Oil-Weighted Stability May 2019 Corporate Presentation About - PowerPoint PPT Presentation

Oil-Weighted Stability May 2019 Corporate Presentation

About PRAIRIE PROVIDENT • Oil and liquids-focused Alberta E&P with three core areas (Michichi/Wayne, Princess & Evi) which offer significant torque to oil prices • Production weighted 70% to oil & liquids (94% light & medium oil) with low ~16% base decline (1) • >90% working interests and >98% operatorship allows control over pace of development • 2019 capital budget of $14.2MM (excl. ARO) will underspend forecast adjusted funds flow (2) by ~$4MM • Competition for capital allocation enhances capital efficiencies and IRRs >100 gross proved drilling locations (2) that can generate compelling expected returns at current • strip prices gives ability to increase / decrease development as prices fluctuate • Supportive lenders and rolling three-year hedging program support capital expenditures and allow conservative management of production, reserves and cash flow • Year end 2018 estimated NAV of $0.43/share on PDP, $1.16/share on 1P and $2.29/share on 2P (3) ; current share price of $0.14 = 33% of PDP NAV (1) Excluding three higher decline Princess wells to be drilled in 2019; 22% including the anticipated impact of the Princess wells (2) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 23. (3) Based on year end 2018 independent reserves evaluation of NPV10 BT after accounting for estimated long-term debt, less cash collateralized letters of credit, divided by basic shares outstanding. See Reserves Data Disclosure Advisories on slide 25. 2

PPR’S FOCUSED STRATEGY • Development of conventional oil and liquids plays across core Michichi/Wayne, Princess and Evi areas that offer compelling economics • Maintain capital spending levels to approximate adjusted funds flow (1) ; remain flexible to quickly respond to increases or decreases in commodity prices • Pursue accretive business combinations to add scale, improve efficiencies and increase cash flows to drive growth; management has track record of successful acquisitions completed to date • Remain committed to protecting and strengthening the balance sheet through capital expenditure discipline and a robust hedging program (1) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 23. 3

PPR STRATEGIC HIGHLIGHTS • Increased size, scale and self-funded growth potential affords PPR Snap Shot (1) opportunity to command increased market awareness • 6,300 boe/d Financial metrics improve as cash inflows expected to be Production (2) balanced with cash outflows in 2019 (70% liquids) • 2019 capital expenditures (excl. ARO) forecast at $14.2MM, Base production decline (3) ~16% with $12.3MM directed to development capital P+P reserves (Mboe) (4) 33,836 • Synergies & operational efficiencies captured with declining operating costs Net debt (5) $118 million 2019 G&A projected at $3.60 – $3.80 / boe, a 15% reduction • over 2018 Enterprise value (6) $142 million • Improved capital investment efficiency with low annual production decline rate Outstanding shares 171 million 1) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 23 2) April 2019 production 3) Excluding three higher decline Princess wells to be drilled in 2019; 22% including the impact of the Princess wells 4) Based on year end 2018 independent reserves evaluation, results of which were announced January 31, 2019. See Reserves Data Disclosure Advisories on slide 25 5) Net debt at March 31, 2019 (based on unaudited financial information) 6) Enterprise value is calculated above by adding net debt and equity value, based on a share price of $0.13/share 4

PPR YTD 2019 HIGHLIGHTS • Recorded operating netback of $8.5MM in Q1/19, a 676% increase from Q4/18 as Canadian crude oil prices rebounded • Q1/19 production averaged 5,962 boe/d, up 29% from Q1 2018, despite 400 boe/d of offline production due to extreme cold weather • Strengthening of oil prices improves the economics across our plays and free cash flows for the year • Careful revaluation of the Michichi play brings forth new development concepts that are expected to improve drilling economics • Re-confirmed our senior revolver borrowing base, providing financial stability and flexibility to execute our capital program • Eliminated $17.3 million of capital commitments, enhancing flexibility in future capital deployment • Secured additional 21 sections (13,440 acres) of lands in the Princess area, further strengthening our foothold in the Lithic Glauconite prospects 5

