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Transcript of CORDOVA AREA - CIBCWM.com 1 - PROP ALBERTA - Oil Opportunity CORDOVA AREA OVERVIEW Penn West...
1 - PROP ALBERTA - Oil Opportunity
CORDOVA AREA OVERVIEWPenn West Exploration (“Penn West” or the “Company”) has engaged CIBC World Markets Inc. (“CIBC”) to assist with the sales process of certain interests it holds in the Cordova area of Northeast BC . Penn West will consider all proposals for the asset; however, they reserve the right to evaluate offers according to select criteria, at their sole discretion.
OPPORTUNITY HIGHLIGHTS
u Large gas resource within the Devonian Muskwa and Evie shale formations located in the Cordova Embayment, 75km east of the Horn River Basin- Over 10 Tcf net gas in place
u Significant development potential:- Net recoverable resource of over 3 Tcf- Peak net production of 225 MMcf/d
u 50/50 joint venture with Mitsubishi-led consortiumu Current working interest production average of 21 MMcfe/d
(March 2014,~100% gas) from 147 producing wells (19 shale, 128 conventional)u Penn West operates over 95% of its productionu Large undeveloped land base with 430+ location drilling inventoryu Property includes over 225,000 net acres, including over 81,000 net acres
prospective for shale gas developmentu Owned and operated infrastructure and gas processingu Geographically well-positioned for west coast LNG export to Asian markets
DISCLAIMER - This presentation is confidential and has been prepared by CIBC World Markets Inc. (“CIBC”). In preparing this presentation, CIBC has relied without any independent verification on information provided or that is publicly available. The information and any analyses in this presentation are preliminary and is not intended to constitute a “valuation,” “formal valuation,” “appraisal,” “prior valuation,” or a “report, statement or opinion of an expert” for purposes of any securities legislation in Canada or otherwise. We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or accounting matters or the sufficiency of this presentation for your purposes. This printed presentation is incomplete without reference to the oral presentation, discussion and any related written materials that supplement it. These materials are confidential and are intended solely for your benefit and for your internal use only and may not be reproduced, disseminated, quoted from or referred to in whole or in part at any time, in any manner or for any purpose, without obtaining the prior written consent of CIBC World Markets Inc. in each specific instance. CIBC employees are prohibited from offering to change or otherwise influence any research report, rating or price target to any company as inducement for the receipt of any business or compensation. CIBC is a wholly-owned subsidiary of Canadian Imperial Bank of Commerce and a part of Canadian Imperial Bank of Commerce’s wholesale banking arm, which also includes CIBC’s affiliates: CIBC World Markets Corp., CIBC World Markets plc, CIBC World Markets Securities Ireland Limited, CIBC Australia Ltd, and CIBC World Markets (Japan) Inc. All values are expressed in Canadian dollars, unless otherwise noted.
94-P-594-P-5 94-P-694-P-6 94-P-794-P-7 94-P-894-P-8
94-P-994-P-994-P-1094-P-1094-P-1194-P-1194-P-1294-P-12
94-P-1394-P-13 94-P-1494-P-14 94-P-1594-P-15 94-P-1694-P-16
T118
T119
T120
T121
T122
T123
T124
T125
T126
R12W6
BR
ITIS
H C
OLU
MB
IAB
RIT
ISH
CO
LUM
BIA
ALB
ERTA
ALB
ERTA
CORDOVA BASINCORDOVA BASIN
HORN RIVER BASINHORN RIVER BASIN
CORDOVA AREA
Penn West Land
Penn West Well
SALE PROCEDURE
Confidentiality Agreement (“CA”) – Signed CAs should be forwarded by email or courier to Alan Kelly.
Confidential Information – Once a CA has been executed, confidential information will be made available to qualified parties through:- Access to a Virtual Data Room (“VDR”)- Technical Presentations
Technical Presentations – Presentations will be held in CIBC’s Calgary office.
Offer Submission – Bid date to be communicated at a later time
Contacts – Interested parties are not to contact the Company directly. All communications, inquiries and requests for information relating to the process should be directed to one of the CIBC individuals.
4 - CORDOVA - Natural Gas Opportunity 1 - CORDOVA - Natural Gas Opportunity
Edmonton
Calgary
Regina
T120
T110
T100
T90
T80
T70
T60
T50
T40
T30
T20
T10
94-O94-P
94-J94-I
94-G94-H
94-B
93-O93-P
93-J93-I
W6M
W5M
W4MR2
0
R20
R10
R10
W3M W2M
R20
R10
R10
R20
A L B E R T A SASKATCHEWANB . C .
