Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (October 2022)
33 slides from Journey Energy's investor presentation, October 2022
Slide 1: Corporate Presentation
JOURNEY Corporate Presentation TSX: JOY OTCQX: JRNGF @AlexVergeJOY October, 2022
Slide 2: Journey Today Is…
Journey Today Is… Undergoing a transformational acquisition to become: A sustainably growing free cash flow generating business Unlocking value in under capitalized low decline assets Under 20% hedged Uninterested in: Anything that does not create or preserve stakeholder value 2
Slide 3: October 2022
October 2022 9,590 boe/d (Q2)(1) 14,200 – 14,600 boe/d (2022 Pro Forma Exit) 55% liquids Hedges; 10,000 GJ/d of natural gas; for 2H 2022 at $7.28/GJ 5,000 GJ/d of natural gas; for Q4 2022 & Q1 2023 at $7.18/GJ 500 BBL/d of MSW oil; for Q4 2022 & Q1 2023 at $112 CDN/BBL Strategic relationship with AI
Slide 4: Corporate Per Share Growth Growth Returns
Corporate Per Share Growth Growth Returns Accelerating in 2022 2019 2020 2021 2022 Operating Highlights 2023 First Look Actual Actual Actual Forecast(1) Production Average (boe/d) 9,372 8,379 8,004 9,800 – 10,400 14,500 – 15,000 Oil and NGLs (%) 48% 46% 47% 49% 55% Corporate Decline Rate (%) 16% 17%
Slide 5: Pro Forma 2023 Adjusted Funds Flow Sensitivity
Pro Forma 2023 Adjusted Funds Flow Sensitivity WTI ($USD/BBL) 2023 Adjusted Funds Flow ($MM) $65.00 $70.00 $75.00 $80.00 $ 85.00 $ 90.00 $ 95.00 $100.00 $105.00 $4.85 94.9 108.7 122.5 136.3 149.9 163.6 177.0 190.4 203.7 $5.10 97.6 111.4 125.3 139.0 152.6 166.3 179.7 193.1 206.4 $5.35 100.3 114.1 128
Slide 6: 3 Consultants Reserves Average Value Pricing Improving
3 ConsultantsReserves AverageValue Pricing Improving 2022 Forecast Reserve report pricing for July adds significantly to end of 2021 reserve value 6
Slide 7: Pro Forma Reserves Summary
November Stable Base1, -–2020 2022 2021YE Journey YEReserves Reserves Pro Summary Forma Summary Reserves Company Gross (WI) Reserves(1) / Value (July 1, 2022 3 Consultants Pricing) Oil Gas NGLs NPV10 ($million) Reserve Category Mboe RLI FDC ($ million)(2) (Mbbl) (Bcf) (Mbbl) Before Tax (1) Proved De
Slide 8: Top Tier Growth in Net Asset Value Per Share
Top Tier Growth in Net Asset Value Per Share $15.90/share P+P Over 100% annual increase in Net Asset Value per Share over the past two years $9.04/share $8.19/share P+PDP P+P $7.05/share PDP $3.86/share $3.77/share P+PDP P+P $2.85/share PDP $0.86/share P+PDP -$0.05/share PDP Period YE 2020 YE 2021 P
Slide 9: GLJ Forecasted Edmonton Light Value
Reserves GLJ Forecasted Edmonton Light Value Price Reversing Trend Since January 2021 140.00 2015 130.00 120.00 2022 Forecast 2017 110.00 2020 MSW Price ($CDN/bbl) 100.00 07/2022 2023 Budget 90.00 2022 2021 80.00 2021 70.00 60.00 50.00 40.00 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 203
Slide 10: New Acquisition Positions Journey Favorably in the Market
New Acquisition Positions Journey Favorably in the Market (Greater Scale, Increased Oil Weighting and Lower Declines) Increase pro forma production 45% ; 14,200 - 14,600 boe/d for exit 2022 High value waterflood/EOR oil pools enhance netbacks and sustainability Increases pro forma oil production by
Slide 11: Attractive Acquisition Financing
Attractive Acquisition Financing $140,000,000 purchase price (May 1 Effective) $30,000,000 cash flow (May 1 – Close) $45,000,000 vendor take back (VTB) financing (10% interest) Monthly WTI Payment Price $4,000,000/month >US$100/Bbl Price dependent $3,000,000/month US$85 – US$100/Bbl Payment structur
Slide 12: Acquisition Overview; Steady Declines, Bias to Upward Reserve Revisions
Acquisition Overview; Steady Declines, Bias to Upward Reserve Revisions Ante Creek Gross Production Vs McDaniel Forecast Journey and Vendor AB Assets W.I. Oil Production 1600 12,000 Acquired assets add very 1400 Both the Ante Creek and Medicine Hat properties have stable, low decline oil 10,000 prod
Slide 13: Medicine Hat Glauconite C Pool (72.3% working interest)
