iQ2-September 2014 v3biq.iradesso.ca/main/documents/iq_reports/iQ-Q2-2014-web.pdf · 2016. 7. 20. · Long-time player Freehold Royalties Ltd. was joined in 2014 by Encana spinoff

Q2 2014

I N V E S T O RQ U A R T E R LY

CANADIAN OIL & GAS COMPARISON

RELEASED NOV 2014 / VOLUME 33ISSN 1718-9799 iq.bmir.com

FINANCIAL andOPERATING RESULTSfor 39 Juniors and 33 Intermediates

FEATURING FACT SHEETSfrom Juniors and Intermediates

Small but Strong

Surviving oil juniors are small but strongSome are not only survivors, they're thrivers

While the number of public oil and gas companies operating in Western Canada continues to decline, some of the survivors are getting bigger while others are getting better.

Some of the smallest players have admittedly thrown in the towel over the last few years, but others have joined forces to become stronger or found ways to increase their

production and graduate into the realm of intermediate players.

The high cost of doing business in today's world of horizontal drilling is the primary driver behind the slump in the number of junior players. Companies are exiting the industry while few are waiting on the sidelines to take their places. Even more interesting than the decline in the number of small companies has been the slow but steady increase in the number of intermediate companies thankstohighercashflow,economiesofscaleandaccesstogrowthcapital.

At the end of the second quarter of 2014 there were only 39 conventional producers that operate in the Western Canadian Sedimentary Basin, trade on the TSX or TSX Venture exchange and produce between 500 and 10,000 barrels of oil equivalent (boe/d). This is much lower than the peak over the last 10 years of 94 juniors in the third quarter of 2007, after which the junior sector began its descent. Over the same period, the number of intermediate players has been inching up. In the second quarter of 2014, the number of intermediates hit 33, the highest number over the past 10 years, but only marginally higher than the previous peak of 31 intermediates in the second quarter of 2012.

The slip in the number of junior oil and gas companies and the uptick in the number of intermediate players are just two of the

factsandfiguresinthiseditionofBryanMillsIradesso'siQReport,ourquarterlycomparisonofthefinancialandoperatingresultsofWestern Canada’s junior and intermediate energy producers. Our comparison includes every conventional oil and gas company that operates in the Western Canadian Sedimentary Basin, trades on the TSX or TSX Venture exchange and produces between 500 and 200,000 barrels of oil equivalent per day. We realize this is only a slice of the overall pie, so we've included a list of companies with less than 500 boe/d and companies that operate internationally to ensure investors have a variety of investment opportunities on their radar. Additional players include those operating in the oil sands and companies with unconventional business models.

While the number of traditional players has been declining, it's worthreflectingonthecompaniesthatarenotcapturedbythesenumbers that are key players in the oil and gas game. In an attempt to capture the imagination of investors, Canada's oilpatch is experimenting with different business models. Eagle Energy Trust wasthefirstcrossborderoilandgasincometrustin2010,apeergroup that has grown to include Parallel Energy Trust and Argent Energy Trust. Another business model that has been gathering steam consists of the companies that earn royalty interests. Long-timeplayerFreeholdRoyaltiesLtd.wasjoinedin2014byEncanaspinoffPrairieSkyRoyaltyLtd.We'vedecidednottoincludethesecompaniesinouriQReportbecausetheylacktheoperatingexpenses and capital costs of conventional producers.

The decline in the number of conventional companies included in ouriQReportissignificant,butthischangehasbeenaccompaniedby companies that are doing things bigger and better. The overall number of oil and gas producers has slipped, but we're encouraged by the size and savvy of some of those that remain.

Geoffrey VanderburgEditor,iQReportBryanMillsIradesso

MES

SAG

E FR

OM

TH

E ED

ITO

R

Q U A R T E R L Y R E P O R T : Q 2 2 0 1 4 1

Suite 2240, 140 - 4th Avenue SWCalgary, AB T2P 3N3

telephone: 403.503.0144toll-free: 1.866.415.1070email: [email protected]

NOVEMBER 2014 / VOL. 33.

EDITORGeoffrey Vanderburg

RESEARCHERS & CONTRIBUTORSJory Debenham, Clayton Goodwin, Darryl Folkerson.

Data provided by CanOils Database Limited and BMIR researchers

PRODUCTION ARTISTAlberto Delbove

Please email us at [email protected] fi ll out the subscription form atiq.bmir.com to ensure you receive yourfree copy of the iQ Report.

R E L E A S E S C H E D U L E

Q3 2014 iQ Report Release:

January 2015

Q22014Review

In the second quarter of 2014, Western Canada's oil and gas producers continued a long trend away from producing more natural gas than oil. While the median natural gas weighting for the juniors ticked up slightly to 41% from 39% in the previous quarter, this still represents a major shift from the median natural gas weighting of 76% in the second quarter of 2009. By comparison, the median natural gas weighting of the intermediates declined to 56% from 58% in the previous quarter. This compares with a median natural gas weighting for the intermediates of 67% in the second quarter of 2009. The juniors are more nimble than the intermediates when it comes to chasing the commodity with the highest returns, but the intermediates don'tfacethesamelevelofurgencythankstotheirmoreefficientproductionperbarrel of oil equivalent.

ThestockmarketwaskindtoWesternCanada'soilandgasproducersinthefirsthalf of 2014. The median junior provided a return of 14% to shareholders including dividendsinthefirstquarterof2014andanother13%inthesecondquarter.Themedianintermediatedidevenbetter,deliveringatotalreturnof16%inthefirstquarter of 2014 and another 21% in the second quarter. Of course, these gains did not last. The markets started giving back their gains in the second half of the year. While medians go up and medians go down, there are always a few losers in an up market and a few winners in a down market. A combination of skill and good luck allow stock pickers to outpace the average producer.

Themediancashflownetbackperboeforthejuniorsandintermediatesmovedinopposite directions in the second quarter of 2014 compared with the same quarter of thepreviousyear.Themediancashflownetbackforthejuniorsdeclinedto$20.76perboeinthesecondquarterof2014comparedwith$24.19perboeinthesamequarterof2013.Themedianintermediate,meanwhile,deliveredacashflownetbackof$25.26perboeinthesecondquarterof2014comparedwithacashflownetbackof$20.37perboeinthesamequarterof2013.Onereasonforthehighercashflownetbackoftheintermediates than the juniors in the second quarter of 2014 is the higher natural gas weighting of the juniors during a time when natural gas prices were relatively strong. Albertanaturalgassettlementpricesweremuchhigherinthefirsthalfof2014thanthey were in 2013, favouring the companies with a higher natural gas weighting. Cash flowisdeterminedbytakingthenetearningsandaddingbacknon-cashexpensessuchas depreciation.

The gap is widening between the median enterprise value of the juniors and the median enterprise value of the intermediates. The enterprise value is determined by adding a company’s market capitalization to its net debt. When we compare enterprise values to production levels for the second quarter of 2014, we see the stockmarketprovidingasignificantpremiumbasedonsize.Thejuniorstradedatanenterprisevalueof$63,793perboecomparedwithanenterprisevalueof$84,139per boe for the intermediates. A strong valuation allows companies to access capital or use equity to complete accretive deals. For intermediates the range of valuations goesfrom$27,674perflowingboeforPerpetualEnergy,whichisperpetuallyatthebottomofthislist,allthewayto$338,190perflowingboeforParamount.Forthejuniors,therangeisevenwider,startingwithanenterprisevalueof$13,856perflowingboeforQuattroto$352,363perboeforQuesterre.

GAS WEIGHTING TRENDS DOWNWARD

MARKETS K IND IN F IRST HALF OF 2014

CASH FLOW IS K ING

ENTERPRISE GAP WIDENS

COMMUNICATIONMATTERS

Information for investors

iq.bmir.com

C O N T E N T S

B R Y A N M I L L S I R A D E S S O • I Q . B M I R . C O M2

1 Q2 2014 REVIEW

4 WHEELING AND DEALING

5 JUNIOR COMPARISON CHARTS 6 Q2 Production (boe/d)

7 Q2 Production Mix - Natural Gas Weighting (%)

8 Change in Production - Q1 2014 to Q2 2014 (%)

9 Change in production per share – Q1 2014 to Q2 2014

10 Enterprise Value Versus Q2 Production ($ per boe/d)

11 Q2 Cash Flow Netback ($/boe)

12 Q2 Operating and Transportation Expenses ($/boe)

13 Q2 General and Administrative Cash Expenses ($/boe)

14 Q2 Depletion, Depreciation and Accretion Expenses ($/boe)

15 Annualized Q2 Cash Flow Multiples

16 Q2 Net Debt to Annualized Cash Flow

17 Investment Returns – Capital Gains and Distributions or Dividends (%)

18 Juniors Listing – Data Table

26 INTERMEDIATE COMPARISON CHARTS 27 Q2 Production (boe/d)

27 Q2 Production Mix - Natural Gas Weighting (%)

28 Change in Production - Q1 2014 to Q2 2014 (%)

28 Change in Production per share - Q1 2014 to Q2 2014

29 Enterprise Value Versus Q2 Production ($ per boe/d)

29 Q2 Cash Flow Netback ($/boe)

30 Q2 Operating and Transportation Expenses ($/boe)

30 Q2 General and Administrative Cash Expenses ($/boe)

31 Q2 Depletion, Depreciation and Accretion Expenses ($/boe)

31 Annualized Q2 Cash Flow Multiples

32 Q2 Net Debt to Annualized Cash Flow

32 Investment Returns - Capital Gains and Distributions (%)

33 Intermediates Listing – Data Table

37 EMERGING CONVENTIONAL COMPANIES WATCH LIST

38 CANADIAN COMPANIES OPERATING ABROAD

40 IQ TRENDS

I N T H I S I S S U E NOVEMBER 2014


RETURN UNDELIVERABLE CANADIAN ADDRESSES TO:

BRYAN MILLS IRADESSO

2240, 140 4th Avenue SW, Calgary, AB T2P 3N3

ABBREVIATIONS

bbls • barrels of oil

boe • barrels of oil equivalent

boe/d • barrels of oil equivalent per day

mcf • thousand cubic feet

mmcf • million cubic feet

NGLs • natural gas liquids

ASSUMPTIONS

• Barrels of oil equivalent calculated using 6 mcf = 1 boe.

• Net debt has been calculated by including bank debt, debentures, preferred convertible shares and working capital.

• For companies with A/B share structures, B shares have been converted to A shares using end-of-period share prices.

• Exchangeable shares have been converted to common shares using end-of-period exchange ratios.

D I S C L A I M E R

The information used to compile this report is publicly available.

Bryan Mills Iradesso provides the comparison to shine the

spotlight on these segments of the energy industry, and to

communicate the achievements and growth potential of the

oil and gas companies. The iQ Report does not constitute a

solicitation or recommendation for the purchase or sale of any

security; it is provided for information only and is not intended

to serve as investment advice. Bryan Mills Iradesso cannot be

held responsible for accuracy and all readers are encouraged

to conduct their own research. This report is provided by Bryan

Mills Iradesso as a service to the reader without responsibility

for accuracy. Bryan Mills Iradesso must be credited with

developing the iQ Report if any part of it is reproduced. The

companies that have provided a corporate profile for this report

have paid Bryan Mills Iradesso a fee.

34 Crescent Point Energy

35 Delphi Energy

36 Perpetual Energy

I N T E R M E D I AT E S N A P S H OT S

19 Arsenal Energy

20 Canamax Energy

21 Exall Energy

22 Hemisphere Energy

23 Hyperion Exploration

24 Marquee Energy

25 Tamarack Valley Energy

J U N I O R S N A P S H OT S


JUN

IOR

& IN

TERM

EDIA

TE D

EALS

IQ REPORT CATEGORY CHANGES

• Dejour moved to Juniors from Emerging

• Emerald Bay moved to International from Emerging

DONE DEALS

• AraxEnergyInc.acquiredbyRoseheartyEnergyInc.

• ArrivaEnergyInc.acquiredbyPetrusResourcesLtd.

• Baccalieu Energy Inc. acquired by China Oil And Gas Group Limited

• Capio Exploration Ltd. acquired by Kelt Exploration Ltd.

