1. The Economics of Proper Measurement
Why accurate allocations matter to the bottom line!
May 8, 2018

2. Legal Disclaimer
This document, and its contents, are strictly confidential and may not be used for any purpose by any person other than the intended recipient, and may not be reproduced or distributed to any other person or published, in whole or part, anywhere.  Neither Canlin Energy Corporation nor any of its affiliates, representatives or employees, makes any representation or warranty, express or implied, as to the fairness, accuracy or completeness of any of the contents of this document, and nor will they have any liability relating to or resulting from their use.
Under no circumstances will this document, or any of its contents, be construed as an offer to sell, or a solicitation of an offer to purchase, any securities.  This document and its contents are not for publication or distribution, directly or indirectly, in Canada, the United States of America, or any other jurisdiction where it would be unlawful to publish or distribute them, and may not be copied, forwarded, distributed or transmitted, directly or indirectly, in whole or part, in or to any such jurisdiction.
Where this document contains statements, estimates or projections with respect to the anticipated future performance of Canlin Energy Corporation or any of its affiliates, those reflect various assumptions which may or may not prove to be correct, and neither Canlin Energy Corporation nor any of its affiliates makes any representation as to, nor accepts responsibility for, the accuracy of any such statements, estimates or projections.
Before I get into the good stuff. HERE IS THE LEGAL MUMBO JUMBO that I have to show.
The gist of it is
LISTEN TO ME AT YOUR OWN DISCRETION, I MAY NOT KNOW WHAT I AM TALKING ABOUT**
May 8, 2018

3. Canlin Energy Corporation
Introductions
Canlin Energy Corporation
Canlin Energy Corporation is a privately held, long reserve life, natural gas weighted producer in the Western Canadian Sedimentary Basin. Our E&P business produces over 50,000 boe per day from predominantly operated wells, infrastructure and facilities. Canlin's key priorities are running a safe and sustainable business, focusing our portfolio, improving productivity, generating value from our midstream assets and investing for growth and value.
Who I am?
Who I am not!

4. What factors affect allocations?
Volumes
Transportation
Meter Stations
Operated Plants

5. History of our measurement story
3 major plants with complex requirements
2 applications
Manually intensive

6. In April of 2014, the world of allocations became very challenging.
History, part 2
Prior to 2014, Firm and Interruptible transportation flowed freely on NGTL which made moving gas where needed a breeze and managing allocations easier.
In April of 2014, the world of allocations became very challenging.

7. Firm Restriction Example
NGTL posts an 85% Firm Service allowable.
This means only 85% of the firm service held at a meter station can flow.
You have a limited time to reduce your flow.
If you do not comply NGTL can shut in your facility.

8. Help was needed to manage the complexity
Decision to implement WellTrak. Software developed by Tinbox Energy Software.
WellTrak is automated and auditable.
Saves manpower and time.
Removes the risk of manual error.
Increases efficiencies and reduces operational risk.

9. The Nuts and Bolts of Allocations – Why does it matter?
How is gas allocated, and what does it mean to shippers?
What is a Gas Balance Recovery?

10. Gas Balance Recovery Economics, part 1
Actuals Submitted by 17th of following month
Monthly Actuals
Gas Balance Recovery
Daily Estimates
MONTH 1
MONTH 2
MONTH 3

11. Gas Balance Recovery Economics, part 2
Submitted by 17th of following month
Monthly Actuals
Gas Balance Recovery
Daily Estimates
MONTH 1
MONTH 2
MONTH 3
201707
201708
201709
Price (CA$/GJ)7A
2.3029
2.032
1.4604
Original Allocation (201707)
Actual Allocation
(201707, made )
Gas Balance Recovery
(done to 0920)
Gas Balance Volume (GJ)
8,000,000
8,240,000
240,000 or 8,000 GJ/d

12. Gas Balance Recovery Economics, part 3
Each row shows the date, original monthly price, and eventual daily price.
The final column shows the gain loss created by the difference in price.
Bottom line impact of a bad month. Bad months are positive GBR’s in a declining price environment, or negative GBR’s in an increasing price environment. Both of these are typical in shoulder months.

13. Measurement is important
Measurement has an impact on Cash Flow
If you are serious about managing Cash Flow, you should be serious about managing measurement and allocations.

14. Any questions???