Procyon Energy Corp

transcript

8/14/2019 Procyon Energy Corp

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Procyon EnergyCorp

AGM July 9th, 2009


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Results & Forecast

April 01, 2008 to March 31, 2009 forecast Operating Budget 46 MBOEs, average rate 127 boepd (138 boepd excluding June SD)

2,535 k$ revenue (excluding Spectra & f.g.) 1,456 k$ G&A, OpX, GOR, Crown Royalties 700 k$ free cash flow Based on $8.32/GJ gas @ Stn 2 (Sproule April 30, 2008), 12% shrink

Actual: April 1, 2008 March 31, 2009, Operating + Capital 53 MBOEs, average rate 148 boepd (158 boepd excluding June SD) 2,636 k$ revenue (includes Spectra & f.g. ~ 510 k$), 2,126 k$ net 543 k$ Royalties, 1,031 k$ OpX shrinkage 7.5% (f.g. 204 k$, Spectra 306 k$) per Accounting Rules 1,072 k$ cashflow - G&A 665 k$ = Free Cashflow of 408 k$ Station 2 average price = $6.62/GJ

April 01, 2009 to March 31, 2010 forecast 127 MBOEs, average rate 348 boepd 3,842 k$ revenue ($30.25/boe) 3,298 k$ OpX, GOR, Crown Royalties ($25.96/boe) 545 k$ cash flow + hedge 271 K$ - G&A 700 k$ = 115 free cashflow Based on $3.42 gas @ Stn 2 (Sproule April 30 th), 7% shrinkage


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Cost Structure Improving Gas PricesDominate

hedging program crucial

Costs forecast to decline per unit as production increases 2.4X to 348 boepd Operating $19.09 to $17.36/boe (includes Spectra $6.03/boe) G&A $12.31 to $5.51/boe Royalties $10.05 to $8.60/boe


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April 2008 March 2009 Results Capital

Capital spent to March 31st 2009 = 2.2 Million $

Exit rate = 300 boepd, currently 250 boepd Net Reserve adds 436 Mboe, 139% YOY increase Replaced production 9X F&D $6.60/boe including future capital ($4.52 w/o FCapX) Two tested wells, combined1.6 MMcfd test rates tie-ins being

done


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Corporate Reserve Summary

Significant year over year growth


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Corporate Reserve Summary

Significant year over year growth both absolute and per share


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Production growth: 174% increase YOY: 348 boped, peak 444 boepd E&Tsonly

Production History & Forecast


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2009 Budget Capital

Capital E&T 0.77 M$

Tie in 2 tested gas wells (combined test rates 1.6 MMcfd) 0.6 M$ landsale @ 50% W.I. 0.17 M$

Peak rate 444 boepd Average rate 348 boepd

Incremental average rate of 116 boepd over base decline Add 95 Mboe 2P reserves F&D $8.10/boe; $6,600/boepd


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2009 Budget Capital

Equity Case 10 M$ (unrisked, 100% COO)

E&T of 2 tested wells Landsale & drill on FI lands @ Muskrat Drill Cecil oil target @ Stoddart Offset purchase 4.8 M$ - assumes we pay full 10% Btax valuation, 2 owners Re-completion Siphon oil zone @ LaGarde Drill Baldonnel @ LaGarde Drill Siphon oil target @ LaGarde

Unrisked exposure: 754 boepd, 1.3 Million boes, 10 M$

Risked outcome (5 M$ employed) Incremental 353 boepd, 249 boepd for this fiscal year Add 471 Mboe 2P reserves F&D $9.89/boe; $13,200/boepd


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Challenges


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Opportunities

US Gas Rig Count

0

200

400

600800

1,000

1,200

1,400

1,600

1,800

Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec

2005 2006 2007

2008 2009

US Dry Gas Prd MMcf

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Jan Feb Mar A pr May Jun Jul A ug Sep Oc t Nov Dec

2009 2008 2007

2006 2005

US Consumption MMcf

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

Jan Feb M ar Apr M ay J un J ul Aug Sep Oct No v Dec

2009 2008 20072006 2005 US Consumption - Production, MMcf

-250,000

0

250,000

500,000

750,000

1,000,000

1,250,000

J an Feb Ma r A pr May J un J ul A ug Se p Oc t No v Dec

2009 2008 20072006 2005

US LNG Imports, MMcf

0

50000

100000

150000

200000

250000

Jan Feb M ar A pr M ay J un J ul Aug Sep Oct Nov Dec

2009 2008 20072006 2005

Gas rigs running at 50% of peak, gas production has not yet seen decline, Consumption near normal, LNG imports have not materialized


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Opportunities

Procyon Energy Corp

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