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June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
June 2012 GHS100 Conference Presentation
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June 2012 GHS100 Conference Presentation

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  • 1. BUILDING A TOP TIER ENERGY COMPANY, ADDING MORE OIL, BUILDING UP VALUE.GHS100 Conference | June 2012 An Intermediate-Sized Real Growth Company Low Risk Oil Development Robust at Low Prices
  • 2. Forward Looking Statements Forward-Looking Statements: This presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "believes", "expects", "intends", "projects", "plans", "anticipates", “positions”, “potential”, “objective”, “continuous”, “ongoing”, "estimates" or "contains" or similar words or the negative thereof. In particular, this presentation contains forward-looking statements relating to: the estimated production of Pace Oil & Gas Ltd. (“Pace”), the estimated reserves of Pace Oil & Gas Ltd., the estimated pro-forma funds from operation of Pace Oil & Gas Ltd., the expected credit facility available to Pace Oil & Gas Ltd., the anticipated number of wells and completions to be carried out, the anticipated replacement production from our new completions, the expected reserve additions, future plans and expenditures of Pace Oil & Gas Ltd., the forecasted commodity prices. These statements represent managements expectations or beliefs concerning, among other things, future capital expenditures and future operating results and various components thereof or the economic performance of Pace and include, without limitation, statements with respect to the future financial position, business strategy, budgets, projected costs and plans, objectives of or involving Pace or any of its respective affiliates; access to credit facilities; capital taxes; income taxes; commodity prices; administration costs; commodity price risk management activities; expectation of future production rates and components of cash flow and earnings. Actual events or results may differ materially. The projections, estimates and beliefs contained in such forward-looking statements are based on managements estimates, opinions and assumptions at the time the statements were made including assumptions relating to the production performance of Pace’s oil and gas assets, the cost and competition for services throughout the oil and gas industry in 2012 and beyond and the continuation of the current regulatory and tax regime in Canada, and necessarily involve known and unknown risks and uncertainties which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted. Pace does not undertake to update any forward-looking information contained in this presentation whether as to new information, future events or otherwise except as required by securities rules and regulations. Barrels of Oil Equivalency: Barrels of oil equivalent (BOEs) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 Mcf:1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 2
  • 3. Corporate Overview  Strong Real Growth  Top tier growth – increasing oil weighting drives cash flow  Strong Performance Metrics – “Best in Class”  Operating results – Increased oil weighting – Op costs reduced  Execution Efficiency – Low finding costs – Top tier recycle  Significant Upside  Portfolio of top tier resource plays – Large OOIP  Multiple valued-added visible growth opportunities  Significant upside potential/large scale catalysts Clear Path to Sustained Visible Oil GrowthPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 3
