Journey Energy, Inc. · TSX:JOY
Journey Energy — Investor Presentation (August 2024)
30 slides from Journey Energy's investor presentation, August 2024
Slide 1: Corporate Presentation
JOURNEY Corporate Presentation TSX: JOY OTCQX: JRNGF @AlexVergeJOY August, 2024
Slide 2: Journey Today Is…
Journey Today Is… Sustainable Growing free cash flow with low maintenance capital Safe Low decline predictable base Stable revenue stream (power sales) to offset largest operating cost Reduced debt and now termed out to 2029 Trades below PDP NAV Low risk development in mature fields Em
Slide 3: Low Decline Production, Power Generation, Duvernay Growth Snapshot
LOW DECLINE PRODUCTION,2024 POWER GENERATION, DUVERNAY GROWTH SNAPSHOT 11,400 boe/d (July Estimate); 55% crude oil and NGL’s 13% corporate decline Management, directors and AIMCo own 25% of 61.3 million OS shares Adjusted Funds Flow of $60-62 million (1) Exit Net Debt of $46-48 million, $38 million
Slide 4: Steps Taken in 2023 and 2024 Position Journey for 2025
STEPS TAKEN IN 2023 AND 2024 POSITION JOURNEY FOR 2025 Driving down debt by $55 million in 2023/2024 Issued $38 million in convertible debentures (March 2024) to term out 80% of YE debt to March 2029 Hedged one third of 2025 natural gas production at $3.20/mcf In 2025 Journey’s power business transi
Slide 5: Corporate Growth Guidance 2024
Corporate 2024 Growth GUIDANCE Returns in 2022 2021 2022 2023 2024 Operating Highlights Actual Actual Actual Forecast Production Average (boe/d) 8,004 9,778 12,415 11,200 – 11,500 Oil and NGLs (%) 47% 49% 54% 56% Corporate Decline Rate (%) 14% 14% 13% 13% Reference Prices Natural Gas AECO ($/mcf) $3
Slide 6: Adjusted Funds Flow Price Sensitivity
PRICE Reserves SENSITIVITY Value CHART WTI ($USD/BBL) Adjusted Funds Flow ($MM) $75.00 $76.00 $77.00 $78.00 $79.00 $80.00 $81.00 $82.00 $83.00 $1.55 52.5 54.5 56.5 58.5 60.4 62.3 64.2 66.0 67.7 $1.60 53.0 55.0 57.1 59.1 60.9 62.9 64.7 66.5 68.3 $1.65 53.5 55.6 57.6 59.6 61.4 63.4 65.2 67.0 68.8 AECO
Slide 7: Key Asset: Duvernay
KEYReserves Value ASSET: DUVERNAY 128 Section Joint Venture land block; 102 sections currently controlled JV land block is within the thick Duvernay oil fairway Journey current WI in JV land block is 32.5% Spartan Delta Corp current WI in JV land block is 67.5% Drilling 2 wells in 2H 2024 Journey ow
Slide 8: Joint Venture Lands Support Over 60 Net Well Locations
ReservesOVER JOINT VENTURE LANDS SUPPORT Value60 NET WELL LOCATIONS Single Well Economics(2) DCET(1) Capex ($,000) 13,000 11,000 Reserves (MBOE) 573 573 Oil Reserves (MBBL) 400 400 % Oil and NGLs 74% 74% IP30 (BOE/day) 722 722 IP365 (BOE/day) 420 420 F&D ($/BOE) 22.70 19.20 NPV(3)@ 10% BT ($,000) 7,
Slide 9: Key Asset: Power Business Expanding
KEY ASSET: POWER BUSINESS EXPANDING (4 MW TO 35 MW IN 2025) 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 Gilby (Under construction with late 2024 start up) 15.1 MW ca
Slide 10: Monthly Power and Fuel Cost vs. Forecast Power Generation Revenue
MONTHLY POWER AND FUEL COST VS. FORECAST POWER GENERATION REVENUE $6,000,000 Monthly Fuel & Power Cost/Power Generation Revenue $5,000,000 Dashed line represents the hypothetical revenues Journey would have realized if Mazeppa and Gilby Power Generation were online alongside Countess $4,000,000 in 2
Slide 11: Key Asset: Medicine Hat (WCS Oil)
KEY ASSET:Reserves MEDICINEValue HAT (WCS OIL) Flagship asset in Q4 2022 acquisition, 72% WI, operated Multi year development plan, already yielding favourable results 34 undrilled locations currently identified Drilled 4 wells in Q4 2023 and 4 wells in Q1 2024 Small portion of the pool under polyme
Slide 12: Growing Net Asset Value Per Share
