Cenovus Central Alberta Assets Opportunity...

OFFERING PROCESS OVERVIEWIt is the intention of Cenovus Energy Inc. (“Cenovus” or the “Company”) and CIBC Capital Markets (“CIBC”) to conduct the offering process such that it minimizes any disruption to Cenovus’s operations. Interested parties should not contact Cenovus directly regarding any aspect of the offering process. All communications, enquiries and requests for information relating to the offering process should be directed to one of the CIBC contacts listed below. Cenovus has made a strategic decision to divest each of the assets as a “white map”.CENTRAL ALBERTA

ASSETS OPPORTUNITY

TABLE OF CONTENTSOpportunity Highlights ....................................................................... page 1

Opportunity Overview ....................................................................... page 2

Central Alberta Regional Overview ....................................................... page 3

Ferrier Asset .................................................................................. page 4

Hoadley Asset ................................................................................. page 5

Lodgepole Asset ............................................................................... page 6

Disclaimer ...................................................................................... page 7

Bryan BergManaging Director

Tel: (403) [email protected]

Michael FreebornManaging Director,

Head of Energy Investment BankingTel: (403) 221-4138

[email protected]

Colin ManDirector


* CA Contact

CIBC Capital Markets9th Floor, Bankers Hall East

855 – 2nd Street SWCalgary, AB T2P 4J7

CIBC CONTACTS

Brian MacInnis*Associate


Asset AreaDeveloped Undeveloped Total Avg.

WIGross Net Gross Net Gross Net

Ferrier 187.4 101.3 56.4 29.0 243.8 130.3 53%

Hoadley 143.4 89.2 17.1 10.3 160.5 99.6 62%

Lodgepole 142.0 96.4 33.6 17.9 175.6 114.3 65%

Total 472.7 287.0 107.1 57.2 579.8 344.2 59%

OPPORTUNITY HIGHLIGHTS

1

Cenovus has retained CIBC as its financial advisor to solicit and evaluate proposals for selected assets in Central Alberta.

Opportunity to acquire ~16.5 Mboe/d high quality, low decline liquids-weighted production (~50%) with a substantial inventory of low-risk, varied age drilling opportunities throughout the stratigraphic column, and extensive, high quality, strategic infrastructure. Geographically-focused land base of ~344,200 net acres with high working interests. Assets include royalty interest production of ~250 boe/d.

Asset Area

Production

2015 2016 2017YTD1

(Mboe/d) (Mboe/d) (Mboe/d)

Ferrier% Liquids

4.4~40%

4.4~40%

3.9~40%

Hoadley% Liquids

11.2~40%

10.0~50%

8.0~45%

Lodgepole% Liquids

5.6~50%

4.7~55%

4.6~55%

Total% Liquids

21.2~45%

19.1~50%

16.5~50%

Production and Financial SummaryOverview Map

1 Production and % liquids reflects the period January to September 2017.2 Numbers may not add due to rounding.

Land Summary (thousands of acres)2

OPPORTUNITY OVERVIEW

2

LOW DECLINE, LIQUIDS-WEIGHTED PRODUCTION BASE• Low decline production base

• ~16.5 Mboe/d of liquids-weighted production (~50%), including royalty interest production of ~250 boe/d

• Year-round access in close proximity to major service centers

• Estimated Liability Management Rating (“LMR”) of 2.29

LARGE SCALE, LOW RISK, MULTI-ZONE OPPORTUNITIES• Significant growth capability through infill and step-out drilling

• ~1,000 (gross) drilling opportunities throughout the stratigraphic column

— Includes ~750 (gross) horizontal drilling opportunities within the Glauconitic, Falher, Notikewin and Cardium formations

• Overall development plan adds >200 MMboe (gross) of incremental volumes

HIGH QUALITY, STRATEGIC INFRASTRUCTURE• Extensive owned and operated infrastructure with <50%

utilization enables significant low cost production growth

• Gas primarily processed through deep cut facilities with unconstrained sales transportation and market egress

• Significant third party fee revenue

Regional Trend Map

Glauconitic

Cardium

Deposition Trends

CENTRAL ALBERTA REGIONAL OVERVIEW

OIL OPPORTUNITIES• Cardium

• Viking

• Glauconitic

• Jurassic

• Pekisko

• Banff

• Leduc

LIQUIDS-RICH GASOPPORTUNITIES

• Notikewin

• Falher

• Glauconitic

• Ostracod/Ellerslie

• Rock Creek

• Wabamun

GAS OPPORTUNITIES• Edmonton

• Belly River

AREA ACTIVITY HIGHLIGHTS

Ellerslie:Velvet 05-21-048-11W5: 2.4 MMcf/d IP, NGL yield of 84 bbl/MMcf

Glauconitic:Prairie Storm 2013 wells T39 R04W5: 170 bbl/d IP’s, flat recent production of 40 bbl/d

