Corporate Presentation December, 2015 Advisory Regarding Oil and - - PowerPoint PPT Presentation

Corporate Presentation

December, 2015

Mosaic Energy Ltd. • 2

Throughout this presentation the terms Boe (barrels of oil equivalent ) & MBoe (thousands of barrels of oil equivalent) are used. Such terms may be misleading, particularly if used in isolation. The conversion ratio of six thousand cubic feet per barrel (6 Mcf: 1 Bbl) of natural gas to barrels of oil equivalent and the conversion ratio of 1 barrel per six thousand cubic feet (1 Bbl: 6 Mcf) of barrels of oil to natural gas equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. Any references in this presentation to initial production rates (IP30) and production rates at the end of the first year (IP365) are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for Mosaic. Mosaic has presented certain type curves and well economics which are based on historical production in the Kakwa/Resthaven development area. Such type curves and well economics are useful in understanding management's assumptions of well performance in making investment decisions in relation to development drilling in the Kakwa/Resthaven area and for determining the success of the performance of development wells; however, such type curves and well economics are not necessarily determinative of the production rates and performance of existing and future wells. In this presentation, estimated ultimate recovery represents the estimated ultimate recovery associated with the type curves presented; however, there is no certainty that Mosaic will ultimately recover such volumes from the wells it drills. This presentation discloses drilling locations related to proved and/or probable reserves locations. These locations are derived from Mosaic’s most recent independent reserves and resources evaluation as prepared by Sproule & Associates as of July 1, 2015 (the “Sproule Report”) and account for drilling locations that have associated proved and/or probable reserves as applicable. There is no certainty that Mosaic will drill all drilling locations and if drilled there is no certainty that such locations will result in additional production. References to the future development of the Kakwa/Resthaven area are intended to provide the reader with a demonstration of the potential scale of future development. Actual drilling locations and the timing of development will ultimately depend upon the availability of capital, regulatory, oil and natural gas prices, costs, actual drilling results and other factors.

Advisory Regarding Oil and Gas Information

Mosaic Energy Ltd. • 3

Certain statements contained in this Corporate Presentation constitute forward looking statements or information (collectively "forward looking statements") within the meaning of applicable securities legislation. All statements other than statements of historical fact are forward looking statements. This Corporate Presentation contains forward looking statements pertaining, but not limited to, the "full development plan" of Mosaic and the timing and method of financing thereof; the use of proceeds from the proposed offering; the Corporation’s exploration and development activities; drilling inventory, drilling plans and timing of drilling and completion of wells; the timing of completion of the Corporation’s new gas plant and anticipated benefits related thereto; the performance and characteristics of Mosaic’s oil and natural gas properties; future

• perating costs and future cash flow; commodity prices and costs; industry conditions pertaining to the oil and gas industry and treatment under government regulation and

taxation regimes. No assurance can be given that these assessments and other forward-looking statements will prove to be correct and such forward looking statements in this investor summary should not be unduly relied upon. Forward looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance or may be identified by reference to a future date. Mosaic has made assumptions regarding, among other things: the timing and completion of the proposed offering; the timing and amount of future capital expenditures; future sources of funding for the Corporation’s "full development plan"; future operating costs and future cash flow; future crude oil, natural gas and NGL prices and commodity prices generally; government regulation in the areas of taxation, royalty rates and environmental protection; the performance characteristics of oil and natural gas properties; the size of Mosaic’s oil, natural gas and NGL reserves and the recoverability of its reserves; the ability to raise capital; the impact of competition; labour availability; and general economic business and market conditions. Although the Corporation believes that the expectations reflected in the forward looking statements contained in this Corporate Presentation, and the assumptions on which such forward looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward looking statements included in this Corporate Presentation, as there can be no assurance that the plans, intentions or expectations upon which the forward looking statements are based will occur. By their nature, forward looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward looking statements will not occur, which may cause the Corporation's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward looking statements. These risks and uncertainties include, among other things: general economic conditions in Canada, the United States and globally, including reduced availability of debt and equity financing generally; industry conditions, including fluctuations in the price of oil, NGLs and natural gas; liabilities inherent in oil and natural gas operations; governmental regulation of the oil and gas industry, including environmental regulation; fluctuation in foreign exchange or interest rates; geological, technical, drilling and processing problems and other difficulties in producing reserves; unanticipated