Lloydminster
Ft. McMurray
Grande Prairie
CORDOVA
CORDOVA AREADenis RajotteManaging Director
Denise PoleyHead Acquisitions
& Divestitures403-260-0502
Rahim Daredia Chief Engineer 403-216-3004
Chris HindManaging Director
Jack LuiDirector
Alan KellyAssociate
416-594-7443 [email protected]
CIBC World Markets Inc.9th Floor, Bankers Hall East
855 – 2nd Street SWCalgary, Alberta T2P 4J7
Fax: 403-260-0524
PLAY OVERVIEWu Three main producing zones:
- Base production is comprised of unconventional shale gas from the Devonian Muskwa and conventional production from the Jean Marie and Debolt formations
u Future development is focused on the Muskwa formation, with additional resource capture from the Evie formation
u 50-85 Bcf/section in place for Muskwa and Evie formations combined
TYPE CURVEu Several years of appraisal drilling has led to greater
understanding of the play and overall development strategy
u Optimization of drilling and completion techniques is ongoing
u Opportunity for capital and operating cost reductions- Lower per-mcf operating costs on shale development versus conventional legacy production
u Go forward type curve shows positive economics in current gas price environment- Substantial value uplift as gas prices increase
INFRASTRUCTUREu Penn West operated Wildboy plant:
140 MMcf/d raw gas capacity (~45 MMcf/d current throughput)
u Partnership owned 80 km 10” pipeline tied into TCPL
R12W694-P-194-P-294-P-394-P-4
T118
T119
T120
T121
T122
T123
T124
T125
T126
Penn West LandLEGEND
Penn West Gas Gathering
Penn West Sales PipelineTCPL Sales Pipeline
Penn West Wildboy Plant
CODORVA INFRASTRUCTURE MAP
Penn West Wildboy PlantRaw Gas Capacity: 140 MMcf/dThroughput: 45 MMcf/d (32% of cap)
WildboyWildboy
CordovaCordova
2 - CORDOVA - Natural Gas Opportunity 3 - CORDOVA - Natural Gas Opportunity
FUTURE DEVELOPMENT PLAN (GROSS SALES)
CORDOVA WORKING INTEREST PRODUCTION HISTORY
TYPE CURVE EVOLUTION
CORDOVA AREA INFRASTRUCTURE
R12W694-P-194-P-294-P-394-P-4
T118
T119
T120
T121
T122
T123
T124
T125
T126
Penn West LandLEGEND
Penn West Gas Gathering
Penn West Sales PipelineTCPL Sales Pipeline
Penn West Wildboy Plant
CODORVA INFRASTRUCTURE MAP
Penn West Wildboy PlantRaw Gas Capacity: 140 MMcf/dThroughput: 45 MMcf/d (32% of cap)
WildboyWildboy
CordovaCordova
RESERVOIR QUALITY COMPARISON
ParameterHorn River Muskwa
Cordova Muskwa
Cordova Evie
Gross Thickness (m) 60-80 50-80 40-50
TOC (%) 3.5-4.5 3.5-4.5 5-6
Effective Porosity (%) 2-8 6 4-5
Gas Content (scf/ton) ~105 ~112 ~75
Average Depth (m) ~2,600 ~1,800 ~2,000
CO² Content (%) 9 5 11
Average Pressure (MPa) ~36 ~18 ~20
BASIN OVERVIEW
Source: National Energy Board
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
7000
6000
5000
4000
3000
Raw
Gas
Rat
e (m
cf/d
)
Month0 3 6 9 12 15 18 21 24
2000
1000
0
2015 Target 20% Performance Uplift
600m Type Curve
300m Type Curve
5.7 bcf
11.4 bcf
13.7bcf
-
50
100
150
200
250
300
350
400
450
500
2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 2069
Pro
du
ctio
n (
Sale
s)(M
Mcf
e/d)
Base Muskwa Evie
35
30
25
20
15
10
5
0
Jan-1
0
Mar
-10
May
-10
Jul-
10
Sep
-10
Nov-
10
Jan-1
1
Mar
-11
May
-11
Jul-
11
Sep
-11
Nov-
11
Jan-1
2
Mar
-12
May
-12
Jul-
12
Sep
-12
Nov-
12
Jan-1
3
Mar
-13
Jul-
13
May
-13
Sep
-13
Nov-
13
Jan-1
4
(MM
cfe/
d)
Shale Gas Conventional
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
FUTURE DEVELOPMENTu Contingent + Prospective Resource effective Dec 31, 2012 (Draft best est.)
