INVESTOR QUARTERLY - iradesso

Q2 2012

I N V E S T O RQ U A R T E R LY

CANADIAN OIL & GAS COMPARISON

RELEASED SEPTEMBER 2012/ VOLUME 27 ISSN 1718-9799 iq.bmir.com

FINANCIAL and OPERATING RESULTSfor 49 Juniors and 31 Intermediates

FEATURING FACT SHEETSfrom Juniors, Intermediates and Internationals

ENERGY SHARE PRICES MOUNT

COMEBACK

Shares battle back after batteringNatural gas prices, producers on the upswing

Yikes! Not since the stock market crash of 2008 have the share prices of Western Canada’s energy companies been battered so badly. That's the sobering news about the second quarter of 2012. Fortunately, share prices are mounting a comeback.

That's one of the many gems in the latest iQ Report, a quarterly

comparison of the financial and operating results of Western Canada’s junior and intermediate oil and gas producers. We’ve included every conventional oil and gas company that operates in the Western Canadian Sedimentary Basin, trades on the TSX or TSX Venture exchange and produces between 500 and 100,000 barrels of oil equivalent per day. We’ve also included a list of emerging companies and international players.

All 49 junior players in this peer group lost ground in the stock market in the second quarter of 2012 and all but five of the 31 intermediates lost ground. The median junior declined 34.0% over the same period while the median intermediate declined 16.3%.

Investors will remember that the first quarter of 2012 wasn’t a walk in the park either. The median junior declined 5.6% in the first quarter of 2012 while the median intermediate company declined 16.3%. Depressed natural gas prices served as the primary driver for the decline.

The Henry Hub Gulf Coast Natural Gas Spot Price fell to $1.82 (U.S.) per million British Thermal units (MMBtu) on April 20, 2012, its lowest level since hitting $1.69 per MMBtu on November 16, 2001,

more than 10 years earlier. Since that time, natural gas prices spiked to $18.48 per MMBtu on February 25, 2003 and climbed to highs of $15.39 per MMBtu in 2005 and $13.31 per MMBtu in 2008.

Fortunately, natural gas prices may have bottomed. On July 31, 2012, the Henry Hub price climbed back to $3.20 per MMBtu, settling back to $2.83 per MMBtu on September 17, 2012.

The recent upswing in natural gas prices and the associated optimism on the part of investors translated into a healthy resurgence in share prices in the two months following the end of the second quarter of 2012. Some investors who were sitting on the sidelines have decided to jump back into the market. During the months of July and August, the median junior gained 8.6% while the median intermediate delivered a return of 6.8%. Oil and gas companies have a lot of ground to cover to make up for all their losses and not all of them will survive the battle, but the share price trend is moving in the right direction.

This report helps identify industry trends and serves as one way in which Bryan Mills Iradesso helps public oil and gas companies communicate with investors. We use one-page snapshots after each section of comparison charts to highlight some of our clients. For investors with cash, the information in this report will help you evaluate your investment options as you consider taking advantage of an apparent comeback in natural gas prices and share prices to come back to the market.

Geoffrey Vanderburg Editor, iQ Report Bryan Mills Iradesso

MES

SAG

E FR

OM

TH

E ED

ITO

R

Q U A R T E R L Y R E P O R T : Q 2 2 0 1 2 1

Suite 2240, 140 - 4th Avenue SWCalgary, AB T2P 3N3

telephone: 403.503.0144toll-free: 1.866.415.1070email: [email protected]

SEPTEMBER 2012 / VOL. 27.

EDITOR Geoffrey Vanderburg

RESEARCHERS & CONTRIBUTORS Laura Bechtel, Tamara Bowlby, Jory Debenham, Dave Fearman, Angela Iori and Glen Nelson.

Data provided by CanOils Database Limited and BMIR researchers

PRODUCTION COORDINATOR Tammy Cote

DESIGNERS Alyssa Polnick Thomas Magee Candace Evans

PRODUCTION ARTIST Robert Bourassa

PRINTER Rhino Print Solutions

Please email us at [email protected] or fill out the subscription form at iq.bmir.com to ensure you receive your free copy of the iQ Report.

R E L E A S E S C H E D U L E

Q3 2012 iQ Release:

Week of December 10, 2012

Q2 2012 Review

The number of junior oil and gas companies operating in Western Canada has been on the decline for seven years, but the slide appeared to halt in the second quarter of 2011 at 53 companies. After stabilizing for three quarters, the number of players dropped below this level in the second quarter of 2012, declining to 49 companies. The decline includes two companies that dropped out of the category due to a reduction in their production, two that graduated out of the category thanks to an increase in their production and two that were acquired. Meanwhile, two companies entered the category, leaving a net loss of four. By comparison, the intermediate category continues to grow, increasing from 29 companies in the first quarter of 2012 to 31 companies in the second quarter. This compares with 30 companies in the intermediate category in the second quarter of 2011 and only 23 companies in the category in the second quarter of 2010. We define juniors as conventional producers that operate in the Western Canadian Sedimentary Basin, trade on the TSX or TSX Venture exchange and produce between 500 and 10,000 boe/d. We've defined intermediates as companies that produce between 10,000 and 100,000 boe/d.

The juniors have finally done it. After years of trying to reduce their dependence on natural gas, the juniors managed to produce as much oil as gas in the second quarter of 2012. Painfully low natural gas prices served as a powerful motivator. Since the second quarter of 2009 when the average junior had a natural gas weighting of 76%, the juniors have been chipping away at their natural gas weighting. The gas weighting declined to 65% in the second quarter of 2010, 56% in the second quarter of 2011 and 50% in the second quarter of 2012. By comparison, the average intermediate continues to produce more natural gas than oil with a 62% weighting in the second quarter of 2012. This compares with a 70% natural gas weighting for the intermediates in the second quarter of 2010 and 68% in the second quarter of 2011. The intermediates reducing their natural gas exposure, but it takes a while to turn a big ship around.

Oil and gas companies paid slightly more to do slightly less in the second quarter of 2012. Operating expenses and general and administrative expenses increased for both the juniors and intermediates during the quarter while the ratio of net debt to cash flow increased and production per share declined. Production per share decreased 4% for the juniors and 1% for the intermediates. The median junior's overall production declined 2% during the quarter while the median intermediate managed to deliver a 1% increase in overall production.

Depressed share prices render the equity markets off limits as a financing option for many companies, so it makes sense that debt to cash flow ratios are well above their historical average. When equity markets aren’t providing capital at a reasonable value, companies often turn to debt to finance growth. While the median junior oil and gas company reported a debt ratio of 2.0 times cash flow in the second quarter of 2012, the median intermediate reported a debt ratio of 2.7 times cash flow. This is higher than the average over the previous three years of 1.8 times cash flow for both the juniors and intermediates. This measurement compares how long it would theoretically take in years to become debt free if cash flow remained steady year after year and it was dedicated 100 percent to paying down debt. The ratio is affected by both decreased cash flow and increased debt.

THE NUMBER OF JUNIORS IS SL IDING

OIL AND GAS WEIGHTING DRAWS EVEN

IT 'S COSTING MORE TO DO LESS

DEBT INCHES UP

COMMUNICATION MATTERS

Information for investors

iq.bmir.com

C O N T E N T S

B R Y A N M I L L S I R A D E S S O • I Q . B M I R . C O M2

1 Q2 2012 REVIEW

4 WHEELING AND DEALING

5 JUNIOR COMPARISON CHARTS 6 Q2 Production (boe/d)

7 Q2 Production Mix - Natural Gas Weighting (%)

8 Change in Production - Q2 2012 to Q2 2012 (%)

9 Change in production per share - Q1 2012 to Q2 2012

10 Enterprise Value Versus Q2 Production ($ per boe/d)

11 Q2 Cash Flow Netback ($/boe)

12 Q2 Operating and Transportation Expenses ($/boe)

13 Q2 General and Administrative Cash Expenses ($/boe)

14 Q2 Depletion, Depreciation and Accretion Expenses ($/boe)

15 Annualized Q2 Cash Flow Multiples

16 Q2 Net Debt to Annualized Cash Flow

17 Investment Returns – Capital Gains and Distributions or Dividends (%)

18 Juniors Listing – Data Table

30 INTERMEDIATE COMPARISON CHARTS 31 Q2 Production (boe/d)

31 Q2 Production Mix - Natural Gas Weighting (%)

32 Change in Production - Q1 2012 to Q2 2012 (%)

32 Change in Production per share - Q1 2012 to Q2 2012

33 Enterprise Value Versus Q2 Production ($ per boe/d)

33 Q2 Cash Flow Netback ($/boe)

34 Q2 Operating and Transportation Expenses ($/boe)

34 Q2 General and Administrative Cash Expenses ($/boe)

35 Q2 Depletion, Depreciation and Accretion Expenses ($/boe)

35 Annualized Q2 Cash Flow Multiples

36 Q2 Net Debt to Annualized Cash Flow

36 Q2 Total Return - Capital Gains and Distributions (%)

37 Intermediates Listing – Data Table

44 CANADIAN COMPANIES OPERATING ABROAD

48 EMERGING CONVENTIONAL COMPANIES WATCH LIST

48 EMERGING OIL SANDS COMPANIES 49 IQ TRENDS

I N T H I S I S S U E SEPTEMBER 2012


RETURN UNDELIVERABLE CANADIAN ADDRESSES TO:

BRYAN MILLS IRADESSO

2240, 140 4th Avenue SW, Calgary, AB T2P 3N3

ABBREVIATIONS

bbls • barrels of oil

boe • barrels of oil equivalent

boe/d • barrels of oil equivalent per day

mcf • thousand cubic feet

mmcf • million cubic feet

NGLs • natural gas liquids

ASSUMPTIONS

• Barrels of oil equivalent calculated using 6 mcf = 1 boe.

• Net debt has been calculated by including bank debt, debentures, preferred convertible shares and working capital.

• For companies with A/B share structures, B shares have been converted to A shares using end-of-period share prices.

• Exchangeable shares have been converted to common shares using end-of-period exchange ratios.

D I S C L A I M E R

The information used to compile this report is publicly

available. Bryan Mills Iradesso provides the comparison to

shine the spotlight on these segments of the energy industry,

and to communicate the achievements and growth potential

of the oil and gas companies and trusts. The iQ Report does not

constitute a solicitation or recommendation for the purchase

or sale of any security; it is provided for information only and

is not intended to serve as investment advice. Bryan Mills

Iradesso cannot be held responsible for accuracy and all readers

are encouraged to conduct their own research. This report

is provided by Bryan Mills Iradesso as a service to the reader

without responsibility for accuracy. Bryan Mills Iradesso must

be credited with developing the iQ Report if any part of it is

reproduced. The companies that have provided a corporate

profile for this report have paid Bryan Mills Iradesso a fee.

38 Crescent Point Energy

39 Equal Energy

40 Guide Exploration

41 Perpetual Energy

42 PetroBakken Energy

46 Bengal Energy

47 Petrominerales

I N T E R M E D I AT E S N A P S H OT S

I N T E R N AT I O N A L S N A P S H OT S

19 Arsenal Energy

20 Delphi Energy

21 Exall Energy

22 Hyperion Exploration

23 Marquee Energy

24 Novus Energy

25 Strategic Oil & Gas

26 Surge Energy

27 Tamarack Valley Energy

28 Yoho Resources

J U N I O R S N A P S H OT S


JUN

IOR

& IN

TERM

EDIA

TE D

EALS

IQ REPORT CATEGORY CHANGES

• Edge moved to Juniors from Emerging

• Pine Cliff moved to Juniors from Emerging

• Twoco moved to Emerging from Juniors

• Torquay moved to Emerging from Juniors

• Westfire moved to Intermediate from Juniors

• Whitecap moved to Intermediate from Juniors

DEALS ANNOUNCED BUT NOT CLOSED ( i Q Co m p a n i e s )

• Progress Energy Resources Corp. to be acquired by PETRONAS (expected close Sept 2012)

• Cumberland Oil & Gas Ltd. to be acquired by Kallisto Energy Corp. (expected close Oct 2012)

• Tallgrass Energy Corp. to be acquired by Anglo Canadian Oil Corp. (expected close Oct 2012)

• Canadian Energy Exploration Inc. to be acquired by Standard Exploration Ltd. (expected close Oct 2012)

• Geomark Exploration Ltd. to be acquired by Pine Cliff Energy Ltd. (expected close Oct 2012)

• WestFire Energy Ltd. to be acquired by Guide Exploration Ltd. (expected close Oct 2012)

• Waseca Energy Inc. to be acquired by Twin Butte Energy Ltd. (expected close Nov 2012)

• Solara Exploration Ltd. to merge with Verity Energy Ltd. (closing date not announced)

DEALS ANNOUNCED BUT NOT CLOSED ( n o n i Q Co m p a n i e s )

• Bentley Oil & Gas to be acquired by Exito Energy Inc. (expected close Sept 2012)

• Nexen Inc. to be acquired by China National Offshore Corporation (expected close Dec 2012)

DONE DEALS ( i Q Co m p a n i e s )

The following deals have closed since our previous iQ Report in June 2012.

• Compton Petroleum Corporation acquired by MFC Industrial Ltd.

• PetroMagdalena Energy Corp. acquired by Pacific Rubiales Energy Corp.

• Cutpick Energy Inc. acquired by Crescent Point Energy Corp.

• Open Range Energy Corp. acquired by Peyto

• National Petroleum Company Egypt Limited acquired by Sea Dragon Energy Inc.

• In a transaction with Legacy Oil + Gas, Bowood Energy was recapitalized as LGX Oil + Gas Inc., a new emerging company (July 2012)

DONE DEALS ( n o n i Q Co m p a n i e s )

• Kayuco Universal Ltd. acquired by Westbridge Energy Corporation

• TexAlta Industries Ltd. acquired by Petrostar Petroleum Corporation

wheeling & dealing

The above transactions only affect the iQ Report comparison charts in cases where the companies meet the criteria for inclusion in the report. The focus is on public companies. This list is not exhaustive.


junior oil & gas companies

C O M PA R I S O N

INCLUSION CRITERIA

• Primary business must be oil and gas exploration, development and production

• Q2 2012 production must fall between 500 and 10,000 barrels of oil equivalent per day (boe/d)

• Majority of production must be from Western Canada

• Must be publicly traded on the TSX or TSX Venture Exchange

559

652

737

739

972

1,106

1,201

1,403

1,690

1,711

1,733

1,942

2,022

2,091

2,159

2,193

2,341

2,356

2,396

2,442

2,520

2,583

2,584

2,641

2,654

2,750

2,887

2,951

3,172

3,204

3,555

3,712

3,805

3,822

3,834

4,763

5,254

5,438

5,745

5,881

6,037

6,604

6,825

8,290

8,501

8,636

8,660

9,275

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

Argosy

Petro-Reef

Edge

WranglerWest

PineCliff

Exall

Sure

Hyperion

Shoreline

Raging River

Manitok

Palliser

Yangarra

TriOil

Rock

Tamarack

Vero

Sonde

Marquee

Yoho

Waldron

Strategic

Storm

SecondWave

Artek

Spartan

Novus

Pinecrest

Charger

Insignia

Arsenal

Renegade

DeeThree

Skope

AvenEx

RMP

Arcan

Terra

PaintedPony

Longview

Bonterra

Crocotta

Anderson

Zargon

Freehold

Delphi

Cequence

Surge

production tells only part of the storyProduction numbers tell only part of the story when it comes to identifying investment opportunities in the oil and gas sector. Savvy investors know that small oil and gas companies may have the people and prospects to turn any venture into a great investment. While juniors have the potential to be the next big thing, most of today’s juniors are small. Very small. In fact, if you add together the average daily production levels of every company in the sector you get 169,027 boe/d for second quarter 2012, less than the 213,200 boe/d Nexen produced during the same period.

