CREW ENERGY INC. A perfect fit for the future of Canadian energy
TSX: CR
Annual General Meeting
May 2024
CAUTIONARY STATEMENT
Forward-Looking Statements
This presentation contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" "forecast" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this presentation contains forward-looking information and statements pertaining to the following: the ability to execute on its plan to increase production by 2026 to greater than 60,000 boepd and the underlying strategy and targets as described herein, our 2024 annual capital budget range, associated drilling and completion plans and all associated near term initiatives and targets, guidance and underlying assumptions; production estimates including forecast 2024 annual commodity price expectations including Crew's estimates of natural gas pricing exposure; Crew's commodity risk management programs and future hedging opportunities; well abandonment plans; marketing and transportation and processing plans and requirements; estimates of processing capacity and requirements; anticipated reductions in GHG emissions and decommissioning obligations; future liquidity and financial capacity; future results from operations and operating and leverage metrics; plans to increase condensate and light oil production over 2023 to average over 5,300 barrels per day in December 2024; world supply and demand projections and long-term impact on pricing; future development, exploration, acquisition and disposition activities (including drilling and completion plans, anticipated on-stream dates and associated development timing and cost estimates); the potential of our Groundbirch area to be a core area of future development and the number of potential prospective zones to be drilled; infrastructure investment plans; the successful implementation of our ESG initiatives, and significant emissions intensity improvements going forward; the amount and timing of capital projects; and anticipated improvement in our long-term sustainability and the expected positive attributes discussed herein attributable.
The internal projections, expectations, or beliefs underlying our Board approved 2024 capital budget and associated guidance are subject to change in light of the impact of the Russia/Ukraine conflict, and any related actions taken by businesses and governments, ongoing results, prevailing economic circumstances, commodity prices, and industry conditions and regulations. Crew's financial outlook and guidance provides shareholders with relevant information on management's expectations for results of operations, excluding any potential acquisitions or dispositions, for such time periods based upon the key assumptions outlined herein. Such information reflects internal targets used by management for the purposes of making capital investment decisions and for internal long-range planning and budget preparation. Readers are cautioned that events or circumstances could cause capital plans and associated results to
differ materially from those predicted and Crew's guidance for 2024 and may not be appropriate for other purposes. Accordingly, undue reliance should not be placed on same.
In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Crew which have been used to develop such statements and information, but which may prove to be incorrect. Although Crew believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Crew can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: that Crew will continue to conduct its operations in a manner consistent with past operations; results from drilling and development activities consistent with past operations; the quality of the reservoirs in which Crew operates and continued performance from existing wells; the continued and timely development of infrastructure in areas of new production; the accuracy of the estimates of Crew's reserve volumes; certain commodity price and other cost assumptions; continued availability of debt and equity financing and cash flow to fund Crew's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Crew operates; that future business, regulatory and industry conditions will be within the parameters expected by Crew; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Crew to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Crew has an interest in to operate the field in a safe, efficient and effective manner; the ability of Crew to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Crew to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes, environmental and indigenous matters in the jurisdictions in which Crew operates; that regulatory authorities in British Columbia will resume granting approvals for oil and gas activities on time frames, and on terms and conditions, consistent with past practices; and the ability of Crew to successfully market its oil and natural gas products.
The forward-looking information and statements included in this presentation are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect
thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: the continuing and uncertain impact of the Russia/Ukraine conflict; changes in commodity prices; changes in the demand for or supply of Crew's products, the early stage of development of some of the evaluated areas and zones the potential for variation in the quality of the Montney formation; interruptions, unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates; climate change regulations, or other regulatory matters; changes in development plans of Crew or by third party operators of Crew's properties, increased debt levels or debt service requirements; inaccurate estimation of Crew's oil and gas reserve volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time- to-time in Crew's public disclosure documents (including, without limitation, those risks identified in this presentation and Crew's Annual Information Form as well as Crew's MD&A for the year ended December 31, 2022, filed on SEDAR+ at www.sedarplus.ca.
This presentation contains future-oriented financial information and financial outlook information (collectively, "FOFI") about Crew's prospective capital expenditures, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. The actual results of operations of Crew and the resulting financial results will likely vary from the amounts set forth in this presentation and such variation may be material. Crew and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, Crew undertakes no obligation to update such FOFI. FOFI contained in this presentation was made as of the date of this presentation and was provided for the purpose of providing further information about Crew's anticipated future business operations. Readers are cautioned that the FOFI contained in this presentation should not be used for purposes other than for which it is disclosed herein.
The forward-looking information and statements contained in this presentation speak only as of the date of this presentation, and Crew does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
2
Crew Energy Inc. Annual General Meeting May 2024
TSX: CR
WHY INVEST IN CREW?