• perating events which can reduce production or cause production to be shut in or delayed;; the ability of management to execute its business plan; the possibility that

government policies or laws may change or governmental approvals may be delayed or withheld and uncertainties as to the availability and cost of financing. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. These factors should not be considered as exhaustive. Statements relating to "reserves" are by their nature forward- looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future. The forward looking statements contained in this Corporate Presentation speak only as of the date of this Corporate Presentation. The Corporation does not undertake any

• bligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by applicable

securities legislation. The information contained in this investor summary does not purport to be all inclusive or to contain all information that a prospective investor may

• require. Prospective investors are encouraged to conduct their own analysis and to consider the advice of their financial, legal, accounting, tax and other advisors.

Forward-Looking Statements

Mosaic Energy Ltd. • 4

This Corporate Presentation presents certain non-GAAP ("GAAP" refers to Canadian Generally Accepted Accounting Principles) financial measures to assist readers in understanding the Corporation’s performance. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other corporations and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Management uses these non-GAAP financial measures to analyze and evaluate operating performance. Mosaic also believes that the non-GAAP financial measures below are commonly used by the investment community for valuation purposes and are useful complementary measures in the oil and gas industry. The following terms are used in this Corporate Presentation, which are not found in the Canadian Institute of Chartered Accountants Handbook and do not have a standardized meaning under GAAP:

• "EBITDA", which is calculated as income (loss) before interest, taxes, business acquisition transaction costs, depreciation, stock based compensation expense, gains on

disposal of property and equipment, share of unconsolidated joint venture profit and foreign exchange.

• Internal Rate of Return ("IRR") is a performance metric that measures the net present value of all cash flows (both capital deployed and income earned).

NON-GAAP Financial Measures

Corporate Strategy

• Establish funding capability to effectively capture economic value from its

Middle Montney, Wilrich, & Dunvegan assets (“Full Development Plan”)

– First stage of funding underway, anticipated close in late 2015

• Pursue Full Development

– Phase 1 of infrastructure established (50 mmcfd plant started in Sept 2015, 50 mmcfd firm takeaway began Oct 2015. – Further build out infrastructure and drill wells to optimize (125 MMcf/d plant & ~ 47 wells ) – Anticipated timing ~ 3 years – Key decision points will be driven by market conditions – Support major capital investment commitments with active hedging program

• Quantify the magnitude of further upside

– The Lower Montney in Kakwa/Resthaven – Full Montney package in Tower

• Create liquidity

– Scale is large enough to present a wide spectrum of solutions Mosaic Energy Ltd. • 5

Summary of Key Assets

Mosaic Energy Ltd. • 6 Kakwa – Core Montney Asset, Primary Growth Engine

• Over 10,000 boe/d in Oct prior to Pembina Resthaven plant

turnaround (33% liquids)

• Stacked development horizons with drilling results confirming top

tier reservoir characteristics and well performance within the Middle Montney, Wilrich, and Dunvegan

• Infrastructure and egress in place to support near and medium

term growth; 50 MMcf/d plant commissioned in September; 50 MMcf/d TCPL firm began in October

• Control of development with operatorship and 90% average WI

Gilby/Carrot Creek/Niton – Low Risk Base Production

• 3,500 boe/d, 27% liquids (Q3 2015)
• Predictable, stable cash flow to support future Kakwa growth
• Ability to maintain production for several years through low-risk

drilling inventory

• Infrastructure access through owned and AltaGas operated

facilities

Tower – Rapidly Emerging BC Montney Oil, Future Upside

• 9,700 gross acres of Montney rights (75% WI)
• Offset operators (ARC, Crew) actively developing the Montney with

recent results exceeding 1,000 boepd (IP30)

• Mosaic will drill a horizontal (“HZ”) well to prove its lands in

summer 2016

Current Corporate Highlights

Substantial proven development of condensate-rich Montney in the highly prolific Kakwa area

