Eagle Energy Trust VISION • GROWTH • INCOME Investor Presentation February 2015
Disclaimers Disclaimer Regarding Forward Looking Statements: This presentation includes statements that contain forward looking information (“forward-looking statements”) in respect of Eagle Energy Trust’s expectations regarding its future operations, including Eagle’s investment and business strategy, and management’s estimates for Eagle’s capital budget, production, drilling plans operating costs, funds flow from operations, commodity split, debt to trailing cashflow, basic and corporate payout ratios, annual distribution, tax pools, estimated field netback, free cashflow, hedging and capital efficiency in 2015. These forward looking statements involve estimates and assumptions including those relating to timing to drill and bring wells on production, production rates, operating and capital costs, marketability of crude oil, natural gas and natural gas liquids, future commodity prices, future currency exchange rates, anticipated cash flow based on estimated production, size of reserves and reservoir performance, among other things. These estimates and assumptions necessarily involve known and unknown risks, delays, challenges and other uncertainties inherent in the oil and gas industry including those relating to geology, production, drilling, technology, operations, human error, mechanical failures, transportation, processing problems and poor reservoir performance, among others things, as well as the business risks discussed in the Trust’s annual information form dated March 20, 2014 under the headings “Risk Factors” and “Advisory-Forward-Looking Statements and Risk Factors”. The forward-looking statements included in this presentation should not be unduly relied upon. Actual results may differ from the forward-looking information in this presentation, and the difference may be material and adverse to the Trust and its unitholders. No assurance is given that the Trust’s expectations or assumptions will prove to be correct. Accordingly, all such statements are qualified in their entirety by reference to, and are accompanied by, the information and factors discussed throughout this presentation. These statements speak only as of the date of this presentation and may not be appropriate for other purposes. Eagle’s annual information form dated March 20, 2014 contains important detailed information about Eagle and its trust units. Copies of the annual information form may be viewed at www.sedar.com and on Eagle’s website. Disclaimer Regarding Oil and Gas Measures: This presentation contains disclosure expressed as barrel of oil equivalency (“boe”) or boe per day (“boe/d”). All oil and natural gas equivalency volumes have been derived using the conversion ratio of 6 Mcf of natural gas: 1bbl of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value. Disclaimer Regarding Non-IFRS financial measures: Statements throughout this presentation make reference to the terms “funds flow from operations”, “basic payout ratio”, “corporate payout ratio”, and “field netbacks” which are non-IFRS financial measures that do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Investors should be cautioned that these measures should not be construed as an alternative to net income calculated in accordance with IFRS. Management believes that “funds flow from operations”, “basic payout ratio”, “corporate payout ratio” and “field netbacks” provide useful information to investors and management since these terms reflect the quality of production, the level of profitability, the ability to drive growth through the funding of future capital expenditures and the sustainability of distributions to unitholders. Funds flow from operations is calculated before changes in non-cash working capital. Field netback is calculated by subtracting royalties and operating expenses from revenue. 2
Mission Statement VISION We strive to create wealth for investors by combining innovation, expertise and opportunity GROWTH We will maintain a sustainable payout ratio which provides for moderate growth INCOME We strive to deliver predictable monthly distributions 3