Ellerslie:Sitka 02-17-034-04W5: 1.6 MMcf/d IP, NGL yields >100 bbl/MMcf

Falher:Bellatrix 102/04-27-043-09W5: Peak rate of 10.6 MMcf/d,Cum. 5.5 Bcf

Duvernay:Paramount 03-28-039-05W5: >200 bbl/d IP, Cum. 43 Mbbl oil, 120 MMcf gas since 2016/10

Edmonton Gas:Jayhawk 16-31-043-04W4: IP 2.8 MMcf/d, Cum. 1.1 Bcf

Cardium:Well established trends with ongoing development both on and off Cenovus lands

Glauconitic: Strong, continued development along the Hoadley trend

Viking:NAL/Gain:04-10-044-03W5: IP >400 bbl/d oil, 800 Mcf/d gas, Cum. 110 Mbbl

Cardium (Bioturbated):Yangarra: 01-34-039-08W5: 1,017 boe/d IP (80% liquids)

Duvernay:East Shale Basin development by Vesta and others – recent land sales >$675/ha

Falher:Bonavista drilling in T42-44 R27-28W4 can be mapped onto Cenovus lands, recent Husky well at 102/13-02-039-02W5

Notikewin:TAQA 102/04-32-042-10W5: IP of >7 MMcf/d, Cum. >2.8 Bcf

3

0

500

1,0001,500

2,0002,500

3,000

3,5004,000

4,5005,000

2015 2016 2017

Prod

uctio

n (boe/d)

Cardium Glauc Ellerslie Rock Creek Pekisko Other

FERRIER ASSET

4

OPPORTUNITY HIGHLIGHTS• Current production of ~3.9 Mboe/d (~40% liquids) from ~650 wells including ~100 boe/d of

royalty interest production

• Low annual decline rate, estimated at ~8% since 2015

• 243,769 gross acres (130,323 net), 77% developed

• Active area with 171 industry wells rig-released since 2015

• Legacy production is mainly from the Viking, Ellerslie, Ostracod, Glauconitic, Cardium, Pekisko, and Elkton formations

• Recent industry activity has focused on the Cardium formation and Spirit River group, with additional drilling targeting the Glauconitic, Ellerslie and Duvernay formations

• Highly developed oil infrastructure including 4 operated oil batteries with potential for continued area facility consolidation

• Working interest in 5 gas plants (2 operated) with significant gathering infrastructure and compression to service broad land base

• Estimated LMR of 2.37

Cenovus Working Interest Production by Formation1

DEVELOPMENT OPPORTUNITIES• 189 gross Cardium oil drilling opportunities (~9.5 MMbbl)

• High impact Spirit River (44 Falher and 40 Notikewin gross drilling opportunities) (~332 Bcf)

• Additional drilling opportunities include: 13 Rock Creek, 2 Jurassic sand, 7 Ellerslie, 6 Viking and 23 Edmonton sand opportunities

• Numerous vertical recompletion candidates in multiple formations

Asset Map

1 Cenovus working interest production before royalties based on public data up to August 2017; does not include royalty interest production; NGL yield based on estimates.

Cardium

Deposition Trends

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2015 2016 2017

Prod

uctio

n (boe/d)

Glauc Ellerslie Rock Creek Pekisko Other

HOADLEY ASSET

5

OPPORTUNITY HIGHLIGHTS• Current production of ~8.0 Mboe/d (~45% liquids) from ~570 wells including ~100 boe/d of

royalty interest production



• Very active area, with 132 industry wells rig-released since 2015

• Legacy production is dominated by the Glauconitic formation, with additional production from the Pekisko

• Recent activity has focused on the highly prospective Glauconitic formation, with additional drilling targeting the Cardium and Duvernay formations

• Significant owned and operated gathering infrastructure including ~10,000 hp of field compression (<50% utilization) accessing deep cut processing capacity with unrestricted NGL fractionation and gas egress facilitating immediate development potential


DEVELOPMENT OPPORTUNITIES• Large opportunity base with numerous development horizons

• Significant Glauconitic potential within the Hoadley trend with ~375 gross low risk drilling opportunities identified (~670 Bcf)

• 32 gross Viking oil drilling opportunities

• Additional oil and gas drilling opportunities include: 5 Pekisko, 11 Rock Creek, 4 Ellerslie, 3 Cardium, 2 Belly River and 63 Edmonton sand opportunities

