Canadian M&A Perspectives

Canadian M&A Perspectives Ryder Scott Canada – Annual Reserves Conference

May 10, 2016

TECHNICAL PIONEER AND Scotia Waterous GLOBAL LEADER IN OIL AND GAS M&A

AUSTRALIA BAHAMAS BRAZIL CANADA CHILE CHINA COLOMBIA DUBAI FRANCE HONG KONG INDIA

IRELANDJAPAN KOREA MALAYSIAMEXICO PERU SINGAPORE TAIWAN THAILAND UNITED KINGDOM UNITED STATES Scotia Waterous Scotia Waterous is the leading technically-focused upstream investment banking and M&A advisory firm, with global offices in Houston, London, Calgary and Hong Kong • Unrivalled market intelligence from conducting ~50 M&A mandates per year globally

London Calgary

Houston Hong Kong

Scotiabank Oil & Gas Offices

1 Canadian M&A Perspectives – Where are all the deals??

1. Setting the Scene – Macro Environment 2. Canadian M&A Market Update 3. Outlook – 2016 and Beyond

Appendix I. M&A&D Activity II. Comparable Valuation Analysis

2 Setting the Scene – Macro Environment

Section 1 The Canadian Energy Environment Today

“Loonie surges to nine-month high as commodity prices add on gains” April 20, 2016

“Oil jumps despite glut, hits 2016 peaks on weak dollar” April 28, 2016

“Forget Justin Trudeau, it’s oil that’s driving this loonie rally” April 28, 2016

“Premier Rachel Notley talks carbon tax”

March 3, 2016 “How Hillary Clinton’s tone has shifted on fracking” April 14, 2016

“TransCanada Fights Keystone Denial With $15 Billion Appeal” January 6, 2016

“Oil and gas sector says investment will drop by $50B”

April 7, 2016 “Alberta sets out details for new oil and gas royalty framework”

April 21, 2016

4 Significant E&P Job Cuts…

First Announcement Second Announcement # of Jobs Lost Dates Announced # of Jobs Lost Dates Announced Companies (employees) (dates) (employees) (dates)

1,500 July 28, 2015 7,000 October 30, 2015

200 March 18, 2015 1,810 September 01, 2015

4,000 January 12, 2016 3,000 February 02, 2016

2,000 February 13, 2015

1,500 June 16, 2015

6,500 January 09, 2015

1,700 January 13, 2015

250 January 14, 2015

200 November 06, 2015

1,400 October 30, 2015 500 February 09, 2016

700 July 30, 2015

200 October 28, 2015 1,000 February 16, 2016

Total 20,150 13,310 and more…. +33,460 Total!

Source: Press releases

5 …and Material Capital Budget Reductions

Generally larger capital reductions in North America • Over US$250 Billion decrease in capital investment since 2014 Capital Expenditure(1)(2) US$ Billion $250 Mid Cap & Small Cap Large Cap

$200 (63)% or ($149B) $150 (30)% or ($43B)

$100 (37)% or ($27B) (66)% or $50 ($36B)

$0 2014A 2016E 2014A 2016E 2014A 2016E 2014A 2016E (1) (2)

Source: FactSet (1) U.S. small and mid-caps defined as ≤ $25 B as at June 2014 (2) Canada mid-caps defined as ≤ $10 B as at June 2014

6 Cycle Times and Payout

• Length of time from first capex to first production (“Cycle Time”) of large projects is longer • Shale / “Resource Play” development has changed the elasticity of supply in North America and globally – Production from large developments to be replaced over time by shale Payout Period vs. Cycle Time Years | Years

16 LONG PAYOUT LONG CYCLE TIME Rosebank

14 EXPLORATION, APPRAISAL, Libra PRE-FEED / FEED, 12 CONSTRUCTION (DELAYS?) COMMISSIONING, CASH FLOW 10 Johan Castberg Tupi Northeast 8 SHORT PAYOUT Johan Sverdrup SHORT CYCLE Nsiko and Aparo Payout Period 6 TIME (OML 140) DRILL, COMPLETE, 4 Permian EQUIP and TIE IN Bakken 2 Eagle Ford Montney Viking 0 0123456 Source: Wood Mackenzie, Scotiabank Cycle Time

7 Market Themes Overall market remains highly volatile given economic and commodity price uncertainty

• Energy sector has been the weakest performing sub-sector in the S&P TSX until recent rally

• Government changes have become a secondary concern

• Higher cost of capital for public companies (improving recently)

Well capitalized companies have outperformed

• Heavy investor focus on leverage levels, funding and sustainability

Investor flight to size, liquidity and safety

• Larger companies have outperformed

8 E&P Outlook – Scotiabank CAPP Investment Symposium Takeaways

1• Tempered optimism on a price recovery

• General view that the bottom may have been in late January/early February, but price recovery will be volatile

2• Companies remain conservative with primary focus on protecting the balance sheet; will be slower to increase drilling in response to increased prices

• Pipeline and related infrastructure remain key to getting Canadian oil & gas to foreign markets • View that all stakeholders must work together to get Canadians on board for Energy East or other important pipeline projects 3• M&A market may cautiously increase as the year continues

• General view that bid-ask spreads remain high, preventing a lot of transactions from being finalized • Stability/gradual increase in underlying prices will help buyers/sellers align on value and complete deals • Strong demand for high netback, positive IRR opportunities; little demand for other assets 4• Natural gas pricing remains challenged

• Strong production across North America putting a significant damper on prices in the near term • No clarity on LNG projects with FID being deferred for major west coast LNG projects

9 Enterprise Value by Region

Value lost is across the globe Enterprise Value at June 1, 2014 Current Enterprise Value(1)

Total Enterprise Value: US$4,550 billion Total Enterprise Value: US$3,262 billion

WTI – US$102.43/bbl WTI – US$45.99/bbl (55%)

2.8% 7.0% 1.6% 2.7%1.4% 6.0% 8.8% 31.4% 8.2% 34.7% US$1,288 9.0% billion of value 9.6% lost (28% decline)

15.3% 15.3% 22.0% 24.2%

• Canadian E&P equity value has decreased by ~C$157 B since July 1, 2014 – ~C$27 B since July 1, 2015

Source: FactSet (1) As of April 29, 2016

10 North American Share Price Performance By Size Category(1)

North American E&P equity markets have experienced a flight to size and liquidity Price Performance (July 1, 2014 – Present) Price Performance (July 1, 2015 – Present) Return (%) Return (%) Canada U.S. Canada U.S.

