Disclaimer Regarding Forward Looking Statements: This presentation - - PowerPoint PPT Presentation

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Disclaimer Regarding Forward Looking Statements:

This presentation includes statements that contain forward looking information (“forward-looking statements”) in respect of Eagle Energy Trust’s expectations regarding its future operations, drilling program, production, reserves, operating costs, capital expenditures, debt, credit facility, payout and recycle ratios, funds flow from operations, field netbacks, hedging, the amount and sustainability of distributions, tax pools, business strategy and plans for growth, among other things. These forward looking statements involve estimates and assumptions including those relating to timing to drill and bring wells on production, production rates, marketability of oil and natural gas, future commodity prices, currency exchange rates, anticipated cash flow based on estimated production, size of reserves and reservoir performance, among other things. These estimates and assumptions necessarily involve known and unknown risks, delays, challenges and other uncertainties inherent in the oil and gas industry including those relating to geology, production, drilling, technology, operations, human error, mechanical failures, transportation, processing problems and poor reservoir performance, among others things, as well as the business risks discussed in the Trust’s annual information form dated March 22, 2012 under the headings “Risk Factors” and “Forward-Looking Statements and Risk Factors”. The forward-looking statements included in this presentation should not be unduly relied upon. Actual results may differ from the forward-looking information in this presentation, and the difference may be material and adverse to the Trust and its

• unitholders. No assurance is given that the Trust’s expectations or assumptions will prove to be correct. In addition, this

presentation contains forward-looking statements attributed to third party industry sources. Accordingly, all such statements are qualified in their entirety by reference to, and are accompanied by, the information and factors discussed throughout this

• presentation. These statements speak only as of the date of this presentation and may not be appropriate for other purposes.

Eagle’s annual information form dated March 22, 2012 contains important detailed information about Eagle and its trust units. Copies of the annual information form may be viewed at www.sedar.com and on Eagle’s website.

Disclaimer Regarding Oil and Gas Measures:

This presentation contains disclosure expressed as barrel of oil equivalency (“boe”) or boe per day (“boe/d”). All oil and natural gas equivalency volumes have been derived using the conversion ratio of 6 Mcf of natural gas: 1bbl of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the

• wellhead. In addition, given that the value ratio based on the current price of oil as compared to natural gas is significantly

different from the energy equivalent of six to one, utilizing a boe conversion ratio of 6 Mcf: 1 bbl would be misleading as an indication of value.

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• Eagle Energy Trust is an energy trust created to provide investors

with a publicly traded, oil and natural gas focused yield product, with favourable tax treatment relative to taxable Canadian corporations.

• Eagle pays out a portion of its available cash to unitholders on a

monthly basis to provide attractive income.

• Eagle’s strategy is to acquire on-shore producing assets in the

United States that have predictable cash flows and low risk unexploited development and exploitation potential.

• Eagle is a “mutual fund trust” and is not a “SIFT trust”.

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VISION To create wealth for our investors by combining innovation, expertise and opportunity. GROWTH Our targeted 50% payout ratio allows us to sustain growth and distribute income. INCOME To deliver predictable monthly distributions.

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Current Working Interest Production: 2,900 boe/d Production Guidance – second half of 2012: 3,000 boe/d (average) Production Guidance – full year 2012: 2,700 boe/d (average) Production Split: 97% light oil and NGLs Current Debt (Sept 30, 2012): US$34 million Credit Facility: US$48.5 million Annual Distribution: $1.05 per unit Current Yield1: 11.8% Tax Pools:

• approx. $250 million

(1) Based on the closing price of $8.90 on November 12, 2012

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Ticker Symbol: EGL.UN Units Outstanding (basic): 28.9 million 52 Week Range: $7.95 - $11.74 Recent price (Nov 12/12 close): $8.90 Average daily trading volume (30 day): 80,194 units 30 day VWAP: $9.76 Market Cap (Nov 12/12): $257.6 million Insider Ownership: 2.7% basic, 9.5% fully diluted Equity Research: Scotia Acumen CIBC Haywood TD NBF

