061410 investor update

22
Investor Update June 2010

Upload: monster12

Post on 16-May-2015

163 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: 061410 Investor Update

Investor UpdateJune 2010

Page 2: 061410 Investor Update

This presentation is for information purposes only and is not intended to, and should not be construed to, constitute an offer to sell or the solicitation of an offer to buy securities of Penn West.

Discovered Petroleum Initially‐In‐Place (DPIIP) is equivalent to Original Oil In Place (OOIP). DPIIP, also known as a "discovered resource", is defined as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially‐in‐place includes production, reserves and contingent resources; the remainder is unrecoverable. A recovery project cannot be defined for this volume of discovered petroleum initially‐in‐place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources.

Certain information regarding Penn West Energy Trust and the transactions reviewed in this presentation including management’s assessment of future plans and operations, may constitute forward‐looking statements under applicable securities law and necessarily involve risks, including, without  limitation, risks associated with  oil  and  gas  exploration,  development,  exploitation,  production, marketing  and  transportation,  loss  of markets,  volatility  of  commodity  prices,  currency fluctuations, imprecision of reserve estimates, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions and ability to access sufficient capital from internal and external sources; failure to obtain required regulatory approvals. As a consequence, actual  results may  differ materially  from  those  anticipated  in  the  forward‐looking  statements.  Readers  are  cautioned  that  the  foregoing  list  of  factors  is  not exhaustive. Additional  information on  these and other  factors  that could affect Penn West’s operations or  financial  results are  included  in    reports on  file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at Penn West’s website (www.pennwest.com).

This presentation and  its contents should not be construed, under any circumstances, as  investment,  tax or  legal advice.   Any person accepting delivery of  this presentation acknowledges the need to conduct their own thorough investigation into Penn West before considering any investment in its securities. Furthermore, the forward‐looking statements contained in this presentation are made as of the date of this presentation, Penn West does not undertake any obligation to update publicly  or  to  revise  any of  the  included  forward‐looking  statements, whether  as  a  result  of  new  information,  future  events or  otherwise,  except  as may  be expressly required by applicable securities law.

Where reserves or production are stated on a barrel of oil equivalent (BOE) basis, natural gas volumes have been converted to a barrel of oil equivalent (BOE) at a ratio of six thousand cubic feet of natural gas to one barrel of oil. This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOEs may be misleading, particularly if used in isolation.

This presentation may contain references to non‐GAAP terms. Penn West uses these measures to help evaluate their respective performance.  These measures as presented do not have any standardized meaning prescribed by Canadian GAAP and therefore, they may not be comparable with calculations of similar measures for other companies or trusts.

All references are to Canadian Dollars unless otherwise specified.

Advisory

2

Page 3: 061410 Investor Update

3

YieldGrowth

Page 4: 061410 Investor Update

Setting the Course for the Future

4

• Capital budget of $700 to $800 million necessary to maintain current production levels

• Focus funds to increase pace of development in key play areas – anticipate $150 to $200 million for organic growth

• Timing for conversion at year-end 2010

• Set dividend with objective to remain within funds flow for sustaining capital, growth capital and dividend

• Fine tune model for 2011 and provide guidance for capital plans during Q4 2010

Conversion

Page 5: 061410 Investor Update

5

producer of light & medium oil in western Canada

#

Page 6: 061410 Investor Update

6

Significant Light Oil PotentialSignificant Light Oil Potentialmillion acres

Page 7: 061410 Investor Update

7

AdvantageInfrastructure

Page 8: 061410 Investor Update

Oil Gas BOEProved 341 mmbbls 938 bcf 497 mmboe

Proved and Probable 472 mmbbls 1,292 bcf 687 mmboe

8

%Proved OilReserves

VerticallyBooked

95%

Page 9: 061410 Investor Update

Strategic Portfolio Management

9

Peace RiverOil Sands

Wildboy

Eastern Alberta

Penn West land position

Cardium

WaskadaDodsland

North CentralCarbonates

Page 10: 061410 Investor Update

Prospect Inventory

10

Light Oil

Gas

Oil Sands

Cumulative Resource

Production

14%

2%

0%

Discovered Petroleum Initially in Place (DPIIP), is defined in the COGEH handbook as the quantity of hydrocarbons that are estimated to be in place within a known accumulation. DPIIP is divided into recoverable and unrecoverable portions, with the estimated future recoverable portion classified as reserves and contingent resources. There is no certainty that it will be economically viable or technically feasible to produce any portion of this DPIIP except for those identified as proved or probable reserves. At this time all of the DPIIP not classified as reserves would be classified as Unrecoverable Resources.

