Investor Presentation TSX / NYSE: AAV January 2016 ADVANTAGE AT A - PowerPoint PPT Presentation

“Our 2016 Budget Targets 39% Production Growth, $0.75/mcfe Total Cash Costs, 1.6x Total Debt to Cash Flow and Generates Surplus Cash @ AECO Cdn $2.50/mcf ” Investor Presentation TSX / NYSE: AAV January 2016

ADVANTAGE AT A GLANCE TSX, NYSE: AAV TSX 52-week trading range $4.94-$8.36 Shares Outstanding (basic) 170.7 million 39% Annual Target Production Growth 2016 Annual Production Target 200 mmcfe/d (33,300 boe/d) Last Equity Issue 2009 Market Capitalization @ January 14, 2016 $1.1 billion Bank Debt @ Sept. 30, 2015 (37% undrawn on $450 million Credit Facility) $286 million Total Debt @ Sept. 30, 2015 (including working capital deficit) $298 million View of Glacier Plant Process Train – approximately 1000 feet long 2

POSITIONED FOR PROFITABLE & SELF-FUNDED GROWTH World Class Glacier Montney Asset >1,000 future drill Strong Balance Sheet locations Industry Leading Low Cost 2016 Budget (2) Producer $40 million surplus cash flow $0.75/mcfe (2) total cash costs 1.6x YE Total Debt/Cash Flow 26 Employees @$2.50 Cdn/mcf 2015-2017 Development Plan (1) 22% Average Annual Production Growth 245 mmcfe/d in 2017 (40,830 boe/d) Attractive Hedging Program Low Risk Development 52% Hedged @$3.62 Cdn/mcf 2016 2016 production target backstopped by standing wells 22% Hedged @$3.31 Cdn/mcf 2017 50% average ROR well economics 26% Hedged @ $3.17 Cdn/mcf Q1 2018 (1) Based on Management Development Plan Estimates (see pg. 25 in Appendix) 3 (2) Based on 2016 Advantage Budget & Guidance – See Advantage press release December 16, 2015

FOCUSED ON GLACIER DEVELOPMENT ADDITIONAL MONTNEY LANDS PROVIDES FUTURE UPSIDE  Current development at Glacier including Progress dry and liquids rich gas drilling with a (Future) future drilling inventory >1,000 locations 100% owned 9 net Montney Glacier Gas  Glacier New Montney lands at Valhalla, sections acquired Plant 81 net 2014 Wembley & Progress contain multiple sections layers and requires delineation Valhalla (Evaluating)  Total 137 net Montney sections (87,584 net acres) 47.25 net Montney sections Wembley acquired 2013 (Future) 4

CONTINUOUS IMPROVEMENT HAS CREATED INDUSTRY LEADING EFFICIENCIES… Upper & Lower Montney Well Performance Continuous improvement since 2008 5

…AND STRONG INVESTMENT RETURNS… INVESTMENT ANALYSIS OF 2013 DRILLING PROGRAM (No Hedging Gains Included) DC & E (25 Wells in 2013) (1) Capital Investment ($150) million Allocation of Plant, GGS, P/L cost to 25 wells (2) ($13) million Total Capital investment ($163) million Cash Flow Realized to Dec. 31, 2015 (no hedging included) (3) $147 million Remaining 2P Reserves Value at December 31, 2015 (4) $185 million Total Cash Flow + Remaining 2P Reserve Value $332 Million Net Value Generated ($332 million - $163 million) $169 million Profit/Investment Ratio 1.0x Average Program Payout <2 Yrs Top Quartile Wells Payout ~1.2 Yrs (1) Actual capital invested for the 25 wells drilled between July 2013 and March 2014. (2) Allocated based on the ratio of 25 wells over the total 432 wells included in Sproule’s 2P reserves report as of December 31, 2014 (3) Actual cash flow realized from the 25 wells to Nov. 2015 with an estimate for Dec. 2015. First well production was November 2013 with the last well being brought on production in July 2015. 6 (4) Management estimated NPV 10 of the remaining 2P reserves at a price of Cdn AECO $3.00/mcf & $40/bbl Edmonton Light escalated @ 1.5% per annum

