Saguaro Resources Ltd

Private and Confidential – January 2014 1

Saguaro Resources Ltd.Unconventional is our Expertise

Corporate PresentationJanuary 2014

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Certain statements included in this investor presentation (the "Presentation") constitute forward looking statements or forward looking information under applicable securities legislation. Such forward looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this Presentation include, but are not limited to, statements or information with respect to: Saguaro Resources Ltd.'s ("Saguaro" or the "Corporation") business strategy and objectives; statements with respect to the performance characteristics of Saguaro’s oil and natural gasproperties and wells and properties and wells Saguaro believes analogous to its own; potential drilling locations; development plans; exploration plans; focus of the Corporation’s land acquisition plans, including locations, capital efficiencies, testing of resource plays and the anticipated timing thereof; anticipated production; financing plans; anticipated timing of capital calls and the use of proceeds therefrom; expected use of proceeds from December 12, 2013 capital call; terms of the subscription warrants; potential short and long term options for development of infrastructure; potential capital expenditures; anticipated well development program, including number of wells per DSU; forecasted pricing for 2014, 2016 and 2020; and internal rates of return, which include assumptions respecting operating and other costs, royalty rates and taxes. In addition, the statements contained herein relating to "reserves" and "resources" are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the reserves or resources described can be profitably produced in the future. The recovery, reserves and resources estimates provided herein are internal estimates only and there is no guarantee that the estimated reserves or resources will be recovered. As a consequence, actual results may differ materially from those anticipated in the forward looking statements.

Type Well Production and EconomicsThis Presentation contains references to type well production and economics, which are derived, at least in part, from available information respecting the well economics of other companies and, as such, there is no guarantee that Saguaro will achieve the stated or similar results, capital costs and return costs per well. Any references to test rates or initial production rates are useful for confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or ultimate recovery. In addition, such rates may also include recovered fluids used in well completion stimulation. Readers are cautioned not to place reliance on such rates in calculating aggregate production for the Corporation.

AssumptionsForward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Corporation believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Corporation can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this Presentation, assumptions have been made regarding, among other things: the accuracy of geological and geophysical data and its interpretations of that data; estimated decline rates; the impact of increasing competition; the general stability of the economic and political environment in which the Corporation operates; the timely receipt of any required regulatory approvals; the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the Corporation to operate in a safe, efficient and effective manner; the ability of the Corporation to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Corporation to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Corporation operates; and the ability of the Corporation to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

Risks and UncertaintiesForward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Corporation and described in the forward looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward looking statements or information include, among other things: the ability of management to execute its business plan; general economic and business conditions; the risk of instability affecting the jurisdictions in which the Corporation operates; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits; the uncertainty of reserves estimates and reserves life; the ability of the Corporation to add production and reserves through acquisition, development and exploration activities; the Corporation's ability to enter into or renew leases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including decline rates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency exchange rates and interest rates; risks inherent in the Corporation's marketing operations, including credit risk; uncertainty in amounts and timing of royalty payments; health, safety and environmental risks; risks associated with potential future law suits and regulatory actions against the Corporation; uncertainties as to the availability and cost of financing; failure of investors to fund capital calls; risk that the Board of Directors determines to use the proceeds of capital calls for other purposes; and financial risks affecting the value of the Corporation’s investments. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

No Obligation to UpdateThe forward looking statements or information contained in this Presentation are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward looking statements or information contained in this Presentation are expressly qualified by this cautionary statement.

