Primeline Energy Holdings Inc. Corporate Presentation May 2017 Pr - PowerPoint PPT Presentation

Primeline Energy Holdings Inc. Corporate Presentation May 2017 Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 1

L e a ding China F oc use d Oil a nd Ga s Compa ny &P China g a s pla y pro duc ing fo r 3 ye a rs fro m $600m+ re g io na l 1. T SX- V liste d E pro duc tio n infra struc ture hub in E a st China Se a in pa rtne rship with CNOOC. Strong ma na g e me nt te a m prove n to kno w ho w to o pe ra te in China . 2. Suc c e ssful outc ome to a rbitra tion with C$51m re c e ive d in se ttle me nt a nd g a s 3. so ld unde r a 15 ye a r ta ke o r pa y c o ntra c t fe a turing a fixe d pric e a nd g e ne ra te s a b o ut CAD$50m o f E BI T DA pe r ye a r. ina nc e d by le a ding polic y ba nks in China re c e ntly suc c e ssfully re sc he dule d. 4. F Ac c e ss to the e a ste rn China g a s ma rke t. China is the wo rld’ s se c o nd la rg e st 5. e ne rg y ma rke t, b ut with g a s a t just 5.5% o f to ta l e ne rg y mix, inc re a se d g a s utiliza tio n ha s b e c o me a fo c us o f Chine se g o ve rnme nt e ne rg y po lic y Hig h ma rg in hydroc a rbon upside in the fie ld a nd in the 4,397 km 2 e xplo ra tio n 6. c o nc e ssio n no w in the se c o nd pha se o f the e xplo ra tio n pro g ra m with the ne xt we ll in a ppro x. 12 mo nths. Altho ug h unc o mme rc ia l hydro c a rb o ns in pha se 1, the te c hnic a l disc o ve ry pro vide s vita l info rma tio n fo r future e xplo ra tio n Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 2

Pr ove n pe tr ole um pr ovinc e • E &P fo c us in Xihu T ro ug h (Ba sin) in No rthe rn E a st China Se a , a nc ho re d o n two e xisting fie lds: • Ping hu F ie ld: o nstre a m in 1998, 386 km 14” pipe line to Sha ng ha i te rmina l • Chunxia o F ie ld: o nstre a m in 2006, 360 km 28” pipe line to Ning b o a nd fo ur pro duc tio n pla tfo rms. E xpa nsio n de ve lo pme nt unde rwa y – L S36-1 Ga s F ie ld: in so uthe rn E a st c hina Se a : o n stre a m in 2014 Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 3

Pr oduc ing gas with ve r y high gas pr ic e c ontr ac t se c ur e d • L S36-1 g a s fie ld in pro duc tio n, a c c e ssing ma rke t Newly acquired 600 km 2 of 3D thro ug h the re g io na l seismic pro duc tio n infra struc ture hub Ro lling de ve lo pme nt • in fie ld a nd ne a rb y E xplo ra tio n in the • 4,397 km2 737 km 2 of existing 3D c o nc e ssio n c a n b e seismic data ho o ke d into the pro duc ing L S36-1 fa c ility Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 4

Mar ke t: Ac c e ss to Zhe jiang Gas Gr id Zhe jia ng Pro vinc e 50 millio n plus po p. • F o urth la rg e st • Ningbo e c o no my in China L NG So me o ve rsupply • a fte r ra pid g ro wth in pa st 10 ye a rs to ~6.6 b c mpa Ga s is o nly 2.8% o f • to ta l e ne rg y mix L S36- 1 is a stra te g ic g a s fie ld a s the c lose st re sourc e s to the provinc e Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 5

Chine se Gas Mar ke t • Ra pid g a s infra struc ture de ve lo pme nt (L NG te rmina l a nd lo ng dista nc e pipe line ) in the la st 10 ye a rs • Dra ma tic o il a nd c o a l pric e re duc tio ns sinc e la te 2014 a nd slo w do wn o f Chine se e c o no my le d to lo we r g a s de ma nd a nd o ve rsupply. Ga s pric e fo r o nsho re pipe line g a s in China dro ppe d o n No ve mb e r 20, 2015 b y 34% in Zhe jia ng Pro vinc e Curre nt g a s o ve rsupply will c o rre c t e ve ntua lly a nd stra te g ic supply a nd • c o nne c tivity will ha ve va lue . L o ng te rm, still re ma ins a ve ry a ttra c tive ma rke t • Still the hig he st g a s pric e re g io n in the wo rld • China g a s usa g e is o nly 5.5% o f to ta l e ne rg y mix • I nfra struc ture a nd pipe line s in pla c e so a ll ne w disc o ve rie s o f g a s wo uld b e ve ry pro fita b le Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 6

E ast China Gas De ve lopme nts We st- E ast Pipe line Pr oje c ts Pha se 1: 4,000 km pipe line fro m Xinjia ng to • Sha ng ha i; 18 b c mpa , o n-stre a m No ve mb e r 2004 Pha se 2: 6,000 km (9,000 inc lud ing b ra nc he s) fro m • T urkme nista n to Gua ng zho u a nd Sha ng ha i; 30 b c mpa pla nne d ; o n-stre a m 2012 Sic hua n Ga s T o E a st: 2,150 km pipe line • fro m Sic hua n to Sha ng ha i; 12 b c mpa ; o n-stre a m No ve mb e r 2010 L NG Pr oje c ts She nzhe n L NG (3 mto n): first d e live ry in 2006; • Pla nne d e xpa nsio n to 7 mto n • F ujia n L NG: (2.6 mto n) first d e live ry 2009 Ning b o L NG: first d e live ry 2013 • • Othe r L NG te rmina ls c o mple te d o r und e r d e ve lo pme nt Offshor e Gas F ie lds T he re a re e ig ht g a s pipe line s to E a st China tha t • a re o pe ra tio na l fro m o ffsho re g a s fie ld s Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 7

