6-35 pad completion, Gold Creek, June 2019

Investor PresentationSeptember 2019

“Full cycle, fully engaged”

ADVISORIES

2

THESE MATERIALS CONTAIN CONFIDENTIAL INFORMATION AND ARE BEING FURNISHED ON A CONFIDENTIAL BASIS SOLELY FOR INFORMATION PURPOSES TO ASSIST RECIPIENTS IN MAKING THEIR OWN EVALUATION OF VELVET ENERGY LTD. ("VELVET" OR THE "COMCPANY") AND ITS BUSINESSAND ASSETS. BY ACCEPTING THESE MATERIALS, THE RECIPIENT AGREES WITH VELVET THAT NEITHER IT NOR ITS AGENTS, REPRESENTATIVES, DIRECTORS OR EMPLOYEES WILL COPY, REPRODUCE OR DISTRIBUTE TO OTHERS THESE MATERIALS, IN WHOLE OR IN PART, AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF VELVET AND WILL KEEP CONFIDENTIAL ALL INFORMATION CONTAINED HEREIN.

Velvet has included in these materials information which it believes to be reliable for the purpose of describing Velvet and its business and assets. The document is based on information available when the materials were prepared. No representation or warranty, express or implied, is given by Velvet, its affiliates, directors, employees, shareholders, or advisors or any other person as to the accuracy or completeness of such information and no responsibility or liability is accepted for any errors, omissions or misstatements, negligent or otherwise, in such information. Velvet disclaims liability for any reliance upon any information or representation contained in these materials, for any omissions from the materials, and for any written or oral communications made by Velvet or its representatives. The materials are provided as a matter of convenience and any reliance or use of such information is done at the recipient's sole risk. Accordingly, none of Velvet, or its affiliates, directors, employees, shareholders or advisors shall be liable for any direct, indirect, or consequential loss or damage suffered by any person as a result of relying on any statement or omission in this document or any other information or communication received as a part of the due diligence process.

This document does not contain all of the information available with respect to Velvet. Its sole purpose is to assist the recipient in deciding whether to proceed with a further analysis of Velvet and it is assumed, and expected, that the recipient will conduct its own investigation and analysis of Velvet's operations, financial condition and prospects.

The information contained herein is for informational purposes only, and this document is not be construed under any circumstances to be an offering or solicitation for the sale of securities; a recommendation to purchase, sell, or hold any securities; an offering memorandum as contemplated by applicable securities laws.

Forward Looking Information and Future Oriented Financial Information advisory, Non-GAAP Measures and Oil and Gas Information can be found on pages 25 and 26.

VELVET ENERGY LTD. – KEY MESSAGES

Dominant land owner in the Montney oil window in Alberta / NEBC Converted raw land into 21,500 boe/d of light oil production in just over two years Replicating our full cycle approach at Gold Creek / Karr, Pouce and Flatrock

CROCI has consistently driven investment decisions Cumulative CROCI of 12.8%, despite backwardated oil and two organic basin

opening projects

Assured market access for products Egress for current and future oil and natural gas production from the WCSB

Historically 95% of our growth has been via the drill bit, but actively pursuing large scale Montney oil consolidation given generational lows in asset values

3

VELVET ENERGY LTD. OVERVIEW

Largest Holder of Montney Light Oil Acreage in Alberta 29,500 boe/d (47% liquids) Repeatable organic growth model Egress from Canada a differentiator

Montney Light Oil Growth 21,500 boe/d (54% liquids) focused in

Gold Creek / Karr New development areas at Pouce and

Flatrock 352,000 net Montney acres

Harvesting Deep Basin Ellerslie base 8,000 boe/d (30% liquids) today Harvest asset while growing Montney oil 397,000 net acres