Forward Looking Statements

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FUTURE ORIENTED FINANCIAL INFORMATIONThis document, in particular the information contained in the slides entitled “Full Development Plan (FDP) - Economic Metrics", “Capital Cost & Efficiencies”, “Potential Cash Flow vs. Development Capital”, and “Saguaro Price Deck”, contains Future Oriented Financial Information ("FOFI") within the meaning of applicable securities laws. The FOFI has been prepared by Saguaro’s management to provide an outlook of the Corporation's activities and results. The FOFI has been prepared based on a number of assumptions including the assumptions discussed under the heading "Forward-Looking Statements" and assumptions with respect to the costs and expenditures to be incurred by the Corporation, capital equipment and operating costs, foreign exchange rates, taxation rates for the Corporation, general and administrative expenses and the prices to be paid for the Corporation's production. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the FOFI or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Corporation and the resulting financial results will likely vary from the amounts set forth in the analysis presented in this Presentation, and such variation may be material.The Corporation and its management believe that the FOFI has been prepared on a reasonable basis, reflecting the best estimates and judgments, and represent, to the best of management's knowledge and opinion, Saguaro's expected expenditures and results of operations. However, because this information is highly subjective and subject to numerous risks including the risks discussed under the heading "Forward-Looking Statements", it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, Saguaro undertakes no obligation to update such FOFI and forward-looking statements and information.

OIL AND GAS ADVISORIES

Future Drilling LocationsUnless otherwise expressly stated, the information in this Presentation pertaining to future drilling locations or drilling inventories is based solely on internal estimates made by management and such locations have not been reflected in any independent reserve or resource evaluations prepared pursuant to National Instrument 51-101 ("NI 51-101"). Similarly, unless otherwise expressly stated, the information in this Presentation pertaining to targeted reserve volumes from future drilling is intended to indicate that in making its internal drilling decisions, the Corporation seeks to target drilling locations that, based on previous drilling results and its own internal assessments, it believes will on average ultimately generate the indicated volumes.

Reserves and Resources"Gas in Place" or "mmBoe in Place" or "mmBoe Recoverable" are not indicative of reserves, nor are they categories of resources recognized by the Canadian Oil and Gas Handbook. These volumes are based upon Saguaro’s internal estimates only and are not derived from an independent resources evaluation prepared pursuant to NI 51-101. There may be more specific sub-categories of resources applicable to these estimates that would provide a more accurate description of the resources and the work programs, technology and capital required to exploit such resources, but these have not been prepared by the Corporation. In addition, these volumes represent “best” case estimates however “low” and “high” case estimates have not been prepared by the Corporation. There is no certainty that any portion of the noted volumes or resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion thereof.

Analogous InformationIn this Presentation, Saguaro has provided information with respect to certain production information for lands and wells located near its Montney fairway acreage which is "analogous information" as defined applicable securities laws. This analogous information is derived from publicly available information sources which the Corporation believes are predominantly independent in nature. Some of this data may not have been prepared by qualified reserves evaluators or auditors and the preparation of any estimates may not be in strict accordance with Canadian Oil & Gas Evaluation Handbook. Regardless, estimates by engineering and geo-technical practitioners may vary and the differences may be significant. Saguaro believes that the provision of this analogous information is relevant to Saguaro's activities, given its acreage position and operations (either ongoing or planned) in the area in question, however, readers are cautioned that there is no certainty that any of the development on Saguaro's properties will be successful to the extent in which operations on the lands in which the analogous historical production information is derived from were successful, or at all.

Future Oriented Financial Information & Oil & Gas Advisories

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• Saguaro has amassed a substantial land position in a liquids rich natural gas resource play▫ Continue to add land through land sales and acquisitions▫ Current land base of over 100 sections, exact land position is confidential for

strategic reasons

• Focus continues on Alberta/BC tight oil and liquids rich gas fairways▫ Extract value from unconventional resources▫ Emphasis on value creation driven by effective use of current technologies▫ Focus on capital efficiencies and being a low cost producer▫ Test resource play through vertical and horizontal wellbores▫ Consolidate a position in one or more resource plays

Developing Saguaro’s Assets

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Common Shares(Millions)

Gross Proceeds

($MM)

Private Placement 11.01 $20.7Private Equity 147.73 $325.0Subscription Warrants 13.37 $29.4Total Available Equity(1) 172.11 $375.1

Private Equity Summary:Total Private Equity available $325.0Previous amount drawn(2) 20.19 - $44.4Additional Investor True-Up(3) 2.14 - $4.7Capital Call for Sep. 30, 2013 13.91 - $30.6Capital Call for Dec. 12, 2013 33.18 - $73.0Total Private Equity drawn $152.7

Remaining Private Equity $172.3

Equity Capitalization

1. Assumes full draw on Line of Equity and all subscription warrants are exercised.2. Includes $15 MM for the Issuer Bid program and prior Capital Calls totalling $29.4 MM.3. Additional Private Equity Firm added in December to increase total private equity available to

$325MM. True-up required to align proportionate spend with other Private Equity Firms.

