2015 11 05 v0 Surmont Website Version.pptx
Transcription
2015 11 05 v0 Surmont Website Version.pptx
Investing Profitably in the Canadian Oil Sands 2015 November 1 Executive Summary Ø 12,000b/dPhase1(80mmbo) Ø 18,000b/dPhase2(120mmbo) Ø Projectinputcostsaredroppingincurrentlowoilpricecycle Ø Greateraccesstosuppliesandmaterialsreducesschedulinguncertainty Ø Oilpricesbefore2020donotdirectlyaffecteconomics Ø ProjectisprofitablewithoilpricesaboveUS$65perbarrelaJer2020 This is an advantageous point in the oil price cycle to invest in the Wildwood oil sands project. 2 Timeline • Wildwoodoilsandsleases(50km2)acquiredfromAlbertaGovernmentfor $13millionin2006 • SurmontEnergyconductedsuccessful3Dseismicprogramandcorehole drillingprogramduringwinterof2011-2012 • Resultssupportedindependentengineeringbookingsof151mmbo recoverableoil(Phases1+2)underCSANI51-101standards • 12,000b/dPhase1regulatoryapplicaXonssubmiYedinlate2012 • Fundingtargetedforfirsthalfof2016toachievefirstoilproducXonbyearly 2020,whenoilpricesareexpectedtobehigher Ø Projectisprofitablewithworldoilpricesof$65/baJer2020 • Phase2tobedevelopedthereaJerforanaddiXonal18,000b/d Surmont has completed the initial development steps for the Wildwood Project, and the project is now ready for the main investment. 3 Ideal Location • Surroundedbysuccessfulprojects ownedbytopoilsandsdevelopers • AdjacenttoConocoPhillips’ Surmont136,000b/dprojectwith regulatoryapprovalshavingbeen filedtoincreasecapacityto 260,900b/d • Nearstrategicinfrastructurehub withexcellentlocalaccessto pipelines,railwaysandmajor highways Park MEG MapofAreaSouthofFt.McMurrayShowingOilSandsWellsandProjects Wildwood’s ideal location contributes to lower capital and operating costs and welldeveloped oil transportation access. 4 High-Quality Oil Sands • Thicknessuptoover30mwith averageover20m • HighoilsaturaXons • HighverXcalpermeability • Strongcaprockattopandflat baseatboYomofreservoir • NoboYomwater,topgas, compartmentalizaXon,orlean zoneissues • 475mdepthisidealforhighpressuresteaming • Analogtoadjacentsuccessful ConocoPhillipsSurmontProject PhotoofOil-SaturatedSplitCoresfromtheWildwoodProject Wildwood’s high-quality resource is expected to achieve results similar to other highquality oil sands projects. 5 Proven Technology - Subsurface Ø Veryhighoilrecoveries– oJen50-70%oftheoilin place Ø Greatlyreducedsurfaceand environmentalimpacts comparedtominingprojects Ø Scalableandidealfor implementaXoninphasesof 5,000-12,000b/d IllustraXonsofTypicalSAGDImplementaXon Surmont’s approach to the Wildwood Project fully addresses sub-surface risks. 6 Proven Technology - Surface • CentralproducXonfacility usesprovenprocesses • Highlymodularizedto minimizecostsandXming delays • Sizeprovidescostcontrol • Designallowsfor implementaXoninphases of5,000-12,000b/d • CurrentconstrucXoncost trendsarestrongly downwardduetocyclical industryslowdown WildwoodCentralProcessingFacilityandWellPad#1(lookingNE) Current economic environment and modular design provides cost and schedule control. 7 Production PhaseI Ø Full3Dseismiccoverage Ø TwowellpadstobedrillediniXally(14 wellpairs) Ø AddiXonal8wellpadstobedrilled overXme(54wellpairs) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Phase2 18,000b/d 120mmbo Phase1 12,000b/d 80mmbo 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Ø FiJypercentlargerthanPhase1 Ø AddiXonal3Dseismicandcorehole drillingrequiredtofinalizeassessment andwellpadlayouts Ø RequiresfutureregulatoryapplicaXons Phase2 AverageDailyOilProducXonbyYear (b/d) !"