Saturn Oil & Gas Inc. · TSX:SOIL
Saturn Oil & Gas — Investor Presentation (June 2023)
29 slides from Saturn Oil & Gas's investor presentation, June 2023
Slide 1: Corporate Presentation
June 2023 TSX-V: SOIL FSE: SMKA OTCQX: OILSF CORPORATE PRESENTATION
Slide 2: Disclaimer - Cautionary Statements
DISCLAIMER - CAUTIONARY STATEMENTS This presentation is for informational purposes only and is not intended as a solicitation or offering of securities of Saturn Oil & Gas Inc. (“Saturn” or the Company") in any jurisdiction. The material presented is not intended to modify, qualify, supplement or am
Slide 3: Saturn's Free Cash Flow Strategy
SATURN’S FREE CASH FLOW STRATEGY 30,000 barrels of oil equivalent daily production 1 $475 Million (CAD) EBITDA forecast for 2023 $3 Cash Flow per Share Target 2023e 2 <1x Cash Flow 2 Actuals G u i d anc e 15+ Years Of Drilling Inventory 1) Forecasted oil and gas production in H2 2023 and targe
Slide 4: Ridgeback Acquisition, Closed February 28, 2023
RIDGEBACK ACQUISITION, CLOSED FEBRUARY 28, 2023 $525M 17,000 boe/d 71% 1.7x Net Cash & Share Price Net Production Added at Light Oil and NGLs Cash Flow Closing Date Attractive Acquisition Metrics1 $500M Transaction Financing Q1 Cash Recycle $375M Term debt with New York based family office Mmboe Cos
Slide 5: Ridgeback Acquisition Valuation Review
RIDGEBACK ACQUISITION VALUATION REVIEW $400 MM $600 MM $800 MM $1,000 MM $1,200 MM $1,400 MM 67 mmboe Price/1P BOE $603 $737 Transaction Multiples ($9 - $11) 99 mmboe ($7.5 – $9.5) Price/2P BOE $745 $944 17,000 boe/d Price/Production $527 $697 ($31k - $41k) $304 MM (1.9x – 2.5x) Price/Cash Flow $578
Slide 6: Corporate Profile – TSX.V: SOIL FSE: SMKA
CORPORATE PROFILE – TSX.V: SOIL FSE: SMKA OTCQX: OILSF FINANCIALS Conservative Balance Sheet Management Shares Outstanding (Basic) 138.6M ▪ 60% of cash flow directed to debt repayment Options (avg. exercise $2.50) 3.3M • Net debt ~ $345M by year end 2023 = 0.7x EBITDA Warrants (consolidated) 45.6M O
Slide 7: Q2/Q3 Viking Acquisition, Q3/Q4 Drilling
Q2Q3 VIKING ACQUISITION ❖ Q3Q4 DRILLING Production (boe/d) Operating Net Back ($/boe)1,2 Adjusted EBITDA2 ($M) Revenue ($M) Adjusted Funds Flow Per Share2,3 Average WTI Price: 1) Operating Net Back, net of derivatives ▪ Q2/22 – USD 108.41 2) See Disclaimer “Information Regarding Disclosure on Oil
Slide 8: Diversified Sustainable Development
DIVERSIFIED SUSTAINABLE DEVELOPMENT Diversified Light Oil Development Platform ▪ Three core operating areas offer diversification of light oil plays • Oxbow Asset: Low decline, high rates of return, key infrastructure • Viking Asset: Resource play, repeatability, steady production & cash flow Albert
Slide 9: Oxbow Asset: SE Saskatchewan Consolidation
OXBOW ASSET: SE SASKATCHEWAN CONSOLIDATION Viewfield Asset is a Strategic Extension of Saturn’s Oxbow Core Area ▪ 70% increase in production to 12,250 boe/d (96% oil and NGLs) ▪ Operational synergies with integration to Saturn’s Field HQ in Carlyle, SK ▪ Strategic gas processing facility expands net
Slide 10: Cardium Asset: WC Alberta Resource Play
CARDIUM ASSET: WC ALBERTA RESOURCE PLAY Cardium Highlights: ▪ Well defined light oil fairway with predictable reservoir characteristics and long term stable production ▪ >250 locations, with majority in West Pembina West Pembina (additional locations in Brazeau, East Pembina, Garrington, Lochend) ▪
Slide 11: Viking Asset - WC Saskatchewan Resource Play
VIKING ASSET - WC SASKATCHEWAN RESOURCE PLAY Viking Highlights: • Historical company experience continues to produce and exceed piers • >300 de-risked drill locations • Continued development reveals further pool expansion • Strategic facilities offer blending upside • Success rate offers low risk an
Slide 12: Q1 2023 Drilling Program: 37% Above Forecast
Q1 2023 DRILLING PROGRAM: 37% ABOVE FORECAST Saskatchewan Drilling Results1 Finding and Development (F&D) Cost + Recycle Ratio Calculation Two Year Totals and 2022 2021 Weighted Average Capital expenditures ($MM) $86.9 $8.1 $95.0 Gross reserve additions from capital expenditure (Mboe) 5,519 1,299 6,
Slide 13: Pro Forma 2023 Guidance
PRO FORMA 2023 GUIDANCE Pro Forma Ridgeback Acquisition Guidance 2023 Oil Price Assumption USD 80.00 2023E Production boe/d 27,170 H2 2023E Production boe/d 31,000 Pre-Hedge EBITDA1 $M $523 Post-Hedge EBITDA (midpoint)1 $M $475 AFF sensitivity approximately $4 million for each USD$1 change in WTI Ad
Slide 14: Peer Comparison & Research Coverage
PEER COMPARISON & RESEARCH COVERAGE Canaccord Genuity Inc. Research - Canadian Listed Oil & Gas Companies 2023E EV/DACF1 Total Return1 Average 4.0x Rating Target Price Return Beacon Securities Limited, Canada Kirk Wilson | kwilson@beaconsecurities.ca Buy $4.75 107% Canaccord Genuity Inc. Mike Muelle
