Corporate presentation november_2011_4
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Transcript of Corporate presentation november_2011_4
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Solid Assets & Opportunities Light Oil Focus Financial Flexibility
November 2011 TSX: NAE
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NAL Energy Corporation Profile
TSX Symbol NAE Market Capitalization1 $1.2 Billion Monthly Dividend $0.07/share Current Yield1 10.4% Net Debt2 $376 Million Current Shares Outstanding3 150.4 Million
Convertible Debentures
Trading Symbol NAE.DB NAE.DB.A
Coupon 6.75% 6.25%
Principal Outstanding ($MM) 80 115
Conversion Price ($/Share) 14.00 16.50
Maturity Date 31AUG12 31DEC14
Notes: 1) As at 22NOV11; 2) As at 30SEP11; 3) As at 08NOV11.
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Operate Across Western Canada
Alberta
% Crude Oil: 45%
% of Production: 59%
British Columbia
% Gas & NGL’s: 100%
% of Production: 14% SE Saskatchewan
% Crude Oil: 93%
% of Production: 25%
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Reserves Profile
• P+P reserves: 104 MMBoe – 109% total production replacement • Proved reserves: 68% of total P+P • Current RLI: 9.4 years • Mix: 50% Liquids – 50% Natural gas • 3 yr average F&D of $18.80/boe; FD&A of $21.86/boe
Reserves @ Jan 1 2011
PUD's 10%
PROVED PRODUCING
58%
PROBABLE 32%
0
20,000
40,000
60,000
80,000
100,000
120,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
P+P
Res
erve
s (M
boe)
Natural Gas
Oil & Liquids
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• Increasing demand for yield
• Dividend payout model fits the WCSB asset base
• Payout ratio 40 – 50% of cash flow
• Growth through acquisitions – strategic/selective
Income vs Growth
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• Volumes up 2,000 boe/d or 7% Q3/11 vs. Q2/11
• Oil volumes up 7%
• Operational highlights
• Cardium Lochend performance
• Back to business in Saskatchewan
• Liquids-rich gas tie-ins
• New oil resource play – Sawn Lake
• Cash flow in-line with expectations
• $250 MM available on lines of $550 MM
Q3 Highlights
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Q3/11 Performance
Q3/11 Q2/11 % Change
Production (boe/d) 28,752 26,758 7.5
Funds from operations ($MM)1 64.8 60.4 7.3
Funds from operations ($/share) 0.44 0.41 7.3
Capital expenditures ($MM) 86.9 36.1 141
Revenue ($/boe)2 49.30 53.12 -7.2
Operating Netback ($/boe)3 28.64 32.39 -11.6
Notes:
1) All figures prepared in accordance with International Financial Reporting Standards 1 (“IFRS1”); 2) net of transportation charges; 3) Before hedging gains/losses.
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25,500
26,000
26,500
27,000
27,500
28,000
28,500
29,000
29,500
Q1 Q2 Q3e Q4e
Q2 Actual- 26,758 boe/d
Q3 Actual – 28,752 boe/d
December Exit – 29,000 boe/d range
Q1 Actual- 28,025 boe/d
Q4 Key Drivers
• Saskatchewan recovery/drilling
• Garrington/Lochend Cardium tie-ins
• Gas capacity constraints/outages
H1/11 Impacts
• Facility outages
• Availability of services - timing
• Wet weather
Boe/
d Maintaining Momentum Through Year-end
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• On track to complete $240 MM capital program
• Production forecast in the 28,500 boe/d1 range
• Oil hedges in place for 51% of volumes for 2011 -
swaps at US$88/bbl and collars at US$ 90 x 100
Outlook
Notes: 1) Does not account for unplanned gas facility outages in Q4/11 or volume constraints associated with Star Valley facility fire.