  • 4. Corporate Highlights Current – March 31, 2012 Basic Shares Outstanding (mm) 47.2 FD Shares Outstanding (mm) 50.7 Bank Debt (mm) $168 Net Debt (mm) $213 Credit Facility (mm) (1) $300 Proved Reserves (mmboe) (2) 44.4 2P Reserves (mmboe) (2) ~50% Oil 69.6 2012 Q1 2012 Outlook Oil & NGLs (bbls/d) 7,192 7,000 - 7,300 Natural Gas (mmcf/d) 44.2 41 - 44 CapEx 2012 (mm) 41.9 ~ $85 Production Mix ~ 50% Oil 50% - 52% Oil 1. Banking syndicate - CIBC, NBF, BMO, BNS, HSBC, ATB – renewed June 2012 2. Reserves December 31, 2011 evaluated by McDaniels & Associates Consultants Ltd.PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 4
  • 5. Corporate Growth Strategy Near Term (1-2 years)  Exploit and develop existing oil assetsOil Focused – maintain Gas option  Explore and develop oil resource plays in inventory  Identify new oil resource plays/concepts  Maintain/Rank best gas resource opportunities Focus on Oil – Exploitation and development – Dixonville staged development (acceleration), Southern Alberta Glauconitic/Mannville, Mississippian and Waterfloods, Red Earth Slave Point  Engineered oil enhancements – Waterflood/ASP Mid Term (2-4 years)  Acquire strategic synergetic opportunities Advance Oil add Gas/Liquids  Expand resource opportunity base Focus on Oil/Liquids rich gas – Haro Pekisko, Southern Alberta Mannville, Mississippian and Waterfloods/ASP – Dixonville acceleration/ASP, New Oil Resource Plays/New EOR Technologies  Full scale development of resource assets Long Term (5+ years)  Apply technology to enhance recovery and production Balanced Oil & Gas/Liquids  Monitor and identify the key innovative technologies EOR potential additions of over 40 mmbbls Oil resource play potential of 50-250 mmbblsPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 5
  • 6. Oil Growth Drives Production Increase16,000 Gas (boe/d) Oil+NGL (bbls/d) 14,262 14,557 14,141 14,20514,000 13,558 12,403 13,089  Total production up12,000 over 48% from Q1 9,808 10,271 201010,000  Oil production up 8,000 over 100% to 7,200 6,000 bbls/d Q1 2012 4,000  Strong oil growth 6,965 7,192 5,391 5,868 6,077 6,061 (15%+ y/y) drives 4,668 2,000 3,531 3,542 production growth - Only 3% NGL in Oil Total Steady paced oil growth trend PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 6
  • 7. 2011 Reserves Breakdown Reserves by Product Reserves by Category Net Present Value by Product (boe@6:1, P+P) ($, NPV 10% Disc) ($, P+P, 10% Disc) NGL NGL 23% Gas 2% 2% Prob 23% Gas 50% 14% 63% PDNP PDP Oil PUD Oil 48% 75% Working Interest Reserves Oil NGL Natural Gas Total 10% (mboe) (mboe) (mmcf) (mboe) ($mm) Proved Developed Producing 18,456 564 82,169 32,715 530,440 63% Proved Developed Non Producing 2,498 107 18,704 5,722 73,668 Proved Undeveloped 2,593 62 20,022 5,993 49,883 Total Proved Future Development Capital (“FDC”)$97mm 23,548 734 120,895 44,430 653,991 77% Probables 10,100 534 87,403 25,201 193,462 Proved + Probables FDC of $191mm 33,647 1,268 208,298 69,632 847,4541) Based on the December 31, 2011 McDaniel NI 51-101 compliant reserves evaluations2) Columns may not add due to roundingPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 7
