Montney Liquids-Rich Growth Story Corporate Presentation Private - PowerPoint PPT Presentation

Montney Liquids-Rich Growth Story Corporate Presentation Private and Confidential March 2019 Saguaro Resources | Private and Confidential | March 2019 1

Track Record of Success Sets Stage for Material Long-Term Value Creation (1) Growth Potential Attractive Economics Proven Track Record  Privately-held pure play NE BC  Economics at low gas prices  Capital efficient execution led by Montney producer supported by strong liquids volumes experienced management team  100% working interest in a large,  High value condensate consistently  Estimated Q4 2018 production of contiguous land position exceeds 70% of liquids volumes 14,756 Boe/d (3)  1,200+ drilling locations on de-  Shallow drilling depths reduce  Grew production >2.5x since the risked land base capital costs and improve economics start of 2016 (3)(4)  66 wells drilled with 62 onstream (2)  Competitive cost structure  88% ~4 year 2P reserves CAGR (5)  Full development plan is executable  Low royalty structure with attractive with cash flow and reasonable  Industry leading inception-to-date royalty credits leverage 2P FD&A costs of $6.03 per Boe (6)  Remain flexible to evolving market  Manage production growth to align conditions with risk management program  Significant opportunities for future growth in Canadian natural gas demand 1. See advisories and definitions on pages 31 and 32 hereof. 2. As at December 31, 2018. 3. Q4 2018 production based on field estimates (unaudited). 4. Growth calculated on production since Q1 2016. 5. 2P = Total Proved Plus Probable Reserves; 2P Reserves CAGR calculated on volumes from December 31, 2014 to December 31, 2018. 6. Inception to December 31, 2018. Saguaro Resources | Private and Confidential | March 2019 2

Growth Potential Saguaro Resources | Private and Confidential | March 2019 3

Full Development Plan Provides Material and Sustainable Organic Growth (1)(2) 160,000 140,000  Strategically advancing a low-risk development play  2013: initiated pilot program 120,000  2015: commercial development began Annualized Production (Boe/d)  2017: exit production of >16,600 Boe/d 100,000  Peak production held flat at ~150,000 Boe/d for over 10 years  Top priority remains value creation for shareholders 80,000  Focus on capital efficiency and profitability Full Development Plan (3) 60,000 Capital ($B) $7.4 IRR (BT %) 31% 40,000 Net PIR0 (x) 2.9 Net PIR10 (x) 0.8 20,000 NPV0 (BT $B) $19.9 NPV10 (BT $B) $1.9 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Gas Condensate & Other Liquids 1. See advisories and definitions on pages 31 and 32 hereof. 2. Full development plan (“FDP”) is based on a 1,200 well development program which develops ~89% of Saguaro’s existing land base. Assumes 2,500 m HZ wells and a 7 Bcf type curve. FDP is based on 2018 YTD results and will continue to be updated throughout the delineation phase. Any changes to the assumptions used in the FDP will impact the metrics and results including amount of equity raised. 3. FDP capital includes all development capital (inclusive from 2013; undiscounted), excluding land. Economic metrics for FDP based on -$0.30/GJ Station 2 differential; $1.50/GJ AECO, US$65/Bbl WTI, and 0.78 USD/CAD FX in 2018; $1.50/GJ AECO, US$65/Bbl WTI, and 0.75 USD/CAD FX in 2019; $2.00/GJ AECO, US$60/Bbl WTI, and $0.75 USD/CAD FX in 2020; $2.00/GJ AECO, US$55/Bbl WTI, and 0.75 USD/CAD FX in 2021; then escalated at 1.5% thereafter. Natural Gas Liquids pricing relative to WTI based on average of IQRE pricing. Economic metrics are based on go forward assumptions. IRR does not include land costs and undeveloped land value. Saguaro Resources | Private and Confidential | March 2019 4

High Quality Asset in One of North America’s Leading Oil & Gas Plays (1)  The Montney is a large, world class oil and gas play with leading supply costs and economics  Saguaro has acquired a large strategic land position in the NE BC Montney  100% working interest in 165 contiguous sections (114,094 acres)  Liquids-rich stacked potential  Over-pressured with good permeability  Shallow depth (1,400-1,900 m) reduces cost and improves economics  Scale and quality of land base supports impressive growth and capital efficiencies with a drilling inventory of 1,200+ locations  Access to multiple markets through existing and future egress options  Existing and expanding access to AECO, Dawn, Station 2, Chicago, and Sumas hubs  TCPL North Montney Mainline project (in-service ~2019)  Enbridge T-South expansion (in-service ~2020) 19 miles 1. See advisories on pages 31 and 32 hereof. Saguaro Resources | Private and Confidential | March 2019 5

