TSX-SGI September 2005 Investor Presentation September 2005.
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Transcript of TSX-SGI September 2005 Investor Presentation September 2005.
TSX-SGI September 2005TSX-SGI September 2005
Investor PresentationSeptember 2005
TSX-SGI September 2005TSX-SGI September 2005
CorporateCorporate DevelopmentDevelopment StrategyStrategy
The PlanThe Plan
Growth through a balanced approach of acquisitions Growth through a balanced approach of acquisitions combined with aggressive exploitation of upsidecombined with aggressive exploitation of upside
• Significant surplus tax pools provides a competitive advantage
• Acquire and develop quality asset base featuring long-life reserves with high operating net-backs
• Generate a balanced prospect inventory including low risk development, medium risk exploration and high impact reserve targets
• Maintain an in-house technical team skilled in resource play development, conventional exploration and efficient operations
TSX-SGI September 2005TSX-SGI September 2005
Performance to datePerformance to date
The ResultsThe Results
Acquisitions
• Completed four corporate and 3 property acquisitions
• Increased NAV per share to $1.60/share up 130% compared to re-capitalization at $0.70/share in December 2003
Efficient Operations
• Executed 35 operations in 2004 including 23 wells drilled at an 88% success rate
• Delivered top-quartile F&D costs of $11.16/boe Proven plus Probable
• Developed strong prospect inventory of over 60 opportunities
• 7.7 MMboe Proven plus Probable reserves pro-forma Goose River transaction as at March 31, 2005
• Drilled 18 wells year to date in 2005 with 100% success – completions and tie-ins underway
TSX-SGI September 2005TSX-SGI September 2005
2,000
410271 417
1,300
2,500
1,020
430
966
0
500
1,000
1,500
2,000
2,500
3,000
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
2005Exit
Time LineTime Line
Resource Play Development
Acquisitions Exploration and Development
Drilled 23 Wells Drilled 2 Wells Drilled 26 Wells
TSX-SGI September 2005TSX-SGI September 2005
J. Cameron Bailey (CFA) President & CEO
Michael Wuetherick (P.Eng) VP Corporate Development & COO
Dave Meleshko (P.Eng) Executive VP
Darcy Lamb (P.Eng) VP Operations
Tim Campbell VP Land
Brian Doherty VP Exploration
Barry Edmonson (P.Geol) Senior Geologist
Gary Walker (P.Geol) Senior Geologist
Jamie Jeffs (CA) CFO
Management TeamManagement Team
TSX-SGI September 2005TSX-SGI September 2005
Norman McIntyre (P.Eng.) Chairman Former President of Petro-Canada
George Watson (P.Eng.) Former CEO of TransCanada Pipelines Ltd.
Barry Giovanetto (CA) President of Rayquest Holding Ltd.
Randy Harrison (P.Land) President of Stallion Energy Inc.
J. Cameron Bailey (CFA) President and CEO of SignalEnergy Inc.
Curt Hartzler (P.Eng) President and CEO of G2 Resources Inc.
Hugh Mogenson (P.Geol) Former Chairman of Goose River Resources
Board of DirectorsBoard of Directors
TSX-SGI September 2005TSX-SGI September 2005
Where we are TodayWhere we are Today
Production 1,700-1,800 boe/dNatural Gas 75%
Oil and Liquids 25%
March 2005 Year End Reserves (mboe)Proven 5,054Proven & Probable 7,770
Undeveloped Land 52,000 net acres
Net Asset Value Per Share $1.60
RLI (based on current production)Proven 7.7 yearsProven & Probable 11.8 years
TSX-SGI September 2005TSX-SGI September 2005
Signal Score CardSignal Score Card
(Since recapitalization in December 2003 based on 2004 Reserve Estimates)
Finding & Development Costs without with Future Capital Future Capital
Total Proven $14.94/boe $16.30/boeProven & Probable $ 9.81/boe $11.16/boe
Recycle Ratios
Total Proven 2.1 timesProven & Probable 3.2 times
Operating Costs
Total Proven $6.00 -$6.50/boe
Full Cycle Capital Efficiency Full Cycle Capital Efficiency
TSX-SGI September 2005TSX-SGI September 2005
220
600
1200
400
180
520
500
220
0 200 400 600 800 1,000 1,200 1,400
Privateco
Predator
Goose
Carrot Creek
• Average 70% increase in production
Creating Value on Major AcquisitionsCreating Value on Major Acquisitions
Production Increases (boe/d)Production Increases (boe/d)
2005 Exit Rate
Acquired
TSX-SGI September 2005TSX-SGI September 2005
430
966 1,020
2,500
1,300
417271
410
2,000
0
500
1,000
1,500
2,000
2,500
3,000
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
2005Exit
Average Daily Production boe/dAverage Daily Production boe/dB
oe/
d
TSX-SGI September 2005TSX-SGI September 2005
36.8
21.321.720.6
9.012.311.9
13.7
29.4
0.05.0
10.015.020.0
25.030.035.0
40.045.0
Q12004
Q22004
Q32004
Q42004
Q12005
Q22005
Q32005
Q42005
Exit2005
Boe/d
per
mill
ion S
hare
sProduction Per ShareProduction Per Share
74% Growth Rate in 200574% Growth Rate in 2005
TSX-SGI September 2005TSX-SGI September 2005
Pro-forma Net Asset Value Pro-forma Net Asset Value
December 2003 December 2004 (millions) (millions)
Reserves @10% DCF nil $101.7
Undeveloped Land nil $ 9.9
Tax Pools $ 5.5 $ 5.5
Net Working Capital $14.4 ($ 6.9)
Net Asset Value $19.9 $110.2
Shares Outstanding 28.4 68.5
Net Asset Value per Share $ 0.70 $1.60
Growth in Asset Value per Share 130%
• Note: The above is presented on a pro forma basis after giving effect to the Goose River, Predator and Privateco acquisition and the Twining disposition.