For our iQ Report, we define juniors as companies with production from 500 barrels of oil equivalent per day (boe/d) to 10,000 boe/d. Other parameters are included on the previous page.

“Intermediate” and “emerging” domestic companies are featured in sections beginning on page 30 and 48 respectively. A map of Canadian-based international companies is found on page 44.


JUN

IOR

CO

MPA

RISO

N Q2 2012 PRODUCTION (BOE/D)Median = 2,648 boe/d

0

2

3

3

3

7

13

17

21

23

24

24

25

27

29

32

32

33

35

37

38

41

48

49

52

57

58

58

60

61

62

65

66

67

68

69

73

74

75

75

75

77

77

78

83

83

87

100

0 10 20 30 40 50 60 70 80 90 100

Pinecrest

Arcan

Raging River

Renegade

Palliser

Exall

Strategic

Spartan

SecondWave

Rock

Longview

TriOil

Novus

Arsenal

Surge

Vero

Bonterra

Hyperion

Zargon

Freehold

DeeThree

Sure

Petro-Reef

Marquee

AvenEx

Storm

Tamarack

Edge

RMP

Artek

Yangarra

Anderson

Charger

Argosy

Sonde

Crocotta

Waldron

Insignia

Yoho

PaintedPony

Delphi

Shoreline

PineCliff

Manitok

WranglerWest

Terra

Cequence

Skope

oil and gas weighting reaches equilibriumOil has been priced higher than natural gas for a long time, but the juniors have historically produced more natural gas than oil, in part because gas is easier to find in the Western Canadian Sedimentary Basin. In the past years, however, juniors have managed to slowly increase their oil weighting. In the second quarter of 2012, the median junior had a natural gas weighting of 50%, on par with oil and a significant change from the second quarter of 2009 when the weighting was 76%.

To calculate our weighting, we include natural gas liquids (NGLs) with oil production. Produced liquids get prices that are similar to oil, with much stronger margins than natural gas.

As is standard, we convert natural gas into oil equivalence by using a ratio of six thousand cubic feet (mcf) of natural gas to one barrel of oil equivalent (boe). This ratio comes from an energy equivalence at the burner tip.

FORMULAavg. natural gas production per day (boe/d)

avg. total production


JUN

IOR

CO

MPA

RISO

NQ2 PRODUCTION MIX — NATURAL GAS WEIGHTING (%)Median = 50%

(48.8)

(21.5)

(17.9)

(15.2)

(14.2)

(12.7)

(12.1)

(11.6)

(11.1)

(10.9)

(10.2)

(9.8)

(8.5)

(7.4)

(6.2)

(6.2)

(5.7)

(5.5)

(5.2)

(4.1)

(4.0)

(3.4)

(2.7)

(2.3)

(2.2)

(1.1)

1.9

3.0

3.6

5.1

5.3

5.9

6.5

6.9

7.6

7.8

10.6

22.8

24.2

25.1

30.5

35.6

44.5

58.4

76.5

110.3

142.3

172.4

(100.0) (50.0) 0.0 50.0 100.0 150.0 200.0

Vero

Manitok

PaintedPony

Petro-Reef

Sonde

Longview

Pinecrest

AvenEx

Rock

Skope

Waldron

WranglerWest

Cequence

Sure

Bonterra

Zargon

Anderson

Yangarra

RMP

Arsenal

Delphi

Insignia

Freehold

Terra

Crocotta

Exall

Renegade

Surge

Shoreline

Novus

Artek

Edge

Argosy

Hyperion

Palliser

Arcan

Yoho

Raging River

SecondWave

DeeThree

TriOil

Marquee

Spartan

Strategic

Tamarack

Storm

PineCliff

Charger

production levels slipWhen comparing the second quarter with first quarter 2012, only 22 of the 48 junior producers on this list managed to increase their production levels, exceeding the natural production declines of their existing wells. Those companies that experienced the highest rates of growth in Q2 did so because they either made acquisitions or had successful well completions, enabling them to bring significant new production on stream. Companies at the bottom of this chart may have sold some of production recently or experienced technical difficulties. Savvy investors take the time to find out why production levels changed and assess whether the change is likely to continue.

FORMULAcurrent period avg. production – previous period avg. production

previous period avg. production

Note: Gas production converted to boe at 6 mcf: 1 boe.


JUN

IOR

CO

MPA

RISO

N CHANGE IN PRODUCTION — Q1 2012 TO Q2 2012 (%)Median = -2.2%

(48.8)

(21.5)

(21.3)

(18.3)

(18.2)

(15.2)

(14.2)

(12.7)

(12.4)

(11.7)

(11.7)

(10.9)

(10.2)

(10.1)

(9.8)

(8.7)

(7.4)

(6.7)

(6.5)

(6.5)

(5.7)

(5.4)

(4.0)

(3.8)

(3.4)

(3.2)

(2.5)

(2.3)

(2.2)

(1.4)

2.1

3.4

5.3

5.8

6.5

6.9

7.6

7.7

9.6

10.6

12.8

18.2

23.8

27.8

31.5

55.2

58.3

122.0

(60.0) (40.0) (20.0) 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0

Vero

Manitok

Edge

Pinecrest

PaintedPony

Petro-Reef

Sonde

Longview

AvenEx

Renegade

Rock

Skope

Waldron

Cequence

WranglerWest

Yangarra

Sure

Bonterra

Zargon

Freehold

Anderson

RMP

Delphi

Arsenal

Raging River

Insignia

Novus

Terra

Crocotta

Exall

Surge

Shoreline

Artek

Tamarack

Argosy

Hyperion

Palliser

Arcan

Yoho

TriOil

Marquee

DeeThree

SecondWave

Spartan

Storm

Charger

Strategic

PineCliff

losing the battle on a per share basisGood deal making, smart operational decisions and successful drilling can allow oil and gas companies to increase production without increasing the number of outstanding shares. As is evident from the median decline of 3.6% in the second quarter of 2012, increasing production on a per-share basis is not easy to do. Any company that can consistently add production and reserves on a per-share basis will achieve a strong return for investors.

It costs money to increase production, whether it be via drilling or acquisitions. Therefore, junior companies need to deploy their cash flow carefully in order to grow, and they need to augment their cash flow with equity or debt financings in order to sustain their growth.

FORMULAcurrent production per share – previous production per share

previous production per share

Note: Production per share = average production rate for the period divided by basic weighted average shares outstanding during the period.

Gas production converted to boe at 6 mcf: 1 boe.


JUN

IOR

CO

MPA

RISO

NCHANGE IN PRODUCTION PER SHARE — Q1 2012 TO Q2 2012 (%)Median = -3.6%

10,319

11,360

13,706

16,342

16,425

21,477

21,563

22,006

28,513

30,132

31,811

32,780

33,791

37,623

37,989

38,681

40,335

41,529

41,636

43,311

44,231

44,437

48,029

49,978

50,697

51,173

52,616

53,760

56,209

57,688

59,155

61,389

65,027

69,546

69,726

71,275

71,919

78,956

85,027

90,140

101,502

103,668

108,077

111,967

138,214

152,182

154,590

169,817

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

WranglerWest

Sonde

Skope

Insignia

Rock

Terra

Shoreline

Waldron

Cequence

Charger

Delphi

Palliser

Petro-Reef

Yangarra

Arsenal

Anderson

Marquee

Zargon

Tamarack

Yoho

Hyperion

Crocotta

Argosy

Artek

RMP

Vero

TriOil

Storm

Sure

AvenEx

Strategic

Edge

Novus

SecondWave

PineCliff

Longview

Manitok

Surge

Arcan

Renegade

Exall

DeeThree

PaintedPony

Spartan

Pinecrest

Raging River

Freehold

Bonterra

production valueThis chart shows each company’s enterprise value (market capitalization plus net debt) in relation to its average Q2 production levels. The chart does not take into account the value of land and seismic data or the quality and life expectancy of oil and gas reserves.

Companies that are high on this chart may be there because investors deem them to have strong growth prospects, quality long-life reserves, high field netbacks, high dividend or distribution yields, or exceptional management teams.

Companies that are low on this chart may be good value investments with excellent upside potential for investors who do their homework.

FORMULAmarket capitalization + net debt

avg. production in boe

Notes: Market capitalization = August 31 share price x Q2 weighted average basic shares outstanding.

Net debt = bank debt + debentures – working capital.

For A/B share structure companies, the separate market price of B shares is factored into the market capitalization.


JUN

IOR

CO

MPA

RISO

N ENTERPRISE VALUE VERSUS Q2 PRODUCTION ($ PER BOE/D)Median = $50,337 per boe/d

(14.53)

(8.33)

(6.84)

(1.17)

5.10

5.79

5.80

8.31

8.63

8.70

8.92

9.31

9.58

10.46

10.98

11.43

12.25

14.08

14.38

14.72

15.61

15.75

17.14

17.93

18.99

20.22

20.42

21.26

22.25

22.55

22.80

26.67

27.40

28.45

29.10

30.14

30.46

32.16

32.67

34.78

35.00

36.02

39.84

41.98

42.60

48.11

48.54

59.09

(20.00) (10.00) 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00

Argosy

Terra

Sonde

Edge

Charger

Cequence

PineCliff

Waldron

Petro-Reef

WranglerWest

Delphi

Marquee

Shoreline

Skope

Yoho

Insignia

Anderson

Tamarack

Artek

PaintedPony

Storm

Manitok

Zargon

Rock

Yangarra

Arsenal

Crocotta

Sure

RMP

Longview

AvenEx

Freehold

Hyperion

DeeThree

Surge

Bonterra

Arcan

Vero

Novus

Strategic

TriOil

Palliser

SecondWave

Renegade

Exall

Raging River

Spartan

Pinecrest

margins rise materiallyThe median cash flow netback for Q2 2012 of $18.46/boe is still lower than previous years, but does show an increase over the Q1 2012 netback of $17.56. A stronger netback is largely a reflection of the juniors’ increasing oil weighting in combination with strong oil prices.

Cash flow is the result of adding back non-cash expenses such as depreciation and future taxes to net earnings. Cash flow takes into account the hard costs of operating as well as general and administrative costs.

Companies near the top of this chart are seeing the most economic benefit from existing production. Meanwhile, those near the bottom have costs that are reducing their margins.

FORMULAcash flow from operations

total production in the period

Note: Total production in the period = average daily production x 91 days in the period.


JUN

IOR

CO

MPA

RISO

NQ2 CASH FLOW NETBACK ($/BOE)Median = $18.46/boe

3.96

6.96

7.86

8.00

8.32

8.54

8.78

9.18

10.18

10.42

10.51

10.61

10.64

11.18

11.76

11.84

11.95

12.07

12.15

12.53

13.23

13.23

13.37

13.68

13.94

14.10

14.54

14.58

14.89

15.09

15.96

15.99

15.99

16.13

16.80

17.97

18.31

19.64

19.95

20.30

20.79

21.51

21.61

21.75

22.34

22.45

22.70

24.69

0.00 5.00 10.00 15.00 20.00 25.00 30.00

Freehold

Crocotta

PineCliff

Yangarra

Spartan

RMP

Skope

PaintedPony

Yoho

Cequence

Anderson

Waldron

Manitok

Delphi

Tamarack

Artek

Vero

WranglerWest

Insignia

DeeThree

Surge

Exall

Novus

Hyperion

Petro-Reef

Edge

Storm

TriOil

Shoreline

Pinecrest

Bonterra

Charger

Raging River

Renegade

Zargon

Sure

Marquee

Arsenal

AvenEx

Sonde

Strategic

Terra

Arcan

Palliser

Rock

Longview

SecondWave

Argosy

cost controlOperating and transportation expenses in Q2 2012 were slightly higher than the $13.36/boe reported in Q1 2012 and the $13.53/boe reported in Q2 2011.

Companies that do a good job of controlling operating and transportation costs earn more money from their production. The ability to be an efficient operator relates to the productivity of wells, the proximity of producing areas, economies of scale, control over facilities and a company’s production methods. Some companies with high operating costs this quarter may be incurring expenses in an operating area that will not increase when production increases for the area, showing the potential for improving economies of scale.

FORMULAoperating expenses including transportation costs




JUN

IOR

CO

MPA

RISO

N Q2 OPERATING AND TRANSPORTATION EXPENSES ($/BOE)Median = $13.81/boe

1.04

1.55

1.62

1.99

2.13

2.25

2.33

2.56

2.69

2.83

2.84

3.04

3.17

3.21

3.23

3.33

3.46

3.50

3.50

3.58

3.61

3.63

3.94

3.98

4.13

4.14

4.28

4.43

4.49

4.58

4.73

5.10

5.16

5.20

5.35

5.97

5.99

6.26

7.06

7.65

7.71

8.05

8.72

10.57

11.12

11.66

15.94

22.23

0.00 5.00 10.00 15.00 20.00 25.00

Longview

Skope

Crocotta

Spartan

Freehold

PaintedPony

Delphi

Cequence

SecondWave

Bonterra

DeeThree

Yangarra

RMP

Yoho

Waldron

Arsenal

Artek

WranglerWest

Surge

PineCliff

Tamarack

Insignia

Anderson

Raging River

Storm

Palliser

Zargon

TriOil

Pinecrest

Charger

Terra

Shoreline

Renegade

Rock

Exall

Sure

Vero

Novus

Strategic

Hyperion

Manitok

Marquee

Arcan

Edge

Petro-Reef

Sonde

AvenEx

Argosy

the cost of doing businessGeneral and administrative expenses (G&A) pay for the engineering, geology, accounting, business development and other office-related expenses of oil and gas companies. G&A should be lower per boe for larger companies because many of these costs are fixed and do not increase with the amount of production. A lower amount of G&A per boe is good as long as it isn’t at the cost of growth or of meeting the regulatory and legal requirements of being a public company.

Savvy investors should take the time to understand what is happening that causes expenses to be higher than peers and whether or not it will translate into growth that will reward shareholders.

Non-cash compensation expenses, mostly stock options and other share or unit-based incentives, often make up a significant portion of compensation packages at junior oil and gas companies. These are not included in this chart.

FORMULAgeneral & administrative expenses




JUN

IOR

CO

MPA

RISO

NQ2 GENERAL AND ADMINISTRATIVE CASH EXPENSES ($/BOE)Median = $4.05/boe

9.39

9.76

11.72

13.00

13.23

13.68

13.79

13.98

14.04

14.66

14.72

14.90

15.98

16.04

16.29

16.61

16.89

17.13

17.46

17.50

17.93

18.06

18.53

18.90

19.07

19.33

19.50

19.50

19.79

20.20

20.28

21.54

22.12

22.37

23.16

23.58

23.86

24.77

24.90

24.98

25.07

26.67

27.60

27.76

29.21

29.64

31.30

32.35

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00

Skope

PineCliff

Terra

Sonde

Shoreline

Bonterra

Yoho

Artek

Delphi

Edge

Crocotta

Waldron

Charger

Manitok

WranglerWest

PaintedPony

Insignia

Zargon

Argosy

Storm

AvenEx

Cequence

Arsenal

Longview

Freehold

Petro-Reef

Spartan

Vero

Marquee

DeeThree

Anderson

Novus

Surge

Hyperion

Exall

Rock

Tamarack

Palliser

RMP

Sure

Arcan

Yangarra

TriOil

SecondWave

Raging River

Strategic

Pinecrest

Renegade

the cost of finding reservesDepletion, depreciation and accretion expenses (DD&A) may be considered an approximation of finding, development and acquisition costs for oil and gas reserves. DD&A expenses are an ongoing writedown of assets as they are used up. Increasing amounts may mean reserves were more expensive to acquire in the first place and as a result are losing value on the company’s books at a faster pace.

