Cardinal Energy Ltd. · TSX:CJ

Cardinal Energy — Investor Presentation (July 2021)

30 slides from Cardinal Energy's investor presentation, July 2021

  1. Slide 1: Summer 2021 Corporate Presentation

    TSX: CJ Summer 2021 Corporate Presentation

  2. Slide 2: 2021 2nd Half Focus

    2021 2nd Half Focus  Continue to reduce debt  Integrate Venturion assets  Execute capital development program : $26 million • 8 well drilling program • Ongoing facility maintenance and optimization  Increase CO2 sequestration at Midale • 2 new injectors drilled, scheduled to be on injection in A

  3. Slide 3: 2021 2nd Half Forecast

    2021 2nd Half Forecast Revised Budget (1) Sensitivity Case (2) 2021 2nd half $ 60 WTI $ 70 WTI  2022+ Potential Free Cash Flow Uses: $2.58/mcf AECO $2.85/mcf AECO  Debt reduction Production (boe/d) 21,000-21,500 21,000-21,500  Returns to Shareholders Revenue ($MM) $210-220 $240-250 • Dividends Op

  4. Slide 4: Assumptions and Sensitivities

    Assumptions and Sensitivities Pricing Assumptions Annualized Pro-forma Sensitivities Revised Budget Sensitivity Case Adjusted Funds Flow ($ mm) (incl. Venturion) Δ US$1 WTI 5.7 WTI $ US/bbl 60.00 70.00 Δ US$1 WCS Differential 3.9 WCS Differential $ US/bbl (11.00) (14.00) Δ US$1 MSW Differential 1.6

  5. Slide 5: 2021 Current Hedging

    2021 Current Hedging Existing Cardinal Acquired Venturion Cardinal Pro-forma Product Q3 Q4 Q3 Q4 Q3 Q4 WTI - Volume (bbl/d) 2,500 1,500 1,200 750 3,700 2,250 - Avg. Ceiling/Swap Price (CAD$) $57.10 $55.83 $61.36 $77.07 $58.48 $62.91 - % of production ~16% ~10% ~59% ~35% ~20% ~12% WCS Differential -

  6. Slide 6: Significant Torque to Oil Prices

    Significant Torque to Oil Prices 25% 20% 15% 10% 5% 0% TVE CR LXE BIR TOU TPZ CJ CPG FRU ATH ARX AAV POU PIPE KEL SRX NVA PSK PEY VII % change in 2021 estimated cash flow (+$5/bb change in WTI). Source: RBC Capital Markets 6 | Cardinal Energy Ltd. | TSX: CJ

  7. Slide 7: Tax Pools

    Tax Pools Pro-forma Tax Pool Balance YE 2020 $ COGPE 550,366,000 CEE and non-capital losses 707,092,000 CDE 152,793,000 Undepreciated capital cost 150,743,000 Other 2,197,000 Total $1,563,191,000 7 | Cardinal Energy Ltd. | TSX: CJ

  8. Slide 8: FCF Tax Implications

    FCF Tax Implications Source: RBC Capital Markets 8 | Cardinal Energy Ltd. | TSX: CJ

  9. Slide 9: Corporate GHG Impact

    Corporate GHG Impact Cardinal Corporate 2018-2020 emissions table Direct Emissions (Scope 1) GHG Sequestered Net Direct GHG Emissions  Current Midale operation sequesters more 800 CO2e than total Cardinal corporate CO2e 600 direct emissions 400  Opportunity to significantly increase CO2 thousand t

  10. Slide 10: Corporate Production

    Corporate Production 25,000 2nd Half Forecast 21,000-21,500 20,000 Venturion  Predictable production with very low decline  Positive impact of R&M initiatives 15,000 BOE/day  Venturion acquisition adds ~2,400 boe/d (July 15 close) 10,000 5,000 - Oil NGL's Gas (boe) 10 | Cardinal Energy Ltd. | TSX