80 Full time employees in Calgary head office

10 Full time employees in various field offices

4

DEEP BASIN

MONTNEY

53,000 acres

62,000 acres

237,000 acres

397,000 acres

FLATROCK

POUCECOUPE

GOLDCREEK

KARR /SIMONETTE

PINE CREEK

EPG

McLEOD

NOTINE

THE VELVET MONTNEY OIL OPPORTUNITY

GOLD CREEK KARR / SIMONETTE

POUCE COUPE

FLATROCK

5

Gold Creek D23 Gold Creek LSW Karr/Simonette Pouce Coupe Flatrock TOTALOOIP (BnBBLS) 5.9 2.6 2.5 1.9 2.5 15.4Inventory Locations (#) 634 402 138 238 229 1641Oil EUR/well (mmbls) 350 350 711 350 350 380Recoverable Oil (MMbbls) 222 141 98 83 80 624Recovery Factor (%) 3.8% 5.4% 3.9% 4.4% 3.2% 4.1%Booked 2P Locations (#) 146 9 23 37 0 215% Booked (%) 23% 2% 17% 16% 0% 13%

* Company estimates

DIFFERENTIATED AS AN ORGANIC GROWTH COMPANY

Velvet’s commercial approach secures large contiguous land blocks, advances an integrated geological model, including 3D seismic and geoscience to high grade prospects

Strong track record of converting raw land into production and cash flow Have repeated this organic cycle at Edson,

Gold Creek/Karr and Pouce

Over 95% of our production has been added via the drill bit

Recent Edson disposition proceeds were re-invested into oil-weighted Montney The disposed gas-weighted Edson

production has been replaced with oil-weighted Montney production

Historical capital efficiency of $13-16/mboe/d and industry leading CROCI

Our growth to 29,500 boe/d has been funded with PSS equity, term debt, bank debt and funds flow

6

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Jan-

12

Jun-

12

Nov

-12

Apr-

13

Sep-

13

Feb-

14

Jul-1

4

Dec-

14

May

-15

Oct

-15

Mar

-16

Aug-

16

Jan-

17

Jun-

17

Nov

-17

Apr-

18

Sep-

18

Feb-

19

Jul-1

9

Corp

orat

e Pr

oduc

tion

(BO

ED)

Velvet Energy Ltd. Production Growth

2011 2012 2013 2014

2015 2016 2017 2018

2019 2017 - Montney 2018 - Montney 2019 - Montney

Edson asset sale mid-2019

0.0%

5.0%

10.0%

15.0%

20.0%

$- $20 $40 $60 $80 $100 $120

CRO

CI(%

)

WTI Oil ($US/bbl)

CROCI

CROCI = Adjusted EBITDA / Average (Gross PP&E + Gross E&E)

ORGANIC GROWTH YIELDS COMPETITIVE FULL CYCLE RATES OF RETURN

12.8% average CROCI since inception Consistently generate top decile CROCI, even in years where we capitalize resource plays as we shift

from exploration to development Montney at Gold Creek in 2017 Ellerslie at Edson in 2013

In 2020, Velvet achieves 50% liquids and generates 14.5% CROCI on strip pricing

~US$100/bbl oil price environment

Shale sets marginalcost of production

Hedging program sustained returns

Converting Gold Creekland into PDP

Discovered liquids-rich

Ellerslie

First oil at Gold Creek

2012

2013

20142015

2016

20182019E2017

7

2020E

DIFFERENTIATED BY PROACTIVELY ASSURING ACCESS TO MARKET FOR OUR PRODUCTS

8

N.A. Gas Demand Centre

VEL 5-year synthieticpipe to GoM at

US$1.19/mmbtu

Synthetic Pipe to the Gulf Basis positions on 100,000 mmbtu/d via NYMEX-AECO financial hedges through 2023 Represents current wedge of net PDP gas sales Combined AECO/NYMEX swaps and basis hedges are

$40mm in-the-money

Strategy: Synthetic pipe to highly liquid North American demand

centre at Henry Hub Avoid illiquid and less transparent hubs that may serve to

shift basis risk on regional S/D dynamics (Dawn, Sumas)

New gas pipe to GoMUS$1.85/mmbtu

ENB main line toll of $5-7/bbl

Spearhead toll US$2.67/bbl

VEL physical market access to Cushing at

costs inside MSW forward market

Velvet awarded 7,500 bbl/d of capacity on Spearhead pipeline for 7-year term commencing May 1, 2019

