Repositioned for North American Growth
description
Transcript of Repositioned for North American Growth
Repositioned for North American Growth
IPAA Oil & Gas Investor Symposium
April 20, 2004George K. Hickox, Jr. , Chairman and CEO
NYSE: WZR
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Company Profile
NYSE: WZR
$8.00 per Share
15.5MM common shares, mgmt. controls 41%
Share price: 52-week H/L $9.39 / $3.12
$280MM enterprise value, $1.46/Mcfe
191 Bcfe proved reserves (12/31/03)
49% oil 51% gas 70% U.S.
30% Canada 85% developed
2004E production 25.5-26.5 Bcfe
Estimated production for 2004 up 9% over 2003
Current daily net production approximately 70 MMcfe 61% Gas 39% Oil
375 Bcfe current prospect inventory
$48MM 2004E CAPEX 53% Canada 47% U.S.
1Q04E LTD $160MM
BUICK CREEK WOLVERINE
EVI-LOON
WILD RIVER
CHINCHAGA
ANSELL
HINTON-OBED
HAYTERLEAHURST
SAN JUAN BASIN
PERMIAN BASIN
GULF COAST ONSHORE
GULF OF MEXICO
ILLINOIS BASIN
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Repositioning at Wiser
Infuse WZR with $25MM of new capital in May 2000 Shift Wiser business model from development to gas
exploration focus Remove impairments to growth by changing
management, writing down assets, rationalizing low performing properties
Generate Canadian prospect and project inventory Leverage new management experience to add U.S.
exploration content Educate the public markets on new Wiser
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Achievements Since The Beginning of 2000
Production for 2003 up 21%
Natural gas production 55% in 2003, versus 46% in 2000
Natural gas reserves 51% in 2003, versus 34% in 2000
Added 65 Bcfe through the drill bit, 53 Bcfe through acquisitions
Replaced 136% of production
Maintained historical cash flow properties
Built large prospect and project inventory in new core areas such as Gulf of Mexico and Wild River
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Wiser Is Repositioned
2003 2002 2001 2000
Gas Production 55% 52% 49% 46%
Gas Reserves 51% 52% 46% 34%
Developed Reserves 85% 82% 81% 96%
Prospect InventoryNet (Unrisked) Reserves, BCF
375* 320 235 0
AcreageTotal (Net) X1,000
388* 421 434 170
* Includes Sabine acquisition which closed in January 2004
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Current Status
2003 vs. 2002 Daily production: 64.0 MMcfe vs. 65.2 MMcfe Production revenues $107MM vs. $77MM EBITDAX $56.1MM vs. $30.7MM
2004E guidance First quarter average daily production 62.6 MMcfe Average daily production 69.7 to 72.4 MMcfe CAPEX $48MM ($25MM CAN, $23MM U.S.) EBITDAX $79.8MM (4/13/04 NYMEX pricing; 25.4 Bcfe
production)
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0
100
200
300
400
500
600
700
2000 2001 2002 2003*
Reserves and Annual Production
GasOil
Reserves, Bcfe
Production, MMcfe
0
5,000
10,000
15,000
20,000
25,000
30,000
2000 2001 2002 2003 2004E
ProvedProbablesProspects
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2000 2001 2002 2003 2004E
EBITDAX, $000
2004E based on 4/13/04 NYMEX pricing; 25.4 Bcfe
production * Prospects include Sabine acquisition
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Our Operating Areas
U.S. 70%
Canada30%
2003 Reserves - 191 Bcfe
Oil49%
Gas51%
2003 Reserves - 191 Bcfe
U.S. 47%
Canada53%
2004E CAPEX - $48MM
U.S. 55%
Canada45%
2004E Production 25.5-26.5 Bcfe
U.S.67%
Canada33%
2003 Pretax PV-10 - $350MM
U.S.47%
Canada53%
Current Prospects - 375 Bcfe
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U.S. Overview
U.S. growth strategy Grow production and
reserves through exploration, exploitation & tactical acquisitions
Redeploy cash flow from Permian and San Juan legacy assets to fund exploration program
Explore in the GOM and onshore Gulf Coast areas using the latest geophysical tools
Operate the majority of production and drilling programs to reduce costs and control the pace of activity
175 Total Net Reserves (Unrisked) in Wiser U.S. Prospect Inventory
11039693,00049Onshore
6537021,00010Offshore - Gulf of Mexico
Net Reserves
(Bcfe)
Gross Reserves
(Bcfe)Net.
