key industry indicators quarterly deal activity … page document library...buyer seller oil vs. gas...

1

August 2, 2017

Current Previous Month Monthly ChangeValue Value Percent Direction

Edmonton Mixed Sweet (C$/bbl)(2) $52.88 $56.30 (6.1%)

Western Canadian Select (C$/bbl)(2) $48.49 $47.08 3.0%

AECO (C$/GJ)(2) $2.15 $2.09 2.8%

US$/C$(2) $0.80 $0.77 3.6%

Monthly A&D Transaction Value ($MM)(1) $1,920 $1,087 76.6%

Monthly A&D Transaction Count(1) 4 3 33.3%

Canadian Rig Count 214 190 12.6%

Canadian Oil/Cond Production (MMbbl/d) 2.4 2.5 (3.7%)

Canadian Gas Production (Bcf/d) 17.4 18.0 (2.8%)

Canadian Gas Storage (Bcf) 574.4 524.7 9.5%

Source: BMO Capital Markets, All production throughout this document is sourced from GeoSCOUT, and only includes BC/AB/SK/MB. Production volumes are raw.1. Only considering deals larger than C$20MM.2. Current prices as of August 1, 2017 close. Previous month prices as of June 30,/2017 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) and

Cenovus-ConocoPhillips (C$17.7B).

Key Industry IndicatorsJuly 2017 in Review

Covering the Month of July 2017

Four deals to report in July:

Paramount announced two deals concurrently

Acquired assets from Apache for $459.5MM. Production was 42,196 boe/d

Merged with Trilogy in all shares deal for $1.1B with production of 25,133 boe/d. This deal is contingent on closing of the Apache transaction

Pengrowth (Restricted) sold Olds/Garringtonassets for $300MM. Production was 13,875 boe/d

Manitok Inc. acquires Questfire in an all shares deal for $55.4MM. Production was 4,310 boe/d

Quarterly Deal Activity (Producing Assets Only)(3)

$2.6

$8.0

$5.9

$2.2

$1.1

$2.1

$0.2

$3.7 $4.5

$0.8

$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

$1.1

$1.7 $1.9

$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

2010 2011 2012 2013 2014 2015 2016 2017

$18.7 $7.1 $21.6 $8.4 $18.6 $13.1 $10.4 $4.7

Tra

nsa

ctio

n V

alu

e (C

$B)

Asset Corp PrivateCo Average

Commodities WTI rallied from US$46.04 to close out the month at US$50.17, the first time WTI has broken through $50 since late May

Lower Canadian exports to the U.S., higher U.S. oil exports, and strong global refined product demand led to large declines in U.S. total petroleum inventories in July and provided support for prices

The improvement in global physical markets is starting to be reflected in the forward curve with compression of crude oil time spreads. September Brent futures expired in backwardation and the WTI forward curve is flat within the US$50-$51 range through 2019

Canadian oil differentials continue to strengthen relative to WTI with lower supply because of unplanned upgrader outages locally and high demand from U.S. refiners

July was a challenging month for North American natural gas markets with rising output NYMEX declined from US$3.03 to US$2.79 as U.S. output increased, primarily in the Northeast. Marcellus production remains

steady and Utica production hit new highs during the month

Prices at AECO sank on a combination of stronger output and downstream maintenance. Short-term prices will likely remain volatile in August as outages and maintenance continue. AECO storage was 87% full at the end of July

Equity Markets The Canadian new issue market raised gross proceeds of C$2.3B

Hydro One (Restricted) raised C$1.4B via instalment receipts to fund its C$6.7B acquisition of Avista

– Together, Hydro One and Avista will create a North American leader in regulated electricity and natural gas business with over C$32.2B in combined assets

Debt Markets The summer slowdown was in full effect this July – the US$ high yield market witnessed only 25 issuances raising a total volume of

$9.7B in proceeds; the market saw 66 issuances raise a total of $41.0B in June

Despite the slow month, primary YTD volume is now $196.0B, compared to $139.0B of volume in YTD 2016

The C$ high yield market saw no primary issuances in July, marking the 3rd consecutive month without a deal pricing

The C$ High Yield index’s exposure to volatility in oil prices allowed the index to reach 6.15% early in the month - the highest level since mid-May, before prices recovered

2

August 2, 2017

Parameters Metrics

Prod. P+P Production P+P

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

11-Jul-17 Undisclosed Pengrowth (Olds/Garrington Assets) $300 13,875 78,000 $21,622 $3.85 Central AB

7-Jul-17 Manitok Questfire $55 4,310 28,900 $12,854 $1.92 Central AB

6-Jul-17 Paramount Apache Canada Ltd. $460 42,196 288,322 $10,890 $1.59 Other

6-Jul-17 Paramount Trilogy $1,109 25,133 165,059 $44,112 $6.72 Grande Prairie

14-Jun-17 Undisclosed Bellatrix Exploration $35 1,750 n.a. $19,714 n.a. Central AB

9-Jun-17 MIE Holdings CQ Energy Canada $722 55,775 343,612 $12,945 $2.10 Other

1-Jun-17 Cardinal Apache (SE Sask & House Mt. Assets) $330 5,000 28,600 $66,000 $11.54 Area IV

25-May-17 XTO Trilogy (Duvernay Assets) $60 640 n.a. $93,750 n.a. Grande Prairie

10-May-17 Undisclosed Freehold (SE Sask Assets) $29 750 n.a. $38,533 n.a. Area IV

8-May-17 Undisclosed Crew (Goose Assets) $49 n.a. n.a. n.a. n.a. Northeast BC

Average / Total (Ex. Royalty) 10 Transactions (4 Oil, 6 Gas) $3,148 149,429 932,493 $35,602 $4.62

Oil Weighted $708 19,625 106,600 $42,052 $7.69

Gas Weighted $2,440 129,804 825,893 $32,377 $3.08

Ann'd Date Buyer SellerEnterprise

ValueWCSB Region

The 10 Most Recent Transactions Over $20 Million

Note: Transactions that occurred after the month being covered in this report are not included Source: BMO Transaction Database

