Cardinal Energy Ltd. · TSX:CJ

Cardinal Energy — Investor Presentation (June 2021)

29 slides from Cardinal Energy's investor presentation, June 2021

  1. Slide 1: Corporate and Venturion Acquisition Presentation

    TSX: CJ June 2021 Corporate and Venturion Acquisition Presentation

  2. Slide 2: 2021 Q1 Highlights

    2021 Q1 Highlights  Generated $16.1 million of adjusted funds flow, an 8% increase over the same period in 2020 and a 19% increase over the prior quarter. Excluding realized hedging losses, adjusted funds flow was $30 million;  Maintained discipline while executing a $9.5 million capital program f

  3. Slide 3: Q1 2021 Highlights

    Q1 2021 Highlights Q4 2020 2020 Q1 2021 Production Boe/d 18,625 18,442 18,385 Adjusted funds flow $ mm 13.6 43.8 16.1 Basic and diluted per share ($ per share) 0.12 0.39 0.12 Net bank debt $ mm 202.4 201.6 Convertible debentures $ mm 28.2 - Secured notes $ mm 16.2 16.8 Net debt $ mm 246.8 218.4 Capi

  4. Slide 4: 2021 Capital Budget

    2021 Capital Budget Capital Category 2021 Original May Updated Change Budget Budget ($mm) ($mm) ($mm) Drilling Program (8 wells) - 11.3 11.3 Pipeline/Facility Maintenance and 15.6 17.8 2.2 Optimization Recomplete + Workovers 8.1 9.8 1.7 Corporate/Acquisitions/Other 3.1 7.4 4.3 26.8 46.3 19.5 Venturi

  5. Slide 5: Assumptions and Sensitivities

    Assumptions and Sensitivities 2021 Budget Assumptions 2021 Sensitivities Original Revised Adjusted Funds Flow ($ mm) Budget Budget Δ US$1 WTI 3.7 WTI $ US/bbl 52.00 60.00 Δ US$1 WCS Differential 2.6 WCS Differential $ US/bbl (13.50) (11.00) Δ US$1 MSW Differential 1.2 Dividends $ US/bbl MSW Differen

  6. Slide 6: Venturion Acquisition Highlights

    Venturion Acquisition Highlights  ~$47.5 MM purchase price, funded through:  the issuance of 6.3 mm shares  $12.5 MM second lien note  Existing bank facility  ~2400 boe/d, 83% liquids  Low decline production under existing water floods  7.5 MM Boe of PDP reserves  Replaces ~1.1x Cardinal’s 2

  7. Slide 7: 2021 Budget

    2021 Budget Original Budget Revised Budget Revised Budget with Venturion Acquisition Production Boe/d 17,751 18,594 19,800 Adjusted funds flow $ mm 74.8 108.8 121.9 Basic per share ($ per share) 0.61 0.77 0.84 Diluted per share ($ per share) 0.55 0.70 0.76 Net bank debt $ mm 161.2 149.7 153.1 Conver

  8. Slide 8: 2021 Current Hedging

    2021 Current Hedging Product Q2 Q3 Q4 WTI - Volume (bbl/d) 6,000 2,500 1,500 - Avg Price (CAD$) $56.42 $57.10 $55.83 - % of production 38% 16% 10% WCS Differential - Volume (bbl/d) 2,000 - - - Avg Price (CAD$) ($16.18) - - - % of production 24% - - Natural Gas - Volume (mcf/d) 11,000 11,000 11,000 -

  9. Slide 9: 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 9 | Cardinal Energy Ltd. | TSX: CJ

  10. Slide 10: Corporate Production

    Corporate Production  No new wells drilled since Q1 2020  Predictable production with very low decline  Positive impact of R&M initiatives 10 | Cardinal Energy Ltd. | TSX: CJ

  11. Slide 11: North Operating Area

    North Operating Area 2021 Forecast – Including Venturion Assets 2021 Average Production: 6,300 boe/d Oil Price $60 (USD/bbl) NOI $39.8 FCF $31.3  House Mountain/Mitsue  Legacy water flood supported low decline light oil  2022 Clearwater activity  Grande Prairie  Long term Dunvegan and Charlie L