AcreageNo. of
Prospects
PERMIAN BASIN
SAN JUAN BASIN
GULF OF MEXICO
SLASH RANCH
LIBERTY
MALJAMAR
WELLMAN
SOUTH TEXAS
CHARCO
SABINE
United States2004E CAPEX $23MMNet Undeveloped Acreage 114,0003-D Seismic 2,500 sq milesNet Producing Wells 433Booked PUDs 18.1 BcfeBooked Probable 18.7 Bcfe
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Permian and San Juan Basins
San Juan Basin Long-lived legacy asset Drill >100 gross wells
annually replacing reserves
Solid cash flow generator
Permian Basin Long-lived legacy assets Monetizing CO2 at
Wellman; credit sales to operating costs
10 infill development wells planned in 2004
Solid cash flow generator
PERMIAN BASIN
SAN JUAN BASIN
GULF OF MEXICO
SLASH RANCH
LIBERTY
MALJAMAR
WELLMAN
SOUTH TEXAS
CHARCO
SABINE
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2004 U.S. Exploration Program
9 gross U.S. wells (3 GOM and 6 onshore Gulf Coast)
Expect drilling to begin in the second quarter, will
operate all 6 onshore wells
Rapidly building prospect inventory on newly acquired
157,000 gross acre Sabine project
Continuing to build 3-D seismic database and develop
new exploratory project ideas in core areas
U.S. exploration budget - approximately $12 MM.
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GOM Exploration and Discoveries
East Cameron
West Cameron
SouthPelto
Vermilion
10 Prospective Blocks In Inventory
13 Blocks HBP
South MarshIsland
Eugene Island
Ship Shoal
SouthTimbalier
WC 357 P&A
WC 347 #12.2 MMcfe/d gross
WC 4288.7 MMcfe/d gross
WC 417 #1 & WC 416 #13.4 MMcfe/d gross SMI 93 #1
1.5 MMcfe/d gross
EI 302 #1, #2 & #315.0 MMcfe/d gross
SS 164 P&A
EC 179 #A-1 & 185 #A-2 on productionEC 185 #-2 ST Discovery3.4 MMcfe/d grossWC 399 P&A
VR 61 #112.1 MMcfe/d gross
EC 735 MMcfe/d test
SS 32217.8 MMcfde/d gross
WC 4886.4 MMcfe/d gross
Offshore Results:Successfully completed 15 of 19wells participated in, yielding a
79% success rate.
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Upper Gulf Coast Trend
Developing trend ingeo-pressured
Yegua, Cook Mountain and Wilcox aged sands.
Wiser operated Liberty Project 3-D seismic shot in 2003.
Wiser operated Sabine Project acquired in early 2004.
Drilling to commence on both projects in the second quarter of 2004.
Sabine Project
Liberty Project
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Liberty Project
Wiser-operated 51 sq. mile 3-D program, interpretation ongoing.
Approximately 28,000 gross acres under lease or option.
Located in prolific Yegua-Cook Mountain trend.
Multiple prospects generated to date.
LIBERTY
HARDIN
JEFFERSON
Canadian Hunter Field95 BCFE
Sour LakeEast Field52 BCFE
Pine Island Field102 BCFE
Raywood Field156 BCFE
Liberty 3-D Survey51 Sq. Miles
CHAMBERS
HARRIS
MONTGOMERY
SAN JACINTO
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Sabine Project
• Approximately 157,000 acres leased or optioned in prolific Yegua and Wilcox trends.
