National Bank Q2 Oil Preview

NBCFM Research | Industry Note
July 17, 2022
INDUSTRY RATING Oil, Gas and Consumable Fuels

Oil, Gas & Consumable Fuels: Q2/22 Preview and Commodity Update
Overweight
(NBF Economics & Strategy Group)
As with each quarter, we have marked-to-market our Q2/22 commodity prices and have calibrated
our commodity price assumptions through 2023e, appreciating that volatility is likely to persist
as the broader market grapples with recession fears, surging inflation, SPR releases, renewed
COVID-19 outbreaks and geopolitical conflicts. However, we believe the underlying supply/
demand backdrop supports a relatively healthy outlook, evidenced by the backwardated time
spreads. At the same time, we see persistent volatility only serving to further limit a meaningful
supply response due to conservative capital allocation decisions. Taking stock of these recent
developments, we have made only modest tweaks to our price assumptions with the intention of
reinforcing our unchanged bullish sentiment (refer to Exhibits 1 & 2 within).
Q2/22 Reporting Themes

Relative to consensus Q2/22 CFPS estimates, we highlight IMO (+11%), HWX (+9%), WCP (+8%)
and PEY (+8%) as names we are above, while any underperformance relative to consensus
to note on the quarter will largely be attributable to transitory operational issues relating to
third-party throughput restrictions, for which we note the likes of NVA, POU, PIPE and TVE
(each largely communicated to the street).
Our Cheat Sheet (Exhibit 5 within) contains our comparative CFPS and production estimates for the
quarter and reporting dates.
Inflation Persisting — With inflation exceeding original expectations through 2022, we expect
management teams will again hint towards higher budgets for the year — towards the top end
of guidance, and in some cases, above. Our current forecast implies that 2022e spending is 15%
higher than last year, which could be replicated into 2023e as well (our current 2023e spending is
5-10% higher).
Downstream Poised to Outperform — With fuel demand returning to pre-pandemic levels, crack
spreads hit record highs during the quarter, highlighted by prompt NYMEX 3-2-1 eclipsing the US
$60/bbl mark in early June and averaging ~US$49/bbl over the quarter (+88% Q/Q & and +132% Y/
Y), which should translate to strong margin capture in most cases.
Return of Capital — The pace of share buybacks continued to accelerate through the quarter, with
our coverage group repurchasing ~$8.9 bln shares (+175% Q/Q), or ~229 mln shares. We highlight
Research: NBCFM Energy
AAV, BTE, MEG, NVA and TVE which all commenced buybacks during the quarter in light of debt
● ResearchEnergy@nbc.ca
targets being reached.
Analyst Travis Wood
(403) 290-5102 ● travis.wood@nbc.ca
Analyst Dan Payne, CFA

(403) 290-5441 ● dan.payne@nbc.ca
Associate Logan Fisher

(403) 441-0933 ● logan.fisher@nbc.ca
Associate Nick Stevenson

(403) 441-0928 ● nick.stevenson@nbc.ca
Associate Jacob Swan

(403) 290-5445 ● jacob.swan@nbc.ca
Associate Trevor Martensson For required disclosures, please refer to the end of the document.
(403) 290-5624 ● trevor.martensson@nbc.ca
Industry Note
NBCFM Research | July 17, 2022
Commodity Price Deck Update

We have marked to market our Q2/22 commodity prices in advance of reporting season and have made only
modest tweaks to our price assumptions to reinforce our unchanged bullish sentiment. Our changes can be
referenced below in Exhibit 1.
Exhibit 1: NBF Commodity Price Assumptions
2022 2023 2024+

Previous Revised %Δ Previous Revised %Δ Previous Revised %Δ
Crude Oil
WTI (US$/bbl) 106.25 100.00 -6% 93.75 90.00 -4% 85.00 85.00 0%
Edmonton Par Differential (US$/Bbl) -1.84 -1.84 0% -4.00 -4.00 0% -4.50 -4.50 0%
Edmonton Par (C$/bbl) 132.00 124.25 -6% 112.25 107.50 -4% 103.25 103.25 0%
Edmonton C5+ Differential ($US/bbl) -1.46 -1.46 0% -3.00 -3.00 0% -2.50 -2.50 0%
Edmonton Condensate ($C/bbl) 132.50 124.75 -6% 113.50 108.75 -4% 105.75 105.75 0%
WCS Differential (US$/Bbl) -14.30 -14.30 0% -15.00 -15.00 0% -13.00 -13.00 0%
WCS (C$/Bbl) 116.25 108.50 -7% 98.50 93.75 -5% 92.25 92.25 0%
Brent (US$/Bbl) 109.25 103.00 -6% 98.50 94.75 -4% 90.00 90.00 0%
NYMEX 3-2-1 Crack Spread (US$/Bbl) 37.75 37.50 -1% 28.00 28.00 0% 25.00 25.00 0%
Natural Gas - - - -
NYMEX (US$/mcf) 6.75 6.00 -11% 5.80 5.00 -14% 5.00 5.00 0%
AECO - NYMEX Basis (US$/mcf) -1.70 -1.70 0% -1.35 -1.20 -11% -1.25 -1.25 0%
AECO (C$/mcf) 6.35 5.45 -14% 5.50 4.75 -14% 4.80 4.80 0%
NBP (C$/mcf) 30.85 31.00 0% 26.25 26.25 0% 20.00 20.00 0%
Currency - -
USD Exchange Rate ($C/$US) 0.79 0.79 0% 0.80 0.80 0% 0.78 0.78 0%
Source: NBF, Bloomberg
Exhibit 2: NBF Commodity Price Assumptions vs. Strip Pricing

Crude Oil: NBF Price Deck vs. Actual Strip Pricing Natural Gas: NBF Price Deck vs. Actual Strip Pricing
WTI Fwd Strip WTI NBF WCS FWD Strip WCS NBF NYMEX Fwd Strip NYMEX NBF AECO Fwd Strip AECO NBF
$150 $9.50
WTI (US$/bbl); WCS (C$/bbl)
$8.50
NYMEX (US$/mcf); AECO
$130
$7.50
$110
$6.50
(C$/mcf)
$90 $5.50
$70 $4.50
$3.50
$50
$2.50
$30 $1.50
$10 $0.50
2020 2021 2022 2023 2024 2025 2020 2021 2022 2023 2024 2025
NBF Price Deck Strip Pricing as of July 14, 2022

2020 2021 2022 2023 2024+ 2020 2021 2022 2023 2024+
WTI US$/bbl $39.25 $68.00 $100.00 $90.00 $85.00 WTI US$/bbl $39.30 $68.00 $96.79 $80.86 $75.10
Brent US$/bbl $43.25 $70.75 $103.00 $94.75 $90.00 Brent US$/bbl $43.19 $70.83 $101.46 $85.50 $79.71
Edm. Par Diff. US$/bbl -$5.40 -$3.80 -$1.84 -$4.00 -$4.50 Edm. Par Diff. US$/bbl -$5.39 -$3.79 -$2.69 -$4.36 -$5.57
Edm. C5+ Diff US$/bbl -$1.60 $0.40 -$1.46 -$3.00 -$2.50 Edm. C5+ Diff US$/bbl -$1.64 $0.43 -$2.18 -$3.52 -$2.25
WCS Diff. US$/bbl -$12.70 -$13.30 -$14.30 -$15.00 -$13.00 WCS Diff. US$/bbl -$12.71 -$13.30 -$16.92 -$16.54 -$16.73
NYMEX Gas US$/mcf $2.15 $3.70 $6.00 $5.00 $5.00 NYMEX Gas US$/mcf $2.13 $3.72 $6.35 $5.31 $4.69
AECO C$/mcf $2.25 $3.65 $5.45 $4.75 $4.80 AECO C$/mcf $2.24 $3.64 $5.67 $5.04 $4.50
AECO Basis US$/mcf -$0.45 -$0.80 -$1.70 -$1.20 -$1.25 AECO Basis US$/mcf -$0.45 -$0.82 -$1.91 -$1.32 -$1.17
FX USD/CAD $0.75 $0.80 $0.79 $0.80 $0.78 FX USD/CAD $0.75 $0.80 $0.78 $0.77 $0.77
Today's E&Ps, which, after years of laser-like focus on optimizing the underlying business through debt
reduction, cost efficiencies, strategic acquisitions to harness synergies, and capital discipline, are well-
equipped to weather the ongoing commodity price volatility. Unlike early 2020, and previous selloff periods,
further price decreases will not necessitate capex reductions and/or dividend cuts, as management teams
have taken a measured approach to base dividend growth, ensuring to stress-test the business. Unfortunately,
2
Industry Note
and despite this, the drawdown in E&P equities (-32%) has significantly outpaced the drawdown in WTI (–21%)
from 52W highs, further illustrating the ongoing disconnect between equities and the physical market.
Exhibit 3: E&P Equity Drawdown vs. WTI Drawdown
0% 5.0x
-5% 4.5x
Drawdown Off 52-Week high (%)
-10% 4.0x
-15% 3.5x
2023e EV/DACF (x)

