Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (February 2024)
32 slides from Journey Energy's investor presentation, February 2024
Slide 1: Corporate Presentation
JOURNEY Corporate Presentation TSX: JOY OTCQX: JRNGF @AlexVergeJOY February, 2024
Slide 2: Journey Today Is…
Journey Today Is… Undergoing a transformational acquisition to become: A sustainably growing free cash flow generating business Unlocking value in under-capitalized low decline assets Unhedged Uninterested in: Anything that does not create or preserve stakeholder value 2
Slide 3: 2024 Guidance
2024 Guidance 12,200 - 12,400 boe/d (Q1 2024 Estimate); 55% liquids (crude oil and NGL’s) Strategic relationship with AIMCo; majority term debt provider and largest shareholder. December amendment to agreements to amortize repayments to April 30, 2025 13% corporate decline go forward; waterfloods an
Slide 4: 2024 Goals
2024 Goals Reduce leverage created by 2022 transformational acquisition Add Inventory in repeatable plays Advance power business Manage ARO Continue to execute on creative ways to expand our business Improve longer term corporate sustainability while satisfying near term obligations 4
Slide 5: Reserves Value 3 Consultants Average
Reserves 3 Consultants Average Value Pricing WTI Price ($US/bbl) 2023 Actual 2024 Budget Forecast Recent pull back in commodity price impacts near term cash flow, not long term value 5
Slide 6: Corporate Operating Highlights and Forecast
Corporate GrowingGrowth our Base Returns Business in 2022 2021 2022 2023 2024 Operating Highlights Actual Actual Estimate Forecast Production Average (boe/d) 8,004 9,778 12,300 – 12,400 11,500 – 12,000 Oil and NGLs (%) 47% 49% 54% 55% Corporate Decline Rate (%) 14% 14% 13% 13% Reference Prices Natur
Slide 7: Adjusted Funds Flow Sensitivity Chart
Reserves Price Value Sensitivity Chart WTI ($USD/BBL) Adjusted Funds Flow ($MM) $72.00 $73.00 $74.00 $75.00 $76.00 $77.00 $78.00 $79.00 $80.00 $2.35 60.9 62.9 65.0 67.0 68.9 70.9 72.8 74.6 76.4 $2.45 61.9 63.9 66.0 68.0 69.9 71.9 73.8 75.6 77.4 $2.55 AECO GAS ($/MCF) 62.8 64.9 66.9 69.0 70.9 72.9 74
Slide 8: Year End Reserves Summary
December Stable Base -–2020 2021 31, YE 2023 YEReserves Reserves Year End Summary Summary Reserves Company Gross (WI) Reserves(1) / Value (January 1, 2024 3 Consultants Pricing) Oil Gas NGLs NPV10 ($million) Reserve Category Mboe RLI FDC ($ million)(2) (Mbbl) (Bcf) (Mbbl) Before Tax (1) Proved Devel
Slide 9: Top Tier Growth in Net Asset Value Per Share
Top Tier Growth in Net Asset Value Per Share $14.35/share P+P $12.84/share P+P $8.44/share $8.19/share P+PDP P+P $6.77/share $6.44/share PDP P+PDP $5.00/share $3.86/share PDP $3.77/share P+PDP JOY Shares P+P $2.85/share February 23 PDP $0.86/share P+PDP -$0.05/share PDP Period YE 2020 YE 2021 YE 202
Slide 10: GLJ Forecasted Edmonton Light Value
Reserves GLJ Forecasted Edmonton Light Value Price Reversing Trend Since January 2021 2015 2017 2020 MSW Price ($CDN/bbl) 2024 Budget 2024 2022 2021 2021 Continuation of upward pricing trend will drive capital back to our industry (1) GLJ published price forecasts January 1 of forecast year 10
Slide 11: New Acquisition Positions Journey Favorably in the Market
New Acquisition Positions Journey Favorably in the Market (Greater Scale, Increased Oil Weighting and Lower Declines) Increase pro forma production 45% High value waterflood/EOR oil pools enhance netbacks and sustainability Increases pro forma oil production by 70% and liquids weighting to 54% Modes
Slide 12: Attractive Acquisition Financing
Attractive Acquisition Financing $140,000,000 purchase price (May 1 Effective) $30,000,000 cash flow (May 1 – Close) $45,000,000 vendor take back (VTB) financing (10% interest rate) with scaled monthly repayments: Monthly WTI Payment Price $4,000,000/month >US$100/Bbl $3,000,000/month US$85 – US$100
Slide 13: Journey's power business is expanding from 4 MW to 35 MW in 2024
Journey's power business is expanding from 4 MW to 35 MW in 2024 Countess (2020) 4 MW on stream September 2020 Fuel gas supplied by long life natural gas (Countess field) Connected to Alberta power grid Project has paid out original investment Gas price equivalent of $9.47/mcf for the first 9 months
Slide 14: Strong Base! Even Stronger Value
Reserves Strong Base! Even Stronger Value Future Development Potential (As at December 31, 2023) Journey’s $247 million of P+P future development capital (FDC) is approximately $8.25/P+P boe 61% of Journey’s identified capital projects remain unbooked Journey’s P+P FDC adds $299 million of NPV@10%;
Slide 15: Post Acquisition Extensive Drilling Inventory; in Existing Pools!
