february 2020 in review - ad library · 2-oct-17 franco-nevadaosum oil sands (royalty assets) $93...

March 05-2020

Updated to market close on Current Previous Month Monthly ChangeMarch 4th, 2020 Value Value Percent DirectionEdmonton Mixed Sweet (C$/bbl)(2) $59.17 $62.47 (5.3%)

Western Canadian Select (C$/bbl)(2) $43.62 $42.55 2.5%

AECO (C$/GJ)(2) $1.65 $1.67 (1.2%)

US$/C$(2) $0.7458 $0.7531 (1.0%)

Monthly A&D Transaction Value ($MM)(1)(3) $24.0 $77.0 (68.8%)

Monthly A&D Transaction Count(1) 1 1 -- --Canadian Rig Count 206 256 (19.5%)

Canadian Oil/Cond Production (MMbbl/d)* 2.9 2.8 2.2%

Canadian Gas Production (Bcf/d)* 19.2152 19.0 1.2%

Canadian Gas Storage (Bcf) 364.0 527.6 (31.0%)

$2.6

$8.0

$5.9

$2.2

$1.1

$2.1

$0.2

$3.7 $4.5

$1.4

$8.0 $8.3

$0.6

$2.1 $2.2 $3.4

$6.5 $6.2

$2.3 $3.6

$1.6

$6.7

$0.9

$4.0

$0.6

$3.2 $3.0 $3.5

$0.8 $1.7

$3.8

$2.6

$0.6

$4.0

$1.4 $1.0 $0.0 $0.2 $0.2 $0.2 $0.1

$0$1$2$3$4$5$6$7$8$9

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

$18.7 $7.1 $22.2 $8.4 $18.6 $13.1 $10.4 $9.0 $7.0 $0.7 $0.1

Tran

sact

ion

Valu

e (C

$B)

Asset Corp PrivateCo Average

Tourmaline Oil Corp’s acquisition of Chinook Energy for C$24MM

1

February 2020 in Review HIGHLIGHTS IN THIS ISSUE:

The crude oil markets saw another month of volatility due to concerns as COVID-19 spreads globally. Crude oil peaked at ~$54/bbl and closed the month just below $45/bbl, while NYMEX gas market reached the lowest February settlement in 20 years as a result of a warmer winter season (Pages 2, 5)

Check out our special page on the North Montney Mainline and the increased access to additional markets (Page 8)

WCSB active weekly rig count at 206 - down over last year’s levels by 6% (Page 9)

Key Industry Indicators

Quarterly Deal Activity (Producing Assets Only)(3) 1 deal

announced in February

Source: BMO Capital Markets, *All production throughout this document is sourced from geoSCOUT, only includes BC/AB/SK/MB and does not include oil sands mining. Production volumes are raw. 1. Deals larger than C$20MM; transactions are reported based on announcement/disclosure dates. 2. Current prices as of March 4th, 2020 close. Previous month prices as of February 5th, 2020 close. 3. Chart excludes joint ventures, oil sands transactions, and notable transactions including: CNOOC-Nexen (C$17.9B); Repsol-Talisman (C$15.9B); CNRL-Shell (C$12.6B); Cenovus-ConocoPhillips

(C$17.7B); Pengrowth’s disposition announced on October 18, 2017; Aspenleaf-NEP (announced on August 31, 2018); Pacific Oil-Canbriam (announced on May 13, 2019); CNRL-Devon C$3.78B (announced May 29, 2019); Cona-Pengrowth C$740MM announced Nov 1, 2019.

DEALS ANNOUNCED IN FEBRUARY(1):

March 05-2020

2

February was a challenging month for oil prices as COVID-19 became a global problem; impacting transportation networks, industrial operations and consumer activity. Global growth and oil demand were revised down. Prompt WTI opened February at $50, peaked just under $54 on the 20th and closed the month below US$45/bbl (~-17%); the biggest one week drop since 2008

Early optimism that OPEC+ Joint Technical Committee would act swiftly as they met in the first week of February. It appeared that the Saudis were pushing for a cut, but Russia was opposed (as their national budget is less reliant on oil prices), in the end the group decided not to act, waiting instead for their planned meeting on March 5/6

February saw Enbridge’s Line 3 replacement and expansion project clearing important regulatory hurdles in Minnesota, this expansion would add around 370 Mbbl/d of additional capacity out of Canada

Another derailment near Guernsey, Saskatchewan occurred in February. This is the second train derailment in the same area since December 9th which caused the federal government to order trains that carry crude to slow down to 32 km/h in metropolitan areas and to 40 km/h outside of metropolitan areas

WCS tightened over the month closing at $-13.65. Canadian grade strength was driven by declining Alberta inventories and we also saw the U.S. place sanctions on Rosneft and their trading subsidiaries due to their continued dealing with the sanctioned regime of Venezuela. We are watching this closely as it could mean the Gulf will be short heavy barrels once in effect

Equity Markets The Canadian new issue market raised gross proceeds of

approximately C$3.2B in February with no transactions in the energy or PE&I space

2020 YTD, energy High Yield has accounted for 12.6% of all new issue deal and 12.2% of new dollar volume, up significantly from 2019; E&P has accounted for ~39% of energy deals and midstream ~28%, a sharp reversal from 2019

The High Yield primary saw no activity this past week as investors remain on the sidelines amidst COVID-19 fears

The Leveraged Loan market had a tentative tone this week due to concerns around COVID-19, causing arrangers to flex transactions and pull some deals altogether; excluding repricings,16 issuers allocated 18 tranches to raise $6.5B this week

On Feb. 19, Tallgrass Energy priced $430 million of 6.00% Senior Notes due 2027 at $98.591 to yield 6.250%

On Feb. 11, Buckeye Partners priced $500 million of 4.125% Senior Notes due 2025 and $500 million of 4.50% Senior Notes due 2028 at par

The U.S. HY Energy Index widened ~226 bps and the broader U.S. HY Index widened ~72 bps in February

Commodities

Debt Markets

Source: BMO Capital Markets

CRUDE

NATURAL GAS

NATURAL GAS CONTINUED

NYMEX: February saw a continuation of January, U.S. natural

gas persisted with its slide as the absence of cold weather across Europe and North America prevented any meaningful drawdown on inventories. Lower 48 inventories sit at a healthy 2,343 Bcf which marks a 780 Bcf departure from this time last year. Conversely, European gas inventories sit at 2,400 Bcf which is about 800 Bcf higher than this time last year. The reason behind such high inventory is partly due to increasing Lower 48 natural gas production (currently sitting at 92.5 Bcf/d), but mainly the absence of cold weather in key markets. Europe saw it’s warmest January ever, while the U.S. notched its fifth warmest January since records began

AECO: In Alberta the biggest development in natural gas markets for February was NGTL bringing on the highly anticipated North Montney Mainline expansion. Phase one of the project, which is slated to bring an additional 672 MMcf/d of supply to NGTL began flowing on February 1st, while Phase two will bring an additional 813 MMcf/d onto the system in April 2020. While the full capacity of Phase one is yet to be realized, our estimates point to 300-400 MMcf/d of new production coming online. The rig count corroborates this supply increase as producers have but 12 rigs to work in the area surrounding the North Montney Mainline

March 05-2020

Parameters Metrics

Prod. % Gas P+P Production P+P

(C$ MM) (boe/d) (%) (Mboe) (EV$/boe/d) (EV$/boe)

24-Feb-20 Tourmaline Chinook Energy $24 3,500 86% 35,600 $6,971 $0.69 Northeast BC20-Jan-20 IPC Granite $77 1,515 0% 14,000 $50,937 $5.51 S. Eastern AB5-Dec-19 Bonavista Paramount (West Central AB Assets) $53 8,200 56% 47,432 $6,500 $1.12 Central AB6-Nov-19 Tourmaline Undisclosed (Peace River High Assets) $175 5,600 50% 62,000 $31,250 $2.82 Grande Prairie1-Nov-19 Cona Pengrowth $740 22,708 19% 446,508 $32,588 $1.66 Ath/Cold Lake18-Oct-19 Tourmaline Painted Pony (NE BC Montney Assets) $45 -- n.a. n.a. n.a. n.a. Northeast BC3-Sep-19 Undisclosed Crescent Point (SE SK Assets) $212 7,000 15% 49,200 $30,286 $4.31 Area IV28-Jun-19 Freehold Surge (AB and SK Royalty Assets) $29 214 6% n.a. $136,290 n.a. Other26-Jun-19 Pieridae Energy Shell Canada (Alberta Foothills Assets) $190 28,623 69% 119,957 $6,638 $1.58 Foothills29-May-19 CNRL Devon Canada $3,775 122,800 0% 879,000 $30,741 $4.29 Fort McMurray

Average / Total (Ex. Royalty) 9 Transactions (4 Oil, 5 Gas) $5,292 199,945 37% 1,653,697 $24,489 $2.75Oil Weighted $4,804 154,022 8% 1,388,708 $36,138 $3.94Gas Weighted $488 45,923 65% 264,989 $12,840 $1.55