FORMULAdepletion, depreciation & accretion expenses




JUN

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MPA

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N Q2 DEPLETION, DEPRECIATION AND ACCRETION EXPENSES ($/BOE)Median = $ 18.99/boe

2.5

2.5

3.3

3.6

3.9

4.1

4.4

4.4

4.7

4.8

5.2

5.4

5.5

5.9

6.0

6.2

6.3

6.3

6.4

6.5

6.7

6.9

7.3

7.3

7.5

7.7

8.1

8.7

8.7

8.7

9.5

9.6

9.8

10.0

10.8

10.8

11.9

12.5

13.5

15.5

15.9

16.2

20.2

33.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

Palliser

Rock

WranglerWest

Skope

Insignia

TriOil

Vero

Hyperion

Strategic

SecondWave

Arsenal

Yangarra

Novus

Renegade

Crocotta

Shoreline

RMP

Spartan

Pinecrest

Exall

Zargon

AvenEx

Sure

Waldron

Surge

Arcan

Tamarack

Anderson

Longview

Raging River

Storm

Artek

Delphi

DeeThree

Petro-Reef

Yoho

Marquee

Manitok

Cequence

Bonterra

Freehold

Charger

PaintedPony

PineCliff

Edge

Argosy

Terra

Sonde

These four companies had Q2 cash flow that was negative or negligible in comparison to their enterprise value and market capitalization.

multiplying cash flowThe dark bars on this chart show each company’s enterprise value as it relates to annualized cash flow. The lighter bars indicate the market capitalization to annualized cash flow. The difference between the two bars is each company’s net debt. Therefore, a quick glance at this chart doesn’t only show where a company trades in relation to its cash flow, but also shows debt positions.

This calculation of annualized cash flow multiples uses the closing market price on August 31, 2012 combined with Q2 2012 weighted average shares outstanding, net debt and cash flow. The values shown on the chart relate to the enterprise value multiples of annualized cash flow denoted by the dark bars.

FORMULAenterprise value

(cash flow for period x 4)

Note: Enterprise value = (Q2 weighted average basic shares x August 31, 2012 share price) + net debt.

For A/B share structure companies, the separate market price of B shares is also factored into the market capitalization.

Enterprise Value to Annualized Cash Flow

Market Capitalization to Annualized Cash Flow


JUN

IOR

CO

MPA

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NANNUALIZED Q2 CASH FLOW MULTIPLESMarket Capitalization to Annualized Cash Flow Median = 4.6 Enterprise Value to Annualized Cash Flow Median = 6.6

(1.4)

(1.0)

(0.5)

(0.4)

0.0

0.1

0.3

0.4

0.7

0.8

0.8

1.1

1.2

1.3

1.4

1.4

1.6

1.7

1.7

1.8

1.9

2.2

2.3

2.3

2.4

2.4

2.5

2.5

3.0

3.0

3.1

3.2

3.3

3.5

3.6

3.6

4.2

4.8

5.1

5.5

6.2

7.1

9.5

9.6

(2.0) 0.0 2.0 4.0 6.0 8.0 10.0 12.0

PaintedPony

Spartan

Rock

TriOil

Strategic

Pinecrest

Raging River

Freehold

Insignia

Vero

Crocotta

Manitok

Palliser

DeeThree

Novus

Renegade

RMP

Zargon

Surge

WranglerWest

AvenEx

Yoho

Arsenal

Hyperion

Bonterra

Yangarra

Longview

Cequence

Sure

SecondWave

Storm

Shoreline

Exall

Skope

Artek

Tamarack

Delphi

Waldron

Arcan

Marquee

Petro-Reef

Anderson

PineCliff

Charger

Edge

Argosy

Terra

Sonde

The four companies at the bottom of this graph had positive cash positions rather than net debt. As noted above, Sonde also reported a surplus, but had negative cash flow.

Sonde, Terra, Argosy and Edge had negative cash flow for the quarter. While Terra, Argosy and Edge reported net debt, Sonde reported a surplus.

until debt do us partThis measurement compares, in years, how long it would take to become debt free if cash flow remained steady year after year and it was 100 percent dedicated to paying down the debt based on the end of Q2. In times where equity markets aren’t providing capital at a reasonable value, it can be advantageous for companies to be able to utilize debt to finance growth. Assuming they are creditworthy, companies with less debt may be in the fortunate position of having more options open to take advantage of asset-buying opportunities. Companies with higher debt may not have as many desirable options.

Companies with negative values on the chart have a positive working capital position that they will be able to use to fund growth.

FORMULAnet debt

cash flow for period x 4

Note: Net debt = bank debt + debentures – working capital

Convertible debentures make up a portion of the debt load for Anderson, Arcan, Equal, Painted Pony, Reliable, Strategic and Twoco.


JUN

IOR

CO

MPA

RISO

N Q2 NET DEBT TO ANNUALIZED CASH FLOWMedian = 2.0

(87.0)

(74.5)

(67.7)

(67.7)

(59.4)

(59.2)

(55.7)

(52.6)

(51.8)

(51.2)

(50.0)

(45.0)

(44.9)

(37.5)

(36.7)

(36.5)

(36.5)

(35.1)

(34.0)

(32.5)

(32.2)

(31.9)

(30.0)

(29.8)

(28.8)

(28.3)

(27.3)

(27.0)

(26.9)

(25.5)

(25.3)

(20.7)

(20.1)

(18.2)

(17.3)

(16.1)

(7.6)

(7.1)

(4.7)

(4.0)

(0.9)

3.6

3.7

7.0

11.9

13.0

13.4

15.5

46.3

(100.0) (80.0) (60.0) (40.0) (20.0) 0.0 20.0 40.0 60.0

Argosy

SecondWave

Skope

Arcan

Sonde

WranglerWest

Charger

Anderson

Hyperion

Shoreline

Petro-Reef

Terra

Tamarack

Exall

Pinecrest

Sure

Zargon

Storm

Rock

TriOil

Marquee

Longview

Yoho

Novus

AvenEx

Vero

Arsenal

Insignia

Aroway

Yangarra

Waldron

Renegade

Surge

RMP

Palliser

Delphi

Cequence

Bonterra

Strategic

Artek

Raging River

Crocotta

Freehold

Manitok

Spartan

PaintedPony

PineCliff

DeeThree

Edge

dragged downAll the juniors took a hit in the second quarter of 2012, with no company on this list achieving a positive return. Energy shares turned around in the two months subsequent to the end of the second quarter, allowing eight of the 49 juniors to deliver positive returns over the five month period.

These numbers represent the total return, which includes dividends paid during the quarter. The juniors that paid dividends in Q2 include AvenEx, Bonterra, Freehold, Longview, Shoreline and Zargon.

FORMULAcapital gain + total distributions in that period per share or unit

market price at end of the previous period

Note: Capital gain in period = market price at end of period – market price at end of previous period.

Share price change plus distributions from April through August 2012

Share price change plus distributions from April through June 2012


JUN

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CO

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NQ2 TOTAL RETURN - CAPITAL GAINS AND DISTRIBUTIONS OR DIVIDENDS (%)April through June Median: -34.0% April through August Median: -28.8%

Shortenedcompanyname

Chiefexecutive

Stocksymbol& exchange(T=TSX, V=Venture)

Share priceAug 31/12

($)

Q2/12average daily

production(boe/d)

Q2/12 weighted shares

outstanding (basic) including

exchangeable(000)

Jun 30/12net debt before

debentures($000)

Jun 30/12 debentures

outstanding

Q2/12net income

($000)

Q2/12cash flow

($000)Anderson Brian Dau AXL-T 0.27 6,825 172,550 131,675 85,749 (16,828) 7,606Arcan Ed Gilmet ARN-V 1.52 5,254 97,821 156,673 141,387 8,269 14,565Argosy Peter Salamon GSY-T 0.15 559 27,415 22,736 - (1,447) (739) Aroway Chris Cooper ARW-V 0.57 n/a n/a n/a n/a n/a n/aArsenal Tony van Winkoop AEI-T 0.48 3,555 156,227 60,054 - 7,030 6,542Artek Darryl Metcalfe RTK-T 1.91 2,654 43,435 49,689 - 803 3,472AvenEx William Gallacher AVF-T 2.98 3,834 54,238 59,566 - (14,718) 7,957Bonterra George Fink BNE-T 43.95 6,037 19,768 156,339 - 9,201 16,555Cequence Paul Wanklyn CQE-T 1.22 8,660 164,823 45,840 - (6,579) 4,563Charger Thomas Buchanan CHX-V 0.58 3,172 67,321 56,544 - (1,978) 1,473Crocotta Robert Zakresky CTA-T 2.86 6,604 88,095 41,525 - 1,065 12,275DeeThree Martin Cheyne DTX-T 5.13 3,805 66,986 50,803 - 5,603 9,852Delphi David Reid DEE-T 1.20 8,636 131,060 117,457 - (3,531) 7,013Edge Brad Nichol EDE-V 0.30 737 96,168 16,404 - (114) (78) Exall Roger Dueck EE-T 0.90 1,106 62,495 35,497 20,552 1,201 4,289Freehold William Ingram FRU-T 19.61 8,501 65,159 36,397 - 7,862 20,635Hyperion Trevor Spagrud HYX-V 0.54 1,403 54,190 32,779 - 1,095 3,498Insignia Jeffrey Newcommon ISN-T 0.73 3,204 58,860 9,396 - (15,795) 3,334Longview Kelly Drader LNV-T 6.42 5,881 46,787 118,799 - 6,164 12,068Manitok Massimo Geremia MEI-V 1.84 1,733 61,797 10,916 - 499 2,483Marquee Richard Thompson MQL-V 0.99 2,396 52,698 44,466 - (1,414) 2,030Novus Hugh Ross NVS-V 0.73 2,887 190,985 48,292 - 1,090 8,583PaintedPony Patrick Ward PPY-V 9.47 5,745 70,036 (42,343) - (3,523) 7,695Palliser Kevin Gibson PXL-V 0.62 1,942 54,130 30,098 - 4,538 6,366Petro-Reef Gary Van Nest PER-V 0.15 652 62,239 12,696 - 926 512PineCliff Philip Hodge PNE-V 0.76 972 63,564 19,453 - (450) 513Pinecrest Wade Becker PRY-V 1.86 2,951 214,158 9,512 - 9,076 15,866Raging River Neil Roszell RRX-V 2.24 1,711 112,380 8,678 - 3,363 7,492Renegade Michael Erickson RPL-V 2.84 3,712 89,635 80,036 - 8,042 14,179RMP John Ferguson RMP-T 1.84 4,763 96,834 63,295 - 2,678 9,644Rock Allen Bey RE-T 1.07 2,159 39,094 (6,374) - 146 3,523SecondWave Colin Witwer SCS-T 0.83 2,641 83,990 113,947 - 4,869 9,574Shoreline Trevor Folk SEQ-T 3.15 1,690 5,657 18,623 - (664) 1,473Skope Henry Cohen SKL-T 0.15 3,822 8,078 51,167 - (23,366) 3,637Sonde Jack Schanck SOQ-T 0.99 2,356 62,301 (34,916) - (28,030) (1,467) Spartan Richard McHardy STO-T 4.31 2,750 83,227 (50,819) - 4,601 12,147Storm Brian Lavergne SRX-V 1.50 2,584 61,824 46,154 - 947 3,669Strategic Gurpreet Sawhney SOG-V 0.81 2,583 187,092 1,223 - 1,236 8,174Sure Jeffrey Boyce SHR-T 0.66 1,201 60,581 27,543 - (3,816) 2,324Surge Daniel O'Neil SGY-T 7.89 9,275 71,058 171,692 - 13,273 24,562Tamarack Brian Schmidt TVE-V 1.85 2,193 27,366 40,665 - 565 2,809Terra Cas Morel TT-T 0.22 5,438 101,784 94,407 - (2,129) (4,121) TriOil Russell Tripp TOL-V 2.28 2,091 53,220 (11,331) - 7,020 6,659Vero Douglas Bartole VRO-T 1.98 2,341 48,992 22,809 - 4,126 6,853Waldron Ernie Sapieha WDN-T 0.56 2,520 34,333 36,235 - (1,479) 1,907WranglerWest Steven Johnson WX-V 0.51 739 6,466 4,323 - (409) 585Yangarra James Evaskevich YGR-V 0.35 2,022 121,711 33,457 - 3,306 3,493Yoho Brian McLachlan YO-V 1.82 2,442 46,467 21,180 - (223) 2,439Zargon Craig Hansen ZAR-T 8.67 8,290 29,518 37,699 50,660 10,538 12,930TOTAL 169,027 2,100,955 298,348 2,638 311,413AVERAGE 3,521 43,770 6,216 55 6,488MEDIAN 2,648 36,316 937 5,465

For A/B share structures, B shares are not shown above, but are included in the calculations for some of our charts. When we calculate market capitalization, we use the A shares outstanding times the A share price, plus the B shares outstanding times the B share price.

Eastern Canada-focused juniors, coalbed methane-focused junior companies, and oil sands-focused junior companies are not included in this comparison.

Aroway is only included in the share-price comparisons because the company has a June 30 year end and had not yet reported its results for the quarter ended June 30, 2012. For The June 30, 2012 period represents Edge's and Skope's first quarter and Yoho's third quarter.

The data was provided by both CanOils database and bmir researchers


JUN

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MPA

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N JUNIOR DATA TABLE

iQ SNAPSHOT

This company snapshot has been assembled by BMIR using publicly available information. The snapshot is not endorsed by the company profiled.

