Tangle Creek Corporate Overview. December 2016

Transcription

1 Tangle Creek Corporate Overview December 2016

2 Tangle Creek Overview Company Summary Tangle Creek Energy Ltd. is a fully integrated, private energy company differentiated by high margin, light, tight oil & liquids rich natural gas development in central Alberta Tangle raised its initial capital in late 2010 & early 2011 and commenced operations in 2011 A total of $185mm of equity capital was raised at prices from $0.70 to $1.25/share Growth from 0 to 4,000 boe/d and 19 mmboe of reserves was primarily through the drill bit & acquisition of partner interests after de-risking The Company acquired Beringer Energy in August 2016 adding 1,500 boe/d, 12 MMboe of reserves &120 net sections of undeveloped land The Company is backed by top-tier sponsors including ARC Financial and Camcor Board of Directors Capitalization and Operating Summary Capitalization As of Sept 30, 2016 Basic Shares Outstanding MM 226 Current Net Debt $MM $60 Oct Strip Operating Metrics E 2017F Production (Oil & NGL) bbls/d 2,923 2,582 2,632 3,177 Nat Gas Mcf/d 6,050 6,527 10,252 16,554 Total Production boe/d 3,931 3,670 4,163 5,936 Cash Flow $MM $67 $34 $26 $39 CAPEX $MM $62 $71 $25 $40 Period End Debt $MM $43 $60 $69 $61 CFPS $/sh $0.40 $0.20 $0.13 $0.17 Field Netback $/boe $50.95 $26.11 $18.16 $23.55 Corporate Netback $/boe $46.73 $30.13 $22.47 $

3 Executive Team - Introductions Chief Executive Officer Glenn Gradeen Berkana, Rosetta, Ocelot Vice President Exploration Alison Essery Cam Virginillo John Pantazopoulos Conoco-Burlington, Shell Vice President Engineering & Chief Operating Officer PetroBakken, Berens Home Oil Chief Financial Officer Petro-Reef, Terra Vice President Production Greg Kondro Rosetta, Ocelot Vice President Land Mike McGeough Berens, MarkWest Vice President, Drilling & Completions Steve Holyoake EnCana, Berens, Skywest 3

4 Corporate Operating Snapshot Production (Q4 2016) 5,000 boe/d (53% liquids) Cash Flow (Q Annualized US$46 oil Post Pembina/Alliance) Forecast 2017 Net Debt (Sept 30, 2016) Forecast to Dec 31, 2016 $26 million ($0.13/sh) $35 - $40mm $60 million (2) (2.2x CF) est. $69mm (1.7x 2017 CF) Bank Line $100 million P + P Reserves (Jan combined SAL & GLJ) Est Dec 31, 2016 (see Appendix) Total Land Undeveloped Land 31 mmboe (60% light oil & ngls) est mmboe 346 (265 net) sections 257 (204 net) sections Net Drilling Locations economic at current strip Capital Program 2017 Capital Forecast Corporate FD&A (Tangle + Beringer basis Dec 31, 2015 reserves) 2016 Operating Netback (prior to hedging realized & strip) 2016 Corporate Netback (realized, strip & current hedges) $25 million (capex<cash flow) $35-$40 million (capex=cash flow) $17/boe (includes FDC) $18/boe $22/boe (1) Date of strip pricing, Dec 13, 2016, 2016 (2) Excludes ELOC available of $9.7mm 4

5 Tangle Creek Corporate Milestones Technical, focused team Track record of building successful energy businesses Special expertise in tight rock reservoirs recognize that rock & geology matter Focused on profitability building a bullet-proof business Expertise in growing production volumes, top decile operating margins and maintaining strong balance sheet Kaybob Dunvegan Q Initial Kaybob test well Dec 2010 Formation of Tangle Creek Q Initial $1/share 2012 Proof of concept and Kaybob development Initial hunt for tight oil candidates for horizontal multi-stage technologies Extensive rock work, petrophysical work & interpretation of depositional environments - Kaybob Dunvegan was top candidate Several 5-15 year old vertical completions confirmed oil potential 21 section TLM farm-in and first test well at w5 resulted in 1,000 bopd test rates and confirmation of economics Concurrently with initial drill program - sourced and undertook over 20 additional land deals to own the play Best in Class operator a complete full service team 1 st to drill multistage horizontal on Dunvegan Oil Play 1 st approval for Dunvegan water flood 1 st approval to increase well density up to eight wells per section 1 st Dunvegan slick-water completion Large land base & proven oil property in a desirable area In 2016 expanded into Windfall Mannville LRG play and acquired Beringer Energy Inc New $1.25/share and acquisition of TLM Dunvegan assets 2015 New $1.25/share and acquisition of Trilogy Dunvegan assets. Drilling of Windfall test wells 2016 Corporate acquisition of Beringer Energy & New ELOC negotiated for ~$10mm Positioning with merger or major acquisition 2014 Organic Production Growth to 5,000 boe/d 2016 Operational Improvements including completions and waterflood initial development at Windfall 5