WCSB RegionAnn'd Date Buyer Seller Enterprise

Value

Parameters Metrics

Ann'd Date Buyer Seller Enterpise Value Prod. % Gas Production Commentary

(C$ MM) (boe/d) (%) (EV$/boe/d)28-Jun-19 Freehold Surge (AB and SK Royalty Assets) $29 214 6% $136,290 Gross overriding royalty on central & northern AB, SW SK assets28-Feb-18 Freehold Cardinal (Various Royalties) $24 110 n.a. $218,182 Gross overriding royalty on the Mitsue Gilwood Unit27-Feb-18 PrairieSky Undisclosed (AB Viking Royalty Assets) $46 300 54% $153,333 Producing gross overriding royalty acquired27-Feb-18 PrairieSky Undisclosed (Clearwater Royalty Assets) $33 n.a. 0% n.a. Non-producing gross overriding royalty acquired30-Jan-18 Burgess Connacher (Royalty Assets) $44 n.a. 0% n.a. Sliding scale royalty on all lands containing bitumen20-Dec-17 Freehold Bonterra (Pembina GORR) $52 210 26% $247,619 2% gross overriding royalty on its Pembina Cardium pool10-Nov-17 Undisclosed Obsidian (Eastern Alberta Royalty) $40 181 38% $220,994 Royalty interest in Eastern Alberta2-Oct-17 Franco-Nevada Osum Oil Sands (Royalty Assets) $93 310 0% $298,387 4% gross overriding royalty interest on its Orion Project2-Mar-17 Freehold Undisclosed (Royalty Assets) $34 185 9% $183,784 32,000 acres in the Dodsland Viking9-Feb-17 Burgess Athabasca (Royalty Assets) $90 -- 0% n.a. Upsized: Includes Leismer and Corner lease16-Dec-16 Undisclosed Cavalier (Royalty Assets) $100 -- n.a. n.a. Sliding scale (0-20%) starting at US$50/bbl WCS14-Dec-16 PrairieSky Pengrowth (Royalty Assets) $250 608 0% $411,455 4% royalty on Lindbergh properties, including future development14-Dec-16 Burgess Athabasca (Royalty Assets) $50 -- 0% n.a. Upsized: Modified sliding scale and starting point1-Dec-16 PrairieSky BlackPearl / Other (Royalty Assets) $117 460 17% $255,000 Acquired a combined 3.95% royalty interest at Onion Lake3-Nov-16 Burgess Athabasca (Royalty Assets) $129 n.a. 0% n.a. Upsized: Sliding scale (0-12%) starting at US$75/bbl WTI27-Jun-16 PrairieSky Pine Cliff (Royalty Assets) $25 n.a. n.a. n.a. 99,930 net fee title acres20-Jun-16 Burgess Athabasca (Royalty Assets) $129 -- 0% n.a. Sliding scale (0-6%) starting at US$75/bbl WTI2-May-16 Freehold Husky (Royalty Assets) $165 1,700 70% $97,059 Acquired >2MM net acres across Western Canada

Average / Total 18 Transactions $1,449 4,278 15% $222,210

3

The 10 Most Recent Transactions Over $20 Million(1)

Oil Sands Transactions (2016 – Present)

Royalty Transactions (2016 – Present)

Note: Transactions that occurred after the month being covered in this report are not included Source: BMO Transaction Database Denotes current month transaction Blue = BMO Capital Markets provided transaction advisory services Green = BMO Capital Markets provided acquisition financing or related services

1. Excludes Pacific Oil’s acquisition of Canbriam announced on May 13, 2019 (no transaction value disclosed) and Karve’s acquisition of High Ground (no transaction value disclosed).

2. CNRL also acquired Devon’s Bonnyville heavy oil assets (20,100 bbl/d) as part of the transaction.

(2)

Parameters Metrics Date Acquiror Target Type EV Prod. % Gas P+P EV / Prod. EV / P+P

(C$MM) (boe/d) (%) (Mboe) (C$/boe/d) (C$/boe)

1-Nov-19 Cona Pengrowth SAGD $740 22,708 19% 446,508 $32,588 $1.6629-May-19 CNRL Devon Canada SAGD $3,775 122,800 -- 879,000 $30,741 $4.2910-Oct-18 IPC BlackPearl SAGD $712 11,250 1% 162,434 $63,310 $4.3831-Aug-18 CNRL Joslyn Oil Sands Project Mining $225 n.a. n.a. n.a. n.a. n.a.26-Jul-18 CNRL Laricina SAGD $67 n.a. n.a. 389,000 n.a. $0.1712-Feb-18 Suncor Mocal Energy (5% Syncrude W.I.) Mining $921 16,226 -- 122,441 $56,749 $7.523-Jan-18 Suncor Total E&P Canada (3.31% Fort Hills W.I.) Mining $453 6,545 -- 94,804 $69,211 $4.783-Jan-18 Teck Total E&P Canada (1.30% Fort Hills W.I.) Mining $179 2,571 -- 37,234 $69,633 $4.8129-Mar-17 Cenovus ConocoPhillips (FCCL and Deep Basin Assets) SAGD $17,730 284,396 31% 3,965,833 $62,341 $4.479-Mar-17 CNRL Shell & Marathon (70% AOSP W.I.) Mining $12,592 201,800 -- n.a. $62,397 n.a.9-Mar-17 Shell Marathon (10% AOSP W.I.) Mining $1,683 26,857 -- n.a. $62,660 n.a.Average / Total 11 Transactions $39,076 695,153 6% 6,097,254 $56,626 $4.01Median $740 22,708 -- 275,717 $62,397 $4.43

March 05-2020

$0.2B27%

$0.2B23%

$0.2B29%

$0.2B22%

0% 20% 40% 60% 80% 100%

41% 59%

0% 20% 40% 60% 80% 100%

$0.5B62%

$0.2B25%

0% 20% 40% 60% 80% 100%

$3.8B84%

$0.7B16%

0% 20% 40% 60% 80% 100%

$0.7B16%

$3.8B84%

0% 20% 40% 60% 80% 100%

97%

0% 20% 40% 60% 80% 100%

4 Source: BMO Transaction Database 1. Deals larger than C$20MM; transactions are reported based on announcement/disclosure

dates. 2. Chart excludes joint ventures, oil sands transactions, and notable transactions including:

Cenovus-ConocoPhillips (C$17.7B); Pengrowth’s disposition announced on October 18,

2017; Aspenleaf-NEP (announced on August 31, 2018); Pacific Oil-Canbriam (announced on May 13, 2019); CNRL-Devon C$3.78B (announced May 29, 2019); Cona C$740MM (announced November 2019).

3. Excludes royalty transactions.

LTM Transaction Breakdown (By Deal Value) SELLER BUYER OIL VS. GAS

Yield Junior / Interm.

PrivateCo/Sponsor Undisclosed Senior

Foreign Other Gas Oil

E&P(1

)(2)

O

il Sa

nds(2

)

~62% of value acquired by Junior / Interm. buyers

OIL-WEIGHTED TRANSACTIONS

GAS-WEIGHTED TRANSACTIONS

A&D Valuation Trends(1,2,3)

+/- 1 Standard Deviation Annual Weighted Average MSW (Right-hand axis) Average Multiple

+/- 1 Standard Deviation Annual Weighted Average AECO (Right-hand axis) Average Multiple

$20

$40

$60

$80

$100

$120

--

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2015 2016 2017 2018 2019 2020

MSW

(C$/bbl)

EV/P

rodu

ctio

n ($

/boe

/d)

--

$2

$4

$6

$8

$10

--

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000


2015 2016 2017 2018 2019 2020

AEC

O (C

$/MM

BTU

)EV

/Pro

duct

ion

($/b

oe/d

)

~29% of value sold by Yield sellers

March 05-2020

Legend

US$/bbl C$/bbl US$/bbl Diff C$/bbl Diff

Cushing (37 - 42o)

MSW (39.5o)

Clearbrook (~ 40o)

Midland (~ 40o) St. James LLS (~ 40o)

East Coast U.S. Brent (38o)

WCS (20.5o)

Southern California

Henry Hub

Dominion

Dawn

Chicago Citygate

AECO Station 2

Northern California

Legend

US$/MMBTU C$/GJ US$/MMBTU C$/GJ Diff Diff

Transco

El Paso - SJ

Waha

Sumas

Maya (~ 22o)

Commodity Prices – March 4th, 2020

Source: BMO Commodity Products Group, Bloomberg – Prompt Pricing US$/C$ spot rate of 1.3408 used for all conversions from Bloomberg as of March 4, 2020. 5

NATURAL GAS PRICING & DIFFERENTIALS TO HENRY HUB (US$ / MMBTU | C$ / GJ)

OIL PRICING & DIFFERENTIALS TO CUSHING WTI (US$ / BBL) – OIL API GRAVITY IN PARENTHESIS

$46.78 $62.72

$49.79 $66.76

$3.01 $4.04

$51.13 $68.56

$4.35 $5.83

$46.63 $62.52

($0.15) ($0.20)

$48.10 $64.49

$1.32 $1.77

$44.13 $59.17

($2.65) ($3.55)$32.53 $43.62

($14.25) ($19.11)

$42.23 $56.62

($4.55) ($6.10)

$1.83 $2.32

$0.13 $0.16

($1.70) ($2.16)

($0.11) ($0.14)

($1.94) ($2.47)

$1.67 $2.12

($0.16) ($0.20)$1.50 $1.90

($0.33) ($0.42)

$1.41 $1.79

($0.42) ($0.53)

$2.69 $3.42

$0.86 $1.09

$1.59 $2.02

($0.24) ($0.31)

$1.30 $1.65

($0.53) ($0.67)

$1.72 $2.18

($0.11) ($0.14)

$1.23 $1.56

($0.60) ($0.76)

$1.40 $1.78

($0.43) ($0.55)

March 05-2020

$40

$50

$60

$70

$80

2020 2021 2022 2023

MSW

(C$/

bbl)

Strip 03/04/20 Evaluator AverageBMO Research

0

0.5

1

1.5

2

2.5

3

2012 2013 2014 2015 2016 2017 2018 2019 2020

Oil

Prod

uctio

n (M

Mbb

l/d)

SK AB BC MB

Source: geoSCOUT, BMO Capital Markets, Bloomberg Note: Evaluator Average Forecast - averaged Q4 2019 forecasts of GLJ, Sproule, McDaniel, and AJM Deloitte, BMO Research Average as of January 1, 2020.

