Cardinal Energy Ltd. · TSX:CJ

Cardinal Energy — Q3 2023 Earnings Presentation

39 slides from Cardinal Energy's earnings presentation, Nov 1, 2023

1. Slide 1: Q3 Results, Sask Thermal Entry, 2024 Budget

   ~~ Q3 Results, Sask Thermal Entry, 2024 Budget

2. Slide 2: Our Business

   Our Business Cash Flow  Amount of capital required to maintain our assets and keep production flat Maintenance Capital  Amount of capital required to fulfill our commitment to operating our business in a responsible manner ARO/ESG  Capital available to our shareholders  Increase the value of the

3. Slide 3: Q3 Results

   Q3 Results 2022 Annual Budget 2023 Q1 2023 Q2 2023 Q3 2023 Adjusted Funds Flow ($MM) $363 $270 $52.3 $56.2 $81.2 Capital Expenditures ($MM) $120 $97 $25.3 $20.4 $30.2 ARO Expenditures ($MM) $20 $23 $4.8 $4.1 $5.4 Dividend Rate per month per share $0.05 - $0.06 $0.06 $0.06 $0.06 $0.06 Production (boe

4. Slide 4: Corporate Production

   Corporate Production 25,000  Current production >22,000 boe/d  Majority of production under established water flood 20,000 and/or CO2 recovery schemes  Base decline less than 10% 15,000  Large OOIP properties continue to outperform Boe/d 10,000  Successful optimization initiatives across asset

5. Slide 5: 2023 Plan - $120 MM Capital / $23 MM ARO

   2023 Plan - $120 MM Capital / $23 MM ARO 2023 Budget 2023 Q3 YTD Development $43 MM $40 MM  Focused drilling program designed to expand Drill, Complete, Equip and Tie In (17.6 net wells) inventory Optimization $23 MM $16 MM  Continue to optimize existing production to Well Optimization – workovers

6. Slide 6: 2023 Development Drilling Program – Update

   2023 Development Drilling Program – Update Success Across all Districts  19 (17.6 net) new wells planned. 15 producers, 3 injectors, 1 drilling. Current production ~1800 boe/d (1)  North  Central  Nipisi Clearwater 4 well multilateral pad  4 well program following up 2022 drilled in Q1, on-stre

7. Slide 7: Mannville Multi-Lateral Focus

   Mannville Multi-Lateral Focus North - Clearwater/Fahler/Wabiskaw (up to 65 future locations)  Nipisi – 8 ML wells drilled to date, continue development in 2024  Buffalo – 10 ML wells drilled to date on property, up to 25 locations  Heart River/Gift – 2025+ potential development Central – Mannvill

8. Slide 8: Clearwater: Nipisi, Heart River, Buffalo

   Clearwater : Nipisi, Heart River, Buffalo Buffalo Nipisi  Acquired Q4 2023  Acquired 2018  10 multilaterals drilled to date  8 multilaterals drilled  Up to 25 future locations  Completing development  2 wells planned for 2024 with 3 fan wells in 2024  2023 wells producing at ~30% higher rate

9. Slide 9: Central – Wainwright Rex

   Central – Wainwright Rex  Estimated 200 MM barrels original oil in place(1), ~20o API  Q1 23 consolidated land position (green) 2023 drills  Adds up to 90 multi-laterals to inventory (3 wells booked at year end)  Existing infrastructure in place  4 well drilling program complete 10-7 Discovery

10. Slide 10: Ellerslie – Alderson, Southern Alberta

    Ellerslie – Alderson, Southern Alberta  Alderson - 0% royalty lands  New area for multilateral application  2 wells drilled in Q3 extending boundaries of existing developed Ellerslie pool – up to 6 follow ups identified  Overlying Glauc channel also prospective  Optimizing use of existing infra

11. Slide 11: Multi-Leg Horizontals

    Multi-Leg Horizontals North – Dunvegan light oil (over 40 potential locations)  Elmworth – 13 wells drilled since 2017  Wapiti – first test well planned in 2024, competitor activity offsetting South – Glauc Channel, Ellerslie medium oil (15+ potential locations)  Glauc channels – continue select

12. Slide 12: GP - Dunvegan

    GP - Dunvegan Elmworth Elmworth  Well defined light oil pool  13 Cardinal operated multifrac horizontals since 2017  Infrastructure in place  2 wells planned for 2024, multiple follow ups defined Wapiti  Dunvegan channel trend defined by legacy verticals  Successful competitor drills along tre

13. Slide 13: Optimization Assets – EOR and Waterflood

    Optimization Assets – EOR and Waterflood Development drilling potential and flood optimization  House Mountain – 2024 Q4 extended reach horizontal  Midale – 4 wells budgeted in 2024, material long term inventory of over 200 locations  Mica – potential 2025 infill drilling Primary flood optimizati

