Kelt Exploration Ltd. · TSX:KEL
Kelt Exploration — Investor Presentation (November 2023)
50 slides from Kelt Exploration's investor presentation, November 2023
Slide 1: Corporate Presentation November 2023
Corporate Presentation November 2023 KeltExploration.com David J. Wilson President & Chief Executive Officer Sadiq H. Lalani Vice President & Chief Financial Officer www.keltexploration.com 1
Slide 2: Why Invest in Kelt?
Why Invest in Kelt ? VALUE CREATION ● Kelt Exploration Ltd. (“Kelt” or the “Company”) focuses on value creation for shareholders over the long-term. ● The Company emphasizes low-cost land accumulation in resource-style plays with the potential for high rates of return on capital invested and rapid g
Slide 3: Environment, Social and Governance (ESG)
Environment, Social and Governance ( ESG ) On May 4, 2023, Kelt released its third ESG Report as part of its ongoing commitment to health and safety, responsible and sustainable resource development, good governance practices and community Environment engagement. The ESG Report can be viewed on the
Slide 4: Capital Structure
Capital Structure ● Stock Exchange listing TSX ● Trading symbol KEL ● Market capitalization ( @ $ 7.39 effective Nov/8/2023 ) $ 1.4 billion ● 52-week stock trading range $ 4.29 – $ 8.16 ● Common shares issued 194.1 million ● Stock options ( 9.9 MM ) & RSUs ( 1.7 MM ) 11.6 million ( 6.0% ) → average
Slide 5: Insider Commitment
Insider Commitment Insider Purchases Offering / Market Purchases Date Shares (MM) Amount (MM) Price/share $ 13.9 MM Equity Private Placement Feb-2013 3.7 $ 8.7 $ 2.32 $ 94.4 MM Equity Private Placement Apr-2013 5.7 $ 31.5 $ 5.55 $ 92.0 MM Equity Private Placement Aug-2013 0.5 $ 4.0 $ 8.00 $ 19.6 MM
Slide 6: Capital Expenditures – Three Year Comparative
Capital Expenditures – Three Year Comparative ( $ millions ) 2022 2023 Forecast 2024 Budget Drilling & Completions 191.0 188.0 247.0 Infrastructure: Equipment, Facilities, 122.7 88.0 83.0 Pipelines & Tangible Inventory [1] Land, Seismic, Corporate Assets & 6.4 9.5 20.0 Property Acquisitions Property
Slide 7: Drilling & Completions Program
Drilling & Completions Program 2022 2023 Forecast 2024 Budget Drills Gross / Net Wells Gross / Net Wells Gross / Net Wells Alberta 28 25.4 20 19.0 27 26.0 British Columbia 3 3.0 8 8.0 8 8.0 Total 31 28.4 28 27.0 35 34.0 2022 2023 Forecast 2024 Budget Completions Gross / Net Wells Gross / Net Wells G
Slide 8: Production – Three Year Comparative
Production – Three Year Comparative 2022 2023 Forecast 2024 Budget Oil ( bbls/d ) 5,640 21% 8,040 – 8,450 26% 10,000 – 11,000 28% NGLs ( bbls/d ) [1] 4,049 15% 3,870 – 4,210 13% 4,250 – 4,750 12% Gas ( Mcf/d ) 105,280 64% 111,540 – 114,540 61% 130,500 – 139,500 60% Combined ( BOE/d ) 27,236 100% 30,
Slide 9: Commodity Prices – Three Year Comparative
Commodity Prices – Three Year Comparative ( CAD, unless otherwise specified ) 2022 2023 Forecast 2024 Budget WTI Crude Oil ( $/bbl ) [1] US $ 94.80 $ 123.42 US $ 78.50 $ 105.70 US $ 80.00 $ 108.80 MSW Crude Oil ( $/bbl ) [2] US $ 92.78 $ 120.79 US $ 75.44 $ 101.58 US $ 75.50 $ 102.68 NYMEX Henry Hub
Slide 10: 2024 Budget Commodity Price Sensitivities