# Petroleum Consultants Ø Futurewellstobedrilledasneededto keepCPFfull Wildwood will be developed in two phases for an overall producing life of 25 years or more. 8 Profitability Ø ProducealightlydilutedleanbitumenmixforrailtransportaXon Ø LeanbitumencanbeblendedtopipelinetransportaXonspecificaXons Ø Willallowsalestobedirectedtobestmarketsover25-yearlifeofproject Ø CurrentlowoilpricecycleisdrivingdowncapitalinvestmentandoperaXnginput costs–effectwilldependonXmingofinvestment Ø 20+%IRRsifpricesrisetoUS$90+/bin2020s Ø Nofurthernetinvestmentsrequiredtomaintaincashflow Ø Noreinvestmentriskfor25years Ø SurmontisbelowthethresholdforIndustryCanadaapprovalofforeignstate-owned enterpriseacquisiXonsofCanadianoilsandsbusinessesandassets Wildwood provides solid profitability at expected oil prices after 2020, with significant upside. 9 Management Ø TopthreeexecuXveshaveover100yearsofIndustryexperienceinpublicly tradedandprivatecompanies,bothCanadianandinternaXonaloperaXons Ø Surmont’slargestshareholdercompanyhasin-depthexperienceinearly developmentofnumerousoilsandsprojects Ø Surmonthaspre-idenXfiedkeyaddiXonalexecuXveandtechnicalhuman resourcestobebroughtonwhenfundingisinplacetoproceed Ø KPMGauditors Ø GLJPetroleumConsultantsindependentengineers(topoilsandsengineers) Ø RoyalBankofCanadabankers Wildwood’s Management has deep experience and is ready to grow the company once funding is in place. 10 Value Creation Process Value to 2024 with Phase 2 2020 Completed toDate 2012 Additional Future Phases • Up to 30,000 b/d total • Improvements in technology Operations • Commercial production • “Wall of cash flow” begins Construction • Facility and well pads • Cost reduction in current low cycle Scheme Approval • Regulatory approval, funding • Engineering, procurement of long-delivery equipment Independent Engineering Report • Validation of oil reserves and resources Core Hole Drilling • Resource assessment • Delineation of reservoir Time Surmont Energy has de-risked the project through work to date – readying the project for investment in the next steps of substantial value creation. 11 Wildwood Project Advantages Low-Risk SolidProfits IdealTiming AddiXonalUpsides • Locatedincentreof successfuloilsands area • Excellentaccessto infrastructure • High-qualityoil sandsreservoir • Useofproven subsurfaceand surface technologies • ProjectisapracGcal sizetoimplement • Regulatoryscheme approvalimminent • Capable managementteam • Canadaisasafe investmentcountry • Profitablewithoil pricesover$65/b aPer2020– workingtodrive breakeveneven lower • Largeannualcash flowsaPeriniGal investment • Nore-investment riskdueto25year lifeofproject • Belowthresholdfor Canadianforeign investment approvalforoil sands • Currentlowoil pricesarebeneficial –oilsandscapital andoperaGngcosts arenowbeing forceddown significantly • Reducedup-front capitalcostsand greaterschedule control • Top-qualityhuman resourcesavailable forfullcorporate build-out • Reducedcost growthpotenGal • Currentdiscounted Canadiandollar • Futuretechnologies overlonglifeof project • Oilpriceincreases aPer2020 • FurtherreducGons incapitaland operaGngcosts • IniGalinvestment canbefoundaGon toaddmore projects • Futureincreasesin valueofCanadian dollaraPeriniGal investment Wildwood is a low-risk project of controllable size, for investment at an opportune time in the oil price cycle. 12 Initial Steps for Phase 1 - 12,000 b/d H1 2016 Finalize funding of US$370 mln combined equity and debt H2 2016 Invest US$20 mln for engineering and long delivery items 2017 Invest US$150 mln for facilities, infrastructure 2018 Invest US$175 mln for facilities, wells 2019 Invest US$25 mln for facilities, wells, startup, begin steaming mid-2019 Early 2020 First Oil Commence production ramp up Mid-2021 Full Phase 1 12,000 b/d achieved The next step is to finalize US$370 million combined equity and debt financing. 