Focus of Operations

OIL FOCUSED INVENTORY Listing: TSX-AEI

Shares outstanding: 156.2 million at June 30, 2012

Share price: $0.48 at August 31, 2012

Market capitalization: $75.0 million

Net debt: $60.1 million at June 30, 2012

Enterprise value (market cap. + net debt): $135.0 million

Q2 2012 average daily production:

Crude oil and NGLs 2,582 bbls/d 73%

Natural gas 5.84 mmcf/d 27%

Total 3,555 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50AEI $20.22

Peer Median$18.46

Recent News:August 16, 2012 Tony van Winkoop, President & CEO, presented at the EnerCom Oil & Gas Conference

August 8, 2012 Arsenal Energy’s Q2 results showed production for the second quarter increased by 95% compared to Q2 2011

July 5, 2012 Arsenal Energy announced normal course issuer bid

June 26, 2012 Arsenal Energy announced results of shareholders meeting and ratification of rights plan

Strategies:• 75%OilweightingbyProduction

• Tradingbelowitspeergroup • BasedonSharePriceAugust3,2012andEnterpriseValue~0.29xNAVPS,

~$34,195boe/d;~$8.27/P+Pboe

— from Arsenal August 2012 corporate presentation

Contact:1900, 639 - 5th Avenue S.W. Calgary, Alberta T2P 0M9

tel 403.262.4854

[email protected] www.arsenalenergy.com

Analyst Coverage:Casimir Capital

Desjardins Securities

National Bank Financial

PI Financial

Officers:Tony van Winkoop - President & CEO

J.PaulLawrence-VP,Finance&CFO

RonForth-VP,Engineering

LeoNolte-VP,Drilling&Completions

KentSawatzky-VP,Production

GjoaTaylor-VP,Land

Directors:Neil MacKay

Harley Kempthorne

Bill Powers

William Hews

Derek Petrie

Tony van Winkoop

Evi

North Dakota

Southeast Alberta

Desan

Central Alberta


JUN

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JUN

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SNA

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iQ SNAPSHOT


Focus of Operations

REAL ASSETS WITH REAL GROWTHListing: TSX-DEE










Cash flow netback:

Oil

Gas

$0 $50DEE $8.92

Peer Median$18.46

Recent News:August 8, 2012Delphi Energy reports financial and operational results for second quarter 2012

July 30, 2012Delphi Energy reports test results from third Montney well at Bigstone East

July 24, 2012Delphi Energy announces closing of disposition of Cardium interests

Strategies:• Well-positionedfororganicgrowthwithalargeinventoryofdevelopmentopportunitiescomplementedbyahigh-impactexplorationprogram

• Disciplinedfieldcapitalprograminternallygeneratedandprotectedthrough active commodity hedging program

• Operatorshipandownershipofinfrastructure,production,capitalandlands

• Complementaryconventionalmulti-zonedeepbasinassetbase

• Focusedongrowththroughthedrillbitcomplementedwithstrategic acquisitions within core areas

— from Delphi website

Contact:300, 500 - 4th Avenue S.W. Calgary,AlbertaT2P2V6

tel 403.265.6171

[email protected] www.delphienergy.ca

Analyst Coverage:Canaccord Genuity

CIBC World Markets

GMP Securities

Macquarie Capital

Maison Placements


Peters & Co.

RBC Capital Markets

Salman Partners

Scotia Capital

Stifel Nicolaus

Officers:David Reid - President & CEO

Tony Angelidis -Sr.VP,Exploration

Brian Kohlhammer -Sr.VP,Finance&CFO

Hugo Batteke -VP,Operations

Michael Galvin -VP,Land

Rod Hume -Sr.VP,Engineering

Directors:Tony Angelidis

Harry Campbell

Robert Lehodey

Stephen Mulherin

Andrew Osis

David Reid

David Sandmeyer

Lamont Tolley

North West Alberta Region

North East British Columbia Region


JUN

IOR

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JUN

IOR

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iQ SNAPSHOT


Focus of Operations

CRUDE OIL FOCUS AT MITSUE, MARTEN MOUNTAIN, ABListing: TSX-EE










Cash flow netback:

Oil

Gas

$0 $50EE $42.60

Peer Median$18.46

Recent News:August 14, 2012ExallEnergy’sQ22012resultsshowedaproductionincreaseof 23% compared to the second quarter of 2011

June 11, 2012ExallEnergyannouncedupdatestoWaterfloodProjectstatus, operations and progress on 3D seismic interpretation

May 14, 2012 ExallEnergy’sQ12012resultsshowedaproductionincreaseof 7% compared to the first quarter of 2011

Strategies:• ExallEnergyCorporationisfocusedonbuildingshareholdervalueinthe

Oil & Gas industry• TheCorporationwillenhanceshareholdervaluethroughexplorationand

development and selective acquisition opportunities• ExallEnergyhasrapidlyadvanceditsgrowthstrategythroughthesuccessfulacquisitionofKingsmereExplorationLtd.inJanuary,2007

• ExallEnergyisexpectingtocontinuetoincreaseitsoilproductionasaresultof: • therecentMartenMountaindiscoverymadeduringthe2010winter

drillingprogram; • adisciplinedcapitalprogramfocusedondevelopinglightsweetcrude

opportunities, and • existinggoodproductionpracticesandpooloptimizationstrategies

— from Exall website

Contact:400, 715 - 5th Avenue S.W. Calgary, Alberta T2P 2X6

tel 403.237.7820

www.exall.com

Analyst Coverage:Dundee Securities Ltd.

Emerging Equities Inc.

StoneCap Securities

Officers:StephenRoman-ExecutiveChairman

Roger Dueck - President & CEO

WarrenColes-VP,Finance&CFO

Glen Kerr - COO

JanetMacKenzie-VP,Exploration

Directors:Roger Dueck

Wayne Egan

Bernard Lang

Allan Menzies

Roderick Phipps

Frank Rebeyka

Stephen Roman

Mitsue

Bow Island

Jayar


JUN

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iQ SNAPSHOT


Focus of Operations

FOCUSED LIGHT OIL RESOURCE PLAYER Listing:TSXV-HYX




Net debt: $32.8 at June 30, 2012



Crude oil and NGLs 934 bbls/d 67%



Cash flow netback:

Oil

Gas

$0 $50HYX $27.40

Peer Median$18.46

Recent News:August 22, 2012 HyperionExplorationannouncedthatitgrantedoptionson August 22, 2012 to acquire up to 664,000 Common Shares of Hyperion, 430,000 of which were granted to directors and officers of Hyperion

August 17, 2012 HyperionExplorationannouncedsecondquarter2012highlightsandfinancialresults;averageproductionincreased 49% compared the second quarter 2011

August 16, 2012 HyperionExplorationannouncedsignificantundeveloped land acquisition and farm-in transaction at its Niton/Mcleod core area

Strategies:• Focusedonsharepriceappreciationthroughcashflow,productionandreserves

per share growth

• Continuetoacquireandexploitunderdevelopedlightoilresourceplayswhich lead to lower risk, scalable and repeatable development projects

• Identifyandcaptureland/opportunityinearlystageemerginglightoil resource plays

• Leveragesignificanttechnicalandoperatingknowledgetooptimizerecovery andmaximizevalue

• Buildcoreoperatingareaswithlargelandpositions,infrastructureand operating control

— from Hyperion May 2012 corporate presentation

Contact:2010, 355 - 4th Avenue S.W. Calgary, Alberta T2P 0J1

tel 403.930.0700

[email protected] www.hyperionexploration.com


Casimir Capital

Desjardins Capital Markets

Dundee Capital Markets

GMP Securities


Paradigm Capital

Stonecap Securities

Officers:Trevor Spagrud - President & CEO

Larry Hammond - COO

Doug Bailey - CFO

TimGee-VP,Engineering

RyanHeath-VP,Land&BusinessDevelopment

SteveHorth-Manager,Exploration

Directors:RodMaxwell

Dan O’Neil

Greg Turnbull

Trevor Spagrud

Greg Bay

Niton

Garrington

Pembina

Buck Lake


JUN

IOR

SNA

PSH

OTS

JUN

IOR

SNA

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iQ SNAPSHOT


Focus of Operations

HIGH GROWTH, OIL FOCUSED, EXPLORATION AND DEVELOPMENTListing:TSXV-MQL










Oil

Gas

Recent News:September 6, 2012Marquee announced changes to Management Team

August 28, 2012Marquee announced that options to acquire an aggregate of 265,000 common shares have been granted

August 23, 2012 Marquee announced the realization of significant production growth in the second quarter of 2012, largely due to the first five horizontal wells drilled by the company at Michichi being placed on production beginning in late March 2012

Strategies:• Focusedonhighquality,highrateofreturn,oilandliquids-richnaturalgasreservoirs

• Marquee’sinventoryofoilassetsandstrongcapitalpositionprovidesasolidplatformto achieve a high growth strategy

• Focusedon“rightsized”capitalprojects

• Marqueehaslaidthegroundworkforlong-termsuccesswithmaterialexposuretoBanff,Mannville,Sunburst,CardiumandViking

• Primaryareasoffocusandgrowthin2012areMichichiandLloydminster

• FivesuccessfulhorizontalwellsdrilledatMichichiandfivesuccessfulverticaloilwellsdrilled at Lloydminster in the first half of 2012

— from Marquee August 2012 corporate presentation

Contact:1700, 500 - 4th Avenue S.W.

Calgary,ABT2P2V6

tel 403.384.0000

[email protected] www.marquee-energy.com

Analyst Coverage:Acumen Capital

Dundee Securities Ltd.

Fraser Mackenzie

Macquarie Equity Research


Octagon Capital

Officers:Richard Thompson - President & CEO

RoyEvans-VP,Finance&CFO

TrevorRath-SeniorVP,Exploration

RobLemermeyer-VP,Production

SamYip-VP,HeavyOil

SteveBradford-VP,Land

Directors:Dennis Feuchuk

Richard Thompson

Bruce Hammond

RichardAlexander

Robert Steele

Glenn Carley

Greg Bay

West Central

Lloydminster

Michichi

Coutts


JUN

IOR

SNA

PSH

OTS

JUN

IOR

SNA

PSH

OTS

iQ SNAPSHOT


Focus of Operations

VIKING FOCUS, GROWING THROUGH THE DRILL BITListing:TSXV-NVS










Cash flow netback:

Oil

Gas

$0 $50NVS $32.67

Peer Median$18.46

Recent News:September 18, 2012 Novus announces that it intends to make a normal courseissuerbid(“NCIB”)throughthefacilitiesoftheTSXVenturetobuyupto5,000,000ofitsissuedandoutstanding Common Shares

August 14, 2012 Novus announces Q2 2012 results and a significant Vikingacreageexpansion

May 15, 2012 Novus announces Q1 2012 results highlighted by gross revenueof$18.54millionandfundsflowfromoperations of $10.66 million

Strategies:• Targetlarge,highquality“originaloilinplace”(OOIP)resourcepoolswith

production and recovery upside

• Assemblelargelandpositionswithoperatorshipandinfrastructurecontroltofacilitate larger scale development drilling programs

• Applyhorizontalmulti-stagefracturetechnologytoincreaserecoveryfactors

• Emphasizewelldelineated,lowgeologicalriskreserveswithlarge development drilling inventories

• Maintainastrongbalancesheetwithunutilizedbanklinecapacity

— from Novus July 2012 corporate presentation

Contact:5200, 150 - 6th Avenue S.W. Calgary,AlbertaT2P3Y7

tel 403.263.4310

[email protected] www.novusenergy.ca


CIBC World Markets

Cormark Securities



Fraser Mackenzie

GMP Securities

Haywood Securities


Paradigm Capital

Raymond James

Stifel Nicolaus

TD Securities

Officers:Hugh Ross - President & CEO

KetanPanchmatia-VP,Finance&CFO

GregGroten-VP,Exploration

JulianDin-VP,BusinessDevelopment

JackLane-VP,Operations

MitchHuitema–VP,Accounting&Controller

Directors:Michael Halvorson

Harry Knutson

Al Kroontje

A. Bruce Macdonald

Larry Mah

Hugh Ross

Dodsland(Viking)

Wapiti


JUN

IOR

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IOR

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iQ SNAPSHOT


Focus of Operations

EXPANDING LIGHT OIL RESOURCE OPPORTUNITIESListing:TSXV-SOG




Net Debt: 1.2 million at June 30, 2012






Cash flow netback:

Oil

Gas

$0 $50SOG $34.78

Peer Median$18.46

Recent News:August 16, 2012 Strategic announces normal course issuer bid

August 14, 2012 Strategicannouncessecondquarter2012results;oilproductionmorethandoubles(139%growth)sincefourth quarter 2011

July 26, 2012 Strategicannounces2011executivechanges

Strategies:Focus on light oil

• Conventionalreservoirsprovideneartermcashflow • SteenRiver-KegRiverandSulphurPoint

• Resourceplaysprovidereservegrowth • Maxhamish-Chinkeh • Amber-MuskwaandJeanMarie

— from Strategic August 2012 corporate presentation

Contact:1800, 510 - 5th Street S.W. Calgary, Alberta T2P 3S2

tel 403.718.0183

[email protected] www.sogoil.com

Directors:Arn Schoch

Thomas Claugus

John W. Harkins

D. Richard Skeith

Analyst Coverage:Clarus Securities


Dundee Securities

Macquarie Capital Markets

PI Financial

Raymond James

Officers:Gurpreet Sawhney - President and CEO

Sean Hayes - COO

KirkBoote-ExecutiveVP,Engineering

JeffHuckle-VP,Operations

ShelinaHirji-VP,Finance

DouglasWright-VP,BusinessDevelopment

BarbaraJoy-VP,Land

Rooky Driver - Corporate Secretary and Chief Administration Officer

Steen RiverMaxhamish

Ferrier

Taber/ConradHarmattan


JUN

IOR

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iQ SNAPSHOT


Focus of Operations

CONTINUING TO DELIVER TOP TIER OIL GROWTHListing:TSX-SGY










Cash flow netback:

Oil

Gas

$0 $50SGY $29.10

Peer Median$18.46

Recent News:August 8, 2012 Surge Energy Inc. announces record production and fundsflowinthesecondquarter2012

May 9, 2012 Surge Energy announces record first quarter 2012 results;doublingoffundsflowpershare; reiterates 2012 production guidance

April 12, 2012 Surge Energy announces increase in bank line from $175 million to $250 million

Strategies:• Evolveintoatoptierintermediateoilandgasproducerwithafocusonoil

• Acquireanddevelopunderexploitedoilresourceplays

• Optimizeoilrecoveryincludingwaterfloods

• Identifyandcapturenewoilresourceplays

— from Surge August 2012 corporate presentation

Contact:2100, 635 - 8th Avenue S.W. Calgary, Alberta T2P 3M3

tel 403.930.1010

[email protected] www.surgeenergy.ca

Analyst Coverage:AltaCorp. Capital

BMO Capital Markets

CIBC World Markets

Cormark Securities


Dundee Securities

FirstEnergy Capital

GMP Securities

Macquarie Securities Group


Northland Capital Partners

Peters & Co.

Scotia Capital

TD Securities

Officers:Dan O’Neil - President & CEO

MaxLof - CFO

Dan Brown - COO

Malcolm Adams -VP,CorporateDevelopment

Margaret Elekes -VP,Land

Kevin Angus -VP,Exploration

Tee Ong -VP,Engineering

Directors:Dan O’Neil

Paul Colborne

Peter Bannister

Colin Davies

Robert Leach

Keith Macdonald

James Pasieka

Murray Smith

Southeastern Alberta

Western Alberta

Williston Basin


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IOR

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Focus of Operations

TARGETED ASSETS, SUSTAINABLE CORPORATE GROWTH Listing:TSXV-TVE










Cash flow netback:

Oil

Gas

$0 $50TVE $14.08

Peer Median$18.46

Recent News:September 11, 2012 Tamarack announces Garrington drilling results and participation at the Peters & Co. conference in Toronto

August 29, 2012 Tamarack announces the addition of Mr. Ian Schafer to the Tamarack team as a Senior Petroleum Engineer

August 20, 2012 Tamarack announces that granted, in aggregate, 1,065,416options(“Options”)topurchasecommonshares in the capital of the Company to certain directors, officers and employees of the Company

Strategies:• TamarackValleyusesarigorous,provenmodellingprocesstocarefullymanageriskandidentifygrowthopportunities.Thisstrategicplaymodeltargets:

• Resourceplayswithhighoriginalgasinplaceandoriginaloilinplace

• Longlifereserves

• Horizonsthatarerepeatableandhavelargescope

• Focusonriskminimization

— from Tamarack Valley May 2012 corporate presentation

Contact:1800, 407 - 2nd Street S.W. Calgary,AlbertaT2P2Y3

tel 403.263.4440

[email protected] www.tamarackvalley.ca

Analyst Coverage:Acumen Capital Partners

Alta Corp Capital


Haywood Securities

Paradigm Capital

Peters & Co.