  • 8. Pace Underlying Value NGL Gas 2% 23% Proved PV10 $13.85 / share Each common share owns Probable PV10 4.10 / share 1.48 boe of reserves 2P PV10 $17.95 / share (0.71 bbl of oil) Oil 75% Total Proved 2011 Net Asset Value - ($mm) PDP Oil P+P BT 10% reserve value (1) 530 534 $ 847 Less: net debt (186.1) (186.1) (186.1) Add: undeveloped land value (354,000 acres @ $250/acre) (2) 88.5 88.5 88.5 Add: seismic and other assets 2.9 2.9 2.9 Net asset value $ 752.7 Shares outstanding (mm basic) 47.2 47.2 47.2 10 NAV/Share $9.22 $9.30 $ 15.95 (1) McDaniels & Associates Forecast Price & Costs (12/31/2011) Oil WTI 2012 - $97.50 & 2013 - $97.50, GAS AECO 2012 – $3.50 & 2013 – $4.20 (2) Internal value estimatePACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 8
  • 9. Pace Delivers Low Finding Costs – Year / Year 2011 2010 Proved Proved Proved Proved Plus Plus $boe Probable Probable F&D Costs $ 16.17 $ 17.04 $ 12.00 $ 17.20 A&D Costs $ 23.26 $ 7.36 $ 20.03 $ 14.93 FD&A Costs (including $ 16.09 $ 17.36 $ 17.81 $ 15.39 changes in FDC) %Adds by Product Oil 79% 60% 140% 132% Natural Gas 21% 40% (40%) (32%) 100% 100% 100% 100% Pace consistently delivers low cost, high value Oil addsOver 2.1 recycle ratio on weighted average netback by product PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 9
  • 10. Low Finding Costs with Strong Oil Additions 90 90 2011 2010 WFE 80 LEG 80 70 70 BNE 60 60 CKE LEG TP F&D ($/boe)TP F&D ($/boe) 50 TT 50 POU PBN CPG 40 CPG 40 NVA PXX WFE POU PBN 30 BTE 30 NGL PGF CQE CLT NVA PGF BNE TOU ARX CLT TET PXX 20 PRQ PCE 20 TT ARX NGL BXE CKE BTE PCE BIR AAV BXE AAV PRQ TET BIR TOU 10 10 0 0 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% % TP Oil & NGL Additions % TP Oil & NGL Additions Below line = high recycle ratios Oil weighted adds delivered “Best in Class” recycle ratios * Data from Canoils PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 10
  • 11. Increased Liquids Increases Netbacks/Cash Flow 90% 80% 2012e % Liquids  Steady growth in liquids 70% weighting compared to 60% peers 50% 40% 30% 20%  Increased operating 10% 0% efficiencies & oil growth deliver higher netbacks60% CFPS Growth 11/1040%20%  Top tier cash flow per 0% share growth-20%-40% * All estimates based on FirstEnergy Research June 14, 2012 FE Price Deck $105/bbl WTI, $2.25/mcf AECO PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 11
  • 12. Top Quality Reserves – Oil Weighted 30 PDP Oil & NGLs 25 20  Large and growing oilmmbbls 15 reserves are low risk 10 Proved Developed 5 Producing - 100% 90% Value Oil % of TP 80% 70% 60% 50% 40%  Large Proved Developed 30% Producing is increasingly 20% 10% oil weighted 0% * Data from Canoils PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 12
  • 13. Decreasing Op Costs & Increasing Op Netback Operating Costs/boe Operating Netbacks/boe $24.11 $24.18 $20.77 $20.40$19.68 $19.55 $17.24 $16.57 $15.21 $14.99 $15.20 $13.81 $13.51 $13.84 $13.20 $13.38Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 1130% op cost reduction while increased oil weighting to 50% PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 13
  • 14. Operating Cost Reduction & Solid Oil Weighted Reserves with Low Decline50% % change in Opex 2010 to 201140%  17% operating cost30%20%10% reduction while 0% increasing oil-10% production-20%45% Base Decline %  Large legacy oil40% pools - existing35%30% waterflood & EOR25% potential are platform20%15% for low base decline10% now and future 5% 0% * Data from XIT PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 14
