March 2020 Investor Presentation 1. Reduce operating costs/increase - - PowerPoint PPT Presentation

TSX: CJ

March 2020

Investor Presentation

• 1. Reduce operating costs/increase netbacks
• 2. Reduce net debt to 1X
• 3. ARO impact spend

Our Strategy

2 | Cardinal Energy Ltd. | TSX: CJ

Increase Free Cash Flow

Go Forward

3 | Cardinal Energy Ltd. | TSX: CJ

Increase Sustainability Reduce Risk

Goal 2019 Result Goal 2019 Result

1. Firm up our ability to replace production  Increased our drilling inventory by earning land thru farm ins 1. Pay down our debt  Reduced net debt by $22 million 2. Lower our operating costs  As a result of 2019 initiatives reducing our operating cost from $ 20.94 boe/d to a budgeted $20.00 boe/d in 2020 2. Reduce our Asset Retirement Obligations ("ARO") exposure  Reduced our gross undiscounted ARO liability by $42 million 3. Increase our netbacks  Reduced operating costs, began blending operations, optimized

• ur delivery points

3. Reduce our reliance on third parties and variable costs  Reduced our power bill thru self generation by $2.3 million/year

Exhibit 11: 2019E Conventional Decline Rates

Decline Rates

4 | Cardinal Energy Ltd. | TSX: CJ

Note: CNQ, CVE, HSE, and IMO include Canadian production only and exclude oil sands production. VET’s decline rate is based on Canadian production only. Refer to Exhibit 1.33 for detailed data on VET’s corporate decline rate. FRU’s decline rate represents production from free title and gross overriding royalty (GORR) production, excluding joint ventures, production volume royalty agreements, and working interest volumes. Refer to exhibit 1.17 for FRU corporate decline data inclusive of all corporate volumes. Source: Company reports: geoSCOUT: Drillinginfo: Scotiabank GBM estimates Source: Scotiabank, Statsbook, May 2019

5 10 15 20 25 30 35 40 45 50 VII ATH NVA KEL BTE PMT DEE TOU ECA BXE PONY PEY CR ERF CPG OBE AAV VET BNP POU TOG SGY BIR ARX BNE PSX WCP HSE FRU PGF CVE CNQ CJ IMO

Corporate Decline Rate (%)

Average: 28%

Cardinal ± 10%

 Our capital allocation philosophy at Cardinal is to enhance our ability to sustainably increase shareholder returns. This meant taking a hard look at all of our operating metrics and concentrating on those which add real value to our shareholders. It meant being disciplined and judiciously allocating capital to our asset base. In the current market environment where external debt and equity capital, if available, is prohibitively priced, our source of capital is the cash flow generated by our assets. We strive to be disciplined as stewards of this cash flow and re-deploy it in ways which maximize our current and future profitability.  In 2019, lack of transportation egress, Government imposed production constraints and the low decline nature of our assets convinced us that building more productive capacity should be de-emphasized over strengthening our balance sheet and increasing our margins on existing production. As such, some of the allocations of our $63 million of budget expenditures were allocated 35% to drilling wells which targeted reserve additions, 5% to stratigraphic test wells which delineated geological concepts de-risking future development inventory, 6% for ongoing CO2 purchases to enhance recovery at Midale and 30% to improving our facilities and power generation.  The results of these expenditures were not only apparent in our operating results for 2019 but will continue to add to shareholder value over the medium to long term. For example in 2019, our power expenditures and other margin initiatives resulted in a decrease in operating costs while our balance sheet strengthening resulted in both a decline in overall debt and an increase in debt adjusted reserves per share. More importantly, these expenditures on debt reduction and operating cost savings will continue to be felt in enhanced cash flow into the future.