…DRIVING STRONG GROWTH AND FINANCIAL FLEXIBILITY IN OUR 2016 BUDGET… KEY ASSUMPTIONS DELIVERABLES $120 Million Capital $160 Million Cash Flow (1) ($40 million surplus) 130 mmcf/d Completed Standing Well Inventory 39% Production Growth 13 Wells to Drill for 2017 29% Cash Flow per Share growth AAV Growth 70 mmcf/d Available Glacier 200 mmcfe/d Annual Plant Capacity Production (33,300 boe/d) $0.75/mcfe Total Cash Costs 1.6x Total Year End Debt to 52% Hedged @ Cdn $3.62/mcf trailing Cash Flow (1) 7 Note: (1) Based on Cdn AECO $2.50/mcf for 2016

…WITH 2016 SURPLUS CASH FLOW TARGETED AT CURRENT COMMODITY PRICES $160 million (1) $140 million (1) “Surplus Cash” $40 million $120 million $20 million $53 mm Drill 13 wells for 2017 $35 and beyond Pipeline looping $18 Complete 13 wells $41 $67 mm for 2016 Utilities, GGS $17 Other $9 2016 Capital Budget 2016 Cash Flow at AECO $2.50/Mcf 2016 Cash Flow at AECO $2.00/Mcf (2016 Budget) (sensitivity) 8 (1) Cash Flow estimated @ AECO Cdn gas prices, including Advantage’s current hedging positions.

ADVANTAGE DEVELOPMENT PLAN – 2015 THROUGH 2017 (1) Annual Average Production 22% Capital Spending CAGR (2) (mmcfe/d) ($ millions) 235 $200 $485 million Total (original 200 $165 estimate $700 million) 142 $120 2015 Actual + Estimate 2016 Budget 2017 Estimate 2015 Actual + Estimate 2016 Budget 2017 Estimate Capital Efficiency Cash Flow per Share 16% 16% $1.09 ($/boe/d) 29% $19,700 $0.94 29% $13,100 per boe/d Average Capital Efficiency $0.73 $12,500 $7,200 2015 Actual + Estimate 2016 Budget 2017 Estimate 2015 Actual + Estimate 2016 Budget 2017 Estimate Notes : (1) Price assumptions: 2016 AECO $2.50/mcf and 2017 AECO $2.75/mcf. See Appendix pg. 25 for Plan details. 9 (2) Compound annual growth rate. (3) Capital Efficiency calculated using 30% per annum decline including total capital expenditures per year to replace and grow production.

MAINTENANCE CAPITAL AND CASH FLOW SENSITIVITY “Staying Flat” is achievable at ≈ AECO $2.00/ Mcf Based on average well type curve $115 million (1) $195 million $150 million Based $115 million on top $90 million quartile type well (2) Maintenance Capital at Cash Flow at AECO Cash Flow at AECO Cash Flow at AECO 245 mmcfe/d $2.10/Mcf $2.50/Mcf $3.00/Mcf (No hedging included) Notes (1) Assumes 7.2 mmcf/d /7.2 Bcf for Upper/Lower Montney wells and 4.5 mmcf/d /4.5 Bcf for Middle Montney wells (Management estimates) (2) Assumes 9 mmcf/d /9 Bcf for Upper/Lower Montney wells and 6 mmcf/d /6 Bcf for Middle Montney wells (Management estimates) 10

DEVELOPMENT PLAN SENSITIVITY & HEDGING POSITIONS Current hedging program reduces downside risk and maintains upside torque Production Period Hedged (net) AECO 2016 52% $3.62/mcf 2017 22% $3.31/mcf 2018 Q1 26% $3.17/mcf Notes : (1) Estimates updated as of December 10, 2015 and includes Advantage’s current hedges. 11