0% 0% (6%)

(25%) (25%) (12%) (23%) (28%) (28%) (30%) (33%) (33%) (36%) (50%) (50%) (38%) (47%) (51%) (57%) (59%) (60%) (75%) (75%) (67%)

(100%) (100%) Global Large Large Cap Mid Cap Small Cap Global Large Large Cap Mid Cap Small Cap Cap Cap (Over $30B) ($10B to $30B) ($1B to $10B) (Under $1B) (Over $30B) ($10B to $30B) ($1B to $10B) (Under $1B) Number of 5 14 6 13 29 37 9 12 Companies: 5 14 6 13 29 37 9 12

Source: FactSet as of April 29, 2016 (1) Size criteria classified by EV as at July 1, 2014

11 TSX: Broad Market Performance

The energy sector has been among the weakest performing sub-sectors on the TSX, but has recovered slightly in early 2016 S&P TSX Sector Performance S&P TSX Sector Performance July 1, 2014 – Present January 1, 2016 – Present

Consumer Staples 51% Materials 43%

Information Technology 29% Energy 14%

Telecom Services 16% S&P/TSX Composite 7%

Real Estate 15% Utilities 7%

Consumer Discretionary 14% Telecom Services 7%

Utilities 3% Financials 5%

Financials 2% Industrials 4%

Industrials (1%) Real Estate 3%

S&P/TSX Composite (8%) Consumer Staples 1%

Materials (13%) Consumer Discretionary 1%

(7%) Paper and Forest Products (18%) Information Technology

Energy (34%) Paper and Forest Products (17%)

Health Care (59%) Health Care (62%)

(75%) (50%) (25%) 0% 25% 50% 75% (75%) (50%) (25%) 0% 25% 50%

Source: FactSet as of April 29, 2016

12 Canadian E&P Market Capitalization Current Market Capitalization C$ Billions Under $1B $1B to $10B $10B to $30B Over $30B Market Cap. @ Jul. 1, 2014

$67 • Canadian E&P equity value has decreased by ~C$157 B since July 1, 2014 $60 – ~C$27 B since July 1, 2015 Change in Sector Market Capitalization $50 • Top 6 companies Company Current (C$B) July 1, 2014 (C$B) represent ~72% Suncor Energy $58 $67 $40 of total Canadian equity Imperial Oil $41 $54 Canadian Natural Resources $36 $48 value Husky Energy $17 $26 Cenovus Energy $16 $34 $30 – July 2014: ~61% Crescent Point Energy $11 $20 Top Six Canadian E&P $178 $248 Total Canadian E&P $249 $405 $20 Total Canadian E&P Total Top Six Equity Value Decrease $157 $70 $10

> RMP Energy Inc. Energy RMP Crew Energy Inc. Surge Energy Inc.Surge Energy Husky Energy Inc. MEG Energy Corp. Suncor Energy Inc. Imperial Oil Limited Oil Imperial NuVista Energy Ltd. NuVista Encana CorporationEncana Kelt Exploration Ltd. Delphi Corp. Energy Cardinal Energy Ltd. Energy Cardinal ARC Resources Ltd. Birchcliff Energy Ltd. TrilogyCorp. Energy Baytex Energy Corp. Tourmaline Oil Oil Corp.Tourmaline Cenovus Energy Inc. Cenovus Energy TORC Oil & Gas Ltd. Oil & Gas TORC Pine Pine Cliff Energy Ltd. Enerplus Corporation Vermilion Energy Inc. Spartan Energy Corp. Storm Resources Ltd. PrairieSky Royalty Ltd Bonterra Energy Corp. Twin Butte Ltd. Energy SunshineLtd. Oilsands Freehold Royalties Ltd. Freehold Royalties Bellatrix Exploration Ltd. Whitecap ResourcesWhitecap Inc. Advantage Oil & Gas Ltd. Long Run Exploration Ltd.Exploration Run Long Penn West Petroleum Ltd. Penn West Petroleum BlackPearl Resources Inc. Athabasca Oil Corporation Lightstream ResourcesLtd. Canadian Canadian Oil Sands Limited Paramount Resources Ltd. Crescent Point Energy Corp. Crescent Tamarack Valley Energy Ltd. Raging RiverRaging Exploration Inc. Painted Pony Petroleum Petroleum PonyPainted Ltd. Bonavista Energy Corporation Pengrowth Energy Corporation Northern Blizzard Resources Inc Seven Generations Energy Ltd. Canadian Natural ResourcesCanadian Natural Limited Peyto Exploration & Development Corp. > $10 - $ 1 Market - < Cap $30 $30 $ 10 $ 1 B

Source: FactSet as of April 29, 2016; Current Total Canadian E&P adjusted for value of companies that had an IPO during the period; Company Screen: Excludes Trust Companies and companies with EV < C$400MM)

13 TSX E&P Performance

Senior companies and intermediate companies with exposure to strong plays have outperformed Share Price Performance Last 12 Months at April 29, 2016 40% 30%

20% 8% 8% 3% 0% (4%) (5%) (6%) (6%) (20%) (7%) (9%) (12%) (13%) (14%) (16%) (16%) (18%) (19%) (20%) (20%) (21%) (21%) (22%) (40%) (23%) (26%) (29%) (30%) (30%) (30%) (33%) (34%) (37%) (39%) (40%) (41%) (41%) (41%) (43%) (44%) (44%) (60%) (44%) (47%) (48%) (49%) (51%) (52%) (55%) (56%) (58%) (60%) (62%) (62%) (63%) (80%) (63%) (70%) (71%) (71%) (73%) (74%) (76%)

(100%) (82%) (87%) (87%) (94%) (94%) (99%) (120%) Kelt Oryx ARC Gear Rock Crew RMP Peyto Parex Surge Storm Ithaca CNRL Husky TORC Delphi Argent Trilogy Baytex Zargon Suncor Encana NuVista Bellatrix Journey Bankers Canacol Chinook Cardinal Spartan Birchcliff Bonterra Enerplus Freehold Cenovus Pine CliffPine Africa Oil Whitecap Vermilion Perpetual Long Run Long Bonavista PrairieSky Cequence Twin Butte Tamarack BlackPearl Pengrowth Advantage Penn West Penn Paramount Tourmaline Imperial Oil Imperial Gran Tierra Lightstream Touchstone TransGlobe MEG Energy MEG Raging River Raging Painted Pony Athabasca Oil Athabasca Crescent Point Crescent Pacific Rubiales Pacific Northern Blizzard Seven Generations Seven

Seniors & Intermediates Juniors International Oil Sands

Note: Pricing as of April 29, 2016

14 Canada E&P Valuation – Are Prices Actually Low?

Valuation multiples are more expensive, increasing from levels seen a year ago

EV / Forward DACF: 1 Year Ago vs. Today 27.6x 34.4x 39.5x 27.6x February 19, 2015 April 29, 2016 30.1x 25.5x 25.0x 20.9x 20.9x 20.9x 20.9x 21.4x 21.4x 21.0x 21.0x 20.0x 18.8x 18.8x 18.6x 18.6x 17.6x 16.9x 16.9x 16.6x 16.6x 16.4x 16.4x 16.1x 16.1x 16.0x 16.0x 15.7x 15.7x 15.5x 15.5x 15.4x 15.4x 15.4x 15.4x 15.3x 15.3x 14.9x 14.9x 14.8x 14.8x

15.0x 13.9x 13.8x 13.8x 13.7x 13.7x 13.6x 13.6x 13.5x 13.5x 13.4x 13.4x 13.2x 13.2x 13.2x 13.2x 13.2x 13.2x 12.9x 12.9x 12.5x 12.5x 12.4x 12.4x 12.0x 12.0x 11.8x 11.8x 11.8x 11.6x 11.6x 11.6x 11.6x 11.2x 11.2x 11.1x 11.1x 10.8x 10.8x 10.8x 10.8x 10.6x 10.6x 10.5x 10.5x 10.5x 10.5x 10.2x 10.2x 10.1x 10.1x 10.1x 10.0x 10.0x 9.7x 9.7x 9.7x 9.7x 9.5x 9.5x 9.5x 9.5x 9.4x 9.4x 9.2x 9.2x 9.1x 9.1x 10.0x 9.0x 8.6x 8.6x 8.6x 8.6x 8.6x 8.5x 8.5x 8.2x 8.2x 7.8x 7.8x 7.8x 7.8x 7.7x 7.7x 7.4x 7.4x 7.1x 6.9x 6.9x 6.6x 6.6x 6.3x 6.3x 5.9x 5.9x 5.9x 5.9x

