Corporate Presentation

Corporate Presentation
November 2015
Future Oriented Information
(See additional advisories at the end of this presentation document)
• In the interest of providing Trilogy Energy Corp. ("Trilogy” or the “Corporation")
employees, shareholders and potential investors with information regarding Trilogy,
including management's assessment of the Corporation’s future plans and
operations, certain statements and graphs throughout this presentation are "forwardlooking statements".
• The projections, estimates and beliefs contained in such forward-looking statements
necessarily involve known and unknown risks and uncertainties which may cause the
Corporation's actual performance and financial results in future periods to differ
materially from any estimates or projections of future performance or results
expressed or implied by such forward-looking statements.
• For a more detailed explanation regarding forward looking statements and the risks
and uncertainties applicable to the information in this presentation, see the copy of
this presentation document posted on Trilogy’s website at www.trilogyenergy.com
and Trilogy’s most recent Annual Information Form and other documents on file with
the Canadian Securities regulatory authorities at www.sedar.com .
• Accordingly, employees, shareholders and potential investors are cautioned that
events or circumstances could cause actual results to differ materially from those
anticipated.
• Any use of information contained within this presentation is expressly forbidden.
2
2
Trilogy Corporate Profile
Q3 2015 Results:
•
Average production: 25,090 Boe/d (~36% Oil and NGL)
•
Operating income: $15.20/Boe
•
Funds flow: $22.2 million ($9.60/Boe)
•
Market Cap: ~ 126.2 million shares at $4.00/share ~ $504.8 Million
•
Net debt:
$300.0 million
Senior Unsecured Notes - 7.25% due December 2019
$374.0 million
Three Year Revolving Credit Facility - $663 million secured(1)
$674.0 million
•
as at September 30, 2015
Insider Ownership: ~49%
(1) Includes working capital deficit
3
Trilogy Assets
• Geographically concentrated assets
• Multi-zone development and exploration potential in
the Deep Basin
• Significant NGL-rich, high heat content natural gas
and light oil resource potential
• Large unconventional and tight resource plays with
potential to be exploited with vertical and horizontal
drilling and completion technologies
• Large prospect inventory of high quality drilling
opportunities on developed and undeveloped lands
• 260,921 net acres of developed land and 350,696 net
acres undeveloped land (as at December 31, 2014)
Grande Prairie
~1,600 Boe/d 2015E
~$2 MM 2015E Capex
GRANDE
PRAIRIE
EDMONTON
Kaybob
~26,400 Boe/d 2015E
~$98 MM 2015E Capex
CALGARY
• Significant operated processing and gathering
infrastructure in the Kaybob area (five gas plants
and three oil batteries)
4
Operations Update
Trilogy: Key Growth Plays
6
Kaybob Montney Oil Pool Development
• Discovered in 2011
• 8 Hz Montney oil wells/section;
~ 400 locations
• Approximately 50 net sections
at average
10 MMBbl DOIIP/section;
~500 MMBbl DOIIP for pool(1)
• Drilled 110 wells to date
• Horizontal well: D/C/T ~$3.4
MM/well
• Average 1-mile horizontal
lateral
• 22 fracs/well; 75 m spacing
• Net pay ranges from 5 - 15 m
• Proved plus probable reserves/well (2)
• Average well: ~292 MBoe
• ~185 MBbl Oil + NGLs
(1) Internal estimates
(2) InSite Petroleum Consultants Ltd. at December 31, 2014
• ~660 MMcf Solution Gas
7
Kaybob Montney Oil Pool Development
2011
2012
2013
2014
Total
22
24
31
29
106
Drilling/ Completion
$98 MM
$109 MM
$133 MM
$111 MM
$451 MM
Infrastructure
$33 MM
$51 MM
$33 MM
$24 MM
$141 MM
Land
$36 MM
-
-
-
$36 MM
$167 MM
$160 MM
$166 MM
$135 MM
$628 MM
2,446
9,829
11,653
10,214
Annual Production (MBoe)
893
3,597
4,280
3,728
12,498
Annual Operating Income
$54 MM
$172 MM
$199 MM
$179 MM
$604 MM
Wells Drilled
Total Capital
Average Production (Boe/d)
Gas
(Bcf)
Oil
(MMBbl)
NGL
(MMBoe)
Total
(MMBoe)
Cumulative Production to Dec. 31, 2014
30.8
8.8
0.5
14.4
P+P Reserves at Dec. 31, 2014(1)
51.2
12.7
0.9
22.1
82.0
21.5
1.4
36.5
Total
(1) InSite Petroleum Consultants Ltd.
