Premium Pipestone Asset Acquisition August 9, 2018
READER ADVISORY GENERAL A final short form prospectus containing important information relating to the offering (the "Offering") of subscription receipts (the "Subscription Receipts") of NuVista Energy Ltd. ("NuVista") described in this presentation has been filed with the securities regulatory authorities in each of provinces of Canada. A copy of the final short form prospectus, and any amendment, is required to be delivered with this presentation. This presentation does not provide full disclosure of all material facts relating to the Subscription Receipts offered. Investors should read the final short form prospectus and any amendment, for disclosure of those facts, especially risk factors relating to the Subscription Receipts and the underlying common shares of NuVista (together, the "Securities"), before making an investment decision. The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their own analysis and reviews of NuVista and of the information contained in this presentation. Prospective investors should read the entire final short form prospectus and consult their own professional advisors to assess their potential investment in NuVista. A prospective investor should rely only on the information contained in the final short form prospectus relating to the Offering, which will incorporate this presentation by reference therein. None of NuVista or the underwriters has authorized anyone to provide any investors with additional or different information, and any such information provided to an investor should not be relied upon. An investment in the Securities is speculative and is subject to a number of risks that should be considered by a prospective investor. See "Risk Factors" in the short form prospectus and NuVista's annual information form for the year ended December 31, 2017 incorporated by reference therein. August 2018 1
Advisories BASIS OF PRESENTATION Unless otherwise noted, the financial data presented in this presentation has been prepared in accordance with Canadian generally accepted accounting principles ("GAAP") also known as International Financial Reporting Standards ("IFRS"). The reporting and measurement currency is the Canadian dollar. ADVISORY REGARDING OIL AND GAS INFORMATION Throughout this presentation the terms Boe (barrels of oil equivalent), and MMBOE (millions of barrels of oil equivalent). Such terms may be misleading, particularly if used in isolation. The conversion ratio of six thousand cubic feet per barrel (6 Mcf:1 Bbl) of natural gas to barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. In this presentation generally, NuVista has used a number of oil and gas metrics which do not have standardized meanings and therefore may be calculated differently from the metrics presented by other oil and gas companies including "NPV10" and "P+PA NPV10%". NPV10 represents the anticipated net present value of the future net revenue discounted at a rate of 10% associated with the reserves associated with the acquired assets. P+PA NPV10% is calculated as the present value of the future net revenues discounted at 10% before tax on total proved plus probable reserves. This presentation discloses NuVista's undeveloped drilling locations in two categories: (i) proved undeveloped plus probable undeveloped drilling locations; and (ii) 2C drilling locations. Proved undeveloped plus undeveloped drilling locations are derived from (i) in respect of NuVista's current asset base, a report prepared by GLJ, NuVista's independent qualified reserves evaluator, evaluating NuVista's reserves as of December 31, 2017 (the "NuVista Reserves Report"), and (ii) in respect of the assets associated with the potential Pipestone asset acquisition, a report prepared by GLJ, evaluating the reserves associated with the Pipestone asset acquisition as of June 30, 2018 (the "Acquisition Reserves Report"), and account for undeveloped drilling locations that have associated proved and/or probable reserves, as applicable. 