1. Prices reported according to Bloomberg. 2. This page does not include oil sands mining or Northwest Territories well production. 6

0%

50%

100%

150%

200%

Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20

NGL

/ MSW

Spo

t

Edmonton Propane/MSW Edmonton Butane/MSWEdmonton Condensate/MSW

$0

$8

$16

$24

$32

$40

$48

$56

$10

$20

$30

$40

$50

$60

$70

$80


Diff

(US$

/bbl

)

WC

S (C

$/bb

l)

WTI - WCS Diff (US$/bbl) WCS

-$30

-$20

-$10

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100


Diff

(US$

/bbl

)

Edm

. C5

(C$/

bbl)

WTI - CND C5 Diff (US$/bbl) Canadian C5

$0

$6

$12

$18

$24

$30

$36

$42

$48

$20

$30

$40

$50

$60

$70

$80

$90

$100


Diff

(US$

/bbl

)

MSW

(C$/

bbl)

WTI - MSW Diff (US$/bbl) MSW

EDMONTON OIL PRICE FORECASTS

Oil/Liquids Fundamentals EDMONTON MIXED SWEET / WTI HISTORICAL CANADIAN CONDENSATE / WTI HISTORICAL

NGL AS A PERCENTAGE OF MSW(1) WESTERN CANADIAN SELECT / WTI HISTORICAL

WCSB OIL PRODUCTION(2)

March 05-2020

$1

$2

$3

$4

2020 2021 2022 2023

AEC

O (

C$/

MM

BTU)

Strip 03/04/20 Evaluator AverageBMO Research

0

100

200

300

400

500

600

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Natu

ral G

as S

tora

ge (B

cf)

5-Year Range 5-Yr Avg2019 2020

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

5 Year Min/Max 5-Yr Avg2019 2020

Natu

ral G

as S

tora

ge (B

cf)

7

Natural Gas Fundamentals

Source: geoSCOUT, BMO Capital Markets, Bloomberg, NGX Note: Evaluator Average Forecast - averaged Q4 2019 forecasts of GLJ, Sproule, McDaniel and AJM Deloitte. BMO Research Average as of January 1, 2020.

1. This page does not include Northwest Territories well production.

AECO / NYMEX HISTORICAL STATION 2/ AECO HISTORICAL

WESTERN CANADA GAS STORAGE U.S. NATURAL GAS STORAGE

AECO GAS PRICE FORECASTS WCSB GAS PRODUCTION(1)

$0$1$2$3$4$5$6

$0$1$2$3$4$5$6

Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20Di

ff (U

S$/M

MBT

U)

AEC

O (

C$/

MM

BTU)

HH - AECO Diff (US$/MMBTU) AECO

$0

$1

$2

$3

$0

$1

$2

$3

$4


Diff

(C$/

MM

BTU)

St. 2

BC

(C$/

MM

BTU)

AECO - St.2 Diff (C$/MMBTU) Station 2 BC

0

5

10

15

20

2012 2013 2014 2015 2016 2017 2018 2019 2020

Natu

ral G

as P

rodu

ctio

n (B

cf/d

)

BC AB SK MB

March 05-2020

0

50

100

150

200

250

300

350

2012 2013 2014 2015 2016 2017 2018 2019

Pro

duct

ion

(Mbo

e/d)

Shell Petronas Painted Pony TourmalinePacific Canbriam Canadian Natural Crew Other

-$1.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2018 2019 2020

Natu

ral G

as P

rice

(US$

/MM

BTU)

Henry Hub Dawn Chicago City Gate AECO Station 2

8 Source: BMO Capital Markets, Bloomberg 1. TC Energy. 2. NMML production area defined by wells on Pipeline Route & Market Access Map. Note: NMML – North Montney Mainline

North Montney Mainline – Increased Access to Additional Gas Markets

NORTH AMERICAN GAS MARKET PRICING

PIPELINE ROUTE & MARKET ACCESS MAP PROJECT TIMELINE(1)

PIPELINE DESIGN AND MARKET ACCESS(1)

The NMML is a 42” diameter pipeline, operated by TC Energy, spanning 206 km from the existing Saturn section to the Blair Creek receipt point

The first segment of the project (Groundbirch compressor station Aitken Creek) was put into service in February 2020

The NMML is expected to add up to 2.4 Bcf/d with 14 different metering stations with multiple access points to tie into the pipeline. The pipeline adds an additional egress point out of NEBC and exposure beyond Station 2. Other key lines include Enbridge, North River & Alliance

The project will enable Northeast BC gas to access Alberta and various North American gas markets through the NGTL system

NEBC gas production has undergone significant production growth introducing the need for additional egress options and multiple pipeline projects for the area

Over 300% production

growth since 2012

2011

Initiated landowner, Indigenous, and

Stakeholder engagement

2017

Filed variance application and meter station applications

with NEB

Received Project Approval from the

NEB

2015

Construction commences per

regulatory approval

2017

Q1 2020

Aitken Creek section and Groundbrich

Compressor Station placed into service

Kahta section & Saturn Compressor Station to be placed

into service

Q2 2020

NMML MONTNEY CATCHMENT PRODUCTION GROWTH(2)

Station 2 Groundbirch Compressor

Station

McMahon

Townsend

Aitken Creek

Saturn Compressor

Station

HH, Dawn & Chicago historically have stronger

prices and less volatility than AECO & Station 2

Blair Creek

March 05-2020

0

50

100

150

200

250

300

Act

ive

Rig

Cou

nt

AB SK BC MB Previous Year Activity

0 2 4 6 8 10 12 14

Crescent Point

Tourmaline

Husky

Canadian Natural

Cenovus

Seven Generations

Suncor

Baytex

Vermilion

Whitecap

Grande Prairie Central AB SK Area IVPeace River / Slave Lk. Athabasca / Cold Lk. NEBCSK Area II SK Area I Fort McMurraySE AB SK Area III E.Central AB

ACTIVE RIG COUNT BY AREA – 206 ACTIVE RIGS(1) IN THE WEEK ENDING FEBRUARY 28, 2020

9

Rig Analysis

Source: DOB, BMO Capital Markets 1. Based on DOB Weekly Drilling Report ending on February 28, 2020 2. Based on DOB Rig Activity ending on February 25, 2020

PSAC Area

Active Rig Count

SASKATCHEWAN

ALBERTA

BRITISH COLUMBIA

SK Area I 14

Athabasca/Cold Lk 18

Fort McMurray 12

SK Area IV 20

SK Area III 5

Rainbow Lk 1 NEBC

18

Peace River/Slave Lk. 19

E. Central AB 9

SK Area II 14

Active Rigs Shown

Central AB 24

51% of rig count

Grande Prairie 42

Foothills 2

WEEKLY RIG COUNT BY PROVINCE(2) TOP OPERATORS BY RIG COUNT(1)

SE AB 8

218 Rigs were active this

time last year

March 05-2020

Wells Spud Oil and Raw Gas ProductionFeb-20 vs. Feb-19 Direction Dec-19 vs. Nov-19 vs. Oct-19 vs. Dec-18 Direction

(well count) (%) (boe/d) (%) (%) (%)

Viking 108 (3%) 151,051 (1%) 1% (3%)

BC Montney 22 (44%) 899,512 2% 5% 1%

AB Montney 28 (24%) 616,281 (2%) 3% 4%

Duvernay WSB 27 59% 116,108 (2%) 3% 22%

Duvernay ESB 4 (33%) 20,902 9% 12% 15%

Spirit River 12 33% 377,941 3% 4% (22%)

Cardium 22 (37%) 207,409 3% 3% (1%)

Bakken 25 (31%) 69,507 2% 4% (3%)

SE Sask Mississippian 55 (37%) 132,366 (0%) (1%) (9%)

Sub-Total 303 (20%) 2,591,077 1% 4% (3%)

Other 338 (41%) 1,789,655 1% 5% (1%)

Total 641 (33%) 4,380,732 0.7% 4.4% (2.4%)

0

1

2

3

4

5

2012 2013 2014 2015 2016 2017 2018 2019 2020

Tota

l Pro

duct

ion

(MM

boe/

d)

Other VikingAB Montney BC MontneySE Sask Mississippian Spirit RiverBakken Duvernay WSBDuvernay ESB Cardium

For use on pages 11-19, we define the following well classifications: Location and Drilling wells defined as wells licensed or licensed and spud in the last twelve months (LTM), with no rig release date on record. Standing wells are defined as wells that have not produced but have a rig release date within the LTM. Producing wells include water injectors that support production All wells with no production and a rig release prior to January 2012 are not shown. All wells with no production in LTM not shown. As of the August 2018 Market Monitor, thermal production in Saskatchewan is now excluded from the “Other” play category. Production volumes are raw.

