Disclaimer ForwardLookingStatementsThis presenta,on contains statements that may cons,tute "forward-looking statements” within the meaning of applicable securi,es legisla,on. Thesestatementsinclude,amongothers,statementsregardingbusinessstrategy,beliefs,plans,goals,objec,ves,assump,onsorstatementsaboutfutureeventsorperformance. Bytheirnature,forwardlookingstatementsaresubjecttonumerousrisksanduncertain,es,someofwhicharebeyondtheCompany'scontrol,includingtheimpactofgeneraleconomiccondi,ons,industrycondi,ons,vola,lityofcommodityprices,currencyfluctua,ons,environmentalrisks,compe,,onfromother industrypar,cipants, lackofavailabilityofqualifiedpersonnelormanagement,stockmarketvola,lityandabilitytoaccesssufficientcapital frominternalandexternalsources.Readersarecau,onedthattheassump,onsusedintheprepara,onofsuchinforma,on,althoughconsideredreasonableatthe,meofprepara,on,mayprovetobeincorrectand,assuch,unduerelianceshouldnotbeplacedonforward-lookingstatements.Actualresults,performanceorachievementcoulddiffermateriallyfromthoseexpressedin,orimpliedbyanyforwardlookingstatementsinthispresenta,on,andaccordingly,noassurancecanbegiventhatanyoftheeventsan,cipatedbytheforward-lookingstatementswilltranspireoroccur,orifanyofthemdoso,whatbenefitstheCompanywillderivetherefrom.
TheCompanydisclaimsanyinten,onorobliga,ontoupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinforma,on,futureeventsorotherwise.
ReservesandResourceExceptwherenotedtobefromanothersource,thereservees,mateshereinwereextractedfromreportspreparedbyGLJPetroleumConsultantsLtd.(GLJ),anindependentprofessionalpetroleumengineeringfirm,inaccordancewithCanadianSecuri,esAdministrators’Na,onalInstrument51-101(NI51-101)andtheCanadian Oil and Gas Evalua,on Handbook (COGEH). Under NI 51-101, proved reserves are those reserveswhich can be es,matedwith a high degree ofcertaintytoberecoverable.Itis90percentlikelythatactualremainingquan,,eswillexceedes,matedprovedreserves.Probablereservesarethoseaddi,onalreservesthatarelesscertaintoberecoveredthanprovedreserves.Itisequallylikelythattheactualremainingquan,,esrecoveredwillbegreaterorlessthanthesumofprovedplusprobablereserves.Possiblereservesarethoseaddi,onalreservesthatarelesscertaintoberecoveredthanprobablereserves.Thereisonlya10percentprobabilitythatthequan,,esactuallyrecoveredwillequalorexceedthesumofprovedplusprobablepluspossiblereserves.
Theprepara,onofanevalua,onrequirestheuseofjudgementinapplyingthestandardsanddefini,onscontainedinCOGEHandNI51-101.AstheCompany’sindependentreserveevaluator,GLJappliesthosestandardsanddefini,onsbasedonitsexperienceandknowledgeofindustryprac,ce.However,becausetheapplica,onofthestandardsanddefini,onscontained inCOGEHandNI51-101requiretheuseof judgementthere isnoassurancethatgoverningsecuri,esregulator(s)willnottakeadifferentviewthanGLJastosomeofthedetermina,onsinanevalua,on.
Resourcees,mateshereinarethoseoftheCompany’smanagementandarenotinaccordancewithNI51-101orCOGEH.
Presenta7onofFinancialInforma7onUnlessotherwisestated,allfigurespresentedareinCanadianDollars.
2015 Corporate Highlights
3
Solid Financial Position(1)
• $199mm in net working capital(2), US$15mm undrawn revolver • $284mm term loan(3) maturing in 2020 • Active commodity hedging program covering about 50% of production • Prudently managing spending within context of current environment
1. As at December 31, 2015 2. Excludes net unrealized hedging assets. Includes $100 million from proceeds of callable warrants. 3. Long term portion of principal outstanding on US$210 million term loan converted at December 31, 2015 foreign exchange rate.
