CQ Energy Canada Partnership Offering | May 2016

Leading Canadian energy producer with a vast portfolio of liquids-rich opportunities, exposure to resource play upside and strategically owned and operated infrastructure

PRESENTED BY TD Energy Advisors / TD Securities Inc. 421 – 7th Avenue S.W., 36th Floor, Calgary, Alberta T2P 4K9 ▪ Telephone: 403 503 4848 ▪ Fax: 403 503 4849 www.tdenergyadvisors.com

Introduction Centrica plc and its partner have engaged TD Securities and J.P. Morgan, respectively, to manage a process (the “Offering”) to divest of CQ Energy Canada Partnership (“CQ”, the “Partnership”), held on a 60/40 basis by wholly owned subsidiaries of each of Centrica plc and its partner. The Partnership, through its operating subsidiary CQ Energy Canada Resources Partnership, owns a diverse Canadian producing, resource and infrastructure portfolio located throughout the Western Canadian Sedimentary and Williston basins. It is the partners’ intention to both maximize value and fully exit the Canadian oil and gas market through this offering. A unique opportunity to acquire a top-ten natural gas producer in Western Canada with an attractive and high quality portfolio highlighted by resource play exposure and strategically-owned and operated infrastructure

Core Value Propositions

•• Business Highlights »»Strong safety track record »»Majority operated, 353 mmcfe/d (Q1 2016 average) production, with an additional 50 mmcfe/d behind pipe »»Proved + Probable Reserve base of 2.14 tcfe(1) »»Unbooked recoverable resource of greater than 5.3 tcfe »»2.34 million net acres of Crown, Fee and Royalty land »»Top quartile Liability Management Rating of 2.5 in Alberta and 2.2 in British Columbia •• Low-Decline Base Production with Long Reserves Life »»Current production comes from a high quality portfolio of long life assets ranging from shallow reservoirs in the Plains, to Foothills deep gas, through to Deep Basin oil and liquids rich gas •• Combined Reserves and Recoverable Resource Potential of Greater Than 7.4 tcfe(2) »»Extensive inventory of low risk, liquids-rich, overpressured Montney gas »»Significant portfolio of oil, liquids-rich gas and dry gas opportunities »»Additional resource potential of ~400 bcfe anticipating future technology improvements and increased recovery factors •• Fully Integrated Gas Business »»High working interest, predominantly operated facilities with throughput capacity of over 600 mmcfe/d »»Proactive, in-house marketing adds to efficiencies •• Strong Financial Capability »»2015 operating cash flow of $150 million »»Considerable and sustainable cost reductions implemented in Q4 2015 through Q1 2016 •• High Performing Team »»Repeated success in growing business through both acquisition and development »»Highly experienced, fully-staffed team with strong technical capabilities and established systems and processes

(1) DeGolyer and McNaughton (95%) and internal evaluation (5%), effective December 31, 2015 (2) Company estimate

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Business Highlights High working interest, majority-operated, integrated portfolio that allows for control of prospect development, production optimization, facilities and transportation to maximize margins and reduce costs. REGIONAL AREA MAP Partnership Asset Map LEGEND

Bougie

BIA

SASKATCHEWAN ALBERTA

ALBERTA BRITIS H COLU M

CQ Land CQ Operated Gas CQ Non-Operated

Laprise

0

Boundary Lake

0

Fort St Jo hn

Fort McMurray

0 0

500 Miles 500 km

500 Miles 500 km

Spirit River

Parkland

LAND

Glacier

Infrastructure

Carrot Creek

Capacity (mmcfe/d) Throughput (mmcfe/d) Gathering System (km)

Edmonton

Hanlan Robb

BA MANITO AN TCHEW SASKA

Total Net (acres) Gross Royalty (acres) Average Working Interest (%)

Grande Prairie

2,337,000 498,000 65 630 215 12,850

Seismic 3D Proprietary (km2) 2D Proprietary (km) 3D Joint Venture (km2) 2D Joint Venture (km)

