April 4, 2017

CANADIAN OIL & GAS

SECTOR REPORT
Beyond E&P Reserves:
What Annual Disclosures Tell Us About Value

Average
Veritas Market Float Shares
Daily
Company Rating Current Price Intrinsic Yield Cap Outstanding
Volume
Value (millions) (million shrs)
(30 days)

ARC Resources, Ltd (ARX) Buy C$18.99 C$25.00 3.2% 6,713 1,100.0 353.5

Bonavista Energy Corp (BNP) Buy C$3.35 C$10.00 1.2% 842 819.1 251.3

Baytex Energy Corp (BTE) Buy C$4.48 / US$3.33 C$11.50 0.0% 1,049 4,060.0 234.2

Crescent Point Energy Corp (CPG) Buy C$14.31 / US$10.69 C$22.50 2.5% 7,794 2,760.0 544.6

Enerplus Corp (ERF) Buy C$10.66 / US$7.96 C$17.50 1.1% 2,569 1,030.0 241.0

Peyto Exploration & Dev. Corp. (PEY) Buy C$27.59 C$31.50 4.8% 4,549 715.6 164.9

Vermilion Energy Inc (VET) Buy C$49.80 / US$37.21 C$60.00 5.2% 5,911 341.0 118.7

Encana Corp (ECA) Sell C$15.61 / US$11.64 US$9.25 0.5% 11,326 11,690.0 973.0

Energy

Nima Billou, MBA, CFA

nbillou@veritascorp.com
Jeff Craig, CPA, CA
jcraig@veritascorp.com

Veritas Investment Research Corporation owns the copyright in this report. This report may not be reproduced in whole or in part without Veritas’ express prior
written consent. Any such breach of this copyright is contrary to ss. 27(1), 34, 35 and 42 of the Copyright Act, R.S.C. 1985, c. C-42 and will be liable for
damages.
Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

BEYOND E&P RESERVES: WHAT ANNUAL DISCLOSURES TELL US ABOUT VALUE

Oil and gas investors have no doubt seen examples of company’s calculating Net Asset Values (NAV) based on
their reserves and balance sheet items. Typically, asset values are limited to the Future Net Revenues (FNR)
associated with proved and probable (2P) reserves disclosed in the annual information form (AIF) plus undeveloped
land and working capital.

We note however, that companies rarely trade at these NAV values, but instead transact at a steep premium to
2P NAVs as the market also values assets outside the 2P definition and each company’s ability to ‘discover’ new
reserves. More recently, however, we find that a number of companies are trading at a discount to 2P NAV, which
typically signals a deep value opportunity (in the absence of near-term a liquidity problem). Most notably, we find
that Crescent Point, Baytex and Bonavista now trade at a discount to NAV. Given that we each company’s near-
term liquidity as stable to improving, the situation signals a significant buying opportunity. These three companies
share similar attributes: 1) their key plays have not changed materially over the last several years; 2) they have
significant experience in drilling these plays, making 2P a good proxy for long-term value; 3) their volumes can be
held flat even in a low commodity price environment.

At the other end of the spectrum, we find a number of companies trading at a significant premium to their NAV
value, including Vermilion, ARC Resources, Enerplus and Peyto. In these cases, the market reflects the companies
continued ability to grow reserves and associated NAV value. In many cases, the companies also disclose
contingent and/or prospective resources that represent future possible additions to reserves (for definitions please
refer to our Appendix).

Lastly, we highlight Encana as an example of the many moving parts affecting NAV value. In our view, Encana’s
jump in NAV value is less likely to recur, as it was driven by strategic asset sales, a redrawing of drilling plans and
falling costs which the company signals may now be bottoming.

At our long run pricing of US$65 for WTI oil and US$3.75 for NYMEX gas, we maintain our Buy recommendations on
ARC Resources ($25.00), Bonavista ($10.00), Baytex ($11.50), Enerplus ($17.50), Crescent Point ($22.50), Peyto
($31.50) and Vermilion ($60.00) and our Sell recommendation on Encana (US$9.25)

(All figures in Canadian dollars unless otherwise noted.)