Sproule’s Assessment of Saguaro’s Reserves and Risked Resource Base (1)(2)(3) 14 MMBoe Produced 1P: 152 MMBoe 2P: 420 MMBoe 3P: 703 MMBoe  (22% liquids) (22% liquids) (22% liquids) 1P HZ Well Count: 187 2P HZ Well Count: 363 3P HZ Well Count: 467 152 MMBoe 420 MMBoe 703 MMBoe 1P Reserves 2P Reserves 3P Reserves Best Estimate Contingent Resource of 345 MMBoe (23% liquids) (4)  262 MMBoe 345 MMBoe 449 MMBoe Additional 319 locations (Best Estimate Risked)  Low Estimate Best Estimate High Estimate Risked Contingent Risked Contingent Risked Contingent  Best Estimate Prospective Resource of 372 MMBoe (24% liquids) (5) 280 MMBoe 372 MMBoe 489 MMBoe Additional 387 locations (Best Estimate Risked)  Low Estimate Best Estimate High Estimate Risked Prospective Risked Prospective Risked Prospective 1. See advisories and definitions on pages 31 and 32 hereof. 2. Produced volumes as at October 31, 2018. Based on Sproule Reserves Evaluations dated effective December 31, 2018 and Evaluation of the Contingent and Prospective P&NG Resources prepared by Sproule Associates Limited dated October 31, 2017 pursuant to National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) and the Canadian Oil and Gas Evaluation Handbooks (“COGE Handbook”); Reserves Evaluation based on Sproule Pricing as of December 31, 2018 and Evaluation of the Contingent and Prospective P&NG Resources based on Sproule Pricing as of September 30, 2017. Certain inputs and parameters used in the Sproule reserves and resource evaluations differ due to the effective dates of the respective reports. These differences could be material to the net present values, but would not be expected to be material to the volume estimates. For reference: 1P = Total Proved Reserves; 2P = Total Proved Plus Probable Reserves; 3P = Total Proved Plus Probable Plus Possible Reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. 3. All figures include Montney production, reserves, and resources only; excludes Coplin / Charlie Lake / other conventional production, reserves, and resources. 4. Contingent resources are classified as development pending, subject to evaluation drilling, corporate commitment and development timing contingencies, and the chance of development and therefore chance of commerciality has been estimated to be 90%. 5. Prospective resources are undiscovered volumes with an estimated chance of discovery of 95% and a chance of development of 90%, resulting in an aggregated 85% chance of commerciality. Saguaro Resources | Private and Confidential | March 2019 6

Stacked Zone Exploitation Multiplies Productive Potential (1)(2)  All three Montney targets proven productive  Over pressured: 11-15 kPa/m  Shallow depth: 1,400-1,900 m  Gross pay: ~260 m across 3 stacked porous zones  Development plan focuses on Upper and Middle targets  66 wells drilled to date (3) :  19 Upper Target  43 Middle Target  4 Lower Target 1,600 m 1. See advisories on pages 31 and 32 hereof. 2. Porosity from Nutech Petrophysical analysis. 3% porosity cut off. 3. As at January 3, 2018. Saguaro Resources | Private and Confidential | March 2019 7

Successful De-Risking & Delineation Drives Reserve Growth (1) De-Risking & Delineation (2) Reserve Bookings (3)  High confidence in our resource which is 98% de-risked through  High quality asset has allowed impressive, consistent reserve drilling and competitor activity growth to date and provides large future growth potential  2P Reserves represent ~27% of Saguaro’s estimated well inventory Upper Target 14-I 81-G 78-C 76-D 34-H Middle Target 14-I 81-G 54-H 78-C 76-D 34-H Lower Target 14-I 81-G 34-H 76-D Proved Probable 5 miles 1. See advisories on pages 31 and 32 hereof. 2. Wells drilled as at December 31, 2018. 3. Illustration based on Sproule’s reserves evaluation dated December 31, 2018. Saguaro Resources | Private and Confidential | March 2019 8