5.0x

0.0x ARC MEG Crew Peyto Surge CNRL Husky TORC Trilogy Baytex Suncor Encana NuVista Bellatrix Imperial Cardinal Birchcliff Bonterra Enerplus Freehold Cenovus Vermilion Whitecap Bonavista PrairieSky Advantage Pengrowth Paramount Penn West Tourmaline Lightstream Raging River Painted Pony Crescent Point Spartan Energy Kelt Exploration Northern Blizzard Seven GenerationsSeven Seniors & Oil Sands Intermediates (> $1 B) Juniors ($500 MM-$1 B) Average 12.1x 12.4x 8.9x Previous Current 18.8x 15.3x 13.1x

Note: New estimates based on strip pricing as of April 22, 2016 (2016E: $39.98/bbl WTI and $2.18/MMbtu Henry Hub), prior estimates based on strip pricing as of February 19, 2015 (2015E: $56.92/bbl WTI and $2.94/MMbtu Henry Hub); share price as of April 29, 2016

15 Comparative Valuation Analysis at Strip Pricing

Stock market appears to be pricing in well above strip prices – valuations are not inexpensive Junior/Intermediate E&P Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Advantage Oil & Gas AAV SO $6.94 $10.00 $1,519 8.9x 7.0x 9.5x 7.7x 1.2x 1.0x 371% 212% 138% 101% Birchcliff Energy BIR SP $4.67 $7.00 $1,557 10.5x 4.5x 14.8x 7.9x 11.7x 5.2x nmf nmf 6671% 202% Cardinal Energy CJ SO $9.30 $12.00 $740 12.3x 15.2x 13.6x 16.8x 2.8x 4.0x 217% 163% 150% 139% Crew Energy CR SO $4.62 $6.50 $931 12.3x 7.3x 12.6x 8.7x 4.8x 3.2x 477% 208% 405% 1050% Freehold Royalties Ltd. FRU SP $11.80 $14.00 $1,312 20.3x 14.3x 19.8x 14.5x 2.5x 1.5x 253% 192% n/a n/a Northern Blizzard NBZ SP $4.28 $5.75 $889 4.4x 9.6x 6.3x 11.8x 3.5x 8.3x n/a 222% 170% 134% NuVista Energy NVA SO 5.12 7 1060 7.8x 9.0x 9.6x 11.2x 2.5x 3.3x 1024% nmf 1707% 294% Paramount Resources POU SO 7.85 12.5 2827 9.7x 5.2x 11.4x 8.7x 17.9x 10.6x nmf nmf 459% 88% Perpetual Energy PMT SU $1.24 $0.10 $393 nmf nmf -506.3x 107.6x -8.7x -22.8x nmf (134%) (103%) (124%) Peyto Exploration & Dev. PEY SO $31.76 $40.00 $6,155 10.5x 8.6x 12.1x 10.3x 2.8x 2.7x 735% 379% 302% 263% Tourmaline Oil TOU SO $27.99 $35.00 $8,368 13.8x 8.2x 15.2x 9.6x 3.5x 2.2x 918% 409% 337% 296% Trilogy Energy TET SP $4.46 $5.50 $1,152 12.1x 12.1x 14.3x 14.5x 11.8x 12.3x nmf nmf nmf nmf Vermilion Energy VET SO $39.11 $57.50 $5,936 10.8x 9.6x 12.4x 11.6x 3.5x 3.8x n/a 340% 229% 142% Av e rage $2,526 11.1x 9.2x -27.3x 18.5x 4.6x 2.7x 571% 221% 951% 235%

Intermediate E&P Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) ARC Resources ARX SO $19.60 $23.00 $7,893 11.0x 10.7x 11.8x 11.4x 1.6x 1.5x 1233% 613% 236% 193% Baytex Energy BTE SO $6.05 $7.00 $3,297 5.1x 4.3x 9.4x 8.7x 7.6x 7.5x 336% 232% 40% 27% Bonavista Energy BNP SP $2.84 $4.00 $1,959 3.5x 3.1x 8.1x 8.2x 6.6x 6.9x 53% 53% 55% 55% Crescent Point Energy CPG SO $21.24 $26.00 $15,551 7.7x 8.2x 9.7x 10.1x 3.0x 3.0x 921% 372% 233% 218% Enerplus Corporation ERF SP $6.57 $5.75 $2,677 8.3x 6.6x 11.2x 10.1x 6.1x 5.7x 102% 259% 267% 179% Pengrowth Energy PGF SP $1.73 $1.75 $2,896 3.2x 7.4x 6.4x 12.2x 5.3x 12.5x n/a 277% 161% 71% Penn West Exploration PWT SU 1.38 1 2773 -59.4x -29.3x 29.2x 38.8x -154.2x -82.1x n/a 167% 57% 33% PrairieSky Royalty PSK SO 26.02 28 4168 35.0x 31.4x 33.7x 30.0x -1.3x -1.2x n/a n/a n/a n/a Seven Generations VII SO $21.74 $22.00 $7,797 13.1x 8.8x 13.0x 9.7x 3.0x 2.4x nmf nmf nmf nmf Lightstream Resources LTS SU $0.32 $0.25 $1,708 -2.7x 38.1x 16.3x 13.7x -72.8x 1044.2x nmf n/a nmf nmf Av e rage $5,072 2.5x 8.9x 14.9x 15.3x -19.5x 100.0x 529% 282% 150% 111%

Source: Scotiabank GBM estimates; company reports; Bloomberg Note: * Figures reported in US$. ** Target price in SEK/Figures in US$ ***Prices in COP/Figures in US$ Strip pricing as of April 21, 2016 (1) Risked NAV: NAV + Risked Upside or 2P+2C NAV (2) Unrisked NAV: NAV + Unrisked Upside (3) Scotiabank GBM Ratings: Focus Stock (FS); Sector Outperform (SO); Sector Perform (SP); Sector Underperform (SU); Tender (T); Under Review (UR); R=Restricted (4) Risks include: lower realized crude oil and gas prices, general market conditions, and project timing and execution

16 Canadian E&P Equity Issuance

Oil & gas equity markets have recently opened for top tier companies

Oil & Gas Equity Issuances by Year Oil & Gas Equity Issuances by Quarter 2003 – 2016 YTD | C$ Billions 2013 – 2016 YTD Quarterly | C$ Billions

7 Generations: $2.9 B $300MM $14.0 $6.0 attributed Advantage: $100MM $12.9 $5.5 to Cenovus Raging River: and $108MM $12.0 $11.4 $5.0 Encana Whitecap: $95MM $10.6 $10.7 Spartan: $96MM Tamarack Valley: $10.0 $9.4 $9.4 $44MM $4.0 $3.8 $8.5 $8.5 RMP: $35MM $8.0 $3.5 $8.0 Tourmaline: $7.1 $2.9 $281MM $3.0 $2.6 Peyto: $150MM $6.0 $5.3 Freehold: $165MM $1.9 $4.0 $2.0 $4.0 $3.2 $1.4

$0.9 $1.0 $0.8 $0.8 $2.0 $1.4 $0.6 $0.4 $0.3 $0.2 $0.0 $0.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 2016 YTD

Note: Only includes E&P companies, grouped based on closing date

17 Use of Proceeds for Raised Equity

Repay Debt(1) Fund Acquisition Pre-Fund Acquisition • Accessing capital • Accretive transaction • Investors support strong markets to reduce funding in a "buyers’ names in proactively Description leverage and avoid market" pursuing opportunities in breach of covenants a "buyers’ market"