-20% 3.0x
-25% 2.5x
-30% 2.0x
-35% 1.5x
-40% 1.0x
Sr. Avg. -29%, 3.3x Large/Mid Avg. -32%, 2.2x Small Avg. -36%, 1.6x
-45% 0.5x
Average Drawdown (%) Average 2023e EV/DACF 2023e EV/DACF
-50% 0.0x
Note: Strip and share pricing as of close on 2022-07-15, WTI is represented by the prompt month futures contract, Large/Mid Avg. EV/DACF excludes Royalty Co's
Note: Strip and share pricing as of close on 2022-07-15; WTI represented by the prompt month futures contract; Large/Mid Avg. EV/DACF excl. Roy Co's
Source: NBF, Company Reports, Refinitiv
Q2/22 Reporting Themes

We are anticipating an uneventful Q2/22 reporting season as companies stick to the status quo of further
deleveraging and providing incremental shareholder returns. We expect to see sequential and year-over-year
increases in cash flow across the majority of our coverage on account of strong benchmark pricing for both WTI
(~US$108/bbl; +15% Q/Q) and AECO (~C$7.20/mcf; +53% Q/Q). We would also point toward the integrated
names (CVE, IMO, SU) which we believe could surprise to the upside, despite a busy quarter of planned
maintenance activities, given the robust crack spreads (NYMEX 3-2-1 ~US$49/bbl; +88% Q/Q) leading to
stronger than expected margin capture in their respective refining segments.
Exhibit 4: Q/Q & Y/Y CFPS Comparison

CFPS Q2/21 CFPS Q1/22 CFPS Q2/22 Q/Q %
$5.00 160%
$4.50 140%
$4.00 120%
$3.50 100%
Q/Q ∆CFPS (%)
CFPS ($/sh)
$3.00 80%
$2.50 60%
$2.00 40%
$1.50 20%
$1.00 0%
$0.50 -20%
$0.00 -40%
IMO CNQ OVV TOU SU VET POU MEG ARX CVE PEY SDE ERF KEC WCP CPG SGY AAV NVA TPZ BTE PSK FRU YGR CR KEL PIPE TVE HWX LOU
Source: NBF, Company Reports
Our Cheat Sheet (see Exhibit 5) contains our comparative CFPS and production estimates for the quarter and
reporting dates. Relative to consensus Q2/22 CFPS estimates, we highlight IMO (+11%), HWX (+9%), WCP
(+8%), and PEY (+8%) as names we are above, while any underperformance relative to consensus to note
on the quarter will largely be attributable to transitory operational issues relating to third-party
3
Industry Note
throughput restrictions, for which we note the likes of NVA, POU, PIPE and TVE (each largely
communicated to the street).
Exhibit 5: Cheat Sheet – NBF vs. Consensus Comparative Estimates and Reporting Dates
Reporting CFPS (Q2/22) mboe/d (Q2/22) Reporting CFPS (Q2/22) mboe/d (Q2/22)
Date NBF Cons. %Δ NBF Cons. %Δ Date NBF Cons. %Δ NBF Cons. %Δ
PSK 18-Jul (A) $0.60 $0.56 7% 23.8 24.2 -2% POU 3-Aug (B) $1.74 $1.89 -8% 77.5 83.7 -7%
TPZ 26-Jul (A) $0.63 $0.65 -3% 16.0 16.6 -3% CNQ 4-Aug (B) $4.48 $4.26 5% 1,194.6 1,206.6 -1%
CPG 27-Jul (B) $0.97 $0.99 -2% 127.1 127.0 0% ERF* 4-Aug (A) $1.20 $1.14 5% 93.0 93.7 -1%
BTE 27-Jul (A) $0.61 $0.57 7% 82.5 82.2 0% SU 4-Aug (A) $3.53 $3.55 -1% 724.7 734.4 -1%
SGY 27-Jul (A) $0.91 $0.91 0% 21.0 21.5 -2% HWX 4-Aug (A) $0.34 $0.31 9% 11.7 11.5 2%
TOU 27-Jul (A) $3.55 $3.96 -10% 500.0 502.5 0% KEL 4-Aug (B) $0.45 $0.47 -3% 27.0 28.9 -6%
ARX 28-Jul (A) $1.55 $1.50 3% 334.0 337.2 -1% LOU 4-Aug (A) $0.05 $0.06 -12% 10.8 10.8 0%
CVE 28-Jul (B) $1.55 $1.60 -3% 756.6 767.5 -1% CR 8-Aug (A) $0.51 $0.53 -5% 32.0 32.1 0%
MEG 28-Jul (A) $1.56 $1.56 0% 67.0 73.8 -9% FRU 9-Aug (A) $0.59 $0.58 1% 14.0 14.2 -1%
WCP 28-Jul (B) $1.00 $0.93 8% 129.0 129.2 0% SDE 9-Aug (A) $1.22 $1.27 -3% 70.0 69.6 1%
AAV 28-Jul (A) $0.82 $0.79 3% 60.0 57.4 4% PEY 10-Aug (A) $1.53 $1.41 8% 103.9 104.9 -1%
TVE 28-Jul (A) $0.41 $0.44 -8% 43.5 45.9 -5% BIR 10-Aug (A) $0.99 $1.02 -2% 73.5 74.2 -1%
YGR 28-Jul (B) $0.55 $0.54 1% 10.5 11.1 -6% PIPE 10-Aug (B) $0.41 $0.41 0% 30.0 31.4 -4%
IMO 29-Jul (B) $4.52 $4.08 11% 409.0 412.4 -1% VET 11-Aug (A) $2.61 $2.62 0% 84.4 85.1 -1%
OVV* 3-Aug (A) $4.37 $4.53 -3% 485.8 494.2 -2% KEC 11-Aug (B) $1.11 $1.18 -6% 15.5 13.5 15%
NVA 3-Aug (B) $0.80 $0.81 0% 63.5 63.8 0%
Note: Consensus data from Bloomberg as of July 14, 2022. (B) = Before Market, (A) = After Market
*ERF & OVV CFPS estimates in USD
Source: NBF, Company Reports, Bloomberg
Inflation Persisting
To no surprise, inflation continues to grind higher, with the latest U.S. CPI print registering a 9.1% Y/Y
increase, above consensus forecasts, and the highest such increase since 1981. The energy sector accounted
for price increases in 2022e capex programs (~10-15%) and opex guidance for materials (i.e., drill pipe, line
pipe, casing), fuels (i.e., natural gas, diesel), chemicals, and labour. However, with inflation consistently
exceeding expectations, we expect management teams to begin hinting toward capex increases in both 2022e
(towards the top end of current guidance ranges, and in some cases, above) and 2023e as capital efficiencies
deteriorate. While the entire sector is exposed to these inflationary pressures, those with significant DCET
costs in active plays appear to be the most vulnerable. Meanwhile, those with oil sand assets are dealing with
markedly higher fuel costs across both mining and thermal operations.
Downstream Poised to Outperform

While there will be a large focus on the upstream this quarter given WTI averaged ~US$108/bbl (and WCS
averaging ~C$120/bbl), we wanted to specifically highlight what we expect to be an incredibly strong
downstream performance across our integrated names (CVE, IMO, SU), even though there were major
turnaround activities during the quarter. While we saw some lost throughput early on in Q2 related to these
outages, we also saw record utilizations once the assets were brought back up to full capacity as refineries ran
full out to take advantage of record refining cracks. Per Exhibit 6, with fuel demand returning to pre-
pandemic levels, crack spreads hit record highs during the quarter, highlighted by prompt NYMEX 3-2-1
4
Industry Note
eclipsing the US$60/bbl mark in early June and averaging ~US$49/bbl over the quarter (+88% Q/Q & and +132%
Y/Y), which should translate to strong margin capture.
Exhibit 6: 3-2-1 Crack Spreads Historical & Forward Pricing

NYMEX 321 Midcon 321 Gulf Coast 321 Chicago 321 NYMEX 321 (Fwd) NBF
$70
3-2-1 Crack Spreads (US$/bbl)
$60
$50
$40
$30
$20
Q2
$10
$0
20-Jan 20-Apr 20-Jul 20-Oct 21-Jan 21-Apr 21-Jul 21-Oct 22-Jan 22-Apr 22-Jul 22-Oct 23-Jan 23-Apr
Return of Capital
The pace of share buybacks continued to accelerate through the quarter, with our coverage group
repurchasing ~$8.9 bln shares (+175% Q/Q), or ~229 mln shares. We highlight AAV, BTE, MEG, NVA and TVE
which all commenced buybacks during the quarter in light of debt targets being reached.
Exhibit 7: NBF Coverage NCIB Progress

NCIB Progress Remaining
VET0% 07/06/2022 - 07/05/2023; 16.1 mln shares (10% O/S)
PSK
0% 05/26/2022 - 05/25/2023; 16.96 mln shares (10% O/S)
POU0% 06/30/2022 - 06/29/2023; 7.6 mln shares (10% O/S)
IMO0% 06/29/2022 - 06/28/2023; 31.8 mln shares (5% O/S)

