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, operating and capital costs, marketability of crude oil, natural gas and natural gas liquids, 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, 2013 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, 2013 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. 2
Eagle Energy Trust is an energy trust created to provide investors with a publicly traded, reliable distribution paying investment, with favourable tax treatment relative to taxable Canadian corporations. Eagle pays out a portion of its available cash to unit holders on a monthly basis to provide attractive income. Eagle’s strategy is to acquire on-shore petroleum assets in the United States that have predictable cash flows and low risk unexploited development and exploitation potential. 3
VISION To create wealth for our investors by combining innovation, expertise and opportunity. GROWTH Our targeted lower payout ratio allows us to sustain growth and distribute income. INCOME To deliver predictable monthly distributions. 4
BUSINESS STRATEGY To acquire and optimize US based petroleum assets which have been adequately de-risked and have attractive metrics for: • significant “post acquisition” production growth, followed by long term production sustainability • strong returns on capital (2:1 recycle ratio), and • sustainable cash-flows which underpin distributions. 5
PLAN FOR GROWTH Upon acquiring a lower 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 distribution, • fund the capital to replace declines with less than 50% of cash flow, and • Deliver moderate annual production growth on that asset. Eagle may acquire higher PDP % assets if production is sustainable. 6
Current Working Interest Production: 3,000 boe/d Production Guidance – full year 2013 : 2,900 - 3,100 boe/d (average) Production Split: 95% light oil and NGLs Credit Facility: $US 61.0 million Annual Distribution: $1.05 per unit Current Yield (1)(2) : 13.8% Tax Pools: approx. $280 million (1) Based on the closing price of $7.62 on May 23, 2013. (2) Unlike fixed income securities, the Trust has no obligation to distribute any fixed amount, and reductions in, or suspension of, cash distributions may occur that would reduce future yield. 7
Ticker Symbol: EGL.UN Units Outstanding (basic): 30.3 million 52 Week Range: $6.28 - $10.94 Recent price (May 23/13 close): $7.62 Average daily trading volume (30 day): 88,773 units 30 day VWAP: $7.03 Market Cap (May 14/13): $231.2 million Insider Ownership: 2.4% basic, 8.0% fully diluted Equity Research: Scotia Acumen CIBC Haywood TD NBF PI Financial 8
First quarter 2013 average working interest sales volumes of 2,928 boe/d exceeded Eagle’s first quarter plan and were unchanged from Q4 2012 production levels. Achieved a 37% reduction in field operating costs (excluding transportation) compared to Q1 2012, and a 20% reduction compared to Q4 2012. Total field operating costs including transportation were $11.18/boe. This significant reduction was primarily due to improved operating procedures, including reducing salt water volumes and costs, resizing submersible pumps and negotiating lower power contracts. Q1 2013 funds flow from operations of $11.9 million, up 30% from Q1 2012 and up 20% from Q4 2012. Top-decile first quarter field netbacks were $52.59/boe. Canadian dollar realized oil prices were 103% of benchmark $US WTI. Premium pricing negotiated by Eagle in its 2013 marketing arrangements contributed to top decile per boe field and operating netbacks, giving Eagle a substantial revenue advantage over producers of Canadian oil. Q1 distributions held steady at $0.26 per unit or $0.0875 per unit per month without increasing debt per unit from the fourth quarter 2012. 9
A 188% increase year-over-year in total proved reserves. A 107% increase in year-over-year in proved developed producing reserves. A $US 46.4 million increase in year-over-year in PV10 value of proved developed producing reserves. Total proved plus probable reserves of approximately 16.6 million boe (68% proved, 29% proved producing). Reserve life index of 14.3 years based on forecast 2013 production. Reserves (Mboe) by Category PV10 Value ($US MM) 29.15% 32.13% PDP PDP $98.1 $115.3 PDNP PDNP PUD PUD 4.95% Probable Probable 33.77% $37.5 $13.3 10
On April 22, 2013, Eagle acquired the remaining 7.5% interest in its oil and natural gas properties in the Permian Basin located near Midland for cash consideration of approximately $US 8.5 million. The acquisition adds approximately 70 boe/d of production. The trust now owns 100% working interest in these properties. Upon completion of the 2012 year end reserves report and the closing of the acquisition, the borrowing base under Eagle’s credit facility was increased from $US 48.5 million to $US 61.0 million. 11
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