2013 TD Calgary Energy Conference July 9-10, 2013

Transcription

1 2013 TD Calgary Energy Conference July 9-10, 2013

2 Disclaimer FORWARD-LOOKING STATEMENTS: This presentation contains certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements typically contain words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", predict, targeting, seek, intend, could, potential, scheduled, "should", outlook or similar words suggesting future outcomes. In particular, this presentation contains forward-looking statements pertaining to our business plans and strategies; anticipated and potential oil and gas production levels for each of our core areas and corporate totals and the estimated project life of each project; timing for regulatory approval for the Onion Lake thermal EOR project and the potential to reclassify contingent resources to probable reserves at Onion Lake; anticipated capital costs of the Onion Lake thermal EOR project, expected oil recovery rates for the Onion Lake thermal EOR project; oil recovery rates and anticipated peak production rates from the Mooney ASP flood and estimated project life; expected timing for regulatory approval for the expansion of the ASP flood at Mooney; expected timing for regulatory approval for the first phase of the Blackrod SAGD project and estimated capital costs of the first phase of development; corporate guidance and key milestones for 2013; and sources and timing of additional financing our capital expenditure programs. In addition, statements relating to "reserves" or resources are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. The forward-looking statements in this presentation reflect certain assumptions and expectations by management. The key assumptions that have been made in connection with these forward-looking statements include the continuation of current or, where applicable, assumed industry conditions, the continuation of existing tax, royalty and regulatory regimes, commodity price and cost assumptions, the continued availability of cash flow or financing on acceptable terms to fund the Company s capital programs, the accuracy of the estimate of the Company s reserves and resource volumes and that BlackPearl will conduct its operations in a manner consistent with past operations. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those contained in forward-looking statements. These factors include, but are not limited to, risks associated with fluctuations in market prices for crude oil, natural gas and diluent; risks related to the exploration, development and production of crude oil, natural gas and NGLs reserves; general economic, market and business conditions; substantial capital requirements; uncertainties inherent in estimating quantities of reserves and resources; extent of, and cost of compliance with, government laws and regulations and the effect of changes in such laws and regulations from time to time; the need to obtain regulatory approvals on projects before development commences; environmental risks and hazards and the cost of compliance with environmental regulations; aboriginal claims; inherent risks and hazards with operations such as fire, explosion, blowouts, mechanical or pipe failure, cratering, oil spills, vandalism and other dangerous conditions; potential cost overruns; variations in foreign exchange rates; diluent supply shortages; competition for capital, equipment, new leases, pipeline capacity and skilled personnel; uncertainties inherent in the SAGD bitumen and ASP recovery processes; credit risks associated with counterparties; the failure of the Company or the holder of licenses, leases and permits to meet requirements of such licenses, leases and permits; reliance on third parties for pipelines and other infrastructure; changes in royalty regimes; failure to accurately estimate abandonment and reclamation costs; inaccurate estimates and assumptions by management; effectiveness of internal controls; the potential lack of available drilling equipment and other restrictions; failure to obtain or keep key personnel; title deficiencies with the Company s assets; geo-political risks; risks that the Company does not have adequate insurance coverage; risk of litigation and risks arising from future acquisition activities. Further information regarding these risk factors and others may be found under "Risk Factors" in the Annual Information Form. Undue reliance should not be placed on these forward-looking statements. Readers are cautioned that the actual results achieved will vary from the information provided herein and the variations could be material. Readers are also cautioned that the foregoing list of assumptions, risks and factors is not exhaustive. Consequently, there is no assurance by the Company that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements. Furthermore, the forward-looking statements contained in this Annual Information Form are made as of the date hereof, and the Company does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein are expressly qualified by this cautionary statement. CONTINGENT RESOURCES: Contingent resources are defined in the COGE Handbook as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. In the case of the contingent resources assigned to BlackPearl s three core projects the contingencies include the requirement for more evaluation drilling to better define the resource, the absence of submission of commercial SAGD development applications (for future phases of development at Blackrod), the likelihood of attaining regulatory approvals for commercial SAGD development (for our Onion Lake SAGD project), further establishment of increased oil production response from the ASP flood at Mooney and the uncertainty of the timing of production and development. There is no certainty that it will be commercially viable to produce any of the contingent resources..these volumes are the arithmetic sums of the Best Estimate Resources for Blackrod, Mooney and Onion Lake. Best estimate (P50) is a classification of estimated resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will be actually recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the best estimate. Please refer to our Annual Information Form for a more detailed discussion of our contingent resources. BOE s: All references to BOEs are based on a 6 to 1 conversion ratio. BOEs may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. NON-GAAP MEASURES: This presentation uses the terms Cash flow from operations and cash flow which represent cash flow from operating activities before asset abandonment costs and working capital adjustments. In addition, EBITDA is a non-gaap measure. It represents earnings before deduction for interest, taxes and depletion, depreciation and amortization. 1

