Paramount Resources Ltd. Class A · TSX:POU
Paramount Resources Ltd. Class A — Investor Presentation (January 2016)
30 slides from Paramount Resources Ltd. Class A's investor presentation, January 2016
Slide 1: Corporate Presentation January 2016
Corporate Presentation January 2016
Slide 2: Future Oriented Information
Future Oriented Information (See additional advisories at the end of this document) • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount" or the "Company") and its future plans and operations, this presentation contains certain forward-looking information and for
Slide 3: Corporate Profile
Corporate Profile Corporate Profile • Founded in 1974; IPO in 1978 • TSX: POU • Market Cap: 106.2 MM shares @ 4.00/share ~ $0.4 Billion • ~50% insider ownership • Net Debt (Sept 30, 2015): $1.8 Billion • 2015 Capital Guidance: $490 MM Low Risk/Repeatable Growth Operations focused on large-scale Deep
Slide 4: Deep Basin Resource
Deep Basin Resource Paramount Acreage (gross): • 500 Sections Cretaceous Rights • 361 Sections Montney Rights • 178 Sections Duvernay Rights • Deep Basin liquids-rich gas resources in SECONDARY multiple stacked horizons • 40-160 Bcf/section DGIIP (1) • ~5+ Bcf EUR/Hz well (1) • >10 Tcf DGIIP + NGLs
Slide 5: Cretaceous Gas Resource
Cretaceous Gas Resource • Hz Dunvegan well at • Hz Falher well at Musreau Resthaven • IP: 12.0 MMcf/d • IP: 8.3 MMcf/d • Cum production to 12/15: • Cum production to 12/15: • 5.1 Bcf • 5.3 Bcf • 57 MBbl NGLs • 77 MBbl NGLs • Cost: $8.6 MM d/c/t in 2010 • Cost: $8.3 MM d/c/t in 2010 5
Slide 6: Cretaceous Economics
Cretaceous Economics Assumptions Capital: $6.2 MM horizontal well IP30: 9.0 MMcf/d Natural Gas (raw): 4.9 Bcf Raw Condensate Gas Ratio (CGR)(1): 17 Bbl/MMcf C2-C4 NGLs: 61 Bbl/MMcf Deep Cut Facility Economics(2) @ $2.50 AECO US$40.00 WTI NPV 10% $ 1.1 MM IRR 20% Payout (Years) 3.2 P/I (1) 1.3 (1) Pl
Slide 7: Montney Gas Resource
Montney Gas Resource Liquids-rich Montney gas play; Paramount holds ~313 net sections of Montney rights Kaybob Montney Wells Natural Wellhead Gas(1) Liquids(1) CGR(1) Total MMcf/d Bbl/d Bbl/MMcf Boe/d Wells IP 30 4.0 652 165 1,319 55 IP 90 3.6 414 115 1,014 43 IP 180 2.9 306 106 789 36 IP 270 2.4
Slide 8: Montney "Rich" Well Economics (1.0-Mile Lateral)
Montney "Rich" Well Economics (1.0 - Mile Lateral) "Rich" Montney Wells (1) Gas Liquids CGR Total Wells MMcf/d Bbl/d Bbl/MMcf Boe/d IP 30 4.9 594 122 1,411 33 IP 90 4.2 403 97 1,103 30 IP 180 3.3 282 87 832 25 IP 270 2.6 212 82 645 14 Wells < 30 days onstream and wells in progress 3 Total 36 Assumpt
Slide 9: Montney "Rich" Well Economics (1.5-Mile Lateral)
Montney "Rich" Well Economics (1.5 - Mile Lateral) Assumptions Capital: $10.2 MM horizontal 1.5-mile lateral well IP30: 5.4 MMcf/d (restricted) Natural Gas (raw): 5.0 Bcf Raw Condensate Gas Ratio (CGR)(1): 171 Bbl/MMcf (IP30) (72 Bbl/MMcf lifetime average) C2-C4 NGLs: ~90 Bbl/MMcf through Deep Cut F
Slide 10: Montney "Ultra Rich" Well Economics
Montney "Ultra Rich" Well Economics "Ultra Rich" Montney Wells(1) Gas Liquids CGR(1) Total Wells MMcf/d Bbl/d Bbl/MMcf Boe/d IP 30 2.3 850 375 1,233 18 IP 90 1.8 561 315 861 9 IP 180 1.5 458 296 708 8 IP 270 1.6 433 277 700 6 Wells < 30 days onstream and wells in progress 10 Total 28 Assumptions Cap
Slide 11: Montney Drilling/Completion Improvements
Montney Drilling/Completion Improvements • Pad drilling/pad layout • Bits/muds/motors • Well design: monobores/orientation/reservoir placement • Toe up/toe down: effects on production • Natural gas fueled rigs • Plug and perf/sliding sleeves • Cemented liners/open-hole packers (ECP’s) • Frac sizing/
Slide 12: Completion Cost Improvements ($/Tonne)
Completion Cost Improvements ($/Tonne) $/Tonne 12
Slide 13: Montney Well Cost Progression
Montney Well Cost Progression Key Points Expected Well Cost ($MM) 1.0 Mile 1.5 Mile ($MM) Lateral Lateral Drill $3.5 $4.2 Complete $3.4 $4.9 Equip/Tie in. $1.3 $1.1 Total $8.2 $10.2 • Lower drilling costs due to lower day rates for rigs and lower equipment rental costs • Lower completion costs due t
Slide 14: Musreau 8-13 Complex
Musreau 8-13 Complex October 13, 2014