2024 Budget Commodity Price Sensitivities Kelt Kelt 2024 Oil/NGLs Price Gas Price Forecast Plus 10% Plus 10% Kelt Oil Price ( CAD/bbl ) 99.97 109.97 +10% 99.97 ─ Kelt NGLs Price ( CAD/bbl ) 48.31 53.14 +10% 48.31 ─ Kelt Gas Price ( CAD/Mcf ) 3.94 3.94 ─ 4.33 +10% AFFO ( $MM ) [1] [2] 350.0 383.0 365
Slide 11: Gas Market Risk Management
Gas Market Risk Management GAS MARKET DIVERSIFICATION ● Kelt has taken a diversified approach to selling its natural gas in order to reduce exposure to single market risk. ● Estimated % of average gas sales in 2024 at each respective price hub is forecasted to be as follows: AECO 19% Dawn 2% 1% 41%
Slide 12: Gas Processing Arrangements
Gas Processing Arrangements GAS PLANT DIVERSIFICATION Kelt has entered into various agreements that provide the Company with the ability to increase its gas processing capacity over the next three years: ❖ WEMBLEY/PIPESTONE DIVISION: Kelt expects to increase firm service raw gas processing capacity
Slide 13: Commodity Price Risk Management – Derivative Instruments
Commodity Price Risk Management – Derivative Instruments Remaining Commodity Index Type Quantity Contract Price Term NYMEX−AECO Nov/2023 to 10,000 Natural Gas Financial Monthly AECO Basis calculated at 30% of the floating monthly NYMEX Henry Hub price Basis Differential Oct/2024 MMBtu/d NYMEX−AECO N
Slide 14: Netbacks – Three Year Comparative
Netbacks – Three Year Comparative 2023 2024 2024/23 ( $ / BOE ) 2022 Forecast Budget change Net realized price 59.54 44.24 47.89 8% Realized hedging gain ( loss ) ( 5.68 ) 1.34 0.01 ─ Royalties ( % of net realized price ) ( 11.1% ) ( 12.4% ) ( 14.3% ) 15% Transportation expense ( 3.06 ) ( 3.44 ) ( 3
Slide 15: Financial Summary – Three Year Comparative
Financial Summary – Three Year Comparative 2023 2024 2024/23 ( $ MM, unless otherwise specified ) 2022 Forecast Budget change P&NG sales 613.4 509.0 670.0 32% Adjusted funds from operations [1] 327.0 280.0 350.0 25% AFFO per share – diluted ( $/share ) [1] 1.67 1.42 1.76 24% Capital expenditures, ne
Slide 16: Reserves - Volumes
Reserves - Volumes ( MBOE ) Dec/31/2021 Dec/31/2022 Change Proved Developed Producing 43,854 61,062 39% Proved 134,091 192,073 43% Proved plus Probable 254,149 340,801 34% Oil & NGLs / Gas Mix 41% 59% 38% 62% ( MBOE ) PDP Proved P+P Reserve Additions, net 27,138 67,912 96,582 2022 Production 9,930 9
Slide 17: Reserves – Future Development Capital
Reserves – Future Development Capital Proved Reserves P+P Reserves December 31, 2022 FDC Net FDC Net ( $ MM ) Wells ( $ MM ) Wells Alberta Montney wells 887.0 111.8 1,423.5 181.8 B.C. Montney wells 177.3 23.0 281.7 36.0 Alberta Charlie Lake wells 96.4 16.9 182.5 31.2 Other formations 24.8 7.1 108.4
Slide 18: 2022 Finding, Development, Acquisition & Disposition Costs
2022 Finding, Development, Acquisition & Disposition Costs PDP Proved P+P ( $ M, unless otherwise specified ) Reserves Reserves Reserves Capital expenditures, net of dispositions 317,540 317,540 317,540 Change in FDC costs required to develop reserves ( 1,427 ) 455,788 623,296 Total capital costs 31
Slide 19: Reserves - Values
Reserves - Values Net Asset Value per Share Sproule’s Forecasted Future Commodity Prices $M $ / share WTI NYMEX HH Exchange Crude Oil Natural Gas Rate ( USD/bbl ) ( USD/MMBtu ) ( CAD / USD ) P+P Reserves, NPV 10% BT [3] [4] 3,430,114 17.18 Undeveloped land 129,396 0.65 2023 86.00 5.00 1.333 Net debt
