Corporate Presentation
May, 2019
Advisory
This presentation is for informational purposes only and is not intended as a solicitation or offering of securities of Traverse Energy Ltd.
(“Traverse” or “TVL”) in any jurisdiction. The material presented is not intended to modify, qualify, supplement or amend information disclosed
under corporate and securities legislation of any jurisdiction applicable to Traverse and should not be used for the purpose of making investment
decisions concerning Traverse securities.
Forward Looking Information
Certain statements contained in this presentation constitute forward-looking information and are based upon the estimates and opinions of the
Company’s management at the time the statements are made. The use of any of the words “could”, “expect”, “believe”, “will”, “projected”,
“estimated” and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking
information and are based on Traverse’s current belief or assumptions as to the outcome and timing of such future events. Actual future results
may differ materially. These statements relate to the Company’s corporate strategy, reserves and resources estimates, type curve production
estimates and the potential development or disposition of its Duvernay lands. Traverse’s Annual Information Form filed with securities regulatory
authorities (accessible through the SEDAR website www.sedar.com) describes the risks, material assumptions and other factors that could
influence actual results and which are incorporated herein by reference. Traverse disclaims any intention or obligation to publicly update or
revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required
by applicable securities laws.
Barrels of Oil Equivalent
Natural gas reserves and volumes contained herein are converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet
(mcf) of gas to one barrel (bbl) of oil. The term “barrels of oil equivalent” may be misleading, particularly if used in isolation. A BOE conversion
ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.
Original Oil in Place (“OOIP”)
OOIP is equivalent to Total Petroleum Initially-In-Place (“TPIIP”). TPIIP, as defined in the Canadian Oil and Gas Evaluations (COGE)
Handbook, is that quantity of petroleum that is estimated to exist in naturally occurring accumulations. It includes that quantity of petroleum that
is estimated, at a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet
to be discovered. A portion of the TPIIP is considered undiscovered and there is no certainty that any portion of such undiscovered resources
will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of such discovered resources. A
significant portion of the estimated volumes of TPIIP will never be recovered. Due to the uncertainty as to how the Duvernay will be developed
and the lack of definition of a recovery project for the OOIP at this time, the OOIP estimates disclosed herein are the most specific assignable
category that can be provided at this time.
Type Curves
Certain type curve disclosure presented herein represents estimates of the production decline and ultimate volumes expected to be recovered
over time. Type curves are useful in confirming and assessing the potential for the presence of hydrocarbons, however, such rates are not
determinative of the rates at which such wells will continue production and decline thereafter and are not necessarily indicative of long-term
performance or long term economics of the relevant well or fields or of ultimate recovery of hydrocarbons. While encouraging, readers are
cautioned not to place reliance on such rates in calculating the aggregate production or performance of Traverse.
Advisory
Analogous Information
Certain information in this presentation may constitute “analogous information” as defined in NI 51-101, including, but not limited to, information
relating to the areas in geographical proximity to lands held or to be held by Traverse. Traverse believes this information is relevant as it helps
to define the reservoir characteristics in which Traverse may hold an interest. Traverse is unable to confirm that the analogous information was
prepared by a qualified reserves evaluator or auditor or in compliance with the COGE Handbook. Such information is not an estimate of the
reserves or resources attributable to lands held or to be held by Traverse and there is no certainty that the reservoir data and economics
information for the lands held or to be held by Traverse will be similar to the information presented herein. The reader is cautioned that the data
relied upon by Traverse may be in error and/or may not be analogous to such lands held or to be held by Traverse.
Non-IFRS Measures
In this presentation references are made to certain financial measures such as “adjusted funds flow”, “operating netback” and “net debt” which
do not have standardized meanings prescribed by IFRS and therefore may not be comparable to the calculation of similar measures by other
entities. Management uses certain industry benchmarks such as operating netback to analyze financial and operating performance. There are
no comparable measures in accordance with IFRS for operating netback. Management believes that in addition to net income (loss), these non-
IFRS measures are useful supplemental measures as they assist in the determination of the Company’s performance, leverage and liquidity.