• Key offset operators include Seven Generations Energy Ltd. (“7G”), Paramount Resources Ltd. (“POU”), and ExxonMobil

(“XTO”)

Low risk drilling inventory of booked locations

• HZ development has been proven in the Montney, Wilrich and Dunvegan
• Stacked zones underlying a high working interest (“WI”), operated land base sets the stage for an efficient, multi-zone

development

• 174 MMboe 2P reserves (BT NPV10 = $1.3 billion; using Sproule price forecast)
• No material expiry issues

Strategic company-owned and operated infrastructure

• September start-up of 50 MMcf/d gas plant with flexibility to expand for full development
• Firm service in place to meet production growth (TCPL – 50 MMcf/d firm in October 2015, expanding to 100 MMcf/d in

April 2018)

• Established production base of ~13,500 boe/d during first 20 days of October, prior to Pembina Resthaven turnaround,

(31% liquids)

• 4 additional Montney wells already drilled and awaiting completion

Significant inventory upside with only 26% of potential drilling locations booked

• Substantial potential remains, primarily driven by Kakwa Lower Montney and Tower Montney oil play

Mosaic Energy Ltd. • 7

Establishing funding capability will support effective implementation of corporate strategy

Reserves Growth Driven By Kakwa Area

Mosaic Energy Ltd.

Mosaic Energy Ltd. • 8

Category July 1, 2015 Report (Sproule) Reserves (mboe) PV10 ($000) (%) FDC (2) ($000) PDP and PDNP 1 21,266 237,427 19 11,953 PUD 86,955 415,856 33 1,070,684 Proved 108,221 653,283 52 1,082,636 Probable 66,581 607,106 48 360,216 Proved + Probable 174,802 1,260,389 100 1,442,852 63% 34% 3%

Reserves Composition

Natural Gas NGLs Oil 0.00 0.50 1.00 1.50 2.00 2.50 $0.00 $5.00 $10.00 $15.00 $20.00 2012 2013 2014 + 1H '15 3.5 Yr Avg

Re-cycle Ratio

F&D $/boe

Kakwa/Resthaven Area F&D’s & Re-cycle Ratio

P+P F&D Re-cycle Ratio

1. Majority of PDNP will be re-categorized to PDP with plant start-up in Sept/15 2. PDNP FDCs largely related to plant construction costs which is almost complete

(60% Pentanes)

• $300
• $100

$100 $300 $500 $700

• $300
• $200
• $100

$0 $100 $200 $300 $400 $500 $600 $700 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Cumulative Cash ($MM) Cash Flow & CAPEX ($MM) Net Operating Income CAPEX Free Cash Flow

• Cum. Cash Flow
• Cum. Cash Flow (Strip Pricing)

20 40 60 80 100 120 140 160 5000 10000 15000 20000 25000 30000 35000 40000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Sales Gas Rate (mmcfd) Total BOE/d Sales Gas Rate Oil Rate NGL Rate Total Production (boe/d)

Moving Towards Kakwa Full Development

Mosaic Energy Ltd. • 9

Kakwa Development - Production Forecast

Mosaic is positioned to realize full development plan production and cash flow ramp-up by April 2018 Near term funding represents final equity injection facilitating full development and long term cash flow sustainability In the near term, our Kakwa gas plant will be optimized by balancing revenue generated by processing third party gas and drilling wells strategic to positioning for full development Commodity price environment will be monitored and appropriate adjustments made to ensure balance sheet can withstand prolonged downturn

Cash Flow Summary: Reserve Evaluator & Strip Pricing

Additional Growth Potential – Drilling Inventory

Mosaic Energy Ltd. • 10

Current Kakwa Development Future Upside Base

= Booked Locations (Total = 151) = Unbooked Locations (Total = 427)

27 14 12 98 6 68 199 34 28 93

100 200 300 400 500 600 700 West Central Tower Montney Kakwa Lower Montney Kakwa Dunvegan Kakwa Wilrich Kakwa Middle/ Upper Montney Mosaic Cumulative Booked+Unbooked Horizontal Locations

