Saturn Oil & Gas Inc. · TSX:SOIL
Saturn Oil & Gas — Investor Presentation (January 2025)
41 slides from Saturn Oil & Gas's investor presentation, January 2025
Slide 1: Corporate Presentation January 2025
CORPORATE PRESENTATION January 2025 TSX: SOIL OTCQX: OILSF
Slide 2: Disclaimer
DISCLAIMER 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 amend information disclos
Slide 3: Company Overview
COMPANY OVERVIEW TSX: SOIL OTCQX: OILSF 3
Slide 4: Deploying the Saturn Blueprint
DEPLOYING THE SATURN BLUEPRINT Saturn is an oil-weighted producer focused on expanding per share metrics through the development of our low- decline, long runway asset base in Saskatchewan & Alberta Our Proven Blueprint for Unlocking Value: ✓ Track record of acquiring assets at attractive valuations
Slide 5: Corporate Profile
CORPORATE PROFILE Saturn is a Low Decline, Low Royalty, Light Oil Producer Leveraging Our Saskatchewan Advantage FINANCIAL & OPERATIONAL (TSX: SOIL OTCQX: OILSF) Track Record of Adjusted EBITDA Expansion $180.0 Shares Outstanding (Basic) 202.0 M Options, RSUs & PSUs 6.3 M $160.0 $430 M Adjusted EBIT
Slide 6: Q3 2024 Highlights
Q3 2024 HIGHLIGHTS Record Quarterly Production, Adjusted EBITDA and Adjusted Funds Flow Average Production Adjusted Funds Flow (AFF)2 ~$110 M Mboe/d 39.0 Millions $ 30.1 26.3 26.9 26.4 Normalized AFF (before ~114 9 Months 2024 Free Funds Flow2 one-time $20 M cost to enhance hedge book3 ) 94.1 ~$81 M
Slide 7: Fueling Free Cash Flow with Strategic Growth
FUELING FREE CASH FLOW WITH STRATEGIC GROWTH Repeated Success Completing Accretive Acquisitions That Drive Strong Free Funds Flow Quarterly Production History and Forecast (MBoe/d) Actively Returning Capital 39.5 • Share buybacks commenced Aug 39-40 39.0 38-40 27/24 through NCIB • Saturn continues t
Slide 8: 4th Major Acquisition Extends Core SK Assets
4TH MAJOR ACQUISITION EXTENDS CORE SK ASSETS Battrum & Flat Lake Assets Acquired at Attractive Valuation; Contiguous to Saturn’s Core Sask. Land Base Low decline, oil weighted production Attractive purchase price, immediately enhances scale and margins accretive to key metrics 2020 • >13,000 boe/d (
Slide 9: Blueprint for Optimizing Margins
BLUEPRINT FOR OPTIMIZING MARGINS Applying Saturn’s Innovative Approach to Operations Contributes to Margin Expansion Operating & Transportation Cost1 ($/boe) Operating Netback Growth 68% 26% $30 Operating Netback, Net of Derivatives (C$/boe)1,2 $50 $100 Operating $25 27.96 25.28 Vs 2021 netback v
Slide 10: A Leading Light Oil, Low Decline Producer
A LEADING LIGHT OIL, LOW DECLINE PRODUCER Track Record of Successful and Efficient Development Drives High Return on Invested Capital • Oil weighting + efficient development supports strong cash netbacks 20+ Yrs • Type curve outperformance across numerous areas drives strong returns • In 2023, aband
Slide 11: High Quality & Diversified Land Base
HIGH QUALITY & DIVERSIFIED LAND BASE Three Diversified, Light Oil Core Operating Areas Viking & Lower Shaunavon Across 1,800 Net Sections of Land Cardium & Montney Bakken, Spearfish, Mississippian, Conventional Central AB West Central SK 11,450 boe/d1 7,904 boe/d1 SE SK 19,695 boe/d1 1) Production b
Slide 12: Southeast Saskatchewan
SOUTHEAST SASKATCHEWAN High Rate of Return, Abundant Seismic Coverage, Large Scale Infrastructure Oxbow ~ 62% 80 NET Of the total 2025 budget New wells planned in 2025 OHML Bakken Wells Bakken 2025 AREA FOCUS Waterflood Program Viewfield OHML Expand on proven OHML development Spearfish Wells • 8 Bak
Slide 13: West Saskatchewan
WEST SASKATCHEWAN Resource Plays, Repeatability, Steady Production and Cash Flow Kindersley Herschel Viking Resource Development ~ 17% 26 NET Of the total 2025 budget New wells planned in 2025 Plato 2025 AREA FOCUS Viking & Lower Shaunavon further resource development Viking Resource & delineation D
Slide 14: Central Alberta
CENTRAL ALBERTA Resource Play, Large Prospect Inventory, Significant Expansion Potential Kaybob 7-30 Pad Montney Wells ~ 21% 14 NET Of the total 2025 budget New wells planned in 2025 W.Pembina 2025 AREA FOCUS Brazeau E.Pembina Acquisition & Record Increasing capital efficiencies Corporate Wells • Dr