Example

• Investors willing to • Accretive transactions • Still rare support some and acquisition growth names to preserve supported by the capital • Pre-fund in order to investment and markets strengthen bargaining Rationale position for recovery position and agility • Near-term cash flow seems to be more important than NAV

(1) Of 8 recently announced financings, 7 cited debt reduction

18 Canadian M&A Market Update

Section 2 1 M&A: Demand

• Commodity price volatility and scarcity of capital have made it difficult to align buyers/sellers • Reduced buying power for many public intermediate and junior companies – Few strategic buyers have access to capital – Recent recovery in equity values has improved cost of capital for public buyers • Private equity remains an active buyer group, but have completed few transactions to date – $85 billion of energy-focused private capital raises – Especially for US private equity firms, hedging is a key strategy; recent recovery in commodity prices has been helpful • Demand higher for oil/liquids versus natural gas – US has more light oil • Buyers seem generally patient and “skittish”

20 M&A Perceived Sentiment

Historical WTI Price April 1, 2014 – Present | US$/bbl $120 “Good old days” Few willing sellers Relatively stable high price at low prices

$100 Companies focus inward Cautious Uh-oh… on strategy Everyone a Many companies optimism for updates buyer! re-focus on survival M&A $80 Low price, low loonie Private equity companies sense their time

$60

OPEC $40 Meeting Nov. 2014

$20 NDP wins a Alberta Royalty Royalty majority uncertainty on framework formulas government carbon, royalties; announced finalized May 2015 increased taxes Jan. 2016 Apr. 2016 $0 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16

Source: FactSet (1) Current as at April 29, 2016

21 Illustrative Buyer Interest

Differentiation in buyer interest for high quality vs. low quality assets – wider now than at any point over the last 15 years

Buyer Interest High

Buyer Interest Trend has magnified

Lower buyer interest for longer Low Low Asset Quality High

22 What’s Hot, What’s Not?

• Liquids-Rich Gas (Montney, Deep • Oil sands & Heavy Oil Basin, Duvernay) • Conventional Oil (except Light, • Light Oil (Large OOIP) Large OOIP) • High Netback (Low Cost •Dry Gas Producers) • Deep Sour Gas • Midstream Infrastructure • High Liabilities (Low LLR) • Royalties • Joint Ventures • US Assets (relative to Canada) • Oilfield Services • + 2,000 boe/d • Canadian Assets • < 2,000 boe/d • Low netback/uneconomic assets

23 ~$85 B of Energy-Focused PE in the Market – More Being Raised

Fund Ta r ge t Size • ~50 Private Equity companies with Financial Sponsor ($MM)

significant available funds for investment in Riverstone Holdings $7,500 the energy space First Reserve 6,000 Morgan Stanley Captial Partners 6,000 – ~20 funds >$1.0 B Encap Investments 5,000 NGP Energy Capital Management 4,500 • Dry powder from prior funds, LP co- EIG Global Energy Partners 4,250 investments, Infrastructure funds, Generalist Arclight Capital Partners 4,000 Blackstone Group 2,500 Funds and Special Situation Funds take this Quantum Energy Partners 2,500 amount significantly higher Warburg Pincus 2,500 Denham Capital Management 2,500 – Important to note that these numbers Energy & Minerals Group 2,500 Enervest Energy 2,500 exclude leverage Pine Brook Road Partners 2,000 Apollo Global Management 2,000 • Sponsor-backed deals will get larger and Barclays Natural Resource Investments 2,000 larger Avista Capital Holdings 2,000 Kayne Anderson Capital Advisors 1,600 – Larger fund sizes dictate larger capital Yorktown Partners 1,600 commitments KKR 1,250 White Deer Energy 1,000 Old Ironsides Energy 1,000 – Hard to imagine that we will see >$5 B Lime Rock Resources 600 deals such as Samson and EPE Energy Trust Partners 600 Trilantic Capital Management 500 SFC Energy Management 450 Tailwater Capital (fka Hicks Muse) 400 Other 15,000+ Source: Sponsor websites, Capital IQ May denote estimated portion of generalist fund that will be allocated to energy investments Total Capital ~$85,000

24 Canadian Midstream Landscape

9 largest Canadian midstream players have a combined market cap of $154 billion while the 6 largest E&P companies now have a combined market cap of $178 billion

Canadian Midstream Landscape

Private-Equity Steel Reef Backed Companies: Infrastructure Corp.

Note: Pricing as of April 29, 2016

25 2 M&A: Supply

• Supply has increased, and is expected to continue to increase in the short-to- medium term – Strategic and balance sheet driven • Over 150,000 boe/d of opportunities are currently in the market • Higher quality assets expected to become available as corporate situations deteriorate further – Lower quality assets are effectively not saleable – Loan redeterminations are ongoing • Midstream sales: more producers willing to monetize – Husky/Cheung-Kong Infrastructure – Lloydminster infrastructure – Paramount Resources / Pembina Pipeline – Musreau Complex – Devon, MEG – Potential sales of Access Pipeline interests

26 Motivations for Transacting

Distressed Sale Repositioning Asset Clean-Up • Sale of assets to • Companies combine in • Sale of non-core assets; solve leverage or an all-share transaction company is not Description funding gap to be better positioned distressed through the downturn

Anegada (Jenner Assets) Energy Example 3 Buyers • Capital markets not • Synergies, cash flow, • Refocus investment on open to many and drilling inventory more profitable areas distressed names combination creates a stronger company • Cash flow multiples Rationale • Solve covenant attractive issues, “live to fight • Shareholders not another day” monetizing at the “trough”

27 Leverage Profile and Recent Equity Financing

Many companies challenged; require restructuring to remain a going concern • Likely to increase asset sales and recapitalizations Canadian Oil & Gas Leverage Profiling(1)(2) Market Cap / EV (%) | Net Debt / 2016E CF (x) TBE LREZAR BXE PWT POU PNE 12.0x 18.4x 34.7x 20.6x 13.4x 137.3x 16.0x 17.8x

TET 10.0x Excluded AEI Companies with MQL Negative Cash BIR Flow Estimates BTE 8.0x HME DEN OIL Mar 14, 2016 TOO $280.6 MM PGF JOY Bought Deal TT BNP ERF KEL 6.0x LTS MEG EGL PRQ CQE PXX CNQ RE BNE Feb 9, 2016 ECA CR IMO $300.0 MM DEE Feb 23, 2016 Private Placement 4.0x $95.0 MM SKX HSE Bought Deal NBZ VET GXE TOU Feb 29, 2016 YGR $43.7 MM WCP SU CPG SGY CVE Bought Deal FRU MEI RMP NVA CJTOG VII Feb 17, 2016 2.0x $108.1 MM PEY PPY Mar 2, 2016 IKM GXO Bought Deal $34.5 MM TVE SRX Feb 18, 2016 Bought Deal April 28, 2016 $100.0 MM AAV ARX $150.0 MM RRX Bought Deal Bought Deal 102%, 0.3x PSK 0.0x 104%, n.m.f SPE 0% 25%High Leverage, May Need to 50% 75% 100% 106%, n.m.f Significant Leverage, Difficult to Access Equity Markets / Sell Moderate Leverage Well Capitalized Improve Capital Structure Assets Feb 24, 2016 $85.0 MM Source: FactSet Bought Deal Note: Pricing as of April 29, 2016; cash flow estimates based on Scotiabank GBM Equity Research using research price deck (2016E: $40.00/bbl WTI and $2.15/MMbtu HH) (1) Market Cap and EV are calculated using fully diluted method; Net Debt is calculated using basic method (2) Net Debt / 2016E CF multiples are capped at 12.0x for illustrative purposes