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• Oil drilling - 85% of the capital program
• Focus on ROR and capital efficiency – 95% Hz drills
• Leverage BP and Cochrane partnerships
• Prove-up emerging opportunity inventory
• Farm-out non-core acreage – maintain upside
2011 Operational Strategy
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Capital Program On Track
(13 Garrington, 4 Cochrane, 1 Willesden Green)
(Pekisko , Viking, other Carbonates)
(15 in greater Hoffer area)
(2 Fireweed , 1 Kakwa, 4 Deep Basin (Wilrich)
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Scalable Oil Development: Cardium West Central AB
Key Attributes
Garrington/
Westward Ho Cochrane
Working Interest (%) 65 65
OOIP/SEC (MMbbl) Up to 4.21 2.62
Reserves per well (Mboe) 165 Up to 225
DCET Cap (Gross - $MM) $3.0 – 3.3 $3.5 – 3.8
OPEX ($/boe) 8 10
Capital Efficiency ($/boe) 16 – 22 15-24
Un-risked ROR (%) 45 35
**Resource Halo Areas provided by Canadian Discovery Notes: 1) Cardium A&B sands; 2) Cardium A sand only;
• Cardium performance - continues to meet or exceed type curves
• Successfully implementing water based fracs on all new wells
• Approximately 300 gross risked locations in inventory at 2 wells per section
• Positive results from downspacing to 3-4 wells/sec
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• Completion technique advancements include:
• Switch to water-based fracs
• Longer lateral section – up to 1,500 metres
• Reduced inter-frac spacing to 75 metres
• Decreased per frac tonnage to 15 tonnes
• Target DCET costs: $3.0–3.3 MM in Garrington and
$3.5–3.8 MM at Lochend
Advancements in the Cardium
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Lochend Cardium Exceeding Expectations
Lochend
W5M 3-17-027-03 1-17-027-03 1-18-027-03 16-19-027-03 14-20-027-03 16-20-027-03 8-33-027-03
On Production August 27, 2010 December 1, 2011 November 3, 2011 November 3,2011 September 5, 2011 December 1, 2011 August 6, 2011
30 day IP (boe/d)1 335 2002 3302 3502 770 3502 172
90 day IP (boe/d) 268 - - - - - 162
Current (boe/d) 189 - 400 617 400 - 137
Formation Cardium A Cardium A Cardium A Cardium A Cardium A Cardium A Cardium A
Frac Fluid Type Water Water Water Water Water Water Water
Number of Fracs 10 15 11 13 14 14 12
Lateral length (m) 1082 1179 1024 1260 1132 1276 1000
Notes: 1) First full month average post load fluid recovery 2) Forecast
• Q4 2011 results set-up active program for 2012
• Liquids and solution gas handling facilities added in 2011
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Stratigraphic Oil Plays: Mississippian – Southeast SK
Key Attributes
Working Interest (%) 50
OOIP/Sec (MMbbls) Up to 5
Reserves per well (Mboe) 60 – 200
DCET Cap (Gross -$MM) 1.6 - 1.8
Capital Efficiency ($/boe) 18
Un-risked ROR (%) 40 -50%
• Stratigraphic plays laterally extensive
• Positive reservoir permeability/porosity
• Over 100 gross risked locations
• Delineation continuing on Neptune/Oungre
• Multi-zone potential: Ratcliffe, Oungre, Red River, Birdbear and Bakken
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• No multi-stage fracs – lower cost - $1.7MM DCET
• IP’s enhanced by under-balanced drilling
• New pool royalties at 2.5% on first 100,000 bbls
• New oil battery at Hoffer increases reliability
• Waterflood potential to increase recovery factors
Profiling the Mississippian
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Strong Oil Economics - $85/bbl WTI
Mississippian - SE Sask Cardium - Alberta
Capital Efficiency ($/boe) $16 - $25 $17 - $28
Operating Netback ($/boe) $60 - $70 $65
Recycle Ratio 2x - 3x 2x - 3x
Royalties 4.5%* 12%
Capital Costs/Well ($MM) 1.5 – 2.0 3.0 – 4.0
Operating Costs ($/boe) 10.00 8.00
Rates of Return 40% - 100% + Up to 40%
Note: Assuming US$85/bbl ; * On first 37,000/100,000 bbls.
