Calgary Public Library

January 9, 2019

The New Energy Bull Market

Is Ready To Rocket In 2019

Source: stockcharts.com May 18, 2018

S&P/TSX ENERGY INDEX

Over valued

Under valued

Over valued

CRUDE OIL – WTI – PRICE/B US$

Source: stockcharts.com April 20, 2018

OVERBOUGHT

OVERSOLD

US$60/b

Breach point

SELL Zone above 90%

BUY Zone below 10%

Now

80.64%

S&P ENERGY BULLISH PERCENT

INDEX

Source: stockcharts.com

April 20, 2018

US COMMERCIAL CRUDE

INVENTORIES HAVE BIG GAIN

Source: Wall Street Journal – Daily Shots November 16, 2018

SPECULATIVE POSITIONS BEING

LIQUIDATED –MARGIN CALLS

Source: Wall Street Journal –

Daily Shots January 7, 2019

OPEC PRODUCTION

NOVEMBER 2018

Source: OPEC Monthly Oil

Report December 12, 2018

SAUDI PRODUCTION CUTS MEANINGFUL

Source: Wall Street Journal –

Daily Shots January 3, 2019

CRUDE MARKETS

HEADING INTO BALANCE WITH

OPEC CUT

Source: Wall Street Journal –

Daily Shots December 6, 2018

Source: Hess Presentation December 12, 2018

Source: US EIA, Thomas Reuters and Schacter Energy Report data August 2018

Source: Transocean Presentation December 4, 2018

NYMEX:

WTI CRUDE OIL:

Schachter Energy Report - Weekly Gas Injection/Withdrawal

$48.12

$2.99

Week ending December 28, 2018

0

500

1000

1500

2000

2500

3000

3500

4000

Tota

l NG

as in

Sto

rage

(Bcf

)

