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

Montney Liquids-Rich Growth Story Corporate Presentation Private and Confidential December 2019 Saguaro Resources | Private and Confidential | December 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  Q3 2019 production of 17,242 Boe/d contiguous land position, associated exceeds 70% of liquids volumes gathering system, and facility  Grew production 3.0x since the start  Shallow drilling depths reduce  1,400+ drilling locations on de- of 2016 (3) capital costs and improve economics risked land base  88% ~4 year 2P reserves CAGR (4)  Competitive cost structure  75 wells drilled with 74 onstream (2)  Industry leading inception-to-date  Low royalty structure with attractive  Adequate liquidity to execute near- 2P FD&A costs of $6.03 per Boe (5) royalty credits term development program  Manage production growth to align  Remain flexible to evolving market with risk management program conditions  Significant opportunities for future  Capital budget driven by expected growth in Canadian natural gas cash flows demand 1. See advisories and definitions on pages 33 and 34 hereof. 2. As at November 30, 2019. 3. Growth calculated on production since Q1 2016. 4. 2P = Total Proved Plus Probable Reserves; 2P Reserves CAGR calculated on volumes from December 31, 2014 to December 31, 2018. 5. Inception to December 31, 2018. Saguaro Resources | Private and Confidential | December 2019 2

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

Full Development Plan Provides Material and Sustainable Organic Growth (1)(2) 250,000  Strategically advancing a low-risk development play  2013: initiated pilot program 200,000  2015: commercial development began  2018: average annual production of 16,485 Boe/d Annualized Production (Boe/d)  2019: updated full development plan to 8 Bcf type curve 150,000  Peak production held flat at ~215,000 Boe/d for 10 years  Top priority remains value creation for shareholders  Focus on capital efficiency and profitability Full Development Plan (3) 100,000 Capital ($B) $8.6 IRR (BT %) 49% Net PIR0 (x) 2.4 50,000 Net PIR10 (x) 1.1 NPV0 (BT $B) $19.0 NPV10 (BT $B) $2.9 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Gas Condensate & Other Liquids 1. See advisories and definitions on pages 33 and 34 hereof. 2. Full development plan (“FDP”) is based on a 1,400 well development program which develops ~98% of Saguaro’s existing land base. Assumes 2,500 m HZ wells and an 8 Bcf type curve. FDP is based on 2019 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 -$0.20/GJ Station 2 differential and 0.75 U$/C$ FX; $1.75/GJ AECO and US$55/Bbl WTI in 2019 and 2020; $2.00/GJ AECO and US$55/Bbl WTI 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 | December 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 1,400+ locations  Access to multiple markets through existing and future egress options  Existing and expanding access to AECO, Dawn, Station 2, Chicago, and Sumas hubs  TC Energy North Montney Mainline project (in-service first half 2020)  Enbridge T-South expansion (in-service ~2021) 19 miles 1. See advisories on pages 33 and 34 hereof. Saguaro Resources | Private and Confidential | December 2019 5

Sproule’s Assessment of Saguaro’s Reserves and Risked Resource Base (1)(2)(3) 15 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 33 and 34 hereof. 2. Produced volumes as at December 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 | December 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: up to 265 m across 3 stacked porous zones  Development plan focuses on Upper and Middle targets  75 wells drilled to date (3) :  26 Upper Target  45 Middle Target  4 Lower Target 1,600 m 1. See advisories on pages 33 and 34 hereof. 2. Porosity from Nutech Petrophysical analysis. 3% porosity cut off. 3. As at November 30, 2019. Saguaro Resources | Private and Confidential | December 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 ~25% of Saguaro’s estimated well inventory Upper Target 14-I 14-I 81-G 81-G 78-C 78-C 34-H 34-H 76-D 76-D Middle Target 14-I 14-I 56-E 81-G 81-G 54-H 54-H 78-C 78-C 76-D 34-H 34-H Lower Target 14-I 81-G 34-H 76-D Proved Probable 5 miles 1. See advisories on pages 33 and 34 hereof. 2. Wells drilled as at November 30, 2019. 3. Illustration based on Sproule’s reserves evaluation dated March 31, 2019. Saguaro Resources | Private and Confidential | December 2019 8