Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Investor Presentation (June 2017)
24 slides from Tamarack Valley Energy's investor presentation, June 2017
Slide 1: Poised for Predictable & Sustainable Per Share Growth
Poised for Predictable & Sustainable Per Share Growth JUNE 2017 TVE : TSX www.tamarackvalley.ca 1
Slide 2: Forward Looking Information
Forward Looking Information Certain information included in this presentation constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”,
Slide 3: Tamarack Valley – Strategy & Guiding Principles
Tamarack Valley – Strategy & Guiding Principles Strategy: Principles: • Growth company with a long term focus • Full cycle rate of return focused • Multi-play strategy ensures risk • Internal processes and skills to management through diversity grow to a much larger size • Own and operate infrastruc
Slide 4: Record First Quarter with Viking Integrated
Record First Quarter with Viking Integrated Q1 Best Quarter of Delivery Yet: Second Quarter: • Integrated operations and increased • Veteran battery expansion production to 20,000 boe/d (April avg.) • 1,300 to 5,000 bopd capacity • Attained the best capital efficiency in • Added injection facilities
Slide 5: Historical Capital Efficiency
Historical Capital Efficiency 350 Total CAPEX 289 300 % of D,C&E 250 CAPEX ($millions) 200 165 150 141 107 88% 100 43% 58 50 72% 31% 37% 0 2013 2014 2015 2016 2017 Corporate Capital Efficiency* ($000s/boepd) 2013 2014 2015 2016 To April 2017 Q4 to Q4 production $21,225 $51,590 $21,845 $26,740 $19,50
Slide 6: First Quarter Update – at 20,000 boe/d
First Quarter Update – at 20,000 boe/d April 2017 Production* BOE/D % Liquids Cardium oil 8,570 54% ALBERTA Viking oil 8,220 63% Penny 1,280 71% SASKATCHEWAN Other 1,930 37% VIKING OIL Total 20,000 58% * Based on field estimates CARDIUM OIL Redwater Lloydminster Edmonton Q1/17 Capital Activity Drill
Slide 7: Tamarack Corporate Snapshot – TVE : TSX
Tamarack Corporate Snapshot – TVE : TSX Operational 2017 Guidance First Half 2017 Guidance Average production (boe/d) 19,000 – 20,000 Average production (boe/d) 18,000 – 18,500 % Liquids average production 55 – 60 % Liquids average production 55 - 60 Exit Q4 avg. production (boe/d) 20,000 – 21,000 C
Slide 8: Sustainability and 2018 Growth Sensitivities
Sustainability and 2018 Growth Sensitivities Maintenance Scenario Growth Scenario Oil (US$WTI) @ $40.00 @ $50.00 @ $50.00 @ $50.00 FX (Cdn$/US$) $0.74 $0.74 $0.74 $0.74 Oil (Cdn$WTI) $54.88 $62.77 $62.77 $62.77 AECO (Cdn$/GJ) $2.75 $2.75 $2.75 $2.75 Funds flow netback ($/boe) $19.45 $22.06 $22.06 $2
Slide 9: Current Hedges as at May 31, 2017
Current Hedges as at May 31, 2017 Term Hedge Type Volume Cdn Pricing January 1, 2017 to March 31, 2017 WTI fixed price 3,000 bbls/d Cdn $63.12/bbl April 1, 2017 to June 30, 2017 WTI fixed price 3,000 bbls/d Cdn $63.88/bbl 2017 average July 1, 2017 to September 30, 2017 WTI fixed price 2,700 bbls/d C
Slide 10: Wilson Creek / Alder Flats Cardium
Wilson Creek / Alder Flats Cardium Closed PWT 8,000 acquisition 7,000 Closed Suncor acquisition 6,000 Production (boe/d) 5,000 4,000 3,000 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2014 2015 2016 Q1 2017 Operating netback ($/boe) $43.32 $21.58 $18.90 $24.59 • Drill 8 C
Slide 11: Veteran / Milton Viking Oil
Veteran / Milton Viking Oil 7,000 6,000 Closed Spur 5,000 Production (boe/d) 4,000 3,000 Redwater Viking 2,000 1,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 • Drill 44 ERH Viking oil wells in Milton and 2014 2015 2016 Q1 2017 Veteran in H2/17 Operating netback ($/boe) $57.74 $25
Slide 12: 2017 Veteran Drilling Update
2017 Veteran Drilling Update 2017 Horizontal Wells Q1/17 drills 120 H2/17 drills Average 100 Original TC Risked 90% 80 bbl/d 60 40 Cum prod’n @ 90 days = 5,000 20 bbls of oil 0 1 21 41 61 81 101 Days on Production Pre 2017 Horizontal Wells* 150 125 100 bbl/d 75 50 25 0 1 21 41 61 81 101 121 141 161