Rolling 5 Year Storage Band

2018 Storage Levels

2017 Storage Levels

2016 Storage Levels

This week: -20Bcf Withdrawal5 year avg: -58Bcf Withdrawal

NATURAL GAS STORAGE US

Source: WTRG October 10, 2017

S&P TSX ENERGY INDEX

Source: stockcharts.com January 8, 2019

Target

2020

Target

2019

Bull Market

Peak 2023

Target

DOW JONES INDUSTRIALS INDEX – ANNUAL CHART

TTarget Q1/19 20,000 – 21,000

Source: stockcharts.com January 4, 2019

$VIX – VOLATILITY INDEX

Source: stockcharts.com December 14, 2018

53.29

89.53

FEAR ZONE: BUY

NORMAL ZONE/Quiet

Market

Optimism

Panic Selling

Source: stockcharts.com December 14, 2018

S&P ENERGY SECTOR BULLISH PERCENTAGE INDEX – BUY SIGNALS BELOW 5%

Source: stockcharts.com December 14, 2018

S&P ENERGY BULLISH PERCENT INDEX

4.8X

470.01

99.09

S&P/TSX ENERGY INDEX

Source: stockcharts.com August 20, 2008

7.8 X

25.10

3.20

VERMILION ENERGY

Source: stockcharts.com December 30, 2008

Source: Ensco Presentation December 12, 2018

Source: Ensco Presentation December 12, 2018

Source: Ensco Presentation December 12, 2018

Source: Transocean Presentation December 4, 2018

Source: Hess Presentation December 12, 2018

Source: Hess Presentation December 12, 2018

SCHACHTER ENERGY REPORT’SRESEARCH PROCESS

• Global Events that may impact the

price of Oil and Natural Gas

• Fundamentals and Technical

Analysis in the Energy Sector and at

Corporate levels

• Detailed analysis at the Company

level, People, Projects and Financial

Capacity

ENERGY TARGETS

Source: Reported data and SER forecasts

NOW

COMPANIES Jan 04/19 1H/19 2H/19 2020 2023

CRUDE OIL US$/b $48.17 42.00 - 62.00 56.00 - 78.00 65.00 64.00 - 90.00 75.00 100.00 > 148.00

NYMEX NAT GAS US$/MCF $2.89 2.70 - 5.00 3.00 - 7.00 3.50 3.00 - 8.00 4.00 4.50 > 10.00

AECO NAT GAS C$/MCF $1.60 0.00 - 3.50 1.50 - 4.00 2.75 1.00 - 5.00 3.00 3.25 > 5.00

S+P/TSX ENERGY INDEX 143 125 - 170 160 - 200 180 - 340 280 - 400 > 470

2019

Energy Targets - January 4, 2019

FORECAST

AVERAGE

FORECAST

AVERAGE

FORECAST

MARKET

PEAK

COMPANIES SYMBOL STOCK PRICESHARES O/S

M

MARKET CAP

$M

ALERT BUY

LEVEL

ATTRACTIVE

PURCHASE

TABLE-

POUND BUY

RECENT BOOK

VALUE

12 MONTH

TARGET

MARKET

PEAK*

LARGE MARKET CAPITALIZATION > $1.0B

CRESCENT POINT ENERGY CPG-T $4.38 549.9 $2,409 $5.52 $16.18 $12.00 $34.00 P

