may 2020 in review...june 4, 2020 aeco: little changed in the canadian gas market in the past month...

June 4, 2020

Updated to market close on Current Previous Month Monthly Change

June 3rd, 2020 Value Value Percent Direction

Edmonton Mixed Sweet (C$/bbl)(2) $46.66 $30.37 53.6%

Western Canadian Select (C$/bbl)(2) $38.84 $26.84 44.7%

AECO (C$/GJ)(2) $2.39 $2.14 11.7%

US$/C$(2) $0.7413 $0.7076 4.8%

Monthly A&D Transaction Value ($MM)(1)(3) $0.00 $172.00 (100.0%)

Monthly A&D Transaction Count(1) 0 2 (100.0%)

Canadian Rig Count 18 23 (21.7%)

Canadian Oil/Cond Production (MMbbl/d)* 2.7 2.9 (5.4%)

Canadian Gas Production (Bcf/d)* 18.6 19.2 (3.3%)

Canadian Gas Storage (Bcf) 406.0 331.7 22.4%

$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 $0.2

$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 Q2

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 $0.3

Tra

nsacti

on

Valu

e (

C$B

)

Asset Corp PrivateCo Average

⚫ No new deals announced in May

⚫ Most recent announced deal was Spartan

Delta’s acquisition of Bellatrix for C$102MM

which was announced April 23, 2020 and

closed June 1, 2020. BMO Capital Markets

was financial advisor to Bellatrix in its

Strategic Process

1

May 2020 in Review

HIGHLIGHTS IN THIS ISSUE:

◼ The crude oil markets saw a rebound in May settling at

$35.49/bbl with the differentials remaining fairly tight,

NYMEX gas market closed at US$1.773/MMBTU, down

$0.183/MMBTU from the previous month’s close, AECO

suffered a delay on the NGTL Pipeline Expansion approval

(Pages 2, 5)

◼ Check out our special page on Oil – The beginning of the

recovery (Page 8)

◼ WCSB active weekly rig count at an all time low of 18

◼ With developments around COVID-19 in constant flux, BMO

Capital Markets has set up a dedicated page to provide

clients with the latest news and information, from the market

response to developments in the fight against the virus and

its spread - read more here

Key Industry Indicators

Quarterly Deal Activity (Producing Assets Only)(3)

DEALS ANNOUNCED IN May(1):

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 June 3, 2020 close. Previous month prices as of May 6, 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.

http://click.bmocapitalmarkets.bmo.com/?qs=03fcb12a88749b0b76e27316f9f3d7e04429fc86ad3968af73db0eb6143eb83689e92267ec90d9321264f530aa9da2750d436633e690c79a

June 4, 2020

⚫ AECO: Little changed in the Canadian gas market in the

past month other than the unfortunate development on May

19th with the 2021 NGTL Expansion Project that is suffering

a delay regarding its approval. The project, if approved, will

see 344 km of pipeline laid and the addition of three new

compressor stations along the west path of the NGTL

system. The Canadian Energy Regulator (CER) cited

delaying approval by 150 days due to difficulty in consulting

with stakeholders as a result of COVID-19. AECO basis for

Summer 2021 did not welcome this news with the

April 2021 to October 2021 strip trading down to

US$-0.8575/MMBTU from a recent high of

US$-0.7900/MMBTU

NATURAL GAS

2

⚫ Prompt WTI rebounded significantly over the course of

May increasing an impressive ~80% to settle at

$35.49/bbl. Crude markets were buoyed by the OPEC+

cuts as well as larger than anticipated production

curtailments across the U.S. and Canada. Lower

production relieved fears that storage would hit tank tops

after U.S. inventories built by almost 11 MMbbl per week

on average across March and April. May saw the balances

shift as production cuts and slight demand improvements

hit the market, resulting in inventories only building by

1.7 MMbbl/d (which included two weeks of draws).

Markets are watching demand closely as it is clear that the

crude market has rebalanced much faster than the product

market and for higher crude prices to be sustainable,

post-COVID-19 lockdown demand for gasoline and

distillates will have to pick up in order to clear the large

refined products glut

⚫ Canadian differentials remained fairly tight, trading inside

pipe economics given the strength of the production cuts

mentioned above. WCS and MSW closed the month

trading at $-5.75 and $-3.50/bbl respectively. Additional

factors we are watching are the response of shale oil to

the price increase and how quickly production is able to

come back, the upcoming OPEC+ meeting and the

potential for extending current cuts, as well as the evolving

relationship between the U.S. and China

Equity Markets

⚫ The Canadian new issue market raised gross proceeds of

approximately C$4.7B in May with no transactions in

energy or PE&I

⚫ The U.S. High Yield primary market saw $9.0B of new

issue supply across twelve issuers (12 tranches) in a

holiday shortened week this past week. U.S. HY volume

for May 2020 is on pace to be among the top three highest

monthly volumes on record

⚫ Following the long weekend, arrangers in the Leveraged

Loan market were looking to wrap up M&A financings and

launch opportunistic issuances. Five issuers allocated five

tranches to raise $1.6B this past week

⚫ PBF Energy, an independent petroleum refiner that

supplies unbranded transportation fuels, heating oil,

petrochemical feedstocks, and other petroleum products

across the U.S. (Ba3 / BB / BB-), priced US$1B five-year

9.250% Senior Secured Notes (Ba2 / BBB- / BB) due 2025

at par, at the tight end of the 9.25% – 9.50% price

guidance. The proceeds will be used for general corporate

purposes

⚫ The U.S. HY Energy Index tightened ~262 bps and the

broader U.S. HY Index tightened ~113 bps in May

Commodities

Debt Markets

Source: BMO Capital Markets

CRUDE NATURAL GAS CONTINUED

⚫ NYMEX: Crude prices continue to rally, which leads to

more associated gas into U.S. balances at a time when the

market is already oversupplied, industrial demand has

been weak due to COVID-19, and out-of-the-money LNG

transport spreads are shutting gas into the gulf. These

bearish factors are revealing themselves in both the spot

and forward markets, with Henry Hub cash trading around

US$1.50/MMBTU (low of summer) and NYMEX futures

trading down to US$1.773/MMBTU at the time of writing.