Officers:Brian Schmidt - President & CEO

RonHozjan-VP,Finance&CFO

NielsGundesen-VP,Engineering

KenCruikshank-VP,Land

KevinScreen-VP,Production&Operations

Directors:Floyd Price

Anthony Lambert

Dean Setoguchi

David Mackenzie

Sheldon Steeves

Brian Schmidt

Ansell

Hanlan

Garrington

Lochend

Quaich

Buck Lake

Heavy Oil

Foley Lake Westlock

Redwater


JUN

IOR

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Focus of Operations

DISCOVERY. DELINEATION. DEVELOPMENT.Listing:TSXV-YOShares outstanding: 46.5 million at June 30, 2012





Average daily production for the quarter ended June 30, 2012




Cash flow netback:

Oil

Gas

$0 $50YO $10.98

Peer Median$18.46

Recent News:September 5, 2012 YohoResourcesInc.announcesnon-brokeredprivateplacementofflow-throughshares

August 22, 2012 YohoResourcesInc.announcesfiscalQ32012financialand operating results and provides operational update

Strategies:YohoResourcesisfocusedontwounconventionalhigh-liquidsgasplays.Shorttomediumtermplansare:

• 2011YearofDiscovery

• Testedthreeunconventionalplays-allsuccessful-Duvernay,Kaybob,AB, Montney - Nig, BC, Jean Marie - Mike, BC

• 2012YearofDelineation

• Drilldelineationwellsontwoplays,fourtofivewellsperplay.FocusonDuvernayandMontney liquid rich gas plays

• 2013InitialYearofDevelopment

• Initiatepaddrilling,reducecosts,increaseefficienciesandrampupproductionandsubsequentcashflow

— from Yoho website

Contact:500, 521 - 3rd Avenue S.W. Calgary, AB T2P 3T3

tel 403.537.1771

[email protected] www.yohoresources.ca

Analyst Coverage:Acumen Capital Partners

First Energy Capital

Haywood Securities Inc.

Paradigm Capital

Peters & Co. Limited

Officers:Brian McLachlan - President & CEO

BarryStobo-VP,Engineering&COO

WendyWoolsey-VP,Finance&CFO

ClarkDrader-VP,Land

Directors:Bruce Allford

John Brussa

Peter Kurceba

Brian McLachlan

Kevin Olson

Gary Perron

Terry Svarich, Chairman

Northeast British Columbia

Peace River Arch

West Central Alberta


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FREE ADMISSION | OPEN TO THE PUBLIC | NO REGISTRATION | WWW.SEPAC.CA

OIL & GAS

INVESTOR SHOWCASEInvesting opportunities with a select group of Canada’s most dynamic junior and mid-cap oil & gas producers

Wednesday, November 21, 20129:00 am – 4:00 pm

The Metropolitan Conference Centre333 – 4th Avenue SW, Calgary


intermediate oil & gas companies

C O M PA R I S O N

INCLUSION CRITERIA

• Primary business must be oil and gas exploration, development and production

• Q2 2012 production must fall between 10,000 and 100,000 barrels of oil equivalent per day (boe/d)

• Majority of production must be from North America

• Must be publicly traded on the TSX or TSX Venture Exchange

10,349

11,548

11,549

12,678

13,559

13,765

13,956

14,193

15,044

15,075

15,403

15,569

16,569

19,406

20,963

21,474

22,039

23,467

27,949

28,192

34,585

38,715

41,343

44,641

51,022

53,074

69,506

78,870

82,108

93,997

96,972

0 25,000 50,000 75,000 100,000 125,000

Equal

Chinook

WestFire

Compton

Whitecap

Pace

Fairborne

TwinButte

Guide

Legacy

Lone Pine

Angle

Bellatrix

Celtic

Perpetual

Paramount

Birchcliff

NuVista

Advantage

Crew

Trilogy

PetroBakken

Peyto

Progress

Tourmaline

Baytex

Bonavista

Pengrowth

Enerplus

ARC

CrescentPoint

8

14

15

17

18

28

33

46

48

50

51

54

56

60

61

62

63

65

66

68

70

76

79

79

82

82

84

84

84

87

89

0 10 20 30 40 50 60 70 80 90 100

CrescentPoint

Baytex

Legacy

PetroBakken

TwinButte

WestFire

Whitecap

Pengrowth

Crew

Equal

Enerplus

Pace

Angle

Trilogy

Bonavista

ARC

Chinook

Bellatrix

Guide

Lone Pine

NuVista

Birchcliff

Celtic

Advantage

Compton

Paramount

Perpetual

Fairborne

Progress

Tourmaline

Peyto

intermediate peer group growsTwo companies joined the intermediate ranks in Q2 2012: WestFire and Whitecap. As was the case last quarter, only seven of the intermediate companies have production greater than 50,000 boe/d.

We define intermediate oil and gas companies as those with production between 10,000 and 100,000 boe/d. In order to produce a relevant peer group, the intermediate category is restricted to companies with conventional oil and gas development and production as their primary business, with the majority of their production in North America, and with their shares traded on the TSX. Junior companies are featured elsewhere in this report. Senior producers, with production in excess of 100,000 boe/d, are not included.

oil vs. gasThe median natural gas weighting of Western Canada’s intermediate oil and gas players remained fairly stable in the second quarter of 2012, falling only 1 percent since the first quarter of this year. The intermediate companies towards the bottom of this chart that have truly focused their production on oil, whereas all the others are either a mix of oil and natural gas or primarily natural gas.

Oil and natural gas are made comparable by converting natural gas from thousands of cubic feet (mcf) to barrels of oil equivalent (boe) at a ratio of 6:1.

FORMULAavg. natural gas production per day (boe/d)

avg. total production


INTE

RMED

IATE

CO

MPA

RISO

N

Q2 2012 PRODUCTION (BOE/D)Median = 21,474 boe/d

Q2 PRODUCTION MIX — NATURAL GAS WEIGHTING (%)Median = 62%

(23.8)

(15.1)

(10.3)

(8.2)

(7.9)

(7.8)

(7.3)

(7.1)

(6.5)

(5.3)

(4.9)

(4.2)

(2.8)

(2.5)

(1.5)

(1.4)

(1.0)

(0.8)

(0.5)

0.0

0.9

1.0

3.2

3.3

3.8

4.2

8.0

11.3

14.1

20.5

30.5

(30.0) (20.0) (10.0) 0.0 10.0 20.0 30.0 40.0

PetroBakken

Chinook

Fairborne

Pengrowth

Legacy

Whitecap

Crew

NuVista

Perpetual

Pace

Progress

Birchcliff

Bonavista

Lone Pine

ARC

Baytex

CrescentPoint

Angle

Equal

Enerplus

Compton

Peyto

Celtic

Guide

TwinButte

Bellatrix

Tourmaline

Trilogy

Paramount

Advantage

WestFire

(17.1)

(15.1)

(10.3)

(7.9)

(7.2)

(7.1)

(6.5)

(5.4)

(4.5)

(2.5)

(1.0)

(1.0)

(0.7)

(0.3)

0.9

1.1

3.3

3.6

3.7

4.2

4.3

4.6

4.6

7.3

7.4

9.1

11.5

14.1

20.9

30.5

38.6

(20.0) (10.0) 0.0 10.0 20.0 30.0 40.0 50.0

PetroBakken

Chinook

Fairborne

Legacy

Crew

NuVista

Perpetual

Pace

Progress

Lone Pine

ARC

Bonavista

Baytex

Equal

Compton

Peyto

Angle

Celtic

Enerplus

Bellatrix

Pengrowth

Guide

Birchcliff

TwinButte

CrescentPoint

Tourmaline

Trilogy

Paramount

Advantage

WestFire

Whitecap

less production per shareThe biggest challenge oil and gas companies have is to achieve real growth on a per share basis. Although it is only one brief quarter-to-quarter snapshot, one can see that many companies have trouble achieving per share growth. This is because oil and gas production is a capital intensive business that often requires issuing more shares to fund capital programs. Only 11 of the 31 intermediates increased their production on a per share basis from the first quarter to the second quarter.

FORMULAcurrent production per share – previous production per share

previous production per share

Note: Production per share = average production rate for the period divided by basic weighted average shares outstanding during the period.

Gas production converted to boe at 6 mcf: 1 boe.

fighting declinesIf no effort were made by a conventional oil and gas company to stabilize or increase production, its production would typically decline at rates varying from 20 percent to 30 percent per year depending on its commodity mix, depth of wells and age of assets.

Some companies were able to add production between the first quarter and the second quarter of 2012; others had declining production, possibly due to asset divestitures or declining wells.

The next chart is even more telling of growth given that it shows production change on a per share basis..

FORMULAcurrent period avg. production – previous period avg. production

previous period avg. production

Note: Gas production converted to boe at 6 mcf: 1 boe.


INTE

RMED

IATE

CO

MPA

RISO

N

CHANGE IN PRODUCTION — Q1 2012 TO Q2 2012 (%)Median = 1%

CHANGE IN PRODUCTION PER SHARE — Q1 2012 TO Q2 2012 (%)Median = -1%

15,560

23,480

25,011

26,072

26,777

26,882

31,202

33,024

34,084

34,187

36,072

36,688

40,092

42,926

43,676

53,723

56,383

59,238

63,010

81,154

82,600

90,176

90,210

91,425

93,356

98,719

106,509

107,725

109,166

125,068

156,721

0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000

Compton

Fairborne

Pace

Guide

Equal

Perpetual

Bellatrix

NuVista

Angle

Advantage

Chinook

Lone Pine

Crew

WestFire

TwinButte

Enerplus

Bonavista

Pengrowth

Birchcliff

Peyto

ARC

Whitecap

Trilogy

Legacy

Tourmaline

PetroBakken

Paramount

Celtic

Baytex

Progress

CrescentPoint

4.54

5.21

6.34

7.11

8.47

8.49

8.79

9.35

10.16

12.96

13.15

13.16

13.26

13.32

13.52

14.31

14.66

16.82

16.91

17.55

17.86

19.61

19.76

20.28

26.14

27.88

30.38

32.72

34.79

34.86

43.27

0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00

Compton

Paramount

Perpetual

Progress

NuVista

Equal

Advantage

Chinook

Fairborne

Birchcliff

Pengrowth

Pace

Tourmaline

Lone Pine

Celtic

Angle

Bonavista

Bellatrix

Peyto

Guide

Trilogy

Enerplus

ARC

Crew

TwinButte

Baytex

Whitecap

WestFire

PetroBakken

Legacy

CrescentPoint

value per barrelThis graph shows each intermediate company’s enterprise value per flowing barrel of oil equivalent per day (boe/d) of Q2 production. Enterprise value is calculated by multiplying the share price on August 31, 2012 by the weighted average number of shares outstanding during Q2 before adding debt and debentures outstanding net of working capital at the end of the quarter.

A high number means the markets are placing more value on the production of a particular company, perhaps for reasons such as long life reserves, a higher proportion of oil to gas, high field netbacks, or perceived strong production growth prospects.

FORMULAmarket capitalization + net debt

average production in barrels of oil equivalent

Note: Market capitalization = August 31 share price x Q2 weighted average basic shares outstanding.

Net debt = bank debt + debentures – working capital.

making money flowCash flow netbacks are equivalent to sales margins. They indicate how much cash flow a company generates from each barrel of oil equivalent (boe) of production. Companies with higher netbacks may have a better chance of thriving during periods of lower commodity prices when higher cost production may be uneconomical.

Companies with the highest cash flow netbacks tend to be the companies with the highest oil weighting. This is indicative of the comparably higher price of oil versus natural gas.

FORMULAcash flow from operations


Notes: Total production in the period = Average daily production x 91 days in the period.


INTE

RMED

IATE

CO

MPA

RISO

N

ENTERPRISE VALUE VERSUS Q2 PRODUCTION ($ PER BOE/D)Median = $53,723/boe

Q2 CASH FLOW NETBACK ($/BOE)Median = $14.31/boe

2.46

6.68

6.76

8.61

8.66

8.73

8.80

8.96

9.35

9.78

10.46

10.63

10.66

10.71

11.49

11.69

11.93

12.33

12.71

13.18

13.23

13.66

14.21

14.38

15.50

15.72

16.25

17.28

17.46

17.76

19.44

0.00 5.00 10.00 15.00 20.00 25.00

Peyto

Tourmaline

Angle

Birchcliff

Equal

Fairborne

Advantage

Trilogy

Bellatrix

Progress

Celtic

Paramount

Bonavista

ARC

Perpetual

Enerplus

NuVista

Guide

Crew

Lone Pine

CrescentPoint

PetroBakken

Whitecap

Compton

Chinook

Baytex

Pengrowth

WestFire

Pace

Legacy

TwinButte

0.44

0.69

0.70

0.96

1.07

1.09

1.57

1.68

1.89

1.91

1.94

2.14

2.26

2.27

2.31

2.44

2.47

2.59

2.62

2.66

2.76

2.81

2.93

3.12

3.23

3.27

3.45

3.56

3.57

3.78

4.26

0.00 1.00 2.00 3.00 4.00 5.00

Peyto

Tourmaline

Celtic

Progress

Bonavista

Trilogy

TwinButte

Crew

Whitecap

ARC

CrescentPoint

Advantage

Birchcliff

Pengrowth

Baytex

Chinook

Bellatrix

Angle

Guide

NuVista

Enerplus

Paramount

Perpetual

Compton

Pace

Equal

Lone Pine

PetroBakken

Legacy

Fairborne

WestFire

field costsTypically heavier oil has higher operating and transportation costs than light oil. Thankfully, natural gas often comes with even lower operating costs, which is important considering the selling price for natural gas is relatively low.

Other factors that can influence operating and transportation costs include proximity to pipelines, volumes being produced per well and the cost of secondary and tertiary methods being used to stimulate production.

FORMULAoperating expenses (including transportation costs)


Note: Total production in the period = Average daily production x 91 days in the period.

office costsThe general and administrative (G&A) cash expenses per boe represent office-related costs per barrel of oil equivalent produced. This number indicates how efficiently oil and gas companies manage their offices.

Factors that affect G&A include the number of staff, their salaries and benefits, contractors, service agreements, management fees, lease terms, processes and systems. The size of G&A can also be affected by the method a company uses in accounting for expenses, such as whether or not they are capitalized.

Wherever possible we have only included cash G&A expenses and management fees, excluding non-cash items such as share-based compensation, which can also have a significant impact on an investment.

FORMULAgeneral & administrative expenses


Notes: Total production in the period = Average daily production x 91 days in the period.


