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March 2015
FIRSTENERGY | East Coast Energy Conference
Canadian International Oil Corp. (CIOC)
ANALYST: Robert J. Fitzmartyn, P.Eng.
ASSOCIATE: Rachel C. Eddy, P.Eng.
Corporate Profile
Montney Regional Play Fairway
CIOC
CIOC is a widely held private company with a large, contiguous land base in
the heart of two of the most prolific resource plays in North America. The
Company is focusing development activity in the Montney and Duvernay
formations, in which it holds 218,000 and 193,000 net acres respectively – the
majority of which is owned without encumbrances (98% working interest in
Tier 1 acreage).
The Company’s development has been focused on the Upper/Middle Montney
at Gold Creek and Karr, where delineation activity has proven the repeatability
of the laterally continuous liquids-rich fairway (Liquids ratios of 150-400 bbl/
MMcf).
The Company also brought online its first horizontal Duvernay well in 2014,
establishing the play extension of the prolific Kaybob fairway to the west.
The Company’s key financial partners include Riverstone Holdings LLC and
1901 Partners (formerly ZBI Ventures).
Operational Update
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CIOC has demonstrated significant year-on-year production growth, with 4Q14
production averaging ~4,000 boe/d (50% liquids) and current capability of
approximately 10,000 boe/d.
CIOC Gold Creek wells compete with the best wells in the basin - at a
significantly lower capital cost. First pad drill results have demonstrated
leading cost competitiveness, with average D&C costs of $5.8mm/ well for a
two-well pad.
Operating netbacks are improving with the recent installation of water
disposal facilities at Gold Creek and Karr. The netback is expected to further
increase with the elimination of oil trucking as crude oil pipeline infrastructure
continues to be built out.
CIOC has protected near-term cash flows through hedging activities, with
~70% of estimated 1H15e and 50% of 2H15e oil production hedged above
C$82/bbl and C$75/bbl WTI respectively.
Midstream Activities
CIOC recognizes the value of having key infrastructure in place within a basin
that is experiencing significant production growth.
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As such, the Company has entered into a midstream agreement that will
provide an initial 75 mmcf/d gas plant to process near term production. As
part of this agreement, CIOC will enjoy anchor tenant privileges and will retain
the option to trigger additional plant expansions as Company production
grows.
In addition, CIOC has firm service agreements in place for the transportation
of its oil and gas production over periods ranging from eight to ten years
commencing in 2016e. These agreements provide takeaway security, ensuring
that CIOC has the ability to access North American markets for the Company’s
future hydrocarbon production.
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Recent Financing Activity and Go Forward Strategy
Riverstone Holdings LLC announced a C$200mm equity commitment in
April 2014. This funding has allowed the Company to accelerate its Montney
development and pursue retention of its top tier Duvernay acreage through a
three to four rig drilling program in 2014.
The Company has line of sight to 20,000 boe/d in the near term, continuing to
delineate its land base through a balance of pilot activities and multi-well pad
drilling while maintaining cost control in all areas of the business.
2
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(000’s)
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Upper/Middle Montney
Lower Montney
Duvernay
218
218
193
705 - 1,155
325 - 1,000
500 - 1,125
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Interval/Area
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March 2015
FIRSTENERGY | East Coast Energy Conference
Canadian International Oil Corp. (CIOC)
CIOC - Alberta Deep Basin (March 2015)
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CIOC
Source: geoSCOUT; Wells shown are horizontal Montney producers rig released since Jan. 1, 2008 and licensed wells
Development Value Upside
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Management Team
Name
ScoƩ Sobie
Key Role
President & CEO
Daniel Labelle
SVP, ExploraƟon
David Anderson
Stuart King
ScoƩ Rennie
Nicki Stevens
Board of Directors
Bryan Begley
Gary H. Dundas
William M. Gallacher
ScoƩ Sobie
Robert M. Tichio
SVP, OperaƟons & Business Development
VP, Finance
VP, Development
VP, ProducƟon & MarkeƟng
Director
Director
Director
Director
Director
DescripƟon
Formerly VP ConvenƟonal Development, North America at Talisman Energy; Prior
thereto held various posiƟons at Talisman including VP Shale Pilots
Formerly Manager of Geology at Delphi Energy; Prior thereto held various
posiƟons at Talisman and Mobil Canada
Formerly President and CEO of Lone Pine Resources Inc. and President of
Canadian Forest Oil Ltd.
Formerly Controller of AvenEx Energy Corp.; Prior thereto worked in M&A group
of a large internaƟonal accounƟng Įrm, focusing on oil and gas transacƟons
Previously held various posiƟons with ConocoPhillips and Schlumberger
Previously held various posiƟons with Talisman Energy and Chevron Canada
1901 Partners Management LP, Formerly ZBI Ventures LLC
Independent; Previously CFO, AvenEx Energy Corp.
Independent; Previously President & CEO of Avenex Energy Corp.
President & CEO, CIOC
Riverstone
3