Strategy: Physical egress at tolls inside forward MSW prices Marketing Agreement with third party allows VEL to

optimize revenue amongst selected grades of Canadian crude

Physical Oil Takeaway

8

CONFLUENCE OF FACTORS DRIVE M&A STRATEGY

Confluence of factors create value enhancing M&A scenario

Dislocation in private / public multiples Historic low energy weight in market

indices Stranded balance sheets and banking

relationships Made in Canada egress risks and ongoing

uncertainty Strategic advantage for private companies

to transact vs. visceral public market responses

Velvet M&A focus has historically been on land capture Iron Bridge hostile takeover in 2018

consolidated land footprint at Gold Creek Current environment supports

consolidation of PDP and land in the Montney oil window of Alberta and BC

9

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x

11.0x

12.0x EV / Forward DACF(x)

Senior IntegratedMid CapSmall Cap

Source: Peters & Co

HISTORY OF VELVET

10

2017

Closed C$336 million equity line with Warburg Pincus, 1901 Partners, Trilantic Capital; $70 million equity draw

2016

2015

2014

2013

2012

2011

Acquired Vero Energy Deep Basin assets for $209 million;$110 million equity draw

Ellerslie discovery; $50 million equity draw

Acquired Lightstream assets in West Pembina for $72 million; $106 million equity draw; Reached 10,000 boe/d in 2Q

Closed new C$100 million equity line; Built and filled 54 mmcf/d fit-for-purpose gas and NGL plant at Zeta in 3Q

15-7 Montney oil well at Gold Creek; Doubled Gold Creek acreage to 195 sections; Closed US$125 million Senior Secured 2nd Lien financing

2018

Two successful horizontal wells at Gold Creek; First oil in June 2017; 20,000 boe/d at end 2Q; CPPIB new equity investor at $150mm; +US$50mm in 2nd lien notes

19 Montney oil wells in 2018 yield organic growth to 30,000 boe/dSuccessful unsolicited acquisition of Iron Bridge, adding 49,600 net acres at Gold Creek; CPPIB $75 million equity investment

10,000

20,000

30,000

Production (boe/d)

2019 1901 Partners $32 million equity investment; YE2018 2P reserve value of $2.0 billion (NPV10%BT on IQRE pricing)

10

STRONG GOVERNANCE: MANAGEMENT & DIRECTORS

Ken Woolner, P.Eng, President & CEO

Jeremy Kwasnecha, P.Eng, VP, Midstream & Marketing

Scott James, P.Eng, VP, Capital Execution

Tyler Williscroft, P.Eng, VP, Production

Chris Theal, CFA, CIM, Chief Financial Officer

Peter Henry, CA, VP, Finance

David Stobbe, CPA, VP, Accounting

Ken Woolner, P.Eng, President & CEO

John Brussa, Partner, Burnet, Duckworth & Palmer LLP

Vincent Chahley, Independent Businessman

Robert E. Hougie, 1901 Partners LP

Jacob Strauss, Warburg Pincus

Harvey Doerr, Independent Businessman

Roger Smith, Independent Businessman

Christopher R. Manning, Trilantic Capital Partners

David B. Krieger, Warburg Pincus

Kevin Godwin, Canada Pension Plan Investment Board

Debbie Stein, Independent Businessperson

MANAGEMENT

BOARD OF DIRECTORS

11

VELVET TECHNICAL DIFFERENTIATION

RISKMANAGEMENT

12

Petrophysicist (1)

Geomodeller (1)

Microseismic/geomechanics expert (1)

Reservoir Engineer (2)Geophysicist (3)

Geologist (6)

All geotechnical work is carried out in-house

VELVET’S MONTNEY PORTFOLIO

Montney dual zone play development at Gold Creek Pouce Coupe under delineation with proven results Significant resource captured at Flatrock, awaiting

delineation 15.4 billion barrels of oil in place

Velvet Exploration & Development Portfolio

Conceptual Exploratory Development Exploitation

Play Maturity

Data

Ric

hnes

s

Pouce CoupeMontney

Gold CreekMontney

Flat RockMontney

5.9BnBbl

1.9

2.5

FLATROCK

POUCECOUPE

KARR

SIMONETTE

GOLDCREEK

MONTNEY 352,000 acres

Organic Growth at Velvet = taking high quality prospects from identification to exploitation

