Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (February 2019)
28 slides from Journey Energy's investor presentation, February 2019
Slide 1: Corporate Presentation February 2019
TSX: JOY Corporate Presentation February, 2019 exploring new roads
Slide 2: Why Journey?
Why Journey? Why JOY Experienced management Skilled board of directors Team Acquire and develop mentality Experience in resource play development Control legacy under-developed conventional oil pools Business Balance acquisitions, drilling and secondary recovery Model Development of em
Slide 3: Forward-Looking Statements and Financial Measures
Forward-Looking Statements and Financial Measures This presentation contains “forward-looking statements” including estimates of future production, cash flows and reserves, business plans for drilling and exploration, the estimated amounts and timing of capital expenditures, the assumptions upon whi
Slide 4: Forward-Looking Statements and Financial Measures (Oil and Gas Advisory)
Forward-Looking Statements and Financial Measures OIL AND GAS ADVISORY The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Journey presented herein were evaluated by GLJ, Journey’s independent reserves evaluators, in accordance with the requirements of Nation
Slide 5: Snapshot
Snapshot 9,400 boe/d balanced producer; 49% liquids(1) 16% corporate decline; interest in early stage oil resource play (funded by others for 2019) $0.84-$0.94/share funds flow; $33-37 million annual funds flow for 2019 $210 million enterprise value; <$22,000 boe/d 39.2 million shares @ $1.90/share;
Slide 6: Road Map for Value Creation
Road Map for Value Creation >165 gross sections of Duvernay lands concentrated in the oil window World Class World class partner with proven expertise Duvernay Well tests in 2019 being funded by partner 37.5% WI in commercial development Infill drilling using new technology for existing po
Slide 7: Growth in Funds Flow for 2019
Growth in Funds Flow for 2019(1) 2017 2018 2019 Operating Highlights Actual Estimate Forecast Production Average (boe/d) 9,962 10,075 ~ 9,200 – 9,600 Oil and NGLs (%) 46% 47% 49% Corporate Decline Rate (%) 17% 16% 16% Reference Natural Gas AECO ($/MMBtu) $2.20 $1.54 $1.65 Prices Oil WTI ($US/bbl) $5
Slide 8: Funds Flow Sensitivity Based on 2019 Guidance
Funds Flow Sensitivity Based on 2019 Guidance WTI ($USD/bbl) Funds Flow ($millions) (Including Hedges) $48.50 $51.00 $53.50 $56.00 $58.50 $61.00 $63.50 $66.00 $68.50 $1.35 13.3 17.9 22.5 27.1 31.5 36.1 40.5 44.9 49.3 $1.45 14.6 19.2 23.8 28.4 32.8 37.4 41.8 46.2 50.6 AECO GAS ($/MCF) $1.55 15.9 20.5
Slide 9: Southern Core Area
Base – Core Areas Southern Core Area (5,300 boe/d; ~41% oil and NGLs(1) ) • Key properties at Skiff, Matziwin, Herronton and Edmonton Countess Brooks • Waterflood expansion, Red Deer extensive drilling upside Calgary • Impressive 2018 drilling program results • Low decline base production (1) Foreca
Slide 10: Base - 2018 YE Reserves Summary
Base - 2018 YE Reserves Summary Gross Company (WI) Reserves(1) Oil Gas NGLs Reserve Category Mboe RLI (Mbbl) (Bcf) (Mbbl) Proved Developed Producing 8,680 84.3 2,357 25,087 7.6 Total Proved 13,103 112.9 3,495 35,412 10.0 Proved + Probable Producing 11,908 112.9 2,978 33,710 9.8 Total Proved + Probab
Slide 11: Base - PDP Reserve Life Index
Base - PDP Reserve Life Index(1) 11 Peer Group Includes; AAV, ARX, BNP, BTR, CJ, CR, DEE, GXE, GXO, IPO, 10 JOY, KEL, NVA, PONY, PRQ, PEY, SPE, SRX, SGY, TVE, TOG, WCP, YGR Lowest Declines 9 8 7 6 Highest Declines 5 4 3 2 1 (1) PDP Reserve Life Index on this page is calculated by dividing PDP reserv
Slide 12: Base – Lowering Corporate Decline
Base – Lowering Corporate Decline Put another 310 MMbbls of OOIP on waterflood 75 MM conventional 385 MM on waterflood 60 MM to be delineated & flooded 250 MM to be flooded JOY net barrels of OOIP by category 770 MM net barrels of OOIP(1) 385 MMbbls 385 MMbbls convert many of 310 MMbbls on waterfloo
Slide 13: Conventional - Economic Plays
Conventional - Economic Plays DUVERNAY Unbooked World class JV partner selected CONVENTIONAL Duvernay Wells for 2019 funded by JV partner BASE World Class No reserve value assigned Resource $3.61/P+P boe FDC is lower than the average of our peer group Low Only 30% of our HZ oil location in
Slide 14: Conventional - 2018 Half Cycle Results
Conventional - 2018 Half Cycle Results Skiff – Sawtooth Drilling and Waterflood Development Drilled 8 HZ wells in 2018: $17.2 million for DCET and 1 water injector conversion ($425k in 2019) Total IP30: 2,016 boe/d (65% oil and NGLs); $8.5k/boe/d, ~$8 million 2018 incremental operating income
Slide 15: Conventional – 25 Years of Drilling