• Numerous vertical recompletion candidates in multiple formations


Asset Map


Glauconitic

Deposition Trends

Cardium

Deposition Trends

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2015 2016 2017

Prod

uctio

n (boe/d)

Cardium Glauc Ellerslie Rock Creek Pekisko Leduc Other

LODGEPOLE ASSET

6

OPPORTUNITY HIGHLIGHTS• Current production of ~4.6 Mboe/d (~55% liquids) from ~780 wells including ~50 boe/d of royalty

interest production



• Active area with 221 industry wells rig-released since 2015

• Legacy oil and gas is primarily from the Leduc, Banff, Nordegg, Cardium, Rock Creek, Ellerslie, Ostracod, Notikewin and Falher formations

• Recent activity has focused on the Cardium primarily within the prolific Pembina field where 57 drilling opportunities have been identified

• Emerging opportunities include the Ellerslie and Duvernay as indicated through recent offset development and land sale activity

• Solution gas flows through the Keyera deep cut facility, providing high NGL content

• Highly developed, operated infrastructure (<50% utilization) for both gas and oil including the Lodgepole Gas Plant (30 MMcf/d licensed capacity), >12,000 horsepower of field and battery compression and 3 oil batteries processing connected, trucked-in and third party volumes


DEVELOPMENT OPPORTUNITIES• 57 gross Cardium oil drilling opportunities (~3.4 MMbbl)

• 44 gross Notikewin gas drilling opportunities (~105 Bcf)

• 5 low risk Leduc infill gross drilling opportunities at Homeglen Rimbey

• 9 gross Ostracod/Ellerslie oil and liquid rich gas drilling opportunities within a well developed fairway located in the Pembina region

• Additional drilling opportunities exist throughout the area including: 7 Wabamun, 2 Banff, 2 Pekisko, 4 Rock Creek, 8 Glauconitic and numerous Edmonton sand opportunities

• Vertical recompletion candidates in multiple formations


Asset Map


DISCLAIMER

7

This Information Summary (the “Summary”) is being furnished solely for use by the prospective purchasers(“Prospective Purchasers”) in connection with their consideration of a potential acquisition of one or more ofthe Central Alberta Assets of Cenovus Energy Inc. (the “Company”) and is not binding in any way. The Companyhas retained CIBC World Markets Inc. (“the Advisor”) as its financial advisor in connection with the potential saleof the Central Alberta Assets (the “Proposed Transaction”). This Summary is based upon information supplied bythe Company and from other sources.

This Summary includes certain statements, estimates and projections provided by the Company with respect toits management’s subjective views of the anticipated future performance of the Company’s business. Suchstatements, estimates and projections are identified by words such as “estimate“, “forecast“, “expect”,“potential”, or similar expressions and includes suggestions of future outcomes. Such statements, estimates, andprojections reflect various assumptions by the management of the Company concerning anticipated results,which assumptions may or may not prove to be correct. These projections have not been independently verifiedand cannot be regarded as forecasts. The pro forma and estimated financial information contained herein wasprepared expressly for use herein and is based on certain assumptions and management’s analysis of informationavailable at the time this Summary was prepared. There can be no assurance that management’s views orassumptions are accurate or that management’s projections and forward-looking statements will be realized.Industry experts may disagree with these assumptions and with management’s view of the market and theprospects for the Company. The actual results may vary from the anticipated results and such variations may bematerial. For additional information regarding the underlying assumptions made by management in developingforward-looking information and the risks and uncertainties associated with such information, please see theadvisories contained in Cenovus’s most recently filed Management Discussion & Analysis and Annual InformationForm filed on SEDAR. No representations are made, and any and all representations are hereby expresslydisclaimed, as to the accuracy of such statements, estimates or projections, and neither of the Advisor or theCompany has any obligation to update or correct any such information. Only information and representationsand warranties specifically contained or referred to in a definitive purchase agreement, if any, and subject tosuch limitations and restrictions as may be contained or made in a definitive and final written agreement, when,as and if executed, will have any legal effect. No person has been authorized to provide any information withrespect to the Company or the Proposed Transaction except the information contained herein. Unless otherwisestated, this Summary presents information with respect to the Company as of the date hereof. In furnishing thisSummary, the Advisor and the Company reserve the right to amend or replace the Summary at anytime andundertake no obligation to provide any Prospective Purchaser with any additional information, or to update, orto correct any inaccuracies which may become apparent in this Summary or any other information madeavailable in connection with the Proposed Transaction.