TSX-SGI September 2005TSX-SGI September 2005
Ideal Budget AllocationIdeal Budget Allocation
Prospect Development PyramidProspect Development Pyramid
Geotechnical Geotechnical ResourcesResources
Three GeologistsThree GeologistsOne GeophysistOne GeophysistThree EngineersThree Engineers
New Concept Plays &High Risk Exploration
10%10%
30%Medium Risk
30%Medium Risk
60%Low Risk Development
60%Low Risk Development
ProductionProduction
TSX-SGI September 2005TSX-SGI September 2005
The Landscape has ChangedThe Landscape has Changed
Prospect Development Pyramid Prospect Development Pyramid
10%10%
30%Medium Risk
30%Medium Risk
60%Low Risk Development
60%Low Risk Development
ProductionProduction
ExploreCos – Peer Group
• Seeded with inventory drillable prospects and access to land
• Valuations reflect high growth rates
Trusts
• Transformed into sustainable business models through reinvestment activities
• Distributions average 64%
• Low cost of capital
• Drilling inventory acquired
• Competition for acquisitions
TSX-SGI September 2005TSX-SGI September 2005
How Does Signal Compete?How Does Signal Compete?
Average Gas Production Mix 54%SignalEnergy 75%
Average Operating Costs $7.67 per boeSignalEnergy $6.00 per boe
Proven Reserve Life Index 7.0 yearsSignalEnergy 7.7 Years
Average Reserves per Well 98 mboeSignalEnergy 140 mboe
Average Production per Well 28 boe/dSignalEnergy 40 boe/d
Trust Comparison Trust Comparison
TSX-SGI September 2005TSX-SGI September 2005
Unlocking Hidden ValueUnlocking Hidden Value
• Tax Pools $90 million
100% Write-off Pools $60 million
• Signal can shelter proceeds from the sale of its producing assets
• Signal has developed assets that are highly marketable and valuable to the Trusts
• Trust can provide access to undeveloped land
• Signal has very attractive “trading chips” in a highly competitive cash rich environment.
Strategies Strategies
TSX-SGI September 2005TSX-SGI September 2005
$21.0
$3.7$18.3
2005 Capital Budget of $6 MM for remainder of year
• Always maintain prospect inventory double available capital
• Manage portfolio risk exposure by high-grading opportunities
• Exploration and medium risk projects to provide contingent follow-up low risk development locations
$43 MM Prospect Inventory$43 MM Prospect Inventory
High Risk Exploration:• 2 Drilling Locations• 320 boe/d• 700 Mboe Reserves
Low RiskLow RiskDevelopment:Development:• 32 Operations• 857 boe/d• 2227 Mboe Reserves
Medium Risk:Medium Risk:• 20 Operations• 926 boe/d• 1225 Mboe Reserves
TSX-SGI September 2005TSX-SGI September 2005
Core AreasCore Areas
Cheap Deep (Resource Plays)
• Chigwell
• Buick Creek
• Bashaw
Conventional Plays• Carrot Creek
• Elmworth
• Kaybob
• Redwater
Edmonton
Calgary
Bashaw
Kaybob
Chigwell
Redwater
Buick Creek
Carrot Creek
E
Elmworth
TSX-SGI September 2005TSX-SGI September 2005
Chigwell / BashawChigwell / Bashaw
Low Risk DevelopmentLow Risk Development• Current production of 285 boe/d
• Multi-zone targets to depths of 1700 m
• 9 gross (4.5 net) sections of undeveloped land
2005 Capital Program:
• Q2 &Q3 Drilled 7 wells and completed three tie-ins
• Q4 – 3 Drills and 7 tie-ins
2006 Capital Program:
• Drill 15 CBM locations
• Re-enter 2-3 wellbores for Ostracod potential
T.42
T.41
R.22
T.43
R.23R.24R.25 W.4
Bashaw
Chigwell
Signal LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 WellsGas Wells
TSX-SGI September 2005TSX-SGI September 2005
• Multi-zone Mannville-Rock Creek at depths to 2500 m
• Follow-up on recent drilling success
• 41 gross (31 net) sections of undeveloped land
2005 Capital Program:
• Q2 & Q3 Drilled 4 wells and completed one tie-in
• Q4 – 3 wells and 3 tie-ins
2006 Capital Program:
• Drill 3-5 additional wells pending success
Carrot CreekCarrot Creek