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NAL Land Position: • 23 gross sections • 50% - 100% WI • Slave Point carbonate
Development Potential:
• Up to 4 wells per section • 75 – 100 locations • First well – Q1/12
Key Offsets1: A: 16-35-91-13W5 Horizontal On Production: March 2011 Peak Rate: 378 bbls/d @ 7% WC August Rate: 335 bbls/d @11% WC B: 1-26-91-13W5 Horizontal On Production: April 2011 Peak Rate: 445 bbls/d @ 2% WC August Rate: 445 bbls/d @ 1% WC
Emerging Tight Oil Play: Sawn Lake – North Central AB
Notes: 1) Source - GeoScout
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Key Attributes (Wilrich)
Working Interest (%) 70
NGL Yield (Bbl/mcf) 15
Gross RGIP (Bcf/well) 3.7
Gross Reserves/Well (Mboe) Up to 620
Capital Efficiency ($/boe) 9.40
Un-risked ROR (%) 40
Liquids-rich Natural Gas Plays
• Wilrich well performance exceeding expectations with an average 30 day IP capability in excess of 7 mmcf/d
• Production at Fireweed is in the 2,100 boe/d range
• Up to 90 gross risked locations in inventory
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• Guidance to be announced mid-January 2012
• Focus on lower risk operated oil opportunities
• Less proof-of-concept, land & facilities capital
• Commodity prices key driver of cash flow
• 2012 Hedging – 5,000 bbls/d at $97/bbl
2012 Guidance Framework
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Available Credit Lines
Credit Lines ($MM)
2011
Bank of Montreal* 145
Royal Bank of Canada 110
CIBC 87.5
Bank of Nova Scotia 87.5
Alberta Treasury Branch 40
National Bank Financial 40
Union Bank of California 40
Total 550
* Includes $15 million of working capital facility
$247 MM of credit available as at Sept. 30th
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NAL Investment Proposition
• Balanced portfolio of high quality assets
• Focus on light oil
• Strong inventory of opportunities
• Available lines of credit
• Non-taxable for many years
• Attractive valuation and yield
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Appendix
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Manulife: • Direct investor in oil and gas assets since
1990 • Long term investment horizon • Desire to increase investment
Terms of Administrative Cost Sharing Agreement: • No management or acquisition fees • Shared G&A costs • Independently controlled board • Long term contract - 90 day NAL Energy exit
option
Benefits: • Enhanced technical/financial capability • Broad market view & investment discipline • Financial partner in transactions
Strategic Partnership with Manulife
NAL Resources Management
(manages 47,000 boe/d)
65% of assets are common
90% are operated
NAL Energy
29,000
boe/d
Manulife
18,000
boe/d
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Canadian75%
U.S. 22%
Foreign3%
Institutional 41%
Retail58%
Manulife 1%
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NAL Shareholder Analysis
Income Focused Institutional Presence
High Canadian Ownership
Note: As at September 30, 2011
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Cardium Type-Curve
0
25
50
75
100
125
150
175
200
225
250
1 2 3 4 5 6 7 8 9 10 11 12Months On Production
Prod
uctio
n (b
oe/d
)
Typical Horizontal Well
Typical Vertical Well
NAL’s Drilling Results Validate Type Curve
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SE Sask Mississippian Type-Curve
0
10
20
30
40
50
60
70
80
90
100
110
120
0 12 24 36 48 60 72 84 96 108 120 132 144 156 168 180 192 204
Months
Rate
(bb
l/d)
1st Month IP: 115 bbls/d
EUR: 110 mboe/well
Based on 2006 – 2010 drills
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Reserves & Capital Efficiency Summary 2010 2009
Reserves (MMboe)
Proved 71.0 70.91
Proved + Probable (“P+P) 103.9 102.21
P+P Reserves/sh (boe/sh) 0.71 0.74
RLI (years)
P+P 9.4 9.2
Reserves Replacement Ratio
P+P (excluding A&D) 90% 131%
P+P (including A&D) 109% 445%
Three Year Weighted Average
Including Changes in Future Development Capital 2010 2009 2008 2008 – 2010
Finding & Development Costs ($/boe)
Proved 21.41 18.52 14.18 17.92
P+P 22.60 17.86 16.24 18.80
F&D Recycle Ratio(3)
Proved 1.4 1.7 3.0 1.9
P+P 1.3 1.8 2.6 1.8
Finding, Development & Acquisition Costs ($/boe)
Proved 22.37 27.87 19.41 24.77
P+P 22.85 22.33 19.66 21.86
Notes: All reserves and production volumes data excludes royalty interest volumes; 1) 2009 reserves have been adjusted for the wind-up of the T&S partnership to be comparable with 2010.