2019 Reserves Summary

5 | Cardinal Energy Ltd. | TSX: CJ

Reserves per Share Growth

2019 Reserves

6 | Cardinal Energy Ltd. | TSX: CJ

Debt Adjusted Reserves per Share (1)(2)(3) Year End 2019 Year End 2018 % Change Reserves/Share (boe/debt adjusted share) Basic Diluted Basic Diluted % Change Basic % Change Diluted Proved Producing 0.34 0.33 0.31 0.31 9% 8% Total Proved and Probable 0.52 0.51 0.46 0.46 12% 11%

Notes: (1) Debt adjusted shares are based on the closing share price at December 31, 2019 of $2.60/share and December 31, 2018 of $2.22/share and unaudited net debt of $247.6 million at December 31, 2019 and net debt of $269.7 million at December 31, 2018 (2) Diluted shares include consideration of outstanding Restricted Awards (3) 2019 reserves based on GLJ Petroleum Consultants reserves evaluation report effective December 31, 2019 ("GLJ Report")

NPV10 per Share Growth

2019 Reserves

7 | Cardinal Energy Ltd. | TSX: CJ

Debt Adjusted NPV10 per Share (1)(2)(3) Year End 2019 Year End 2018 % Change NPV10/Share ($/debt adjusted share) Basic Diluted Basic Diluted % Change Basic % Change Diluted Proved Producing $4.54 $4.44 $4.27 $4.21 6% 6% Total Proved and Probable $6.15 $6.02 $5.78 $5.69 6% 6%

Notes: (1) Debt adjusted shares are based on the closing share price at December 31, 2019 of $2.60/share and December 31, 2018 of $2.22/share and unaudited net debt of $247.6 million at December 31, 2019 and net debt of $269.7 million at December 31, 2018 (2) Diluted shares include consideration of outstanding Restricted Awards (3) 2019 net present value discounted at 10% before tax ("NPV10") based on the GLJ report

• Multi-year inventory
• Conventional play types
• Extensions and infills of

existing producing assets

• Inventory balanced across:
• Asset base
• Play types
• Oil quality
• Development maturity
• Egress options
• Strong economics at current

commodity prices

8 | Cardinal Energy Ltd. | TSX: CJ

Drilling Inventory

Ensures sustainability of production, optionality for long-term growth

North (105/31)

• Light and medium oil
• Horizontal multifrac and

multilateral inventory

• Dunvegan bars
• Clearwater shoreface
• Swan Hills platform
• Gilwood sandstones

South (88/39)

• Light and medium oil
• Horizontal multifrac and multilateral

inventory

• Glauc channels
• Ellerslie valley fill
• Arcs

Central (117/9)

• Light and medium oil
• Horizontal multifrac and

multilateral inventory

• Rex marine sand
• Viking shoreface
• Waseca channels

Midale (201/26)

• Light oil
• Horizontal multifrac and CO2

infill vertical and horizontal inventory

Cardinal (>500 identified locations/105 booked)

Light and medium oil Horizontal multifrac, multilateral and vertical inventory

Cardinal Production Trend

9 | Cardinal Energy Ltd. | TSX: CJ

Daily Field Net Production (BOEPD)

Midale Turnaround (September) House Mountain Turnaround (October) Self-Curtail (late-Nov/Dec.) South AB Turnaround (Scots Lake) and Jenner Power Outages South AB New Drills

• n Production

2019 Recovery

• Low Decline, Long Reserve Life
• Oil Focused
• Balanced Portfolio
• Deep Development Drilling Inventory
• Defined ESG Focus

Cardinal (Sustainable Asset )

10 | Cardinal Energy Ltd. | TSX: CJ

North Central South Midale

2020 Budget and Statistics

26% 16% 30% 28% FCF* ($40-45MM)

24% 25% 26% 25%

NOI ($155-165MM) 22% 39% 19% 21% Capex ($60-65MM) 16% 29% 32% 24% Production (20.5-21.5 mboe/d) 20% 55% 10% 15% Drilling (wells) 200 92 87 136 Drilling Inventory (# potential locations)

Total Production

11 | Cardinal Energy Ltd. | TSX: CJ

Daily Net Sales (BOEPD)

5,000 10,000 15,000 20,000 25,000 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Net Produced Oil/NGL/Condensate (bbl/day) Net Est Sales Gas (BOE/day) Net Est Sales Total (BOE/day) Rate (BOEPD)

• Low decline, light oil focus
• Established long life water floods
• Water flood, Infrastructure
• ptimization
• Select development drilling

North (Sustainable Asset)

12 | Cardinal Energy Ltd. | TSX: CJ

2020 Budget and Statistics

26% NOI ($155-165MM) 19% Capex ($60-65MM) 30% FCF* ($40-45MM) 32% Production

(20.5-21.5 mboe/d)

