corporate presentation - leucrotta … relating to the company’s risk management program, oil,...
TRANSCRIPT
Forward Looking Information
Page 2
This document contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “intends”, “forecast”, “plans”, “guidance” and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this document contains forward looking statements and information relating to the Company’s risk management program, oil, NGLs and natural gas production, capital programs, oil, NGLs, and natural gas commodity prices, and debt levels. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services. Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company’s expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Corporate Information
Page 3
• Production 2,400 boepd • Cash and working capital as of Dec 31/14 $25 million • Dawson and Area Montney land - Gross (Net) sections 196 (171) • Estimated average OGIP per section 40 bcf
• Development locations (# booked) 112 (10) • Total potential locations 500+
• Capacity of operated facilities (connected to Alliance) 25 mmcf/d
• Shares outstanding (diluted) 165.2 (185.0)
• Management & directors shareholdings (diluted) 7.5% (14.7%)
Upper & Lower Montney Trends NW Alberta - NEBC
Septimus
Parkland
Dawson
Doe
Mica
P Coupe
Gordondale
Eagle
Lower Montney Fairway
NE Edge of Upper Montney Fairway
Legend Leucrotta Land
Lower Montney Producers
Upper Montney Producers
• Area predisposed to high-rate Montney wells with large OGIP and OOIP
• Upper Montney has liquids-rich gas development plus light oil exploration
• Lower Montney has both liquids-rich gas development and exploration opportunities
Page 4
Upper and Lower Montney 3 Distinct Areas:
Develop/Delineate/Explore
Legend Leucrotta Land L. Montney Hz delineation wells Montney vertical stratigraphic tests
Two Rivers
MICA
Sunrise -Doe
Doe – Sunrise Development Mode • D/C/tie-in: 56-84 Lower Montney wells
• 14 sec @4-6 wells per sec. • D/C//tie-in: 56-79 Upper Montney wells
• 14 sec @ 4-6 wells per sec. • Total Inventory of 112 to 163 Hz wells • Complete the associated infra-structure with
the Development plan • Average EUR of 0.9 million boe/well
Mica Delineation Program • Frac and test 13-7 Lower Montney Hz • Additional production testing of the 8-18
Lower Montney Hz • 3 recompletions to gather pressure and
reservoir compositions • 4 Hz wells to delineate the resource • 200 possible locations
Two Rivers Exploration Program • 1 re-completion for pressure and reservoir
compositions • 5 vertical stratigraphic test with core to
gather key reservoir properties (pressure, compositions and rock properties)
• Follow-up with 1 or more Hz wells based on the best vertical stratigraphic tests
• 300 possible locations
LXE 8-18
LXE 13-7
Explore
Delineate
Develop
Page 5
Lower Montney Trend NW Alberta – NEBC
Eagle Boundary
Lake FSJ Two
Rivers
Septimus Tower
Doe
Dawson
P. Coupe
BC
AB.
Mica
Gordondale
Parkland
Sunrise
Lower Montney Fairway
Legend Leucrotta Land Lower Montney Producers Lower Montney Fairway
Page 6
• Pervasive deposit spans townships of land
• Developed more extensively in Alberta side
• Recent drilling in BC proves high productivity of liquids-rich gas
Page 7
Lower Montney Results vs. Expectation
Performance Indicator Type Well
Drill & Case ($K) 2,600 Complete ($K) 2,500 Tie-in ($K) 400 Total ($K) 5,500
Year 1 Avg. Q (boe/d) 509 Recoverable Reserves (mboe) 945
NPV10 ($K)*
IRR (%) Payout (yrs)
Cap. Eff. Q-12mo. ($/boe/d)
Montney Hz Well
239
PV10 ($K)**
F&D ($/boe)
706 373 136
Total Liquids Gas
* NPV – Net Present Value is defined as “the present value of future cash flows minus the initial capital.”
** PV – Present Value is defined as “the present value of future cash flows.”
Note: – Economics based on a Jan 2015 start date using GLJ Q1 2015 forecast ($US 63/bbl; $3.14/GJ AECO; FX 1.18 for 2015).