10

WCSB Key Play Activity

Source: BMO Capital Markets, geoSCOUT, GeoEdges Note: This page does not include mining or thermal production or conventional wells from the Northwest Territories Production as of December 2019; Spud and license data as of March 2, 2020

1. LTM is 13 month rolling window

0

250

500

750

1,000

1,250

Feb-19 May-19 Aug-19 Nov-19 Feb-20

Wel

l Eve

nts

Spud

(cou

nt)

Other Viking BC MontneyAB Montney Duvernay WSB Duvernay ESBSpir it River Cardium BakkenSE Sask Mississippian

0.0

0.5

1.0

1.5

2.0

2.5


Met

res

Dri

lled

(mill

ions

)

Other Viking BC MontneyAB Montney Duvernay WSB Duvernay ESBSpir it River Cardium BakkenSE Sask Mississippian

LOCATOR MAP PRODUCTION BY PLAY(1)

METRES DRILLED BY PLAY LTM(1) WELLS SPUD BY PLAY(1)

PLAY SUMMARY – WELLS SPUD AND TOTAL PRODUCTION

March 05-2020

Current Last Month Last Year(Feb-20) (Jan-20) (Feb-19)

Licensing Count 45 98 44Spud Count 108 154 111

0

50

100

150

200


Wells Licensed Wells Spud 13mo Licensing Avg

-

50

100

150

200

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

0 500 1,000 1,500 2,000 2,500 3,000

TeineBaytex

WhitecapCrescent Point

Tamarack Valley

Producing Standing Location and Drilling

11

Viking

Viking Snapshot

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020 1. As defined on page 10

2. Excludes royalty transactions. 3. Deal metrics shown include entire corporate transaction, not just the Viking assets 4. Karve’s acquisition of High Ground for an undisclosed amount.

2

1

3

1

3

1 1

0

0.5

1

1.5

2

2.5

3

3.5

$0

$50,000

$100,000

$150,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

Last Announced Deal: July 2019(4)

Parameters MetricsProd. %Gas P+P RLI (P+P) EV/boe/d EV/2P EV/DACF

(C$MM) (boe/d) (%) (Mboe) (Years) (C$/boe/d) (C$/boe) (x)18-Jun-18 Baytex Raging River Corp $1,935 24,118 7% 106,652 12.1 $80,246 $18.15 4.9x15-Aug-17 Karve Energy Apache (Alberta Viking Assets) Asset $118 6,500 57% 16,800 7.1 $18,154 $7.02 4.6x13-Dec-16 Steelhead Toro Corp $40 658 40% 4,647 19.3 $60,000 $8.50 nmf28-Nov-16 Raging River Northern Blizzard (Viking Assets) Asset $58 620 3% 5,800 25.6 $93,548 $10.00 6.1x2-Nov-16 Tamarack Valley Spur (Viking) PrivateCo $388 6,250 48% 26,500 11.6 $62,150 $14.66 6.0x20-Jul-16 Raging River Rock (Forgan Lands) Asset $25 100 0% n.a. n.a. $251,000 n.a. n.a.10-Jun-16 Teine Energy Penn West (Viking Assets) Asset $975 16,300 9% 53,200 8.9 $59,816 $18.33 12.9x31-May-16 Raging River Rock Energy Corp $109 2,550 5% 17,077 18.3 $42,745 $6.38 6.6x10-May-16 NAL Resources Husky (Viking) Asset $102 1,470 45% n.a. n.a. $69,388 n.a. n.a.Average - Viking $417 6,507 24% 32,954 14.7 $81,894 $11.86 6.8xMedian - Viking $109 2,550 9% 17,077 12.1 $62,150 $10.00 6.0x

ROYALTY27-Feb-18 PrairieSky Undisclosed (AB Viking Royalty Assets) Asset $46 300 54% n.a. n.a. $153,333 n.a. n.a.2-Mar-17 Freehold Undisclosed (Royalty Assets) Asset $34 185 9% n.a. n.a. $183,784 n.a. n.a.

AnnounceDate Acquiror Target Corp/Asset Enterprise

Value

TRANSACTION ACTIVITY (2016 TO PRESENT)(2)

PRODUCTION BY DRILLING YEAR TOP 5 OPERATORS BY HORIZONTAL WELL COUNT(1)

Activity down from last month but consistent with one year

ago

(3)

(3)

TRANSACTION 2P RESERVES MULTIPLES ($/BOE) TRANSACTION PRODUCTION MULTIPLES ($/BOE/D)

~$251k/boe/d

2

1 1

3

1 1

0

0.5

1

1.5

2

2.5

3

3.5

$0

$5

$10

$15

$20


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

Viking Horizontal Wells

ACTIVITY OVERVIEW MAP

March 05-2020

0 200 400 600 800 1,000 1,200

OvintivPetronas

TourmalineARCShell


-

250

500

750

1,000

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

0

40

80

120

160





Parameters Metrics

Prod. %Gas P+P RLI (P+P) EV/boe/d EV/2P EV/DACF(C$MM) (boe/d) (%) (Mboe) (Years) (C$/boe/d) (C$/boe) (x)

24-Feb-20 Tourmaline Chinook Energy (NE BC Montney) Corp $24 3,500 86% 35,600 27.9 $6,971 $0.69 n.a.18-Oct-19 Tourmaline Painted Pony (NE BC Montney) Asset $45 -- n.a. n.a. n.a. n.a. n.a. n.a.31-Jul-18 Undisclosed Canbriam (NE BC Montney) Asset $50 n.a. n.a. n.a. n.a. n.a. n.a. n.a.8-May-17 Primavera Crew (Goose Assets) Asset $49 n.a. n.a. n.a. n.a. n.a. n.a. n.a.23-Mar-17 ConocoPhillips Pengrowth (Bernadet) Asset $92 n.a. n.a. n.a. n.a. n.a. n.a. n.a.15-Mar-17 Painted Pony UGR PrivateCo $271 8,500 99% 325,100 104.8 $31,914 $0.83 8.9x20-Oct-16 Tourmaline Shell (Deep Basin / Montney) Asset $1,369 24,850 85% 473,500 52.2 $55,091 $2.89 n.a.Average - BC Montney $272 9,213 90% 278,067 61.6 $31,325 $1.47 8.9xMedian - BC Montney $50 6,000 86% 325,100 52.2 $31,914 $0.83 8.9x

Enterprise Value

AnnounceDate Acquiror Vendor Corp/Asset

1

2

1

2 2

1 1 1

0

0.5

1

1.5

2

2.5

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

1

2

1

2 2

1 1 1

0

0.5

1

1.5

2

2.5

$0

$5

$10

$15

$20


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

12

BC Montney

BC Montney Horizontal Wells

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020 1. As defined on page 10

2. Excludes Suncor’s divesture of NEBC mineral land holdings and subsequent equity stake in Canbriam and Pacific Oil & Gas’ acquisition of Canbriam for an undisclosed amount

BC Montney Snapshot Last Announced Deal: $24MM in February 2020

Activity decreased from last month


TRANSACTION ACTIVITY (2016 TO PRESENT)(2)

TRANSACTION 2P RESERVES MULTIPLES ($/BOE)

~$153k/boe/d

TRANSACTION PRODUCTION MULTIPLES ($/BOE/D)


March 05-2020

0 200 400 600 800

Seven GenerationsBirchcliff

ParamountOvintiv

NuVista


-

250

500

750

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019



020406080

100



1 1 1 1 1 12 2 2

12

0

1

2

3

4

5

6

7

8

$0

$40,000

$80,000

$120,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

13

Parameters Metrics


14-Nov-18 Birchcliff ORLEN (Pouce Coupe Assets) Asset $39 700 86% -- n.a. $55,714 n.a. n.a.30-Oct-18 Pipestone Blackbird Corp $247 1,148 45% 59,099 141.0 $215,262 $4.18 19.7x10-Sep-18 Velvet Iron Bridge Corp $142 2,314 70% 26,113 30.9 $61,379 $5.44 14.5x9-Aug-18 NuVista Cenovus (Pipestone Partnership) Asset $625 9,600 54% 156,888 44.8 $65,104 $3.98 9.9x14-Jun-18 Strath Paramount (Resthaven/Jayar) Corp $340 5,300 64% 8,100 4.2 $64,151 $41.98 n.a.1-Sep-17 Tangle Creek RMP (Waskahigan) Asset $80 3,215 70% 23,000 19.6 $24,883 $3.48 n.a.6-Jul-17 Paramount Trilogy Corp $1,109 25,133 62% 165,059 18.0 $44,112 $6.72 6.3x1-May-17 Undisclosed Trilogy (Valhalla) Asset $50 1,100 84% 5,500 13.7 $45,455 $9.09 n.a.1-May-17 Undisclosed Paramount (Valhalla) Asset $150 1,400 88% n.a. n.a. $107,143 n.a. n.a.5-Apr-17 Leucrotta Undisclosed (Mica/Doe) Asset $36 n.a. n.a. n.a. n.a. n.a. n.a. n.a.4-Jan-17 Undisclosed Kelt (Karr Assets) Asset $100 1,303 50% 12,700 26.7 $76,746 $7.87 n.a.31-Oct-16 Enerplus RMP (Ante Creek Assets) Asset $114 4,300 55% 10,001 6.4 $26,581 $11.43 n.a.6-Jul-16 Seven Generations Paramount (Musreau Assets) Asset $1,897 30,000 44% 293,000 26.8 $63,219 $6.47 n.a.21-Jun-16 Birchcliff Encana (Gordondale Assets) Asset $625 26,000 59% 191,133 20.1 $24,038 $3.27 n.a.16-Mar-16 Enercapita Surge (Sunset Assets) Asset $28 700 n.a. n.a. n.a. $40,000 n.a. n.a.Average - AB Montney $372 8,015 64% 79,216 32.0 $65,271 $9.45 12.6xMedian - AB Montney $142 2,764 62% 24,557 20.1 $58,547 $6.47 12.2x