TOU 1% 07/20/2021 - 07/19/2022; 14.9 mln shares (5% O/S)
WCP 3% 05/21/2022 - 05/20/2023; 58.3 mln shares (10% O/S)
TVE 6% 11/03/2021 - 11/02/2022; 20.4 mln shares (5% O/S)
NVA 14% 06/14/2022 - 06/13/2023; 18.2 mln shares (10% O/S)
CPG 15% 03/09/2022 - 03/08/2023; 57.3 mln shares (10% O/S)
MEG 16% 03/10/2022 - 03/09/2023; 27.2 mln shares (10% O/S)
BTE 17% 05/09/2022 - 05/08/2023; 56.3 mln shares (10% O/S)
OVV 18% 10/01/2021 - 09/30/2022; 26.05 mln shares (10% O/S)
AAV 24% 04/13/2022 - 04/12/2023; 18.7 mln shares (10% O/S)
CNQ 32% 03/11/2022 - 03/10/2023; 101.6 mln shares (10% O/S)
SU 47% 02/08/2022 - 02/07/2023; 143.5 mln shares (10% O/S)
BIR 49% 11/25/2021 - 11/24/2022; 13.3 mln shares (5% O/S)
CVE 57% 11/09/2021 - 11/08/2022; 146.5 mln shares (10% O/S)
PIPE 57% 11/25/2021 - 11/24/2022; 9.6 mln shares (5% O/S)
ARX 85% 09/01/2021 - 08/31/2022; 72.2 mln shares (10% O/S)
ERF 90% 08/16/2021 - 08/15/2022; 25.6 mln shares (10% O/S)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
C$000 # Shares (K)
Company 2019 2020 2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 2022 Company 2019 2020 2021 Q1/2022 Q2/2022 Q3/2022 Q4/2022 2022
AAV $0 $0 $0 $0 $46,920 $0 $0 $46,920 AAV 0 0 0 0 4,446 0 0 4,446
ARX $0 $0 $340,299 $196,523 $310,324 $0 $0 $506,846 ARX 0 0 30,488 13,226 17,481 0 0 30,706
BIR $0 $609 $31,454 $9,783 $39,609 $2,238 $0 $51,630 BIR 0 465 5,243 1,438 4,077 275 0 5,790
BTE $0 $0 $0 $0 $68,810 $0 $0 $68,810 BTE 0 0 0 0 10,074 0 0 10,074
CNQ $940,379 $273,118 $1,578,650 $1,074,881 $2,001,341 $0 $0 $3,076,222 CNQ 25,900 6,970 33,644 15,750 26,400 0 0 42,150
CPG $124,993 $9,999 $20,001 $61,002 $68,998 $0 $0 $130,000 CPG 24,529 1,710 3,191 7,177 7,001 0 0 14,177
CVE $0 $0 $264,878 $461,742 $975,864 $0 $0 $1,437,605 CVE 0 0 17,026 24,619 43,160 0 0 67,779
ERF $178,432 $2,577 $155,322 $47,132 $118,544 $0 $0 $165,676 ERF 18,231 340 12,898 3,135 7,078 0 0 10,213
IMO $1,371,152 $275,567 $2,245,502 $472,704 $2,500,000 $0 $0 $2,972,704 IMO 38,663 9,832 56,004 9,383 32,468 0 0 41,850
MEG $0 $0 $0 $0 $93,999 $0 $0 $93,999 MEG 0 0 0 0 4,448 0 0 4,448
NVA $0 $0 $0 $0 $27,537 $0 $0 $27,537 NVA 0 0 0 0 2,557 0 0 2,557
OVV $1,660,623 $0 $139,836 $89,916 $0 $0 $0 $89,916 OVV 196,726 0 3,114 1,700 0 0 0 1,700
PIPE $0 $0 $3,415 $6,106 $15,037 $941 $0 $22,085 PIPE 0 0 949 1,285 3,026 250 0 4,561
POU $14,340 $0 $2,697 $0 $0 $0 $0 $0 POU 2,622 0 198 0 0 0 0 0
PSK $19,188 $90,581 $22,515 $0 $0 $0 $0 $0 PSK 1,094 9,761 1,667 0 0 0 0 0
SU $2,268,422 $306,496 $2,301,517 $826,169 $2,546,615 $0 $0 $3,372,784 SU 55,184 7,385 83,605 21,698 53,513 0 0 75,212
TVE $8,174 $1,275 $0 $0 $5,793 $0 $0 $5,793 TVE 4,181 664 0 0 1,227 0 0 1,227
TOU $9,064 $1,614 $6,546 $0 $0 $0 $0 $0 TOU 760 172 200 0 0 0 0 0
VET $0 $0 $0 $0 $0 $0 $0 $0 VET 0 0 0 0 0 0 0 0
WCP $19,582 $10,178 $164,142 $0 $120,801 $0 $0 $120,801 WCP 4,621 2,634 24,328 0 11,725 0 0 11,725
Total: $6,614,350 $972,016 $7,276,772 $3,245,958 $8,940,193 $3,179 $0 $12,189,329 Total: 372,511 39,933 272,555 99,411 228,680 525 0 328,615
Source: NBF, Company Reports, INK Research
5
Industry Note
Appendix 1: Revised Ratings/Estimates/Valuations