Total Net Potential Locations Total Potential Future Capital ($MM) Total Potential Recoverable Resource (MMboe) % Liquids

191 1,900

209 41

40 325

48 12

48 375

35 55

199 2,000

213 41

68 425

34 63

33 125

11 22 578 ~5,100 549

* Note: Based on the Sproule Report

Kakwa – Stacked Horizontal Development

Mosaic Energy Ltd. • 11

Mosaic holds ~95,000 gross acres within the highly prospective Kakwa area of Alberta

• 100% operated
• Dunvegan: 72,300 gross acres (80% WI)
• Wilrich: 57,600 gross acres (83% WI)
• Montney: 28,800 gross acres (97% WI)
• 3D seismic across majority of acreage

Middle Montney development layer delineated, de-risked and booked

• Top tier economics driven by high

deliverability, condensate rich gas production

• Industry focused on Upper and Middle

Montney currently; expanding to include Lower Montney

• Thick (~200 m) Montney formation

supports significant unbooked potential Wilrich and Dunvegan offer compelling development economics and flexibility to complement the Montney

Mosaic Mapped Field Condensate Ratio (bbl/MMcf) 200 100 50 25 200 100 50 25 260 135 40 110 80 75

Prime Acreage in Proven Kakwa Montney Fairway

Mosaic Energy Ltd. • 12

Mosaic’s Montney land is located in the prolific, liquids rich Kakwa/Resthaven fairway

• Mosaic lands de-risked through 8 Mosaic HZ wells (2

awaiting completion) and numerous offset drilling

• Offset operators POU and 7G have moved to development

phase High liquids rates on Mosaic land consistent with offset results

• Mosaic’s 6 Montney wells have tested condensate rates

averaging 115 bbl/MMcf, ranging from 40 to 260 bbl/MMcf

• Facility constraints have limited Mosaic to producing only

2 of its tested wells; production from those wells has confirmed test rates W6 Alberta Montney Fairway – Robust Activity & Growth

100 200 300 400 500 600 700 2010 2011 2012 2013 2014 2015

• Cal. Day Raw Gas (MMcf/d)

Hz Producing Well Count (#)

Activity levels in greater Kakwa area increasing YoY with ~80 Hz Montney wells drilled in H1 2015 (vs ~135 in 2014)

• Wells - Montney deeper regional

Crown – Seven Generations Land Crown - Paramount Land Crown – Exxon/XTO Land MOSAIC ENERGY LTD. Layers Mosaic Montney Rights

Map Legend

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 12 24 36 48 60 Sales Gas Rate (Mcf/d) Time (months)

CGR = 30 CGR = 61 CGR = 154

20 40 60 80 100 120 30 40 50 60 70 80 90 IRR (%) WTI Oil Price ($US/bbl)

$3.5 AECO $2.5 AECO $3.5 AECO $2.5 AECO $3.5 AECO $2.5 AECO

Montney – Economics Enhanced by High Liquids

Mosaic Energy Ltd. • 13

IRR Sensitivity to WTI Oil Price – $2.50 & $3.50/MMBTU AECO(1)

Prolific deliverability and significant free liquids driving top tier returns

• High condensate yields deliver robust returns, even

in current price environment

• Mosaic production exceeds type curve condensate

rates

Further room to improve capital costs as Mosaic transitions to multi-well pads

• Active industry drilling continues to enhance

drilling and completions methodology; cost improvements and increased production performance continually realized

Notes: 1. Economics presented as go-forward economics

CGR = 30 CGR = 61 CGR = 154 Wellsite Condensate Yield (bbl/MMcf) 30 61 154 Total Liquid Yield (bbl/MMcf) 72 112 242 EUR (Mboe) 1,182 1,210 980 % Liquids (%) 30% 40% 59% IP 30 (boe/d) 1,631 1,725 1,560 IP 365 (boe/d) 858 884 857 IRR - Flat $50 WTI, $3 AECO (%) 17 35 66 NPV 10 - Flat $50 WTI, $3 AECO ($MM) 1.6 5.1 8.6 # of Locations (# booked) (#) 91 (38) 66 (40) 34 (20) Type Curve Assumptions (1.5 mile HZ) - DCT Capex = $10.4 MM/Well