Post Acquisition Extensive Drilling Inventory; in Existing Pools! Journey has identified 309 (254 net) horizontal drilling opportunities Drilling Locations(1) % Booked(2) in Total(1) Reserve Report Region Gross Net South 159 134 39% Central 150 120 39% Total 309 254 39% Unbooked Projects Booked Proj
Slide 16: Medicine Hat
Reserves MedicineValue Hat Extraordinary waterflood purchased from Enerplus in 2022 Small portion of the pool successfully under polymer enhanced recovery scheme 34 undrilled locations currently identified 72% WI, operated Plan to begin expansion of polymer flood, and implement viscous slug placemen
Slide 17: Westerose
Reserves Westerose Value Glauconitic Legend Journey Land 24 derisked hz locations, generally 100% WI Glauconitic Liquids rich gas, virgin pressure, well delineated with existing vertical Producers penetrations and some production. Thick, continuous porous zone over Journey landbase Infrastructure ex
Slide 18: Duvernay
Reserves Value Duvernay 55-75 Gross locations controlled and derisked in core block, based on 400 and 300m spacing, 1.5-2.25 mile laterals Excellent top tier results to date on current landbase Sold gassy land, consolidated oily lands around infrastructure and operated gas plant Great economics at s
Slide 19: Value of Inventory Appreciates with Pricing
Value of Inventory Appreciates with Pricing AECO $3.75/MMbtu Note: Based upon 2023 estimated capital costs 19
Slide 20: Journey Has Over 15 Years of Drilling Inventory
Journey Has Over 15 Years of Drilling Inventory, Let’s Get After It! AECO $3.75/MMbtu Note: Based upon 2023 estimated capital costs 20
Slide 21: How to make a Low Decline even LOWER
How to make a Low Decline even LOWER 770 MM bbl on waterflood 38 MM bbl conventional 280 MM bbl 38 MM to JOY net barrels of future potential be delineated and flooded DOOIP by category for waterfloor 1.1 Billion net bbl of DOOIP 770 MM bbl 355 MM bbl convert 280 MM bbl future on waterflood/Polymer c
Slide 22: But Wait! There's Still More To Come
But Wait! There’s Still More To Come 1.1 Billion net barrels of DOOIP 3.0% of booked recovery 85.0% of oil left behind Ultimate 12.0% recovered to date Recovery 15.0% ultimate recovery Oil left behind becomes Target Resource Journey can double our P+P oil reserves by recovering 3.8% more of the oil
Slide 23: In 2024, Journey Will…
In 2024, Journey Will… Pay off $34 million of its outstanding term debt Advance power projects with combined NPVs of $60-$80 million… … material increase in PDP Net Asset Value per Share for 2024 Maintain production levels 23
Slide 24: Energized and Engaged Team
Energized and Engaged Team Alex G. Verge, P.Eng., M.Eng. President and Chief Executive Officer, and Director – Previously President and CEO of NuVista Energy, VP Engineering at Bonavista, and senior positions at Poco Petroleums, Rising Resources, Shell, and Gulf. Gerry N. Gilewicz, CPA, CMA Chief Fi
Slide 25: Directors – Strong Governance
Directors – Strong Governance Craig Hansen Chairman of the Board – Independent businessman, Former President and Chief Executive Officer of Zargon Oil & Gas Ltd. and its predecessor, Zargon Energy Trust. Thomas Mullane Reserves Committee Chair – Independent businessman and former President and Chief
Slide 26: Appendix
Appendix 26
Slide 27: Environment, Social and Governance – Environmental
Environment, Social and Governance Environmental Journey is striving to reduce direct emissions intensity from year end 2022 levels for scope 1 and 2 emissions. We chose this time period for this target to focus on new reductions rather than accounting for reductions already achieved. We reuse 99.9%
Slide 28: Environment, Social and Governance (Continued) – Social
Environment, Social and Governance (Continued) Social Journey takes pride in maintaining its operations with the highest of standards and ensures its suppliers of goods and services do so as well. Journey operates in nine key areas in the province of Alberta and is very active in the communities in
Slide 29: Environment, Social and Governance (Continued) – Governance
Environment, Social and Governance (Continued) Governance In recognition of the key role that sustainability plays in our business, Journey has mandated that the Board of Directors (the “Board”) take an active role in evaluating our corporate sustainability strategy, improving our risk management pr
Slide 30: Forward-Looking Statements and Financial Measures
Forward-Looking Statements and Financial Measures This presentation contains “forward-looking statements” including estimates of future production, cash flows and reserves, business plans for drilling and exploration, the estimated amounts and timing of capital expenditures, the assumptions upon whi
Slide 31: Oil and Gas Advisory
Oil and Gas Advisory The crude oil, natural gas and natural gas liquid reserves and related future net revenue of Journey presented herein were evaluated by GLJ, Journey’s independent reserves evaluators, in accordance with the requirements of National Instrument 51-101 (“NI 51-101”) and the Canadia
Slide 32: Notes
6) JOURNEY 32 ENERGY INC.
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