Corporate Presentation January 2015 for OPEN for BUSINESS
PrairieSky Snapshot Symbol TSX: PSK Land Position 5.3 million Fee acres; 3.6 million GORR acres Market Capitalization 4.0 billion Production (1) 18,365boe/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 Lands located throughout the heart of the oil and gas producing basins in Alberta and Saskatchewan License to…
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%…
The Royalty Advantage Fee lands equivalent to Crown lands Can recycle or re-lease land that is not held by production Nearly one million acres scheduled to revert back to PrairieSky in the next two years(1) Gross Overriding…
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 55.70/boe 55.70/boe…
Portfolio Approach to Investing in Oil & Gas Over 275 lessees paying revenue on PrairieSky lands Operator Operators on PrairieSky Fee Lands include Majors, Independents, Mid Cap and Small Cap producers Over 75% of revenue…
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%,…
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…
Mannville Seeing Continued Interest Lithic Mannville in early gestation of development on PrairieSky lands Expected to be cornerstone of future growth MannvilleType Curves 450 C50/bbl Edmonton, US0.833/C, C3.00/mcf 400 Input…
Viking Should Continue to See Investment 90 Viking Type Curves C50/bbl Edmonton, US0.833/C, C3.00/mcf 80 Input 70 Tier 7 + 8% GORR Tier 8 + 8% GORR Assumptions Oil Production (bbl/d) 60 Capital: 850k 850k 50 1st Month IP:…
Viking a Focus of Future Growth Viking Highlights: Large OOIP of 6 11 mmbbl per section Shallow depths, low risk and predictable oil rates Excellent vertical well control Improvement in completions leading to higher IPs and quick…
Optionality Case Study 1: 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 2: Technology Multi-zone 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…
Optionality Case Study 3: 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 14.0% 12.0% Annualized…
Why PrairieSky 5.3 million acres of Fee Simple lands Vast Land Base 3.6 million acres of GORRs Long tenured team with direct experience in land negotiations, business development, Experienced Team royalty compliance and…
Appendix: Addition Information OPEN for BUSINESS
Scratching the Surface of Resource Play Potential Expansive asset base provides extensive long term exploration and development opportunities 21
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…
Financial Results Three Months Ended ( millions, unless otherwise noted) September 30, 2014 Funds from Operations(1) 68.7 Revenues 87.7 Dividends 41.3 Production Volumes Natural Gas (MMcf/d) 44.1 Crude Oil (bbls/d) 6,599…
Executive Team Andrew M. Phillips, President & CEO / Director Most recently, CEO of Home Quarter Resources (acquired by a public oil and gas company in 2014) Over 15 years of experience in the oil & gas industry Held increasingly…
Analyst Coverage Firm Analyst AltaCorp Jeremy McCrea, Klazina van den Berg Barclays Grant Hofer BMO Gordon Tait, Scott Van Bolhuis CIBC Arthur Grayfer, Dennis Fong, Shahzaib Merwat FirstEnergy Michael Dunn GMP Stacey McDonald, Holly…
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