Medium RiskMedium Risk R.14 W.5 R.13 R.12
T.52
T.51
T.53
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Rock Creek Trends
BlueskySand
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Signal LandsFarmin LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
TSX-SGI September 2005TSX-SGI September 2005
• Target Ellerslie Oil at depth of <1100m
• Current production 600 boe/d
• Operating Cost reduction from $12.00/boe to $6.50/boe
• Average Working Interest 60%
2005 Capital Program:
• Q2 &Q3 – drilled 5 wells and completed 3 tie-in complete flow lines
• Q4 – Drill 7 infill wells and complete 9 tie-ins
2006 Capital Program:
• Drill 15 wells on 40 acre spacing
• 40 locations on 20 acre spacing
RedwaterRedwater
Low Risk DevelopmentLow Risk DevelopmentR.21 W.4 R.20
T.55
2
Signal LandsQ3 2005 WellsQ4 2005 WellsQ1 2006 Wells
Eller
slie
Cha
nnel
PendingPurchase
TSX-SGI September 2005TSX-SGI September 2005
2005 Fourth Quarter Activity2005 Fourth Quarter Activity
Q4 Expected Prod. adds
Q4 Drilling No. of Wells (boe/d)
Redwater 7 350
Bashaw / Chigwell 2 35
Carrot 3 *nil
Exploration 1 *nil
Total Drilling 13 385
Q4 Tie-insRedwater 2 20
Bashaw / Chigwell 7 35
Carrot 3 150
Total Tie-ins 12 205
Total Operations 25 590
* First Quarter 2006 Tie-in
TSX-SGI September 2005TSX-SGI September 2005
Shares Outstanding 68.5 million
Recent Share Price $1.40
Market Capitalization $95.9 million
Pro-forma Debt $22.5 million
Pro-forma Lending Facility $27.0 million
Total Capitalization $118.4 million
CapitalizationCapitalization
TSX-SGI September 2005TSX-SGI September 2005
2005 Average Production 1,300 boe/d
Cash Flow Per Share $0.17 per share
2005 Exit Rate 2,500 boe/d
Annualized Exit Rate Cash Flow $23.4 million
Annualized Exit Rate CFPS $0.38
Remaining 2005 Capital Expenditures $6.0 million
Year-end Exit Debt $22.0 million
Reserve Life Index 11.8 years
Tax Pools $90 million
2005 Guidance2005 Guidance
Price Assumption $50 WTIPrice Assumption $50 WTI
TSX-SGI September 2005TSX-SGI September 2005
Why SignalEnergy?Why SignalEnergy?
Attractive MetricsAttractive Metrics
• EV per boe/d
- Average 2005 Production $ 90,770
- Current Production $ 65,500
- 2005 Exit Rate $ 47,200
• High Quality Assets
- Long Life Assets - 11.8 year Reserve Life Index
- Low Operating Costs $6.00 - $6.50 per boe
• Significant Unused Tax Pools - $ 90 million
• Excellent Prospect Inventory
• Top 10% Industry Performance
• EV per boe = $ 15.94
- Lower than Industry average F & D Costs
TSX-SGI September 2005TSX-SGI September 2005
Corporate InformationCorporate Information
SignalEnergy Inc.SignalEnergy Inc.600, 311 – 6600, 311 – 6thth Avenue S.W. Avenue S.W.
Calgary, Alberta T2P 3H2Calgary, Alberta T2P 3H2Email: [email protected]
Website: www.signalenergy.com
Investor Relations Contacts:
President & CEO J. Cameron Bailey [email protected]
VP – Corp.Dev &COO Michael Wuetherick [email protected]
Corporate Analyst Teresa Beets [email protected]
This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of SignalEnergy (the “Company”). These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, fluctuations in commodity prices, weather, access to capital markets, competition, changes in technology and government policies. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of the Company will be achieved. The Company believes that the expectations reflected in these forward-looking statements are reasonable; however, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentation should not be relied upon. In addition, these forward-looking statements relate to the date on which they are made. Unless otherwise required by applicable securities legislation, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Phone: (403)398-3345
Fax: (403)398-3351
Toll Free: 1-866-592-6205