CREW'S INVESTMENT HIGHLIGHTS
Location, Location, Location
Exceptional value - 2023 year-end reserve value less net debt per share of |
$4.33 for PDP3, $9.70 for 1P3 and $18.61 for 2P3 |
Inventory rich - over 2,500 potential drilling locations3 on 217,000 net Montney |
acres |
Strong financial position - 0.6 net debt1/last twelve month EBITDA1 as at |
March 31, 2024 |
Low cash costs1 - $10.08/boe in Q1/24 - 3rd lowest out of 39 companies |
Long reserve life3 - PDP of 8 years, 1P of 22 years and 2P of 42 years |
Operator and ownership in facilities - 200 mmcfpd and 15,000 bbls/d liquids |
Exceptional egress - Tied into three major export pipelines |
(TCPL, Alliance, Enbridge) and proximal to CGL (LNG) and rail |
Commodity optionality - Dry gas, NGL rich gas, ultra condensate rich gas, light oil |
Excellent reservoir characteristics - 800 to 1,100' porous siltstone that is |
1.3 to 1.5x over-pressured - greater storage with enhanced flow characteristics |
Monias | Greater |
Septimus |
Groundbirch
TC
Meter
Station
To Coastal
GasLink LNG
Canada
Tower
Land Legend
Crew CNRL
Aduro Shell
ARC Strathcona
Shareholder alignment - 6 of the top 10 shareholders are insiders4 | |
Abundant tax pools - ~ $900 million as at Mar. 31, 2024 | |
1) | See 'Reader Advisories - Non-IFRS and Other Financial Measures. Certain additional disclosures for these specified financial measures or ratios |
have been incorporated by reference herein and can be found in the "Advisories - Non-IFRS and other Financial measures" section of the | |
Company's MD&A for the year ended 2023, available on SEDAR+ at www.sedarplus.ca and on the Company's website under the Investors section. | |
2) | Supplementary financial measure that does not have any standardized meaning as prescribed by International Financial Reporting and therefore, |
may not be comparable with the calculations of similar measures for other entities. See "Advisories - Non-IFRS and Other Financial Measures" | |
contained within this corporate presentation. | |
3) | See "Advisories - Information on Reserves & Operational Information". |
4) | As at April 1, 2023; Source: Proxy Statement, © 2022 Factset Research Systems, Inc. |
4 | Crew Energy Inc. | Annual General Meeting May 2024 |
CAPITAL STRUCTURE | millions | ||
Shares issued and outstanding | 157.1 | ||
Market capitalization2 @ $4.56/share (May 9, 2024) | $716 | ||
Debt summary as at Mar. 31, 2023: | |||
Bank loan | $106 | ||
Other long-term obligations | $18 | ||
Working capital deficiency1 | $24 | ||
Net Debt1 as at Mar. 31, 2024 | $148 | ||
2024 PLAN
Crew plans to invest in infrastructure to further to drive down costs in the current low natural gas price environment
Capital Program1
$165 - $185 million
- $105 - $115 million drilling (6 wells) and completions (11 wells)
- 10 drilled uncompleted wells at year end
- $60-$70million infrastructure
- $50-$55million electrification at West Septimus
- $10-$15million FEED and plant site at Groundbirch
Designed to:
- Maintain average production of 29,000 - 31,000 boepd
- Increase condensate production by 15%
- Curtail gas production by 5%
- Maintain a strong financial position
- Target net debt2/LTM AFF2 of <1x
- Position the Company to thrive and grow in an improved natural gas price environment
- Electrify West Septimus Gas Plant
- Increasing capacity by 17% to 140 mmcfpd in 2025
- Reduce operating costs by >10%
- Reduce CO2 emissions by ~ 82% generating carbon credits
- Reduces the cost of electrification of the Groundbirch project by ~ $30 million
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Crew Energy Inc. Annual General Meeting May 2024
- All guidance contained herein is based on Crew's 2024 guidance detailed in the MD&A for the year ended December 31, 2023, available for review at www.crewenergy.com or SEDAR+ at www.sedarplus.ca. For material underlying assumptions see "Appendix - Guidance Assumptions"
- See 'Reader Advisories - Non-IFRS and Other Financial Measures"
LONG TERM VALUE CREATION
Untapped Inherent Value Growth
Crew Share Price (TSX:CR) and Reserves per Debt Adjusted Share1
CAD)($PriceShareClosingMonthly | 25 | 3,000 | (Boe/mSh)SharesAdjustedDebtThousand | ||||||||||||||||||||||||||
2,594 | |||||||||||||||||||||||||||||
20 | 2,500 | ||||||||||||||||||||||||||||
2,000 | |||||||||||||||||||||||||||||
15 | |||||||||||||||||||||||||||||
1,358 1,500 | |||||||||||||||||||||||||||||
10 | |||||||||||||||||||||||||||||
1,000 | |||||||||||||||||||||||||||||
5 | 500 | ||||||||||||||||||||||||||||