28 3 M&A: Transaction Activity

• Buyers expected to respond well to quality increase – potential for increased activity • Recent equity issuance is positive for buyer confidence – Access continues to be limited to certain public companies • More creative – a little of everything (but not a lot of anything) – Hostile (Suncor/COS) – Joint Venture (Murphy/Athabasca) – Core asset for cash (Suncor/Murphy) – Take private (Sinoenergy/Long Run) – Debt exchange for TOU shares (Perpetual) – Distressed – Pre-negotiation with AER on liability allocations (Spyglass)

29 Transaction Activity: Slow 2015 • 2016 having a slow start North American Oil & Gas M&A(1) E&P Total Transaction Value ($ Billions) Canada US $140

$117 $119 $120 $114

$100 U.S. Average $80 (‘09-’15) = US$61 B $80 $79 $79 $69 $82

$60 Canada Average $50 (‘09-’15) = C$23 B $62 $39 $40 $61

$41 $26 $20 $38 $40 $33 $7 $18 $13 $8 $9 $6 $0 $1 2009 2010 2011 2012 2013 2014 2015 2016 YTD

(1) Source: IHS Herold, Bloomberg, Scotia Waterous; Excludes oil sands and JVs

30 Canadian M&A Transaction Summary

Number of Transactions Production Traded Mboe/d 125 Asset Corporate 106 Asset Corporate SU/PCA CNOOC/NXY Repsol/TLM 99 95 800 100 92 Canadian 82 30 83 700 Production Only 26 600 75 51 14 47 61 63 459 60 500 420 435 42 54 49 20 12 400 356 50 299 315 91 29 14 224 76 300 69 66 69 221 361 73 196 143 166 25 48 48 48 200 132 46 40 43 40 7 144 161 319 32 100 115 226 90 1 135 81 150 59 67 85 76 11 0 6 0 28 51 56 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

% Gas64% 56% 64% 32% 54% 57% 39% 63% 64% 53% 62% Total Transaction Value $ Billions

Asset Corporate SU/PCA CNOOC/NXY Repsol/TLM $45 $40 $40 $38 $33 $35 $30 $30 $27 $19 $25 $23 $16 $18 $20 $22 $15 $23 $13 $6 $4 $13 $15 $8 $9 $5 $10 $10 $0 $3 $12 $12 $13 $5 $9 $6 $6 $6 $8 $1 $3 $1 $4 $0 $2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Note: Transactions based on both public and non-public transactions. Reserves and production are gross of royalties. Excludes oil sands transactions and joint ventures

31 Transaction: Cash Flow Multiples

Historically 4.0x to 6.0x NOI • Contango in the oil price curve increased ‘oil weighted’ transaction multiples on near term cash flow Selected Transactions(1)(2)(3) EV / NOI | x Gas Mixed Oil 12.0x 11.3x 10.7x 7 Private Co. or Private Equity

10.0x 9.4x 4 Publicly Traded 8.9x

8.0x Average: 6.4x 7.0x 6.1x 5.8x 6.0x 5.4x 5.2x 5.0x 4.3x 4.4x 4.0x

2.0x

- Calgary Sinoenergy Buyer Sinoenergy Undisclosed Pacific Investment

Undisclosed Anegada Seller (Wilson Creek Energy (Jenner Asset) (Bodo Asset) (Mitsue Asset) Assets)

Date 24-Feb-16 21-Dec-15 14-Dec-15 10-Dec-15 22-Oct-15 13-Oct-15 6-Oct-15 15-Sep-15 29-Jun-15 26-May-15 26-May-15 14-May-15

Size $268 $770 $5 $126 $78 $356 $95 $130 $90 $1,529 $215 $54 ($mm)

% Gas 29% 60% 9% 42% 36% 47% 13% 22% 97% 16% 57% 55%

(1) Source: Scotia Waterous proprietary database (2) Mixed includes oil and gas weightings of 30-70% (3) Excludes royalties transactions

32 Outlook – 2016 and Beyond

Section 3 Canadian M&A Perspectives – Influencing Factors

Transaction activity affected by numerous other factors • Even large cap, well-financed companies have faced rating downgrades – Suncor, Cenovus, Encana, Anadarko, Devon, Hess, Chevron • Unprecedented number of business failures – more are likely – Samson, LINN Energy, Spyglass, Sangel • Many companies focused internally – Reducing operating and capital costs, not taking risks – Less likely to buy or sell

34 Canadian M&A Perspectives – Influencing Factors (continued)

• Capital and operating costs down 20% or more – Helps returns/survival – Hard for buyers to credit value ( are they sustainable?) • Asset liabilities are a significant factor for buyers and sellers – Particularly challenging for distressed sales – Court cases will be watched with interest • Distinct preferences on cash vs share transactions – Some sellers want shares

– Participate in the recovery, not monetizing at a low – Sellers that want cash may be uninspired by value on strip pricing – Many buyers have cash (especially private buyers)

– Hard to justify a premium when valuations are well above strip

35 Catalysts for More M&A&D

• Confirmation of Alberta royalties removes uncertainty – New C* model calibration announcement – Less efficient plays discouraged • Commodity price stability or slow strengthening – Increases buyer-seller value alignment – Prices may “catch up” to valuations • Companies emerging post-restructuring – Better positioned to buy or sell • Demonstration of sustained improvements – Technology improvements and cost control – Performance of Canadian plays versus US • Government action on infrastructure & carbon – Resolve pipelines, LNG, carbon emissions

36 Canadian M&A&D - 2016 and Beyond

• Increase in transactions – Balance sheet driven, some strategic • Canadian Junior market will remain weak – Business failures and weak valuations eventually drive consolidation • Private Equity interest to continue – Remain discerning/value focused • Continued bifurcation on saleability – Transactions to remain challenging for capital intensive plays and uneconomic assets – Midstream monetization to fund business • Expect more PDP-weighted/cash flowing assets transactions – Modest interest in early stage assets – Less value for resources / 2C • Continued shareholder activism – Bond holders owning equity • Support for oil & gas sector – Markets open for top tier issuers

37 M&A&D Activity

Appendix I M&A&D Activity: 2015 and 2016 Transactions (> ~$75 million)(1)

Adjusted Enterprise Value EV/ Primary Transaction Gas RLI Reserves Production NOI Acquiror Target / Vendor Type Consideration Area Date Value Weighting 2P 1P 2P LQA LQA C$mm % years $/boe $/boe $/boe/day x Acquiror . Target per Vendor . Date . Basic Tran . Gas Weigh. 2P RLI . TEV per . TEV per. TEV per LQ.TEV per

