Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (August 2024)
42 slides from Birchcliff Energy's investor presentation, August 2024
Slide 1: Corporate Presentation August 2024
Birchcliff’s 100% owned and operated Pouce Coupe Gas Plant CORPORATE PRESENTATION AUGUST 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 75,000 – 77,000 boe/d Adjusted funds flow(2) $250 million F&D capital expenditures $250 – $270 million Free funds flow(2) $0 – ($20) mil
Slide 3: Corporate Snapshot: Select Q2 2024 Results
CORPORATE SNAPSHOT SELECT Q2 2024 RESULTS Average production 78,358 boe/d Light oil (% of production) 2,419 bbls/d (3%) Condensate (% of production) 4,467 bbls/d (6%) NGLs (% of production) 6,634 bbls/d (8%) Natural gas (% of production) 389,026 Mcf/d (83%) $53.7 million(1) Adjusted funds flow $0.20
Slide 4: Why Invest in Birchcliff
CORPORATE SNAPSHOT WHY INVEST IN BIRCHCLIFF WORLD-CLASS ASSET BASE OPERATIONAL EXCELLENCE High-quality, multi-decade inventory in Pouce Coupe and Gordondale Executive and management teams with a proven track record Portfolio provides optionality, with a mix of low-decline dry Low cost through owning
Slide 5: 2024 Outlook: Capital Program Details
2024 OUTLOOK CAPITAL PROGRAM DETAILS(1) 2024 F&D Capital Expenditures by Classification 2024 POUCE COUPE & GORDONDALE Classification Capital (millions) PAD LOCATIONS DCCET(2)(3) $195 – $200 2024 Program Facilities and Infrastructure $15 – $20 2025 Pre-spend Pouce Coupe Gas Plant Maintenance and Opti
Slide 6: Long-Term Contract Operating Agreement
LONG-TERM CONTRACT OPERATING AGREEMENT AGREEMENT EXPECTED TO REDUCE LONG-TERM OPERATING COSTS ▪ Birchcliff commenced contract operating the Gordondale Gas Plant on July 1, 2024 ▪ Optimization opportunities and the interconnectivity of the two C2+ assets are expected to drive lower operating costs, r
Slide 7: Natural Gas Marketing and Diversification
2024 OUTLOOK NATURAL GAS MARKETING AND DIVERSIFICATION(1) 2024E NATURAL GAS MARKET EXPOSURE MARKETING HIGHLIGHTS ▪ Diversified portfolio engaged in physical and financial North American markets Future West Coast ▪ Substantial firm transportation away from AECO into Dawn to capitalize on LNG Projects
Slide 8: Liquids Marketing
LIQUIDS MARKETING BIRCHCLIFF’S LPG DIVERSIFICATION PROVIDES EXPOSURE TO PREMIUM FAR EAST INDEX PRICING PROPANE (C3) BIRCHCLIFF PRODUCTION JAPAN/KOREA C2+ ▪ Birchcliff currently markets a portion of its propane at AltaGas’ (FEI) PRICED C3+ PRINCE RUPERT Ridley Island Propane Export Terminal in Britis
Slide 9: Five-Year Outlook
FIVE-YEAR OUTLOOK(1) DISCIPLINED PRODUCTION GROWTH AND CAPITAL INVESTMENT ENHANCES PROFITABILITY MAINTAIN STRONG DELIVER STABLE FULLY UTILIZE EXISTING KEY THEMES: BALANCE SHEET SHAREHOLDER RETURNS INFRASTRUCTURE F&D Capital Spending: $500 90,000 2024E – 2026E: $250 – $300 million 87,500 2027E – 2028
Slide 10: Focused on Stable Shareholder Returns
FOCUSED ON STABLE SHAREHOLDER RETURNS SIGNIFICANT COMMON SHARE DIVIDENDS DECLARED SINCE Q1 2017 CUMULATIVE COMMON SHARE DIVIDENDS(1) $500 $450 Over $460 million in common share $400 dividends(1) declared since Q1 2017 $350 $300 Focused on maintaining a strong balance sheet with an annual base divide
Slide 11: 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 12: 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 optimizati
Slide 13: Large Multi-Interval Land Position
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LARGE MULTI-INTERVAL LAND POSITION AUGUST 2024 13
Slide 14: Upper and Lower Stack Development Opportunities
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY 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 and high Young’s Modulus ▪ Exc
Slide 15: 2024 Capital Program
2024 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY MAJOR THEMES 2024 POUCE COUPE & GORDONDALE 2024 Capital Program Major Themes PAD LOCATIONS ▪ The program is focused on locations with high rate-of-return, attractive 2024 Program paybacks and strong capital efficiencies. 2025 Pre-spend ▪ Level-loaded p
Slide 16: 2024 Natural Gas Pads: Exceeding Expectations
2024 NATURAL GAS PADS: EXCEEDING EXPECTATIONS HIGH-RATE POUCE AND LIQUIDS-RICH GORDONDALE PADS VS. TIER 0 CAPPED TYPE CURVE(1) 04-30 Avg Cumulative Raw Gas Rate (MMcf) 2024 Avg Raw Gas Rate (Mcf/d) 04-30 Avg 2024 Avg 02-27 Avg 16-17 Avg 16-17 Avg Deloitte Tier 0 Capped 02-27 Avg Deloitte Tier 0 Capp
Slide 17: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW Q2 2024 average production of 55,394 boe/d(1), with a natural gas weighting of 91%. Pads brought onstream in 1H 2024 are exceeding internal estimates. Proven asset in development phase, with large, low-risk multi-decade drilling inventory.