Ferrier

Wildcat Hills

Gilby

LEGEND

3,405 42,196 5,343 66,690

SE Saskatchewan / Manitoba Fee and Royalty Lands

Calgary

CQ Land CQ Operated Gas Plants

Medicine Hat

CQ Non-Operated Gas Plants Alderson 0

km

0

125 mile

125

Asset Summary Table Production

0 0

500 Miles 500 km

2015 Financials

Reserves Volume(1)

Reserves Value(1)

Q1 2016 (mmcfe/d)

Avg. WI (%)

Opex ($/mcfe)

Netback ($/mcf)

Cash Flow ($mm)

PDP (bcfe)

TP (bcfe)

2P (bcfe)

PDP ($mm)

TP ($mm)

2P ($mm)

353

67

1.97(2)

1.06

150

1,017

1,478

2,136

1,306

1,577

2,131

(1) DeGolyer and McNaughton (95%) and internal evaluation (5%), effective December 31, 2015 (2) Q1 2016 actuals & estimate of $1.65/mcfe

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Low-Decline Base Production with Long Reserves Life Multi-zone, stable, low decline base production supported by a P+P reserve base of 2.14 tcfe Partnership Pro forma Production

Production (mmcfe/d)

600 500

Decline

400 300 200 100

Oil and Liquids

0

2013

BELLY RIVER FM COLORADO GP

MILK RIVER FM MEDICINE HAT FM CARDIUM FM

MANNVILLE GP

VIKING FM NOTIKEWIN FM

SPIRIT RIVER GROUP

Gas

2014

PRODUCING HORIZONS producing horizons

CRETACEOUS

Rate 12%

FALHER FM WILRICH FM GLAUCONITIC FM

2015

2016

Production •• Spans long life, low decline dry gas in the Plains and Foothills regions through to Deep Basin liquids-rich gas •• Average Q1 2016 production of 353 mmcfe/d with an additional 50 mmcfe/d behind pipe •• 16 unique stratigraphic horizons, distributed across numerous geographic regions, contribute to the corporate production profile

GETHING FM ROCK CREEK FM

TRIASSIC

JURASSIC

CHARLIE LAKE FM MONTNEY FM

MISSISSIPPIAN DEVONIAN

RUNDLE GP NISKU FM SWAN HILLS / SLAVE POINT FM

Reserves •• Proved Developed Producing reserves represent 69% of Total Proved

Probable Producing: 13% 285 bcfe PBU & PBN: 17% 373 bcfe

PDNP & PUD: 22% 461 bcfe

•• Total Proved represents 69% of Proved + Probable reserves PDP: 48% 1,017 bcfe

•• Vast majority of Proved + Probable reserves are focused within existing producing areas •• 15 year Reserve Life Index (RLI)

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Large Resource Potential Unbooked Multi-Zone Recoverable Resource of Greater Than 5.3 tcfe(1) REGIONAL AREA MAP Major Opportunities Map LEGEND

SK AB

SK

MB

AB BC

CQ has annually added significant reserves and quantified multiple TCFEs of additional recoverable unbooked resource. This ongoing internal effort, along with technology advancements and improvement to recovery factors, will add new recoverable resource. LEGEND

Fort St Joh n

CQ Land Core Fairways

Fort McMurray

MB SK

SK AB Grande Prairie

Spirit River Group

Montney Gas Oil & Liquids-Rich Gas Edmonton

Fort McMurray

Mississippian Gas

Shallow Gas Calgary

irit River Group

0 0

km

125 mile

125

Montney Gas •• Liquids-rich potential at Glacier and Parkland, dry gas at Bougie

Oil & Liquids-Rich Gas •• Active industry drilling de-risking Partnership acreage positions as well as vertical stack Edmonton

•• Potential development could exceed 50,000 boe/d

Oil & Liquids-Rich Gas •• Multi-zone potential from the Belly River, Cardium, Charlie Lake, Gething, Glauconitic and Ellerslie Formations •• Existing owned and operated infrastructure in place to maximize future recovery