10% Drilling

(wells)

87 Drilling Inventory

(# of potential locations)

Northern Alberta (Stable Light Oil)

13 | Cardinal Energy Ltd. | TSX: CJ

Daily Net Sales (BOEPD)

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Net Produced Oil/NGL/Condensate (bbl/day) Net Est Sales Gas (BOE/day) Net Est Sales Total (BOE/day) Rate (BOEPD)

• Low Decline, Long Reserve Life
• Medium oil
• Established water floods
• Water flood optimization
• Select drilling inventory assessment
• Focus on reduction in inactive well

count

Central (Sustainable Asset )

14 | Cardinal Energy Ltd. | TSX: CJ

2020 Budget and Statistics

25% NOI ($155-165MM) 21% Capex ($60-65MM) 28% FCF* ($40-45MM) 24% Production

(20.5-21.5 mboe/d)

15% Drilling

(wells)

136 Drilling Inventory

(# of potential locations)

Central Alberta (Waterflood Management and Optimization)

15 | Cardinal Energy Ltd. | TSX: CJ

Daily Net Sales (BOEPD)

1,000 2,000 3,000 4,000 5,000 6,000 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Net Produced Oil/NGL/Condensate (bbl/day) Net Est Sales Gas (BOE/day) Net Est Sales Total (BOE/day) Rate (BOEPD)

• Light, Medium Oil focus
• High deliverability drilling

development

• Area based closure focus

South

16 | Cardinal Energy Ltd. | TSX: CJ

2020 Budget and Statistics

25% NOI ($155-165MM) 39% Capex ($60-65MM) 16% FCF* ($40-45MM) 29% Production

(20.5-21.5 mboe/d)

55% Drilling

(wells)

92 Drilling Inventory

(# of potential locations)

South Alberta (Predictable Development Drilling and Optimization)

17 | Cardinal Energy Ltd. | TSX: CJ

Daily Net Sales (BOEPD)

1,000 2,000 3,000 4,000 5,000 6,000 7,000 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Net Produced Oil/NGL/Condensate (bbl/day) Net Est Sales Gas (BOE/day) Net Est Sales Total (BOE/day) Rate (BOEPD)

24% NOI ($155-165MM) 22% Capex ($60-65MM) 26% FCF* ($40-45MM) 2% Area inventory 20% Drilling 16% Production

• <10% decline
• Low relative recovery factor
• Targeted EOR/CO2 development
• Annual CO2 sequestration ~0.3MT

Midale (Low Decline, Free Cash Flow Asset)

18 | Cardinal Energy Ltd. | TSX: CJ

2020 Budget and Statistics

Midale, Saskatchewan (Waterflood Management and Optimization)

19 | Cardinal Energy Ltd. | TSX: CJ

Daily Net Sales (BOEPD)

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Net Produced Oil/NGL/Condensate (bbl/day) Net Est Sales Total (BOE/day) Rate (BOEPD)

Note Regarding Forward Looking Statements This presentation contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws relating to Cardinal's plans and other aspects of Cardinal's anticipated future operations, management focus, objectives, strategies, financial, operating and production results. Forward- looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend", " may", "would", "could" or "will" or similar words suggesting future

• utcomes, events or performance. The forward-looking statements

contained in this presentation speak only as of the date thereof and are expressly qualified by this cautionary statement. Specifically, this presentation contains forward-looking statements relating to: our business goals, strategies, plans and objectives, drilling inventory and future locations, expected future drilling and

• perating costs, production decline rates, expected realized pricing,

the benefits of our risk management program, future free cash flow, plans to increase sustainability and reduce risk by, among other things, improving our ability to replace production, lowering

• perating costs and increasing netbacks, and by reducing debt,

ARO exposure and reliance on third parties and variable costs, our capital budget and the allocation thereof, our drilling and

• ptimization plans, plans to reduce our electricity demand, power

generation costs and economics, targeted debt to cash flow, and plans with respect to use of future free cash flow. Forward-looking statements regarding Cardinal are based on certain key expectations and assumptions of Cardinal concerning anticipated financial performance, business prospects, strategies, regulatory developments, production curtailments, current and future commodity prices and exchange rates, applicable royalty rates, tax laws, future well production rates and reserve volumes, future operating costs, the performance of existing and future wells, the success of our exploration and development activities, the sufficiency and timing of budgeted capital expenditures in carrying