Denotes current month transactionBlue = BMO Capital provided transaction advisory services Green = BMO Capital provided acquisition financing or related servicesBMO Capital Markets is restricted on Pengrowth Energy

Oil Sands Transactions (2016 – Present)

Royalty Transactions (2016 – Present)

Parameters Metrics

Prod. Production

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

2-Mar-17 Freehold Undisclosed (Royalty Assets) $34 185 $183,784 32,000 acres in the Dodsland Viking

9-Feb-17 Burgess Athabasca (Royalty Assets) $90 -- n.a. Upsized: Includes Leismer and Corner lease

16-Dec-16 Undisclosed Cavalier (Royalty Assets) $100 -- n.a. Sliding scale (0-20%) starting at US$50/bbl WCS

14-Dec-16 PrairieSky Pengrowth (Royalty Assets) $250 608 $411,455 4% royalty on Lindbergh properties, including future development

14-Dec-16 Burgess Athabasca (Royalty Assets) $50 -- n.a. Upsized: Modified sliding scale and starting point

1-Dec-16 PrairieSky BlackPearl / Other (Royalty Assets) $117 460 $255,000 Acquired a combined 3.95% royalty interest at Onion Lake

3-Nov-16 Burgess Athabasca (Royalty Assets) $129 n.a. n.a. Upsized: Sliding scale (0-12%) starting at US$75/bbl WTI

27-Jun-16 PrairieSky Pine Cliff (Royalty Assets) $25 n.a. n.a. 99,930 net fee title acres

20-Jun-16 Burgess Athabasca (Royalty Assets) $129 -- n.a. Sliding scale (0-6%) starting at US$75/bbl WTI

2-May-16 Freehold Husky (Royalty Assets) $165 1,700 $97,059 Acquired >2MM net acres across Western Canada

Average / Total 10 Transactions $1,088 2,953 $236,824

Ann'd Date Buyer SellerEnterprise

ValueCommentary

ParametersProd. 2P+2C EV / Prod. EV / 2P+2C

(C$MM) (boe/d) (mmboe) (C$/boe/d) (C$/boe)

29-Mar-17 Cenovus ConocoPhillips (FCCL, Deep Basin) SAGD $17,730 284,396 n.a. $62,341 n.a.

9-Mar-17 CNRL Shell & Marathon (AOSP) Mining $12,592 201,800 n.a. $62,397 n.a.

9-Mar-17 Shell Marathon (AOSP) Mining $1,683 26,857 n.a. $62,660 n.a.

14-Dec-16 Athabasca Statoil ASA SAGD $582 24,000 1,484 $24,250 $0.39

27-Apr-16 Suncor Murphy (5% Interest in Syncrude) Mining $937 15,600 n.a. $60,064 n.a.

18-Jan-16 Suncor Canadian Oil Sands Mining $6,844 105,400 3,309 $64,931 2.07

Average / Total $40,367 658,053 4,793 $56,107 $1.23

MetricsDate Acquiror Target Type EV

3

August 2, 2017

--

$1

$2

$3

$4

$5

$6

--

$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

2013 2014 2015 2016 2017

Hen

ry Hu

b (U

S$/m

mb

tu)

EV

/Pro

du

ctio

n (

$/b

oe/

d)

--

$20

$40

$60

$80

$100

$120

$140

--

$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

2013 2014 2015 2016 2017

WT

I (US

$/bb

l)E

V/P

rod

uct

ion

($/

bo

e/d

)

42% 58%

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

A&D Valuation Trends(2)

LTM Transaction Breakdown (By Deal Value)(1)

SELLERBUYER OIL vs. GAS

YieldJunior / Interm.

PrivateCo/Sponsor

Undisclosed Senior

Foreign Other Gas Oil

Source: BMO Transaction Database1. Excludes oil sands transactions including Cenovus’ acquisition of ConocoPhillips’ FCCL and Deep Basin assets.2. Excludes royalty transactions.

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

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

OIL-WEIGHTED TRANSACTIONS

GAS-WEIGHTED TRANSACTIONS

84% 16%

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

$3.1B37%

$2.2B26%

$1.5B17%

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

$32.6B100%

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

$4.9B58%

$1.4B17%

$0.9B10%

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

$30.3B93%

$1.7B5%

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

E&

P(1

)O

il S

and

s(2)

Foreign companies’ exits biased toward

oil sands assets

~50% of value is comprised of junior / interm. buyers

with EV >C$2BSupported by sellers

with EV <C$2B

4

August 2, 2017

$0

$250

$500

$750

$1,000

0

90

180

270

360

01/16 04/16 07/16 10/16 01/17 04/17 07/17

Ave

rag

e P

ost

(C

$/ac

re)

To

tal

Are

a (s

ecti

on

s)

<$40/acre $40-400/acre $400-800/acre

$800-1,600/acre >$1,600/acre C$/acre

Montney gas production has grown from negligible volumes to ~5.5 Bcf/d. This growth has offset declines in the rest of the WCSB

The play continues to evolve and expand as companies consolidate and push the edges of the fairway

Consolidation

The de-risked part of the fairway is largely locked up and bidders are forced to pay high land acquisition costs for the few sections that remain

Some parcels of land have taken longer to get to market due to requirements for consultations and approvals (Blueberry/Inga)

Some land sales are a result of exceptional well results and attract high land sale prices (Gold Creek)

Going forward we expect operators to further consolidate through acquisitions and land swaps

Consolidation in the de-risked areas of the Monteny have averaged ~ $1,400/acre since January 2016

Pushing the Edge

Land sales continue northeast of the de-risked part of the fairway

Speculators continue to buy land along the edge of the play at prices of less than $40/acre

The average price outside the core of the Montney is ~$60/acre since January 2016