2018 RESERVES HIGHLIGHTS Reserves per Basic Share (1)(3)(4) Value Volumes (Btax) +25% Conventional 0.22 ‘16 - ’18 Natural Gas (2) Conventional 2016 0.20 Light & (other than Natural Gas Natural Gas Barrels of Oil 2017 Medium Oil Heavy Oil Solution Gas) (Solution Gas) Liquids Equivalent (4) NPV10 +15% 0.18 2018 Reserves Category (1)(4)(5) (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mboe) ($MM) ‘16 - ’18 0.16 Proved developed producing 6,924 313 9,208 11,025 338 10,946 174.8 0.14 Proved developed 0.12 non-producing 359 9 488 10 3 453 9.3 0.10 0.08 Proved undeveloped 7,803 124 0 15,953 374 10,960 117.3 0.06 Total proved 15,085 446 9,696 26,988 714 22,360 301.4 0.04 0.02 Probable 7,413 552 3,234 15,806 365 11,504 193.6 0.00 1P 2P Total proved plus probable 22,498 998 12,930 42,795 1,080 33,863 495.0 STEADILY INCREASING Based on Sproule’s forecast prices and costs, applicable for the effective date of the independent reserves (1) RESERVES PER SHARE evaluation report. Forecast commodity prices can be found at www.Sproule.com (2) Including both non-associated gas and associated gas but excluding solution gas (gas dissolved in crude oil) Through strategic M&A and successful (3) Per share numbers based on basic shares outstanding at December 31 (4) See Reserves Data Disclosure Advisories on slide 25 drilling programs within challenging (5) Columns may not add due to rounding environments through 2017 & 2018 6

MANAGEMENT TEAM AND BOARD Management Board of Directors Tim S. Granger , President & CEO Patrick R. McDonald , Chairman CEO at Molopo Energy Limited, President and CEO at Compton Petroleum Corporation, COO at Paramount Energy, Managing Director at TAQA North, COO at PrimeWest Energy Derek Petrie Mimi M. Lai, VP Finance and CFO Vice President, Finance & Controller, Manager Financial Reporting at Harvest William Roach Operations Corp., Sr. Manager at Ernst & Young LLP Brad Likuski, VP Operations Ajay Sabherwal Manager of Exploitation, Vice President Production at Spyglass Resources Corp., Vice President Engineering at AvenEx Energy Corp. Rob Wonnacott Tony van Winkoop, VP Exploration President and CEO at Arsenal Energy Inc., General Manager of Development at PrimeWest Energy, Co-founder of Venator Petroleum Terence (Tad) Flynn Gjoa Taylor, VP Land Vice President, Land at Arsenal Energy Inc., various land positions of increasing responsibility with Imperial Oil, Crestar Energy, and Manager, Negotiations Tim Granger (President & CEO) at PrimeWest Energy 7

CURRENT ASSET OVERVIEW KEY FOCUS AREAS EVI ~2,000 boe/d Michichi/Wayne 33.9 MMboe Lower cretaceous oil/gas Proved + Probable Reserves (1) Year round access Hz development 699,100 Princess PPR Total Net Acres Multi-zone potential MICHICHI/ Lithic Glauc & Detrital WAYNE Hz and Vt development ~2,700 boe/d $495 MM Evi Proved + Probable NPV10 Value (1) Other Slave Point light oil – low risk ~400 boe/d PRINCESS (1) See Reserves Data Disclosure Advisories on slide 25 Granite Wash light oil play ~1,200 boe/d Emerging waterflood; initial reserves booked ALBERTA 8

PRINCESS 13-26-020-11W4 2019 Drill IP30 800 boe/d Offers Robust Economics Current production: 1,200 boe/d of medium gravity oil • Revenue/boe (1) $41.75 • Opex/boe (2) $10.05 • Royalty/boe (1) $6.95 • Operating Netbacks (3) $24.30/boe 2018 activity: Newly acquired • Drilled and tied in 5 wells adding >2MMboe of P+P reserves acreage 2019 planned activity: • Drill, complete and tie-in 2 wells 14-12-019-11W4 IP30 625 boe/d 2019 Drill Emerging Ellerslie potential on PPR’s acreage: • Competitors on offsetting land have drilled wells with IP30 rates ~200 to 300 bbls/d 2018 Drill Locations (1) Based on Q1 operating results 2019 Drill Locations (2) Based on normalized Q1 operating results 9 (3) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 23

EVI AREA High value, low-decline Light oil play Current production: 2,000 boe/d • Revenue/boe (1) $59.57 • Opex/boe (2) $22.91 • 9-12-87-12 Royalty/boe (1) $4.07 IP30 80 boe/d • Operating Netbacks (3) $32.59/boe 2018 activity: 2-12-87-12 • 5km expansion of waterflood pipeline IP30 250 boe/d • Conversion of 3 wells to injectors • Brought 2 Granite Wash oil wells on production 2019 activity: 16-31-86-11 16-4-87-11 IP30 120 boe/d IP30 125 boe/d • Completed and tied-in 2 Slave Point wells in Q1; further advancing waterflood development (1) Based on Q1 operating results (2) Based on normalized Q1 operating results 10 (3) See Oil and Gas Metrics and Non-IFRS Measures Advisories on slide 23

WATERFLOOD STRATEGY: SHALLOW THE DECLINE CURVE Primary Producers – 30% decline rate Added 363.5 mboe of P+P reserves in 2018 & 850 mboe over last 3 years Waterflood Producers – minor decline Existing PPR Waterflood 11