Accelerating Condensate Development in the Heart of the Montney - PowerPoint PPT Presentation

“Accelerating Condensate Development in the Heart of the Montney While Retaining Capital Flexibility” Investor Presentation TSX: AAV March 2019

ADVANTAGE AT A GLANCE TSX 52-week trading range $1.80 - $4.80 Shares Outstanding (basic) 186 million Market Capitalization $0.4 billion Enterprise Value $0.7 billion 2018 Estimated Production (1) Advantage Montney Assets Total Production 41,651 boe/d Liquids Production 1,491 bbls/d Exit Liquids Production 1,974 bbls/d Progress 2019 Guidance (2) Glacier Valhalla Total Production 43,500 to 46,500 boe/d Liquids Production (100% Increase) 3,100 bbls/d Exit Liquids Production ~4,500 bbls/d Pipestone/ Wembley Notes: (1) 2018 operational and financial results are estimates only and have not been reviewed Advantage holds 131,840 net acres (206 net or audited by our independent auditor. sections) in the condensate-rich Montney (2) Forward-looking information. Refer to three year development plan (page 11) and Glacier/Pipestone fairway Advisory for material assumptions and risk factors. 2

2019-2021 DEVELOPMENT PLAN FURTHER STRENGTHENS BUSINESS MODEL Solid Today Solid Tomorrow Free Cash Generating Asset Reinvest to Diversify & Enhance Free Cash Generation Ultra-low Costs Maintain & Strengthen Netbacks Financial Strength & Flexibility Preserve & Enhance Investment Returns World Class Montney Resource Condensate/Light Oil & Natural Gas Capital Allocation Flexibility 3

2019-2021 DEVELOPMENT PLAN - INTERNALLY-FUNDED GROWTH (1) Condensate & Light Oil Focused 6 miles • Drill 96 Montney wells: Progress – 42 Pipestone/Wembley – 14 Valhalla – 36 Glacier Glacier – 4 Progress ‘The Foundation’ • Utilize 3 rd party gas processing for Valhalla initial Pipestone/Wembley development Glacier/Pipestone • Utilize spare processing capacity at Liquids Development Glacier gas plant for growth at Valhalla, Glacier, Progress & 3 rd party ‘The Next Phase’ Pipestone/ Wembley processing income • Build liquids handling hub at Pipestone/Wembley Notes: (1) Forward-looking information. Refer to three year development plan (page 11) and Advisory for material assumptions and risk factors. 4

OPERATIONS OVERVIEW – SHIFTING TO MIDDLE MONTNEY LIQUIDS Deep Liquids-Rich Inventory (1)(2)(3) Booked Undeveloped Unbooked Upside Progress TOTAL future location inventory Glacier ~1,200 to 1,400 590 Valhalla 61 215 188 11 129 Pipestone/ <25 bbls/mmcf 25-100 bbls/mmcf >100 bbls/mmcf Wembley • Total of ~206 net sections (131,840 net acres) • Middle Montney is liquids-rich throughout (25 to 280 bbls/mmcf) • Only 65 liquids-rich wells drilled to date – 5% of inventory Liquids-rich Middle Montney • 100% Ownership of Glacier gas plant • 400 mmcf/d capacity, 6,800 bbls/d liquids handling (1) Management Estimates. Refer to Advisory. (2) Based on Sproule December 31, 2018 Reserves Report. 5 (3) C 3 + shallow cut recoveries.

PIPESTONE/WEMBLEY – LIQUIDS RICH DEVELOPMENT • The premium condensate play in Canada Pipestone • 31 net sections BBI • CNQ Recent M&A land values exceeding $4.5 million per section ECA • 42 wells planned from 2019 to 2021 (4) Kelt • Inventory of >200 wells in primary development zones (4) Half-cycle Economics (1)(2) AAV 1,312 boe/d (AECO Cdn $2.00/mcf & $US 60/bbl WTI) 62% liquids Breakeven (3) Rate of Return % Payout Years 160% - 200% 0.8 – 1.0 <$1.00/mcf Average Initial Average over 1- Area Well Production Year Production TOTAL EUR Performance (boe/d) (boe/d) (boe) Oil 581 303 361,000 Blackbird Gas 409 260 384,000 Energy NGL 160 101 150,000 Total 1,150 664 895,000 Liquid Yield 300 260 225 Pipestone Oil Corp Bbls/mmcf (1) Management estimates. (2) Rate of Return is the percentage return earned on the capital invested in a well during the well’s producing life assuming initial capital of $5.3 million per well DCE+T (drilling, completion, equipping and tie-in) with natural gas and NGL prices and costs escalated at 1.5% annually. (3) Breakeven based on NPV10 pre-tax equal to zero and calculated AECO Cdn price. (4) There are 11 proved and no probable undeveloped locations booked by our independent 6 reserve evaluator in this area. Refer to Appendix and Advisory.