• Caracal Energy Inc acquired by Glencore Xstrata plc

• CochonProperties,LLCacquiredbyRoosterEnergyLtd.

• Corinthian Exploration Corp. acquired by Legacy Oil + Gas Inc.

• CrocottaEnergyInc.acquiredbyLongRunExplorationLtd.

• Eaglewood Energy Inc. acquired by Transform Exploration Pty Ltd.

• EqualEnergyLtd.acquiredbyPetroflowEnergyCorporation

• Forest Oil Corporation combines with Sabine Oil & Gas LLC

• HeritageOilPlcacquiredbyAlMirqabCapitalSPC

• Kodiak Oil & Gas Corp. acquired by Whiting Petroleum Corporation

• MedalOilCompanyLimitedacquiredbyOandoEnergyResourcesInc.

• PalliserOil&GasCorporationacquiredbyMahaEnergyInc.

• Passport Energy Ltd. merged with Amarok Energy Inc. to createPowderMountainEnergyLtd.

• Privateco acquired by Trident Exploration (WX) Corp. and 1808039 Alberta Ltd.

• RavenwoodEnergyCorp.acquiredbyPetrusResourcesLtd.

• Stream Oil & Gas Ltd. acquired by TransAtlantic Petroleum Ltd.

• Suroco Energy Inc. acquired by Petroamerica Oil Corp.

• VeranoEnergyLimitedacquiredbyParexResourcesInc.

• VerazPetroleumLtd.acquiredbyMomentusEnergyCorp.

wheeling & dealing

TheabovetransactionsonlyaffecttheiQReportcomparisonchartsincaseswherethecompaniesmeetthecriteriaforinclusion in the report. The focus is on public companies. This list is not exhaustive.


junior oil & gas companies

C O M PA R I S O N

INCLUSION CRITERIA

• Primary business must be oil and gas exploration, development and production

• Q22014productionmustfallbetween500and9,999barrelsofoilequivalentperday(boe/d)

• MajorityofproductionmustbefromWesternCanada

• MustbepubliclytradedontheTSXorTSXVentureExchange


JUN

IOR

CO

MPA

RISO

N

553

561

613

659

659

679

718

758

772

775

849

864

1,440

1,525

1,528

1,563

1,739

2,070

2,437

2,606

3,414

3,538

3,610

3,769

4,105

4,292

4,644

4,722

4,988

5,035

5,203

5,462

6,170

6,371

6,396

6,501

6,558

9,875

9,960

0 2,000 4,000 6,000 8,000 10,000 12,000

Hemisphere

Dejour

Edge

Hawk

Canamax

Anterra

Hyperion

Tuscany

Exall

Traverse

Questerre

LGX

Waldron

Quattro

Shoreline

Yoho

Palliser

Pinecrest

Toscana

Yangarra

Anderson

Strategic

Terra

Artek

Arcan

Arsenal

Manitok

Questfire

Rock

Marquee

Tamarack

Storm

Gear

PineCliff

Spartan

Cardinal

Zargon

Chinook

Raging River

Q2 2014 PRODUCTION (BOE/D)Median = 2,606 boe/d

small players with big potentialProduction numbers tell only part of the story when it comes to identifying investment opportunities in the oil and gas sector. Small oil and gas companies often have the people and prospects to turn their venture into a great investment. Many juniors have the potential to be the next big thing, although in general, they are very small compared to the intermediate and senior players. For our iQ Report, we define juniors as companies with production from 500 barrels of oil equivalent per day (boe/d) to 9,999 boe/d.

Other criteria are included on the previous page.


JUN

IOR

CO

MPA

RISO

N

2

2

3

3

4

5

5

5

7

10

11

18

20

21

25

33

35

38

39

41

41

42

46

49

52

56

57

57

63

66

70

71

72

73

77

78

78

85

96

0 10 20 30 40 50 60 70 80 90 100

Palliser

Hawk

Gear

Arcan

Pinecrest

Raging River

Rock

Exall

Spartan

Anterra

Cardinal

Hemisphere

Tuscany

Arsenal

LGX

Questerre

Strategic

Zargon

Tamarack

Manitok

Edge

Hyperion

Traverse

Yangarra

Chinook

Canamax

Toscana

Marquee

Artek

Dejour

Anderson

Shoreline

Waldron

Yoho

Quattro

Storm

Questfire

Terra

PineCliff

Q2 PRODUCTION MIX — NATURAL GAS WEIGHTING (%)Median = 41%

balancing act between oil and gasOil has been priced higher than natural gas for a long time, but the juniors have historically produced more natural gas than oil, in part because gas is easier to find in the Western Canadian Sedimentary Basin. There has been a trend in the past few years of the juniors increasing their oil weighting, and this quarter, the preference for oil is highlighted with just over 60 percent of the companies reporting less than half of their production coming from natural gas. To calculate our weighting, we include natural gas liquids (NGL) with oil production. Produced liquids get prices that are similar to oil, with much stronger margins than natural gas. As is standard, we convert natural gas into oil equivalence by using a ratio of six thousand cubic feet (mcf) of natural gas to one barrel of oil equivalent (boe). This ratio comes from an energy equivalence at the burner tip.


JUN

IOR

CO

MPA

RISO

N

(25.1)

(19.7)

(15.0)

(14.7)

(13.2)

(12.6)

(9.1)

(8.9)

(7.2)

(6.8)

(6.1)

(5.8)

(5.1)

(5.1)

(3.4)

(2.4)

(1.6)

(0.9)

(0.9)

1.2

1.5

1.6

1.8

2.0

2.4

2.8

4.3

4.5

7.8

9.8

12.3

12.4

15.4

17.5

24.4

25.1

48.4

52.2

652.8

(100.0) 0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0

Questerre

Exall

Hyperion

Waldron

Manitok

Yoho

Artek

LGX

Palliser

Yangarra

Hawk

Toscana

Anterra

Questfire

Pinecrest

Hemisphere

Zargon

Edge

Shoreline

Chinook

PineCliff

Raging River

Rock

Terra

Traverse

Dejour

Cardinal

Arsenal

Storm

Arcan

Tuscany

Strategic

Anderson

Quattro

Tamarack

Marquee

Gear

Canamax

Spartan

CHANGE IN PRODUCTION — Q1 2014 TO Q2 2014 (%)Median = 1.2%

productionfluctuationsHalf of the 39 juniors compared on this chart managed to increase their overall production from Q1 2014 to Q2 2014 offsetting the remaining companies who experienced between 0.9 and 25.1% lower production this quarter. Consistently increasing production is challenging because production from most wells in Western Canada declines at a relatively high rate. These declines need to be replaced before additions can be made. Companies at the bottom of this chart may have sold production recently while companies at the top either acquired production or drilled successful wells.

FORMULAcurrent period avg. production – previous period avg. production

previous period avg. production

Note: Gas production converted to boe at 6 mcf: 1 boe.


JUN

IOR

CO

MPA

RISO

N

(43.8)

(35.0)

(28.6)

(25.1)

(19.7)

(18.5)

(18.0)

(15.7)

(15.2)

(15.0)

(14.5)

(13.7)

(12.4)

(9.9)

(9.2)

(8.9)

(7.2)

(5.1)

(3.4)

(2.5)

(1.9)

(1.8)

(1.7)

(1.2)

(0.9)

(0.9)

(0.7)

0.3

0.6

0.9

1.1

4.5

8.3

9.8

12.5

15.4

15.5

26.6

(50.0) (40.0) (30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0

Tuscany

Questfire

Hawk

Questerre

Exall

Strategic

Waldron

Yoho

Traverse

Hyperion

Yangarra

Artek

Hemisphere

Manitok

Toscana

LGX

Palliser

Anterra

Pinecrest

Dejour

Terra

Marquee

Zargon

Storm

Edge

Shoreline

Raging River

PineCliff

Rock

Cardinal

Chinook

Arsenal

Tamarack

Arcan

Quattro

Anderson

Gear

Canamax

CHANGE IN PRODUCTION PER SHARE — Q1 2014 TO Q2 2014(%)Median = (2.9)%

losing groundGood deal making, smart operational decisions and successful drilling can allow oil and gas companies to increase production without increasing the number of outstanding shares. The median decrease of 2.9% in the second quarter of 2014 shows that increasing production on a per-share basis is obviously not easy to do and that many of the companies on this chart have not been successful this quarter . Any company that can consistently add production and reserves on a per-share basis will achieve a strong return for investors.

It costs money to increase production, whether it be via drilling or acquisitions. Therefore, junior companies need to deploy their cash flow carefully in order to grow, and they need to augment their cash flow with equity or debt financings in order to sustain their growth.

FORMULAcurrent production per share – previous production per share

previous production per share

Note: Production per share = average production rate for the period divided by basic weighted average shares outstanding during the period.

Gas production converted to boe at 6 mcf: 1 boe.


JUN

IOR

CO

MPA

RISO

N

13,856

15,922

16,206

27,719

34,223

34,870

37,454

41,105

43,429

44,565

45,596

45,963

46,654

46,930

53,162

55,734

60,658

60,911

61,931

63,793

64,902

65,412

72,456

76,403

77,290

81,116

82,941

84,051

84,694

89,903

91,765

92,525

97,975

102,761

119,599

123,494

163,449

207,137

352,363

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

Quattro

Questfire

Terra

Waldron

Palliser

Tuscany

Marquee

Anderson

Shoreline

Toscana

Manitok

Hyperion

Anterra

Hawk

Arsenal

Zargon

Chinook

Strategic

PineCliff

Canamax

Rock

Pinecrest

Artek

Gear

LGX

Arcan

Yangarra

Edge

Exall

Hemisphere

Yoho

Dejour

Tamarack

Traverse

Cardinal

Storm

Spartan

Raging River

Questerre

ENTERPRISE VALUE VERSUS Q2 PRODUCTION ($ PER BOE/D)Median = $63,793 per boe/d

the value of productionThis chart shows each junior company’s enterprise value per flowing barrel of oil equivalent per day (boe/d) of this quarter’s production. We’ve calculated the enterprise value by multiplying the share price on August 29, 2014 by the weighted average number of shares outstanding during Q2 before adding debt and debentures outstanding net of working capital at the end of the quarter. A high number means the markets are placing more value on the production of a particular company, perhaps for reasons such as long life reserves, a higher proportion of oil to gas, high field netbacks, or perceived strong production growth prospects.

FORMULAmarket capitalization + net debt

average production in barrels of oil equivalent

Note: Market capitalization = Aug 29, 2014 share price x Q2 weighted average basic shares outstanding.

Net debt = bank debt + debentures – working capital.


JUN

IOR

CO

MPA

RISO

N

(7.11)

(0.63)

1.40

1.69

6.85

10.26

10.35

10.90

11.00

13.16

14.34

14.46

15.63

15.83

17.57

17.91

19.76

20.24

20.27

20.76

22.28

22.55

23.85

25.68

26.46

26.50

26.89

30.80

31.58

32.51

34.17

34.49

35.66

36.80

37.58

39.76

41.49

42.47

62.10

(20.00) (10.00) 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00

Shoreline

Dejour

Canamax

Waldron

Palliser

Questfire

Terra

Exall

Strategic

Quattro

Edge

Toscana

Yoho

PineCliff

Anderson

Anterra

Artek

Marquee

Arcan

Zargon

Storm

Hyperion

LGX

Chinook

Arsenal

Manitok

Questerre

Hemisphere

Pinecrest

Hawk

Traverse

Yangarra

Tuscany

Gear

Tamarack

Cardinal

Spartan

Rock

Raging River

Q2 CASH FLOW NETBACK ($/BOE)Median = $20.76/boe

margins wideningThis chart demonstrates the amount of cash each company brings in on average for each barrel of oil equivalent it produces. It demonstrates that one company’s boe may be significantly different from another’s. In addition to commodity mix, cash flow netbacks are influenced by spot or hedged prices, cash taxes, royalties, and associated expenses. A number of the companies with the best netbacks on this chart are weighted towards oil production, which returns the highest relative prices in today’s markets. They may also have hedging programs in place that benefit their netbacks. Cash flow is the result of adding back non-cash expenses such as depreciation and future taxes to net earnings. It is a measurement that is not defined by generally accepted accounting principles (GAAP) in Canada. The median cash flow netback decreased this quarter to $20.76 compared with $28.30 /boe in Q1 2014.

