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A Capital Opportunity A Global Market for Oil & Gas Companies CAPP ScotiaBank Investment Symposium – April 2014

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Disclaimer This document is for information purposes only. While the information herein is collected and compiled with care, neither TMX Group Limited nor any of its affiliated companies represents, warrants or guarantees the accuracy or the completeness of the information. You agree not to rely on the information contained herein for any trading, legal, accounting, tax, investment, business, financial or other purpose. This information is provided with the express condition, to which by making use thereof you expressly consent, that no liability shall be incurred by TMX Group Limited and/or any of its affiliates as a result of any errors or omissions herein or any use or reliance upon this information.

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Š 2014 TSX Inc. All rights reserved. Do not sell or modify without the prior written consent of TSX Inc.


Canada and TSX: Strong Fundamentals Economically stable •

• • • • •

Canada is the fifth largest equity market by float capitalization in the MSCI World Index World’s soundest banking system Lowest debt-to-GDP among G7 Strong equity culture ~$2.4 Trillion in market cap $270 billion in equity capital raised in last 5 years

Energy and resource rich • •

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3rd largest oil reserves in the world #1 in resource listings


Canadian Markets‌Global Leaders

1

st

In Listed Oil & Gas Companies

1

st

In Listed Renewable Energy and Clean Technology Companies

2

nd

In Number of Listed Companies

4

1

st

In Listed Energy Services Companies

2

nd

In New Listings

7

th

In Equity Capital Raised

Source: World Federation of Exchanges, 2013, Capital IQ, TSX/TSXV Market Intelligence Group

1

st

In Oil & Gas Analysts

3

rd

In New International Listings

7

th

In Market Capitalization and Value Traded


The World Lists on TSX and TSXV TSX and TSXV International Listings by Country/Region

Total International Listings as at December 31 2013= 314 TSX = 164 Listings | QMV=$151 B TSXV = 150 Listings | QMV= $2.8 B

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The World Trades on TSX and TSXV

~40% of daily trading originates from international brokers

7

th

in the world in value traded

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Service at All Stages of Growth A Unique Market Structure with Strong Feeder System

Serving all Market Caps

% of TSX Issuers % of TSXV Issuers

94%

583

35%

535 Issuers

29% 2,015 Issuers

<$50 Million

442 Issuers

graduates +147 M&A*

36%

5% 114

$50 - $250 Million

555 Issuers

1%

12

>$250 Million From January 1, 2000 â&#x20AC;&#x201C; December 31, 2013

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Market Capitalization, December 31, 2013


Access to Capital Toronto Stock Exchange and TSX Venture Exchange Total Financings (C$ Billions) 1999 â&#x20AC;&#x201C; 2013 Average Financing Size: TSX: $67M TSXV: $2M

64.9 58.8

52.2 46.2 19.2 19.2

1999*

8

25.5 23.1

22.0 20.9

2.4

1.1

2000

2001

27.3 25.8 1.4

2002

31.5

32.5

29.1

28.4

41.8

47.6

54.0 40.8

44.1

35.3

2.4

4.1

6.1

2003

2004

2005

TSX Venture Exchange commenced operations on November 29, 1999

49.7

56.5

60.0

7.9

2006

11.1

2007

9.8

5.5

5.0

2008

2009

2010

51.1

50.6

41.0

10.1

2011

43.6 39.9

6.0

2012

3.8

2013


Oil & Gas by the Numbers

369 Issuers 110 TSX + 259 TSX V

$5.2B Equity Capital Raised $3.9B TSX + $1.3B TSXV

246 Number of Financings 72 TSX + 174 TSXV 9

$375B Market Capitalization $364B TSX + $11B TSX V

15 New Listings 9 TSX + 6 TSXV


Leading Growth Markets for Oil & Gas

1

#

Number of Listed Oil & Gas Issuers 369

in listed oil & gas companies globally

167

147

136 49

32% of the worldâ&#x20AC;&#x2122;s public oil & gas companies

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Source: Capital IQ, as at December 31, 2013

TSX/TSXV

NYSE/ NYSE MKT

ASX

LSE/AIM NASDAQ

17

14

HKEx

Oslo Bors


Leader in Energy Services

1

#

Number of Listed Energy Services Issuers 80

in listed energy services companies globally

59 46 21

21% of the worldâ&#x20AC;&#x2122;s public energy services companies

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Source: Capital IQ, as at December 31, 2013

TSX/TSXV

19

NYSE/ Oslo Bors LSE/AIM NASDAQ NYSE MKT

13

HKEx

6 ASX


Access to Capital

$

5.2B

Raised by oil and gas companies in 2013

Oil & Gas Equity Capital Raised on Toronto Stock Exchange and TSX Venture Exchange (C$ Billions) Secondary Offerings

Private Placements

$11.7B $10.4B

IPOs

$11.3B $10.5B

$10.1B

$9.2B

$9.0B $8.2B

246

$5.2B $4.1B

Financings in 2013 2004

12

2005

2006

2007

2008

2009

2010

2011

2012

2013


Service at All Stages of Growth

200

+

Oil & Gas Equity Analysts Cover the Sector

Companies of all sizes receive analyst coverage

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Source: Capital IQ

Oil and Gas Analyst Coverage


Who is Attracting Capital? 

They have a good story

Strong balance sheet

Room for growth

Strong management team  Are they known in the energy community?  Are they known in the investment community: bankers, analysts, investors?  Have they done it before?  What is their track record?

14

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Where Is the Capital Going?

Canada: $2.7B

UK/Europe, Middle East and Russia: $595M

USA: $980M Latin America: $75M

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Equity capital raised on TSX and TSXV for oil & gas companies by location of project Source: TSX/TSXV Market Intelligence Group, 2014

Africa: $789M


Clean Tech Sector Growth and Performance Growth of Sector:

Performance:

Year-End Market Capitalization (C$B)

S&P/TSX Renewable Energy and Clean Technology Index

$18.0

$16.8

$18.1

2010

2011

2012

$12.9

2009

16

$21.8

2013


2013 Oil & Gas Junior Market Overview 

Depressed Capital Market Activity

Increased Private Equity financing

Junior companies traded up approximately 17% in the last half of 2013

A lot of consolidation, only 50% of juniors remain from 2007

Equity financings were down 30% from 2012

5 companies raised 60% of equity capital raised

75% of junior proceeds were raised in the second half of the year

More IPO’s in the second half of the year

Companies are recapitalizing

Decreased M&A activity (67%) and higher cost of capital

25% decrease in flowing oil metrics

A lot of assets on the market

Source: Paradigm Capital

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General Trends

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Increased interest in yield/dividends

Private Equity filled the gap that the sluggish capital markets created

Thirst for international projects

Increased activity and capital raising for African based projects

Capital raising and M&A activity has increased dramatically in 2014

Funds are flowing back into the Oil & Gas sector

Preference for oil-weighted E&P issuers

More room for midstream and oilfield services

Private placements and bought deals

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Monica Rovers, Head, Business Development, Global Energy, TMX.