Investors should be cautioned however, that these measures should not be construed as an alternative to both net income (loss) and cash from
operating activities, which are determined in accordance with IFRS, as indicators of the Company’s performance.
Operating netback represents revenue less royalties, operating and transportation expenses. Operating netback per boe is the operating
netback divided by barrels of oil equivalent production volumes for the applicable period. The calculation of the Company’s operating netback is
detailed under the heading “Netback” within Highlights. The Company defines net debt as outstanding bank debt plus or minus working capital.
Adjusted funds flow represents cash from operating activities prior to changes in non-cash working capital and settlement of decommissioning
obligations as detailed below:
($ Thousands) 2019 Q1 2018 2017
Cash from operating activities 203 2,216 3,420
Decommissioning expenditures 12 268 178
Change in non-cash working capital 158 (1,042) 640
Adjusted funds flow 373 1,442 4,238
Corporate
Market Summary
TSXV: TVL
Basic shares outstanding 103.5 million
Fully diluted 111.9 million
Insider ownership basic 29.9%
Insider ownership fully diluted 33.5%
Corporate Strategy
Growth through the drill bit (predominantly 100% working interest)
Exploring for new oil pools that can be exploited by vertical and horizontal drilling
Maintain a significant undeveloped land base
Focus on southern and central Alberta
Corporate Summary
P+P Reserves1 1,853 Mboe
Undeveloped land 203,800 net acres (99.7% working interest)
LMR May 4, 2019 3.44
March 31, 2019 Exit Net Debt $6.7 million
Bank line $7 million
1 Independent reserves evaluation prepared by Sproule & Associates Limited dated February 15, 2019, effective December 31, 2018
Highlights
2019 Q1 2018 2017
Financial ($ thousands)
Petroleum and natural gas revenue 1,582 6,717 10,023
Adjusted funds flow 373 1,442 4,238
Net loss (512) (17,705) (5,006)
Capital expenditures 238 2,954 17,706
Working capital (deficiency) (6,671) (6,673) (4,894)
Average production (units as noted)
Natural gas (Mcf per day) 1,629 1,774 2,358
Oil and NGL (bbls per day) 237 264 375
Total (BOE per day) 509 559 768
Average sales price
Natural gas ($/Mcf) 2.63 1.83 2.66
Oil and NGL ($/bbl) 56.10 57.43 56.48
Netback ($/BOE)
Petroleum and natural gas revenue 34.58 32.90 35.74
Royalties 0.55 1.57 1.17
Operating 16.41 15.88 14.33
Transportation 1.85 1.91 1.73
Operating netback 15.77 13.54 18.52
Undeveloped Land Holdings
(March 31, 2019)
Gross Net
Acres Acres
Duvernay Shale Oil 100,100 100,100
Greater Coyote 92,000 92,000
Non Core 8,300 7,700
Turin 4,000 4,000
204,400 203,800
Areas of Activity
Development of the Duvernay Shale Oil Window
• The Duvernay Shale Basin is a light oil resource play
in the initial phase of development.
• Estimated potential of 7 to 18 MMbbls of original oil in
place per section (BMO Capital Markets PADA Society
Presentation March 12, 2018).
• The major players developing the East Shale Basin oil
window are Vesta Energy and Artis Exploration.
• In the West Shale Basin near Pigeon Lake, several
new wells have recently been completed and put on
production by Baytex Energy and Crescent Point
Energy.
• Operators continue to improve oil productivity and
development economics by modifying horizontal lateral
lengths, fracture spacing, sand placement techniques,
and sand and water concentrations.
Duvernay Formation Gross Isopach
East Shale Basin
(ERCB/AGS Open File Report 2012-06)
Chigwell
(Traverse)
Joffre
(Vesta)
Huxley-
Twining
(Artis)
Edmonton
West Shale
Basin
Buffalo Lake
(Traverse)
Pigeon Lake
(Traverse)
Duvernay Shale Oil Play
Core Land Positions:
Chigwell
39,200 Net Acres Crown and Freehold
1,900 Acres Freehold Options
Pigeon Lake
31,900 Net Acres Crown and Freehold
Buffalo Lake
27,700 Net Acres Crown and Freehold
• Traverse’s core land positions target three
prospective oil prone Duvernay areas at
Chigwell, Pigeon Lake and Buffalo Lake.
