• Velvet is proud to be partnered with  @kathairos_sol  to eliminate our methane emissions from routine site venting in… https://t.co/Jpx0v8tYvt 2 months ago
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  • Velvet is proud to be partnered with  @kathairos_sol  to eliminate our methane emissions from routine site venting in… https://t.co/Jpx0v8tYvt
    2 months ago

  • (2/2) Since 2017, Velvet invested in water infrastructure to reduce our reliance on freshwater, reaching 100% water… https://t.co/nwRYNNtRCX
    7 months ago

  • (1/2) Velvet Energy wins the 2020 Energy Excellence Award for Project Execution: Oil & Gas for the Gold Creek Water Recycling Project.
    7 months ago

  • (2/2) to work remotely, practice physical distancing and precautionary self-isolation. Through regular and open dig… https://t.co/FeVN6PuXMi
    8 months ago

  • (1/2) Velvet is proactively responding in ways that ensure the safety & wellbeing of our people, our communities an… https://t.co/DRY54m2spi
    8 months ago

Engagement

Velvet is an organic growth company. We apply best-in-class geoscience and commercial skill to build large and contiguous tracts of land in, and adjacent to, oil-window source rocks. State-of-the-art prospecting, drilling, completions, and production methods allow us to generate top decile economic returns.

Velvet Energy Operations

Velvet’s operations are focused in the light oil window of the Montney in Alberta and northeast B.C. and in the liquids rich window of the Deep Basin of Alberta. The Company produces 14,000 boe/d from the liquids rich Ellerslie formation which spans from West Pembina to Whitecourt. Velvet has over 15 years of Ellerslie and stack development inventory to continue to sustain or grow this high rate of return asset.

The Company has drilled 26 gross/net wells in the black oil window of the Montney in the Karr/Gold Creek area of northwest Alberta. With the acquisition of Iron Bridge Resources Inc. in 2018, Velvet now controls 230 net sections of land at Karr/Gold Creek, where it produces 17,000 boe/d.  The company also has a portfolio of early phase exploration lands, targeting Montney light oil at Pouce and Flatrock, B.C. Two wells were drilled at Pouce in 2018, with one well tied in during September last year.

Chronology of Growth

2020

• Brought onstream 3 wells targeting high return gas opportunities at Edson to take advantage of seasonal high gas pricing in the Deep basin

• Drilled and completed a two well development pad program at Pouce Coupe, with both wells achieving over 1,000 bbl/d of light oil production exceeding type curve expectations

• Realized a C$73.4 million gain in oil hedging contracts to date, protecting 2020 year cashflows amidst worldwide selloff in crude oil prices.

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2019

• Divested non-core assets in the Pembina area and reallocated a portion of proceeds to replace sold production with light oil weighted Montney volumes

• Increased corporate liquids weighting to exit 2019 at 46% with ongoing Montney light oil development

• Achieved cumulative hedging gains of C$98.3 million as at 2019 year end, including $23.8 million in realized gains for 2019

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2018

• Successfully completed unsolicited takeover of Iron Bridge Resources, adding 49,600 net undeveloped acres of Montney land at Gold Creek

• The Acquisition was fully funded with equity from existing shareholders and the monetization of midstream facilities acquired in the transaction

• Expanded Montney light oil inventory with successful horizontal wells at Karr and Pouce Coupe

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2017

• Pivotal shift in capital allocation to our Montney light oil project at Gold Creek – Completed facilities installations and brought on first production at Gold Creek in June 2017

• Achieved the 20,000 BOE/d milestone in mid-2017 – All from organic growth

•  Added US$50 Million of term debt to our existing second lien notes

• CPPIB commits C$150 million equity investment in December 2017

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2016

• Drew $65 million of equity in the first half to support Montney expansion

• Completed the 15-7 Montney oil well at Gold Creek

• Doubled Gold Creek Montney acreage to 124,800 net acres

• Closed US$125 million senior secured second lien financing and drew C$30 million of equity in the third quarter of 2016

• Accelerated development at Edson to two rigs and commenced a winter 3-well drilling program at Gold Creek

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2015

• Closed a new C$100 million equity line with our New York investors in the first quarter of 2015

• Completed construction of a 54 MMcf/d fit-for-purpose gas plant at Zeta Creek in the third quarter of 2015

Drilling activity in 2015 supported filling our 40% interest in the plant at start-up

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2014

• Acquired assets from Lightstream in West Pembina for C$72.2 million in the first quarter of 2014

• Drew C$105.6 million of equity to fund the acquisition and an expansion of the Ellerslie delineation program

• Achieved the 10,000 BOE/d milestone in May 2014

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2013

• Drew $50 million of equity in second quarter 2014 to fund a multi-zone evaluation of the Deep Basin stack

• Brought our first liquids-rich Ellerslie horizontal well onstream at 1,250 BOE/d in West Pembina

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2011-2012

• Velvet Closed a C$355 million equity line with three New York based investors in the second quarter of 2011

• Drew C$70 million of equity at closing

• Acquired Vero Deep basin gas assets for C$200 million in the first quarter 2011

• Drew C$110 million of equity to fund the acquisition

Home
2Q2011
1Q2012
4Q2012
2Q2013
4Q2013
1Q2014
3Q2014
4Q2014
1Q2015
3Q2015
4Q2015
Q12016
2Q2016
3Q2016
Q42016
Current

2Q2011

Closed C$355mm Equity Line at $10.00/sh. Drew $70MM of equity

1Q2012

Acquired Vero Deep Basin assets for $200.5MM. Drew $110MM of equity

4Q2012

Velvet Energy Ltd. Production Growth

2Q2013

Drew $50MM of equity. Concluded multi-zone evaluation of Deep Basin stack. Brought 16-14 Ellerslie hz onstream.

4Q2013

Velvet Energy Ltd. Production Growth

1Q2014

Acquired Lightstream Assets in Pembina for $72.2MM. Drew $75MM of equity.

3Q2014

Completed 1st Montney well and commenced Zeta Creek Plant design. Drew $30.6MM of equity.

4Q2014

Velvet Energy Ltd. Production Growth

1Q2015

Closed new $100MM equity line at $13.75/sh

3Q2015

Completed construction and filled equity interest in new 54mmcf/d fit-for-purpose gas and NGL plant at Zeta Creek. On time and on budget.

4Q2015

Velvet Energy Ltd. Production Growth

Q12016

Drew $15MM of equity.

2Q2016

Edson development accelerated with 2nd rig. Additional land acquisition opportunities in Gold Creek. Drew $50MM of equity.

3Q2016

Completed 15-7 oil well in the Montney at Gold Creek. Doubled Gold Creek landholdings to 195 net sections via asset & Crown land acquisitions.

Q42016

Closed US$125MM Senior Secured Second Lien Financing. Drew $30MM of equity.

Velvet Energy Ltd. Production Growth

Current

Velvet Energy Ltd. Production

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Investor Presentation

Investor Contacts

Chris Theal, Chief Financial Officer

Careers

We’re always looking for talented people to join our team. At Velvet, we value our employees and recognize them as the driving force behind our success.

Contact

We are located in the downtown core in Calgary, but you can keep up with what is happening at Velvet by following us on LinkedIn or Twitter.

Contact Us

We're not around right now. But you can send us an email and we'll get back to you, asap.

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