3 1. Company overview 2

4 Corporate Snapshot Market Capitalization: Current market capitalization: $ 0.5 billion (TSX: PXX 6/28/13) Shares outstanding: Basic: 296 million Fully Diluted: 315 million Reserves & Resources 1 : Management ownership 9.5% (11.5% fully diluted) Volume (mmboe) NPV 10 (BT) ($mm) 2P Reserves 213 $1,158 Best Estimate Contingent Resources (2C) 583 $2,402 Production: Current production ~9,500 boe/d (99.5% oil weighted) Potential production 100,000+ boe/d from core properties Financial: 2012 cash flow of $83 mm $4.6 million working capital deficiency (as at 3/31/13) Long-term debt - $12 million; $115 million bank facility (as at 3/31/13) Core Assets: Onion Lake: Current heavy oil production and a potential 12,000 bbl/d SAGD project Mooney: Current heavy oil production ramping-up with ASP flood, potential expansion Blackrod: 80,000 bbl/d Grand Rapids SAGD project with successful pilot production 1. Source: Sproule Unconventional Limited ( Sproule ) reserve and contingent resource evaluation (best estimate) reports effective December 31, 2012 (see Cautionary Statement on Contingent Resources at the back of the presentation) 3

5 Asset Highlights The three core areas have common characteristics BlackPearl operated High working interests Resource exploitable with proven technology Significant amount of 2P reserves and contingent resource Development plans supported by successful analogues and pilots 590 $2, $3, $1, $246 Proved 2P 2C resources 2P + 2C resources Reserves (MMboe) PV-10% (C$MM) Asset summary Gross 2P Gross 2C Q Potential 2P reserves 2P + 2C res. Working reserves resources production production PV-10% PV-10% Asset interest (MMboe) (MMboe) (boe/d) (boe/d) ($MM) ($MM) Technology Onion Lake 87.5% - 100% ,322 17,000 $195 $1,035 Conventional wells, EOR Mooney 100% ,892 8, Horizontal wells, ASP flood Blackrod 100% , ,101 SAGD Other 100% , Conventional wells Total , ,000 $1,158 $3,560 Source: Company filings. Note: Reserve & best estimate contingent resource estimates prepared by Sproule, effective as of 12/31/12. Asset summary reflects recently renegotiated agreement with Onion Lake Cree First Nation, with the exception of PV-10%. 4

6 Historical production growth BlackPearl has experienced steady production growth from its existing conventional heavy oil assets BlackPearl has also sold assets with over 1,000 boe/d of production during the same time frame (boe/d) +78% production growth 9,366 6,951 7,620 5, Production has increased by 78% since 2009 to reach ~9,400 bbl/d by end of 2012 Source: Company filings. 5

7 Key elements of BlackPearl s near-term business strategy Continue to invest in existing low risk conventional heavy oil production at Mooney and Onion Lake to provide stable cash flow base to support development projects Existing production from primary wells at Onion Lake provide consistent cash flow Continue to expand ASP flood to improve recovery factors and provide incremental production growth at Mooney Focus on developing Onion Lake Thermal EOR project to increase corporate production to over 20,000 bbl/d in 2016 Pursue a JV arrangement for the Blackrod oil sands project to accelerate development Otherwise we will continue to optimize or expand the pilot and defer development until the Onion Lake EOR project is in production Hedge a portion of existing production to protect project economics during construction phase of material development projects Practice disciplined financial stewardship to maintain balance sheet strength Existing high netback production and prudent financing plan support BlackPearl s next major phase of development 6

8 2. Operations overview 7

9 BlackPearl s operating philosophy Common characteristics of BlackPearl s core assets Proven development and exploitation model Onion Lake Mooney Blackrod Identify Land capture and reserve / resource delineation Validate Testing, optimization and piloting High working interest Exploitable with proven technology Significant resource base (2P + 2C) Development supported by successful analogs / pilots Existing production Commercialize Full-scale development and production optimization BlackPearl has successfully employed and continues to employ this strategy on each of its core assets 8