6 Operating Area West Central Alberta Kaybob 130 net sections at Kaybob / Windfall Ft. McMurray Windfall Grande Prairie Edmonton Operating area Between Highway 43 & Hwy 16 between Edmonton & Grande Prairie Windfall Calgary Carrot Creek net sections at Carrot Creek 6

7 Single Well Economics Play Ranking 180+ Locations (90+ economic) Cost reductions have led to significant improvement in well economics Average prospect - 50% to 60% of these improved through newer drilling and completion practices & 1 mi vs ½ mi laterals Gas Plant construction (Windfall) and slick water facing on Tier 3 wells (Kaybob) to generate 50%-60% returns Locations 6+ (net) Plant Gate Nat Gas (C$ / mcf) Locations 20+ (net) Plant Gate Nat Gas (C$ / mcf) Locations 8 (net) Plant Gate Nat Gas (C$ / mcf) Locations 20+ (net) Plant Gate Nat Gas (C$ / mcf) MRF - Tier 1 Dunvegan ($2.1mm capex) MRF - Tier 2 / 4 Dunvegan ($2.1mmcapex) IRR Locations IRR US$ / bbl 47+ (net) US$ / bbl $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $ % 115.4% 182.8% 304.3% 396.7% 487.4% $ % 54.8% 93.5% 120.8% 149.1% $ % 120.0% 188.9% 312.8% 406.8% 499.2% $ % 56.6% 95.9% 123.6% 152.3% $ % 124.7% 195.0% 321.4% 417.1% 511.1% $ % 58.4% 98.2% 126.4% 155.5% $ % 61.5% 129.4% 201.2% 330.0% 427.5% 523.2% $ % 60.2% 100.7% 129.2% 158.7% $ % 64.6% 134.1% 207.4% 338.5% 437.7% 534.9% $ % 37.9% 62.0% 103.1% 132.0% 161.9% $ % 67.9% 138.9% 213.7% 347.2% 448.0% 546.8% $ % 39.3% 63.9% 105.5% 134.9% 165.1% $ % 71.2% 143.7% 220.0% 355.9% 458.4% 558.8% $ % 40.8% 65.7% 108.0% 137.7% 168.4% MRF - Windfall Mannville - TCE Gas Plant Locations MRF - Carrot Gething IRR 20 (net) IRR US$ / bbl US$ / bbl $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $ % 19.4% 29.9% 40.0% 47.5% $ % 14.3% 22.8% 33.9% 45.9% 54.9% $ % 22.0% 31.6% 42.9% 54.4% 61.8% $ % 19.3% 28.5% 40.6% 53.6% 63.3% $ % 21.1% 34.3% 44.8% 57.5% 70.0% 78.8% $ % 13.5% 24.7% 34.8% 47.8% 61.8% 72.2% $ % 33.3% 47.8% 59.4% 73.2% 86.5% 95.6% $ % 18.3% 30.5% 41.5% 55.5% 70.5% 81.5% $ % 45.9% 61.6% 74.4% 89.1% 104.0% 113.5% $ % 23.3% 36.6% 48.4% 63.5% 79.4% 91.0% $ % 59.7% 77.1% 90.4% 106.7% 122.6% 134.8% $ % 28.7% 43.1% 55.9% 71.9% 88.8% 101.1% $ % 74.4% 93.1% 107.8% 125.2% 141.8% 154.8% $ % 34.6% 50.1% 63.7% 80.8% 98.6% 111.5% MRF - Carrot Rock Creek Oil Locations MRF - Pembina Rock Creek Oil IRR 8 (net) IRR US$ / bbl US$ / bbl $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $ % 29.7% 40.7% 48.8% $ % 24.4% 34.3% 41.9% $ % 22.3% 33.2% 44.7% 53.7% $ % 27.0% 37.4% 45.2% $ % 25.5% 37.0% 49.4% 58.1% $ % 29.7% 40.6% 48.6% $ % 28.9% 40.9% 53.7% 62.5% $ % 32.5% 43.6% 52.1% $ % 22.4% 32.4% 44.7% 57.7% 67.5% $ % 15.5% 24.4% 35.2% 46.8% 55.5% $ % 25.5% 35.7% 48.6% 61.8% 71.8% $ % 17.8% 26.8% 38.2% 50.0% 58.9% $ % 28.7% 39.3% 52.5% 66.7% 75.8% $ % 20.1% 29.4% 41.2% 53.3% 62.4% MRF - Windfall Mannville - No Gas Plant Locations MRF - Dunvegan Tier 3 ($2.1mm capex) IRR 72 (net) IRR US$ / bbl US$ / bbl $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 $ % $ % 16.5% 27.2% 34.9% $ % 17.0% $ % 17.3% 28.0% 35.9% $ % 14.6% 23.5% 29.5% $ % 18.1% 28.9% 36.8% $ % 16.9% 26.7% 36.0% 43.2% $ % 18.9% 29.8% 37.8% $ % 19.2% 28.0% 38.3% 48.8% 56.7% $ % 19.7% 30.7% 38.8% $ % 17.9% 30.4% 39.7% 51.3% 62.6% 71.3% $ % 9.8% 20.5% 31.6% 39.8% $ % 28.6% 42.0% 52.4% 64.9% 76.9% 86.2% $ % 10.5% 21.3% 32.5% 40.7% Plant Gate Nat Gas (C$ / mcf) Plant Gate Nat Gas (C$ / mcf) Plant Gate Nat Gas (C$ / mcf) Plant Gate Nat Gas (C$ / mcf) 7

