Rubellite Energy : January 18, 2022 - Rubellite Investor Presentation

Rubellite Energy Inc.

Investor Presentation

January 18, 2022

Disclaimers

FORWARD-LOOKINGINFORMATION: Certain information in this January 2022 investor presentation (this "Presentation") may constitute forward-looking information or statements (together, "forward-looking information") under applicable securities laws. The forward-looking information includes, without limitation, statements with respect to management's assessment of future plans and operations, and including the information contained under the headings "Investment Highlights", "Rubellite Guidance and Development Potential" and "Capital Efficiency" and also statements with respect to: expectations as to future production levels, capital expenditures, free funds flow, and planned drilling programs and the benefits to be derived from such drilling including the production growth and ability for the business plan to be fully funded; expectations respecting Rubellite's future exploration, development and drilling activities; the estimated capital and debt profile of Rubellite; and the anticipated focus of Rubellite's business plan. Forward-looking information is based on current expectations, estimates and projections that involve a number of known and unknown risks, which could cause actual results to vary and in some instances to differ materially from those anticipated by Rubellite and described in the forward-looking information contained in this Presentation. In particular and without limitation of the foregoing, material factors or assumptions on which the forward-looking information in this Presentation is based include: the ability of Rubellite to successfully operate the Clearwater assets; forecast commodity prices and other pricing assumptions; forecast production volumes based on business and market conditions; foreign exchange rates; near-term pricing and continued volatility of the market; accounting estimates and judgments; future use and development of technology and associated expected future results; the ability to obtain regulatory approvals; the successful and timely implementation of capital projects; ability to generate sufficient cash flow to meet current and future obligations; Rubellite's ability to operate under the management of Perpetual Energy Inc. ("Perpetual") pursuant to the management services agreement; the ability of Rubellite to obtain and retain qualified staff and equipment in a timely and cost-efficient manner, as applicable; the retention of key properties; forecast inflation and other assumptions inherent in Rubellite's current guidance and estimates; the continuance of existing tax, royalty, and regulatory regimes; the accuracy of the estimates of reserves volumes; ability to access and implement technology necessary to efficiently and effectively operate assets; and the ongoing and future impact of COVID-19 and supply chain disruptions on commodity prices and the global economy, among others. Statements relating to "reserves" and "resources" are also deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves or resources described exist in the quantities predicted or estimated and that the reserves or resources can be profitably produced in the future. Actual reserves may be greater than or less than the estimates provided herein. The estimated future net revenue from the production of the disclosed oil, natural gas liquids and natural gas reserves does not represent the fair market value of these reserves. Undue reliance should not be placed on forward-looking information, which is not a guarantee of performance and is subject to a number of risks or uncertainties, including without limitation those described herein and under "Risk Factors" in Perpetual's Management Information Circular dated August 4, 2021 and in other reports on file with Canadian securities regulatory authorities which may be accessed through the SEDAR website (www.sedar.com). Readers are cautioned that the foregoing list of risk factors is not exhaustive. Forward-looking information is based on the estimates and opinions of Rubellite's management at the time the information is released, and Rubellite disclaims any intent or obligation to update publicly any such forward-looking information, whether as a result of new information, future events or otherwise, other than as expressly required by applicable securities law.

THIRD PARTY INFORMATION: This Presentation includes market, industry and economic data which was obtained from various publicly available sources and other sources believed by Rubellite to be true. Although Rubellite believes it to be reliable, it has not independently verified any of the data from third party sources referred to in this Presentation or analyzed or verified the underlying reports relied upon or referred to by such sources or ascertained the underlying economic and other assumptions relied upon by such sources. Rubellite believes that its market, industry and economic data is accurate and that its estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness thereof. The accuracy and completeness of the market, industry and economic data used throughout this Presentation are not guaranteed and Rubellite makes no representation as to the accuracy of such information

NON-GAAPMEASURES: This Presentation contains terms such as "free funds flow" which do not have standardized meanings prescribed by GAAP. Management believes that in addition to net income (loss) and net cash flows from (used in) operating activities as defined by GAAP, these terms are useful supplemental measures to evaluate operating performance. Users are cautioned however that these measures should not be construed as an alternative to net income (loss) or net cash flows from operating activities determined in accordance with GAAP as an indication of Rubellite's performance and may not be comparable with the calculation of similar measurements by other entities. For additional reader advisories in regards to non-GAAP financial measures, including Rubellite's method of calculation and reconciliation of these terms to their corresponding GAAP measures, see the section entitled "Non-GAAP Measures" within the Company's MD&A filed on SEDAR.

Free funds flow: Free funds flow is defined as adjusted funds flow less total net capital expenditures. Total net capital expenditures is defined as total capital expenditures before acquisitions and non-core dispositions.