FORMULAcash flow from operations

total production in the period

Notes: Total production in the period = average daily production x 91 days in the period


JUN

IOR

CO

MPA

RISO

N

8.80

9.02

11.24

11.24

12.37

13.56

13.65

13.72

13.98

14.35

14.54

14.79

14.81

15.31

15.83

16.11

17.85

18.03

18.06

18.22

18.33

18.39

18.46

19.67

19.71

20.08

20.89

21.06

21.37

21.48

21.75

22.20

23.43

24.98

27.49

29.18

31.38

33.42

44.88

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00

Yangarra

PineCliff

Storm

Manitok

Traverse

Quattro

Yoho

Anderson

Raging River

Tamarack

Artek

Terra

Rock

Exall

Arcan

Hyperion

Canamax

Questfire

Questerre

Spartan

Toscana

Waldron

Edge

Marquee

Zargon

Hemisphere

Arsenal

Shoreline

Gear

Tuscany

Chinook

Cardinal

Hawk

Pinecrest

Dejour

Strategic

Palliser

LGX

Anterra

Q2 OPERATING AND TRANSPORTATION EXPENSES ($/BOE)Median = $18.22/boe

cost controlCompanies that do a good job of controlling operating and transportation costs earn more money from their production. The ability to be an efficient operator relates to the productivity of wells, the proximity of producing areas, economies of scale, control over facilities and a company’s production methods. Some companies with high operating costs this quarter may be incurring expenses in an operating area that will not increase when production increases for the area, creating the potential for improving economies of scale.

FORMULAoperating expenses including transportation costs


Note: Total production in the period = average daily production x 91 days in the period.


JUN

IOR

CO

MPA

RISO

N

1.36

1.43

1.53

2.02

2.32

2.90

2.94

3.11

3.19

3.23

3.65

3.75

3.81

3.81

4.01

4.13

4.27

4.32

4.56

4.64

4.75

4.90

5.08

5.50

5.55

5.72

5.92

7.52

8.22

8.35

8.52

9.44

9.50

9.56

10.32

10.36

12.16

15.24

17.14

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00

Yangarra

Raging River

Storm

PineCliff

Rock

Artek

Arsenal

Spartan

Tamarack

Cardinal

Marquee

Quattro

Chinook

Questfire

Hawk

Traverse

Gear

Terra

Toscana

Manitok

Yoho

Waldron

Zargon

Anderson

Palliser

Shoreline

Strategic

Hemisphere

Edge

Hyperion

Tuscany

LGX

Pinecrest

Arcan

Anterra

Exall

Questerre

Dejour

Canamax

Q2 GENERAL AND ADMINISTRATIVE CASH EXPENSES ($/BOE)Median = $4.64/boe

mindingtheofficeGeneral and administrative expenses (G&A) pay for the engineering, geology, accounting, business development and other office-related expenses of oil and gas companies. G&A should be lower per boe for larger companies because many of these costs are fixed and do not increase with the amount of production. A lower amount of G&A per boe is good as long as it isn’t at the cost of growth or of meeting the regulatory and legal requirements of being a public company. Savvy investors should take the time to understand what is happening that causes expenses to be higher than peers and whether or not it will translate into growth that will reward shareholders. Non-cash compensation expenses, mostly stock options and other share or unit-based incentives, often make up a significant portion of compensation packages at junior oil and gas companies. These are not included in this chart.

FORMULAgeneral & administrative expenses


Notes: Total production in the period = average daily production x 91 days in the period.


JUN

IOR

CO

MPA

RISO

N

7.55

8.13

9.73

10.01

10.13

12.37

12.47

12.88

13.47

14.16

14.31

14.63

14.72

15.20

15.44

15.71

16.58

17.21

18.13

18.42

18.79

19.59

20.15

20.35

20.97

21.50

21.52

21.74

22.61

22.71

23.40

26.08

26.17

27.46

28.71

29.60

29.70

30.30

33.57

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00

Quattro

Questfire

PineCliff

Edge

Terra

Storm

Dejour

Canamax

Artek

Toscana

Hemisphere

Yoho

Traverse

Waldron

Manitok

Shoreline

Yangarra

Hyperion

Palliser

Hawk

Marquee

Anterra

Arsenal

Chinook

Questerre

Anderson

Gear

Zargon

Tamarack

Cardinal

Raging River

Arcan

Rock

Strategic

LGX

Tuscany

Exall

Pinecrest

Spartan

Q2 DEPLETION, DEPRECIATION AND ACCRETION EXPENSES ($/BOE)Median = $18.42/boe

reserves writedownDepletion, depreciation and accretion expenses (DD&A) are an approximation of finding, development and acquisition costs for oil and gas reserves. DD&A expenses are an ongoing writedown of assets as they are used up. Increasing amounts may mean reserves were more expensive to acquire in the first place and as a result are losing value on the company’s books at a faster pace. It’s worth noting that the numbers on this chart have been drawn directly from each company’s income statement. As a result, the amounts include one-time items.

FORMULAdepletion, depreciation & accretion expenses




JUN

IOR

CO

MPA

RISO

N

2.7

2.9

4.0

4.2

4.3

4.3

4.7

5.1

5.5

5.6

5.7

5.7

6.4

6.5

6.6

7.2

7.2

7.4

8.0

8.3

8.3

8.5

8.9

9.2

10.1

10.7

10.8

11.0

13.7

15.2

15.2

16.1

16.1

21.3

36.0

44.9

124.8

0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0

Dejour

Shoreline

Tuscany

Quattro

Hawk

Rock

Questfire

Terra

Manitok

Marquee

Arsenal

Hyperion

Pinecrest

Gear

Anderson

Chinook

Yangarra

Anterra

Tamarack

Zargon

Hemisphere

Traverse

Cardinal

Toscana

LGX

Raging River

Artek

PineCliff

Spartan

Arcan

Palliser

Strategic

Storm

Edge

Yoho

Exall

Questerre

Waldron

Canamax

ANNUALIZED Q2 CASH FLOW MULTIPLESEnterprise Value to Annualized Cash Flow Median = 7.4 Market Capitalization to Annualized Cash Flow Median = 4.9

flowingcashThe dark bars on this chart show each company’s enterprise value as it relates to annualized cash flow. The lighter bars indicate the market capitalization to annualized cash flow. The difference between the two bars is each company’s net debt. Therefore, a quick glance at this chart doesn’t only show where a company trades in relation to its cash flow, but also shows debt positions. This calculation of annualized cash flow multiples uses the closing market price on Aug 29, 2014 combined with Q2 2014 weighted average shares outstanding, net debt and cash flow. The values shown on the chart relate to the enterprise value multiples of annualized cash flow denoted by the dark bars.

FORMULAenterprise value

cash flow for period x 4

Note: Enterprise value = (Q2 weighted average basic shares x Aug 29, 2014 share price) + net debt.

For A/B share structure companies, the separate market price of B shares is also factored into the market capitalization.

Market Capitalization to Annualized Cash Flow

Enterprise Value to Annualized Cash Flow


JUN

IOR

CO

MPA

RISO

N

(19.9)

(1.6)

(0.9)

(0.6)

(0.6)

(0.0)

0.2

0.3

0.3

0.4

0.6

0.8

0.9

0.9

0.9

1.1

1.1

1.3

1.3

1.4

1.5

2.0

2.0

2.3

2.3

2.3

2.5

3.8

4.1

4.3

4.8

5.1

5.5

10.2

11.4

18.7

27.2

(30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0

Canamax

Questerre

PineCliff

Traverse

Spartan

Cardinal

Rock

Quattro

Hemisphere

Raging River

Tuscany

Tamarack

Chinook

Manitok

Storm

Gear

Hawk

Yangarra

Yoho

Terra

Marquee

Arsenal

Artek

LGX

Questfire

Toscana

Zargon

Anterra

Anderson

Hyperion

Pinecrest

Edge

Strategic

Arcan

Palliser

Exall

Waldron

Dejour

Shoreline

Q2 NET DEBT TO ANNUALIZED CASH FLOWMedian = 1.3

The two companies at the top of this graph had negative cash flow for the quarter so they were not included since the multiple of cash flow is not meaningful

The six companies at the bottom of this graph had positive cash positions rather than net debt.

leveraging leverageThis measurement compares, in years, how long it would theoretically take to become debt free if cash flow remained steady year after year and it was 100% dedicated to paying down debt. In times where equity markets aren’t providing capital at a reasonable value, it can be advantageous for companies to use debt to finance growth. Assuming they are creditworthy, companies with lower debt may be better positioned to seize asset-buying opportunities. Companies with higher debt may not have as many options. Companies with negative values on the chart have a positive working capital position that they will be able to use to fund growth.

FORMULAnet debt


Note: Net debt = bank debt + debentures – working capital.

Convertible debentures make up a portion of the debt load for Anderson, Anterra, Arcan, Exall, Quattro, Shoreline, Toscana and Zargon.


JUN

IOR

CO

MPA

RISO

NINVESTMENT RETURNS – CAPITAL GAINS AND DISTRIBUTIONS OR DIVIDENDS (%)April through June Median = 13% April through August Median = 17%

(64)

(50)

(25)

(24)

(24)

(22)

(17)

(16)

(15)

(7)

(6)

(6)

(6)

1

3

4

5

9

12

17

17

19

22

22

23

24

29

31

31

34

35

38

39

47

53

57

79

87

148

(100) (50) 0 50 100 150 200

Shoreline

Pinecrest

Anterra

Strategic

Artek

Hyperion

Waldron

Palliser

Arcan

Questerre

Terra

Manitok

Zargon

Hemisphere

Dejour

Yoho

Toscana

Exall

Canamax

LGX

Hawk

Marquee

Storm

Yangarra

Anderson

Raging River

Gear

Tamarack

Spartan

PineCliff

Rock

Cardinal

Arsenal

Traverse

Questfire

Quattro

Chinook

Edge

Tuscany

looking upInvestors in the junior oil and gas producers experienced mainly positive returns in the second quarter and subsequent months. The numbers in this chart represent the total return, which includes dividends paid during the quarter. The juniors that paid dividends in Q2 2014 include Arsenal, Cardinal, Toscana and Zargon.

FORMULAcapital gain + total distributions in that period per share or unit

market price at end of the previous period


Note: Capital gain in period = market price at end of period – market price at end of previous period.