Highlights from our report:

 Look at NAV before you buy: For many investors, NAV calculations stop at 2P reserves, however companies
often have material contingent resources with a consistent track record of converting into 2P reserves with
time and drilling activity. We recommend evaluating each company’s contingent and prospective
resources to gain the full picture, especially when the company is trading at NAV premium. (See Figure 1)

 Based on our NAV calculations which include capitalized G&A, a number of companies are at a steep
discount: We present our NAVs for each of the E&P’s in our coverage universe, illustrating price-to-NAV
premiums and year-over-year growth. We find significant value in discounted names like Crescent Point
and Bonavista which should be trading at far higher than their wind-down NAV values. (See Figure 1)

 NAV growth has more working parts than just volumes and pricing: Even though price assumptions fell in
2016, on the whole E&Ps grew their NAVs significantly on the year. Looking at Encana, we illustrate how
management decisions can affect NAV growth, even over a single year. (See Figures 2, 3 and 4)

 2016 NAVs grew despite falling forecast commodity prices: NAV growth was positive in 2016 despite
declines in forecast commodity prices of ~-5% for US$WTI and between ~3.5% to 5.0% for C$ AECO per
thousand cubic feet. With more realistic pricing, we see 2P NAVs as an even better proxy for fundamental
asset values. (See Figure 4)

Nima Billou|nbillou@veritascorp.com | 416-866-8783 1

 Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

USING 2P NAV DISCOUNTS AS A DEEP VALUE SCREEN

Below, we present calculated Net Asset Values (NAV’s) for eight companies in our coverage based on the
disclosed Future Net Revenues associated with their reserves and resources (for resource definitions, adjusted to
PV9 which approximates our cost of equity, and deducting net debt, working capital deficits (excluding derivatives)
and capitalized G&A expenses. The NAVs are roughly equivalent to the ‘wind-down’ value of simply producing
out the reported reserves and resources and do not attribute value to future 2P bookings or exploration potential.

Interestingly, the market price rarely reflects this wind-down value exactly. As illustrated in Figure 1, Bonavista trades
at 60% of 2P value, while the market has extended Vermilion Energy’s price well into the company’s contingent
and prospective resources. Vermilion trades at 240% of the company’s 2P reserve NAV and 137% of its full resource
value including contingent and prospective resources. Vermilion is adding reserves at one of the fastest rates in
the sector, however.

Figure 1
Canadian E&P Premium/Discount to NAV

Current Share Price P/2P NAV P/2P NAV + CR P/2P NAV + CR + PR

Vermilion 49.80 240% 159% 144%
ARC Resources 18.99 195% 142% 97%
Enerplus 10.66 180% 110% N/D
Peyto 27.59 150% N/D N/D
Encana (USD) 11.64 121% 102% 76%
Crescent Point 14.31 86% N/D N/D
Baytex 4.48 83% 56% 51%
Bonavista 3.35 60% N/D N/D
Average 137% 108% 96%

Source: Company filings, Veritas

In our view, looking at NAVs is a deep value screen rather than an exercise in determining who is expensive. If
companies trade below NAV, it is generally a buying opportunity, absent immediate liquidity concerns – which we
currently see as the case for Crescent Point, Baytex and Bonavista, which are all trading at a discount to NAV.

The companies at the top of the list (Vermilion, ARC, Enerplus) also carry our Buy recommendations, but less
because of current NAVs and more because of their attractive near-term free cash flows and consistent record of
growing 2P reserves and NAVs over time.

BREAKING OUT 2016 SOURCES OF NAV GROWTH

In Figure 2 (next page), we look at the change in NAV from 2015 to 2016 for NAVs based on 2P reserves and 2P plus
resources. Notably, despite a collapse in commodity prices and reduction in future price forecasts, for most
companies 2016 was a year of strong NAV growth overall. Leading the pack on NAV growth were Encana, ARC
and Peyto, all of which trade at premiums to NAV:

Nima Billou|nbillou@veritascorp.com | 416-866-8783 2

 Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

Figure 2
Canadian E&P Change in NAV based on Future Net Revenues (FNR)
Amounts in Canadian dollars except as noted

NAV-2P NAV- 2P + Contingent + Prospective

2016 2015 % Change 2016 2015 Change

Encana (U.S.) 9.59 5.09 88% 15.42 11.55 33%

Peyto 18.72 14.46 29% 18.72 14.46 29%
ARC Resources 9.74 8.02 21% 19.62 15.98 23%
Bonavista 5.60 4.91 14% 5.60 4.91 14%
Vermilion 20.76 18.97 9% 34.62 26.86 29%
Baytex 5.40 5.54 -2% 8.83 9.27 -5%
Crescent Point 16.64 16.68 0% 16.64 16.91 -2%
Enerplus 5.91 5.90 0% 9.66 11.65 -17%
Average 20% 13%

Source: Company filings, Veritas

Encana stands out for its prolific 88% 2P NAV growth last year, which requires a closer look. We see three factors at
work:

1. Asset sales directed to debt reduction: Encana divested 261.7 million boe for US$1.26 billion which
contributed to debt reduction. Assuming these boe had the same value as Encana’s opening 2015 FNR
per boe (~US$4.02 per boe), net debt reduction amounted to ~$0.22 per share (US$1.26 billion less US$4.00
x 261.7 MM boe).