Corporate Profile Current Estimated Working Interest Production: 3,050 boe/d Production Guidance – Full Year 2015 : 2,950 – 3,150 boe/d Production Split: 97% light oil 1.2 times (1) 2015 Ending Debt to Trailing Cashflow: 88% (1) 2015 Corporate Payout Ratio: Annualized Distribution: $0.36 per unit US Tax Pools: approx. $US 166 million Cdn Tax Pools: approx. $CA 100 million 1. At $US 60.00 WTI and foreign exchange rate of $US 1.00 equal to $CA 1.25. 4
Market Data TSX: EGL.UN Ticker Symbol: Units Outstanding (basic): 35.1 million 52 Week Range: $1.58 - $8.38 Recent price (Feb 9/15 close): $2.05 Average daily trading volume (30 day): 115,191 units Market Cap (Feb 9/15): $72 million Directors’ & Officers’ Ownership: 2.8% basic, 10.4% fully diluted Equity Research: Scotia Acumen TD NBF 5
Recent Events • In December 2014, Eagle acquired Dixonville properties in Alberta for $100 million • 50% non-operated working interest Waterflood producing ~1,250 bbl/d of 30 ◦ • API oil • Eagle continues to own and operate oil properties producing ~1,800 boe/d in Caldwell and Hardeman County, Texas and Jackson County, Oklahoma • Eagle sold its Texas Permian asset in August 2014 for $US 140 million 6
Eagle Exercises Fiscal Prudence and Discipline • In December 2014 • Eagle reduced its annual distribution to $0.03 per unit per month ($0.36 per unit annualized) due to the rapid decline in commodity prices • Eagle announced a 2015 capital budget 54% below 2014 levels • Made possible by the sale of its capital intensive Permian property and low maintenance capital requirements of Dixonville • Swapping Permian for Dixonville saw Eagle drop its corporate decline rate to 18% from 33% • In February 2015 • Eagle trimmed its 2015 capital budget, while maintaining distribution, production and cash flow guidance • Eagle announced an expanded credit facility of $US 95 million 7
Permian for Dixonville – Our Vision in Action • Innovation, expertise and opportunity: • The first energy trust to re-enter Canada • Sold Permian at height of market in August 2014 • Took advantage of the downturn in the market to acquire Dixonville – a premier long life Canadian asset Sold Permian Bought Dixonville Net to Eagle Property (1) Property (2) Sale / Purchase $US 140 MM $CA 100 MM + $CA 50 MM Price Average Annual 1,000 boe/d 1,250 boe/d + 250 bo/pd Estimated WI (2014) (2015) p.a. Production Free cashflow 3 $US 4 MM $CA 10.6 MM + $CA 6.6 MM Notes: 1. Based on January to June 2014 annualized field netback. 2. Based on estimated 2015 field netback at $US 60.00 WTI. 3. “Free cashflow” is defined as cashflow from the property less capital expenditures. 8
CDN Properties – Dixonville Property (Alberta) 60 km from Peace River • 50% non-operated working interest in a horizontal oil waterflood in the Montney Formation currently operated by Spyglass Resources Corp. • 1,250 boe/d WI to Eagle (99% oil) • Primary development started in 2004 with full scale waterflood by 2012 • 190 horizontal wells (110 Producers, 80 Injectors) 30 ◦ API Oil, 18 mD permeability and 16-26% average porosity • 9
CDN Properties – Dixonville Property (Alberta) • Premier Waterflood in Western Canada • Low decline, high netbacks • Production aspects Current • Decline rate sub 10% field • Currently producing > 2,500 boe/d production (1,250 boe/d net to Eagle) • New gathering system • Refurbished and optimized gathering system • Reserve Life Index • Total Proved 15 years • Total Proved Plus Probable 22 years • Capex and operating costs • Low maintenance capital of less than $1 million per year to Eagle • Operating costs of $16 to $18/boe Source: IHS public data 10
US Properties – Salt Flat Property (Texas) • Current production ~1,350 bbl/d o API) from the Edwards • Producing light oil (35 limestone formation, located in the Salt Flat field in Caldwell County, South Central Texas • Salt Flat field discovered in late 1920’s and abandoned in 1960’s with a total recovery factor of less than 30%. Eagle acquired its 80% working interest in 2011 • Eagle is redeveloping the pool using new low cost horizontal well drilling technology to capture additional oil: • Eagle has drilled 57 horizontal wells • Completed numerous successful production enhancing and operating cost reduction capital projects • Shot additional seismic • Eagle continues to identify additional locations and optimizations to capture additional recovery from this legacy oil pool 11
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