• ut planned activities, the availability and cost of labor and services,

the impact of competition, conditions in general economic and financial markets, availability of drilling and related equipment, effects of regulation by governmental agencies, the ability to obtain financing on acceptable terms which are subject to change based on commodity prices, market conditions, drilling success and potential timing delays. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond Cardinal's control. Such risks and uncertainties include, without limitation: the impact of general economic conditions; volatility in commodity prices and differentials; power costs; industry conditions; currency fluctuations; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition from other producers; the lack

• f availability of qualified personnel, drilling rigs or other services;

changes in income tax laws or changes in royalty rates and incentive programs relating to the oil and gas industry; changes in curtailment programs; hazards such as fire, explosion, blowouts, and spills, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury; and ability to access sufficient capital from internal and external sources. Management has included the forward-looking statements above and a summary of assumptions and risks related to forward-looking statements provided in this presentation in order to provide readers with a more complete perspective on Cardinal's future operations and such information may not be appropriate for other purposes. Cardinal's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward- looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Cardinal will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of this presentation and Cardinal disclaims any intent or obligation to update publicly any forward- looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

Advisory

20 | Cardinal Energy Ltd. | TSX: CJ

Oil and Gas Advisories The term "boe" or barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Additionally, 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 ratio of 6:1 may be misleading as an indication of value. Any references in this presentation to initial production rates 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. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Cardinal. This presentation contains metrics commonly used in the oil and natural gas industry which have been prepared by management, such as "netback" or "operating netback". These terms do not have standardized meaning and may not be comparable to similar measures presented by other companies and, therefore, should not be used to make such comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide shareholders with measures to compare Cardinal’s operations over time. Readers are cautioned that the information provided by these metrics, or that can be derived from metrics presented in this presentation, should not be relied upon for investment or other

• purposes. Refer below to the Non-GAAP Measures section of this

presentation for additional disclosure on "operating netback" or "netback". Drilling Locations This presentation discloses Cardinal's approximate 500 gross drilling locations, of which 80 (69.7 net) are booked proved undeveloped locations, 25 (22.6 net) are booked probable undeveloped locations and 439 are unbooked. The booked locations are derived from the report prepared by GLJ evaluating Cardinal's reserves as of December 31, 2019. There is no certainty that we will drill all drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas

• production. The drilling locations on which we actually drill wells

will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is

• btained and other factors. While certain of the unbooked drilling

locations have been de-risked by drilling existing wells in relative close proximity to such unbooked drilling locations, other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore these is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production. Non-GAAP measures This presentation contains the terms "adjusted funds flow", "free cash flow", "net debt" and "netback" which do not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS" or, alternatively, "GAAP") and therefore may not be comparable with the calculation of similar measures by other companies. Cardinal uses adjusted funds flow to analyze operating performance and assess leverage. Cardinal feels this benchmark is a key measure of profitability and overall sustainability for the Company. Adjusted funds flow is not intended to represent operating profits nor should it be viewed as an alternative to cash flow provided by operating activities, net earnings or other measures of performance calculated in accordance with GAAP. Adjusted funds flow is calculated as cash flows from

• perating activities adjusted for changes in non-cash working

capital, decommissioning expenditures and transaction costs. "Free cash flow" is calculated as adjusted funds flow less development capital expenditures less dividends. The term "net debt" is not recognized under GAAP and is calculated as bank debt plus the principal amount of convertible unsecured subordinated debentures ("convertible debentures") and current liabilities less current assets (adjusted for the fair value of financial instruments, the current portion of lease liabilities and the current portion of the decommissioning obligation). Net debt is used by management to analyze the financial position, liquidity and leverage of Cardinal. Netback is calculated on a boe basis and is determined by deducting royalties, transportation costs and operating expenses from petroleum and natural gas revenue. Netback is utilized by Cardinal to better analyze the operating performance of our petroleum and natural gas assets as compared to prior periods.

Advisory

21 | Cardinal Energy Ltd. | TSX: CJ