2. Equity issuance directed to reduce debt: Net proceeds of equity issuance amounted to US$1.13 billion on
the year with 123.05 million shares issued at US$9.35 per share (i.e. well above opening NAV). If this offering
were assumed to occur on January 1st, 2016, we note that Encana’s NAV would have increased by
~US$0.52 per share.

3. Moving up its drilling plans: We note that Encana’s undiscounted FNR rose by US$3.82 billion on the year,
but its PV10 FNR rose by US$3.01 billion – virtually the same amount. Comparing PV10 values to PV0 values,
we estimate the average 2P discount period was 10.6 years in 2015 and 9.1 years in 2016. We suspect that
the lower discount rate reflects more aggressive drilling plans in the U.S. and the sale of assets with longer
development horizons. We estimate the reduced discounting period added ~US$1.44 per share to our 2016
NAV value.

4. Lowering its cost assumptions: We note that 2P revenues net of royalties and taxes rose by US$1.2 billion
but costs fell by US$4.0 billion (undiscounted). The cost savings, assuming the same PV10 to undiscounted
ratio, explain another US$1.73 increase in 2016 NAV, while the revenue line increases added US$0.52.

The key takeaway from our Encana illustration is that there are many moving parts in the NAV calculation that
depend on management’s strategies to deliver shareholder value. Management’s acquisitions & divestitures,
capital management and drilling plans all play a role. In Encana’s case, the company radically redrew its NAV
through divestitures, debt reduction and strategy changes; our concern is with whether the company can achieve
the goals implied by their current NAV assumptions, particular net corporate growth after redeploying most of their
spending to Permian drilling.

As a final note, we highlight that the 2016 NAV lift was in part due to net 2P boe additions, and not due to forecast
commodity assumptions, which we consider in the next section.

Nima Billou|nbillou@veritascorp.com | 416-866-8783 3

 Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

HOW RESERVE VOLUMES AND PRICING AFFECTED NAVS

The two most common factors contributing to NAVs are volumes and pricing. In Figure 3 we show that, perhaps
not surprisingly, the change in contingent and prospective resource barrels is strongly correlated with the change
in reported 2P reserves. As companies explore for and drill new plays, the likelihood of development on both
contingent resources AND 2P reserves increases.

Figure 3
Canadian E&P Asset Growth - 2P and Contingent Resources
Amounts in millions of barrels of oil equivalent except as noted

2P Reserves 2P + Contingent + Prospective Reserves

2016 2015 % Change 2016 2015 Change

Vermilion 290 261 11% 614 422* 46%

Peyto 655 590 11% 655 590 11%
ARC Resources 737 687 7% 3,867 3,320 16%
Encana 2,038 1,964 4% 6,660 6,787 -2%
Bonavista 414 406 2% 414 406 2%
Crescent Point 958 936 2% 958 936 2%
Baytex 406 417 -3% 1,632 1,672 -2%
Enerplus 368 406 -9% 617 673 -8%
Average 3% 8%

*VET did not disclose contingent resources (development on hold) or prospective resources in its 2015 AIF
Source: Company filings, Veritas

Changing commodity assumptions are intertwined with reserve growth in setting FNRs. We note that, at the end of
2016, companies have converged on much more realistic oil price assumptions for 2017-2019, which we illustrate
below:

Figure 4
Canadian E&P Premium/Discount to NAV

Average 2017-2019
Average 2017-2019 AECO $ per mcf
Edmonton Light Sweet per barrel