  • 15. Significant Upside & Visible Long Term Growth Areas Key Attributes  High Working Interest  Operational Control Play Type Project Gross Net Wells Capital Operated MM$ WellsSouthern Glauconite $45 20 18.4Alberta Lithic Pekisko WaterfloodDixonville Montney C $10 WaterfloodRed Earth Slave Point $5Northwest Pekisko $15 4 4AlbertaTotal Oil $75 24 22.4Deep Basin $5 - -Land, $10Seismic, G&AotherGrand Total $85 24 22.4  CapEx to match Cash Flow  2012 CapEx directed towards oil program PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 15
  • 16. Southern Alberta Glauconite & Mannville Oil Plays R20W4 R15W4 Key Attributes  Current production: 4,800 boe/d (44% oil) • 2,100 bbls/d oil  Total Acreage • Net 312,000 - 488 sectionsT15  2011 Program – Successful Oil Drilling • Oil production up 30% from Q4 2010  Repeatable Drilling & EOR Potential • 75 well inventory and growing • Execution efficiency gains drive lower D,C & E costs • 90 MMbbls DPIIP and growing • Waterflood and ASP/tertiary potentialT10  2012 Plan (~ $45 mm) • Implement waterflood in NNN/BBB – commenced Q1 2012 • 20 (18.4 net) oil drills – 6 (5.4 net) drilled in Q1 2012 • Other pool waterflood optimization High working interest with infrastructure PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 16
  • 17. Southern Alberta – Drill Economics R19W4 R17W4 Play Type Curve 500T14 450 Type Curve 400 Average 350 300 BOE/D 250 200 150 100 50 0 0 12 24 Months D,C, Equip $1.9 mmT12 Production, boe/d (IP 30 day) 130 Reserves (mboe) 125 NPV 10%($mm/well) $2.0 Profit to Investment 1.05  Successful 2011 drilling program drives oil growth Rate of Return 56%  2012 Plan ($40 mm+/-) Reserve Cost ($/boe) $15.25 • 20 (18.4 net) horizontal drills • Expand current inventory of 75 wells Netback (1st year) ($/boe) $54.40 PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 17
  • 18. Southern Alberta Cost Drivers - Pads1.4 Drilling Costs Initiatives Completion Cost Initiatives $1,0001.2 0.10 $900 - Remove frac strings1.0 0.14 - Remove frac port drill outs $800 - Minimize testing 0.10 0.10 $7000.8 Completion Cost ($K) $6000.6 1.20 $5000.4 0.76 $400 2011 Q3 - 2012 $300 Rig & Testing: $200k - Slickwater fracs0.2 Water: $50-75k - Water recycling Frac: $175-225K $200 Drillout ports: $0-75k - Project frac execution Well Equip.: $75k - Less than $400 K/well0.0 $100 Total $525-$650k $0 0 5 10 15 20 25 Target D,C,& E well cost from $1.9 MM/well to $1.2 - $1.4 MM/well Q1 2012 average 1.8 MM/well PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 18
  • 19. Price/Capital Sensitivity – Southern Alberta SAB - Capital Sensitivity 140  Costs expectations of 120 $1.2 to $1.4 MM/well 100 80 by 2013IRR,% 95% 60  Returns above 60% 40 20  Higher returns 0 compounded with 1000 1200 1400 1600 1800 2000 2200 Capital $K/Well capital reduction Price Sensitivity (Oil) 90 80 70  Break even price of 150 Mboe 60 $45/bbl at current 125 MboeIRR,% 50 capital cost 100 Mboe 40 30  Break even of 20 <$30/bbl with target 10 cost reductions - 40 50 60 70 80 90 100Hardisty Bow River 25API (AB) - $20/bbl offset Wellhead Price, $/bbl PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 19
  • 20. Waterflood Management Opportunities R18W4 R17W4 1000 5000 Retlaw Unit WF Forecast Cal Day Oil 4000 800 Water Inj, bwpd 3000T13 600 2000 400 1000 200 0T12 0 -1000 2012 Plan ($5 mm net capital)  Implement waterflood in NNN/BBB • 400 bbl/d production adds forecasted • 52% IRR, 1.5 mmbbls PDP additions  Infill horizontals possible once pressures restored  Other pool waterflood optimization  Additional ASP potential PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 20