Share price change plus distributions from April through August 2014

Share price change plus distributions from April through June 2014


JUN

IOR

CO

MPA

RISO

N

CompanyChiefexecutive

Stocksymbol& exchange(T=TSX, V=Venture)

Share priceAug 29/14

($)

Q2/14average daily

production(boe/d)

Q2/14 weighted shares outstanding

(basic) including exchangeable

(000)

Jun 30/14net debt before

debentures($000)

Jun 30/14 debentures

outstanding

Q2/14net income

($000)

Q2/14cash flow

($000)Anderson Brian Dau AXL-T 0.30 3,414 172,550 (656) 90,093 (993) 5,458Anterra Gang Fang AE.A 0.03 679 496,871 13,198 3,550 (132) 1,106Arcan Terry McCoy ARN-V 0.23 4,105 97,860 157,836 152,623 (6,325) 7,573Arsenal Tony van Winkoop AEI-T 9.03 4,292 16,085 82,916 0 (376) 10,334Artek Darryl Metcalfe RTK-T 3.09 3,769 70,587 54,935 0 1,963 6,777Canamax Brad Gabel CAC-V 1.55 659 31,450 (6,698) 0 (1,221) 84Cardinal Scott Ratushny CJ-T 20.62 6,501 37,734 (518) 0 3,780 23,522Chinook Walter Vrataric CKE-T 2.42 9,875 214,226 80,536 0 4,391 23,073Dejour Robert Hodgkinson DEJ-T 0.30 561 163,839 2,770 0 730 (32) Edge Brad Nichol EDE-V 0.22 613 163,815 16,261 0 288 799Exall Roger Dueck EE-T 0.12 772 66,635 35,967 21,435 (882) 766Gear Ingram Gillmore GXE-T 5.46 6,170 70,293 87,635 0 6,420 20,661Hawk Steve Fitzmaurice HWK.A-V 0.48 659 34,686 8,600 0 334 1,949Hemisphere Don Simmons HME-V 0.70 553 68,336 1,912 0 830 1,551Hyperion Trevor Spagrud HYX-V 0.14 718 54,190 25,430 0 207 1,474LGX Trent Yanko OIL-V 0.56 864 88,658 17,117 0 (727) 1,875Manitok Massimo Geremia MEI-V 2.44 4,644 70,390 39,987 0 (9,044) 11,197Marquee Richard Thompson MQL-V 1.17 5,035 112,534 56,911 0 900 9,274Palliser Kevin Gibson PXL-V 0.16 1,739 63,916 49,293 0 (19,346) 1,084PineCliff Philip Hodge PNE-V 2.11 6,371 203,138 (34,047) 0 2,333 9,180Pinecrest Wade Becker PRY-V 0.10 2,070 217,212 114,778 0 407 5,950Quattro Leonard Van Betuw QXP-V 0.55 1,525 34,995 633 1,250 632 1,826Questerre Michael Binnion QEC-T 1.18 849 264,928 (13,518) 0 520 2,077Questfire Richard Dahl Q.A-T 2.60 4,722 13,418 40,298 0 8,172 4,410Raging River Neil Roszell RRX-T 11.00 9,960 179,438 89,333 0 30,238 56,283Rock Allen Bey RE-T 7.69 4,988 39,918 16,775 0 8,292 19,276Shoreline Trevor Folk SEQ-T 0.62 1,528 9,041 43,754 17,000 (6,732) (988) Spartan Richard McHardy SPE-V 4.20 6,396 262,340 (56,406) 0 1,357 24,146Storm Brian Lavergne SRX-V 5.76 5,462 109,842 41,837 0 6,598 11,076Strategic Gurpreet Sawhney SOG-V 0.38 3,538 360,959 78,307 0 (2,717) 3,541Tamarack Brian Schmidt TVE-V 7.46 5,203 60,352 59,490 0 5,243 17,790Terra Cas Morel TT-T 0.37 3,610 19,332 19,332 0 12 3,399Toscana Joseph Durante TEI-T 14.19 2,437 5,537 13,076 16,942 1,250 3,207Traverse Laurie Smith TVL-V 1.25 775 68,275 (5,756) 0 407 2,409Tuscany Robert Lamond TUS-V 0.52 758 38,659 6,334 0 440 2,460Waldron Ernie Sapieha WDN-T 0.28 1,440 57,267 24,163 0 (215) 222Yangarra James Evaskevich YGR-T 3.27 2,606 53,558 41,022 0 2,851 8,180Yoho Brian McLachlan YO-V 2.50 1,563 52,621 11,908 0 500 2,224Zargon Craig Hansen ZAR-T 8.00 6,558 30,128 71,378 53,084 (2,020) 12,390TOTAL 127,979 1,286,123 355,977 38,365 317,583AVERAGE 3,282 32,978 44,497 984 8,143MEDIAN 2,606 24,163 19,218 440 3,541

For A/B share structures, B shares are not shown above, but are included in the calculations for some of our charts. When we calculate market capitalization, we use the A shares outstanding times the A share price, plus the B shares outstanding times the B share price.

Eastern Canada-focused juniors, coalbed methane-focused junior companies, and oil sands-focused junior companies are not included in this comparison.

The June 30, 2014 period represents Edge's first quarter and Yoho's third quarter.

The data was provided by both CanOils database and BMIR researchers.

JUNIOR DATA TABLE

iQ SNAPSHOT

This company snapshot has been assembled by BMIR using publicly available information. The snapshot is not endorsed by the company profiled.

Focus of Operations

OIL FOCUSED INVENTORY Listing: TSX-AEI

Shares outstanding: 16.1 million at June 30, 2014

Share price: $9.03 at August 29, 2014

Market capitalization: $145.4 million

Net debt: $82.9 million at June 30, 2014

Enterprise value (market cap. + net debt): $228.1 million

Q2 2014 average daily production:

Crude oil and NGLs 3,386 bbls/d 79%

Natural gas 5.44 mmcf/d 21%

Total 4,292 boe/d 100%

Cash fl ow netback:

Oil

Gas

$0 $50AEI $26.46

Peer Median$20.80

Recent News:September 15, 2014Arsenal releases operational update. At Princess, Alberta, Arsenal’s current total production was approximately 1,500 boe/day (80% oil).

August 7, 2014Arsenal announces Q2 2014 Results and Increase in Quarterly Dividend. Cash fl ow for the second quarter was $11.6 million or $0.72/share, a 14% increase from Q2 2013.

August 6, 2014Arsenal announces 7.7% increase in its quarterly dividend to $0.07 per common share.

Strategies:• Arsenal is focused on increasing shareholder value through development and

exploration of its projects in North Dakota and Alberta in a balanced and fi nancially responsible manner.

• Arsenal’s production mix in Q2 2014 was 79% crude oil and natural gas liquids and 21% natural gas.

• The Company operates in the US in North Dakota and in Canada in Alberta and British Columbia with activities focused at Stanley and Lindahl in North Dakota and at Princess in Alberta.

— from Arsenal website.

Contact:1900, 639 - 5th Avenue S.W.Calgary, Alberta T2P 0M9

tel 403.262.4854

[email protected]

Directors:Neil MacKay

Tony van Winkoop

William Hews

Harley Kempthorne

Bill Powers

Derek Petrie

Analyst Coverage:Acumen Capital

National Bank Financial

Paradigm Capital

PI Financial

Industrial Alliance

Offi cers:Tony van Winkoop - President & CEO

J. Paul Lawrence - VP, Finance & CFO

Gjoa Taylor - VP, Land

Ron Forth - VP, Engineering

Leo Nolte - VP, Drilling & Completions

Kent Sawatzky - VP, Production

Don Edwards - Corporate Secretary

Evi

North Dakota

Southeast Alberta

Desan

Deep Basin


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOT


Focus of Operations

EXPLOITING QUALITY ASSETSListing: TSXV-CAC

Shares outstanding: 41 million at June 30, 2014


Market capitalization: $64 million

Net surplus: $6.7 million at June 30, 2014



Crude oil and NGLs 293 bbls/d 44%


Total 659 boe/d 100%

Cash fl ow netback:

Oil

Gas

$0 $50CAC $1.40

Peer Median$20.80

Recent News:October 29, 2014Canamax announced increased production and cash fl ow for Q2 August 31, 2014. Canamax exited Q2 with a net production rate of just under 1,100 boe/d, which is a 38% increase from the prior quarter end.

September 19, 2014Canamax announced an increased capital expenditure program from June 2014 to December 31, 2014 to approximately $20.5 million from $14 million.

September 16, 2014Canamax announced the listing of 7,951,514 common share purchase warrants of the Company on the TSX Venture Exchange.

Strategies:• Canamax is dedicated to growing shareholder value:

• The Opportunity:

• Top tier technical and fi nancial competence

• Exploit low rish development opportunities

• 2014 Execution:

• Completed fi ve accretive deals ad one farm-in in the last 12 months

• Strong balance sheet - No debt

• Visble Growth:

• Focus on consolidation in core areas

• Top tier technical and fi nancial competence.

— from Canamax October 2014 Corporate Presentation

Contact:Suite 610, 324 - 8th Avenue SWCalgary, Alberta, CanadaT2P 2Z2

tel 587.349.5186investor line 587.349.5187www.canamaxenergy.com

Directors:Kevin Adair

Brad Gabel

Hugh Ross

Mark Shilling

Stuart McDowall

Allan King

Kevin Delaney

Analyst Coverage:Paradigm Capital

Beacon Securities

Offi cers:Brad Gabel - President & CEO

Jeremy Krukowski, P.Eng - Chief Operating Offi cer

Chris Martin, C.A. - VP Finance and CFO

Karen Genoway - Landman

Nabil Khouri, P.Geol - Geologist

Brazeau River

Retlaw

Wapiti

Flood


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOT


Focus of Operations

CRUDE OIL FOCUSListing: TSX-EE

Shares outstanding: 66.6 million June 30, 2014



Net debt: $36.0 million (includes $57.4 million debentures) at June 30, 2014






Cash fl ow netback:

Oil

Gas

$0 $50EE $10.90

Peer Median$20.80

Recent News:October 6, 2014Exall Energy announced revised process to pay out existing credit facility.

September 25, 2014Exall Energy signed agreement for a $35 million debenture to replace existing senior facility; debentures fully secured by Exall’s oil and gas assets, maturing 5 years from the issue date, and bearing interest at 8% per annum.

August 13, 2014Exall Energy corporation announces results for the three and six months ended June 30, 2014. Q2 2014 production average of 772 boe per day for a six month production average of 866 boe per day.

Strategies:• Exall Energy Corporation is focused on building shareholder value in the

oil and gas industry

• The Corporation will enhance shareholder value through exploration and development and selective acquisition opportunities

• Exall rapidly advanced its growth strategy through the successful acquisition of Kingsmere Exploration Ltd. in January 2007

• Exall is expecting to continue to increase its oil production as a result of:

• the Marten Mountain discovery made during the 2010 winterdrilling program;

• a disciplined capital program focused on developing light sweet crude opportunities, and

• existing good production practices and pool optimization strategies

— from Exall website

Contact:Calgary

400, 715 - 5th Avenue S.W.Calgary, Alberta T2P 2X6tel 403.237.7820

Toronto

8 King Street East, Suite 1700Toronto, Ontario M5C 1B5tel 416.368.3949

www.exall.com

Directors:Roger Dueck

Wayne Egan

Bernard Lang

Allan Menzies

Roderick Phipps

Frank Rebeyka

Stephen Roman

Analyst Coverage:Dundee Securities Corporation

D & D Securities

Emerging Equities

StoneCap Securities

Offi cers:Warren Coles - VP, Finance & CFO

Glen Kerr - COO

Janet MacKenzie - VP, Exploration

Mitsue

Bow Island


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOTe n e r g y c o r p o r a t i o n


Focus of Operations

Listing: TSXV: HME










Cash fl ow netback:

Oil

Gas

$0 $50HME $30.80

Peer Median$20.80

Recent News:September 22, 2014 Hemisphere announces record initial production results from the fi nal three wells of its summer drilling program

September 9, 2014Hemisphere appoints Ian Duncan to Chief Operating Offi cer and Ashley Ramsden-Wood to Vice President of Engineering

August 27, 2014Hemisphere releases Q2 fi nancial and operating results

Strategies:Hemisphere Energy Corporation focuses on horizontal development of established, well delineated oil pools

• Ramp up Atlee Buffalo production with aggressive drilling program

• Maintain steady production base at Jenner and pursue growth through infi ll and step-out development drilling

• Pursue additional strategic acquisitions with opportunities that expand the company’s core foundation

— from Hemisphere September presentation

Contact:2000, 1055 West Hastings St.Vancouver, British ColumbiaV6E 2E9

tel 604.685.9255

[email protected]

Investor [email protected]

Analyst Coverage:Canaccord Genuity

Industrial Alliance Securities

Integral Capital Markets

Offi cers:Don Simmons - President & CEO

Dorlyn Evancic - Chief Financial Offi cer

Ian Duncan - Chief Operating Offi cer

Ashley Ramsden-Wood - VP, Engineering

Andrew Arthur - VP, Exploration

David Savage- Consultant, Business Development

James Muraro - Consultant, Geophysics

Directors:Charles O’Sullivan

Don Simmons

Bruce McIntyre

Gregg Vernon

Frank Borowicz

Trutch

Jenner / Atlee


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOT


Focus of Operations

FOCUSED LIGHT OIL RESOURCE PLAYER Listing: TSXV-HYX










Cash fl ow netback:

Oil

Gas

$0 $50HYX $22.55

Peer Median$20.80

Recent News:August 15, 2014Hyperion announced second quarter results and operations update. 18% increase in operating netback (Q2 2014 - $38.04/boe) quarter over quarter.

