prospective resources are those quantities of petroleum … · 2016-06-07 · prospective resources...
TRANSCRIPT
2
This presentation may include certain forward looking statements. All statements other than statements of historical fact, included
herein, including, without limitation, statements regarding future plans and objectives of Canacol Energy Ltd. (“Canacol” or the
“Corporation”), are forward-looking statements that involve various risks, assumptions, estimates, and uncertainties. These
statements reflect the current internal projections, expectations or beliefs of Canacol and are based on information currently
available to the Corporation. There can be no assurance that such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in
this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such
statements are made as of the date this presentation is given and Canacol assumes no obligation to update or revise these
statements.
An investment in Canacol is speculative due to the nature of the Corporation's business. The ability of the Corporation to carry out
its growth initiatives as described in this confidential presentation is dependent on Canacol obtaining additional capital. There is no
assurance that the Corporation will be able to successfully raise the capital required or to complete each of the growth initiatives
described. Investors must rely upon the ability, expertise, judgment, discretion, integrity, and good faith of the Management of the
Corporation.
Barrels of Oil Equivalent
Barrels of oil equivalent (boe) is calculated using the conversion factor of 5.7 Mcf (thousand cubic feet) of natural gas being
equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 5.7 Mcf:1 bbl
(barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
3
Definition
Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance
of discovery and a chance of development.
Cautionary Statement
There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be
commercially viable to produce any portion of the resources
Further Cautionary Statement for Risked Prospective Resources
These are partially risked prospective resources that have been risked for chance of discovery, but have not been risked for chance
of development. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to
the timing of such development.
(1) Pre-royalty 2P reserves + deemed volumes and pre-tax NPV-10 as of Jun ‘13and Dec ‘13 (D&M reserve reports). These figures do not reflect productionvolumes since the date of D&M’s reserve reports
(2) Management’s estimate for net risked recoverable prospective resources 4
Diversified base production
Portfolio 5 basins / 8 fields
Enterprise value US $ 723 million
2P reserves + DV 41 MMboe / US $ 846 million(1)
Long reserve life ~9 years
Exploration upside
Portfolio 23 contracts / 1.8 million net acres
Prospective resources ~210 MMboe(2)
World-class partners ConocoPhillips, ExxonMobil, Shell
56 gross wells (39 remaining) + 13 workoversDiversified across 5 basins in Colombia and Ecuador~$44 million capex in calendar 1Q ‘14(1)
43 gross development wells (28 remaining)Calendar ‘14e 12,500-13,500 boepd(2)
Y/Y growth 40-50%~65% oil / ~25% gas
Calendar ’14 exit ~17,000 boepd(2)
13 gross exploration wells (11 remaining)~85% of exploration capex committed around existing fields
‘14e: Targeting prospective resources 89 MMboe / 31 MMboe(3)
(1) Excludes business acquisition(2) Pre-royalty average net production(2) Management’s estimate for net unrisked / risked recoverable prospective resources 5
0
10,000
20,000
30,000
40,000
50,000
'13a '14e '15e '16e '17e '18e '19e '20e
Nearly triple production from existing 2P reserves over the next 3 years
Calendar year average production positioned on x-axis labels
Pre-royalty avg net production (boepd)
$581 $723
$1,546 $265
$708
$190
$81
$-
$500.0
$1,000.0
$1,500.0
$2,000.0
$2,500.0
Proven Probable Possible EV Upside
Exploration upside
2P reserves + DV41 MMboe / US $ 846 million
Prospective resources~210 MMboe / US $2.3 billion
6