• 260 sq. mi. of 3D data and approx. 2,000 mi. 2D data already acquired
• Numerous (>35) documented leads and prospects in Yegua and Wilcox.
• Wiser to operate with 45% working interest.
3D Seismic Surveys
LegendAvailable 3D Seismic
- 224 Sq Miles - El PasoWiser
Lease Acreage
Optioned Acreage
HPB Acreage
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CHINCHAGA
BUICK CREEK
EVI - LOON
WOLVERINE
WILD RIVER
ANSELL
HINTON - OBED
HAYTER
LEAHURST
Canadian Core BaseCanada
2004E CAPEX (U.S.$) $25MMNet Undeveloped Acreage 172,000Net Wells 266Average WI% 70%3-D Seismic 250 sq milesPUDs 16 BcfeProbable 27.3 Bcfe
Acquire and operate numerous lands and wells with “upside” opportunities
Use advanced technologies to add reserves and increase production
Increase netback margins through intensive engineering
Apply. downspacing technologies to increase reserves at Wild River
6,000 BOED NET (6:1)
9.4 MM BOE Proved reserves
Shallow Gas
Light Oil
Heavy Oil
Deep Gas
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Shallow Gas Projects
CHINCHAGA
WOLVERINE
Net production 8.5 MMcf/d Net reserves 28 Bcfe P+P 140,000 net undeveloped
acres 140 WI wells 25+MMcf/d gas plant
capacity WI% range from 33%
to 100% 10 wells drilled Q1/ 2004
CHINCHAGA
WOLVERINE6 miles
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Wolverine - Shallow Gas
5.5 MMcf/d - Wolverine
1.5 MMcf/d - Bison
Combined plant capacity: 25 MMcf/d
7 wells drilled Q1/ 2004
Added shallow production at Wolverine and deeper Gilwood production at Bison
12 MILES
BISON GAS PLANT
WOLVERINE GAS PLANT
WOLVERINE
Wiser Land
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Deep Gas Projects - Wild River/Hinton-Obed
Net production 10 MMcf/d
Net reserves 21.5 Bcfe P+P
18,000 net undeveloped acres
WI% range from 3% to 50%
Depth: 9,000 - 12,000 ft
3 wells completed Q1/ 2004
1 well drilling, 3 wells production
testing
2 wells waiting on rig
WILD RIVER
HINTON-OBEDANSELL
6 miles
WILD RIVER
HINTON-OBED
ANSELL
BUICK CREEK
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Wild River - Deep Gas
WILD RIVER
Operator; 50% WI Multi-zone gas potential down to
9,800 ft on 21,900 gross acres Production up 1000% since 2000 15-30 Discovery: On stream Jan.
6; current rate: 20 mmcf/d (50% WI)
Offsets planned for 2004 TLM, APC and DVN active in
area
15-30
Wiser drilling/operated wells
Talisman operated
Recent TLM, APC & DVN drilling
Nexen acquisition - 24% WI
New 3-D seismic program Q1 03
Existing 3-D seismic
WISER’S NEW POOL WABAMUN DISCOVERY
1 mile
BERLAND RIVER WABAMUN
80 BCF TO DATE
NEW GASWELL
DRILLING
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Hinton-Obed - Deep Gas
HINTON-OBED
Operator; 3.3% to 50% WI
12,500 net undeveloped acres with 5-10 drillable locations
Potential 2-5MMcfe/d risked
13-8 Well Tested 4.2 MMCFD from two zones
9-16 PROD. TESTING (WISER 6.6%)
14-23 PROD. TESTING (WISER 25%)
1-29 PROD. TESTING (WISER 50%)
VIKING CHANNEL SS TREND
1 mile
5-7
4-21-53-22W5 DISCOVERY WELL
IP: 14 MMCF/D WISER 3.3%
Section 29 acquired July Landsale
4-21-53-22W5 Viking Pool
Locations (50%)
Fault
3-D seismic control
13-8 GASWELL16.6% WI
1-29 TESTING50% WI
9-16 TESTING6.6% WI
14-23 TESTING25% WI
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Buick Creek - Deep Gas
Ladyfern largest discovery to date at
750 Bcf recoverable
Depth ranges from 8,000 feet to
12,000 feet
Wiser has large land holding covered
with 3D seismic
Identified large reef for winter drilling
100 - 200 BCF Potential
CNRL offset well: 30 mmcf/d
Well penetrated low perm. Fore-Reef
facies / possible side track planned
