Corporate Presentation - November 2012 - Newswireextras.newswire.ca/sepac/Nov2012/Hyperion Corporate...
Transcript of Corporate Presentation - November 2012 - Newswireextras.newswire.ca/sepac/Nov2012/Hyperion Corporate...
Forward Looking Statements
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This document may include forward-looking statements including opinions, assumptions, estimates and expectations of future production, cash flow and earnings. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "plan", "will", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, the volatility of oil and gas prices, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in oil and gas acquisition and drilling programs, operating risks, production rates, reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. BOEs may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Niton /McLeod, AB
Pembina, AB
Buck Lake, AB
Garrington, AB
Focused Resource Player
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Land Summary Acres
Net Land ~ 80,000
Net Undeveloped Land ~ 66,000
Net Undeveloped Cardium Land (including Farm In Land)
~ 37,000
Background:
Started in July 2010 with a recapitalization of a public shell
Early focus: acquisitions, gaining scale and resource drilling repeatability in Cardium light oil
Current focus: share price appreciation through cash flow, production and reserves per share growth.
Strategy:
Acquire and exploit underdeveloped light oil resource plays which lead to lower risk, scalable and repeatable development projects.
Light oil resource play focus
Light sweet oil (38 – 41o API) High netbacks at $90/bbl WTI oil price:
• $75/boe on crown lands • $65/boe on farm in lands
High working interest 92%, operated assets Year round access Low risk development
Experience with Cardium horizontal wells
Currently have 20 horizontal producers Wells have met or exceeded expectations to-date
Growth Potential
Cardium Light Oil
• 215 gross/196 net unbooked locations • Drill 9.3 net wells in 2012
Hyperion has unmatched exposure to Cardium acreage relative to its size; nearly double its closest competitor (Source: Canaccord Research October 25, 2012)
GROWTH – Repeatable Cardium Light Oil (Why Niton /McLeod for Future Growth?)
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Hyperion Land
VALUE - Net Asset Value Build Up
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NAV Build-Up – Pro Forma September, 2012
$1.25 $1.74
• $0.95/share base producing NAV Includes no booked or unbooked locations, net of debt.
• $1.10/share base 2P NAV
Includes only booked locations intended to be drilled within 2012 timeframe, net of debt.
2011 Year End McDaniel Reserve Summary: Proved Plus Probable Reserve Value (BT NPV 10%) …$76.0 million Proved Plus Probable Reserve …………………….……………5.5 MMboe (56 % Oil + NGL’s)
$4.75+/share un-booked
*risked* drilling upside
$5.85
$11.15
2011 Year End McDaniel Property Summary: Garrington Proved Plus Probable Reserve Value (BT NPV 10%) ….…$37.0 million Pembina Proved Plus Probable Reserve Value (BT NPV 10%) ………..$16.2million Other Proved Plus Probable Reserve Value (BT NPV 10%) ……….……$22.8 million
Niton / McLeod “Potential Company Maker Asset”
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File: Niton-McLeod Hyperion Land (Al Datum: NAD27 Projection: Stereographic Center: N53.77840 W115.86764 Created in AccuMap™, a product of IHS
Cardium rights - Crown
Deep rights only
Legend
Cardium rights – Crown with farm-in
Gross Net
Land Capture (acres) 35,680 32,508
Tier 1 Tier 1 & 2
Estimated Well Locations (wells) 129 gross/114 net 191 gross/172 net
Estimated Oil in place (Mbbl) 110,500 171,000
Potential Recoverable Oil with primary recovery at 11.7% (Mbbl)
12,900 20,000
Cardium Light Oil Economics
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Niton / McLeod Risked case Technically Supported Case
Targeted Well Capital ($M) $3,000 $3,000
IP 30 day (boe/d) 161 (92% oil) 225 (92% oi)
Reserves (mboe) 146 (88% oil) 178 (88% oil)
Primary Oil Recovery Factor (%) 11.7% 15.9%
Unbooked Hz Well Location’s 191 Gross / 172 Net 191 Gross / 172 Net
NPV BT10% ($M) $2,000 $4,100
ROR (%) 41% 98%
Payout (Years) 2.0 1.2
Production Efficiency ($/boe/d) $19,000 $13,500
Reserve Cost ($/boe) $20.54 $16.90
Field Netback ($/boe) $67.46 $69.48
Recycle Ratio 3.3 4.1
* Commodity Pricing – McDaniel & Associates July 2012 forecast; WTI US$90.00
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Months On Production
Niton / McLeod Model - Cardium Hz Type Well
Risked Case Technically Supported Case
Financial & Production Performance
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Accelerating cash flow(1) and cash flow per share growth since recap in July 2010
(1) “Cash Flow” refers to cash flow from operations excluding changes in working capital
Continued quarter over quarter oil focused production growth Long term production increases through opportunistic/accretive acquisitions and continuous development of corporate lands.