AnnounceDate Acquiror Vendor Corp/Asset Enterprise

Value

Last Announced Deal: $39MM in November 2018 AB Montney Snapshot

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020

1. As defined on page 10 2. Reflects full corporate transaction

AB Montney

AB Montney Horizontal Wells Activity up and

production increased by

4% YoY


TRANSACTION ACTIVITY (2016 TO PRESENT)


~$135k/boe/d

(2)


1 1 1 1 1 1

2 2 2

1

2

0

0.5

1

1.5

2

2.5

$0$5

$10$15$20$25$30$35


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals


March 05-2020

0 100 200 300 400

ShellChevron

OvintivXTO

Murphy


- 25 50 75

100 125

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

0

10

20

30

40





14

Duvernay West Shale Basin Snapshot Last Announced Deal: $1.1B in July 2017(3)

Duvernay WSB

Spuds up and production

holding flat YoY

Compensation Parameters Metrics (Adjusted)Upfront Total Interest Acres Production Resource Acreage Resource

($MM) ($MM) (%) (mcfe/d) (tcf) (C$/Acre) (C$/Mcfe)

6-Jul-17 Paramount Trilogy n.a. n.a. 100% 118,000 n.a. n.a. n.a. n.a.25-May-17 XTO Trilogy $60 $60 100% 6,240 3,840 n.a. $6,026 n.a.27-Jan-16 Murphy Oil Athabasca $250 $475 61% 158,000 28,440 1.00 $1,877 $0.307-Dec-15 XTO Yoho $50 $50 100% 10,290 5,340 n.a. $1,832 n.a.19-Nov-15 Undisclosed Trilogy $113 $113 100% 5,760 3,480 n.a. $16,055 n.a.6-Oct-14 KUFPEC Chevron <$1,678 $1,678 30% 99,000 4,590 n.a. $16,678 n.a.1-Aug-13 Chevron Alta Energy $900 $900 100% 67,900 -- n.a. $13,255 n.a.13-Dec-12 PetroChina Encana $1,180 $2,180 50% 222,055 -- 6.74 $9,817 $0.32Average - Duvernay $604 $779 85,906 6,527 3.87 $9,363 $0.31Median - Duvernay $250 $475 83,450 3,840 3.87 $9,817 $0.31

AnnounceDate Acquiror Vendor

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020. 1. As defined on page 10 2. Production multiple adjusted assuming $30,000/boe/d.

3. Paramount’s acquisition of Trilogy is a corporate transaction 4. Transaction value includes a carry of a portion of Chevron Canada’s share of the joint venture’s

future capital costs; amount unknown



TRANSACTION MULTIPLES ($/MCFE) TRANSACTION ACREAGE MULTIPLES ($/ACRE)

(3)

(4)

(2)

1

0

0.2

0.4

0.6

0.8

1

1.2

$0.0

$0.1

$0.2

$0.3

$0.4

$0.5


2015 2016 2017 2018 2019 2020

Avg. $/Mcfe #Deals

2

1 1 1

0

0.5

1

1.5

2

2.5

$0

$5,000

$10,000

$15,000

$20,000


2015 2016 2017 2018 2019 2020

Avg. $/Acre #Deals

Duvernay Horizontal Wells


March 05-2020

15

Duvernay East Shale Basin Snapshot

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020 1. As defined on page 10 2. Journey and Kiwetinohk deal is a joint venture agreement

3. Baytex’s acquisition of Raging River was a corporate transaction

Last Announced Deal: August 2018

Duvernay ESB

- 5

10 15 20 25

2012 2013 2014 2015 2016 2017 2018 2019 2020

Prod

uctio

n (M

boe/

d)

2012 2013 2014 2015 2016 2017 2018 2019

0 50 100 150

VestaArtis

PrairieThunderChronos

Baytex


Compensation Parameters Metrics (Adjusted)Upfront Total Interest Acres Production Resource Acreage Resource

($MM) ($MM) (%) (mcfe/d) (tcf) (C$/Acre) (C$/Mcfe)

29-Aug-18 Kiwetinohk Journey (JV) n.a. n.a. n.a. 89,600 n.a. n.a. n.a. n.a.18-Jun-18 Baytex Raging River (Corporate) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.Average - Duvernay n.a. n.a. 89,600 n.a. n.a. n.a. n.a.Median - Duvernay n.a. n.a. 89,600 n.a. n.a. n.a. n.a.

AnnounceDate Acquiror Vendor

02468

1012





Activity increasing

YoY


TRANSACTION ACTIVITY (2018 – PRESENT)(2,3)

Duvernay Horizontal Wells


March 05-2020

0 200 400 600 800 1,000

PeytoTourmaline

BellatrixJupiter

Cenovus


- 100 200 300 400 500 600

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

05

1015202530





1 1 1

2

1

2

0

0.5

1

1.5

2

2.5

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

Parameters MetricsProd. %Gas P+P RLI (P+P) EV/boe/d EV/2P EV/DACF

(C$MM) (boe/d) (%) (Mboe) (Years) (C$/boe/d) (C$/boe) (x)

29-Mar-17 Cenovus ConocoPhillips (FCCL & D. Basin Assets) Asset $17,730 284,396 31% 3,965,833 38.2 $62,341 $4.47 9.8x20-Oct-16 Tourmaline Shell (Deep Basin & Gundy Montney) Asset $1,369 24,850 85% 473,500 52.2 $55,091 $2.89 n.a.16-Jun-16 Bellatrix Grafton (Ferrier Assets) Asset $29 2,000 79% n.a. n.a. $14,599 n.a. n.a.13-Jun-16 Undisclosed NuVista (Cretaceous Wapiti) Asset $70 3,200 73% 21,700 18.6 $21,875 $3.23 n.a.11-Jan-16 Tourmaline / Undisc. Enerplus (Deep Basin Assets) Asset $193 5,400 98% n.a. n.a. $35,741 n.a. n.a.Average - Spirit River $3,878 63,969 73% 1,487,011 36.3 $37,929 $3.53 9.8xMedian - Spirit River $193 5,400 79% 473,500 38.2 $35,741 $3.23 9.8x


Value

16 Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020 1. As defined on page 10

2. Deal metrics shown include entire transaction (including non-Spirit River assets, which are significant)

Spirit River Snapshot

Spirit River

Activity holding flat and

consistent with one year ago

Last Announced Deal: $17.7B in March 2017(2)




(2)


1 1

2

1

2

0

0.5

1

1.5

2

2.5

$0

$2

$4

$6

$8

$10

$12


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

Spirit River Horizontal Wells


March 05-2020

0102030405060




2. Does not include the take-private of Lightstream (now called Ridgeback) 3. Does not include royalty transactions

Cardium Snapshot

Cardium

Activity decreased YoY with production

holding flat



- 50

100 150 200 250 300

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019 0 200 400 600

WhitecapRidgeback

BonterraObsidian

Peyto


Parameters Metrics


11-Jul-17 NAL Resources Pengrowth (Olds/Garrington Assets) Asset $300 13,875 n.a. 78,000 15.4 $21,622 $3.85 n.a.14-Jun-17 Undisclosed Bellatrix (Strachan Assets) Asset $35 1,750 70% n.a. n.a. $19,714 n.a. n.a.5-Dec-16 TransGlobe Bellatrix (Harmattan Assets) Asset $80 3,104 43% 21,300 18.8 $25,773 $3.76 n.a.19-Sep-16 InPlay Bellatrix (Pembina Assets) Asset $47 900 25% 7,900 24.0 $51,782 $5.90 n.a.19-Sep-16 InPlay Anderson Corp $33 1,659 58% 6,517 10.8 $19,640 $5.00 6.5x28-Jul-16 ARC Resources Husky & Penn West (Pembina) Asset $148 3,083 15% n.a. n.a. $48,000 n.a. n.a.7-Jun-16 Gear Energy Striker Corp $64 2,000 40% 11,068 15.2 $31,850 $5.76 13.8xAverage - Cardium $101 3,767 42% 24,957 16.8 $31,197 $4.85 10.1xMedian - Cardium $64 2,000 42% 11,068 15.4 $25,773 $5.00 10.1x


Value


TRANSACTION ACTIVITY(2)(3) (2016 TO PRESENT)


1 1 1

2

1 1

0

0.5

1

1.5

2

2.5

$0

$5

$10

$15

$20

$25


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

1 1 1

3

1 1 1

0

0.5

1

1.5

2

2.5

3

3.5

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

Cardium Horizontal Wells


Last Announced Deal: $52MM GORR in Dec 2017

March 05-2020

- 25 50 75

100 125

2012 2013 2014 2015 2016 2017 2018 2019 2020

Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

0 500 1,000 1,500 2,000 2,500 3,000

Crescent PointTundra

RidgebackTORC

Vermilion


Parameters Metrics


23-Jul-18 Gear Steppe PrivateCo $70 1,175 1% n.a. n.a. $59,915 n.a. 2.9x

15-Jan-18 Vermilion Red River PrivateCo $91 1,150 0% 6,700 16.0 $78,957 $13.55 4.2x

