2 PrairieSky Snapshot Symbol TSX: PSK 5.5 million acres of Fee Land Land Position (1) 3.4 million GORR acres Market Capitalization (2) 4 billion Production (3) 17,500 boe/d Positive working cap, Balance Sheet no…
3 Introduction to PrairieSky 5.5 million acres of Fee Lands dating back to Business models supports 1881 and 3.4 million acres of GORR lands (1) dividend payments Lands located throughout the heart of the oil and Operating margin…
4 The Royalty Advantage High margin cash flow through all cycles The Royalty Advantage Over Perpetual 10 million leasable, Optionality undeveloped acres
5 Royalty Hierarchy Government owns mineral rights (90% of Alberta) Revenue received from E&P companies with producing wells located on Crown lands Crown Corporations/individuals own the mineral rights (9% and 1% respectively in…
6 Higher Margin, Lower Risk Margin Summary (/boe) Illustrative Working Interest Operator PrairieSky Royalty Revenue (58% Gas Production)(2) 28.42/boe Freehold Providing the same revenue Royalties Mineral Tax (3.41/boe) per…
7 Portfolio Approach to Investing in Oil & Gas Operator Over 285 lessees paying royalties on PrairieSky lands Operators on PrairieSky Fee Lands include Majors, Independents, Mid Cap and Small Cap producers Commodity…
8 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…
9 Diversity in Top Payers Top 10 payers represent 61% of trailing 12 month revenue, while the top 25 payers represent 83% of revenue Exposure to various operators with diverse expertise ranging from private companies to Majors No…
10 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…
11 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 Future Homeglen Rimbey Duvernay, Banff Leduc…
Future Development and Optionality
13 Growth in a Challenging Commodity Price Environment Focus remains on leasing undeveloped land to set up for future drilling and growth Lease issuance bonuses exceeded expectations in H1/15 at 30.8 Million Current leasing activity…
14 Mannville Still Delivering Attractive Economics Mannville has been a strong source of new leasing interest in 2015 Expected to be a cornerstone of future growth 450 Mannville Type Curves August 31 Strip Pricing; 17.5%…
15 Viking Continues to See Capital Allocation Viking is a low risk oil play with predictable rates Shallow depths mean shorter cycle times and lower capital requirements Over 1,600 locations on PSK lands Viking Type Curves 80…
16 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…
17 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…
18 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…
19 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 Operator successfully…
20 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 14.0% Large Cap Cdn…
Appendix
22 Executive Team Board of Directors Andrew M. Phillips, President & CEO / Director James M. Estey, Chair of the Board Previously, CEO of Home Quarter Resources (acquired by a public oil Retired Chairman of UBS Securities Canada Inc.,…
23 Recycling the Land Base End of Primary Term At the end of the primary lease term, any lands / rights not held by production revert back to PrairieSky Royalty HBP(1) Primary lease term is typically up to five years long Back…
24 Scratching the Surface of Resource Play Potential Asset Base (million acres) Expansive asset base provides extensive long term exploration and development opportunities
25 Financial Results For the three month period ( millions, unless otherwise noted) ended June 30, 2015 Funds from Operations(1) 43.6 Revenues 71.8 Dividends declared 48.5 Production Volumes Natural Gas (MMcf/d) 59.5…
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