Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (March 2024)
42 slides from Birchcliff Energy's investor presentation, March 2024
Slide 1: Corporate Presentation
CORPORATE PRESENTATION March 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: Corporate Snapshot: 2023 Quarterly and Annual Results
CORPORATE SNAPSHOT 2023 QUARTERLY AND ANNUAL RESULTS SELECT Q4/23 RESULTS Average production 76,546 boe/d Light oil (% of production) 1,649 bbls/d (2%) Condensate (% of production) 5,145 bbls/d (7%) NGLs (% of production) 7,653 bbls/d (10%) Natural gas (% of production) 372,594 Mcf/d (81%) $76.2 mil
Slide 4: 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 Portfolio provides optionality with mix of low-decline dry natural gas and liquids-ric
Slide 5: 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 6: Natural Gas Marketing and Diversification
2024 OUTLOOK NATURAL GAS MARKETING AND DIVERSIFICATION(1) 2024E NATURAL GAS MARKETING NATURAL GAS DIVERSIFICATION AND FUTURE LNG PROJECTS Due to Birchcliff’s market diversification strategy, its effective natural gas realized sales price has Future West Coast historically outperformed the AECO LNG P
Slide 7: Five-Year Outlook
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 8: 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 9: 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 10: Corporate Reserves: Significant Intrinsic Value
CORPORATE RESERVES(1) SIGNIFICANT INTRINSIC VALUE RESERVES SUMMARY – AT DECEMBER 31, 2023 2023YE NET ASSET VALUE PER COMMON SHARE(2) $25.00 Proved Total $23.60 Total Developed Proved Plus Proved $20.00 Producing Probable $18.38 Reserves $15.00 220,536 691,886 993,897 $/share (Mboe) $10.00 NPV10 befo
Slide 11: Corporate Reserves: Significant Reserves Volumes and Value
CORPORATE RESERVES(1) SIGNIFICANT RESERVES VOLUMES AND VALUE 1,200,000 $9,000 PDP Reserves Significant reserves growth since 1,100,000 1P Reserves inception $8,000 2P Reserves 1,000,000 PDP NPV10 900,000 1P NPV10 Focused on converting deep $7,000 inventory of 1P and 2P reserves 2P NPV10 800,000 to P
Slide 12: Historical Profitability: Proven Track Record as a Low-Cost Producer
HISTORICAL PROFITABILITY PROVEN TRACK RECORD AS A LOW-COST PRODUCER 3-YEAR F&D OPERATING NETBACK PDP RECYCLE RATIOS(1) F&D Operating Netback PDP Recycle Ratios 4.0x 3.5x 3.7x 3.0x 3.2x 2.5x 2.5x 2.0x 1.5x 1.0x 1.1x 0.5x 0.0x 2021 2022 2023 3-Yr Avg Corporate F&D Costs (incl. FDC)(2) & Operating Netb
Slide 13: Significant Drilling Inventory: Pouce Coupe & Gordondale
SIGNIFICANT DRILLING INVENTORY: POUCE COUPE & GORDONDALE DECADES OF LOW-RISK BOOKED INVENTORY BEYOND FIVE-YEAR OUTLOOK(1) 5-Year Outlook (2024 – 2028) Future Years Total 2P Booked Locations 170 – 180 wells 30 wells/yr going forward 23 years of 2P locations(2) Production growth Maintain 87,500 boe/d
Slide 14: 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 375.8 net sections as at December 31, 2023, including the Pouce Coupe, Gordondale and Elmworth areas. Extensive Montney/Doig portfolio provides commodity cycle optimizat
Slide 15: Massive Multi-Interval Land Position
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG MASSIVE MULTI-INTERVAL LAND POSITION MARCH 2024 15
Slide 16: Upper and Lower Stack Development Opportunities
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG UPPER AND LOWER STACK DEVELOPMENT OPPORTUNITIES • 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 an
Slide 17: 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 18: D&C Continuous Improvement
BIRCHCLIFF’S MONTNEY/DOIG RESOURCEPERFORMANCE D&C CONTINOUS PLAY IMPROVEMENT 09-04/02-27 PAD AVERAGES VS. TIER 0 CAPPED TYPE CURVE(1) The recent 09-04 (7 wells) and 02-27 (2 wells) pad averages are outperforming the Tier 0 capped type curve and continue to show strong, sustained production 1) Tier 0
Slide 19: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW 2023 average production of 52,857 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 sta
Slide 20: 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 $2.00 103 122 142 163 (C$/GJ) AECO 3000 $3.00 143 164 187 212 $4.00 185 209 235 262 Sales Gas Rate (Mcf/d) 2500 $5.00 230 257 284 314 NPV10 ($MM)
Slide 21: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW 2023 average production of 22,759 boe/d(1), with a liquids weighting of 34%. Low base production decline requires less incremental wells to keep infrastructure full. Strategic infrastructure with deep-cut liquids recovery and blending facil