MONTNEY LAND SALES SINCE JANUARY 2016 AND HELD CROWN RIGHTS

VALUE PROGRESSION OVER TIMEMONTNEY PRODUCTION VS WCSB

MONTNEY OVERVIEW

Two Montney Strategies: Consolidation & Pushing the Edge

0

5

10

15

20

25

2000 2003 2006 2009 2012 2015 2018

Nat

Gas

Pro

d (

Bcf

/d)

Associated Gas (Oil Wells) Other Gas Wells

Shallow Gas Wells Deep Basin Gas Wells

Montney Gas Wells

Source: GeoSCOUT, GeoEDGES, BMO Capital Markets

Montney currently accounts for ~30% WCSB gas prod

Pushing the edge

Consolidation

Jedney

NIG

Blueberry/Inga

Tower

Sunrise

Elmworth

Wapiti

Kakwa

Altares

Gold Creek

5

August 2, 2017

Montney Gold Creek: Consolidation Game

GOLD CREEK AREA (CIRCA 2015)

The edge of the Montney has continued to expand and has attracted some high land sale prices in the Gold Creek area:

Sec 18, T066-06W6 sold in Oct. 2016 for a unit price of ~C$2,626/acre

Sections 19,25,30 of T068-05W6 sold in Aug. 2016 for an average of ~C$1,700/acre

GOLD CREEK AREA (PRESENT) SUMMARY

Velvet and CIOC have been most active in acquiring lands and extending the play to the northeast

Since virtually all lands are held in the Greater Gold Creek area we expect further consolidation to occur through land swaps and acquisitions

Source: GeoSCOUT, BMO Capital Markets, public disclosure. Corporate positions as shown may not be indicative of operatorship and do not include acquisitions and divestiture activity (post transaction layer shown).

6

August 2, 2017

Montney Blueberry/Inga: Large Contiguous Packages Available in 2017 Land Sales

HALFWAY AREA (PRESENT)

The Blueberry / Inga area has had some recent land sales at high metrics likely due to offsetting wells showing compelling condensate gas ratios

Some of the larger blocks that are just now coming to market have experienced long delays due to being in designated areas of “cultural significance” to First Nations

The July land sale saw one parcel transact for almost $5,600/acre; offsetting postings for September and October will likely garner significant attention (approximately 35 sections to the north are posted in the October sale)

HALFWAY AREA (CIRCA 2015)

Source: GeoSCOUT, BMO Capital Markets, public disclosure. Corporate positions as shown may not be indicative of operatorship and do not include acquisitions and divestiture activity (post transaction layer shown).

COMMENTARY

Parcel 66423 went for C$ 77MM (close to 22 sections) at the July 26, 2017 BC Land Sale

Since 2015, area operators have continued to consolidate their land positions – note the amount of available land (indicated by the white space) at the beginning of 2015

ConocoPhillips is a relative new entrant to the area having purchased positions from Bonavista and Pengrowth. In addition to oil sands this is the only notable remaining Canadian holding

7

August 2, 2017

Legend

US$/bbl C$/bbl

US$/bbl Diff C$/bbl Diff

Cushing (37- 42o)

EMS (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

AECOStation 2

Northern California

Legend

US$/MMBTU C$/GJ

US$/MMBTU C$/GJ Diff

Transco

El Paso - SJ

Waha

$49.16 $61.65

$48.89 $61.31

($0.27) ($0.34)

$45.76 $57.38

($3.40) ($4.26)

$51.78 $64.93

$2.62 $3.29

$48.14 $60.37

($1.02) ($1.28)$51.37 $64.42

$2.21 $2.77

$1.66 $1.98

($1.16) ($1.37)

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

Commodity Prices – August 1, 2017OIL PRICING & DIFFERENTIALS TO CUSHING WTI ($ / BBL) – OIL API GRAVITY IN PARENTHESIS

Source: BMO Commodity Products Group, Bloomberg1. US$/C$ spot rate of 1.254 used for all conversions. Source: Bloomberg, as of 08/01/2017

$2.76 $3.28

($0.06) ($0.07)

$1.56 $1.85

($1.26) ($1.50)

$0.57 $0.68

($2.25) ($2.67)

$37.93 $47.56

($11.23) ($14.08)

$2.62 $3.11

($0.20) ($0.24)

$3.16 $3.76

$0.35 $0.41

$2.69 $3.20

($0.13) ($0.15)

$2.68 $3.18

($0.14) ($0.17)

$2.49 $2.97

($0.33) ($0.39)

$2.44 $2.90

($0.38) ($0.45)

$2.82 $3.35

8

August 2, 2017

$40

$50

$60

$70

$80

2017 2018 2019 2020

EM

S (

C$/

bb

l)

Strip 08/01/17 Engineering Average

BMO Research

0

0.5

1

1.5

2

2.5

3

2010 2011 2012 2013 2014 2015 2016 2017

Oil

Pro

d (

MM

bb

l/d)

BC AB SK MB

$0

$2

$4

$6

$30

$40

$50

$60

$70

Dec-15Mar-16 Jun-16Sep-16Dec-16Mar-17 Jun-17

Dif

f (U

S$/

bb

l)

EM

S (

C$/

bb

l)

WTI - EMS Diff (US$/bbl) EMS

0%

20%

40%

60%

80%

100%

120%

140%

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17

NG

L /

EM

S S

po

t (C

$/b

bl/

C$/

bb

l)

Edmonton Propane/EMS Edmonton Butane/EMS

Edmonton Condensate/EMS

$0

$6

$12

$18

$24

$10

$20

$30

$40

$50

$60


Dif

f (U

S$/

bb

l)

WC

S (

C$/

bb

l)

WTI - WCS Diff (US$/bbl) WCS

-$6

-$4

-$2

$0

$2

$4

$30

$40

$50

$60

$70

$80


Dif

f (U

S$/

bb

l)

Ed

m. C

5 (C

$/b

bl)

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

FUTURES CURVE AND ENGINEERING AVERAGE

Oil/Liquids Fundamentals

EDMONTON MIXED SWEET VS. WTI HISTORICAL CANADIAN CONDENSATE VS. WTI HISTORICAL

NGL AS A PERCENTAGE OF EMS(1)

Source: GeoSCOUT, BMO Capital Markets, BloombergNote: Engineering Average Forecast - averaged Q3 forecasts of GLJ, Sproule, McDaniel, and AJM Deloitte1. Prices reported according to Bloomberg.2. This page does not include Oil sands mining or Northwest Territories well production.