DIAMOND OFFSHORE (US$) DO-N $10.80 137.4 $1,484 <$11.00 <$10.25 US$26.64 $18.00 $40.00

ENSCO PLC (US$) ESV-N $4.18 434.4 $1,816 <$4.30 <$4.00 US$19.08 $11.00 $40.00

GRAN TIERRA ENERGY GTE-T $3.21 391.3 $1,256 $3.30 US$2.69 $5.50 $12.00

TOURMALINE OIL TOU-T $17.69 272.0 $4,812 $17.70 $27.20 $34.00 $60.00

TRANSOCEAN (US$) RIG-N $7.62 463.0 $3,528 <$9.00 <$8.00 US$25.83 $16.00 $50.00

VERMILION ENERGY VET-T $30.70 152.4 $4,679 $34.34 $16.56 $50.00 $70.00 P

WHITECAP RESOURCES WCP-T $4.67 416.5 $1,945 $5.75 $7.89 $12.00 $20.00 P

INTERMEDIATE MARKET CAPITALIZATION $400M - $1.0B

BIRCHCLIFF ENERGY BIR-T $3.21 265.9 $854 $3.91 $6.43 $9.00 $15.00 P

CANACOL ENERGY CNE-T $4.20 177.6 $746 $3.60 US$1.25 $8.00 $18.00

PRECISION DRILLING PD-T $2.67 293.8 $784 <$3.50 <$3.25 $5.89 $7.00 $14.00

SURGE ENERGY SGY-T $1.52 309.0 $470 $1.91 $3.06 $3.70 $8.50 P

TAMARACK VALLEY ENERGY TVE-T $2.38 227.6 $542 $3.00 $3.48 $6.00 $14.00

TRICAN WELL SERVICE TCW-T $1.29 313.1 $404 $1.27 $3.27 $4.50 $12.00

JUNIOR MARKET CAPITALIZATION $100M - $400M

BLACKBIRD ENERGY BBI-V $0.24 748.0 $180 $0.195 $0.22 $0.72 $2.00

BONAVISTA ENERGY BNP-T $1.27 260.0 $330 $1.78 $5.66 $7.00 $20.00 P

CREW ENERGY CR-T $0.91 151.7 $138 $3.41 $5.76 $7.00 $22.00 P

PAINTED PONY ENERGY PONY-T $1.54 161.0 $248 $1.66 $6.39 $6.00 $15.00

PENGROWTH ENERGY PGF-T $0.67 556.1 $373 <$0.85 <$0.80 $1.35 $2.00 $4.50

QUESTERRE ENERGY QEC-T $0.32 389.0 $124 $0.22 $0.44 $1.20 $4.00

SDX ENERGY SDX-V $0.76 204.7 $156 $0.94 US$0.56 $2.00 $5.00 P

STEP ENERGY SERVICES STEP-T $2.19 66.6 $146 $2.58 $7.69 $7.00 $13.00

SMALL MARKET CAPITALIZATION <$100M

BELLATRIX EXPLORATION BXE-T $0.73 80.9 $59 $1.87 $11.04 $7.00 $20.00 P

CEQUENCE ENERGY CQE-T $0.68 24.6 $17 $1.10 $6.34 $2.00 $8.00 P

DELPHI ENERGY DEE-T $0.40 185.5 $74 $0.50 $1.02 $1.70 $4.00

ESSENTIAL ENERGY SERVICES ESN-T $0.32 141.9 $45 $0.40 $1.17 $1.20 $5.00

INPLAY OIL IPO-T $1.06 67.9 $72 $1.44 $2.81 $2.50 $6.00

PETRUS RESOURCES PRQ-T $0.57 49.5 $28 $1.47 $2.56 $2.00 $6.00 P

RAZOR ENERGY RZE-V $2.30 15.5 $36 <$2.30 <$2.10 $0.78 $3.50 $12.00

TOUCHSTONE EXPLORATION TXP-T $0.225 129.0 $29 $0.19 $0.31 $0.50 $2.00

WESTERN ENERGY SERVICES WRG-T $0.50 92.2 $46 $1.16 $3.88 $1.40 $8.00

*Disclosure: Ownership by JIS or immediate family member

No new positions either Buy or Sell can be undertaken by anyone at SER until 5 days after an Action Alert has been sent out

