Petrus Resources Ltd. · TSX:PRQ
Petrus Resources — Q3 2021 Earnings Presentation
24 slides from Petrus Resources's earnings presentation, Nov 10, 2021
Slide 1: Q3 2021 Corporate Update
Q3 2021 Corporate Update November 10, 2021
Slide 2: Why Invest in Petrus? Assets. Execution. Results.
WHY INVEST IN PETRUS? Assets. Execution. Results. Quality Assets Low Cost Operations Financial Discipline Proven Track Record of Execution Primed for Growth Strategic Plan to Create Shareholder Value 2
Slide 3: Transformative Transactions
Net Debt ($Millions) Transformative Transactions Material Reduction in Debt, Positioned Petrus for Growth $148.1 $139.2 Closed transactions September 22, 2021 $123.7 Issued $25.8 Million in Equity ($0.55/share) $114.4 Used proceeds to: Eliminate $39.3 million in Second Lien Debt Reduce First Lien De
Slide 4: Strategy: Unlock Proven Value
Strategy: Unlock Proven Value Reduced Debt By Nearly 50% Invest in Development of Quality Assets Operational Excellence Production/Cash Flow Growth Q3 2021 Debt/CF 1.9X Direct Excess Cash to Drilling Generate Superior Returns Create Shareholder Value 4
Slide 5: Ferrier, Alberta
FERRIER, ALBERTA Repeatable, predictable and low risk resource play 4,349 boe/d (68% Gas, 32% oil/NGLs)1 Cardium oil and condensate rich gas One of top plays in Alberta, competitive with Montney 202+ drilling locations Petrus 2-25 Processing & gathering infrastructure owned 100% Gas Plant -60 mmcf/d
Slide 6: Ferrier Economics
FERRIER Fe ECONOMICS 1 Petrus Ferrier Locations Highly Competitive vs Leading North American Plays 8.4 Months Payout 1) Non-Petrus payout estimates provided by Peters & Co. Limited. All payout estimates based on flat US$70/B WTI, CA $77/B PAR, US $3.25/Mcf NYMEX, CA $3.10/Mcf AECO. Petrus economics
Slide 7: Ferrier
FERRIER Economics & Drilling Locations 112 sections, up to 5 wells per section Petrus 2-25 202+ drilling locations Gas Plant -118+ Cardium, 84+ Other (Glauc, Falher, Notikewin, Ellerslie) 20+ year drilling inventory Flexibility to strategically target locations based on commodity pricing Low operati
Slide 8: North Ferrier
NORTH FERRIER Opportunity for Growth 13-16-41-10W5 (Petrus 100% WI) Very active play Strong land position (31 Sections) 65 potential locations Excellent economics 04-06-041-10W5 Ownership in processing infrastructure (Petrus 17.5% WI) Well positioned for significant growth Recently drilled 04-06-41-
Slide 9: Thorsby, Alberta
THORSBY, ALBERTA Stable funds flow generation 1,148 boe/d (67% Gas, 33% oil/NGLs)1 Low decline Glauc production Strong, steady cash flow with little ongoing capital investment Thorsby 05- 04 Ownership and control of critical infrastructure Oil Battery & Gas Plant Thorsby 7-14 Gas Plant Concentrated,
Slide 10: Other Assets
OTHER ASSETS Foothills, AB & Kakwa, AB FOOTHILLS KAKWA Low decline gas and cardium oil Dunvegan oil production 348 boe/d (69% Gas, 31% Oil) 1 Recently drilled first well Minimal capital investment Growing land position (20.75 sections) Cash flow generating asset Potential for long term growth 1) Q3
Slide 11: Monetizing Assets
MONETIZING ASSETS Drilling Inventory Can Be Quickly Converted to Cashflow Capital Spending Focused on Ferrier & North Ferrier Drilling 267+ Potential Drilling Locations1 26+ Year Drilling Inventory2 Quickly Realize ROI Wells Drilled and On Production in 24 days Average Payout is 0.8 years 3 Forecast
Slide 12: Capital Efficiency
CAPITAL EFFICIENCY Reducing the Cost of Adding Production in Ferrier $12,039/boed Total Capital Invested 1 per BOE of Production Added 49% 2 $6,158/boed Increased frac density Pad drilling Wellbore design improvements Faster drilling times Efficient water management 2015 2021 1) Total Capital cost r