Slide 13: Viking Inventory Expansion – A Great Start
Viking Inventory Expansion – A Great Start Number Locations (Gross) Total Lateral Length (km) 700 52 666 700 647 (35) 48 639 (16) 93 94 (75) 600 600 +9% +35% 506 (34) 500 (12) 37 500 400 400 300 300 200 200 100 100 72 other Viking locations unchanged 50 km other Viking locations unchanged 0 0 Acquis
Slide 14: Other Core Areas
Other Core Areas Wilson Creek Mannville Liquids Rich Gas Hatton Heavy Oil 600 800 700 500 Production (boe/d) 600 Production (boe/d) 400 500 300 400 300 200 200 100 100 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2014 2015 2016 2017 2014 2015 2016 2017 2016 Q1 20
Slide 15: Acquisition Lookbacks - Significant Value Added
Acquisition Lookbacks - Significant Value Added Wilson Creek / Alder Flats Cardium* 700 • As promised, TVE will be transparent and 500 Return = 2.4X provide lookbacks on all acquisitions 300 • Strategy of acquire and exploit is working $million 100 generating returns of 2.4 – 6.0 times -100 investme
Slide 16: Summary
Summary Lever Off Strengths - Historical Operational Execution: • Delivered better than guided results on three major asset acquisitions over the past 3 years (Wilson Creek Cardium and Redwater Viking, Penny) • On our way to delivering better than guided results on Spur Viking acquisition • Strategi
Slide 17: Appendix
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Slide 18: 2017 Milton Drilling Update
2017 Milton Drilling Update Average Q1/17 drills 2017 Horizontal Wells Existing Type Curve H2/17 drills 200 TC Risked 85% 180 Well Count 160 140 120 BOE/d 100 80 60 40 20 0 1 21 41 61 81 Days on Production Pre 2017 Horizontal Wells 200 175 150 125 BOE/D 100 75 50 25 0 1 21 41 61 81 101 121 141 161 1
Slide 19: Wilson Creek 2016-17 2-mile Cardium Drills – 6 Wells
Wilson Creek 2016-17 2-mile Cardium Drills – 6 Wells 1000 Average 100/12-03-045-06W5/00 (115 Stages) 900 100/13-03-0450-6W5/00 (85 Stages) 800 700 600 bbl/d 500 Year 1 Average Cum Oil – 50,000 bbls 60 day Cum Oil – 16,000 bbls 400 IP90 - 250 bopd / 270 boe/d 300 200 100 0 1 21 41 61 81 101 121 141 1
Slide 20: Un-risked Half Cycle Economics – Q1/17
Un-risked Half Cycle Economics – Q1/17 Half Cycle Economics N. Hoosier/ Veteran Wilson Creek Wilson Creek Penny Alder Flats Mannville Gas Milton Viking 1.5 mile Cardium 2.0 mile Cardium Barons Higher GOR Cardium Wilson Creek / Alder Flats Viking Number of net locations* 449 180 55 52 32 47 28 1.5 ye
Slide 21: Quick Payback Drilling Inventory
Tamarack Quick Payback Drilling Inventory (<1.5 years) Mar 2017 1,400 Total Inventory Other (Hatton, Mannville) @ $60/bbl WTI Viking ERH >25% ROR 1,190 TVE has 1,200 Penny 1,237 Locations converted 88% of Cardium Spur’s inventory 1,063 GLJ 2P Booked locations to ERH (3/4 mile) Quick Payback Drilling
Slide 22: Building Per Share Growth While De-levering
Building Per Share Growth While De-levering Achieving Leverage-Neutral Production Per Share Growth 25,000 108.0 23,000 Leverage neutral prod’n per shareCompleted growth of 10% 2014 Majors began exiting WCSB Production per share (boe/d per million shares) Completed 106.0 21,000 and 186% prod’n growth
Slide 23: Financial Stats per BOE
Financial Stats per BOE 2016 Actuals 2017 Budget 2017 Outlook Q1 2017 Actuals Average pricing $43.32/bbl WTI $55.00/bbl WTI $50.50/bbl WTI Edm Par $51.69/bbl $64.47/bbl $63.25/bbl $64.69/bbl AECO (monthly index) $2.00/GJ $2.65/GJ $2.70/GJ $2.58/GJ $/boe Revenue 30.51 42.00 39.75 39.25 Royalties 2.32
Slide 24: Key 6 Month Objectives and Look-back
Key 6 Month Objectives and Look-back What we did in Objectives for What we said we would do Q3 2016 / Q4 2016… H1 2017 … Produced over 11,100 boe/d in H2/16, capital in- Average 18,500 – 19,000 boe/d H1/17 on $75 H2/16 prod’n average 9,800 – 10,500 boe/d on line with expectations; accelerated drilli
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