2015 E xplor ation Dr illing Pr ogr am Bloc k 33/ 07 showing we ll loc ations and L S36- 1 Gas F ie ld Western Margin Fault Block Zone LS23-1-1 LS30-3-1 F ir st we ll: L S23- 1- 1 T D 2666m Se c ond we ll L S30- 3- 1 T D 2000m Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 8

High Mar gin Upside Pote ntial Ide ntifie d • Mc Da nie l inde pe nde ntly a sse sse d upside a s fo llo ws: Gr oss Pr ospe c tive Re sour c e s - Natur al Gas – 31/ 3/ 16 Riske d (2) Pro spe c tive Re so urc e s - Unriske d (1) Cha nc e o f Re so urc e s Suc c e ss (3) Pro spe c t L o w Me dium Me a n Hig h Me a n MMc f MMc f MMc f MMc f MMc f % L S36-1 Pa le o c e ne -M1-0 2,740 5,436 6,301 11,055 4,593 73 L S36-1 Pa le o c e ne -M1-1 1,716 3,936 4,729 8,745 3,447 73 L S36-1 Pa le o c e ne -M2 4,942 14,300 18,929 38,222 11,357 60 L S36-1 Pa le o c e ne -M3 14,308 31,325 37,045 67,044 25,932 70 L S36-1 Pa le o c e ne -L 1 8,347 23,808 32,791 68,497 16,395 50 L S36-1 Pa le o c e ne -L 2 2,353 5,271 6,448 11,998 2,579 40 L S30-8 Pa le o c e ne -M2 9,190 27,006 35,747 72,219 5,405 17 L S36- 1 Sub tota l) 43,595 111,081 141,989 277,770 69,709 L S23-2 N T o ta l 7,549 23,443 34,834 74,191 3,102 80 L S23-2 S T o ta l 8,459 28,480 43,444 93,278 3,662 80 L S29-3 Pa le o c e ne -M1-2 7,607 24,278 35,589 75,152 4,100 80 A Pa le o c e ne -M1-2 5,332 16,571 24,127 51,333 5,559 90 B Pa le o c e ne -M1-2 7,798 20,492 26,584 53,363 3,101 90 E No rth Pa le o c e ne -M1-2 2,755 7,366 9,614 18,902 433 60 E So uth Pa le o c e ne -M1-2 2,509 6,719 8,973 18,070 404 60 T 1 Cha nne l Pa le o c e ne -M1-2 7,610 23,636 34,220 73,465 6,338 90 T 3 De e p Pa le o c e ne -M1-2 10,326 27,565 36,333 73,366 7,151 90 L S35-1 T o ta l 21,225 69,048 106,442 233,827 11,658 90 Bloc k 33/ 07 3D Se ismic Ar e a 81,171 247,598 360,158 764,948 45,508 T otal Pr ope r ty Gr oss 124,766 358,679 502,147 1,042,717 115,216 Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 9

Additional Re sour c e s in L owe r Zone s • Curre nt pro duc e rs a re in M1-1 a nd M1-2 sa nds • Additio na l g a s in o the r sa nds a nd in lo we r tig ht re se rvo irs Cr oss- se c tion of L S36- 1 M11 M12 M2 M31 M32 L1 L2 Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 10

Re se r ve Additions via Phase 2 Dr illing fr om Platfor m E xisting we lls sho wn in b la c k LS36-1 M1 1 Sth well LS36-1 M1 0 well 30-8 Exploration Prospect Wells LS36-1 M2 & M3 wells LS36-1 M1 1 SW well E ig ht lo c a tio ns a nd we ll tra c ks se le c te d a s c a ndida te s • fo r re se rve a dditio ns Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 11

L S36- 1 F ie ld Ne ar by Pr ospe c ts Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 12

Good e ntr y point for shar e s Sha re s ha ve tra ding we ll b e lo w pre vio us tra ding ra ng e o f 40c -70c . T his is a • c a sh pro duc ing c o mpa ny with e xplo ra tio n a nd a b a se po sitio n in a ma jo r e ne rg y ma rke t. • Pha se 1 o f L S36-1 is c a sh flo wing – E BI T DA o f CAD$50 millio n e xpe c te d in 2017 • Se ttle me nt o f ZG dispute – o ne o ff c a sh flo w o f CAD$49 millio n • Se lling into o ne o f the ke y pro vinc ia l e c o no mie s in China . De spite slo we r de ma nd re c e ntly, this re ma ins o ne o f the hig he st g a s pric e re g io ns in the wo rld Ma na g e me nt with pro ve n tra c k re c o rd a nd o pe ra tio na l e xpe rtise • One o f the ve ry fe w o ffsho re g a s de ve lo pme nts in China - with a wo rld c la ss • $600m+ infra struc ture hub • Pha se 2 e xplo ra tio n pro g ra m plus ro lling de ve lo pme nt in c o nc e ssio n with upside po te ntia l a b le to sha re infra struc ture . T he e a st sub -b a sin ha s o il po te ntia l to b e e xplo re d in the Blo c k. Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 13

Appe ndic e s Supple me nta ry T e c hnic a l a nd Ope ra tio na l Da ta Bo a rd o f Dire c to rs Ma na g e me nt a nd T e c hnic a l T e a m Co rpo ra te Struc ture Pr ime line Cor por a te Pr e se nta tion - Ma y 2017 14