Strathcona Resources (SCR) Investor Day 2024 summary

Strategic Vision and Growth Plans

• Focus on attracting long-term shareholders aligned with a value-investing philosophy, emphasizing organic growth over acquisitions for the next six years.

• Targeting organic production growth of 105,000 BOE/d (83% liquids) at 8% CAGR, reaching 290,000 BOE/d by 2030, with oil weighting increasing from 72% to 75%.

• Growth will be driven by four autonomous business units, each with tailored strategies for their asset base.

• Capital spending will remain stable at CAD 1.03–1.06 billion annually through 2030, with about a third allocated to growth projects and a total capex plan of $8.8bn.

• All four business units (Cold Lake, Lloydminster Thermal, Lloydminster Conventional, Montney) to compete for capital, with oil sands driving most growth.

Financial Performance and Capital Allocation

• Achieved 21% CAGR in 1P NAV/share after-tax and 25% ROE over the past eight years, outpacing peers.

• Expecting to generate over $25/share in free cash flow at $70 WTI while growing production, with $26–54/share FCF projected by 2030 at $70–100 WTI.

• Plan to return significant capital to shareholders via base dividends, special dividends, and potential share buybacks as float increases.

• Base dividend could grow from $1 to $3 per share annually over six years, with a 20% CAGR.

• Break-even price to sustain operations expected to fall from $43 to $39 WTI by 2030, further reduced by carbon initiatives.

Asset Quality and Operational Excellence

• High-quality assets defined by high margins (33% pre-tax) and long reserve life index (39 years 2P RLI, third longest in North America).

• Organic growth prioritized due to superior capital efficiency compared to acquisitions (e.g., building MEG-sized growth for CAD 2.75B vs. buying MEG for CAD 8B).

• Montney asset provides a natural hedge for thermal operations, with 90% of condensate needs met internally.

• Lloydminster conventional assets feature polymer floods with ultra-low decline rates and 100-year field potential.

• Safety performance has improved as the company scaled, with 25% of compensation tied to safety outcomes.