INTE

RMED

IATE

CO

MPA

RISO

N

Q2 OPERATING AND TRANSPORTATION EXPENSES ($/BOE)Median = $11.69/boe

Q2 GENERAL AND ADMINISTRATIVE CASH EXPENSES ($/BOE)Median = $2.44/boe

10.45

11.32

11.70

13.18

13.21

13.37

13.58

13.88

13.99

14.42

14.96

15.03

17.42

17.50

17.63

18.32

18.35

19.22

19.71

20.04

20.51

20.98

21.65

22.99

23.79

28.40

29.19

33.99

35.96

65.26

78.64

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00

Peyto

Compton

Birchcliff

Bellatrix

Bonavista

Tourmaline

Equal

Progress

Angle

Advantage

Baytex

Perpetual

Guide

Fairborne

Enerplus

TwinButte

Pengrowth

Crew

Paramount

Chinook

Trilogy

Celtic

ARC

Lone Pine

Whitecap

WestFire

PetroBakken

CrescentPoint

Legacy

NuVista

Pace

3.6

4.1

4.6

5.1

5.2

5.4

6.4

6.5

7.2

7.5

7.6

7.8

8.2

8.7

9.4

10.0

10.6

10.6

10.7

10.7

10.8

11.5

11.6

12.4

13.2

13.4

13.9

19.3

21.9

48.3

56.2

0.0 10.0 20.0 30.0 40.0 50.0 60.0

WestFire

Guide

TwinButte

Bellatrix

Pace

Crew

Fairborne

Angle

Legacy

Enerplus

Lone Pine

PetroBakken

Whitecap

Equal

Compton

CrescentPoint

Bonavista

Chinook

Advantage

NuVista

Baytex

ARC

Perpetual

Pengrowth

Peyto

Birchcliff

Trilogy

Tourmaline

Celtic

Progress

Paramount

reserves come at a costDepletion, depreciation and accretion expenses indicate the finding and development costs for oil and gas reserves. These costs relate mainly to accounting for the production of oil and gas reserves, and the depletion of value from the balance sheet as reserves are produced. Higher amounts mean the value of a company’s reserves is being decreased more rapidly than companies with lower amounts. This could be because the valuation was high in the first place or the reserves are being produced at a faster pace.

FORMULAdepletion, depreciation & accretion expenses


Note: Total production in the period = Average daily production x 91 days in the period.

a range of multiplesAs can be seen by this chart, there are a wide range of cash flow multiples in the intermediate group. Where it would theoretically take some companies only around half a decade to produce as much cash flow per share as their share price and net debt per share combined, others would take well over a decade to do the same. These multiples may be a good barometer of current market sentiment towards each of the companies.

The cash flow multiples in this report are calculated using the closing market price on August 31 and the Q2 weighted average number of shares outstanding. The numbers on the chart correspond to the dark bars that show multiples of enterprise value to annualized cash flow. The lighter bars simply reflect the market capitalization as a multiple of annualized cash flow without taking debt into account.

FORMULAenterprise value


Note: Enterprise value = Q2 weighted average basic shares x August 31, 2012 share price + net debt.

Market Capitalization to Annualized Cash Flow

Enterprise Value to Annualized Cash Flow


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Q2 DEPLETION, DEPRECIATION AND ACCRETION EXPENSES ($/BOE)Median = $18.32/boe

ANNUALIZED Q2 CASH FLOW MULTIPLESMarket Capitalization to Annualized Cash Flow Median = 5.8 Enterprise Value to Annualized Cash Flow Median = 10.0

0.8

0.9

1.3

1.3

1.4

1.5

1.6

1.8

2.0

2.1

2.3

2.3

2.4

2.4

2.7

2.7

3.0

3.2

3.2

3.7

3.7

3.8

4.3

4.4

4.7

4.7

5.1

5.6

6.1

7.8

7.9

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

Baytex

TwinButte

WestFire

CrescentPoint

Tourmaline

ARC

Bellatrix

Crew

Chinook

Peyto

Enerplus

Whitecap

Legacy

Guide

Angle

Trilogy

Bonavista

Pace

PetroBakken

Celtic

Fairborne

Progress

Advantage

Birchcliff

Equal

NuVista

Pengrowth

Paramount

Lone Pine

Compton

Perpetual

(80.5)

(68.8)

(42.9)

(40.0)

(37.1)

(34.1)

(31.4)

(30.1)

(27.3)

(27.2)

(25.0)

(25.0)

(19.3)

(17.4)

(16.7)

(16.0)

(15.2)

(11.2)

(7.0)

(2.7)

(1.9)

2.7

4.0

4.5

9.0

13.8

18.7

25.1

26.6

64.0

120.7

(100.0) (50.0) 0.0 50.0 100.0 150.0

Lone Pine

Compton

Pace

Fairborne

Bellatrix

Crew

Angle

Legacy

Guide

Enerplus

Pengrowth

WestFire

PetroBakken

Trilogy

Whitecap

Paramount

Bonavista

Baytex

Birchcliff

Equal

CrescentPoint

Advantage

ARC

TwinButte

Chinook

Celtic

NuVista

Tourmaline

Peyto

Perpetual

Progress

years of debtWe calculate net debt as bank debt plus debentures net of working capital. Companies with lower debt to cash flow ratios are in a safer position when it comes to having room to maneuver with their balance sheets. As debt levels get higher, returns for shareholders get leveraged, but risk also increases and companies can become constrained in their ability to invest in growth.

Total net debt for all the intermediate companies adds to $16.8 billion - an increase of $3 billion since Q2 of 2011.

FORMULAnet debt


Note: Net debt = bank debt + debentures – working capital.

Convertible debentures make up a portion of the debt load for Advantage, Angle, Bellatrix, Daylight, Fairborne, NAL, Perpetual, PetroBakken and Progress.

market sentimentThe second quarter continued to be a challenging period for capital markets, and the intermediate oil and gas sector was not left alone. A median drop in investor returns of 21 percent during the second quarter is significant, however, when the subsequent two months of July and August are taken into account, the loss is less substantial resulting in a median drop of only 16 percent. These numbers include all dividends.

Approximately a third of the intermediate companies showed positive shareholder returns during the five month period from April through August 2012.

FORMULAcapital gain + total distributions or dividends over the

period per share or unit

market price at end of the previous period

Note: Capital gain in period = market price at end of current period – market price at end of previous period.

Share price change plus distributions from April through August

Share price change plus distributions from April through June


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Q2 NET DEBT TO ANNUALIZED CASH FLOWMedian = 2.7

Q2 TOTAL RETURN - CAPITAL GAINS AND DISTRIBUTIONS (%)April through June Median: -21% April through August Median: -16

Shortenedcompanyname

Chiefexecutive

Stocksymbol& exchange(T=TSX, V=Venture)

Share priceAug 31/12

($)

Q2/12average daily

production(boe/d)

Q2/12 weighted shares

outstanding (basic) including

exchangeable(000)

Jun 30/12net debt before

debentures($000)

Jun 30/12debentures

outstanding($000)

Q2/12net income

($000)

Q2/12cash flow

($000)Advantage Andy Mah AAV-T 3.44 27,949 167,087 303,216 77,491 (15,579) 22,367 Angle Gregg Fischbuch NGL-T 3.87 15,569 80,921 163,490 53,998 2,389 20,280 ARC John Dielwart ARX-T 23.31 93,997 290,800 985,600 0 38,100 169,000 Baytex Raymond Chan BTE-T 44.90 53,074 119,387 433,416 0 157,280 134,672 Bellatrix Raymond Smith BXE-T 3.31 16,569 107,485 111,360 49,860 9,963 25,366 Birchcliff Jeffery Tonken BIR-T 6.74 22,039 138,426 455,708 0 416 25,985 Bonavista Keith MacPhail BNP-T 16.53 69,506 169,245 1,121,314 0 3,553 92,699 Celtic David Wilson CLT-T 16.54 19,406 105,296 201,708 147,216 9,247 23,881 Chinook Matthew Brister CKE-T 1.58 11,548 214,188 78,149 0 (24,812) 9,830 Compton Edward Bogle CMT-T 1.24 12,678 26,539 164,363 0 (47,021) 5,238 CrescentPoint Scott Saxberg CPG-T 40.99 96,972 321,421 2,022,539 0 287,430 381,813 Crew Dale Shwed CR-T 6.27 28,192 120,811 372,804 0 24,107 52,027 Enerplus Gordon Kerr ERF-T 15.54 82,108 196,768 1,353,323 0 100,264 146,547 Equal Don Klapko EQU-T 3.65 10,349 35,046 107,459 41,743 2,340 7,994 Fairborne Steven VanSickle FEL-T 1.32 13,956 102,594 192,246 0 (44,721) 12,898 Guide Bill Andrew GO-T 1.60 15,044 102,635 228,001 0 20,650 24,027 Legacy Trent Yanko LEG-T 6.47 15,075 143,309 451,008 0 (687) 47,820 Lone Pine David Anderson LPR-T 1.26 15,403 85,008 458,002 0 (105,035) 18,676 NuVista Jonathan Wright NVA-T 4.38 23,467 99,513 339,111 0 (85,411) 18,083 Pace Fred Woods PCE-T 2.84 13,765 47,135 210,409 0 (56,581) 16,485 Paramount Clay Riddell POU-T 24.09 21,474 85,497 227,587 0 18 10,181 Pengrowth Derek Evans PGF-T 6.66 78,870 411,408 1,694,540 237,560 31,066 94,368 Perpetual Susan Riddell Rose PMT-T 1.23 20,963 147,056 232,342 150,305 25,899 12,101 PetroBakken John Wright PBN-T 13.00 38,715 172,625 1,316,461 261,336 (21,510) 122,557 Peyto Darren Gee PEY-T 20.43 41,343 138,486 525,900 0 18,201 63,617 Progress Michael Culbert PRQ-T 21.97 44,641 234,390 71,633 361,932 (31,512) 28,884 Tourmaline Michael Rose TOU-T 27.58 51,022 160,236 343,868 0 1,012 61,547 Trilogy James Riddell TET-T 21.60 34,585 116,415 605,338 0 282 56,219 TwinButte Jim Saunders TBE-T 2.58 14,193 192,023 124,459 0 29,340 33,762 WestFire Lowell Jackson WFE-T 3.86 11,549 82,969 175,493 0 17,506 34,385 Whitecap Grant Fagerheim WCP-T 7.37 13,559 118,730 347,639 0 26,536 37,482 TOTAL 1,027,578 15,418,486 1,381,441 372,730 1,810,791 AVERAGE 33,148 497,371 12,024 58,413 MEDIAN 21,474 339,111 2,389 28,884

Data provided by CanOils Database and bmir researchers.


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INTERMEDIATE DATA TABLE

iQ SNAPSHOT


Focus of Operations

ACQUIRE, DEVELOP, EXPLOIT Listing: TSX-CPG



Market capitalization: $13,594 million

Net debt: $2,023 million at June 30, 2012

Enterprise value (market cap. + net debt): $15,617 million


Crude oil and NGLs 88,798bbls/d 92%


Total 96,972 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50CPG $43.27

Peer Median$14.31

Recent News:September 17, 2012 Crescent Point Energy confirmed that a dividend of $0.23 per share will be paid on Oct 15, 2012 to shareholders of record on Sept. 30, 2012

August 30, 2012 Crescent Point Energy announced closing of bought deal financing

August 15, 2012 Crescent Point Energy confirmed that a dividend of $0.23 per share will be paid on Sept. 17, 2012 to shareholders of record on August 31, 2012

Strategies:• Increaserecoveryfactorsthroughinfilldrilling,waterfloodoptimization

and improved technology

• Focusonhigh-quality,largeresource-in-placepoolswithproductionand reserves upside

• Maintainstrongbalancesheet,significantunutilizedbanklinecapacity and 3 ½-year hedging program

— from Crescent Point 2012 AGM presentation

Shaunavon

Beaverhill Lake

ViewfieldBakken

Alberta Bakken

Contact:2800, 111 - 5th Avenue S.W. Calgary,AlbertaT2P3Y6

tel 403.693.0020 toll-free 888.693.0020

[email protected]

Investor Relations 403.767.6959

[email protected]

Analyst Coverage:AltaCorp Capital

BMO Nesbitt Burns

Canaccord Genuity

CIBC Wood Gundy

Cormark Securities

Credit Suisse


FirstEnergy Capital

GMP Securities

Haywood Securities

Macquarie Capital Markets Canada


Peters & Co. Ltd.

Raymond James Ltd.

Royal Bank of Canada

Salman Partners Inc.

Scotia Capital

Stifel Nicolaus Canada Inc.

TD Newcrest

UBS Securities

Officers:ScottSaxberg - President & CEOGreg Tisdale - CFONeil Smith -VP,Engineering&Business

Development Dave Balutis -VP,ExplorationBrad Borggard -VP,CorporatePlanningDerek Christie -VP,Geosciences

Trent Stangl -VP,Marketing

& Investor RelationsSteven Toews -VP,EngineeringWestRyan Gritzfeldt -VP,EngineeringEastTamara MacDonald -VP,LandKen Lamont -VP,FinanceandTreasurerMark Eade - Corporate Secretary

Directors:Peter Bannister Paul ColborneKen CugnetHugh Gillard

Gerald RomanzinScottSaxbergGreg Turnbull

North Dakota Bakken/Three Forks

Viking

Flat Lake Bakken

Manitoba Bakken


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Focus of Operations

SOLID PORTFOLIO OF OIL & GAS ASSETSListing:TSX-EQU,NYSE-EQU




Net debt:$149.2million(includes$41.7milliondebentures)atJune30,2012

Enterprise value (market cap. + net debt): $277 million


Crude oil and NGLs 5,207bbls/d 50%


Total 10,349 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50EQU $8.49

Peer Median$14.31

Recent News:August 9, 2012 Equal announces Q2 2012 results. A strong operational second quarter was highlighted by increased production and lower debt

May 10, 2012 Equal announces Q1 2012 results. Production was up 20% year on year and averaged over 10,000 boe per day. Funds from operations were up 12% year on year

May 3, 2012 Equal announces it has initiated a strategic review processtoidentify,examineandconsideralternativeswith the view to enhancing shareholder value

Strategies:• Focusonoilplays–existingandnew

• Managecapitalprogramswithincashflow

• ShiftourcapitalspendingtowardsoildrillingintheCardium,MississippianandVikingplays

• Maintainoperationalandfinancialdiscipline

• CompletetheStrategicReviewProcesstounlockshareholdervalue

— from Equal June 2012 presentation

Contact:2600, 500 - 4th Avenue S.W. Calgary,AlbertaT2P2V6

tel 403.263.0262 toll free 877.263.0262

[email protected] www.equalenergy.ca

Analyst Coverage:Casimir Capital


Octagon Capital

PI Financial

Scotia Capital

Officers:Don Klapko - President & CEO

Dell Chapman -Sr.VP&CFO

John Chimahusky -Sr.VP&COO,

U.S. Operations

Terry Fullerton -Sr.VP,Exploration

Dan McKinnon -SeniorVP,Engineering

Mark Rupert -VP,U.S.Operations

RichardDixon -VP,Land,

U.S. Operations

Peter Letizia -VP,Production

for Canada

Directors:Daniel Botterill

Peter Carpenter

Michael Doyle

VictorDusik

Roger Giovanetto

Don Klapko

Robert Wilkinson

Hunton Trend

VikingTrend

Cardium Trends

Clair Trend


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iQ SNAPSHOT


Focus of Operations

UNLOCKING SIGNIFICANT POTENTIAL FROM RESOURCE PLAYSListing: TSX-GO




Net debt: $228 million at June 30, 2012





Total 15,044 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50GO $17.55

Peer Median$14.31

Recent News:August 8, 2012 Guide to acquire Westfire Energy, becoming a leading intermediate oil and gas company

August 8, 2012 Guide announces Q2 2012 results highlighted by revenueof$42.8million,andQ22012fundsflowfrom operations of $24.0 million an increase of 27.7% from Q1

May 7, 2012 Guide announces Q1 2012 results highlighted by revenue of$47.4million,andfundsflowfromoperationsforQ12012 of $18.8 million

Strategies:• Focusonoildevelopmentandoilproductiongrowth

• EstablishstrongfoundationforfuturegasdevelopmentwithBoyeracquisition

• Establishcorporatebaselinereservesandhighgradedportfolioofproperties

— from Guide Spring 2012 corporate presentation

Contact:400, 250 - 2nd Street S.W. Calgary, Alberta T2P 0C1

tel 403.261.6012

[email protected]

Analyst Coverage:BMO Capital Markets

Cormark Securities

FirstEnergy Capital

GMP Securities L.P.