10 Onion Lake conventional development Overview Established conventional heavy oil production Area map Current average daily production of 4,800 boe/d Well-delineated field with over 300 wells drilled to date; anticipate keeping current conventional production flat for the next 3 to 4 years Significant upside with 163 future drilling locations in the 2P case and an additional 74 wells in the 2C case assigned by Sproule Potential to increase locations with future delineation drilling Typical well IP ~40 60 bbl/d Estimated capex of $0.6 million per well Payout in months Plan to continue development over the next 3 to 5 years Key metrics Production Oil quality Regulatory stage Current Potential (1) 2P reserves (2) 2C resources (2) ( API) (boe/d) (boe/d) (mmboe) (mmboe) 11 Approved 4,800 4,500-5, Conventional heavy oil property with stable production and cash flow Source: Company filings. Note: Current production as of June 3, 2013 press release. (1) Potential production represents peak production. (2) Reserve & resource estimates prepared by Sproule, effective as of 12/31/12. 9

11 Onion Lake Thermal EOR development Overview Regional analog map Net pay in the Lower Cummings Formation on a portion of the Onion Lake lands is 10 m 24 m, making it suitable for thermal development Other similar thermal projects in Saskatchewan include CNRL s Tangleflags, Husky s Pikes Peak and Husky Lashburn (typically smaller but very prolific projects) Submitted a 12,000 bbl/d (gross) Thermal EOR development application: Approval expected in Q Potential to reclassify MMbbl of Best Estimate Contingent Resources into Probable Reserves on approval BlackPearl has reached an agreement with the Onion Lake Cree First Nation, whereby the Cree First Nation group relinquishes their W.I. in the thermal project in return for a GORR Recovery rates in excess of 50% anticipated, with a CSOR of Payout between 3-4 years over 25+ year project life Total estimated capex of $300-$350 million Existing production at Onion Lake provides a high degree of confidence on success of thermal EOR development Key metrics Production Oil quality Regulatory stage Current Potential (1) 2P reserves (2)(3) 2C resources (2)(3) ( API) (boe/d) (boe/d) (mmboe) (mmboe) 11 Imminent 0 12, Source: Company filings. Thermal EOR development has the potential to add 12,000 bbl/d of production (1) Potential production represents peak production. Cumulative peak ultimate conventional and Thermal EOR production at Onion Lake expected to be 17,000 bbl/d. (2) Reflects recently renegotiated Onion Lake Cree First Nation agreement whereby the Cree First Nation band relinquished their working interest for a GORR. (3) Reserve & resource estimates prepared by Sproule, effective as of 12/31/12. 10

12 Prior Prod, Inj, SOR and No. of Wells Cum Oil Onion Lake Thermal EOR development (cont d) Analog 1 (Lashburn) For Onion Lake Thermal Currently producing 11,000 boe/d, with SOR of 2.0 Capital intensity of $24,000 / bbl /d based on design capacity of 8,000 boe/d Analog 2 (Tangleflags) For Onion Lake Thermal Producing since the late 1980s, with SOR of Projected eventual recovery of 70% of the OOIP Lashburn Overview: Normalized Production and Injection Average Per Well Plot For 14 New Well Pairs plus 2 Wedge Wells Tangleflags Core Project Wells Cal Day Oil (bopd) Prod Well Count Inj Well Count SOR (bbl/bbl) Norm Avg Cal Day Avg Oil (bopd) 100 Norm Avg Act-Day Avg Steam (bwepd) Norm Avg Inst SOR (bwe/bo) Norm Avg Cum SOR (bwe/bo) Norm No of Prod Wells Norm No of Inj Wells Norm Avg Cum Oil (bo) Month 1 Month 13 Month 25 Source: Company data. Recent successful thermal developments at Lashburn (Husky) and Tangleflags (CNRL) are direct analogs 11

13 Onion Lake Thermal EOR development (cont d) Saskatchewan cost advantage Facility for Onion Lake Thermal EOR does not require water recycling under Saskatchewan provincial regulations Dramatically reduces capex intensity as water recycling typically represents ~1/3 of facility costs for Thermal EOR Close proximity to existing infrastructure also reduces capex intensity Well understood technology / off-the-shelf engineering replicating a recently built facility in the area Husky Lashburn project (completed 2012) utilized the same type of facility Comparative capex intensity ($/bbl/d) 2015E PXX Onion Lake 2015E ATH Dover West 2014E HSE/BP Sunrise E MEG Christina Lake 2012E STP STP-McKay 2011 DVN Jackfish CLL Algar 2008 CNQ Primrose East 2007 DVN Jackfish 1 Average: $31, CLL Pod One 2004 SU Firebag 1 - $10,000 $20,000 $30,000 $40,000 $50,000 BlackPearl s favorable capital cost profile supports significant liquidity through project completion Source: Street research and company filings. 12

