Jupiter Resources | 1 Jupiter Resources | 1 Corporate Presentation November 2019 The largest Canadian energy producer that nobody has heard of …
Why you should care Jupiter Resources | 2 • Canada’s 5 th largest gas-weighted producer • 2 nd largest Deep Basin pure play • Consistently drill some of Canada’s highest productivity gas wells • Scalable platform with deep inventory of low-risk resource • Targeting all-in corporate returns on capital investment > 20% JUPITER PROPERTIES WESTERN CANADA SEDIMENTARY BASIN DEEP BASIN FAIRWAY MAJOR GAS PIPELINES
Why we operate in the deep basin Jupiter Resources | 3 Technology matters High productivity wells - Leverage strong, integrated technical - Deeper, over-pressured reservoirs team to differentiate our results - Higher relative permeability - Employ risked innovation and challenge the status quo Large multi-zone Strong economic returns resource potential - Prolific natural gas wells supported - Multiple, high quality stacked targets by significant liquids content - Vast database from historical vertical - Low operating costs and good wells & existing 3D seismic infrastructure
Significant resource across ~350k net acres Jupiter Resources | 4 Over 6 Tcfe WOLF CREEK RED ROCK KAKWA RESTHAVEN of recoverable resource identified in proven PEMBINA MUSREAU horizontal target formations Deepcut 150 MMcf/d alone (Cardium, Dunvegan, Falher C, Falher F, Wilrich) PEMBINA JUPITER CUTBANK RESTHAVEN C5+ C5+ 40 MMcf/d 100 MMcf/d STRATIGRAPHIC LEGEND JUPITER KAKWA C5+ PEMBINA FUTURE HORIZONTAL TARGET FORMATION 60 MMcf/d RESTHAVEN Deepcut PROVEN HORIZONTAL TARGET FORMATION 160 MMcf/d TARGET FORMATION COMPANY LAND GAS PROCESSING PLANTS MAJOR GAS PIPELINES
Our diversified, high quality inventory* Jupiter Resources | 5 >6 TCFE total resource From proven formations PROVED 19% FALHER F 35% FALHER C 10% PROBABLE 14% WILRICH 27% OTHER 9% ADDITIONAL RESOURCE 67% DUNVEGAN E 12% CARDIUM 7% Creating value in everything we do Resource split by area 750 derisked future locations (net) FALHER C 10% FALHER F 35% WOLF CREEK 39% RESTHAVEN 21% OTHER 9% WILRICH 27% RED ROCK 8% KAKWA 32% CARDIUM 7% DUNVEGAN E 12% Total Resource includes remaining reserves from 79 wells drilled from 2014 – 2018; Other locations based on preliminary analysis of additional formations including Falher B & Notikewin *As at year-end 2018
Midstream capacity supports 20%+ growth Jupiter Resources | 6 Jupiter has sufficient capacity to support planned production growth 800 700 600 500 RAW GAS VOLUME (mmcf/d) 400 300 Shut-in production exposed to daily AECO pricing 200 100 0 JAN-15 JAN-16 JAN-17 JAN-18 JAN-19 JAN-20 JAN-21 JUPITER RESTHAVEN MUSREAU PROCESSING CAPACITY KAKWA NGTL (raw gas eq) CUTBANK RESTHAVEN
Securing market access Jupiter Resources | 7 Natural Gas transportation capacity secured through long term agreements ~ 575 MMcf/d firm sales gas transportation Additional future capacity: 2020: +122 MMcf/d Primarily exposed to AECO (NIT) pricing Very liquid market with growing Intra-AB demand 50,000 GJ/d optionality to Malin JUPITER MARKET EXPOSURE KEY MARKET POINTS MAJOR GAS PIPELINES
AECO supply/demand overview AECO supply/demand overview Jupiter Resources | 8 Western Canadian Major Gas Pipeline Network • The NGTL system (in blue) is the primary natural gas gathering network in Alberta and relies on TransCanada to balance supply and demand AB / BC / SK Net Production: ~14 Bcf/d Legend Regional Demand: ~5 Bcf/d Historically, TransCanada maintained supply / demand balance by • Westcoast System (ENB) Alliance (ENB/PPL) limiting gas receipts accepted onto NGTL NGTL System (TRP) Mainline (TRP) Other Pipelines In August 2017, TransCanada changed its approach and allowed • Export Routes unlimited gas receipts onto NGTL, flooding the market with gas, similar Station 2 to OPEC with oil in 2014 With NGTL reaching maximum utilization, intra-Alberta bottlenecks • TRP Mainline to Eastern Canada (Dawn, ON) / U.S. Montney & emerged, particularly at East Gate and West Gate, and gas was unable Duvernay Basins (Supply Growth) to leave the NGTL system as alternative channels away from Alberta AECO Empress Enbridge remained full 3.0 Bcf/d GTN System BC Pipeline to Malin, OR to Sumas, WA East Gate In anticipation of increased oil sands and LNG growth to the northeast • and west, TransCanada limited maintenance / expansion on the West Gate Sumas AECO/Empress corridor resulting in further bottlenecks emerging Northern Border Pipeline Alliance Pipeline to to Chicago, IL Chicago, IL Limitations on gas storage capacity and access further exacerbated • price volatility