Mosaic has booked ~25% of the estimated ultimate number of locations within the Montney

• 98 horizontal locations booked (Sproule Report)
• Potential for additional 93 locations in the Upper/Middle

Montney and 199 in the Lower Montney Mosaic is currently drilling a 3-well pad to prove optimal lateral and vertical spacing for full development (“W” pattern with laterals in lower and upper layers of Middle Montney)

• Offset operators already applying this development pattern
• Success will result in booking of additional 4 wells/Section in

Upper/Middle zone

Kakwa Montney – First Development Layer Booked, Significant Un-booked Potential Remains

Mosaic Energy Ltd. • 14 Montney Reserves Locations – Single Layer of Middle Montney Booked To Date

Mosaic 06-09 Pad (3 Wells)

• Currently Drilling
• 2 wells targeting Lower Middle

Montney

• 1 well targeting Upper Middle

Montney

Lower Montney gas charged and highly prospective with industry

• perators

testing productivity in Kakwa to Wapiti fairway

~200 m thick

Offset Wilrich Results Have Demonstrated Play Potential

Mosaic Energy Ltd. • 15

Wilrich play has been proven through vertical well control and three Mosaic horizontals that each tested > 18 mmcf/d

• High deliverability gas

provides compelling stand-alone economics

• 04-09 CTD > 1.5 Bcf

flowing restricted since Q1/14 Mosaic’s 40 Wilrich locations significantly contribute to the Kakwa development (12 booked, 28 un-booked) Significant operational synergies by sharing surface pads and

• ptimizing infrastructure

with the Montney and Dunvegan

Notes: 1. Average well performance quoted as Swanson’s mean for horizontal well dataset

2 4 6 8 10 20 40 60 80 100 2.50 2.75 3.00 3.25 3.50 3.75 4.00 NPV 10 ($MM) IRR (%) AECO Gas Price ($/Mcf)

Wilrich Single Wells Economics

Mosaic Energy Ltd. • 16

Notes: 1. IRR sensitivity assumes $US 50 WTI 2. Economics presented as go-forward economics 3. Additional 18 “Tier 2” locations generate a 17% IRR at $US 50.00 WTI & $3.00 AECO

IRR Sensitivity to AECO Gas Price(1)(2) Prolific gas deliverability and high EURs offer compelling returns at current prices and significant torque to higher gas prices

• Breakeven price of $2.42/MMBtu AECO(1)
• High deliverability wells offer flexibility and

strategic lever to fill plant volumes during ramp up and beyond

2,000 4,000 6,000 8,000 10,000 12,000 12 24 36 48 60 Production Rate (Mcfe/d) Time (months)

DCT Capex ($MM) 8.4 EUR (Mboe) 1,266 Sales Gas (Bcf) 6.7 Plant Liquids (bbl/MMcf) 22 IP 30 (boe/d) 1,707 IP 365 (boe/d) 1,423 IRR - Flat $50 WTI, $3 AECO (%) 36 NPV 10 - Flat $50 WTI, $3 AECO ($MM) 3.1 # of Locations (# booked) (#) 22 (12) Type Curve Assumptions

Dunvegan – Development Potential

Mosaic Energy Ltd. • 17

Dunvegan light oil play defined by >20 area vertical wells and proven by four Mosaic horizontals (1 mile laterals)

• Production from Mosaic’ HZ

wells has proven the type curve for 1 mile laterals with IP30 rates of 437 boe/d and EUR of 466 Mboe (details in Appendix) Significant unbooked potential from 48 remaining drill locations (34 unbooked) The Dunvegan offers significant

• perational synergies by

sharing surface pads and

• ptimizing infrastructure with

the Montney and Wilrich

• Mosaic’s 4 Dunvegan HZ Wells

Booked - 14 Unbooked - 34 Vertical Dnvg Wells

10 20 30 40 50 60 70 80 30 40 50 60 70 80 90 IRR (%) WTI Oil Price ($US/bbl)

$3.5 AECO $2.5 AECO $3.5 AECO $2.5 AECO $3.5 AECO $2.5 AECO

250 500 750 1,000 12 24 36 48 60 Production Rate (boe/d) Time (months)

