Corporate Presentation A Premier Pure-Play Pipestone Montney Company SEPTEMBER 2020
Pipestone Energy Corp. Overview Over 140 net Montney sections in the heart of the condensate fairway Large Contiguous Undeveloped Acreage Position in the Condensate- Rich Montney AB Super Rich Montney Trend Keyer a Keyera Pipes…
Private Placement Key Terms Pipestone has entered into agreements providing for 70 million of structured equity financing to execute an accelerated growth program Issue Type Convertible Preferred Shares (CP Shares) Gross issuance of 70…
Private Placement Strategic Rationale The proposed financing provides structured equity capital to accelerate development and maximize returns Highly Economic Drilling Inventory at Current Commodity Prices The Company has reduced…
Capitalized for Accelerated Growth The 70 million financing provides the capital necessary to re-initiate development activities in H2 2020 Net proceeds from the financing initially utilized to repay amounts outstanding on the RBL No…
Positioned to Achieve Scale Fully-funded three-year development plan fills the in-place infrastructure, delivers scale and de-leverages the Company through YE 2022 3 Year Corporate Growth Trajectory(1) Annual Average Production…
Differentiated from the Peer Group Pipestone Energys leverage profile and growth trajectory is differentiated from the…
2020 Achievements & Future Game Plan On-track to Return To Profitable Growth Trajectory Achieved Pad Average Pacesetter Achievements Took Decisive Action to Protect Results on Recent 6-30 Pad with 2020 Key Balance Sheet,…
Pipestone Energy Development Focus High return development inventory along the installed in-field gathering system 2020 2021 Development Focus Focused along the North-South PIPE Acreage infrastructure spine PIPE Montney Wells H2…
Leader on Capital Costs Pipestone has significantly reduced its capital costs through improved efficiency in a flat service cost environment Well Cost Performance Since 2019(1)(2) Well Cost (MM) 10.0 9.0 PIPE Forecast well cost…
Well Cost Improvement to Returns Well cost achievements have materially improved development economics and go-forward free cash flow generation capability Improvement in Well Economics(1) Free Cash Flow Enhancement(2) Payback (Months)…
Pipestone Energy Well Performance Production from the initial three producing pads are demonstrating strong deliverability and attractive condensate-gas-ratios Pipestone Energy Well Results to Date(1) Gas Rate (MMcf/d)(1) Condensate…
Attractive Asset Economics Pipestone Montney wells deliver highly competitive half-cycle economics, which translates into strong full-cycle economics at US40 WTI Pipestone VRGC3 (Montney B + C Average) Type Curve Economics(1)(2)(3)…
APPENDIX
Consistent Geology The well at 03-12 confirms the lateral continuity of Montney resource potential across our land base Pipestone Area Cross Section Ovintiv Pipestone Energy A A Future Upside Layer Montney B and C zones have…
Efficient Reserve Growth Increased reserve volumes materially across all categories since YE 2018; improved capital cost efficiencies reflected in significantly lower future development costs Y-o-Y Reserve Volume Increase(1)…
Significant Reserves & Resource Recognition Increased reserve volumes with decreased FDC driving a 57% year-over-year increase to 2P NAVPS (strip pricing) to 5/share(2) NPV 10% Volume Condensate / Oil NGLs Total Liquids 3C Price…
Secured Processing Capacity Infrastructure & committed third party facilities will support initial growth to 36,000 boe/d; TOP escalation reduced in 2021 and staggered into Jan 2022 No take-or-pay commitment concerns post-financing…
Committed Egress Capacity In Place Firm access to natural gas egress solutions to match existing processing commitments and support future production growth PIPE will seek to further diversify natural gas price exposure after first…
Environment, Social, & Governance Highlights State of the Art Design & Facilities, Focused on Minimizing Emissions Environment In-field fuel gas displacing diesel on drilling rigs and frac fleets Air powered instrumentation vs.…
Experienced Management and Board Pipestone Energy is led by a management team with significant Montney experience Management Team Board of Directors Paul Wanklyn Gordon Ritchie, Chairman President and CEO Previously Vice Chairman for…
Advisories (Continued) Notice to United States Readers The petroleum and natural gas reserves contained in this presentation have generally been prepared in accordance with Canadian disclosure standards, which are not comparable in all…
Statutory Rights of Action STATUTORY RIGHTS OF ACTION (ONTARIO PURCHASERS) Section 5.2 of OSC Rule 45-501 Ontario Prospectus and Registration Exemptions provides that when an offering memorandum is delivered to an investor to whom…
Statutory Rights of Action (Continued) STATUTORY RIGHTS OF ACTION (SASKATCHEWAN PURCHASERS) Section 138 of The Securities Act, 1988 (Saskatchewan), as amended (the Saskatchewan Act) provides that where an offering memorandum or any…
Statutory Rights of Action (Continued) Not all defences upon which we or others may rely are described herein. Please refer to the full text of the Saskatchewan Act for a complete listing. Similar rights of action for damages and…
Statutory Rights of Action (Continued) STATUTORY RIGHTS OF ACTION (NEW BRUNSWICK PURCHASERS) Section 2.1 of New Brunswick Securities Commission Rule 45-802 Prospectus and Registration Exemptions provides that the statutory rights of…
Statutory Rights of Action (Continued) STATUTORY RIGHTS OF ACTION (NOVA SCOTIA PURCHASERS) The right of action for rescission or damages described herein is conferred by section 138 of the Securities Act (Nova Scotia) (Section 138).…
Statutory Rights of Action (Continued) STATUTORY RIGHTS OF ACTION (MANITOBA, NEWFOUNDLAND AND LABRADOR AND PRINCE EDWARD ISLAND) The Securities Act (Manitoba), the Securities Act (Newfoundland and Labrador) and the Securities Act…
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