Leadership & Support
• Strong shareholder group including Blackstone Capital, Warburg Pincus, Azimuth Capital, GIC, KIC and two Canadian pension funds
• Experienced Management & Board of Directors
Positioned for Growth
• High quality assets with defined and approved growth projects in the Cold Lake region that allow for staged expansions to over 50,000 bpd, when commodity prices allow
• Significant long-term upside in the bitumen carbonate resource play (Saleski)
Production and
Cashflow
• 7,736 bbl per day of commercial production from Cold Lake • Positive field-level netbacks below US$40 WTI - significant structural
advantages compared to Athabasca thermal producers
Core Areas
Cold Lake
• Profitable production and growth
Grosmont Carbonates (Saleski)
• An enormous opportunity in the bitumen carbonate resource play
4
Cold Lake Portfolio
5 - 5 10 15 20 25 30 35
TaigaOrion
Mbpd
AverageProduc,on(2015) NameplateCapacity RegulatoryApproval
Cold Lake Advantages
Advantages Impact the Bottom Line • Premium heavy oil - Well established “Cold Lake Blend” with lower
diluent blending requirement and quality differential discount • Location - Access, infrastructure, closer to Edmonton and U.S.
markets • Community - Well established, rural, multi-industry community with a
resident skilled labour force 6
Cold Lake Orion • Orion SAGD asset was acquired from Shell in July 2014
• 100% WI in a production facility, 5,440 acres of land, and 22 well pairs on 6 well pads
• Regulatory approval for expansion to 20,000 bbl per day
• Production: 7,736 bbl per day (2015 Average)
• Reserves: Proven (1P) 47 MMbbl, Proven plus Probable (2P) 127 MMbbl 1
71. GLJPetroleumConsultants.ReservesandresourcesasatDec.31,2015.
Cold Lake Taiga
• Thermal in-situ project to be developed through staged expansions
• Regulatory approval in place for 35,000 bpd and the potential to reach 45,000 bpd at full development
• 100% W.I. in 22,422 acres located 10 miles from Orion
• Two proven commercial high quality, laterally predictable shoreface reservoir zones
• Producing Analogs
• Clearwater – Osum Orion
• Lower Grand Rapids – Pengrowth Lindbergh & CNRL Wolf Lake B10
• Reserves: Proven plus Probable (2P) 376 MMbbl1
TaigaProject
1. GLJPetroleumConsultants.ReservesandresourcesasatDec.31,2015.8
Saleski&LiegeProjects
Grosmont Carbonates Portfolio
High quality resource position in world scale play
• Over 4 billion bbl (net) recoverable resources1
• Thick, laterally extensive oil columns in stacked target zones
Established commercial potential through pilot project (shut-in in Q3 2015)
Leveraging knowledge gained to date to refine our plans with a focus on Osum’s Grosmont C position
1. Managementes,mate.See“ReservesandResources”Disclaimeronpage2.9
Optimized Orion
Operations
• Record oil volumes in Q1 ‘15, but with poor steam reliability. Lower oil volumes in 2H ‘15.
