This Is

Velvet Energy

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Engagement

Velvet is an organic growth company. We apply best-in-class geoscience and commercial skill to build large and contiguous tracts of land in, and adjacent to, oil-window source rocks. State-of-the-art prospecting, drilling, completions, and production methods allow us to generate top decile economic returns.

CORPORATE PROFILE

MEET THE TEAM

Velvet Energy Operations

Velvet’s operations are focused in the liquids rich window of the Deep Basin of Alberta. The Company produces 17,000 boe/d from the liquids rich Ellerslie formation which spans from West Pembina to Whitecourt. Velvet has over 15 years of Ellerslie and stack development inventory to continue to sustain or grow this high rate of return asset.

The Company recently commenced production in the black oil window of the Montney in the Gold Creek area of northwest Alberta. Velvet controls over 200 net sections of land at Gold Creek, where it produces 4,000 boe/d. The company also has a portfolio of early phase exploration lands, targeting oil and liquids rich prospects in its existing areas of operations.

EXPLORE OPERATIONS

Chronology of Growth

2017

• 1Q2017 was the most active quarter in Velvet’s history, with 16 gross / 11.6 net wells in Edson and Gold Creek.Our program successfully drilled four productive formations across our landbase

• Completed facilities installations and brought on first production at Gold Creek in June 2017

• Achieved 20,000 boe/d milestone at end of 2Q2017

• Velvet has drilled 96 gross horizontal wells in the Ellerslie since 2013

2016

• Drew a total of $65 million equity in the first half

• Completed the 15-7 Montney oil well at Gold Creek

• Doubled Gold Creek acreage to 195 net sections

• Closed US$125 million Senior Secured Second Lien financing and drew $30 million of equity in 3Q2016

• Accelerated development at Edson to two rigs and commenced 3-well winter program at Gold Creek

2015

• Closed a new $100 million equity line with our New York investors in 1Q2015

• Completed construction of a 54mmcf/d fit-for-purpose gas and NGL plant at Zeta Creek in our Edson core in 3Q2015

• Drilling activity in 2015 supported filling our 40% equity interest in the plant at start-up

2014

• Acquired Lightstream assets in West Pembina for $72.2 million in 1Q2014

• Drew $105.6 million of equity to fund the acquisition and expanded Ellerslie delineation program

• Achieved 10,000 boe/d milestone in May 2014

2013

• Drew $50 million of equity in 2Q2013 to fund a multi-zone evaluation of the Deep Basin stack

• Brought our first liquids-rich Ellerslie horizontal well onstream at 1,250 boe/d in West Pembina

2012

• Acquired Vero Deep Basin gas assets for $200 million in 1Q2012

• Drew $110 million of equity to fund the acquisition

2011

• Velvet closed a C$355million equity line with three New York-based investors in 2Q2011

• Drew $70 million of equity at closing

2Q2011

1Q2012

4Q2012

2Q2013

4Q2013

1Q2014

3Q2014

4Q2014

1Q2015

3Q2015

4Q2015

Q12016

2Q2016

3Q2016

Q42016

Current

2Q2011

Closed C$355mm Equity Line at $10.00/sh. Drew $70MM of equity

1Q2012

Acquired Vero Deep Basin assets for $200.5MM. Drew $110MM of equity

4Q2012

Velvet Energy Ltd. Production Growth

2Q2013

Drew $50MM of equity. Concluded multi-zone evaluation of Deep Basin stack. Brought 16-14 Ellerslie hz onstream.

4Q2013

Velvet Energy Ltd. Production Growth

1Q2014

Acquired Lightstream Assets in Pembina for $72.2MM. Drew $75MM of equity.

3Q2014

Completed 1st Montney well and commenced Zeta Creek Plant design. Drew $30.6MM of equity.

4Q2014

Velvet Energy Ltd. Production Growth

1Q2015

Closed new $100MM equity line at $13.75/sh

3Q2015

Completed construction and filled equity interest in new 54mmcf/d fit-for-purpose gas and NGL plant at Zeta Creek. On time and on budget.

4Q2015

Velvet Energy Ltd. Production Growth

Q12016

Drew $15MM of equity.

2Q2016

Edson development accelerated with 2nd rig. Additional land acquisition opportunities in Gold Creek. Drew $50MM of equity.

3Q2016

Completed 15-7 oil well in the Montney at Gold Creek. Doubled Gold Creek landholdings to 195 net sections via asset & Crown land acquisitions.

Q42016

Closed US$125MM Senior Secured Second Lien Financing. Drew $30MM of equity.

Velvet Energy Ltd. Production Growth

Current

Velvet Energy Ltd. Production

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Investor Presentation

Under Construction

Investor Contacts

Chris Theal, Chief Financial Officer

Careers

We’re always looking for talented people to join our team. At Velvet, we value our employees and recognize them as the driving force behind our success.

LEARN MORE

Contact

We are located in the downtown core in Calgary, but you can keep up with what is happening at Velvet by following us on LinkedIn or Twitter.

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