Advantage Energy Ltd · TSX:AAV
Advantage Energy — Investor Presentation (October 2024)
39 slides from Advantage Energy's investor presentation, October 2024
Slide 1: A Progressive Montney Producer for the New Energy Market
A Progressive Montney Producer for the New Energy Market Investor Presentation October 2024
Slide 2: Advantage Corporate Highlights
Advantage Corporate Highlights Market Overview AB AAV Lands Montney-Focused Producer GORDONDALE AAV Facilities Market Capitalization: $1.5 b Decades of top-tier inventory Enterprise Value: $2.2 b Gas processing capacity of 500 mmcf/d Net Debt(1): $0.6 b(2) (Advantage only) PROGRESS rising to over 60
Slide 3: Corporate Strategy – Building on Our Track Record of Per Share Growth
Corporate Strategy – Building on Our Track Record of Per Share Growth Performance Evolving Competitively ~10% compound annual growth Entropy Inc. - (long-term) Modular Carbon Capture and StorageTM Prolific, predictable well productivity Increasing liquids exposure Bought back 37.7 m shares and retur
Slide 4: Three-Year Strategic Plan: Continued Strong Execution
Three-Year Strategic Plan: Continued Strong Execution Net Capital Expenditures (1)(2) Production Range (2) 350 85,000 Reduced $35 million since 300 80,000 June 2024 250 75,000 200 70,000 boe/d Millions 150 65,000 100 60,000 50 55,000 0 50,000 2023 2024 2025 2023 2024 2025 Glacier Valhalla Progress W
Slide 5: Three-Year Strategic Plan Augmented by Strategic Acquisition
Three-Year Strategic Plan Augmented by Strategic Acquisition(1) Net Capital Expenditures (2)(3) Production Range (3) Reduced by $35 million $350350 $350 Standalone since Acquisition was 85,000 Standalone announced Pro-forma Includes activity Pro-forma deferrals and $300 300 $300 Range economic curta
Slide 6: Acquisition Synergies Driving Lower Capital and Higher AFF
Acquisition Synergies Driving Lower Capital and Higher AFF(1) $100 MM Capital spending reductions in 2026/27 Indefinite deferral of Progress Phase 2 expansion Capital spending reductions through year-end 2025 $16 MM $4.4 million reduction to date Increase in cash flow through year-end 2025 >
Slide 7: Glacier Core: World-Class Free Cash Flow Engine
Glacier Core: World-Class Free Cash Flow(1) Engine Glacier Production Forecast2 Net Capital Expenditures1,4 & FCF1 Free Cash Actuals Net Operating Income1,2 Growth Net Capital Expenditures [MM$]1,2 Flow1 Base Cumulative Free Cash Flow [MM$]1,2 Engine Production boe/d3 5-21: On $230MM+ production 02-
Slide 8: Wembley/Pipestone: Premium Oil-Weighted Asset With Room to Run
Wembley/Pipestone: Premium Oil-Weighted Asset With Room to Run Wembley Production Forecast2 Net Capital Expenditures1 & FCF1 Actuals Net Operating Income1,2 Growth Net Capital Expenditures [MM$]1,2 Base Cumulative Free Cash Flow [MM$]1,2 $60MM+ Production boe/d3 04-22: On production 2023 2024 2025 2
Slide 9: Progress/Valhalla: Integrated, Prolific Liquids-Rich Assets
Progress/Valhalla: Integrated, Prolific Liquids-Rich Assets Progress/Valhalla Production Forecast2 Net Capital Expenditures1,4 & FCF1 Actuals Net Operating Income1,2 2025 Gas Plant Growth Net Capital Expenditures [MM$]1,2 AAV Pipelines Base Cumulative Free Cash Flow [MM$]1,2 Sets Stage For Productio
Slide 10: Charlie Lake – First Drilling Campaign Underway
Charlie Lake – First Drilling Campaign Underway AAV Pipelines • Inventory of ‘ready to licence’ locations prioritized 24/25 locations Charlie Lake Wells • High-grading areas with development and delineation 14-10-80-9W6 IP30 1,030 bbls/d success 15-20 Pad Q1/25 Spud • Optimize production capacity at
Slide 11: Compelling Economics Across Multiple Assets
Compelling Economics Across Multiple Assets AAV Tier 1 Half Cycle Production Generic Type Wells3 Type Curve4 Generic IRR1,4 Generic Payout1,4 Generic Type Well Capital Liquids Oil & C5+ (%) (%) Legend (%) (months) ($MM)3 Glacier D1 Gas 89% 14 $6.8 2% 1% Glacier D4 Gas 90% 13 $6.8 6% 3% mcf/day Glaci
Slide 12: Since 2020 - All Wells Have Ranged From 2 to 14 Months Payout
Since 2020 - All Wells Have Ranged From 2 to 14 Months Payout1 2020-2023 Well Payout 1 Performance 2H 2020 average 1x payout: 8 mo 2021 average 2x payout: 19 mo 1x payout: 6 mo 2x payout: 11 mo 2022 average 40 1x payout: 7 mo 2023 average 30 1x payout: 11 mo 20 10 0 25 20 15 10 5 0 1 2 3 4 5 6 7 8 9
Slide 13: Advantage Montney Gas Wells Dominated 2023 Alberta Results
