Bonterra Energy Corporate Presentation

Bonterra Energy Corporate Presentation

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  INVESTOR UPDATE APRIL 2012 TSX: BNE TSX: BNE |
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  FORWARD LOOKING INFORMATION Certainstatements contained in this Presentation include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”, “intend”, “likely”, “will”, “believe” and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs, intentions and expectations about development, results and events which will or may occur in the future, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and perceptions. Forward- looking information in this Presentation includes, but is not limited to: expected cash provided by continuing operations; cash distributions; future capital expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas industry; business strategy and outlook; expansion and growth of our business and operations; and maintenance of existing customer, supplier and partner relationships; supply channels; accounting policies; credit risks; and other such matters. All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas trusts to raise capital; the effect of weather conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility; opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive. Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be derived therefrom. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained herein is expressly qualified by this cautionary statement. TSX: BNE | 2
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  CURRENT SNAPSHOT Shares issued 19.6 million Market capitalization $1.01 billion* Directors/employee ownership 25 percent Payout ratio based on funds flow 50 – 65 percent Current monthly dividend $0.26/share Current annualized yield 6.1 percent* Production profile 71% oil / 29% nat. gas Cash netback (full year 2011) $42.47 Drilling inventory > 14 years Tax pools $402 million Tax horizon Beyond 2016 Debt (at 12/31/2011 including working capital) $122 million * Based on March 27, 2012 closing price of $51.43 ** Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding the effects of changes in non-cash operating working capital items, restricted cash and decommissioning expenditures settled. TSX: BNE | 3
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  2012 GUIDANCE 33 gross (23.83 net) wells are planned with 21 gross (13.33 net) wells targeting the main pool of the Pembina Cardium, most notably in the Blue Rapids and Berrymoor Cardium 2012 Capital $65 million units and 11 gross (9.5 net) wells targeting the halo area of Development Budget the Pembina Cardium and Willesden Green fields. Bonterra will also be drilling at least one new oil play using horizontal technology in 2012. Production Levels 6,700 - 7,000 BOE per day Targets a 10 percent increase over 2011 levels Operating Costs ~$15.00 per BOE Consistent with estimated 2011 costs Anticipate fully funding capital development program from Payout Ratio 50 to 65 percent cash flow, exercise of stock options, sale of investments and bank borrowing facility. Debt 1.0:1 to 1.5:1 range Sustainable capital program Cash Flow Sensitivity Analysis(1) (estimate for 2012) Cash Flow Per Share (2) U.S. $1.00 per barrel $1,300,000 $0.066 Canadian $0.10 per MCF $360,000 $0.018 Change of Canadian $0.01 / U.S. $ exchange rate $930,000 $0.048 (1) Based on Sproule Proved Developed Producing production of 5,553 BOE per day (2) Based on year end outstanding common shares of 19,571,316 TSX: BNE | 4
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  2011 HIGHLIGHTS • Maintainedfocus on providing investors with continued growth on a per share basis, sustainable pace of development and monthly income through its dividend policy. • Increased dividends twice in 2011 and paid out $3.04 per share, a 22% increase compared with 2010. • Horizontal drill success in 2011 with 21 gross (15.3 net) operated Cardium horizontal wells drilled in the Halo areas of the Pembina and Willesden Green Fields, 4 gross (0.86 net) non-operated Cardium horizontal wells in the main Pembina pool and 1 gross (0.13 net) non-operated horizontal well in southeast SK, all with a 100% success rate. • Average daily production increased by 12.3 percent to a record 6,322 BOE/day for 2011 compared to 2010. The company also had record daily production of 6,679 BOE per day in Q4 2011, an increase of 9.9 percent compared to Q4 2010. • Reserve Life Index (P+P) of 16.9 years is one of the highest among conventional producers. TSX: BNE | 5
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  FINANCIAL RESULTS Highlights Year Year Year (000s except per share amounts) 2011 2010 2009(2) Funds Flow(1) $101,988 $74,385 $69,975 Per share – basic $5.27 $3.95 $3.89 Payout ratio 58% 64% 44% Cash flow from operations $97,409 $66,238 $38,893 Per share - basic $5.04 $3.52 $2.16 Payout ratio 61% 72% 79% Net earnings 43,608 39,954 68,563 Per share - basic 2.25 2.12 3.81 Capital expenditures and acquisitions (net of dispositions) 62,686 70,680 5,640 Working capital deficiency $51,576 $17,905 $10,162 Long-term debt $69,916 $85,386 $59,823 (1) Funds flow is not a recognized measure under IFRS. For these purposes, the Company defines funds flow as funds provided by operations including proceeds from sale of investments and investment income received excluding the effects of changes in non-cash working capital items, restricted cash, investment tax credit receivable and decommissioning expenditures settled. (2) The comparative highlights for 2009 are under Canadian Generally Accepted Accounting Principles (GAAP) prior to the adoption of IFRS. (3) At December 31, 2010, long-term debt includes bank debt and subordinated promissory note. TSX: BNE | 6
