Cardinal Energy Ltd. · TSX:CJ

Cardinal Energy — Investor Presentation (November 2021)

26 slides from Cardinal Energy's investor presentation, November 2021

  1. Slide 1: Winter 2021-22 Corporate Presentation

    TSX: CJ Winter 2021-22 Corporate Presentation

  2. Slide 2: Cardinal Energy

    Cardinal Energy 1. Scope one negative for carbon emissions 2. Lowest production decline among conventional producers 3. Begin significant returns to shareholders in 2022 2 | Cardinal Energy Ltd. | TSX: CJ

  3. Slide 3: Cardinal Snapshot

    Cardinal Snapshot  Net Zero: Negative Scope 1 Emissions Cardinal Corporate As at September 30, 2021 2018-2020 emissions table Shares Outstanding – Basic 150 MM Direct Emissions (Scope 1) GHG Sequestered Net Direct GHG Emissions 800 Shares Outstanding – Fully Diluted 166 MM 600 net negative Net Debt

  4. Slide 4: Our Business

    Our Business Cash Flow Maintenance  Amount of capital required to maintain Capital our assets and keep production flat ARO/ESG  Amount of capital required to fulfill our commitment to operating our business in a responsible manner Free Cash Flow  Capital available to our shareholders 4 | Cardinal

  5. Slide 5: Returns to Shareholders

    Returns to Shareholders Phase One Protect the Business  100% of our Free Cash Flow will go toward repayment of Bank Debt until Bank Debt is reduced to $100 MM (increases Net Asset Value per share by $0.50). Phase Two Deliver direct returns to shareholders  Upon reaching our Phase One Bank Debt mil

  6. Slide 6: Free Cash Flow Forecast

    Free Cash Flow Forecast WTI ($USD/bbl) $65 $70 $75 $80 $85 $90 2022 Cash flow ($MM) $174 $207 $239 $272 $304 $337 Capex/ARO ($MM) $85 $85 $85 $85 $85 $85 Free cash flow ($MM) $89 $122 $154 $187 $219 $252 Closing net debt/(Cash) ($MM)(1) $83 $55 $23 ($10) ($42) ($74) 1. Excluding potential dividend 6

  7. Slide 7: Estimated Second Half 2022 Dividend Level Scenarios

    Estimated Second Half 2022 Dividend Level Scenarios The dividend rate is expected to be fixed at the prevailing oil price at the time Phase One debt level is achieved. Below assumes that level is reached July 1, 2022. WTI ($USD/bbl) $65 $70 $75 $80 $85 $90 2H 2022 Dividend ($MM) $15 $30 $40 $50 $60

  8. Slide 8: Corporate Production

    Corporate Production 25,000  Base decline ~ 10% 20,000  Majority of production under established secondary or tertiary recovery schemes 15,000  84% oil, 4% NGLs, 12% natural gas boe/d 10,000  Venturion assets performing to expectation  2021 new drills performing on average 50% 5,000 above expec

  9. Slide 9: 2022 Budget – Enhance Long Term Sustainability

    2022 Budget – Enhance Long Term Sustainability Budget Forecast Sensitivity at $70 WTI $80 WTI 2022 Budget  Generate significant Free Cash Flow $3.50/mcf AECO $3.50/mcf AECO YE 2021 Net Debt Estimate ($MM) $175-180 $175-180  Continue to reduce Net Debt Production (boe/d) 20,000-21,000 20,000-21,500

  10. Slide 10: Assumptions and Sensitivities

    Assumptions and Sensitivities Pricing Assumptions Annualized Sensitivities 2022 Budget Adjusted Funds Flow ($ mm) WTI $ US/bbl 70.00 Δ US$1 WTI 6.5 WCS Differential $ US/bbl (12.50) Δ US$1 WCS Differential 3.8 MSW Differential $ US/bbl (4.30) Δ US$1 MSW Differential 1.7 Fx rate US/CAD 0.80 Δ $0.01 F

  11. Slide 11: Risk Management

    Risk Management Product Q4 2021 2022 WTI - Volume (bbl/d) 2,250 0  Unhedged in 2022 - Avg. Ceiling/Swap Price (CAD$) $62.91 -  With decreased debt/leverage remaining fully exposed to upside - % of production ~11% 0% in commodity prices WCS Differential  Consider downside protection when dividend

  12. Slide 12: Low Decline Base Production

    Low Decline Base Production Base Operated Production 1.20 BASE* OPERATED PRODUCTION RELATIVE TO JAN 2019 VOLUME  Lowest decline rate in peer group (~10% per year) 1.00  Peers: 20 – 30% decline rate per year 0.80  Delivers more predictable volume forecast 0.60  Least exposed to inflationary press