Our baseline valuation multiple used in our target price calculation remains based on 2023e EV/DACF, which we believe reflects long-term fair value as investors look
for normalized value in a more stable price environment. Of note, for TPZ, we use an unchanged 7% aggregate FCF yield to derive our target price.
Senior/Integrated
Target EV/DACF 2022E Production 2023E Production 2022E Capex 2023E Capex 2022E Cash Flow 2023E Cash Flow 2022
Rating Target 2023E Total Risk (boe/d) (boe/d) ($mln) ($mln) ($mln) ($mln) ($
Symbol New Old New Old %Δ New Old %Δ Return Rating New Old %Δ New Old %Δ New Old %Δ New Old %Δ New Old %Δ New Old %Δ
CNQ OP OP $100.00 $115.00 -13% 6.0x 6.0x 0% 67% - 1,280,344 1,296,814 -1% 1,310,752 1,311,567 0% $4,345 $4,345 0% $4,206 $4,206 0% $20,575 $23,585 -13% $17,583 $19,445 -10%
CVE OP OP $38.00 $41.00 -7% 5.0x 5.0x 0% 81% - 784,913 778,017 1% 811,290 810,732 0% $3,075 $3,075 0% $3,176 $3,176 0% $13,388 $14,878 -10% $12,924 $13,278 -3%
IMO SP SP $86.00 $93.00 -8% 6.5x 6.5x 0% 61% - 415,799 424,686 -2% 438,360 454,359 -4% $1,400 $1,400 0% $1,400 $1,400 0% $8,560 $9,270 -8% $7,481 $8,044 -7%
SU SP SP $64.00 $73.00 -12% 5.0x 5.0x 0% 68% - 770,914 770,914 0% 816,016 816,016 0% $4,880 $4,880 0% $5,021 $5,021 0% $19,730 $21,554 -8% $16,748 $17,440 -4%
Median/Average/Total* -10% 5.5x 5.5x 0% 69% 3,251,970 3,270,432 -1% 3,376,417 3,392,673 0% $13,700 $13,700 0% $13,803 $13,803 0% $62,253 $69,287 -10% $54,736 $58,207 -6%
Large/Mid Cap
AAV OP OP $15.00 $18.00 -17% 3.5x 3.0x 17% 64% - 55,000 55,000 0% 60,000 60,000 0% $200 $200 0% $250 $250 0% $495 $560 -12% $550 $625 -12%
ARX OP OP $27.00 $32.00 -16% 4.5x 4.5x 0% 90% - 343,305 343,305 0% 352,851 352,851 0% $1,175 $1,175 0% $1,565 $1,565 0% $3,474 $3,922 -11% $3,523 $3,906 -10%
BIR OP OP $13.50 $15.00 -10% 4.0x 3.5x 14% 59% - 78,280 78,280 0% 81,000 81,000 0% $260 $260 0% $260 $260 0% $949 $1,100 -14% $770 $890 -13%
BTE OP OP $10.00 $10.50 -5% 3.5x 3.5x 0% 71% - 84,000 84,000 0% 88,000 88,000 0% $523 $523 0% $559 $559 0% $1,278 $1,371 -7% $1,467 $1,568 -6%
CPG OP OP $21.00 $23.00 -9% 4.0x 4.0x 0% 147% - 131,947 131,947 0% 138,807 139,057 0% $900 $900 0% $1,100 $975 13% $2,299 $2,455 -6% $2,670 $2,859 -7%
ERF (US$) OP OP $25.00 $29.00 -14% 4.0x 4.0x 0% 109% - 97,975 99,495 -2% 102,083 102,142 0% $420 $420 0% $420 $420 0% $1,189 $1,361 -13% $1,308 $1,426 -8%
FRU OP OP $20.00 $22.00 -9% 10.0x 10.0x 0% 66% - 14,379 14,379 0% 15,516 15,516 0% $0 $0 0% $0 $0 0% $326 $353 -8% $295 $314 -6%
HWX OP OP $10.50 $10.50 0% 6.0x 6.0x 0% 103% - 13,000 13,000 0% 19,250 19,250 0% $230 $230 0% $210 $210 0% $313 $338 -7% $347 $366 -5%
KEL OP OP $10.50 $11.00 -5% 4.0x 3.5x 14% 90% - 31,000 31,000 0% 40,000 40,000 0% $300 $300 0% $350 $350 0% $380 $421 -10% $468 $521 -10%
MEG OP OP $30.00 $31.00 -3% 5.0x 5.0x 0% 85% - 92,830 92,830 0% 99,762 99,762 0% $375 $375 0% $383 $383 0% $2,123 $2,299 -8% $1,515 $1,523 -1%
NVA SP SP $16.50 $19.00 -13% 3.5x 3.5x 0% 82% - 68,000 68,000 0% 80,000 80,000 0% $375 $375 0% $375 $375 0% $909 $1,024 -11% $948 $1,077 -12%
OVV (US$) OP OP $100.00 $115.00 -13% 4.0x 4.0x 0% 145% - 509,438 507,643 0% 511,537 512,922 0% $1,750 $1,750 0% $1,836 $1,836 0% $4,421 $4,839 -9% $5,825 $6,568 -11%
PEY OP OP $19.50 $23.00 -15% 4.0x 4.0x 0% 68% - 104,108 103,527 1% 112,871 112,446 0% $375 $375 0% $379 $379 0% $880 $1,027 -14% $881 $981 -10%
PIPE SP SP $7.00 $7.50 -7% 3.0x 3.0x 0% 98% - 32,000 32,000 0% 41,000 41,000 0% $235 $235 0% $250 $250 0% $435 $479 -9% $541 $600 -10%
POU OP OP $45.00 $50.00 -10% 4.0x 4.0x 0% 76% - 91,250 93,000 -2% 107,500 107,500 0% $600 $600 0% $627 $627 0% $1,265 $1,439 -12% $1,460 $1,617 -10%
PSK SP SP $25.00 $27.00 -7% 14.0x 14.0x 0% 55% - 23,743 23,743 0% 23,742 23,742 0% $0 $0 nmf $0 $0 nmf $482 $522 -8% $423 $449 -6%
SDE OP OP $20.00 $22.50 -11% 3.0x 3.0x 0% 83% - 70,500 70,500 0% 78,000 78,000 0% $330 $330 0% $330 $330 0% $826 $927 -11% $907 $1,018 -11%
TOU OP OP $85.00 $95.00 -11% 5.0x 5.0x 0% 34% - 500,000 500,000 0% 515,000 515,000 0% $1,285 $1,285 0% $1,378 $1,378 0% $4,562 $5,202 -12% $4,690 $5,267 -11%
TPZ OP OP $30.00 $32.00 -6% N/A N/A nmf 65% - 16,600 16,600 0% 17,700 17,700 0% $3 $3 0% $3 $3 0% $340 $366 -7% $341 $370 -8%
TVE OP OP $8.00 $8.50 -6% 4.5x 4.5x 0% 113% - 46,700 46,700 0% 48,600 48,600 0% $315 $315 0% $278 $278 0% $750 $807 -7% $732 $798 -8%
VET OP OP $48.00 $52.00 -8% 3.5x 3.5x 0% 84% - 91,349 91,349 0% 99,775 99,775 0% $500 $500 0% $530 $530 0% $1,931 $2,044 -6% $2,094 $2,219 -6%
WCP OP OP $17.50 $22.00 -20% 5.0x 5.0x 0% 113% - 138,170 138,170 0% 171,853 171,853 0% $620 $620 0% $1,000 $1,000 0% $2,458 $2,717 -10% $2,268 $2,721 -17%
Median/Average/Total* -10% 4.0x 4.0x 0% 86% 2,633,574 2,634,468 0% 2,804,849 2,806,118 0% $10,771 $10,771 0% $12,082 $11,957 1% $32,084 $35,574 -10% $34,024 $37,684 -10%
Small Cap
CR SP SP $6.75 $7.50 -10% 3.5x 3.0x 17% 50% S 32,000 32,000 0% 32,000 32,000 0% $90 $90 0% $75 $75 0% $296 $325 -9% $311 $353 -12%
KEC OP OP $25.00 $27.50 -9% 3.0x 3.0x 0% 89% - 16,000 16,000 0% 23,000 23,000 0% $295 $295 0% $295 $295 0% $248 $267 -7% $375 $404 -7%
LOU SP SP $1.20 $1.20 0% 3.5x 3.5x 0% 103% S 10,750 10,750 0% 11,250 11,250 0% $58 $58 0% $58 $58 0% $170 $185 -8% $192 $206 -7%
SGY OP OP $15.50 $16.50 -6% 3.0x 3.0x 0% 96% S 21,500 21,500 0% 21,500 21,500 0% $124 $124 0% $124 $124 0% $364 $392 -7% $404 $436 -7%
YGR SP SP $4.00 $4.50 -11% 2.0x 2.0x 0% 61% S 12,000 12,000 0% 12,000 12,000 0% $105 $105 0% $60 $60 0% $209 $230 -9% $182 $200 -9%
Median/Average/Total* -9% 3.0x 3.0x 0% 80% 92,250 92,250 0% 99,750 99,750 0% $672 $672 0% $612 $612 0% $1,287 $1,399 -8% $1,464 $1,599 -8%
NBF Coverage Median/Average/Total* -9% 4.0x 4.0x 0% 83% 5,977,794 5,997,150 0% 6,281,016 6,298,541 0% $25,143 $25,143 0% $26,496 $26,371 0% $95,623 $106,260 -10% $90,224 $97,490 -7%
1. Stock Rating: OP - Outperform; SP - Sector Perform; UP - Underperform; R - Restricted; T - Tender; UR - Under Review
2. Risk Rating: S - Speculative; R - Restricted
*Note: Total Return is an average calculation, Production and Capex are sum calculations, and the remainder are median calculations. Priced as of 2022-07-15 close.
Source: NBF, Bloomberg, Company Reports
6
Industry Note
Disclosures
PRICE, RATING AND TARGET HISTORY: I = Initiation, OP = Outperform, SP = Sector Perform, UP = Underperform, UR = Under Review, R = Restricted; T = Tender (Source: Factset, NBF)
ARC Resources Ltd. Rating History as of 07/15/2022

OP:$9.00 OP:$8.50 OP:$7.00 OP:$9.00 OP:$10.50 OP:$8.00 OP:$7.00 OP:$9.00 OP:$13.00 OP:$12.50 OP:$15.00 OP:$13.50
10/01/2019 02/06/2020 03/09/2020 04/22/2020 10/15/2020 11/15/2020 01/05/2021 02/11/2021 02/18/2021 04/14/2021 05/13/2021 07/18/2021
25
20
15
Price (CAD)
10
0
Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21 Jul 21 Oct 21 Jan 22 Apr 22 Jul 22
OP:$18.50 OP:$20.00 OP:$21.00 OP:$24.00 OP:$32.00
09/27/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
Canadian Natural Resources Limited Rating History as of 07/15/2022

SP:$43.00 SP:$44.00 SP:$42.00 SP:$40.00 SP:$39.00 SP:$30.00 SP:$27.00 SP:$25.00 OP:$39.00 OP:$40.00 OP:$35.00 OP:$36.00
10/01/2019 11/07/2019 12/04/2019 01/30/2020 03/05/2020 03/09/2020 03/10/2020 04/22/2020 06/23/2020 08/06/2020 10/15/2020 12/09/2020
90
80
70
60
50
Price (CAD)
40
30
20
10
01/05/2021 01/31/2021 02/18/2021 04/14/2021 06/16/2021 07/18/2021 08/05/2021 09/27/2021 11/04/2021 01/05/2022 01/11/2022 02/02/2022
OP:$100.00 OP:$115.00
04/13/2022 06/15/2022
Closing Price
Cenovus Energy Inc. Rating History as of 07/15/2022

07/25/2019 10/01/2019 01/30/2020 02/12/2020 03/09/2020 03/10/2020 04/02/2020 04/22/2020 06/24/2020 10/15/2020 10/25/2020 01/05/2021
35
30
25
20
15
Price (CAD)
10
5
0
01/28/2021 02/18/2021 04/14/2021 06/16/2021 07/18/2021 09/27/2021 01/05/2022 02/02/2022 04/13/2022 06/08/2022 06/13/2022 06/15/2022
Closing Price
7
Industry Note
Crescent Point Energy Corp. Rating History as of 07/15/2022

R:NM OP:$9.50 OP:$10.00 OP:$9.50 OP:$8.50 OP:$5.00 OP:$4.00 OP:$3.00 OP:$2.25 OP:$3.25 OP:$2.50 OP:$3.75
09/05/2019 10/20/2019 11/14/2019 01/14/2020 01/30/2020 03/09/2020 03/16/2020 04/20/2020 04/22/2020 06/24/2020 10/15/2020 12/06/2020
14
12
10
8
6
Price (CAD)
4
2
0
OP:$3.50 OP:$3.75 OP:$5.50 OP:$7.50 OP:$7.00 OP:$11.00 OP:$12.50 OP:$13.50 OP:$15.50 OP:$20.00 OP:$23.00
01/05/2021 01/31/2021 02/17/2021 02/18/2021 04/14/2021 06/16/2021 09/27/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
Enerplus Corporation Rating History as of 07/15/2022