2.6

LSWMontney

13

2.5

Karr/SimonetteMontney

VELVET’S OIL WINDOW ACREAGE & MONTNEY INVENTORY

14

FLATROCK53,000 ac

POUCE COUPE62,000 ac

GOLD CREEK187,000 ac

KARR/SIMONETTE50,000 ac

Velvet Montney Oil Position:352,000 acres

Montney Prospect Zone Inventory

Gold Creek D23 634LSW 402

Karr/Simonette D3 138Pouce Coupe D1a 238Flatrock D1a 229Total 1,641

Velvet has acquired 352,000 acres of Montney land within the light oil window in

Alberta and BC at various stages of maturity; each position is offset by active

Montney operators that continue to delineate and prove up the normally

pressured light oil window

VELVET

LXEKELBIR

VIINVA

COMPLETIONS EVOLUTION

1515

VELVET 2019 & Forward

• ~7000 ft Laterals • 1600 – 1800 lb / ft Proppant• 150+ Stages• 40 ft Spacing

VELVET 2016

• 2600 – 6000 ft Laterals • 500-1100 lb / ft Proppant• 30-60 Stages• 100 ft Spacing

Velvet 2017 / 2018

• 8000 – 10,000 ft Laterals • 1600 – 1850 lb / ft Proppant• 110 – 180 Stages• 60 ft Spacing

• ~150,000 bbl Fluid/Well• Cemented annular coil • Slick Water Fluid, no Surfactant• All 40/70 proppant• 7” INT x 4 ½” LINER • Targeting >75% produced water in fracture stimulations

• 10,000 – 80,000 bbl Fluid/Well• Open Hole Ball Drop• Slick Water Fluid w/ Surfactant• 20/40 with 30/50 Proppant• 7” INT / 5 ½” x 4 ½” LINER • No produced water recycled

• 135,000 – 185,000 bbl Fluid/Well• Cemented annular coil• Slick Water Fluid / phasing out surfactant• 30/50 transitioning to 40/70 Proppant • 5 ½” x 4 ½” Tapered monobore and 4 ½” straight monobores• Transition to produced water up to 50% being utilized

MONTNEY PRODUCTION GROWTH

Montney production has grown to ~21,500 BOE/d in 2 years through the drill bit

Velvet Montney Historical Production By Vintage

16

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

01-2017 04-2017 07-2017 10-2017 01-2018 04-2018 07-2018 10-2018 01-2019 04-2019 07-2019

Cale

ndar

Day

Pro

duct

ion

(BO

E/d)

2016 2017 2018 2019

2019 Current: 21,500 BOE/d

GOLD CREEK – ACTIVITY UPDATE

2019 Activity To-date

7 Wells on Production Mid - Montney D2A wells 6700’ laterals

3 Wells Drilled Mid - Montney D2A wells 6700’ laterals Frac in Sept, on prod Q4/2019

Proposed 4Q2019 Activity

DCET 3 wells from existing 6-35 pad 3 Mid - Montney D2A wells 6700’ laterals On production Q1/2020

17

Phase 4

6-35 Pad

4-1 Pad

0

100

200

300

400

500

600

700

800

900

1 2 3 4 5 6 7 8 9 10 11

Sale

s O

il Pr

oduc

tion

(bbl

/d)

Producing Months

Phase 4 - Producing Day Oil Rates

TYPE CURVE Average (7 Wells)

GOLD CREEK– OIL PRODUCTION PHASE 4 WELLS

18

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

0 30 60 90 120 150 180 210 240 270

Cum

ulat

ive

Oil

(bbl

s)

Producing Days

Phase 4 - Producing Day Cumulative Oil

TYPE CURVE AVERAGE (7 Wells)

NEW 2019 GOLD CREEK WELLS – OIL PRODUCTION TO-DATE

19

0

100

200

300

400

500

600

700

800

0 10 20 30 40 50 60 70 80

Oil

Prod

uctio

n (b

bl/d

)

Days on Production

TYPE AVERAGE

New 06-35 and 04-01 Pad Wells

TYPE CURVE ECONOMICS

IRR vs. Price Sensitivities2EUR, IRR and Payout1,2

1: Economics assume $55 USD WTI and $6.25 USD MSW differential2: C$1.50/GJ AECO; FX 1.33 $CDN/$USD; Liquids: C3/C4/C5+ pricing = 0.20/0.35/0.90 of WTI. $0.20/mcf transport, HV=1110 BTU/scf.

