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April 2019 Corporate Presentation – Prairiesky Royalty Ltd.

Prairiesky Royalty Ltd. · Apr 23, 2019 · 43 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 1
    CORPORATE APRIL 2019 PRESENTATION
  2. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 2
    PrairieSky Royalty Snapshot 4.5 TSX Balance Sheet PSK Billion Strength Enterprise Value(1) Annual Dividend 233.9 50 0.78 Million Million Per Common Share Shares Outstanding(2) NCIB 7.8 7.8 4 Million Million Provinces…
  3. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 3
    Introduction to PrairieSky Royalty 7.8 million acres of Fee Lands(1) Business model supports dividend payments 7.8 million acres of GORR lands(1) Operating margin(2) of 98% Lands located throughout the heart of the oil and gas…
  4. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 4
    A Unique and Diversified Approach to Investing in Oil & Gas Third Party Operators 335 lessees paying royalties on PrairieSky Royalty lands Operators on PrairieSky Royalty Fee Lands include Majors, Independents, Mid Cap and…
  5. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 5
    Royalty Advantage Ownership in PrairieSky provides a long duration cash flow stream and the optionality associated with perpetual land title ownership. Exposure to: No exposure to: High margin cash flow streams Capital costs New…
  6. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 6
    Higher Margin, Lower Risk Margin Summary (/boe) Illustrative Working Interest Operator PrairieSky Royalty Revenue (52% Liquids Production)(1) 33.58/boe PrairieSky Royalty offers higher margins Production & Mineral Tax than…
  7. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 7
    Recycling the Land Base The perpetual nature of Fee Lands allows PrairieSky Royalty to continually recycle lands and grow its revenue base. PrairieSky leases At the end of the primary lease lands by zone same term, any lands/rights…
  8. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 8
    Production History on our Fee Lands Cumulative production of Historical Gross Production on PSK Fee Lands 4.4 billion boe 300,000 250,000 200,000 150,000 100,000 50,000 - CD Avg. Oil (bbl/d) CD Avg. Gas…
  9. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 9
    PrairieSky Royalty Per Share Metrics Production per Million Shares Acres per Million Shares(1) 140 80,000 120 60,000 100 80 40,000 60 40 20,000 20 0 - 2013 Q1/14 Q2/14 Q3/14 Q4/14 Q4/15 Q1/16 Q2/16 Q3/16…
  10. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 10
    Revenues Generated from Royalty Properties PrairieSky generates revenues through Royalty Compliance analysis focuses on leasing its Fee Lands and its GORR capturing mispaid royalties through Interests, which includes Royalty…
  11. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 11
    Returns to Shareholders From IPO to March 31, 1.4 WTI down 2019, PrairieSky has 39% AECO down returned 900 million in 1.2 55% dividends and 120 million in share buybacks to 1.0 shareholders 0.8 billions High conversion…
  12. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 12
    Capital-Free Returns and Diversification PrairieSky Royalty E&Ps Midstream Capital-Free Returns No capital investment required x Requires significant capital x Requires significant capital or acquisitions for growth for growth…
  13. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 13
    Shareholder Alignment Board & Management invested 80 million in PSK Shares Shareholder All staff are shareholders Pay for performance long-term incentives Alignment and maximize participation in Employee Stock Purchase…
  14. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 14
    HIGH QUALITY ROYALTIES = OPTIONALITY
  15. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 15
    Future Potential Optionality Crown Royalties Optionality Beyond Current Valuation Expansion of productive trends Material new pool discoveries Improvements in drilling and completions technologies: incremental recovery via…
  16. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 16
    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 Oil…
  17. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 17
    Saskatchewan Viking Continues to Attract Capital Saskatchewan Viking remains a key play for many producers based on superior economics, short cycle times and low capital requirements < 1 million to bring well on-stream and…
  18. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 18
    Development of an Economic Resource Play Saskatchewan Viking Wells Drilled Before 2010 2,650 vertical wells drilled (in this map area) 36 horizontal wells drilled Horizontal lateral length 1 mile or 0.5 mile PrairieSky Drilling…
  19. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 19
    Central Alberta Duvernay 900,000 acres of royalty lands in the oil and volatile oil window of an emerging shale resource play. Pembina Pembina/ Thorsby / Thorsby Duvernay is in early stages of contributing to PrairieSkys…
  20. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 20
    Alberta Viking Growth in Activity 16,000 14,000 Gross Oil Production (bbl/d) 12,000 10,000 8,000 6,000 4,000 2,000 0 2014 2015 2016 2017 2018 2019 pre-2014 RR 2014 RR 2015 RR 2016 RR 2017 RR 2018 RR Activity…
  21. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 21