• $325 MM of private equity financing has been secured▫ $2.20 per share▫ Cash draws on line of equity

(“Capital Calls”) as required▫ Capital Calls are expected to

occur on a quarterly basis or for special circumstances such as land sales, asset acquisitions, etc.

• Subscription warrants are eligible with Capital Calls▫ $2.20 per share ▫ Participation in Sep. 30 Capital

Call was oversubscribed Received additional share

requests totalling 24% excess of the eligible amount

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• A Capital Call for $73.0 MM closed on December 12, 2013▫ This Capital Call will be used to fund land acquisitions and the Q1 2014 capital

program including: Drilling 4 horizontal wells, completing 3 horizontal wells, expanding compression and

dehy capacity, building a pipeline for new production and pad construction

• Shareholders who are still participating(1) in the Subscription Warrant program (“Warrant holders”) are eligible to exercise such subscription warrants following the December 12, 2013 Capital Call▫ Acquire a prescribed number of shares at the same price of $2.20 per share ▫ Warrant holders will have 60 days to participate (deadline February 17, 2014)▫ Please refer to the subscription agreements sent to each shareholder for

completion and the exercise notice that was sent to Warrant holders on or about December 17, 2013 for further information

Subscription Warrant Program & Capital Call

1. Warrant holders who did not participate in the September 30, 2013 Capital Call are not eligible to participate in the December 12, 2013 Capital Call or any other subsequent Capital Calls. Confid

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• As per the Subscription Warrant agreement, Warrant holders are entitled to participate at 10.4862% of each Capital Call▫ 10.4862% of $73.0 MM (or 33,181,810 shares) = $7,654,924.11 ▫ Equates to 3,479,510 shares @ $2.20/share

(rounded down to nearest whole share)

• Each warrant holder’s proportion is based on their participation ratio▫ Participation ratio = shares owned(1) / 10,570,465 total warrant holder shares

For example: Warrant holder #1 owns 25,000 shares Participation ratio is 25,000 / 10,570,465 = 0.237%

▫ Therefore, if warrant holder #1 exercises their warrant for this Capital Call: That Warrant holder would be required to purchase no less than:

8,229 common shares at $2.20 per share or $18,103.80 This amount is calculated as: 0.237% x 3,479,510 common shares at $2.20/share

Note: Warrant holder can also request to purchase Additional Subscription Shares

Capital Call

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• If a Warrant holder does not participate in this Capital Call, the Subscription Warrant is terminated▫ Warrant holder will not be eligible to participate in future Capital Calls -- “One

Strike” -- but will retain all shares purchased in prior Capital Calls

• Warrant holders participating in the warrant program can request additional shares (“Oversubscription”) above their eligible amount ▫ Additional Subscription Shares are available for purchase due to non-

participation of some Warrant holders in the September 30, 2013 Capital Call 335,068 Additional Subscription Shares (at $2.20 per share) are available More shares will be available if Warrant holders do not participate in this Capital Call

▫ Oversubscription must be stated at initial time of warrant capital request If more Additional Subscription Shares are requested than available through non-

participation, pro-ration of the available Additional Subscription Shares will occur based on the warrant holder’s original ratio of common shares held

Subscription Warrant Program

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• Since the creation of Saguaro Resources in August 2012, capital has been spent on various value-add activities:

Activity to Date(1)

As at December 31, 2013 $MM

Land sales & acquisitions $98.5

Capital Development Program(Standing wellbore including test and tie-in; two horizontal wells; deposits on facility and pipeline long lead items; seismic; road, camp and lease construction)