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Stable Reserves Per Share Performance
Note: DARPU calculated using year-end reserves, net debt, convertibles and units outstanding. Net debt converted to units using annual average unit price. Converts converted to units at strike price
Stable reserves per share performance reinvesting approximately 53% of cash flow
0.00
0.50
1.00
1.50
2004 2005 2006 2007 2008 2009 2010
Mbo
e / 0
00 u
nits
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
P+P
Res
erve
s (M
boe)
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PDP reserves represent a high percentage of total proved
Conservatively Booked Reserves
86%85%
94%95%
94%93%
96%
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2004 2005 2006 2007 2008 2009 2010
Mbo
e
PROVED PRODUCING PROVED NON-PRODUCING & UNDEVELOPED
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Probables represent a low percentage of total P+P reserves
Conservatively Booked Reserves
32%31%
28%27%
30%30%
29%
0
20,000
40,000
60,000
80,000
100,000
120,000
2004 2005 2006 2007 2008 2009 2010
Mbo
e
PROVED PROBABLE
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Stable Production Per Share Performance
Note: Production per unit calculated using annual average production and annual average units outstanding. This metric is not debt-adjusted given complications in calculating average annual debt figures.
Stable production per share performance reinvesting approximately 46% of cash flow
0
20
40
60
80
100
120
2006 2007 2008 2009 2010
boe
/ 000
uni
ts
10,000
15,000
20,000
25,000
30,000
35,000
Prod
uctio
n (b
oe/d
)
P+P Reserves Per Unit Annual Average Production
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Available Tax Pools $ MM Canadian Exploration Expense 91
Canadian Development Expense 442
Canadian Oil & Gas Property Expense 417
Undepreciated Capital Costs 261
Other (including loss carry forwards) 328
Total 1,539
Non-Taxable For Many Years
Note: as at 30SEP11
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• Objective
• protect cash flow for the purposes of sustaining dividends and maintaining an active capital program
• Board approval
• maximum of 60% of net production after royalty
• Counterparties
• all Canadian chartered banks
Hedging Programs Manage Risk
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• Crude oil hedges: • 49% of net 2011 liquids volumes - average floor price
above US$ 88/bbl • 5,000 bbls/d in 2012 hedged at average floor price
above US$ 97/bbl • Natural gas hedges:
• 31% of net 2011 gas volumes • Average floor price of approximately C$4.00/GJ
• Interest rate: • 45% of 2011 bank debt @ 1.67%
• Foreign Exchange: • 36% of 2011 US$ exposure @ $1.0328
Hedging Program Adding Protection
* Current all in Bank Interest rate 4.7% after Bank Fees; percent of commodity hedged based on mid-point of production guidance range of 29,000 boe/d.
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Note: All counterparties are Canadian banks in our syndicate.
• Two 500 bbl/d, calendar 2011, swap contracts with an average price of $95.00 contain extendable call options. The extendible call option provides the counterparty with the option to extend the contract into calendar 2012 under the same price and volumetric terms. The counterparty can exercise this option any time before December 31, 2011.
