NON-CORE ASSET DIVESTITURE

Transcription

1 NON-CORE ASSET DIVESTITURE CIBC Capital Markets 9th Floor, Bankers Hall East 855 2nd Street SW Calgary, Alberta T2P 4J7 February 208

2 Opportunity Highlights Canlin Energy Corporation ( Canlin ) has engaged CIBC Capital Markets ( CIBC ) as its exclusive advisor to solicit and evaluate proposals for their assets in the Ashlar and Pincher areas of Alberta, and the Table area of Southwest Saskatchewan. Opportunity Overview Turnkey operation with ownership of key infrastructure directly connected to sales Owned sweet and sour gas processing provides the opportunity to increase processing income and/or add low-cost production growth No major land expiry issues allow buyer to develop at their own pace Assets are located in an industry friendly area, close to egress with favourable topography and year round access Production and Reserves Highlights 207 production of ~2,940 boe/d (90% gas) from 73 producing wells Ashlar: ~2,00 boe/d (92% gas) from 435 wells Pincher: ~ 440 boe/d (73% gas) from 54 wells Table: ~ 400 boe/d (00% gas) from 242 wells Conservatively booked 2P reserves Significant Upside Potential Large drilling inventory 2 net locations Mannville oil opportunity Two Lower Mannville oil pools in the Ashlar and Pincher areas (Ellerslie and Basal Quartz) have been mapped using 3D seismic providing low-risk, short cycle time opportunities Optimization and Reactivation Potential Crane Lake field in the Table area can be reactivated at minimal cost to add production with no exploration risk Significant low-cost recompletion and optimization opportunities using existing wellbores Infrastructure optimization potential Water pipeline could significantly reduce ongoing operating costs Strategic Midstream Assets Ownership of key infrastructure in high demand areas: Sweet and sour gas processing plants, compressors, water disposal well, and a large network of gas gathering infrastructure with direct access to egress $2.4 million of processing revenue received in 207 Working interest wells, Company production based on lease operating statements as of Jan. 208.

3 Area Overview 2 Ashlar, Pincher Overview Opportunity Highlights Low-decline base production, made up primarily of shallow gas, with exposure to Lower Mannville oil Significant ownership and operatorship of the Wood River Basal Quartz unit gives control of the asset Opportunity to add significant oil production with seismically defined Ellerslie opportunities in Watelet and Wood River Ownership of key infrastructure including 3 gas processing plants, a water disposal well, and a large network of gas gathering infrastructure and field compression with direct access to egress $2.4 million processing revenue earned in 207 Table Overview Location Summary (Net) Identified W.I. Ashlar 65 65% Pincher 9 00% Table 37 54% Total 2 65% - Gas - Oil Canlin Lease operating statements Jan. 208.

4 Area Production and Reserves 3 Overview Asset package consists of ~2,940 boe/d of low-decline production (90% gas weighted) Production primarily from shallow gas and Horseshoe Canyon CBM formations Conservatively booked reserves Production Summary Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Sales Volume Oil (bbl/d) Gas (Mcf/d) 20,884 9,937 9,05 8,83 7,269 6,606 6,770 6,982 6,490 6,30 6,027 3,90 NGLs (bbl/d) Total Production (boe/d) 3,928 3,704 3,539 3,327 3,49 3,037 3,04 3,35 3,049 3,043 2,952 2,570 Wells shut-in due to low commodity price Booked Reserves Composition 2 Historical Production by Product PB 39% PDP 56% Production (boe/d) 4,000 3,500 3,000 2,500 2,000,500,000 3, ,48 3, ,323 3, ,84 3, ,030 3,49 3,037 3,04 3,35 3,049 3,043 2, ,878 2,768 2,795 2,830 2,748 2,77 2,67 2, , PDNP + PUD 5% Company reports. 2 Canlin reserve report at Jan., Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q Gas Oil & NGL

5 Ashlar Company Interest Overview 4 Ashlar Overview Wood River Ellerslie Pool ~2,00 boe/d (92% gas) from 435 wells Ability to add reserves: 65 net locations at 33% 98% working interest vs 5.7 booked Potential to infill drill 4 wells/section Targeted formations are low-risk, low-cost opportunities Inventory is located in a developmentfriendly area with favorable topography, and year-round access Minimal expiries: 52 net hectares in 202 LMR 2 =.85 $.3 million 207 processing revenue 3D seismic included Ownership in a number of area units Location Summary (Net) Identified W.I. Land and Production Summary Net Company Land Summary 207 Production W.I. Total Developed Undeveloped Total % Gas (%) (acres) (acres) (acres) (boe/d) (%) 62% 40,045 3,822 8,223 ~2,00 92% Stettler 6 33% Bashaw 42 98% Wood River 4 80% Rowley 3 00% Total 65 65% Ashlar Area Working Interest Production by Formation 3,500 3,000 Production (boe/d) 2,500 2,000,500, Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Shallow Gas Ellerslie Wabamun Mannville Other Pekisko Viking Company production based on lease operating statements as of Jan Source: AER, wells only. As of Oct. 3, Gas -Oil