Not all is dire for NYMEX natural gas, however, as gas for

2021 delivery is still holding on to gains enjoyed over the

last couple months, and currently trading around

US$2.64/MMBTU which is good for a US$0.35/MMBTU

rally from early March lows

June 4, 2020

Parameters Metrics

Prod. % Gas P+P Production P+P

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

28-Apr-20 Burgess Athabasca (Royalty Assets) $70 n.a. n.a. n.a. n.a. n.a. Fort McMurray

23-Apr-20 Spartan Delta Bellatrix Exploration $102 25,000 70% 268,000 $4,088 $0.38 Central AB

1-Apr-20 Undisclosed Perpetual (East Edson / Spirit River Assets) $35 3,127 90% 30,000 $11,195 $1.17 Central AB

24-Feb-20 Tourmaline Chinook Energy $24 3,500 86% 35,600 $6,971 $0.69 Northeast BC

20-Jan-20 IPC Granite $77 1,515 0% 14,000 $50,937 $5.51 S. Eastern AB

5-Dec-19 Bonavista Paramount (West Central AB Assets) $53 8,200 56% 47,432 $6,500 $1.12 Central AB

6-Nov-19 Tourmaline Undisclosed (Peace River High Assets) $175 5,600 50% 62,000 $31,250 $2.82 Grande Prairie

1-Nov-19 Cona Pengrowth $740 22,708 19% 446,508 $32,588 $1.66 Ath/Cold Lake

18-Oct-19 Tourmaline Painted Pony (NE BC Montney Assets) $45 -- n.a. n.a. n.a. n.a. Northeast BC

3-Sep-19 Undisclosed Crescent Point (SE SK Assets) $212 7,000 15% 49,200 $30,286 $4.31 Area IV

Average / Total (Ex. Royalty) 9 Transactions (3 Oil, 6 Gas) $1,464 76,649 48% 952,740 $21,727 $2.21

Oil Weighted $1,029 31,222 11% 509,708 $37,937 $3.83

Gas Weighted $435 45,427 70% 443,032 $12,001 $1.24

Ann'd Date Buyer SellerEnterprise

Value

WCSB

Region

Parameters Metrics

Ann'd Date Buyer SellerEnterpise

ValueProd. % Gas Production Commentary

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

28-Apr-20 Burgess Athabasca (Royalty Assets) $70 n.a. n.a. n.a. Upsized: Includes Leismer, Hangingstone and Corner

28-Jun-19 Freehold Surge (AB and SK Royalty Assets) $29 214 6% $136,290 Gross overriding royalty on central & northern AB, SW SK assets

28-Feb-18 Freehold Cardinal (Various Royalties) $24 110 n.a. $218,182 Gross overriding royalty on the Mitsue Gilwood Unit

27-Feb-18 PrairieSky Undisclosed (AB Viking Royalty Assets) $46 300 54% $153,333 Producing gross overriding royalty acquired

27-Feb-18 PrairieSky Undisclosed (Clearwater Royalty Assets) $33 n.a. 0% n.a. Non-producing gross overriding royalty acquired

30-Jan-18 Burgess Connacher (Royalty Assets) $44 n.a. 0% n.a. Sliding scale royalty on all lands containing bitumen

20-Dec-17 Freehold Bonterra (Pembina GORR) $52 210 26% $247,619 2% gross overriding royalty on its Pembina Cardium pool

10-Nov-17 Undisclosed Obsidian (Eastern Alberta Royalty) $40 181 38% $220,994 Royalty interest in Eastern Alberta

2-Oct-17 Franco-Nevada Osum Oil Sands (Royalty Assets) $93 310 0% $298,387 4% gross overriding royalty interest on its Orion Project

2-Mar-17 Freehold Undisclosed (Royalty Assets) $34 185 9% $183,784 32,000 acres in the Dodsland Viking

9-Feb-17 Burgess Athabasca (Royalty Assets) $90 -- 0% n.a. Upsized: Includes Leismer and Corner lease

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

14-Dec-16 PrairieSky Pengrowth (Royalty Assets) $250 608 0% $411,455 4% royalty on Lindbergh properties, including future development

14-Dec-16 Burgess Athabasca (Royalty Assets) $50 -- 0% n.a. Upsized: Modified sliding scale and starting point

1-Dec-16 PrairieSky BlackPearl / Other (Royalty Assets) $117 460 17% $255,000 Acquired a combined 3.95% royalty interest at Onion Lake

3-Nov-16 Burgess Athabasca (Royalty Assets) $129 n.a. 0% 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. n.a. 99,930 net fee title acres

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

2-May-16 Freehold Husky (Royalty Assets) $165 1,700 70% $97,059 Acquired >2MM net acres across Western Canada