  • 21. Taber South Full Life Example A B C (A) Strong early waterflood response (B) Low mid life declines (C) significant ASP upliftPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 21
  • 22. Peace River Arch - Dixonville Key Attributes  Current production: 3,600 boe/d (88% oil) R1W6 R25W5 • Netback over ~ $35/boe*  Total AcreageT87 • Net 58,500 - 91 sections  Montney “C” Oil Pool with expanding waterflood • OOIP increased by 25% to 188 mmbbls – 30 API oil • 100% Pace working interest • Incremental 20,000 bbls/d fluid capacityT86 • Tertiary potential – ASP in 2014  2011 Program – Continued successful waterflood • Oil Production up 36% from Dec. 2010  Large Reserve Upside • 2P remaining reserves 23 mmboe (15% recovery) • 2011 TP reserve adds 3.6 mmboe Strong waterflood response  2012 Plan ($10 mm) continues • Expand waterflood on remaining 1/3 of pool to drive increased oil production • 17 injector conversions • Continue well pump upsizes PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 22
  • 23. Dixonville: Montney C Reservoir Simulation 3,200 bbls/d DIXONVILLE: MONTNEY C REMAINING RECOVERABLE OIL (MMBBL) 70 35% 0.40 ULTIMATE RECOVERY OF OOIP (%) 60 0.35 0.30 50 Tertiary, 28.2 20% 0.25 40 15% Upside, 9.4 Upside, 9.4 0.20 30 2P, 7.0 2P, 7.0 2P, 7.0 0.15 20 0.10 1P, 16.2 1P, 16.2 1P, 16.2 10 0.05 Prod, 5.7 Prod, 5.7 Prod, 5.7 0 - Base Case Waterflood EUR (SP) Optimization Prod 1P 2P Upside Total OOIP Rec.Waterflood response exceeds base case (booked reserves) and current model PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 23
  • 24. Peace River Arch - Red Earth Area Key Attributes R9W5 R7W5  Current Production: 550 bbls/d (oil)  Total AcreageT88 • Net 50,250 – 78 sections Southern Alberta  Top Quality light oil property • Netback > $60/boe*  Slave Point Resource Play • High industry activity • Gross 42,800 (32,200 net) acres  2013 Plan ($15-20 mm) • Create Slave Point program for 2013T86 • Current inventory of 50 wells & growing • Monitor industry activity/performance • No material near term expiries PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 24
  • 25. Peace River Arch - Red Earth Area - Economics R10W5 R6W5 Play Type CurveT89 100/1-9-88-8W5/0 Type Curve 1st Generation Wells 2011 Wells Southern Alberta Oil Rate (bbl/d) 100/8-1-88-12W5/0T87 0 1 2 3 Years D,C, Equip $3.0 mmT85 Production, boe/d (IP 30 day) 125 - 150 Reserves (mboe) 150 NPV 10%($mm/well) $2.1 Profit to Investment 0.7 Rate of Return 50% Reserve Cost ($/boe) $20.00 Netback (1st year) ($/boe) $73.00 PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 25
  • 26. Northern Alberta: Rainbow/Haro – Resource play R10W6 R6W6 R2W6 Key AttributesT110  Current production: 3,700 boe/d (25% oil)  Total Acreage • Gross 366,000 - 572 sections • Net 319,000 - 498 sections  Production Optimization • 925 bbl/d Muskeg & Keg River sweet crude • Oil production up 40% from Dec 2010T105 • Large low decline (5-7%/yr) Bluesky gas  Haro – early stage oil resource play • 1.16 B bbls DPIIP, Net 71,000 acres – 111 sections • 22º API with cold production • Potential 4-8 wells per section • 500 m depth – low capital cost per wellT100  2012 Plan (~ $15 mm) • Drilled 4 & completed 3 horizontal wells • Pace activity continues land for 5 years • ARC drilled 4 Pekisko wells this winter (1) Discovered petroleum initially-in-place PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 26
