33 slides from Paramount Resources Ltd. Class A's investor presentation, August 2018
Slide 1: Corporate Presentation
Corporate Presentation August 2018
Slide 2: Advisories
Advisories • In the interest of providing information regarding Paramount Resources Ltd. ("Paramount", "PRL" or the "Company") and its future plans and operations, this presentation contains certain forward-looking information and statements. • The projections, estimates and forecasts contained in s
Slide 3: Corporate Overview
Corporate Overview • Founded in 1976; IPO in 1978; TSX: POU • Market Cap: ~$1.8 Bln (131.9 MM shares @$14.00/sh) • Insider ownership: ~47% • Pro Forma Net Debt: ~$684 MM (1) • Total land position ~3.0 million net acres including: • ~330,000 net Montney acres • ~230,000 net Duvernay acres • 376 MMBoe
Slide 4: Highlights
Highlights Transaction Highlights • May 2017 closed the sale of Valhalla assets for cash of ~$150 MM • August 2017 closed Apache Canada acquisition for ~$487 MM • September 2017 merged with Trilogy for 1 POU share for every 3.75 TET shares • July 6, 2018 closed the sale of Resthaven/Jayar assets for
Slide 5: Higher Sales & Stronger Balance Sheet
Higher Sales & Stronger Balance Sheet • Organically grew legacy Paramount production from ~11,000 Boe/d following the Musreau sale to ~37,000 Boe/d in October 2017 through the Karr development program • Returned to pre-disposition production levels in 14 months 5
Slide 6: Strategic Transactions
Strategic Transactions • ~$487 MM acquisition; funded with cash on hand • High quality Wapiti Montney acreage, liquids-rich Montney and Duvernay at Kaybob and lower decline, long-life assets in Central Alberta (including 183,000 net acres of fee simple lands) • Added ~39,000 Boe/d of production (26%
Slide 7: Diversified Montney and Duvernay Assets
Diversified Montney and Duvernay Assets Location Breakeven Breakeven 2021 Wellhead Production Stage of Asset Description Inventory WTI Oil NYMEX Gas Potential (Gross) Development (1) (2) (2) P+P | Total (1) US$/Bbl () US$/MMbtu () Liquids Bbl/d | Total Boe/d(3) 2018 – 2021 Focus Assets Karr Montney
Slide 8: Grande Prairie Snapshot
Grande Prairie Snapshot Operational Highlights 2018 Program: • Drill two five-well pads at Karr; complete 1 pad • Drill 23 wells; complete 6 wells at Wapiti • H1 2018 Sales: 27,938 Boe/d (50% liquids) Asset Summary • Resthaven/Jayar sold to Strath Resources Ltd. for ~$340 MM July 2018 • Focused on M
Slide 9: Karr Montney Asset Detail
Karr Montney Asset Detail (1) Operational Highlights • Wells on the 1-2 pad are drilled and completed; expected to produce Q3 2018 • Wells on the 4-24 pad are rig released and will be completed Q1 2019; expected to produce Q1 2019 • Average peak 30-day wellhead rate of 1,963 Boe/d (~60% condensate)
Slide 10: Karr Montney P+P Type-Well
Karr Montney P+P Type-Well (1) Karr West Unit Lateral Length = 3,000m Wellhead IP30 Boe/d 2,112 Proppant Loading = 1,565 lb/ft (2.3 t/m) Stages = 75 Wellhead IP30 Condensate % 67 Total Sales Gas Bcf 4.8 Total Sales Condensate MBbl 569 Total Sales Volume MBoe 1,428 DCET (multi-well pad) MM$ 12.8 Btax
Slide 11: Wapiti Montney Asset Detail
Wapiti Montney Asset Detail (1) Operational Highlights • 9-3 pad drilling is complete (total 11 wells); six wells are expected to be completed in Q4 2018 • Additional 12 wells to be drilled from 5-3 pad • Third party gas plant and infrastructure under construction with scheduled mid 2019 in-service
Slide 12: Wapiti Montney P+P Type-Well
Wapiti Montney P+P Type-Well (1) Wapiti Unit Wellhead IP30 Boe/d 2,159 Wellhead IP30 % 56 Condensate Total Sales Gas Bcf 4.9 Total Sales MBbl 500 Condensate Total Sales Volume MBoe 1,408 DCET (multi-well pad) MM$ 12.5 Btax NPV10 MM$ 7.9 Lateral Length = 3,000m Proppant Loading = 1,676 lb/ft (2.5 t/m
Slide 13: Kaybob Snapshot
Kaybob Snapshot (1) Operational Highlights • 8 of 17 planned Montney wells have been drilled and put on production • 9 of 14 planned Duvernay wells are rig released and expected to be on production in Q3 2018 • Evaluating gas re-routing projects to reduce operating costs • H1 2018 Sales: 40,678 Boe/
Slide 14: Kaybob Duvernay Asset Details
Kaybob Duvernay Asset Details (1) Operational Highlights • Kaybob Smoky 10-35 pad: 4 wells drilled and completed; expected to be brought on production Q3 2018 • Kaybob South 7-22 pad: 5 wells drilled and completed; currently producing on clean up • Special projects include fibre optics and micro-sei
Slide 15: Kaybob Duvernay P+P Type-Well
Kaybob Duvernay P+P Type-Well (1) Kaybob Smoky Unit Lateral Length = ~ 2,700m Wellhead IP30 Boe/d 1,877 Proppant Loading = 2,000 lb/ft (3.0 t/m) Wellhead IP30 Condensate % 69 Total Sales Gas Bcf 2.2 Total Sales Condensate MBbl 469 Total Sales Volume MBoe 929 DCET (multi-well pad) MM$ 11.5 Btax NPV10
Slide 16: Kaybob Montney Oil Development