ADVANTAGE VERSUS CANADIAN GAS & OIL PRODUCERS Targeting top tier debt-adjusted production per share growth while retaining a strong balance sheet… …and spending less than cash flow. Source : RBC Capital Markets, Equity Research estimates for 2016 at future strip pricing dated as of Jan. 4, 2016. Companies include AAV, ARX, BIR, BNP, BTE, CJ, CPG, CR, ERF, KEL, NVA, PEY, PGF, POU, PPY, PWT, RRX, SGY, SRX, TET, TOG, TOU, VET, VII, WCP and excludes any companies with 2016 net debt to cash flow exceeding 5.0x or 2016 effective payout ratio exceeding 200%. 12

INDUSTRY LEADING LOW COST STRUCTURE PROVIDES STRONG NETBACKS & RECYCLE RATIO EVEN WITHOUT HEDGING Illustrative AECO Cdn Glacier Operating Netback $2.50/mcf $2.40 (1) Revenue (Realized Price) ($0.12) Royalties AAV - Industry leading low ($0.36) Operating Costs (2) cost structure $1.92 Operating Netback Recycle Ratio 3 Year average 2P 1.9x F&D $1.03/mcfe (3) G&A ($0.12) ($0.15) Finance Expense & other $1.65 or Cash Flow Netback $9.90/boe (1) Revenue includes adjustments for heat value offset by natural gas transportation costs of $0.28/mcf (2) Operating costs include estimate for liquids transportation costs 13 (3) 2P F&D includes Future Development Capital with 2012 @ $0.73/mcfe, 2013 @ $1.33/mcfe and 2014 @ $1.03/mcfe

ADVANTAGE COMPARED TO NORTH AMERICAN GAS WEIGHTED PRODUCERS 16E/15E Production Growth (%) 2016E Total Cash Costs (Cdn $/boe) $12.78 $12.43 38% 17% $4.48 13% AAV Canadian E&P US E&P AAV Canadian E&P US E&P (Gas Weighted) (Gas Weighted) (Gas Weighted) (Gas Weighted) 2016E D/CF (x) 2016E Capital/Cash Flow (%) 5.5 157% 135% 3.7 67% 1.2 AAV Canadian E&P US E&P AAV Canadian E&P US E&P (Gas Weighted) (Gas Weighted) (Gas Weighted) (Gas Weighted) Source : RBC Capital Markets, Equity Research estimates for 2016 at future strip pricing dated as of Jan. 12, 2016. Canadian E&P companies include AAV, BIR, BNP, CR, ECA, ERF, KEL, NVA, PEY, PMT, POU, PPY, TET, TOU, and VII. US E&P companies include CHK, CRK, ECR, EQT, GPOR, MRD, NBL, REXX, RICE, RRC, SWN, UPL, and XCO. 14

OPERATIONAL EXCELLENCE 15

LARGE INVENTORY OF STANDING WELLS & PRODUCTION CAPABILITY 20 Only 8 Wells Required to Wells Completed & Standing Sustain Production from 130 to (current) 180 mmcfe/d since July 2015 130+ MMCF/D IP30 from the 20 wells 17 Wells Drilled, uncompleted 2-18 LM (2013) 5-3 UM 21 mmcf/d (1) (2014) 12-35 MM 2016 Annual target of 200 mmcfe/d & 12 mmcf/d (1) (2014) 18 mmcf/d (1) growth to 245 mmcfe/d in April 2017 attainable with current standing inventory of wells 4-15 LM (2014) 12 mmcf/d (1) 2014 Drilling Program Wells 8-35 MM (2014) 12 Upper Montney 9 mmcf/d (1) 13 Middle Montney 9-35 UM (2014) 8 Lower Montney 17 mmcf/d (1) (1) Initial production rate 16 Note: Wells will be choked to ≤10 mmcf/d to manage frac sand flow back issues per AAV operating practices