Slide 15: Strong Outperformance in Core Areas
STRONG OUTPERFORMANCE IN CORE AREAS Type Curve Outperformance Aligned with Areas Featuring Sizeable Inventory for Future Development SE Saskatchewan Conventional Net Location Inventory Type Curve Outperformance by Area 46 Gross (43.8 Net) Operated Wells Drilled in 2023 120 33% Above Type Curve IP30
Slide 16: Net Asset Value
NET ASSET VALUE Saturn Shares Are Backed With 3 Years of Quality Growth and Solid Asset Value1 Year End 2023 (Pro Forma)1 Three Year Finding, Development & Acquisition (FD&A) $ millions PDP Proved P+P Cash Flows PV 10% Pre Tax1 $2,288 $2,960 $4,079 Net Debt2 (779) (779) (779) Net Asset Value 1,509 2
Slide 17: 2025 Guidance & Outlook
2025 GUIDANCE & OUTLOOK TSX: SOIL OTCQX: OILSF 17
Slide 18: 2025 Guidance Overview
2025 GUIDANCE OVERVIEW Fully Funded Development Capital Budget of $300 - $320 Million(1)(2); 85% Allocated to DCET Activities 2025 Guidance(4)(6) Sensitivities Annual Average Production Boe/d 38,000 – 40,000(1) Factor Change Approximate AFF(2)(5) Impact Oil & Liquids Weighting % ~85% WTI Oil Price A
Slide 19: Continued Return of Capital in 2025
CONTINUED RETURN OF CAPITAL IN 2025 Phased capital return framework prioritizes net debt reduction, shareholder returns and growing production per share, including through tuck-in acquisitions Key Assumptions 2025 $600 550 - 600 WTI Oil Price (USD / Bbl) $70.00 525 - 575 FX (CAD / USD) 0.72x (25) AE
Slide 20: 2025 Operating Guidance Summary
2025 OPERATING GUIDANCE SUMMARY Drive improved efficiencies, continued type curve outperformance and reduced opex to enhance margins Continued increase in OHML development 2025 Production Profile: Base + Development • Viewfield Bakken and Manor Spearfish 45,000 Increase capital efficiencies by exten
Slide 21: Maintaining Financial Flexibility
MAINTAINING FINANCIAL FLEXIBILITY Structure of our Senior Notes facilitates ongoing net debt reduction with 10% annual prepayments(2) SR. NOTES TERMED SYSTEMATIC DEBT MEANINGFUL OUT 5 YEARS REPAYMENT LIQUIDITY • No near-term repayment risk • Sr. Notes 10% annual principal • $113 MM cash (Q3/24) prep
Slide 22: Building on the Saturn Blueprint
BUILDING ON THE SATURN BLUEPRINT Positioning Saturn with Ongoing Financial Flexibility to Continue Delivering Shareholder Value ACQUIRE 04 REPEAT mid-life cycle assets at continue unlocking value, increasing attractive valuations free funds flow and driving growth with the Saturn Blueprint 01 SATURN
Slide 23: Three-Year Outlook Pillars
THREE-YEAR OUTLOOK PILLARS Committed to Long-Term Resilience, Financial Strength, and Deploying our Saturn Blueprint 2025 to 2027 Pillars: Forecast Net Debt / Free Funds Flow(2) RESPONSIBLE DEVELOPMENT 2025 - 2027 • 38,000 to 40,000(1) boe/d (~85% oil & liquids) 800 170 • ~70% of AFF(2) to capital a
Slide 24: Peer Comparison & Research Coverage
PEER COMPARISON & RESEARCH COVERAGE Saturn Positioned for Strong Free Cash Flow to Support Debt Repayment and Return of Capital Unhedged Debt Adjusted Free Cash Flow Yield1,3 2025E 2025E EV/DACF2,3 5.0 16% 14% 4.0 Avg: 3.4x 12% Avg: 10% 10% 3.0 8% 2.0 6% 4% 1.0 2% 0% - SOIL 1 2 3 4 5 6 7 8 9 10 11 1
Slide 25: Investment Highlights
INVESTMENT HIGHLIGHTS 1 Light Oil Weighted Assets in Prolific Canadian Basins Offer Attractive Half & Full Cycle Returns 2 Low Decline Rates and Strong Operational Outperformance 3 Strategic Deleveraging and Capital Return Strategy in Place 4 Operating Cost Reductions and Attractive Royalty Regime S
Slide 26: Appendix: Debt & Hedging Overview
APPENDIX: DEBT & HEDGING OVERVIEW TSX: SOIL OTCQX: OILSF 26
Slide 27: Summary of Notes Issue and Financial Policies
SUMMARY OF NOTES ISSUE AND FINANCIAL POLICIES US$ 650 million Aggregate Principal Amount of 5 Year Notes, Issued June 14, 2024 • Coupon 9.625%; Interest Payment Dates June 15 and December 15, Maturity Date June 15, 2029 • Mandatory Quarterly Prepayment, the Company will redeem 2.5% original principa
Slide 28: Hedging Overview
HEDGING OVERVIEW Robust risk management program to secure cash flow stability and mitigate commodity and FX price risks ▪ Target hedging 50-60% of oil and liquids production net of royalties on a rolling 12-month1 basis ~50% oil & liquids volumes hedged ▪ 2025 hedges weighted to collars (60%) vs swa