Suncor Energy Inc. Murphy (5% Syncrude) Asset Cash Syncrude Project 27-Apr-16 $937.0 0% 41.9 $9.89 $4.28 $79,425 13.0x Undisclosed Enerplus Corp. (Pouce Coupe Assets) Asset Cash Peace River Arch 11-Apr-16 $95.5 50% 10.8 n.a. $10.49 n.a. n.a. Mount Bastion Oil & Gas Corp. Penn West Petroleum Ltd. (Slave Point Assets) Asset Cash Evi 21-Mar-16 $148.0 3% n.a. n.a. n.a. n.a. n.a. ARC Financial Corp. Boulder Energy Ltd. Corporate Cash Pembina 24-Feb-16 $268.0 22% 17.1 $10.76 $7.71 $47,854 11.3x Murphy Oil Corporation Athabasca Oil Corporation (Duvernay & Montney JV) Asset Cash Kaybob 27-Jan-16 $475.0 43% 14.4 n.m.f. $17.73 $93,137 n.a. Suncor Energy Inc. Canadian Oil Sands Ltd. Corporate Equity Syncrude Project 18-Jan-16 $6,657.2 0% 41.9 $5.61 $2.43 $45,072 12.6x Tourmaline Oil Corp. Enerplus Corp. (Ansell, Minehead & Hanlan-Robb Assets) Asset Cash Foothills 11-Jan-16 $183.0 n.a. 17.5 n.a. $3.81 $38,526 n.a. Sinoenergy Pacific Corp. Long Run Exploration Ltd. Corporate Cash Peace River Arch 21-Dec-15 $770.0 60% 17.0 $7.44 $4.51 $25,055 6.1x Whitecap Resources Inc. Undisclosed (Boundary Lake Assets) Asset Cash Fort St. John 15-Dec-15 $93.4 n.a. 18.5 $10.86 $8.12 $54,941 n.a. Raging River Exploration Inc. Anegada Energy Corp. Corporate Equity Provost Viking 10-Dec-15 $125.5 42% 10.0 n.a. $12.55 $45,645 5.8x Royal Dutch Shell Plc. Trilogy Energy Corp. (Kaybob Assets) Asset Cash Kaybob 19-Nov-15 $113.3 40% 13.7 n.a. $39.08 $195,402 n.a. Pine Cliff Energy Ltd. ConocoPhillips (Viking & Ghost Pine Assets) Asset Cash Central Alberta Corridor 9-Nov-15 $185.0 89% 18.4 $3.89 $2.35 $15,772 n.a. Imaginea Energy Corp. Pengrowth Energy Corp. (Jenner Assets) Asset Cash Southeast Alberta 22-Oct-15 $78.0 36% 9.2 n.a. $5.53 $18,571 4.3x ORLEN Upstream Canada Ltd. Kicking Horse Energy Inc. Corporate Cash Deep Basin 13-Oct-15 $356.0 47% 16.5 $20.04 $12.04 $117,337 10.7x Caltex II Pengrowth Energy Corp. (Bodo Asset) Asset Cash Southeast Alberta 6-Oct-15 $95.0 13% 13.1 n.a. $7.36 $35,185 5.2x TIAA-Cref (Polar Star) Penn West Petroleum Ltd. (Weyburn Asset) Asset Cash Williston Basin 1-Oct-15 $205.0 0% n.a. n.a. n.a. $82,000 12.8x Cardinal Energy Ltd. Penn West Petroleum Ltd. (Mitsue Assets) Asset Cash Gilwood / Beaverhill Lake 15-Sep-15 $129.7 22% 15.1 $9.29 $7.15 $39,303 5.0x Husky Energy Crew Energy Inc. (Heavy Oil Asset) Asset Cash Lloydminster 9-Sep-15 $50.0 0% 12.2 n.a. $50.00 $222,222 n.a. Crescent Point Energy Corp. Coral Hill Energy Ltd. Corporate Equity Gilwood / Beaverhill Lake 2-Jul-15 $258.0 n.a. 15.1 $25.80 $14.66 $80,625 n.a. Tourmaline Oil Corp. Mapan Energy Ltd. Corporate Equity Deep Basin 29-Jun-15 $89.9 97% 9.3 $6.00 $4.70 $15,889 5.4x Black Swan Energy Ltd. Carmel Bay Exploration Ltd. Corporate Cash Fort St. John 9-Jun-15 $195.6 78% 50.0 n.a. $8.70 $240,059 n.a. Tourmaline Oil Corp. Leucrotta Exploration Inc. (NE B.C. Assets) Asset Cash Fort St. John 27-May-15 $80.0 87% 18.1 n.a. $9.30 $61,538 n.a. Sinoenergy Pacific Corp. New Star Energy Corporate Cash Central Alberta 26-May-15 $215.0 57% 13.8 $19.77 $10.86 $54,615 7.0x Crescent Point Energy Corp. Legacy Oil & Gas Inc. Corporate Equity Williston Basin 26-May-15 $1,529.2 16% 11.4 $24.63 $14.89 $62,117 8.9x TORC Oil & Gas Ltd. Surge Energy Inc. (SE Sask & Manitoba Assets) Asset Cash Williston Basin 27-Apr-15 $430.0 2% 12.6 $27.60 $15.75 $72,6328.8x Aspenleaf Energy Ltd. Arcan Resources Ltd. Corporate Cash Gilwood / Beaverhill Lake 22-Apr-15 $299.7 3% 27.1 $13.39 $8.55 $84,597 6.4x Whitecap Resources Inc. Beaumont Energy Inc. (Private) Corporate Cash & Equity Southwest Saskatchewan 18-Mar-15 $587.5 3% 16.9 $21.60 $18.67 $115,196 6.4x Tourmaline Oil Corp. Perpetual Energy Inc. (West Edson Assets) Asset Equity Pembina 12-Mar-15 $256.5 97% 11.4 n.a. $10.69 $44,609 n.a. Kelt Exploration Ltd. Artek Exploration Ltd. Corporate Equity Fort St. John 23-Feb-15 $307.0 56% 25.7 $12.77 $6.62 $62,127 10.5x Bonterra Energy Ltd. Enerplus Corporation (Pembina Cardium Assets) Asset Cash Pembina 20-Feb-15 $172.0 14% 19.8 $17.44 $13.19 $95,556 n.a. TORC Oil & Gas Ltd. Midale Petroleums Ltd. (Southeast Saskatchewan Assets) Asset Equity Williston Basin 5-Feb-15 $127.7 6% 10.4 $29.02 $21.64 $82,374 n.a.

(1) As of April 29, 2016

39 M&A&D Opportunities in the Market

There are a number of opportunities on the market but few transactions to date; buyers focused on oil-weighted, positive netback opportunities which are scarce Company Process Type Asset Description Production % Gas

Intention to sell ~60,000 boe/d of non-heavy oil Assets ~60,000 boe/d 46% Post Bid WCSB assets

Assets Sale of all Western Canadian upstream assets ~70,000 boe/d 85% Mid-May Marketing

4 main asset areas: Swan Hills, NE BC & NW AB, Assets ~26,000 boe/d 52% Sold ~$200 MM of assets in 2016 East Central AB, PROP

Received bids late 2015; did Assets Garrington / Olds, Swan Hills Area of Alberta ~31,000 boe/d 35% not transact Corporate: Strategic Provost Medium Oil, Lloydminster Heavy Oil ~16,000 boe/d 22% Alternatives Corporate: Strategic Strategic alternatives process NW Alberta and NE BC assets ~9,700 boe/d 83% Alternatives failed

Corporate: Receivership All corporate assets ~9,600 boe/d 58%

Corporate Leduc legacy field ~7,600 boe/d 80%

Sold ~$275 million of gas- Assets Various; Mostly gas-weighted ~7,000 boe/d 100% weighted assets