Pre-royalty 2P reserves + deemed volumes and pre-tax NPV-10 as of Jun ’13 and Dec ‘13 (D&M reserve reports). These figures do not reflect production volumes since the date of D&M’s reserve reports
Management’s estimate for net risked recoverable prospectiveresources
Guidance ~13,000 boepd for calendar year ‘14e
8 fields
~$62 / barrel netbacks at LLA 23
Pre-royalty avgnet production
(boepd)
Corp avgnetback(/boe)
Producing
7
Rancho Hermoso tariff oilGas
$-
$5
$10
$15
$20
$25
$30
$35
$40
$45
-
2,000
4,000
6,000
8,000
10,000
12,000
Operated 80% WI
Strong $62/barrel netback
Accelerate productionand reserves growth
Up to 9 wells left in ‘14Up to 6 development
3 exploration (Tigro-1, Pointer-1,Maltes-1)
1 ‘08Rancho Hermoso Field13 for 13~15,000 net bopd at peak
2 ‘12Labrador Field4 for 4Spud Lab-4 on April 30
3 ‘13Leono Field2 for 2Set to spud Leono-3
4 ‘14Pantro Field1 for 1
Tigro-15 MMbls(1)
LLA 23~50 MMbls
pursuit(1)
Rancho HermosoFault
Oil fields Leads
8
Pointer-12 MMbls(1)
(1) Management’s estimate of net unrisked recoverable prospective resources
Labrador
LeonoPantro
3D
3D
2
1
34
Maltes-12 MMbls(1)
Barco
Gacheta
Ubaque
Mirador
C7
20 straight successful wells at 4 fieldsRanchoHermoso Labrador Leono PantroDec ‘09 Dec ‘12 Dec ‘13 May ‘1413 4 2 16 3 4 5
FieldDiscoveryWellsReservoirs
Source ANH: Digitally reproduced stratigraphic column for the Eastern Llanos basin (Casanare)Shales Sandstones
Tested 2,930 bopd
Tested 1,038 bopd
Guadalupe
LLA 23
9
LLA 23
10
Lab
4-for-4 atLabrador
Tests 1,800 bopd
Lab-4 results imminent
Stacked pay mitigates risk
Pointer/Maltescoming soon
$62/bbl netbackP
A-1ST
L-5
L-2
L-3
L-4
L-6c
A
M-1
P Pointer-12 MMbls(1)
A
Lab-4
Lab-2G,U
Lab-3C7,G,U
Lab-5C7,G
A-1STC7,G,U
Lab-6c
Maltes-12 MMbls(1)Agueda
pad
Pointerpad
2km
(1) Management’s estimate
80% WI
3 confirmed reservoirsC7, G, U2 displayed: C7 and G
P-1
Leono-2
Leono-3
Leono-1
Pantro-2
Tigro-2c
Pantro-3
Tigro-3c
L-3
P-1
P-2
P-3
T-2c
T-3c
L-1
L-2
2km
Pantro-1
Tigropad
Lancerospad L
T
Tigro-15 MMbls(1)
L
T
Leono Pantro Tigro
80% WI
4 confirmedreservoirsM, B, G, U 2 displayed: B, G
6 month payback/well
OWC @ 10,346 ft
OWC @ 9,446 ft
11
4 solid resultsTest rate
Leono-1 (B) 1,490 net bopdLeono-2(B) 2,406Pantro-1(G) 2,344Pantro-1(M) 830
(1) Management’s estimate
Tigro-1 LLA 23
PantroLeono
LLA 23
Las Maracas
Macarenas
Heredia
Saimiri
Zopilote
Cravo ECravo S
Mateguaia
FaultOil fields Leads 12
In Jun ‘14, shoot 400 sq km of 3D seismic to firm up ‘15 and ‘16 drilling locations
115k gross acresOne of the largestE&P contracts
10x the 3D seismic coverage
Sandstones Shales Limestones
Conv
entio
nal
Unc
onve
ntio
nal
Umir
La LunaSimitiTablazoPajaRosablanca
Colorado
Mugrosa
Esmeraldas
La Paz
Lisama
13
VMM 2
VMM 3
Santa Isabel
MA-1
MA-1
40%
WI s
hallo
w20
% W
I dee
p
VMM 2
VMM 2
Jan ‘13, Mono Araña-1 discovery at VMM 2
Shallow conventionalWI 40%Operator Vetra E&PNet oil pay (Lisama) 85 ft
Up and Low Lisama tests 703 / 727 gross bopd, 21Comingled test 1,043
Deep unconventionalSame source rock as prolific Maracaibo basin (250 b barrels)
3-6x the thickest shale basin in the world (Vaca Muerta)
WI 20%Operator ExxonNet oil pay (La Luna) 230 ft
LT production test of La Luna
pipeline
1 km
Top Lisama depth(3) Represents comingled gross production test results for ~ 1 moManagement’s estimate of gross / net production
100 mmbls OOIP(1)
25 / 10 mmbls prospective resources(2)
MA-1A next…
2 for 2 at MA
36 4
1
2
VMM 2 40% WI‘14e activities Drill 3 development wells
5
14
MA-1 MA-2
72 ft payU Lisama
172 ft payB Lisama
85 ft payU+ L Lisama21 APITested 1k bopd(3)
(1) Management’s estimate for Basal Lisama only(2) Management’s estimate of gross / net recoverable prospective resources
for Basal Lisama only
Esperanza100% WI
Solid LT gas contracts + strong pricing / netback + minimal development capital
Asset ranks in the top 5% in Colombian reserve life2P reserves 22.6 mmboe(1)
Current producction ~3,000 boepdReserve life 20-yrs
Exploration upsideJun ‘14e activities Commence 3 exploration wells
20.3 / 10.4 mmboe prospectiveresources(2)
Existing contract‘14 ’21e 2,800 boepd @ ~$4/mmbtu
2 new contracts will triple production in Dec ‘15e’15e ’20e 6,140 boepd @ $5.40/mmbtu