8,487
84 1.3
10,806
13,987
5.82
Pricing GLJ
4.5 bcf
Note: Flowing against 7,500 kPa wellhead pressure
4.5 bcf
Added Compression. Flowing Pressure 4,300 kPa
Upper Montney Trend NW Alberta - NEBC
Legend
Leucrotta Land Upper Montney Producers
BC
AB
NE Edge of Upper Montney Fairway
Tower
Doe
Parkland
Dawson
Two Rivers
Sunrise
Page 8
• Upper Montney is liquids-rich gas in Doe and Sunrise (development area)
• Upper Montney is potentially oil in Two Rivers (exploratory area)
Page 9
Upper Montney Results vs. Expectation
Performance Indicator Type Well
Drill & Case ($K) 2,600 Complete ($K) 2,500 Tie-in ($K) 400 Total ($K) 5,500
Year 1 Avg. Q (boe/d) 611 Recoverable Reserves (mboe) 919
NPV10 ($K)*
IRR (%) Payout (yrs)
Cap. Eff. Q-12mo. ($/boe/d)
Montney Hz Well
143
PV10 ($K)**
F&D ($/boe)
776 524 87
Total Liquids Gas
* NPV – Net Present Value is defined as “the present value of future cash flows minus the initial capital.”
** PV – Present Value is defined as “the present value of future cash flows.”
Note: – Economics based on a Jan 2015 start date using GLJ Q1 2015 forecast ($US 63/bbl; $3.14/GJ AECO; FX 1.18 for 2015).
8,425
83 1.4
9,002
13,925
5.98
Pricing GLJ
5 bcf
Montney Price Sensitivities
Lower Montney Upper MontneyPrice Sensitivity Price Sensitivity
ROR (%) ROR (%)
AECO Gas Price (C$/GJ) AECO Gas Price (C$/GJ) 2.50 3.00 3.50 4.00 4.50 2.50 3.00 3.50 4.00 4.50
40 27 36 48 62 79 40 33 47 64 84 110
50 38 49 63 81 101 50 40 56 74 96 123
60 52 66 83 104 130 60 48 65 84 108 138
70 69 86 107 134 166 70 56 75 95 122 154
80 90 112 138 171 211 80 66 85 108 136 17190 117 144 177 219 269 90 75 97 121 152 190
Payout less than 12 monthsPayout less than 18 months
WTI
Oil
Pric
e (U
$/bb
l)
WTI
Oil
Pric
e (U
$/bb
l)
Note: – Economics based on a FX rate of 1.14
Page 10
Infrastructure
Leucrotta Gathering Lines
AltaGas Pouce Coupe Plant
Spectra Pouce Coupe Plant
Spectra McMahon Plant
Spectra Doe Plant
Leucrotta Plant and Gathering Lines
Alliance Pipeline
Spectra/West Coast Gathering Line
Westcoast Transmission
NGTL
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• 25 mmcf/d LXE sweet plant and facilities
• Gathering System to be expanded as required
• Third party facilities used as needed
Gas Plant
LEGEND
Why Leucrotta?
Page 12
• Montney has top decile economics • Large tracts of land can be de-risked quickly due to expansive nature of the
Montney • High production rates (IP30> 1,000 boepd) will allow Leucrotta to grow rapidly • Over 500 possible Montney locations
Management & Directors
Page 13
Directors Management Robert J. Zakresky, CA Robert J. Zakresky, CA - President and CEO John A. Brussa, B.A., LL.B. Terry L. Trudeau, P. Eng. - VP Operations and COO Donald Cowie Nolan Chicoine, MPAcc, CA - VP Finance & CFO Daryl H. Gilbert, P. Eng. R.D. (Rick) Sereda, M.Sc., P. Geol. - Sr. VP Exploration Kelvin B. Johnston, P. Geol. Helmut R. Eckert, P. Land - VP Land Brian Krausert, B.Sc. Peter Cochrane - VP Engineering Tom J. Medvedic, CA