GROWING 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+P P+PDP $2.85/share JOY Shares PDP August 2024 $0.86/share $2.50/share P+PDP -$0.05/share PDP Period YE 2020 YE 2021 YE 20
Slide 13: Journey's Low Decline Results in a Higher NAV for a Given Multiple of Cash Flow
JOURNEY’S LOW DECLINE RESULTS IN A HIGHER NAV FOR A GIVEN MULTIPLE OF CASH REVALUING OF JOURNEY SHARES FLOW Corporate Production Decline Rates (%/year) 50% 45% Why Is Journey’s decline rate (13%) less than half of the 40% Peer Average: 29%/yr Base Decline industry average (29%)? 35% 30% 75% of our a
Slide 14: Increasing Price Favors Companies with Larger Reserve Bases
Increasing Price EDMONTON LIGHTFavors Companies PRICE Reserves REVERSING with Larger Value TREND SINCEReserve JANUARYBases 2021 2015 2024 Q2 2024 Actuals 2024 Budget Rising Price 2022 Trend 2021 INCREASING PRICE GLJ FORECASTED FAVORS EDMONTON Journey’s COMPANIES LIGHT Enterprise PRICE Value 1,WITH R
Slide 15: Year End 2023 Reserves Summary
DECEMBER Stable Base -–2020 2021 31, 2023 YE YEReserves Reserves YEAR END Summary Summary RESERVES Company Gross (WI) Reserves(1) / Value (January 1, 2024 3 Consultants Pricing) Oil Gas NGLs NPV10 ($million) Reserve Category Mboe RLI FDC ($ million)(2) (Mbbl) (Bcf) (Mbbl) Before Tax (1) Proved Devel
Slide 16: Future Development (Excluding Duvernay)
Reserves FUTURE DEVELOPMENT Value (EXCLUDING DUVERNAY) (As at December 31, 2023) Journey’s $247 million of P+P future development capital (FDC) adds reserves at $8.25/P+P boe Over 80% of Journey’s identified capital projects are unbooked Journey’s P+P FDC adds $299 million of NPV@10%, or $1.21 of NP
Slide 17: Unbooked Duvernay Provides Growth for Years to Come
UNBOOKED DUVERNAY PROVIDES GROWTH FOR YEARS TO COME Journey has identified 509 (314 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% Duvernay 200 60 0% Total 509 314 32% Unbooked Projects Booked
Slide 18: How to Make a Low Decline Even Lower: Waterflood Expansion
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 waterflood 1.1 Billion net bbl of DOOIP(3) 770 MM bbl 355 MM bbl convert 280 MM bbl future on waterflood/Polyme
Slide 19: More to Come
MORE TO COME 1.1 Billion net barrels of DOOIP(3) 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 PDP oil reserves by recovering 1.5% more of the oil left behind Infill Dr
Slide 20: In 2024, Journey Will…
In 2024, Journey Will… Reduce outstanding term debt… … term out most of net debt to 2029 with the issuance of $38 MM of convertible debentures Advance power projects with combined NPVs of $60-$80 million… … material increase in PDP Net Asset Value per Share Begin Duvernay development drilling on our
Slide 21: 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 22: 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 23: Appendix
Appendix 23
Slide 24: Value of Inventory Appreciates with Pricing
VALUE OF INVENTORY APPRECIATES WITH PRICING AECO $2.75/Mmbtu(1) Note: Based upon August 2024 estimated capital costs, operating costs and royalties (1) One third of Journey’s 2025 gas volumes are hedged at $3.20/MMbtu 24
Slide 25: Journey Has Over 30 Years of Drilling Inventory
JOURNEY HAS OVER 30 YEARS OF DRILLING INVENTORY AECO $2.75/Mmbtu(1) Note: Based upon August 2024 estimated capital costs, operating costs and royalties (1) One third of Journey’s 2025 gas volumes are hedged at $3.20/MMbtu 25
Slide 26: 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 27: 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 28: 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 29: 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 30: 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