July 25, 2014Hyperion announced that Mr. William (Bill) Cromb was appointed as Chief Financial Offi cer of Hyperion effective July 14, 2014.

June 27, 2014Hyperion announced revision to bank line. The lending limit of the revolving operating facility was revised to $28.0 million from $30.0 million.

Strategies:• Hyperion’s strategy is to grow through acquisitions which lead to lower risk, scalable

and repeatable development drilling projects.

• Ownership of high quality base assets that have approximately 21% base decline rate.

• Future focus on improving capital effi ciency at Niton-McLeod with full scale drill program and use of long reach horizontal wells.

• Hyperion holds approximately 51,043 net acres of undeveloped land with excellent tenure.

— from Hyperion May 2014 corporate presentation and website.

Contact:Suite 2110, Royal Bank Building335 - 8th Avenue S.W.Calgary, Alberta T2P 1C9

tel 403.930.0700

[email protected]

Directors:Rod Maxwell

Dan O’Neil

Greg Bay

Greg Turnbull

Trevor Spagrud

Leif Snethun

Offi cers:Trevor Spagrud - President & CEO

Larry Hammond - COO

Tim Gee - VP, Engineering

Steve Horth - Manager, Exploration

William (Bill) Taylor Cromb - CFO

Niton

Garrington

Pembina

Buck Lake


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOT


Focus of Operations

HIGH GROWTH, OIL FOCUSED, DEVELOPMENT AND PRODUCTIONListing: TSXV-MQL










Cash fl ow netback:

Oil

Gas

$0 $50MQL $20.24

Peer Median$20.80

Recent News:October 15, 2014Marquee announces operations update and upward revision to 2014 exit guidance. Michichi production increased to approximately 4,000 boe/d. Lloydminster production increased to approximately 700 boe/d.

September 30, 2014Marquee announces the completion of the previously announced disposition of its non-core asset located in the Pembina area of Alberta.

September 25, 2014Marquee announces the sale of a non-core asset in the Pembina area of western Alberta for $14 million and maintains 2014 production guidance.

Strategies:• Scalable, low risk, development stage, oil-prone asset base with a clearly delineated

drilling inventory capable of supporting many years of profi table growth

• Focus on delivering debt-adjusted per share growth in production, reserves, NAV, CF and FCF

• There is distinct value at the current share price as the company trades below its peers with fi nancial fl exibility

• Plan to drill 22 net wells at Michichi and Lloydminster in 2014

— from Marquee October 2014 Corporate Presentation

Contact:1700, 500 - 4th Avenue S.W. Calgary, AB T2P 2V6

tel 403.384.0000

[email protected]

Directors:Richard M. Alexander

Glenn Carley

Dennis Feuchuk

James H.T. Riddell

Dr. William J.F. Roach

Richard Thompson

Gregory G. Turnbull

Analyst Coverage:Acumen Capital

Canaccord Genuity Corp.

Dundee Capital Markets

FirstEnergy Capital Corp

GMP Securities

Haywood Securities Inc.

Macquarie Equity Research


Octagon Capital

Peters & Co. Limited

Offi cers:Richard Thompson - President & CEO

Roy Evans - CFO & VP, Finance

Steve Bradford - VP, Land

Rob Lemermeyer - VP, Production

Dave Washenfelder - VP, Exploration

Sam Yip - VP, Engineering

ENERGY LTD.

Lloydminster

Michichi


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON

iQ SNAPSHOT


Focus of Operations

TARGETED ASSETS, SUSTAINABLE CORPORATE GROWTH Listing: TSXV-TVE










Cash fl ow netback:

Oil

Gas

$0 $50TVE $37.58

Peer Median$20.80

Recent News:October 14, 2014Tamarack Valley announced a record current production rate, increased drilling activity and additions to drilling inventory. Current production rate of 7,400 boe/d.

September 30, 2014Tamarack Valley closed its acquisition of 100% of Suncor Energy’s interests in the Wilson Creek area of Alberta for an aggregate purcahse price of $168.5 million, prior to closing adjustments.

September 26, 2014Tamarack Valley closed its bought deal public offering of subscriptions receipts and fl ow-through shares for aggregate gross proceeds of $125,163,000.

Strategies: • Tamarack Valley utilizes a proven, rigorous process to identify opportunities, evaluate risk and measure results.

• Tamarack Valley’s longer term strategy involves the identifi cation and development of assets in four different core areas, which will enable proper risk management while delivering superior rates of return.

• Tamarack is continuing to execute its short term strategy to develop high quality assets that allow the Company to continue to be self-suffi cient, funding growth through internal cash fl ow and debt, enabling per share growth.

— from Tamarack Valley website

Contact:Bow Valley Square 43100, 250 - 6th Avenue S.W.Calgary, Alberta T2P 3H7

tel 403.263.4440

[email protected] www.tamarackvalley.ca

Directors:Floyd Price

Jeff Boyce

David Mackenzie

Dean Setoguchi

Brian Schmidt

Analyst Coverage:Acumen Capital Partners

Alta Corp Capital

Canaccord Genuity

Clarus Securities.


GMP Securities

Macquarie Capital


Paradigm Capital

Peters & Co.

RBC Dominion Securities

Offi cers:Brian Schmidt - President & CEO

Dave Christensen - VP, Engineering

Ken Cruikshank - VP, Land

Ron Hozjan - VP, Finance & CFO

Kevin Screen - VP, Production & Operations

Scott Reimond - VP, Exploration

Scott Hanson - Operations Manager

Derek Blizzard - Controller

Garrington

LochendQuaich

Buck Lake Heavy Oil

Redwater

Cardium Farm-in Wilson Creek

Hatton


JUN

IOR

CO

MPA

RISO

NJU

NIO

R C

OM

PARI

SON


intermediate oil & gas companies

C O M PA R I S O N

INCLUSION CRITERIA

• Primary business must be oil and gas exploration, development and production

• Q22014productionmustfallwithintherangeof10,000to200,000barrelsofoilequivalentperday(boe/d)

• MajorityofproductionmustbefromNorthAmerica

• MustbepubliclytradedontheTSXorTSXVentureExchange


INTE

RMED

IATE

CO

MPA

RISO

N

10,397

10,744

11,116

11,151

11,381

12,437

12,735

13,911

14,474

14,493

15,029

16,395

20,224

20,585

21,109

22,685

23,270

27,200

27,602

30,574

31,178

36,187

36,342

42,513

66,934

72,302

73,823

74,273

103,987

106,706

109,953

110,165

137,368

0 25,000 50,000 75,000 100,000 125,000 150,000

Delphi

DeeThree

TORC

Journey

Kelt

RMP

Cequence

Bonterra

Spyglass

NuVista

PaintedPony

Surge

Legacy

Paramount

TwinButte

Advantage

Perpetual

Crew

Long Run

Whitecap

Birchcliff

Trilogy

Bellatrix

Lightstream

Baytex

Peyto

Pengrowth

Bonavista

Enerplus

PennWest

Tourmaline

ARC

CrescentPoint

9

10

11

13

13

16

20

20

29

29

35

43

44

47

47

54

56

58

59

60

65

67

67

69

70

80

83

84

85

85

85

90

99

0 10 20 30 40 50 60 70 80 90 100

CrescentPoint

TwinButte

Legacy

Baytex

Surge

TORC

Lightstream

DeeThree

Whitecap

Bonterra

PennWest

RMP

Pengrowth

Journey

Long Run

Spyglass

Crew

Enerplus

Trilogy

ARC

Bellatrix

Bonavista

Delphi

NuVista

Kelt

Paramount

Birchcliff

Perpetual

Cequence

Tourmaline

PaintedPony

Peyto

Advantage

Q1 2014 PRODUCTION (BOE/D)Median = 23,270 boe/d

Q2 PRODUCTION MIX — NATURAL GAS WEIGHTING (%)Median = 56%

bigger peer groupWe define intermediate oil and gas companies as those with production from 10,000 boe/d to 200,000 boe/d. To ensure the peer group is relatively comparable, we restrict the category to companies with conventional oil and gas development and production as their primary business. The majority of their production must be from Canada and their shares must trade on the TSX or TSX Venture Exchange.

oil vs gas The median natural gas weighting of Western Canada’s intermediate oil and gas players decreased slightly this quarter with a median weighting of 56%. In the past there have been intermediate players that produced oil or gas exclusively. Now nearly all the players maintain a mix of oil and natural gas, ranging from a low of 9% natural gas for Crescent Point and Twin Butte to a high of 99% natural gas weighting for Advantage. Oil and natural gas are made comparable by converting natural gas from thousands of cubic feet (mcf) to barrels of oil equivalent (boe) at a ratio of 6:1.

FORMULAaverage natural gas production per day (boe/d)

average total production

(18.7)

(6.3)

(4.1)

(3.7)

(3.3)

(2.9)

(2.1)

(1.8)

(1.7)

(0.6)

0.1

0.5

0.9

3.7

4.2

5.2

5.2

5.6

5.6

7.2

7.8

9.1

9.2

9.7

10.2

12.2

12.5

14.6

15.3

15.9

34.8

54.4

(30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0

NuVista

TwinButte

Legacy

PennWest

Lightstream

Crew

Paramount

Birchcliff

Pengrowth

Spyglass

Peyto

Bonavista

Delphi

Bellatrix

ARC

CrescentPoint

Enerplus

TORC

Perpetual

Tourmaline

Long Run

Surge

Trilogy

Cequence

Advantage

Kelt

Baytex

DeeThree

Whitecap

Bonterra

RMP

PaintedPony

(19.0)

(6.8)

(6.6)

(4.1)

(3.4)

(3.3)

(2.8)

(2.6)

(2.4)

(1.1)

(0.6)

(0.6)

(0.5)

(0.3)

0.1

0.3

0.9

1.7

2.4

3.7

3.8

4.5

4.7

5.0

5.3

8.7

9.6

9.8

11.0

14.5

32.6

53.2

(30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0

NuVista

Legacy

TwinButte

PennWest

Lightstream

Crew

Paramount

Birchcliff

Pengrowth

Peyto

Spyglass

Surge

Whitecap

Bonavista

Bellatrix

Delphi

Long Run

Kelt

CrescentPoint

Tourmaline

ARC

Baytex

Enerplus

TORC

Perpetual

Trilogy

Cequence

Advantage

DeeThree

Bonterra

RMP

PaintedPony

CHANGE IN PRODUCTION — Q1 TO Q2 2014 (%)Median = 5.2%

CHANGE IN PRODUCTION PER SHARE — Q1 2014 TO Q2 2014 (%)Median = 0.6%

building productionIf no effort were made by a conventional oil and gas company to stabilize or increase production, its production would typically decline at rates varying from 20% to 30% per year depending on its commodity mix, depth of wells and age of assets. More than half of the intermediate were able to add production since the previous quarter of 2014. Others had declining production, possibly due to asset divestitures or declining wells.

FORMULAcurrent period avg. production – previous period avg. production

previous period avg. production

Note: Gas production converted to boe at 6 mcf: 1 boe.


INTE

RMED

IATE

CO

MPA

RISO

N

maintaining production per shareThe biggest challenge oil and gas companies have is to achieve growth on a per-share basis. Although this comparison offers only a quarter-to-quarter snapshot, one can see that many companies have trouble achieving per-share growth. This is because oil and gas production is a capital intensive business that often requires issuing more shares to fund capital programs. 18 of the 33 intermediates increased their production on a per-share basis from the first quarter of 2014 to the second quarter.

FORMULAcurrent production per share – previous production per share

previous production per share

Note: Production per share = average production rate for the period divided by basic weighted average shares outstanding during the period.

Gas production converted to boe at 6 mcf: 1 boe.