>8,900 boepd in Dec ‘15e
Corozo
Palmer
Cañandonga
1
3
2
Nispero
ProspectsLeadsProducing fields
Katana
Nelson
Arianna
Cana Flecha
Jobostation
Pipeline to mine
(1) Reserve report effective Dec ‘13(2) Management’s estimate for net unrisked/risked recoverable prospective resources
pipeline
Esperanza
15
A Palmer-1 (P-1)exploration B C
P-1
A
B
C
N-3
N-2
N-4
Maxclosure at6600ft ss
UpperPorquero
UpperCienagade Orgo
(1) Reserve report effective Jun ’13(2) As of Mar ‘14, the Corporation had spent ~$45 million
Mature fields w/ 15-yr risked service contract
Producing > 30 years / >130 wellsPartners Tecpetrol, Schlumberger,
SertecpetTerms Incremental oil + explorationInsensitive to oil prices $38.54/bbl above base curve
State pays all opex
Gross/net capital $334 mm / $93 mm(2)
New wells + workovers 31 + >40Facilities + waterflood pilot
Current net production ~1,800 bopdRemaining ‘14e activities Drill 6 development
5 workovers1 exploration -
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Jan-12 Jan-14 Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Jan-26
2P deemed volumes of 4 mmbls(1)
Net incremental 10.5 mmbls over contract life
Base
Incremental ’16e peak ~2,500 net to Canacol
bopd
17
Oct’12 ’14e ’16e ’18e ’20e ’22e ’24e ’26e
Current 18,132 bopd gross
25% JV equity interest
3
2
1
4
6
COR 4
COR 12
VMM 3
VMM 2
COR 11
COR 39
SantaIsabel
5
7
N
N
S
The motivation is crystal clear‘93 ‘12, Colombia’s oil reserve life has decreased from 19 7 years
Shale solution to Colombia’s reserves
Canacol has the 2nd largest shale land position in Colombia
Objective: Repeat North farm-out performance in the South
S
COR 62 $263/acre
18
‘14e: 11 wells5 fracs
$240 mm capex’16e >25,000 bopd
definedshale oil
area(1)
Proposed wells(1) ~1.5 mm acres of prospective La Luna shale oil in the Middle Magdalena Basins, EIA Jun ‘13 19
La LunaTotumal 1-5 Produced 800k bbls
La LunaOlivo-1 Tested 6,400 bopd
Catalina-1Tested 7,820 bopd
Santa Isabel
VMM 3
VMM 2
Buturama 1-4 Produced 500k+ bbls
Mono Araña-1 LT test
Rosablanca
OP-1
El Cejudo-1
Pico Plata-1
Multiple shale zones
Sweet spot
Santa Isabel discoveries (Lisama & Umir) VMM 2 discoveries (Lisama & La Luna)
OP-1
MA-1Tested 590 bopd
21 APIW E
20
Conventional production test of thick, tectonically-induced fractured shale
Expansive volume of unfractured shale best suited for frac-induced technology
Santa Isabel
VMM 3
VMM 2
MA-1
OP-1
ROSA
ROSA +LUNA
LUNA
Dev
elop
men
t LLA 23 (Labrador, Leono, Pantro)VMM 2EcuadorCapellaRancho Hermoso(1) Management’s estimate of net unrisked/risked recoverable prospective resources (2) Represents net average production before royalties
21
‘14e guidance43 development wells13 workovers12,500 – 13,500 boepd(2)
Expl
orat
ion
upsi
de
‘14e Total
HEAVYCapella: Chipo 1 3.3/0.8
Q 3 ‘14e Q 4 ‘14eQ 2 ‘14e
SHALEVMM 3: Picoplata 1 54.8/13.7
VMM 2
GASEsperanza: Palmer, Corozo, Canandonga 3 20.3/10.4
11 89/31 mmboe
LIGHTLLA 23: Pointer, Tigro, Maltes 3 8.3/4.7 mmbls
CLT: Guepardo 1 1.3/0.7
Santa Isabel: Morsa 1 0.3/0.2
Ecuador: Secoya Oeste 1 1.0/0.4
WellsProspectiveResources(1)
Advantage
22
TSX (CNE), BVC (CNEC), OTCQX (CNNEF)
Team with > 50-yr combined operating history inColombia
Calendar ‘14e 12,500 - 13,500 boepdTargeting 89 mmboe / 31 mmboe(4)
Diverse platform 5 basins / 8 fields
2P reserves + DV 41 mmboe(5)
Prospective resources ~210 mmboe(6)
World class partners ConocoPhillips, Exxon, Shell
Investment summary
(1) Excludes anti-dilutive securities based on current market price CDN $7.22/share101.9 mm fully diluted securities: 90.2 mm common shares + 3.7 mm warrants + 8.0 mm options
(2) Converted using CDN USD exchange rate (0.9192) as of 5/15/14(3) As of March 31, 2014
28% 32%
18%22%
In mmShares outstanding 90.2Dilutive securities 2.7
92.9USD in mmMarket capitalization $616.4Net debt 106.7Enterprise value $723.1
Diversified ownership
(1)
(2)
(4) Management’s estimate for net unrisked/risked recoverable prospective resources
(5) Reserve reports effective Jun ‘13 and Dec ‘14(6) Management’s estimate of net risked recoverable
prospective resources
(3)