Fairborne Energy Corporate Presentation

Fairborne Energy Ltd. Corporate Presentation

Please refer to Forward-Looking Statements, Advisory and Resource Disclosure at end of presentation.

November, 2012

Fairborne Snapshot

Production 4,500 BOE/d (20% Oil & Cond, 5% NGL’s)

Reserves 23.1 MMBOE (1)

Resource 131 MMBOE (2) – Cardium only

Drilling Inventory >1,000 gross locations

Bank Line $ 80 MM

Net Debt $ 13 MM Working Capital Deficit

Shares OS (basic/FD) 102.6 MM/110.0 MM

Management & Insiders (FD) 5% (8%)

(1) As evaluated by GLJ, effective Dec 31, 2011 and updated for divestitures and production (2) As evaluated by GLJ, see May 2, 2012 press release

Activity

Fourth Quarter 2012 Cardium HZ

1-9 Drill and Complete (76% WI) 1-6 Drill and Complete (33% WI)

Wilrich HZ 1-20 Drill (50% WI)

First Half 2013 Cardium HZ

13-31 Drill and Complete (76% WI) Wilrich HZ

1-20 Complete Multizone Vertical

4-30 Drill and Complete (76% WI) 13-35 Drill and Complete (33%WI)

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

Oct. 12 Exit 12 H1, 13 Exit 13

Prod

uctio

n (B

OE/

d)

Production Forecast

Proforma Value

10.6

15.4

23.1

0

10

20

30

40

PDP Proven P+P

MM

BO

E

$1.75

$2.35

$3.21

$-

$1

$2

$3

$4

$5

PDP Proven P+P

$/sh

1

45

68

0

10

20

30

40

50

60

70

80

90

100

PDP Proven P+P

$ M

M

Horizontal Cardium

Horizontal Wilrich/Falher

Multizone Vertical

Gross Unbooked Locations 330 201/182 55

* Net Asset Value = PV10 - Debt

Shares OS

Reserves Future Development

Capital ** Net Asset Value *

Current Share Price

Bank Lines

GLJ Resource Report Cardium 131 MM boe’s Economic Contingent

Resource * PV10 YE 2011 Reserves & Pricing ** FDC on a Discounted Basis

Fairb

orne

Position for Co’s ‹10,000 boe/d Size (BOE/d) Opex ($/BOE)

Debt to Cash Flow G&A ($/BOE)

0100020003000400050006000700080009000

10000

$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00

$10.00

$0$3$6$9

$12$15$18$21$24$27$30

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

FEL Proforma Production = 4,500 BOE/d

OPEX = $10.50/BOE

G&A = $3.80/BOE

Fairb

orne

Fairb

orne

Fairb

orne

Operating Focus – Deep Basin 320 Gross (204 Net) Sections • FEL operates 100% of production • High working interest • Reservoir depth up to 3,800 m Multizone 12 producing horizons • Rich gas, light oil & NGL’s

Harlech Area – Infrastructure & Activity

Keyera West Pembina Gas Plant Capacity: 150 MMscf/d

Keyera Brazeau Gas Plant Capacity: 218 MMscf/d

Keyera Nordegg Gas Plant Capacity: 75 MMscf/d

Blackstone De-Hy Gas goes to

Husky Ram River Gas Plant Capacity: 532 MMscf/d

FEL 16-36 Compressor Station Capacity: 30 MMscf/d

200m3 oil/condensate transfer capacity

March 29, 2012 Landsale $4,000/ha

October 17, 2012 Land Acq.

1-9 Cardium HZ Q4 ‘12

1-20 Wilrich HZ

1-6 Cardium HZ Q4 ‘12

Regional Cardium Geology

Cardium Ram Barrier Trend

225 Miles long

30 Miles wide

2,562 Vertical production

163 Hz. Production

13,350 Total wells through cardium sand

Harlech – Cardium Ram Barrier

1-9 Cardium HZ Q4 ‘12

1-6 Cardium HZ Q4 ‘12

Harlech Cardium

CARDIUM TOP

CARDIUM BASE

2850

2860

2870

Gamma Depth 15 Porosity 0 Resistivity Mud Gas

Cardium Type Log Theoretical Volumetric Calculation Low Med High

AREA (acres): 640 640 640

NET PAY (m): 6 7 8

POROSITY (%): 12 11 10

SW (%): 20 15 10

RESERVOIR TEMPERATURE (deg F) 184 184 184

RESERVOIR PRESSURE (psia): 4,700 4,700 4,700

COMPRESSIBILITY FACTOR: 0.95 0.95 0.95

RECOVERY FACTOR (%): 75% 75% 75%

GIP PER SECTION (BCF) 14.4 16.3 17.9

RGIP PER SECTION (BCF) 10.8 12.2 13.4

LIQUIDS mmbbls 0.54 0.61 0.67

MM BOE/SECTION 2.34 2.64 2.90

Fairborne owns 104 net sections

Cardium Resource Economic Contingent Resource – GLJ Evaluated

LOW (P90) BEST (P50) HIGH (P10)

TOTAL RECOVERABLE

GAS (BCF) 790 1,056 1,389

CONDENSATE/NGL (MMBBLs) 45 60 79

TOTAL (MMBOE) 176 236 310

WORKING INTEREST

GAS (BCF) 436 588 757

CONDENSATE/NGL (MMBBLs) 25 33 43

TOTAL (MMBOE) 97 131 169

WELLS (GROSS) 298 330 387

TYPE WELL

GAS (BCF) 2.9 3.5 4.0

CONDENSATE/NGL (MBBLs) 150 180 200

1. Based on an independent resource study (the "Resource Study") prepared by GLJ for a portion of Fairborne's Cardium land holdings in the greater Harlech area effective March 31, 2012.

2. "Total Interest" means a 100% working interest in the lands in which Fairborne has an interest in the area (which includes Fairborne's interest in the area as well as all other working interests in such lands held by third parties).

3. "Working Interest" means Fairborne's working interest (operated or non-operated) share before deduction of royalties and without including any royalty interests of Fairborne.

4. All volumes in the table are sales volumes. 5. The liquid yields are based on average yield over the producing life of the property. 6. Numbers in the table may not add due to rounding. 7. Reflects contingent resources which have been sub-classified by GLJ as economic based on GLJ forecast pricing as

at April 1, 2012. 8. See "Information Regarding Disclosure on Contingent Resources and Resource Study"

Liquids 0% C2 33% C3 – C4

67% C5 +

Cost Per Well ($000) Capital Efficiency

$3,900 Drill $10.00 F & D (per boe)

$2,800 Complete $8,705 On Stream Cost (per boe/D)

$ 700 Tie-In & Equip

$7,400 TOTAL

Cardium - Resource

$0

$1

$2

$3

$4

$5

$6

$7

$8

$/M

CFE

Total Revenue per MCF (Sales) at 3.50/MCFE

0

200

400

600

800

1,000

1,20011-21 Well 5.6 MMscf/d IP2-15 Well 2.4 MMscf/d IPGLJ TYPE CURVE

Well #1 Well #1 850 m Hz 10 Fracs

Well #2 1,200 m Hz 20 Fracs

Estim

ated

Dai

ly P

rodu

ctio

n Ra

te (B

OE/

d)

CRDM HZ Estimated Type Well Curve 3.5 BCF GAS 50 bbls/MMscf liquid Yield

Harlech Revenue Stream

Liquid Pricing : C3 = $34.00/bbl C4 = $66.00/bbl C5+=$95.00/bbl

Gas 44%

NGLs 56%

1 Year 2 Years

Harlech Wilrich

Summary

Hz Drilled 0

Land 106 Gross Sections

45 Net Sections

Drilling inventory Wilrich/Felare

354 (152 Net) Hz

Depth 3,400 m

Liquids content in gas 10+ bbls/MMcf

Husky

Tourmaline

13-29 HZ On Prod May 12, 2012

Test Rate: 31MMcf/d CTD: 771 MMcf

16-15 HZ On Prod Dec 8, 2011

Test Rate: 13MMcf/d CTD: 916 MMcf

08-36 HZ On Prod Dec 11, 2010 IP30: 6 MMcf/d

CTD: 1.7 Bcf

05-29 HZ On Prod Dec 16, 2009 IP30: 6 MMcf/d

CTD: 4.8 Bcf

07-21 HZ On Prod Dec 2, 2008 IP30: 6 MMcf/d

CTD: 6.1 Bcf

07-35 VT On Prod Dec 18, 1995 IP30: 2.5 MMcf/d

CTD: 2.2 Bcf

FEL 1-20 Wilrich HZ Location

FEL Voyager Wilrich Tested

Harlech Wilrich WilrichType Log 7-35-46-15W5

Theoretical Volumetric Calculation Low Med High

AREA (acres): 640 640 640

NET PAY (m): 8 9 10

POROSITY (%): 12 10 8

SW (%): 25 20 15

RESERVOIR TEMPERATURE (deg F) 203 203 203

RESERVOIR PRESSURE (psia): 5,200 5,200 5,200

COMPRESSIBILITY FACTOR: 0.99 0.99 0.99

RECOVERY FACTOR (%): 70% 70% 70%

GIP PER SECTION (BCF) 12.2 18.8 27.4

RGIP PER SECTION (BCF) 8.5 13.1 19.1

LIQUIDS mmbbls .10 .16 .23

MM BOE/SECTION 1.95 3.00 4.39

Fairborne owns 106 gross sections

3010

3020

3030

Gas kick bypassed

shaker

Wilrich Top

Wilrich Base

Porosity

Conglomerate Intergranular Porosity

Sandstone Intergranular Porosity

Rock – Porosity Types

Conglomerate Zone

Gamma Depth 20 Porosity 0 Resistivity Mud Gas

Coal

FEL – The Investment Opportunity

Trading below PDP net asset value Value $80 MM undrawn bank facility $68 MM in FDC 23.1 MM BOE in 2P reserves Assets Low Corporate decline rate (20%) 207,250 acres undeveloped land (132,270 net) Competitive cost structure with peers

Upside Cardium - 131 MM BOE in Economic Cont. Resource 1,000+ unbooked drilling locations

Corporate Information TSX Listings Trading Symbol: FEL Corporate Office 3400, 450 1st St. S.W. Calgary, Alberta, T2P 5H1 Telephone: 403-290-7750 Fax: 403-290-7724 Website: www.fairborne-energy.com E-mail: [email protected] Contacts S. R. VanSickle, President & CEO A. G. Grandberg, CFO

Reserve Auditors GLJ Petroleum Consultants Ltd. Banking Royal Bank of Canada Alberta Treasury Branch National Bank of Canada Union Bank Legal Counsel Burnet, Duckworth & Palmer LLP Auditors KPMG LLP

Aug ‘12

Forward-Looking Statements & Advisories Certain information set forth in this document, contains forward-looking statements including management's assessment of future plans and operations of Fairborne Energy Ltd. ("Fairborne"), the inventory of drilling prospects and potential drilling locations, future or anticipated production levels, the risk/reward potential of the portfolio of plays, drilling plans, debt levels, capital expenditures and the nature of the expenditures, commodity and revenue mix, estimated netbacks, and estimated well costs and the resulting capital efficiencies. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Fairborne's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, delays resulting from or the inability to obtain required regulatory approvals, inability to retain and delays in retaining drilling rigs and other services, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions and ability to access sufficient capital from internal and external sources. The foregoing list is not exhaustive. The estimates of reserves and future net income for individual properties may not reflect the same confidence level as estimates of reserves and future net income for all properties, due to the effects of aggregation. Reserve information included herein is as at December 31, 2011 unless otherwise stated. Type curves are provided for illustration purposes and may not necessarily be indicative of future well or production results. Test rates and initial production rates disclosed may not necessarily be indicative of long-term performance or of ultimate recovery. Netbacks are calculated by subtracting royalties, operating costs and transportation costs from revenues. Additional information on these and other risks that could affect Fairborne's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at Fairborne's website (www.fairborne-energy.com). Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The actual results, performance or achievement of Fairborne could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Fairborne will derive therefrom. Fairborne disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. BOE disclosure may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Natural gas volumes are converted to barrels of oil equivalent (boe) on the basis of 6,000 cubic feet (mcf) of gas for 1 barrel (bbl) of oil. The terms "barrels of oil equivalent" may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas 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.

Information Regarding Disclosure on Continegent Resources and Resource Study

The Resource Study is effective March 31, 2012 and was prepared in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities ("NI 51-101") of the Canadian Securities Administrators based on the definitions and guidelines contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but may not currently be considered commercially recoverable due to one or more contingencies. Contingent resources are in additions to reserves booked as proved, probable and possible. Uncertainty ranges are described by the COGE Handbook as low, best and high estimates for resources as follows: Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate. Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate. High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate. The most significant positive factors with respect to estimates of contingent resources are that Cardium formation is extensive in the Harlech region and there is extensive vertical well data. Negative factors include that there is limited horizontal well tests and history in the immediate area. Both resource-in-place and productivity may be higher or lower than current estimates. The principal risk that will influence the recovery of the contingent resources relate to the potential for variations in the quality of the Cardium formation where minimal well data currently exists. There is no certainty that it will be commercially viable to produce any portion of the resources. In the Company's year-end independent reserves evaluation, effective as at December 31, 2011, prepared by GLJ, gross proved plus probable reserves of 2.2 MMboe were assigned to seven gross (4.9 net) horizontal Cardium well locations attributable to the Fairborne's interest evaluated in the Resource Study, which resources are incremented to economic contingent resource identified in the Resource Study. The year-end independent reserve evaluation did not incorporate Fairborne's most recent Cardium well (75% WI) that, as previously announced, had an initial 30 day gross production rate of 1,000 boe per day.