Athabasca Oil Corporation · TSX:ATH
Athabasca Oil — Investor Presentation (March 2020)
29 slides from Athabasca Oil's investor presentation, Mar 4, 2020
Slide 1: Athabasca Oil Corporation March 2020 Corporate Update
ATHABASCA OIL CORPORATION FOCUSED | EXECUTING | DELIVERING MARCH 2020 CORPORATE UPDATE
Slide 2: Athabasca – Premier Resource Exposure
ATHABASCA – PREMIER RESOURCE EXPOSURE LIGHT OIL 37,500 boe/d THERMAL OIL MONTNEY 88% liquids $500MM EV $340MM Liquidity HANGINGSTONE 95 year 2P RLI 1,300 MMboe 2P 455 MMboe Proved LIGHT OIL CORNER DUVERNAY LEISMER ATHABASCA OIL (TSX:ATH) Footnotes and additional information included in the back as e
Slide 3: Athabasca – The Transformation
ATHABASCA – THE TRANSFORMATION $400MM 2019 Capital Light Oil Contingent Program Funded surpasses Bitumen 10,000 boe/d Royalty within Funds Flow Disciplined Resource Operations Appraisal Strong Balance 2016 2017 2018 2019 2020 Sheet Funding not Secured Future Growth $486MM $560MM Balance Sheet $265MM
Slide 4: Athabasca – 2019 Highlights
ATHABASCA – 2019 HIGHLIGHTS ~36,200 boe/d $155MM Funds Flow 87% liquids $15MM Free Cash Flow $340MM liquidity Strong Netbacks $140MM Capex (net) 2.0x net debt/funds flow $26/boe Light Oil 45% Thermal / 55% Light Oil 1.4x net debt/EBITDA $20/bbl Thermal Oil ATHABASCA OIL (TSX:ATH) Footnotes and addit
Slide 5: Athabasca – 2019 Reserve Highlights
ATHABASCA – 2019 RESERVE HIGHLIGHTS RESERVE OVERVIEW 2P RESERVES BY ASSET (MMBOE) o ~1 billion bbl of high quality 2P reserves at Leismer/Corner 177 o Compelling Net Asset Value (NPV 10 BT) • PDP: $1.58/share 695 • TP: $4.92/share 353 • 2P: $8.90/share o Strong asset coverage ratios (NPV10 / Total D
Slide 6: Athabasca – Drive to Free Cash Flow
ATHABASCA – DRIVE TO FREE CASH FLOW 60 PRODUCTION SUSTAINABLE PRODUCTION 50 Thermal Oil Light Oil 40 o Low corporate sustaining capital mboe/d 30 • 2020: $125MM* (~$10/boe) 20 o Flexible Light Oil development 10 0 • Operated liquids rich Montney 2018 2019 2020 • Duvernay funded through joint venture
Slide 7: Canadian Heavy Oil Outlook
CANADIAN HEAVY OIL OUTLOOK WCSB BASIN EGRESS CURRENT LANDSCAPE o Government mandated curtailments and crude by rail remain a necessary bridge to pipelines MID‐TERM EGRESS +800MBBL/D o Pipeline optimizations (Mainline, Keystone etc.) o Incremental crude by rail o New capacity (370,000 bbl/d ENB L3R)
Slide 8: Thermal Oil Market Access & Risk Management
THERMAL OIL MARKET ACCESS & RISK MGMT THERMAL OIL EGRESS HEDGING Current Egress LT Egress o 2020 financial hedges (March – December) AOC Thermal • WTI: ~12,500 bbl/d at ~US$55 Leases • WCS diff: ~14,500 bbl/d at US$18.25 o 2020 apportionment protection • 8,000 bbl/d of direct refinery sales Enbridge
Slide 9: Light Oil: Montney & Duvernay
LIGHT OIL MONTNEY & DUVERNAY
Slide 10: Placid Montney
PLACID MONTNEY PLACID ACTIVITY 16‐30 Pad HIGHLIGHTS – OPERATED 70%WI 6 wells 2‐5 Pad o 80,000 gross prospective acres 4 wells • 200 well development inventory1 • $22/boe operating netback (2019) • 200 – 300 bbl/mmcf initial free liquids Wells ATH Montney Licensed Montney ACTIVITY OVERVIEW PLACID PRO
Slide 11: Placid Montney – Strong Economics
PLACID MONTNEY – STRONG ECONOMICS PRODUCTION PLOT INTERNAL TYPE WELL PARAMETERS Rate Sales Gas C5+ liquids boe/d mmcf/d bbl/d % IP30 1,000 2.6 501 57% IP90 875 2.4 421 55% IP365 600 1.8 262 49% mboe bcf mbbl % EUR 675 2.2 246 45% ~25 bbl/mmcf plant recovered NGLs included in IPs & EURs CUMULATIVE CO
Slide 12: Kaybob Duvernay
KAYBOB DUVERNAY DUVERNAY HIGHLIGHTS JOINT VENTURE HIGHLIGHTS (30% WI) o Significant resource exposure (~220,000 acres) o $1B gross initial investment; $75MM net to retain 30%WI o Strong condensate yields (200 – 1,000 bbl/mmcf) o 2020 budget: ~$185MM ($30MM net) o Royalty advantage (5% vs. ~25% US sh
Slide 13: Duvernay – Competitive Shale Play
DUVERNAY – COMPETITIVE SHALE PLAY UNIQUE EXPOSURE TO THE OIL WINDOW KAYBOB WEST & EAST OIL o Significant running room • ~700 remaining locations across the play o Transitioning to development in select areas 16‐25 NORTHERN STEP‐OUT • Achieved C$7.5MM D&C costs (2‐well pad) KAYBOB WEST & EAST (26 WEL
Slide 14: Thermal Oil: Leismer & Hangingstone
THERMAL OIL LEISMER & HANGINGSTONE
