March 2017
Future Oriented Information
(See additional advisories at the end of this presentation document)
2
Trilogy Corporate Profile
2016 Results: Average 2016 2017 Forecast
Production (Boe/d): 21,822 24,000
(30% Liquids) (~35% Liquids)
Net capital expenditures ($MM): 72.8 130
Funds flow from operations ($MM)(1): 55.9
Operating netback ($/Boe)(1): 12.58
Current Market Cap.: ~ 126.1 million shares at $6.00/share ~ $757 Million
Insider Ownership: ~ 50%
Net debt: $300.0 million Senior Unsecured Notes - 7.25% due December 2019
$288.6 million Three Year Revolving Credit Facility:$300 million secured (2)
$588.6 million as at December 31, 2016
(1) Includes an environmental remediation provision made in the fourth quarter of 2016 for $6.0 MM( 2.89/Boe for Q4/2016 or $0.75 for all of 2016) (2) Includes working capital deficit
3
Operations Update
Trilogy: Key Growth Plays
5
Kaybob Montney Oil Pool Development
Discovered in 2011
Approximately 50 net sections at
average 10 MMBbl DOIIP/section;
~ 500 MMBbl DOIIP for pool(1)
8 Hz Montney oil wells/section;
~ 400 potential drilling opportunities
Drilled 123 wells to date
Drilling and completions costs for
2016 are expected to average
~ $2.9 MM per well; a 30% reduction
from 2014
Average 1 mile horizontal lateral:
22 fracs/well increasing to 32 fracs/well
75 m spacing decreasing to 50 m
10 t/stage increasing to 20 t/stage Average Proved plus Probable reserves/well(2):
Net pay ranges from 5 m - 15 m ~ 286 MBoe
Drilled 12 (net) wells in 2016 ~ 168 MBoe Oil + NGLs
15 (net) wells planned for 2017 ~ 0.7 Bcf Solution Gas
(1) Please refer to the heading Internal Estimates in the Advisories Appendix of this presentation for more information. DOIIP denotes Discovered Oil Initially in Place. Refer to Oil & Gas Measures
and Definitions in the Advisories Appendix for further information.
(2) McDaniel & Associates Consultants Ltd. at December 31, 2016
6
Economics - Kaybob Montney Oil Pool West Side
Capital: $2.9 MM D/C/T per well Reserves per well: 354 MBoe(2)
IP30: 640 Bbl/d oil - 0.7 Bcf natural gas
- 223 MBbl oil
- 14 MBbl C3+
WTI $US/Bbl
7
Kaybob Montney Oil: New Drills
(1) Please refer to the heading "Type Curves" in the Advisories Appendix of this presentation for more information
8
Kaybob Presley Montney Gas Development
Approximately 60 net sections with
DGIIP estimate of 10 - 15 Bcf per
section(1)
5 Hz wells/section: ~ 300 potential
drilling opportunities
82 horizontal wells drilled as of
December 31, 2016
Potential recoverable reserves (1) of
> 600 Bcf raw gas and 15 MMBbl
NGLs
Average D/C/T costs:
~ 1 mile $3.9 MM
~ 2 mile $4.8 MM
Long-reach horizontal wells have
had positive results
Six (5.3 net) wells planned for 2017
9
Presley Montney Gas Economics
Capital: $4.8 MM D/C/T per well Reserves per well: 822 MBoe(2)
IP30: 6.8 MMcf/d 4.5 Bcf natural gas
NGL: $CDN 31.53/Bbl 72 MBbl NGLs
Condensate: $CDN 65.00/Bbl
12
Trilogy Duvernay
R25 R24 R23 R22 R21 R20 R19 R18 R17 R16 R15W5
T66 T66
~185 net sections at Kaybob
T65 T65
~100 net sections in ultra-liquids-rich gas and volatile oil
Kaybob
window
Smoky River
T64 North T64 ~85 net sections in the liquids-rich window
Strategically positioned land base in the core of the
T63 T63 Duvernay with offsetting operators initiating full-scale
development
T62 T62
Participated in 39 horizontal wells (15 of which Trilogy
drilled and completed), including the first horizontal well
Grizzly
into the play in 2010
T61 Bigstone T61
R26 R25 R24 R23 R22 R21 R20 R19 R18 R17 R16 R15W5
Chevron/KUFPEC JV 42 44 28 114
14
Duvernay: Drilling Cost Improvement
15
Duvernay: Completion Cost Improvement
16
Duvernay Drilling and Completion Future
17
Duvernay Unconventional Shale Play- Kaybob Area
18
North Kaybob Duvernay
19
North Kaybob Duvernay Shale Type Curve
(1) Please refer to the heading "Type Curves" in the Advisories Appendix of this presentation for more information
(2) Please refer to the heading Internal Estimates in the Advisories Appendix of this presentation for more information
20
South Kaybob Duvernay
21
South Kaybob Duvernay Shale Gas/Condensate Play
22
Financial Update
Quarterly Review
24
Reserves
(McDaniel & Associates Consultants Ltd. at December 31, 2016)
Natural Crude
NGL Total BT NPV
Gas Oil % %
Reserve Category BCF MBbl
MBbl MBoe 10% $MM
Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Assumptions have been made regarding the following
matters, in addition to any other assumptions identified in this presentation or Trilogys continuous disclosure documents:
future oil, natural gas and natural gas liquids (including condensate) supply and prices;
foreign currency, exchange and interest rates;
Trilogys ability to obtain on acceptable terms the required capital to finance its exploration, development and other operations in the Montney oil and gas pools and the
Duvernay shale play (including credit facility availability consistent with expectations);
projected capital investment levels and the successful and timely implementation of capital projects;
the ability to source water for Trilogy's operations;
anticipated timelines and budgets being met in respect of drilling programs and other operations;
the ability of Trilogy to service its debt and re-pay its debt when due;
royalty rates, taxes and capital, operating, general & administrative and other costs;
current production forecasts and the relative content of crude oil, natural gas and NGLs therein;
geology applicable to Trilogys land holdings;