• Increased boiler uptime & reliability following June plant turnaround (25+% gain)
• Increased steam output by adding reverse osmosis water treatment unit
• Installed artificial lift on four additional wells in Q4 ‘15 with positive results
Managed Commodity
Risk
• Realized hedging gains of $18.8 million in 2015 significantly enhancing liquidity position
• Hedges are being rolled forward and reviewed at least quarterly
Disciplined Capital
Allocation
• Discretionary capital spending restricted to projects that add incremental production or reduce operating costs
• Low sustaining capital and decline rates allow for stable production with limited immediate investment
Reduced Costs
• Renegotiated key contracts to reduce operating expenses
• Reduced G&A primarily through decreased head office staffing levels (Completed in Q2‘16)
Responsible management In a low price environment
Maintained HSE
Performance
• Health, Safety, and Environmental performance was not sacrificed
• No recordable incidents in 2015 (327,000 manhours)
• Environment: 1 reportable incident
Suspended Saleski
• Pilot operations terminated on completion of ~5 years of operations
• Commercial demonstration phase suspended
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Grosmont Carbonates 2015
The Saleski Pilot project (Joint Venture) was completed and the facility was shut-in in September 2015 (~5 years in operation)
• 40% non-operated interest in 1,800 bpd pilot facility
• Reservoir performance was proven using a variant of the established CSS process
• Both the Grosmont C & D reservoirs were shown to be productive
• The Grosmont C wells were progressed furthest in the pilot, showing the potential for high recovery factors and thermal efficiency (SOR) near the commercial range
Commercial Demonstration Phase planning was suspended
We adopted a low-cost hold strategy to preserve knowledge and future value of these assets
12
Orion Production and Injection
Turnaround
Steam Reliability >95%
Steam Reliability <70%
2015 production averaged 7,736 bpd
Lower steam injection rates early in year resulted in reduced production in Q4 2015 13
Cold Lake Netbacks Cold Lake advantages resulted in positive netbacks
• $15.75/bbl netback in 2015 when oil averaged below US$50/bbl WTI (without hedging)
• Operating breakeven is below US$40/bbl WTI
$48.03
$33.24
$14.76
$25.80 $13.80
$8.43
$10.76
$14.36
$94.54
$73.15
$48.56 $57.96
$46.44 $42.17
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015
Orion Netbacks - Since Acquisition Hedging Gains
Field Netback C$/bbl
Royalties C$/bbl
Operating Costs C$/bbl
WTI US$/bbl
14
Orion Operating Results
15
1VolumesfromtheSaleskipilotarenotincluded22014representstheperiodfollowingtheOrionacquisi,ononly3Financialhedginggainsonly.Physicalhedginggainsareincludedinbitumenrevenue
2015 2014(2) Change-$ Change-%BitumenProduc,on(1) bbl/d 7,736 7,996 (260) (3%) WTI US$/bbl 48.76 81.70 (32.94) (40%)ColdLakeBlend US$/bbl 33.84 63.84 (30.00) (47%)Differen,al US$/bbl 14.92 17.86 (2.94) (16%)Differen,al % 30.6% 21.90% 8.70% 40%ForeignExchangeRate US$/C$ 0.782 0.892 (0.110) (12%)AECOGasPrice C$/mcf 2.77 4.01 (1.24) (31%) BitumenFieldPrice C$/bbl 34.61 60.76 (26.15) (43%)Royal,es C$/bbl 0.69 4.67 (3.98) (85%)Opera,ngCosts C$/bbl 18.18 17.28 0.90 5%FieldNetbackBeforeHedging C$/bbl 15.74 38.81 (23.07) (59%)RealizedHedgingGains C$/bbl 6.10 - 6.10 -CashOpera,ngNetbackAmerHedging C$/bbl 21.84 38.81 (16.97) (44%)
FieldNetbackBeforeHedging C$000 44,446RealizedHedgingGains(3) C$000 17,223CashOpera,ngNetbackAmerHedging C$000 61,669
Balance Sheet
16
31-Dec-15 31-Dec-14
Cash and Cash Equivalents (1) C$ MM 109.4 115.6
Working Capital Surplus (2) C$ MM 199.3 208.5
Long Term Debt Outstanding (3) C$ MM 284.1 230.5
Basic Shares Outstanding (4) MM 130.4 130.4
(1)
Includes restricted cash
(2)Excludes net unrealized hedging assets. Includes $100MM proceeds from callable common share purchase warrants
(3)Consists of the outstanding non-current portion of the term loan translated to C$ at the period-end exchange rate. The current portion is included in the working capital surplus. The term loan bears a floating interest rate based on the greater of LIBOR or 1%, plus 5.5%.
