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September 2017
Two gas projects to nearlytriple gas production by Dec 2018(1)
(1) From 85 → 230 MMcf/d, or 2.7x
2
Forward Looking Statements
This presentation may include certain forward looking statements. All statementsother than statements of historical fact, included herein, including, withoutlimitation, statements regarding future plans and objectives of Canacol EnergyLtd. (“Canacol” or the “Corporation”), are forward‐looking statements thatinvolve various risks, assumptions, estimates, and uncertainties. These statementsreflect the current internal projections, expectations or beliefs of Canacol and arebased on information currently available to the Corporation. There can be noassurance that such statements will prove to be accurate, and actual results andfuture events could differ materially from those anticipated in such statements.All of the forward looking statements contained in this presentation are qualifiedby these cautionary statements and the risk factors described above.Furthermore, all such statements are made as of the date this presentation isgiven and Canacol assumes no obligation to update or revise these statements.
Barrels of Oil EquivalentBarrels of oil equivalent (boe) is calculated using the conversion factor of 5.7 Mcf(thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boesmay be misleading, particularly if used in isolation. A boe conversion ratio of 5.7Mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarilyapplicable at the burner tip and does not represent a value equivalency at thewellhead.
Production and ReservesProduction represents net before royaltyReserves represent 2P reserves and before tax NPV‐10 as of December 31, 2016
USDAll dollar amounts are shown in US dollars, unless indicated otherwise
Ecuador
140 280 420 560
Km
S. Pacific Ocean
Natural Gas
Colombia
20 blocks /2.2 MM net acres
Light oil
Light oil
Shale oil
Shale oil
2
Heavy oil
Gas deficit
• ‘17 corporate production guidance• ↑ gas production 85 → 130 MMcf/d (Dec ’17 exit)• Fully funded capex $89 MM• Production 18‐19k boepd
% gas 81%
• ‘18 gas production guidance• ↑ gas production 130 → 230 MMcf/d (Dec ’18 exit)(1) Includes in‐the‐money options based on CDN $4.04 / share price
~140 MM shares in the float(2) Converted from CDN → USD exchange rate (0.825) as of 9/12/17(3) As of 6/30/17
FOCUS: The Path To ~$300 MM EBITDA
In MM, except CDN $/share amounts
TSX $/share (9/12/17) CDN $4.04
Fully diluted shares outstanding(1) 177
Market capitalization(2) US $590
Net debt(3) $230
Enterprise value US $820
Insider ownership 22%
3
TSX: CNE | BVC: CNE.C
Strong Track Record Of Asset OptimizationAdded 314 BCF in 2P reserves over the trailing 3‐yrs.
• A conventional gas success story
• Recent 2P NPV‐10 $1.2 B(2)
• Gas exploration success 8/9 wells (89%)• 1P / 2P reserve 166% /
replacement 194% y/y• Avg. F&D cost $0.44 / MCF(3)
• The lowest cost gas operator always wins
In US dollars unless otherwise noted(1) Represents before tax corporate total (oil + natural gas) 2P reserves value as of 12/31/16(2) Represents before tax natural gas only 2P reserves value as of 12/31/16(3) Average over the trailing 2‐yr. period
35
43
17 20
65 72
7 8 11 18
18 23
14 13
'09 '10 '11 '12 '13 '14 '15 '16
7985
+52% CAGR in 2P reserves
Gas
In MMboe(1)oil gas
4
For the 3 months ended 6/30/17
$ / MCF % marginNatural gas revenues $ 4.96 Royalties $ (0.64) 13%Production expenses $ (0.36) 7%Operating netback $ 3.96 80%
85% gas
Oil
Caribbean Sea
ChuchupaBallena
Canacol gas blocksGas pipeline‘17 pipeline‘18 pipeline
La Creciente
Cartagena
Barranquilla
Jobo facility
SabanasPipeline Co.
