investor deck sep 13 2017 - mark vancouver final lower tubara mid miocene / top cdo upper cdo mid...

Download Investor Deck Sep 13 2017 - Mark Vancouver final Lower Tubara Mid Miocene / Top CDO Upper CDO Mid CDO

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  • September 2017

    Two gas projects to nearly triple gas production by Dec 2018(1)

    (1) From 85 → 230 MMcf/d, or 2.7x

  • 2

    Forward Looking Statements

    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.

    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.

    Production and Reserves Production represents net before royalty Reserves represent 2P reserves and before tax NPV‐10 as of December 31, 2016

    USD All dollar amounts are shown in US dollars, unless indicated otherwise

    Ecuador

    140 280 420 560

    Km

    S. Pacific Ocean

    Natural Gas

    Colombia

    20 blocks / 2.2 MM net acres

    Light oil

    Light oil

    Shale oil

    Shale oil

    2

    Heavy oil

    Gas deficit

  • • ‘17 corporate production guidance • ↑ gas production 85 → 130 MMcf/d (Dec ’17 exit) • Fully funded capex $89 MM • Production 18‐19k boepd

    % gas 81%

    • ‘18 gas production guidance • ↑ gas production 130 → 230 MMcf/d (Dec ’18 exit)(1) Includes in‐the‐money options based on CDN $4.04 / share price 

    ~140 MM shares in the float (2) Converted from CDN → USD exchange rate (0.825) as of 9/12/17 (3) As of 6/30/17

    FOCUS: The Path To ~$300 MM EBITDA

    In MM, except CDN $/share amounts

    TSX $/share (9/12/17) CDN $4.04

    Fully diluted shares outstanding(1) 177

    Market capitalization(2) US $590

    Net debt(3) $230

    Enterprise value US $820

    Insider ownership 22%

    3

    TSX: CNE | BVC: CNE.C

  • Strong Track Record Of Asset Optimization Added 314 BCF in 2P reserves over the trailing 3‐yrs.

    • A conventional gas success story

    • Recent 2P NPV‐10 $1.2 B(2) • Gas exploration success 8/9 wells (89%) • 1P / 2P reserve    166% /                                    

    replacement 194% y/y • Avg. F&D cost $0.44 / MCF(3)

    • The lowest cost gas operator always wins

    In US dollars unless otherwise noted (1) Represents before tax corporate total (oil + natural gas) 2P reserves value as of 12/31/16 (2) Represents before tax natural gas only 2P reserves value as of 12/31/16 (3) Average over the trailing 2‐yr. period

    35

    43

    17  20 

    65  72 

    7  8  11  18 

    18  23 

    14  13

    '09 '10 '11 '12 '13 '14 '15 '16

    79 85

    +52% CAGR in 2P reserves 

    Gas

    In MMboe(1) oil         gas

    4

    For the 3 months ended 6/30/17

    $ / MCF % margin Natural gas revenues $       4.96  Royalties $    (0.64) 13% Production expenses $    (0.36) 7% Operating netback $      3.96  80%

    85%  gas

    Oil

  • Caribbean Sea

    Chuchupa Ballena

    Canacol gas blocks Gas pipeline ‘17 pipeline ‘18 pipeline

    La Creciente

    Cartagena

    Barranquilla

    Jobo facility

    Sabanas Pipeline Co.

    +40 MMcf/d 130 MMcf/d

    Dec ‘17

    • $40 MM pipeline; announced $30 MM  private financing 

    • In Aug ‘17, build 6‐in. pipeline Jobo→ Sincelejo

    • Twin Jobo→ Sincelejo pipeline

    • Construct new pipeline Cartagena→ Barranquilla 

    +100 MMcf/d 230 MMcf/d

    Dec ‘18

    Filadelfia

    Paiva

    Caracoli

    Compressor 10 km Gas field

    Reficar

    1

    2

    5

    Two Gas Projects To Nearly Triple Gas Production By Dec ‘18

    1 2

    8 gas fields 5 blocks 1.1 MM net acres

  • Lower Magdalena                        Basin

    6

    Chuchupa Ballena

    La Creciente

    477 432

    381

    337 299

    265

    25 75 85 138

    230 230

    0

    200

    400

    600

    '15 ' 16 ' 17E ' 18E ' 19E '20E

    3 mature producing fields Chuchupa, Ballena, & La Creciente

    Excess demand

    Caribbean Sea

    Canacol’s Sweet Spot Replacing Chevron’s gas supply to the Caribbean

    • Gas demand +3%/yr. through 2025e(1) supply ‐20%/yr. decline ongoing            

    or ‐100 MMcf/d(2) • Excess demand ~70 MMcf/d avg. → ‘20e

    (1)Source: Wood Mackenzie and UPME Colombia estimates (2) Average annual decline for the trailing 3 years

