Strathcona Resources (SCR) Investor Day 2024 summary

Strategic Vision and Growth Plans

• Targeting long-term, value-oriented shareholders with a unique cash-based incentive structure and alignment with management.

• Focused on organic production growth of 105,000 BOE/d (8% CAGR) to reach 290,000 BOE/d by 2030, with oil weighting rising from 72% to 75%.

• Four autonomous business units (Montney, Lloydminster Conventional, Lloyd Thermal, Cold Lake) drive growth, each with tailored strategies and leadership.

• Capital spending to remain stable at ~$1.05B/year, with $8.8bn planned through 2030, allocating one-third to growth projects.

• All business units compete for capital, with oil sands driving most growth.

Financial Performance and Guidance

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

• Free cash flow yield at $30/share is ~15%, targeting $25/share FCF and 20% total return at $70 WTI.

• Plan to pay out $5.6B to shareholders over six years, with potential for base dividend to grow at a 20% CAGR.

• Break-even WTI price expected to fall from $43 to $39 by 2030, with sustaining WTI breakeven dropping by ~$4/bbl.

• Strong balance sheet with debt/EBITDA under 2x at $50 WTI, $700M liquidity, and debt capacity expanded to $2.5bn.

Asset Quality and Operational Execution

• High-margin (33% pre-tax) and long-reserve-life (39-year 2P RLI) assets reduce risk and support premium valuation.

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

• Lloyd Thermal and Cold Lake units have significant growth projects, leveraging modular plant designs and premium market access via rail.

• Lloydminster Conventional assets are low-decline, high-margin, with polymer floods expected to last 100 years and ongoing technology improvements.

• Continuous improvement in drilling efficiency and capital allocation, with best-in-class capital efficiency in Montney and Lloyd assets.