% Increase % Increase
12/31/2016 12/31/2015 12/31/2016 12/31/2015
(Decrease) (Decrease)
ARC Resources 72.20 68.71 5.1% 3.28 3.45 -5.0%
Bonavista Energy 72.20 68.71 5.1% 3.28 3.45 -5.0%
Baytex Energy 72.78 78.95 -7.8% 3.31 3.43 -3.4%
Crescent Point 72.78 78.95 -7.8% 3.31 3.43 -3.4%
Peyto Exploration 72.23 75.93 -4.9% 3.49 3.63 -3.7%
Vermilion Energy 72.20 68.71 5.1% 3.28 3.45 -5.0%

Average 2017-2019 US$WTI Average 2017-2019 NYMEX US$ per mmbtu

Encana 60.46 63.22 -4.4% 3.41 3.38 0.7%

Enerplus 58.70 61.67 -4.8% 3.32 3.35 -1.0%

Source: Company filings, Veritas

Nima Billou|nbillou@veritascorp.com | 416-866-8783 4

Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

Consensus estimates now average ~$72 for Edmonton Sweet and ~$60 for WTI. For the natural gas market, AECO
assumptions have fallen across the board, even as NYMEX has remained flat, the result of widening NYMEX-AECO
differentials. We attribute the growing differentials to regional oversupply in western Canada as well as competition
from U.S. natural gas such as the Marcellus region.

Our remaining commentary updates our views on individual companies, highlighting our views on each company’s
strategy and what we now know from annual reporting. All forecasts assume long-run pricing of US$65 for WTI and
$3.55 for AECO gas in 2020.

MAINTAIN BUY: BONAVISTA, ENERPLUS, ARC, VERMILION, CRESCENT POINT & PEYTO
ARC Resources set to drive long term value with reserve additions from aggressive Montney spending: In our view,
ARC is a great opportunity for investors to get exposure to the highly productive and fast growing Montney region.
Management has outlined a plan to spend total capex of $750 million in 2017, up from $453 in 2016, including $625
million on its vast Montney inventory. ARC has proved time and again its ability to grow production and reserves,
which accounts for its premium FFO and NAV multiples of 11.4x and 2.0x, respectively. Although the company has
given 2017 guidance for 2% annual production growth, we see the resulting cash deficit of ~$165 million at US$55
WTI, after dividends, as within current resources and liquidity. ARC’s Q4 2017 exit to exit growth of 11% and strong
balance sheet set the company up for long term gains, however we caution that our valuation of $25.00 per share
is quite dependent on the outer years and our assumption of a return to US$65 WTI and $3.55 AECO gas in 2020.

Baytex’ 2P NAV discount offers deep value and downside protection: Baytex management has signaled it expects
2017 production declines on the back of a modest capex budget ($300 to $350 million) as the company waits for
higher WTI prices and narrower Canadian heavy oil discounts. With long dated debt maturities (2021+) and a 2017
hedge book covering 50%+ of production, Baytex can remain in a holding pattern in the short term without
significant loss of value. Despite being a higher risk name due to leverage and limited flexibility at low oil prices,
current NAV discounts give investors downside protection. We maintain our Buy recommendation, with an updated
intrinsic value of $11.50 per share.

Bonavista attractive due to tightly focused play opportunities: After a Q4 2016 asset exchange that increased the
company’s exposure to higher productivity liquids-rich gas, management indicates that Bonavista now has 90%+
of funds from operation in the Deep Basin and West Central regions of Alberta. We see the increased focused on
a smaller set of highly productive plays as the right strategy for this smaller cap E&P. Bonavista has laid out impressive
growth plans for 2017-2019, targeting 10% CAGR internally funded with cash flows. A strong 2017 hedging program
(75% of natural gas at C$3.32/mcf) gives us confidence that Bonavista can weather the current weakness in
commodity prices. We maintain our view that Bonavista’s payout ratio should fall below 50% if AECO trades above
C$3.00. Our intrinsic value remains unchanged at $10.00 per share.

Crescent Point is well positioned for volatile markets due to flexible capital spending: Crescent Point provides
investors with a direct way to play the current volatility in crude oil prices, while offering downside protection due
to hedging. If WTI continues to retreat, the company’s flexible budget can scale back growth and its ample liquidity
can fund resulting shortfalls. In contrast, company has an extensive inventory of economic drilling opportunities and
an 89% liquids weighting to take advantage of any rally in WTI prices. We have updated our intrinsic value to $22.50
per share.