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Average working interest production of 3,000 boe/d for the second half of 2012 and 2,700 boe/d for the full year 2012:

• In Q3 2012 Eagle brought on production:
• 8 (6.4 net) wells in the Salt Flat Field
• 2 (1.9 net) wells in the Midland Area
• New wells expected to be brought on production in Q4:
• 5 wells in the Salt Flat Field
• 3 wells in the Midland Area
• Q4 2012 average working interest production expected to be

approximately 11% above third quarter production of 2,825 boe/d

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• 2012 exit rate production of approximately 3,300 boe/d, with approximately

1,000 boe/d (95% oil and NGL) coming from the Midland area and 2,300 boe/d (100% oil) coming from the Luling area.

• 2012 full year average operating cost guidance maintained at approximately

$15.00 per boe, trending below $13.00 per boe during the fourth quarter.

• 2012 full year funds flow from operations guidance of approximately $37.0

million1.

• Exit 2012 with an approximate 1.0 x debt to trailing cash flow ratio.
• Distributions remain sustainable.
• 2012 payout ratio2 expected to be approximately 70%.

Eagle does not anticipate any negative revisions to reserves as the adjustment to Eagle’s guidance is due to drilling delays and potential mud displacement issues during completion techniques only. (1) Assuming $US 88 WTI, natural gas $US 2.90 NYMEX and 2012 average working interest production of 2,700 boe/d. (2) Eagle calculates this ratio as follows: Unitholders Distributions / Funds flow from operations.

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• Current hedges lock in at least 1,300 bopd at US$87 - $108 WTI through

January 2014

• Average working interest sales volumes of 2,825 boe/d, (95% oil and natural gas

liquids), a 184% increase from the comparable 2011 quarter and an 18% increase from the second quarter of 2012.

• Funds flow from operations of $9.0 million ($34.78 per boe or $0.32 per unit), a

272% increase from the comparable 2011 quarter and a 25% increase from the second quarter of 2012.

• A 12% reduction in field operating costs, excluding transportation, since the

second quarter 2012 and a 17% reduction when compared to the third quarter of

• 2011. Total field operating costs, including transportation, are $13.78/boe.
• Field netbacks of approximately $45 per boe at US$92 average WTI.
• Declared unitholder distributions of $0.26 per unit for the quarter ($0.0875 per

unit per month).

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• 2012 Capital budget of US$ 42 million (net to Eagle):
• Midland area (US$ 17.5 million):
• 8 (7.4 net) vertical oil wells.
• 8 stage frac, multi-zone, stacked pay.
• Luling area (US$ 24.5 million):
• 16 (12.8 net) horizontal oil wells.
• 3 (2.1 net) side track re-entry wells.
• 2 (1.6 net) salt water disposal wells.
• 2 tank batteries.
• Completing the electrification of balance of Salt Flat field.

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BUSINESS STRATEGY

• To acquire and optimize US based petroleum assets which have

been adequately de-risked (typically >20% PDP) and have attractive metrics for:

• potential production growth (typically >2x boe/d in <24

months),

• return on capex (2:1 recycle ratio), and
• sustainability (targeted 50% payout ratio and multi-year

drilling inventory), on an asset-by-asset basis.

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PLAN FOR GROWTH

• Upon acquiring a low PDP % asset, Eagle intends to increase the

historical rate of capital investment in the near term to grow production, optimize operations and maximize drilling inventory.

• After the “ramp up”, Eagle expects cash-flow from each asset to:
• sustainably support Eagle’s targeted payout ratio of 50%,
• fund the capital to replace declines, and
• deliver 7-10% annual production growth on that asset.
• Eagle may acquire higher PDP % assets if production is sustainable.

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• Eagle has paid out $40.4 million in cash distributions since inception to the end of

September 2012.