INTE

RMED

IATE

CO

MPA

RISO

N

27,674

32,752

36,402

45,363

46,890

47,791

51,634

54,510

57,285

60,640

60,642

61,354

72,390

74,008

77,175

82,507

84,139

93,211

94,332

99,048

99,998

101,972

107,361

120,768

121,897

134,771

134,985

136,378

137,299

154,847

162,924

164,361

338,190

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000

Perpetual

Spyglass

Journey

Cequence

Long Run

TwinButte

Bellatrix

Bonavista

Advantage

Crew

Enerplus

PennWest

Pengrowth

Lightstream

Birchcliff

Delphi

PaintedPony

RMP

Peyto

DeeThree

ARC

Legacy

Tourmaline

Trilogy

NuVista

Surge

Baytex

Kelt

TORC

CrescentPoint

Whitecap

Bonterra

Paramount

ENTERPRISE VALUE VERSUS Q2 PRODUCTION ($ PER BOE/D)Median = $84,139/boe

11.41

14.44

14.46

14.72

16.00

17.46

18.07

19.32

21.21

21.47

21.63

21.90

22.53

23.14

23.52

24.64

25.26

26.57

26.99

29.23

29.51

29.72

30.69

31.12

39.79

41.03

41.82

42.74

44.15

45.80

50.08

50.16

51.47

0.00 10.00 20.00 30.00 40.00 50.00 60.00

NuVista

Delphi

Spyglass

Paramount

Perpetual

Cequence

Pengrowth

Crew

Journey

Bellatrix

Bonavista

Advantage

Enerplus

Tourmaline

Peyto

PaintedPony

TwinButte

Birchcliff

Kelt

Long Run

ARC

Baytex

PennWest

Trilogy

Surge

Legacy

Whitecap

RMP

DeeThree

Lightstream

TORC

CrescentPoint

Bonterra

Q2 CASH FLOW NETBACK ($/BOE)Median = $25.26/boe

makingmoneyflowCash flow netbacks are equivalent to sales margins. They indicate how much cash flow a company generates from each barrel of oil equivalent (boe) of production. Companies with higher netbacks may have a better chance of thriving during periods of lower commodity prices when higher cost production may be uneconomical. The intermediate companies with the highest cash flow netbacks tend to also be the companies with the highest oil weighting. This is indicative of the comparably higher price of oil versus natural gas.

FORMULAcash flow from operations



value per barrelThis graph shows each intermediate company’s enterprise value per flowing barrel of oil equivalent per day (boe/d) of Q2 production. Enterprise value is calculated by multiplying the share price on Aug 29, 2014 by the weighted average number of shares outstanding during Q2 before adding debt and debentures outstanding net of working capital at the end of the quarter. A high number means the markets are placing more value on the production of a particular company, perhaps for reasons such as long life reserves, a higher proportion of oil to gas, high field netbacks, or perceived strong production growth prospects.

FORMULAmarket capitalization + net debt

average production in barrels of oil equivalent

Note: Market capitalization = Aug 29, 2014 share price x Q2 weighted average basic shares outstanding.

Net debt = bank debt + debentures – working capital.

1.88

2.91

7.16

7.37

7.71

8.62

9.64

9.98

10.02

10.41

10.75

11.13

11.48

12.04

12.24

12.64

12.66

12.92

13.98

14.11

14.29

14.80

15.09

15.33

15.76

16.02

17.08

17.43

17.90

18.12

18.55

20.37

22.12

0.00 5.00 10.00 15.00 20.00 25.00

Advantage

Peyto

RMP

Tourmaline

Birchcliff

Bellatrix

Bonavista

Perpetual

Cequence

Trilogy

PaintedPony

ARC

Enerplus

Paramount

Crew

NuVista

Delphi

DeeThree

Bonterra

Kelt

Whitecap

Lightstream

CrescentPoint

TORC

PennWest

Baytex

Long Run

Surge

Journey

Pengrowth

Legacy

Spyglass

TwinButte

Q2 OPERATING AND TRANSPORTATION EXPENSES ($/BOE)Median = $ 12.66 /boe

0.09

0.64

1.00

1.03

1.14

1.19

1.37

1.39

1.50

1.57

1.62

1.89

1.91

1.94

1.97

1.99

2.06

2.12

2.27

2.32

2.35

2.40

2.54

2.63

2.77

2.89

2.96

3.18

3.18

3.35

3.50

3.64

3.99

0.00 1.00 2.00 3.00 4.00 5.00

Peyto

Tourmaline

Kelt

Trilogy

Advantage

Bonavista

Bellatrix

ARC

Whitecap

PaintedPony

RMP

Delphi

Birchcliff

Crew

Enerplus

DeeThree

Surge

Cequence

TORC

TwinButte

Baytex

CrescentPoint

Perpetual

Bonterra

Legacy

Pengrowth

Lightstream

Journey

Paramount

Spyglass

PennWest

Long Run

NuVista

Q2 GENERAL AND ADMINISTRATIVE CASH EXPENSES ($/BOE)Median = $2.06/boe

officecostsThe general and administrative (G&A) cash expenses per boe represent office-related costs per barrel of oil equivalent produced. This number indicates how efficiently oil and gas companies manage their offices. Factors that affect G&A include the number of staff, their salaries and benefits, contractors, service agreements, management fees, lease terms, processes and systems. The size of G&A can also be affected by the method a company uses in accounting for expenses, such as whether or not they are capitalized. Wherever possible we have only included cash G&A expenses and management fees, excluding non-cash items such as share-based compensation.

FORMULAgeneral & administrative expenses




INTE

RMED

IATE

CO

MPA

RISO

N

fieldcostsTypically heavier oil has higher operating and transportation costs than light oil. Thankfully, natural gas often comes with even lower operating costs, which is important considering the selling price for natural gas is relatively low. Other factors that can influence operating and transportation costs include proximity to pipelines, volumes being produced per well and the cost of secondary and tertiary methods being used to stimulate production.

FORMULAoperating expenses (including transportation costs)



10.47

10.92

11.44

11.45

11.78

12.20

12.36

12.52

12.77

13.71

14.49

15.71

16.37

16.64

17.37

17.40

17.45

19.21

19.39

20.18

20.19

21.15

21.70

21.85

22.20

22.21

23.22

25.93

26.16

28.99

31.77

32.53

33.15

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00

Peyto

Advantage

PaintedPony

Delphi

Birchcliff

Perpetual

Cequence

Bellatrix

Tourmaline

Bonavista

Journey

Enerplus

ARC

Baytex

Kelt

Crew

Trilogy

Spyglass

DeeThree

PennWest

Pengrowth

Long Run

RMP

Paramount

Bonterra

Whitecap

TwinButte

Surge

NuVista

TORC

Lightstream

Legacy

CrescentPoint

Q2 DEPLETION, DEPRECIATION AND ACCRETION EXPENSES ($/BOE)Median = $17.45/boe

4.4

4.4

4.7

4.8

5.2

5.5

6.0

6.2

6.2

6.6

6.8

6.9

7.1

7.2

7.4

7.5

8.0

8.5

8.6

8.8

9.3

9.3

9.4

10.7

10.7

11.0

11.0

12.5

12.7

13.9

15.7

29.3

63.1

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0

Long Run

Lightstream

Journey

Perpetual

TwinButte

PennWest

RMP

DeeThree

Spyglass

Bellatrix

Legacy

Bonavista

Cequence

Advantage

Enerplus

TORC

Birchcliff

CrescentPoint

Crew

Bonterra

Surge

ARC

PaintedPony

Trilogy

Whitecap

Pengrowth

Peyto

Baytex

Tourmaline

Kelt

Delphi

NuVista

Paramount

ANNUALIZED Q2 CASH FLOW MULTIPLESEnterprise Value to Annualized Cash Flow Median = 8.0 Market Capitalization to Annualized Cash Flow Median = 6.6

reserves come at a costDepletion, depreciation and accretion expenses indicate the finding and development costs for oil and gas reserves. These costs relate mainly to accounting for the production of oil and gas reserves, and the depletion of value from the balance sheet as reserves are produced. Higher amounts mean the value of a company’s reserves is declining more rapidly than companies with lower amounts. This could be because the valuation was high in the first place or the reserves are being produced at a faster pace.

FORMULAdepletion, depreciation & accretion expenses



a range of multiplesAs can be seen by this chart, there is a large spread of cash flow multiples in the intermediate group. Where it would theoretically take some companies only half a decade to produce as much cash flow per share as their share price and net debt per share combined, others would take well over a decade to do the same. These multiples may be a good barometer of current market sentiment towards each of the companies. The cash flow multiples in this report are calculated using the closing market price on Aug 29, 2014 and the Q2 2014 weighted average number of shares outstanding. The numbers on the chart correspond to the dark bars that show multiples of enterprise value to annualized cash flow. The lighter bars simply reflect the market capitalization as a multiple of annualized cash flow without taking debt into account.

FORMULAenterprise value


Note: Enterprise value = Q2 weighted average basic shares or units x Aug 29, 2014 share price + net debt.

Enterprise Value to Annualized Cash Flow

Market Capitalization to Annualized Cash Flow


INTE

RMED

IATE

CO

MPA

RISO

N

(1.1)

(0.3)

0.5

0.7

0.7

0.9

0.9

0.9

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.5

1.6

1.8

1.8

1.8

1.9

2.0

2.0

2.4

2.5

2.6

2.7

2.9

3.1

3.4

3.5

3.6

9.5

(2.0) 0.0 2.0 4.0 6.0 8.0 10.0 12.0

Kelt

PaintedPony

RMP

DeeThree

Bonterra

Advantage

Tourmaline

TORC

ARC

Journey

Cequence

CrescentPoint

Bellatrix

Enerplus

Peyto

Crew

Whitecap

Bonavista

Trilogy

TwinButte

Birchcliff

Long Run

PennWest

Surge

Perpetual

Legacy

Lightstream

Delphi

NuVista

Baytex

Pengrowth

Spyglass

Paramount

Q2 NET DEBT TO ANNUALIZED CASH FLOWMedian = 1.6

Q2 TOTAL RETURNS – CAPITAL GAINS AND DISTRIBUTIONS (%)April through June Median: 21% April through August Median: 15%

(12.4)

(9.9)

(9.0)

(7.6)

(7.0)

(6.2)

2.7

3.4

4.9

5.4

6.3

6.6

7.2

7.7

9.3

14.4

14.7

15.3

15.5

18.1

21.6

22.5

23.1

25.7

26.4

26.8

44.7

45.2

51.7

62.8

68.0

69.0

(30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0

TwinButte

Bellatrix

Cequence

Spyglass

PennWest

Bonavista

Long Run

Peyto

ARC

Tourmaline

Kelt

Pengrowth

Trilogy

Legacy

Baytex

CrescentPoint

Enerplus

Lightstream

Birchcliff

DeeThree

NuVista

TORC

Advantage

Bonterra

Paramount

Crew

Perpetual

Surge

Whitecap

PaintedPony

RMP

Delphi

years of debtWe calculate net debt as bank debt plus debentures net of working capital. Companies with lower debt to cash flow ratios are in a safer position when it comes to having room to manoeuvre with their balance sheets. As debt levels get higher, returns for shareholders get leveraged, but risk also increases and companies can become constrained in their ability to invest in growth. Total net debt for all the intermediate companies including debentures adds to $24.2 billion.

FORMULAnet debt


Note: Net debt = bank debt + debentures – working capital.

Convertible debentures make up a portion of the debt load for Advantage, Birchcilff, Lightstream, Long Run, Pengrowth, Perpetual and Twin Butte.

moving upIn the most previous quarters, the returns remained fairly stable. The first half of this year showed a strong upswing. These numbers take into account all dividends. Companies that paid dividends this quarter are Arc, Baytex, Bonavista, Bonterra, Crescent Point, Enerplus, Lightstream, Long Run, Pengrowth, Penn West, Peyto, Spyglass, Surge, TORC, Trilogy, Twin Butte and Whitecap.

FORMULAcapital gain + total distributions or dividends over the

period per share or unit


Note: Capital gain in period = market price at end of current period – market price at end of previous period.