  • 27. Haro Pekisko Encouragement R5W6 R3W6 Unrisked 300 to 1600 locationsT102 200 2-36-101-5W6 175 Oil Rate (bbl/d) 150 125 100 75 50 25T100 0 0 12 Months 24 36 Type Curve 00/02-36 D,C, Equip $2.1 – 2.5 mm Production, boe/d (IP 30 day) 100 - 125 T98 Reserves (mboe) 100 - 150 NPV 10%($mm/well) $2.0 – 2.4 Profit to Investment 0.8 – 1.1 Rate of Return 35 - 75% Reserve Cost ($/boe) $14 - 25 Netback (1st year) ($/boe) $55 - 60 PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 27
  • 28. Haro Drilling Initiatives Drilling Cost Initiatives Completion Cost Initiatives 2.0 1.8 0.30  2011 completion costs 1.6 0.15 • $1.2 - $1.5 MM/well 1.4 0.20  Initiatives: 1.2 0.15 • Build water pits$MM 1.0 1.90 0.8 • Expand water disposal & 0.6 reduce trucking 1.10 0.4 • Roads for access 0.2  Future completion costs 0.0 • $0.8 to $1.0 MM/well Target D,C,& E well cost of $1.9 to $2.1 MM/well PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 28
  • 29. Price/Capital Sensitivity Haro - Capital Sensitivity 150  Costs expectations of 125 <$2.1 DC&E 2014+ 100  Returns above 35%IRR,% 75 50  Road & pad scouting 25 on going 0 2.0 2.5 3.0 3.5 Capital $MM/Well Price Sensitivity (Oil) at $2.1 MM well 120 100 80 Break even price 60 $45 - $55/bblIRR,% 40 with drill, complete, 20 equipment cost of - $2.1 MM/well 40 50 60 70 80 90 100 Wellhead Oil Price, $/bbl 22 API (AB) - $25/bbl offset PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 29
  • 30. Large Repeatable Gas Deep Basin Land Farrell Creek, BC Area Gross Acres Net Acres  Working interest: 75%-100% (operated) Elmworth 5,800 3,500 Chinook Ridge 27,000 16,300  Net acreage: 19,300 acres (30.2 sections) Red Rock 20,100 19,000  Large scale area development ongoing Bilbo 15,400 5,400 Total 68,300 44,200 Current Production: ~ 7.6 mmcf/dPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 30
  • 31. Deep Basin Multi-Zone Gas Resource Play PROSPECTIVE NUMBER OF WELLS AND COST LAND PER WELL UNRISKED POTENTIAL Net Net Original Book- Net Unbooked Est. Drill, Pace Net Unrisked ed Unrisked Complete and Pace WI EUR (1) Sections Of Wells Per Drilling Loca- Remaining Tie-in per Net Unrisked Capital Area Zone Land Section Inventory tions Locations well ($MM) Inventory ($MM) (Bcf)Natural Gas Resource PlaysBilbo Falher G HZL 10 2 - 3 20 - 30 0 20 - 30 $6.0 120 - 180 TBD Cadomin HZL &Red Rock & Uphole 40 3 - 4 120 - 160 0 120 - 160 $7.0 840 - 1120 600 - 800Bilbo CretaceousRed Rock & Nikanassin (Vt.) 40 2 - 3 80 - 120 3.8 76 - 116 $6.0 456 - 695 400 - 600Bilbo Cadomin HZL &Elmworth Uphole 5.5 2 - 3 11 - 17 5.3 6 - 11 $6.0 34 - 70 50 - 80 CretaceousChinook Ridge Nikanassin (Vt.) 20 2 - 3 40 - 60 2.3 38 - 58 $6.0 230 - 345 200 - 300 Cadomin HZL &Chinook Ridge Uphole 20 2 - 3 40 - 60 0 40 - 60 $7.0 280 - 420 200 - 300 CretaceousMoberly/Farrell Montney - Doig 30 4 - 8 120 - 240 0 120 - 240 $6.0 720 - 1,440 720 - 1,440Creek HZLMoberly/Farrell Phosphate HZL 30 2 - 3 60 - 90 0 60 - 90 $5.8 348 - 522 360 - 540Creek Total (+/-) 491 - 777 11.4 480 - 765 3,030 - 4,790 2,530 - 4,080 TCF 2.5 - 4.0*Amounts above may not add due to rounding • Over 700 potential drilling locations • 11.4 net locations booked in the reserve report (< 2% of potential) • Potential to add 4 Tcf of reserves (est. ~$5.0B investment)(1) Net EUR means Paces share of estimated ultimate recovery and are not NI 51-101 compliant PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 31