IP30 EURSales Gas (mmcf/d ; bcf) 1.6 1.61

Oil (bbl/d ; mbbl) 500 312C3+ (bbl/mmcf ; mboe) 38 61

Total (boe/d ; mboe) 818 641% Oil 61% 49%

MetricsDCET Cost $mm 7.3

Payout yrs 1.4RoR % 75

NPV10 $mm 4.8F&D $ per boe 11.40

20

0

100

200

300

400

500

600

700

800

900

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Prod

uctio

n (b

oe/d

)

MonthTotal Sales Type Oil

$0$2,000$4,000$6,000$8,000$10,000$12,000$14,000$16,000$18,000$20,000

0%20%40%60%80%

100%120%140%160%180%200%

$45 $50 $55 $60 $65 $70 $75

NPV

($m

)

IRR(

%)

WTI Oil Price ($US/bbl)Type Curve IRR Type Curve NPV

HARVESTING LIQUIDS RICH ELLERSLIE INVENTORY IN EDSON

21

Edson capex directed at harvesting inventory into equity-owned plants

Prioritize Extended Reach Horizontal Ellerslie wells Maintain optionality on development

pace to coincide with improved natural gas fundamentals

397,000 net acres

Play Current Inventory(G / N)

Deep Basin

Ellerslie (65% ERH) 503 / 341

Notikewin / Falher (19% ERH) 68 / 47

Wilrich Bayfill (43% ERH) 93 / 71

Wilrich Shoreface (38% ERH) 138/ 90

Bluesky 62 / 43

Rock Creek 51 / 31

Total Deep Basin 915 / 623

PINECREEK

MCLEOD

VEL OWNED PLANTS

VEL OWNED COMPRESSORS

EDSON PLANT GROUP

FINANCIAL & OPERATING RESULTS

8-year production CAGR of 26%, notably crude oil growth has outpaced at 41%

1P/2P reserve growth of 55% driven by Montney resource development at Gold Creek, Karr and Pouce

EBITDA growth has kept pace with production at 26%, despite executing business plan in a consistently backwardated oil market and egress challenged gas market

22

-

50,000

100,000

150,000

200,000

250,000

300,000

PDP Reserves 1P Reserves 2P Reserves

mbo

e

Reserves

2012 2013 2014 2015 2016 2017 2018

EBITDA

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

2012 2013 2014 2015 2016 2017 2018 2019E

Annu

al E

BITD

A ($

000)

*0%5%10%15%20%25%30%35%40%45%50%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2011 2012 2013 2014 2015 2016 2017 2018 2019E 4Q19E

(boe

/d)

Production

Crude Oil NGL Gas Liquids weight

PSS Equity, $704

2nd Lien Notes, $224

Bank Draw, $180

Velvet Capital Structure

3.38x3.10x

1.13x

2.41x 2.33x2.66x

3.49x3.18x

0.00x

0.50x

1.00x

1.50x

2.00x

2.50x

3.00x

3.50x

4.00x

2011 2012 2013 2014 2015 2016 2017 2018 2019E

Tota

l Deb

t / E

BITD

A (x

)

FINANCIAL HIGHLIGHTS

$704 mm in PSS equity from four shareholders, including CPPIB

US$175mm 2nd lien notes due 2023 held by two world class institutional debt investors

Underutilized C$275mm syndicated borrowing base with four Canadian chartered banks

Full cycle return driven business

23

Total Debt to EBITDA **

* Bank draw as at September 1, 2019** Total Debt to Annualized 4th quarter EBITDA