2C drilling locations are derived from a report prepared by GLJ evaluating NuVista's contingent resources as of December 31, 2017 (the "GLJ Contingent Resource Report"). No 2C drilling locations are attributed to the potential Pipestone asset acquisition at this time. There is no certainty that we will drill all drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas production. The drilling locations on which we actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. Contingent resources are 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 which are not currently considered to be commercially recoverable due to one or more contingencies. In the case of the contingent resources estimated in the GLJ Contingent Resource Report, contingencies include: (i) further delineation of interest lands; (ii) corporate commitment, and; (iii) final development plan. To further delineate interest lands additional wells must be drilled and tested to demonstrate commercial rates on the resource lands. Reserves are only assigned in close proximity to demonstrated productivity. As continued delineation drilling occurs, a portion of the contingent resources are expected to be reclassified as reserves. Confirmation of corporate intent to proceed with remaining capital expenditures within a reasonable timeframe is a requirement for the assessment of reserves. Finalization of a development plan including timing, infrastructure spending and the commitment of capital. Determination of productivity levels is generally required before a company can prepare firm development plans and commit required capital for the development of the contingent resources. There is uncertainty that it will be commercially viable to produce any portion of the contingent resources. August 2018 2
Advisories ADVISORY REGARDING OIL AND GAS INFORMATION (continued) Certain information in this presentation may constitute "analogous information" as defined in National Instrument 51 101 Standards of Disclosure for Oil and Gas Activities with respect to the certain drilling results, total production in the Montney, number of wells drilled, or offset well production from other producers with operations that are in geographical proximity to or believed to be on trend with NuVista's Montney assets. Management of NuVista believes the information may be relevant to help determine the expected results that NuVista may achieve within NuVista's lands and such information has been presented to help demonstrate the basis for NuVista's business plans and strategies with respect to its Montney assets. There is no certainty that the results of the analogous information or inferred thereby will be achieved by NuVista and such information should not be construed as an estimate of future production levels, reserves or the actual characteristics and quality of NuVista's Montney assets. It should not be assumed that the future net revenues (NPV10) included in this presentation represent the fair market value of the reserves. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties due to the effects of aggregation. ADVISORY REGARDING FORWARD LOOKING INFORMATION AND STATEMENTS This presentation contains forward looking statements and forward looking information (collectively, "forward looking statements") within the meaning of applicable securities laws. The use of any of the words "will", "may", "expects", "believe", "plans", "potential", "continue", "guidance", and similar expressions are intended to identify forward looking statements. More particularly and without limitation, this presentation contains forward looking statements, with respect to: the ability to close the acquisition and the timing thereof; management's assessment of NuVista's future focus, strategy, plans, opportunities and operations; NuVista's 110,000 Boe/d growth plan; the quality of the inventory to be acquired pursuant to the acquisition; future potential reserve bookings from the acquired assets; expected future production and condensate gas ratios from the acquired assets; expectations that the acquisition will be accretive on all long term metrics; expectations that NuVista will achieve full field development of its assets and the acquired assets; plans to arrange egress for Montney development growth; NuVista's business plan to maintain pro forma net debt/cash flow under 2x; NuVista's plans to add value to the acquired assets, and the create additional value and shareholder returns as the acquired assets are developed; the expected purchase price of the acquisition; 2018 and 2019 pro forma capex breakdowns; drilling economics, capital deployment opportunities associated with the acquired assets; the estimated production decline rate of the acquired assets; NuVista's future production; proved plus probable drilling locations; market egress and hedging plans; plans to focus on new term cash flow generation; NuVista's full field development production capacity and production mix targets; the development potential of the acquired assets; future facility capacity and optionality; well inventory; drilling and completion opportunities and plans; anticipated future facility capacity; future processing options; natural gas price diversification plans; and illustrative 2022 revenue by product type. Statements relating to "reserves" and "resources" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves or resources described exist in the quantities predicted or estimated and that the reserves or resources can be profitably produced in the future. August 2018 3