Conventional – 25 Years of Drilling Booked Projects(3) $207 million in Capital Waterflood Journey’s inventory includes over $500 million in booked(3) and Other HZ & Vertical Horizontal unbooked(2) conventional oil projects Oil Multi-Stage Oil Journey has identified 224 gross (212 net)(1) horizon
Slide 16: Conventional - Remaining Resource
Conventional - Remaining Resource(2) 770 MM net barrels of OOIP(1)(2) 82.1% of oil left behind 13.5% produced to date 1.8% unbooked inventory 2.6% booked inventory Oil left behind becomes 4.4% remains Target Resource Booked & Unbooked 17.7% ultimate recovery Journey can double P+P oil reserves by
Slide 17: Duvernay - Emerging World Class Resource
Duvernay - Emerging World Class Resource Initiate commercial development 2020 JV WI: KRC 62.5% WI, JOY 37.5% WI & Initial 2 yrs of operations: max. 10 wells/yr Beyond Continue to add land and capture resource Two Commitment Well Phase & Five Option Well Phase 100% funded by KRC 2019 Ut
Slide 18: Duvernay – Oil Development Taking Off
Duvernay – Oil Development Taking Off…. Accelerating Industry Activity offsetting JV Land Dramatic increase in activity since Q2 2018 • 15 wells on production delineating the Oil Trend • 18 more wells licensed or drilling Appraisal Programs underway on adjacent Lands • Repsol: 6 wells drilled, 4
Slide 19: Duvernay – Resource Captured
Duvernay – Resource Captured 12-9 well Total Organic Drill Depth Gamma Ray Total Phi ELAN Swe Carbon frac 15-31 hz 6-28 Pad 16-15 hz 11-2 new drill Significant Infrastructure Ownership Thick Mature Shale 43.3% ownership in underutilized Gilby 1-4 Gas Plant 6-28 vertical strat well confirmed 31m
Slide 20: Duvernay – World Class Partner Kiwetinohk Resources Corp.
Duvernay – World Class Partner Kiwetinohk Resources Corp. JV WI: KRC 62.5% / JOY 37.5% W Initial 2 yr. Initial 2 yrs of JV operations (10 wells/yr max) Development Per well option to participate or take GORR (Option on first 20 wells) Phase Attractive Lessor Royalties over project life cycle
Slide 21: Duvernay - Potential Commercial Development
Duvernay - Potential Commercial Development Gilby Duvernay HZ Oil Well (Gross) NPV@10%(1) AECO $1.60/MMbtu (flat) 5 NPV@ 10% Before Tax - $millions 4 3 2 1 0 $60 $70 $80 $CAN/bbl - EDM Light Sweet Potential Single Well Parameters(1) Significant running room over large acreage position for 2,400m
Slide 22: Appendix - Content
Appendix- Content Finding, Development and Acquisition Costs Drilling inventory Central Region Central Region Edmonton South Region Red Deer Calgary Strong Governance South Region Experienced Management 22
Slide 23: Finding, Development & Acquisition Costs
Finding, Development & Acquisition Costs For the years ending December 31, 2016 to December 31, 2018 2016 2017 2018 (3 Yr) Acquisitions and Divestiture Capital ($millions) $(9.3) $33.3 $(5.1) $18.8 Exploration and Development Capital ($millions) $16.3 $32.2 $31.7 $80.3 Total Capital Expenditures ($m
Slide 24: Improving Recovery in our Legacy Oil Pools
Improving Recovery in our Legacy Oil Pools $65 CAD/bbl EDM Light Sweet, $55 CAD/bbl WCS, $1.55/MMbtu AECO, No Inflation HZ Drilling Economics(1) Crystal Cherhill Matziwin Herronton Drilling Metric HZ Viking HZ Banff HZ Regional Glauconite HZ Elkton Capital Cost ($MM) $2.7 $1.8 $2.0 $2.6 Ultimate Rec
Slide 25: Central Region Conventional
Central Region Conventional Horizontal Oil Well Drilling Locations(2) Booked(1) Unbooked(3) Property Formations Gross Net Gross Net Poplar Creek/ Belly River, 5 4.5 14 13.3 Westerose Cardium, Banff Cherhill Banff 6 5.4 1 0.9 Crystal Viking 4 4 30 29.5 Central Remainder 7 5.5 4 2.5 Total Central Regi
Slide 26: South Region Conventional
South Region Conventional Horizontal Oil Well Drilling Locations(1) Booked(2) Unbooked(3) Property Formations Gross Net Gross Net Matziwin Glauconite, Colony 20 20.0 21 20.0 Skiff Sawtooth 15 15.0 19 18.9 Countess / Brooks Glauconite, Sunburst, Pekisko 6 4.0 26 24.5 Herronton Elkton 5 4.9 41 39.0 To
Slide 27: Board of Directors - Strong Governance
Board of Directors - Strong Governance Howard Crone Chairman of the Board – Executive Vice President of Cequence Energy Ltd.; Director of Cequence Energy Ltd. and Karve Energy Inc. Glenn Hamilton Audit Committee Chair – Independent businessman, former Senior Vice President and Chief Financial Office
Slide 28: Experienced Management Team
Experienced Management Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Over 35 years of experience: Seven years as Director of Journey (six as CEO), President and CEO of NuVista Energy, VP Engineering at Bonavista, and senior positions at Poco Petroleums, Ris
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