• For calendar 2012, there is a 500 bbl/d and a 250 bb/d swap contract with a price of $87.15 and $100.25 respectively, that contain extendable call options. These options provide the counterparty with the right to extend the contract into calendar 2013 under the same price and volumetric terms. The counterparty can exercise this option anytime before December 31, 2012.
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Crude Oil Hedge Positions Crude Oil Hedge Contracts as at 11/7/2011
Q4-11
Q1-12
Q2-12
Q3-12
Q4-12
US$ Collar Contracts
$US WTI Collar Volume (b/d) 200 900 900 700 700
Bought Puts – Average Strike Price ($US/bbl) 90.00 101.11 101.11 101.43 101.43
Sold Calls – Average Strike Price ($US/bbl) 100.50 117.07 117.07 117.66 117.66
US$ Swap Contracts
$US WTI Swap Volume (b/d)* 5,700 3,450 3,450 3,450 3,450
Average WTI Swap Price ($US/bbl) 88.10 95.38 95.38 95.38 95.38
Cdn$ Collar Contracts
$Cdn WTI Collar Volume (b/d)
Bought Puts – Average Strike Price ($Cdn/bbl)
Sold Calls – Average Strike Price ($Cdn/bbl)
Cdn$ Swap Contracts
$Cdn WTI Swap Volume (b/d)
Average WTI Swap Price ($Cdn/bbl)
Total Volume (b/d) 5,900 4,350 4,350 4,150 4,150
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Natural Gas Hedge Positions
Natural Gas Hedge Contracts as at 11/7/2011
Q4-11 Q1-12 Q2-12 Q3-12 Q4-12
Collar Contracts
AECO Collar Volume (GJ/d)
Bought Puts – AECO Average Strike Price ($Cdn/GJ)
Sold Calls – AECO Average Strike Price ($Cdn/GJ)
Swap Contracts
AECO Swap Volume (GJ/d) 27,000 24,000 5,000 5,000 3,674
AECO Average Price ($Cdn/GJ) 3.99 3.98 4.16 4.16 4.17
Total Volume (GJ/d) 27,000 24,000 5,000 5,000 3,674
Note: All counterparties are Canadian banks in our syndicate.
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Interest Rate Hedge Positions
Financial Interest Rate Swap Contracts as at 11/7/2011
Remaining Term Notional (Cdn $MM) Floating Rate (Receive)
Fixed Rate (Pay)
Oct 2011 – Dec 2011 39 CAD-BA-CDOR 3 month 1.5864%
Oct 2011– Jan 2013 22 CAD-BA-CDOR 3 month 1.3850%
Oct 2011– Jan 2014 22 CAD-BA-CDOR 3 month 1.5100%
Oct 2011 – Mar 2013 14 CAD-BA-CDOR 3 month 1.8500%
Oct 2011 – Mar 2013 14 CAD-BA-CDOR 3 month 1.8750%
Oct 2011 – Mar 2014 14 CAD-BA-CDOR 3 month 1.9300%
Oct 2011 – Mar 2014 14 CAD-BA-CDOR 3 month 1.9850%
Total Notional (Cdn $) 139*
* Fixed approximately 49% of floating bank debt ($285MM average for 2011e)
Note: All counterparties are Canadian banks in our syndicate.
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Foreign Exchange Hedge Positions
Fixed Rate (USD/CAD)
Notional (US) per month
Term Counterparty Floating Rate
1.05 $2.0 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
1.0608 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
0.9954 $2.0 MM Jan 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
1.0565 $1.5 MM Jan 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
NAL has a monthly commitment to settle the above fixed rates against the Bank of Canada monthly average noon rate. The 1.0565 fixed rate calendar 2012 contract contains the premium from the sale of a 1.05 extendable call option that expires December 31, 2011. If exercised the option will be converted to an additional equivalent contract at a fixed rate of 1.05.