Spirit River Group Calgary

•• Area Shallow characterized Gas with highly sought-after Notikewin, Falher, Wilrich reservoirs •• Existing owned infrastructure key to future economic development of resource

Mississippian Gas •• Low decline, long life base production with substantial upside potential •• Significant existing owned sour gas infrastructure key to future economic development

Shallow Gas •• Low decline, long life base production •• Up to 4,000 additional low risk infill locations (1) Company estimate

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CQ Land Core Fairways

Fully Integrated Gas Business An extensive network of facilities and pipelines are well positioned within areas which can support near-term capital investment REGIONAL AREA MAP Regional Infrastructure Map LEGEND

LEGEND

BIA

SASKATCHEWAN ALBERTA

A LB E R TA BRITIS H COLU M

SASKATCHEWAN ALBERTA Boundary 67% WI Capacity 19 mmcfe/d Throughput 8 mmcfe/d

CQ Land

CQ Land CQ Operated Gas Plants CQ Non-Operated Gas Plants CQ Pipelines * All Values Net to CQ

Progress 38% WI Capacity 16 mmcfe/d Throughput 11 mmcfe/d

Fort St Jo hn

Fort McMurray

Parkland 35% WI Capacity 4 mmcfe/d Throughput 2 mmcfe/d Fort McMurray

Grande Prairie

Carrot Creek (Sweet) 100% WI Capacity 49 mmcf/d Throughput 16 mmcfe/d Hanlan 50% WI Capacity 92 mmcfe/d Throughput 28 mmcfe/d

Edmonton

MANITOBA AN TCHEW SASKA

Keyera Minnehik-Buck 10% WI Capacity 16 mmcfe/d Throughput 1 mmcfe/d

Keyera Minnehik-Buck 10% WI Capacity 16 mmcfe/d Throughput 1 mmcfe/d

Hanlan (Sweet) 39% WI Capacity 20 mmcfe/d Throughput 3 mmcfe/d

Ferrier (Sweet) 100% WI Capacity 155 mmcfe/d Throughput 15 mmcfe/d

Edmonton

Calgary

Wildcat Hills 100% WI Capacity 128 mmcfe/d Throughput 63 mmcfe/d 0 km Gilby 100% WI 0 Capacity 50 mmcfe/d Throughput 27 mmcfe/d

125 mile

A MANITOB AN TCHEW SASKA

Husky Ram 5% WI Capacity 27 mmcfe/d Throughput 27 mmcfe/d

Gilby 100% WI Capacity 50 mmcfe/d Throughput 27 mmcfe/d

125

Calgary

at Hills 100% WI ity 128 mmcfe/d ghput 63 mmcfe/d

Facility Overview Total Number of Facilities (Major)

11

Sweet Facilities

3

Sour Facilities

8

Total Capacity(1)

(mmcfe/d)

630

Total Throughput

(mmcfe/d)

215

Utilization of Net Capacity

(%)

35%

Gathering Systems

(km)

12,850

(1) Total capacity includes both major and minor facilities

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CQ Operated G CQ Non-Opera CQ Pipelines * All Values Net to

Fully Integrated Gas Business (Cont’d)

EXECUTIVE PRESENTATION - REGIONAL INFRASTRUCTURE Carrot Creek 100% WI Capacity 49 mmcf/d Throughput 16 mmcf/d

Facilities & Pipelines •• The integrated nature of the Partnership’s infrastructure provides a strategic advantage

•• The infrastructure assets are also positioned well in active industry areas to capture third party volumes •• Owned and operated facilities are proximal to market trunklines EXECUTIVE PRESENTATION - REGIONAL INFRASTRUCTURE MAP