• Multiple exploratory horizontal Duvernay
wells are being completed near Traverse
lands which will provide significant
information to further de-risk the play.
• In March 2019 Traverse retained an advisor
to pursue alternatives for development or
disposition of its Duvernay lands.
Traverse Energy Land
Leduc ReefHz Duvernay Well Awaiting Completion
Producing Hz Duvernay Well
Deep Control WellsLicensed Duvernay well
R24W4R25W4R26W4R27W4R01W5R02W5R03W5 R23W4 R22W4 R21W4 R20W4 R19W4
T52
R04W5
T50
T43
T44
T45
T46
T48
T47
T41
T42
T49
T51
T40
T39
Duvernay East Shale Basin Log and Maturity Comparison
Baytex Ferrybank Traverse Chigwell Vesta Joffre
FERRYBANK AREA
Total Organic Content (TOC) 2.0-7.5 wt.%
Thermal Maturity (Tmax) 436-443°C
CHIGWELL AREA
Total Organic Content (TOC) 2.0-5.9 wt.%
Thermal Maturity (Tmax) 439-449°C
02/03-32-042-24W4 (Tmax) 447°C
JOFFRE AREA
Total Organic Content (TOC) 2.9-5.8 wt.%
Thermal Maturity (Tmax) 440-452°C
Chigwell Duvernay Shale Oil Development
Traverse Energy Land
Land Position:
39,200 Net Acres Crown and Freehold
1,900 Net Acres Freehold Options
• Large continuous land base.
• Traverse’s first exploratory well (03-32) was
drilled in October, 2017 and has been on
production since December 21, 2017.
• 03-32’s water recovery to the end of March
2019 was 44% (114,000 barrels).
• 03-32’s oil cut for the month of March 2019
was 12%.
• Baytex Energy’s horizontal well 8 miles west of
Traverse’s well is currently at 15% oil cut (and
improving) after three months of production
and 10% load recovery.
Completed Hz Duvernay Well Awaiting
Production Information
TVL Producing Hz Duvernay WellLeduc Reef
Deep Control Wells
Traverse Chigwell Duvernay Drilling and Completion Information
TVL Chigwell 02/03-32-042-24W4
Total Well Length 4410 m MD
Well Depth 2025 m TVD
Drilling Period 15 days
Frac Stages 44
Stimulated Length
of Horizontal Leg
2172 m
Sand Placed 1.6 tonnes/m
(3414 tonnes)
Open Hole Logs
Recorded Through
Horizontal Leg
Density-Neutron, Resistivity,
and Spectral Gamma
Porosity 6-9%
Average Net Pay 24 m
Chigwell 03-32-042-024W4 Cordax Open Hole Logs
0
4
8
12
16
20
24
28
32
36
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2050 2250 2450 2650 2850 3050 3250 3450 3650 3850 4050 4250 4450
Lim
esto
ne
Po
rosity (
%)
Resis
tivity (
oh
m-m
)
Measured Depth, m KB
02/03-32-042-24W4 Resistivity and Porosity75 Units GR Cutoff for Shale
GR > 75 (more shaly) GR < 75 (more limestone) 00/02-04-043-24W4
00/03-32-042-24W4 Porosity (Shaly) Porosity (Limestone)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
100
200
300
400
500
600
700
800
900
1000
2017-12-21 2018-02-19 2018-04-20 2018-06-19 2018-08-18 2018-10-17 2018-12-16 2019-02-14
Oil
Cut (%
)
Flu
id R
ate
, B
arr
els
/Day
Date
02/03-32-042-24W4 Duvernay Fluid Rate and Oil Cut
Fluid Rate Oil Cut
Buildup
Test
Cleanout &
Lowered
Bottomhole
Pump Pump
Change Buildup
Test
Coyote Ellerslie Development
• Additional horizontal locations
have been identified using 3D
seismic data interpretation.
• Wells can be added to the
existing infrastructure for
minimal cost.
• Coyote Oil Battery has emulsion
treating, gas compression, oil
storage, on-site power
generation and water disposal.
