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Storm Energy: Montney Land Position with Strong Growth Potential

Storm Energy (TSX: SRX) is a Canadian oil and gas company with a large and liquids-rich land position in the Montney region of BC. With improving horizontal well results and a history of disciplined capital investment, Storm Energy offers attractive returns on invested capital and is poised for future growth. This update provides a summary of the company's financials, production growth, reserves, and upcoming projects.

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Storm Energy: Montney Land Position with Strong Growth Potential

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  1. MAY 2019 UPDATE

  2. INTRODUCTION • TSX symbol “SRX”, started Sep 2010 • fourth ‘Storm’ since Nov 1998 • history of discipline with capital investment & per share growth • Market cap $250 MM (~$2.00/share), Q1/19 debt $92 MM • 121 MM shares + 9 MM options • officer + director ownership 13% (15% FD) • Large, liquids rich land position in Montney at Umbach/Nig/Fireweed (NE BC) • Near term, reinvesting funds flow exceeding maintenance capex into growth offering attractive ROR at current pricing • flattening decline (forecast 20% in 2019) & hz results improving • 2018 prod’n per share +28% with capex $15 MM less than funds flow • future growth will increase % liquids while reducing costs

  3. results reflect cost reductions, improving hz’s, disciplined capital investment FINANCIALS 2018 +56% per share YOY 2018 -11% YOY 2018 earnings $0.33/share debt reduced $15 MM in 2018 achieving debt adjusted growth; since 2016 prod’n per share +54% & debt flat

  4. achieving growth and return on invested capital RETURN ON CAPITAL 2018 CROCE 21% 2018 ROE 10% Q1/19 reduced by 17 day outage at McMahon GP prod’n becoming seasonal, higher in winter & lower in summer in response to pricing

  5. prod’n per share +250% since Q1/14 (2018 +28% YOY) PRODUCTION GROWTH Q2/19 f/c 20 – 22,000 boe/d; incl planned 5 day outages at McMahon GP & Alliance Pipeline plus prod’n shut-in due to low W Cdnnat gas prices Q1/19 reduced by unplanned 17 day outage at McMahon GP

  6. 10 gas weighted peers with >70% nat gas & >20,000 boe/d COMPARISON TO PEERS Storm has increased funds flow per share by 100% since 2014 Storm increased prod’n per share 165% from 2014 to 2018

  7. resource being converted into asset value growth on a per share basis RESERVES 2018 PDP adds replaced 2.1 X of prod’n (1P 8.0 X, 2P 8.1 X) all-in reflects total investment 2018 PDP FD&A $5.24/boe vs funds flow $13.34/boe 2018 PDP per share +25% YOY (1P +54%, 2P +41%) 2018 PDP recycle 2.5 X (3 yr 1.9 X)

  8. UMBACH/NIG/FIREWEED (NE British Columbia) 0.2% - 1.2% H2S requires processing at sour gas plant • Montney liquids rich gas • raw gas 1,200 - 1,300 btu/scf • Current ~37 bbls/mmcf • ~58% condensate • Drill hz in ~15 days • shallow depth 1,550 metres • F&D $3 - $6/Boe (full-cycle) • 2018 D&C $6.3 MM/hz • (~2050 m & 36 fracs) • f/c 2019 D&C ~$5.7 MM/hz • (~2400 m & >40 fracs) • 2018 hz’s avg 2P: 8.9 Bcf raw (1,580 Mboe sales) McMahon GP has access to 3 sales pipelines end Q1/19, 10 standing hz’s (9.5 net), 2 completed (1.5 net) Montney producing hz’s in grey

  9. LARGE LAND POSITION 172 net sections 121,000 net acres near term growth from Nig & Fireweed Montney productive across the area learning from offsetting hz results material future upside 74 net hz’s drilled 8% lands with PDP 24% lands with 2P [upper Montney only] Montney producing hz’s in red