• Marketing Contracts
• A new marketing contract (with a September 2012 through February 2013 term)

at the Salt Flat Field pegs the reference price to Louisiana Light Sweet instead of WTI, resulting in Eagle receiving an additional $US 5.80 per barrel.

• A new marketing contract (with an October 2012 through February 2013 term) in

the Midland Area will result in Eagle receiving an additional $US 2.24 per barrel.

• Electrical Contracts
• Power installation at the Salt Flat Field is now complete (one or two generators

are used temporarily until recently drilled well sites can be electrified).

• The Salt Flat Field electrical contract has been renegotiated which will save

Eagle $US 143,000 for the remainder of 2012 and will result in a 37% drop in the per-kilowatt-hour electrical charges from December 2012 to December 2014. Fuel, utilities and equipment rentals (generators) account for 40% of the 2012 year to date operating costs.

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DELIVERING ON VALUE CREATION IN THE LULING, TEXAS AREA

• 2012 exit rate of approximately 2,300 bopd from this area will result

in a greater than seven fold production increase since the June 1, 2010 effective acquisition date.

• Extended drilling inventory on Salt Flat from 3 years at time of

acquisition, to over 5 years.

• Reserves replacement ratio over 250% from acquisition date.
• Achieved a recycle ratio of 2:1.

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MIDLAND, TEXAS AREA ACQUISITION

• 92.5% working interest in 3,175 gross (2,937 net) acres of land.
• Acquired 600 boe/d effective April 1, 2012, for US$113 million.
• Expect to exit 2012 at approximately 1,000 boe/d.
• Added 10.2 MMboe of proved plus probable reserves (88% oil and liquids),

valued at $US 152 million (PV10 2P).

• Eagle overall 2P RLI lengthened from 8 years to over 13 years.
• $95 million financing at $11/unit; balance paid with $18 million of debt.
• Eagle has agreed to purchase the seller’s remaining working interest in the

properties on or before April 30, 2013 at fair market value.

• Assumed operatorship September 1, 2012.

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• Since inception, Eagle has bought 900 boe/d of production at a cost
• f $243 million (Luling and Midland areas).
• By the end of 2012, we expect to add $69 million of additional capital

for an overall cost since inception of $312 million.

• With $69 million, we expect to grow 900 boe/d of purchased

production into 3,000 boe/d average for the second half of 2012 – a greater than 330% increase.

• Eagle has drilled 52 horizontal wells at the Salt Flat Field (Luling

area) with a 95% success rate – a trend we expect to continue on the Permian Basin (Midland area) assets.

• Since the April 1 effective date of the Midland area acquisition, 7

wells have been drilled in the Midland area.

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• Solid metrics:
• 97% light oil and NGL’s, 3% natural gas.
• Premium netbacks.
• Competitive operating costs.
• Excellent balance sheet – prudent use of debt.
• Experienced management team and Board.
• Demonstrated ongoing organic growth.
• Predictable distributions.
• Poised to grow production on existing assets.
• Expect to grow by continuing to transact.

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200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 Bbl/d

Hedging Summary

95 X 103.75 Costless Collar 98 Fixed Price 103 Fixed Price 90 X 91.60 Costless Collar 87 X 89.70 Costless Collar 95 X 108 Costless Collar 92 X 105 Costless Collar 91 Fixed Price 101 Fixed Price 88 X 107 Costless Collar 85 X 100 Costless Collar

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$50.00 $75.00 $100.00 $125.00 $150.00 Eagle Energy Trust TSX Composite TSX Oil and Gas E&P

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Total Pre-Tax EV / Entity Value / Reserve Unit Market Entity Debt / Yield DACF Volume % Gas 2012E Daily P+P Life Index Price Cap Value