13 Executive Contacts MarkR.Smith,ChiefExecuXveOfficer msmith@surmontenergy.com +1.403.689.5488 GordonD.Holden,ChiefOperaXngOfficer gholden@surmontenergy.com +1.403.807.2397 Suite2300,144FourthAvenue,SW Calgary,Alberta,CANADAT2P3N4 info@surmontenergy.com +1.403.930.4692 www.surmontenergy.com 14 Disclaimer This presentaXon material contains forward-looking statements and forward-looking informaXon within the meaningofSecXon27AoftheSecuriXesActof1933,asamended,SecXon21EoftheSecuriXesExchangeAct of1934,asamended,andapplicableCanadiansecuriXeslaws.Theopinions,forecasts,projecXons,statements of resource potenXal or other statements about future events of results, are forward looking informaXon, forward-looking statements or financial outlooks (collecXvely, "forward-looking statements") under the meaning of applicable securiXes laws, including Canadian SecuriXes Administrators' NaXonal Instrument 51-102 ConXnuous Disclosure ObligaXons and the United States Private SecuriXes LiXgaXon Reform Act of 1995. These statements are made as of the date of this presentaXon and the fact that this presentaXon remainsavailabledoesnotconsXtutearepresentaXonbySurmontEnergythatSurmontEnergybelievesthese forward-lookingstatementsconXnuetobetrueasofanysubsequentdate.AlthoughSurmontEnergybelieves that the assumpXons underlying, and expectaXons reflected in, these forward-looking statements are reasonable,itcangivenoassurancethattheseassumpXonsandexpectaXonswillprovetobecorrect.Such statements include, but are not limited to, statements about future projected or target producXon, future expected product prices, future financial and operaXng results, the plans, objecXves, expectaXons and intenXonsofthecompanyregardingproducXon,exploraXon,drillinganddevelopment,futureenvironmental legislaXon, and the future development of the company’s business. Amongtheimportant factorsthatcould causeactualresultstodiffermateriallyfromthoseindicatedbysuchforward-lookingstatementsare:Surmont Energy’s operaXons are bitumen-related in Alberta Canada, and unexpected problems can arise due to technicaldifficulXesandoperaXonaldifficulXeswhichimpacttheproducXon,transportorsaleofitsproducts; geographicandweathercondiXonscanimpacttheproducXon,transportorsaleofitsproducts;theriskthat currentglobaleconomicandcreditcondiXonsmayimpactoilpricesandoilconsumpXonmorethanSurmont Energy currently predicts; the risk that unexpected delays and difficulXes in developing currently owned properXes may occur; the failure of exploratory drilling to result in commercial projects; unexpected delays duetothelimitedavailabilityofdrillingequipmentandpersonnel;andtheriskfactorsdetailedfromXmeto Xme in Surmont Energy’s periodic reports. Surmont Energy's forward-looking statements are expressly qualifiedintheirenXretybythiscauXonarystatement. Additional Information 16 Management • MarkR.Smith,BComm,LLB–ChiefExecuXveOfficerandDirector Ø Over30yearsexperienceinoilandgastransacXons,corporatelaw,andexecuXve leadership,inpublicandprivateandCanadianandinternaXonalcompanies • GordonD.Holden,BScEng,MSc[Dist]–ChiefOperaXngOfficerandDirector Ø Nearly40yearsofexperienceinengineering,projectmanagement,economic evaluaXonsandexecuXveleadership,inpublicandprivateandCanadianand internaXonalcompanies • WilliamB.Cooper–Director Ø Nearly30yearsofexperienceincorporatedevelopment,foundingandfinancing companies,inpublicandprivateandCanadianandinternaXonalcompanies • BountyDevelopmentsLtd.–LargestShareholder Ø Geosciences,reservoirengineering,regulatoryexperXse • AddiXonalkeyhumanresourceshavebeenpre-idenXfied,tobebroughtinto companyoncefundingisinplacetoproceed Ø CrudeoilmarkeXng,oilsandsgeologyandsubsurfaceengineering,oilsandssurface engineeringandoperaXons 17 Terms b b/d CPF GLJ mln mmbo SAGD -barrels(=0.159m3) -barrelsperday -CentralProcessingFacility -GLJPetroleumConsultants(independentreservesengineers) -million -millionsofbarrelsofoil -steam-assistedgravitydrainage www.surmontenergy.com 18