Paramount Resources Ltd. Class A · TSX:POU
Paramount Resources Ltd. Class A — Investor Presentation (February 2018)
36 slides from Paramount Resources Ltd. Class A's investor presentation, February 2018
Slide 1: Corporate Presentation
Corporate Presentation February 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: ~$2.3 Bln (134.9 MM shares @$17/sh) • Net Debt at Sep 30, 2017 ~$564 MM (1) • Total land position: ~2.7 million net acres, including: • ~378,000 net Montney acres • ~230,000 net Duvernay acres • 345 MMBoe Proved Reserves; 600
Slide 4: Highlights
Highlights Transaction Highlights • April 2016 sold Musreau Plant ~$565 MM • August 2016 sold Musreau Asset ~$2.1 Bln • December 2016 sold royalty on Cavalier Oil Sands Asset ~$100 MM • December 2016 dividend declared: ~3.8 MM Seven Generations shares ~$120 MM • May 2017 closed the sale of Valhalla
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 > 98,000 Boe/d ~ 38% Liquids • Returned to pre-disposition production levels in 14 months • Total s
Slide 6: Strategic Transactions
Strategic Transactions • ~$487 MM acquisition; funded with cash on-hand • High quality Wapiti Montney acreage, liquids-rich Montney and Duvernay at Kaybob and lower decline, long-life assets in Central Alberta (including 176,000 net acres of fee simple lands) • Added ~39,000 Boe/d of production (26%
Slide 7: Liquids Focused Assets
Liquids Focused Assets Montney Assets Duvernay Assets Wellhead Asset Description Liquids (1) Bbl/MMcf MONTNEY Birch 25 Wapiti 90 Karr 120 Smoky/Resthaven 85 Ante Creek 120 Kaybob 220 Presley/Fir 12 DUVERNAY Kaybob North 360 Kaybob Smoky 220 Kaybob South 100 Kaybob Bigstone 60 Kaybob Pine Creek 30 Wi
Slide 8: Diversified Assets
Diversified Assets Location Breakeven Breakeven Wellhead Production Stage of Asset Description Inventory WTI Oil NYMEX Gas Potential (Gross) Development P+P | Total(1) US$/Bbl(2) US$/MMbtu(2) Liquids Bbl/d | Total Boe/d(3) 2017 – 2021 Focus Assets Karr Montney Development 76 | 227 31.92 0.92 18,000
Slide 9: Focus Assets – Btax Return and NPV10
Focus Assets – Btax Return and NPV10 (1) (1) McDaniel P+P unless noted as “(Internal)”, US$50/Bbl WTI & US$3.00/MMbtu NYMEX, US$0.95/MMbtu AECO Basis & FX US$/C$ 0.775. Refer to the heading “Reserves and Other Information” in the Advisories Appendix. 9
Slide 10: Revenue/Boe and AECO
Revenue/Boe and AECO 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 50.00 3.00 2.37 (1.00) 0.8000 17.50 28.25 11.07 29.21 January 3 2018 Strip 60.37 2.81 1.42 (1.73) 0.8026 25.55 36.53 6.56 30.66 Oil/ Oil/ Condensate
Slide 11: Midstream & Marketing Strategy
Midstream & Marketing Strategy Karr 06-18 Midstream Portfolio Positioned for Growth • Focus assets in Montney and Duvernay have takeaway capacity to manage growth plan through 2021 Keyera Wapiti • Owned and operated infrastructure coupled with 3rd party midstream provide balanced opex structure • Op
Slide 12: Grande Prairie Snapshot
Grande Prairie Snapshot Operational Highlights • 26 of 27 wells in the 2017 Karr program on production; remaining well being completed • 5 new 2018 wells on 1-2-66-5W6 pad in progress • Evaluating new Montney zone at Wapiti • Evaluating new Montney well at Resthaven/Jayar Asset Summary • Three Montn
Slide 13: Permian | Karr Comparison
Permian | Karr Comparison Note: Permian Operators based on data provided in publicly available Corporate Presentations for CDEV, CPE, CXO, EGN, FANG, OXY, PDCE, PE, RSPP, SM, WPX and XEC. Paramount Karr wells IP30 volumes are produced volumes of oil, condensate and natural gas measured at the wellhe
Slide 14: Kaybob Snapshot
Kaybob Snapshot Operational Highlights • 2018 drill 21 hz Montney oil wells • 2018 drill 15 hz Duvernay wells from three pad sites • Evaluating gas re-routing projects to reduce operating costs Asset Summary • Three Montney assets and five Duvernay assets • Montney assets includes oil at Ante Creek
Slide 15: Central Alberta & Other Snapshot
Central Alberta & Other Snapshot Operational Highlights • 2 hz Duvernay 2018 wells planned at Willesden Green • 3 hz Glauconite 2018 wells planned at Leafland • Continue to monitor the performance of the 02/13- 05 Duvernay well which has a peak IP30 (oil) rate of 492 Bbl/d (total producing days 148)
Slide 16: 2018 Budget
2018 Budget • 2018 Capex ~$600 million (excluding acquisitions & divestitures) • Plan to drill 70 – 75 net development wells and complete up to 55 of those net wells 55 net well completions represent ~13% of PRL’s P+P undeveloped locations (1) • Drilling services to be primarily provided by Paramo