Advisories ADVISORY REGARDING FORWARD LOOKING INFORMATION AND STATEMENTS (continued) By their nature, forward looking statements are based upon certain assumptions and are subject to numerous risks and uncertainties, some of which are beyond NuVista's control, including the ability to close the acquisition and the timing thereof, the impact of general economic conditions, industry conditions, current and future commodity prices, currency and interest rates, anticipated production rates, borrowing, operating and other costs and cash provided by operating activities, the timing, allocation and amount of capital expenditures and the results therefrom, anticipated reserves and resources and the imprecision of reserve and resource estimates, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, access to infrastructure and markets, competition from other industry participants, availability of qualified personnel or services and drilling and related equipment, stock market volatility, effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties; the ability to access sufficient capital from internal sources and bank and equity markets; obtaining the necessary regulatory approvals to complete the acquisition and other transactions referred to herein on the terms and timing contemplated and including, without limitation, those risks considered under "Risk Factors" in NuVista's Annual Information Form. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward looking statements. NuVista's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements, or if any of them do so, what benefits NuVista will derive therefrom. NuVista has included the forward looking statements in this presentation in order to provide readers with a more complete perspective on NuVista's future operations and such information may not be appropriate for other purposes. NuVista disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise, except as required by law. August 2018 4
Pipestone Asset Acquisition Strategic Rationale "More Value Per Share Short & Long Term" Exceptional opportunity that expands NuVista's line-of-sight to over 110,000 Boe/d with a well inventory that adds the best to our best High quality asset Condensate-rich proven production from all four Montney benches on or adjacent to acquired lands 90% of Proved plus Probable ("P + PA") reserves booked in just one zone thus far Condensate gas ratios expected to be 80-90 Bbls/MMcf in full development, bringing anticipated corporate average to 70+ Bbls/MMcf Contiguous, well delineated land-base in an area with active infrastructure expansion Accretive, higher value per share Line of sight to over 110,000 Boe/d (32+% condensate) from 60,000 Boe/d (30% condensate) In 2019-2020, cash provided by operating activities from the acquired assets will be used to fund additional growth on NuVista s existing assets while arranging egress and optimizing facilities planning for growth from the acquired assets Growth from the Pipestone area could commence as early as Q4 2019 setting up 2020 production levels to pass through 75,000 Boe/d on our path to 110,000 Boe/d Maintains financial strength and flexibility Leverage NuVista proven track record of execution and continuous improvement to add value NuVista is ideally positioned to drive substantial value creation and shareholder returns as the asset is developed August 2018 5
Pipestone Asset Acquisition Summary $625 million acquisition of premium Pipestone assets from Cenovus 35,250 net Montney acres (86% WI), predominantly contiguous 52,800 net acres of other Triassic lands 200 metres thick Montney interval with four proven benches Premium drilling economics; significant capital deployment opportunity offering industry leading returns Production of 9,600 Boe/d, ~46% oil and liquids (1) Low decline of ~22% (2) 39% operated WI in ~100 MMcf/d Wembley deep cut plant and gathering system (1) August 2018 Based on Cenovus field estimates of average production between June 1 12, 2018. 6 (2) Based on the GLJ Acquisition Reserve Report.
Cal Day Gas Avg (MMcf/d) Prod Well Count Montney In The Right Neighborhood Condensate-Rich Montney Industry Growth Continues High level of industry activity continues > 900 Industry Montney HZ wells licensed and/or drilled to date (1) Elmworth to Kakwa Montney HZ Activity Update Incoming Incoming Montney Montney Acreage Acreage Montney gas production nearing 1.2 Bcf/d (1) Elmworth to Kakwa Production Growth (1,2) 1200 Cal Gas Rate Prod Well Count 900 1000 750 800 600 600 450 400 200 0 300 150 0 NuVista Encana Paramount Sinopec-Daylight CNRL Seven Generations Shell Montney Licenses and Hz Wells August 2018 (1) Source: geoscout. (2) Excludes southern areas of Alberta Condensate-rich Montney (Resthaven and Simonette). Map is an estimate of Industry land positions compiled by NuVista from public data. Certain information in this slide constitutes analogous information, see Advisory Regarding Oil and Gas Information. 7