Slide 15: Thermal Oil
THERMAL OIL LEISMER – TOP TIER OIL SANDS PROJECT REGIONAL MAP o ~20,000 bbl/d; ~3.5x SOR o 40,000 bbl/d AER approval Hangingstone o 695 mmbbl 2P reserves; 95 year 2P RLI o ~US$44 WTI operating breakeven (2020e) HANGINGSTONE – LOW SUSTAINING CAPITAL o ~9,000 bbl/d; ~4.5x SOR o 177 mmbbl 2P reserves;
Slide 16: Thermal Oil – Leismer Activity
THERMAL OIL – LEISMER ACTIVITY HIGHLIGHTS o L7 sustaining pad LEISMER DEVELOPMENT • 1,250m laterals (50% longer); flow control equipped • On‐stream in Q4/19 o L8 sustaining pad PAD 8N • Drilled 4 observation wells Q1/20 PAD 8S • Commenced long lead initiatives PAD 6 CPF o Expanding non‐condensable g
Slide 17: Canada Energy Makes a Global Difference
CANADA ENERGY MAKES A GLOBAL DIFFERENCE
Slide 18: Canadian Energy Makes a Global Difference
CANADIAN ENERGY MAKES A GLOBAL DIFFERENCE THE WORLD NEEDS CANADA’S ENERGY WORLD ENERGY MIX (2016 – 2040) o Energy Demand to grow by 27% by 2040 o ALL forms of energy are needed CANADA IS A GLOBAL LEADER IN INNOVATION & ENVIRONMENTAL STEWARDSHIP o If Canadian Energy standards were applied across the
Slide 19: Corporate Responsibility
CORPORATE RESPONSIBILITY We believe that strong performance in health, safety, and environment is essential to achieving our business goals and meeting the needs of stakeholders. We are focused on being a valued partner in local communities and industry programs while developing Alberta’s energy res
Slide 20: Corporate Responsibility – Environment
CORPORATE RESPONSIBILITY – ENVIRONMENT CORPORATE EMISSIONS INTENSITY GLOBAL EMISSIONS WATER RECYCLING RATES (2018) LIABILITY MANAGEMENT RATING 94% of Thermal Oil reservoir water recycled for steam generation Alberta Liability Management Rating (LMR) 16.0 ATHABASCA OIL (TSX:ATH) Sources: National Pol
Slide 21: Corporate Responsibility – Social
CORPORATE RESPONSIBILITY – SOCIAL SAFETY BENCHMARKING (2018) SAFETY 1.8 o 2018 Total Recordable Injury Frequency: 0.36 AOC has a strong track 1.6 record of safe operations o Exemplary safety performance key to business results and 1.4 stakeholder needs 1.2 • Behavior Based Safety embedded in culture
Slide 22: Corporate Responsibility – Governance
CORPORATE RESPONSIBILITY – GOVERNANCE GOVERNANCE OVERVIEW o AOC’s Board is responsible for the stewardship of the Independent Board and Chair (5 of 7) Company and provides independent and effective leadership o Some key areas of oversight include: • Health, safety and environmental performance • Str
Slide 23: Supplemental Information
mea SUPPLEMENTAL INFORMATION
Slide 24: Corporate Snapshot & Hedging
CORPORATE SNAPSHOT & HEDGING CAPITALIZATION OVERVIEW (ATH‐TSX) Basic Shares Outstanding 523 MM Market Capitalization ($0.35/sh) $188 MM Q4/19 Net Debt $308 MM Total Enterprise Value $496 MM Term Debt (9.875% due Feb 2022) US$450 MM Reserve Based Facility $120 MM Liquidity $340 MM Tax Pools (total /
Slide 25: Athabasca – 2020 Budget
ATHABASCA – 2020 BUDGET CORPORATE o Production: 36,000 – 37,500 boe/d (88% liquids) o Capital: $125MM E&D (+$9MM capitalized G&A) THERMAL OIL o Production: 26,000 – 27,000 bbl/d o Capital: $65MM o Major projects: Pad L8 long leads, water disposal project, Hangingstone turnaround, routine pump change
Slide 26: Management Team and Board
MANAGEMENT TEAM AND BOARD MANAGEMENT TEAM BOARD OF DIRECTORS Robert Broen, P.Eng. Ronald Eckhardt President & Chief Executive Officer Chair of the Board, member of the Reserves Committee Matt Taylor, CFA Robert Broen, P.Eng. Chief Financial Officer President & Chief Executive Officer Karla Ingoldsby
Slide 27: Endnotes & Risk Management
ENDNOTES & RISK MANAGEMENT Slide Endnotes Multi‐year outlook price assumptions: 2018 2019 2020e WTI US$/bbl $64.75 $57.00 $56.75 FX C$/US$ $0.75 $0.75 $0.75 Heavy Diff US$/bbl -$26.25 -$12.75 -$18.25 WCS C$/bbl $49.75 $58.75 $51.00 MSW Diff US$/bbl -$11.25 -$5.00 -$7.25 MSW (Ed. Par. Light Oil) C$/b
Slide 28: Reader Advisory
READER ADVISORY Forward Looking Statements This Presentation contains forward‐looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward‐looking information. The use of any of the words “anticipate”, “plan”, “
Slide 29: Athabasca Oil Corporation
ATHABASCA OIL CORPORATION