8 8 Production Adds & Drilling Vintages Production is leveling Wells with 4+ years history are down to 15% declines or less Corporate decline is 25% to 30% Beringer Acquisition 3 rd Party Solution Gas Processing Restriction 2014 Drilling Solution Gas Takeaway Restricti on 2015 Trilogy 2016 Acquisition Drilling TCPL Curtailment Windfall Shut-in 2012 Drilling 2013 Drilling 35% 25% Prior 12 month Decline 2011 Drilling 15% 12%

9 Kaybob Asset Operational Improvements have Enhanced Economics & drilling inventory Kaybob Dunvegan represents the bulk of Tangle s asset value, production & cash flow. Focus has been on improving economics to establish a top tier asset with significant running room: Capital cost reductions have been a game-changer last two wells drilled were $2.1mm each all in. Four years ago cost was $4.8mm per well, better technologies, mono-bore designs, internally designed drill equipment have all come together to reduce capital costs over and above the economic climate. For example drill times have been reduced from days to 8-9 days. These are real structural changes Opex has been reduced by 40% by consolidating batteries, boring the Athabasca River, renegotiation trucking and third party charges and bringing field staff on the payroll Declines are better understood, with steep initial and long term declines down to 15% to 20% on wells older than 30 months. Corporately we are at 30% or less including Beringer While Tier 1 wells were always highly economic (200%+ IRR at US$50 oil), the reduced costs combined with better completions result in Tier 2 single well economics of 60% IRR or better moving these ~50 locations into top tier vis-à-vis industry Improving the drilling inventory. Improved hybrid slick water fracturing has opened up new regions for moving some of the 75 Tier 3 locations into Tier 2 or better. Further economic enhancements are being planned with successful response on the pilot water-flood This is a significant, top tier asset with considerable growth potential yet 9

10 OPEX Top Decile Among Liquid Peers OPEX / Transportation / BOE - Liquids Producers Fiscal 2016 (NBF Research) $30.00 $25.00 includes $2.00 Transportation Costs $20.00 $15.00 $11.25 $10.00 $5.00 $0.00 VII TCE RRX TVE SKX BTE MQL PGF RE TOO PWT MEI SPE AEI ZAR SOG 10

