasts contained in
Slide 3: Corporate Overview
Corporate Overview Founded in 1976 (IPO’d in 1978), Paramount has a proven track record and strategy that generates above-average long term rates of return. Early identification and low cost capture • Large and diversified suite of horizons/zones to pursue, dependent on market conditions Appraise an
Slide 4: Montney and Duvernay Focus Areas
Montney and Duvernay Focus Areas Paramount is reaffirming its forecasted 2019F production of 81,000 to 85,000 Boe/d. The Montney and Duvernay account for ~45,000 Boe/d of this. (1) (1) 1) Excludes production from the Resthaven / Jayar asset that was sold in 2018. 4
Slide 5: Paramount Strategy
Paramount Strategy Paramount has secured significant land positions in what is proving to be the most liquids-rich (and therefore economic) windows of the Montney and Duvernay. • Large suite of high rate of return assets at various stages in the development lifecycle provides significant optionality
Slide 6: History of Generating Returns
History of Generating Returns The 2019 capital expenditure program is heavily weighted towards our highest return projects and is expected to drive and maintain strong returns on a go-forward basis. • Paramount outperformed its peer group on return Paramount vs. Peers - Historical CFROCE (%) (1) met
Slide 7: 2019 Budget and Production Guidance
2019 Budget and Production Guidance Paramount has set a base 2019 capital budget of $350 MM to support annual production of 81,000 – 85,000 Boe/d; Q419 forecast to average 85,000 – 90,000 Boe/d. 2019F Budget and Production Guidance 2019F Capex Breakdown ($MM) (1) 2018 2019F Production (Boe/d) 85,941
Slide 8: Karr Asset Overview
Karr Asset Overview Producing Montney wells at Karr continue to exhibit strong production rates and condensate yields. • A multi-stacked horizon, offering development potential over three intervals • Primary focus has been the Middle Montney with no reserves bookings in other intervals Type Well (1)
Slide 9: Karr Asset Overview (Cont'd)
Karr Asset Overview (Cont’d) Processing and takeaway capacity is in place to support Montney growth at Karr. Recent Developments Gas Processing and Takeaway Capacity • Five Montney wells drilled in 2018 on the 4-24 pad to be Gross Capacity completed in Q2 Post • Three new wells being drilled on the
Slide 10: Wapiti Asset Overview
Wapiti Asset Overview The Company is delivering volumes from the 9-3 pad as part of the commissioning of the new third-party Wapiti natural gas processing plant. • The Wapiti asset is a continuation of Type Well (1) Karr and is characterized by multi- interval potential in the Montney Return (%) 45%
Slide 11: Wapiti Asset Overview (Cont'd)
Wapiti Asset Overview (Cont’d) Processing and takeaway capacity is in place to support Montney growth at Wapiti, with natural gas sales takeaway increasing to 130 MMcf/d by 2021. Recent Developments Gas Processing and Takeaway (MMcf/d) • Large scale development of Wapiti has commenced in earnest • F
Slide 12: Karr / Wapiti Free Cash Flow Potential
Karr / Wapiti Free Cash Flow Potential Karr and Wapiti together have the potential to generate annual free cash flow (1) of $350 MM - $500 MM. • The table highlights illustrative potential annual free cash flow (1) (“FCF”) of Karr and Wapiti at various levels of production based on the underlying as
Slide 13: Kaybob Montney Oil Asset Overview
Kaybob Montney Oil Asset Overview Although more geologically complex, the Montney Oil field continues to generate strong rates of return. Asset Overview • Discovered in 2010 with ~150 wells drilled to date • Paramount owned 12-10 battery with 20,000 Bbl/d of sour fluid handling capacity for treating
Slide 14: Kaybob Duvernay Asset Overview
Kaybob Duvernay Asset Overview The recent 4-well pad at Smoky continues to exceed expectations with a high liquids contribution in particular. 2019 activities will focus on Kaybob South. Asset Overview • Liquids-rich Duvernay fairway controlled by a handful of companies • Increasing competitor activ
Slide 15: Central Alberta & Other Overview
Central Alberta & Other Overview Multiple land and resource positions including ~150,000 net acres of core Duvernay rights at Willesden Green and the East Shale Basin. Asset Overview • Low decline, predictable production • Owned and operated gas processing facilities • Material, contiguous Willesden
Slide 16: Area Based Closures Reducing Cost Structure
Area Based Closures Reducing Cost Structure Paramount continues to focus on safety and environmental responsibility as it transitions into the abandonment and reclamation phase in both Hawkeye and Zama. • Permanently shut-in dry gas production in Hawkeye in September 2018 • Paramount has commenced t
Slide 17: Type Well Economics - Core Areas
Type Well Economics - Core Areas Paramount’s 2019 activities are predominantly directed to its highest risk-adjusted rate of return opportunities. Type Well Economics (1) Montney Duvernay Grande Prairie Kaybob Kaybob Central Montney Kaybob Willesden Karr Wapiti Smoky Oil South Green Return (%) 46% 4
Slide 18: Liquidity and Risk Management
Liquidity and Risk Management In Q4 2018, Paramount expanded its covenant based revolving bank credit facility to $1.5 billion. Market diversification strategies have improved netbacks. Credit Facility • Exercised accordion feature to expand credit facility from $1.2 billion to $1.5 billion in Novem
Slide 19: Strategic and Long-Term Investments
Strategic and Long-Term Investments Paramount is unique in that it holds a strategic position in a number of public and private entities. 19
Slide 20: Paramount Investment Attributes
Paramount Investment Attributes Paramount offers a unique investment proposition. Extensive portfolio of liquids-rich resource plays in the Montney and Duvernay Returns focused capital allocation strategy supported by rigorous full-cycle analysis Aligned management and board with significant insi
Slide 21: Advisories Appendix
PAramouturnt resources Itd. « | | Advisories Appendix #
Slide 22: Advisories
Advisories Forward-Looking Information Certain statements in this presentation constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "will", "expect", "plan", "
Slide 23: Advisories (con't)
Advisories (con't) Oil and Gas Measures and Definitions The term "liquids" includes oil, condensate and Other NGLs (ethane, propane and butane). NGLs consist of condensate and Other NGLs. Liquids Natural Gas Oil Equivalent Bbl Barrels Mcf Thousands of cubic feet Boe Barrels of oil equivalent MBbl Th
Slide 24: Advisories (con't)
Advisories (con't) Type Well Information The type well information contained in this presentation has been prepared effective March 1, 2019 by internal qualified reserves evaluators from Paramount using pricing of US$55/Bbl WTI, US$2.75/MMBtu NYMEX and $1.51/Mcf AECO and an exchange rate of US$0.760
Slide 25: Advisories (con't)
Advisories (con't) Non-GAAP Measures In this presentation, “adjusted funds flow”, “net debt", “netback“, “free cash flow", “ROCE” and “CFROCE”, collectively the "Non-GAAP measures", are used and do not have any standardized meanings as prescribed by International Financial Reporting Standards. “Adju
Slide 26: Paramount Resources Ltd.
resources Itd. « Paramount Resources Ltd. 2800 - 421 7 Avenue S.W. Calgary, Alberta Canada, T2P 4K9 Telephone: 403.290.3600 Facsimile: 403.262.7994 www.paramountres.com