OP:$15.00 OP:$13.50 OP:$11.50 OP:$11.00 OP:$5.50 OP:$4.75 OP:$5.00 OP:$5.50 OP:$4.50 OP:$4.75 OP:$5.50 R:NM
08/09/2019 01/20/2020 01/30/2020 02/21/2020 03/09/2020 04/22/2020 06/24/2020 08/07/2020 10/15/2020 11/15/2020 01/05/2021 01/25/2021
20
15
10
Price (USD)
5
0
02/03/2021 02/18/2021 02/19/2021 04/08/2021 04/14/2021 05/13/2021 06/16/2021 08/05/2021 09/27/2021 01/05/2022 02/02/2022 04/13/2022
OP:$29.00
06/15/2022
Closing Price
Freehold Royalties Ltd. Rating History as of 07/15/2022

OP:$10.50 SP:$9.50 OP:$9.00 OP:$6.00 OP:$4.50 SP:$4.25 SP:$4.50 R:NM OP:$7.50 OP:$9.00 OP:$10.00 OP:$11.50
08/01/2019 10/01/2019 01/30/2020 03/09/2020 04/22/2020 06/23/2020 10/15/2020 11/24/2020 12/09/2020 02/18/2021 05/13/2021 06/16/2021
18
16
14
12
10
Price (CAD)
8
6
4
2
OP:$12.00 R:NM OP:$13.00 OP:$15.00 OP:$15.50 OP:$17.00 OP:$18.00 OP:$19.50 OP:$22.00
07/18/2021 09/08/2021 09/22/2021 09/27/2021 11/10/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
8
Industry Note
Imperial Oil Limited Rating History as of 07/15/2022

SP:$47.00 SP:$41.00 SP:$37.00 SP:$34.00 SP:$25.00 SP:$29.00 SP:$26.00 SP:$20.00 SP:$30.00 SP:$21.00 SP:$22.00 SP:$30.00
10/01/2019 11/12/2019 01/30/2020 02/28/2020 03/09/2020 03/10/2020 03/31/2020 04/22/2020 06/24/2020 10/15/2020 11/19/2020 01/05/2021
80
70
60
50
40
Price (CAD)
30
20
10
01/31/2021 02/18/2021 04/14/2021 05/13/2021 06/16/2021 09/27/2021 10/20/2021 01/05/2022 02/02/2022 04/13/2022 05/04/2022 06/15/2022
Closing Price
MEG Energy Corp. Rating History as of 07/15/2022

OP:$9.25 OP:$8.50 OP:$5.25 OP:$5.00 OP:$3.50 OP:$4.50 OP:$3.50 OP:$3.00 SP:$4.25 SP:$5.50 SP:$8.00 SP:$11.00
01/16/2020 01/30/2020 03/09/2020 03/11/2020 04/22/2020 06/24/2020 10/15/2020 11/15/2020 12/08/2020 01/05/2021 02/18/2021 04/14/2021
25
20
15
Price (CAD)
10
0
SP:$13.50 SP:$15.00 SP:$14.50 SP:$14.00 SP:$15.00 SP:$18.50 SP:$25.00 OP:$24.00 OP:$32.00 OP:$31.00
06/16/2021 07/18/2021 07/23/2021 09/27/2021 11/08/2021 01/05/2022 02/02/2022 03/04/2022 04/13/2022 06/29/2022
Closing Price
Ovintiv Inc. Rating History as of 07/15/2022

07/31/2019 10/17/2019 10/31/2019 01/29/2020 01/30/2020 02/20/2020 03/09/2020 04/22/2020 05/08/2020 06/24/2020 07/29/2020 10/15/2020
70
60
50
40
30
Price (USD)
20
10
0
01/05/2021 01/31/2021 02/18/2021 04/14/2021 05/13/2021 06/16/2021 07/28/2021 09/27/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
9
Industry Note
Peyto Exploration & Development Corp. Rating History as of 07/15/2022

SP:$4.25 SP:$4.00 SP:$3.00 SP:$2.50 OP:$5.00 OP:$4.00 OP:$5.00 OP:$3.50 OP:$8.00 OP:$8.50 OP:$15.50 OP:$15.00
10/01/2019 10/17/2019 01/30/2020 03/09/2020 04/22/2020 06/24/2020 10/15/2020 01/05/2021 02/18/2021 06/16/2021 09/27/2021 11/09/2021
20
15
10
Price (CAD)
5
0
OP:$14.00 OP:$15.00 OP:$15.50 OP:$18.00 OP:$23.00
01/05/2022 02/02/2022 03/09/2022 04/13/2022 06/15/2022
Closing Price
PrairieSky Royalty Ltd. Rating History as of 07/15/2022

07/22/2019 10/28/2019 01/30/2020 02/10/2020 03/09/2020 04/22/2020 10/15/2020 01/05/2021 02/08/2021 02/18/2021 06/16/2021 09/27/2021
22
20
18
16
14
Price (CAD)
12
10
8
6
R:NM SP:$21.00 SP:$18.50 SP:$22.00 SP:$23.00 SP:$24.00 SP:$27.00
11/29/2021 12/15/2021 01/05/2022 02/02/2022 04/13/2022 04/18/2022 06/15/2022
Closing Price
Suncor Energy Inc. Rating History as of 07/15/2022

10/01/2019 10/17/2019 10/31/2019 01/30/2020 03/09/2020 03/10/2020 03/24/2020 04/22/2020 06/24/2020 07/23/2020 10/15/2020 11/30/2020
60
50
40 Price (CAD)
30
20
10
01/05/2021 02/18/2021 04/14/2021 05/13/2021 06/16/2021 07/18/2021 07/29/2021 09/27/2021 01/05/2022 02/02/2022 02/03/2022 04/13/2022
SP:$73.00
06/15/2022
Closing Price
10
Industry Note
Vermilion Energy Inc. Rating History as of 07/15/2022

OP:$28.00 SP:$24.00 SP:$20.00 UP:$17.50 UP:$9.00 UP:$4.75 UP:$3.25 SP:$6.00 SP:$8.00 SP:$7.00 SP:$6.00 SP:$5.00
07/29/2019 10/01/2019 10/31/2019 01/30/2020 03/06/2020 03/09/2020 03/16/2020 04/22/2020 05/25/2020 07/27/2020 09/24/2020 10/15/2020
35
30
25
20
15
Price (CAD)
10
5
0
SP:$4.75 SP:$7.00 SP:$6.50 SP:$7.00 SP:$9.50 SP:$10.00 SP:$14.00 SP:$13.50 SP:$18.00 OP:$19.00 OP:$30.00 OP:$34.00
11/15/2020 01/05/2021 01/18/2021 01/31/2021 02/18/2021 04/14/2021 06/16/2021 08/16/2021 09/27/2021 11/29/2021 01/05/2022 02/02/2022
OP:$53.00 OP:$52.00
04/13/2022 06/15/2022
Closing Price
Whitecap Resources Inc. Rating History as of 07/15/2022

OP:$7.00 OP:$6.50 OP:$4.00 OP:$2.50 OP:$2.25 OP:$3.00 OP:$4.00 OP:$3.50 OP:$4.75 R:NM OP:$8.00 OP:$8.50
08/26/2019 01/30/2020 03/09/2020 03/17/2020 04/22/2020 06/24/2020 08/31/2020 10/15/2020 12/06/2020 12/08/2020 02/24/2021 04/05/2021
14
12
10
8
6
Price (CAD)
4
2
0
OP:$10.00 OP:$9.50 OP:$10.00 OP:$11.00 OP:$12.00 OP:$14.00 OP:$16.00 OP:$17.50 OP:$20.00 OP:$22.00
06/16/2021 07/18/2021 07/29/2021 09/27/2021 10/05/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022 06/28/2022
Closing Price
Advantage Energy Ltd. Rating History as of 07/15/2022

10/01/2019 01/30/2020 03/09/2020 04/13/2020 04/22/2020 06/24/2020 10/15/2020 01/05/2021 02/18/2021 02/26/2021 04/14/2021 06/16/2021
12
10
8
6
Price (CAD)
4
2
0
OP:$9.00 OP:$10.00 OP:$11.00 OP:$12.50 OP:$15.00 OP:$18.00
09/27/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022 07/07/2022
Closing Price
11
Industry Note
Birchcliff Energy Ltd. Rating History as of 07/15/2022

10/01/2019 01/30/2020 03/09/2020 03/11/2020 04/22/2020 06/24/2020 10/15/2020 01/20/2021 02/18/2021 04/14/2021 06/16/2021 09/27/2021
14
12
10
8
6
Price (CAD)
4
2
0
OP:$11.00 OP:$12.50 OP:$15.00
02/02/2022 04/13/2022 06/15/2022
Closing Price
Baytex Energy Corp. Rating History as of 07/15/2022

OP:$2.50 SP:$1.00 SP:$0.50 SP:$0.75 SP:$0.90 SP:$0.75 SP:$1.00 SP:$1.50 SP:$1.75 SP:$2.00 SP:$3.00 SP:$4.50
01/30/2020 03/09/2020 03/18/2020 06/24/2020 07/30/2020 10/15/2020 01/05/2021 02/18/2021 02/24/2021 04/29/2021 06/16/2021 09/27/2021
10
Price (CAD)
4
0
SP:$5.00 SP:$6.50 OP:$8.75 OP:$9.50 OP:$10.50
11/05/2021 02/02/2022 04/13/2022 04/28/2022 06/15/2022
Closing Price
Crew Energy Inc. Rating History as of 07/15/2022