COVERAGE LIST JANUARY 4, 2019

COMPANIES SYMBOL STOCK PRICESHARES O/S

M

MARKET CAP

$M

ALERT BUY

LEVEL

ATTRACTIVE

PURCHASE

TABLE-

POUND BUY

RECENT BOOK

VALUE

12 MONTH

TARGET

MARKET

PEAK*

LARGE MARKET CAPITALIZATION > $1.0B

CRESCENT POINT ENERGY CPG-T $4.38 549.9 $2,409 $5.52 $16.18 $12.00 $34.00 P

DIAMOND OFFSHORE (US$) DO-N $10.80 137.4 $1,484 <$11.00 <$10.25 US$26.64 $18.00 $40.00

ENSCO PLC (US$) ESV-N $4.18 434.4 $1,816 <$4.30 <$4.00 US$19.08 $11.00 $40.00

GRAN TIERRA ENERGY GTE-T $3.21 391.3 $1,256 $3.30 US$2.69 $5.50 $12.00

TOURMALINE OIL TOU-T $17.69 272.0 $4,812 $17.70 $27.20 $34.00 $60.00

TRANSOCEAN (US$) RIG-N $7.62 463.0 $3,528 <$9.00 <$8.00 US$25.83 $16.00 $50.00

VERMILION ENERGY VET-T $30.70 152.4 $4,679 $34.34 $16.56 $50.00 $70.00 P

WHITECAP RESOURCES WCP-T $4.67 416.5 $1,945 $5.75 $7.89 $12.00 $20.00 P

INTERMEDIATE MARKET CAPITALIZATION $400M - $1.0B

BIRCHCLIFF ENERGY BIR-T $3.21 265.9 $854 $3.91 $6.43 $9.00 $15.00 P

CANACOL ENERGY CNE-T $4.20 177.6 $746 $3.60 US$1.25 $8.00 $18.00

PRECISION DRILLING PD-T $2.67 293.8 $784 <$3.50 <$3.25 $5.89 $7.00 $14.00

SURGE ENERGY SGY-T $1.52 309.0 $470 $1.91 $3.06 $3.70 $8.50 P

TAMARACK VALLEY ENERGY TVE-T $2.38 227.6 $542 $3.00 $3.48 $6.00 $14.00

TRICAN WELL SERVICE TCW-T $1.29 313.1 $404 $1.27 $3.27 $4.50 $12.00

JUNIOR MARKET CAPITALIZATION $100M - $400M

BLACKBIRD ENERGY BBI-V $0.24 748.0 $180 $0.195 $0.22 $0.72 $2.00

BONAVISTA ENERGY BNP-T $1.27 260.0 $330 $1.78 $5.66 $7.00 $20.00 P

CREW ENERGY CR-T $0.91 151.7 $138 $3.41 $5.76 $7.00 $22.00 P

PAINTED PONY ENERGY PONY-T $1.54 161.0 $248 $1.66 $6.39 $6.00 $15.00

PENGROWTH ENERGY PGF-T $0.67 556.1 $373 <$0.85 <$0.80 $1.35 $2.00 $4.50

QUESTERRE ENERGY QEC-T $0.32 389.0 $124 $0.22 $0.44 $1.20 $4.00

SDX ENERGY SDX-V $0.76 204.7 $156 $0.94 US$0.56 $2.00 $5.00 P

STEP ENERGY SERVICES STEP-T $2.19 66.6 $146 $2.58 $7.69 $7.00 $13.00

SMALL MARKET CAPITALIZATION <$100M

BELLATRIX EXPLORATION BXE-T $0.73 80.9 $59 $1.87 $11.04 $7.00 $20.00 P

CEQUENCE ENERGY CQE-T $0.68 24.6 $17 $1.10 $6.34 $2.00 $8.00 P

DELPHI ENERGY DEE-T $0.40 185.5 $74 $0.50 $1.02 $1.70 $4.00

ESSENTIAL ENERGY SERVICES ESN-T $0.32 141.9 $45 $0.40 $1.17 $1.20 $5.00

INPLAY OIL IPO-T $1.06 67.9 $72 $1.44 $2.81 $2.50 $6.00

PETRUS RESOURCES PRQ-T $0.57 49.5 $28 $1.47 $2.56 $2.00 $6.00 P

RAZOR ENERGY RZE-V $2.30 15.5 $36 <$2.30 <$2.10 $0.78 $3.50 $12.00

TOUCHSTONE EXPLORATION TXP-T $0.225 129.0 $29 $0.19 $0.31 $0.50 $2.00

WESTERN ENERGY SERVICES WRG-T $0.50 92.2 $46 $1.16 $3.88 $1.40 $8.00

*Disclosure: Ownership by JIS or immediate family member

No new positions either Buy or Sell can be undertaken by anyone at SER until 5 days after an Action Alert has been sent out