assumptions inherent in estimating reserves and resources (including internal estimates of DOIIP and DGIIP and the associated net present value) and the likelihood that the
reserves described exist in the quantities predicted or estimated and can be profitably produced in the future;
the ability of Trilogy and its industry partners to obtain drilling and operational results, improvements and efficiencies consistent with expectations (including in respect of
anticipated production volumes, reserves additions and NGLs yields);
well economics;
27
Advisories Appendix con't
the timing and costs of plant turnaround, pipeline and storage facility construction and expansion and the ability to secure adequate product, processing, fractionation and transportation;
Trilogys ability to obtain equipment, services and supplies in a timely manner to carry out its activities;
Trilogys ability to market oil and natural gas successfully to current and new customers;
funds flow from operations consistent with expectations;
the timely receipt of required regulatory approvals;
the ability of Trilogy to obtain financing and access to capital markets on acceptable terms;
continuity of government royalty and regulatory regimes, including drilling and royalty incentive programs and their application to Trilogys operations and assumptions regarding the
applicability of the Alberta Government's Modernized Royalty Framework;
the continuation of assumed tax regimes including estimates and availability of deferred tax amounts, tax assets and tax pools;
the extent of Trilogy's liabilities;
general business, economic and market conditions; and
other assumptions inherent in Trilogys current guidance.
Although Trilogy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking
statements because Trilogy can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates
and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Trilogy and described in the forward-looking
statements or information. These risks and uncertainties include and/or relate (but are not limited) to:
fluctuations in oil, natural gas and natural gas liquids prices, foreign currency exchange rates and interest rates;
the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand;
risks and uncertainties involving geology of oil and gas deposits;
risks associated with processing, storing, and transporting crude oil, natural gas and related products;
the ability of management to execute its business plan;
risks associated with obtaining timely access to areas where Trilogys operations are to be conducted;
risks inherent in Trilogys marketing operations, including credit risk;
the ability to generate sufficient funds flow from operations to meet current and future obligations, including costs of anticipated projects and repayment of debt;
the uncertainty of reserves and resource estimates (including internal estimates of DOIIP, DGIIP);
Trilogys ability to replace and add production and reserves through development and exploration activities and acquisitions;
the uncertainty of estimates and projections relating to production, drilling, and other costs and expenses;
potential delays or changes in plans with respect to exploration or development projects or capital expenditures including without limitation the possibility that regulatory approvals may be
delayed or withheld;
potential disruptions or unexpected technical difficulties in designing, developing or operating new, expanded or existing facilities, including third-party operated facilities;
Trilogy's ability to enter into or renew leases;
Trilogy's ability to source water and obtain water licenses;
uncertainty regarding aboriginal land claims and consultations with local populations and industry participants;
health, safety and environmental risks;
uncertainties as to the availability and costs of financing;
Trilogys ability to generate sufficient cash flow from operations to meet its current and future obligations, including costs of anticipated projects and repayment of debt;
Trilogys ability to maintain targeted or required ratios within its credit and debt arrangements, and the risks of not maintaining such required ratios, including early debt repayment and/or
other penalties;
weather;
general economic, market, industry and business conditions;
28
Advisories Appendix con't
the possibility that government policies or laws may change or governmental approvals may be delayed or withheld, including risks related to the imposition of moratoriums;
uncertainty in amounts and timing of royalty payments and the application of and potential changes to royalty and drilling incentive programs applicable to Trilogys assets;
imprecision in estimates of product sales tax, tax pools, tax shelter, and tax deductions available to Trilogy and changes to tax legislation and regulations applicable to Trilogy and the
interpretation thereof;
risks associated with Trilogy's mitigation strategies, including insurance and hedging activities;
uncertainty regarding results of third party industry participants to Trilogys development plans;
changes to environmental legislation and regulations applicable to Trilogy including those relating to greenhouse gases and hydraulic fracturing among others and the cost of complying
with same;
risks associated with existing and potential future law suits and regulatory actions against Trilogy;
hiring/retaining staff; and
other risks and uncertainties described elsewhere in this document or in Trilogy's other filings with Canadian securities authorities.
