2018 Cash Flow Funded Capital Budget Increases Focus on Liquids - PowerPoint PPT Presentation

“ 2018 Cash Flow Funded Capital Budget Increases Focus on Liquids Development & Growth Driven by Strong Well Results ” Investor Presentation TSX / NYSE: AAV December 2017

ADVANTAGE AT A GLANCE TSX 52-week trading range $4.84 - $9.37 Shares Outstanding (basic) 186 million Market Capitalization $1.0 billion 2017 Production Estimate (16% Growth) 236 mmcfe/d (39,330 boe/d) 2018 Guidance (10% Growth) 255 to 265 mmcfe/d (42,500 to 44,170 boe/d) 2018 Total Cash Costs $1.10/mcfe ($6.60/boe) As of September 30, 2017: Bank Debt (39% drawn on $400 million Credit Facility) $156 million Total Debt (including working capital deficit) $193 million Total Debt/Trailing 12 Month Cash Flow 1.0x 2

MONTNEY LAND HOLDINGS PROVIDES GROWTH AND UPSIDE VALUE OPPORTUNITIES FOR DECADES Alberta B.C. Progress (30 sections) 100% owned Glacier Gas Glacier Plant 90 net sections Glacier Development will Valhalla (36 sections) continue for decades. Initial delineation drilling at Valhalla, Wembley & Progress underway. Wembley Recent 4 well pad success – 6,410 boe/d /Pipestone (32 mmcf/d gas + 1,075 bbls/d liquids) with (28 sections) certain yields >100 bbls/mmcf, 90% C5/oil) Up to 5 layers of dry and liquids rich gas with a future drilling inventory >1,200 locations  Total 184 net Montney sections (117,760 acres)  Total 94 net sections at Valhalla, Wembley & Progress acquired for a total of $18 million since 2013 3

OUR STRATEGY – VALUE CREATION THROUGH DISCIPLINED CAPITAL INVESTMENT World Class Montney Asset Own & Operate 100% Operating & Plant & Infrastructure Financial Flexibility VALUE CREATION Strong Balance Industry Leading Low Sheet Cost Gas Supply Hedging & Market Diversification 4

RETURN ON AVERAGE CAPITAL EMPLOYED COMPARISON 5-YEAR AVERAGE (2013 TO 2017 ESTIMATE) Advantage Montney Development 5.6% Before tax 7.9% Peers Average 1.4% Comparative data is shown on an after-tax basis. Cdn Large Caps Average 5.2% Advantage was not taxable in the last 5 years and is not Cdn Small/Mid Caps Average 0.8% expected to be taxable for the next 5 years or more due Cdn Yields Average 3.5% to its significant tax pools. US Large Caps Average 3.9% US Small/Mid Caps Average 3.9% Notes: 1. Advantage return on average capital employed (ROACE) is calculated by Management for the development of Glacier, Valhalla, Progress and Wembley since inception (legacy property disposition impacts have been excluded). 2. Comparative data is based on Macquarie Research September 11, 2017 and Peers Average includes ARX, BIR, BNP, CR, KEL, NVA, PEY, POU and VII. 3. ROACE as defined by Macquarie Research includes revenue and realized hedging gains/losses less royalty expense, operating expense, transportation expense, G&A expense, depreciation expense and income taxes (excludes unrealized hedging gains/losses and financing expense after taxes) divided by average capital employed. 5

2018 CASH FLOW FUNDED BUDGET FOCUSES ON LIQUIDS GROWTH & RETAINS FLEXIBLITY ($ million) $30 2018 Highlights (1) (2) $145 $175 to $200 Million Cash Flow & Positive Income 1.0 to 1.3x Year-end 2018 Total Debt/Cash Flow Glacier Valhalla, Wembley, Progress 260 MMcfe/d (43,330 Boe/d) Average Production 255 to 265 mmcfe/d Annual Range $175-$200 10% Annual Production Growth $175 50% Annual Liquids Production Growth Well $30 Million to Advance Liquids Development at Valhalla, Operations $80 Wembley and Progress Complete Glacier Gas Plant Expansion to 400 mmcf/d & 6,800 bbls/d of liquids extraction Plant & Value Add Facilities $85 $1.10/mcfe Total Cash Costs Including Transportation $11,400/boe/d All-In Capital Efficiency Other, $10 2018 Capital Estimate 2018 Cash Flow (1) Midpoint of 2018 Guidance Range. 6 (2) Based on an average AECO Cdn $1.75/mcf to $2.25/mcf ($1.66/GJ to $2.13/GJ) natural gas price for 2018 and Advantage’s current hedge positions

2018 BUDGET AT A GLANCE Liquids Production Capital Annual Average Production ($ million) (bbls/d) (mmcfe/d) 2,400 $240 10% 260 -27% 236 1,900 16% 50% 203 $175 32% $128 1,250 950 2016 2017E 2018E 2016 2017E 2018E 2018Exit 2016 2017E 2018E Total Debt to Trailing Cash ALL-IN Capital Efficiency Total Cash Costs (1)(2) Flow Sensitivity ($/boe/d) ($/Mcfe) 22% $15,000 -24% $11,400 $7,330 E E (3) 2016 2017E 2018E NOTES: (1) Transportation costs shown includes natural gas transportation for all years. Prior to November 2016, our financial reports included gas 7 transportation as a deduction to revenue. (2) Includes Dawn transportation costs effective November 2017 for direct sales to the Dawn, Ontario hub realizing higher revenue. (3) Capital Efficiency calculated using 28% per annum decline and includes all annual capital.