WESTERN CANADIAN SELECT VS. WTI HISTORICAL

HISTORICAL OIL PRODUCTION(2)

9

August 2, 2017

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 Avg

2016 2017

Nat

ura

l Gas

Sto

rag

e (B

cf)

0

100

200

300

400

500

600

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

Nat

ura

l Gas

Sto

rag

e (B

cf)

5-Year Range 5-Yr Avg

2016 2017

0

5

10

15

20

2010 2011 2012 2013 2014 2015 2016 2017

Nat

Gas

Pro

d (

Bcf

/d)

BC AB SK MB

$1

$2

$3

$4

2017 2018 2019 2020

HH

NY

ME

X (

US

$/M

MB

TU

)

Strip 08/01/17 Engineering AverageBMO Research

-$1

$0

$1

$2

$3

$0

$1

$2

$3

$4


Dif

f (C

$/M

MB

TU

)

St.

2 B

C

(C$/

MM

BT

U)

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

$0

$1

$2

$3

$4

$0

$1

$2

$3

$4


Dif

f (U

S$/

MM

BT

U)

AE

CO

(C

$/M

MB

TU

)

HH - AECO Diff (US$/MMBTU) AECO

FUTURES CURVE AND ENGINEERING AVERAGE

Natural Gas Fundamentals

AECO / NYMEX HISTORICAL STATION 2 / AECO HISTORICAL

WESTERN CANADA GAS STORAGE

Source: GeoSCOUT, BMO Capital Markets, Bloomberg, NGX Note: Engineering Consultant Forecast - averaged Q3 forecasts of GLJ, Sproule, McDaniel, and AJM Deloitte1. This page does not include oil sands mining or Northwest Territories well production.

U.S. NATURAL GAS STORAGE

WCSB PRODUCTION BY PROVINCE(1)

10

August 2, 2017

0 5 10 15 20

Crescent Point

Tourmaline

Peyto

Encana

Canadian Natural

Seven Generations

Whitecap

Teine

Tamarack Valley

Raging River

Grande Prairie Central ABSK Area IV NEBCSK Area II Athabasca / Cold Lk.Peace River / Slave Lk. SE ABFoothills SK Area III

0

25

50

75

100

125

150

175

200

225

Act

ive

Rig

Co

un

t

AB SK BC MB 2016 Weekly Total

WEEKLY RIG COUNT BY PROVINCE

Rig Analysis ACTIVE RIG COUNT BY AREA – 214 ACTIVE RIGS IN THE WEEK ENDING JULY 28

Source: DOB, BMO Capital Markets

TOP OPERATORS BY RIG COUNT

PSAC Area

Active Rig Count

Saskatchewan

Alberta

British Columbia

SK Area I

2

Athabasca/Cold Lk

12

Fort McMurray

2

SK Area IV

28

SK Area III

5

Rainbow Lk

1NEBC

26

Peace River/Slave Lk.

10

Grande Prairie

54

Central AB

32 E. Central AB

9

SE AB

10

Foothills

6 SK Area II

17

2017

Active Rigs Shown

50% of rig count

11

August 2, 2017

0

1

2

3

4

5

2010 2011 2012 2013 2014 2015 2016 2017T

ota

l P

rod

uct

ion

(M

Mb

oe/

d)

Other VikingMontney SE Sask MississippianSpirit River BakkenDuvernay Cardium

0.0

0.5

1.0

1.5

2.0

2.5

Aug-16 Nov-16 Feb-17 May-17Met

res

Dri

lled

(m

illio

ns)


0

250

500

750

1,000

1,250

Aug-16 Nov-16 Feb-17 May-17

Wel

l E

ven

ts S

pu

d (

Co

un

t)


Wells Spud Oil and Raw Gas ProductionJul-17 vs. Jul-16 Direction May-17 vs. Apr-17 vs. Mar-17 vs. May-16 Direction

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

Viking 81 3% 141,805 (6%) (8%) 14%

Montney 65 41% 1,029,805 (1%) (3%) 5%

Duvernay 9 (44%) 63,161 (1%) (2%) 17%

Spirit River 34 17% 565,866 (3%) (3%) 9%

Cardium 18 125% 190,358 (1%) 0% (3%)

Bakken 2 (87%) 80,932 0% 1% (5%)

SE Sask Mississippian 8 (75%) 137,288 (0%) 1% 0%

Sub-Total 217 (3%) 2,209,215 (2%) (2%) 5%

Other 114 (15%) 2,025,362 (3%) (6%) (4%)

Total 331 (7.8%) 4,234,577 (2.3%) (4.2%) 3.1%

PRODUCTION BY PLAY(1)

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: This page does not include mining or thermal production or conventional wells from the Northwest Territories. Production as of May 2017. Spud and License data as of July 31, 2017.

LOCATOR MAP

WCSB Key Play Activity

WELLS SPUD BY PLAY LTM METRES DRILLED BY PLAY LTM

PLAY SUMMARY – WELLS SPUD AND TOTAL PRODUCTION

For use on pages 12-18, 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. All wells with no production and a rig release prior to Jan. 2010 are not shown. All wells with no production in LTM or with most recent month production of less than 10 boe/d are not shown.

