Advantage Energy Ltd · TSX:AAV
Advantage Energy — Advantage Oil & Gas — Investor Presentation (March 2011)
19 slides from Advantage Energy's investor presentation, March 2011
Slide 1: Investor Presentation: Creation of Longview Oil Corp.
Investor Presentation March 2011 Creation of Longview Oil Corp. March 2011 Page 1
Slide 2: Overview
Overview • Longview Oil Corp. • IPO & Benefits to Advantage Shareholders • New Advantage • Property Summary • Glacier Phase III update • Pro forma Cash Flow Statement • Longview Business Strengths March 2011 Page 2
Slide 3: Longview Initial Public Offering (IPO)
Longview Initial Public Offering (“IPO”) • Longview Oil Corp. is being created to acquire certain oil-weighted assets (the “Acquired Assets”) of Advantage Oil & Gas Ltd. • Q4 2010 daily production of 6,220 boe/d • P+P Reserves of 36.9 mmboe (77% oil and NGL) with a 16.2 year RLI(1) • Longview has fi
Slide 4: Longview – Management and Directors
Longview – Management and Directors • Longview will be managed by Advantage under a Technical Services Agreement • General and administrative expenses will be allocated based on production • Management Team: • Kelly Drader, Chief Executive Officer • Andy Mah, Chief Operating Officer • Craig Blackwoo
Slide 5: Benefits to Advantage Shareholders
Benefits to Advantage Shareholders • Two strategically focused Canadian energy companies • Increased financial flexibility through debt reduction • Both companies will have conservative financial structures with significant liquidity to fund future internal development opportunities and potential ac
Slide 6: Debt Reduction - Increased Financial Flexibility
Debt Reduction - Increased Financial Flexibility Advantage Pro forma Debt Position ($millions) Y/E 2010 Pro forma Bank Debt $ 288.9 $47.9 Convertible Debentures: December 2011 62.3 62.3 January 2015 86.3 86.3 Total Debt $437.5 $196.5 • Based on net proceeds of $141 million from Longview IPO and $100
Slide 7: New Advantage – “Pure Play” Natural Gas Focus
New Advantage – “Pure Play” Natural Gas Focus Company Total Montney Unconventional 2011 Production : 14,811 boe/d 2011 Production : 23,353 boe/d Gas/Oil % : 100/0 Gas/Oil % : 92/8 Avg. W.I. : 93% Liquids Rich Multi-zone CBM + Colorado Group 2011 Production : 4,721 boe/d 2011 Production: Production :
Slide 8: New Advantage – P+P Reserves
New Advantage – P+P Reserves(1) Production : 4,557 boe/d Eastern Alberta Gas/Oil % : 65/35 RLI 12.8 Avg. W.I. %: Gas/Oil % 94/6 Western Alberta RLI 12.7 Glacier Gas/Oil % 68/32 RLI 31.7 8% Gas/Oil % 100/0 11% 81% Total RLI 24.3 (1) Based on the December 31, 2010 Sproule Reserve Report Gas/Oil % 96/4
Slide 9: Glacier Development Driving Organic Production Growth
Glacier Development Driving Organic Production Growth Glacier Phase III results are exceeding New Advantage Production(1) (boe/d) expectations: 24,000 • 22 of the 28 Phase III Montney wells have 95% Production Growth been drilled, completed and tested 18,000 • 6 remaining wells are drilled with comp
Slide 10: Daily Gas Production (mcf/d)
Daily Gas Production (mcf/d) 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 1-Jan-09 1-Feb-09 1-Mar-09 1-Apr-09 Phase I 25 mmcf/d 1-May-09 1-Jun-09 1-Jul-09 1-Aug-09 1-Sep-09 Glacier Production Growth 1-Oct-09 1-Nov-09 Phase II 1-Dec-09 50 mmcf/d 1-Jan-10 1-Feb-10 1-Mar-10 1-Apr-10 1-May-10 1-Ju
Slide 11: Glacier 2P Reserves Exceed 1.0 Tcf
Glacier 2P Reserves Exceed 1.0 Tcf (1) • Production and test rates have exceeded expectations • 2010 Finding and Development costs were $9.29/boe (3 year F&D $10.75/boe)(2) 1.04 Tcf 0.82 Tcf Probable Proven 57% 0.21 Tcf 37% 29% 2008 YE 2009 YE 2010 YE (1) Based on the December 31, 2010 Sproule Reser
Slide 12: Glacier Value Growth
Glacier Value Growth(1) • Glacier’s asset value grew 19% to $1.4 Billion at YE 2010 despite a 25% reduction in Sproule’s natural gas price forecast for the years 2011 through to 2015 $1.40 Billion $1.16 Billion $0.30 Billion 2008 YE 2009 YE 2010 YE (1) Based on the December 31, 2010, 2009 and 2008 S
Slide 13: Strong Test Rates Across Glacier Land Block
Strong Test Rates Across Glacier Land Block Glacier Phase III Upper Montney Test Rates(1) Glacier Phase III results are exceeding expectations: • Recent delineation drilling results confirm high quality reservoir to the extreme NE and SE areas of the land block Phase III Test Rates Continue to Impro
Slide 14: 2011 Pro forma “New Advantage” Cash Flow Summary
2011 Pro forma “New Advantage” Cash Flow Summary ($000’s) Daily production (boe/d)(1) 23,353 Gas/Oil % 92/8 Operating income(1) $ 147,512 Hedging gains 26,212 G&A and capital taxes(2) (19,900) Interest and financing expenses (8,829) Dividend income from Longview 18,667 Adjusted funds from operations
Slide 15: Low Cost Structure
Low Cost Structure New Advantage 2011 Operating Netbacks(1) • Cost structure expected to rank in the top quartile among the intermediate sector $/boe $/mcfe • Strong netbacks driven in part by Revenue $25.36 $4.23 Glacier: Operating cost $1.60/boe Royalties @ 10.2% (2.58) (0.43) Royalty rate 7.3% Op
Slide 16: Longview – Business Strengths
Longview – Business Strengths • Assets consist of oil-weighted resource plays with ~487 million bbls of Discovered Petroleum Initially-In-Place (“DPIIP”)(1) • Only 6.8% recovered to date with an additional 4.6% included in Sproule P+P reserves • Multi-year inventory of low risk drilling and recomple
Slide 17: Advantage Contact Information
Advantage Contact Information Investor Relations 1.866.393.0393 [email protected] Andy Mah, P.Eng. Chief Executive Officer Craig Blackwood, C.A. Vice-President, Finance www.advantageog.com TSX:AAV NYSE:AAV Advantage Oil & Gas Ltd. Suite 700, 400 – 3rd Avenue SW Calgary, Alberta T2P 4H2 Main: 403.71
Slide 18: Advisory
Advisory Forward-Looking Statements The information in this presentation contains certain forward-looking statements, including within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future intentions or performance.
Slide 19: Advisory
Advisory Forward-Looking Statements continued Certain estimates of DPIIP have been presented in this presentation. All estimates of resources presented in this press release have an effective date of December 31, 2010 and represent estimates of oil resources determined by internal "qualified reserve
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