6 Ashlar Production and Reserves 5 Ashlar Overview Ashlar asset consists of ~2,00 boe/d of low-decline production (92% gas weighted) Production primarily from shallow gas zones with additional exposure to Upper and Lower Mannville formations Conservatively booked reserves Production Summary Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Sales Volume Oil (bbl/d) Gas (Mcf/d) 5,242 4,96 4,342 3,623 3,00 2,383 2,9 2,209,897,833,778 0,60 NGLs (bbl/d) Total Production (boe/d) 2,832 2,750 2,643 2,483 2,360 2,254 2,20 2,225 2,79 2,73 2,25,83 Wells shut-in due to low commodity price Booked Reserves Composition 2 Historical Production by Product PB 32% PDNP + PUD 6% PDP 62% Production (boe/d) 3,000 2,500 2,000,500, ,832 2,750 2, ,540 2,486 2,390 2, ,27 2, ,68 2,254 2,20 2,225 2,79 2,73 2, ,064 2,020 2,035,983,972,963,83 38,693 Lease operating statements. 2 Canlin reserve report at Jan., Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q Gas Oil & NGLs

7 Ashlar Infrastructure & Egress 6 Ashlar Infrastructure Overview W4 9% WI Gas Plant W4 9% WI WOOD RIVER BASHAW Keyera Nevis W4 NEVIS STETTLER ROWLEY W4 50% WI Water Disposal Well W W4 90% WI W4 00% WI W4 00% WI Gas Plant W4 78% WI Infrastructure Summary 7 MMcf/d licensed gas processing capacity Bashaw Gas Plant W4: 7 MMcf/d 32.4% current utilization Wood River Gas Plant W4: 0 MMcf/d 25.4% current utilization Significant steel pipe allows optionality to produce nearby liquids-rich gas without additional pipelining Egress Summary Gas egress Bashaw/Stettler: Gas is gathered and processed at company operated, high working-interest facilities, with direct connectivity to TCPL meter stations Nevis: Gas is compressed using Company-owned field compression, and processed at Keyera s W4 gas plant Oil & water egress Wood River: Oil pipeline connected to a central tank farm then trucked to market. Water is trucked to the Company-owned water disposal well or 3 rd party disposal well. Upside exists to pipeline connect the owned disposal well Nevis: Oil is trucked from an oil battery to market. Produced water is trucked for disposal

8 Ashlar Oil Development Opportunity Overview 7 Upside Opportunity: Wood Basal Quartz Oil Pool Presence of baffle creates permeability barrier to underlying water on west side of pool Ashlar Oil Opportunity Distinct, seismically defined Basal Quartz pools with well defined water contacts Reservoir sands deposited within a fluvial system Logs show a baffle zone on the pools west side, creating a permeability barrier between oil and water intervals Proprietary seismic shows potential to add 4 new net locations to the west side of the existing pool Ashlar Optimization Opportunities 00/ W4M Log Water Pipeline A pipeline could be constructed to transport produced water directly to the W4/2 disposal well Significantly reduced trucking costs Allows for the potential to increase oil production Cumulative production to October 207 ~46,600 bbl oil ~,00 bbl water

9 Pincher Company Interest Overview 8 Pincher Overview Watelet Ellerslie Pool Land and Production Summary Net Company Land Summary 207 Production W.I. Total Developed Undeveloped Total % Gas (%) (acres) (acres) (acres) (boe/d) (%) 78% 48,038 40,902 7,36 ~440 73% ~440 boe/d (73% gas) from 54 wells Very active Duvernay focused area: December land sale had over 50,000 acres posted Located close to services, in a development friendly area with favorable topography, and year-round access Ability to add reserves: 9 net locations at 00% working interest vs 8 booked Drilling inventory consists of low-risk, low-cost opportunities Potential to infill drill to 4 wells/section No upcoming land expiries LMR 2 =.5 $0.96 million 207 processing revenue Trade seismic available Location Summary (Net) Identified W.I. Wetaskiwin 5 00% Watelet 4 00% Total 9 00% Pincher Area Working Interest Production by Formation,200,000 Wells shut-in due to low commodity price Production (boe/d) Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Shallow Gas Ellerslie Mannville Company production based on lease operating statements as of Jan Source: AER, wells only. As of Oct. 3, Gas -Oil

