CORPORATE PRESENTATION November 2019 SEVEN GENERATIONS ENERGY - PowerPoint PPT Presentation

TSX: VII CORPORATE PRESENTATION November 2019

SEVEN GENERATIONS ENERGY Serving our stakeholders through: • Differentiated attention to selection, development & replenishment of the lowest supply cost resource • Best in class execution through safe, responsible, innovative and efficient development • Maximizing profitability by proactively securing access to premium-priced markets • Maintaining an unwavering focus on balance sheet strength 2

7G CORPORATE PROFILE Largest Producer of Condensate, Premier Alberta Montney Pure-Play Canada’s Most Valuable Hydrocarbon  205 Mboe/d (37% condensate, 21% NGL, 42% gas) in Q3/19  Multiple market exposures provide maximum gas price optionality Financial Strength and Capital Discipline  $1.37 billion adjusted funds flow (trailing twelve months)  1.6x trailing 12 month net debt to adjusted funds flow ratio  $1.3 billion current available funding (3)(4) A Sustainable, Top-tier assets located near demand centers, Free Cash Flow Generating Business Model (4) multiple pipeline routes, and future LNG optionality  Over 15 years of premium inventory, with future upside  Sustaining capital requirements of $1 billion, trending lower  Best-in-class GHGe emissions TSX:VII Capitalization and Q3 2019 Financial Highlights Share Count Market Cap (1) $2.5 billion 341 million Basic (1) Generating Meaningful Returns (Trailing 12 Month) Adjusted Funds Flow Net Debt (2) $2.2 billion $0.98 per Diluted Share (4)  7.9% return on capital employed (ROCE) (4)  14.1% cash return on invested capital (CROIC) (4) Adjusted Funds Flow Enterprise Value (3) $4.7 billion $18.09  $1.79 per share of net income ($/boe) (4) (1) October 31, 2019 share price & shares outstanding as of September 30, 2019. (2) US$1.575B in senior unsecured notes converted at $1.3164 CAD/USD plus adjusted net working capital deficiency as of September 30, 2019 of $128 MM. (3) Figures may not add due to rounding. For additional information see “Non - IFRS Measures Advisory” and “Other Definitions” in the “Important Notice” that appears at the end of the presentation. (4) 3

2020 BUDGET - SETTING THE STAGE Budget Objectives: Value Creation • Economic growth in per-share production, cash flow and free cash flow Shareholder Focus • Cash flow upside from higher prices benefits shareholders Consistency • Commitment to execution, stakeholder service and responsible development Resiliency • Cost and operating efficiencies, optimization and naturally moderating decline rates 1) For additional information, see “Forward Looking Information Advisory” and “Non - IFRS Measures Advisory” in the “Important Notice” at the end of this presentation 4

NEAR TERM DEVELOPMENT GOALS • Nest 1 development  Integrate Nest 3 Core • Step into Nest 2 East development Areas • Nest 3 resource to fill  Define Nest 1 perimeter infrastructure • Balanced Nest development across all 3 layers • Optimize Nest 1 / Nest 2 boundaries • Advance integrated lower  Full triple-stack New Montney development  Assess lower Montney • Potentially high-grade Areas areal extent perimeter areas 2019 2020 2021+  Evaluate NCIB allocation • Further reduce decline rate • Sub-40% corporate decline  Moderate corporate decline • Reduced WTI break-even • Sub-US$45 WTI break-even Corporate  Free cash flow above US$50 WTI • Significant free cash flow • Significant free cash flow at  Land swap efficiencies potential at $50+ WTI $45+ WTI 7G’s business becomes more resilient and expands free cash flow potential 1) For additional information, see “Forward Looking Information Advisory” and “Non - IFRS Measures Advisory” in the “Important Notice” at the end of this presentation. 5

2020 CAPITAL BUDGET & GUIDANCE 2020 Capital Budget & Guidance Sustaining Capital (1) $1.0 billion Completions Discretionary Capital (2) $0.1 billion Total Capital Investment $1.1 billion Average Production 200 - 205 Mboe/d H1/20 Production 190 - 200 Mboe/d $1.1 Equip & Tie-in billion H2/20 Production 205 - 215 Mboe/d Development Wells On Stream (#) 75 - 80 Pads & Drilling Percent Liquids 56 - 60% Pipes Percent Condensate 34 - 38% Other Value Royalty Rate at US$50 WTI 5 - 7% Enhancing Royalty Rate at US$60 WTI 7 - 9% Delineation Operating Expenses ($/boe) $4.75 - $5.25 • Organically funded at $50 WTI / $2.50 Henry Hub Transportation ($/boe) $6.75 - $7.25 • Commodity price upside benefits shareholders in the form G&A ($/boe) $0.85 - $0.95 of accelerated buyback / net debt reduction • Value enhancements improve future condensate pricing Interest ($/boe) $1.80 - $1.90 • Sustaining capital continues to trend lower 1) Sustaining capital refers to capital expenditures including drilling, completions, equipping, tie-in and other expenditures required to maintain production from existing facilities at current levels. 2) Discretionary capital refers to capital expenditures that are not required to maintain production from existing facilities at current levels, including but not limited to delineation, infrastructure, value-enhancing projects, and production growth 6 For additional information, see “Forward - Looking Information Advisory” and “Other Definitions” in the “Important Notice” at the end of this presentation. 3)