The foregoing list of risks is not exhaustive. Additional information on these and other factors which could affect Trilogys operations or finances are included: (1) under the heading Risk
Factors in Trilogys Annual Information Form; and (2) under the heading Managements Discussion and Analysis Advisories in Trilogys Annual Report. The forward-looking statements
and information contained in this document are made as of the date hereof and Trilogy undertakes no obligation to update publicly or revise any forward-looking statements or information,
whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
This document contains disclosure expressed as "Boe", MBoe, MMBoe, Mcf, MMcf, Bcf, Bbl, MBbl and MMBbl. All oil and natural gas equivalency volumes have been derived
using the ratio of six thousand cubic feet of natural gas to one barrel of oil. Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand
cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well
head. For Q4 2016, the ratio between Trilogys average realized oil price and the average realized natural gas price was approximately 18:1 (Value Ratio). The Value Ratio is obtained
using the Q4 2016 average realized oil price of $56.16 (CAD$/Bbl) and the Q4 2016 average realized natural gas price of $3.17 (CAD$/Mcf). This Value Ratio is significantly different from
the energy equivalency ratio of 6:1 and using a 6:1 ratio would be misleading as an indication of value.
This presentation contains disclosure of Discovered Oil Initially in Place (DOIIP) and Discovered Gas Initially in Place (DGIIP). DGIIP is that quantity of gas that is estimated to exist
originally in naturally occurring accumulations. It includes that quantity of gas that is estimated, as of a given date, to be commercial and contained in known accumulations prior to
production. DOIIP is that quantity of oil that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of oil that is estimated, as of a given date, to be
commercial and contained in known accumulations prior to production. In each case where used herein, DOIIP or DGIIP is the most specific category that could be assigned. There is no
certainty that it will be commercially viable to produce any portion of this DOIIP or DGIIP. The estimated net present values discussed in this document do not represent fair market value.
29
Advisories Appendix con't
Internal Estimates In this presentation, Trilogy has provided information with respect to its Kaybob Montney oil and gas assets and Duvernay shale play which is analogous information as
defined in NI 51-101. This analogous information includes managements internal estimates of DOIIP and DGIIP, as defined in the Canadian Oil and Gas Evaluation Handbook (COHEH)
and/or production type curves in respect of proved plus probable reserves. Except as noted, this analogous information is presented on an area basis utilizing data derived from Trilogys
internal sources based on existing wells as well as from a variety of publicly available information sources which are predominantly independent in nature. These internal estimates are subject
to the specific assumptions identified by Trilogy in respect of such estimates plus other assumptions contained herein (including the forward-looking information advisories), and are not
necessarily representative of the actual resources or production rates associated with Trilogys properties and wells. Estimates of reserves for individual properties may not reflect the same
confidence level as estimates of reserves for all properties, due to the effects of aggregation.
Type Curves - Production type curves are based on a methodology of analog, empirical and theoretical assessments and reservoir modelling with consideration of the specific asset, and as
depicted in this presentation, is representative of Trilogys current program and interpretation. Some of this data may not have been prepared by qualified reserves evaluators or auditors and
may have been prepared based on internal estimates. Estimates by engineering and geo-technical practitioners may vary and the differences may be significant. Trilogy believes that the
provision of this analogous information is relevant to Trilogys oil and gas activities, given its acreage position and operations (either ongoing or planned) in the areas, and such information
has been updated as of the date hereof unless otherwise specified. The type curves presented are indicative of the average production volumes of analogous wells within the Companys area
of interest that are geologically similar to the applicable prospect type. In the case of the Montney Oil Pool, the type curve presented is in respect of the west half of the pool, which has
delivered better results as compared to the east half of the pool. Due to the relative immaturity of the Duvernay shale play, type curves for this play are less reliable than for other, more
mature plays. No reserves or resources other than reserves are assigned to or associated with these type curves. There is no certainty that it will be commercially viable to produce any
portion of the estimated volumes. Type curves should not be relied upon to predict actual well performance or be interpreted as applying equally throughout a play.
Potential Drilling Opportunities - Disclosure regarding drilling opportunities and locations is based on internal estimates, may include proved, probable and unbooked locations, and
assumes a number of wells that can be drilled per section based on industry practice and internal review. The drilling locations which Trilogy will actually drill will ultimately depend upon the
availability of capital, regulatory and partner approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other
factors. No reserves or resources other than reserves are assigned or associated with the locations/ opportunities.
30