The Advisor, including its respective subsidiaries, controlling companies, affiliates, companies under commoncontrol and their directors, officers, employees, advisors and other representatives (“Representatives”)expressly disclaims any and all liability relating to or resulting from the use of the Summary or such otherinformation, reliance on the information contained herein, or the distribution or possession of this Summary,including without limitation, any market analysis and financial projections that may be contained herein orprovided in connection herewith, by a Prospective Purchaser or its affiliates or any of their respective directors,officers, employees, advisors or other representatives. The Advisor has not independently verified any of theinformation, including the projections, contained herein. None of the Advisor, the Company nor any of theirrespective Representatives makes any representation or warranty, express or implied, as to the accuracy orcompleteness of any of the information contained in the Summary or any other information (whethercommunicated in written or oral form) transmitted or made available to Prospective Purchasers. In providing thisSummary, the Advisor is not acting as financial advisor, intermediary and/or distributor of securities to or forany Prospective Purchaser and has no fiduciary responsibility of any kind to any Prospective Purchaser.

The information contained herein does not purport to be all-inclusive or contain all of the information that aProspective Purchaser may need or desire. Before deciding to participate in the Proposed Transaction,Prospective Purchasers shall take all measures that they deem necessary to ensure the due understanding of theProposed Transaction in all its aspects and make an independent assessment of the merits, terms, conditions,risks, suitability and appropriateness of any transaction and/or any related securities described herein. TheProspective Purchasers should also seek advice from specialized advisors (financial, tax, legal and accounting,among others) to make such assessment.

The Company reserves the right to terminate, at any time, solicitations of interest for the transaction involvingthe Proposed Transaction or future participation in the investigation and proposal process by any party. Anydealings, negotiations and/or discussions that may be initiated or established with the Prospective Purchasersmay be interrupted at any time without any explanation. No responsibility can be attributed to the Advisor forany interruption of any ongoing discussions. The Company reserves the right to negotiate with one or moreProspective Purchasers at any time and to enter into a definitive agreement involving the Proposed Transactionwithout prior notice to any other Prospective Purchaser. The Company also reserves the right to enter intoexclusive discussions with any third party at any time without incurring any liability whatsoever. Finally, theCompany and the Advisor reserve the right to modify, at any time, any procedures relating to such process, orterminate or extend the process, without assigning any reason therefore and reject or decline any proposals attheir sole discretion. The Company reserves the right to take any action, whether in or out of the ordinarycourse of business, including but not limited to the sale of any securities or property, which the Company deemsnecessary or prudent in the conduct of such business.

This Summary does not constitute nor does it form part of an offer to sell or purchase, or the solicitation of anoffer to sell or purchase, any securities or any of the businesses or assets described herein or an offer offinancing or an offer or recommendation to enter into any transaction described herein. Neither this Summarynor its contents will form the basis or part of any contract. No transaction or service related thereto iscontemplated without a written agreement.

The information contained in this document is not intended to constitute a “report, statement or opinion of anexpert” for purposes of Canadian securities legislation.

The calculation of oil equivalency (“boe”) is based on a conversion ratio of six thousand cubic feet of natural gasto one barrel of oil to estimate relative energy content and does not represent a value equivalency at thewellhead. Boe’s may be misleading, particularly if used in isolation.

CIBC World Markets Inc. is a legal entity name. CIBC Capital Markets is a trademark brand name under whichdifferent legal entities provide different services under this umbrella brand. Products and/or services offeredthrough CIBC Capital Markets include products and/or services offered by the Canadian Imperial Bank ofCommerce, the parent bank of CIBC World Markets Inc. and various other subsidiaries of the Canadian ImperialBank of Commerce. Services offered by the Canadian Imperial Bank of Commerce include corporate lendingservices, foreign exchange, money market instruments, structured notes, interest rate products andcommodities, equity options and OTC derivatives. Canadian exchange-traded equity options are executedthrough CIBC World Markets Inc. Equity and fixed income securities are executed through CIBC World MarketsInc. and other directly or indirectly held subsidiaries of CIBC.

CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment IndustryRegulatory Organization of Canada. CIBC World Markets Corp. is a member of the Financial Industry RegulatoryAuthority. CIBC World Markets plc is regulated by the Prudential Regulation Authority and Financial ConductAuthority.

CIBC World Markets Securities Ireland Limited is regulated by the Central Bank of Ireland. CIBC Australia Ltd isregulated by the Australia Securities and Investment Commission. CIBC World Markets (Japan) Inc. is a memberof the Japanese Securities Dealer Association. Canadian Imperial Bank of Commerce, Hong Kong Branch, is aregistered institution under the Securities and Futures Ordinance, Cap 571. Canadian Imperial Bank ofCommerce, Singapore Branch, is an offshore bank licensed and regulated by the Monetary Authority ofSingapore.

Cenovus Central Alberta Assets Opportunity...

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