  10. growth depends on Stn 2 price UMBACH (100% WI) • Growth if Stn 2 >$1.50/GJ • 113 net sections, 74 hz’s drilled • Current ~17,700 boe/d sales • 37 bbls/mmcf (56% cond) • 150 mmcf/d field compression • current ~120 mmcf/d raw incl Nig (room for growth) currently ~12 mmcf/d shut-in due to low W Cdnnat gas prices Storm mgmt type curve 8 Bcf/hz Q4/18–Q1/19: drilled 5 hz’s H2/19: compl 3 hz’s Q4/18 – Q1/19 hz drills

  11. gas plant reduces op cost & increases liquids NIG (100% WI) • Growth 2019 – 2020 • 16 net sections, 7 hz’s drilled • Current ~4,100 boe/d sales • 34 bbls/mmcf (67% cond) • Building 50 mmcf/d sour gas plant • start-up Jan/20 (rec’d license Apr/19) • $81 MM incl acid gas injhz, sales pipe • ($11 MM 2018, $70 MM 2019) • forecast 60 bbls/mmcf (43% cond) adds 1,100 bpd, forecast op cost ~$2/boe (-$11 MM/yr), gas shrink -5% lower H2S 0.2% Q4/18 – Q1/19 hz drills full cycle ROR ~30%, netback ~$12/boe at Stn 2 $1.25/GJ & WTI US$55/bbl (economics in appendix) Q1/19: drilled 4 hz’s H2/19: compl 4 hz’s Storm mgmt type curve 14 Bcf/hz est lifetime CGR 15 bbls/mmcf raw (1.5 X higher vs Umbach) 50 mmcf/d gas plant full for 10 years with ~23 hz’s @ 14 bcf/hz

  12. increasing cond prod’n with CGR 2 to 5 times higher vs Umbach FIREWEED (50% WI) • Growth in H2/20 • 50/50 JV with privateco • 26 net sections, 1 hz drilled • Building 50 mmcf/d field compression • start-up H2/20 (first prod’n) • forecast 60 bbls/mmcf (75% cond) • $35 MM gross ($17.5 MM net) • expandable to 100 mmcf/d H2/19 hz drills full cycle ROR ~25%, netback ~$16/boe at Stn 2 $1.25/GJ & WTI US$55/bbl (economics in appendix) Storm mgmt type curve 7.2 Bcf/hz est lifetime CGR 20 - 50 bbls/mmcf raw (2 to 5 times higher vs Umbach) H2/19: drill & compl 3 hz’s

  13. IMPROVING HZ RESULTS

  14. 2017 - 18 HZ’S

  15. ALSO IMPROVING CONDENSATE RATES

  16. NE BC & NW AB HZ COMPARISON

  17. UMBACH HZ COSTS longer hz’s more expensive, rate/reserves also increasing, reducing FD&A 2018 hz’s have higher avg drill cost from adding length, and inflation on some services showing accounting costs which incl everything (lease & road construction, water handling) DRILLING hz’s length cost 2014-16 38 1330 m $2.0 MM 2017 16 1900 m $2.0 MM 2018 4 2408 m $3.1 MM COMPL’N hz’s fracs length cost 2014-16 33 22 1347 m $2.3 MM 2017 12 34 1830 m $2.4 MM 2018 11 36 2057 m $3.2 MM

  18. growth will increase % liquids and reduce op cost GROWTH PLAN • Path to >30,000 Boe/d by Q4/20 • April/19 Q4/20 • Umbach ~17,700 boe/d 15,500 boe/d growth cont on Stn 2 price • Nig ~4,100 boe/d 10,500 boe/d gas plant Jan/20 • Fireweed 4,500 boe/dfacility & first prod’n H2/20 funding growth with funds flow + bank line; capex is flexible, can reduce if required (strong balance sheet is important) 2018 to fc Q4/20 boe/d +50% liquids +75%