Detailed Infrastructure Map

Carrot Creek 100% WI Capacity 49 mmcf/d Throughput 16 mmcf/d

T54 T52 T50

Hanlan Sour 50% WI Marketing & Transportation Capacity 93 mmcf/d Throughput 47 mmcf/d 100% WI •• In-house marketing team Ferrier Capacity 155 mmcf/d Throughput 96 mmcf/d Hanlan Sweet 41% WI pricing and contract focused on Capacity 21 mmcf/d Throughput 19 mmcf/d strategies provides efficiencies in the business

•• Active management and planning of transportation requirements

T48 T46

Hanlan Sour 50% WI Capacity 93 mmcf/d Throughput 47 mmcf/d Hanlan Sweet 41% WI Capacity 21 mmcf/d Throughput 19 mmcf/d

Ferrier 100% WI Capacity 155 mmcf/d Throughput 96 mmcf/d

»»Yields premium value for natural gas, oil, condensate, NGLs and sulphur

T44 T42

»»Provides competitive advantage 82-Nlooking at the business when from a full portfolio perspective 82-N-11

T40 T38

82-N-6

82-N-7

82-N-3

82-N-2

T36

Husky Ram

T34

Shell Caroline

82-N-14

0 km 12 0

mile 12

LEGEND

82-N-11

T30

82-N

82-N-3

82-N-2

T28

T26 0 km 12 0

mile 12

Wildcat Hills 100% WI Capacity 128 mmcf/d Throughput 63 mmcf/d

R12

R10

R8

T24 R6

LEGEND CQ Land CQ Operated Gas Plants CQ Non-Operated Gas Plants Industry Gas Plants CQ Pipelines TCPL Pipelines Other Connecting Pipelines * All Values Net to CQ

7

R4W5

Wildcat Hills 100% WI Capacity 128 mmcf/d Throughput 63 mmcf/d

R12

T32

82-N-7

Shell Carolin

82-N-14

CQECP Gilby

82-N-6

Husky Ram

CQ Land CQ Operated Gas Plants CQ Non-Operated Gas Plants Industry Gas Plants CQ Pipelines TCPL Pipelines Other Connecting Pipelines * All Values Net to CQ

R10

R8

R6

Strong Financial Capability Solid financial position driven by a demonstrated track record of sustained cost reductions through a focused above-ground production optimization and continuous refinement of all aspects of the business Current Business •• 2015 operating cash flow of $150 million •• The Partnership has been dedicated to maintaining volumes while historically operating within cash flow •• Tax pools in place that positively impact the Partnership •• 2015 revenue of $10.8 million from Fee and Royalty land Cost Reduction Strategies •• Implementation of permanent margin protection strategies continue to drive cost from the business »»Demonstrated cost reductions over the past six months averaging $0.40/mcfe »»A major driver of this reduction is related to processing fees from plant optimization and re-routing volumes Operating Cost Improvements 3.00 2.80 Avg. Costs ($/mcfe)

2.60 2.40 2.20

Cost Reduc tion

2015 Average $1.97/mcfe

2.00 1.80

Trend

2016 Estimate $1.65/mcfe

1.60 1.40 1.20 1.00

Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16

Financial Growth •• At current strip pricing, production can be maintained at current levels in forward years under a cash flow neutral strategy •• Significant growth potential from the broad diverse asset portfolio can be realized along the strip pricing curve

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Process and Contacts Centrica plc (60%) and its partner (40%) have engaged advisors to manage a process to divest of their equity interests in CQ Energy Canada Partnership (“CQ”). CQ holds a Canadian E&P portfolio located across the Western Canadian Sedimentary and Williston basins through its operating subsidiary CQ Energy Canada Resources Partnership (“CQCRP”). Centrica plc has engaged TD Securities Inc. (“TD” or “TD Securities”) as its sole financial advisor and its partner has engaged J.P. Morgan (“JPM”) as its sole financial advisor (together the “Advisors”). It is the partners’ intention to both maximize value and fully exit the Canadian oil and gas market through this offering. It is the intention of the sellers and the Advisors to conduct the Offering process such that it minimizes any disruption to CQCRP’s business operations. Interested parties should not contact the sellers, CQ or CQCRP directly regarding any aspect of the Offering. A Confidentiality Agreement may be requested by contacting one of the following individuals at TD Securities. Virtual data room access may be obtained upon executing and submitting a Confidentiality Agreement. All other inquiries, communications or additional information requests related to the Offering should be directed to one of the following individuals at TD Securities. TD Securities TD Canada Trust Tower Suite 3600, 421 - 7th Ave SW Calgary, AB T2P 4K9 Tel: 403-503-4848 TD Energy Advisors