11 Cash Flow - Top Decile Among Peers CF / BOE - All Producers Fiscal 2016 (NBF Research) $35.00 $30.00 $25.00 $20.00 $18.84 $15.00 $10.00 $5.00 $0.00 SOG PMT MEI CKE ZAR PNE PWT PGF CQE BBI MQL TOO BXE POU CR AEI PPY KEL SRX TET DEE BTE NVA BIR RE AAV VII TVE SKX RMP LXE TCE SPE RRX 11

12 Ongoing Continuous Improvement #1 - Cost Improvements - A Game-Changer Year over year reductions in costs and improved economics driven by improved efficiencies $18.00 OPEX / Transportation ($ / boe) $16.00 $ % reduction in drill times $14.00 $12.00 $13.69 $14.56 $12.80 $11.95 $12.18 $13.63 $14.23 $11.75 $10.83 $11.64 $10.51 $10.92 $11.34 Q4 - $1.00 / boe increase due to Alliance Gas Transportation $10.79 $10.29 $11.27 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q % reduction in total capex/well 55% reduction in Drilling costs 12

13 Operational Performance 4+ Years History - Cost reductions = Improving economics Tier 1 IP 365 = 222 boe/d (35 wells) Tier 2 IP 365 =117 boe/d (23 wells) All Wells Tier 3 IP 365 = 65 boe/d (16 wells) Type Curve Economics - MRF Tier 1 Type Curve - $2.1mm Capex, EUR 280 mbbls oil 375 mboe Capital Payout IRR NPV10 F&D Recycle Ratio 1st Yr Capital WTI ($MM) (yrs) (%) ($MM) ($/boe) (times) Efficiency ($/boe/d) $45 $ $4.1 $ $9,930 $55 $ $5.6 $ $9,930 $65 $ $6.9 $ $9,930 Tier 2 Type Curve - $2.1mm Capex, EUR 150 mbbls oil 195 mboe Capital Payout IRR NPV10 F&D Recycle Ratio 1st Yr Capital WTI ($MM) (yrs) (%) ($MM) ($/boe) (times) Efficiency ($/boe/d) $45 $ $1.3 $ $17,115 $55 $ $2.2 $ $17,115 $65 $ $3.1 $ $17,115 13

14 Field Development Plan Tiers 1, 2 & 4 Economic at Strip 55 Locations (March 31, 2016) Recent drilling and interpretation has led to the upgrading of multiple Tier 3 wells to Tier 2 Two Tier 1 wells drilled in November reduces inventory from 8 to 6 14

15 Slickwater Application Expanding the Sweet Spots w5 On-stream Feb 22, 2016 Tier 3 to Tier 2 + Tier 1 Type Curve Tier 2 Type Curve w5 On-stream Mar 15, Tier 3 to Tier 2 Tier 3 Type Curve 15

16 Tangle Dunvegan Slickwater Application Slickwater Frac Foam Frac 16

17 Ongoing Continuous Improvement #2 - Slickwater Application Improving Inventory Green = Proved Undeveloped Red = Probable Undeveloped Orange = Uneconomic PUD Black = Q Drills 9 Gross (8.9 Net) PUDs Assume Type 195 mboe = 1.73 mmboe w5 On-stream Feb 22, w5 On-stream Mar 15,

18 Continuous Improvement #3 - Dunvegan Waterflood - EOR under MRF should be a game-changer 18 sections with 175 mmbbls OOIP Secondary Recovery mmbbls Reserves increase could reach 50% to 90% Reserve Additions at $2.50/bbl Injector Conversion 1/2 section pilot Good Response after 8 months GOR Decreasing Oil Rate Increasing No Water Breakthrough from Hz Injector 13

19 Windfall & Carrot Creek/Pembina Expanding Scope to Oily & LRG Mannville/Jurassic Stacked Deep Basin Lower Mannville targets & upper Jurassic targets Oil & gas pools ( Ostracod, Ellerslie, Rock Creek) and secondary dry gas (Spirit River, Bluesky, Gething) Detailed technical review - uncovering high potential oily opportunities Active drilling by Velvet and Vermillion, year-round access and good infrastructure 65 net sections at Windfall, 120 net sections at Carrot Creek/Pembina Current focus on expanding scale & scope of the plays, improving technology applications & on cost efficiencies Lower Mannville is 2,000 to 2,300 m deep; typical 1 mile horizontal well legs 19