+40 MMcf/d130 MMcf/d
Dec ‘17
• $40 MM pipeline; announced $30 MM private financing
• In Aug ‘17, build 6‐in. pipeline Jobo→Sincelejo
• Twin Jobo→ Sincelejo pipeline
• Construct new pipeline Cartagena→Barranquilla
+100 MMcf/d230 MMcf/d
Dec ‘18
Filadelfia
Paiva
Caracoli
Compressor10 kmGas field
Reficar
1
2
5
Two Gas Projects To Nearly Triple Gas Production By Dec ‘18
12
8 gas fields5 blocks1.1 MM net acres
Lower Magdalena Basin
6
ChuchupaBallena
La Creciente
477432
381
337299
265
25 7585 138
230230
0
200
400
600
'15 ' 16 ' 17E ' 18E ' 19E '20E
3 mature producing fieldsChuchupa, Ballena, & La Creciente
Excess demand
Caribbean Sea
Canacol’s Sweet SpotReplacing Chevron’s gas supply to the Caribbean
• Gas demand +3%/yr. through 2025e(1)
supply ‐20%/yr. decline ongoing or ‐100 MMcf/d(2)
• Excess demand ~70 MMcf/d avg. → ‘20e
(1)Source: Wood Mackenzie and UPME Colombia estimates(2) Average annual decline for the trailing 3 years
X
Nelson
Esperanza
VIM 5SSJN7
VIM 19
Sincelejo
Oboe
Trombon
VIM 21
Palmer
1
(1) As of Dec ‘16 reserve reports, net of ~50 BCF produced(2) Gaffney, Cline & Associates (“GCA”)prospective conventional natural gas resource
report, effective Dec ‘16(3) Expected Monetary Value discounted at 10%, GCA Dec ‘16
LegendGas field Prospects / leads Facilities Existing pipelineSabanas planned pipeline (12/1/17)Promigas planned pipeline (12/1/18)
20 km
Strong base production and reserves 3 acquisitions ('12‐'14) 96 BCFTrailing 3‐yr. 2P reserve adds 314 BCFRecent 2p reserves 410 BCF(1)
Gas exploration success 8/9 wells (89%)Producing wells 14
Large resource upsideNet acres 1.1 MMBlocks 5Gross mean unrisked resources 2 TCF (2)
BT EMV‐10 US $789 MM(3)
Prospects / leads 44
7
• Canacol Gas
2
Canahuate
Jobo ’17 Cañandonga‐1
’17 Pandereta‐1
’17 Gaitero‐1
A Conventional Natural Gas Success Story3 exploration wells left for 2017
Clarinete
Nispero
Toronja
Bremen
AVO Reduces Exploration RiskDiscovered 314 BCF from 8 gas fields over the trailing 3‐yrs.