Average / Total 19 Transactions $1,519 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 includedSource: BMO Transaction Database

Denotes current month transactionBlue = 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 $1.66

29-May-19 CNRL Devon Canada SAGD $3,775 122,800 -- 879,000 $30,741 $4.29

10-Oct-18 IPC BlackPearl SAGD $712 11,250 1% 162,434 $63,310 $4.38

31-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. $0.17

12-Feb-18 Suncor Mocal Energy (5% Syncrude W.I.) Mining $921 16,226 -- 122,441 $56,749 $7.52

3-Jan-18 Suncor Total E&P Canada (3.31% Fort Hills W.I.) Mining $453 6,545 -- 94,804 $69,211 $4.78

3-Jan-18 Teck Total E&P Canada (1.30% Fort Hills W.I.) Mining $179 2,571 -- 37,234 $69,633 $4.81

29-Mar-17 Cenovus ConocoPhillips (FCCL and Deep Basin Assets) SAGD $17,730 284,396 31% 3,965,833 $62,341 $4.47

9-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 $4.01

Median $740 22,708 -- 275,717 $62,397 $4.43

June 4, 2020

81% 19%

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

36% 64%

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

$0.3B35%

$0.2B20%

$0.2B25%

$0.2B19%

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

$0.6B66%

$0.2B22%

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

$0.8B100%

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

$0.8B100%

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

4Source: BMO Transaction Database1. 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:

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)

SELLERBUYER OIL VS. GAS

Yield

Junior / Interm.

PrivateCo/Sponsor

Undisclosed Senior

Foreign Other Gas Oil

E&

P(1

)(2)

Oil

San

ds

~66% 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

--

$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 Q2

2015 2016 2017 2018 2019 2020

MS

W (C

$/b

bl)

EV

/Pro

du

cti

on

($/b

oe/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

AE

CO

(C$/M

MB

TU

)E

V/P

rod

ucti

on

($/b

oe/d

)

~35% of value sold by

Junior / Interm. sellers

June 4, 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

AECOStation 2

Northern

California

Legend

US$/MMBTU C$/GJ

US$/MMBTU C$/GJ

Diff Diff

Transco

El Paso - SJ

Waha

Sumas

Maya (~ 22o)

Commodity Prices – April 6th, 2020

Source: BMO Commodity Products Group, Bloomberg – Prompt PricingUS$/C$ spot rate of 1.349 used for all conversions from Bloomberg as of June 3, 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

$37.29 $50.30

$38.88 $52.45

$1.59 $2.14

$39.79 $53.68

$2.50 $3.37

$36.04 $48.62

($1.25) ($1.69)

$37.32 $50.34

$0.03 $0.04

$34.59 $46.66

($2.70) ($3.64)

$28.79 $38.84

($8.50) ($11.47)

$34.60 $46.68

($2.69) ($3.63)

$1.82 $2.33

$1.63 $2.09

($0.19) ($0.24)

$1.57 $2.01

($0.25) ($0.32)

$1.78 $2.28

($0.04) ($0.05)$1.42 $1.82

($0.40) ($0.51)

$2.06 $2.64

$0.24 $0.31

$2.51 $3.21

$0.69 $0.88

$1.57 $2.01

($0.25) ($0.32)

$1.87 $2.39

$0.05 $0.06

$1.75 $2.24

($0.07) ($0.09)

$1.46 $1.87

($0.36) ($0.46)

$1.75 $2.24

($0.07) ($0.09)

June 4, 2020

$20

$30

$40

$50

$60

$70

$80

2020 2021 2022 2023

MS

W (C

$/b

bl)

Strip 06/03/20 Evaluator Average

BMO Research

0

0.5

1

1.5

2

2.5

3

2012 2013 2014 2015 2016 2017 2018 2019 2020

Oil P

rod

ucti

on (M

Mbb

l/d)

SK AB BC MB

Source: geoSCOUT, BMO Capital Markets, BloombergNote: Evaluator Average Forecast - averaged Q2 2020 forecasts of GLJ, Sproule, McDaniel,

Deloitte, BMO Research Average as of May 4th, 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%

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

NG

L / M

SW

Sp

ot

Edmonton P ropane/MSW Edmonton Butane/M SW

Edmonton Cond ensate/M SW

$0

$7

$14

$21

$28

$35

$42

$49

$56

$0

$10

$20

$30

$40

$50

$60

$70

$80


Dif

f (U

S$/b

bl)

WC

S (

C$/b

bl)

WT I - WCS Dif f (US$/bbl) WCS

-$20

-$15

-$10

-$5

$0

$5

$10

$15

$20

$25

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90


Dif

f (U

S$/b

bl)

Ed

m. C

5 (

C$/b

bl)

WT I - CND C5 Diff (US$/bb l) Canadian C5

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90


Dif

f (U

S$/b

bl)

MS

W (C

$/b

bl)

WT I - MSW Diff (US$/bb l) M SW

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)

June 4, 2020

$1

$2

$3

$4

2020 2021 2022 2023

AEC

O (

C$/M

MB

TU

)

Strip 06/03/20 Evaluator Average

BMO Research

0

100

200

300

400

500

600

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

Natu

ral G

as

Sto

rag

e (B

cf)

5-Year Range 5-Yr Avg

2019 2020

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500


5 Year Min/Max 5-Yr Avg

2019 2020N

atu

ral G

as

Sto

rag

e (B

cf)

7

Natural Gas Fundamentals

Source: geoSCOUT, BMO Capital Markets, Bloomberg, NGX Note: Evaluator Average Forecast - averaged Q2 2020 forecasts of GLJ, Sproule, McDaniel,

Deloitte. BMO Research Average as of March 16, 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


Dif

f (U

S$/M

MB

TU

)

AEC

O (

C$/M

MB

TU

)

HH - AECO Diff (US$/M M BT U) AECO

$0

$1

$2

$3

$0

$1

$2

$3

$4


Dif

f (C

$/M

MB

TU

)

St.