Assets NE BC assets ~6,400 boe/d 90%

Corporate: Strategic Alberta and Saskatchewan oil assets ~4,600 boe/d 18% Alternatives Corporate: Strategic SW Saskatchewan: Viking / Mannville Onward, ~3,900 boe/d 3% Alternatives Mantario / Laporte Corporate: Strategic West Central AB Belly River Channel and Basal ~2,500 boe/d 41% Alternatives Formations Corporate: Strategic Glauconitic at Northville, Rock Creek, Ellerslie, and ~2,000 boe/d 40% Alternatives Slave Point Western Canadian Sedimentary and Williston Assets: Royalty Lands ~1,800 boe/d 66% Sold to Freehold for ~$165 MM Basins Corporate: Strategic S. Alberta Bakken, Manyberries ~800 boe/d 23% Alternatives Fee title and GORR lands in Central and Southern Assets: Royalty Lands n.a. n.a. Alberta Note: List is not exhaustive; Total: ~259,000 boe/d Does not include oil sands processes

40 Transaction Metrics - 6:1 Conversion

Cash Flow Multiples by Commodity(1)(2) P+P Reserve Multiples by Commodity(1)(2) x $/boe

Oil Gas Mixed Oil Gas Mixed 12.0x $40 11.3x

10.0x 9.3x 8.9x 8.6x $30 8.0x 7.7x 8.0x 7.6x 7.2x 6.9x $22.30 $22.20 6.6x $21.95 6.6x $21.75 6.4x 6.3x $20.34 $20.21 6.1x 6.0x $19.77 6.0x 5.9x 5.9x $19.44 $18.95 5.6x 5.5x $18.23 6.0x 5.5x $17.85 5.4x $17.74

5.3x $20 $17.55 $17.46 5.4x $17.23 5.2x 5.1x 5.1x $16.79 $16.56 4.9x 4.7x 4.6x $15.00 $14.16 $13.57 $12.71 $12.18 $11.96 4.0x 3.6x $10.49 $10.40 $10.27 $9.48

$10 $7.71 $7.04 $6.35 $6.16 2.0x $5.49 n.a. n.a. – – n.a. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD YTD Production Multiples by Commodity Weighting(1)(2) $/boe/d $180,000 Oil Gas Mixed $160,000 $140,000 $120,000 $96,546 $95,335 $92,588 $90,427 $100,000 $89,307 $86,004 $78,335 $78,265 $80,000 $76,019 $66,862 $66,448 $64,685 $64,174 $63,882 $62,754 $61,525 $60,994 $60,053 $57,294 $55,043 $51,222 $50,399 $48,608

$60,000 $47,854 $45,880 $45,483 $45,275 $43,313 $39,174 $35,286 $33,201 $40,000 $31,333 $20,000 n.a. – n.a. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

(1) Transactions based on both public and non-public transactions. Reserves and production are gross of royalties. Excludes oil sands transactions (2) Mixed includes oil and gas weightings of 30-70%

41 Comparable Valuation Analysis (Excerpt – ScotiaView Research April 21, 2016)

Appendix II Comparative Valuation Analysis at Strip Pricing

Integrated Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Cenovus Energy CVE SO $18.56 $20.00 $18,029 19.4x 15.7x 16.2x 14.7x 3.5x 4.0x 131% 102% 93% 60% Husky Energy HSE SP $17.63 $19.00 $24,406 8.0x 5.7x 10.2x 7.4x 3.2x 2.1x 174% 121% 89% 47% Imperial Oil IMO SP $41.13 $45.00 $46,037 27.1x 16.0x 34.8x 20.7x 8.9x 4.3x 141% 106% 95% 77% Suncor Energy SU SO $36.53 $37.00 $68,253 12.2x 11.7x 14.4x 13.6x 3.6x 4.2x 167% 108% 94% 75% Av e rage $39,181 16.7x 12.3x 18.9x 14.1x 4.8x 3.7x 153% 109% 93% 65%

Oil Sands Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Athabasca Oil Corp. ATH SP $1.10 $1.75 $639 nmf nmf nmf nmf nmf nmf nmf nmf 62% 10% MEG Energy MEG SO $7.58 $13.00 $6,845 nmf -16.8x 54.0x 56.0x nmf nmf 120% 62% 51% 16% Av e rage $3,742 n/a -16.8x 54.0x 56.0x n/a n/a 120% 62% 57% 13%

Senior Independent Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Canadian Natural CNQ SO $38.11 $35.00 $57,858 14.4x 8.7x 18.3x 11.5x 6.0x 3.6x nmf nmf 98% 69% Encana* ECA SP $7.19 $8.00 $11,607 10.4x 11.3x 12.5x 14.2x 8.6x 10.7x nmf 118% 87% 60% Av e rage $34,733 12.4x 10.0x 15.4x 12.9x 7.3x 7.2x n/a 118% 93% 65%

Please refer to slide 45 for footnotes

43 Comparative Valuation Analysis at Strip Pricing (Continued)

International E&P Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Africa Oil Corp AOI SP $2.14 $3.00 $914 n/a n/a n/a n/a n/a n/a n/a 121% 110% 54% Bankers Petroleum BNK T $1.81 $2.20 $395 7.0x 5.8x 5.4x 4.5x -1.1x -0.3x n/a nmf nmf nmf Canacol Energy CNE SO $3.97 $4.50 $692 6.6x 3.3x 7.4x 3.9x 2.2x 0.6x n/a 102% 135% 59% GeoPark Limited* GPRK SO $2.92 $4.50 $547 3.2x 1.7x 6.8x 4.2x 6.8x 4.1x n/a nmf nmf nmf Gran Tierra Energy GTE SO $3.63 $4.50 $837 9.1x 6.9x 8.3x 6.5x -0.8x 0.0x n/a 180% 142% 89% Ecopetrol*** EC SO $1,425.00 $1,600.00 $32,467 nmf 12.0x nmf 25.9x nmf 17.9x 232% 233% 237% 217% Lundin Petroleum AB** LUPE SP $140.60 $135.00 $44,180 56.6x 48.8x 47.2x 41.0x 5.3x 5.9x n/a nmf nmf nmf Oryx Petroleum OXC SP $0.54 $0.75 $302 n/a 55.3x n/a n/a n/a n/a n/a nmf nmf nmf Pacific E&P PREURURURURURURURURURURURUR UR UR Parex Resources PXT SO $11.86 $13.50 $1,699 14.2x 9.5x 14.0x 9.4x 0.0x 0.5x n/a 226% 182% 146% ShaMaran Petroleum SNM SP $0.12 $0.13 $353 n/a n/a n/a n/a n/a n/a n/a nmf nmf nmf TransGlobe Energy TGL SP $2.46 $3.50 $63 -8.1x -92.5x -7.8x 42.6x 1.8x -7.1x n/a 80% 134% nmf WesternZagros Resources WZR SP $0.06 $0.20 $194 n/a n/a n/a n/a n/a n/a n/a nmf nmf nmf Av e rage $6,887 12.7x 5.6x 11.6x 17.3x 1.8x -7.1x n/a 157% 157% 113%