14. Slide 14: Midale - Injectors

    Midale - Injectors 2021-23 Midale Injector Drilling Results 200 Incremental Oil Production (bbl/d gross) 160 120 80 40 0 0 6 12 18 24 30 36 Months on Injection New injectors Type Curve 2021 Avg. 2022 Avg. 2023 Avg. 2021-2023 Performing well above expectation, primarily on waterflood  Type Curve Pay

15. Slide 15: 2024 Budget Highlights

    2024 Budget Highlights 2024 Annual Adjusted Funds Flow ($MM) $290 Capital Expenditures ($MM)  Development drilling focus to maintain base production Conventional $116  Continue to optimize water floods to reduce decline Thermal $69 ARO Expenditures ($MM) $20  Continue capital investments for long

16. Slide 16: Assumptions and Sensitivities

    Assumptions and Sensitivities Pricing Assumptions Annualized Sensitivities 2024 Budget Adjusted Funds Flow ($ mm) WTI $ US/bbl 79.00 Δ US$1 WTI 8.0 WCS Differential $ US/bbl (16.50) Δ US$1 WCS Differential 5.0 MSW Differential $ US/bbl (2.50) Δ US$1 MSW Differential 1.5 Fx rate US/CAD 0.74 Δ $0.01 F

17. Slide 17: 2024 Capital/ARO Plan

    2024 Capital/ARO Plan 2024 Budget CONVENTIONAL Development $60 MM Drill, Complete, Equip and Tie In (24 gross wells) Optimization $16 MM Well Optimization, Water flood optimization, CO2 Purchases Maintenance and Other $40 MM Facility and Pipeline Maintenance, Turnarounds, Corporate THERMAL Reford SA

18. Slide 18: 2024 Budget – Conventional

    2024 Budget – Conventional 24 Conventional development wells Continue flood optimization  North  Clearwater  Central  Nipisi 3 multilateral fan wells  4 well Wainwright Rex drilling program  Buffalo 2 multilateral horizontals  Heart River / Gift monitor CJ and  Further consolidate Mannville

19. Slide 19: Saskatchewan Thermal Trend

    Saskatchewan Thermal Trend Well established SAGD developments east of Lloydminster  17 projects producing ~150,000 bbls/d in Saskatchewan  Initially defined by legacy conventional heavy oil drilling providing Existing significant control to define channel trends and oil accumulations Thermal Proje

20. Slide 20: Why SAGD for CJ

    Why for CJ  6,000-10,000 bopd project size - risk appropriate for our Company  "Off the shelf" proven SAGD technology available at fixed pricing giving certainty around project economics and timeline  Large talent pool of professionals with previous development and production experience available

21. Slide 21: Saskatchewan Thermal Heavy Oil History & Advantages

    Saskatchewan Thermal Heavy Oil History & Advantages 180,000 160,000 Saskatchewan advantages include: 140,000  Surface Access = Lower CAPEX 120,000  Existing Infrastructure = Marketing Optionality 100,000 Oil Production  Oil Quality = Better Wellhead Price (bopd) 80,000  Lower Royalties = Strong

22. Slide 22: Reservoir Comparison

    Reservoir Comparison Dee Edam Edam Meota Meota Paradise Pikes Rush Spruce Valley Edam East West East West Hills Peak Lake Sandall Lake Reford Oil Viscosity Operator CVE SRC CVE CVE SRC SRC CVE CVE CVE CVE CVE CJ 1,000,000 Meota West 1 Str Edam Year on stream 2019 2016 2016 2016 2018 2020 2012 2007 2

23. Slide 23: Cardinal Thermal Heavy Oil Trend

    Cardinal Thermal Heavy Oil Trend  Waseca channel trend is the primary SAGD target with numerous heavy oil intersections  Land position (>45,000 acres) established primarily through acquisition of Broadview Energy assets in Q2 2023  Currently 3 potential (6,000 -10,000 bbls/d) SAGD sites identifie

24. Slide 24: Reford Waseca Channel

    Reford Waseca Channel  Defined resource  9 legacy verticals  4 assessment wells drilled Q4 2023  3D seismic across land base  Channel isopach up to 35m  Oil column up to 20m  Channel width 500-800m  Porosity 30%+  100% working interest land established on core of oil accumulation  Target d

25. Slide 25: Reford Thermal Estimated Cost Breakdown

    Reford Thermal Estimated Cost Breakdown Project Type % of Project Cost Central Processing Facility $155 million initial development estimate SAGD Well Pads Above Ground Flowlines 64%  Standardized development approach Pump Station  Modularized facilities that are shop fabricated reducing field con