SP:$1.00 SP:$0.50 UP:$0.25 UP:$0.20 UP:$0.30 SP:$0.40 SP:$0.50 SP:$0.60 SP:$0.75 SP:$0.90 SP:$1.50 SP:$2.00
10/01/2019 01/30/2020 03/09/2020 04/22/2020 06/24/2020 08/06/2020 10/15/2020 12/10/2020 01/05/2021 02/01/2021 02/18/2021 06/16/2021
7
6
5
4
3
Price (CAD)
2
1
0
SP:$3.50 SP:$4.00 SP:$5.00 SP:$5.75 SP:$6.00 SP:$7.50
09/27/2021 11/05/2021 02/02/2022 04/13/2022 05/05/2022 06/15/2022
Closing Price
12
Industry Note
Headwater Exploration Inc. Rating History as of 07/15/2022

I:OP:$3.00 OP:$3.50 OP:$4.00 OP:$4.50 OP:$5.50 OP:$6.25 OP:$7.00 OP:$7.75 OP:$9.00 OP:$10.50
11/30/2020 01/05/2021 01/27/2021 02/18/2021 05/12/2021 06/16/2021 09/27/2021 01/05/2022 02/01/2022 02/02/2022
10
Price (CAD)
4
0
Closing Price
Kiwetinohk Energy Corp. Rating History as of 07/15/2022

I:OP:$18.00 OP:$20.00 OP:$27.50
05/03/2022 05/18/2022 06/15/2022
18
17
16
15
14
Price (CAD)
13
12
11
Closing Price
Kelt Exploration Ltd. Rating History as of 07/15/2022

OP:$7.00 OP:$5.50 OP:$6.00 OP:$5.50 OP:$3.50 OP:$2.50 OP:$2.25 SP:$2.00 SP:$2.25 OP:$2.50 OP:$2.25 OP:$2.50
10/01/2019 11/08/2019 01/30/2020 02/20/2020 03/09/2020 03/17/2020 04/22/2020 05/07/2020 06/24/2020 07/23/2020 11/10/2020 01/05/2021
10
Price (CAD)
4
0
OP:$3.25 OP:$4.00 OP:$4.50 OP:$5.00 OP:$7.00 OP:$8.50 OP:$10.00 OP:$11.00
02/18/2021 03/11/2021 05/25/2021 06/16/2021 09/27/2021 02/02/2022 04/13/2022 06/15/2022
Closing Price
13
Industry Note
Lucero Energy Corp. Rating History as of 07/15/2022

OP:$1.75 OP:$1.50 OP:$1.35 OP:$1.10 SP:$0.35 SP:$0.20 SP:$0.25 SP:$0.20 SP:$0.15 SP:$0.20 SP:$0.40
08/28/2019 10/01/2019 11/20/2019 01/30/2020 03/09/2020 03/27/2020 06/24/2020 08/21/2020 10/15/2020 01/05/2021 02/18/2021
1.00
0.80
0.60
Price (CAD)
0.40
0.20
0.00
NA:NA SP:$1.00 SP:$1.10 SP:$1.20
03/04/2021 03/30/2022 04/13/2022 06/15/2022
Closing Price
NuVista Energy Ltd. Rating History as of 07/15/2022

OP:$5.25 OP:$4.00 OP:$3.50 OP:$1.85 SP:$1.00 SP:$1.25 SP:$2.50 OP:$3.00 SP:$3.00 SP:$4.25 SP:$6.75 SP:$7.50
10/01/2019 01/30/2020 03/04/2020 03/09/2020 04/22/2020 01/05/2021 02/18/2021 02/25/2021 04/14/2021 06/16/2021 09/27/2021 11/10/2021
16
14
12
10
8
Price (CAD)
6
4
2
0
SP:$9.00 SP:$11.50 SP:$14.50 SP:$19.00
01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
Pipestone Energy Corp. Rating History as of 07/15/2022

OP:$2.00 SP:$1.00 SP:$0.75 OP:$0.85 SP:$0.85 SP:$1.50 SP:$2.50 SP:$3.25 SP:$4.00 SP:$4.50 SP:$6.00 SP:$7.00
01/30/2020 03/09/2020 04/22/2020 08/05/2020 10/15/2020 02/10/2021 02/18/2021 06/16/2021 09/27/2021 11/10/2021 02/02/2022 04/13/2022
7
6
5
4
3
Price (CAD)
2
1
0
SP:$7.50
06/15/2022
Closing Price
14
Industry Note
Paramount Resources Ltd. Rating History as of 07/15/2022

SP:$8.00 SP:$7.00 SP:$4.75 UP:$2.00 UP:$1.25 UP:$1.50 UP:$1.75 SP:$3.00 SP:$3.75 SP:$7.00 SP:$10.50 SP:$13.50
11/07/2019 01/30/2020 03/04/2020 03/09/2020 04/22/2020 06/24/2020 08/06/2020 10/15/2020 11/05/2020 01/05/2021 02/08/2021 02/18/2021
50
40
30
Price (CAD)
20
10
0
SP:$14.00 SP:$18.00 SP:$19.00 OP:$28.00 SP:$19.00 OP:$28.00 OP:$30.00 OP:$35.00 OP:$45.00 OP:$50.00
05/05/2021 06/16/2021 08/04/2021 09/27/2021 09/27/2021 10/13/2021 01/05/2022 02/02/2022 04/13/2022 06/15/2022
Closing Price
Spartan Delta Corp. Rating History as of 07/15/2022

I:OP:$5.00 OP:$6.00 R:NM OP:$6.00 OP:$6.75 OP:$7.25 OP:$8.00 R:NM OP:$8.00 OP:$10.00 OP:$14.50 OP:$18.00
06/05/2020 01/06/2021 02/16/2021 03/08/2021 03/12/2021 05/26/2021 06/16/2021 07/28/2021 08/18/2021 09/27/2021 02/02/2022 04/13/2022
20
15
10
Price (CAD)
5
0
OP:$22.50
06/15/2022
Closing Price
Surge Energy Inc. Rating History as of 07/15/2022

OP:$1.50 SP:$0.65 SP:$0.50 SP:$0.40 SP:$0.50 SP:$0.40 SP:$0.50 SP:$0.75 OP:$0.90 SP:$0.90 R:NM SP:$0.90
01/30/2020 03/09/2020 04/14/2020 04/22/2020 06/24/2020 10/15/2020 01/05/2021 02/18/2021 03/05/2021 04/14/2021 04/28/2021 05/13/2021
14
12
10
8
6
Price (CAD)
4
2
0
SP:$1.00 R:NM SP:$1.00 SP:$8.50 SP:$9.00 SP:$10.00 OP:$14.50 OP:$16.50
06/16/2021 06/22/2021 08/18/2021 08/23/2021 10/04/2021 02/02/2022 04/13/2022 06/15/2022
Closing Price
15
Industry Note
Tourmaline Oil Corp. Rating History as of 07/15/2022

OP:$23.50 OP:$22.00 OP:$21.00 OP:$17.00 OP:$20.00 OP:$22.50 R:NM OP:$30.00 OP:$32.50 OP:$30.00 OP:$37.50 OP:$40.00
07/31/2019 11/06/2019 01/30/2020 03/09/2020 04/22/2020 05/06/2020 09/25/2020 10/21/2020 11/05/2020 01/05/2021 02/18/2021 06/11/2021
100
80
60
Price (CAD)
40
20
0
OP:$45.00 OP:$57.50 OP:$62.50 OP:$75.00 OP:$95.00
09/22/2021 09/27/2021 02/02/2022 04/13/2022 06/15/2022
Closing Price
Topaz Energy Corp. Rating History as of 07/15/2022

I:OP:$18.00 OP:$17.00 OP:$18.00 R:NM OP:$18.00 OP:$20.00 R:NM OP:$24.00 OP:$25.00 OP:$27.50 OP:$32.00
11/13/2020 01/05/2021 02/18/2021 05/18/2021 06/08/2021 07/08/2021 10/05/2021 10/26/2021 02/02/2022 04/13/2022 06/15/2022
26
24
22
20
18
Price (CAD)
16
14
12
Closing Price
Yangarra Resources Ltd. Rating History as of 07/15/2022