2 B

C (

C$/M

MB

TU

)

AECO - S t .2 Diff (C$/MM BT U) Statio n 2 BC

0

5

10

15

20

2012 2013 2014 2015 2016 2017 2018 2019 2020

Natu

ral G

as

Pro

du

cti

on (B

cf/

d)

BC AB SK MB

June 4, 2020

--

$10

$20

$30

$40

$50

$60

$70

$80

Jan-20 Feb-20 Mar-20 Apr-20 May-20

WT

I (U

S$

/bb

l)

Lowest utilization levels

observed in early April(3)

8

Source: BMO CM, BMO CM Commodity Products, BMO Equity Research, CER, geoSCOUT, EIA, Department of Energy, Bloomberg, Baker Hughes, Public Disclosure.

Note: Rig count as of May 22, 2020.1. Based on Baker Hughes data going back to 19402. EIA, Department of Energy

3. U.S. refinery throughput and utilization as at April 17, 2020 (lowest utilization level)

4. BMO CM Commodity Products, EIA5. BMO Equity Research, CER

OIL – THE BEGINNING OF THE RECOVERYCANADIAN OIL RIG COUNT U.S. ONSHORE OIL RIG COUNT

COMMENTARYHISTORICAL WTI PRICES AND OUTLOOKS(5)

⚫ As the U.S. and Canada start opening up the economy from the COVID-

19 pandemic, oil commodities are expected to continue to recover in the

coming months

⚫ Voluntary production shut-ins have supported the pricing recovery; field-

specific challenges may impact which fields/wells can be turned back on

in the near future

⚫ On-shore oil rig activity at all time historic lows in both the U.S. and

Canada implies increasing production declines and therefore, lower

supply into the market

◼ Low rig activity is a leading indicator that oil supply may remain

low/declining for the foreseeable future

⚫ 2020 U.S. refinery throughput is lower than 2019 but utilization has

started increasing in the past month, implying demand recovery;

supported by the increased demand on petroleum products

⚫ Shut-ins, historic low rig activity, and increasing demand indicate further

contango WTI pricing in the near future

Crude Oil

Price

Recovery

U.S. REFINERY UTILIZATION BY PADD(2)

Period that many Canadian

shut-in and output reduction

decisions were made

Historical WTI pricing

Average Strip Pricing (Next 12 Months)

Average Strip Pricing (Next 6 Months)

0

50

100

150

200

250


Ac

tiv

e O

il R

igs

70

200

400

600

800

1,000

1,200

1,400

1,600

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

cti

ve O

il R

igs

258

Canadian oil rig count down 84% year-over-year U.S. oil rig count down 72% year-over-year

Strip curve in contango

through late March &

April; further incentive to

temporarily reduce

output to capture better

pricing in the future

Increasing utilization as demand

starts recovering from COVID-19

2020

2019

5-Year Average

2018

5-Year Max/Min

2020

2019

5-Year Average

2018

5-Year Max/Min

All time rig activity low(1)

All time rig activity low(1)

U.S. WEEKLY PETROLEUM PRODUCTS IMPLIED DEMAND(4)

2020

2019

Prior 5-Year Average

5-Year Max/Min

Pe

tro

leu

m P

rod

uc

ts M

bb

l/d

Increasing demand from

early April low

June 4, 2020

0

50

100

150

200

250

Acti

ve

Rig

Co

un

t

AB SK BC MB Previous Year Activity

0 1 2 3 4

Tourmaline

PETRONAS

Paramount

Imperial Oil

Peyto

Ovintiv

Jupiter

XTO

Inception

Chevron

Grande Prairie NEBC Athabasca / Cold Lk. Foothills

ACTIVE RIG COUNT BY AREA – 18 ACTIVE RIGS(1) IN THE WEEK ENDING MAY 29, 2020

9

Rig Analysis

Source: DOB, BMO Capital Markets1. Based on DOB Weekly Drilling Report ending on May 29, 2020

2. Based on DOB Rig Activity ending on May 26, 2020

PSAC Area

Active Rig Count

SASKATCHEWAN

ALBERTA

BRITISH

COLUMBIA

SK Area I

0

Athabasca/Cold Lk

2

Fort McMurray

0

SK Area IV

0

SK Area III

0

Rainbow Lk

0NEBC

6

Peace River/Slave Lk.