26. Slide 26: Reford Thermal Project Timeline

    Reford Thermal Project Timeline Project Oil Production DEVELOPMENT CAPEX 8000 $160 7000 $140 Forecast Cumulative Development Forecast Oil Rate (bopd) 6000 $120 5000 $100 Capex ($MM) 4000 $80 3000 $60 2000 $40 1000 $20 0 $0 2024-01-01 2024-04-01 2024-07-01 2024-10-01 2025-01-01 2025-04-01 2025-07-01

27. Slide 27: Reford - Economics

    Reford - Economics Reford 6,000 bopd Cash Flow Summary 400 8,000 Project payout within 18 months initial production 350 7,000 300 6,000 Cum. free cash flow of $1.4 Billion over 20 years 250 5,000 200 Daily Production NPV10 of $456 MM Annual Cash 150 4,000 ($MM) (bopd) 100 3,000 PIR of 182% 50 2,000

28. Slide 28: Cardinal – 2024-2029 Preliminary Plan

    Cardinal – 2024-2029 Preliminary Plan Production and CFPS Annual Cash Flow Forecast and Uses $3.33 45,000 $3.39 $3.50 $700 40,000 $3.00 $600 $2.39 $2.40 $500 Production (bbl/d) 35,000 $2.50 Cash Flow per Share $1.87 Incremental $400 30,000 $2.00 FCF $MM $1.71 $300 25,000 $1.50 $200 20,000 $1.00 $100

29. Slide 29: 2022 Year End Reserves

    2022 Year End Reserves  Top tier 2022 results  Performance driven by both strong base production NPVBT10 FD&A optimization and better than forecast drilling results Year End 2022 MMBOE (1) (2)(3) Recycle Ratio (4) (MM) ($/boe)  Cardinal 3 average year PDP FD&A $8.61/boe  Large inventory of unboo

30. Slide 30: Focusing on a Sustainable Future – ESG Focus

    Focusing on a Sustainable Future – ESG Focus Environment Social Governance  Indigenous Engagement &  Corporate Governance  CO2 injection exceeds Support  Diversity Scope 1 emissions  Sponsorships  Executive Compensation  Accelerating ARO activity  Standing with Ukraine tied to performance 

31. Slide 31: Net Negative Carbon Emissions

    Net Negative Carbon Emissions 2023 Cardinal Energy Corporate Emissions 30 60 Thousands Thousands  Differentiated from our Peers 20 40  Negative Corporate Net Scope 1 CO2e Emissions Monthly Emissions (t CO2e) / Sequestration (t CO2) Cumulative Emissions (t CO2e) against 'Net Zero' 10 20  Midale, S

32. Slide 32: Responsible Asset Retirement

    Responsible Asset Retirement Assets Retired between 2019-2023 to date Minimizing our Surface Footprint  Cardinal has committed to a robust asset retirement program:  Since 2020, Cardinal abandoned 9x more  well abandonments (100 well program for wells than drilled. 2023) 618  Use of long-reach o

33. Slide 33: Overview

    Overview Current Yield ~9.5%, forecasted average annual growth (2024-2027) ~14% = ~23% projected annual return Drilling Inventories  Established significant 5-20+ year drilling inventories in each operating area. Reduce Business Risk  Less business risk by reducing debt to 0.2x cashflow. Focus on

34. Slide 34: Tax Pools

    Tax Pools Tax Pool Balance ($ MM) YE 2022 YE 2021 COGPE 454 492  Based on available tax pools, forecasted capital CEE and non-capital losses 533 720 expenditures and forecasted commodity prices at December 31, 2022 from the average of three CDE 167 149 independent third party reserve evaluators, Ca

35. Slide 35: Inventory Identified for the Long Term

    Inventory Identified for the Long Term Potential Locations (Gross) 2023 Drilling District Tier 1 Tier 2 Current Focus Long Term Opportunities Program Continue to expand multilateral applications to other Expanding Ellerslie multi-lateral development at Tide South 23 63 4 zones/areas Lake and Alderso

36. Slide 36: Advisory

    Advisory Note Regarding Forward Looking Statements This presentation contains forward-looking statements and forward-looking information (collectively These forward-looking statements are subject to numerous risks and uncertainties, certain of which are "forward-looking information") within the mean

37. Slide 37: Advisory

    Advisory Oil and Gas Advisories The term "boe" or barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) Reserve & Product Type Information is based on an energy e

38. Slide 38: Advisory

    Advisory The following tables provide a detailed breakdown of the current Cardinal net drilling locations included in Netback this presentation: Cardinal utilizes netback as key performance indicator and is utilized by Cardinal to better analyze the operating performance of its petroleum and natural

39. Slide 39: Advisory

    Advisory Netback per boe Market, Independent Third Party and Industry Data Cardinal utilizes netback per boe to assess Cardinal’s operating performance of its petroleum and Certain market, independent third party and industry data contained in this presentation is based upon natural gas assets on a

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