Birchcliff Energy Ltd. · TSX:BIR
Birchcliff Energy — Investor Presentation (January 2023)
40 slides from Birchcliff Energy's investor presentation, January 2023
Slide 1: Corporate Presentation
CORPORATE PRESENTATION JANUARY 2023
Slide 2: Corporate Snapshot: Birchcliff Overview
CORPORATE SNAPSHOT BIRCHCLIFF OVERVIEW SELECT 2023 GUIDANCE(1)(2) BIRCHCLIFF IS A PURE ALBERTA MONTNEY/DOIG Average production 81,000 – 83,000 boe/d RESOURCE PLAY PRODUCER Adjusted funds flow(3) $570 million BC AB F&D capital expenditures $260 – $280 million Free funds flow(3) $290 – $310 million Ex
Slide 3: Why Invest in Birchcliff
CORPORATE SNAPSHOT WHY INVEST IN BIRCHCLIFF WORLD-CLASS ASSET BASE OPERATIONAL EXPERTISE Executive and management teams with a proven Focused, contiguous Montney land position track record Using scale to drive down costs and reduce Own, operate and control infrastructure environmental impact Multi-l
Slide 4: 2023 Outlook: Capital Program Details
2023 OUTLOOK 2023 CAPITAL PROGRAM DETAILS(1) 2023 F&D Capital Expenditures by Classification 2023 Pad Locations 09-04 (7) 14-06 (6) 3 Montney D1 3 Montney D1 Classification Capital (millions) (2)(3) 3 Montney D2 2 Montney D2 DCCET $191 - $206 1 Montney C 1 Montney C (4) Facilities and Infrastructure
Slide 5: 2023 Outlook: Fully Funded Capital Program and Dividend
2023 OUTLOOK(1) FULLY FUNDED 2023 CAPITAL PROGRAM + DIVIDEND AT WTI US$70/BBL AND AECO CDN$3/GJ $600 $570 MM Delivering Shareholder Returns 2023 excess free funds flow(2) – budgeted • Announced a 10-fold increase to common share dividend for commodity pricing(3) 2023 ($0.80/share annually).(5) $500
Slide 6: 2023 Outlook: Natural Gas Marketing
2023 OUTLOOK 2023 NATURAL GAS MARKETING(1) – FORECASTED AVERAGE PRICE PER HUB AECO AECO $3.30 ($0.05) 17% DIVERSIFIED ($0.31) $2.94 MARKET EXPOSURE Dawn 41% NO FIXED Dawn $4.51 PRICE ($0.20) Alliance ($1.25) COMMODITY $3.06 6% HEDGES Alliance $3.40 ($0.00) ($0.31) Pricing Hub Henry Hub Dif. Henry $3
Slide 7: Five-Year Plan: Disciplined Production Growth
FIVE-YEAR PLAN(1) DISCIPLINED PRODUCTION GROWTH ENHANCES PROFITABILITY DELIVER SIGNIFICANT FULLY UTILIZE EXISTING FIVE-YEAR PLAN GENERATE SUBSTANTIAL FREE FUNDS FLOW AND SHAREHOLDER RETURNS INFRASTRUCTURE KEY THEMES: MAINTAIN CAPITAL AND ESTABLISH A CASH LEVERAGING EXTENSIVE DISCIPLINE POSITION DRIL
Slide 8: Five-Year Plan: Significant Drilling Inventory
FIVE-YEAR PLAN(1) DECADES OF LOW-RISK BOOKED INVENTORY BEYOND FIVE-YEAR PLAN SIGNIFICANT DRILLING INVENTORY: Future Total 2P Booked 2023 2024 2025 2026 2027 5 Year Total Years Locations 30 wells/yr 23 years of 2P Wells/yr 32 44 45 32 29 182 going locations forward 5-year plan annual well count Maint
Slide 9: Five-Year Plan: Profitability and Shareholder Returns
FIVE-YEAR PLAN(1) FOCUSED ON PROFITABILITY & SHAREHOLDER RETURNS GENERATING EXCESS FREE FUNDS FLOW SHAREHOLDER RETURNS CAPACITY $800 $177 $162 $237 $247 $700 $77 - $2.00 $600 $97 $213 $213 $1.69 $1.73 $213 $213 $213 $1.47 $1.41 $500 $1.50 $1.09 – $/common share $ millions $400 $260 - $355 $360 $1.17
Slide 10: Enhanced Shareholder Returns
ENHANCED SHAREHOLDER RETURNS NEW BASE DIVIDEND IS ONE OF THE HIGHEST YIELDS AMONG PEERS ANNUAL BASE DIVIDEND YIELD(1)(2) at January 17, 2023 10% New annual $0.80per common share base dividend(3) represents a 10-fold increase 8% over the previous base dividend yield. 6% 4% 2% 0% Peer 1 Peer 2 Peer 3
Slide 11: Birchcliff Assets
BIRCHCLIFF ASSETS
Slide 12: 2023 Capital Program
2023 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY MAJOR THEMES 2023 Capital Program Major Themes 2023 Pad Locations • Balanced drilling opportunities of prolific gas and liquids-rich wells. 09-04 (7) 14-06 (6) • Leverage interconnectivity between Pouce and Gordondale to optimize Lower Montney Lower Mo
Slide 13: 2022 Capital Program
2022 CAPITAL PROGRAM MONTNEY/DOIG RESOURCE PLAY IP60 PRODUCTION RESULTS 2022 Locations & Well Rates (IP60) 2022 Capital Program Major Themes • Balanced drilling opportunities of prolific gas and liquids-rich wells. • Focused on scale and repeatability. • Significant capital spend on successful facil
Slide 14: Birchcliff's Montney/Doig Resource Play
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY Large focused land base with 404.8 net sections prospective for the Montney/Doig as at December 31, 2021. Birchcliff has a contiguous land block at Pouce Coupe and Gordondale of approximately 214.2 net sections.