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  $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 Jan-09 $0.30 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 HISTORY OF DIVIDEND GROWTH 11-Jun 11-Jul 11-Aug 11-Sep 11-Oct 11-Nov 11-Dec 12-Jan 12-Feb 12-Mar TSX: BNE | 7
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  OIL PRICES: WTIVS. EDMONTON PAR 2011 Average Price $106 per barrel WTI Differential +$3 to -$5 Quality Adjustment -$4 Net to Bonterra $97 to $105 2012 Average Price $106 per barrel WTI Differential -$15 to -$20 Quality Adjustment -$4 Net to Bonterra $82 to $87 TSX: BNE | 8
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  SUPERIOR BEFORE &AFTER TAX RETURNS $100,000 Investment: Bonterra Investment Bank Investment Dividend Rate 6.1% $6,100 Interest Rate 1.25% $1,250 AB Tax Rate 19% AB Tax Rate 39.5% After Tax Income $4,941 After Tax Income $756 Net Return 4.9% Net Return 0.76% Bonterra’s current tax pools of $402 million extend its tax horizon past 2016 maximizing returns to shareholders. TSX: BNE | 9
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  SHAREHOLDER VALUE $90.00 Combined Share Price Cumulative Dist./Div. $80.00 $75.85 $70.00 $60.00 $51.43 $50.00 $40.00 $30.00 $24.42 $20.00 $10.00 $0.00 1998 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Mar-12 * Based on March 26, 2012 closing price of $51.43 TSX: BNE | 10
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  INCREASING SHAREHOLDER VALUE Production per Share Production Profile (BOE per share) 71% Oil/NGLs 29% Natural Gas 2007 2008 2009 2010 2011 Gross Production (BOE – Year Over Year Growth) 6,322 5,628 4,994 4,218 4,346 4,042 3,655 3,179 3,118 3,194 1,766 10.6% 14.9% 12.7% 12.3% 14.4% 80.0% -1.9% 4.4% 3.0% 2.4% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Oil/Liquids Natural Gas TSX: BNE | 11
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  INCREASING SHAREHOLDER VALUE Reserves per Share Reserves Profile (BOE per share) (Proved plus Probable) (Proved plus Probable) 74% Oil/NGLs 26% Natural Gas 2007 2008 2009 2010 2011 Gross Reserves (MBOE - Proved plus Probable – Year Over Year Growth) 41,149 39,371 35,824 31,241 27,321 26,476 23,870 19,711 14,899 16,529 8,201 81.7% 10.9% 19.3% 21.1% 10.9% 14.3% 14.7% 3.2% 9.9% 4.6% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Proved Probable TSX: BNE | 12
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  PEMBINA CARDIUM Pembina Halo Cardium Area Gross Sections 161 28.5 Net Sections 118 24.4 BONTERRA LAND TSX: BNE | 13
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  CARDIUM HORIZONTAL PRODUCTION Well Economics (based on Sproule Jan. 31, 2012 price forecast: Oil - $96.87; Natural gas - $3.16 and NGLs - $70.07) CapEx: $2.7 million (ave.) 10% NPV BT: $4.2 million 30 Day Initial Production: 250 BOE per day Rate of Return 136 percent First Year Ave. Production: 121 BOE per day Payout: 9.6 months Reserves: 175 MBOE TSX: BNE | 14
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  MAIN POOL DEVELOPMENT– ORIGINAL OIL IN PLACE TSX: BNE | 15
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  MAIN POOL DEVELOPMENT– CURRENT RECOVERY FACTOR TSX: BNE | 16
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  SIGNIFICANT UPSIDE TSX: BNE | 17
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  MAIN POOL PERFORMANCE Main Pool Cardium Hz Performance vs. Sproule 2P Type Curve (125,000 Bbl) Sproule 2P Type Curve 125,000 Bbl Main Pool Cardium Hz Wells Bonterra Interest Wells 100000 Cumulative Production (Bbl) 10000 1000 100 0 5 10 15 20 25 30 35 40 45 Month TSX: BNE | 18
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  LARGE OPPORTUNITY SET Grossundrilled locations: Inventory of new locations currently identified (subject to commodity prices and the terms of the Alberta royalty plan): Booked Horizontal Cardium Bonterra has 110 gross (77.3 Net) locations booked. 110 This represents Bonterra’s current three-year capital program. Unbooked Potential Horizontal Cardium Bonterra has a maximum of 390 gross (273 net) 390 additional horizontal locations based on four wells per section. The technical and economically feasible number of locations has yet to be determined. Other: Including Edmonton Sand, Gething, Notikewin, Banff 25 and Upper and Lower Shaunavon. Greater than 14 year drilling inventory TSX: BNE | 19
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  THE VALUE OFBONTERRA GROWTH • Consistently provides investors with production and reserves growth on both a total and per share basis. • 2012 capital development program of $65 million will mainly continue to pursue development of our significant Cardium light oil play that will consist of an aggressive multi-well horizontal drilling program in the main Pembina Cardium pool. • Targeting 10% production growth in 2012 with production for the year estimated at 6,700 to 7,000 BOE per day. PERFORMANCE • Provides investors with superior returns and paid out $3.04 per share in 2011. • Current monthly dividend of $0.26 per share ($3.12 annualized). • Current annualized yield of ~6.1%. • $402 million in tax pools extend the Company’s tax horizon beyond 2016. SUSTAINABILITY • Approximately 161 gross (118 net) Cardium sections including 28.5 gross (24.4 net) in the halo area. • Corporate production profile of 73% light oil/liquids and 27% natural gas (mainly solution gas) targeted in 2012. • Drilling inventory in excess of 14 years. TSX: BNE | 20
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  901, 1015 –4th Street SW Calgary, AB T2R 1J4 Telephone: (403) 262-5307 Fax: (403) 265-7488 Website: www.bonterraenergy.com TSX: BNE |