36%
52%
12%
Q4 2011 to Q1 2012 cash flow decrease primarily caused by realized pricing issues between Edmonton Par and WTI benchmarks.
Corporate Profile
Volumes Hedged
Weighted Average Floors and Ceilings
$111.86 $111.86 $112.26 $108.00 $108.00 $108.00
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Other hedges include: • 425 bbls/day differential hedge Edmonton Light to WTI U.S. for the production period October 1, 2012 to December 31,2012 at PAR • Fixed/floating interest rate swap for $20 million for the borrowing period May 30, 2012 to May 29, 2015 at 1.5% • 1095 mcf/day hedge on Alberta natural gas benchmark for the production period May 1, 2012 to December 31, 2012 at a floor of $1.58 and a ceiling of $2.31
Ticker Symbol: HYX on TSX.V
Shares Outstanding:
Basic (MM): 54.2
Warrants (MM): 12.9
Options (MM): 4.8
Total Fully Diluted (MM): 71.9
Management, employees and directors ownership all sources (%): 12%
Current bank line limit – to be reviewed by lender in November 2012 $40
Current acquisition line limit – to be reviewed by lender in November 2012 $10
Management and Directors
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Executive History
Trevor Spagrud President, CEO and Director
President, CEO & Director, Titan Exploration Ltd. VP Engineering, Enterra Energy; VP Operations, Big Horn Resources
Larry Hammond Chief Operating Officer
VP Canadian Operations, Enerplus Team Lead EnCana, PanCanadian; Lead Petroleum Engineer, Hibernia
Doug Bailey Chief Financial Officer
Energy Restructuring Consultant CFO Canadian Phoenix, interim CFO various restructured companies, founder private E&P
Tim Gee Vice President, Engineering
Manager Engineering, Berkana Energy (Quatro Resources) Engineering Team Lead, NAL Oil & Gas Trust, Ocelot
Ryan Heath Vice President Land & Business Development
VP Land & Business Development, Severo Energy Corp. Senior Land Negotiator, Paramount; NCE Petrofund
Steve Horth Manager, Exploration
Senior Geologist, Titan Exploration Ltd. Starpoint, Cougar, Dominion, Marathon, Tarragon, Opinac
Director History
Rod Maxwell, Chairman Managing Director, Stonebridge Merchant Capital
Director of a number of publically traded oil and gas companies and energy related service companies. CA & CBV.
Dan O’Neil President, CEO and Director Surge Energy Inc.
Director of a number of publically traded oil and gas companies and energy related service companies; former President and CEO Breaker Energy Ltd.