23-Apr-14 Crescent Point CanEra PrivateCo $1,113 10,000 4% 52,100 14.3 $111,340 $21.37 4.8x

14-Mar-12 Crescent Point Reliable Corp $107 1,100 0% 4,100 10.2 $97,378 $26.13 4.1x

16-Feb-12 Crescent Point PetroBakken (Bakken Assets) Asset $427 2,900 10% 12,600 11.9 $147,241 $33.89 6.4x

Average - Bakken $362 3,265 3% 18,875 13.1 $98,966 $23.73 4.5xMedian - Bakken $107 1,175 1% 9,650 13.1 $97,378 $23.75 4.2x


Value

01020304050





Bakken Horizontal Wells

18 Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdges Note: Production as of December 2019; Spud and license data as of March 2, 2020 1. The Torquay and Three Forks are included as part of the Bakken sub-group 2. In Manitoba, licensing may not specify target formation, and as a result wells will be correctly

categorized after they are drilled 3. As defined on page 10 4. Does not include the take-private of Lightstream (now called Ridgeback)

Bakken Snapshot(1)

Bakken


PRODUCTION BY DRILLING YEAR

1 1

0

0.5

1

1.5

2

2.5

3

$0

$5

$10

$15

$20

$25

$30

$35


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

1 1

0

0.5

1

1.5

2

2.5

3

$0

$25,000

$50,000

$75,000

$100,000

$125,000

$150,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

TOP 5 OPERATORS BY HORIZONTAL WELL COUNT(2)(3)


Spuds down 30% and

licensing up 42% YoY

TRANSACTION ACTIVITY(4) (2012 TO PRESENT)

Last Announced Deal: $70MM in July 2018

March 05-2020

020406080

100120



ACTIVITY

Parameters Metrics


3-Sep-19 Undisclosed Crescent Point (SE SK Assets) Asset $212 7,000 15% 49,200 19.3 $30,286 $4.31 4.5x8-Aug-18 TORC Villanova 4 PrivateCo $62 1,000 20% 4,000 11.0 $61,642 $15.41 n.a.8-May-18 TORC Crescent Point (SE SK Assets) Asset $225 3,200 n.a. 15,500 13.3 $70,281 $14.51 n.a.16-Apr-18 Vermilion Spartan Corp $1,396 23,000 9% 113,485 13.5 $60,684 $12.30 4.3x13-Nov-17 Whitecap Cenovus (Weyburn Unit) Asset $940 14,800 0% 121,409 22.5 $63,514 $7.74 6.7x1-Jun-17 Cardinal Apache (SE SK & House Mountain Assets) Asset $330 5,000 0% 28,600 15.7 $66,000 $11.54 6.0x10-May-17 Undisclosed Freehold (SE Sask Assets) Asset $29 750 44% n.a. n.a. $38,533 n.a. n.a.17-Nov-16 Spartan ARC (SE Sask Assets) Asset $700 7,500 2% 39,300 14.4 $93,333 $17.81 8.2x3-Aug-16 Spartan Kinwest (SE Sask Assets) Asset $24 450 7% n.a. n.a. $53,333 n.a. n.a.25-Jul-16 TORC Zargon (SE Sask Assets) Asset $96 1,200 4% n.a. n.a. $79,583 n.a. n.a.29-Jun-16 Spartan Halo / Other (SE Sask Assets) Asset $62 1,500 1% 7,176 13.1 $41,467 $8.67 5.7x19-May-16 Spartan Wyatt Oil + Gas PrivateCo $77 1,330 24% 14,629 30.1 $57,895 $5.26 6.8xAverage - SE Sask $346 5,561 11% 43,700 17.0 $59,713 $10.84 6.0xMedian - SE Sask $154 2,350 7% 28,600 14.4 $61,163 $11.54 6.0x


Value


2. In Manitoba, licensing may not specify target formation, and as a result wells will be correctly categorized after they are drilled

SE Mississippian Snapshot Last Announced Deal: $212MM in September 2019

Activity down and production declined 9%

YoY

Mississippian Current Last Month Last Year(Feb-20) (Jan-20) (Feb-19)


-

50

100

150

200

2012 2013 2014 2015 2016 2017 2018 2019 2020Prod

uctio

n (M

boe/

d)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019

0 500 1,000 1,500 2,000

VermilionCrescent Point

TundraTORC

Whitecap



TOP 5 OPERATORS BY HORIZONTAL WELL COUNT(1,2)



1

2

1

2 2

1

2

1 1

2

1 1

0

0.5

1

1.5

2

2.5

$0

$50,000

$100,000

$150,000

$200,000


2015 2016 2017 2018 2019 2020

Avg. $/boe/d #Deals

1

2 2

1 1 1 1

2

1 1

0

0.5

1

1.5

2

2.5

$0$5

$10$15$20$25$30


2015 2016 2017 2018 2019 2020

Avg. $/boe #Deals

SE Saskatchewan Horizontal Wells

PRODUCTION BY DRILLING YEAR

March 05-2020

Cheryl Sandercock, P.Eng. Managing Director +1-403-515-1526 [email protected]

Joyce Kennedy, P.Geol. Managing Director +1-403-515-1576 [email protected]

Wendy Smith Low Managing Director +1-403-515-1528 [email protected]

Contacts

20

Disclaimer This material is prepared by the BMO Capital Markets’ Investment and Corporate Banking Department, for distribution to BMO Capital Markets’ clientele. It is not a product of BMO Capital Markets’ Research Department. The views of the Investment and Corporate Banking Department may differ from those of the Research Department. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted, or otherwise reproduced, stored, disseminated, transferred or used, in any form or by any means by any third parties, except with the prior written permission of BMO Capital Markets. BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Europe p.l.c, and Bank of Montreal (China) Co. Ltd and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member FINRA and SIPC) in the U.S., BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. (authorized and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorized and regulated by the Financial Conduct Authority) in the UK and Australia. “Nesbitt Burns” is a registered trademark of BMO Nesbitt Burns Inc., used under license. “BMO Capital Markets” is a trademark of Bank of Montreal, used under license. "BMO (M-Bar roundel symbol)" is a registered trademark of Bank of Montreal, used under license. ® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere.

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© 2018 BMO Financial Group

Bank of Montreal or its subsidiaries (“BMO Financial Group”) has lending arrangements with, or provide other remunerated services to, many issuers covered by BMO Capital Markets. The opinions, estimates and projections contained in this report are those of BMO Capital Markets as of the date of this report and are subject to change without notice. BMO Capital Markets endeavors to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information and opinions that are accurate and complete. However, BMO Capital Markets makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents. Information may be available to BMO Capital Markets or its affiliates that is not reflected in this report. The information in this report is not intended to be used as the primary basis of investment decisions, and because of individual client objectives, should not be construed as advice designed to meet the particular investment needs of any investor. This material is for information purposes only and is not an offer to sell or the solicitation of an offer to buy any security. BMO Capital Markets or its affiliates will buy from or sell to customers the securities of issuers mentioned in this report on a principal basis. BMO Capital Markets or its affiliates, officers, directors or employees have a long or short position in many of the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. BMO Capital Markets may act as financial advisor and/or underwriter for the issuers mentioned herein and may receive remuneration for same. The reader should assume that BMO Capital Markets or its affiliates may have a conflict of interest and should not rely solely on this report in evaluating whether or not to buy or sell securities of issuers discussed herein. All values in this document are in C$ unless otherwise specified.

GEOLOGY Kathleen Dixon, MBA, P.Geol. Vice President +1-403-515-3654 [email protected]

Ryan Axani, P.Geol. Vice President +1-403-515-1512 [email protected]

COMMERCIAL Mandy Edwards Coordinator +1-403-515-1581 [email protected]

ENGINEERING Steve Kehoe, MESc, P.Eng. Director +1-403-515-3661 [email protected]

Jennifer Haskey, P.Eng. Vice President +1-403-515-1558 [email protected]

Jason Beekhuizen, MBA, P.Eng. Associate +1-403-515-1596 [email protected]

Maureen Jarvis, CET Associate +1-403-515-1537 [email protected]

INVESTMENT BANKING Sam Di Pinto Associate +1-403-515-1534 [email protected]

Taya Hanson Analyst +1-403-515-1551 [email protected]

GLOBAL MARKETS Leigh MacComb Associate +1-403-515-3694 [email protected]

Tom Widdowson Analyst +1-403-515-3682 [email protected]

March 4, 2020

Price Change Price Change Price Apr20 Apr20-Oct20 Nov20-Mar21

Prompt $1.827 $0.027 ($0.53) ($0.005) $1.65 Chi Citygate ($0.16) ($0.23) $0.03

CIG, Rockies ($0.45) ($0.56) ($0.37)

Apr20-Oct20 $1.970 $0.029 ($0.68) $0.001 $1.73 Dawn ($0.11) ($0.23) $0.01

Zero-Cost Collar $1.50/$2.43 $1.15/$2.06 Dominion ($0.33) ($0.46) ($0.38)

Zero-Cost Collar $1.25/$2.64 $1.00/$2.19 El Paso, Perm ($1.70) ($1.43) ($1.35)

HSC ($0.04) ($0.05) ($0.10)

Apr20-Dec20 $2.049 $0.028 ($0.71) ($0.005) $1.80 Malin ($0.31) ($0.39) ($0.06)