Enerplus tightly focusing its growth spending on core Bakken properties: 2017 is a transition year for Enerplus as it
refocuses its strategy on its productive and 90% liquids-weighted U.S. Bakken play. A March 2017 divestment of
Canadian natural gas assets for $60 million is in line with the plan and helps fund a 2017 capex budget of $450
million. We forecast a manageable cash shortfall in 2017 as outlays are second-half weighted and include spending
on facilities that further Enerplus’ goal of 30% CAGR liquids growth through 2019. A recent ‘shelf’ filing for $2 billion
in preferred or common equity offers liquidity should Bakken or other opportunities arise. We have revised our
intrinsic value to $17.50 per share.

Peyto provides investors a Montney alternative with long term growth and capital discipline: Although an
aggressive spender, we view Peyto as set to deliver 10%+ production growth while funding its $575 million capex
budget from cash flows. Peyto is likely to run a cash deficit after its dividend obligation in 2017, however a strong
hedging program ensures potential shortfalls will be manageable. Peyto provides investors exposure to Canadian
natural gas with diversification from the red-hot Montney play, which we view as at risk of cost inflation and/or
supply constraints. We have revised our intrinsic value to $32.50 per share.

Nima Billou|nbillou@veritascorp.com | 416-866-8783 5

Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

Vermilion’s international strategy targeting orphan assets continues to deliver: Vermilion has been able to execute
on a vast array of international opportunities and remains the only E&P in our coverage universe able to fully fund
its capex and dividends in 2017 at US$55 WTI. With its Ireland Corrib natural gas project running at full steam and no
longer requiring significant capex, Vermillion will generate FFO of ~$400 million against capex of $295 million in 2017.
Vermilion’s balance of production growth and dividend sustainability warrant its premium valuation of 10x FFO and
2.2x NAV. We have lowered our target price to $60.00 per share but maintain our BUY recommendation.

MAINTAIN SELL: ENCANA

Permian growth targets could be challenged by cost inflation as the play heats up; we see near term cash deficits:
Encana has communicated that 2017 will be a transitional year as the company runs material cash deficits of more
than $660 million, as it relegates three of its ‘core four’ plays to the sidelines and focuses on the Permian. Encana’s
emphasis on North America’s hottest play brings with it the risk of service cost inflation and potential challenges in
securing energy services. We believe investors should factor in execution risk when evaluating the company’s
guidance. We have decreased our intrinsic value to US$9.25 but maintain our SELL recommendation based on our
concerns.

Nima Billou|nbillou@veritascorp.com | 416-866-8783 6

Beyond E&P Reserves: What Annual Disclosures Tell Us About Value April 4, 2017

APPENDIX
CONTINGENT AND PROSPECTIVE RESOURCE DEFINITIONS
Determining an E&P’s net asset value (NAV) using future net revenue of 2P reserves provides investors with a
concrete foundation for asset values. We note however, that for some E&P`s the NAV of 2P reserves can be
misleading as it can understate the value of a company with material resources that are not captured in reported
proved and probable reserves.

A simple way of looking at these resource estimates is that they begin as prospective resources – which are simply
volumetric estimates – and are reduced in scope based on requirements to achieve their production
(contingencies). These contingencies may involve technological feasibility, economic viability, the development
of a drilling plan, regulatory approval, etc. We highlight the following definitions from the Canadian Oil and Gas
Evaluator’s Handbook (COGEH):

Prospective resources (PR) are defined in COGEH as: “… those quantities of petroleum estimated, as of a given
date, to be potentially recoverable from undiscovered accumulations by application of future development
projects. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there
is no certainty that it will be commercially viable to produce any portion of the prospective resources or that any
portion of the volumes currently classified as prospective resources will be produced.” In other words, prospective
barrels may exist but investors must apply considerable judgement to determine if any value should be attributed.

Contingent resources (CR) are defined in COGEH as: “… those quantities of petroleum estimated, as of a given
date, to be potentially recoverable from known accumulations using established technology or technology under
development, but which are not currently considered to be commercially recoverable due to one or more
contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory
matters or a lack of markets.”

For investors, contingent resources are only as good as the probability of removing the contingencies. In some
cases, investors may judge that the contingencies are strictly technical and likely to be removed as a company
moves forward towards production. As a result, some companies may further divide contingent resources (CR) into
sub-categories. In ARC’s case, it shows:

Contingent resources with development pending: These resources have” ... a high chance of development and
the resolution of final conditions for development are being actively pursued”; ARC provides a discounted FNR
value for the future potential of these resources.