The New NuVista Adding More to the Best of Our Economic Returns Pure-Play Montney Company In The Right Neighborhood Balance Sheet Strength Funded Growth Plan with Great Economics Clear Line-of-Sight to 60,000 Boe/d Now 110,000 Boe/d Inventory Underpinned by Four Established Development Blocks Wellhead-to-Market Egress Plan In-Place + Rolling Hedging Program 30%+ Condensate Production Torque to Oil Price Proven Track Record of Execution & Continuous Improvement August 2018 8
Capital Expenditure Highlights Focusing on Near-term Cash Flow Generation while Laying the Foundation Future Growth 2018 Pro Forma Capex Breakdown 2019 Pro Forma Capex Breakdown ~$30 MM ~$20 MM ~$50 MM ~$110 MM ~$260 MM ~$350 MM 2018 Drill, Complete, Equip & T/I Facilities & Water Management Maintenance, Corporate & Other 2018 Capex Guidance $325 $350 million Focused on dev drilling to fill existing capacity and the first tranche of production into the new gas plant ~28 wells drilled (~3-4 rig program) Long-lead Pipestone compressor items 2019 Capex Plan $450 $500 million Dev drilling at Bilbo and Elmworth; initial growth into the new Wapiti gas plant at Gold Creek and Pipestone ~40 wells drilled (~4-5 rig program) Construct Pipestone compressor and water hub August 2018 9
P Line-of-Sight now to 110,000+ Boe/d Four Development Blocks Established Pipestone Position Increased Significantly Pipestone Footprint & Targets Significantly Augmented Four layer development potential in the Montney Multiple gas plants proceeding or under construction in the area Forecast production ~35-40% condensate or 80-90 Bbls/MMcf Acquisition adds 50,000 Boe/d well inventory (1) total expected full field development now 60,000 Boe/d Gold Creek On Production NVA footprint provides optionality in well length (ERH) Full development into 2019 SemCAMS Wapiti gas plant Forecast production ~30% condensate 18,000 Boe/d expected facility capacity and well inventory (2) Elmworth Cash Provided by Elmworth Operating Activities Generation Existing NVA owned compression and long-term firm service agreement for 100% of volumes Current production ~22% condensate 19,000+ Boe/d existing facility capacity and well inventory (2) Bilbo Cash Provided by Operating Activities Generation Existing NVA owned compression and long-term firm service agreement for 100% of volumes Current production ~40% condensate 18,000+ Boe/d existing facility capacity and well inventory (2) (1) Based on NuVista estimates. (2) August 2018 Well inventory is expected to be sufficient to produce at facility capacity for at least 10 years, see Advisory Regarding Oil and Gas Information. 10
Stratigraphy & Well Placement CVE Pipestone Pipestone area has four well developed zones NVA Pipestone Elmworth Gold Creek Bilbo D C B Lower Montney 5% Gas Filled Porosity Zone Tested Planned Future Target Middle Montney Lower Montney August 2018 11
Development Underpinned by Robust Established and Emerging Inventory Montney 'A' Reserves & Resource Montney Wells Montney A HZ Wells Montney Lands Montney 2P Reserves Montney 2C Resources Montney 'B' Reserves & Resource Montney Wells Montney B HZ Wells Montney Lands Montney 2P Reserves Montney 2C Resources Montney 'C+D' Reserves & Resource Montney Wells Montney D HZ Wells Montney C HZ Wells Montney Lands Montney 2P Reserves Montney 2C Resources Montney Well and Location Count Breakdown (1) (Gross) Bilbo West Bilbo Elmworth Gold Creek Pipestone Incoming Pipestone Post Pipestone Acquisition Developed Wells 59 1 36 10 1 29 136 Undeveloped 2P Locations 90 4 89 53 36 89 361 Undeveloped 2C Locations 165 45 221 117 20 TBC 568+ Total Wells + Locations 314 49 346 180 57 118+ 1,064+ (1) Based on the NuVista Reserves Report and GLJ Contingent Resource Report, other than the inventory under the column entitled Incoming Pipestone, which is based on the Acquisition Reserves Report, see August 2018 Advisory Regarding Oil and Gas Information. 12
Montney Raw Gas Capacity (MMcf/d) Market Egress Plan Material Capacity Secured Plus Significant Optionality Around Future Additions Towards 110,000 Boe/d Montney Capacity (Boe/d) 600 110,000+ Boe/d Montney Production Potential 120,000 500 400 This growth on the Acquired Assets could commence as early as 2019 but we have conservatively not counted on that 100,000 80,000 300 60,000 200 100 Egress Secured 40,000 20,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 Pipestone Expected Future Capacity Pipestone Secured Capacity Gold Creek Secured Bilbo Secured Elmworth Secured August 2018 13