465 | Per | ||||||||||||||||||||||||||||
0 | - | Reserves | |||||||||||||||||||||||||||
10/1/2003 | 7/1/2004 | 4/1/2005 | 1/1/2006 | 10/1/2006 | 7/1/2007 | 4/1/2008 | 1/1/2009 | 10/1/2009 | 7/1/2010 | 4/1/2011 | 1/1/2012 | 10/1/2012 | 7/1/2013 | 4/1/2014 | 1/1/2015 | 10/1/2015 | 7/1/2016 | 4/1/2017 | 1/1/2018 | 10/1/2018 | 7/1/2019 | 4/1/2020 | 1/1/2021 | 10/1/2021 | 7/1/2022 | 4/1/2023 | 1/1/2024 | ||
Share Price | 1P Reserves Per Debt Adjusted Share | ||||||||||||||||||||||||||||
2P Reserves Per Debt Adjusted Share | PDP Reserves per Debt Adjusted Share | ||||||||||||||||||||||||||||
6 | Crew Energy Inc. | Annual General Meeting May 2024 |
- 2023 reserve value less net debt value per share of $4.33 for PDP3, $9.70 for 1P3 and $18.61 for 2P3
- 2023 reserves3: PDP of 84 million boe, 1P of 248 million boe and 2P of 473 million boe
- Increased 1P and 2P reserves per debt adjusted share by 22% and 32% respectively from year-end 2022 to year-end 2023
- Reserve bookings3 >1.4 boe of 1P and >2.6 boe of 2P reserves per debt adjusted share booked on
19% of the Company's controlled acreage in the Upper Montney - Compelling investment metrics at $4.54 share price and year end debt of $117 mm - buying PDP reserves at $9.63 per boe with a 2.3x recycle ratio2,3
- Derived from Crew's annual independent year-end reserves evaluations. Per share values are debt adjusted at $4.54 per share.
- Crew's operating netback of $22.47/boe in Q4/23 before gain on derivative financial instruments
- See "Advisories - Information on Reserves & Operational Information"
LOW CASH COSTS - IMPROVING MARGINS
Crew performed favorably compared to 39 company peer group on cash cost comparative metrics in Q1/20241
$/BOE
CASH COSTS/BOE2,3 Q1/24
$45 $40 $35 $30 $25
$20 | Peer Average | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$10.08 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peer 1 | Peer 2 | CrewEnergy | Peer 3 | Peer 4 | Peer 5 | Peer 6 | Peer 7 | Peer 8 | Peer 9 | Peer 10 | Peer 11 | Peer 12 | Peer 13 | Peer 14 | Peer 15 | Peer 16 | Peer 17 | Peer 18 | Peer 19 | Peer 20 | Peer 21 | Peer 22 | Peer 23 | Peer 24 | Peer 25 | Peer 26 | Peer 27 | Peer 28 | Peer 29 | Peer 30 | Peer 31 | Peer 32 | Peer 33 | Peer 34 | Peer 35 | Peer 36 | Peer 37 | Peer 38 | |
1) | Source Data Peters & Co Ltd - see "Reader Advisories" | ||||||||||||||||||||||||||||||||||||||
2) | See "Reader Advisories - Non-IFRS and Other Financial Measures". Certain additional disclosures for these specified financial measures or ratios have | ||||||||||||||||||||||||||||||||||||||
7 | Crew Energy Inc. | Annual General Meeting May 2024 | been incorporated by reference herein and can be found in the "Advisories - Non-IFRS and other Financial measures" section of the Company's MD&A for | ||||||||||||||||||||||||||||||||||||
the year ended 2023, available on SEDAR+ at www.sedarplus.ca and on the Company's website under the Investors section. |
- Cash costs are the sum of net operating, net transportation, interest and general administrative costs per boe.
TSX: CR
MULTI YEAR STRATEGIC
GROWTH PLANS
OPPORTUNITY FOR FUTURE GROWTH
Production (boepd) 000's
70
60
50
40
30
20
10
0
>48% Increase | Target >95% Increase | ||||
3 YEAR PLAN | EXIT 2023 to EXIT 20271 | ||||
With low gas prices, Crew plans to increase condensate by 15% and curtail gas production by 5% in 2024
33.3
30.2
26.4
22.0
2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | exit 2027 |
Road Map to Growth
- Opportunity to increase future production to over 60,000 boepd with Groundbirch project
- Crew's extensive resource base has the potential to support a significantly larger production base for decades
- Requirements for final investment decision ("FID")
- Plant permit - Completed
- Pipeline and well permits - 85 well authorizations received
- Supportive future natural gas prices
- Financing initiation requires improved pricing
- Crew plans on investing $50-55 million in 2024 to electrify and expand the West Septimus Gas Plant, which is estimated to save $30 million for the electrification of the Groundbirch project.
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Crew Energy Inc. Annual General Meeting May 2024
- See "Forward Looking Statements" and "Reader Advisories" for additional disclosures and risk factors
TSX: CR
MONTNEY:
WORLD CLASS RESOURCE
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Crew Energy Inc. published this content on 25 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 May 2024 16:20:03 UTC.