12

August 2, 2017

0 500 1,000 1,500 2,000

Teine

Raging River

Whitecap

Crescent Point

Tamarack Valley

Producing Standing Location and Drilling

0

60

120

180

240

Jul-16 Oct-16 Jan-17 Apr-17 Jul-17

13mo Average

ItemCurrent (Jul-17)

Last Month (Jun-17)

Last Year (Jul-16)

Licensing Count 134 202 55

Spud Count 81 133 79

2

1

2

1

4

1 1

2

1

3

1

3

$0

$50,000

$100,000

$150,000

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

2012 2013 2014 2015 2016

Avg. $/boe/d

# Deals

1 1 1 1

3

1 1

2

1

2

3

$0

$5

$10

$15

$20

$25

$30

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

2012 2013 2014 2015 2016

Avg. $/boe

# Deals

0

100

200

2010 2011 2012 2013 2014 2015 2016 2017

Pro

du

cti

on

(M

bo

e/d

)

Verticals Pre-2010 2010 2011 20122013 2014 2015 2016 2017

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)

13-Dec-16 Steelhead Toro Corp $40 658 40% 4,647 19.3 $60,000 $8.50 nmf

28-Nov-16 Raging River Northern Blizzard (Viking Assets) Asset $58 620 3% 5,800 25.6 $93,548 $10.00 6.1x

2-Nov-16 Tamarack Valley Spur (Viking) Corp $388 6,250 48% 26,500 11.6 $62,150 $14.66 6.0x

20-Jul-16 Raging River Whitecap (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 12.9x

31-May-16 Raging River Rock Energy Corp $109 2,550 5% 17,077 18.3 $42,745 $6.38 6.6x

10-May-16 NAL Resources Husky (Viking) Asset $102 1,470 45% n.a. n.a. $69,388 n.a. n.a.

Average - Viking $242 3,993 21% 21,445 16.8 $91,235 $11.57 7.9x

Median - Viking $102 1,470 9% 17,077 18.3 $62,150 $10.00 6.3x

ROYALTY

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/AssetEnterprise

Value

TRANSACTION ACTIVITY (2016 TO PRESENT)

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.2. Excludes royalty transactions.

ACTIVITY OVERVIEW MAPLICENSING ACTIVITY

LICENSING ACTIVITY

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

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

Key Industry IndicatorsViking Snapshot Last Announced Deal: $34MM in March 2017

Viking

$251k/boe/d

13

August 2, 2017

1

32

1

65

2

7

12

1 1 1 12

34

1$0

$40,000

$80,000

$120,000

Q1Q2Q3 Q4Q1Q2Q3Q4Q1Q2 Q3Q4Q1Q2Q3 Q4Q1Q2Q3Q4Q1Q2 Q3Q4

2012 2013 2014 2015 2016 2017

Avg. $/boe/d

# Deals

1

32

65

2

7

12

1 1 12

34

1$0

$5

$10

$15

$20

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

2012 2013 2014 2015 2016 2017

Avg. $/boe

# Deals


LICENSING ACTIVITY



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

0 500 1,000

Progress

Encana

ARC

Shell

Seven Generations


0

500

1,000

1,500

2010 2011 2012 2013 2014 2015 2016 2017

Pro

du

ctio

n (

Mb

oe/

d)

Verticals Pre-2010 2010 2011 20122013 2014 2015 2016 2017

0

50

100

150

200


13mo Average


Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 65 56 46

Key Industry IndicatorsMontney SnapshotLast Announced Deal: $1.1B July 2017

Montney

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017;BMO Capital Markets is restricted on Pengrowth Energy

1. As defined on page 11.2. Reflects full corporate transaction (Duvernay and Montney).

Parameters Metrics



6-Jul-17 Paramount Trilogy Corp $1,109 25,133 62% 165,059 18.0 $44,112 $6.72 6.3x

8-May-17 Undisclosed Crew (Goose Assets) Asset $49 n.a. n.a. n.a. n.a. n.a. n.a. n.a.

1-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.

23-Mar-17 Undisclosed 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 $296 8,500 99% 325,100 104.8 $34,856 $0.91 9.7x

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.

20-Oct-16 Tourmaline Shell (Deep Basin / Montney) Asset $1,369 24,850 85% 473,500 52.2 $55,091 $2.89 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 - Montney $455 12,329 70% 184,499 33.6 $51,724 $6.08 8.0x

Median - Montney $114 6,400 62% 178,096 23.4 $44,783 $6.59 8.0x

AnnounceDate

Acquiror Vendor Corp/AssetEnterprise

Value

$153k/boe/d

(2)

14

August 2, 2017

0

10

20

30

40


13mo Average

0 100 200 300

Shell

Encana

Chevron

Vesta

XTO



Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 9 4 16

0

20

40

60

80

2010 2011 2012 2013 2014 2015 2016 2017Pro

du

ctio

n (

Mb

oe/

d)

2011 2012 2013 2014 2015 2016 2017


LICENSING ACTIVITY

PRODUCTION BY DRILLING YEAR

1 1 1

2

1 1 1

$0

$5,000

$10,000

$15,000

$20,000


2012 2013 2014 2015 2016 2017

Average of $/Acre

# Deals1 1

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50


2012 2013 2014 2015 2016 2017

Average of $/Mcfe

# Deals

TOP 5 OPERATORS BY HORIZONTAL WELL COUNT(1)

TRANSACTION ACTIVITY

TRANS. RESOURCE MULTIPLES ($/MCFE) TRANS. ACREAGE MULTIPLES ($/ACRE)

Key Industry IndicatorsDuvernay SnapshotLast Announced Deal: $1.1B in July 2017

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.2. Production multiple adjusted assuming $30,000/boe/d.

Duvernay

Parameters Compensation Metrics (Adjusted)

Interest Acres Production Resource Upfront Total Acreage Resource

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

6-Jul-17 Paramount Trilogy 100% 118,000 n.a. n.a. n.a. n.a. n.a. n.a.

25-May-17 Undisclosed Trilogy 100% 6,240 3,840 n.a. $60 $60 $6,538 n.a.

27-Jan-16 Murphy Oil Athabasca 61% 158,000 28,440 1.00 $250 $475 $2,038 $0.32

7-Dec-15 ExxonMobil (XTO) Yoho 100% 10,290 5,340 n.a. $50 $50 $2,264 n.a.

19-Nov-15 Undisclosed Trilogy 100% 5,760 3,480 n.a. $113 $113 $16,559 n.a.