    Investing in Future Growth Opportunities PrairieSky has re-invested its cash lease bonus consideration into new emerging oil An emerging resource play opportunities to provide capital efficient liquids growth in the medium to long…
  22. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 22
    Upper Montney Light Oil Exposure GORR on 70 sections of prospective Upper Montney light oil lands in Two Rivers region of British Columbia PrairieSky will benefit from future development of play without capital expenditures,…
  23. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 23
    Enhanced Oil Recovery Unit on single section of land first started producing in 1979 Production has increased dramatically with EOR scheme, delivering 55,000 per month in royalty revenue in Q1 2019 1,600 0 1 Mile 1,400…
  24. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 24
    Multi-Zoned, Prolific Spirit River Exposure 35,000 30,000 Gross Production (boe/d) 25,000 20,000 15,000 10,000 5,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Pre-2011 RR 2011 RR 2012 RR 2013 RR 2014 RR…
  25. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 25
    Legacy Production Unit was discovered in 1956 and developed vertically until 1965 Placed under a partial waterflood in 2003 Operator has an inventory of 166 net wells, 93 are booked locations (1) First horizontal well…
  26. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 26
    Technology Unit started producing in the 1950s. Horizontal, multi-stage fracture development started in 2012 increasing production to levels not seen since the 1960s. Increased horizontal drilling activity on a number of units…
  27. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 27
    New Pool Discovery and Development The pool encompasses 32 sections of Fee Land, currently under natural gas flood Production began in early 2012 and reached peak production of over 4,000 bbls/d Over 100 million in royalty…
  28. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 28
    Spuds on PrairieSky Lands Q1 2019 27
  29. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 29
    Quarterly Activity on PrairieSky Lands Wells Spud Wells Spud 300 300 12.0% 250 250 10.0% 200 200 8.0% 150 150 6.0% 100 100 4.0% 50 50 2.0% 0 0 0.0% 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2017 Q1…
  30. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 30
    10 Year Free Cash Flow Generation 2018 Funds from Operations 2018 Average Royalty Production 229.7 million 23,358 boe/d 10 Year Average Annual Production (boe/d) FX AECO WTI (US / 22,000 24,000 26,000 28,000 30,000 (/Mcf)…
  31. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 31
    Why PrairieSky 7.8 million acres of Fee Simple lands Vast Land Base 7.8 million acres of GORRs Management and directors with an unparalleled understanding of the Experienced Team royalty business and are invested alongside…
  32. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 32
    APPENDICES
  33. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 33
    UNDERSTANDING ROYALTIES
  34. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 34
    History of PrairieSkys Fee Lands 1676 1887 1958 2002 2014 Present King Charles II of Dominion of CPR creates Encana created PrairieSky completes PrairieSky is the largest England granted Canada stops Canadian Pacific through merger…
  35. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 35
    Types of Royalties Crown Royalties The following figure Fee Simple Mineral Title - outlines the royalty PrairieSky owns 7.8 million acres hierarchy. As you Gross Overriding Royalties - PrairieSky owns 7.8 million acres move down…
  36. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 36
    Dominant Land Position 35
  37. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 37
    Active Management of Land Base PrairieSky actively License to 13,000 km2 of 3D manages its Fee seismic & 46,000 km of 2D seismic Lands: PrairieSkys Seismic Coverage Meeting with operators and providing updates on available…
  38. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 38
    Recycling the Land Base The perpetual nature of Fee Lands allows PrairieSky Royalty to continually recycle lands and grow its revenue base. PrairieSky leases At the end of the primary lease lands by zone same term, any lands/rights…
  39. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 39
    FINANCIAL INFORMATION
  40. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 40
    Financial Highlights Year Ended December 31, Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Q4 2017 millions, unless otherwise 2018 2017 noted Production Volumes Crude Oil (bbls/d) 8,904 9,163 9,018 9,098 8,731 9,419 9,004 9,565 NGLs (bbls/d)…
  41. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 41
    Diversity in Top Payers Top 10 payers represent 49% Exposure to various operators with of product revenue, while the diverse expertise ranging from Top 25 payers represent 70% private companies to Majors of product revenue 12…
  42. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 42
    Leadership Team Executive Team Board of Directors Andrew M. Phillips, President & CEO / Director James M. Estey, Chair of the Board Previously, President, CEO & Director of Home Quarter Resources Corporate Director, Retired Chairman of…
  43. April 2019 Corporate Presentation – Prairiesky Royalty Ltd. – slide 43
    CONTACT PrairieSky Royalty Ltd. 1700, 350 7 Avenue SW Calgary, AB T2P 3N9 www.prairiesky.com T 587.293.4000 E Investor.relationsprairiesky.com

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