Slide 20: Operating Divisions
Operating Divisions Oak/Flatrock ● Montney light oil/condensate-rich gas Pouce Coupe/Progress/Spirit River ● Montney light oil ● Montney and Doig gas Oak/Flatrock Pouce Coupe/ Progress/Spirit River ● Charlie Lake light oil Wembley/Pipestone Wembley/Pipestone Grande Cache ● Montney light oil/condensa
Slide 21: Kelt Land Fairway Land Holdings
Kelt Land Fairway R13 R11 R9 R7 R5 R3 R1W6 R24W5 94-A-14 94-A-15 94-A-16 T90 94-A-11 94-A-10 94-A-9 T88 T88 Land Holdings T86 T86 Oak Developed + Gross Net Net T84 Fort Flatrock T84 Undeveloped Acres Acres Sections St. John T82 BC Montney 196,792 193,607 302 T82 T80 T80 Pouce Coupe Progress AB Montn
Slide 22: Kelt Montney Framework
#2 Kelt exploration Kelt M Oak / Flatrock ; Pouce Coupe Progress La Glace Pipestone / Wembley A A A _A A 290m D2/Montney H D1/Sexsmith Lower Montney | Belloy — J Proven Productive Montney Horizons © Kelt Future Exploratory Horizons Within Core Areas Doig Lower Montney | Belloy 22
Slide 23: British Columbia Montney - Oak / Flatrock Division
British Columbia Montney - Oak / Flatrock Division 8-16 D4 14-2 D4 02/8-16 D4 (sfc 11-26) 1-9 D4, 4-10 D4 (sfc 13-12) (DUC) 16-23 D4 2-9 D5, 3-9 D4 14-24 D4 Montney Land Holdings 3-10 D5, 2-10 D4 (sfc 13-12) (sfc 5-33) 02/13-13 D4 16-6 D3 (sfc 13-12) Gross 191,742 acres ( 300 sections ) 13-5 D4 T87
Slide 24: Oak Montney ─ Type Curve / Production Profile
Oak Montney ─ Type Curve / Production Profile 2-9 D5 (sfc 5-33) 3-9 D4 (sfc 5-33) Notes: ─ Sproule (December 31, 2022) Raw Gas Type Curve ▪▪▪ Mean Production from Nine producing Oak wells Most recent wells brought on production 24
Slide 25: Pioneering a Model for Sustainable Oil & Gas Development at Oak
Pioneering a Model for Sustainable Oil & Gas Development at Oak Kelt’s “Green” Initiatives for Sustainable Oil & Gas Development at Oak in British Columbia ELECTRONIC FLARE STACK* Annual CO2E reduction of Elimination of continuous pilot flare. 70 t 19,630 tonnes from initiatives supporting sustainab
Slide 26: Alberta Montney Lands
Alberta Montney Lands Alberta − Montney Land Holdings T80 Gross 169,928 acres ( 265 sections ) Net 150,667 acres ( 235 sections ) Pouce Pouce Coupe Coupe T78 POUCE COUPE WEST West ● High deliverability dry gas wells. Progress ● Wells that came on production in Q1 2021 at rates between 10-12 MMcf/d,
Slide 27: Pouce Coupe / Progress Division – Montney
Pouce Coupe / Progress Division – Montney Kelt Lands T82 Gas Plants NRM Fourth Creek T81 Gas Plant NRM Gordondale East Gas Plant Pouce T79 Pouce Coupe Coupe (oil-prone) West (gas-prone) Progress T77 Progress (oil-prone) Proven Productive Montney Horizons Kelt Future Exploratory Horizons within Core
Slide 28: Wembley / Pipestone / La Glace Division – Montney
Wembley / Pipestone / La Glace Division – Montney ( D1 / D3 ) 02/13-32 13-10 Montney Land Holdings (sfc 14-34) 1-35 13-18 (sfc 9-17) (sfc 12-19) 5-9 T75 Gross 113,608 acres ( 177 sections ) 13-6 (sfc 15-29) (sfc 11-31) Net 109,659 acres ( 171 sections ) 1-36 00/16-14 (UD3/D4) (sfc 10-28) 02/16-14 13
Slide 29: Wembley / Pipestone / La Glace Division – Infrastructure