2020 CAPITAL ALLOCATION GUIDING PRINCIPLES Dollars ($MM) $1,800 Value Enhancing $1,600 $70 WTI Delineation $1,400 Major Infra $60 WTI Value Enhancing Reduced break-even costs Growth $1,200 and FCF growth Delineation even with low prices Value Enhancing $50 WTI Delineation $1,000 $800 $40 WTI $600 Sustaining Sustaining Sustaining $400 $200 $0 2018 Actual 2019 Budget 2020 Budget 2021 Budget 2022 Budget Adjusted Funds Flow Sensitivity Free cash flow growth trajectory on track 1) E&P adjusted funds flow reflects US$2.50/MMbtu Henry Hub, US$5/bbl condensate differentials. 2) For additional information, see “Forward -Looking Information Advisory ”, “ Non-IFRS Measures Advisory” and “Other Definitions” in the “Important Notice” at the end of this presentation. 7 3) Sustaining capital refers to capital expenditures including drilling, completions, equipping, tie-in and other expenditures required to maintain production from existing facilities at current levels.

THE CORNERSTONES OF OUR BUSINESS Return of Capital Return on Capital Free Cash Flow Strategic Principles Financial Sustainability Market Resource Access Quality & Low Supply Cost Stakeholder Strong Service balance sheet Large, high quality asset base Location/access to infrastructure Control/flexibility Skilled and knowledgeable staff 7G’s strategic principles drive value creation 8

STRATEGIC PRINCIPLES: FINANCIAL SUSTAINABILITY Net debt to trailing 12 month adjusted EBITDA Solid Balance Sheet 2.4x Leverage is below 2x at US$50 WTI 2.1x 1.6x 1.5x 1.4x 1.3x 1.2x $1.6B of liquidity 0.9x $1.3B available on $1.4B facility 2015 2016 2017 2018 2019E 2020E C$0.3B accordion 2023 maturity Historical US$70 WTI US$60 WTI US$50 WTI Long maturities with fixed coupons Long term note maturities 3.5 Years to Next 6.875% Notes Maturity US$450MM 5.375% Notes 2023 is earliest senior 6.75% Notes US$700MM unsecured note maturity US$425MM 2020 2021 2022 2023 2024 2025 Balance sheet strength is core to 7G’s business For additional information, see “Forward - Looking Information Advisory” and “Non - IFRS Measures Advisory” in the “Important Notice” at the end of this 1) presentation. 9

7G’S TRACK RECORD OF INDUSTRY LEADING RETURNS 7G Cash Return on Invested Capital (CROIC) (2) 19.1% 17.9% 17.4% 16.4% 2015 2016 2017 2018 Top Quartile Returns vs North American Sectors 2018 EBITDA / Total Average Capital (2) (3) (4 ) 30% 27% 27% 25% 25% 20% 19% 19% 18% 18% 16% 14% 12% 10% Tech Cons. VII Industrials Staples Materials Healthcare Comms. Financials US CDN Montney Utilities Real Disc. Energy Energy Firms (4) Estate Source: Bloomberg Non-IFRS financial measures. For additional information see “Non - IFRS Measures Advisory” and “Forward - Looking Information Advisory” in the “Important Notice” (1) that appears at the end of the presentation. (2) Subsectors based on SPDR Select Indices: XLK, XLY, XLI, XLP, XLB, XLV, XLC, XLF, XLE, XLU, XLRE, and iShares XEG (TSX Capped Energy). 10 (3) Montney firms include: AAV, ARX, BIR, CR, ECA, KEL, NVA, PIPE, PONY, POU, TOU.

7G’S STRATEGIC EVOLUTION TOWARD FREE CASH FLOW (1)(2)(3) Free Cash Flow (2) (3) Capital Investments As a Percentage of Adjusted Funds Flow ($MM) 350% Nearly $300 MM free cash flow potential between $200 Total Capital $50-$60/bbl WTI 300% 250% Facilities capital intensity -$200 continues to fall across a 200% $50-$60/bbl environment 150% -$600 100% 50% Facilities Capital 0% -$1,000 2014 2015 2016 2017 2018 2019E 2020E 2014 2015 2016 2017 2018 2019E 2020E Free cash flow growth via decline moderation and reduced facilities investment drives future capital allocation optionality (1) 2020 full-year budgeted assumptions include US$50/bbl WTI, US$2.50/MMbtu Henry Hub, US$5/bbl condensate differentials. Adjusted funds flow and free cash flow shown above use 11 the same assumptions with $60/bbl WTI price. For additional information see “Forward - Looking Information Advisory” and “Non - IFRS Measures Advisory” in the “Important Notice” that appears at the end of the presentation. (2)