$18.4

G&A; financing & asset closing costs $8.9

TOTAL $125.8

Total Equity Issued to December 31 $176.7

Working Capital Balance as at December 31 $50.9

1. Preliminary analysis only. Amounts are unaudited and subject to change based on year-end procedures and allocations.

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Potential Captured to Date - Montney(1)(2)

• Captured over 100 sections of a Liquids Rich Montney Natural Gas play with stacked potential▫ Asset acquisitions & land sales ▫ Potential to capture additional

lands on trend

1. Based on internal estimates pending continued evaluation.2. See disclaimer on page 3 hereof respecting reserves and resources information.

Internal estimate of resource size:

2,500 MMBoe in Place(15 Tcf Gas in Place)

830-1,200 MMBoeRecoverable

Est. 25-30% Liquids

Scale: 19 miles

55 bbls/MMcf19% C317% C464% C5+ (includes Free)

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0

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1,200

1,400

0 5 10 15 20 25 30 35 40

Gas

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Normalized Producing Months

Type Well per Stage(1)(2)

1. Graph and data table public data as per Geoscout and Canadian Discovery Frac Database (updated November 2013).2. Type curves based on 100 tonnes/stage, 10m3/min rate/stage, 600 m3 fluid/stage

• Type well is representative of the1:1 relationship seen in Deep Basin Montney wells

▫ For example, a 10 stage well at 300 mcfd per stage would result in a 3.0 mmcfd well

Risked

Team Pick Type Well

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• Drill 13 HZ wells

• Build 20 MMcfd facility (two 10 MMcfd phases)

• Install backbone gathering system (3 stages)

• Move from pilot delineation to demonstration de-risking

• Ability to adjust 2014 capital program to align with well results (both Saguaro and offsetting wells)

2014 Budget Overview

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Full Development Plan (FDP) - Economic Metrics(1)

(Once de-risked with verticals and early horizontal drilling program)

FDP

Total Capital ($MM) $1,708

IRR(2) (%) 47.4%

NPV0 ($MM) $5,499

NPV10 ($MM) $1,324

PIR0(3) (net) 3.22

PIR10(3) (net) 0.78

NPV0 / Well ($MM) $22.91

NPV10 / Well ($MM) $5.52

Supply Cost ($/Mcf) $0.78

• PIRO and PIR10 are stated as net of capital in NPV. i.e. +1 to compare to industry

Note: Internally generated price file.

Gas $/MMBtu

Propane$/bbl

Butane $/bbl

Condensate $/bbl

2014 $3.39 $27.41 $50.25 $100.50

2016 $4.05 $28.57 $52.37 $104.75

2020 $4.98 $30.29 $55.53 $111.07

1. See disclaimer on page 3 hereof respecting future oriented financial information.2. IRR does not include G&A, land costs and undeveloped land value.3. PIR (Profit to Investment Ratio) is the ratio of payoff to investment for the project. For example, a net PIR (PIR0 for undiscounted future cash flow

and PIR10 for future cash flow discounted by 10%) of $1.50 represents for every $1.00 of investment, the project will return the invested $1.00 plus and additional $1.50 of profit for a total cash flow of $2.50. The net PIR of such a project would be $1.50 while the gross PIR would be $2.50.

• The Full Development Plan assumes a 20 DSU development with 240 HZ Montneylocations which represents less than 20% of Saguaro’s existing land base

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Capital Cost & Efficiencies(1)(2)

• Economies of scale can be achieved through pad drilling

• Risked scenario:▫ 6 wells/section pad▫ Personnel & equipment Mob/

De-Mob savings▫ Lease construction savings▫ Tie in cost reduction

• Un-risked scenario:▫ 12 wells/section pad▫ Further site savings▫ Operational efficiencies

$6.0 MM

$5.0 MM

$4.0 MM

1. See disclaimer on page 3 hereof respecting future oriented financial information.2. Cost estimates based on a 1000m, 10 stage well.Con