20 Windfall Development 10+ Section Oily Area Basis Third well drilled at w5 (October 2016 completed Nov 2016 initial clean-up flow similar to currently on build-up) 2017 plan is for two additional scoping wells then a development including gas plant Drilling program and gas plant currently under review Proposed gas plant site provides access to either Nova or Alliance Alliance Nova Third well Q Second well mmcfd sales bbl/d oil and NGL s Nova and 3 rd party lines Section 8 acquired Oct locations First well produces mmcf/d of natural gas with ~200 bbl/mmcf of water Proposed gas plant site 20

21 Windfall Development Single Well Economics and 3 year - 10 Well Program 3 Year development program Includes 10 wells, 10 mmcfd gas plant & infrastructure Current data indicates 11 low risk sections (22 wells) & additional 8 moderate risk Total 20 out of 65 net sections 30% of lands currently considered prospective MRF Strip ( ) High ( ) MBOE Gas IRR NPV 10 P/I P/O MBOE % Gas IRR NPV 10 P/I P/O (%) (%) (M$C) 10% (Years) (%) (%) (M$C) 10% (Years) SemCams Single Well , Gas Plant Single Well , , Well/Gas Plant Project 6, , , , Total Field NPV10 Ex Capital 70,719 87,281 Notes 1. Capex = 3.5 M$C/well 2. Gas Plant = $10.125M$C (including Water Disposal) 3. Total Capital Cost ($m) = $ 45, Does not include and 9-14 wells 4. Using modernized royalty regime 21

22 Carrot Creek Acquired August net sections in corporate acquisition Extensive owned infrastructure makes gassier asset attractive however focused on oilier areas 27.5 net locations and 11.4 net contingent locations in Lower Mannville/Jurassic fluvial and tidal sandstones and Jurassic Rock Creek/Niton shoreface sandstones Petrophysical review of Lower Mannville complete - cores and cutting samples from area wells interpreted to ensure high-grading of locations Expect Lower Mannville to be liquids - rich gas based on older vertical production in the region initial locations offset vertical wells that produced or tested oil. Rock Creek will generally be oily with ½ mile laterals Two wells planned for Q three wells planned in 2017 with some contingencies Further Multi-zone Potential Secondary zones in Viking, Notikewin, Gething, Ostracod 22

23 Carrot Creek Land Base / Infrastructure Carrot Creek Land Base: 120 Net Sections Average WI 84% Carrot Creek Infrastructure: Gas Plant 73% Gas Plant 100% 15 mmcf/d net capacity (40% utilized) Firm Service 7.1 mmcf/d rises to 11.5 mmcf/d in Q

24 Carrot/South-Pembina Locations (Mannville purple; Rock Creek green). Contingent (grey) Land Rights Bullhead to Fernie Rock Creek Drilling Q Rock Creek Production

25 Proactive Hedging Plan Tangle Creek maintains a proactive hedging program 50% - 60% of 2017 physical total developed oil volumes (net of royalties) & ~65% of net gas volumes are currently hedged through a combination of swaps and collars Plan to continue as production volumes increase - unhedged volumes will be protected through regular program of layering contracts every quarter. Target is 60% to 70% of physical production Following table shows % of base production (current production declined) hedged gross before deduction of royalties (add 5% to 10% for volumes net of royalties) % of Production Hedged Q Q Q Q Q Q Q Q Q % of Total - Crude Oil 66% 53% 49% 58% 58% 38% 39% 30% 30% % of Total - Nat Gas 51% 55% 49% 49% 45% 24% 18% 12% 12% 25