0

E. Central AB

0

SK Area II

0

Active Rigs

Shown

Central AB

0

83% of rig

count

Grande Prairie

9

Foothills

1

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

SE AB

0

June 4, 2020

Wells Spud Oil and Raw Gas Production

May-20 vs. May-19 Direction Mar-20 vs. Feb-20 vs. Jan-20 vs. Mar-19 Direction

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

Viking 0 (100%) 150,919 4% 7% (3%)

BC Montney 1 (92%) 892,381 1% 1% 5%

AB Montney 5 (82%) 587,237 (3%) (1%) 2%

Duvernay WSB 0 (100%) 115,701 (1%) 1% 21%

Duvernay ESB 0 (100%) 18,206 (10%) (6%) 4%

Spirit River 2 (50%) 377,487 (4%) (3%) (20%)

Cardium 1 (67%) 202,789 (0%) 3% (3%)

Bakken 0 (100%) 69,574 2% 3% (5%)

SE Sask Mississippian 0 (100%) 135,086 1% 2% (6%)

Sub-Total 9 (95%) 2,549,380 (1%) 0% (2%)

Other 6 (96%) 1,730,582 (1%) 2% (2%)

Total 15 (95%) 4,279,962 (1.0%) 1.0% (1.0%)

0

1

2

3

4

5

2012 2013 2014 2015 2016 2017 2018 2019 2020

To

tal P

rod

ucti

on

(M

Mb

oe/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, GeoEdgesNote: This page does not include mining or thermal production or conventional wells from the

Northwest TerritoriesProduction as of March 2020; Spud and License data as of June 1, 2020

1. LTM is 13 month rolling window

0

250

500

750

1,000

1,250

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

We

ll E

ve

nts

Sp

ud

(c

ou

nt)

Other Viking BC Montney

AB Montney Duvernay WSB Duvernay ESB

Spir it River Cardium Bakken

SE Sask Mississippian

0.0

0.5

1.0

1.5

2.0

2.5


Me

tre

s D

rill

ed

(m

illi

on

s)

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

June 4, 2020

-

50

100

150

200

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020

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

Teine

Baytex

Whitecap

Crescent Point

Tamarack Valley

Producing Standing Location and Drilling

0

50

100

150

200


Wells Licensed Wells Spud 13mo Licensing Avg

Current Last Month Last Year

(May-20) (Apr-20) (May-19)

Licensing Count 22 12 145

Spud Count 0 0 86

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

11

Viking

Viking Snapshot

Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdgesNote: Production as of March 2020; Spud and License data as of June 1, 2020

1. As defined on page 10

2. Excludes royalty transactions3. Deal metrics shown include entire corporate transaction, not just the Viking assets

4. Karve’s acquisition of High Ground for an undisclosed amount

Last Announced Deal: July 2019(4)

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)

18-Jun-18 Baytex Raging River Corp $1,935 24,118 7% 106,652 12.1 $80,246 $18.15 4.9x

15-Aug-17 Karve Energy Apache (Alberta Viking Assets) Asset $118 6,500 57% 16,800 7.1 $18,154 $7.02 4.6x

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) PrivateCo $388 6,250 48% 26,500 11.6 $62,150 $14.66 6.0x

20-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 12.9x

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 $417 6,507 24% 32,954 14.7 $81,894 $11.86 6.8x

Median - Viking $109 2,550 9% 17,077 12.1 $62,150 $10.00 6.0x

ROYALTY

27-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.

Announce

DateAcquiror Target Corp/Asset

Enterprise

Value

TRANSACTION ACTIVITY (2016 TO PRESENT)(2)

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

(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

June 4, 2020

0 200 400 600 800 1,000 1,200

Ovintiv

PETRONAS

Tourmaline

ARC

Shell


-

250

500

750

1,000

2012 2013 2014 2015 2016 2017 2018 2019 2020Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020

0

40

80

120




(May-20) (Apr-20) (May-19)


Spud Count 1 30 12

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

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

Parameters Metrics



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 8.9x

20-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 8.9x

Median - BC Montney $50 6,000 86% 325,100 52.2 $31,914 $0.83 8.9x

Enterprise

Value

Announce

DateAcquiror Vendor Corp/Asset

12

BC Montney

BC Montney Horizontal Wells



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


TRANSACTION ACTIVITY (2016 TO PRESENT)(2)

TRANSACTION 2P RESERVES MULTIPLES ($/BOE)

~$153k/boe/d

TRANSACTION PRODUCTION MULTIPLES ($/BOE/D)


June 4, 2020

0 200 400 600 800

Seven Generations

Birchcliff

Paramount

Ovintiv

NuVista


-

250

500

750

2012 2013 2014 2015 2016 2017 2018 2019 2020Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 20152016 2017 2018 2019 2020

0

20

40

60

80

100




(May-20) (Apr-20) (May-19)


Spud Count 5 2 28

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 19.7x

10-Sep-18 Velvet Iron Bridge Corp $142 2,314 70% 26,113 30.9 $61,379 $5.44 14.5x

9-Aug-18 NuVista Cenovus (Pipestone Partnership) Asset $625 9,600 54% 156,888 44.8 $65,104 $3.98 9.9x

14-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 6.3x

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.

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 12.6x

Median - AB Montney $142 2,764 62% 24,557 20.1 $58,547 $6.47 12.2x

Announce


Enterprise

Value

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


1. As defined on page 102. Reflects full corporate transaction

AB Montney

AB Montney Horizontal Wells


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


June 4, 2020

0

10

20

30

40



0 100 200 300 400

Shell

Chevron

Ovintiv

XTO

Murphy


-

25

50

75

100

125

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020


(May-20) (Apr-20) (May-19)


Spud Count 0 0 11

14

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

Duvernay

WSB

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 $0.30

7-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 $0.32

Average - Duvernay $604 $779 85,906 6,527 3.87 $9,363 $0.31

Median - Duvernay $250 $475 83,450 3,840 3.87 $9,817 $0.31

Announce

DateAcquiror Vendor


1. As defined on page 102. Production multiple adjusted assuming $30,000/boe/d

3. Paramount’s acquisition of Trilogy is a corporate transaction4. 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


June 4, 2020

15

Duvernay East Shale Basin Snapshot


1. As defined on page 102. 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

Pro

du

cti

on (M

bo

e/d

)

2012 2013 2014 2015 2016

2017 2018 2019 2020

0 50 100 150

Vesta

Artis

Chronos

Crescent Point

PrairieThunder


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.