  19. LIQUIDS RECOVERY BY AREA • Future growth from Nig & Fireweed where liquids recovery is highest • field CGR • Liquidscondensate lifetime avg • MboeMbblsMbblsbbls/mmcf raw • Umbach 8 Bcf(1)McMahon GP1,420 235(2) 140(2) 11 • Nig 14 Bcf(1)Storm Nig GP2,960 780(3) 330(3) 15(1) • Fireweed 7.2 Bcf(1)McMahon GP1,460 380(2) 295(2) 20 - 50(1) • (1) Storm management estimate • (2) McMahon GP estimated shrink 11%, plant liquids 21 bbls/mmcf sales (37% C5+ or cond) • (3) Storm Nig GP estimated shrink 6.5%, plant liquids 44 bbls/mmcf sales (22% C5+ or cond) Fireweed has highest % condensate Fireweed 1styrest 35 - 70 bbls/mmcf

  20. NATURAL GAS MARKETING started diversifying nat gas sales in 2015 by adding firm pipeline capacity (increases transportation cost) firm transport to US is mitigating current weak W Cdn prices 2018 sales: 63% Chicago 14% Stn 2 12% Sumas 6% AECO 5% ATP Stn 2 price affected by pipeline restrictions

  21. BC NATURAL GAS FLOWS increasing exports from NE BC onto TCPL/NGTL to AECO; North Montney start-up Q4/19 increases NE BC takeaway 1.5 Bcf/d; bullish Stn 2 - AECO diff

  22. Q1/19 affected by 17 day McMahon outage FINANCIAL GUIDANCE 2019 guidance incl lower NGL pricing Apr/19 – Mar/20 bank line to $205 MM Apr/19 (was $180 MM)

  23. funds flow exceeding maintenance capex is invested in growth CAPITAL INVESTMENT growth at Nig and Fireweed offers full-cycle ROR >25% 2018–19 maintenance capex averages ~$33 MM/yr (for ~21,000 boe/d) 2019 maintenance capex assumes 4 new hz’s plus misc costs (3 completed hz’s to turn on at start of 2019) balance sheet is important, can reduce 2019 capex ~$65 MM (Nig GP ~$43 MM & growth ~$24 MM not committed Q2-Q4)

  24. decline flattening & improving hz’s has reduced maintenance capex PRODUCTION FORECAST 2019 capex $128 MM Nig GP $70 MM Fireweed $15 MM drill 7.5 net hz's compl 9.5 net hz's connect 9.0 net hz's D&C ~$5.7 MM/hz assumes 11 bcf/hz (avg Nig & Umbach) forecast 2019 decline ~20%, offset with ~4 new hz’s corp decline ~26% Dec/17 to Dec/18

  25. SUMMARY • Large resource in Montney, multi-year drilling inventory, converting into debt adjusted per share growth in funds flow and asset value • Results reflect per share growth and discipline with capex • last 5 years per share growth: prod’n +300%, funds flow +165% • attractive return on capital (2018 ROE 10%, CROCE 21%) • Low maintenance capex (flattening decline, improving hz’s) • Funds flow exceeding maintenance capex being re-invested into growth at Nig (Q4/19 - Q1/20) and Fireweed (H2/20) • full-cycle ROR >25% at Stn 2 $1.25/GJ, WTI US$55/bbl • growth plan increases liquids % while reducing op cost • further growth from Umbach depends on Stn 2 nat gas price

  26. STORM RESOURCES LTD CONTACT INFO For further information please contact: Brian Lavergne, President and Chief Executive Officer Michael Hearn, Chief Financial Officer Carol Knudsen, Manager Corporate Affairs Address: #600, 215 – 2nd Street S.W., Calgary, Alberta T2P 1M4 Phone: (403) 817-6145 Fax: (403) 817-6146 Website: www.stormresourcesltd.com