Advantage Montney Gas Wells Dominated 2023 Alberta Results Calendar-Day Natural Gas Rate (Mcf/d) IP30 Natural Gas Rate (Mcf/d) IP30/100m (mcf/d/100m) 20,000 IP90 Natural Gas Rate (Mcf/d) 800 18,000 IP30/m (mcf/d/100m) 700 16,000 600 14,000 500 12,000 10,000 400 8,000 300 6,000 200 4,000 100 2,000 0
Slide 14: Deep Inventory of Gas, NGLs and Oil
Deep Inventory of Gas, NGLs and Oil Deep Inventory (1)(2) Tier 1 Inventory – 20 Years | Booked Inventory – 10 Years | Unbooked Inventory - ~50 Years 8 Total CHARLIE Lake 21 LAKE rlie 2024 Budget ha C l Drill Count ta To 51 y2 GLACIER ble Gla PROGRESS Wem cier 8 35 Total VALHALLA a 402 Total all alh
Slide 15: Tier Promotion – Glacier D1 Example
Tier Promotion – Glacier D1 Example 2020 D1 Inventory Map 2024 D1 Inventory Map West Glacier Legacy Well: IP 30 1.4 mmcf/d 2020 Well: IP 30 9.5 mmcf/d East Glacier Legacy Well: IP 30 1.8 mmcf/d 2022 Well: IP 30 15.4 mmcf/d South Glacier Legacy Well: IP 30 3.3 mmcf/d 2024 Well: IP 30 16.9 mmcf/d 2024
Slide 16: Well Execution Driving Increased Tier 1 Inventory
Well Execution Driving Increased Tier 1 Inventory Glacier Tier 1 Inventory Valhalla Tier 1 Inventory Wembley Tier 1 Inventory 47% Inventory Growth 26% Inventory Growth 69% Inventory Growth 2020 Inventory Tier 1 Wells Tier 1 2024 Total 2020 Inventory Tier 1 Wells Tier 1 2024 Total 2020 Inventory Tier
Slide 17: Commodity Marketing Highlights
Commodity Marketing Highlights Revenue Exposure by Q4-24 Q1-25 Q2-25 Q3-25 Q4-25 Q1-26 27 mmcf/d of TC Market Mainline to Emerson Fixed Price 37% 38% 34% 35% 36% 34% until Nov-32 Aeco 7% 20% 26% 23% 22% 29% Empress 20% 18% 22% 23% 19% 16% Emerson 12% 11% 6% 7% 7% 6% Dawn 7% 2% 2% 2% 5% 6% U.S. Midwe
Slide 18: Commodity Hedging | De-risking our Net Debt Target
Commodity Hedging | De-risking our Net Debt Target Targeting hedging levels between 30% and 50% of production volumes (liquids + gas) Current Natural Gas Hedging (MMcf/d) (1) Current Crude Oil Hedging (bbl/d) (1) 160 40% 7,000 70% 140 35% 6,000 60% 120 30% 5,000 50% 100 25% 4,000 40% 80 20% $3.39 $7
Slide 19: Focused on Environmental, Safety and Stakeholder Stewardship
Focused on Environmental, Safety and Stakeholder Stewardship Industry Peers Emissions Intensity Environmental Highlights 6% increase in emissions 8% decrease in emission $2.2 million spent on abandonment and intensity(4) reclamation 1% increase in methane 14% reduction in sites under active manageme
Slide 20: Entropy: Commercial Carbon Capture and Storage, Today
ENTROPY: COMMERCIAL CARBON CAPTURE AND STORAGE, TODAY Clean-Tech(1) Pure Play Technology • Dedicated, full-service industrial • Exclusive ownership of world- CCS company leading solvent • Proprietary, innovative • Innovative process technology and commercial enhancement technologies structure • Deca
Slide 21: Entropy Inc. – Uniquely Positioned in a Global Market
ENTROPY INC. – UNIQUELY POSITIONED IN A GLOBAL MARKET Leading the way on post-combustion carbon capture Massive Market Opportunity Pure-Play, Full Scope CCS Developer TECH NCE NO CCS: IEA Net Zero 2050 Pathway1 • Advanced carbon capture IE R LO 7,600 Mtpa technology PE GY • Permitting/Licensing EX C
Slide 22: Entropy Establishing Leading Position as an Integrated Power Producer
ENTROPY ESTABLISHING LEADING POSITION AS AN INTEGRATED POWER PRODUCER Combining affordable, reliable electricity with independently funded CCS Affordable Baseload (Always-On) Power1 Baseload Power Carbon Intensity Comparison2,4 Entropy is constructing baseload power using 1250 Life Cycle Analysis: C
Slide 23: Glacier 2: World's First Commercial Post-Combustion CCS
GLACIER 2: WORLD’S FIRST COMMERCIAL POST-COMBUSTION CCS1 Introducing Entropy’s first investment into the integrated power generation market PHASE 2 PROJECT HIGHLIGHTS PROJECT SCOPE 1. Install post-combustion carbon capture on remaining Capture capacity: 160 ktpa compressors (9) at the Glacier Gas Pr
Slide 24: Glacier Phase 2: Onstream Q2 2026
GLACIER PHASE 2: ONSTREAM Q2 2026 Implementing the world’s first decarbonized base-load power (Onstream 2026) Phase 1A & 1B Absorber Towers Phase 2 Compressors Phase 2 Absorber Tower Coolers Phase 2 Absorber Skid Phase 2 Phase 1 & 2 T130 Turbine Phase 2 Disposal Blower Compressor Phase 2 Regeneratio
Slide 25: Global Scale Projects – Advancing
GLOBAL SCALE PROJECTS – ADVANCING Jurisdictions Industries Scoping/Pre-Feed (26 Projects) Gas processing, steel, methanol, ethanol, power, data centers FEED (7 Projects) Applications iCCS Recip iCCS Thermal iCCS Turbine LOI (2 Project) Project Pipeline (KTPA) 2000 FID (3) 1000 Operating (2) 0 FID LO