6-Oct-14 KUFPEC Chevron 30% 99,000 4,590 n.a. $0 $1,678 $16,717 n.a.

1-Aug-13 Chevron Alta Energy 100% 67,900 -- n.a. $900 $900 $13,255 n.a.

13-Dec-12 PetroChina Encana 50% 222,055 -- 6.74 $1,180 $2,180 $9,817 $0.32

Average - Duvernay 85,906 6,527 3.87 $365 $779 $9,598 $0.32

Median - Duvernay 83,450 3,840 3.87 $113 $475 $9,817 $0.32

AnnounceDate

Acquiror Vendor

15

August 2, 2017

Parameters Metrics



29-Mar-17 Cenovus ConocoPhillips (FCCL & D. Basin Assets) Asset $17,730 284,396 31% 3,966,000 38.2 $62,341 $4.47 9.8x

20-Mar-17 Journey Undisclosed (Central AB Assets) Asset $35 2,000 72% 13,000 17.8 $17,740 $2.73 4.1x

20-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 (Wapiti Assets) 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 $3,238 53,641 73% 1,118,550 31.7 $34,564 $3.33 7.0x

Median - Spirit River $132 4,300 76% 247,600 28.4 $28,808 $3.06 7.0x

AnnounceDate


Value

2 2

3

1 1 1

3

5

2

1 1 1 1

2

1 1

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000


2012 2013 2014 2015 2016 2017

Avg. $/boe/d # Deals

2 2 2

1 1

5

1 1 1 1 1 1 1

$0

$2

$4

$6

$8

$10

$12


2012 2013 2014 2015 2016 2017

Avg. $/boe # Deals


LICENSING ACTIVITY


0 200 400 600 800 1,000

Peyto

Tourmaline

Jupiter

Bellatrix

Bonavista


0

200

400

600

2010 2011 2012 2013 2014 2015 2016 2017Pro

du

ctio

n (

Mb

oe/

d)

Verticals Pre-2010 2010 2011 20122013 2014 2015 2016 2017

0

20

40

60

80


13mo Average


Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 34 25 29

Key Industry IndicatorsSpirit River SnapshotLast Announced Deal: $17.7B in March 2017

Spirit River

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.2. Deal metrics shown include entire transaction (including non-Spirit River assets).



(2)

16

August 2, 2017

2

1

4

1 1 1

3

6

2

1 1

2

1

$0

$5

$10

$15

$20

$25


2012 2013 2014 2015 2016 2017

Avg. $/boe

# Deals


LICENSING ACTIVITY


TRANSACTION ACTIVITY(2) (2016 TO PRESENT)


0 100 200 300 400 500

Whitecap

Ridgeback

Obsidian

Bonterra

Pengrowth


0

100

200

300

2010 2011 2012 2013 2014 2015 2016 2017Pro

du

ctio

n (

Mb

oe/

d)

Verticals Pre-2010 2010 2011 2012

2013 2014 2015 2016 2017

0

15

30

45


13mo Average


Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 18 10 8

Key Industry IndicatorsCardium SnapshotLast Announced Deal: $35MM in June 2017

Parameters Metrics



14-Jun-17 Undisclosed Bellatrix Exploration 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 6.5x

28-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 Exploration Corp $64 2,000 40% 11,068 15.2 $31,850 $5.76 13.8x

Average - Cardium $68 2,083 42% 11,696 17.2 $32,793 $5.10 10.1x

Median - Cardium $55 1,875 42% 9,484 17.0 $28,812 $5.38 10.1x

AnnounceDate


Value

2

1

4

1

2 2

4

6

2

1 1 1

3

1 1

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

2012 2013 2014 2015 2016 2017

Avg. $/boe/d

# Deals

Cardium

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.2. Does not include the take-private of Lightstream (now called Ridgeback).BMO Capital Markets is restricted on Pengrowth Energy

17

August 2, 2017


LICENSING ACTIVITY


TRANSACTION ACTIVITY(2) (2012 TO PRESENT)

0 1,000 2,000 3,000

Crescent Point

Ridgeback

Tundra

Red River

Steppe


0

50

100

150

2010 2011 2012 2013 2014 2015 2016 2017Pro

du

ctio

n (

Mb

oe/

d)

Verticals Pre-2010 2010 2011 20122013 2014 2015 2016 2017

0

20

40

60

80


13mo Average


Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 2 25 15

Key Industry IndicatorsBakken SnapshotLast Announced Deal: $1.1B in April 2014

Parameters Metrics



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

Average - Bakken $549 4,667 5% 22,933 12.1 $118,653 $27.13 5.1x

Median - Bakken $427 2,900 4% 12,600 11.9 $111,340 $26.13 4.8x

AnnounceDate


Value


2

1

$104,000

$108,000

$112,000

$116,000

$120,000

$124,000

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

2012 2013 2014

Avg. $/boe/d

# Deals2

1

$0

$5

$10

$15

$20

$25

$30

$35

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

2012 2013 2014

Avg. $/boe

# Deals

Bakken

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.2. Does not include the take private of Lightstream (now called Ridgeback).

18

August 2, 2017

0

25

50

75

100


13mo Average


Last Month (Jun-17)

Last Year (Jul-16)


Spud Count 8 27 32

0 500 1,000 1,500 2,000

Crescent Point

Spartan

TORC

Tundra

NAL


0

50

100

150

200

2010 2011 2012 2013 2014 2015 2016 2017Pro

du

ctio

n (

Mb

oe/

d)

Verticals Pre-2010 2010 2011 2012

2013 2014 2015 2016 2017

Parameters Metrics



1-Jun-17 Cardinal Apache (SE SK & House Mountain Assets) Asset $330 5,000 0% 28,600 15.7 $66,000 $11.54 6.0x

10-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 8.2x

3-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 5.7x

19-May-16 Spartan Wyatt Oil + Gas Corp $77 1,330 24% 14,629 30.1 $57,895 $5.26 6.8x