1.0 Mile 1.5 Mile 2.0 Mile

Dunvegan Single Well Economics

Mosaic Energy Ltd. • 18

IRR Sensitivity to WTI Oil Price – $2.50 & $3.50/MMBTU AECO(1)

Oil weighted, high GOR production delivers robust returns

• High heat content associated gas contributes to

plant liquids recoveries and premium sales gas pricing

Longer laterals & improved completion techniques will be incorporated into Dunvegan development to deliver superior returns

Notes: 1. Economics presented as go-forward economics

1.0 Mile Hz 1.5 Mile Hz 2.0 Mile Hz DCT Capex ($MM) 6.2 7.2 8.2 EUR (Mboe) 466 715 938 % Liquids (%) 56% 56% 56% IP 30 (boe/d) 437 706 950 IP 365 (boe/d) 250 399 533 IRR - Flat $50 WTI, $3 AECO (%) 12 25 32 NPV 10 - Flat $50 WTI, $3 AECO ($MM) 0.3 2.9 4.7 # of Locations (# booked) (#) 15 (4) 10 (4) 23 (6) Type Curve Assumptions

Facility & Marketing Arrangements Are In Place

Mosaic Energy Ltd. • 19

Infrastructure and egress critical to executing business plan

• Mosaic 50 mmcfd

plant is up and running, we have secured capacity and access over the near and medium term to align with the Kakwa development Expansion capability has been built into current infrastructure

• Mosaic gas plant can be

expanded to accommodate full development

• Pipeline to Pembina

Resthaven can handle multiples of near-term production

• Midstream companies

in dialogue to expand area capacity

Summary

• Assets in the heart one of highest value areas in the Kakwa development

fairway

• Substantial resource established with the bulk of the currently planned

activity related to PDP conversion

• Quality plays that generate attractive economics even in a challenged

price environment

• Flexible capital program that reduces timing risk
• A balance sheet and production base that can fund full development
• Size and location provide compelling liquidity options

Mosaic Energy Ltd. • 20

Mosaic Energy Ltd. • 21

Appendix – Supplementary Materials

1,000 2,000 3,000 4,000 5,000 3 6 9 12 15 18 Raw PD Gas Rate (Mcf/d) Time (Months)

100/04-18-065-05W6/02 100/12-32-064-05W6/00

Kakwa – Lower Montney Asset Potential

Mosaic Energy Ltd. • 22

1.6 MMcf/d 2.7 MMcf/d

Paramount 13-18-065-05W6

A A’

7G 13-28-064-05W6 Mosaic 12-06-062-03W6

• A

A’

Encouraging Early Gas Rates (no public liquids)

Dunvegan Hz Well Results

Mosaic Energy Ltd. • 23

100 200 300 400 500 600 700 800 200 400 600 800 1000 02/16-28-061-03W6 BOE Production vs Type Curve

Type Curve - 1 Mile Dunvegan Total BOE 22 x 42T Hybrid Slickwater 1566m Lateral 53% Liquids, CTD = 220.3 mboe

100 200 300 400 500 600 700 800 200 400 600 800 13-34-061-03W6 BOE Production vs Type Curve

Type Curve - 1 Mile Dunvegan Total BOE

100 200 300 400 500 600 700 800 500 1000 1500 16-32-061-03W6 BOE Production vs Type Curve

Type Curve - 1 Mile Dunvegan Total BOE 15 x 90T X-link Gelled Water 1410m Lateral 44% Liquids, CTD = 213.2 mboe TCPL Outages 3rd Party Restrictions, New Well Backout

100 200 300 400 500 600 700 800 50 100 150 200 04-28-061-03W6 BOE Production vs Type Curve

Type Curve - 1 Mile Dunvegan Total BOE 25 x 42T Hybrid Slickwater 1617m Lateral 48% Liquids, CTD = 46.7 mboe 22 x 42T Hybrid Slickwater 1540m Lateral 61% Liquids, CTD = 132.8 mboe TCPL Outages