Junior E&P Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Bellatrix Exploration BXE SP $1.34 $2.50 $1,032 5.6x 3.0x 11.2x 8.1x 15.6x 9.0x nmf nmf nmf nmf BlackPearl Resources PXX SP $0.85 $0.90 $400 19.7x 23.7x 8.5x 10.7x 5.8x 8.1x nmf nmf nmf nmf Bonterra Energy BNE SP $25.09 $22.50 $1,194 11.7x 9.8x 14.1x 12.2x 5.2x 4.5x 426% 319% 257% 225% Cequence Energy CQE SP $0.33 $0.55 $140 6.0x 4.5x 8.8x 7.1x 5.9x 5.2x nmf nmf nmf nmf Delphi Energy DEE SP $1.18 $1.10 $328 6.4x 6.2x 9.2x 9.2x 4.6x 4.7x 331% 234% 236% 223% Eagle Energy Trust EGL SP $0.83 $1.00 $93 3.4x 6.3x 7.6x 13.2x 6.2x 13.6x 242% 28% 32% 30% Kelt Exploration KELR R R R RRRRRRRR R R Long Run Exploration LRER R R R RRRRRRRR R R Painted Pony Petroleum PPY SO $4.96 $7.50 $664 10.9x 4.5x 13.4x 7.3x 5.0x 4.0x 319% 216% 242% 103% Pine Cliff Energy PNE SU $0.72 $0.75 $380 nmf 5.5x 44.7x 7.5x 104.0x 3.2x 1769% 809% 800% 800% Raging River Exploration RRX SP $10.01 $11.00 $2,411 16.3x 12.2x 16.5x 12.4x 0.4x 0.4x 856% 638% 453% 414% RMP Energy RMP SP $1.72 $1.85 $382 6.9x 4.9x 9.0x 6.8x 2.9x 2.3x 749% 1767% nmf nmf Spartan Energy SPE SO $3.08 $3.75 $1,074 19.9x 14.5x 19.8x 14.6x 0.1x 0.2x 459% 356% 354% 350% Surge Energy SGY SP $2.34 $2.75 $677 15.9x 9.8x 17.3x 11.7x 4.9x 3.7x 252% 159% 177% 177% TORC Oil & Gas TOG SO $8.91 $9.00 $1,853 17.5x 12.8x 19.5x 14.7x 4.4x 3.3x 498% 391% 586% 582% Twin Butte Energy TBE SU $0.10 $0.15 $326 nmf 2.2x 12.9x 11.1x 27.7x 19.1x nmf nmf nmf nmf Whitecap Resources WCP SO $9.60 $12.00 $3,876 10.4x 10.7x 11.4x 11.7x 2.6x 2.5x 1315% 686% 555% 519% Zargon Oil & Gas ZARR R R R RRRRRRRR R R Av e rage $989 11.6x 8.7x 14.9x 10.6x 13.0x 5.6x 656% 509% 369% 342% Please refer to slide 45 for footnotes

44 Comparative Valuation Analysis at Strip Pricing (Continued)

Junior/Intermediate E&P Price Target EV P/CF EV/DACF D/CF P/NAV Ticker Rating (3) 20-Apr-16 Price ($M) 2016E 2017E 2016E 2017E 2016E 2017E 1P 2P Risked (1) Unrisked (2) Advantage Oil & Gas AAV SO $6.94 $10.00 $1,519 8.9x 7.0x 9.5x 7.7x 1.2x 1.0x 371% 212% 138% 101% Birchcliff Energy BIR SP $4.67 $7.00 $1,557 10.5x 4.5x 14.8x 7.9x 11.7x 5.2x nmf nmf 6671% 202% Cardinal Energy CJ SO $9.30 $12.00 $740 12.3x 15.2x 13.6x 16.8x 2.8x 4.0x 217% 163% 150% 139% Crew Energy CR SO $4.62 $6.50 $931 12.3x 7.3x 12.6x 8.7x 4.8x 3.2x 477% 208% 405% 1050% Freehold Royalties Ltd. FRU SP $11.80 $14.00 $1,312 20.3x 14.3x 19.8x 14.5x 2.5x 1.5x 253% 192% n/a n/a Northern Blizzard NBZ SP $4.28 $5.75 $889 4.4x 9.6x 6.3x 11.8x 3.5x 8.3x n/a 222% 170% 134% NuVista Energy NVA SO 5.12 7 1060 7.8x 9.0x 9.6x 11.2x 2.5x 3.3x 1024% nmf 1707% 294% Paramount Resources POU SO 7.85 12.5 2827 9.7x 5.2x 11.4x 8.7x 17.9x 10.6x nmf nmf 459% 88% Perpetual Energy PMT SU $1.24 $0.10 $393 nmf nmf -506.3x 107.6x -8.7x -22.8x nmf (134%) (103%) (124%) Peyto Exploration & Dev. PEY SO $31.76 $40.00 $6,155 10.5x 8.6x 12.1x 10.3x 2.8x 2.7x 735% 379% 302% 263% Tourmaline Oil TOU SO $27.99 $35.00 $8,368 13.8x 8.2x 15.2x 9.6x 3.5x 2.2x 918% 409% 337% 296% Trilogy Energy TET SP $4.46 $5.50 $1,152 12.1x 12.1x 14.3x 14.5x 11.8x 12.3x nmf nmf nmf nmf Vermilion Energy VET SO $39.11 $57.50 $5,936 10.8x 9.6x 12.4x 11.6x 3.5x 3.8x n/a 340% 229% 142% Av e rage $2,526 11.1x 9.2x -27.3x 18.5x 4.6x 2.7x 571% 221% 951% 235%

45 Legal Notices

TM Trademark of The Bank of Nova Scotia. Used under license, where applicable. Scotiabank, together with "Global Banking and Markets", is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank of Nova Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc., Scotia Capital (USA) Inc., Scotiabanc Inc., Citadel Hill Advisors L.L.C., The Bank of Nova Scotia Trust Company of New York, Scotiabank Europe plc, Scotiabank (Ireland) Limited, Scotiabank Inverlat S.A., Institución de Banca Múltiple, Scotia Inverlat Casa de Bolsa S.A. de C.V., Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank Group and authorized users of the mark. The Bank of Nova Scotia is incorporated in Canada with limited liability. Scotia Capital Inc. is a member of the Canadian Investor Protection Fund. Scotia Capital (USA) Inc. is a broker-dealer registered with the SEC and is a member of FINRA, NYSE, NFA and SIPC. The Bank of Nova Scotia is authorized and regulated by the Office of the Superintendent of Financial Institutions in Canada. The Bank of Nova Scotia is authorized by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of The Bank of Nova Scotia's regulation by the Prudential Regulation Authority are available from us on request. Scotia Capital Inc. is regulated by the Investment Industry Regulatory Organisation of Canada and authorised and regulated by the Financial Conduct Authority. Scotiabank Europe plc is authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Scotiabank Inverlat, S.A., Scotia Inverlat Casa de Bolsa, S.A. de C.V., and Scotia Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financial authorities. The products and services described herein may not be available in all jurisdictions, and are offered by different legal entities authorized to use the SCOTIABANK trademark. The ScotiaMocatta trademark is used in association with the precious and base metals businesses of The Bank of Nova Scotia The Scotia Waterous trademark is used in association with the oil and gas M&A advisory businesses of The Bank of Nova Scotia and some of its subsidiaries, including Scotia Waterous Inc, Scotia Waterous (USA) Inc, Scotia Waterous (UK) Limited and Scotia Capital Inc - all members of the Scotiabank group and authorized users of the mark. Scotia Capital Inc owns or controls an equity interest in the TMX Group Limited (TMX) and has a nominee director serving on its board As such, Scotia Capital Inc may be considered to have an economic interest in the listing of securities on an exchange owned or operated by TMX, including the Toronto Stock Exchange, the TSX Venture Exchange and the Alpha Exchange (each, an Exchange) No person or company is required to obtain products or services from TMX or its affiliates as a condition of Scotia Capital Inc supplying or continuing to supply a product or service Scotia Capital Inc does not require issuers or selling shareholders to list securities on any of the Exchanges as a condition of supplying or continuing to supply underwriting and/or any other services.