Wembley / Pipestone / La Glace Division – Infrastructure Kelt 14-29 INFRASTRUCTURE Kelt 11-31 La Glace Facility Sexsmith Wembley (100% WI) Gas Plant T75 ● Ownership in extensive pipeline infrastructure and Facility (0.3% WI) (100% WI) minor interests in the Sexsmith and Wembley Gas Plants. Kelt 14-2
Slide 30: Alberta Charlie Lake Lands
Alberta Charlie Lake Lands Alberta − Charlie Lake Land Holdings T80 Gross 137,120 acres ( 214 sections ) Pouce Coupe Net 92,205 acres ( 144 sections ) Progress Spirit Spirit River − Lower Charlie Lake Type Curve River T78 ( Sproule, December 31, 2022 ) 388 BOE/d Estimated sales – IP365 ( 53% Oil/NGL
Slide 31: Progress / Spirit River – Charlie Lake
Progress / Spirit River – Charlie Lake CHARLIE LAKE LAND HOLDINGS Spirit T79 Gross: 27,840 acres ( 43 sections ) 1-30 LCL River Net: 20,755 acres ( 32 sections ) (sfc 10-7) 1-25 LCL Kelt 14-6 KEL 50% 1-36 UCL 8-25 UCL Spirit River 9-25 UCL (sfc 8-27) Facility 2-22 LCL (100% WI) 1-22 LCL CHARLIE LAKE
Slide 32: Pouce Coupe – Charlie Lake
Pouce Coupe – Charlie Lake 13-7 (sfc 12-9) Kelt 8-33 Pouce Coupe North CHARLIE LAKE LAND HOLDINGS DUC Facility T81 (99% WI) Gross: 60,320 acres ( 94 sections ) Net: 39,488 acres ( 61 sections ) Pouce 16-6 (sfc 8-1) Coupe DUC North T80 CHARLIE LAKE ACTIVITY 2-1 (sfc 13-33) ● Recently acquired lands i
Slide 33: Wembley / Pipestone – Charlie Lake
Wembley / Pipestone – Charlie Lake CHARLIE LAKE LAND HOLDINGS T74 Gross: 31,520 acres ( 49 sections ) Net: 23,917 acres ( 37 sections ) CHARLIE LAKE ACTIVITY Wembley / T73 ● Charlie Lake lands overlapping Kelt’s Montney 1-24 Pipestone development play at Wembley/Pipestone. (sfc 16-26) KEL = 60% ● Ad
Slide 34: Future Considerations
Future Considerations ● The Company has numerous potential future drilling opportunities on its existing lands that will provide for continued growth in the years to come. ● The Company has amassed vast Montney acreage in new plays to complement its existing development Montney lands. ● The Company
Slide 35: Appendix
Appendix ● ESG – GHG Emissions ● ESG – Carbon Tax ● ESG – Corporate Governance ● Corporate Governance – Board of Directors ● Leadership – Management ● Abbreviations and Definitions ● Disclaimers 35
Slide 36: ESG – Greenhouse Gas Emissions
ESG – Greenhouse Gas Emissions Kelt supports innovative strategies, clean technology (including alternative energy and renewable energy), green products and utilizing lower emitting solutions to improve air quality by reducing greenhouse gas (“GHG”) emissions. 2018 2019 2020 2021 2022 Type of Emissi
Slide 37: ESG – Carbon Tax
ESG – Carbon Tax CARBON TAX ● FEDERAL ➢ The Federal carbon tax applies where a Province does not have a carbon pricing system that aligns with Federal benchmarks. ➢ The current carbon tax rate is $65/tonne; and proposing annual increases reaching $170/tonne by 2030. ● ALBERTA ➢ The Technology Innova
Slide 38: ESG – Corporate Governance
ESG – Corporate Governance Corporate Governance The following documents relating to the Company’s corporate governance matters are available on the internet at www.keltexploration.com: ● Advance Notice Policy ● Disclosure, Confidentiality and Trading Policy ● Articles of Incorporation, Amalgamation,
Slide 39: Corporate Governance - Board of Directors