VALHALLA LIQUIDS DEVELOPMENT ADVANCING • Industry results in Middle Montney have proven ultra-rich condensate on offsetting lands AAV Liquids • Advantage to target same interval Handling Hub Q1 2019 Competitor well • Extension of Wembley reservoir IP30 1,400 boe/d 68% liquids • 42 net sections • 200 well inventory and growing (4) 2 well pad • Pipeline connected to Advantage completion Upper Montney planned Glacier gas plant through new AAV Middle Montney 2 February 2019 Middle Montney 3 liquids hub Middle Montney 4 Lower Montney Half-cycle Economics (1)(2) (1) Management estimates. (AECO Cdn $2.00/mcf & $US 60/bbl WTI) (2) Rate of Return is the percentage return earned on the capital invested in a well during the well’s producing life assuming initial capital of $4.8 million per well DCE+T (drilling, completion, Breakeven (3) equipping and tie-in) with natural gas and NGL prices and costs escalated at 1.5% annually. Rate of Return % Payout Years (AECO Cdn $) (3) Breakeven based on NPV10 pre-tax equal to zero and calculated AECO Cdn price. (4) There are 13 proved and 1 probable undeveloped locations booked by our independent reserve 40% - 90% 1.4 – 2.2 <$1.00/mcf evaluator in this area. All remaining locations are unbooked estimates by Management. Refer to Appendix and Advisory. 7

LIQUIDS-RICH MIDDLE MONTNEY AT GLACIER STEPPING UP • Early development was in Upper and Lower Montney Only 41 Middle Montney drills • Recent focus on Middle Montney, where liquids to date range from 25-80 bbls/mmcf • 90 net sections • 750 well inventory (4) , including 480 liquids-rich • Low costs = high netbacks • IP30 well liquids rates up to 400 bbls/d Half-cycle Economics (1)(2) (AECO Cdn $2.00/mcf & $US 60/bbl WTI) Breakeven (3) Rate of Return % Payout Years (AECO Cdn $) 40% - 90% 1.4 – 2.2 <$1.00/mcf Upper Montney Middle Montney 2 (1) Management estimates. Middle Montney 3 (2) Rate of Return is the percentage return earned on the capital invested in a well during the well’s Middle Montney 4 producing life assuming initial capital of $4.8 million per well DCE+T (drilling, completion, Lower Montney equipping and tie-in) with natural gas and NGL prices and costs escalated at 1.5% annually. (3) Breakeven based on NPV10 pre-tax equal to zero and calculated AECO Cdn price. (4) There are 303 proved and 28 probable undeveloped locations booked by our independent reserve evaluator in this area. All remaining locations are unbooked estimates by Management. Refer to Appendix and Advisory. 8

STRATEGIC INFRASTRUCTURE CONTROL, FLEXIBLE PIPELINE ACCESS 100% Owned Glacier Gas Plant – 400 mmcf/d Raw Gas + 6,800 bbls/d C3+ Liquids Extraction Advantage Gas Alliance Sales Plant Gas Line Liquids Handling Hub Pembina NGL Line NGTL Sales Gas Mainline Keyera Pipestone Plant (2021) Company Land Company Gas Plant TransCanada Pipeline Pembina Pipeline Advantage Pipeline Tidewater Pipestone Alliance Pipeline Plant (2019) • Growth beyond 400 mmcf/d can be accommodated on existing plant site • NGTL Natural Gas Firm Transportation Service in-place • Several new gas plants underway in Pipestone/Wembley area – competitive options available 3 rd Party processing capacity in H2 2019 to match Pipestone/Wembley growth profile • • Advantage’s Wembley to Glacier planned pipeline routing work continuing 9

REVENUE & MARKET DIVERSIFICATION, HEDGING AND TRANSPORTATION (1) Current Hedging Transactions (MMcf/d) Revenue Diversification 140 60% $2.87 $3.45 120 50% $2.87 22% 100 40% $3.01 Liquids $2.93 48% 80 $2.75 8% 58% $2.87 30% 60 $2.75 13% Midwest US 20% 40 10% 20 15% $3.09 $2.34 $1.72 $2.84 $2.83 $1.84 $1.84 $2.07 Dawn 37% - 0% 14% Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 17% AECO ($Cdn/Mcf) Dawn ($US/Mmbtu) % of Production Hedged Fixed Price 13% Hedging Strategy 20% 20% • Actively hedge future commodity prices to ensure 15% AECO cash expectations and preserve development project economics 2019E 2020E 2021E Transportation Market Diversification Benefits • Sufficient current and future transportation capacity • Diversifies Advantage’s sales portfolio available to meet requirements of 2019-2021 • Enhances commercial terms to optimize netbacks & development plan increases commercial flexibility • Actively manage contracted transportation capacity to minimize unutilized demand charges 10 Notes: (1) Forward-looking information. Refer to three year development plan (page 11) and Advisory for material assumptions and risk factors.