  27. ADVISORY Reserves – All reserves in this presentation are, unless indicated otherwise, as at December 31, 2018 as evaluated by Insite Petroleum Consultants Ltd. in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards for Disclosure for Oil and Gas Activities. Boe Presentation - for the purpose of calculating unit revenues and costs, natural gas is converted to a barrel of oil equivalent (“Boe”) using six thousand cubic feet (“Mcf”) of natural gas equal to one barrel of oil unless otherwise stated. Barrels of oil equivalent (“Boe”) may be misleading, particularly if used in isolation. A Boe conversion ratio of six Mcf to one barrel (“bbl”) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All Boe measurements and conversions in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Type Curves – Certain type curves presented herein represent estimates of production decline and ultimate volumes expected to be recovered over the life of a well. Storm management has generated the 14 Bcf raw (represents the ultimate raw gas volume expected to be recovered over the life of a well based on the type curve) with 7.3 mmcf/d IP365 (which represents the average first year production rate) and the 8 Bcf raw with 4.2 mmcf/d IP365 Upper Montney type curves using the first 9 months of actual calendar day production data from the horizontal wells completed in 2017. After the first 9 months, production is declined at the same rate as the forecast decline used by InSite for the future proved and probable drilling locations on 100% working interest lands at Umbach that were assigned 2P reserves of 8.0 Bcf raw in the 2018 reserve evaluation. Individual wells may be higher or lower but, over a larger number of wells, management expects the average to be consistent with the type curve. Forward-Looking Information - certain information set forth in this presentation, including management’s assessment of Storm’s future plans and operations, contains forward-looking statements. These statements are based on current beliefs and expectations based on the information available at the time the applicable assumptions were made. By their nature, forward-looking statements are subject to numerous risks, uncertainties and assumptions, some of which are beyond the Company’s control, including the material risks described in Storm’s Annual Information Form dated March 29, 2019 under “Risk Factors” and Management’s Discussion and Analysis for the quarter ending December 31, 2018 under “Business Risks”, the effect of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are advised that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Storm’s actual results, performance or achievement, could differ materially from those expressed in, or implied by, these forward-looking statements. Storm disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under securities law. Reference is made to “Forward-Looking Statements” in Storm’s Management’s Discussion and Analysis for the period ending March 31, 2019 dated May 14, 2019 which may be found on Storm’s website at www.stormresourcesltd.com or on SEDAR at www.sedar.com and which are hereby incorporated by reference in this presentation and which outline a number of assumptions, risks, and uncertainties associated with forward-looking statements.

  28. APPENDIX

  29. CUM GAS VS TIME

  30. CUM FIELD CONDENSATE VS TIME

  31. GROWTH ECONOMICS NIG & FIREWEED reflects new NGL pricing (C3 & C4) Apr/19 - Mar/20 • Flat Pricing: Stn 2 $1.25/GJ, WTI US$55/bbl, Edmcond -US$6/bbl, FX 0.76 • Fireweed - McMahon GP Nig - Storm gas plant • 7.2 Bcf raw (1) 14 Bcf raw(1) • Ultimate Sales 1,460 Mboe, 26% liquids 2,965 Mboe, 26% liquids • 1styravg sales 3.9 mmcf/d sales + 325 bpd(2) 6.8 mmcf/d sales + 455 bpd(3) • (4.3 mmcf/d raw, 11% shrink)(7.3 mmcf/d raw, 6.5% shrink) • 1st yr Revenue(2) $24.30/boe(2) ($1.56/mcf, $53.70/bbl)$17.10/boe(3) ($1.46/mcf, $35.60/bbl) • Transportation -$2.25 ($0.24/mcf, $3.85/bbl) -$2.20 ($0.36/mcf, $2.40/bbl) • Op Cost -$5.25 -$1.75 • Royalty -$1.10 (~5% with roy credit) -$0.90(~5% with roy credit) • Netback 1st Year $15.70/boe $12.25/boe • Half-cycle capex $6.1 MM/hz (drill, compl, equip) $6.1 MM/hz (drill, compl, equip) • F&D $4.15/boe $2.05/boe • btax ROR 41% 82% • payout 1.3 yrs 0.9 yrs • Full-cycle capex $7.8 MM/hz $12.5 MM/hz • F&D $5.35/boe $4.25/boe • btax ROR 25% 31% • payout 2.2 yrs 2.3 yrs • Storm management estimate • Fireweed 1styr revenue based on field CGR 57 bbls/mmcf raw (vs lifetime avg 34 bbls/mmcf) • Nig GP 1styr revenue based on field CGR 21 bbls/mmcf raw (vs lifetime avg 15 bbls/mmcf) +$300 K/hz gathering +$1500 K/hz facility [$34 MM compression, 23 hz’s in 3 yrs to fill] +$300 K/hz gathering +$6250 K/hz gas plant [$81 MM gas plant, 13 hz’s in 5 yrs to fill] Nig & Fireweed full-cycle ROR ~25%