Slide 15: Deep Basin Processing Capacity
Deep Basin Processing Capacity Gross Net POU Potential Raw Gas Raw Gas Sales Capacity Capacity Volumes MMcf/d MMcf/d Boe/d (1) Musreau Deep Cut Facility 200 200 50,000 Musreau Refrig Facility 45 45 8,500 Smoky Deep Cut Facility 200 40 10,000 Karr Capacity 40 40 10,000 Other Musreau area capacity 64
Slide 16: Illustrative Deep-Cut - Montney Wells
Illustrative Deep-Cut - Montney Wells 200 MMcf/d x 23% Shrinkage = 154 MMcf/d Sales Gas (25,667 Boe/d) + 22,000 Bbl/d condensate + 18,000 Bbl/d NGLs Price(1) Yield Bbl/MMcf Deep-Cut Sales Gas $2.75/Mcf 154 MMcf/d $423,500 Condensate $65.00/Bbl 110 22,000 Bbl/d $1,430,000 Butane $35.00/Bbl 12.5 2,500
Slide 17: Illustrative Deep-Cut - Current Sales Mix
Illustrative Deep-Cut - Current Sales Mix Raw Gas 150 MMcf/d Shrinkage 23% Yield Price Bbl/MMcf Deep-Cut Sales Gas $2.50/Mcf 116 MMcf/d $290,000 Condensate $40.00/Bbl 70 10,500 Bbl/d $420,000 Butane $30.00/Bbl 10 1,500 Bbl/d $45,000 Propane ($1.00/Bbl) 20 3,000 Bbl/d ($3,000) Ethane $14.00/Bbl 50 7,
Slide 18: Paramount Deep-Cut Montney - Illustrative Project Economics
Paramount Deep-Cut Montney - Illustrative Project Economics • Paramount’s shallow rights will add substantially to the RLI • Paramount has de-risked a substantial amount of its land base and thus could have the potential to add a series of refrigeration or deep cut plants • Simple Payout from free c
Slide 19: Willesden Green Duvernay Shale Play
Willesden Green Duvernay Shale Play • 64,452 (34,305 net) acres of land • Drilled and completed 3 (1.5 net) Hz Duvernay wells to date: Cumulative production to October 31,2015 Natural Gas Oil and NGLs MMcf MBbl 03/16-13-39-5W5 88.7 79 7-19-39-5W5 57.1 18 3-28-39-5W5 11.2 8 Total 157.0 105 • Two stan
Slide 20: Montney: Valhalla and Birch
Montney Valhalla: ~65 sections (~49 net) Montney/~60 sections (~44 net) Doig rights • Montney/Doig Play • 16 wells tied in at restricted rates (midstream constraints) • Evaluating long term production/economics to determine future investment levels Birch: ~67 sections (~34 net) Montney rights • Mont
Slide 21: Paramount Investments
2 estments /< Paramount resources Itd.
Slide 22: Paramount Investments
Paramount Investments Paramoumrt resources Itd. _am___—_|rilogy Energy (TSX:TET) @ wes Energy Corp. MEG Energy (TSX:MEG) Spun-out from Paramount in 2005 * Acquired through sale of Surmont assets Market Cap: ~$0.3 Billion * Market Cap: ~C$1.0 Billion * Q3 2015 production: 82,768 Bbi/d * Large, high q
Slide 23: Paramount 100% Subsidiary Investments
Paramount 100% Subsidiary Investments (1) As publicly disclosed by a large U.S. public E&P company with significant landholdings in the Liard Basin. The resource evaluation disclosed by such E&P company was not noted as having been prepared independently or by a qualified reserves evaluator or audit
Slide 24: Quarterly Operating Results
Quarterly Operating Results 24
Slide 25: Conventional Reserves
Conventional Reserves Columns may not add due to rounding. Conventional reserves only. Includes nominal amounts of estimated reserves in respect of Paramount's initial shale gas well at Patry, B.C. Reserves evaluated by McDaniel &Associates Consultants Ltd. in accordance with National Instrument 51-
Slide 26: Summary
Summary Exposure to significant reserve opportunities Deep Basin: Cretaceous, Montney Valhalla: Montney, Doig Birch: Montney Willesden Green: Duvernay Significant asset value Trilogy MEG Energy Cavalier Energy Liard Shale Gas Paramount continues to provide long-term value creation fo
Slide 27: Advisories Appendix
Paramount resources Itd.
Slide 28: 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 29: Advisories (con't)
Advisories (con't) Oil and Gas Measures and Definitions This presentation contains disclosure expressed as "Boe", "MMBoe" and "Boe/d". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures ma
Slide 30: Paramount Resources Ltd. contact
Paramrmourst resources itd. 4700 Bankers Hall West 888 Third Street S.W. Calgary, Alberta Canada T2P 5C5 Telephone: (403) 290-3600 Facsimile: (403) 262-7994 www.paramountres.com
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