8
Economics - Kaybob Montney Oil Pool
WTI $US/Bbl
40
50
60
70
80
$1.4
$2.6
$3.7
$4.8
$5.9
BT ROR %
25
45
72
111
161
Payout years
3.4
1.9
1.3
1.0
0.8
NPV 10% $MM
Assumptions
Capital: $3.4 MM D/C/T per well
AECO Gas Price: $2.80/GJ ($3.18/Mcf)
IP30: 300 Bbl/d oil
Type curve reserves per well: 360 MBoe(1)
- 0.8 Bcf natural gas
- 200 MBbl oil
- 25 MBoe C3+
(1) Internal estimates
9
Kaybob Presley Montney Gas Development
•Approximately 60 net sections with
IGIP estimate of 10 - 15 Bcf per
section(1)
•5 Hz wells/section: ~ 300 locations
•79 horizontal wells drilled as of
December 31, 2014
•Horizontal well: ~$4.3 MM/well D/C/T
•Liquids-rich gas: 3 Bcf/well,
~30 Bbl/MMcf
•Average F&D: $7.00 to $8.00/Boe
•Potential recoverable reserves (1) of
> 500 Bcf raw gas and 15 MMBbl
NGLs
• 2.5 net wells drilled in 2015
•Long-reach horizontal wells have had
positive results
•Wells qualify for NGDDP
(1) Internal estimates
10
Presley Montney Gas Economics
Assumptions
Capital: $4.3 MM DCT per well
IP30: 5.3 MMcf/d
Reserves per well: 590 MBoe(1)
• 3 Bcf natural gas
• 90 MBoe NGLs
Economics:
AECO Natural Gas: $2.80/GJ ($3.18/Mcf)
NGL: $30.50/Boe
Condensate: $65.00/Boe
NPV 10%: $1.7 MM
IRR: 33%
Payout: 28 months
(1) Internal estimates
11
Emerging Duvernay Shale Play
Duvernay Unconventional Shale Play- Kaybob Area
• Large liquids-rich
gas and
condensate/oil
resource play
• Increasing liquids
content within the
Duvernay to the
northeast
• Qualifies for the 5%
Shale Royalty for 36
months on all
products
• Some lands will also
qualify for the
NGDDP royalty relief
• D/C/T on multi-well
pad developments:
$9 - $11 MM/well
13
Duvernay Unconventional Shale Play
• ~75 sections in
gas/condensate area
• ~125 additional sections in
volatile oil area
• Participated in ~51 horizontal
wells into this play to date
• 2014 D/C/T 12 (7.4 net) wells
($150 MM)
• Approximately $340 MM
capital spent on Duvernay
projects to date
• 2015 spending principally on
non-operated Joint Venture
activity (~$60 MM)
14
South Kaybob Duvernay
15
South Kaybob Duvernay Shale Gas/Condensate Play
WTI $US/Bbl
Economics are based on the following assumptions:
NPV 10% $MM
IP30: 4.6 MMcf/d
(1)
P+P Reserves : 1,218 MBoe
BT ROR %
4.1 Bcf Natural Gas
307 MBbl Condensate
Payout years
223 MBbl NGLs
Condensate to Sales Gas Ratio: 75 Bbl/MMcf
Capital Cost: $11.0 MM DCT (multi-well pad, 2,000m laterals)
Operating Cost: $4,250/month +$0.50/Mcf
AECO Gas Price: $2.80/GJ ($3.18/Mcf)
FX: $1.3 CDN / $1 US
(1) Internal estimates
40
50
60
70
80
$4.3
$7.2
$10.2
$12.8
$16.2
24
36
50
66
84
3.3
2.4
1.9
1.5
1.3
16
North Kaybob Duvernay
17
North Kaybob Duvernay Shale Type Curve
WTI $US/Bbl