  12. Slide 12: North – House Mountain Acquisition

    North – House Mountain Acquisition  Low decline, long life, high netback light oil HMU #1  Q1 Acquisition interests in 2 operated House Mountain units  HMU#1 : from 56.6% to 65.9% (+9.2%)  HMU#2 : from 61.7% to 87.0% (+21.3%) HMU #2  Net production +175 bbls/d  PDP reserves +855 mboe 12 | Card

  13. Slide 13: 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

  14. Slide 14: North - Nipisi Clearwater Conventional Heavy Oil

    North - Nipisi Clearwater Conventional Heavy Oil  Evaluating first block to develop in 2022 12-17 88 14 | Cardinal Energy Ltd. | TSX: CJ Phase 1 drilling Follow up pads

  15. Slide 15: 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

  16. Slide 16: North – Charlie Lake Long Term Potential

    North – Charlie Lake Long Term Potential D H R10 R9 R8 R7W6  Cardinal Lands are located offsetting recent industry activity D T75 H H T75 H  15,800 gross acres (~70% average working interest) D D D  No near term land expiries D D D T74 T74 H  Legacy vertical and horizontal producers on and/or of

  17. Slide 17: Central Operating Area

    Central Operating Area 2021 Forecast - Including Venturion Assets 2021 Average Production: 5,450 boe/d Oil Price $60 (USD/bbl) NOI $56.7 FCF $47.8  Legacy water flood supported conventional medium and heavy oil  Ongoing R&M investment  Secondary zone development potential 17 | Cardinal Energy Ltd

  18. Slide 18: Central District - Venturion Acquisition

    Central District - Venturion Acquisition Venturion Assets  Synergistic with existing Cardinal operations at Wainwright  Potential future operating cost efficiencies  Current production ~1700 boe/d  Horizontally developed under water flood  Optimization and infill drilling upside Cardinal Ventur

  19. Slide 19: 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 Cum Prod (MMbbls) ~19.1 - prospect (through 2021/02) Current Production ~500 - (barre

  20. Slide 20: 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 activity Economic Summary Rex Channel Irma $60US/bbl WTI, $2.80/mcf Sp

  21. Slide 21: South Operating Area

    South Operating Area 2021 Forecast 2021 Average Production: 5,000 boe/d Oil Price $60 (USD/bbl) NOI $46.2 FCF $31.8  Conventional medium and heavy oil and natural gas  Multiple high deliverability locations identified for future development 21 | Cardinal Energy Ltd. | TSX: CJ

  22. Slide 22: 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 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 Ellerslie EUR (Mboe) 244 236 test I

  23. Slide 23: Saskatchewan Operating Area - Midale

    Saskatchewan Operating Area - Midale 2021 Forecast 2021 Average Production: 3,050 bo/d Oil Price $60 (USD/bbl) NOI $37.0 FCF $26.7  Long term very low decline oil production  Established CCS-EOR CO2 flood over ~1/3 of asset  Material CO2 Sequestration ~ 5 MT to date, >200 kT annually 23 | Cardina

  24. Slide 24: Midale – Initiate Phase 1 Development Plan

    Midale – Initiate Phase 1 Development Plan  Drill 2 WAG injectors targeted in under pressured Marly zone within existing EOR patterns Economic Summary Per Well $60US/bbl WTI, $2.80/mcf AECO Capex (DCET) Gross $1.7MM Peak IP365 (boepd) 99 EUR (Mboe) 234 IRR 76% Payout (years) 2.0 2021 Drills Full ph

  25. Slide 25: Midale – Carbon Sequestration / CO2 Rollout

    Midale – Carbon Sequestration / CO2 Rollout  ~ 5 Million tonnes of CO2 sequestered to date CO2 Sequestration and Oil Production 500,000 10  24 active or suspended WAG injectors  New injectors deferred since 2017 due to: 400,000 8 Avg. Annual Unit Prod (Mbbls/d) Est Annual CO2 Sequestered (t)  De

  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 Asset Retirement Obligations (ARO) Since 2016 to April 2021, 433 wells and 37 facilities have been abandoned. Cardinal is anticipating ~ 200 wells and numerous  Cardinal is a voluntary participant i

  28. Slide 28: 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

  29. Slide 29: 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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