Tangle Creek Corporate April 2018
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. More particularly, this presentation contains statements concerning anticipated: business strategies, plans and objectives; potential development opportunities and drilling locations, expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, decline rates, recovery factors, the successful application of technology and the geological characteristics of our properties; cash flow; timing and amount of future dividend payments; oil & natural gas production growth and mix; reserves; debt and bank facilities; amounts and timing of capital expenditures; hedging results; primary and secondary recovery potentials and implementation thereof; and drilling, completion and operating costs. Statements relating to "reserves" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. Actual reserve values may be greater than or less than the estimates provided in this presentation. The forward-looking statements are based on certain key expectations and assumptions made by Tangle Creek, including expectations and assumptions concerning the performance of existing wells and success obtained in drilling new wells, anticipated expenses, cash flow and capital expenditures and the application of regulatory and royalty regimes. Although Tangle Creek believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Tangle Creek can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Readers are cautioned that the foregoing list of risk factors is not exhaustive. Furthermore, new risk factors emerge from time to time, and it is not possible for Tangle Creek to predict all of such factors and to assess in advance the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. The above summary of assumptions and risks related to forward-looking statements in this presentation has been provided in order to provide potential investors with a more complete perspective of our current and future operations and as such information may be not appropriate for other purposes. The forward-looking statements contained in this presentation are made as of the date hereof and Tangle Creek undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. 2
Tangle Creek Overview Company Summary ➢ Private energy company focused on quality, innovation, margins & operating efficiency : ✓ One operating area, two primary light-tight oil development projects - Montney and Dunvegan ✓ Top quartile netbacks and operating costs ✓ Concentrated, contiguous land position & infrastructure control ✓ Product egress secured ➢ Strong, motivated management team ; track record of capturing large resource opportunities and innovating – driven to quality & margins (well economics 40% to 100% IRR & 12 to 24 month payouts) ➢ Actively consolidating offsetting operators at discounted metrics - control of infrastructure Experienced Leadership Team Board of Directors Vice President Senior Engineering Manager - Land Jeff Prentice Jim Junker Ben Makar Nordegg, Burmis, Wascana, Shell ARC Financial Corp 3
The Value Proposition – Total Return – Existing Assets ➢ Return 2x – 4x investment over 2 to 4 years – Flat Pricing ($US55/bbl) Since Q1 2017… ✓ RESERVES UP 23% PER SHARE ✓ LOCATIONS UP 290% PER SHARE …DRIVING GROWTH 4
Production Growth – Annual growth since Inception > 40% Prior 12 month decline RMP Acquisition 2017 Drilling Beringer Acquisition Commodity Price Decline Restricted Drilling 35% 3 rd Party Solution Gas 2016 Processing Drilling 2014 Restriction 2015 Drilling Drilling 25% 2013 Drilling 15% 2012 Drilling 10% 2011 Drilling 6% 2011 Drilling 5
Tangle Creek Today - Operating Metrics % % Today March 2017 Change/ Change Share Current Production (boe/d) 8,500 boe/d 6,000 42% 10% % Oil 55% 60% -8% Annual Cash Flow ($MM) $60 $40 50% 10% Cash Flow per Share $0.18 $0.16 (actual) 10% YE Net Debt ($MM) $80 MM $69 16% -23% Net Debt/CF 1.4x 1.7x -15% Bank Line ($MM) $130 MM $100 30% 2P Reserves (mmboe) 53 29 83% 23% Total Land 345 net sections 265 30% Total Montney Land 98 net sections Game Changer! 0 Net Drilling Locations 400+ 90 290% 160% $24/boe Q1 Operating Netback $19 26% (US$59/bbl & Fx=$0.80 & US$9 Diff) Est 2018 Capital $60 MM $19 Shares Outstanding (million Dec 31, 2017) 336 226 49% Equity Value (US$55/bbl flat pricing NPV10 $300MM $146 100% 38% Developed NPV20 undeveloped) 6
Background – North American Resource Plays ➢ The Montney is among the most prolific & largest unconventional resources plays, comparable to the Permian , Marcellus, Eagle Ford & Bakken in the US Estimated at ~50,000 sq. miles in ➢ total size Reservoir thickness exceeding ➢ Dunvegan - Deep Basin 300 meters in certain areas, requiring > 12 wells / section to properly exploit the resources ➢ Tangle Creek’s Dunvegan light oil property at Kaybob is a water free resource play within the Deep Basin ➢ Tangle Creek’s experience with Unconventional Tight Oil & Gas Plays unconventional reservoirs uniquely Basins positions us to capture & create significant shareholder value 7
Tangle Creek West Central Alberta Operating Fairway Waskahigan, Kaybob, Windfall, Carrot/Pembiina Hwy 32 Hwy 43 Tangle Field Office Waskahigan Kaybob Windfall Total Land Montney Gross Net Net Sections Sections Sections Hwy 16 Waskahigan 86 85 73 Kaybob 125 82 25 Carrot Creek Windfall 69 66 Carrot 130 102 Other 17 10 Pembina Total 345 98 March 1, 2018 8
Stacked Oil Reservoirs – Dunvegan, Rock Creek and Montney 1,600 m Kaybob / Falher Gething Rock Creek Carrot/Pembina 2,200 m Waskahigan Montney Montney 9
Innovation - Applying What We’ve Learned – Type Curves for Two Main Plays Tier 1 – IP 365 = 222 boe/d (35 wells) Tier 2 – IP 365 =117 boe/d Kaybob (23 wells) Dunvegan – Type Curves ➢ Higher intensity slickwater fracs are shifting Tier 3 & Tier 2 locations into Tier All Wells Tier 3 – IP 365 = 65 boe/d 2 & Tier 1 (16 wells) Waskahigan Montney – Type Curves ➢ 50 older “oil frac’d” wells supplemented with newer slickwater ➢ Opportunity to apply newer, higher intensity fracs including reduced spacing and higher tonnage Older oil frac type curve based on initial 50 wells 10
Completion Technologies – Unlocking Light Tight Oil Tangle Creek Multistage Fracturing System ➢ One to two mile lateral length ➢ 3,500m to 5,500m total measured well length ➢ 50 to 75 frac ports Evolution of Completion Designs in North America ✓ 30m to 60m port spacing ✓ 30 tonnes to 100 tonnes proppant ✓ 1 T/m to 2 T/m proppant intensity ✓ (700 lbs/ft to 1400 lbs/ft) 11 Lateral Schematic: http://www.loganinternationalinc.com/lcs/PDF/LCS_MS-Brochure_R1_web - Chart: RSEG Nov 2017
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