Slide 29: Appendix: SE Saskatchewan Acquisition June/24
APPENDIX: SE SASKATCHEWAN ACQUISITION JUNE/24 TSX: SOIL OTCQX: OILSF 29
Slide 30: Battrum and Flat Lake Acquisition, Closed June 14, 2024
BATTRUM AND FLAT LAKE ACQUISITION, CLOSED JUNE 14, 2024 $535M 13,000 boe/d 96% 2.1x Net Cash Increased oil production +50% Crude Oil and NGLs Cash Flow Attractive Acquisition Metrics1 Refinancing of Debt Structure Cost Q1 Cash Recycle U$650M Note Offering - 9.625% Coupon Mmboe $ / boe Netback2 Ratio
Slide 31: Southeast Saskatchewan: Consolidation
SOUTHEAST SASKATCHEWAN: CONSOLIDATION Multi-Zone Light Oil Development ▪ 19,695 boe/d1 (94% oil & NGLs) Southeast Saskatchewan ▪ Strategic control of the area’s robust infrastructure 2021 - Oxbow ▪ Strategic gas processing facility expands netbacks ▪ Over 20 years of booked and unbooked drilling inv
Slide 32: Appendix: Corporate Details
APPENDIX: CORPORATE DETAILS TSX: SOIL OTCQX: OILSF 32
Slide 33: Our Team
MANAGEMENT Our Team A Long History of Value Creation in the Oil Y O&UGas R S U Production B T I T L E H E R E Space John Jeffrey, Chief Executive Officer Jamie Kuntz, VP Operations ▪ Former Facility & Pipeline Engineering Manager at Ridgeback Resources ▪ Former CFO and founding partner of Axiom Grou
Slide 34: Directors
DIRECTORS Sound Governance and Strategic Oversight John Jeffrey, MBA, BA Dr. Thomas Gutschlag ▪ Former CFO and founding partner of Axiom Group ▪ Chairman, Cofounder and former CEO/CFO of Deutsche Rohstoff AG, a public company listed on the ▪ Strong background in operations and finance with successfu
Slide 35: Corporate Profile
CORPORATE PROFILE TSX: SOIL OTCQX: OILSF Share Structure 2024 Average Daily Trade Volume1 Basic Millions Thousands TSX 170.5 Shares Outstanding 202.0 Other Canada 212.0 Options & Warrants Millions Expiry Date Strike Price Proceeds ($M) USA 28.8 Options, PSUs and RSUs 6.3 Various $2.532 2.4 Total 411
Slide 36: Saturn's Community Involvement
SATURN’S COMMUNITY INVOLVEMENT Community Involvement and Charitable Donations Ronald McDonald House Charities At Saturn, we believe in building relationships that benefit everyone involved. We In 2024, Saturn committed $50,000 to Ronald McDonald foster collaboration, listen to the input of our stake
Slide 37: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Information Regarding Disclosure on Oil and Gas Operational Information and Non-IFRS Measures Throughout this presentation and in other materials disclosed by the Company, Saturn employs certain measures to analyze financial performance, financial position and cash
Slide 38: Disclaimer – Oil & Gas Advisories, Cont'd
DISCLAIMER – OIL & GAS ADVISORIES, CONT’D Net Operating Expenses Net operating expense is calculated by deducting processing income primarily generated by processing third party production at processing facilities where the Company has an ownership interest, from operating expenses presented on the
Slide 39: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Reserve Assumptions: Reserve evaluation calculations are based on data and expected future production volumes as provided by third party independent evaluators Ryder Scott Company (the “Ryder Scott Report”) for year end December 31, 2023. It should not be assumed th
Slide 40: Disclaimer – Oil & Gas Advisories
DISCLAIMER – OIL & GAS ADVISORIES Supplemental Information for Battrum and Flat Lake Acquisition, Closed June 14, 2024 1 Supplimental Information Regarding Reserves of Saskatchewan Asset Acquisition Supplemental Light and Natural Gas Conventional Barrels of Oil Heavy Oil Tight Oil Shale Gas Liquids
Slide 41: Executive Officers, Directors, Head Office
TSX: SOIL OTCQX: OILSF Executive Officers Directors Head Office John Jeffrey, Chief Executive Officer & Director John Jeffrey, CEO & Director Saturn Oil & Gas Inc. Scott Sanborn, Chief Financial Officer Grant MacKenzie, CLO & Director Suite 2800, 525 – 8th Ave SW Justin Kaufmann, Chief Development O
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