Greg Turnbull Regional Managing Partner, McCarthy Tetrault LLP
Director of a number of publically traded oil and gas companies including Crescent Point
Greg Bay Founding Partner, Cypress Capital Management
Director of a number of publically traded oil and gas companies and energy related service companies
Titan Exploration (2004-2007): • Founder, 0 - 2,800 boe/d in 3 years • 150 net, hz light oil drilling locations in inventory • Stock value increased from approx. $1.50/sh (IPO) to ~$7.50/sh. • Sold to PennWest (Dec/07) at ~ $3.00/sh (market was depressed at the time
due to recent market events: Elimination of royalty trust structure and punitive changes to Alberta crown royalties)
Enterra Energy / Big Horn Resources (1997-2003): • Started as second employee with 50 boe/d of production • Grew company to 6,500 boe/d by 2003 • Growth from repeatable Doe Creek light oil drilling • Stock value appreciated from $0.70 to $25.00 in this period • Was asked to be CEO of Enterra Trust, but left to found Titan Enerplus (2005-2008): • Led a team of 400 people and production base of 80,000 boe/d (capex of
$400M/yr). Left to found Hyperion EnCana (2000-2005): • Led a team of 40 people and production base of 15,000 boe/d (capex of $40
million/yr) • Responsible for increasing opportunities which resulted in annual capital
expenditures increasing in area from $10M to $40M Hibernia Management Company (1997-2000): • Lead petroleum engineer responsible for offshore well completion and
operations engineering • Managed production of 150k boe/d (well capital cost of ~$50MM each)
Restructuring Consultant (2004-2010): • Worked with lenders, portfolio managers and other stakeholders in the
restructuring of distressed junior oil and gas companies • 15 engagements: involved corrective actions such as: sale of assets, raising
equity, satisfaction of flow thru spending obligations and corporate mergers • Raised $230M of debt and equity as part of restructuring initiatives • Developed enhanced budgeting and modelling skills. Left to found
Hyperion SCGC Inc. (2002-2004): • Responsible for Calgary based, Korean backed, junior oil and gas start up • Helped managed growth thru acquisitions and drilling
Banker: National Bank of Canada
Auditor: KPMG
Legal Counsel: McCarthy Tétrault LLP
Evaluation Engineers: McDaniel & Associates
Registrar & Transfer Agent: Alliance Trust Company
Research Coverage:
GMP Securities Dundee Capital Markets
Canaccord Genuity Paradigm Capital
Desjardins Securities Casimir Capital
Stonecap Securities National Bank Financial
Contact Information
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Advisors
Hyperion Exploration Corp.
Trevor Spagrud, P.Eng.
President & Chief Executive Officer
(403) 930-0701
Hyperion Exploration Corp.
Doug Bailey, CGA
Chief Financial Officer
(403) 930-0703
Notice to Residents of Ontario
Subscribers (“Subscribers”) resident in Ontario who purchase the securities (the “Shares”) described in this document (the “Offering Memorandum”), and any amendment thereto, during the period of distribution will have a statutory right of action for damages, or, while still the owner of the Shares, for rescission, against Hyperion in the event that the Offering Memorandum, or any amendment thereto, contains an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in which it was made (hereinafter referred to as a “misrepresentation”) without regard to whether the purchaser relied on the misrepresentation. This statutory right of action is subject to, among other things, the following:
a) if a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against Hyperion;
b) no action may be commenced to enforce a right of action for rescission 180 days after the date on which payment for the Shares is made by the purchaser;
c) no action may be commenced to enforce a right of action for damages after the earlier of (i) 180 days after the Subscriber of the Shares first had knowledge of the facts giving rise to the cause of action and (ii) three years after the date on which payment for the Shares is made by the Subscriber;
d) Hyperion will not be liable if it proves that the Subscriber purchased Shares of Hyperion with knowledge of the misrepresentation;
e) in the case of an action for damages, Hyperion will not be liable for all or any portion of the damages that it proves do not represent the depreciation in value of the Shares as a result of the misrepresentations relied upon; and
f) in no case will the amount recoverable in such action exceed the price at which the Shares were sold to the Subscriber.
The statutory right of action described above is in addition to and without derogation from any other right or remedy that the Subscriber might have at law.
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