TVL Producing Ellerslie Horizontal WellTraverse Energy Land
T29
R15W4R16W4
T28
Control Point Well
TVL Producing Ellerslie Vertical/Directional Well
TVL Ellerslie Horizontal Well Location Ellerslie Pool Boundary
00/15-36
02/09-36
B
B TVL BatteryTVL Suspended Ellerslie Well
0
50
100
150
200
250
300
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Oil
Pro
du
ctio
n, B
arr
els
/Da
y
Months of Production
Coyote Ellerslie Oil Type Curve120,000 Barrels Oil, 333 MMscf Sales Gas
Type Curve 00/15-36 02/09-36
Type Curve is based on:• Optimal placement of horizontal wells within
reservoir.
• Increased horizontal length.
• Improved fracture techniques.
Coyote Mid Mannville Lithic Channel Development
• The Mid Mannville Lithic
Channel pool will be further
developed using horizontal
wells.
• 3D seismic coverage and
well control are used to
delineate the pool.
• The new wells will access
existing infrastructure and
have significantly lower tie-
in costs.
T29
R15W4R16W4
T28
TVL Producing Mannville Horizontal wellTraverse Energy Land
Control Point Well TVL Mannville Horizontal Well Location
Mannville Channel Pool Boundary
03/09-36
02/11-36
00/11-36
B
B TVL Battery
0
50
100
150
200
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
Oil
Pro
du
ctio
n, B
arr
els
/Day
Months of Production
Coyote Mid Mannville Oil Type Curve80,000 Barrels Oil, 436 MMscf Sales Gas
Type Curve 00/11-36 02/11-36 03/09-36
Type Curve is based on:• Optimal placement of horizontal wells within
reservoir.
• Increased horizontal length.
• Improved fracture techniques.
Watts Ellerslie Development
• The Watts Ellerslie oil pool is characterized
by high permeability and excellent porosity.
It is partially depleted due to gas cap
drainage.
• 3D seismic program shot in 2017
compliments existing 2D seismic coverage
and delineates pool for further development.
• Third Party reservoir study identified
remaining reserves in the oil dominant
portion of the reservoir. These reserves will
be accessed by additional locations.
T30
R15W4
TVL Producing Ellerslie Oil WellTraverse Energy Land
Control Point Well
00/03-29
00/07-29
TVL Ellerslie Location
Ellerslie interpreted Pool
Boundary
0
25
50
75
100
125
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Oil
Pro
du
ctio
n, B
arr
els
/Day
Months of Production
Watts Ellerslie Oil Type Curve32,000 Barrels Oil, 63 MMscf Sales Gas
Type Curve 100/03-29 100/07-29
Turin
• Low decline production from
Sunburst sands.
• Existing infrastructure includes
an oil battery equipped with
water disposal, sweetening, gas
compression, a sales gas line
and gathering system.
• Conducted seismic and
geological review for additional
development drilling locations.
• Acquired shut in oil well (10-04-
011-19W4) which will be
reworked for oil production.
Traverse Energy Land
Control Point Well TVL Producing Oil Well
TVL Suspended Well
R19W4
T11
TVL Oil Pipeline
TVL Water Pipeline
TVL Natural Gas Pipeline
B
TVL BatteryB
Water Disposal Well TVL Producing Gas Well TVL Sales Gas line
Ellerslie Sand 1
meter thickness
Mid Mannville Sand
Seismic defined edge
Ellerslie Sand 1m
TVL Sunburst Location
Corporate Information
Management Bank
Laurie J. Smith Alberta Treasury Branch
President & Chief Executive Officer Auditor
David H. Erickson KPMG LLP
VP and Chief Operating Officer Legal Counsel
Sharon A. Supple Osler, Hoskin & Harcourt LLP
Chief Financial Officer Independent Reserve Engineer
Sproule Associates Limited
Directors Transfer Agent
David H. Erickson Computershare
J. Reid Hutchinson Corporate Office
Robert M. Libin Suite 780, 839 – 5th Avenue S.W.
Laurie J. Smith Calgary, AB T2P 3C8
A. David van der Lee T: (403) 264-9223
Adam O. Wells www.traverseenergy.com