Slide 17: The New Paramount
The New Paramount ~100,000 Boe/d intermediate E&P company with an extensive portfolio of liquids-rich Significantly Expanded unconventional plays and the financial strength to exploit those opportunities Scale with Financial Reserves: 147 MMBoe PDP, 345 MMBoe Proved, 600 MMBoe P+P (1) Flexibilit
Slide 18: Appendix: Asset Detail
Appendix: Asset Detail 18
Slide 19: Karr Montney Asset Detail
Karr Montney Asset Detail (1) Operational Highlights • Rig released all 27 wells within 10% of budget • 26 net wells on production and 1 well under completion (2017 budget) • 2018 activity: drill and complete two 5-well pads • Average peak 30-day wellhead rate of 2,011 Boe/d (~60% condensate) from 2
Slide 20: Karr Montney P+P Type-Well
Karr Montney P+P Type-Well Karr West Unit McDaniel(1) Wellhead IP30 Boe/d 2,187 Lateral Length = 2,900m Proppant Loading = 1,600 lbs/ft Wellhead IP30 Condensate % 67 Stages = 73 Total Sales Gas Bcf 4.4 Bcf Total Sales Condensate MBbl 590 Total Sales Volume MBoe 1,394 DCET (multi-well pad) MM$ 12.3 B
Slide 21: Wapiti Montney Asset Detail
Wapiti Montney Asset Detail (1) Operational Highlights • 9-3 pad drilling begun (total 11 2018 wells) • Additional 11 2018 wells to be drilled from 5-3 pad • Testing new Montney zone in East Block • Third party gas plant and infrastructure under construction with scheduled Q2 2019 in-service • Param
Slide 22: Wapiti Montney P+P Type-Well
Wapiti Montney P+P Type-Well Wapiti East Unit McDaniel(1) Wellhead IP30 Boe/d 1,847 Lateral Length = 3,000m Proppant Loading = 1,600 lbs/ft Wellhead IP30 Condensate % 59 Stages = 75 Total Sales Gas Bcf 5.7 Bcf Total Sales Condensate MBbl 540 Total Sales Volume Mboe 1,629 DCET (multi-well pad) MM$ 11
Slide 23: Kaybob Duvernay Asset Details
Kaybob Duvernay Asset Details (1) Operational Highlights • Smoky 10-35 pad: 5 wells drilled to intermediate casing point • Kaybob South 7-22 pad: first of 5 wells spud • Kaybob South 7-28 pad: 6 wells planned • Near-term data acquisition projects include fiber for optimizing well placement, well spa
Slide 24: Kaybob Duvernay P+P Type-Well
Kaybob Duvernay P+P Type-Well Kaybob Smoky Unit McDaniel(1) Internal(1) Wellhead IP30 Boe/d 1,505 2,104 McDaniel P+P Lateral Length = 2,600m Wellhead IP30 Condensate % 67 67 Proppant Loading = 1,500 lbs/ft Stages = 33 Total Sales Gas Bcf 2.1 2.9 Total Sales Condensate MBbl 439 615 Total Sales Volume
Slide 25: Kaybob Montney Oil Development
Kaybob Montney Oil Development (1) Operational Highlights • 22 gross wells were drilled and completed in 2017 • 2018 activity: drill and complete 21 hz wells • New completion design has 45% more stages and 290% higher proppant loading intensity Asset Potential • Discovered 2011 with ~140 wells drill
Slide 26: Kaybob Montney P+P Type Well
Kaybob Montney P+P Type Well Kaybob Montney Unit McDaniel(1) Internal(1) McDaniel P+P Wellhead IP30 Boe/d 545 658 Lateral Length = 2,000m Wellhead IP30 Oil % 80 80 Proppant Loading = 167 lbs/ft Stages = 40 Total Sales Gas Bcf 0.6 0.6 Total Sales Oil/Condensate MBbl 152 152 Total Sales Volume MBoe 25
Slide 27: Focus Assets – Btax Breakeven @ 10%
Focus Assets – Btax Breakeven @ 10% (1) (1) Breakeven analysis discounted at 10 percent before tax, based on McDaniel P+P type well assumptions (unless noted as “(Internal)”) using constant costs, FX rate of $0.775 $US/$C and AECO basis of US$0.95/MMbtu. Breakeven oil prices based on a constant NYME
Slide 28: 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 29: Appendix: Paramount Investments & Performance
Appendix: Paramount Investments & Performance 29
Slide 30: 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. 30
Slide 31: Performance
Performance (1) As evaluated by McDaniel & Associates Consultants Ltd. as of June 1, 2017. 31
Slide 32: Advisories Appendix
Advisories Appendix
Slide 33: 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 34: 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 35: 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, intern
Slide 36: Paramount Resources Ltd.
Paramount resources Itd. ; Cea, Yok pe Ve 3 in Lo oe Maat ace Paramount Resources Ltd. 2800 - 421 7 Avenue S.W. Calgary, Alberta Canada, T2P 4K9 Telephone: 403.290.3600 Facsimile; 403.262.7994 | www.paramountres.com
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