Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (March 2022)
27 slides from Journey Energy's investor presentation, March 2022
Slide 1: Corporate Presentation
JOURNEY Corporate Presentation TSX: JOY OTCQX: JRNGF March, 2022
Slide 2: Journey Today Is…
Journey Today Is… Unlevered Unhedged Undergoing a transformation to: A sustainably growing free cash flow business Unlocking value in under capitalized assets Uninterested in: Anything that does not create or preserve stakeholder value 2
Slide 3: March 2022
March 2022 8,700 boe/d(1) (45% liquids); 100% unhedged Strategic relationship with AIMCo; Sole lender and largest shareholder 14% corporate decline go forward; waterfloods and other low decline assets supports sustainability Forecast Adjusted Funds Flow of $80-85 million in 2022; $1.66-$1.76 funds f
Slide 4: Corporate Growth Returns in 2022
Corporate Growth Returns in 2022 2022 2019 2020 2021 2022 Operating Highlights Pro Forma Actual Actual Actual Forecast Equity(1) Production Average (boe/d) 9,372 8,379 8,004 8,500 – 9,000 8,500 – 9,000 Oil and NGLs (%) 48% 46% 47% 46% 46% Corporate Decline Rate (%) 16% 17% 14% 14% 14% Reference Pric
Slide 5: Funds Flow Increasing / Net Debt Decreasing with Improving Commodity Prices
Funds Flow Increasing / Net Debt Decreasing with Improving with Commodity Prices $124 million $90 million $57 million $82 million $44 million $18 million $6 million $6 million 2020 2021 2022 Pro Forma 2020 2021 2022 equity Fund Flow (unhedged) Net Debt 5
Slide 6: Buoyant 2022 Drives Sustainability
Buoyant 2022 Drives Sustainability WTI ($USD/BBL) Cash Flow ($MM) $67.50 $72.50 $77.50 $82.50 $87.50 $ 92.50 $ 97.50 $102.50 $107.50 $3.60 48.5 55.8 63.1 70.4 77.5 84.8 91.8 98.9 105.9 $3.75 49.7 57.0 64.3 71.6 78.7 86.0 93.0 100.1 107.1 $3.90 50.9 58.2 65.5 72.8 79.9 87.2 94.2 101.3 108.3 AECO GAS
Slide 7: 2021 YE Reserves; Declines Stable Base
2021 YE Reserves; Declines Stable Base -–2020 2021 AddYEYE Value Reserves Reserves - Excess Summary Summary Tax Pools Preserve Value Company Gross (WI) Reserves(1) Oil Gas NGLs Reserve Category Mboe RLI (Mbbl) (Bcf) (Mbbl) Proved Developed Producing 8,022 82.3 2,300 24,032 7.8 Total Proved 12,509 10
Slide 8: YE NAV Growth; Increasing Commodity Prices / Net Asset Value
Net Asset Prices/Exceptional YE NAV Growth; Increasing Commodity Value Capital Efficiency 2021 NPV @ 10% 2021 2021 Net Asset Net Asset Value per Value Share P+P $450MM $57MM 48 MM P+P O/S Shares P+P YE net debt $8.19/share $393MM P+PDP 2020 $242MM Net Asset Value per P+PDP P+PDP $3.86/share Share $1
Slide 9: GLJ Forecasted Edmonton Light Price Reversing Trend for 2022
Reserves GLJ Forecasted Edmonton Value Light Price Reversing Trend for 2022(1) Forecast Year 2015 2014 March 2022 2016 2017 2019 MSW Price ($CDN/bbl) 2018, 2020 2022 2021 January 1, 2022 Pricing still lags current/strip pricing (1) GLJ published price forecasts January 1 of forecast year 9
Slide 10: How to make a Low Decline even LOWER
How to make a Low Decline even LOWER 415 MM on waterflood 40 MM conventional 415 MM on 40 MM to waterflood be delineated and flooded JOY net barrels of 260 MM to be DOOIP by category flooded 755 MM net barrels of DOOIP 415 MM 340 MM convert 260 MM barrels on waterflood barrels conventional conventio
Slide 11: Reserves Value Strong Base! Even Stronger Value
Reserves Strong Base! Even Stronger Value Future Development Potential (As at December 31, 2021) Journey’s $203 million of P+P future development capital (FDC) is only $3.70/P+P boe 65% of Journey’s identified capital projects remain unbooked Journey’s P+P FDC adds $206 million of NPV@10%; this tran
Slide 12: Extensive Drilling Inventory; in Existing Pools!