2.5 KM
PANDERETA‐1
OBOE‐1FEB ‘16
CLARINETE‐1Dec ‘14
ACORDEON‐1
Tubara Marker
Lower Tubara
Mid Miocene / Top CDO
Upper CDO
Mid CDO
Basal CDO
1,200
1,400
1,600
1,800
2,000
2,200
2.400
PANDERETA‐1
• Applying AVO technology to gas‐charged sandstones• Exploration success 8‐for‐9 (89%)• Avg. net pay/well 78 ft. TVD• Avg. test rate/well 33 MMcf/d• Producers 14 wells
• >2 TCF of running room(1)
The hunt for repeatable anomalies
AVO extraction over the Mid CDO
Fluid Factor (AVO) section(1) Represents gross unrisked mean resources from the
Gaffney, Cline & Associates prospective gas resource report, effective Dec ‘16
CLARINETE‐1
8
Drilling For Repeatable Anomalies In The PorqueroJun ’17: Toronja‐1 exploration well tested 46 MMcf/d
NELSON‐5
NELSON‐4
NELSON‐3
NELSON‐8PALMER‐1
2
1
Mid Porquero time structure
1,200
1,400
1,600
1,800
2.000
2,200
2.400
Basement
Intra Porquero
Top CDO
Fluid Factor (AVO) section1KM
• Tested 46 MMcf/d • Exploration target Porquero reservoir sandstones • Well cost 41% below budget
• Work underway to tie Toronja into Jobo (3 kms)• Porosity 20%
NELSON‐2
PORQUERO
21
NELSON‐6Nov ‘16
TORONJA‐1Jun ‘17
Esperanza
SSJN7VIM 5
VIM 21
VIM 19
9
Toronja‐1 Suggests Much More In Store For The Porquero
• Nov ’16 Nelson‐6 spelled opportunity• Net pay 39 ft. TVD• Tested 23 MMcf/d
• Dec ‘16 Nelson‐5 Porquero recompletion ↑ confidence • Net pay 79 ft. TVD• Tested 13 MMcf/d
• Jun ‘17 Toronja‐1 says more running room…• Tested 46 MMcf/d
• Aranadala‐1, Breva‐1, Carambolo‐1 offer 3 follow‐up exploration locations
TORONJA‐1
BREVA‐1
ARANDALA‐1
CARAMBOLO‐1
1 KM
AVO extraction over Mid Porquero SST marker
NELSON‐5
NELSON‐6
Nelson‐5, Nelson‐6 added 25 Bcffrom the Porquero Formation(1)
SSJN7VIM 5
VIM 21
VIM 19
Esperanza
10(1) Represents 2P reserves as of Dec ‘16 reserve report
Pandereta‐1 Exploration Target
• Estimated spud October 2017• Exploration target Cienaga de Oro reservoir sandstones • Drill & test / Depth $5.5 MM / ~9k ft. MD• Days to drill/test 5 weeks
• 13 km from Clarinete discovery• On success, rapid tie‐in to 6” flow‐line
connecting Clarinete to Jobo
1KMFluid Factor (AVO) section
1,500
1,700
1,900
2,100
2,300
SSJN7VIM 5
VIM 21
VIM 19
Esperanza
11
21
Basement
Top Basal
Top Red
Top Blue
Mid Miocene / Top CDO
Lower Tubara Marker
Tubara Marker
2KM
1
2
Mid CDO time structure
Pandereta‐1
Pandereta‐1
NELSON‐5
NELSON‐4
NELSON‐3
NELSON‐2
Cañandonga‐1 Exploration Well | 3 Potential Pay Zones
4 km(1) Includes Arianna and Palmer fields
(not pictured on map)
Nelson Field193 BCF
• On strong structural trend• Canacol fields 240 BCF(1)
• Nelson, Nispero & Trombon
• Formerly producing fields 378 BCF• Castor, Sucre, Tablon
• Cañandonga‐1 spud Nov 2017• Fault dependent closure• Stacked multi‐zone objectives
(CDO, Porquero, Tubara)• AVO‐supported new play in Tubara sandstones• Drill & test / Depth $5.5 MM / ~10k ft. MD
Jobo Station
Sucre
Sucre S
Castor N
Tablon
Castor SFlow line
NISPERO‐1
TROMBON‐1
Cañandonga‐1
12
Aim To Deliver 230 MMcf/d By 2018 ExitOnly 3 wells or $18 MM to maintain 230 MMcf/d
13
• 85 MMcf/d today• Today ‐ 13 gas wells producing 85 MMcf/d
• Wells choked back
• Potential ‐ 13 gas wells producing 130 MMcf/d
• To 130 MMcf/d to exit 2017• Drill 2 more wells ~$12 MM