summer 2004
Drill stem test recovered gas
WISER’S BUICK CREEK
Ladyfern EnCana Discovery
Canadian Natural Resource DiscoveryCalpine Discovery
Samson Discovery
BC
AB
BUICK CREEK
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Evi-Loon & Red Earth - Light Oil
Production 1,340 BOPD Evi-Loon & Red Earth - Light Oil
Net reserves 2.5 MMBOE 7,500 net undeveloped acres;
14 locations identified on seismic
40° API gravity; receive 95% of WTI cash price
Current Netbacks $29 bbl Cdn. 7 Wells planned for Q3/04
N. EVI
W. EVI
LOON
EVI
RED EARTH
Proposed locations
Wiser Land
EVI-LOON
1 mile
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Hayter - Heavy Oil
HAYTER
100% WI,
2,048 BOED
OOIP - 143 MMBbl, WZR has
booked ~ Proved 1.5 MMBOE
Reactivated 58 producing wells
Drilled 39 wells
50 additional locations to drill
Add compression Jan. 2004,
increased production from 1,500 to
over 2,000 BOED by March
2003 Summer locations (10)
New 3-D Acquired May 2003
Wiser Land
OIL BATTERY
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Production GrowthM
Mcf
e pe
r Q
uart
er
MM
cfe
per
Day
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Plans for Debt
1Q 2004E debt $160MM $125MM, 9.50% coupon, principal due May 2007 $29MM bank debt, $45MM borrowing base, additional $20MM
acquisition facility
Debt coverage YE 03 Debt/03 EBITDAX 2.8X 03 Interest Coverage 3.9X
Expect to reduce credit facility by $10MM in 2004 Considering a refinancing of the $125MM
subordinated notes Will continue to hedge production to maintain debt
service
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Hedging Strategy
We look forward 3 to 4 quarters, locking in ~50% of production
Protects downside, captures upside
Covers 100% of interest payments, protecting equity from default risk
1Q 2004 2Q 2004 3Q 2004 4Q 2004
Oil * 72% 46% 47% 23%
Gas 82% 56% 60% 22%
* Excludes calls sold during period
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Current Wiser Valuation
Current Price per Share $8.00 Market Equity Value $124MM3/04E Long Term Debt $160MM 3/04E Cash $4MM
4/13 NYMEX Pricing Flat Pricing $29 Oil/$5 GasAvg. $35.56 Oil/$5.97 Gas Avg. $30.54 Oil/$5.20 Gas
2004E EBITDAX $79.8MM $68.2MMEnterprise Value $280MM $280MM
04E EV/EBITDAX Multiple 3.5x 4.1x
Peer Group 04E EV/EBITDAX Comp 5.5x
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Reasons for Buying Wiser Oil
The turnaround risk is largely removed
Clear business plan with exploration focus
Present management is aligned with shareholders
Exposure to Canadian assets and prospects
Diverse portfolio of legacy and prospect assets
Demonstrated growth track record with growth upside
Shares still trade below peer group metrics
Repositioned for North American Growth
NYSE: WZR
Except for historical information contained herein, the statements in this Presentation are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, and the business prospects of The Wiser Oil Company, are subject to a number of risks and uncertainties that may cause the Company's actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of oil and gas prices, product supply and demand, competition, government regulation or action, litigation, the costs and results of drilling and operations, the Company's ability to replace reserves or implement its business plans, access to and cost of capital, uncertainties about estimates of reserves, quality of technical data, and environmental risks. These and other risks are described in the Company's 10-K and 10-Q Reports and other filings with the Securities and Exchange Commission.