Investment Banking

Mark Kuhn Managing Director, Head of TD Energy Advisors T: 403 503 4852 [email protected]

Scott Barron Managing Director T: 403 292 1283 [email protected]

Ruben Contreras, P.Eng Director T: 403 503 4853 [email protected]

Michael Charron Vice President T: 403 299 8505 [email protected]

Timing •• Virtual Data Room: Week of May 23, 2016

•• Technical Presentations: To commence June 2016

•• Bid Date: TBD

•• Closing: Before Year-End 2016

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Disclaimer This document was prepared solely for informational purposes and is being provided to assist prospective purchasers in considering their interest in acquiring CQ Energy Canada Partnership (“CQ” or the “Partnership”) and its subsidiaries, including CQ Energy Canada Resources Partnership, from its partners (the “Sellers”), Direct Energy Resources Partnership (“DERP”) and a third party partner. Direct Energy Marketing Limited, as the managing partner of DERP and a wholly owned subsidiary of Centrica plc, has engaged TD Securities Inc. as its sole financial advisor and the third party partner has engaged JP Morgan as its sole financial advisor in connection with this transaction. By accepting this document, the recipient acknowledges that it has read, understood and accepted the terms of this notice. The distribution of this document in certain jurisdictions may be restricted by law and, accordingly, recipients of this document represent that they are entitled to receive this document without contravention of any unfulfilled registration requirements or other legal restrictions in the jurisdiction they reside or conduct business in. This document may not be distributed or published in the People’s Republic of China, except under circumstances that will result in compliance with any applicable laws and regulations. This document does not constitute or form part of an offer, solicitation, advertisement, recommendation or invitation for the sale, issuance or purchase of securities in CQ, its subsidiaries or any other entity, or any of the business assets described herein. Neither this document, nor the fact of its distribution, shall form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever with respect to such securities or assets. This document is not and under no circumstances is to be construed as (i) a prospectus, a public offering or an offering memorandum, or (ii) a report, statement, or opinion of an expert, each as defined under applicable securities laws. Without limitation, CQ’s securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or applicable state securities laws, and may not be offered or sold in the U.S. unless the securities are registered under the U.S. Securities Act, or an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available. No securities regulatory authority in either the U.S. or Canada has passed upon the securities described herein or reviewed this presentation. Nothing in this document should be construed as giving legal, investment or other advice of any kind. The recipient should consult its own professional advisors as to legal, tax and related matters concerning an acquisition of CQ, its subsidiaries or any of their business assets. This document is intended only for persons reasonably believed to be sufficiently expert to understand the risks involved. The recipient should conduct its own investigation, analysis and evaluation of these assets. In particular, any estimates or projections or opinions contained herein necessarily involve significant elements of subjective judgment, analysis and assumption and each recipient should satisfy itself in relation to such matters. The information in this document, which does not purport to be comprehensive and does not include all of the information that a prospective purchaser may require, has been provided by the Sellers and other sources and has not been independently verified by TD Securities, JP Morgan or otherwise. The information contained herein must be considered as a whole and selecting portions of the analyses without considering all of the factors and analyses together, could create a misleading view of the presentation. The preparation of a document such as this is complex and is not necessarily susceptible to partial analysis or summary description. Any attempt to do so could lend to undue emphasis on any particular factor or analysis. This presentation may contain forward-looking information relating to capital expenditures, future drilling, economic predictions, drilling costs, production rates, cash flow, investment payouts, valuations and other matters. These statements relate to future events or future performance. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “plan”, “estimate”, “expect”, “forecast”, “may”, “project”, “believe” and similar expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Although the Sellers believe that the expectations are reasonable there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, level of activity, performance or achievements and there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking statements. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. The forward-looking statements made herein relate only to events or information as of the date on which the statements are made.