10 Pincher Production and Reserves 9 Pincher Overview Pincher asset consists of ~440 boe/d of low-decline production (73% gas weighted) Production is primarily from shallow gas zones with some Upper and Lower Mannville Conservatively booked reserves Production Summary Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Sales Volume Oil (bbl/d) Gas (Mcf/d) 2,990 2,48 2,50,964,7,78 2,49 2,325 2,75 2,076,946,434 NGLs (bbl/d) Total Production (boe/d) Wells shut-in due to low commodity price Reserves Composition 2 Historical Production by Product 800 PB 67% PDP 29% PDNP + PUD 4% Production (boe/d) Lease operating statements. 2 Canlin reserve report at Jan., Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q Gas Oil & NGLs

11 Pincher Infrastructure & Egress 0 Pincher Infrastructure Gas Plant W4 00% WI W4 48% WI WATELET W4 00% WI Oil Battery W4 00% WI BITTERN LAKE/ W4 00% WI W4 00% WI Infrastructure Summary 20 MMcf/d licensed sour gas processing capacity at Watelet Gas Plant W4.4% current utilization Canlin s sour gas infrastructure is highly coveted Gas Production (Mcf/d) Regional gas production has increased significantly in recent years, leaving little available spare capacity Recent Area Gas Production 5,000 0,000 5,000 Increased production at Leduc- Woodbend Nisku field Nisku Other Recent Mannville focused drilling 0 Jan-4 Jan-5 Jan-6 Jan-7 Egress Summary Gas egress Watelet: Gas is processed at the Company-owned sour gas plant and sells to the ATCO Conjuring Creek Receipt Station. The gas plant generates significant third party revenue Bittern Lake: Gas is processed at a Companyowned sweet facility and sells to the ATCO Boulder Receipt Station Oil & water egress Company-owned oil battery at Watelet from which liquids are trucked to a third party battery for oil sales Public data to October 207.

12 Pincher Oil Development Opportunity Overview Upside Opportunity: Watelet Ellerslie Pool Pincher Oil Opportunity 4 net horizontal infill locations identified in well defined Ellerslie pool Trade 3D seismic available for purchase Low pool recovery factor to-date Close to existing infrastructure and operated oil battery provides low-cost egress 00/ W4M Log ~0 m of excellent pay Porosity averages 4% Perforated above -683 m TVDss Thick baffle between oil and water legs Baffle present where expected oil-water contact exists Cumulative production to October 207: 2.3 MMbbl oil and 4.7 MMbbl water

13 Table Company Interest Overview 2 Table Overview Land and Production Summary Net Company Land Summary 207 Production W.I. Total Developed Undeveloped Total % Gas (%) (acres) (acres) (acres) (boe/d) (%) 4% 60,920 47,838 3,082 ~400 00% Table Area Working Interest Production by Formation 600 ~400 boe/d (00% gas) from 242 working interest wells Ability to add reserves: 37 net locations at 50 00% working interest vs 6 booked Potential to infill to 4 wells/section Low-decline shallow gas production, mainly from the Milk River, Medicine Hat, and Second White Specks formations Targeted formations are short cycletime, low-cost opportunities Low-risk upside opportunity Crane Lake area was shut-in due to flooding in 20 Field could be reactivated to increase production at a minimal cost $90, processing revenue LMR 2 =.7 Locations Summary (Net) Identified W.I. Bigstick 3 00% Hatton 3 00% Crane Lake 3 50% Total 37 54% 500 Production (boe/d) Jan-3 Jan-4 Jan-5 Jan-6 Jan-7 Shallow Gas -Gas Company production based on lease operating statements as of Jan Source: AER, wells only. As of Oct. 3, 207.