Slide 15: Montney/Doig Hexastack
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG BIRCHCLIFF MONTNEY/DOIG HEXASTACK • Resource density: Stacked resource up to 300 metres thick. • Large areal extent: Extends over 50,000 square miles. • Exceptional “fracability”: Low clay content, low Poisson’s Ratio and high Young’s
Slide 16: Located in the Heart of the World-Class Montney
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAYRESOURCE PLAY MONTNEY/DOIG LOCATED IN THE HEART OF THE WORLD-CLASS MONTNEY JANUARY 2023 16
Slide 17: Pouce Coupe Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE OVERVIEW 2021 average production of 50,025 boe/d(1) with a natural gas weighting of 89%. Proven asset in development phase. Wells show high initial deliverability, low terminal decline and stable long-term production. Predictable results with impro
Slide 18: Pouce Coupe Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY POUCE COUPE TYPE CURVE(1) Rate of Return (%) WTI (US$/bbl) $70.00 $80.00 $90.00 $100.00 $3.00 162 187 213 241 (C$/GJ) AECO $4.00 212 240 269 300 $5.00 265 296 328 362 $6.00 321 355 389 426 NPV 10% ($MM) WTI (US$/bbl) $70.00 $80.00 $90.00 $100.00 $3.00 16.3 17.
Slide 19: Exceeding Expectations
D&C CONTINOUS PERFORMANCE IMPROVEMENT EXCEEDING EXPECTATIONS 2022 WELLS VS. TIER 0 CAPPED TYPE CURVE 13-29 Pad 13-29 Pad 01-08 Pad 04-04 Pad 01-08 Pad Solid performance from the 2022 capital program with a mix of greenfield and brownfield pads JANUARY 2023 19
Slide 20: Gordondale Overview
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE OVERVIEW 2021 average production of 28,492 boe/d(1) with an oil & NGLs weighting of 37%. Strategic infrastructure with deep cut liquids recovery enhancing netbacks. Low base production decline requires less incremental wells to keep infrastructure f
Slide 21: Gordondale Type Curve
BIRCHCLIFF’S MONTNEY/DOIG RESOURCE PLAY GORDONDALE TYPE CURVE(1) D1 & D2 Halo High GOR - Rate of Return (%) WTI (US$/bbl) $70.00 $80.00 $90.00 $100.00 $3.00 143 170 200 231 (C$/GJ) AECO $4.00 183 214 246 280 $5.00 225 258 293 330 $6.00 268 304 341 380 D1 & D2 Halo High GOR - NPV 10% ($MM) WTI (US$/b
Slide 22: Focused on ESG Excellence: Environmental
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE PEER EMISSIONS METRICS(1)(2)(3)(4)(5) ENVIRONMENTAL 2,500,000 Producer GHG Emissions Metrics 0.050 Waste heat recovery units at the Pouce Coupe Gas Plant take the 2,000,000 0.040 equivalent of >5,000 cars off the road annually. Emissions Intensity(7
Slide 23: Focused on ESG Excellence: Social and Governance
CORPORATE RESPONSIBILITY FOCUSED ON ESG EXCELLENCE SOCIAL $4.25 million donated to more than 100 local community groups and organizations in the last 5 years. Continued partnerships with local communities through educational, cultural, and economic development initiatives. Major supporter of STARS A
Slide 24: Canadian West Coast LNG Opportunity
CANADIAN WEST COAST LNG OPPORTUNITY BIRCHCLIFF’S ACTIVE ROLE SUPPLYING THE WORLD WITH CLEAN LNG Environmental Benefits of Canadian LNG LNG is critical in the transition to a low-carbon economy, as it displaces higher carbon fuels like coal and oil and provides a backstop to intermittent renewables s
Slide 25: Appendix
BIRCHCLIFF ENERGY APPENDIX JANUARY 2023 25
Slide 26: Production History
PRODUCTION HISTORY SIGNIFICANT GROWTH SINCE INCEPTION 90,000 81,000 – 83,000 77,977 78,520 78,000 80,000 77,096 76,401 70,000 67,963 Average Production (boe/d) 60,000 49,236 50,000 38,950 40,000 33,734 30,000 25,829 22,802 20,000 18,136 13,079 10,148 11,216 10,000 6,711 5,368 2,793 0 2005 2006 2007
Slide 27: Corporate Reserves
CORPORATE RESERVES CONSISTENT RESERVES VOLUME AND VALUE GROWTH 1,200,000 $7,000 PDP - Reserves On a per share basis PDP, TP 1,100,000 TP - Reserves and 2P reserves have 2P - Reserves increased at a compound $6,000 1,000,000 annual growth rate of 11%, PDP - NPV10 16% and 16% per year since 900,000 TP
Slide 28: Historical Profitability