  • X

    Nelson

    Esperanza

    VIM 5 SSJN7

    VIM 19

    Sincelejo

    Oboe

    Trombon

    VIM 21

    Palmer

    1

    (1) As of Dec ‘16 reserve reports, net of ~50 BCF produced (2) Gaffney, Cline & Associates (“GCA”)prospective conventional natural gas resource 

    report, effective Dec ‘16 (3) Expected Monetary Value discounted at 10%, GCA Dec ‘16

    Legend Gas field    Prospects / leads   Facilities                  Existing pipeline Sabanas planned pipeline (12/1/17) Promigas planned pipeline (12/1/18)

    20 km

    Strong base production and reserves  3 acquisitions ('12‐'14) 96 BCF Trailing 3‐yr. 2P reserve adds 314 BCF Recent 2p reserves 410 BCF(1) Gas exploration success 8/9 wells (89%) Producing wells 14

    Large resource upside Net acres 1.1 MM Blocks 5 Gross mean unrisked resources 2 TCF (2) BT EMV‐10 US $789 MM(3) Prospects / leads 44

    7

    • Canacol Gas

    2

    Canahuate

    Jobo  ’17 Cañandonga‐1

    ’17 Pandereta‐1

    ’17 Gaitero‐1

    A Conventional Natural Gas Success Story 3 exploration wells left for 2017

    Clarinete

    Nispero

    Toronja

    Bremen

  • AVO Reduces Exploration Risk Discovered 314 BCF from 8 gas fields over the trailing 3‐yrs.

    2.5 KM

    PANDERETA‐1

    OBOE‐1 FEB ‘16

    CLARINETE‐1 Dec ‘14

    ACORDEON‐1

    Tubara Marker

    Lower Tubara

    Mid Miocene / Top CDO

    Upper CDO

    Mid CDO

    Basal CDO

    1,200

    1,400

    1,600

    1,800

    2,000

    2,200

    2.400

    PANDERETA‐1

    • Applying AVO technology to gas‐ charged sandstones • Exploration success 8‐for‐9 (89%) • Avg. net pay/well 78 ft. TVD • Avg. test rate/well 33 MMcf/d • Producers 14 wells

    • >2 TCF of running room(1)

    The hunt for repeatable anomalies

    AVO extraction over the Mid CDO

    Fluid Factor (AVO) section (1) Represents gross unrisked mean resources from the 

    Gaffney, Cline & Associates prospective gas resource report, effective Dec ‘16

    CLARINETE‐1

    8

  • Drilling For Repeatable Anomalies In The Porquero Jun ’17: Toronja‐1 exploration well tested 46 MMcf/d

    NELSON‐5

    NELSON‐4

    NELSON‐3

    NELSON‐8PALMER‐1

    2

    1

    Mid Porquero time structure

    1,200

    1,400

    1,600

    1,800

    2.000

    2,200

    2.400

    Basement

    Intra  Porquero

    Top CDO

    Fluid Factor (AVO) section1KM

    • Tested 46 MMcf/d  • Exploration target Porquero reservoir sandstones  • Well cost 41% below budget

    • Work underway to tie Toronja into Jobo (3 kms) • Porosity 20%

    NELSON‐2

    PORQUERO

    21

    NELSON‐6 Nov ‘16

    TORONJA‐1 Jun ‘17

    Esperanza

    SSJN7 VIM 5

    VIM 21

    VIM  19

    9

  • Toronja‐1 Suggests Much More  In Store For The Porquero

    • Nov ’16  Nelson‐6 spelled opportunity • Net pay  39 ft. TVD • Tested 23 MMcf/d

    • Dec ‘16  Nelson‐5 Porquero recompletion ↑ confidence  • Net pay  79 ft. TVD • Tested 13 MMcf/d

    • Jun ‘17  Toronja‐1 says more runni