Corporate Presentation Spring 2015 OPEN for BUSINESS
PrairieSky Snapshot Symbol TSX: PSK Land Position (1) 5.3 million Fee acres; 3.6 million GORR acres Market Capitalization 4.7 billion Production (2) 18,000boe/d Balance Sheet Positive working cap, no debt Current Dividend…
Introduction to PrairieSky 5.3 million acres of Fee title lands dating back to 1881 and 3.6 million acres of GORR lands (1) Lands located throughout the heart of the oil and gas producing basins in Alberta and Saskatchewan License…
The Royalty Advantage Over 10 High margin million cash flow leasable, through all undeveloped cycles acres Perpetual Optionality The Royalty Advantage 4
Royalty Hierarchy Government owns mineral rights (90% of Alberta) Crown Revenue received from E&P companies with producing wells located on Crown lands Fee Simple Corporations/Individuals own the mineral rights (9% and 1%…
Higher Margin, Lower Risk Margin Summary (/boe) Illustrative Working PrairieSky Interest Operator Royalty Providing the same revenue per Revenue (48% Gas) Revenue (48% Gas)(2) boe, a royalty barrel realizes a 50.62/boe 50.62/boe…
Portfolio Approach to Investing in Oil & Gas Over 285 lessees paying revenue on PrairieSky lands Operator Operators on PrairieSky Fee Lands include Majors, Independents, Mid Cap and Small Cap producers 74% of product revenue…
Underlying commodity exposure without liabilities PrairieSky provides unlevered, unhedged exposure to the underlying commodity without operational risk and working interest liabilities Limited impact on funds flow margin during the…
Diversity in Top Payers Top 10 payers represent 58% of trailing 12 month revenue, while the top 25 payers represent 80% of revenue Exposure to various operators with diverse expertise ranging from private companies to Majors No…
Power of Royalties PrairieSky has experienced continued investment on its Fee Land since 1962 (earliest record of public data) without significant capital commitment Production base exhibits a relatively stable decline rate of 20%,…
Multi-zone Potential Exploration and development has taken place since the 1950s in the form of new pool discoveries as well as through redevelopment with evolving technology 1950s 1990s Homeglen Rimbey Pekisko Oil, Leduc Oil…
Future Development and Optionality OPEN for BUSINESS
Drilling Activity on Fee Lands Increased Since IPO Drilling activity has increased significantly since the IPO of PrairieSky relative to the prior year Wells spud on PrairieSky Fee land in Q4/14 increased over 60% relative to Q4/13…
Q4 Drilling Remained Active 14
Optionality Case Study 1: Multiple horizons Area has been on production since the 1950s and has seen steady discoveries for the past thirty years Primary target was Mannville natural gas with Mannville oil production increasing through…
Optionality Case Study 2: Legacy Production Unit was discovered in 1956 and developed vertically until 1965. Was placed under a partial water flood in 2003 In 2011 the first horizontal well was drilled with the last horizontal drilled…
Optionality Case Study 3: Technology Area initially developed vertically. Horizontal, multi-stage fracture development started in 2009 (following an acquisition of working interest production on Fee Lands) Over 75 Fee sections in the…
Optionality Case Study 4: New Pool Discovery The pool encompasses 32 sections of Fee land Production began in early 2012 and has averaged nearly 3,000bbl/d in 2014 to-date from 44 total producing wells Royalty revenue to PrairieSky…
Free Cash Flow and Capex Requirements Matter PrairieSky generates significant free cash flow compared to other oil and gas investments; however, unlike its peers, no capex is required to generate cash flow 14% 12% (1) 10% 2014…
Why PrairieSky 5.3 million acres of Fee Simple lands Vast Land Base 3.6 million acres of GORRs (1) Long tenured team with direct experience in land negotiations, business development, Experienced Team royalty compliance and…
Appendix: Additional Information OPEN for BUSINESS
Executive Team Board of Directors Andrew M. Phillips, President & CEO / Director James M. Estey, Chair of the Board Most recently, CEO of Home Quarter Resources (acquired Retired Chairman of UBS Securities Canada Inc., and has more…
Recycling the Land Base At the end of the primary lease term, any lands / rights not held by production revert back to PrairieSky Royalty Primary lease term is typically up to five years long End of Primary Term Current potential…
Scratching the Surface of Resource Play Potential Expansive asset base provides extensive long term exploration and development opportunities 24
Financial Results For the period May 27, 2014 ( millions, unless otherwise noted) to December 31, 2014 Funds from Operations(1) 158.7 Revenues 198.7 Dividends 98.3 Production Volumes Natural Gas (MMcf/d) 50 Crude Oil…
Analyst Coverage Firm Analyst AltaCorp Jeremy McCrea Barclays Grant Hofer BMO Gordon Tait CIBC Arthur Grayfer FirstEnergy Michael Dunn GMP Stacey McDonald, Holly Craven Macquarie Securities Brian Bagnell National Bank Kyle Preston,…
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