A focused group

Experience counts

Corporate Offices

600, 400 – 3 Ave. SW
Calgary, AB.
T2P 4H2

Auditors

KPMG LLP

Legal

Burnet Duckworth & Palmer LLP

Reserves

Sproule Associates Limited


Competitive Advantages

Completive Advantages

Management believes Cardinal has several competitive advantages that will help it execute its business strategy successfully:

  • Solid Base of Low Decline Crude Oil Production

Cardinal's current oil focused production decline rate is estimated to be less than 15% per year. These decline rates will allow the Company to spend a relatively smaller portion of its budget replacing production decline, allowing more capital in its budget to be allocated to maintaining its dividend and enabling the Company to pursue production and cash flow growth opportunities.

  • Operated Assets, High Working Interest

Cardinal operates 97% of its properties with an average working interest of 90%. Operating its assets allows the Company to dictate the pace of development of its organic growth opportunities while controlling the cost and timing. Operating its properties further allows Cardinal to achieve operating benefits as it consolidates future core areas. When considering future growth opportunities, the Company will target high working interest, operated crude oil properties with attractive netbacks.

  • Large Development Drilling Inventory

Cardinal's drilling strategy is to engage in low risk development drilling with low capital exposure per well. Management believes that it has a multi-year drilling inventory consisting of approximately 40 development drilling locations as well as 40 contingent development drilling locations. Management is continually working to increase our drilling inventories.  

  • Disciplined Growth Strategy

Cardinal is highly focused on building a sustainable business by establishing core areas with production in excess of 1,000 Boe/d and low decline rates. As Cardinal grows, it will maintain a low decline rate by continuing to acquire proven and established assets with lower production decline profiles than those of newly drilled wells. Cardinal's acquisition success in combination with its expertise in organically growing oil and gas production, will assist in achieving and maintaining low decline rates.

  • Conservative Balance Sheet

Cardinal's long term corporate goal is to maintain a ratio of net debt to cash flow from operations below one which will provide the financial flexibility necessary for continued success in executing its acquisition program and organic growth. The Company had net debt of $3.9MM as of March 31, 2014. In addition, Cardinal has also established a rolling, three year corporate hedging policy to provide increased certainty in cash flows and dividends.

  • Management Team with a History of Creating Value for Shareholders

Cardinal's senior management team has extensive experience in the oil and natural gas business in Western Canada. The senior team members have an average of 18 years of experience. The Company believes that its management team has the necessary skills and experience to build Cardinal into a successful dividend paying, oil focused, growth company supported by their experience and past involvement and success with growing several public and private companies from start-up to eventual sale. Management of Cardinal is experienced in acquiring, drilling, completing and operating vertical and horizontal wells in a number of areas and play types, including the areas currently owned and being acquired, in Western Canada.

  • Track Record of Accretive Acquisitions

Cardinal has completed four major acquisitions since it commenced operations in May of 2012, resulting in production growth from zero to 6,300 Boe/d. The Company believes its management team is one of its core competitive strengths relative to industry peers due to the team's track record of identifying, sourcing and executing accretive transactions.