Average - SE Sask $188 2,533 12% 22,426 18.3 $61,449 $10.82 6.7x

Median - SE Sask $77 1,330 4% 21,615 15.0 $57,895 $10.10 6.4x

AnnounceDate


Value

LICENSING ACTIVITY

LICENSING ACTIVITY




Key Industry IndicatorsSE Mississippian SnapshotLast Announced Deal: $330MM in June 2017

1

3

1 1 1

3 3 3

1

2

1

2 2

1

2

$0

$50,000

$100,000

$150,000

$200,000

Q1Q2 Q3Q4 Q1Q2 Q3Q4Q1 Q2Q3 Q4Q1 Q2Q3 Q4Q1Q2 Q3Q4 Q1Q2 Q3Q4

2012 2013 2014 2015 2016 2017

Avg. $/boe/d

# Deals

1

3

1 1

3 3 3

1

2 2

1 1

$0

$5

$10

$15

$20

$25

$30


2012 2013 2014 2015 2016 2017

Avg. $/boe

# Deals

SE MississippianMississippian

Source: BMO Capital Markets, Bloomberg, GeoSCOUT, GeoEDGESNote: Production as of May 2017. Spud and License data as of July 31, 2017. 1. As defined on page 11.

ACTIVITY OVERVIEW MAP

19

August 2, 2017

Wendy Smith LowManaging [email protected]

Cheryl Sandercock, P.Eng.Managing [email protected]

ENGINEERING GEOLOGY COMMERCIAL

Morad Rizkalla, [email protected]

Joyce Kennedy, [email protected]

Cliff [email protected]

Steve Kehoe, M.E.Sc, [email protected]

Kathleen Dixon, M.B.A., P.Geol.Vice [email protected]

Mandy [email protected]

Jennifer Haskey, P.Eng.Vice [email protected]

Michael Greene, M.Sc., P.Geo.Vice President [email protected]

Aidin Sadr, [email protected]

Maureen Jarvis, CETAssociate [email protected]

Conor Ross, P.Eng, CFAAnalyst [email protected]

Disclaimer

Contacts

This material is prepared by the BMO Capital Markets’ Investment and Corporate Banking Department, for distribution to BMO Capital Markets’ clientele. It is not aproduct of BMO Capital Markets’ Research Department. The views of the Investment and Corporate Banking Department may differ from those of the Research Department.

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), Bankof Montreal Ireland p.l.c, and Bank of Montreal (China) Co. Ltd and the institutional broker dealer businesses of BMO Capital Markets Corp. (Member SIPC) in the U.S., BMONesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia and BMO CapitalMarkets Limited (authorised and regulated by the Financial Conduct Authority) in Europe 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 ofMontreal, used under license.

® Registered trademark of Bank of Montreal in the United States, Canada and elsewhere.™ Trademark of Bank of Montreal in the United States and Canada.

Bank of Montreal or its subsidiaries (“BMO Financial Group”) has lending arrangements with, or provide other remunerated services to, many issuers covered by BMO CapitalMarkets. 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 withoutnotice. BMO Capital Markets endeavors to ensure that the contents have been compiled or derived from sources that we believe are reliable and contain information andopinions that are accurate and complete. However, BMO Capital Markets makes no representation or warranty, express or implied, in respect thereof, takes no responsibilityfor 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 maybe 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 investmentdecisions, 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 forinformation 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 thesecurities 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 ofthe 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 aconflict 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.

INVESTMENT BANKING

Brian [email protected]

Jorden [email protected]

EIA Diesel Price Change LLS Midland Edm SW WCS Price Change Price Change Price Change Spread

Prompt Future $49.16 -$1.01 $51.78 -$0.94 $1.6413 -$0.026Calendar Sep $49.34 -$0.96 $2.21 ($1.02) ($3.40) ($11.23) $61.76 -$0.84 $51.95 -$0.93 $1.6449 -$0.025 $1.0205Sep17-Dec17 $49.54 -$0.90 $2.04 ($1.01) ($3.65) ($12.46) $61.98 -$0.77 $52.18 -$0.89 $1.6496 -$0.022 $1.0129Zero-Cost Collar $45.00/$53.45 $55.00/$66.67 $50.00/$53.91 $1.515/$1.750Zero-Cost Collar $40.00/$57.58 $50.00/$69.98 $45.00/$58.19 $1.389/$1.850Jan18-Dec18 $49.89 -$0.66 $1.60 ($0.95) ($3.76) ($14.61) $62.33 -$0.48 $52.83 -$0.69 $1.6374 -$0.017 $1.0301Zero-Cost Collar $45.00/$53.58 $55.00/$66.68 $50.00/$54.85 $1.442/$1.800Zero-Cost 3-Way $40/$50/$52.82 $50/$60/$66.42 $40/$50/$57.60 $1.471/$1.65/$1.80Oct17-Dec17 $49.61 -$0.88 $1.98 ($1.00) ($3.73) ($12.88) $62.05 -$0.74 $52.26 -$0.87 $1.6511 -$0.022 $1.0103Jan18-Mar18 $49.83 -$0.75 $1.70 ($0.88) ($3.83) ($13.56) $62.29 -$0.58 $52.59 -$0.76 $1.6468 -$0.017 $1.0293Apr18-Jun18 $49.89 -$0.67 $1.62 ($0.93) ($3.43) ($14.11) $62.33 -$0.49 $52.76 -$0.71 $1.6265 -$0.016 $1.0400Jan19-Dec19 $50.15 -$0.60 $1.53 ($1.02) ($3.41) ($15.82) $62.55 -$0.42 $53.50 -$0.63 $1.6554 -$0.015 $1.0313Jan20-Dec20 $50.77 -$0.65 $1.62 ($0.93) $63.27 -$0.51 $54.30 -$0.66