Share price change plus distributions from April through August 2014

Share price change plus distributions from April through June 2014


INTE

RMED

IATE

CO

MPA

RISO

N

CompanyChiefexecutive

Stocksymbol& exchange(T=TSX, V=Venture)

Share price Aug 29/14

($)2

Q2/14average daily

production(boe/d)4

Q2/14 weighted shares outstanding (basic) including

exchangeable & B shares converted

(000)

Jun 30/14net debt before

debentures($000)

Jun 30/14debentures

outstanding($000)

Q2/14net income

($000)

Q2/14cash flow

($000)Advantage Andy Mah AAV-T 6.72 22,685 169,354 77,285 84,183 24,330 45,201 ARC Myron Stadnyk ARX-T 31.43 110,165 315,917 1,087,000 0 147,400 295,800 Baytex James Bowzer BTE-T 48.62 66,934 135,620 2,441,202 0 36,799 181,039 Bellatrix Raymond Smith BXE-T 8.42 36,342 177,847 379,009 0 38,252 71,013 Birchcliff Jeffery Tonken BIR-T 12.70 31,178 145,145 514,637 48,141 28,087 75,382 Bonavista Jason Skehar BNP-T 14.82 74,273 202,329 1,050,140 0 86,576 146,208 Bonterra George Fink BNE-T 65.84 13,911 31,902 186,044 0 27,614 65,160 Cequence Paul Wanklyn CQE-T 2.33 12,735 210,986 86,087 0 8,876 20,235 CrescentPoint Scott Saxberg CPG-T 45.00 137,368 407,544 2,931,525 0 98,586 627,007 Crew Dale Shwed CR-T 11.15 27,200 122,134 287,622 0 3,792 47,824 DeeThree Martin Cheyne DTX-T 11.20 10,744 84,654 116,064 0 18,133 43,167 Delphi David Reid DEE-T 4.53 10,397 154,746 156,794 0 5,439 13,658 Enerplus Ian Dundas ERF-T 24.89 103,987 204,158 1,224,542 0 39,957 213,211 Journey Alex Verge JOY-T 11.25 11,151 28,280 87,778 0 3,480 21,523 Kelt David Wilson KEL-T 13.66 11,381 122,456 (120,586) 0 3,336 27,956 Legacy Trent Yanko LEG-T 7.83 20,224 161,877 794,799 0 18,818 75,508 Lightstream John Wright LTS-T 6.28 42,513 200,060 1,883,478 6,455 68,195 177,176 Long Run William Andrew LRE-T 5.27 27,602 134,291 519,085 67,463 20,842 73,429 NuVista Jonathan Wright NVA-T 11.65 14,493 135,593 187,019 0 (11,837) 15,053 PaintedPony Patrick Ward PPY-T 14.55 15,029 89,231 (33,772) 0 (18,923) 33,705 Paramount Clay Riddell POU-T 60.30 20,585 98,043 1,049,758 0 53,109 27,569 Pengrowth Derek Evans PGF-T 6.93 73,823 527,141 1,455,400 235,500 (8,800) 121,400 PennWest David Roberts PWT-T 8.45 106,706 492,400 2,386,000 0 143,000 298,000 Perpetual Susan Riddell Rose PMT-T 2.04 23,270 148,835 184,221 156,109 2,549 33,871 Peyto Darren Gee PEY-T 38.53 72,302 153,691 898,703 0 62,159 154,730 RMP John Ferguson RMP-T 8.75 12,437 120,827 102,048 0 18,339 48,368 Spyglass Dan O'Byrne SGL-T 1.57 14,474 128,077 272,960 0 815 19,043 Surge Paul Colborne SGY-T 8.68 16,395 189,969 560,625 0 37,927 59,364 TORC Brett Herman TOG-T 14.60 11,116 92,126 181,169 0 13,494 50,655 Tourmaline Michael Rose TOU-T 55.07 109,953 199,336 827,246 0 66,437 231,552 Trilogy James Riddell TET-T 28.88 36,187 125,634 741,973 0 28,234 102,487 TwinButte Jim Saunders TBE-T 1.90 21,109 345,604 273,929 78,269 7,181 48,520 Whitecap Grant Fagerheim WCP-T 18.41 30,574 229,680 752,882 0 195,045 116,360 TOTAL 1,349,244 23,542,666 676,120 1,267,241 3,581,174 AVERAGE 40,886 713,414 96,589 38,401 108,520 MEDIAN 23,270 514,637 78,269 24,330 65,160

Data provided by CanOils Database and bmir researchers.

INTERMEDIATE DATA TABLE


INTE

RMED

IATE

CO

MPA

RISO

N

iQ SNAPSHOT


Focus of Operations

ACQUIRE, DEVELOP, EXPLOIT Listing: TSX-CPG NYSE-CPG



Market capitalization: $18,935.4 million

Net debt: $2,931.5 million at June 30, 2014

Enterprise value (market cap. + net debt): $21,866.9 million




Total 137,368 boe/d 100%

Cash fl ow netback:

Oil

Gas

$0 $50CPG $50.16

Peer Median$25.26

Recent News:September 23, 2014Crescent Point closes bought deal fi nancing for raising aggregate gross proceeds of approximately $800 million

September 2, 2014 Crescent Point announces consolidated acquisition of conventional oil assets and upwardly revises production guidance for 2014.

August 13, 2014Crescent Point releases second quarter results and upwardly revises 2014 guidance.

Strategies:• Increase recovery factors through infi ll drilling, water fl ood optimization

and improved technology

• Focus on high-quality, large resource-in-place pools with production and reserves upside

• Maintain strong balance sheet, signifi cant unutilized bank line capacity and 3 ½-year hedging program

— from Crescent Point’s September 2013 corporate presentation

Shaunavon

Beaverhill Lake

Viewfi eld Bakken

Alberta Bakken

Uinta Basin

Contact:2000, 585 - 8th Avenue S.W.Calgary, Alberta T2P 1G1

tel 403.693.0020toll-free 888.693.0020

[email protected]

Investor Relations403.767.69591.855.767.6923

[email protected]

Analyst Coverage:AltaCorp Capital

Bank of America Merrill Lynch

Barclays Capital

BMO Nesbitt Burns

Canaccord Genuity

CIBC Wood Gundy

Cormark Securities

Credit Suisse

Desjardins Securities Inc.


FirstEnergy Capital

GMP Securities

Goldman Sachs

Haywood Securities

Macquarie Capital Markets Canada


Peters & Co.

Royal Bank of Canada

Salman Partners

Scotia Capital

TD Newcrest

Offi cers:Scott Saxberg - President & CEOGreg Tisdale - CFOC. Neil Smith - COOBrad Borggard - VP, Corporate PlanningDerek Christie - VP, Exploration &

GeosciencesTrent Stangl - VP, Marketing

& Investor RelationsSteven Toews - VP, Engineering WestRyan Gritzfeldt - VP, Engineering East

Tamara MacDonald - VP, LandKen Lamont - VP, Finance & TreasurerMark Eade - Corporate SecretaryKent Mitchell - President, Crescent

Point Energy U.S. Corp

Directors:Peter Bannister Ken CugnetHugh GillardGerald RomanzinScott SaxbergGreg TurnbullBob HeinemannRene Amirault

North Dakota Bakken/Three Forks

Flat Lake Bakken

Manitoba Bakken

Viking


INTE

RMED

IATE

CO

MPA

RISO

N

iQ SNAPSHOT


Focus of Operations

REAL ASSETS WITH REAL GROWTHListing: TSX-DEE









Total 10,397 boe/d 100%

Cash fl ow netback:

Oil

Gas

$0 $50DEE $14.44

Peer Median$25.26

Recent News:October 23, 2014Delphi provided operations update. Delphi successfully completed its sixth Montney horizontal well of 2014 in East Bigstone.

September 9, 2014Delphi announced continued Montney success. Delphi completed its tenth horizontal Montney well utilizing a 30 stage slickwater hybrid completion technique.

August 13, 2014Delphi reported quarterly results for the quarter ended June 30, 2014. 10,397 boe/d. 36% over the comparative quarter in 2013.

Strategies:• Signifi cant Montney production growth at East Bigstone:

• Montney production increased to over 60% in Q2/14 from 20% in Q1/13

• Slickwater well performance exceeding Delphi’s expectations

• Cash generating capability increasing with Montney growth• Montney fi eld netback of $34/boe for fi rst half of 2014

• Montney C3+ NGL Yields 100 bbls/mmcf (ave 71% C5+)

• Montney program will accelerate through 2014 and 2015 with:

• Robust economics and shortened payouts

• Signifi cant unbooked value at Bigstone Montney

• Potential to add a second rig in 2015, accelerating the 5 year plan

— from Delphi presentation

Contact:300, 500 - 4th Avenue S.W.Calgary, Alberta T2P 2V6

tel 403.265.6171

[email protected]

Directors:David Reid

Tony Angelidis

Harry Campbell

Robert Lehodey

Andrew Osis

Lamont Tolley

David Sandmeyer

Stephen Mulherin

Analyst Coverage:Macquarie Capital

Maison Placements Canada


Peters & Co.

Scotia Capital

Raymond James

Jennings Capital

Offi cers:David Reid - President & CEO

Brian Kohlhammer - Sr. VP, Finance & CFO

Tony Angelidis - Sr. VP, Exploration

Rod Hume - Sr. VP, Engineering

Hugo Batteke - VP, Operations

Michael Galvin - VP, Land

North West Alberta Region


INTE

RMED

IATE

CO

MPA

RISO

N

iQ SNAPSHOT


Focus of Operations

SUSTAINABLE BASE ASSETS FUEL GROWTHListing: TSX-PMT




Net debt: $340.3 million (includes $156.1 million debentures) at June 30, 2014





Total 23,270 boe/d 100%

Cash fl ow netback:

Oil

Gas

$0 $50PMT $16.00

Peer Median$25.26

Recent News:October 27, 2014Perpetual announced the sale of non-core heavy oil properties and provides East Edson and West Edson operational updates; gross proceeds were $21.6 million.

August 7, 2014Perpetual released second quarter 2014 fi nancial and operating results. Q2 average production of 20,053 boe/day increased seven percent from Q1 production.

July 23, 2014Perpetual announced closing of previously announced senior unsecured notes offering and notice of redemption of 7.25% subordinated convertible debentures.

Strategies:A Spectrum of Opportunity

Perpetual remains focused on its top fi ve strategic properties for 2014

1. Reduce debt and manage downside risk

2. Grow Edson liquids-rich gas production, reserves cash fl ow, inventory and value

3. Maximize value of Mannville heavy oil

4. Maximize cash fl ow from shallow gas

5. Advance and broaden portfolio of high impact opportunities with risk-managed investments

— from Perpetual’s website

Contact:3200, 605 - 5th Avenue S.W.Calgary, Alberta T2P 3H5

tel 403.269.4400toll free 800.811.5522

[email protected]

Directors:Clayton Riddell

Susan Riddell Rose

Karen Genoway

Randall Johnson

Robert Maitland

Geoffrey Merritt

Donald Nelson

Howard Ward

Analyst Coverage:BMO Nesbitt Burns

CIBC World Markets

FirstEnergy Capital


Peters & Co.