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Disclaimer (cont’d) In addition, certain disclosure in this presentation may constitute “anticipated results” for the purposes of National Instrument 51-101 of the Canadian Securities Administrators because the disclosure in question may, in the opinion of a reasonable person, indicate the potential value or quantities of resources attributable to assets. Anticipated results are subject to numerous risks and uncertainties, including various geotechnical, geological, technical, operational, engineering, commercial and technical risks. In addition, the geotechnical analysis and engineering to be conducted in respect of such assets is incomplete. Such risks and uncertainties may render some such assets uneconomic or may cause the anticipated results disclosed herein to be inaccurate. None of the Sellers, CQ, TD Securities, JP Morgan or any of their respective affiliates, directors, officers, employees, shareholders, partners, agents, representatives, consultants or advisors (collectively, their “Representatives”), makes any representations or warranties, express or implied, as to the accuracy, reliability or completeness of this document any revision thereof or any other written or oral information made available (collectively, the “Information”). None of the Sellers, CQ, TD Securities, JP Morgan or any of their respective Representatives accepts any responsibility or liability in relation to the accuracy or completeness of the Information, errors therein or omissions therefrom, and any liability therefor is hereby expressly disclaimed. The recipient shall be entitled to rely solely on the representations and warranties, if any, made to it in any definitive purchase agreement when and if one is executed. The recipient is responsible for satisfying itself as to the accuracy and completeness of all Information. The Sellers, CQ, TD Securities and JP Morgan reserve the right to amend or replace this document at any time but have no obligation to do so. None of the Sellers, CQ, TD Securities, JP Morgan or their respective Representatives undertakes any obligation to (i) update or otherwise revise or correct any inaccuracies which become apparent in the Information, or (ii) provide the recipient with access to any additional information. This document shall not be deemed an indication of the state of affairs of CQ and its subsidiaries nor shall it constitute an indication that there has been no change in the business or affairs of CQ and its subsidiaries since the date hereof. Nothing herein is or should be relied upon as a promise or representation as to the future. The Sellers and CQ reserve the right to: (i) negotiate with one or more persons at any time and to enter into a definitive purchase agreement without prior notice to the recipient or any other person; (ii) terminate further participation in the investigation and proposal process by any person; (iii) request the return of this document and any other Information provided to the recipient; and (iv) modify any procedures relating to this process without assigning any reason therefor. The issuance of this document shall not be taken as any form of commitment or obligation on the part of the Sellers, CQ, TD Securities or JP Morgan to proceed with any transaction. In no circumstances will the Sellers or CQ be responsible for any costs, losses or expenses incurred in connection with any appraisal or investigation by you of CQ, its subsidiaries or their business assets. All communications, inquiries and requests for information relating to this document should be addressed only to TD Securities. The management or other employees of the Sellers, CQ or their affiliates should not be contacted whether directly or indirectly. The recipient agrees with the Sellers and CQ that it will not use this document or any other Information for any purpose other than considering its interest in acquiring CQ, its subsidiaries or the business assets described herein. The recipient further agrees that it will not copy or reproduce in any electronic or physical form or distribute, communicate, disclose or otherwise make available in whole or in part to any other person, other than its agents, representatives, directors, officers and employees, this document or any other Information. This document, as well as any other Information that subsequently may be provided by the Sellers, CQ, TD Securities, JP Morgan or their respective Representatives, and any copies of such Information, is to be returned or destroyed promptly upon request by any of the Sellers, CQ, TD Securities, JP Morgan or their respective Representatives.

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