HISTORICAL PROFITABILITY PROVEN TRACK RECORD AS A LOW-COST PRODUCER Profitability Breakdown: 5 Year 2017 2018 2019 2020 2021 Average Average AECO (CDN$/GJ) $2.04 $1.42 $1.67 $2.11 $3.44 $2.14 Average WTI (US$/bbl) $50.95 $64.77 $57.03 $38.91 $68.70 $56.07 P&NG Revenue ($/Mcfe)(1)(2) $3.74 $3.68 $3.5
Slide 29: Corporate Information
CORPORATE INFORMATION EXECUTIVE DIRECTORS BANK SYNDICATE Jeff Tonken Jeff Tonken The Bank of Nova Scotia Chief Executive Officer and Chairman of the Board Chief Executive Officer and Chairman of the Board HSBC Bank Canada National Bank of Canada Christopher Carlsen Dennis Dawson Canadian Imperial Ba
Slide 30: Corporate Information: Management Team
CORPORATE INFORMATION MANAGEMENT TEAM HEAD OFFICE Gates Aurigemma Jeff Rogers Suite 1000, 600 – 3rd Avenue S.W. Manager, General Accounting Facilities Manager Calgary, Alberta T2P 0G5 Phone: 403-261-6401 Jesse Doenz Randy Rousson Controller and Investor Relations Manager Drilling and Completions Man
Slide 31: Advisories: Definitions
ADVISORIES DEFINITIONS Deloitte Deloitte LLP, independent qualified reserves evaluator Gordondale Gas Plant AltaGas’ deep-cut sour gas processing facility in Gordondale NI 52-112 National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure Pouce Coupe Gas Plant Birchcliff’s 100% own
Slide 32: Advisories: Non-GAAP Measures
ADVISORIES WTI West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma, for crude oil of standard grade $000s thousands of dollars NON-GAAP AND OTHER FINANCIAL MEASURES This presentation uses various “non-GAAP financial measures”, “non-GAAP ratios”, “supplementary fina
Slide 33: Advisories
ADVISORIES Birchcliff anticipates the forward-looking non-GAAP financial measures for adjusted funds flow and free funds flow disclosed herein to generally exceed their respective historical amounts for the twelve months ended December 31, 2021, primarily due to higher anticipated benchmark oil and
Slide 34: Advisories: Profit Measures
ADVISORIES Profit Per Mcfe Birchcliff calculates “profit per Mcfe” as aggregate profit in the period divided by the production (Mcfe) in the period. Management believes that profit per Mcfe assists management and investors in assessing Birchcliff’s ability to bear its total cash costs and the costs
Slide 35: Advisories: Presentation of Oil and Gas Reserves
ADVISORIES PRESENTATION OF OIL AND GAS RESERVES Certain terms used herein are defined in National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”), CSA Staff Notice 51-324 Revised Glossary to NI 51-101 – Standards of Disclosure for Oil and Gas Activities (“CSA Sta
Slide 36: Advisories
ADVISORIES Reserves life index is calculated by dividing PDP, proved or proved plus probable reserves, as the case may be, as estimated by Birchcliff’s independent qualified reserves evaluator at December 31, 2021, by the Corporation’s average annual production guidance for the period indicated. Res
Slide 37: Advisories
ADVISORIES To-date, no pressure transient or well-test interpretation has been carried out on any of the wells. The natural gas volumes represent raw natural gas volumes as opposed to sales gas volumes. F&D CAPITAL EXPENDITURES Unless otherwise stated, references in this presentation to “F&D capital
Slide 38: Advisories
ADVISORIES • the information set forth on the slide “Five-Year Plan – Decades of Low-Risk Booked Inventory Beyond Five-Year Plan”, including: that approximately 25 to 30 wells will be required each year after the Five-Year Plan to keep all of its infrastructure fully utilized and producing 90,000 bo
Slide 39: Advisories
ADVISORIES • With respect to Birchcliff’s Five-Year Plan: o The following commodity prices and exchange rate are assumed for 2024 to 2027 (see above for 2023 commodity prices and exchange rate assumptions): an average WTI price of US$80.00/bbl; an average WTI-MSW differential of CDN$5.00/bbl; an ave
Slide 40: Advisories
ADVISORIES Birchcliff’s actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of both known and unknown risks and uncertainties including, but not limited to: the risks posed by pandemics (including COVID-19), epidemi
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