Medicine Hat Glauconite C Pool (72.3% working interest) Medicine Hat EOR Project Summary Medicine Hat Glauc Pool Overview "C" Current Gross Oil Production (bbl/d) 2,710 Oil Quality (API°) 16 Cumulative Production (MMbbl) 39.2 (1) OOIP (MMbbl) 288 305.0 Acquired Lands Current Recovery (%) 14% 13% Pro
Slide 14: Ante Creek Montney Pool (100% working interest)
Ante Creek Montney Pool (100% working interest) Acquired Lands Producing wells Injection wells Montney producers Ante Creek Waterflood Project Summary Ante Creek Upper Pool Overview Montney Current Gross Oil Production (bbl/d) 855 Oil Quality (API°) 35 Cumulative Production (MMbbl) 6.7 OOIP (MMBbl)
Slide 15: How to make a Low Decline even LOWER
How to make a Low Decline even LOWER 763 MM bbl on waterflood 40 MM bbl conventional 260 MM bbl to 40 MM to JOY net barrels of be flooded be delineated and flooded DOOIP by category 1.1 Billion net bbl of DOOIP 763 MM bbl 340 MM bbl convert 260 MM bbl on waterflood conventional conventional to be lo
Slide 16: Reserves Strong Base! Even Stronger Value
Reserves Strong Base! Even Stronger Value Future Development Potential (As at October 31, 2022) Journey’s $270 million of P+P future development capital (FDC) is only $3.40/P+P boe 60% of Journey’s identified capital projects remain unbooked Journey’s P+P FDC adds $400 million of NPV@10%; this trans
Slide 17: Post Acquisition Extensive Drilling Inventory; in Existing Pools!
Post Acquisition Extensive Drilling Inventory; in Existing Pools! Journey has identified 283 (244 net) horizontal drilling opportunities Drilling Locations(1) % Booked(2) in Total(1) Reserve Report Region Gross Net South 150 137 40% Central 133 107 37% Total 283 244 39% Unbooked Projects $373MM in C
Slide 18: Value of Inventory Appreciates with Pricing
Value of Inventory Appreciates with Pricing AECO $4.00/MMbtu (1) Based upon 2022 drilling rates 18
Slide 19: Journey Has Over 15 Years of Drilling Inventory, Let's Get After It!
Journey Has Over 15 Years of Drilling Inventory, Let’s Get After It! (1) (1) Based upon 2022 drilling rates 19
Slide 20: Countess Power; New for 2023 15.5 MW Power Project
Countess Power (on stream Q4 2020) New for 2023; 15.5 MW Power Project 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
Slide 21: But Wait! There's Still More To Come
But Wait! There’s Still More To Come 1.1 Billion net barrels of DOOIP 3.0% of booked recovery 85.0% of oil left behind Ultimate 12.0% recovered to date Recovery 15.0% ultimate recovery Oil left behind becomes Target Resource Journey can double our P+P oil reserves by recovering 3.3% more of the oil
Slide 22: In 2023, Journey Could…
In 2023, Journey Could… Pay off almost all of our debt Grow production >5% Adding a power project with NPV of $40-50 million… … resulting in a material increase in Net Asset Value per Share … at $85 US/bbl WTI pricing 22
Slide 23: 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 24: Directors – Strong Governance
Directors – Strong Governance Craig Hansen Chairman of the Board – Independent businessman, Former President and Chief Executive Officer of Zargon Oil & Gas Ltd. and its predecessor, Zargon Energy Trust. Thomas Mullane Reserves Committee Chair – Independent businessman and former President and Chief
Slide 25: Appendix
Appendix 25
Slide 26: 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+ 26
Slide 27: 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 28: Crystal Viking - 2 Wells Drilled Q2 2022
Crystal Viking - 2 Wells Drilled 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 book
Slide 29: 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. We reuse 99.9% of our wat
Slide 30: 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 31: 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 32: 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 33: 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
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