Zero-Cost Collar $1.50/$2.67 $1.15/$2.20 NW Rockies ($0.38) ($0.47) ($0.14)

Zero-Cost 3-Way $1.50/$2.00/$2.12 $1.15/$1.25/$2.33 Panhandle ($0.49) ($0.50) ($0.38)

PGE Citygate $0.86 $0.80 $0.64

Apr20-Jun20 $1.872 $0.027 ($0.62) ($0.001) $1.60 SoCal Gas ($0.42) ($0.15) $0.18

Jul20-Sep20 $2.029 $0.030 ($0.72) $0.003 $1.66 Station 2 ($0.60) ($0.78) ($0.89)

Jul20-Dec20 $2.137 $0.029 ($0.75) ($0.007) $1.76 Sumas ($0.43) ($0.42) $0.53

Oct20-Dec20 $2.246 $0.027 ($0.78) ($0.017) $1.86 TCO ($0.24) ($0.34) ($0.28)

Nov20-Mar21 $2.419 $0.023 ($0.85) ($0.023) $2.00 TxOk ($0.17) ($0.22) ($0.21)

Jan21-Dec21 $2.317 $0.009 ($0.89) ($0.006) $1.82 W aha ($1.94) ($1.59) ($1.50)

Jan21-Mar21 $2.482 $0.021 ($0.88) ($0.022) $2.03 NBP (GBP/THERM) £0.22 £0.24 £0.39

Station 2 Storage (BCF) Current W /W Change Last Year5 Yr. Avg.Seasonal

Next Day (C$/GJ) US Natural Gas # 2,200 -6.10% 1,539 1,946

Last Close $1.6889 CAN Natural Gas # 364 -7.17% 347 395

D/D Change 1.03% 0.52% Production (BCF/Day) Current Mo/Mo Change Last Year 5 Yr. Avg.

MTD Avg. $1.7403 US Dry Gas Production # 90.9 -1.08% 87.6 82.2

12-Mar-20 11-Mar-20 10-Mar-20 9-Mar-20 8-Mar-20 7-Mar-20 6-Mar-20 5-Mar-20 4-Mar-20 Commodities

Dry Gas Production 92.04 92.04 92.04 92.04 92.04 92.04 92.04 92.04 Calgary

LNG Sendout 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 (403) 515 3682

Net CAD Imports 4.80 4.80 4.80 4.80 4.80 4.80 4.80 4.80 Houston

Total Supply 96.96 96.96 96.96 96.96 96.96 96.96 96.96 96.96 (713) 546 9782

PowerBurn 27.98 28.12 28.25 28.17 27.97 28.40 27.97 27.98 New York

Industrial 23.40 23.40 23.40 23.40 23.40 23.40 23.40 23.40 (212) 605 1570

ResComm 30.58 28.11 26.88 27.54 32.32 38.60 32.25 30.75 London

Pipeloss 2.33 2.26 2.23 2.25 2.38 2.57 2.38 2.33 +44 20 766 8005

US Demand 92.86 90.47 89.33 89.94 94.64 101.55 94.58 93.03 Metals

Mexican Exports 5.32 5.32 5.32 5.32 5.32 5.32 5.32 5.32 New York

LNG Feedgas 8.58 8.58 8.58 8.58 8.58 8.58 8.58 8.58 (212) 605 1494

Total Demand 98.18 95.79 94.65 95.26 99.96 106.87 99.89 98.35

Current Weekly ChangeCanada Tota 240 -1.6%Canada Gas 77 2.7%

US Total 790 -0.1%US GAS 110 0.0%

Cana Wood 21 10.5%DJ-Niobrara 20 5.3%Eagle Ford 68 -2.9%Haynesvil le 43 2.4%Marcellus 38 0.0%Permian 411 0.5%

Utica 11 0.0%Will iston 53 0.0%

Dawn

Next Day (US$/MM)

$1.6688

$1.7851

Aeco 5a

Same Day (C$/GJ)

$1.6821

1.98%

$1.8594

5.32

8.58

103.26

$0.044

$0.007

$0.003

Natural Gas Storage & Production (Bloomberg)

Natural Gas Basis (USD/MMBTU)

35.40

2.47

The broad market for risk assets rallied as the Bank of Canada cut 50bp. Nat gas cash prices also were bid, facing resistance at the $1.818 10-day moving average, before rallying highe ahead of Thursday’s inventory report. Consensus is for stockpiles to decline by 125 Bcf. We see flows on

Groundbirch East from BC to Alberta averaging lower (0.3 bcf/d vs 0.5 bcf/d) since Feb 1st as more gas flows in on NMML, tightening cash spreads between station 2 and AECO. The weather is expected to warmer than normal over 6-10 and 8-14.

Daily Gas Market Fundamentals (BMO Forecast)

Natural Gas Commentary

Cash Fixed Price Liquidations (NGX)

NYMEX Natural Gas (USD/MMBTU) AECO Basis (USD/MMBTU)

$0.030

$0.016

$0.004

AECO (CAD/GJ)

Change

$0.031

$0.042

$0.034

$0.037

97.95

96.96

28.10

23.40

92.04

0.12

4.80

Daily Market Summary ReportCommodities | Fixed Income, Currencies and Commodities

This material has been prepared with the assistance of employees of Bank of Montreal (“BMO”) who are involved in derivatives sales and marketing efforts. Accordingly, it should be considered to be a solicitation of derivatives business generally and not a research report that reflects the views of disinterested research analysts.Notwithstanding the foregoing, this material should not be construed as an offer or the solicitation of an offer to sell or to buy or subscribe for any particular product or services (including, without limitation, any commodities, securities or other financial instruments). We are not soliciting any specific action based on this material. It is for the general information of our clients. It does not constitute a recommendation or a suggestion that any investment or strategy referenced herein may be suitable for you. It does not take into account the particular investment objectives, financial conditions, or needs of individual clients. Nothing in this material constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your unique circumstances, or otherwise constitutes an opinion or a recommendation to you. BMO is not providing advice regarding the value or advisability of trading in commodity interests, including futures contractsand commodity options or any other activity which would cause BMO or any of its affiliates to be considered a commodity trading advisor under the U.S. Commodity Exchange Act. BMO is not undertaking to act as a swap advisor to you or in your best interests and you, to the extent applicable, will rely solely on advice from your qualified independent representative in making hedging or trading decisions. This material is not to be relied upon in substitution for the exercise of independent judgment. Any recipient of these materials should conduct its own independent analysis of the matters referred to herein, together with its qualified independent representative, if applicable. The recipient should seek advice based on its particular circumstances from its own independent financial, tax, legal, accounting and other professional advisors (including, without limitation, its qualified independent representative, if applicable). These materials are confidential and proprietary to, and may not be reproduced, disseminated or referred to, in whole or in part without the prior consent of BMO. Information presented in this material has been obtained or derived from sources believed by BMO to be reliable, but BMO does not guarantee their accuracy or completeness. BMO assumes no responsibility for verification of the information in these materials, no representation or warranty is made as to the accuracy or completeness of such information and BMO accepts no liability whatsoever for any loss arising from any use of, or reliance on, these materials. BMO assumes no obligation to correct or update these materials. These materials do not contain all information that may be required to evaluate any transaction or matter and information may be available to BMO and/or its affiliates that is not reflected herein. BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A, Bank of Montreal Ireland Plc, and Bank of Montreal (China) Co. Ltd. and the institutional broker dealer businesses of BMO Capital Markets Corp., BMO Nesbitt Burns Securities Limited and BMO Capital Markets GKST Inc. in the U.S., BMO Nesbitt Burns Inc. in Canada, Europe and Asia, BMO Capital Markets Limited in Europe and Australia and BMO Advisors Private Limited in India.

http://www.bmocm.com/products/marketrisk/commodity/

US Gas Production Bcf/d (Bloomberg) US Storage Bcf (Bloomberg)

GFS Ensembel L48 Forecast L48 Res/Comm Forecast Baker Hughes Rig Count

60

65

70

75

80

85

90

95

100

J F M A M J J A S O N D

201 8 201 9 202 0 BM O Fo recast

0

500

100 0

150 0

200 0

250 0

300 0

350 0

400 0

450 0

J F M A M J J A S O N D

5yr Ran ge 5 Yr Average 201 8 201 9 202 0

Price Change LLS Midland Edm SW WCS Edm C5 Price Change Price Change Price Change Spread

Prompt Future $46.78 -$0.40 ($2.65) ($14.25) ($2.12) $51.13 -$0.730 $1.5273 $0.00

Calendar Apr $47.00 -$0.37 $3.01 $1.32 $51.25 -$0.513 $63.01 -$0.38 $1.5273 $0.00 $1.1966

Apr20-Jun20 $47.13 -$0.33 $2.92 $1.28 ($3.27) ($14.75) ($3.74) $51.31 -$0.40 $63.19 -$0.32 $1.5295 $0.00 $1.2000

Zero-Cost Collar $40.00/$52.88 $45.00/$56.51 $58.00/$66.92 $1.304/$1.750

Zero-Cost Collar $38.00/$54.41 $40.00/$60.27 $56.00/$68.39 $1.304/$1.750

Apr20-Dec20 $47.37 -$0.22 $2.84 $1.28 ($5.29) ($15.83) ($4.54) $51.64 -$0.24 $63.53 -$0.18 $1.5587 $0.00 $1.1931

Zero-Cost Collar $43.00/$50.99 $50.00/$52.81 $56.00/$69.31 $1.123/$2.000

Zero-Cost 3-Way $40/$46/$51.96 $1.399/$1.75/$2.00

Apr20-Oct20 $47.29 -$0.25 $2.87 $1.27 ($4.63) ($15.24) ($4.46) $51.53 -$0.28 $63.42 -$0.22 $1.5734 $0.00 $1.1896

Jul20-Dec20 $47.49 -$0.17 $2.80 $1.28 ($6.30) ($16.37) ($4.94) $51.80 -$0.16 $63.70 -$0.11 $1.5569 $0.00 $1.2005

Jul20-Sep20 $47.38 -$0.20 $2.84 $1.26 ($5.17) ($15.22) ($5.14) $51.63 -$0.21 $63.54 -$0.16 $1.5898 $0.00 $1.1786

Oct20-Dec20 $47.59 -$0.13 $2.75 $1.79 ($7.43) ($17.52) ($4.75) $51.97 -$0.12 $63.87 -$0.07 $1.6302 $0.01 $1.2173

Jan21-Dec21 $48.04 -$0.08 $2.58 $1.34 ($7.50) ($18.66) ($5.00) $52.69 -$0.04 $64.57 $0.00

Apr20 Apr20-Jun20 Apr20-Dec20 Spot Spot Change Storage (MMBbls) Current W/W Change Last Year 5 Yr. Avg.