OOIP / OGIP

8.5 B bbls

18 Tcf

2.75 B bbls

Incremental

Recovery

85 million bbls

180 Bcf

27.5 million bbls

1%

Page 11: 061410 Investor Update

11

Unlocking Oil in Place

CardiumWest Central Alberta

Page 12: 061410 Investor Update

West Central AB - Cardium

bbls OOIP10 billion

wells (net)2,400

current production~25,000 boe/d

880 sections (net)

1.6 billion bbls recovered to date

2 – 5 billion bbls potentialOOIP additions

12Penn West land

Pembina

WillesdenGreen

WestPembina

Leafland

Garrington

Strachan

Ferrybank

BuckLake

Vertically definedpool boundary

Cardium trend

20 miles

30 kms

Program Summary

Page 13: 061410 Investor Update

Cardium Land Holding – Existing

13

Source: Company reports, Scotia Capital estimates.

530

0

100

NetSections

200

300

400

500

204160150150150

100 95 92 81 75 66 52 49 47 40 40 38 30 23 19 17 17 9 8

600

700

800

PennWest

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

880

+ Halo

Page 14: 061410 Investor Update

Penn West land position

Light Oil Resource Plays

14

Cardium

net sections880 wellinventory2,000 +

50 2010 net wells

Page 15: 061410 Investor Update

Penn West land position

Light Oil Resource Plays

15

Cardium

Waskada

net sections125 wellinventory1,000

60 2010 net wells

Page 16: 061410 Investor Update

Penn West land position

Light Oil Resource Plays

16

Dodsland

Cardium

Waskada

net sections280 wellinventory1,000

70 2010 net wells

Page 17: 061410 Investor Update

Penn West land position

Light Oil Resource Plays

17

DevonianCarbonates

Cardium

Dodsland Waskada

net sections300 wellinventory200 +

25 2010 net wells

Page 18: 061410 Investor Update

Unlocking Oil in Place

Peace RiverCentral Alberta

18

Page 19: 061410 Investor Update

Peace River Oil Partnership

19

Strategic Rationale

• Establish key technical and financial relationship

• Increase pace of development

(primary and thermal)

• Operate Peace River as a stand alone project

reflecting its uniqueness in Penn West

Page 20: 061410 Investor Update

Peace River Oil Partnership

20

Penn West contributes:• 106,650 acres (45% of 237,000 acres)

• 1,215 boe/d (45% of 2,700 boe/d)

• $56 million go forward investment (10% of PWT’s 55% interest)

Partner contributes:

• $312 million cash (paid to PWT directly)

• $505 million go forward investment (90% of PWT’s 55% interest)

• $459 million capital (45% interest)

Key Points

Page 21: 061410 Investor Update

21

* Pro Forma debt at March 31, 2010 net of equity private placement and funds received from the formation of the Peace River Oil Partnership announced May 13, 2010.** On April 30, 2010 Penn West Petroleum Ltd. Closed the renewal of its unsecured revolving syndicated bank facility.*** All debentures expire prior to December 31, 2011 and can be settled with equity.

Credit Capacity

$1.75 billionundrawn**

$500 million drawn*

Total Debt

PrivateDebt$1.6

billionConvertibleDebentures***$273 million

Bank Debt$0.5 billion

Setting the Course for the Future

Page 22: 061410 Investor Update

Stock ExchangeToronto: PWT.UNNew York: PWE

Legal CounselBurnet, Duckworth & Palmer LLP

Independent Reserves EvaluatorsGLJ Petroleum Consultants Ltd.Sproule Associates Limited

Transfer AgentCIBC Mellon Trust CompanyToll Free: 1-800-387-0825Email: [email protected]: www.cibcmellon.ca

Investor RelationsJason Fleury, Manager, Investor RelationsTelephone: (403) 539-6343Email: [email protected]

Toll Free: 1-888-770-2633Email: [email protected]: www.pennwest.com

Penn West EnergySuite 200, 207 – 9th Avenue SWCalgary, Alberta, Canada T2P 1K3Telephone: (403) 777-2707Toll Free: 1-866-693-2707Facsimile: (403) 777-2699Website: www.pennwest.com