  11. Slide 11: Saskatchewan Operating Area - Midale

    Saskatchewan Operating Area - Midale 2021 Full Year Forecast 2021 Forecast Average Production: 3,050 bbls/d Revised Sensitivity 4,000 Budget Case 2021 Average production thru May/21 : 3,160 bbls/d 2nd Half 2021 WTI (USD/bbl) $60 $70 NOI(1) $37 $42 3,000 FCF(2) $27 $31 BOE/day 2,000  Low decline lig

  12. Slide 12: Midale – CCS EOR Simplified

    Midale – CCS EOR Simplified Process Impact Source EPA  CO2 is injected into the reservoir combines with  Very low production decline residual oil and then a portion is produced along with the recovered oil, with the balance remaining safely  Predictable long term performance sequestered in the re

  13. Slide 13: Midale and Weyburn CO2 EOR Fields

    Midale and Weyburn CO2 EOR Fields Weyburn Midale Operator Whitecap Cardinal Cardinal Working Interest >0.1% 77.1% OOIP (MMbbls) 1480 760 Cum. Production 04/21 (MMbbls) 531 161 Midale Recovery Factor to date 36% 21% Weyburn Current CO2 Storage Capacity (Mt) 86 30 Total Potential CO2 Storage Capacity

  14. Slide 14: Midale – Initiate Phase 1 Development Plan

    Midale – Initiate Phase 1 Development Plan  Drilled 2 WAG injectors (July 2021) within existing EOR patterns  Expected on injection August 2021  Each WAG injector is forecast to inject over 200,000 tonnes of CO2 over its life time, the equivalent of:  Removing ~45,000 cars off the road for a yea

  15. Slide 15: Conventional vs. CO2 EOR Lifecycle GHG Comparison

    Conventional vs. CO2 EOR Lifecycle GHG Comparison Well to Gas Station Pump Combustion Total Emissions Conventional Cdn Light Barrel Lifecycle GHG Emissions ~475 kg CO2e/bbl ~73 kg CO2e/bbl ~402 kg CO2e/bbl Midale CO2 EOR Barrel Lifecycle GHG Emissions ~55 kg CO2e/bbl >80% reduction in Sequestration

  16. Slide 16: North Operating Area

    North Operating Area 2021 Full Year Forecast Revised Sensitivity 2021 Forecast Average Production: 6,300 boe/d Budget Case 8,000 2nd Half 2021 WTI (USD/bbl) $60 $70 NOI(1) $40 $48 2nd Half 2021 production forecast : 6,600-6,800 FCF(2) $31 $40 6,000  House Mountain/Mitsue BOE/day  Legacy water floo

  17. Slide 17: North - Nipisi Clearwater Upcoming Activity

    North - Nipisi Clearwater Upcoming Activity  Initial Cardinal Clearwater activity currently planned for 2022  Up to 12 potential 4-6 leg Hz multilaterals per zone in first block to be developed  500+ bbls/d long term sustainable production potential  Strong primary development economics  Close

  18. Slide 18: North - Elmworth – Dunvegan Light Oil Development

    North - Elmworth – Dunvegan Light Oil Development  Well defined, shallow (1250m) Dunvegan sandstone  Strong results from most recent drilling programs  2 wells planned for 2H 2021 (50% wi) Economic Summary Per Well $60US/bbl WTI, $2.80/mcf AECO Capex (DCET) $2.4MM IP365 (boepd) 125 EUR (Mboe) 266

  19. Slide 19: North – Charlie Lake Long Term Potential

    North – Charlie Lake Long Term Potential  15,800 gross acres (~70% average working interest)  No near term land expiries  Legacy vertical and horizontal producers on and/or offsetting Cardinal lands  Bypass pay on vertical wells on land base  2022-23 potential activity  New licenses directly o

  20. Slide 20: Central Operating Area

    Central Operating Area 2021 Full Year Forecast Revised Sensitivity 2021 Forecast Average Production: 5,450 boe/d Budget Case 5,000 2nd Half 2021 production forecast : 6,100-6,300 2nd Half 2021 WTI (USD/bbl) $60 $70 NOI(1) $57 $65 4,000 FCF(2) $48 $56 3,000 BOE/day  Legacy water flood supported conv