USGC Diesel $1.4739 $1.4795 $1.5018 Gold $1,642 CAD/USD $1.3427 $0.0088 Crude Ex SPR 444.1 0.2% 453 463

USGC Jet $1.4123 $1.4170 $1.4512 Silv er $17 USD/EUR $1.1136 -$0.0037 Crude at Cushing 37.2 -5.0% 48 44

NYMEX RBOB $1.5392 $1.5266 $1.4320 Platinum $876 USD/GBP $1.2872 $0.0061 Mogas 252.0 -1.7% 251 251

NYMEX 3:2:1 Crack $0.4161 $0.4054 $0.3464 Palladium $2,468 1 Mo BA's 1.5100 -0.2325 Distillates 134.5 -2.9% 136 142

Purity Ethane $0.1475 $0.1450 $0.1554 3 Mo 3 Mo BA's 1.5025 -0.2300

Conway Propane $0.3625 $0.3642 $0.4019 Aluminium $1,726 6 Mo BA's 1.4900 -0.2338 Production (MMBbls) Current Mo/Mo Change Last Year 5 Yr. Avg.

Mt Bel Propane Non-LST $0.4100 $0.4133 $0.4406 Copper $5,684 CAD Prime 3.9500 0.0000 OPEC 27.9 -2.70% 29.8 30.8

Mt Bel N.Butane Non-LST $0.5425 $0.5400 $0.5579 Zinc $1,982 US 3 Mo Libor 1.3143 -0.1485 Russia 11.3 0.33% 11.4 11.2

Mt Bel I.Butane Non-LST $0.5825 $0.5733 $0.5835 Nickle $12,680 US 13.1 1.55% 12.1 11.1

Mt Bel C5 Non-LST $0.9475 $0.9413 $0.9335 Lead $1,820 Rest of World 48.1 -0.17% 47.0 45.9

Crude, Products and Metals Pricing

The wild ride continues, with virus, OPEC, and inventory news all playing a role today. First OPEC: the Saudis were seeking a cut of more than 1MMbpd, some say 1.5MMbpd even, and other OPEC members seemed to be fall ing

in l ine, but Russia is no mood to participate it seems which would leave Saudi Arabia on its own for the most part. A couple of more days and we’ll know if Russia capitulates at the last minute. Regarding the virus, U.S. fatalities

are now at 11. For perspective, the CDC estimate for flu-related deaths in the U.S. just this season is 18,000. Thank goodness the media doesn’t report on the flu the way they do coronavirus or grocery stores and businesses would

be empty. Not to make light of the highly contagious coronavirus, but perspective is helpful and often necessary. Anyway, South Korea seems to be ground zero now, not China. Finally, crude oil inventory numbers in the U.S. were

mixed between bullish and bearish. Cushing stocks declined nearly 2MM barrels, but overall stocks gained nearly 800k barrels, with a gain of nearly 3.5MM barrels in PADD3. Gasoline stocks declined a whopping 4.34MM barrels

and disti l late a similar 4MM barrels, for a total products decline of over 8MM barrels. Bullish, no? However, refinery runs were lower by 312Kbpd on util ization of 86.9%. So, in summary, quite the mixed bag of news today.

Petroleum Commentary

NYMEX WTI (USD/BBL)

March 4, 2020

NYH ULSD (USD/GAL) Diesel CAD WTI (CAD/BBL)ICE Brent (USD/BBL)Oil Spread Differential (USD/BBL)

Other Refined Products & NGLs (USD/GAL)

Crude Market Fundamentals

Metals Exchange & Lending Rates Crude Storage & Production (Bloomberg)

Daily Market Summary ReportCommodities | Fixed Income, Currencies and Commodities

This material has been prepared with the assistance of employees of Bank of Montreal (“BMO”) who are involved in derivatives sales and marketing efforts. Accordingly, it should be considered to be a solicitation of derivatives business generally and not a research report that reflects the views of disinterested research analysts.Notwithstanding the foregoing, this material should not be construed as an offer or the solicitation of an offer to sell or to buy or subscribe for any particular product or services ( including, without limitation, any commodities, securities or other f inancial instruments). We are not soliciting any specif ic action based on this material. It is for the general information of our clients. It does not constitute a recommendation or a suggestion that any investment or strategy referenced herein may be suitable for you. It does not take into account the particular investment objectives, financial conditions, or needs of individual clients. Nothing in this material constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your unique circumstances, or otherwise constitutes an opinion or a recommendation to you. BMO is not providing advice regarding the value or advisability of trading in commodity interests, including futures contracts and commodity options or any other activity which would cause BMO or any of its affiliates to be considered a commodity trading advisor under the U.S. Commodity Exchange Act. BMO is not undertaking to act as a swap advisor to you or in your best interests and you, to the extent applicable, will rely solely on advice from your qualified independent representative in making hedging or trading decisions. This material is not to be relied upon in substitution for the exercise of independent judgment. Any recipient of these materials should conduct its own independent analysis of the matters referred to herein, together with its qualif ied independent representative, if applicable. The recipient should seek advice based on its particular circumstances from its own independent financial, tax, legal, accounting and other professional advisors (including, without limitation, its qualif ied independent representative, if applicable) . These materials are conf idential and proprietary to, and may not be reproduced, disseminated or referred to, in whole or in part without the prior consent of BMO. Information presented in this material has been obtained or derived from sources believed by BMO to be reliable, but BMO does not guarantee their accuracy or completeness. BMO assumes no responsibility for verificationofthe information in these materials, no representation or warranty is made as to the accuracy or completeness of such information and BMO accepts no liability whatsoever for any loss arising from any use of, or reliance on, these materials. BMO assumes no obligation to correct or update these materials. These materials do not contain all information that may be required to evaluate any transaction or matter and information may be available to BMO and/or its affiliates that is not reflected herein. BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A, Bank of Montreal Ireland Plc, and Bank of Montreal (China) Co. Ltd. and the institutional broker dealer businesses of BMO Capital Markets Corp., BMO Nesbitt Burns Securities Limited and BMO Capital Markets GKST Inc. in the U.S., BMO Nesbitt Burns Inc. in Canada, Europe and Asia, BMO Capital Markets Limited in Europe and Australia and BMO Advisors Private Limited in India.

http://www.bmocm.c om/products/ marke trisk/commodity/

Annual Supply & Demand Balance (MMbbls), North American Crude Storage (MMbbls) US Refinery Utilization EIA

Pricing Differentials (USD/bbl)NYMEX Futures CurveUS Crude Imports (MMbpd), EIA

-$4

-$2

$0

$2

$4

$6

$8

$35

$39

$43

$47

$51

$55

$59

$63

$67

$71

$75

$79

Apr-20 Oct-22 Apr-25 Oct-27

Delta Today 1 Mo Ago

0

10

20

30

40

50

60

70

80

90

Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20

WTI-WCS BRENT-WTI Brent WTI WCS

0

50

100

150

200

250

300

350

400

450

500

02/08/19 02/07/20 02/15/19 02/14/20 02/22/19 02/21/20 03/01/19 02/28/20

Tota

l Bui

ld o

f 784

Cush

ing

Draw

of -

1971

Cushing Max

0

2

4

6

8

10US IMPORTS CAD Imports CAD Heavy Imports

*Heavy imports reported on a lagging basis

60%

65%

70%

75%

80%

85%

90%

95%

100%

105%

Jan-17 May-17 Sep-17 Jan-18 May-18 Sep-18 Jan-19 May-19 Sep-19 Jan-20

US TOTAL PAD III PAD IITotal Crude Last Year

Cushing Last Year

Total Crude Last Year

Cushing Last Year

0.79

0.57

-0.44

-1.48

0.00

-0.68

0.03

-0.56

0.03

-0.91

0.20

1.14

0.04

-0.84

0.86

-0.06

0.23

-2.0 0

-1.5 0

-1.0 0

-0.5 0

0.00

0.50

1.00

1.50

2004 2007 2010 2013 2016 2019

Crude Surplus

Crude Shortage

february 2020 in review - ad library · 2-oct-17 franco-nevadaosum oil sands (royalty assets) $93...

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