Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (March 2021)
36 slides from Athabasca Oil's investor presentation, March 2021
Slide 1: Athabasca Oil Corporation Corporate Overview – March 2021
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING CORPORATE OVERVIEW – MARCH 2021
Slide 2: Premier Resource Exposure
PREMIER RESOURCE EXPOSURE LIGHT OIL ~34,000 boe/d THERMAL OIL MONTNEY ~90% liquids ~$650MM EV $165MM Cash HANGINGSTONE ~90 year 2P RLI 1,150 MMboe 2P 400 MMboe Proved LIGHT OIL CORNER DUVERNAY LEISMER ATHABASCA OIL (TSX:ATH) Footnotes and additional information included in the back as endnotes and r
Slide 3: Q4 2020 Highlights
Q4 2020 HIGHLIGHTS 34,233 boe/d 1,150 MMboe $11MM Adjusted 89% liquids 2P Reserves Funds Flow 0.9x PDP & 2.7x 1P Asset Coverage $165MM Cash Netbacks $17MM Capex $23/boe Light Oil Unrestricted 98% Thermal Oil $13/bbl Leismer ATHABASCA OIL (TSX:ATH) Footnotes and additional information included in the
Slide 4: The Transformation
THE TRANSFORMATION $486MM $400MM COVID19 $265MM Refinance 2L Light Oil JV Contingent Managed Infrastructure Notes with Bitumen Business Sale (to be completed) Murphy Oil Royalty Momentum Resource FCF Generation Appraisal Disciplined 2016 2017 2018 2019 2020 2021 Operations Funding Strong Balance not
Slide 5: Operational Improvements
OPERATIONAL IMPROVEMENTS PRODUCTION (BOE/D) OPERATING EXPENSES ($/BOE) 50,000 $25 >100% Production Per ~$10/boe reduction Share Growth (‐15% CAGR) 40,000 (28% CAGR) $20 30,000 $15 20,000 $10 10,000 $5 ‐ $‐ 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 CAPITAL EXPENDITURES ($/BOE) 2P RESERVES (MM
Slide 6: Business Environment & COVID-19 Impact
BUSINESS ENVIRONMENT & COVID-19 IMPACT SUPPLY/DEMAND OUTLOOK COVID‐19 IMPACT 105 o WHO declared COVID‐19 a pandemic in March 2020 100 o Resulted in a material disruption to global economy o Economies starting to reopen and positive developments on the 95 mmbbl/d vaccine front 90 INVENTORIES CONTINUE
Slide 7: Outlook, Capitalization & Hedging
OUTLOOK, CAPITALIZATION & HEDGING WTI HEDGES (BBL/D; US$/BBL) 2021 OUTLOOK 20,000 Sold Calls Collars o Production 31,000 – 33,000 boe/d (90% liquids) 3‐Ways o Capital program $100MM 15,000 ~$95MM Thermal Oil & ~$5MM Light Oil $39.90/$45.63 $55.00 10,000 $55.90 $55.90 5,000 $40/$45/$57 $40/$45/$57
Slide 8: ESG Commitment
ESG COMMITMENT ENVIRONMENT SOCIAL Corporate CO2e Emissions Intensity o AOC works with Indigenous Communities to 0.07 Air Quality help preserve their rights and cultures 0.06 o 42% reduction in corporate per boe emissions o AOC supports many local causes Intensity (tonnes CO2e/bbl) 0.05 0.04 o Optimi
Slide 9: Athabasca Value Proposition
ATHABASCA VALUE PROPOSITION Certainty on Long Term Financial Capacity to Top Tier Assets with Long Unparalleled Torque to Egress to High Value Navigate Volatile Markets Term Reserves Oil Prices longer term Markets Through the Cycle Liquids weighted portfolio 7,200 bbl/d on Keystone +US$5 WTI g
Slide 10: Thermal Oil: Leismer, Hangingstone & Other Assets
THERMAL OIL LEISMER, HANGINGSTONE & OTHER ASSETS
Slide 11: Thermal Oil Portfolio
THERMAL OIL PORTFOLIO LEISMER – TOP TIER OIL SANDS PROJECT AOC THERMAL PROPERTIES o ~20,000 bbl/d productive capacity (~3x SOR) o 694 mmbbl 2P reserves; ~90 year 2P RLI Fort McMurray o US$27 WCS operating break‐even (US$12.50 WCS diff) AOC Hangingstone HANGINGSTONE o ~9,500 bbl/d productive capacity
Slide 12: Leismer Overview
LEISMER OVERVIEW DEVELOPMENT MAP ASSET OVERVIEW o Located ~100 km south of Fort McMurray o Central Processing Facility (CPF); approved capacity of 40,000 bbl/d PAD 8N PAD 8S o On site lodge with ~500 person capacity; owned Aerodrome PAD 5 CPF PAD 6 SUBSURFACE DATA & WELLS 4PAD 3 PAD 4PAD o 500+ deli