- Muskwa: 2,008 Bcfe- Evie: 1,099 Bcfe
u Shale gas well inventory of over 430 locations - Estimated gross peak production over 450 MMcf/d for ten years with 25+ year drilling inventory
u New BC two-tier deep royalty program provides additional drilling credits for Muskwa wells in addition to Evie deep-royalty programu Additional upside potential in Jean Marie formation currently being demonstrated by area operators near Cordova
PLAY OVERVIEWu Three main producing zones:
- Base production is comprised of unconventional shale gas from the Devonian Muskwa and conventional production from the Jean Marie and Debolt formations
u Future development is focused on the Muskwa formation, with additional resource capture from the Evie formation
u 50-85 Bcf/section in place for Muskwa and Evie formations combined
TYPE CURVEu Several years of appraisal drilling has led to greater
understanding of the play and overall development strategy
u Optimization of drilling and completion techniques is ongoing
u Opportunity for capital and operating cost reductions- Lower per-mcf operating costs on shale development versus conventional legacy production
u Go forward type curve shows positive economics in current gas price environment- Substantial value uplift as gas prices increase
INFRASTRUCTUREu Penn West operated Wildboy plant:
140 MMcf/d raw gas capacity (~45 MMcf/d current throughput)
u Partnership owned 80 km 10” pipeline tied into TCPL
R12W694-P-194-P-294-P-394-P-4
T118
T119
T120
T121
T122
T123
T124
T125
T126
Penn West LandLEGEND
Penn West Gas Gathering
Penn West Sales PipelineTCPL Sales Pipeline
Penn West Wildboy Plant
CODORVA INFRASTRUCTURE MAP
Penn West Wildboy PlantRaw Gas Capacity: 140 MMcf/dThroughput: 45 MMcf/d (32% of cap)
WildboyWildboy
CordovaCordova
2 - CORDOVA - Natural Gas Opportunity 3 - CORDOVA - Natural Gas Opportunity
FUTURE DEVELOPMENT PLAN (GROSS SALES)
CORDOVA WORKING INTEREST PRODUCTION HISTORY
TYPE CURVE EVOLUTION
CORDOVA AREA INFRASTRUCTURE
R12W694-P-194-P-294-P-394-P-4
T118
T119
T120
T121
T122
T123
T124
T125
T126
Penn West LandLEGEND
Penn West Gas Gathering
Penn West Sales PipelineTCPL Sales Pipeline
Penn West Wildboy Plant
CODORVA INFRASTRUCTURE MAP
Penn West Wildboy PlantRaw Gas Capacity: 140 MMcf/dThroughput: 45 MMcf/d (32% of cap)
WildboyWildboy
CordovaCordova
RESERVOIR QUALITY COMPARISON
ParameterHorn River Muskwa
Cordova Muskwa
Cordova Evie
Gross Thickness (m) 60-80 50-80 40-50
TOC (%) 3.5-4.5 3.5-4.5 5-6
Effective Porosity (%) 2-8 6 4-5
Gas Content (scf/ton) ~105 ~112 ~75
Average Depth (m) ~2,600 ~1,800 ~2,000
CO² Content (%) 9 5 11
Average Pressure (MPa) ~36 ~18 ~20
BASIN OVERVIEW
Source: National Energy Board
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
7000
6000
5000
4000
3000
Raw
Gas
Rat
e (m
cf/d
)
Month0 3 6 9 12 15 18 21 24
2000
1000
0
2015 Target 20% Performance Uplift
600m Type Curve
300m Type Curve
5.7 bcf
11.4 bcf
13.7bcf
-
50
100
150
200
250
300
350
400
450
500
2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 2069
Pro
du
ctio
n (
Sale
s)(M
Mcf
e/d)
Base Muskwa Evie
35
30
25
20
15
10
5
0
Jan-1
0
Mar
-10
May
-10
Jul-
10
Sep
-10
Nov-
10
Jan-1
1
Mar
-11
May
-11
Jul-
11
Sep
-11
Nov-
11
Jan-1
2
Mar
-12
May
-12
Jul-
12
Sep
-12
Nov-
12
Jan-1
3
Mar
-13
Jul-
13
May
-13
Sep
-13
Nov-
13
Jan-1
4
(MM
cfe/
d)
Shale Gas Conventional
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
Liard BasinLiard Basin
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Bovi
e St
ruct
ireBo
vie
Stru
ctire
Fort Simpson(Mid Besa River)
Fort Simpson(Mid Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
MuskwaOtter Park-Evie
(Lower Besa River)
Muskwa Otter ParkMuskwa Otter Park
Muskwa Otter ParkMuskwa Otter Park
Lower Otter ParkLower Otter Park