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Saguaro Price Deck(1)

Gas $/MMBtu

Propane$/bbl

Butane $/bbl

Condensate $/bbl

2014 $3.39 $27.41 $50.25 $100.50

2016 $4.05 $28.57 $52.37 $104.75

2020 $4.98 $30.29 $55.53 $111.07% of

Edm. Light 30% 55% 110%

Note: Jan. 27 Edmonton Light - $90.30/bbl

Source: ARC Financial Corp. Energy Charts – January 27, 2014

1. Internally generated price file.

$0 $500 $1,000 $1,500 $2,000 $2,500

Price

Volumes

Capital

Variable Costs

Saguaro FDP NPV10 Tornado ($MM)

Volumes & capital are linked;

increasing HZ length and # of stages

result in increased IP & EUR

+20%

+20%

+20%

+20%

-20%

-20%

-20%

-20%

$MM

NPV10 = $1,324 MM

Daily NGL Prices as % of Edmonton Par

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Potential Liquids Rich Development Program(1)


1. 240 well development program which at 12 wells per DSU develops 20 DSU’s of Saguaro’s existing land position with 15 stage HZ team pick wells.

0

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150

200

250

300

350

1 2 3 4 5 6 7 8 9 10

Annu

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Development Year

GasNGLs

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10

15

20

25

30

35

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Development Year

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Potential Cash Flow vs. Development Capital(1)(2)


1. 240 well development program which at 12 wells per DSU develops 20 DSU’s of Saguaro’s existing land position with 15 stage HZ team pick wells (development represents less than 20% of Saguaro’s existing land base).

2. See disclaimer on page 3 hereof respecting future oriented financial information.3. Development capital does not include land or exploration capital.

Full Development Plan

Development Capital(3) ($MM) $1,708

NPV10 ($MM) $1,324

Total Locations 240

Note: Internally generated price file.($400)

($200)

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

1 2 3 4 5 6 7 8 9 10

$MM

Development Year

Development Capital ExpendituresOperating Cash FlowCumulative Net Cash Flow

Gas $/MMBtu

Propane$/bbl

Butane $/bbl

Condensate $/bbl

2014 $3.39 $27.41 $50.25 $100.50

2016 $4.05 $28.57 $52.37 $104.75

2020 $4.98 $30.29 $55.53 $111.07

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• $73.0 Capital Call provides the capital required to fund prior land acquisitions and the Q1 2014 capital program including:

• Horizontal wells▫ Construct pad site▫ Drill four horizontal wells

(each well will penetrate one of the three Montney zones)

▫ Complete three horizontal wells

• Facilities▫ Completion of a 10 MMcf/d facility

and pipeline for new production

December 12th Capital Call Use of Proceeds(1)

$MM

Land acquisitions (2013) $35.8

Horizontal wells $18.8

Facilities $15.9

Other including Corporate expenses, seismic, G&A, etc.

$2.5

TOTAL $73.0

1. See disclaimer on page 2 hereof respecting forward looking statements.Confid

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• Warrant holders have the opportunity to participate following Saguaro’s December 12, 2013 Capital Call under the warrant program ▫ Can participate up to 10.4862% of $73.0 MM Capital Call or $7.65 MM▫ Deadline of February 17, 2014 to complete the participation process ▫ Calculation for each individual warrant holder:

= Capital Call Amount x 10.4862% x Number of Shares Owned(1)

10,570,465 Total Shares held by Warrant Holders

▫ Please note: as stated in the subscription warrant agreement, if a Warrant holder does not participate in this Capital Call the subscription warrant is terminated

• Another Capital Call may be issued in early Q2 2014▫ Warrant holders have 60 days after the closing of the Capital Call to participate▫ Corporate Presentation will continue to be updated prior to each Capital Call▫ Company is willing to conduct one-on-one in depth presentations, please

contact Stacy Knull or Rich Greenough at (403) 453-3040 to arrange a time

Summary

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Saguaro Resources Ltd

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