Announce

DateAcquiror Vendor

0

2

4

6

8

10

12




(May-20) (Apr-20) (May-19)


Spud Count 0 0 4


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

Duvernay Horizontal Wells


June 4, 2020

0

5

10

15

20

25

30



0 200 400 600 800 1,000

Peyto

Tourmaline

Bellatrix

Jupiter

Cenovus


-

100

200

300

400

500

600

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020

Parameters Metrics



23-Apr-20 Spartan Delta Bellatrix Exploration Corp $102 25,000 70% 268,000 29.4 $4,088 $0.38 2.3x

1-Apr-20 Undisclosed Perpetual (East Edson/Spirit River) Asset $35 3,127 90% 30,000 26.3 $11,195 $1.17 4.3x

29-Mar-17 Cenovus ConocoPhillips (FCCL & D. Basin) Asset $17,730 284,396 31% 3,965,833 38.2 $62,341 $4.47 9.8x

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 $33 2,000 79% n.a. n.a. $16,541 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 $3,238 53,829 76% 1,122,758 33.8 $33,797 $2.94 7.1x

Median - Spirit River $132 4,300 82% 251,750 32.2 $28,808 $3.06 7.1x

Announce


Enterprise

Value


(May-20) (Apr-20) (May-19)


Spud Count 2 2 4

1 1 1

2

1

2 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

16Source: BMO Capital Markets, Bloomberg, geoSCOUT, GeoEdgesNote: Production as of March 2020; Spud and License data as of June 1, 2020


2. Deal metrics shown includes entire transaction (including Cardium producing assets)3. Deal metrics shown include entire transaction (including non-Spirit River assets, which are

significant)

Spirit River Snapshot

Spirit River

Last Announced Deal: $102MM in April 2020(2)




(3)


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


(2)

June 4, 2020

0

10

20

30

40

50



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 6.5x

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 Corp $69 2,000 40% 11,068 15.2 $34,490 $6.23 14.9x

Average - Cardium $102 3,767 42% 24,957 16.8 $31,575 $4.95 10.7x

Median - Cardium $69 2,000 42% 11,068 15.4 $25,773 $5.00 10.7x

Announce


Enterprise

Value



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

Cardium Snapshot

Cardium


(May-20) (Apr-20) (May-19)


Spud Count 1 1 3

-

50

100

150

200

250

300

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 20200 200 400 600

Whitecap

Ridgeback

Bonterra

Obsidian

Peyto



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 – Seller is Bonterra Energy

June 4, 2020

0

10

20

30

40

50



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

Crescent Point

Tundra

Ridgeback

TORC

Vermilion


-

25

50

75

100

125

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020

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 4.5x

Median - Bakken $107 1,175 1% 9,650 13.1 $97,378 $23.75 4.2x

Announce

DateAcquiror Vendor Corp/Asset Enterprise Value


(May-20) (Apr-20) (May-19)


Spud Count 0 0 2

Bakken Horizontal Wells


1. The Torquay and Three Forks are included as part of the Bakken sub-group2. In Manitoba, licensing may not specify target formation, and as a result wells will be correctly

categorized after they are drilled3. As defined on page 10

4. Does not include the take-private of Lightstream (now called Ridgeback)

Bakken Snapshot(1)

Bakken


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

PRODUCTION BY DRILLING YEAR TOP 5 OPERATORS BY HORIZONTAL WELL COUNT(2)(3)


Last Announced Deal: $70MM in July 2018

TRANSACTION ACTIVITY(4) (2012 TO PRESENT)

June 4, 2020

0

20

40

60

80

100

120



ACTIVITY

Parameters MetricsCommodity

Futures PriceProd. %Gas P+P RLI (P+P) EV/boe/d EV/2P EV/DACF


3-Sep-19 Undisclosed Crescent Point (SE SK Assets) Asset $212 7,000 15% 49,200 19.3 $30,286 $4.31 4.5x

8-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 4.3x

13-Nov-17 Whitecap Cenovus (Weyburn Unit) Asset $940 14,800 0% 121,409 22.5 $63,514 $7.74 6.7x

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 PrivateCo $77 1,330 24% 14,629 30.1 $57,895 $5.26 6.8x

Average - SE Sask $346 5,561 11% 43,700 17.0 $59,713 $10.84 6.0x

Median - SE Sask $154 2,350 7% 28,600 14.4 $61,163 $11.54 6.0x

Announce


Enterprise

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

Mississippian Current Last Month Last Year

(May-20) (Apr-20) (May-19)


Spud Count 0 0 25

-

50

100

150

200

2012 2013 2014 2015 2016 2017 2018 2019 2020

Pro

du

cti

on (M

bo

e/d

)

Pre-2012 2012 2013 2014 2015

2016 2017 2018 2019 2020

0 500 1,000 1,500 2,000

Vermilion

Crescent Point

TORC

Tundra

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

June 4, 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

DisclaimerThis 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),

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

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© 2020 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