(4)Includes 8.0 million callable common share purchase warrants with an exercise price of $12.50/share
Reserves
17
ColdLake Saleski1 Other Total
Reserves (MMbbls)
Proven Reserves 2 47 − − 47
Proven + Probable Reserves 2 502 − − 502
Present Value Before Tax 10% ($MM)
Proven Reserves 2 $275 − − $275
Proven + Probable Reserves 2 $1,343 − − $1,343
Potential Production Capacity (net) 65,000 bpd 465,000 bpd 40,000 bpd 570,000 bpd
Net Acreage 26,000 ac 164,300 ac 5,700 ac 196,000 ac
1. IncludesOsum’s40%interestintheSaleskiJV,and100%oftheremainingSaleskiprojects,Managementview2. GLJPetroleumConsultantsasatDecember31,2015.See“ReservesandResources”Disclaimeronpage2.
Future Capital Requirements
Timing CashFlow
CashonHand Debt Equity
MaintenanceCapital Ongoing ü üCorporateG&Aanddebtservice Ongoing ü üOrionOp,miza,on Ongoing ü üOrionExpansion 2017+ ü ü ü üTaiga(Phase1) TBD ü ü üSaleski(Demonstra,on) TBD ü ü
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2016 Focus • Manage our finances prudently to protect the business
through the downturn
• Focus on our Cold Lake assets in the near term, adding production and reducing structural costs
• Pursue small production enhancement projects at Orion that are profitable in today’s business conditions, and make the business more robust (e.g. debottlenecking, well stimulations)
• Larger expansions will be considered as oil prices recover to a point that provides the confidence to move forward
• Deliver superior safety and environmental performance
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Summary • 2015 was a challenging year characterized by declining oil
prices and production swings
• We achieved positive operating netbacks through the year, which were further uplifted by a successful hedging program
• Our liquidity remains strong
• We have positioned the business to weather the downturn and will continue to manage our finances prudently
• Our operational priorities for 2016 are to stabilize production, and further reduce costs
• Our near term discretionary capital expenditures are focused on small production enhancement projects at Orion that are profitable in today’s business conditions
• We are well positioned for the long term with a portfolio of significant growth opportunities
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Board of Directors
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Name/Title RelevantPriorExperienceRichard(Rick)George,OCChairman
¡ FormerCEO&DirectorofSuncorEnergy¡ DirectoroftheRoyalBankofCanada,AnadarkoPetroleum,andPennWestExplora,on
(Chairman)¡ Partner,NovoInvestmentGroup
AngeloAcconcia ¡ SeniorManagingDirector,BlackstoneCapitalPartnersandBlackstoneEnergyPartners¡ DirectorofAltaEnergy,HunterOil&Gas,LLOGExplora,on,andRoyalResources
VincentChahley ¡ IndependentBusinessman¡ FormerManagingDirectorofCorporateFinanceatFirstEnergyCapital
GeorgeCrookshank ¡ IndependentBusinessman¡ FormerVicePresidentofFinanceandChiefFinancialOfficerofOPTICanadaInc.(2002to2007)
WilliamA.Friley ¡ IndependentBusinessman¡ PresidentandChiefExecu,veOfficerofTellurideOilandGasandPresidentofSkyelandOils
DavidKrieger ¡ ManagingDirector,WarburgPincusLLC¡ DirectorofBlackSwanEnergy,CanbriamEnergy,Ceres,EnduranceEnergy,FirstGreen
Partners,KosmosEnergy,MEGEnergy,VelvetEnergyandWestValleyEnergy
GaryLevin ¡ Principal,BlackstoneCapitalPartnersandBlackstoneEnergyPartners¡ DirectorofLLOGExplora,onandVineOil&Gas
CameronMcVeigh ¡ President,CamcorPartnersInc.¡ DirectorofTangleCreekEnergy
BrianReinsborough ¡ Founder,President&CEO,VenariResourcesLLC¡ FormerPresidentofNexenPetroleumU.S.A.
JeffvanSteenbergen ¡ ManagingPartner,AzimuthCapitalManagement¡ DirectorofAduroResources,AltexEnergy,CobaltInterna,onalEnergy(US),FairfieldEnergy
(UK),MagmaGlobalLtd.,andSevenGenera,onsEnergy
SteveSpence ¡ President&CEOofOsum