Slide 13: Capital Budget
CAPITAL BUDGET Increasing Investment in Developing Assets Drilling Q4 2021 Forecasted Q4 2021 capital budget of $12.5 MM $12.5MM 1 Reinvesting free cash flow into drilling 1 98% directed to Cardium development in Ferrier Capital Budget Completion Drilling 3 Gross (3.0 net) wells 1 well in North Ferr
Slide 14: Corporate Results
CORPORATE RESULTS Financial and operational highlights 5,937 1.9X Current Debt/Funds Flow1 Q3 2021 Production $5.57 $0.32 Q3 2021 Funds Flow ($/share) 2 Q3 2021 Operating Expense ($/boe ) $25.86 Q3 2021 Operating Netback ($/boe) 87% Q3 2021 Operating Netback 3 1) Debt to funds flow calculation uses
Slide 15: Peer Comparisons
PEER COMPARISONS 1 Competitve on Key Performance Metrics 2 $6.80 $69.89 Q2 2021 Operating Expense ($/boe)3 Q2 2021 ARO ($/boe)4 $14.06 1.9X Pro Forma Q2 2021 Debt/Funds Flow5 Q2 2021 Corporate Netback ($/boe)6 1) Peer group, as defined by Petrus, comprised of the following companies listed in alphab
Slide 16: Investment Opportunity
INVESTMENT OPPORTUNITY Undervalued Relative to Peer Group1 3.6X Petrus is highly competitive on key performance indicators, but is currently one of the lowest valued companies in its peer group . 2 Q2 2021 Enterprise Value/Debt Adjusted Funds Flow 3 1) Peer group, as defined by Petrus, comprised of
Slide 17: Leadership
LEADERSHIP Experienced & Effective Don T. Gray Donald Cormack Peter Verburg Director Patrick Arnell Chairman, Board of Directors Director Director Numi Health Inc. Peyto Exloration & Development Corp. Former PWC Audit Partner EIQ Captial Corp. Rangeland Industrial Services Ltd. ORIX Gear Energy Ltd.
Slide 18: The Team
THE TEAM Committed & Professional 18
Slide 19: Reader Advisory
READER ADVISORY Certain information regarding Petrus Resources Ltd. ("Petrus", "our" or "we" or the "Company") set forth in this document may constitute forward-looking statements under applicable securities laws, including, but not limited to, the following: Petrus' business model, including planne
Slide 20: Reader Advisory (Continued)
READER ADVISORY Continued Capital costs to drill, complete and tie-in wells and operating costs in each area are also based on management's experience and not on historical data. In addition, such costs are based on management's estimates when the estimates were prepared and have not been escalated
Slide 21: Contact Us
CONTACT US Suite 2400, 240 4th Ave SW Calgary, Alberta T2P 4H4 www.petrusresources.com For more information: Ken Gray, President & CEO 403-930-0889 kgray@petrusresources.com Mathew Wong, Vice President, Finance 587-349-5827 mwong@petrusresources.com Lindsay Hatcher, Investor Relations 587-349-5823 l
Slide 22: Appendix: Supplemental Information
APPENDIX Supplemental Information 22
Slide 23: Ferrier: Recent Cardium Drilling Results
FERRIER Recent Cardium Drilling Results 1 $33.65 Average Netback $/boe 2 0.8 Average Payout 3 Years 0.5 Est. Payout of Recent Drills4 Years $3.12 Ferrier OpEx ($/boe)5 1) Individual well production data sourced from publicly available data in GeoScout. IP30 numbers have been adjusted to account for
Slide 24: Pricing: Using Current Numbers
PRICING Using Current Numbers financial and physical contracts to mitigate risk 1 46% Q4 2021 Liquids Hedged (as a % of Q3 production) 5 65.85 $/bbl Q4 2021 Avg. Hedge Price 2 2 3 61% Q4 2021 Gas Hedged 1 (as a % of Q3 production) 6 2.80 $/mcf Q4 2021 Avg. Price 2 7 1) Oil price in CAD$/bbl. Gas pri