2012E CF Current 2012E 2012E 2012E

Production Reserve

P+P

10/9/2012

$MM $MM x % x boe / d % $/ boe / d $/ boe years

Crescent Point $42.48 $14,659 $16,251 1.0 x 6.5% 9.4 x 95,000 9% $171,061 $31.88 14.7 Baytex $46.39 $5,710 $6,229 1.0 x 5.7% 10.7 x 54,000 14% $115,355 $22.41 14.1 Vermilion $45.64 $4,566 $5,091 0.9 x 5.0% 8.6 x 37,750 33% $134,851 $33.29 11.1 PetroBakken $14.03 $2,687 $4,303 2.6 x 6.8% 6.2 x 44,400 14% $96,913 $22.71 11.7 Bonterra $43.18 $862 $1,014 2.0 x 7.2% 11.5 x 6,850 30% $147,964 $24.63 16.5 Parallel $4.78 $245 $446 4.9 x 20.1% 8.5 x 7,300 34% $61,034 $8.51 19.7 Argent $10.15 $366 $361 n.a. 10.3% n.a. 3,400 53% $106,312 $16.34 17.8 Zargon $8.85 $265 $360 1.7 x 8.1% 5.8 x 8,300 36% $43,319 $12.13 9.8 Average 2.0 x 8.7% 8.7 x 32,125 28% $109,601 $21.49 14.4 $9.92 $297 $320 0.7x 10.6% 6.9 x 2,900 2% $110,247 $17.89 16.9 Notes:

(1) Production and reserves stated gross of royalties using a 6:1 equivalent conversion. (2) Total debt includes long-term debt, working capital deficiency and convertible debentures. (3) Leverage ratios exclude option proceeds. (4) Cash flow forecasts based on consensus estimates. (5) Production forecasts based on company guidance and street consensus estimates. (6) Reserve Life Index calculated based on 2012E production, adjusted for acquisitions and divestitures. (7) Unlike fixed income securities, the Trust has no obligation to distribute any fixed amount, and reduction in, or suspensions of cash distributions may occur that will reduce future yield. (8) Eagle Energy Trust reserves as at December 31, 2011 pro forma the Permian Basin acquisition announced April 2012; Reserve Life Index calculated based on estimated 2012E production of 2,900 boe/d pro forma the Permian Basin acquisition announced April 2012.

Source: Scotiabank Global Banking & Markets, Bloomberg, Company Reports. Daily Production

• Eagle’s targeted monthly distribution of $0.0875 per unit ($1.05 for 2012)
• 45% of 2012 distributions assumed to be included in the income of Unitholders.
• Remainder is return of capital and reduces the adjusted cost base of the units.

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Unit Market Entity Pre-tax After-tax Yield Price Cap Value Yield Ontario Alberta B.C. Quebec

10/9/2012

$MM $MM

Current 2012 2012 2012 2012

Marginal Dividend Tax Rate 29.5% 19.3% 26.1% 32.8% Marginal Income Tax Rate 46.4% 39.0% 43.7% 48.2% Crescent Point $42.48 $14,659 $16,251 6.5% 4.6% 5.2% 4.8% 4.4% Baytex $46.39 $5,710 $6,229 5.7% 4.0% 4.6% 4.2% 3.8% Vermilion $45.64 $4,566 $5,091 5.0% 3.5% 4.0% 3.7% 3.4% PetroBakken $14.03 $2,687 $4,303 6.8% 4.8% 5.5% 5.1% 4.6% Bonterra $43.18 $862 $1,014 7.2% 5.1% 5.8% 5.3% 4.9% Parallel $4.78 $245 $446 20.1% 14.0% 15.0% 14.4% 13.8% Argent $10.15 $366 $361 10.3% 8.5% 8.8% 8.6% 8.5% Zargon $8.85 $265 $360 8.1% 5.7% 6.6% 6.0% 5.5% Average 8.7% 6.3% 7.0% 6.5% 6.1% Eagle @ $1.05 Dist. $9.92 $297 $320 10.6% 8.4% 8.7% 8.5% 8.3% Yield Premium (based on Eagle at 10.6%) Average 1.9% 2.1% 1.8% 2.0% 2.2% Low