  13. Slide 13: Midale – CCS EOR Simplified

    Midale – CCS EOR Simplified Utilizing CCS EOR reduces emissions while still contributing a low carbon source of energy  Midale CO2EOR project has sequestered over 5 million tonnes of CO2 over its lifetime making it currently the 6th largest anthropogenic storage site in the world(3)  Fully utilize

  14. Slide 14: Material Brownfield Sequestration Potential

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

  15. Slide 15: Drilling Inventory Breakdown

    Drilling Inventory Breakdown Identified Tier 1 Potential Cardinal Growth/Maintenance Drilling District Primary Plan Inventory  Multiple oil targeted play types across asset base South Ellerslie, Glauc, Arcs 45  Deliberate, reasonable pace of development Central Infills, secondary zones 30  All ti

  16. Slide 16: ARO

    ARO Abandoned *  $9 million of Cardinal’s 2022 budget has been committed to Wells Facilities Asset Retirement Obligations (“ARO”) 250 600 From 2016 to Q3 2021, 492 wells and 46  In the last 2 years Cardinal will have abandoned ~ 20% of facilities have been abandoned. Cardinal is 500 200 the then i

  17. Slide 17: 2022 Plan - $75 MM Capital / $9 MM ARO

    2022 Plan - $75 MM Capital / $9 MM ARO Development  Maintains production 20-21,000 boe/d Drill, Complete, Equip and Tie In (16.5 net wells) $31MM  Focused development Liquids Recovery Facility – Midale $4MM  Increased maintenance capital to further improve base Optimization $21MM production relia

  18. Slide 18: North District

    North District  Water flood optimization - House Mountain & Mitsue 2022 Full Year Forecast Budget  Elmworth Dunvegan development – 2 wells 2022 WTI (USD/bbl) $70  Drill 2 and bring onstream first 4 well Nipisi Clearwater pad Production Forecast (boe/d) 6,300-6,500  Reduce risk of future capital

  19. Slide 19: North - Nipisi Clearwater - 2022

    North - Nipisi Clearwater - 2022  Highly economic competitor wells surround initial drills (< 1 year payout)  4 well 6-18 pad licensed and under construction  Drilling December 2021 – January 2022  On-stream Q1 2022 19 | Cardinal Energy Ltd. | TSX: CJ

  20. Slide 20: Saskatchewan District – Midale - 2022

    Saskatchewan District – Midale - 2022 2022 Full Year Forecast Budget 2022 WTI (USD/bbl) $70 Production Forecast (boe/d) 3,000-3,200 NOI(1) (MM) $45-50 Capital Expenditures (MM) $18 FCF(2) (MM) $27-32 1. NOI – Field Net Operating Income. 2. FCF – NOI minus area capex  Continue phase 1 development 

  21. Slide 21: South District - 2022

    South District - 2022 2022 Full Year Forecast Budget 2022 WTI (USD/bbl) $70 Production Forecast (boe/d) 5,100-5,300 NOI(1) (MM) $55-60 Capital Expenditures (MM) $22 FCF(2) (MM) $33-38 1. NOI – Field Net Operating Income. 2. FCF – NOI minus area capex  Continue Ellerslie and Glauc development – 8 we

  22. Slide 22: Central District - 2022

    Central District - 2022 2022 Full Year Forecast Budget 2022 WTI (USD/bbl) $70 Production Forecast (boe/d) 5,600-5,800 NOI(1) (MM) $65-70 Capital Expenditures (MM) ~$14 FCF(2) (MM) $51-56 1. NOI – Field Net Operating Income. 2. FCF – NOI minus area capex  Continue successful Q3 optimization initiati

  23. Slide 23: 2021 Q3 Results

    2021 Q3 Results 2021 Q3 VS Q2 Production (boe/d) 19,473 +1,524 Venturion acquisition partially offset by unscheduled 3rd party downtime Revenue (MM) $120 +$21 Improved commodity prices, higher production Operating Income (MM) $55 +$9 Higher pricing and production Adjusted Funds Flow (MM) $38 +$12 Hi

  24. Slide 24: 2021 Q3 Results

    2021 Q3 Results 2021 Q3 $/boe Revenue $66.99  Q3 WTI average $70.56/bbl US, current spot >$80/bbl US Royalties ($12.38) Operating Costs ($23.53)  Opex elevated due to higher than expected power costs Transportation Costs ($0.58) Operating Income $30.50 G&A ($2.12) Finance and Interest ($1.63)  Fi

  25. Slide 25: 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

  26. Slide 26: Advisory

    Advisory This presentation contains metrics commonly used in the oil and natural regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, as bank debt plus the principal amount of convertible unsecured gas industry which have been prepared by management, such as "netback" actu

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