26 A Look Into 2017 Solid Margins CF stable at $35 to $40mm with free cash flow above maintenance CAPEX to grow production >10% per year Free cash flow can maintain current production with ~$20mm per year CAPEX Low cost structure (opex ~$10/boe) ensures sustainable total cash costs ~C$17 / boe (includes opex, transportation, G&A, E&E, interest) Shipper on Alliance (firm service) and firm on Pembina Peace (liquids) unique among juniors ensures lower costs, higher realized pricing and minimal downtime due to pipeline constraints Disciplined - CAPEX ~ Cashflow improves liquidity & dry powder for acquisitions Production Maintenance In 2016 while CAPEX ~ cash flow as declines further reduce to 20% - 30% / annum maintain production while not depleting inventory IRR / NPV Positive Drilling Tier 1 and Tier 2 Dunvegan drilling inventory expanding with new technologies - economic at current strip Hedging program crucial to protecting cash flows and capital programs Hedging gains funded 33% of 2016 CAPEX program allowing for modest deleveraging and growth Upside Exposure & Optionality WTI price increase to US$60 / bbl increases cash flow to $47mm with debt / CF of <1.0x by Q Opportunity to accelerate drilling, increase production, add to reserves and grow cash flow Expand Dunvegan and Evaluate Windfall 26

27 2016 / 2017 TCE Cash Flow Back to Growth! Forecasted production of 5,900 boe/d with a Cash flow ~ CAPEX budget in fiscal 2017 Liquids production remains > 50%, with majority (> 85%) of liquids being light oil Forecasted 47% increase in cash flow (27% increase in CFPS), with debt reducing to $61mm due to equity draw end of Q Ability to add additional 2-3 wells (500 boe/d / annum) to capital budget should prices rise to US$60 / bbl, which would push exit 2017 volumes to ~7,000 boe/d and grow cash flow to > $46mm Q Fiscal 2016 Q Q Q Q Fiscal 2017 Production (Boe/d) 5,000 4,100 5,900 6,100 5,500 6,100 5,900 % Liquids 53.1% 59.0% 54.1% 55.6% 54.2% 50.2% 53.5% Liquids (bbls/d) 2,632 2,454 3,218 3,434 2,978 3,082 3,177 Revenue (Before Hedging) $16,346,090 $52,111,859 $21,375,300 $22,927,530 $20,236,424 $21,404,682 $85,943,936 Revenue (After Hedging) $16,717,662 $58,519,451 $20,611,750 $22,142,055 $19,442,317 $20,628,974 $82,825,096 Hedging Gain $371,572 $6,407,592 -$763,550 -$785,476 -$794,107 -$775,707 -$3,118,840 Field NOI $8,602,227 $27,673,471 $12,614,456 $13,839,203 $12,023,618 $12,553,223 $51,030,499 CF From Ops $6,443,418 $26,300,387 $9,503,717 $10,552,400 $9,059,070 $9,611,214 $38,726,401 CAPEX $15,300,000 $25,092,961 $12,700,000 $800,000 $11,650,000 $14,850,000 $40,000,000 CAPEX (excluding acquisitions) $15,300,000 $25,092,961 $12,700,000 $800,000 $11,650,000 $14,850,000 $40,000,000 Quarter End Debt (exc MTM) $69,537,959 $69,537,959 $72,734,242 $53,281,841 $55,872,771 $61,111,557 $61,111,557 Quarter End Debt / Annualized CF 2.70x 2.64x 1.91x 1.26x 1.54x 1.59x 1.58x Share Count / Equity Drawn 226,574, ,524, ,574, ,885, ,508, ,508, ,119,116 Annualized CPFS $0.114 $0.129 $0.168 $0.183 $0.151 $0.161 $