• 9.5%
• 5.7%
• 6.3%
• 5.9%
• 5.5%

High 5.6% 4.9% 4.7% 4.8% 4.9%

Notes: (1) Non-taxable (RRSP or TSFA) investors who hold Eagle (assuming 10.6% yield) are earning a yield premium of 190 bps against the average yield of the peer group. (2) Taxable investors in Ontario are earning a yield premium of 210 bps against the peer average (assuming 10.6% yield for Eagle) and a yield premium/discount range from a 570 bps discount to 490 bps premium. (3) Taxable investors in Alberta, B.C. and Quebec enjoy average yield premiums of 180 bps, 200 bps and 220 bps, respectively. (4) Pre-tax yield is calculated as total annual dividends per share divided by the current share price. (5) The tax deferred component of the Eagle distribution is assumed to be 55%. (6) Unlike fixed income securities, the Trust has no obligation to distribute any fixed amount, and reductions in, or suspensions of cash distributions may occur that would reduce future yield. Source: Scotiabank Global Banking & Markets

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Richard Clark, Director, President and Chief Executive Officer

• Nineteen years in the legal profession as a founding partner at a boutique oil and gas law firm, then ten years

at a Canadian national law firm, specializing in corporate finance, securities, M&A and venture capital.

• Extensive experience in the royalty trust sector.

Kelly Tomyn, CA, Chief Financial Officer

• Former VP Finance and CFO for numerous public & private companies with over twenty-two years of financial

experience with E&P companies.

• Former controller for Shiningbank.

Wayne Wisniewski, MBA, P.E., VP Operations (Houston)

• Twenty-nine years of oil and gas engineering and operations experience.
• Last 12 years of career spent in a senior operations management role in the Houston office of a major

petroleum company.

Continued..

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Continued.. Robert Cunningham, VP Business Development (Houston)

• Over twenty-five years experience in the oil and gas business involving business development, finance, energy

banking and risk management.

• Former VP Finance and Business Development of Zone Energy, LLC, a privately held oil and gas company.

James Elliott, CA, VP Finance

• 16 years of experience in corporate finance and financial accounting, with 14 years of direct experience in the oil

and gas industry.

• Former controller with Southern Pacific Resource Corp.

Dusty Dumas, Controller (Houston)

• Twenty years experience in financial and reporting roles.
• Former VP Finance of a large privately held oil and gas company.

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David Fitzpatrick, P.Eng., Chairman Former Chief Executive Officer, Shiningbank Bruce Gibson, CA, Chair of Audit Committee Former Chief Financial Officer, Shiningbank Warren Steckley, P.Eng., Chair of Reserves and Governance Committee President and Chief Operating Officer, Barnwell of Canada, Former Director Shiningbank Joseph Blandford, P.Eng., Chair of Compensation Committee Retired Oilman, Resides in Houston, TX Richard Clark, B.A. (Econ), LLB, Director President and Chief Executive Officer, Eagle Energy, Former Director Shiningbank

EAGLE’S AREAS OF ACTIVITY

25 Caldwell County (Luling area) Houston Martin County (Midland area)

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Caldwell County - Luling, Texas

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Caldwell County - Luling, Texas

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Caldwell County - Luling, Texas

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Martin County - Midland, Texas

…

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EAGLE LEADS THE RE-EMERGENCE OF THE CANADIAN ENERGY TRUSTS

• First energy trust IPO since 2006 (Nov. 2010).
• First IPO using the foreign asset income trust model, which we

created (Nov. 2010).

• First to operate our own assets (Aug. 2011).
• First bought deal acquisition of a stand-alone asset (May 18, 2012):
• not a working interest top up;
• not a private equity sponsored acquisition.
• Eagle leads this emerging asset class and we expect to continue to

lead as we grow our business.

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CONTACT: Richard W. Clark, CEO

Eagle Energy Inc.

900, 639 – 5th Avenue SW Calgary, AB T2P 0M9 Tel: (403) 531-1575 info@EagleEnergyTrust.com