Economics are based on the following assumptions:
IP30: 2.0 MMcf/d
P+P Reserves(1): 856 MBoe
1.5 Bcf Natural Gas,
473 MBbl Condensate
130 MBbl NGLs
Capital Cost: $9.0MM DCT (multi-well pad, 2,000m laterals)
Condensate to Sales Gas Ratio: 312 Bbl/MMcf
Operating Cost: $4,250/month +$0.50/Mcf
AECO Gas Price: $2.80/GJ ($3.18/Mcf)
FX: $1.3 CDN / $1 US
(1) Internal estimates
40
50
60
70
80
$8.5
$12.9
$17.3
$21.7
$26.2
BT ROR %
66
107
159
223
300
Payout years
1.5
1.1
0.9
0.8
0.7
NPV 10% $MM
18
Financial Update
Review
20
2016 Estimated Oil Price Sensitivities
(WTI) $US/Bbl
45
55
65
75
Capex ($MM)
100
125
150
200
28,000
28,800
29,400
31,800
Cash Flow ($MM)
109
133
159
201
Net Debt ($MM)
691
692
691
699
Total
4.9x
4.2x
3.6x
3.0x
Senior
2.8x
2.4x
2.1x
1.7x
Production (Boe/d)
D/EBITDA Ratio
Assumptions:
AECO Gas Price
CAD/USD
Estimated Annual
Production Decline
$2.88/GJ
$1.30
25%
21
2015 Balance Sheet Flexibility
Available
$ MM
Drawn
$MM
Dec 2019 Senior Notes
300
300
Syndicated Facility
538
374(1)
Syndicated Development
Facility
125
0
-
(12.5)
Facility
2016 Oil Hedges
Covenants
Incurrence based
6x total debt, 3.5x senior debt
$70 WTI for sixty days, Incurrence test
3,000 Bbl/d hedged in 2016 at $77.18,
Edmonton
(1) Not including LC’s
22
Reserves
(InSite Petroleum Consultants Ltd., as at December 31, 2014)
Proved Reserves
Probable Reserves
Natural Gas
BCF
Crude Oil
MBbl
NGL
MBbl
Total
MBoe
%
279.5
13,462
12,626
72,663
52
Proved Developed Non-Producing
22.7
1,252
1,181
6,213
4
Proved Undeveloped
57.4
1,207
5,909
16,682
12
359.5
15,921
19,716
95,558
68
Probable Developed Producing
81.1
5,123
2,763
21,404
15
Probable Developed Non-Producing
19.7
329
349
3,962
3
Probable Undeveloped
63.3
1,902
6,381
18,832
14
Total Probable
164.1
7,354
9,493
44,198
32
Total Proved plus Probable
523.6
23,274
29,209
139,756
100
Reserve Category
Proved Developed Producing
Total Proved
23
Summary
•
Extensive high working interest land base in the Deep Basin
•
Significant operated gathering and processing infrastructure in Kaybob
area
•
High capital efficiency resulting in low F & D costs
•
Large inventory of low-risk, liquid-rich natural gas resource opportunities
suitable for horizontal drilling and multi-stage fracture stimulation
completion techniques
•
Experienced staff with proven track record
•
High insider ownership
•
Montney oil and gas pool development opportunities
•
Significant exposure to Duvernay Shale play
•
Strategy to adapt to changing commodity prices through strategic capital
spending allocation
24
1400, 332 6th Avenue, SW
Calgary, Alberta
Canada T2P 0B2
Telephone: (403) 290-2900
Facsimile: (403) 263-8915
www.trilogyenergy.com