28 2017 TCE Cash Flow Sensitivity Analysis Forecasted cash flows of > $39mm with + / - US$5 / bbl change in oil price resulting in ~$5mm of CF Upside to cash flow and potential for production growth exists as US$5 / bbl increase in commodity prices potentially supporting the drilling of 2 incremental wells ( boe/d incremental production) Balance sheet remains strong and capital programs can be adjusted to ensure financial strength 2017 hedges focused on wide collars providing opportunity if prices rise above strip 2017 capital program includes 4 Dunvegan, 3 Windfall, 2 Carrot Creek and 1 Gething wells, $6mm for the expansion of our waterflood project and $2mm towards the construction of a new natural gas plant Fiscal 2017 Cash Flow Price of Oil (US$ / bbl) $38.7 $40.00 $42.50 $45.00 $47.50 $50.00 $52.50 $55.00 $57.50 $60.00 $62.50 $65.00 Nat Gas Price ($ / mcf) $2.50 $25.0 $26.6 $28.1 $29.7 $32.2 $34.8 $37.3 $39.9 $42.4 $45.0 $47.6 $2.75 $25.7 $27.3 $28.9 $30.4 $32.9 $35.5 $38.0 $40.6 $43.1 $45.7 $48.3 $3.00 $26.4 $28.0 $29.6 $31.1 $33.6 $36.2 $38.7 $41.3 $43.8 $46.4 $49.0 $3.25 $27.1 $28.7 $30.3 $31.9 $34.3 $36.9 $39.4 $42.0 $44.6 $47.1 $49.7 $3.50 $27.8 $29.4 $31.0 $32.6 $35.0 $37.6 $40.1 $42.7 $45.3 $47.8 $50.4 $3.75 $28.5 $30.1 $31.7 $33.3 $35.7 $38.3 $40.8 $43.4 $46.0 $48.5 $

29 2017 Production Summary Annual Average 5,938boe/d Total BOE/D % of Total Base 2016 Wedge 4, % Q Wells % Q Wells % Q Wells % Q Wells % 29

30 The Vision To create a must own growth producer with the capital, cash flow, balance sheet and assets to create long-term shareholder value & multiple expansion Position the company with a best in class balance sheet to exploit both existing and new opportunities that create long-term shareholder value Disciplined approach to debt maintain top quartile debt to cash flow Disciplined consolidation strategy for assets in a core fairway with specific technical attributes Methodically develop the asset base with a focus on the highest return projects Execute a balanced capital program to deliver on conservative growth targets Continued conservative approach to forecasting and guidance Growth within cash flows Deliver 10% to 20% per year production growth i.e. steady CFPS growth at strip Continuously improve market following & cost of capital through communication and careful, consistent execution of the business plan Provide investors with significant potential returns by delivering consistent per share growth of production, reserves, cash flow, and net asset value 30

31 Acquisition Opportunities Currently Under Review Entity Large Target Acquisitions - Moving toward PubCo 2017 Production boed % Oil & NGL 2P Reserve mmboe Tangle Creek 6,000 55% 30 Estimated Cost $mm Two Targets under review 6,700 30% 50 $270 Total TCE + Large Targets 12,700 42% 80 $270 Strategic Acquisitions - Enhancing existing operations Five Targets under review 2,800 50% 20 $97 Total TCE+Large+Strategic 15,500 44% 100 $367 Internal Projects - Waterflood + Windfall + Maintenance Four internal projects 2,800 45% 6 $45 Total Unrisked Potential 18,300 45% 106 $412 31

32 Tangle Creek Corporate Summary Efficient and Effective Light Oil & Gas Producer Best in class revenues, operating costs & netbacks, combined with low FD&A and Recycle Ratios Capital costs reduced 50% BEFORE 2015 price adjustments by service companies Proven Organic Growth Capacity 1 st to identify & implement Kaybob Dunvegan horizontal technologies including new drilling and completions applications and EOR Organic growth over 3 years from 0 to 4,000 boe/d (Q4 2014) 75% light sweet crude with over 460 mmbbls OIP on Tangle Kaybob Lands Most active, experienced Dunvegan oil operator Opportunistic Acquirer With Strong Balance Sheet Focus on quality, operating margins, economics and running room Since inception, completed $130mm in acquisitions while keeping debt / cash flow under 2x Over $50mm of acquisitions in 2015 including undeveloped land 69 net light oil sections in Kaybob acquired through 30 separate transactions Counter cyclically acquired 80 net sections on two plays in 2015 (Kaybob and Windfall) Acquired Beringer Corporate (120 net sections) in August 2016 adding 1,500 boed and supplementing Windfall play On the hunt for material acquisitions - move into next tier of production & development 32

33 Contact: Tangle Creek Energy Ltd Glenn Gradeen CEO d: +1 (403) m: +1(403) John Pantazopoulos CFO d: +1 (403) m: +1(403) , th Ave S.W. Calgary, AB T2P 2X6 TANGLE CREEK ENERGY December 2016 Logo Placement