CGR (bbl/MMcf) = 30 61 154 1 mile 1.5 mile 2.0 mile DCE CAPEX ($MM) 10.4 10.4 10.4 8.4 6.2 7.2 8.2 Oil (Mbbl)

• 179

293 398 Condensate (Mbbl) 180 313 429 50 14 21 27 Other NGL (Mbbl) 178 175 151 100 57 84 108 Sales Gas (Bcf) 4.9 4.3 2.4 6.7 1.3 1.9 2.4 Total (Mboe) 1,182 1,210 980 1,266 466 715 938 Capex/Boe ($/boe) 8.80 8.60 10.61 6.64 13.32 10.00 8.69 % liquids (%) 30% 40% 59% 12% 56% 56% 56% IP30 (boe/d) 1,630 1,725 1,560 1,707 437 706 950 IP 365 (boe/d) 860 885 855 1,423 250 399 533 PV10 ($mm) ($MM) 1.6 5.1 8.6 3.1 0.3 2.9 4.7 ROR (%) 17 35 66 36 12 25 32 Payout (years) (Years) 3.9 2.3 1.4 1.8 5.9 3.3 2.7 Recycle Ratio 1.7 2.2 2.5 1.7 1.6 2.2 2.5 # locations (booked) (#) 91 (38) 66 (40) 34 (20) 22 (12) 15 (4) 10 (4) 23 (6) Single Well Economics - 50 USD WTI, $3/mmBtu AECO 1.5 Mile Lateral - Wellsite Condy Yield EUR

Dunvegan Wilrich Montney

Type Curve Details & Single Well Economics

Mosaic Energy Ltd. • 24

Hedging Summary

Mosaic Energy Ltd. • 25

Product Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 2017 Average Oil Volume Hedged (bpd) 1,400 2,000 2,000 2,000 2,000 1,000 Average Price (WTI $Cdn.) 88.03 73.85 73.85 73.85 73.85 76.50 Average Gas Volume Hedged (mcfd) 22,217 33,175 28,436 18,957 18,957 9,479 Average Price (AECO $Cdn/mcf) 3.79 3.27 3.27 3.10 3.10 3.24

Pricing Summary

Mosaic Energy Ltd. • 26

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Sproule Price Deck WTI (US $/bbl) 70.00 $ 70.00 $ 70.00 $ 70.00 $ 75.00 $ 75.00 $ 75.00 $ 75.00 $ 80.00 $ 80.00 $ 80.00 $ 80.00 $ Henry Hub (US $/Mmbtu) 3.50 $ 3.50 $ 3.50 $ 3.50 $ 4.00 $ 4.00 $ 4.00 $ 4.00 $ 4.50 $ 4.50 $ 4.50 $ 4.50 $ AECO (C $/Mcf) 3.42 $ 3.42 $ 3.42 $ 3.42 $ 4.01 $ 4.01 $ 4.01 $ 4.01 $ 4.59 $ 4.59 $ 4.59 $ 4.59 $ F/X ($CAD/$US) 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 1.18 Corporate Price Deck WTI (US $/bbl) 56.00 $ 56.00 $ 56.00 $ 56.00 $ 60.00 $ 60.00 $ 60.00 $ 60.00 $ 64.00 $ 64.00 $ 64.00 $ 64.00 $ Henry Hub (US $/Mmbtu) 3.15 $ 3.15 $ 3.15 $ 3.15 $ 3.25 $ 3.25 $ 3.25 $ 3.25 $ 3.50 $ 3.50 $ 3.50 $ 3.50 $ AECO (C $/Mcf) 3.02 $ 3.02 $ 3.02 $ 3.02 $ 3.14 $ 3.14 $ 3.14 $ 3.14 $ 3.44 $ 3.44 $ 3.44 $ 3.44 $ F/X ($CAD/$US) 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 1.25 NGL Pricing Assumptions (% of C$ WTI) Propane 16% 16% 16% 16% 41% 41% 41% 41% 41% 41% 41% 41% Butane 67% 67% 67% 67% 68% 68% 68% 68% 68% 68% 68% 68% Pentane 96% 96% 96% 96% 102% 102% 102% 102% 102% 102% 102% 102%