Contingent resources where development is unclarified: Here, the resource “requires further appraisal to clarify the
potential for development and has been assigned a lower chance of development until contingencies can be
clearly defined.” ARC only provides estimated volumes for this category of resources.

While many market commentators become too focused on 2P reserves, we believe it is important for investors to
remember the value of contingent and prospective resources. The caveat to this however, is that unlike 2P reserves,
not all contingent resources are created equal. It is important to review E&P’s on a case by case basis when
assessing the value of these alternative reserves.

Nima Billou|nbillou@veritascorp.com | 416-866-8783 7

 Head of Research

Sam La Bell, MA, MBA, CFA

slabell@veritascorp.com

Accounting & Special Situations Group

Anthony Scilipoti, FCPA, FCA, CPA (Illinois)

ascilipoti@veritascorp.com

Dimitry Khmelnitsky, CPA, CA Howard Leung, CPA, CA, CFA

dkhmelnitsky@veritascorp.com hleung@veritascorp.com

Taso Georgopoulos, CPA, CA, CFA Nigel D’Souza, B.Sc., CFA

tgeorgopoulos@veritascorp.com ndsouza@veritascorp.com

Frank Meng, CPA, CA, CFA

fmeng@veritascorp.com

Consumer Staples & Consumer Discretionary Energy

Kathleen Wong, CPA, CA, CFA Nima Billou, MBA, CFA

kwong@veritascorp.com nbillou@veritascorp.com

Ahmad Faheem, Honours BBA Jeffrey Craig, CPA, CA, Honours BBA
afaheem@veritascorp.com jcraig@veritascorp.com

Industrials & Utilities Telecommunications & Technology

Darryl McCoubrey, CPA, CA Desmond Lau, CPA, CA, CFA

dmccoubrey@veritascorp.com dlau@veritascorp.com

Nasiba Akhmedova, MBA Anthony Meyer, BA (Hons), CFA

nakhmedova@veritascorp.com ameyer@veritascorp.com

Dan Fong, BA, HBA, CFA

dfong@veritascorp.com

Financial Services Precious Metals

Mike Rizvanovic, CFA Sid Subramani, P. Eng, MBA

mrizvanovic@veritascorp.com ssubramani@veritascorp.com

Brent Levenstadt, Honours BA

blevenstadt@veritascorp.com

Client Support & Business Development

Stuart Rolfe, B.A.Sc. Tom Jarmai, B.S.,B.BA, FCSI

srolfe@veritascorp.com tjarmai@veritascorp.com
Mickey MacDonald
mmacdonald@veritascorp.com

Veritas Investment Research Corporation ("Veritas") its directors, officers, employees and their immediate families are prohibited from trading any position in the securities profiled in a
report thirty (30) days before and five (5) days after the publication date where the report involves coverage initiation or a change of opinion. Veritas has not offered any consulting,
financial advisory, investment banking or underwriting services to the companies mentioned. Veritas does not accept research fees from the companies profiled herein. The
information contained in this report has been obtained from sources believed reliable however the accuracy and/or completeness of the information is not guaranteed by Veritas, nor
does Veritas assume any responsibility or liability whatsoever. All opinions expressed are subject to change without notification. This report is for information purposes only and does not
constitute and should in no way be construed as a solicitation to buy or sell any of the securities mentioned herein. The contents of this research report do not, in any way, purport to
include any manner of legal advice or opinion. The intention of this report is to provide a forthright discussion of business, accounting and financial reporting issues, as well as generally
accepted accounting principles and the limits of their usefulness to investors. As such, please do not infer from this report that the accounting policies of any company mentioned
herein are not allowed within the broad range of generally accepted accounting principles, or that the policies employed by that company were not approved by its auditor(s). This
report may not be reproduced in whole or in part without the express prior written consent of Veritas. Veritas is a 100% employee owned firm. ©2017 Veritas Investment Research
Corporation.

Veritas Investment Research, 100 Wellington Street West, TD West Tower, Suite 3110, P.O. Box 80, Toronto, Ontario , M5K 1E7, 416-866-8783, www.veritascorp.com
 Our Vision
To seek the truth from the facts.

Our Mission
To be our clients' trusted source
of independent knowledge and advice.

Veritas Investment Research Corporation

TD West Tower
100 Wellington Street West Suite 3110, PO Box 80
Toronto, Ontario, Canada M5K 1E7

416.866.8783
www.veritascorp.com