OP:$3.75 OP:$2.75 OP:$2.50 OP:$1.75 OP:$1.50 SP:$0.65 SP:$0.50 SP:$0.75 SP:$0.90 SP:$1.00 SP:$1.50 SP:$2.00
10/01/2019 10/30/2019 01/30/2020 02/06/2020 03/05/2020 03/09/2020 04/01/2020 06/24/2020 12/11/2020 01/05/2021 02/18/2021 06/16/2021
5
2 Price (CAD)
0
SP:$2.50 SP:$3.50 SP:$4.50
09/27/2021 04/13/2022 06/15/2022
Closing Price
RISKS:
16
Industry Note
ARX
Commodity Price Risk: Fluctuations in global and local commodity prices, in addition to foreign exchange rates, can have material, adverse impacts on operations, financial condition and reserves
value. A decline in commodity prices presents the greatest single direct risk to a company’s revenue, cash flow and earnings.
Operational Risk: Oil and natural gas development involves a high degree of risk, which is managed through a combination of experience, knowledge and careful evaluation. There is no assurance
that expenditures made on exploration and development will result in new discoveries or commercial quantities of oil and gas. As well, existing production and processing activities can be impacted
by unforeseeable events that can negatively impact production and cash flow. Additionally, controls and regulations may be imposed and amended from all levels of government, presenting
immediate material impacts to companies in some cases.
Changes to production deliverability: As ARC’s Attachie asset is currently in the early stage of development, adverse changes to well performance, largely in terms of production deliverability and
declines, could have material impacts on the future profitability of this asset.
CNQ
Lack of Integration: Canadian Natural has elevated exposure to commodity price volatility compared with its peers as it currently does not own substantial refining capacity relative to its production,
and additionally, it does not use hedging as an alternative form of downside protection.
Environmental Spill: As the company owns and operates a large number of older legacy assets, the risk is typically higher for an environmental spill. In addition to any associated clean-up costs and
fines, an environmental incident can also damage the company’s reputation and standing to the public.
CVE
Heavy Oil Exposure: Cenovus’s upstream heavy production outpaces downstream refining capacity, resulting in additional exposure to a widening light/heavy differential.
CPG
Changes to production deliverability: As Crescent Point drills many wells to sustain and grow its production volumes, adverse changes to well performance, largely in terms of production
deliverability and declines, can have material negative impacts on the future profitability of the company and its assets.
17
Industry Note
ERF
Market Access: Market access constraints in North Dakota, which have historically impacted oil prices related to limited pipeline capacity, could have sudden and drastic cash flow impacts on
Enerplus’s core North Dakota Bakken asset.
FRU
Market access: Market access constraints in Western Canada, affecting both oil and natural gas production, can have sudden and drastic impacts on local commodity prices and industry activity.
Changes to Industry Activity: As Freehold collects royalties and does not operate the production across most of its asset base, the company’s cash flow is dependent upon industry activity across
its lands. Changes to industry spending can impact the company’s future cash flows.
IMO
Major Asset Performance and Reliability: Imperial’s major assets, including Cold Lake Syncrude and Kearl, have each been affected by operational and reliability challenges historically. Future
operational issues and asset underperformance could be negative for the company’s shareholders.
MEG
High cash flow sensitivity: MEG retains some of the highest sensitivity to commodity prices in our coverage space. While this provides strong torque to the upside, downside is also sensitive
to changes lower in oil prices or Canadian differentials. Given absolute net debt levels remain relatively high, the sensitivity on cash flow and higher costs structure can drive leverage ratios to
unsustainable levels over relatively short periods of weak commodity prices.
18
Industry Note
OVV
Market Access: Market access constraints in the Permian, which have historically impacted both oil and gas prices related to limited pipeline capacity, can have sudden and drastic cash flow impacts
on Ovintiv’s Permian asset. Ovintiv has historically partially mitigated this risk through hedging and marketing contracts.
PEY
NGTL System Downtime: A significant portion of Peyto’s natural gas volumes flow on TC Energy’s NGTL system, which has historically experienced sudden and prolonged operational downtime
due to planned and unplanned maintenance activity. Sudden changes to operational conditions can have immediate impacts on Peyto’s production volumes.
PSK
Market access: Market access constraints in Western Canada, affecting both oil and natural gas production, can have sudden and drastic impacts on local commodity prices and industry activity.
Changes to Industry Activity: As PrairieSky collects royalties and does not operate the production across its asset base, the company’s cash flow is dependent upon industry activity across its
lands. Changes to industry spending can impact the company’s future cash flows.
SU
Syncrude Performance and Reliability: Syncrude, which represents a sizeable portion of Suncor’s portfolio, has been historically affected by operational and reliability challenges. Future
operational issues and asset underperformance could be negative for the company’s shareholders.
VET
value. A decline in commodity prices presents the greatest single direct risk to the company’s revenue, cash flow and earnings.
International Assets: Vermilion operates in several international jurisdictions, which can be subject to changing regulatory, government and environmental policies.
19
Industry Note
WCP
Market access: As a large Western Canada-focused oil producer, market access constraints, affecting both oil and natural gas production, can have sudden and drastic impacts on Whitecap’s cash
flows.
AAV
Commodity Prices: Fluctuations in global and local commodity prices, in addition to foreign exchange rates, can have material, adverse impacts on operations, financial condition and reserves
Operational/Regulatory: Oil and natural gas development involves a high degree of risk, which is managed through a combination of experience, knowledge and careful evaluation. There is no
assurance that expenditures made on exploration and development will result in new discoveries or commercial quantities of oil and gas. As well, existing production and processing activities can be
impacted by unforeseeable events that can negatively impact production and cash flow. Additionally, controls and regulations may be imposed and amended from all levels of government, presenting
Gathering and Processing Facilities and Pipeline Systems: Lack of capacity and/or constraints on gathering and processing facilities and pipeline systems may have a negative impact on the
Corporation's ability to produce and sell its oil and natural gas.
BIR
BTE
Non-Operated Assets: The company is not the operator of its drilling locations in the Eagle Ford, and therefore, not able to control the timing of development, associated costs or the rate of
production on the subject properties.
20
Industry Note
CR
Gathering and Processing Facilities and Pipeline Systems: Lack of capacity and/or constraints on gathering and processing facilities, pipeline systems, and in certain circumstances rail, may
have a negative impact on the Corporation's ability to produce and sell its oil and natural gas.
HWX
Major Shareholder Risk: Additionally, major shareholders that may hold a substantial proportion of the company’s outstanding shares can also present risk to liquidity, cost of capital and
capitalization of the company. In HWX's case, CVE is a 26% (31% fully diluted) shareholder, and while its interests are aligned, could present an overhang to the stock through its own strategic
interests (orientation of the company or need to crystalize its interests).
Clearwater Risks: While the project holds substantially positive attributes, as with all elements of the exploration and production business, this play holds inherent risk, which we primarily highlight
through WCS differentials, sulphur content, infrastructure support, solution gas drive, land access and structure & geology (in-depth understanding of the aforementioned can be found within our
initiation report).
Operational Risk: Oil and natural gas exploration involves a high degree of risk, which is managed through a combination of experience, knowledge and careful evaluation. There is no assurance
that expenditures made on exploration will result in new discoveries or commercial quantities of oil and gas. As well, existing production and processing activities can be impacted by unforeseeable
events that can negatively impact production and cash flow levels. HWX has a meaningful orientation towards exploration investment, which in addition to ongoing validation of EOR response, will
comprise the key sources of risk to our outlook.
KEC
Commodity Price Risk: Oil and gas prices are determined by global supply, demand and other factors. Fluctuations in these prices could have a material, adverse impact on the operations, financial
condition, proven and/or probable reserves and future development of undeveloped land. Declines in prices have a direct impact on revenue, cash flow and earnings.
Operational Risk: Oil and natural gas exploration involves a high degree of risk, which is managed through a combination of experience, knowledge and careful evaluation. There is no assurance
that expenditures made on exploration will result in discoveries or commercial quantities of oil and gas. As well, existing production and processing activities can be impacted by unforeseeable events
that can negatively impact production and cash flow levels.
Liquidity Risk: As a function of the closely-held nature of the company’s equity, the stock has a limited public float and liquidity to date has been minimal, which in future may continue to challenge
the stock’s ability to fully realize its upside (e.g., index inclusion will be difficult to achieve due to float).
Time Horizon Risk: Given the long-dated investment cycle of its green portfolio relative to that of its upstream portfolio, there could be a drag on its valuation until that portion of its capital is viewed
as investable), which may impact the required cost of capital to pursue its strategy at the prescribed pace.
KEL
21
Industry Note
LOU
Operational Risk: Oil and natural gas development involves a high degree of risk which is managed through a combination of experience, knowledge and careful evaluation. There is no assurance
Market Access: Market access constraints in North Dakota, which have historically impacted oil prices related to limited pipeline capacity, could have sudden and drastic cash flow impacts on the
company.
NVA
PIPE
POU
22
Industry Note
SDE
SGY
TOU
TPZ
Execution of the Strategy: The value of its assets and strategy will be predicated on its ability to execute continued growth, principally targeting diversification (jurisdiction, counterparty, commodity)
and quality (counterparty and take-or-pay). Deal flow may not be readily accessible in a timely fashion and could cause a drag on sentiment and value.
Concentration Risk: As it sits, TOU is the major underlying counterparty and will predicate the majority of its embedded growth strategy, but could in specific situations prove an impediment to its
outlook (as growth, optionality and transactions will largely be dictated by TOU; i.e., take-or-pays and activity distribution).
Tourmaline Share Overhang: Given the significance of TOU’s holdings and the competing opportunities to expand its interest (future dropdowns) relative to its ultimate goal to reduce its interest,
there could be material blocks of stock available at various intervals of time, which may or may not be affiliated with an accretive transaction, subject to the needs of the parent company, and could
present overhang to the stock and risk to its cost of capital.
23
Industry Note
TVE
Surface Conditions: Oil and gas industry operations are affected by road bans imposed from time to time during the winter break-up and thaw period in the spring. Road bans are also imposed due
to snow, mud and rock slides and periods of high water or wildfires which can restrict access to well sites and production facilities.
YGR
Changes to production deliverability: Adverse changes to well performance, largely in terms of production deliverability and declines, can have material negative impacts on the future profitability
of a company and its assets.
ADDITIONAL COMPANY RELATED DISCLOSURES