Multiple Existing and Future Processing Options Cenovus Wembley Keyera Pipestone Part of Acquired Assets Facility SemCAMS K3 Existing Gas Plants NuVista Ownership or Firm Capacity In Place NuVista Firm Downstream Capacity Excess Capacity Available X CSV Albright Keyera Simonette X Tidewater Pipestone SemCAMS Pipestone Planned Gathering Lines Planned Gathering Lines (approx.) Cenovus Wembley Facility Future Gas Plants Status NuVista Ownership or Firm Capacity Contracted X Excess Capacity Available SemCAMS Wapiti Constructing Keyera Wapiti #1 & #2 SemCAMS Wapiti Keyera Wapiti Plant #1 Keyera Wapiti Plant #2 Constructing X X Announced X SemCAMS Pipestone Proposed X SemCAMS Raw Gas Pipeline Keyera Raw Gas and C5+ P/L Existing Gas Plant Proposed or Future Gas Plant Tidewater Pipestone Constructing X CSV Albright Proposed X Keyera Pipestone Constructing X August 2018 14
Pct. of Forecast Gas Production Market Egress Plan In-Place Natural Gas Price Diversification NuVista has contracted for firm transportation on export pipelines to diversify pricing exposure Ongoing rolling hedging program and financial basis hedges further diversify price exposure We continue to evaluate future opportunities for diversification Acquired gas volumes temporarily increase AECO exposure however favorable condensate ratios of new development volumes more than offset AECO exposure through higher profitability Minor 2018 AECO Exposure Natural Gas Price Diversification Full-Field Target Revenue by Product Type Hedged NYMEX Floating Chicago Floating California Floating Dawn Floating AECO Floating Natural Gas NGL's Condensate 100% 14% 75% 50% 11% 13% 7% 39% 40% 11% 9% 9% 10% 5% 3% 34% 7% 6% 2% 41% 8% 6% 3% 23% 7% 25% 56% 11% 24% 38% 50% 43% 70% 0% 2018 2H 2019 2020 2021 2022 * This pie chart is provided by NuVista for illustrative purposes and is based on the assumptions below. * Production of 110,000 Boe/d, comprised of 60% Natural Gas, 8% NGL's and 32% Condensate. * Pricing Assumptions: WTI (USD$65/Bbl); AECO (C$1.90/GJ); Fx (CAD:USD): 1.25:1 August 2018 15
Pipestone Acquisition Detail Acreage (Gross / Net Sections) Montney 63.8 Gross 55.1 Net Other 131.5 Gross 82.5 Net Well Count (Gross / Net) (1) Montney Non-Montney Total 30 / 28.8 451 / 211.7 481 / 240.5 Oil + C5+ Gas NGL BOE Sales Production (Boe/d or MMcf/d) (2) Montney Non-Montney (Doig/Hlfy) Non-Montney (Other) Total 1,837 328 14 2,179 26.1 3.6 1.8 31.5 1,801 275 118 2,194 7,983 1,203 434 9,620 ~23% Condy + Oil Reserves (MMBOE/$MM NPV10) (3) NuVista Incoming Montney Incoming Non-Mntn Montney Licenses and Hz Wells Montney Non-Montney Total PDP 19 / $163 4 / $43 22 / $206 2P 151 / $1,149 6 / $63 157 / $1,212 (1) As of June 30, 2018. (2) August 2018 Based on Cenovus field estimates of average production between June 1 12, 2018. 16 (3) Based on the Acquisition Reserves Report, see "Advisory Regarding Oil and Gas Information.
Technical Overview Contiguous acreage with year round access - Ideally suited for ERH development TVD of reservoir shallower than much of NVA existing acreage lower D & C costs Core acquired acreage is located ideally across the Condensate Volatile Oil transition window Reservoir significantly over-pressured and of outstanding quality 4 Zones with existing economic production within or in close proximity to core acreage H 2 S values within range of NVA existing operations Acquired core acreage reservoir is more of the best of what we already do August 2018 17
Pipestone Montney Acquisition Creates Material Growth Opportunity Pipestone Activity Pipestone Highlights Up to 4 developable layers All have been proven productive on or adjacent to NuVista Lands 28 Montney HZ Wells producing Abundant offsetting production information 90% of wells completed with 0.3 to 0.8 T/m proppant room to grow frac intensity Combination of frac fluids utilized few slickwater Condensate yield expected to average 50+ Bbls/MMcf on current base production development yields (2021-2022 and beyond) expected to be 80+ Bbls/MMcf as a result of the successful application of NuVista s drilling and completion technologies NVA successfully tested first Pipestone well in 2017 NVA successfully tested first Lower Montney well in late 2017 Montney 'D' HZ Wells Montney 'C' HZ Wells Montney 'B' HZ Wells Lwr. Montney HZ Wells *Map of activity at Pipestone is compiled from public data Certain information in this slide constitutes analogous information, see "Advisory Regarding Oil and Gas Information". August 2018 18