• Debottleneck gathering systems $5 MM
• Additional flowlines $12 MM
• To 230 MMcf/d to exit 2018• Drill 5‐7 wells ~$30 ‐ $42 MM
• +50 MMcf/d of processing capacity ~$10 ‐ $15 MM
• Additional flowlines $10 ‐ $12 MM
Construction of the new Sabanas pipeline project, Sep 2017
Spend ~$40 MM To +40 MMcf/d in Dec ‘17→ 130 → 230 MMcf/d in Dec ‘18
Jobo Station
La Union Station
San Luis Station
Sincelejo
Bremen Station
20 m
VIM 19
SSJN 7
VIM 21
Esperanza
VIM 5
Prom
igas
14
• Building 84 km Sabanas pipeline + 2 compressor stations• ~42 MMcf/d flow line capacity to Bremen
• Utilizing state‐of‐the‐art flexible steel pipe
• Flex pipe requires no welding and optimal construction (2km of pipe/day)
• IN PROGRESS ‐ deployment of flowline + civil works for compressor station sites
• $40.6 MM budget
Caribbean Sea
Pipeline $12.4
EPC pipeline $11.8Customs & transport$6.8
Envrionmental & social $4.2
Other $4.4
+49% CAGR in gas productionMMcf/d
Outlook85 → 130 → 230 MMcf/d
70 85
130
230
60
100
140
180
220
'16 '17 '17 exit '18 exit
forecast
'16 '19e
$135
~$300
Substantial liquidity enables executionUS $ in MM
2Q ‘17 net debt $230 MM‘19e ebitda ~$300 MM
• Senior secured term loan• Credit Suisse + syndicate / L+5.50%• No re‐determination if oil prices fall• Mar ’19 →Mar ’22 ~$22 MM of principal
payments for 13 consecutive quarters
• For the remainder of 2017e:• Drill 3 more gas exploration wells• Completion of Sabanas flow line
15
• > 2.3 trillion oil barrels in S.A. has La Luna source rock• Source: 2010 Journal of Petroleum Geology
• 1.7 M acres of La Luna fairway in Colombia• Source: 2013 U.S. EIA study • Canacol blocks 5• Gross / net acres 625k / 371k
• Canacol’s VMM 2 and VMM 3 offer over pressured, Tier 1 acreage in the La Luna fairway
• Gross/net acres 159k / 32k• Operating partner ConocoPhillips• Solid results from multiple fracs in the latest well (Pico Plata)
• Potential prize: 1.9 B barrels of net mean OOIP(1)
• Source: DeGolyer & McNaughton unconventional oil prospective resource report, Oct ’14
16
Canacol’s Acreage Is Colombia’s Shale Oil Sweet Spot
VMM 2
VMM 3
(1) Pro forma for the relinquishment of the Santa Isabel blockDeGolyer & McNaughton (“D&M”) Resource Report as of 6/30/14. D&M provided mean estimates of Original Oil In Place (OOIP). These estimates have not been adjusted for the probability of geologic success.
10 kmWells Oil fieldsCanacol wells
Mono Araña
Normal pressure
Over pressured
Tier 1% Vro 0.6‐1.2
Mono Capuchino
Pico Plata
Tier 2% Vro >0.6
PicoPlata‐1 Vertical Unconventional Well
• Operated By Conoco• VMM3 gross acres 83k
• Canacol WI 20%
• La Luna shales• Gross thickness 1369 ft.
• Net pay 866 ft.
• Avg. porosity 10%
• Jan 2017, 3 successful fracs• Highly over pressured
• All fracture treatment successfully placed
• Induced fractures grow in height (125 ‐ 200 ft.)
• Variable flow rates 60 – 500 bopd (no water)
• 31 ̊ API gravity oil 18
Frac #3
SALA
DA A
GALE
MBO
D‐1
GALE
MBO
C
Frac #2
Frac #1
Contact
Carolina OrozcoDirector, Investor Relations
44 (0) 755.537.3873corozco@canacolenergy.com
Kevin FlickVP, Investor Relations
214.235.4798kflick@canacolenergy.com
Phil HeinrichInvestor Relations Manager
403.561.1648pheinrich@canacolenergy.com
19
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