Sep17 Sep17-Dec17 Jan18-Dec18 Spot ChangeUSGC Diesel $1.610 $1.601 $1.595 CAD (CAD/USD) 1.2541 0.0061USGC Jet $1.535 $1.517 $1.520 EUR (USD/EUR) 1.1805 -0.0037NYMEX RBOB $1.547 $1.508 $1.568 GBP (USD/GBP) 1.3208 -0.0007NYMEX 3:2:1 Crack $0.405 $0.376 $0.403 1 Month BA's 1.2250 0.0070Conway Propane $0.713 $0.722 3 Month BA's 1.2860 0.0020Mt Bel Propane $0.742 $0.739 6 Month BA's 1.4300 0.0000Mt Bel N.Butane $0.899 $0.896 CAD Prime 2.9500 0.0000Mt Bel I.Butane $0.899 $0.896 US 3 Month Libor 1.3106 0.0000Mt Bel C5 $1.142 $1.131

Price Change Price Change Price Change Sep17 Sep17-Dec17 Jan18-Dec18 Spot 3 MoPrompt $2.82 $0.02 ($1.26) $0.01 $1.85 $0.05 Chi Citygate ($0.14) ($0.11) ($0.16) Gold $1,273.39 -Sep17-Dec17 $2.93 $0.02 ($1.12) $0.01 $2.14 $0.04 CIG, Rockies ($0.38) ($0.35) ($0.43) Silver $16.78 -Zero-Cost Collar $2.75/$3.14 $2.00/$2.24 Dominion ($1.16) ($0.86) ($0.48) Aluminium - $1,907.00Zero-Cost Collar $2.60/$3.37 $1.85/$2.46 El Paso, Perm ($0.38) ($0.42) ($0.58) Copper - $6,345.00Jan18-Dec18 $2.93 $0.01 ($0.99) $0.00 $2.29 $0.03 El Paso, SJ ($0.33) ($0.32) ($0.42) Zinc - $2,780.00Zero-Cost Collar $2.75/$3.12 $2.00/$2.52 HSC ($0.05) ($0.07) ($0.06)Zero-Cost 3-Way $2.50/$2.90/$3.26 $2.00/$2.30/$2.49 Malin ($0.22) ($0.22) ($0.34)Nov 17-Mar18 $3.10 $0.01 ($1.08) $0.01 $2.40 $0.03 NW Rockies ($0.31) ($0.30) ($0.39) CalgaryApr18-Oct18 $2.82 $0.01 ($0.98) $0.00 $2.18 $0.03 Panhandle ($0.37) ($0.36) ($0.43) (403) 515-3682Nov 18-Mar19 $3.03 $0.01 ($0.92) -$0.01 $2.49 $0.02 PGE Citygate $0.35 $0.27 $0.13 1-888-432-0222Jan18-Dec18 $2.93 $0.01 ($0.99) $0.00 $2.29 $0.03 SoCal Gas ($0.13) ($0.15) ($0.25) Paul DunsmoreJan19-Dec19 $2.81 $0.02 ($0.92) -$0.01 $2.23 $0.03 Sumas ($0.45) ($0.33) ($0.60) Marielle JamesJan20-Dec20 $2.77 $0.01 ($0.90) $0.00 $2.21 $0.03 TCO ($0.20) ($0.21) ($0.25) Andrew ParkeJan21-Dec21 $2.78 $0.01 ($0.92) $0.00 $2.21 $0.02 TxOk ($0.16) ($0.17) ($0.17)

ChicagoCurrent Change Last Year 5 Yr. Av g. Commodity Price Volume Open Interest Market Condition Volatility (312) 845-2163

US Natural Gas (BCF) 2,990 17 A Requesting DatA Requesting Da WTI Up Up Up Bullish Low Mark MathewsCAN Natural Gas (BCF) 588 13.50 718 N/A Brent Up Up Up Bullish Low LondonCrude Oil (MBbls) 483,415 -7,208 379,784 358,563 NYMEX NG Down Down Down Strengthening Low +44-20-7664-8005 Toronto New YorkMotor Gasoline (MBbls) 230,196 -1,015 215,504 209,053 NYH ULSD Up Up Down Neutral Low Lukas Swanepoel (416) 359-8133 (212) 702-1817Distil lates (Mbbls) 149,564 -1,852 125,774 145,840 RBOB Up Up Down Neutral Neutral Marty Reszetnik Gary Spencer

NYMEX NYH ULSD (USD/GAL)

August 1, 2017

NYMEX WTI (USD/BBL) Oil Spread Differential (USD/BBL) CAD WTI (CAD/BBL) ICE Brent (USD/BBL)

Petroleum Commentary Natural Gas Commentary Other Refined Products & NGLs (USD/GAL) Exchange & Lending RatesIt was a bit of a wild ride in crude oil today, with the trading rangearound $1.65, and more like $2+ in WTI and Brent if you includeovernight hours. OPEC’s oil output is estimated to have risen by 210kbarrels in July according to Bloomberg with compliance to the cutsfaltering as well. In addition, Shell is reporting that Pernis, the largestrefinery in Europe, will not reopen until the second half of August atthe earliest. All of this created a fairly bearish picture for today whichcould quickly be corrected if the API numbers turn out bullish. Thosenumbers will be released at 4:30 ET. For guidance, analysts estimatesfor the DOE numbers tomorrow morning are on average -3.5MMbarrels for crude oil inventories, -1.1MM for gasoline, and -1.3MM fordisti l late. Imports will be watched closely along with U.S. exports,which crossed the 1MM barrel mark in last week’s report, only the 6thtime this year that has happened.

After yesterday’s precipitous drop Nymex took a little bit of a pausetoday with technical trading in the front dominating much of theday. NG initially continued the trend lower based onsupply/demand fundamentals hitting as low as 2.761 in the frontonly to bounce and stay slightly up on the day as noon weatherforecasts trended warmer than the previous ultra-bearish reportsfrom yesterday. The back of curve was relatively quiet today withsome sellers in the backs but not enough to materially change thecurve.

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

Current Storage Lev els Technical Trend Table New York

Metals

ContactsHouston

(713) 546-9782Renee Morgan

Dustin Cook

Natural Gas Basis (USD/MMBTU)

(212) 605-1570Chris Coyne

Metals

Laney Sweatt

d

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

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