  • 32. Pace Oil Enhanced Recovery Estimated Gross Ultimate Recovery Total Gross EUR Cum as of Dec. Pace WI as of Dec. Pace Gross 31/2011 31, 2011 Incr. Recovery OOIP Prod. Recovery Total Proved Proved + Probable Upside Potential (2P + Upside) Pace WI TP 2P Upside Area / Pool Mechanism (mmbbls) (mmbbls) (% OOIP) (% OOIP) (mmbbls) (% OOIP) (mmbbls) (% OOIP) (mmbbls) (mmbbls) (% OOIP) (%) (mmbbls) (mmbbls) (mmbbls)Dixonville Montney C Waterflood 188 5.7 3.0% 11.7% 21.9 15.4% 29 5.0% 9 38 20.4% 100% 16.2 23.2 9 Polymer - SP 15.0% 28 67 35.4% 28 Southern Alta Waterflood 91 14.5 16.0% 20.5% 18.6 22.1% 20 6.9% 6 26 29.0% 66% 2.0 2.7 4Total Waterflood 279 20.2 7.3% 14.5% 40.5 17.6% 49 5.6% 16 65 23.2% 18.2 25.9 13Total Surfactant-Polymer 212 15.0% 32 76 35.7% 30Total Conventional 279 20.2 7.3% 14.5% 40.5 17.6% 49 17.0% 47 140 50.3% 18.2 25.9 44Haro Pekislo Resource Primary 1,160 5.0% 58 58 5.0% 100% 58 Solvent/Thermal 15.0% 174 174 15.0% 100% 174Total - Haro Resource 1,160 20.0% 232 232 20.0% 232Total Pace Upside 275.9 Large oil in place with low 2P recovery factorsPotential to add significant barrels through enhanced mechanisms PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 32
  • 33. Key Investment Highlights  Strong Real Growth • Oil weighting up and Oil weighting growing  Strong Performance Metrics – “Best in Class” • Solid operating results and Execution Efficiency • Increased oil weighting and op cost reduction  Solid low risk high value oil reserve additions  Significant Upside • Identified portfolio of visible long term, low risk, oil growth opportunities  Oil resource play potential plus large scale enhanced recovery upside Oil Weighted (Real) Growth, Excellent Results, Excellent PotentialPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 33
  • 34. Hedging Commodity Term Type Volume Price (CDN$)Oil 2012 fiscal Collar 500 bbl/d $95.00 to $117.75Oil 2012 fiscal Collar 500 bbl/d $100.00 to 108.70Oil 2012 fiscal Swap 1,500 bbl/d $97.07Natural Gas Jun - Dec 2012 Swap 4,740 mcf/d $2.37/mcfNatural Gas 2013 fiscal Swap 4,740 mcf/d $3.23/mcfNatural Gas 2013 fiscal Collar 4,740 mcf/d $2.90 to $3.56/mcf PACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 34
  • 35. Pace Corporate Information Management Directors Fred Woods Fred Woods Tom Simons President & CEO Tom Buchanan Jeff Smith Todd Brown Peter Harrison Jay Squiers Vice President & COO Mike Shaikh David Tuer Chad Kalmakoff Vice President, Finance & CFO Banking Syndicate Volker Braun CIBC Vice President, Exploration National Bank Colin Merrick Bank of Montreal Vice President, HR, IR & Administration Bank of Nova Scotia Darrell Osinchuk Alberta Treasury Branches Vice President, Exploitation HSBC Bank of Canada Martin Saizew Auditors Vice President, Engineering PriceWaterhouse Coopers LLP Andrew Weldon Vice President, Business Development Legal Counsel Heenan Blaikie LLP Address Livingston Place, West Tower Evaluation Engineers Suite 1700, 250 – 2nd Avenue SW McDaniels & Associates Consultants Ltd. Calgary, Alberta, Canada T2P 0C1 Registrar & Transfer Agent Ph: 403-303-8500 Computershare Trust Company of Canada Investor Relations Email: ir@paceoil.ca Website: www.paceoil.ca TSX Listing Symbol OTC Pinks Symbol PCE PACEFPACE OIL & GAS | GHS100 CONFERENCE SAN FRANCISCO | JUNE 2012 35
  • 36. For Information ContactFred Woods President & CEOTodd Brown VP & COOChad Kalmakoff VP, Finance & CFO Main: 403-303-8500 Investor Relations Email: ir@paceoil.ca Website: www.paceoil.ca TSX: PCE OTC: PACEF

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