Tamarack Valley Energy Ltd. · TSX:TVE
Tamarack Valley Energy — Q1 2017 Earnings Presentation
23 slides from Tamarack Valley Energy's earnings presentation, May 2017
Slide 1: Transformational Acquisition Increases Growth Profile
Transformational Acquisition Increases Growth Profile First Quarter Update MAY 201 7 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: Q1 2017 Executing on Plan
Q1 2017 Executing on Plan 2017 Plan (“what we said we were going to do”): • Achieve 7-8% production per share growth (Q4/17 over Q4/16) • Increase oil weighting to at least 52% (from 45% in Q4/16) • Oil weighting increase will result in higher cash flow netbacks; forecasting 15-18% increase under no
Slide 4: H2/17 Objectives
H2/17 Objectives Capital Activity Focus: Drilling: • 44 ERH Viking oil wells in Veteran and Milton • 8 Cardium and 3 Mannville gas wells in Wilson Creek / Alder Flats • 4 wells in Penny Infrastructure: • Complete Veteran project that increases oil capacity to 5,000 bbls/d 2017 Targets (still in-tact
Slide 5: 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 6: 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 7: 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 $/boe Revenue 30.51 42.00 39.75 39.25 Royalties 2.32
Slide 8: 2017 WTI Sensitivities to H2/17
2017 WTI Sensitivities to H2/17 Oil (US$WTI) – H2/17 $40.00 $45.00 $50.00 $55.00 FX (C$/US$) $0.74 $0.74 $0.74 $0.74 Oil (Cdn$/WTI) $54.88 $58.85 $62.77 $66.79 AECO (C$/GJ) $2.75 $2.75 $2.75 $2.75 Cash flow netback* ($/boe) $19.45 $20.90 $22.06 $23.94 Average production (boe/d) 19,000 19,000 19,000
Slide 9: Sensitivities to Oil Prices
Sensitivities to Oil Prices Maintaining Q4/17 D/CF at 1.0x 2017 Cash Flow Netback Sensitivities to Oil Prices 2017 CAPEX Sensitivities to Oil Prices 30 300 Completed Completed 25 $23.94 Suremm $60 250 $22.06 Energy equity *2017 Cash Flow Netback ($/boe) $20.90 acquisition financing 213 20 $19.45 200
Slide 10: Current Hedges as at May 15, 2017
Current Hedges as at May 15, 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 2017 April 1, 2017 to June 30, 2017 WTI fixed price 3,000 bbls/d Cdn $63.88/bbl average July 1, 2017 to September 30, 2017 WTI fixed price 2,700 bbls/d C
Slide 11: 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 12: Acquisition Lookbacks - Significant Value Added
Acquisition Lookbacks - Significant Value Added Wilson Creek / Alder Flats Cardium* 700 500 Return = 2.4X • As promised, TVE will be transparent 300 and provide lookbacks on all acquisitions $million 100 -100 • Strategy of acquire & exploit is working -300 generating returns of 2.4 – 6.0 times -500
Slide 13: Un-risked Half Cycle Economics
Un-risked Half Cycle Economics 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 50 1.5 year payou
Slide 14: Quick Payback Drilling Inventory
Tamarack Quick Payback Drilling Inventory (<1.5 years) May 2017 Total Inventory 1,400 @ $60/bbl WTI Other (Hatton, Mannville) >25% ROR Spur Viking* TVE has 1,237 Locations 1,190 1,200 Redwater converted 88% of Penny Spur’s inventory 1,063 Cardium to ERH (3/4 mile) Quick Payback Drilling Inventory 1,
Slide 15: Viking Core Area Overview
Viking Core Area Overview • 451 net sections of consolidated Viking • Strategic owned and operated infrastructure • Production estimated at close of 6,250 boe/d (52% liquids) • Low operating costs < $11/boe • 720 (695 net) locations • Waterflood upside • Rich in bolt-on opportunities 15
Slide 16: 2017 Veteran Drilling Update
2017 Veteran Drilling Update Average Existing Type Curve Q1/17 drills 2017 Horizontal Wells TC Risked 85% 120 H2/17 drills Well Count 100 Cum prod’n @ 60 days = 3,300 80 bbls of oil bbl/d 60 40 20 0 1 21 41 61 81 Days On Production Pre 2017 Horizontal Wells* 150 125 100 bbls/d 75 50 25 0 1 21 41 61
Slide 17: Veteran Viking Oil
Veteran Viking Oil Q1/17 Accomplishments: UPPER VIKING HZ TARGET • Drilled 17 (16.5 net) wells UPPER SST-THICKER, FINE TO MEDIUM GRAINED DECENT PERMEABILITY NEGELECTED • Oil weighting 93% on 2017 HISTORICALLY drills • Current production at 1,400 boe/d up 330% from Dec/16 • Full cycle capital efficie
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: North Hoosier / Milton Viking Oil
North Hoosier / Milton Viking Oil NEW HZ TARGET UPPER SST- THICKER, FINER GRAINED WITH North LOWER GOR Hoosier HISTORIC TARGET (HZ & VERT) LOWER SST- THINNER, COARSER GRAINED WITH TVE land HIGHER GOR Existing wells Hoosier Q1/17 drills Viking oil trend Q1/17 Accomplishments: • Drilled 13 (10.6 net)
Slide 20: Wilson Creek / Alder Flats Cardium
Wilson Creek / Alder Flats Cardium TVE Sun Creek GP Keyera Minnehik Current: Buck Lake • April 2017 Cardium prod’n 8,570 boe/d (54% liquids) TVE 9-24 Compressor • Mannville gas prod’n 471 Alder Flats boe/d (14% liquids) • 310 (229 net) sections TVE Wilson Creek Battery • Over 150 Cardium locations a
Slide 21: 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 • Strategic
Slide 22: Appendix
dé Meds, is tamarack valley ENERGY Appendix
Slide 23: 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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