14 Onion Lake Thermal EOR development (cont d) Development plan Onion Lake Thermal EOR development enjoys attractive capex intensity due to reservoir and regulatory advantages Vertical wells used for primary development will be converted to steam injectors Horizontal wells would then be drilled for oil production Use of existing vertical wells contributes to below average capex intensity, bolstering Onion Lake Thermal EOR economics Development timeline Capex breakdown (C$ in millions) Central Processing Facility (CPF) $175 EPCM and Commissioning Support and Planning 17 Procurement OTSG's 14 Procurement Equipment 24 Procurement Bulk Materials 29 CPF Fabrication 31 CPF Construction Civil 22 CPF Construction Piping / Mechanical 24 CPF Construction Electrical / Instrumentation 14 Well Pad Facilities $ Q3 Q2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FEED Phase Detailed Engineering Procurement - Major Equipment Fabrication Regulatory Approvals Received - Milestone CPF Construction Civil CPF Construction Mechanical / Electrical Well Pad Civil Drilling and Completions Well Pad Facilities Construction Well Pad Pipelines (Steam distribution, Emulsion gather, Gas distribution) Infrastructure - Source Water (Incl. regulatory, 8 wells, pump building, pipeline) - Disposal Wells (Incl. 2 wells, and associated pipelines) - Fuel Gas (Incl. tie in and pipeline) - Electricity (Temporary power will be required - crititcal path) Sales Oil Pipeline Commissioning First Steam First Oil Well Pad Pipelines $10 Infrastructure $31 Source Water (Incl. regulatory, 8 wells, pump building, pipeline) 14 Disposal Wells (Incl. 2 wells, and associated pipelines) 6 Fuel Gas (Incl. tie in and pipeline) 1 Electricity 10 Drilling and Completions $65 Sales Oil Pipeline $10 Total $309 Plans to spend ~$309MM for Onion Lake Thermal EOR over next two years with first oil expected in 2015 Source: Street research and company filings. 13

15 Mooney ASP Flood Overview Phase 1 current production of ~1,800 bbl/d Focused on the Bluesky Formation Key to unlocking upside value has been the implementation of an ASP (1) (polymer) flood Phase 1 initiated in Q Peak production of 3,000+ bbl/d anticipated in 2013 from Phase 1 Expect oil recovery factor to increase from ~4-5% to ~30-35% Pilot recovered approximately 18% before being shut down to initiate commercial development Key metrics Production Oil quality Regulatory stage Current Potential (2) 2P reserves (4) 2C resources (4) ( API) (boe/d) (boe/d) (mmboe) (mmboe) 16 Approved (3) 3,892 (5) 8, (5) Includes 1,846 bbl/d from ASP flood area and 2,046 bbl/d from non-flood areas. Field calendar day production Field-wide conversion to ASP wells Favourable royalty treatment for EOR approved projects <10% royalty during the initial years (pre-payout) 40+ year project life Source: Company filings. (1) Alkali Surfactant Polymer. (2) Potential production represents peak production. (3) ERCB approval was received for Phase 1 of commercial ASP flood development; Phase 2 application filed with ERCB. (4) Reserve & resource estimates prepared by Sproule, effective as of 12/31/12. Successful implementation of ASP flood has boosted production profile at Mooney and unlocked incremental value 14

16 Mooney Expansion of ASP Flood Mooney Detailed Area Map Expansion Plans Drill an additional 8 to 10 horizontal wells on Phase 2 lands Current production of 2,000 bbls/d Expand ASP Flood to Phase 2 lands in months Regulatory Application filed Infill wells to be drilled in Q or Q Minor infrastructure changes required (road and pipeline extension) Phase 3 lands to be tested in

17 Blackrod SAGD Oil Sands Project Key Blackrod Metrics Stage of Oil Reg. Current Potential 2P 2C Qualty Approval Prod. Prod. Reserves 1. Resources 1. [ API ] [bbl/d] [bbl/d] [mmbbl] [mmbbl] 9 Filed ~600 80, Located in the Athabasca Oil Sands region Lower Grand Rapids Formation at a depth of approximately 300 metres metres of continuous net pay Homogenous shoreface reservoir is predictable 100% owned and operated year project life Undertook a pilot to de-risk the project and better understand the operating characteristics 1. Source: Sproule Unconventional Limited ( Sproule ) reserve and resource evaluation (best estimate) reports effective December 31, 2012 (see Cautionary Statement on Contingent Resources at the back of the presentation) 16