Slide 26: Path to Value Creation
PATH TO VALUE CREATION Path to IPO(4) and value recognition for AAV involves progressing 2-3 projects to Commercial Operations and demonstrating a robust pipeline of opportunities at earlier stages of development. Project Value Evolution MOU1 Exclusivity LOI2 FID3 Commercial IPO Ready • Abundant res
Slide 27: Appendix
Financial Discipline Operationally Nimble Focus on Profitability APPENDIX
Slide 28: Advantage Montney Assets – Multizone Oil, Liquids and Gas
Advantage Montney Assets – Multizone Oil, Liquids and Gas Throughout Glacier Valhalla Progress Wembley Conroy, BC Doig Upper Montney D4 Middle Montney 300m D3 D2 D1 2024 Targets Lower Advantage Operated HZ Montney Belloy Offset Operator HZ 28
Slide 29: Advisory
Advisory Forward-Looking Information and Statements The information in this presentation contains certain forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of applicable securities laws relating to the Corporation's plans and o
Slide 30: Advisory (continued)
Advisory (continued) This presentation contains additional forward-looking statements which are estimates of Advantage's 2024 and 2025 net capital expenditures, annual production, net operating income, free cash flow, net debt to adjusted funds flow, AFF per share accretion, operating netbacks and r
Slide 31: Advisory (continued)
Advisory (continued) The future acquisition by the Corporation of the Corporation's shares pursuant to a share buyback program, if any, and the level thereof is uncertain. Any decision to implement a share buyback program or acquire shares of the Corporation will be subject to the discretion of the
Slide 32: Advisory (continued)
Advisory (continued) Oil and Gas Metrics This presentation contains a number of oil and gas and finance metrics, including "PDP reserve additions replaced", "PDP F&D", "recycle ratio", "payout", "internal rate of return (IRR)", "operating netback", "IP30", "IP30/m" "IP90" and "IP180" which do not ha
Slide 33: Advisory (continued)
Advisory (continued) Net Capital Expenditures Net capital expenditures include total capital expenditures related to property, plant and equipment, exploration and evaluation assets and intangible assets. Management considers this measure reflective of actual capital activity for the period as it ex
Slide 34: Advisory (continued)
Advisory (continued) Reinvestment Ratio Reinvestment ratio is calculated by dividing net capital expenditures by adjusted funds flow. Advantage uses reinvestment ratio as an indicator of the efficiency and liquidity of Advantage's business by measuring its cash available after net capital expenditur
Slide 35: Advisory (continued)
Advisory (continued) Supplementary Financial Measures Internal Rate of Return (“IRR”) Internal rate of return means the rate of return of a well or the discount rate required to arrive at a NPV equal to zero. Reserve Additions Replaced Reserve additions replaced is calculated by dividing reserves ne
Slide 36: Advisory (continued)
Advisory (continued) This presentation discloses drilling inventory in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Booked locations include both proved locations and probable locations that are derived from the Sproule Associates Limited (Glacier, P
Slide 37: Advisory (continued)
Advisory (continued) Market, Independent Third Party and Industry Data Certain market, independent third party and industry data contained in this presentation is based upon information from government or other independent industry publications and reports or based on estimates derived from such pub
Slide 38: Advisory (continued)
Advisory (continued) Abbreviations The following abbreviations used in this presentation have the meanings set forth below. b billion bbl barrel bbl/d barrel per day bbls/d barrels per day bbls/mmcf barrels per million cubic feet Bcf billion cubic feet boe barrels of oil equivalent of natural gas, o
Slide 39: Advantage Contact Information
Advantage Contact Information Investor Relations 1.866.393.0393 ir@advantageog.com www.advantageog.com TSX Listed Common shares: AAV Debentures 5%: AAV.DB Advantage Energy Ltd. Suite 2200, 440 – 2nd Avenue SW Calgary, Alberta T2P 5E9 Advantage Glacier Gas Plant Main: 403.718.8000 Facsimile: 403.718.
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