Extensive Drilling Inventory; in Existing Pools! Journey has identified 232 (211 net) horizontal drilling opportunities Drilling Locations(1) % Booked(2) in Total(1) Reserve Report Region Gross Net South 112 107 36% Central 120 104 41% Total 232 211 38% Unbooked Projects $357MM in Capital Booked Pro
Slide 13: Value of Inventory Appreciates with Pricing
Value of Inventory Appreciates with Pricing Comparative Economics Versus Oil Price - IRR% 400 Matziwin HZ AECO $4.00/MMbtu Peters & Co 2022 Price 350 Crystal HZ Forecast Cherhill HZ 300 Westerose HZ Skiff 3 HZ WF Pattern 250 IRR % 200 150 100 50 AECO $3.15/MMbtu 0 $70/bbl WCS, $80/bbl EDML $80/bbl W
Slide 14: Payout Years
Journey Has Over 15 Years of Drilling Inventory, Let’s Get After It! (1) Comparative Economics Versus Oil Price - Payout (Years) 2.5 Skiff 3 HZ WF Pattern AECO $4.00/MMbtu Peters & Co 2022 Price Westerose HZ Forecast Cherhill HZ 2.0 Crystal HZ Matziwin HZ Payout Years 1.5 1.0 0.5 AECO $3.15/MMbtu 0.
Slide 15: 2022 High Impact Opportunity - Westerose Glauconitic Liquid Rich Gas
2022 High Impact Opportunity - Westerose Glauconitic Liquid Rich Gas(1) 04-06 Vertical Discovery offsetting Drilling Plan Legend Deep Wells Glauc Pool 2022 Location Inventory Location Planned hz well path JOY Land 2021 Acquired JOY Land (1) Natural Gas Liquids 45 bbl/mmscf C3+ 15
Slide 16: Crystal Viking - 2 Wells Drilling Q2 2022
Crystal Viking - 2 Wells Drilling Q2 2022 Legend Journey operated wells and infrastructure JOY Wells OOIP: 153 MMbbl, 16% recovered to date Viking Pool Oil: 40° API 2022 Location Inventory 4 successful HZ analog wells drilled to date Location GOR land Over 30 drillable well locations - GLJ has 6 boo
Slide 17: Skiff – 3 Wells Drilled Q1 2022
Skiff – 3 Wells Drilled Q1 2022 Journey operated wells and infrastructure OOIP: 28 MMbbl, 17% recovered to date GLJ booked 2P total recovery of 38% Unbooked potential for further recovery Oil: ~20° API Cumulative Voidage Ratio to date: 0.80 Two highly successful horizontal waterflood patterns 2-8 In
Slide 18: Countess Power (on stream Q4 2020) Future Potential
Countess Power (on stream Q4 2020) Future Potential Journey holds 100% WI in the Countess power plant 4 MW power generation; fuel gas supplied by long life, natural gas Connected to the Alberta Power grid; sold on the spot market Flexibility to sell gas or produce power depending on pricing Receivin
Slide 19: But Wait! There's Still More To Come
But Wait! There’s Still More To Come 755 MM net barrels of DOOIP 2.6% of booked recovery 84.6% of oil left behind Ultimate 12.8% recovered to date Recovery 15.4% ultimate recovery Oil left behind becomes Target Resource Journey can double our P+P oil reserves by recovering 3% more of the oil left be
Slide 20: Journey Today Is…
Journey Today Is… Unlevered Unhedged Undergoing a transformation to: A sustainably growing free cash flow business Unlocking value in under capitalized assets Uninterested in: Anything that does not create or preserve stakeholder value 20
Slide 21: Directors – Strong Governance
Directors – Strong Governance Craig Hansen Chairman of the Board – Independent businessman, President and Chief Executive Officer of Zargon Oil & Gas Ltd. and its predecessor, Zargon Energy Trust. Also a member of Journey’s Reserves and Compensation/Governance committees. Dana Laustsen Reserves Comm
Slide 22: Energized and Engaged Team
Energized and Engaged Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Previously President and CEO of NuVista Energy, VP Engineering at Bonavista, and senior positions at Poco Petroleums, Rising Resources, Shell, and Gulf. Gerry N. Gilewicz, CPA, CMA Chief Fi
Slide 23: Environment, Social and Governance: Environmental
Environment, Social and Governance Environmental Journey has established a target to reduce direct emissions intensity by 20% from 2019 levels by 2023. We chose 2019 as a base for this target to focus on new reductions rather than accounting for reductions already achieved. In 2019, we reused 99.9%
Slide 24: Environment, Social and Governance (Continued): Social
Environment, Social and Governance (Continued) Social Journey takes pride in maintaining its operations with the highest of standards and ensures its suppliers of goods and services do so as well. Journey operates in nine key areas in the province of Alberta and is very active in the communities in
Slide 25: Environment, Social and Governance (Continued): Governance
Environment, Social and Governance (Continued) Governance In recognition of the key role that sustainability plays in our business, Journey has mandated that the Board of Directors (the “Board”) take an active role in evaluating our corporate sustainability strategy, improving our risk management pr
Slide 26: 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 27: Oil and Gas Advisory
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 National Instrument 51-101 (“NI 51-101”) and the Canadia