Recapitalization transaction completed Jupiter Resources | 9 Recapitalization Summary New Board of Directors comprised of: Consolidated existing equity into 10 million Simon Bregazzi (Jupiter CEO) common shares plus warrants Rakesh Wilson (Apollo) – Chairman Converted 100% of existing bonds (US$1.1 billion Wilson Handler (Apollo) 8.5% notes) into equity Robert Pearce (Designated Party) Notes exchanged pro rata for 78,235,294 common shares; plus Eugene Davis (Designated Party) Option to subscribe pro rata for 11,764,706 common shares in exchange for US$50 million (US$4.25/share); backstopped by Noteholder Group Total of 100 million common shares outstanding, excluding Management Incentive Plan (TBD) Completed effective December 19th, 2018 Company leverage less than 1.5x trailing EBITDA
What we’ve learnt to date (2014 – 2018) Jupiter Resources | 10 Team Geology - Built and fostered a highly integrated - Fuller understanding of petrophysics operations & technical team and reservoir analysis - Established strong platform for growth - Matching predictive models to results Results Operations - Improved economics - Process, cost & efficiency improvements - Larger recoverable resource - Drilling longer laterals with - Higher quality inventory optimized spacing 10
What we have done since 2014 Jupiter Resources | 11 We have spent $890 million in capital, generated $1.1 billion in EBITDA (including hedging) and averaged 13% annual production growth. Wells Drilled by Production Area (gross) (mmcfe/d) RESTHAVEN KAKWA REDROCK WOLF CREEK Capital by Unit Operating Cost Type Costs ($/mcfe) ($MILLIONS) DRILLING PROCESSING FEES - CAPITAL COMPLETIONS PROCESSING FEES - OPERATING EQUIP & TIE JUPITER OPEX FACILITIES UNUTILIZED PROCESSING OTHER
Jupiter DNA Jupiter Resources | 12 Striving to be one of Canada’s premier natural gas producers Returns Focused Technology Leader Set the bar higher Faster – efficiency boost returns Challenge the status quo Higher – lower costs drive profits Invest in innovation Stronger – reduced risk strengthens capital Invest In Progress – The Returns Are Worth It We are committed to providing strong returns through disciplined, focused investment of the shareholder capital entrusted to us. We measure our success by all-in cash-on-cash returns targeting corporate level returns in excess of 20%. 12
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At Jupiter, we… Jupiter Resources | 14 Strive to be extraordinary Are committed to conducting Treat our communities with respect business in a responsible manner and dignity Are responsible stewards of the Create value in everything we do Are proud to be a Canadian shareholder capital entrusted to us energy provider 14
Executive team Jupiter Resources | 15 Simon Bregazzi Patrick Elliott Marian Kanik Basilis Brad Wakefield Shyla Stinson CEO EVP SVP Planning SVP Operations CFO Simon brings over 20 years Patrick brings over 20 years Marian brings over 30 years Brad brings over 20 years Shyla brings over 15 years of experience in the energy of experience in the oil and of experience in the energy of energy industry of oil and gas experience industry in corporate gas industry in North industry in economic experience in a wide range to the Company in a finance and mergers & America, in both evaluations, business of operational and broad range of corporate acquisitions. Simon holds a unconventional and development, investor technical roles. Brad holds finance and accounting BSc (Hons) in Actuarial conventional resources. relations and marketing. a Mechanical Engineering activities. Shyla is a CPA, Science from the University Patrick holds a BSc (Hons) Marian holds a BComm Technology Diploma from CA and holds a Bachelor of Western Ontario. in Geology from the from the University of the Saskatchewan Institute of Commerce degree University of Western Calgary. of Applied Sciences and from the University of Ontario. Technology. Saskatchewan. Prior or Comp ompanies: s: Prior or Comp ompanies: s: Prior or Comp ompanies: s: Prior or Comp ompanies: s: Prior or Comp ompanies: s: Canbriam Energy Canbriam Energy Canbriam Energy Centrica Energy BOS Solutions Ltd. Goldman Sachs Capitol Energy Northwest Upgrading Talisman Energy Welton Energy CIBC World Markets Encana Esprit Exploration Esprit Exploration PanCanadian Energy Canadian Hunter
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