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Disclaimers (Cont'd)

RESERVE ESTIMATES: The reserves estimates contained in this Presentation with respect to Rubellite's gross reserves as at June 1, 2021, and are defined under NI 51-101, as Rubellite's interest before deduction of royalties and without including any of our royalty interests. It should not be assumed that the present worth of estimated future net revenues represents the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserves estimates of our crude oil, NGL and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and NGL reserves may be greater than or less than the estimates provided herein. All future net revenues are estimated using forecast prices, arising from the anticipated development and production of our reserves, net of the associated royalties, operating costs, development costs, and decommissioning obligations and are stated prior to provision for finance and general and administrative expenses. Future net revenues have been presented on a before tax basis. Estimated values of future net revenue disclosed herein do not represent fair market value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

ESTIMATES OF DRILLING LOCATIONS: Unbooked drilling locations are the internal estimates of Rubellite based on the Clearwater assets prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources (including contingent and prospective). Unbooked locations have been identified by Rubellite's management as an estimation of Rubellite's multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that Rubellite will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and natural gas reserves, resources or production. The drilling locations on which Rubellite will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While a certain number of the unbooked drilling locations have been de-risked by Rubellite by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management of Rubellite has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

OIL AND GAS METRICS: This Presentation contains certain oil and gas metrics which do not have standardized meanings or standard methods of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons. Such metrics have been included in this document to provide readers with additional measures to evaluate Rubellite's performance; however, such measures are not reliable indicators of Rubellite's future performance and future performance may not compare to Rubellite's performance in previous periods and therefore such metrics should not be unduly relied upon.

BOE EQUIVALENTS: Rubellite's aggregate proved and probable reserves are reported in barrels of oil equivalent (boe). Boe may be misleading, particularly if used in isolation. In

accordance with NI 51-101 a boe conversion ratio for natural gas of 6 Mcf: 1 boe has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

The following abbreviations used in this Presentation have the meanings set forth below:

bbl	barrels
bbl/d	barrels per day
boe	barrels of oil equivalent
.

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Background

Newly created, growth-focused, pure play Clearwater company (TSX:RBY)

Since 2018, Perpetual / Rubellite has executed 30+ separate transactions to assemble a position of over 140 net sections across the Clearwater fairway:

• Rubellite acquired all of Perpetual's Clearwater Assets for total consideration of $65.3 MM (including $59.2 mm in cash)
• • Rubellite incorporated on July 12, 2021
  • Clearwater Assets conveyed to Rubellite on July 15th
  • Public announcement of the Plan of Arrangement on July 16th
  • Plan of Arrangement closed on September 3rd
  • Equity Financings closed / released from Escrow on Oct 5, 2021
• $83.5 MM in Equity Financings:
• • $30.0 MM Brokered Sub-Receipts Financing (closed into escrow July 13th)
  • $20 MM Non-Brokered Private Placement
  • $33.5 MM Arrangement Warrant ("rights offering") Financing for Perpetual shareholders fully backstopped by Sue Riddell Rose, President & CEO
  • • $30.6 MM (91%) was initially subscribed for by shareholders pro rata
    • Oversubscribing shareholders fully took up the remaining $2.9 MM
  • All components of the Financings priced at $2.00/share
  • Insider ownership of ~35.8%
  • AIMCo ownership of ~8.3%
• Enterprise value of ~$105 MM (1)
• • 43.8 MM shares outstanding
  • 4.0 MM Rubellite Share Purchase Warrants (owned by Perpetual) (2)
  • 1.1 MM share-based payment awards (priced at $2.00/share)
  • ~$8-9MM in net positive working capital estimated at year-end 2021

1. At January 18, 2022 closing price of $2.60
2. $3.00 exercise price; Non-cash consideration of $2 MM valued using Black Scholes model

Assets

assembled over

three years

through third

party and

crown land

acquisitions, farm-ins and freehold mineral leasing

Captured strategic

road

infrastructure

required for future

development

Spin-out of

Rubellite assets, public listing and equity financing

Significant delineation through Perpetual and competitor activity provided confidence in drilling inventory

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Investment Highlights

Robust growth opportunity in the prolific Clearwater play

Pure Play

Clearwater

Asset Base

Robust Organic

Production

Growth Profile

Fully Funded

Development

Unlocks Free

Funds Flow

Conservative

Capitalization

and Risk

Mitigation

Management

Alignment and

ESG Excellence

• Access for public investors to participate in a high growth, pure play Clearwater explorer/producer
• 140+ net sections of highly prospective Clearwater lands with 550+ potential drilling locations
• Line of sight to additional exploratory land capture and M&A opportunities
• Rubellite controls and operates 100% of its Clearwater asset base
• Organic production growth from 350 bbl/d to >2,000 bbl/d milestone during Q1 2022
• Highly profitable, full cycle IRRs with well payouts in less than one year at current strip pricing
• <50% of development/step-out inventory drilled to support 5,000 - 10,000 bbl/d growth plan
• <5% of potential drilling locations booked in June 1, 2021 McDaniel Reserve Report
• Rapid, organic growth plan financed through initial capital raise and free funds flow
• Total cash costs of ~$15 to $18/bbl drives organic free funds flow forecast in 2022 at strip pricing
• Extensive infrastructure in core operating areas drives attractive capital efficiencies
• Future waterflood and EOR potential to mitigate production declines and increase recovery
• No debt and organic free funds flow positive in 2022
• $3 MM borrowing capacity on bank facility expected to grow upon redetermination in Q1 2022
• Prudent approach to hedging to protect capital investment plans and returns during growth ramp
• Forecast cash on balance sheet to allocate to accelerated organic growth, exploration activities, acquisitions and distributions to shareholders
• Strong management alignment with insider ownership of ~35.8%
• Unstimulated, multi-lateral drilling technology off multi-well pads supports environmentally responsible development with limited surface footprint and use of freshwater
• Strong governance with three independent board members

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