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2012 2013 2014 2015 2016 2017 2018 2019E 2020E

%

CROCI

*

VELVET ENERGY LTD. – SUMMARY

24

Seasoned executive team that has built and sold successful E&P companies

Convergence of best-in-class geoscience and completion engineering

Accountable and engaged in decision making process Resource unlocked and optimized through application of

state-of-the-art technology

People

Assets

Full Cycle Returns

Strong Balance Sheet and Supportive Sponsors

Dominant player in the Montney oil window of the Western Canadian Sedimentary Basin (550 net sections)

1,750 total net sections of Crown land in Alberta and NEBC 47% liquids weighting and growing to >50% in 2020 Industry leading IP rates in Montney oil window

Strong track record of top decile full cycle cash on cash returns Third-party recognition of top decile return projects in our portfolio – Edson and Gold Creek Cost control and market access integral to business plan Risk management central to full cycle return philosophy

Solid foundation of PE support + addition of CPPIB Strategic relationships with equity and term debt

providers 2-year revolver supports liquidity through plan Sufficient unutilized capacity on our bank line High impact tax pools

Organic Growth

Operate 100% of our drilling program Control infrastructure through direct equity interest or

midstream partnerships Organic growth derived from Montney oil portfolio at Gold

Creek/Karr, Pouce, Flatrock

FORWARD LOOKING INFORMATION AND FUTURE ORIENTED FINANCIAL INFORMATION

25

Certain statements contained in these materials including, expectations, beliefs, plans, goals, strategies, objectives, assumptions, information and statements about future events, conditions,results of operations and performance are prospective in nature and constitute forward-looking statements. The use of any of the words "anticipate", "continue", "estimate", "expect", "may","will", "should", "believe", "plans", and similar expressions are intended to identify forward-looking information or statements. In particular, and without limiting the foregoing, this presentationincludes forward-looking statements with respect to: future debt, EBITDA, capitalization, FCCR, borrowing capacity and other financial and leverage metrics; future cash flow, free cash flow, fundsfrom operations, operating netbacks, working capital and cash on cash returns; anticipated sustaining capital requirements; Velvet's tax pools and future taxability; future production and theexpected splits among crude oil, NGLs and natural gas production; hedging plans and strategies; drilling plans; future well economics, type curves, recovery factors, EURs, IIRs and payouts; drillinginventory and opportunities; expected drilling and completion costs; infrastructure and transportation plans; Velvet’s planned capital expenditure program and the nature of the expenditures;operating and transportation costs; forecasted commodity prices and factors affecting natural gas prices; management’s assessment of future potential and expectations with respect to naturalgas demand and supply in North America. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements as they involve the implied assessment, based on currentestimates and assumptions that the reserves and resources can be profitably produced in the future. Readers are cautioned that disclosure of any well test results or initial production rates is notnecessarily indicative of long-term performance.

These forward-looking statements are based on assumptions and are subject to numerous risks and uncertainties, certain of which are beyond the Company’s control, including the impact ofgeneral economic conditions; industry conditions; volatility of commodity prices; currency exchange rates; imprecision of reserve estimates; environmental risks; competition from other explorers;stock market volatility; oil and natural gas development and transportation; actions by governmental authorities, including changes in government regulation, royalties and taxation; dependenceupon compressors, gathering lines, pipelines and other facilities, certain of which the Company does not control; shortage or lack of available of pipeline capacity or other transportation facilities;weather conditions, natural disasters and fires; and ability to access sufficient capital. Accordingly, no assurance can be given that any of the forward looking statements will transpire or occur, or ifany of them do so, what benefits will be derived therefrom. In addition, the reader is cautioned that historical results are not necessarily indicative of future performance.