RBC Capital Markets

Schachter Asset Management

Scotia Capital

Stifel Nicolaus

Officers:William Andrew - Chair & CEO

Dale Miller - President

Shivon Crabtree -VP,Finance&CFO

Jim Iverson -VP,Exploration

Dale Orton -VP,Operations

& Engineering

Devin Sundstrom -VP,Production

William Tang Kong -VP,Corporate

Development

Directors:William Andrew

John Brussa

Glenn Carley

William Cooke

Jeffery Errico

Lawrence Fenwick

Dale Miller

Brad Munro

Patricia Newson

Peace River Arch


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Focus of Operations

SUSTAINABLE BASE ASSETS FUEL GROWTHListing: TSX-PMT









Total 20, 963 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50PMT $6.34

Peer Median$14.31

Recent News:September 10, 2012 Perpetual Energy updates asset disposition program

August 13, 2012 Perpetual Energy releases second quarter 2012 financial and operating results

July 13, 2012 Perpetual Energy confirms repayment of convertible debentures June 30, 2012 and updates commodity price risk management

Strategies:• Profitablecapitalinvestmentinchosenprovendiversifyinggrowthstrategiesto

increase oil and NGL production

• Debtreduction

• Advanceassessmentandgrowthvalueofotherlargehighimpactresourceopportunities with risk-managed investment

• Managedownsiderisksrelatedtocommoditypricevolatility

— from Perpetual June 2012 Management Discussion and Analysis

Contact:3200, 605 - 5th Avenue S.W. Calgary, Alberta T2P 3H5

tel 403.269.4400 toll free 800.811.5522

[email protected] www.perpetualenergyinc.com

Directors:Clayton Riddell Susan Riddell RoseKaren GenowayRandall JohnsonRobert MaitlandGeoffrey MerrittDonald Nelson

Howard Ward

Analyst Coverage:BMO Nesbitt BurnsCanaccord AdamsCIBC World MarketsCormark SecuritiesDundee SecuritiesFirstEnergy CapitalPeters & Co.Raymond JamesRBC Capital MarketsScotia Capital TD Newcrest

Officers:ClaytonRiddell-ExecutiveChairmanSusan Riddell Rose - President & CEOCameronSebastian-VP,Finance&CFOVickiBenoit-VP,ProductionOperationsJeffGreen-VP,Corporate&EngineeringServicesGaryJackson-VP,Land&AcquisitionsLindaMcKean-VP,ExploitationMarcelloRapini-VP,MarketingAaron Thompson - Controller

West Central District

Eastern District


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iQ SNAPSHOT


Focus of Operations

TECHNICAL EXCELLENCE, HIGH NETBACKSListing: TSX-PBN

Shares outstanding (A+B): 187.9 million at June 30, 2012


Market capitalization: $2,442.7 million

Net debt: $1,316million+$261.3milliondebenturesatJune30,2012





Total 38,715 boe/d 100%

Cash flow netback:

Oil

Gas

$0 $50PBN $34.79

Peer Median$14.31

RecentNews:

September 17, 2012 PetroBakken confirms that a cash dividend for the month of September will be paid on October 15, 2012 to all shareholders of record on September 30, 2012

September 17, 2012 PetroBakken announced that the Board of Directors has approvedanormalcourseissuerbid(the“NCIB”)

August 15, 2012 PetroBakken confirms that a cash dividend for the month of August will be paid on September 17, 2012 to all shareholders of record on August 31, 2012

Strategies:• Focusondeliveringindustryleadingoperatingnetbacks,strongcashflows

and production growth

• ApplyleadingedgetechnologytoamultiyearinventoryofBakkenand Cardium light oil development locations

• Futuredevelopmentopportunitiesinfouremerginglightoilresourceplays, and natural gas optionality in the Horn River and Montney resource plays

• Deliveraccretiveproductionandreservesgrowthintandemwithwithan attractive dividend yield

— from PetroBakken website

Contact:2800, 525 – 8th Avenue S.W. Calgary, Alberta T2P 1G1

tel 403.268.7800

[email protected] www.petrobakken.com

Analyst Coverage:Alta Corp Capital

Bank of America

BMO Nesbitt Burns

Canaccord Genuity

CIBC World Markets

Cormark Securities

Credit Suisse Securities


FirstEnergy Capital

GMP Securities

Haywood Securities

Macquarie Financial


Peters & Co.

Raymond James

RBC Capital Markets

Scotia Capital

Stifel Nicolaus

TD Securities

Officers:John Wright - President & CEO

Mary Bulmer -VP,CorporateServices

Lawrence Fisher -VP,LandandA&D

George Gervais -VP,Exploitation

Andrea Hatzinikolas - Corporate Secretary

Peter Hawkes -VP,Exploration

William Kanters -VP,CapitalMarkets

Rene LaPrade -SrVP,Operations

Peter Scott -SrVP&CFO

Directors:Ian Brown

Martin Hislop

Craig Lothian

Corey Ruttan

Dan Themig

Brett Wilson

John Wright

Kenneth McKinnon

Cardium

Horn River

Monias

SE SaskatchewanEmerging Resources


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Financial & Operating Analysis of Canadian Oil & Gas CompaniesCanOils

An Evaluate Energy Service

Exploration and Development Expenditures are on the Decline

CanOils now provides current and historic company guidance (with tracked changes) for all publicly traded E&P companies. Updated daily with access to all source documents, guidance data items include:

Average and Exit Rate Production

Capital Spending Budgets

Operational Costs

Royalty Rates

Reserve Estimates

Drilling Plans

Projected Cash Flow and Net Debt

CanOils ® gives you the edge in discovering actionable opportunities in Canadian oil and gas. Accurate and complete annual and quarterly data will transform the way your company analyzes

and compares the performance of all TSX and TSX-V exploration and production companies.

© 2012 Evaluate Energy Ltd. www.canoils.com

0.00

20.00

40.00

60.00

80.00

100.00

120.00

0

200,000

400,000

600,000

800,000

1,000,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012

C$/bbl

CAD$

000's

Cash Flow from Operations

Total Exploration & Development Expenditures

WTI

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

‐500,000

0

500,000

1,000,000

1,500,000

2,000,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2010 2011 2012

BOE/d

CAD$

000's

Exploration & Development Actual Expenditures (Quarterly)

Remaining Exploration & Development Budget (Annual)

BOE/d

An analysis of 24 Junior E&P companies

indicates that more than 73% of their

total Exploration and Development

budgets have already been spent in the

first half of 2012 (Figure 1). Further,

total Exploration and Development

expenditures and Cash Flow from

Operations are on the decline since the

fourth quarter of 2011. This trend is in

the wake of an 11% drop in oil prices

from Q2 to Q3 in 2011 (Figure 2).

Exploration and Development spending

should continue to decline for the rest

of the calendar year and is likely to go

over budget, much like previous years.

The peer group is made up of 24 TSX and TSX-V

listed companies producing between 1,000 and

10,000 boe/d, as of August 23, 2012.

TUNISIAAfrica HydroCandaxChinookCYGAMDualexLundinSondeTerrace Winstar

FRANCEGallic Lundin Sterling Vermilion

UKRAINECubEast WestTransEuro

SPAINBNKDundeeSaxon

TANZANIAAntrim HeritageOrca

YEMENCalvalleyEast WestTransGlobe

PAKISTANHeritageNiko

PAPUA NEW GUINEAEaglewoodLNG TransEuro

UNITED KINGDOMAntrim Canadian OverseasInternational FrontierIona Ithaca Lundin North SeaSerica Sterling VermilionXcite

HUNGARYDualexFalconWinstar

ITALYBRS CYGAMOrcaSaxon Oil

ROMANIAEast WestSterlingTransAtlanticWinstar

INDIABengalEast WestNiko

NAMIBIAEcoEnergulfHRT ParticipacoesSerica

SOMALIAHorn

CONGOEnergulfHeritageLundin

ETHIOPIAAfrica OilCalvalleyEpsilon

THAILANDCoastalPan Orient

MALTAHeritage

BRAZILBrookwaterBrownstoneCanacolGran TierraHRT ParticipacoesPetro Vista

UNITED STATESArsenal Aurora Big SkyBlackbirdBNK Bowood Bridge BrownstoneBRS Bucking HorseCaza Oil & GasDejour Derek Doxa Eagle Enerplus Enhanced OilEnterprise EpsilonEqual Exall First StarGale ForceGuardianHillcrestIvanhoeLNG Lynden KFG Maxim Montana MountainviewNextraction NiMin Parallel Paramax Paramount Petra Primary RenegadeRooster SaxonSolimar Thunderbird UndergroundUnited Hunter Westbridge Wind River Zargon Zodiac

COLOMBIAAzabache BrownstoneC&C EnergiaCanacol Gran TierraParex PetroamericaPetrodoradoPetromagdalenaPetromineralesPetroNovaPetro VistaQuetzal Sagres Santa MariaShonaSintanaSuroco Energy

GUYANACanacolCGX GroundstarSagres

ARGENTINAAmericas PetrogasAntrim ArPetrolAzabache BrownstoneCrown PointGran TierraMadalena

PERUAmericas PetrogasGran TierraLoonPetrodoradoPetromineralesShonaSintanaVeraz

TRINIDAD & TOBAGOMaxim Niko Parex Primera Touchstone

ALBANIAAPICBankersManasPetromanasStream

KAZAKHSTANCaspianCondorTethys

RUSSIAEast WestHeritageLundinPetroKamchatka

TAJIKISTANManasTethys

NEW ZEALANDNew ZealandTAG

CHINAIvanhoePrimeline

AUSTRALIABengalFalconGallicPetroFrontierRodiniaVermilion

INDONESIACBM AsiaLundinPan OrientSerica

SYRIAMena

EGYPTEast WestGroundstarMenaSea DragonTransGlobe

IRAQGroundstarHeritageIraqLongfordShaMaranSonoroVastWesternZagros

ECUADORIvanhoe

GUATEMALA QuetzalSanta Maria

UZBEKISTANTethys

MONGOLIAIvanhoeManas

MOROCCOLongreachSericaTransAtlantic

PARAGUAYPetrodorado

LIBYAHeritageSonde

LIBERIASimba

ISRAELAdiraBrownstone

KENYAAfrica OilSimbaVanoil

POLANDBNK LNG GERMANY

BNK Petroleum

NETHERLANDSLundinSterlingVermilion

ZAMBIAExile

JAMAICASagres

PORTUGALPorto

NORWAYLundin

AZERBAIJANGreenfields

VIETNAM Lundin

BULGARIATransAtlantic

MALAYSIA Lundin

KYRGYZSTANManas

GUINEASimba

NIGERIAExileMart

MALIAfrica OilHeritageSimba

TURKEYAnatoliaEmperor ExileTransAtlantic

SOUTH AFRICAFalcon

BANGLADESHNiko

MADAGASCARCandaxNiko

RWANDAVanoil


This map shows the footprint of activities for TSX and TSX Venture listed oil and gas companies with a market capitalization of more than $5 million and less than 100,000 boe/d of production in the second quarter of 2012. If you know a company that meets this criteria that has been left out, please email us at [email protected].

Canadian companies operating abroad




SPAINBNKDundeeSaxon











SOMALIAHorn




MALTAHeritage
















SYRIAMena



ECUADORIvanhoe


UZBEKISTANTethys



PARAGUAYPetrodorado

LIBYAHeritageSonde

LIBERIASimba




BNK Petroleum


ZAMBIAExile

JAMAICASagres

PORTUGALPorto

NORWAYLundin


VIETNAM Lundin


MALAYSIA Lundin

KYRGYZSTANManas

GUINEASimba

NIGERIAExileMart



SOUTH AFRICAFalcon

BANGLADESHNiko


RWANDAVanoil




SPAINBNKDundeeSaxon











SOMALIAHorn




MALTAHeritage
















SYRIAMena



ECUADORIvanhoe


UZBEKISTANTethys



PARAGUAYPetrodorado

LIBYAHeritageSonde

LIBERIASimba




BNK Petroleum


ZAMBIAExile

JAMAICASagres

PORTUGALPorto

NORWAYLundin


VIETNAM Lundin


MALAYSIA Lundin

KYRGYZSTANManas

GUINEASimba

NIGERIAExileMart



SOUTH AFRICAFalcon

BANGLADESHNiko


RWANDAVanoil


iQ SNAPSHOT

HIGH IMPACT EXPLORATION AND DRILLING IN STABLE COUNTRIESListing: TSX-BNG




Net surplus: $18.4 million at June 30, 2012

Enterprise value (market cap. - net surplus): $14.4 million

Average daily production for fiscal Q1 2013 ended June 30, 2012:


Natural gas 225 mcf/d 43%

Total 89 boe/d 100%

Oil

Gas

Recent News:September 18, 2012 Bengal announced completion of production testing on recently drilled Cuisinier wells, with positive results

August 13, 2012 Bengal provided updated corporate presentation and operations review and filed MD&A and financial interim report for Q1 2013, indicating that the Company entered Q2 2013 with a strong balance sheet with $19.7 million in cash, no debt and a balanced portfolio ofexplorationanddevelopmentdrillingopportunities

July 13, 2012 Bengal provided final Cuisinier drilling campaign data and operational update

Strategies:• Solidportfolioofassetsandopportunities-Near-term,low-riskopportunitiesand

long-term, high impact prospects

• Technicallydrivenevaluationandvaluecreationprocess

• Robustcashpositionfacilitatesoperationalexecution

• Initiatingoperatedmulti-targetdrillinginonshoreAustralia,mid2012

• Takingcontrolofoperationswithcompanyowneddrillingrigandcrew

• Continuationofdrillingprogramforproduction,reservesandresources

• Targetedmilestonesincludingfarm-outsonselectedproperties

— from Bengal August 2012 presentation


Focus of Operations

AUSTRALIA

INDIA

Cauvery Basin

Contact:Suite 1810, 801 - 6th Ave S.W. Calgary, Alberta T2P 3W2

tel 403.205.2526

[email protected] www.bengalenergy.ca

Analyst Coverage:Casimir Capital Ltd.

Cormark Securities Inc.

Officers:Chayan Chakrabarty - President & CEO

Bryan Goudie - CFO

RichardEdgar-ExecutiveVP

GarrettWilson-VP,Engineering&Operations

GordonMacMahon-VP,Exploration

Directors:Ian Towers

Chayan Chakrabarty

Peter Gaffney

James Howe

Stephen Inbusch

Dr. Brian Moss

Robert Steele

Bill Wheeler

Cooper Basin

Timor Sea


INTE

RNAT

ION

AL

SNA

PSH

OTS

iQ SNAPSHOT

HIGH IMPACT EXPLORATION AND DRILLING IN STABLE COUNTRIESListing: TSX-BNG




Net surplus: $18.4 million at June 30, 2012

Enterprise value (market cap. - net surplus): $14.4 million

Average daily production for fiscal Q1 2013 ended June 30, 2012:


Natural gas 225 mcf/d 43%

Total 89 boe/d 100%

Oil

Gas

Recent News:September 18, 2012 Bengal announced completion of production testing on recently drilled Cuisinier wells, with positive results

August 13, 2012 Bengal provided updated corporate presentation and operations review and filed MD&A and financial interim report for Q1 2013, indicating that the Company entered Q2 2013 with a strong balance sheet with $19.7 million in cash, no debt and a balanced portfolio ofexplorationanddevelopmentdrillingopportunities

July 13, 2012 Bengal provided final Cuisinier drilling campaign data and operational update

Strategies:• Solidportfolioofassetsandopportunities-Near-term,low-riskopportunitiesand

long-term, high impact prospects

• Technicallydrivenevaluationandvaluecreationprocess

• Robustcashpositionfacilitatesoperationalexecution

• Initiatingoperatedmulti-targetdrillinginonshoreAustralia,mid2012

• Takingcontrolofoperationswithcompanyowneddrillingrigandcrew

• Continuationofdrillingprogramforproduction,reservesandresources

• Targetedmilestonesincludingfarm-outsonselectedproperties

— from Bengal August 2012 presentation


Focus of Operations

AUSTRALIA

INDIA

Cauvery Basin

Contact:Suite 1810, 801 - 6th Ave S.W. Calgary, Alberta T2P 3W2

tel 403.205.2526

[email protected] www.bengalenergy.ca

Analyst Coverage:Casimir Capital Ltd.