  21. Slide 21: Central District - Venturion Acquisition

    Central District - Venturion Acquisition Venturion Assets  Synergistic with existing Cardinal operations at Wainwright  Potential future operating cost efficiencies  Horizontally developed under water flood  Optimization and infill drilling upside Cardinal Venturion 21 | Cardinal Energy Ltd. | T

  22. Slide 22: Central – Irma - Sparky A Secondary Zone Development

    Central – Irma - Sparky A Secondary Zone Development SPARKY B SPARKY A Initial test Area (ha) ~1400 ~750 Avg. Net Pay (m) ~3.0 ~2.5 Avg. Porosity (%) ~28% ~25% OOIP (MMbbls) ~41.9 ~11.5 (internal estimate) Sparky A prospect Cum Prod (MMbbls) ~19.1 - (through 2021/02) Current Production ~500 - (barre

  23. Slide 23: Central - Chauvin Rex Channel

    Central - Chauvin Rex Channel  Well defined productive Rex channel  9 leg multilateral planned  8 mmbo in place  220 mbo recovered to date  Current aggregate production : ~22 bbls/d  Analogous to recent 2016-2020 competitor area activity  Target Spud July 2021 Economic Summary Chauvin Irma $6

  24. Slide 24: South Operating Area

    South Operating Area 2021 Full Year Forecast 2021 Forecast Average Production: 5,000 boe/d Revised Sensitivity Budget Case 6,000 2nd Half 2021 WTI (USD/bbl) $60 $70 NOI(1) $46 $51 5,000 FCF(2) $32 $37 4,000 BOE/day 3,000  Conventional light, medium and heavy oil, and natural gas 2,000  Multiple hi

  25. Slide 25: South – Bantry, Tide Lake, Duchess Ongoing Development

    South – Bantry, Tide Lake, Duchess Ongoing Development  2021 2H planned activity – 1 Tide Lake Ellerslie hz, 1 Glauc channel – tentative spud Sept 2021 Glauc Ch test Economic Summary Glauc Ch Ellerslie $60US/bbl WTI, $2.80/mcf AECO 9-36 2-25 Capex (DCET) $2.0MM $1.6MM IP365 (boepd) 199 198 Ellersli

  26. Slide 26: Drilling Inventory Breakdown

    Drilling Inventory Breakdown Cardinal Growth/Maintenance Drilling Drill Ready Tier 1 Tier 2 Follow ups  Focus of drilling investment is the production maintenance South 51 35 and growth in existing areas where Cardinal owns and Central 37 90 operates infrastructure. North 40 65  At $55 WTI, all dr

  27. Slide 27: Liability Reduction

    Liability Reduction Committed Budget  $5 million of Cardinal’s capital budget has been committed to ARO(1) Since 2016 to July 2021, 486 wells and 46 facilities have been abandoned. Cardinal is  Cardinal is a voluntary participant in the AER’s anticipating ~ 200 wells and numerous facilities to be

  28. Slide 28: Reducing Inactive Wells

    Reducing Inactive Wells Net Operated Wells # Change Inactive (YE 2020) 1,135 Abandoned (YTD 2021) 135 12% reduction Forecast Abandoned (Full Year 2021) 200 18% reduction  Effective and efficient use of government funding and Cardinal expenditures  Reducing long term liability 28 | Cardinal Energy

  29. Slide 29: Advisory

    Advisory Note Regarding Forward Looking Statements performance of existing and future wells, the success of our exploration expressed in, or implied by, these forward-looking statements and, and development activities, the sufficiency and timing of budgeted capital accordingly, no assurance can be g

  30. Slide 30: Advisory

    Advisory This presentation contains metrics commonly used in the oil and natural the characteristics of the reservoir and therefore these is more uncertainty current decommissioning obligation and current lease liabilities). "Net gas industry which have been prepared by management, such as "netback"

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