Slide 15: Corporate Information
CORPORATE INFORMATION CONTACT US Kevin Smith VP Corporate Development +1 (587) 392-7900 info@saturnoil.com Website www.saturnoil.com Corporate Headquarters 2800, 525 – 8th Avenue SW Calgary, Alberta, T2P 1G1 Canada TSXV: SOIL I FSE: SMKA 15 15
Slide 16: Appendix
APPENDIX TSXV: SOIL I FSE: SMKA 16 16
Slide 17: Management
MANAGEMENT • Former CFO and founding partner of Axiom Group John Jeffrey • Strong background in operations and finance with successful track record executing large international engineering and environmental projects Chief Executive Officer • MBA majoring in Finance from University of Saskatchewan,
Slide 18: Directors
DIRECTORS • Former CFO and founding partner of Axiom Group John Jeffrey • Strong background in operations and finance with successful track record executing large international engineering and environmental projects • MBA majoring in Finance from University of Saskatchewan, and B. Comm (Economics) •
Slide 19: Net Asset Value
NET ASSET VALUE Saturn Shares are Backed with Solid Asset Value1 Long Life Assets Expected to Generate Strong Cash Flows ▪ 13.8 year P+P Reserve Life Index (RLI)2 ▪ Full exercise of warrants and options provides $138.3M in proceeds (as at December 31, 2022 average exercise price $3.27 / share) ▪ Tot
Slide 20: Hedging Summary
HEDGING SUMMARY 2023 Hedging Five Year Hedging Volume Low High Volume % of Oil & Low High Year (bbl/d) (USD) (USD) (bbl/d) NGL Hedged3 (USD) (USD) Previous Hedges 4,388 53.03 58.20 2023 12,238 54% 69.90 73.42 Viking Acquisition (Q2-2022) 2,282 91.21 91.21 2024 10,805 44% 66.35 67.44 Ridgeback Existi
Slide 21: SE Saskatchewan Oxbow Asset
SE SASKATCHEWAN OXBOW ASSET Growth Engine – Exploitation of Conventional Light Oil Pools Saturn Land Multi-Zone Light Oil Targets: Midale / Frobisher / Spearfish / Alida / Tilston ▪ Large land position – 290,000 net acres North ▪ Identified low-risk drilling opportunities ▪ Extensive seismic control
Slide 22: Oxbow Asset – Southeast Saskatchewan (North)
OXBOW ASSET – SOUTHEAST SASKATCHEWAN Oxbow North Operating Area – Recent Drilling Activity Spearfish/Frob-Alida/Tilston Reservoir Parameters Anova - Frobisher Crescent Point - Manor Aldon - Tilston Triland - Tilston T9 Manor Queensdale Fertile-Antler 102/01-21-006-04W2 101/14-12-007-02W1 101/09-34-0
Slide 23: Oxbow Asset – Southeast Saskatchewan (South)
OXBOW ASSET – SOUTHEAST SASKATCHEWAN Oxbow South Operating Area – Recent Drilling Activity Midale/Frobisher Reservoir Parameters Whitecap - Frobisher 101/13-17-004-01W2 T5 Parameter Units Midale Frobisher IP 90 Oil: 109 bbl/d Adonai- Frobisher RR: February 2020 101/06-08-003-33W1/00 IP 90 Oil: 156 b
Slide 24: Viking Asset – 300+ Net Sections of Land
VIKING ASSET – 300+ NET SECTIONS OF LAND 5,000 boe/d of Sustainable Production with Repeatable Development Opportunities Viking Light Oil Asset Base in West-Central Saskatchewan Parameter Units Viking Vertical Depth meters 700-750 Net Pay meters 4.5 Avg. Porosity % 20 Permeability mD 0.1 – 1.0 Est.
Slide 25: Alberta Assets
ALBERTA ASSETS W. Pembina - Cardium Kaybob - Montney Deer Mountain - Swan Hills • 167,000 Net Acres, 68% WI • 28,400 Net Acres, 100% WI • 25,500 Net Acres, 100% WI • 9,000 boe/d 40o API light oil • 2,300 boe/d 35-45o API light oil • 1,000 boe/d 40o API light oil • 12 wells per year maintains product
Slide 26: Corporate Profile – Share Structure
CORPORATE PROFILE – TSX.V: SOIL FSE: SMKA OTCQX: OILSF Share Structure Average Daily Trade Volume Basic Millions Shares Outstanding 138.6 Consolidated Strike Options & Warrants Expiry Date Proceeds ($M) Millions Price Options and RSUs 3.3 Various $2.52 8.4 Warrants Tranche 1 (SOIL.WT)1 13.4 June 4,
Slide 27: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures In this presentation and in other materials disclosed by the Company, we employ certain measures to analyze financial performance, financial position and cash flow. These
Slide 28: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Supplemental Information Regarding Corporate Reserves 1 Natural Light & Heavy Natural Gas Reserve Assumptions – Reserve evaluation calculations are based on data and expected Medium Oil Oil Gas Liquids Total future production volumes as provided by third party ind
Slide 29: Disclaimer - Oil and Gas Advisories
DISCLAIMER - OIL AND GAS ADVISORIES Reserve Assumptions (Continued) Saskatchewan “Un-booked drilling locations” are based on Saturn’s review of its current land assets, Price Assumptions(1) Canadian Light Avg. Natural Edmonton geological and reservoir parameters that support potential economic devel