CORPORATE HIGH MARGINS, ZERO CAPITAL PRESENTATION December 2016
PrairieSky Royalty Snapshot 2 Symbol Land Position (1) Balance Sheet (2) TSX: PSK 7.8 million acres of Fee Land Positive working capital, no debt 6.9 million GORR acres Current Dividend Shares Outstanding (2) Director & Officer…
ONION LAKE ROYALTY ACQUISITION 3 Acquired 3.95% gross overriding royalty in the Onion Lake heavy and thermal oil project Long life, low decline assets with top quartile economics Currently producing 8,400 bbls/d (335 bbls/d net…
Introduction to PrairieSky Royalty 4 7.8 million acres of Fee Lands dating back to Business model supports 1881 and 6.9 million acres of GORR lands (1) dividend payments Lands located throughout the heart of the oil and Operating…
The Royalty Advantage 5 High margin cash flow through all cycles The Royalty Advantage Over 12 million leasable, Perpetual undeveloped acres Optionality
Royalty Hierarchy 6 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…
Higher Margin, Lower Risk 7 Margin Summary (/boe) PrairieSky Royalty offers higher margins than Illustrative Working Interest Operator PrairieSky Royalty conventional working interest Revenue (54% Gas Production)(1) production…
A Unique and Diversified Approach to Investing 8 in Oil & Gas Third Party Operators Approximately 345 lessees paying royalties on PrairieSky Royalty lands Operators on PrairieSky Royalty Fee Lands include Majors, Independents,…
Diversity in Top Payers 9 Top 10 payers represent 50% of product revenue, while the top 25 payers represent 74% of product revenue Exposure to various operators with diverse expertise ranging from private companies to Majors No…
Underlying Commodity Exposure without Liabilities 10 PrairieSky Royalty provides unlevered, unhedged exposure to the underlying commodity without operational risk and working interest liabilities Limited impact on funds flow…
Production History on our Fee Lands 11 PrairieSky Royalty has experienced continued investment on its Fee Land since 1962 (earliest record of public data) without significant capital commitment Production base exhibits a…
PrairieSky Royalty Per Share Results 12 Production per Million Shares Free Cash Flow per Share 140 0.60 120 0.50 100 0.40 80 0.30 60 0.20 40 20 0.10 0 - 2013 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16…
High Quality Royalties = Optionality
Multi-Zone Potential 14 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…
New Discoveries and Enhanced Oil Recovery 15 First discovery in 2011 with delineation drilling occurring in 2012 and 2013. Rates restricted due to competitive drainage concerns until early 2015 when the pool was unitized under one…
Bakken Light Oil - EOR 16 First discovered in late 2011, the pool has recovered over 4.3 Mmbbl of oil on PrairieSky lands with net royalty volumes of 1.1 Mmbbl received . Monthly net volumes have averaged approximately 640 bbl/d of…
Viking Continues to Attract Capital in Todays 17 Commodity Environment Viking remains a key play for many producers based on superior economics, short cycle times and low capital requirements Continued capital efficiency improvements…
Multi-Zoned, Prolific Spirit River Exposure 18 Horizontal drilling and improved completions have resulted in improved drilling results from the prolific Spirit River Gross HZ Spirit River Royalty Production on GORR Lands (Wilrich,…
Recycling the Land Base 19 The perpetual nature of Fee Lands allows PrairieSky Royalty to continually recycle lands and grow its revenue base At the end of the primary lease term, any lands / rights not held by production revert…
Capital-Free Growth and Diversification 20 PrairieSky Royalty E&Ps Midstream Cost-Free Growth No capital investment required Requires significant Requires significant capital Future embedded royalties and capital or acquisitions…
Free Cash Flow Generation for Future Dividends 21 and Buybacks Future Free Cash Flow (2016-2026) 25,000 BOE per Day of 30,000 BOE per Day of Production Production 24/Share 6.0 6.0 20/Share 19/Share 5.0 5.0 Free Cash Flow…
Leadership Team 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 Retired Chairman of UBS Securities…
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