Colville Lake Presentation July 2019
Di Discl claimer Paramount Resources Ltd. ("Paramount"), has taken all reasonable care in producing and publishing the information contained in this presentation. Material in this presentation may still contain technical or other inaccuracies, omissions, or typographical errors, for which Paramount assumes no responsibility. Paramount does not warrant or make any representations regarding the use, validity, accuracy, completeness or reliability of any claims, statements or information in this presentation. Under no circumstances, including, but not limited to, negligence, shall Paramount be liable for any direct, indirect, special, incidental, consequential, or other damages, including loss of profits, arising from your use, or inability to use, the material in this presentation. The information is not a substitute for independent professional advice and your own further due diligence before making any investment decisions. Furthermore, you may not modify or reproduce in any form, electronic or otherwise, any information in this presentation, except for personal use unless you have obtained our express permission. 2
MG MGM M Energy History • MGM Energy was spun out of Paramount Resources Ltd. in 2007 and became a stand alone publicly traded company • Land base in the Sahtu Settlement Region and in the Inuvialuit Settlement Region • Delays in the Mackenzie Valley Gas Project resulted in Paramount Resources Ltd. purchasing MGM Energy in 2014 • MGM Energy continues to exist as a wholly owned subsidiary of Paramount Resources Ltd. • Paramount bought Apache Canada in 2017 3
MG MGM M Energy 2014 to Curr rrent • MGM has been conducting annual well head inspections and an annual environmental program • Well head inspections are reported to the Office of the Regulator of Oil and Gas Operations (OROGO) • Local contractors have included Kalo Stantec and Canadian Helicopters. • Other local services have been Monitors and Accommodations 4
Ma Mackenzie Valley Corri rridor 5
Ma Mackenzie Pipeline Timeline • 2010 Mackenzie Valley Pipeline approved • 2014 Paramount Resources Ltd. purchases MGM Energy • 2016 Approvals for MacKenzie Gas Project extended to 2022 • Dec 29, 2017 MacKenzie Gas Project joint venture cancelled by Imperial Oil resources, Conoco Phillips Canada, ExxonMobil Canada, and the Aboriginal Pipeline Group 6
Do Dollars Spent to Da Date by Paramount Resource ces Ltd., Ap Apache Canada Ltd and MGM Energy gy Field Area Maunoir Colville Lake Spending Type Colville Lake Ridge Nogha Turton Lake Other Area MGM/PRL Total 22,096,794 21,850,483 26,535,507 6,671,131 5,000,000 82,153,915 ACL Total 17,386,816 21,850,483 26,053,575 6,671,131 - 71,962,005 Total MGM/PRL/ACL Spend 39,483,610 43,700,965 52,589,082 13,342,262 5,000,000 154,115,920 7
Ma Maunoir C-34: 34: Cam ambrian ian Oil il Disc iscovery Cambrian Oil: 235 bopd 8 Net Pay: 13.4 m; Porosity: 15.4%; Sw: 32%
Re Resource – Ma Maunoir Ri Ridge 9
Ma Maunoir St Structure Location: A-67 Primary (Lateral Continuity) Colville D-45 D&A Location: E-35 Contingent (Closure) Maunoir C-34 Cambrian Oil 235 BOPD Closure: 7 - 8 sections 6.7 miles 10
No Nogha St Structures, , NWT BELE (170 BCF) W. NOGHA NOGHA Suspended Suspended K-14 O-47 C-49 M-17 B-23 O-35 -950 3.5 mmcf/d + condensate -1000 *42 mcf 5 mmsf/d Subsea Depth (m ss) Bele Structure Mt. Proterozoic SDL 23 Clark 1.9 mmsf/d -1050 Nogha *Tstm 1.7 mmsf/d Structure Bele Probable Fault Nogha Fault System System G/W -1100 West *Wet Nogha Structure *Wet 11 -1150 *zone not frac’d
No Nogha St Structure, , NWT 12
Central Mackenzi Ce zie Valley y Assets Central Mackenzie Discoveries • Nogha Gas (100% working interest) • 212 bcf mean gross contingent resource • Maunoir Oil (100% working interest) • 235 bbl/d test (C-34) • East Mackay Shale Oil (62.5% interest) • 1,000 MMBO in place Central Mackenzie Land • EL 474 & 475 (50% interest) • 171,890 hectares (gross) • EL 473 (100% interest) • 82,643 hectares • EL 487 (25% interest) • 84,504 hectares (gross) • East Mackay (62.5% interest) • 82,100 hectares (gross) • Nogha M Blocks (50% interest) • 60,000 hectares (gross) • Nogha Crown Lands (100% interest) • 80,240 hectares • Acquired in July 2010 13