Fort SimpsonFort Simpson
Slave Point U. KegRiver Reefal Carbonates
Slave Point U. KegRiver Reefal Carbonates
L. Keg River Platform CarbonatesL. Keg River Platform Carbonates
Basinal Slave PointSulphur Point Carbonates
Basinal Slave PointSulphur Point Carbonates
Nahanni Platform CarbonatesNahanni Platform Carbonates
EvieEvie EvieEvie
WW EEHorn River BasinHorn River Basin Cordova EmbaymentCordova Embayment
FUTURE DEVELOPMENTu Contingent + Prospective Resource effective Dec 31, 2012 (Draft best est.)
- Muskwa: 2,008 Bcfe- Evie: 1,099 Bcfe
u Shale gas well inventory of over 430 locations - Estimated gross peak production over 450 MMcf/d for ten years with 25+ year drilling inventory
u New BC two-tier deep royalty program provides additional drilling credits for Muskwa wells in addition to Evie deep-royalty programu Additional upside potential in Jean Marie formation currently being demonstrated by area operators near Cordova
1 - PROP ALBERTA - Oil Opportunity
DISCLAIMER - This presentation is confidential and has been prepared by CIBC World Markets Inc. (“CIBC”). In preparing this presentation, CIBC has relied without any independent verification on information provided or that is publicly available. The information and any analyses in this presentation are preliminary and is not intended to constitute a “valuation,” “formal valuation,” “appraisal,” “prior valuation,” or a “report, statement or opinion of an expert” for purposes of any securities legislation in Canada or otherwise. We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or accounting matters or the sufficiency of this presentation for your purposes. This printed presentation is incomplete without reference to the oral presentation, discussion and any related written materials that supplement it. These materials are confidential and are intended solely for your benefit and for your internal use only and may not be reproduced, disseminated, quoted from or referred to in whole or in part at any time, in any manner or for any purpose, without obtaining the prior written consent of CIBC World Markets Inc. in each specific instance. CIBC employees are prohibited from offering to change or otherwise influence any research report, rating or price target to any company as inducement for the receipt of any business or compensation. CIBC is a wholly-owned subsidiary of Canadian Imperial Bank of Commerce and a part of Canadian Imperial Bank of Commerce’s wholesale banking arm, which also includes CIBC’s affiliates: CIBC World Markets Corp., CIBC World Markets plc, CIBC World Markets Securities Ireland Limited, CIBC Australia Ltd, and CIBC World Markets (Japan) Inc. All values are expressed in Canadian dollars, unless otherwise noted.
SALE PROCEDURE
Confidentiality Agreement (“CA”) – Signed CAs should be forwarded by email or courier to Alan Kelly.
Confidential Information – Once a CA has been executed, confidential information will be made available to qualified parties through:- Access to a Virtual Data Room (“VDR”)- Technical Presentations
Technical Presentations – Presentations will be held in CIBC’s Calgary office.
Offer Submission – Bid date to be communicated at a later time
Contacts – Interested parties are not to contact the Company directly. All communications, inquiries and requests for information relating to the process should be directed to one of the CIBC individuals.
4 - CORDOVA - Natural Gas Opportunity
Denis RajotteManaging Director
Denise PoleyHead Acquisitions
& Divestitures403-260-0502
Chris HindManaging Director
Jack LuiDirector
Alan KellyAssociate
416-594-7443 [email protected]
CIBC World Markets Inc.9th Floor, Bankers Hall East
855 – 2nd Street SWCalgary, Alberta T2P 4J7
Fax: 403-260-0524