STRONG NATURAL GAS FIXED PRICE HEDGES $/Mcf Cdn 61% @ $3.18 % of estimated natural gas 5% @ 52% @ $3.11 production , net of royalties $4.42 1% @ $4.42 37% @ $3.21 56% @ 12% @ 51% @ $3.08 $3.67 $3.07 17% @ $2.89 25% @ 2% @ $2.99 15% @ $4.01 $2.71 2017 Q4 2018 Q1 2018 Calendar 2019 Calendar AECO Fixed Dawn Fixed Advantage has exposure to commodity price risk at various market hubs and has fixed prices at multiple markets. These prices represent average Cdn prices based on fixed price hedges secured to date converted at an average Fx of $0.78. 8

MARKET & REVENUE DIVERSIFICATION - 28% REVENUE EXPOSURE TO AECO PRICES IN 2018 “ADVANTAGE’S 2018 TOTAL REVENUE IS 28% EXPOSED TO AECO PRICES” 19% 28% 39% 11% 6% 17% AECO 15% 8% Henry Hub 11% 18% Liquids 53% 19% Dawn 40% Fixed Price 16% 2017 Q4 2018E 2019E Graph represents % of estimated revenue based on strip pricing at December 10, 2017. 9

SIGNIFICANT OPTIONALITY FOR 2018 AND BEYOND PROVIDED THROUGH OPERATIONAL FLEXIBILITY & LOW COSTS • 12 standing completed & 18 standing uncompleted wells (50% liquids rich Middle Montney) supports 2018 and beyond • Drilling plans in H2 2018 supports 2019 and can be revised as necessary • Future wells can target liquids rich or dry zones – pads already surveyed • Gas gathering network connects Valhalla to Glacier, expandable to Progress and Wembley • Gas sales lines connect to TCPL and Alliance (H2 2018) • Liquids currently trucked but can be connected to Pembina pipeline • Total Plant & Field operating costs of $0.27/mcfe($1.62/boe) • Expanding to 400 mmcf/d raw plant capacity Q2 2018 providing years of future growth • C3+ liquids capacity 6,800 bbls/d Q2 2018 with condensate stabilization • Plant is expandable beyond 400 mmcf/d on existing site 10

MAINTENANCE CAPITAL AND SURPLUS CASH FLOW SENSITIVITY ILLUSTRATIVE AT 280 MMCFE/D (Q4 2018) (NO HEDGING INCLUDED) 3 Year Cumulative Surplus $300 million $215 Million “Surplus Cash Flow Above $1.20/mcf ” Cash Surplus $100 million MAINTENANCE CASH FLOW per Year CAPITAL $115 Million Based on $115 average well million type curve (1) Based on top quartile $95 type well (2) million (3) 280 mmcfe/d Q4 AECO $1.20/Mcf Cash Flow at AECO $2.50/Mcf 2018 (1) Assumes 7.5 mmcf/d /7.5 Bcf for Upper/Lower Montney wells and 5.0 mmcf/d /5.0 Bcf for Middle Montney wells 11 Notes (2) Assumes 9 mmcf/d /9 Bcf for Upper/Lower Montney wells and 6 mmcf/d /6 Bcf for Middle Montney wells (3) Assumes Dawn at $3.30/mcf and a WTI price of $55 US/bbl.

ATTRACTIVE NETBACKS & RECYCLE RATIOS ARE ACHIEVABLE WITHOUT HEDGING AAV’s industry leading low costs generates a top tier profit margin “NO HEDGING INCLUDED” amongst dry or rich gas producers Illustrative Illustrative AECO Cdn AECO Cdn $7.00 50% Glacier Netbacks $1.75/mcf $2.25/mcf $6.00 40% Revenue (1) $2.53 $2.94 Royalties ($0.10) ($0.13) $5.00 30% Operating Costs ($0.27) ($0.27) Profit Margin [%] Transportation Costs (2) ($0.55) ($0.55) $4.00 20% $/mcfe $/Mcfe Operating Netback $1.61 $1.99 $3.00 10% G&A ($0.09) ($0.09) $2.00 0% Finance & other ($0.10) ($0.10) Cash Flow Netback $1.00 -10% $/mcfe $1.42 $1.80 $/Boe $8.52 $10.80 $0.00 -20% Recycle Ratio based 3.1x 3.9x AAV VII TET KEL NVA CR TOU BIR PPY PEY AAV on 3 Year Average 2P F&D @ $0.46/mcfe (3) 2016 PDP FD&A 2017E Cash Costs (Ex. Hedging) 2017E Gross Revenue ($/mcfe) Estimated Profit Margin (%) Source: TD Securities (August 23, 2017) (1) Includes Dawn revenue, Natural Gas & Liquids revenue and adjustments for heat value (realized price). 12 (2) Includes liquids transportation costs of $0.04/mcfe, AECO gas transportation costs of $0.29/mcfe and AECO to Dawn transportation costs of $1.10/mcfe. (3) 2P F&D includes Future Development Capital and is based on Sproule’s 2014, 2015 and 2016 year-end 2P reserves reports.

NATURAL GAS TRANSPORTATION SERVICE SECURED TCPL Transportation Service 363 mmcf/d as of April, • Increasing firm service secured to 2020 2020 • Ability to reduce future total service commitments through evergreen contract renewals 2017 2018 2019 2020 Alliance Pipeline Connection Proceeding Sales Gas Target Firm Contracted Service IT Service Estimate TCPL Alliance • New Alliance meter station planned Proceeding with Alliance meter station for 2018 connection for 2018 • Provides future access to U.S. Glacier gas Midwest markets plant TCPL Meter Station Alliance Meter Station 13

ONGOING VALUE CREATION FROM OUR HIGH QUALITY ASSETS THROUGH OPERATIONAL EXCELLENCE 14