• MGM Energy owns and controls meaningful volumes of natural gas: • Internal Estimates of Resources • MGM Energy is the operator of all discoveries. 14
Cu Current Geological Work • Murray Gingras at University of Alberta has 2 grad students working on the Mt. Clark Formation • NWT Geological Survey and GSC have done some recent regional mapping 15
Historical Markets Hi • Norman Wells: Initial production (pre 1944) was dedicated to local consumption and mining projects in Yellowknife • Norman Wells: 1944-45 Canol Pipeline • Norman Wells: 1985 to present Enbridge Pipeline • MVGP 16
Cu Current Markets With the MVGP postponed indefinitely there is no line of sight to a market. 17
MG MGM M Energy - En Environmen nment • Environmental program results are reported to the Sahtu Land and Water Board • Environmental program has focused on terrain monitoring/sampling, revegetation and invasive species elimination 18
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Pr Project Sco cope Colville Lake Area • Abandonment and Reclamation/Remediation activities • Include activities including ice road building, service rig, abandonment operations, camps and remediation/reclamation activities • Leave operation options open so the Permit and/or Licence do not need to be amended in the future • Use the Licence and Permit for Colville as a template for other MGM holdings in the Sahtu Settlement Area 20
Regulatory Re Re Requirements • A Land Use Permit and Water Licence are required from the Sahtu Land and Water Board (SLWB) to facilitate abandonment and reclamation activities. (5 year term with a extension or amendment for 2 years) • MGM also requires approvals from OROGO (underway) for an Operations Authorization and individual Authorities to Alter Condition of a Well 21
Pr Project Timeline • Engagement Activitites started in Q1 of 2019 and will continue through Q3 of 2019 • Apply for Regulatory approvals from OROGO and SLWB starting in Q2 of 2019 (OROGO) and Q4 of 2019 (SLWB) • Receive Regulatory approvals in Q1 of 2020 • Conduct abandonment/reclamation activities in 2021-2022 or 2022- 2023 winter season • Monitoring in subsequent years 22
Pr Project Equipment for Construction and Ab Abandon onment Type No. Type No. Abandonment related equipment Trucks (e.g., vacuum water) 4 Front end loaders with optional attachments 4 40 Man Camp 1 Service rig 2 Graders 4 Plough/auger truck 4 Service Rig Pump and tank 1 Spare Rig Pump 1 Pick-up trucks (personnel vehicles) 10 Catwalk & Pipe Racks 2 bulldozers 8 100 to 150 HP Boilers 3 Trackhoe 2 Wellsite Shacks 3 Backhoe (rubber-tired) 2 Eline/Slick line unit combo unit 2 Snow cats 6 P-Tank unit with flare stack 1 Dump trucks 4 Jet Cut equipment for cut and cap operations 1 Snowmobiles (gasoline) 4 Back Hoe for cut cap operation 1 Snow making machines(s) and/or spray ice pump & monitor(s) 4 Bed Truck for hauling equipment 2 Accessory and support equipment (e.g., power generators, light towers, tanks) 6 Picker Truck for hauling equipment 2 Communication systems (e.g., radios) 20 Water tank truck for produced Fluid 2 Potable Water Trucks 2 Hydrovac truck 2 Vacuum Truck 2 Cement Pumpers 2 Cement Bulker 1 Heated insulated 63.56m3 tanks for fresh water 4 Heated insulated 63.56m3 tanks for produced water 2 Snow mobiles 2-4 Methanol Storage 10m3 1 Secondary containment for tanks 8 23
Pr Project Personal for Construction and Ab Abandon onment Role Estimated Number of Personnel Role Estimated Number of Personnel Supervisor 2 Abandonment supervisors 3 Logistics supervisor 1 Rig managers 1 Equipment operators 20 Rig personnel 4 Camp maintenance 2 Oilfield Trucking 2 Medical 2 Vacuum truck operators 2 Safety Coordinator 1 Camp maintenance 2 Environmental Monitor 1 Medical 1 Wildlife Monitor 1 Safety Coordinator 1 Environmental Monitor 1 Wildlife Monitor 1 Water Truck Operators 4 P-Tank-Test Crew 3 Logging/slickline Crew 3 Cement Pumper 3 Cement Bulker 1 Fuel farm attendant 1 Security/access control 1 Fuel truck driver 1 24
Ex Exampl mples es of Equi quipmen pment 25
Co Concepts to Move Forward OROGO HAS MANDATED THAT ALL WELLS MUST BE ABANDONED BY 2023, UNLESS THEY ARE ON PRODUCTION, OR HAVE A PLAN TO PRODUCE. 26
Ba Backup Nogha M-17 Gas Analysis 28
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