Cormark Securities Inc.

Officers:Chayan Chakrabarty - President & CEO

Bryan Goudie - CFO

RichardEdgar-ExecutiveVP

GarrettWilson-VP,Engineering&Operations

GordonMacMahon-VP,Exploration

Directors:Ian Towers

Chayan Chakrabarty

Peter Gaffney

James Howe

Stephen Inbusch

Dr. Brian Moss

Robert Steele

Bill Wheeler

Cooper Basin

Timor Sea

EXPLORING BEYONDListing:TSX-PMGBVC:PMGC



Market capitalization: $836 million

Net debt including debentures: $516.4 million at June 30, 2012




Natural gas 0 mmcf/d 0%

Total 31,113 boe/d 100%

Oil

Gas

Recent News:August 2, 2012 Petrominerales reports second quarter financial results highlightedbyfundsflowfromoperationsof US$173.7 million

July 24, 2012 PetromineralesannouncesclosingofVerazPeruacquisition and provides an update on Sheshea 1xexplorationwell

June 18, 2012 Petrominerales announces Guala oil discovery on Corcel block and provides an update on Bromelia

Strategies:• Extensive,diversifieddrillinginventory

• 100%ownedlandbaseinColombiawithsuperiorfiscaltermsthat cannot be replicated

• High-valueproductionbase

• Respectforsafety,communitiesandtheenvironment

•World-classprofessionals

• Managementteamdepthandexperiencewithaproventrackrecord

• Fully-fundedexplorationprograms

• Yieldplushigh-impactexplorationupside

— From Petrominerales website 2012

Contact:1000, 333 - 5th Ave S.W. Calgary, Alberta T2P 2Z1

tel 403.705.8850

[email protected] www.petrominerales.com

Analyst Coverage:BMO Capital Markets Canada

Bolsa y Renta

Celfin

CIBC World Markets

Cormark Securities

Credit Suisse

FirstEnergy Capital

Fraser MacKenzie

GMP Securities

Haywood Securities

Interbolsa

Macquarie Research

Peters & Co.

Raymond James

RBC Capital Markets

Scotia Capital

Stifel Nicolaus

TD Securities

Tudor, Pickering, Holt & Co.

UBS Securities

Titicaca Basin

Officers:Corey Ruttan - President & CEO

John Scott - COO

Kelly Sledz - CFO

ErikLyngberg-SrVP,Exploration

Andrea Hatzinikolas - General Council & Corporate Secretary

TannyaMorales-VP,Finance

RubenCano-VP,Services & Logistics

Jeff Chant -VP,OrganizationalPerformance

John Wright - Chairman of the Board & Strategic Advisor

JaimieValenzuela-VP,ProjectManagement & Planning, & Director of Operations

María Mercedes Palacio -VP,CorporateAffairs

Directors:John Wright

Jerald Oaks

Alastair MacDonald

Kenneth McKinnon

Ernesto Sarpi

EnriqueUmaña-Valenzuela

GeirYtreland

Ucayali Basin

Middle Magdelena Basin Central Llanos

Southern Llanos Basin


Focus of Operations

Upper Magdelena Basin

Deep Llanos

Peru

COLOMBIA

Putomayo Basin


INTE

RNAT

ION

AL

SNA

PSH

OTS

Company Ticker Chief Executive

Q2 2012 Production

(boe/d)

Aug 31, 2012share price

($)3MV Energy Corp. TMV-V Curtis Schoenfeld 188 0.26Abenteuer Resources Corp. ABU-V Lewis Dillman 17 0.08Alston Energy Inc. ALO-V Don Umbach 52 0.07Anglo Canadian Oil Corp. ACG-V Todd Montgomery 6 0.04Anterra Energy Inc. AE.A-V Gang Fang 250 0.04Arctic Hunter Energy Inc. AHU-V Tim Coupland not available 0.06Atikwa Resources Inc. ATK-V Sean Kehoe 173 0.04Avatar Energy Ltd. AVG-V Alan Jack 69 0.05Bayshore Petroleum Corp. BSH-V Peter Ho 7 0.30Blackdog Resources Ltd. DOG-V David Corcoran 81 0.25Blackhawk Resource Corp. BLR-V Dave Antony not available 0.13Blacksteel Energy Inc. BEY-V Curtis Hartzler 2 0.08BNP Resources Inc. BNX.A-V Gregory Bilcox 9 0.05Border Petroleum Corp. BOR-V Kelly Kimbley 244 0.17Canadian Energy Exploration Inc. XPL-V Larry Buzan 6 0.01Carmen Energy Inc. CEI-V Randall Harrison 47 0.04Century Energy Ltd. CEY-V Jimmy McCarroll 2 0.03Cumberland Oil & Gas Ltd. COG-V Daniel Allan 87 0.05Dejour Energy Inc. DEJ-T Robert Hodgkinson 406 0.14Desmarais Energy Corp. DES-V Doug Robinson 50 0.07Detector Exploration Ltd. DEX-V Ronald Alexander 73 0.02Diaz Resources Ltd. DZR-V Robert Lamond 387 0.03Donnybrook Energy Inc. DEI-V Malcolm Todd 286 0.15Donnycreek Energy Inc DCK-V Malcolm Todd 40 1.34Elkwater Resources Ltd. ELW-V Don Brown 177 0.10Emerald Bay Energy Inc. EBY-V Shelby Beattie 7 0.06FairWest Energy Corporation FEC-V Vern Fauth 270 0.04Firebird Capital Partners Inc. FRD-V Kevin Patterson 5 0.16Forent Energy Ltd. FEN-V Thomas Lester 227 0.07Galileo Petroleum Ltd. GPL-V David Hottman not available 0.06Georox Resources Inc. GXR-V Burkhard Franz 78 0.08Great Pacific International Inc. GPI-V Mike Robichaud 1 0.01Guardian Exploration Inc. GX-V Graydon Kowal 39 0.02Hawk Exploration Ltd. HWK.A-V Steve Fitzmaurice 486 0.28Hemisphere Energy Corporation HME-V Don Simmons 418 0.60Hermes Financial Inc. HFI-V Christopher Yee 27 0.03Huntington Exploration Inc HEI-V Steve Harding 15 0.05Invicta Energy Corp. VCA-V Gordon Reese 272 0.19Ironhorse Oil & Gas Inc. IOG-V Larry Parks 64 0.15Jadela Oil Corp. JOC-V Gregory Leia not available 0.14

Company Ticker Chief Executive

Q2 2012 Production

(boe/d)

Aug 31, 2012share price

($)Kallisto Energy Corp KEC-V Robyn Lore 223 0.08Lariat Energy Ltd. LE-V Scott Emerson not available 0.12LGX Oil + Gas Ltd. OIL-V Trent Yanko 485 0.99Magnum Energy Inc. MEN-V Richard Nemeth 158 0.11Morumbi Resources Inc MOC-V Mark Brennan 3 0.45Mount Dakota Energy Corp. MMO-V Gary Claytens 2 0.03Nordic Oil & Gas Ltd. NOG-V Donald Benson 85 0.04Northern Spirit Resources Inc NS-V Kevin Baker 80 0.05Online Energy Inc. ONL-V Steve Dabner 406 0.25Pacific Paradym Energy Inc PPE-V Sonny Chew not available 0.03PanTerra Resource Corp. PRC-V Fred Rumak not available 0.11Paris Energy Inc. PI-V Robert Lamond 17 0.05Passport Energy Ltd PPO-V Bruce Murray 15 0.07Pennant Energy Inc. PEN-V Thomas Yingling not available 0.09Pennine Petroleum Corporation PNN-V Jeff Saxinger 11 0.03Petro One Energy Corp. POP-V Terrence King not available 0.35Petro Viking Energy Inc. VIK-V Irvin Eisler 87 0.26Petroforte International Ltd. PFI-V Allan King not available 0.03Poplar Creek Resources Inc. PCK-V John Carruthers 7 0.03Primary Petroleum Corporation PIE-V Mike Marrandino not available 0.39Questfire Energy Corp. Q.A-T Richard Dahl 69 0.45RedWater Energy Corp. RED-V Gary Waters 89 0.17Relentless Resources Ltd. RRL-V Daniel Wilson 89 0.16Ria Resources Corp. RIA-V Neil Wilson 63 0.05RockBridge Resources Inc. RBE-V Michael O'Byrne not available 0.05Saccharum Energy Corp. SHM-V Johannes Kingma 18 0.15Sahara Energy Ltd. SAH-V Martin Feng 23 0.05Samoth Oilfield Inc. SCD-V Leonard Jaroszuk 31 0.08Solara Exploration Ltd. SAA.A-V Donald Holding 239 0.02Standard Exploration Ltd. SDE-V Ronald Wiebe 79 0.09Sunridge Energy Corp SRG-V Dwayne Tyrkalo 4 0.20Terrex Energy Inc. TER-V Jonathan Lexier 274 0.03Torquay Oil Corp. TOC.A-V Terry McCallum 359 0.14Traverse Energy Ltd. TVL-V Laurie Smith 301 0.64TrinCan Capital Corp. TRN-V Burkhard Franz not available 0.07Twoco Petroleums Ltd. TWO-V Wayne Malinowski 426 0.12Tuscany Energy Ltd. TUS-V Robert Lamond 365 0.10Vecta Energy Corporation VER-V Thomas Coffman 61 0.01Western Plains Petroleum Ltd. WPP-V David Forrest 167 0.05


emerging conventional companies This is a list of some of the emerging oil and gas companies that trade on the TSX or TSX Venture Exchange and produced less than 500 boe/d in the second quarter of 2012. This list is not exhaustive.

emerging oil sands companiesThis list is focused on Canadian oil sands players with less than 100,000 barrels of oil per day of production and listed on either the TSX or the TSX Venture Exchange. In some cases, oil sands development is only one aspect of their business.

Company Chief executive

Stock symbol & exchange

(T=TSX, V=Venture)

Share price August 31,

2012 ($)

Market cap August 31/12

share price & June 30/12

shares o/s ($000) Area of focus Stage of development Recovery method

Alberta Oilsands Binh Vu (interim) V-AOS $ 0.10 $ 16,480 Athabasca Application SAGDAthabasca Oil Corp. Sveinung Svarte T-ATH $ 13.58 $ 5,413,611 Athabasca Application In situ recoveryBlackPearl Resources John Festival T-PXX $ 3.18 $ 907,312 AB & SK Heavy Oil Operating SAGD, ASP floodCavalier Energy (Paramount Resources)

William Roach T-POU $ 24.09 $ 2,059,647 Athabasca Announced SAGD anticipated

Connacher Oil and Gas Peter Sametz (interim)

T-CLL $ 0.41 $ 186,503 Athabasca Operating, SAGD

Ivanhoe Energy Robert Friedland T-IE $ 0.71 $ 244,339 Athabasca Application SAGD anticipatedMEG Energy William McCaffrey T-MEG $ 38.82 $ 7,543,741 Athabasca Operating SAGDPengrowth Energy Derek Evans T-PGF $ 6.66 $ 3,332,977 Cold Lake Operating (Pilot) SAGDPetrobank Energy John Wright T-PBG $ 12.37 $ 1,247,820 Dawson & Kerrobert Operating (Pilot) THAI®Poplar Creek Resources Inc.

John Carruthers V-PCK $ 0.03 $ 1,164 Athabasca Announced In situ recovery

SilverWillow Energy Howard Lutley V-SWE $ 1.05 $ 56,154 Athabasca Announced In situ recoverySouthern Pacific Resource

Byron Lutes T-STP $ 1.51 $ 515,371 Athabasca, SK Heavy Oil Operating SAGD

NOTES:1. Oilsands Quest is traded on the Amex Exchange (BQI) and Statoil is traded on the Oslo (STL) and NYSE (STO) Exchanges2. Private oil sands players include Andora Energy, Birchwood Resources Inc., E-T Energy, Grizzly Oil Sands, Harvest Operations, JACOS, Koch Exploration, Laricina Energy, N-SOLV, Oak Point Energy,

OSUM and Value Creation 3. Southern Pacific’s fiscal year end is June 30. The August 31, 2012 share price and March 31, 2012 shares outstanding were used to calculate market cap.

iQ trendsThe following four-year review helps put the latest results into perspective

This iQ Report not only includes the results of Western Canada’s oil and natural gas companies for the second quarter of 2012, it also includes the following review of the results over the past four years to help put the Q2 2012 numbers into perspective.

Junior producers Intermediate producers

NUMBER OF JUNIORS

40

50

60

70

80

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

NUMBER OF COMPANIES WITH PRODUCTION FROM 500 TO 10,000 BOE/D

Junior producersNUMBER OF INTERMEDIATES

15

25

35

45

55

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

NUMBER OF COMPANIES WITH PRODUCTION FROM 10,000 TO 100,000 BOE/D

Intermediate producers

PRODUCTION MIX - NATURAL GAS WEIGHTING (%)

50%

60%

70%

80%

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

AVERAGE GAS PRODUCTION DIVIDED BY AVERAGE TOTAL PRODUCTIONPRODUCTION MIX - NATURAL GAS WEIGHTING (%)

60%

65%

70%

75%

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

AVERAGE GAS PRODUCTION DIVIDED BY AVERAGE TOTAL PRODUCTION

CASH FLOW NETBACK ($/boe)

$0

$10

$20

$30

$40

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

CASH FLOW FROM OPERATIONS DIVIDED BY TOTAL PRODUCTIONCASH FLOW NETBACK ($/boe)

$0

$10

$20

$30

$40

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

CASH FLOW FROM OPERATIONS DIVIDED BY TOTAL PRODUCTION

NET DEBT TO ANNUALIZED CASH FLOW

0

1

2

3

4

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

NET DEBT DIVIDED BY CASH FLOW FOR PERIOD MULTIPLIED BY FOURNET DEBT TO ANNUALIZED CASH FLOW

0

1

2

3

4

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

NET DEBT DIVIDED BY CASH FLOW FOR PERIOD MULTIPLIED BY FOUR

ENTERPRISE VALUE VS PRODUCTION (boe/d)

$25

$35

$45

$55

$65

$75

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

MARKET CAP PLUS DEBT DIVIDED BY PRODUCTION SHOWN IN THOUSANDSENTERPRISE VALUE VS PRODUCTION (boe/d)

$35

$45

$55

$65

$75

$85

Q2Q3 Q1Q22011

Q1Q3Q22010

Q1Q3Q22009

Q1Q3Q22008 2012

MARKET CAP PLUS DEBT DIVIDED BY PRODUCTION SHOWN IN THOUSANDS


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INVESTOR QUARTERLY - iradesso

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