14 Table Production and Reserves 3 Table Overview Table asset consists of ~400 boe/d of low-decline production (00% gas weighted) Production is primarily shallow gas Conservatively booked reserves Production Summary Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Sales Volume Oil (bbl/d) Gas (Mcf/d) 2,652 2,603 2,63 2,596 2,548 2,505 2,502 2,449 2,48 2,39 2,302 2,36 NGLs (bbl/d) Total Production (boe/d) Reserves Composition 2 Historical Production by Product PB 37% PDP 59% Production (boe/d) PDNP + PUD 4% Lease operating statements. 2 Canlin reserve report at Jan., Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q Gas

15 Table Infrastructure & Egress 4 Table Overview W3 00% WI BIGSTICK W3 5% WI 2 Stage + Booster W3 50% WI CRANE LAKE HATTON W3 00% WI Infrastructure Optimization Summary Flood Status Crane Lake and east leg of gathering system are in operable conditions modification required to meet sales line pressure Gathering lines and wells on west and north legs are still underwater from the flood and can be assessed once waters recede Egress Summary Gas egress The majority of wells produce to one of five compressors (4 Company-operated, third-party) Operated compressors are high working interest; 2 at 00%, at 5% and at 50% All Company-operated compressor stations are sales TCPL connected Oil & water egress No significant water production

16 Process Overview 5 Process CIBC has been retained by Canlin as its exclusive advisor to solicit and evaluate proposals for the divestiture of the company s non-core assets in the Ashlar and Pincher areas of Alberta, and the Table area of Saskatchewan. It is the intention of Canlin and CIBC to conduct the process such that it minimizes any disruption to Canlin s operations. Interested parties should not contact Canlin directly regarding any aspect of the process. All communications, enquiries and requests for information relating to the process should be directed to one of the CIBC individuals listed herein. Signed CAs should be forwarded by or courier to CIBC. Once a CA has been executed, confidential information will be made available to qualified parties via a Virtual Data Room ( VDR ). Process timeline will be communicated to the counterparties upon executing of a CA. Key Contacts CIBC Capital Markets 9th Floor, Bankers Hall East 855 2nd Street SW Calgary, Alberta T2P 4J7 Fax: (403) Investment Banking Acquisitions & Divestitures John Peltier Executive Director Tel: (403) john.peltier@cibc.com Ashley Engbloom Director Tel: (403) ashley.engbloom@cibc.com Doug Ashton Chief Engineer Tel: (403) doug.ashton@cibc.com David Smith Chief Geologist Tel: (403) davidw.smith@cibc.com Disclaimer This document is confidential and has been prepared by CIBC Capital Markets. In preparing this presentation, CIBC Capital Markets has relied without any independent verification on information provided or that is publicly available. The information and any analyses in this document are preliminary and is not intended to constitute a valuation, formal valuation, appraisal, prior valuation, or a report, statement or opinion of an expert for purposes of any securities legislation in Canada or otherwise. We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or accounting matters or the sufficiency of this document for your purposes. Prospective counterparties are responsible for their own due diligence investigation in respect of any investment or joint venture in the assets described herein. This printed document is incomplete without reference to discussions and any related written materials that supplement it. These materials are confidential and are intended solely for your benefit and for your internal use only and may not be reproduced, disseminated, quoted from or referred to in whole or in part at any time, in any manner or for any purpose, without obtaining the prior written consent of CIBC Capital Markets in each specific instance. CIBC Capital Markets employees are prohibited from offering to change or otherwise influence any research report, rating or price target to any company as inducement for the receipt of any business or compensation. This document does not constitute an offer or solicitation to buy or sell any securities in any jurisdiction where such would be prohibited. CIBC World Markets Inc. is a legal entity name. CIBC Capital Markets is a trademark brand name under which different legal entities provide different services under this umbrella brand. Products and/or services offered through CIBC Capital Markets include products and/or services offered by the Canadian Imperial Bank of Commerce, the parent bank of CIBC World Markets Inc. and various other subsidiaries of the Canadian Imperial Bank of Commerce. Services offered by the Canadian Imperial Bank of Commerce include corporate lending services, foreign exchange, money market instruments, structured notes, interest rate products and commodities, equity options and OTC derivatives. Canadian exchange-traded equity options are executed through CIBC World Markets Inc. Equity and fixed income securities are executed through CIBC World Markets Inc. and other directly or indirectly held subsidiaries of CIBC. CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. CIBC World Markets Corp. is a member of the Financial Industry Regulatory Authority. CIBC World Markets plc is regulated by the Prudential Regulation Authority and Financial Conduct Authority. CIBC World Markets Securities Ireland Limited is regulated by the Central Bank of Ireland. CIBC Australia Ltd is regulated by the Australia Securities and Investment Commission. CIBC World Markets (Japan) Inc. is a member of the Japanese Securities Dealer Association. Canadian Imperial Bank of Commerce, Hong Kong Branch, is a registered institution under the Securities and Futures Ordinance, Cap 57. Canadian Imperial Bank of Commerce, Singapore Branch, is an offshore bank licensed and regulated by the Monetary Authority of Singapore. All values are expressed in Canadian dollars, unless otherwise noted.