RBC Capital Markets

Scotia Capital

TD Newcrest

Offi cers:Clayton Riddell - Executive Chairman

Susan Riddell Rose - President & CEO

Cameron Sebastian - VP, Finance & CFO

Vicki Benoit - VP, Production Operations

Jeff Green - VP, Corporate & Engineering Services

Gary Jackson - VP, Land & Acquisitions

Linda McKean - VP, Exploitation

Marcello Rapini - VP, Marketing

Deep Basin

Eastern District


INTE

RMED

IATE

CO

MPA

RISO

N

Company Ticker Chief Executive Q2 2014 Production

(boe/d)

3MV Energy Corp. TMV-V Dallas Duce 77

Abenteuer Resources Corp. ABU-V Lewis Dillman 22

Aroway Energy Inc. ARW-V Chris Cooper 216

Arctic Hunter Energy Inc. AHU-V Tim Coupland 6

Artisan Energy Corporation AEC-V Rick Ironside 125

Bayshore Petroleum Corp. BSH-V Peter Ho 7

Blackbird Energy Inc. BBI-V Garth Braun 66

Blackdog Resources Ltd. DOG-V David Corcoran 8

Blackhawk Resource Corp. BLR-V David Antony 31

Border Petroleum Ltd. BOR-V Al Kroontje 79

Century Energy Ltd. CEY-V Jimmy McCarroll 1

Desmarais Energy Corp. DES-V Doug Robinson 33

Detector Exploration Ltd. DEX-V Ronald Alexander 80

Donnybrook Energy Inc. DEI-V Malcolm Todd 211

Elkwater Resources Ltd. ELW-V Doug Bailey 183

Firebird Energy Inc. FRD-V Kevin Patterson 4

First Mountain Exploration Inc. FMX-V William Ambrose 33

Forent Energy Ltd. FEN-V Richard Wade 172

Georox Resources Inc. GXR-V Burkhard Franz 185

Golden Coast Energy Corp. GCE-V Gary Schellenberg 5

High North Resources Ltd. HN-V Colin Soares 250

Huntington Exploration Inc. HEI-V Robert Verhelst 61

International Frontier Resources Corp. IFR-V Patrick Boswell 39

Ironhorse Oil & Gas Inc. IOG-V Larry Parks 30

Kallisto Energy Corp KEC-V Robyn Lore 216

KR Investment Ltd. KR-V John Kim 11

Lariat Energy Ltd. LE-V Mike Marrandino 2

Magnum Energy Inc. MEN-V Richard Nemeth 133

Mount Dakota Energy Corp. MMO-V Gary Claytens 5

Nextraction Energy Corp. NE-V Kent Edney 90

Nordic Oil & Gas Ltd. NOG-V Donald Benson 22

Northern Spirit Resources Inc NS-V Kevin Baker 154

Pacific Paradym Energy Inc PPE-V Harry Chew 34

PanTerra Resource Corp. PRC-V Tim de Freitas 98

Paris Energy Inc. PI-V Robert Lamond 14

Pennine Petroleum Corporation PNN-V Jeff Saxinger 11

Petro Viking Energy Inc. VIK-V Irvin Eisler 85

Powder Mountain Energy Ltd. PDM-V Bruce Murray 19

RedWater Energy Corp. RED-V Gary Waters 274

Relentless Resources Ltd. RRL-V Daniel Wilson 88

Saccharum Energy Corp. SHM-V David Pinkman 16

Sahara Energy Ltd. SAH-V Martin Feng 16

Samoth Oilfield Inc. SCD-V Leonard Jaroszuk 9

Standard Exploration Ltd. SDE-V Tom MacKay 82

TrinCan Capital Corp. TRN-V Colin Bowdidge 9

Wescan Energy Corp. WCE-V Gregory Busby 2

emerging conventional companies This is a list of some of the emerging oil and gas companies that trade on the TSX or TSX Venture Exchange and produced less than 500 boe/d in the second quarter of 2014. This list is not exhaustive.


BRAZILAlvopetroAvantiBrownstoneCanacolGran TierraHRT ParticipacoesPetro Vista

UNITED STATESArgentArsenal AusTex Oil AvantiBNK BrownstoneCaza Oil & GasDejour Doxa Eagle EastWestEmerald BayEnerplus Enhanced EpsilonEqualGale ForceInt’l FrontierIvanhoeJerichoKFG ResourcesLyndenMobius Montana MountainviewNextraction Parallel PetrichorRockefeller HughesRooster Strata-XTerraceWestbridge Zargon

COLOMBIAAvantiAzabache BrownstoneCanacol Gran TierraPacific RubialesParex PetroamericaPetrodoradoPetroNovaPetro VistaPlatinoSintanaSuroco

GUYANACGX

ARGENTINAAmericas PetrogasArPetrolAzabacheCanoel International Energy Crown PointGran TierraMadalena

PERUAmericas PetrogasGran TierraPacific RubialesPetrodorado

TRINIDAD & TOBAGONiko Parex Touchstone

ECUADORCanacolIvanhoe

GUATEMALAPacific Rubiales

PARAGUAYPetrodorado

This map shows the footprint of activities for TSX and TSX Venture listed oil and gas companies with a market capitalization of more than $5millionandlessthan100,000boe/d of production in the second quarter of 2014. If you know a company that meets this criteria that has been left out, please email us at [email protected].

Canadian companiesoperating abroad


TUNISIACandaxChinookCYGAMDualexSerinusSonde

FRANCELundin PetromanasSterling Vermilion

UKRAINECubSerinus TransEuro

SPAINBNKDundee

TANZANIAOrca

YEMENCalvalleyHornTransGlobe

PAKISTANJuraPanorama Petroleum

PAPUA NEW GUINEAEaglewoodHeritage

UNITED KINGDOMAntrim Iona Ithaca North SeaSerica Sterling VermilionXcite

HUNGARYDualexFalcon

ITALYBRS ResourcesCanoel International Energy CYGAMOrca

ROMANIAEast WestSerinusSterling

INDIABengalEast WestNiko

NAMIBIAEcoEnergulfHRT ParticipacoesOandoSericaWestbridge

SOMALIAAfrica OilHorn

CONGOEnergulfOryx

ANGOLAEmperor

ETHIOPIAAfrica Oil

THAILANDPan Orient

GREECEPetra

ALBANIABankersPetromanasStream

KAZAKHSTANCondorTethys

RUSSIALundin

TAJIKISTANTethys

NEW ZEALANDCanadian OverseasEastWestNew ZealandTAG

CHINAPrimeline

AUSTRALIABengalEmperorFalconGallicPetroFrontierPetromanasStrata-XTerra NovaVermilion

INDONESIACBM AsiaLundinNikoPan Orient

EGYPTEmperorSea DragonTransGlobe

KurdistanEmperorOryxShaMaranWesternZagros

UZBEKISTANTethys

MONGOLIAIvanhoe

MOROCCOEastWestEmperorLongreachSerica

LIBYASonde

LIBERIACanadian OverseasSimba

ISRAELBrownstone

KENYAAfrica OilSimbaTaipanVanoil

POLANDBNKGERMANY

BNK PRD Vermilion

NETHERLANDSLundinSterlingVermilion

ZAMBIAOando

NORWAYLundin

AZERBAIJANGreenfields

BULGARIATransAtlantic

MALAYSIA MALAYSIA MALAYSIA MALAYSIA Lundin

GUINEASimba

SENEGALOryx

NIGERIAMartOandoOracle EnergyOryx

MALISimba

GHANASimba

TURKEYEmperorTransAtlanticPanorama PetroleumValeura

SOUTH AFRICAFalcon

BANGLADESHNiko

MADAGASCARCandaxNikoOyster

DJIBOUTIOyster Oil

BRUNEISerinus Energy

SUDANEmperor

CHADSimba

GEORGIATethys

SEYCHELLESVanoil

JORDANTransEuro

PORTUGALOracle Energy


iQtrendsThe following four-year review helps put the latest results into perspective

This iQ Report not only includes the results of Western Canada’s oil and natural gas companies for second quarter of 2014, it also includes the following review of the results over the past four years to help put the Q2 2014 numbers into perspective.

Junior producers Intermediate producers

NUMBER OF JUNIORS

40

50

60

70

80

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

NUMBER OF COMPANIES WITH PRODUCTION FROM 500 TO 10,000 BOE/D

Junior producersNUMBER OF INTERMEDIATES

15

20

25

30

35

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

NUMBER OF COMPANIES WITH PRODUCTION FROM 10,000 TO 200,000 BOE/D

Intermediate producers

PRODUCTION MIX - NATURAL GAS WEIGHTING (%)

50%

60%

70%

80%

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

AVERAGE GAS PRODUCTION DIVIDED BY AVERAGE TOTAL PRODUCTIONPRODUCTION MIX - NATURAL GAS WEIGHTING (%)

30%

40%

50%

60%

70%

80%

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

AVERAGE GAS PRODUCTION DIVIDED BY AVERAGE TOTAL PRODUCTION

CASH FLOW NETBACK ($/boe)

$0

$10

$20

$30

$40

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

CASH FLOW FROM OPERATIONS DIVIDED BY TOTAL PRODUCTION

NET DEBT TO ANNUALIZED CASH FLOW

0

1

2

3

4

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

NET DEBT DIVIDED BY CASH FLOW FOR PERIOD MULTIPLIED BY FOURNET DEBT TO ANNUALIZED CASH FLOW

0

1

2

3

4

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

NET DEBT DIVIDED BY CASH FLOW FOR PERIOD MULTIPLIED BY FOUR

ENTERPRISE VALUE VS PRODUCTION (boe/d)

$25

$35

$45

$55

$65

$75

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

MARKET CAP PLUS DEBT DIVIDED BY PRODUCTION SHOWN IN THOUSANDSENTERPRISE VALUE VS PRODUCTION (boe/d)

$35

$45

$55

$65

$75

$85

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

MARKET CAP PLUS DEBT DIVIDED BY PRODUCTION SHOWN IN THOUSANDS

CASH FLOW NETBACK ($/boe)

$0

$10

$20

$30

$40

Q22014

Q1Q3Q22013

Q1Q3Q22012

Q1Q3Q22011

Q1Q32010

Q2

CASH FLOW FROM OPERATIONS DIVIDED BY TOTAL PRODUCTION


Once again CanOils is proud to provide the tools that help Bryan Mills Iradesso researchers to compile the IQ report.

The CanOils Database Evaluate Energy's CanOils service is trusted by over 80 clients. It provides them with every vital piece of information on Canadian Oil & Gas companies including: Financial and Operating Data, M&A deals, Financings, Land Sales, Executive Compensation, Oil Sands Projects and Broker Forecasts. Imagine being able to synthesize this wealth of data into solution-rich reports and download into Excel with one click. Benchmark against your peers, discover new opportunities for business development or the track the industry in minutes not hours.

The Service Financial & Operating Data

For over 400 TSX & TSX-V listed companies, taken from their annual and quarterly reports.

Unique Insight into the Canadian Oil and Gas

Industry.

The Oil Sands CanOils offers an industry-leading service that tracks all mining and in situ projects in Alberta and Saskatchewan.

Track Projects and Approvals.

M&A Comprehensive and daily coverage of all Canadian oil and gas deals, including deal value analysis, land sales, and links to all source data.

Track Opportunities,. Discoveries and more…

Financings Coverage of all Oil & Gas equity and debt financings in the Canadian market. Comprehensive Coverage

Guidance Corporate guidance collated and presented in an easy to access format with unparalleled coverage across the market.

Predict Company performance.

Forecasts Broker Consensus forecasts of production, reserves, capital spending and key financials.

View data On a By Country Basis.

Executive Compensation

See the people behind the companies, track their share holdings and compensation.

View Key Personnel

Powerful Software

Our web-based software allows you to quickly browse all our data sets or build a custom report when you need extra customization then download to Excel in one click.

Simple Yet Powerful

Unlimited Support

Our Calgary team and London-based analysts are available to provide quick answers to any queries and support when you need it.

Responsive Support

For more information or to discuss how we can help you discover opportunities, save time and improve your business call David Swanson on 403-512-1622 or visit http://www.canoils.com

A win, win, win, win, win situation.

For more than 30 years, exceptional reporting in areas of governance, financial integrity and corporate performance has been a hallmark of our winning DNA at Bryan Mills. We outthink so you can outperform.

It’s time to celebrate your winning story. Contact Geoffrey Vanderburg at [email protected] or phone at 403.503.0144 ext.258

• Grand Award, 2013 Sustainabilityand Responsibility Report, PDF Version of Annual Report: ARCAwards, N.Y. • Gold, 2013 CorporateResponsibility Report, InteractiveAnnual Report: ARC Awards, N.Y.• Gold, 2013 Sustainability andResponsibility Report, PDF Vers- ion of Annual Report: ARC Awards• Silver, 2013 Sustainability andResponsibility Report, Interact-tive Annual Report: ARC Awards• Gold, 2014 Communicator Awards, Website • Silver,2014 Communicator Awards,Website • Silver, 2014 Com- municator Awards, CSRMicrosite • Gold, 2014Astrid Awards, 2012 On-line A/R • Gold, 2014 Astrid Awards, Sustain-ability Report • Silver,2014 Astrid Awards,V i ra l Campa ign • Bronze, 2014 Astrid

Aw a rd s , w e b s i t e .

bmir.com

Documents

iQ2-September 2014 v3biq.iradesso.ca/main/documents/iq_reports/iQ-Q2-2014-web.pdf · 2016. 7. 20. · Long-time player Freehold Royalties Ltd. was joined in 2014 by Encana spinoff