Southern Energy Corp. · TSXV:SOU
Southern Energy — Investor Presentation (January 2019)
21 slides from Southern Energy's investor presentation, January 2019
Slide 1: Corporate Presentation
Corporate Presentation January 2019 Click to edit Master title style Click to edit Master subtitle style
Slide 2: Disclaimer
Disclaimer This presentation contains information that may be considered to be forward-looking information within the meaning of applicable securities laws. Such forward-looking information relates to internal projections, expectations, estimates or beliefs relating to future events or future perfor
Slide 3: Disclaimer
Disclaimer BOE Disclosure The term barrels of oil equivalent (“BOE”) may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primaril
Slide 4: Investment Thesis
Investment Thesis Mission Statement Southern Energy’s mission is to build a substantial oil and gas company in the southeastern United States through the consolidation and development of prolific reservoirs outside of the expensive shale basins. Our goal is to continually grow shareholder value via
Slide 5: About Southern Energy
About Southern Energy Southern Energy is an emerging Gulf States natural gas and light oil producer with a stable production base, significant low-risk drilling inventory and strategic access to the best commodity pricing in North America Capitalization CAD $ Southern Energy Assets Trading Symbol (T
Slide 6: Recent Corporate Developments
Recent Corporate Developments Completed an CAD $18.0 MM non-brokered recapitalization financing • Arranged for an $13.5 MM credit facility with a US commercial bank • Commenced trading on the TSXV and executed a concurrent 5:1 share consolidation Closed the acquisition of on-shore US Gulf Coast asse
Slide 7: Investment Highlights
Investment Highlights • Low decline US Gulf Coast production base of ~1,650 boe/d (14% oil) Stable • Operated assets with over 95% working interest Production • Control of easily expandable infrastructure and abundant regional take away capacity Base • Stacked pay with up to 12 producing formations,
Slide 8: Leadership Team
Leadership Team Experienced and successful management team with a history of creating shareholder value • Strong technical expertise with an early mover advantage and further benefitting from the use of modern data workflow • Proven track record of success and value creation through acquisitions, jo
Slide 9: Asset Overview
Asset Overview MISSISSIPPI ALABAMA Mechanicsburg Black Warrior Basin • 700 boe/d (15% liquids) Black • 50 boe/d (65% liquids), 45° API • Field covered by existing 53 mi2 3D Warrior • > 600,000 acres of highly • 10 - 12 vertical infill Cotton Valley Basin prospective land on mapped trend locations (O
Slide 10: Gwinville Field Overview
Gwinville Field Overview Key Attributes One of Mississippi’s Largest and Most Productive Fields • 1+ Tcf OGIP in Selma Chalk with current recovery factor ~ 15% Cum. Production • Multi-zone production of 1.5 Tcf, 12 MMbbl, current decline < 8%, with Bcf MMbbl additional upside potential Wilcox 0.7 -
Slide 11: Gwinville Selma Chalk Analog
Gwinville Selma Chalk Analog Similar Pool Characteristics • The Baxterville field has undergone a successful HZ conversion and is a direct analog to the Gwinville Field ▪ Recent horizontal wells in the middle of the pool producing > 7 MMcf/d IP30 GWINVILLE ▪ Southern plans to increase the number of
Slide 12: Gwinville Selma Chalk HZ Development
Gwinville Selma Chalk HZ Development Type Curve Economics Economics – Southern HZ (Gen 3) WTI ($/bbl) $55.00 $60.00 Gen 1: 3 - 4 stages, 400 - 800 lb/ft 10,000 Gen 2: 12 - 14 stages, 800 - 1,200 lb/ft Henry Hub ($/MMBTU) $3.00 $4.00 Gen 3: 20+ stages, 2,000+ lb/ft IRR (%) 49% 105% NPV10 ($MM) $2.7 $
Slide 13: Oil Upside – Regional Cotton Valley
Oil Upside – Regional Cotton Valley Over 160 MMbbl of oil and 2 Tcf of gas has been produced from the salt-related structures on the map below • Majority of Cotton Valley wells were drilled before 1985 and took > 12 months to drill • Recent successful drilling targeting Cotton Valley (CNVL) oil belo
Slide 14: Project Economics
Project Economics Horizontal Williamsburg Vertical Southern Project Economics NLA Play Selma Chalk Cotton Valley Significant gas upside above Multi-year drilling inventory in identified oil bearing structures $3.00/MMBTU HH Oil (bbl/d) 11 160 510 IP 30 Gas (Mcf/d) 5,700 280 1,800 Oil (Mbbl) 9 225 57
Slide 15: Access to Premium Commodity Pricing
Access to Premium Commodity Pricing Unique opportunity to invest in US commodity exposure Historical: AECO vs. Henry Hub among Canadian listed small-cap energy companies $7.00 Differential (CAD $/bbl) • Superior commodity pricing through access to Louisiana $6.00 AECO (CAD $/Mcf) Light Sweet oil and
Slide 16: Growth Strategy
Growth Strategy Management expects to establish a dominant production base through an acquire and exploit model ARKANSAS • Target production of 10,000 boe/d over 18 – 24 months • Pursuing multiple follow on acquisitions identified in the focus MISSISSIPPI ALABAMA area while focusing on cash flow per
Slide 17: Summary
Summary Canadian-listed US Gulf Coast focused energy company with a goal to: Consolidate high quality assets in under-exploited basins in US Gulf Coast states • Acquire assets at a discount to typical market metrics • Substantial low risk drilling inventory • Follow-on acquisition potential identifi
Slide 18: Appendix
Southern & ENERGY APPENDIX 17
Slide 19: Favorable Gas Fundamentals
Favorable Gas Fundamentals • US natural gas demand growth is outpacing supply growth led US Gas Storage by natural gas power generation, LNG exports and 5,000 underestimated weather forecasts based on expectations the 5 - Year Range 2017 2018 trend of multi-year mild conditions would continue 4,000
Slide 20: LNG Market Fundamentals
LNG Market Fundamentals Driven by energy security and environmental policies LNG Supply & Demand LNG demand is expected to continue to grow rapidly 600 Demand Supply • LNG is expected to account for 30% of global natural gas demand growth (IEA, Global Gas Security Review) 500 Million Metric Tonnes •
Slide 21: Southern LNG Exposure
Southern LNG Exposure Southern stands to benefit from increased feedstock demand due to the next wave of LNG projects • Gulf Coast US LNG exports projected to grow to 10 Bcf/d by year-end 2020 providing exposure to premium international prices • Southern’s assets receive Henry Hub basis which will c
Southern Energy — Investor Presentation (January 2019) on 6ix