ARC Resources Ltd. 2, 3, 4, 5, 7, 9
Canadian Natural Resources Limited 2, 3, 5, 7
Cenovus Energy Inc. 2, 3, 5, 6, 7, 10
Crescent Point Energy Corp. 2, 3, 5, 6, 7
Crew Energy Inc. 2, 3, 5, 7
Enerplus Corporation 2, 3, 4, 5, 7, 9
Freehold Royalties Ltd. 2, 3, 4, 5, 7
Imperial Oil Limited
Kelt Exploration Ltd. 2, 3, 5, 7
Kiwetinohk Energy Corp.
Lucero Energy Corp. 2, 4, 6, 7
MEG Energy Corp.
NuVista Energy Ltd.
Ovintiv Inc. 10
Paramount Resources Ltd. 2, 3, 5, 7
Peyto Exploration & Development Corp. 2, 3, 5, 7
Pipestone Energy Corp. 2, 3, 5, 7, 10
PrairieSky Royalty Ltd. 2, 3, 4, 5, 7
Spartan Delta Corp. 2, 3, 4, 5, 7
Suncor Energy Inc.
Surge Energy Inc. 2, 3, 4, 5, 6, 7
Tamarack Valley Energy Ltd. 2, 3, 4, 5, 6, 7
Topaz Energy Corp. 2, 3, 4, 5, 7
Tourmaline Oil Corp. 2, 3, 4, 5, 7
Vermilion Energy Inc. 2, 3, 5, 6, 7, 9, 10
Whitecap Resources Inc. 2, 3, 5, 6, 7, 9
Yangarra Resources Ltd. 2, 3, 5, 7
Advantage Energy Ltd. 2, 3, 5, 7, 10
Baytex Energy Corp. 2, 3, 5, 6, 7
Birchcliff Energy Ltd. 2, 3, 5, 7, 10
Headwater Exploration Inc.
24
Industry Note
LEGEND FOR COMPANY RELATED DISCLOSURES:
2 National Bank Financial Inc. has acted as an underwriter with respect to this issuer within the past 12 months.
3 National Bank Financial Inc. has provided investment banking services for this issuer within the past 12 months.
4 National Bank Financial Inc. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within the past 12 months.
5 National Bank Financial Inc. or an affiliate has received compensation for investment banking services from this issuer within the past 12 months.
6 National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months.
7 The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.
8 National Bank Financial Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services from this issuer in the next 3 months.
9 As of the end of the month immediately preceding the date of publication of this research report (or the end of the second most recent month if the publication date is less than 10 calendar days
after the end of the most recent month), National Bank Financial Inc. or an affiliate beneficially own 1% or more of any class of common equity securities of this issuer.
10 National Bank Financial Inc. makes a market in the securities of this issuer, at the time of this report publication.
11 A partner, director, officer or research analyst involved in the preparation of this report has, during the preceding 12 months provided services to this issuer for remuneration other than normal
course investment advisory or trade execution services.
12 A research analyst, associate or any other person (or a member of their household) directly involved in preparing this report has a financial interest in the securities of this issuer.
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14 A member of the Board of Directors of National Bank Financial Inc. is also a member of the Board of Directors or is an officer of this issuer.
15 A redacted draft version of this report has been shown to the issuer for fact checking purposes and changes may have been made to the report before publication.
RATING DISTRIBUTION
Outperform Sector Perform Underperform
Coverage Universe Ratings Distribution 66% 31% 0%
Investment Banking Distribution 71% 63% 66%
DISCLOSURES
Ratings And What They Mean: PRIMARY STOCK RATING: NBF has a three-tiered rating system that is relative to the coverage universe of the particular analyst. Here is a brief description of
each: Outperform (OP) – The stock is expected to outperform the analyst’s coverage universe over the next 12 months; Sector Perform (SP) – The stock is projected to perform in line with the sector
over the next 12 months; Underperform (UP) – The stock is expected to underperform the sector over the next 12 months. SECONDARY STOCK RATING: Under Review (UR) − Our analyst has
withdrawn the rating because of insufficient information and is awaiting more information and/or clarification; Tender (T) − Our analyst is recommending that investors tender to a specific offering for
the company’s stock; Restricted (R) − Because of ongoing investment banking transactions or because of other circumstances, NBF policy and/or laws or regulations preclude our analyst from rating
a company’s stock. INDUSTRY RATING: NBF has an Industry Weighting system that reflects the view of our Economics & Strategy Group, using its sector rotation strategy. The three-tiered system
rates industries as Overweight, Market Weight and Underweight, depending on the sector’s projected performance against broader market averages over the next 12 months. RISK RATING: As of
June 30, 2020, National Bank Financial discontinued its Below Average, Average and Above Average risk ratings. We continue to use the Speculative risk rating which reflects higher financial and/or
operational risk.
GENERAL: This Report was prepared by National Bank Financial Inc. (NBF), a Canadian investment dealer, a dealer member of IIROC and an indirect wholly owned subsidiary of National Bank of
Canada. National Bank of Canada is a public company listed on the Toronto Stock Exchange.
The particulars contained herein were obtained from sources which we believe to be reliable but are not guaranteed by us and may be incomplete and may be subject to change without notice.
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compensation was, is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies.
25
Industry Note
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26
Industry Note
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NBCFM Research | Industry Note

July 17, 2022

INDUSTRY RATING Oil, Gas and Consumable Fuels

Q2/22 Reporting Themes

Analyst Dan Payne, CFA

Associate Logan Fisher

Associate Nick Stevenson

Associate Jacob Swan

Commodity Price Deck Update

Exhibit 1: NBF Commodity Price Assumptions

2022 2023 2024+

Exhibit 2: NBF Commodity Price Assumptions vs. Strip Pricing

NBF Price Deck Strip Pricing as of July 14, 2022

Source: NBF, Bloomberg

Exhibit 3: E&P Equity Drawdown vs. WTI Drawdown

2023e EV/DACF (x)

Q2/22 Reporting Themes

Exhibit 4: Q/Q & Y/Y CFPS Comparison

Source: NBF, Company Reports

NVA 3-Aug (B) $0.80 $0.81 0% 63.5 63.8 0%

Downstream Poised to Outperform

Exhibit 6: 3-2-1 Crack Spreads Historical & Forward Pricing

Source: NBF, Bloomberg

Exhibit 7: NBF Coverage NCIB Progress

POU0% 06/30/2022 - 06/29/2023; 7.6 mln shares (10% O/S)

IMO0% 06/29/2022 - 06/28/2023; 31.8 mln shares (5% O/S)

Source: NBF, Company Reports, INK Research

Appendix 1: Revised Ratings/Estimates/Valuations

ARC Resources Ltd. Rating History as of 07/15/2022

Canadian Natural Resources Limited Rating History as of 07/15/2022

Cenovus Energy Inc. Rating History as of 07/15/2022

Crescent Point Energy Corp. Rating History as of 07/15/2022

Enerplus Corporation Rating History as of 07/15/2022

Freehold Royalties Ltd. Rating History as of 07/15/2022

Imperial Oil Limited Rating History as of 07/15/2022

MEG Energy Corp. Rating History as of 07/15/2022

Ovintiv Inc. Rating History as of 07/15/2022

Peyto Exploration & Development Corp. Rating History as of 07/15/2022

PrairieSky Royalty Ltd. Rating History as of 07/15/2022

Suncor Energy Inc. Rating History as of 07/15/2022

Vermilion Energy Inc. Rating History as of 07/15/2022

Whitecap Resources Inc. Rating History as of 07/15/2022

Advantage Energy Ltd. Rating History as of 07/15/2022

Birchcliff Energy Ltd. Rating History as of 07/15/2022

Baytex Energy Corp. Rating History as of 07/15/2022

Crew Energy Inc. Rating History as of 07/15/2022

Headwater Exploration Inc. Rating History as of 07/15/2022

Kiwetinohk Energy Corp. Rating History as of 07/15/2022

Kelt Exploration Ltd. Rating History as of 07/15/2022

Lucero Energy Corp. Rating History as of 07/15/2022

NuVista Energy Ltd. Rating History as of 07/15/2022

Pipestone Energy Corp. Rating History as of 07/15/2022

Paramount Resources Ltd. Rating History as of 07/15/2022

Spartan Delta Corp. Rating History as of 07/15/2022

Surge Energy Inc. Rating History as of 07/15/2022

Tourmaline Oil Corp. Rating History as of 07/15/2022

Topaz Energy Corp. Rating History as of 07/15/2022

Yangarra Resources Ltd. Rating History as of 07/15/2022

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