18 Production Rate / Steam Oil Ratios Blackrod SAGD pilot progress Overview Achieved commercial level production rates BlackRod pilot SAGD pair Over 400 bbl/d after 10 months of steam Instantaneous SOR under 3.0 Well has produced over 100,000 barrels of oil to date Pilot well pair is only 700 m long, the commercial project wells are expected to be 900 1,200 m in length, which will positively impact production rates Installed downhole pump BlackRod Lower Grand Rapids Pilot SAGD Pair Reached commercial production rates Plant turnaround Experimented with new pump and different steaming strategies Installed less restrictive sand control Flush production (600 bopd) Forecasted stabilised rate ( bopd) Currently experimenting with the well to find best operating parameters Pilot to be expanded with an additional well pair and minor expansion of steam and water handling facilities 1 Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec Oil Prod (bopd) Inst SOR (bw/bo) The second well pair will be longer (900 m) and placed deeper in the reservoir to confirm the expected reservoir performance Well pair drilled in Q1 2013; steam injection expected to begin in Q Piloting a second well pair remains the focus at Blackrod for the remainder of 2013 while awaiting regulatory approvals Source: Company filings. (1) Potential production represents peak production. (2) Reserve & resource estimates prepared by Sproule, effective as of 12/31/12. 17

19 Blackrod Commercial development Overview Phases of Blackrod area map 80,000 bbl/d commercial development application filed in Q Application approval expected in late 2013 Project to be built in phases, with the first phase planned for 20,000 bbl/d; two additional phases of 30,000 bbl/d each to follow 182 million bbl (1) of probable reserves assigned to the first phase of the project and 476 million bbl (1) of best estimate contingent resources assigned to Phase 2 and 3 Additional MMbbl of contingent resource added through recently closed land acquisition Project team has been assembled and detailed engineering has commenced Phase 1 capital cost estimate of $750 - $800 million ($37,500 $40,000/bbl/d) Plans to seek a JV arrangement to accelerate development BlackPearl will opportunistically pursue a JV to accelerate development of 80,000 bbl/d Blackrod project Source: Company filings. (1) Reserve & resource estimates prepared by Sproule, effective as of 12/31/12. 18

20 Blackrod and Onion Lake reservoirs Blackrod best in class due to homogeneity The Blackrod Grand Rapids development is within a relatively homogeneous and predictable shoreface sand reservoir in contrast to those in the more common but less predictable McMurray estuarine / embayment / fluvial channel systems Lower productivity in the Grand Rapids is more than compensated by scale and homogeneity Scale and predictability has helped the CNRL Primrose project become one of the most prolific and profitable thermal projects BlackPearl: Blackrod CNRL: Primrose BlackPearl: Onion Lake Statoil: Leismer 1 mile 1 mile 1 mile 1 mile Onion Lake best in class due to oil quality and productivity The Onion Lake development is a channel system (embayment deposit) and while complicated geologically, it has been a prolific producer based on the numerous wells drilled into the reservoir to date It is similar in size and geology to the Statoil Leismer project with the biggest difference being the oil quality which allows Onion oil to flow without steam Channel systems have more heterogeneous geology and it is difficult to locate a meaningful deposit, but when found, they are prolific producers both in terms of oil rate and steam oil ratio 19

21 John Lake Overview Asset map Located 30 km from BlackPearl s Onion Lake property 2012 production of 576 boe/d; Q production of 781 boe/d John Lake production is focused on exploitation of the Sparky and Cummings reservoirs Exploitation of the Sparky reservoir using horizontal wells and delineation of the Cummings reservoir is in early stages, resulting in relatively high level of undeveloped reserves to developed reserves As of 12/31/12, Sproule had assigned 2.6 MMboe of 2P reserves to the John Lake property Includes 13 future horizontal wells and 10 future vertical wells BlackPearl anticipates drilling up to 5 of these locations in 2013 Designation as oil sands region results in lower royalty regime Conventional production in an oil sands region pays royalties based on oil sands royalty structure 20