Option Fixing Range (USD/CAD)
Notional (US) per month
Term Counterparty Floating Rate
.94 - 1.06 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
.95 - 1.07 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
.94 - 1.08 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
.95 - 1.04 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
.95 – 1.0138 $1.0 MM Oct 1, 2011 to Dec 31, 2012 BofC Monthly Average Noon Rate
When the monthly average noon spot foreign exchange rate exceeds the lower fixing rate, NAL is committed to selling the above listed USD’s at the upper fixing rate for that month. To the extent the monthly average noon spot foreign exchange rate is below the lower fixing rate, NAL has no commitment to sell USD.
Note: FX contracts as at 08/09/2011.
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Foreign Exchange Hedge Positions
Option Fixing Range
(USD/CAD)
Notional (US) per month
Term Counterparty Floating Rate
1.05 - 1.15 $1.0 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
0.97 – 1.04 $1.0 MM Jan 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
When the monthly average noon spot foreign exchange rate exceeds the fixing range, NAL is committed to selling the above listed USD at the lower fixing rate for that month. To the extent the monthly average spot foreign exchange rate is below the lower fixing rate, NAL has a commitment to sell the above listed USD at the lower fixing rate. When the monthly average noon spot foreign exchange rate falls within the fixing range, NAL has no commitment to sell USD.
When the monthly average noon spot foreign exchange rate is outside the payout range, the monthly premium is forfeited. NAL is committed to selling the above listed USD at the upper payout range value for that month when the average noon spot foreign exchange rate exceeds the payout range.
Note: FX contracts as at 08/09/2011.
Fade-in Level (USD/CAD)
Strike Price (USD/CAD)
Participation Level (USD/CAD)
Notional (US) per month
Term Counterparty Floating Rate
0.92 0.985 1.03 $2.0 MM Jul 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
0.91 1.0075 1.05 $1.5 MM Jan 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
0.935 1.00 1.05 $0.5 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate
0.92 1.012 1.0625 $0.5 MM Jan 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
0.92 0.995 1.035 $1.0 MM Jan 1, 2012 to Dec 31, 2012 BofC Monthly Average Noon Rate
0.90 1.065 1.15 $1.0 MM Jan 1, 2013 to Sept 30, 2013 BofC Monthly Average Noon Rate
Option Payout Range
(USD/CAD)
Notional (US) per month
Term Counterparty Floating Rate Monthly Premium Received
0.93 - 1.01 $3.0 MM Oct 1, 2011 to Dec 31, 2011 BofC Monthly Average Noon Rate CAD $60K
0.93 - 1.01 $2.0 MM Jan 1, 2012 to Jun 30, 2012 BofC Monthly Average Noon Rate CAD $40K
0.90 – 1.15 $1.0 MM Jan 1, 2013 to Sept 30, 2013 BofC Monthly Average Noon Rate CAD $40K
NAL is fixed to sell USD on a monthly basis at the strike price. If the Bank of Canada monthly average noon rate is below the fade-in level or between the strike and participating level, NAL has no commitment to sell USD.
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Experienced Management Team Andrew Wiswell President & CEO
John Kanik Director, Marketing
Alex Tworo A&D Geology
John Koyanagi VP Business Dev.