  32. HEDGING (to May 21/19) • Hedging to support growth • target 50% of prod’n for 1 to 12 months, 25% for 13 to 24 months • 2019: • 43,500 mmbtu/d Chicago Cdn$3.26/mmbtu 36.7 mmcf/d @ $3.86/mcf • 8,400 mmbtu/d Sumas Cdn$2.86/mmbtu 7.1 mmcf/d @ $3.38/mcf • 2,500 GJ/d AECO $1.94/GJ 2.0 mmcf/d @ $2.42/mcf • 2,250 GJ/d Stn 2 $1.73/GJ 1.8 mmcf/d @ $2.15/mcf • 875 bpd WTI Cdn$71 X $85/bbl • 625 bpd WTI Cdn$79/bbl • 200 bpd Conway propane Cdn$43/bbl • 2020: • 10,750 mmbtu/d Chicago Cdn$3.32/mmbtu 9.1 mmcf/d @ $3.93/mcf • 375 GJ/d AECO $2.00/GJ 0.3 mmcf/d @ $2.50/mcf • 12,500 mmbtu/d NYMEX-Chicago diff -US$0.27/mmbtu • 150 bpd WTI Cdn$75 X $86/bbl • 50 bpd WTI Cdn$81/bbl growth is not hedged

  33. PROCESSING & TRANSPORTATION • Firm processing totals 80 mmcf/d raw • 2018 ~110 mmcf/d raw • McMahon GP 65 mmcf/d raw & Stoddart GP 15 mmcf/d raw • Transportation commitments provide sales diversification • Alliance @ Chicago 57 mmcf/d • Alliance IT @ Chicago 0 - 14 • Alliance @ ATP* 5 • Spectra @ Stn 2 14 • Spectra @ Stn 2/Sumas** 12 • Spectra/TCPL @ AECO 14 • 102 - 116 mmcf/d • * expires Oct/19 • **sale at Stn 2 for Sumas price -US$0.69/mmbtu avoid overcommitting, reduces flexibility when prices decline 2018 sales: 63% Chicago 14% Stn 2 12% Sumas 6% AECO 5% ATP future commitments: 7 mmcf/d Empress - Iroquois Nov/19 15 mmcf/d AECO - Empress Nov/20

  34. PLANTGATE NAT GAS PRICE AT 2019 FWD STRIP high heat content nat gas 1.25 GJ = 1 mcf remainder on IT to Chicago or Stn 2

  35. demand is growing as fast as supply US NAT GAS DEMAND VS SUPPLY • US demand growth > supply growth • YOY for 12 months to Feb/19: • demand +6.6 bcf/d • supply +6.5 bcf/d [supply = prod’n + net imports] May 29/19 US storage +156 bcf YOY -257 bcf vs 5 yravg US LNG exports 2018 +2.0 Bcf/d YOY Q1/19 +1.4 Bcf/d YOY LNG export capacity to ~9 bcf/d end 2019 from ~4 bcf/d Dec/18

  36. MARCELLUS/UTICA 2018 debt reduction mainly from asset sales & restructuring midstreamco’s Data from AR, CNX, COG, ECR, EQT, GPOR, REXX, RICE, RRC, SWN, ASCENT (2018 avg ~18 bcf/d) Netback comparison for 2018 Marcellus/Utica Storm revenue $3.16/mcfe $5.03/mcfe hedging -$0.06 -$0.50 total costs -$1.44-$2.31 funds flow US$1.66/mcfe Cdn$2.22/mcfe Marcellus pricing discounted to NYMEX for pipeline tariffs: Rover ~$0.80/mmbtu Atlantic Sunrise ~$0.77/mmbtu Mountaineer XPress ~$0.35/mmbtu

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