22 3. Financial summary 21

23 Conservative financial policies Utilize revolver as liquidity cushion, rather than a source of long-term capital Ensure material development projects are fully funded at the outset Maintain prudent mix of debt and equity Target Debt to EBITDA of 1.0x 1.5x over the longer term While BlackPearl is currently unhedged, the Company intends to hedge some portion of its oil production during the construction of major phases of development 22

24 Q results Production remained flat from Q Revenue, EBITDA and cash flow were impacted by wider than normal heavy oil differentials in Q Capital program was scaled back in Q1 to reflect depressed oil price environment Resulted in smaller draw on credit facility Q Q QoQ % change Q YoY % change Pricing WTI (US$/bbl) $94.34 $ % $ (8.3%) Differential 33.8% 20.8% 62.5% 20.8% 62.5% Sales price ($/boe) $50.13 $58.45 (14.2%) $67.98 (26.3%) Selected operational metrics Daily production (boe/d) 9,087 9, % 9,581 (5.2%) Netback ($/boe) $15.68 $24.20 (35.2%) $30.63 (48.8%) Selected financial metrics Gross revenue $40,671 $47,569 (14.5%) $57,776 (29.6%) EBITDA 10,097 17,712 (43.0%) 24,204 (58.3%) 23

25 2013 Guidance Estimates Production (boe/d) Annual average 9,000 10,000 Exit 10,000 10,500 Cash flow from operations ($millions) Capital Program 2 ($mm) Blackrod $ Second well pair - Detailed engineering Capital expenditures ($millions) Year-end debt ($millions) Year-end working capital ($millions) Avg. Production Forecast (boe/d) Onion Lake 40% Other 1% John Lake 7% Blackrod 4% Mooney $ Drill wells on phase 2 & 3 expansion Onion Lake $ Drill 20 primary development wells - Minor infrastructure upgrades Non-Core Assets $ Drill 6 10 horizontal wells - Infrastructure upgrades $ Mooney 49% 1. Pricing assumptions used for 2013 include WTI oil price of $95/bbl, light/heavy differential of $27/bbl and CAD/US exchange rate of $ Capital costs exclude any costs related to the commercial development of the Onion Lake EOR or Blackrod SAGD projects 24

26 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 Oil Pricing High volatility in oil prices particularly in North America In 2012, our realized oil price ranged from $43/bbl to $77/bbl (Q was $50/bbl) A $10/bbl change in our wellhead price impacts annual cash flow by $26 mm 2 0 WTI (C$/bbl) Brent (C$/bbl) WCS (C$/bbl) PXX Wellhead Price (C$/Bbl) % of our production is moving by rail Currently unhedged 1. WCS Western Canadian Select 2. Based on 2012 average production and royalty rates 25

27 Funding For Our Thermal Projects Balance between minimizing NAV dilution versus taking on excess financial risk Onion Lake 12,000 bbl/d development; capital costs of ~ $300 - $350 million Debt finance ~$350mm Fully fund construction and interest costs during construction Blackrod Phase 1 20,000 bbl/d; capital cost of ~ $700 - $800 million Find JV partner for the project Shovel Ready as a result of successful pilot and approval 26

28 $ mm $ mm Share Price vs. Asset Value 2 Perspectives 4,000 4,000 3,500 3,500 3,000 3,000 2,500 2,500 Blackrod 2,000 1,500 1, Market Cap June 28, 2013 ($1.59/sh) 2C 2P 2P + 2C Value 10%, BT) 2,000 1,500 1, Market Cap June 28, 2013 Onion Lake Mooney 2P + 2C Value 10%, BT) BlackPearl is trading at 40% of its 2P Reserve Value No contingent value recognized for our three core properties 2P + 2C NAV of $12/share Current share price attributes no value to Blackrod or the Onion Lake EOR project 1. Proved plus probable (2P) reserves from the Sproule report effective December 31, Best Estimate contingent resource from the Sproule contingent resource reports for the Blackrod, Onion Lake and Mooney areas effective December 31, 2012 (see cautionary statement on contingent resources at the back of the presentation). 27

29 Key Milestones Next Months Regulatory approval for Onion Lake 12,000 bbl/day SAGD project Regulatory approval for first 20,000 bbl/day phase at Blackrod Development financing in place for one or both thermal projects Expansion of the ASP flood at Mooney ,000 8,000 6,000 4,000 2, P Reserves (mmbbl) Production (bbl/d) Source: Sproule Unconventional Limited ( Sproule ) reserve evaluation reports dated December 31, 2011 (reports updated to May 31, 2012 for the Blackrod project). 28