COMPANIES SYMBOL STOCK PRICESHARES O/S

M

MARKET CAP

$M

ALERT BUY

LEVEL

ATTRACTIVE

PURCHASE

TABLE-

POUND BUY

RECENT BOOK

VALUE

12 MONTH

TARGET

MARKET

PEAK*

LARGE MARKET CAPITALIZATION > $1.0B

CRESCENT POINT ENERGY CPG-T $4.38 549.9 $2,409 $5.52 $16.18 $12.00 $34.00 P

DIAMOND OFFSHORE (US$) DO-N $10.80 137.4 $1,484 <$11.00 <$10.25 US$26.64 $18.00 $40.00

ENSCO PLC (US$) ESV-N $4.18 434.4 $1,816 <$4.30 <$4.00 US$19.08 $11.00 $40.00

GRAN TIERRA ENERGY GTE-T $3.21 391.3 $1,256 $3.30 US$2.69 $5.50 $12.00

TOURMALINE OIL TOU-T $17.69 272.0 $4,812 $17.70 $27.20 $34.00 $60.00

TRANSOCEAN (US$) RIG-N $7.62 463.0 $3,528 <$9.00 <$8.00 US$25.83 $16.00 $50.00

VERMILION ENERGY VET-T $30.70 152.4 $4,679 $34.34 $16.56 $50.00 $70.00 P

WHITECAP RESOURCES WCP-T $4.67 416.5 $1,945 $5.75 $7.89 $12.00 $20.00 P

INTERMEDIATE MARKET CAPITALIZATION $400M - $1.0B

BIRCHCLIFF ENERGY BIR-T $3.21 265.9 $854 $3.91 $6.43 $9.00 $15.00 P

CANACOL ENERGY CNE-T $4.20 177.6 $746 $3.60 US$1.25 $8.00 $18.00

PRECISION DRILLING PD-T $2.67 293.8 $784 <$3.50 <$3.25 $5.89 $7.00 $14.00

SURGE ENERGY SGY-T $1.52 309.0 $470 $1.91 $3.06 $3.70 $8.50 P

TAMARACK VALLEY ENERGY TVE-T $2.38 227.6 $542 $3.00 $3.48 $6.00 $14.00

TRICAN WELL SERVICE TCW-T $1.29 313.1 $404 $1.27 $3.27 $4.50 $12.00

JUNIOR MARKET CAPITALIZATION $100M - $400M

BLACKBIRD ENERGY BBI-V $0.24 748.0 $180 $0.195 $0.22 $0.72 $2.00

BONAVISTA ENERGY BNP-T $1.27 260.0 $330 $1.78 $5.66 $7.00 $20.00 P

CREW ENERGY CR-T $0.91 151.7 $138 $3.41 $5.76 $7.00 $22.00 P

PAINTED PONY ENERGY PONY-T $1.54 161.0 $248 $1.66 $6.39 $6.00 $15.00

PENGROWTH ENERGY PGF-T $0.67 556.1 $373 <$0.85 <$0.80 $1.35 $2.00 $4.50

QUESTERRE ENERGY QEC-T $0.32 389.0 $124 $0.22 $0.44 $1.20 $4.00

SDX ENERGY SDX-V $0.76 204.7 $156 $0.94 US$0.56 $2.00 $5.00 P

STEP ENERGY SERVICES STEP-T $2.19 66.6 $146 $2.58 $7.69 $7.00 $13.00

SMALL MARKET CAPITALIZATION <$100M

BELLATRIX EXPLORATION BXE-T $0.73 80.9 $59 $1.87 $11.04 $7.00 $20.00 P

CEQUENCE ENERGY CQE-T $0.68 24.6 $17 $1.10 $6.34 $2.00 $8.00 P

DELPHI ENERGY DEE-T $0.40 185.5 $74 $0.50 $1.02 $1.70 $4.00

ESSENTIAL ENERGY SERVICES ESN-T $0.32 141.9 $45 $0.40 $1.17 $1.20 $5.00

INPLAY OIL IPO-T $1.06 67.9 $72 $1.44 $2.81 $2.50 $6.00

PETRUS RESOURCES PRQ-T $0.57 49.5 $28 $1.47 $2.56 $2.00 $6.00 P

RAZOR ENERGY RZE-V $2.30 15.5 $36 <$2.30 <$2.10 $0.78 $3.50 $12.00

TOUCHSTONE EXPLORATION TXP-T $0.225 129.0 $29 $0.19 $0.31 $0.50 $2.00

WESTERN ENERGY SERVICES WRG-T $0.50 92.2 $46 $1.16 $3.88 $1.40 $8.00

*Disclosure: Ownership by JIS or immediate family member

No new positions either Buy or Sell can be undertaken by anyone at SER until 5 days after an Action Alert has been sent out

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HIGHLIGHTS:

• SESSION ROOMS FOR 25 COMPANIES IN THE ENERGY AND ENERGY SERVICE AREAS.• POTENTIAL FOR COMPANIES TO PRESENT TWICE, MORNING AND AFTERNOON

SESSIONS AVAILABLE.• LUNCH WITH THE CEO OR SENIOR EXECUTIVE OF ATTENDING COMPANIES. B OOK

EARLY TO GET CONFIRMATION OF YOUR CHOICE. • MARKETING TO START IN AUGUST 2019 FOR SUBSCRIBERS AND IN SEPTEMB ER FOR

NON-SUBSCRIBERS.

SER CONFERENCE 2019

MOUNT ROYAL UNIVERSITY

SATURDAYOCTOBER 19,2019

HIRING OPPORTUNITY

SER IS LOOKING FOR A PART TIME G&G TECHNICAL PROFESSIONAL IN AN ADVISORY ROLE FOR 5-8 DAYS PER MONTH:

• REVIEW COMPANY TECHNICAL PRESENTATIONS AND ATTEND MEETINGS TO AD VISE ON AREAS OF POTENTIAL PROBLEMS. NARROW DOWN THE ISSUES.

• WRITE UP REPORTS ON TECHNICAL SUBJECTS (PLAYS) IN LAYPERSON TERM S.• PREPARE REPORTS ON KEY PLAYS INVESTORS ARE INTERESTED IN (ECONOM ICS, COSTS,

UPSIDE AND WHO HAS LAND IN THE AREA; IS SOME LAND BETTER – SWEET SPOT)• PREPARE PRESENTATION MATERIALS FOR SER ROAD SHOWS.

PLEASE SEND RESUMES TO: JOSEF I. SCHACHTER - JOSEF@SERSINC.CATHOSE WHOSE RESUMES ARE OF INTEREST WILL BE CONTACTED FOR MEETIN GS.