Slide 13: Leismer Pad Overview
LEISMER PAD OVERVIEW HIGHLIGHTS PADS 1‐4 (BBL/D) 20,000 Forecast 15,000 Actuals o Pads L1 – 4 have well developed chambers 10,000 ~27% annual decline since 2018 5,000 ‐ Seismic shows connected pairs and pads 2010 2012 2014 2016 2018 2020 2022 2024 2026 PADS 5‐6 (BBL/D) 12,500 o Pads L5 – 6 are l
Slide 14: Leismer Improvements
LEISMER IMPROVEMENTS TECHNOLOGY DRIVING RATES (BBL/D) LOWER WELL PAIR COSTS ($MM) 1,200 $25 Avg. Facilities Cost Pad 1‐6 Avg. Completion Cost 1,000 Pad 7 Avg. Drilling Cost $20 800 $15 600 $10 400 Achieved through longer laterals and implementation 200 of flow control devices $5 0 $0 1 13 25 37 49 6
Slide 15: Leismer Future Opportunities
LEISMER FUTURE OPPORTUNITIES STRATEGY LEISMER DEVELOPMENT (BBL/D) 25,000 o Maximize free cashflow and deliver strong netbacks o Focus on projects that improve the SOR 20,000 L6 infills + L7P6 Illustrative o Maintain agility and execution readiness Sustaining Pad 8 15,000 2021 BASE CAPITAL o L7P6 and
Slide 16: Hangingstone Overview
HANGINGSTONE OVERVIEW ASSET HIGHLIGHTS DEVELOPMENT MAP o Located ~20 km south of Fort McMurray o Central Processing Facility (CPF); approved capacity of 12,000 bbl/d o No camp; proximal to Fort McMurray SUBSURFACE DATA & WELLS o >250 delineation wells with good seismic coverage o First steam March 2
Slide 17: Hangingstone Future Opportunities
HANGINGSTONE FUTURE OPPORTUNITIES REDUCING NON‐ENERGY OPEX ($MM) STRATEGY $60 ~$27MM reduction through o Focused on base production staffing, camp and disposal (~$9.25/bbl reduction) o Continued cost management $45 o Minimize capital spend $30 2020 2021 EXPECTATIONS shut‐in opex o Current production
Slide 18: Light Oil: Placid & Kaybob
ay 3 | 17 LIGHT OIL PLACID & KAYBOB
Slide 19: Light Oil Portfolio
LIGHT OIL PORTFOLIO PLACID MONTNEY – 70% WORKING INTEREST AOC LIGHT OIL PROPERTIES o ~80,000 gross prospective acres o ~150 gross future locations o $19/boe operating netback (Q4/20) KAYBOB DUVERNAY – 30% WORKING INTEREST o ~220,000 gross prospective acres o ~700 gross future locations o $27/boe ope
Slide 20: Placid Montney Overview
PLACID MONTNEY OVERVIEW PLACID ACTIVITY PLACID MONTNEY ASSET – OPERATED o Located ~140 km southeast of Grande Prairie o ~80 mmcf/d & 10,000 bbl/d infrastructure capacity o Field operations located in Fox Creek KRC SUBSURFACE DATA & WELLS o Targeting multiple Montney intervals o ~55 horizontal produc
Slide 21: Kaybob Duvernay Overview
KAYBOB DUVERNAY OVERVIEW KAYBOB DUVERNAY KAYBOB DUVERNAY ASSET – NON OP KAYBOB NORTH KAYBOB EAST o Located ~160 km southeast of Grande Prairie o Two batteries; ~100 mmcf/d & 25,000 bbl/d o $1 billion invested over past 4 years ($75MM net to AOC) SIMONETTE KAYBOB WEST SUBSURFACE DATA & WELLS SAXON TW
Slide 22: Light Oil Improvements
LIGHT OIL IMPROVEMENTS $25 INDUSTRY LEADING NETBACK (Q3/20) Liquids Weighted Netback (>40% liquids) Gas Weighted Netback (>60%Liquids gas) Weighted Netback (>40% liquids) High Liquids %Costs (Operating, Transportation, Gas Weighted Royalties) Netback (>60% gas) $20 High Quality Product Costs (Operat
Slide 23: Placid Future Opportunities
PLACID FUTURE OPPORTUNITIES STRATEGIC OBJECTIVES 2021 CONDITIONAL DEVELOPMENT o Continued development flexibility and readiness o Focus on free cash flow generation FUTURE ACTIVITY o Minimal 2021 budget focused on maintenance capital to support base production Conditional: 12‐24 Pad Drill & Complete
Slide 24: Duvernay Future Opportunities