Slide 18: 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) $5.00 230 257 284 314 2500 NPV10 ($MM)
Slide 19: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW Q2 2024 average production of 22,891 boe/d(1), with a liquids weighting of 38%. Low decline base production requires less incremental wells to keep infrastructure full. Strategic infrastructure with deep-cut liquids recovery and blending fa
Slide 20: 2024 Light Oil Pad: Strong Production
2024 LIGHT OIL PAD: STRONG PRODUCTION GORDONDALE 1-10 PAD VS. HALO OIL TYPE CURVE(1) 01-10 Avg Halo Oil Type Curve Cumulative Raw HCL Rate (Mbbl) Raw HCL Rate (bbls/d) 01-10 Avg Halo Oil Type Curve Producing days Producing days 01-10 (4-well) Pad Wells: IP 30(2) Wells: IP 60(2) Average per well prod
Slide 21: 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 (%) WTI (US$/bbl) 450 $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 22: 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 23: Canadian West Coast LNG Opportunity
CANADIAN WEST COAST LNG OPPORTUNITY(1) WESTERN CANADIAN LNG LANDSCAPE Canada West Coast & US LNG Capacity Ksi Lisims LNG (Floating) 12 MTPA (1.7 Bcf/d) 32 Environmental Assessment (“EA”) Phase 30 United States Incremental 28 LNG Canada Phase 2 Cedar LNG (Floating) 26 3 MTPA (0.4 Bcf/d) Positive Fina
Slide 24: Birchcliff's Active Role in Supplying the World with LNG
CANADIAN WEST COAST LNG OPPORTUNITY BIRCHCLIFF’S ACTIVE ROLE IN SUPPLYING THE WORLD WITH LNG Rockies LNG is collaborating with the Nisga’a Nation, a modern treaty Nation in British Columbia, and Western LNG, an experienced LNG developer, to develop the 12 Source: Canadian Energy Centre, Ksi Lisims L
Slide 25: Corporate Responsibility: Focus on ESG
CORPORATE RESPONSIBILITY FOCUS ON ESG SOCIAL Major supporter of STARS Air Ambulance and the United Way of Calgary, raising more than $4 million for the organizations. In 2023, Birchcliff participated in over 30 engagement sessions with local indigenous communities, invested approximately $50,000 in
Slide 26: Appendix
BIRCHCLIFF ENERGY APPENDIX AUGUST 2024 26
Slide 27: 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 75,000 – 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 28: 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 Focused on converting deep $7,000 900,000 1P NPV10 inventory of 1P and 2P reserves 2P NPV10 to PDP reser
Slide 29: Historical Profitability
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 30: 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 31: 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 32: 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 Jordon Cheung Landon Poffenroth Drilling Manager Montney Asset Manager SPIRIT RIVER OFFICE Jess
Slide 33: Advisories: Definitions
ADVISORIES DEFINITIONS “Deloitte” means Deloitte, independent qualified reserves evaluator. “Gordondale Gas Plant” means the deep-cut gas processing facility owned by AltaGas located in the Gordondale area of Alberta. “COGE Handbook” means the Canadian Oil and Gas Evaluation Handbook maintained by t
Slide 34: 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 35: Advisories
ADVISORIES Birchcliff has disclosed in this presentation forecasts of adjusted funds flow and free funds flow for 2024, which are forward-looking non-GAAP financial measures. The equivalent historical non-GAAP financial measures are adjusted funds flow and free funds flow for the twelve months ended
Slide 36: Advisories
ADVISORIES Net Asset Value Per Common Share Birchcliff calculates “net asset value per common share” as the net asset value in each category of reserves divided by the aggregate of the basic common shares outstanding and in-the money dilutive common shares attributable to stock options and performan
Slide 37: Advisories
ADVISORIES There are numerous uncertainties inherent in estimating quantities of oil, natural gas and NGLs reserves and the future net revenue attributed to such reserves. The reserves and associated future net revenue information set forth in this presentation are estimates only. In general, estima
Slide 38: Advisories: Potential Future Drilling Locations
ADVISORIES POTENTIAL FUTURE DRILLING LOCATIONS This presentation discloses potential net future horizontal drilling locations, specifically: 703 potential net future horizontal drilling locations to which proved plus probable reserves have been attributed by Deloitte. Proved plus probable locations
Slide 39: Advisories
ADVISORIES By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward‐looking statements. Accordingly, readers are cautioned not to place undue relian
Slide 40: Advisories
ADVISORIES With respect to the forward‐looking statements contained in this presentation, assumptions have been made regarding, among other things: prevailing and future commodity prices and differentials, exchange rates, interest rates, inflation rates, royalty rates and tax rates; the state of the
Slide 41: Advisories
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: general economic, market and business conditions which wil
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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