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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

Devon Jonson

Associate

+1-403-515-1515

[email protected]

Preet Dhesi

Analyst

+1-403-515-1571

[email protected]

GLOBAL MARKETS

Leigh MacComb

Associate

+1-403-515-3694

[email protected]

Tom Widdowson

Analyst

+1-403-515-3682

[email protected]

June 3, 2020

Price Change Price Change Price Jul20 Jul20-Oct20 Nov20-Mar21

Prompt $1.821 $0.044 ($0.33) $0.000 $1.87 Chi Citygate ($0.04) ($0.13) $0.07

CIG, Rockies ($0.19) ($0.28) ($0.22)

Jul20-Oct20 $1.939 $0.037 ($0.41) $0.001 $1.95 Dawn ($0.07) ($0.17) $0.03

Zero-Cost Collar $1.85/$2.02 $1.80/$2.08 Dominion ($0.40) ($0.57) ($0.43)

Zero-Cost Collar $1.65/$2.27 $1.75/$2.13 El Paso, SJ ($0.19) ($0.26) ($0.12)

HSC $0.01 $0.00 ($0.05)

Jul20-Dec20 $2.166 $0.033 ($0.50) ($0.002) $2.12 Malin ($0.08) ($0.14) $0.16

Zero-Cost Collar $1.95/$2.42 $1.95/$2.25 NW Rockies ($0.13) ($0.20) $0.07

Zero-Cost 3-Way $1.50/$2.00/$2.45 $1.25/$2.05/$2.19 Panhandle ($0.21) ($0.29) ($0.28)

PGE Citygate $0.69 $0.62 $0.56

Nov20-Mar21 $2.796 $0.021 ($0.83) ($0.019) $2.51 SoCal Gas $0.24 $0.14 $0.31

Apr21-Oct21 $2.540 ($0.005) ($0.89) ($0.020) $2.12 Station 2 ($0.36) ($0.45) ($0.84)

Jan21-Dec21 $2.657 $0.000 ($0.88) ($0.019) $2.28 Sumas ($0.07) ($0.02) $0.77

Nov21-Mar22 $2.737 ($0.007) ($0.79) ($0.011) $2.49 TCO ($0.25) ($0.40) ($0.31)

Apr22-Oct22 $2.344 ($0.006) ($0.76) ($0.012) $2.03 TxOk ($0.10) ($0.16) ($0.18)

Jan22-Dec22 $2.484 ($0.006) ($0.77) ($0.012) $2.20 W aha ($0.25) ($0.35) ($0.45)

Nov22-Mar23 $2.614 ($0.010) ($0.77) ($0.005) $2.37 NBP (GBP/THERM) £0.12 £0.16 £0.33

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

Next Day (C$/GJ) US Natural Gas 2,612 4.35% 1,867 2,182

Last Close $2.0171 CAN Natural Gas 406 6.82% 306 380

D/D Change 7.50% Production (BCF/Day) Current Mo/Mo Change Last Year 5 Yr. Avg.

MTD Avg. $1.7998 US Dry Gas Production 83.2 0.21% 89.6 82.7

Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov -20 Dec-20 Commodities

Dry Gas Production 91.71 88.07 84.10 86.86 88.13 87.80 87.43 87.32 Calgary

LNG Sendout 0.16 0.14 0.12 0.12 0.12 0.12 0.17 0.17 (403) 515 3682

Net CAD Imports 3.50 3.53 4.53 4.98 4.55 5.85 5.58 5.42 Houston

Total Supply 95.37 91.74 88.75 91.96 92.80 93.77 93.18 92.91 (713) 546 9782

PowerBurn 25.57 28.48 36.41 40.96 39.82 35.17 25.29 24.28 New York

Industrial 20.91 20.14 20.29 20.23 20.41 20.60 22.81 24.50 (212) 605 1570

ResComm 24.15 15.14 11.76 10.42 10.88 12.09 33.96 43.13 London

Pipeloss 2.00 1.90 2.03 2.12 2.10 2.03 2.35 2.58 +44 20 766 8005

US Demand 90.53 88.79 92.88 94.15 92.56 97.38 97.03 92.01 Metals

Mexican Exports 4.70 4.50 5.72 5.84 5.82 5.66 5.60 5.49 New York

LNG Feedgas 8.27 6.99 6.71 7.35 7.33 5.01 10.22 10.91 (212) 605 1494

Total Demand 85.60 78.21 82.91 86.93 86.39 81.62 100.26 110.99

Current Weekly ChangeCanada Total 20 -4.8%Canada Gas 13 0.0%

US Total 301 -5.3%US GAS 77 -2.5%

Cana Wood 4 0.0%DJ-Niobrara 5 0.0%Eagle Ford 22 0.0%Haynesvil le 32 0.0%Marcellus 28 -6.7%Permian 148 -8.6%

Utica 9 12.5%Will iston 12 -14.3%

86.88

8.22

5.63

($0.003)

($0.026)

($0.029)

($0.028)

21.25

29.11

93.05

98.50

Daily Gas Market Fundamentals (BMO Forecast)

2.07

20.57

Natural Gas Storage & Production (Bloomberg)

$2.0121

6.44%

5.26

0.12

87.67

$1.7010$1.8162

8.35%

$1.7501

$0.050

Change

($0.024)

Same Day (C$/GJ)