DUVERNAY FUTURE OPPORTUNITIES KAYBOB DUVERNAY STRATEGIC OBJECTIVES KAYBOB NORTH KAYBOB EAST o Continued development flexibility and readiness o Focus on free cash flow generation SIMONETTE KAYBOB WEST FUTURE DEVELOPMENT o Minimal 2021 budget focused on maintenance capital to SAXON support base produ
Slide 25: Appendix
mea APPENDIX
Slide 26: Management Team
MANAGEMENT TEAM o Joined Athabasca in 2012 as Senior Vice President Light Oil. Promoted to Chief Operating Officer in 2013 and President and Chief Executive Officer in 2015 o 30 years of exploration and production experience including 18 years with Talisman Energy in various technical Rob Broen, P.E
Slide 27: Response to COVID-19
RESPONSE TO COVID-19 Ensured the Safety of Staff Maximized Maintained Strong and Contractors Funds Flow Corporate Liquidity • Hangingstone shut‐in/restart • Reduced capital program • Enacted Business Continuity Plan (~$40MM reduction) • Developed site specific plans with • Voluntary curtailments at
Slide 28: Market Egress
MARKET EGRESS THERMAL OIL EGRESS LONG TERM EGRESS SECURED Current Egress o 7,200 bbl/d on Keystone LT Egress AOC Thermal o 20,000 bbl/d on TMX Expansion Leases o 10,000 bbl/d on Keystone XL CANADIAN PIPELINES UNDER CONSTRUCTION o Trans Mountain Expansion – Government of Canada owned Enbridge South C
Slide 29: Canadian Energy Makes a Global Difference
CANADIAN ENERGY MAKES A GLOBAL DIFFERENCE THE WORLD NEEDS CANADA’S ENERGY WORLD ENERGY MIX (2016 – 2040) o Energy Demand to grow by 27% by 2040 o ALL forms of energy are needed CANADA IS A GLOBAL LEADER IN INNOVATION & ENVIRONMENTAL STEWARDSHIP o If Canadian Energy standards were applied across the
Slide 30: Endnotes
ENDNOTES Slide Endnotes 1 (1) Production is the mid‐point of 2021 guidance, product breakdown provided below: Product 2021 Production Split Bitumen 77% Natural Gas 10% Condensate NGLs 4% Other NGLs 2% Light & Medium Crude Oil 0% Tight Oil 7% (2) Cash = unrestricted cash & equivalents as of December
Slide 31: Endnotes
ENDNOTES Slide Endnotes 3‐4 (1) Historical annual and 2021e Corporate volumes by product are provided below: Product 2016 2017 2018 2019 2020 Product 2021 Production Split Bitumen bbl/d 7,384 27,900 27,900 26,058 22,745 Bitumen 77% Natural Gas mcf/d 13,858 20,890 33,104 28,281 23,229 Natural Gas 10%
Slide 32: Endnotes
ENDNOTES Slide Endnotes 10‐16 (1) Leismer reserve life index calculated on 694mmbbl 2P reserves and 20,000 bbl/d production; Hangingstone reserve life index calculated on 36mmbbl 2P reserves and 9,500 bbl/d production. Please see reader advisory “Additional Oil and Gas Information” for more informat
Slide 33: Endnotes
ENDNOTES Slide Endnotes 22 ‐ 23 (1) Placid Montney future production forecasts are ~50‐55% shale gas, ~35‐40% condensate NGLs and ~10% other NGLs (2) Placid Montney IP365 rates are ~40% shale gas, ~50% condensate NGLs and ~10% other NGLs; EURs are ~50% shale gas, ~40% condensate NGLs and ~10% other
Slide 34: Reader Advisory
READER ADVISORY Forward Looking Statements This Presentation contains forward‐looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward‐looking information. The use of any of the words “anticipate”, “plan”, “
Slide 35: Reader Advisory Cont'd
READER ADVISORY CONT’D Reserves Information The McDaniel Report was prepared using the assumptions and methodology guidelines outlined in the COGE Handbook and in accordance with National Instrument 51‐101 Standards of Disclosure for Oil and Gas Activities, effective December 31, 2020. There are num
Slide 36: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION