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Peters & Co. Limited - an independent, fully integrated investment firm which has specialized for over 49 years in investments in the Canadian oil and natural gas and oilfield services industries.
Research - Disclosure & Compliance
The Investment Industry Regulatory Organization of Canada Rule 3400 and the Financial Industry Regulatory Authority Rule 2241 (U.S.) require certain disclosure and compliance in research reports. In general, Peters & Co. Limited and its U.S. registered affiliate, Peters & Co. Equities Inc., are in compliance with the above noted recommendations, rules, and regulations where they apply. The firm does not receive compensation for any non-securities related services.

Compensation of Analysts

The compensation of research analysts is intended to reflect the value of the services they provide to the clients of Peters & Co. Limited and its U.S. registered affiliate, Peters & Co. Equities Inc. As with most other employees, the compensation of research analysts is impacted by the overall profitability of the firm, which may include revenues from corporate finance activities of the firm's Corporate Finance department. Research analysts' compensation is not, however, directly related to any specific corporate finance transactions. All research analysts are employees of the parent company, Peters & Co. Limited.

Certification by Research Analysts

The author(s) of each research report certifies that the views expressed in that report accurately reflects his/her personal views about the subject security and issuer. The author(s) of the report further certifies that no part of his/her compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in that research report.

Stock Ratings and Target Prices

Stock ratings and target prices are based on the analysts' assessment of the potential relative performance of a stock compared to its sector's index performance (namely, the S&P/TSX Energy Index). However, the firm publishes research on a wide range of companies that are headquartered in Canada and operating in the oil and natural gas industry, but many of these stocks or units are not listed in the Energy Index. The most important investment criteria and risk factors in these equities are the outlooks for, and the volatility of prices of world crude oil and North American natural gas. Given the volatility of producers' energy prices, the risk factor in equity prices increases inversely with the volume of production and increases proportionately with the ratio of debt capitalization.

The stock ratings and target prices are not based on financial ratios that are the same across all sectors of the oil and gas industry. Integrated companies are evaluated primarily on earnings estimates (EPS) and expected P/E ratios. Large and intermediate capitalized companies are evaluated primarily on cash flow estimates (CF), expected P/CF ratios, and Peters & Co.'s net asset value estimates. Small capitalization companies are evaluated based on estimates of cash flow, P/CF, and net asset values but with a greater emphasis on our estimate of the potential to increase the net asset value. Energy Service companies are evaluated on estimates of earnings before interest, taxes, depreciation & amortization (EBITDA) and earnings, and expected price multiples of these values. The distribution of stock ratings is intended to represent a statistical normal curve as indicated under Normal in the attached table.

Rating System & Distribution (as at May 8, 2020)

Ratings Distribution
Corporate Finance Services Provided*
Integrated and E&P Energy Services Infrastructure
Sector Outperform
Sector Perform
Sector Underperform
Restricted/Under Review

*Corporate Finance Services column shows the percentage of companies within each category from which the firm has received corporate finance revenues within the past twelve months or expects to receive in the next three months.

United Kingdom - Disclaimer

Peters & Co. Limited (Peters & Co.) is not authorised in the United Kingdom. Therefore, securities that may be offered or discussed in this research publication are intended only for, and directed only at, certain persons in the United Kingdom as stated below:
(a) to persons who are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000 (FSMA);
(b) to persons who are "investment professionals" within the definition in Article 19(5) of the FSMA (Financial Promotion) Order 2005 (FPO);
(c) the categories of persons referred to in Article 49(2) (a) to (d) of the FPO namely, high net worth companies, unincorporated associations, partnerships or trustees of high value trusts; and
(d) to any other persons to whom this material may lawfully be communicated,
the above persons together being referred to as "relevant persons".

Securities that may be offered and represented by this research publication are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such rights in securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This document contains no offer of transferable securities to the public in the United Kingdom within the meaning of sections 85(1) and 102B of FSMA. This document is not an "approved prospectus" for the purposes of Section 85(7) of FSMA. Accordingly, this document has not been examined or approved as a prospectus by the Financial Conduct Authority (FCA) under Section 87A FSMA or by the London Stock Exchange and has not been filed with the FCA pursuant to the rules published by the FCA implementing the Prospectus Directive (2003/71/EC) as amended (including by Directive 2010/73/EU) nor has it been approved by an "authorized person" for the purposes of Section 21 of FSMA.

This is investment research. The information, data, analyses and opinions, "information", contained herein: (1) include the proprietary information of Peters & Co.; (2) may not be copied or redistributed except as specifically authorised; (3) do not constitute advice and should not be relied upon as such; (4) are provided solely for informational purposes; (5) are provided to our clients generally, and are not designed for any one client specifically; (6) are not warranted or represented to be complete, accurate or current; and (7) may be drawn from data published on various dates. The information does not take into account the investment objectives, financial circumstances or investment needs of any particular investor. The investments featured in this research publication may not be suitable for every investor. Nothing in this research publication shall, or is intended to, constitute financial, legal, accounting or tax advice. The information should not be relied upon as the basis of an investment decision. Peters & Co. disclaims all liability to you for any trading decisions, damages or other losses related to the information or its use. If you choose to use this information, you do so at your own risk. You should verify all the information before using it and seek the advice of a professional financial adviser. Past performance is no guarantee of future results. The value and income derived from investments may go down as well as up.

This research publication is CONFIDENTIAL and should not be passed on by a relevant person to anyone, other than to relevant persons, and only as specifically authorised by Peters & Co.


The statements contained herein are based upon information that we believe to be reliable, although we cannot guarantee their accuracy. Our firm or its directors or members of their families may at times have a long or short position in the securities mentioned herein and may make purchases or sales of these securities while this memorandum is in circulation. Peters & Co. Equities Inc., a member of the National Association of Securities Dealers, Inc. and the Securities Investor Protection Corporation, is a wholly-owned subsidiary of Peters & Co. Limited and operates as a broker-dealer in the United States.
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