This presentation also contains future oriented financial information ("FOFI") within the meaning of applicable securities laws. The FOFI has been prepared by management of Velvet to provide anoutlook of Velvet's anticipated future financial results and performance including cash flow, free cash flow, funds from operations and cash on cash returns. The FOFI has been prepared based on anumber of assumptions including the assumptions discussed above and assumptions with respect to drilling and operating costs, capital expenditures, production levels, commodity prices, rates ofreturn, royalty rates and finding and development costs. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare theFOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectivelydeterminable. The actual results of operations of Velvet and the resulting financial results will likely vary from the amounts set forth in this presentation, and such variation may be material. Velvetand its management believe that the FOFI has been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management's knowledge andopinion. However, because this information is highly subjective and subject to numerous risks, including the risks discussed above, it should not be relied on as necessarily indicative of futureresults.

The forward-looking statements and information and FOFI contained in this presentation are made as of the date hereof and Velvet undertakes no obligation to update publicly or revise anyforward-looking statements or information, whether as a result of new information, future events or otherwise.

NON-GAAP MEASURES

This presentation contains various terms which do not have a standardized meaning prescribed by Canadian generally accepted accounting principles and therefore may not be comparable withthe calculation of similar measures by other companies including, without limitation, "operating netback", "cash on cash return", "cash flow", "free cash flow", "operating netback", "total debt" and"EBITDA".

OIL AND GAS INFORMATION

26

We have included estimated reserves, estimated ultimate recovery and recovery rates in this presentation that have been evaluated by Velvet's independent reserves evaluator and/or internallyestimated by Velvet. Such estimates may not have been prepared in accordance with National Instrument 51-101 ("NI 51-101") and there is no certainty that Velvet will ultimately recover suchvolumes from the wells it drills. Estimates of the net present value of the future net revenue from Velvet's reserves do not represent the fair market value of such reserves. The estimates ofreserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties due to the effects ofaggregation.

BOE Advisory

We use the term boe (barrels of oil equivalent) throughout this presentation. Boe's may be misleading, particularly if used in isolation. The conversion ratio of six thousand cubic feet per barrel (6mcf: 1 bbl) of natural gas to barrels of oil equivalent is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at thewellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1basis may be misleading as an indication of value.

Analogous Information

Certain information in this presentation may constitute "analogous information" as defined in NI 51-101. Management of Velvet believes the information is relevant as it may help to define thereservoir characteristics and production profile of lands in which Velvet may hold an interest. Such information is not an estimate of the production, reserves or resources attributable to lands heldor to be held by Velvet and there is no certainty that the production, reserves data and economic information for the lands held or to be held by Velvet will be similar to the information presentedherein. The reader is cautioned that the data relied upon by Velvet may be in error and/or may not be analogous to such lands held or to be held by Velvet.

Drilling Locations

This presentation discloses drilling locations in two categories: (i) booked locations; and (ii) unbooked locations. Booked locations are proved locations and probable locations derived from Velvet'sreserves report for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal estimates based on prospective acreage and anassumption as to the number of wells that can be drilled per section based on industry practice and internal review. There is no certainty that Velvet will drill all unbooked drilling locations and ifdrilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production.

Type Curves

This presentation contains type curves and well economics. The type curve information presented is based on Velvet's historical production, in addition to production history from analogousdevelopments located in close proximity thereto. Such type curves and well economics are useful in understanding management's assumptions of well performance in making investment decisionsin relation to development drilling and for determining the success of the performance of development wells; however, such type curves and well economics are not necessarily determinative ofthe production rates and performance of existing and future wells.

Oil and Gas Metrics

This presentation contains a number of metrics commonly used in the oil and natural gas industry, such as "IRR" "EUR", "F&D" and "FD&A" costs, "Payout", "RoR", "EUR", "recycle ratio" and "TEV".These terms do not have a standardized meaning and may not be comparable to similar measures presented by other companies, and therefore should not be used to make such comparisons.Readers are cautioned that the information provided by these metrics, or that can be derived from the metrics presented in this presentation, should not be relied upon for investment or otherpurposes.

These materials also include estimated resource in place values that have been internally estimated by Velvet which have not been prepared in accordance with NI 51-101 and are not accompaniedby a discussion of the significant positive and negative factors relevant to the estimated amounts. There is no certainty that such reserves exist or that the noted volumes or resources will bediscovered. If discovered, there is no certainty that it will be commercially viable to produce any portion thereof.