Clayton Paradis Director, IR
Tracy Heck Controller
Vacant VP Ops & COO
Keith Steeves VP Finance & CFO
Angele Mullins Director, HR
David Allen Director, E&D
Deric Orton Director, Land
Darcy Reding Western BU
Tim Brandenborg Non-Operated BU
Darcy Erickson Drilling &
Completions
Jim Van Camp Saskatchewan BU
Lance Berg Sylvan Lake BU
Average of 22 years of E&P experience
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Sell-side Research
Analyst Firm Recommendation Gordon Tait BMO Capital Markets Market Perform
Grant Hofer Barclays Capital Underweight
Jeremy Kaliel CIBC World Markets Sector Outperformer
Kevin C.H. Lo FirstEnergy Capital Market Perform
Stacey McDonald GMP Securities Buy
Cristina Lopez Macquarie Capital Neutral
Kyle Preston National Bank Financial Outperform
Jeff Martin Peters & Co. Sector Perform
Kristopher Zack Raymond James Market Perform
Mark Friesen RBC Capital Markets Sector Perform
Gordon Currie Salman Partners Hold
Patrick Bryden Scotia Capital Sector Perform
Michael Zuk Stifel Nicolaus Sell
Roger Serin TD Securities Hold
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EXECUTIVE TEAM
Andrew Wiswell President & CEO
Keith Steeves VP Finance & CFO
John Koyanagi VP Business Development
INVESTOR RELATIONS
Clayton Paradis Director, Investor Relations
Local: (403) 294-3620 Toll-free: (888) 223.8792 E-mail: [email protected]
Corporate Information
TRUSTEE AND TRANSFER AGENT
Computershare Trust Company of Canada
AUDITOR
KPMG
ENGINEERING CONSULTANTS
McDaniel & Associates
LEGAL COUNSEL
Bennett Jones LLP
STOCK EXCHANGE LISTING & SYMBOL
Toronto Stock Exchange: NAE
EXECUTIVE OFFICE 1000 – 550 6th Avenue SW, Calgary, Alberta, T2P 0S2
Website: www.nalenergy.com
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Disclaimers
Forward Looking Statements
This document contains statements that constitute “forward-looking information” within the meaning of applicable securities legislation as to NAL Energy Corporation’s (“NAL’s”) internal projections, expectations and beliefs relating to future events or future performance. This forward-looking information includes, among others, statements regarding: NAL’s strategic focus, business strategy and plans and budgets; business plans for drilling, exploration and development, including drilling locations; estimates of production and operations performance; forecasted commodity price estimates of future sales; estimated amounts, allocation and timing of capital expenditures; estimates of operating costs and unit operating costs; the estimated timing and results of new development programs; estimates of anticipated funds from operations, cash flow, netbacks, dividends, working capital and debt levels; estimated rates of return; the anticipated results of NAL’s divestiture program; various tax matters related to NAL; NAL’s hedging program; NAL’s prospect inventory; and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.
Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this presentation including, without limitation, with respect to commodity prices, interest rates, exchange rates, royalty rates, general and administrative expenses, the success of NAL's drilling programs and the production profile of NAL's oil and natural gas reserves. Forward-looking information is based on current expectations, estimates and projections that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by NAL and described in the forward-looking information contained in this document. Undue reliance should not be placed on forward-looking information. The material risk factors include, but are not limited to: the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing oil and natural gas, market demand and unpredictable facilities outages; risks and uncertainties involving the geology of oil and gas deposits; the uncertainty of estimates and projections relating to production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; risk that adequate pipeline capacity to transport oil and natural gas to market may not be available; fluctuations in oil and gas prices, foreign currency exchange rates and interest rates; the outcome and effects of any future acquisitions and dispositions; safety and environmental risks; uncertainties as to the availability and cost of financing and changes in capital markets; competitive actions of other industry participants; changes in general economic and business conditions; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; changes in tax laws; changes in royalty rates; the results of NAL’s risk mitigation strategies, including insurance; and NAL’s ability to implement its business strategy. Readers are cautioned that the foregoing list of risk factors is not exhaustive. Additional information on these and other factors which could affect NAL’s operations or financial results are included in NAL’s most recent Annual Information Form and Annual Financial Report. In addition, information is available in NAL’s other filings with Canadian securities regulatory authorities.
Forward-looking information is based on the estimates and opinions of NAL’s management at the time the information is released.
Boe Conversion
Throughout this press release, the calculation of barrels of oil equivalent (boe) is based on the widely recognized conversion rate of six thousand cubic feet (mcf) of natural gas for one barrel (bbl) of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalence conversion method primarily applicable at the burner tip and does not represent a value equivalence at the wellhead.
All dollar amounts in Canadian dollars, unless otherwise stated.