Kaybob Montney Oil Development (1) Operational Highlights • 2018 activity: Eight of the 17 Montney horizontal wells planned are completed and on production • New well design incorporates a higher number of frac stages and increased proppant intensity Asset Potential • Discovered 2011 with ~150 wells
Slide 17: Kaybob Montney Oil P+P Type Well
(1) Kaybob Montney Oil P+P Type Well Kaybob Montney Unit Wellhead IP30 Boe/d 545 Wellhead IP30 Oil % 80 Total Sales Gas Bcf 0.6 Total Sales Oil/Condensate MBbl 154 Total Sales Volume MBoe 261 DCET (multi-well pad) MM$ 3.0 Btax NPV10 MM$ 2.2 Btax Return % 68 Payout Months 11 Completion Design Update
Slide 18: Central Alberta & Other Snapshot
Central Alberta & Other Snapshot (1) Operational Highlights 2018 Program: •5-29 hz Duvernay well completed at Willesden Green •2 of 3 hz Glauconite wells at Leafland drilled; one has been cased • New well at 02/13-5-39-5W5 had a peak rate of 532 Bbl/d (total producing days 384) • H1 2018 Sales: 20,8
Slide 19: Willesden Green
(1) Willesden Green Operational Highlights • Horizontal well at 5-29 has been completed and is expected to be brought on production Q3 2018 Asset Potential • Duvernay Shale Play • 59,686 acres of land (100% WI) • Drilled and completed 4 Hz Duvernay wells to date • 02/13-05 Cum Production to July 1,
Slide 20: 2018 Capital Program
2018 Capital Program • 2018 Capex ~$600 million (excluding acquisitions & divestitures) • Plan to drill ~70 development wells and complete ~42 of those wells 42 well completions represent ~11% of PRL’s P+P undeveloped locations (1) • Drilling services to be primarily provided by Paramount's wholly
Slide 21: Midstream & Marketing Strategy
Midstream & Marketing Strategy Midstream Portfolio Positioned for Growth Karr 06-18 • Takeaway capacity secured to manage Montney and Duvernay growth plan through 2021 • Owned and operated infrastructure coupled with 3rd party midstream provides balanced opex structure • Opportunities to increase 3r
Slide 22: Indicative Revenue/Boe
Indicative Revenue/Boe (1) Revenue WTI NYMEX AECO BASIS PROPANE BUTANE ETHANE FX C$/Boe US$/Bbl US$/mmbtu C$/GJ US$/mmbtu US$/Bbl US$/Bbl US$/Bbl 2018 Budget Spring Update 50.00 3.00 2.37 (1.00) 0.8000 17.50 28.25 11.07 29.15 June 30, 2018 Strip 68.02 2.93 1.48 (1.72) 0.7720 23.30 37.14 6.22 33.14 O
Slide 23: Strategic and Long-Term Investments
Strategic and Long-Term Investments 1) Please refer to the heading “Reserves and Other Information” in the Advisories Appendix. 2) Publicly disclosed by competitor. 23
Slide 24: The New Paramount
The New Paramount Intermediate E&P company with an extensive portfolio of liquids-rich unconventional plays and the financial strength to exploit those opportunities Significantly Expanded Reserves: 149 MMBoe PDP, 376 MMBoe Proved, 593 MMBoe P+P (1) Scale with Financial Flexibility Strong Liqu
Slide 25: Appendix: Additional Information
Appendix: Additional Information
Slide 26: Performance
Performance 1) Represents midpoint of 2018 production guidance 2) As evaluated by McDaniel & Associates Consultants Ltd. as of December 31, 2017. 26
Slide 27: Paramount Completion Evolution
Paramount Completion Evolution • Technology and Fluid: Open Hole Packers and Energized Oil • Lateral Length and Stage Spacing: Up to 1,600m and 100m (~16 stages) • Proppant Loading and Proppant Type: Up to 0.6 t/m (400 lbs/ft) and uniform sand size Gen 1 • Cluster Spacing and Pump Rate: Single point
Slide 28: Focus Assets – Btax Breakeven @ 10%
Focus Assets – Btax Breakeven @ 10% (1) 1) Breakeven analysis discounted at 10 percent before tax, based on internal type well assumptions using constant costs, FX rate of $0.80 $US/$C and AECO basis of US$1.00/MMbtu. Breakeven oil prices based on a constant NYMEX gas price of US$3.00/MMbtu. Breakev
Slide 29: Advisories Appendix
Pararmrmourt resources Itd.
Slide 30: Advisories
Advisories Forward-Looking Information Certain statements in this presentation constitute forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "estimate", "will", "expect", "plan", "
Slide 31: Advisories (con't)
Advisories (con't) the timing and costs of future abandonment and reclamation obligations and potential liabilities for environmental damage and contamination; uncertainties regarding aboriginal claims and in maintaining relationships with local populations and other stakeholders; the outcome of exi
Slide 32: Advisories (con't)
Advisories (con't) Paramount has provided information with respect to certain of its plays and emerging opportunities which is "analogous information" as defined in NI 51-101. This analogous information includes Paramount's internally generated production type curves for certain of its wells and int
Slide 33: 2800 - Avenue S.W.
2800 - 421 7 Avenue S.W. Calgary, Alberta Canada, T2P 4K9 Telephone: 403.290.3600 Facsimile: 403.262.7994 www.paramountres.com Pararmrmourt resources Itd.