Corporate Governance - Board of Directors William C. Guinan [ 8, 9 ] Jennifer J. Haskey [ 2, 6 ] Board Chair, Independent Director, Independent Common shares 1,154,459 Common shares Nil Stock options 92,000 Stock options 21,000 Notes: RSUs 11,000 RSUs 6,000 [1] Chair, Audit Committee. 2022 Director
Slide 40: Leadership - Officers
Leadership - Officers Douglas J. Errico David J. Wilson Sadiq H. Lalani Senior Vice President, Land President & Chief Executive Officer Vice President & Chief Financial Officer and Corporate Development Common shares 26,426,842 Common shares 1,810,838 Common shares 496,989 Stock options 1,181,500 St
Slide 41: Abbreviations and Definitions
Abbreviations and Definitions ACE the Chicago natural gas hub pricing point identified as the Alliance M thousand Chicago Exchange MM million AECO Alberta Energy Company “C” Meter Station of the Nova Gas Pipeline MSW Medium Sweet Blend System NGTL Nova Gas Transmission Limited AESO Alberta Electric
Slide 42: Disclaimer
Disclaimer Forward-Looking Statements Certain statements included in this corporate presentation (the “Presentation”) constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purp
Slide 43: Disclaimer
Disclaimer The actual results of operations of the Company and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this Presentation, and such variation may be material. The Company and its management believe that the FOFI has been prepared on a r
Slide 44: Disclaimer
Disclaimer Risks and Uncertainties Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the
Slide 45: Disclaimer
Disclaimer Oil and Gas Advisories Barrel of Oil Equivalent Presentation This Presentation contains various references to the abbreviation BOE which means barrels of oil equivalent. Where amounts are expressed on a BOE basis, natural gas volumes have been converted to oil equivalence at six thousand
Slide 46: Disclaimer
Disclaimer Reserves Unless otherwise specified, reserve estimates disclosed in this Presentation were prepared by Sproule Associates Limited (“Sproule”) in accordance with National Instrument 51- 101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evalua
Slide 47: Disclaimer
Disclaimer Financial Advisories All dollar amounts are referenced in Canadian dollars, except when otherwise noted. Refer to "Non-GAAP Measures and Other Financial Measures" in the Company’s Management’s Discussion and Analysis (“MD&A”) for a quantitative reconciliation of capital expenditures net o
Slide 48: Disclaimer
Disclaimer “Net asset value” is calculated by adding the present value of proved plus probable petroleum and natural gas reserves discounted at 10% before tax, undeveloped land value, proceeds from exercise of stock options, and net bank debt (surplus). “Net asset value per common share” is calculat
Slide 49: Disclaimer
Disclaimer Supplementary Financial Measures Production per common share: is calculated by dividing total production by the basic weighted average number of common shares outstanding, in accordance with GAAP. NPV10% BT: the anticipated net present value of the future net cash flow before taxes and af
Slide 50: Corporate Presentation
Corporate Presentation KeltExploration.com Kelt Exploration Ltd. Suite 300, East Tower 311 – Sixth Avenue SW Calgary, Alberta Canada T2P 3H2 Phone: 403-294-0154 Fax: 403-291-0155 Website: www.KeltExploration.com 50
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