Aeco 5a Dawn

Next Day (US$/MM)

NYMEX Natural Gas (USD/MMBTU)

Cash Fixed Price Liquidations (NGX)

AECO Basis (USD/MMBTU) AECO (CAD/GJ)

($0.028)

($0.036)

$0.036

Natural Gas Basis (USD/MMBTU)

$0.045

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 $37.29 $0.48 ($2.70) ($8.50) ($4.25) $39.79 $0.220 $1.0646 -$0.03

Calendar Jul $37.69 $0.53 $1.59 $0.03 $39.98 $0.313 $50.83 $0.61 $1.0972 -$0.02 $1.2500

Jul20-Aug20 $37.81 $0.52 $1.55 $0.09 ($3.85) ($9.68) ($4.19) $40.13 $0.35 $50.99 $0.60 $1.2231 -$0.01 $1.2525

Zero-Cost Collar $28.50/$43.71 $29.00/$48.10 $40.00/$56.75 $1.236/$1.200

Zero-Cost Collar $25.00/$46.16 $27.00/$49.76 $36.00/$59.00 $1.337/$1.100

Jul20-Dec20 $38.20 $0.53 $1.42 $0.23 ($5.78) ($11.70) ($3.75) $40.77 $0.42 $51.52 $0.61 $1.2862 $0.00 $1.2399

Zero-Cost Collar $26.00/$46.92 $29.00/$50.60 $41.00/$58.06 $0.860/$1.750

Zero-Cost 3-Way $21/$28/$46.99 $0.889/$1.75/$2.00

Jul20-Sep20 $37.91 $0.52 $1.51 $0.15 ($5.11) ($10.80) ($3.97) $40.28 $0.38 $51.12 $0.60 $1.1590 -$0.01 $1.2399

Jul20-Dec20 $38.20 $0.53 $1.42 $0.23 ($5.78) ($11.70) ($3.75) $40.77 $0.42 $51.52 $0.61 $1.1927 -$0.01 $1.2265

Oct20-Dec20 $38.50 $0.54 $1.33 $0.30 ($7.00) ($13.00) ($3.42) $41.27 $0.45 $51.92 $0.62 $1.2513 $0.00 $1.2415

Jan21-Jun21 $39.37 $0.55 $1.23 $0.94 ($6.75) ($14.33) ($5.71) $42.68 $0.45 $53.09 $0.64 $1.2862 $0.00 $1.2435

Jan21-Dec21 $39.89 $0.55 $1.25 $0.42 ($6.81) ($14.35) ($6.04) $43.37 $0.44 $53.82 $0.64

Jul20 Jul20-Aug20 Jul20-Dec20 Spot Spot Change Storage (MMBbls) Current W/W Change Last Year 5 Yr. Avg.

USGC Diesel $1.0372 $1.0544 $1.0889 Gold $1,701 CAD/USD $1.3416 -$0.0089 Crude Ex SPR 532.3 -0.4% 483 491

USGC Jet $0.9197 $0.9394 $0.9850 Silv er $18 USD/EUR $1.1170 $0.0034 Crude at Cushing 51.7 -3.3% 51 50

NYMEX RBOB $1.1338 $1.1336 $1.0740 Platinum $838 USD/GBP $1.2551 $0.0059 Mogas 257.8 1.1% 234 243

NYMEX 3:2:1 Crack $0.2242 $0.2632 $0.2351 Palladium $1,943 1 Mo BA's 0.5250 0.0000 Distillates 174.3 6.0% 129 131

Purity Ethane $0.2325 $0.2263 $0.2171 3 Mo 3 Mo BA's 0.5675 0.0000

Conway Propane $0.4825 $0.4875 $0.5075 Aluminium $1,569 6 Mo BA's 0.7775 -0.0038 Production (MMBbls) Current Mo/Mo Change Last Year 5 Yr. Avg.

Mt Bel Propane Non-LST $0.5025 $0.5044 $0.5121 Copper $5,525 CAD Prime 2.4500 0.0000 OPEC 30.3 4.81% 29.4 30.8

Mt Bel N.Butane Non-LST $0.5475 $0.5488 $0.5517 Zinc $2,022 US 3 Mo Libor 0.3305 -0.0135 Russia 11.3 0.49% 11.1 11.2

Mt Bel I.Butane Non-LST $0.5775 $0.5738 $0.5733 Nickle $12,867 US 11.2 -5.88% 12.4 10.0

Mt Bel C5 Non-LST $0.6600 $0.6750 $0.7033 Lead $1,722 Rest of World 37.2 -20.84% 47.3 47.1

Crude, Products and Metals Pricing

NYMEX WTI (USD/BBL)

June 3, 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

$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

$55

$60

Jul-20 Jan-23 Jul-25 Jan-28

Delta Today 1 Mo Ago

-10

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 May-20

WTI-WCS BRENT-WTI Brent WTI WCS

0

50

100

150

200

250

300

350

400

450

500

05/10/19 05/08/20 05/17/19 05/15/20 05/24/19 05/22/20 05/31/19 05/29/20

Tota

l Dra

w o

f -20

77Cu

shin

g Dr

aw o

f -17

39

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 May-20

US TOTAL PAD III PAD IITotal Crude Last Year

Cushing Last Year

Total Crude Last Year

Cushing Last Year

0.83

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

0.83

-0.16

0.97

-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

may 2020 in review...june 4, 2020 aeco: little changed in the canadian gas market in the past month...

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