Slide 22: 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 $2.00 152 196 243 295 (C$/GJ) AECO $3.00 176 222 272 327 350 $4.00 199 248 301 358 $5.00 223 275 329 389 Oil Rate (bbl/d) 300 NPV10 ($M
Slide 23: 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 24: Focused on ESG Excellence: Environmental
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE PEER EMISSIONS METRICS(1)(2)(3)(4)(5)(6) ENVIRONMENTAL 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 2022. Emissions Intensity Annual Emissi
Slide 25: 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. In 2022, participated in 45 engagement sessions with local Indigenous communities and investing over $120,000 in local I
Slide 26: 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 27: 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 28: Appendix
BIRCHCLIFF ENERGY APPENDIX MARCH 2024 28
Slide 29: Production History
PRODUCTION HISTORY SIGNIFICANT GROWTH SINCE INCEPTION 90,000 In recent years, Birchcliff prioritized its balance sheet and 80,000 shareholder returns over growth 77,977 76,401 78,520 74,000 – 77,096 76,925 75,699 77,000 70,000 67,963 Average Production (boe/d) 60,000 49,236 50,000 38,950 40,000 33,7
Slide 30: Corporate Information
CORPORATE INFORMATION EXECUTIVE TEAM DIRECTORS AUDITORS Chris Carlsen Jeff Tonken KPMG LLP, President and Chief Executive Officer Chairman of the Board Chartered Professional Accountants Calgary, Alberta Bruno Geremia Dennis Dawson Executive Vice President and Chief Financial Officer Independent Lea
Slide 31: 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 32: Advisories: Definitions
ADVISORIES DEFINITIONS “Deloitte” means Deloitte, independent qualified reserves evaluator. “Gordondale Gas Plant” means the deep-cut sour gas processing facility owned and operated by AltaGas located in the Gordondale area of Alberta. “COGE Handbook” means the Canadian Oil and Gas Evaluation Handbo
Slide 33: 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 34: 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 35: Advisories: Non-GAAP Ratios
ADVISORIES Non-GAAP Ratios NI 52-112 defines a non-GAAP ratio as a financial measure that: (i) is in the form of a ratio, fraction, percentage or similar representation; (ii) has a non-GAAP financial measure as one or more of its components; and (iii) is not disclosed in the financial statements of
Slide 36: Advisories: Total Debt
ADVISORIES Total Debt Birchcliff calculates “total debt” as the amount outstanding under the revolving term credit facilities plus working capital deficit (less working capital surplus) plus the fair value of the current asset portion of financial instruments less the fair value of the current liabi
Slide 37: Advisories: BOE and MCFE Conversions
ADVISORIES BOE AND MCFE CONVERSIONS Boe amounts have been calculated by using the conversion ratio of 6 Mcf of natural gas to 1 bbl of oil and Mcfe amounts have been calculated by using the conversion ratio of 1 bbl of oil to 6 Mcf of natural gas. Boe and Mcfe amounts may be misleading, particularly
Slide 38: Advisories: Production
ADVISORIES PRODUCTION With respect to the disclosure of Birchcliff’s production contained in this presentation: (i) references to “light oil” mean “light crude oil and medium crude oil” as such term is defined in NI 51-101; (ii) references to “liquids” mean “light crude oil and medium crude oil” and
Slide 39: Advisories: Forward-Looking Statements
ADVISORIES • the information set forth on the slides “2024 Outlook – Capital Program Details”, “2024 Capital Program – Major Themes” and elsewhere in this presentation as it relates to Birchcliff’s capital program and its exploration, production and development activities and the timing thereof, inc
Slide 40: Advisories: 2024 Guidance Assumptions
ADVISORIES • With respect to Birchcliff’s 2024 guidance, such guidance 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; an average AECO price of CDN$2.50/GJ; an average Dawn price of US$2.80/MMBtu; an ave
Slide 41: Advisories: Risks and Uncertainties
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
Slide 42: Advisories
ADVISORIES Management has included the above summary of assumptions and risks related to forward-looking statements provided in this presentation in order to provide readers with a more complete perspective on Birchcliff’s future operations and management’s current expectations relating to Birchclif
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