Corporate Presentation

Document Sample
Corporate Presentation Powered By Docstoc
					April 2011

Corporate Presentation
Forward-Looking Information and Advisories
This presentation contains "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking information is included in this presentation with respect to, among
other things: estimates of reserves and resources and future net revenue associated therewith; forecast netbacks and the anticipated benefits thereof; anticipated timing associated with the phased
development of Alberta Oilsands Inc.'s ("AOS'") Clearwater, Hangingstone, Grand Rapids and Algar Lake properties (including anticipated timing for receipt of regulatory approvals, delineation, drilling,
completion project plans, commencement of construction, first-steam, commencement of production and timing of stakeholder consultations); expectations of future production and bitumen production
goals; the anticipated application of certain technologies to enhance production; funding requirements and capital expenditures associated with such development; achieving commerciality; future
development of AOS' conventional assets and its reserves and resource base; and general operational and financial performance in future periods.
 With respect to forward-looking information contained in this presentation, AOS has made assumptions regarding, among other things: the future growth of AOS, operating costs; future prices for crude oil,
natural gas, bitumen and refined products; AOS' ability to generate sufficient cash flow from operations and to access existing credit facilities and capital markets to meet its future obligations; the legal and
regulatory framework representing royalties, taxes and environmental matters where AOS conducts its business; and future economic conditions. Although the forward-looking information contained in this
presentation is based upon assumptions which management of AOS believes to be reasonable, AOS cannot assure investors that actual results will be consistent with this forward-looking information.
Forward-looking information involves significant known and unknown risks and uncertainties. A number of factors, many of which are beyond the control of AOS could cause actual results to differ
materially from the results discussed in the forward-looking information. Some of the risks that could affect the future results of AOS and could cause results to differ materially from those expressed in the
forward-looking information of AOS include: the need to obtain required approvals and permits from regulatory authorities; the impact of competition; compliance with and liabilities under environmental
laws and regulations; the uncertainties of estimates by AOS' independent consultants with respect to the company's reserves and resources; the volatility of crude oil, natural gas, bitumen and refined
product prices; economic conditions in Canada and globally; changes to royalty regimes and government regulations regarding royalty payments; risks associated with exploring for, developing, producing,
processing, storing and transporting crude oil, bitumen and natural gas; geological, technical, drilling and processing problems; imprecision in estimating capital expenditures and operating expenses;
imprecision in estimating the timing, costs and levels of production and drilling; imprecision in estimates of future production capacity, potential delays or changes in plans with respect to exploration and
development projects or capital expenditures; and changes to regulations and legislation applicable to the Corporation and the interpretation thereof including tax and environmental legislation and
regulations in the provinces of Canada in which AOS conducts its business. These and additional risks and uncertainties relating to the business and operations of AOS are described in detail in its most
recently filed Annual Information Form, which is available on SEDAR at
Statements relating to "reserves" and "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the described
reserves and resources, as the case may be, exist in the quantities predicted or estimated, and can be profitably produced in the future. "Contingent resources" means 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 which are not currently considered to be
commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political and regulatory matters or a lack of markets. It is also
appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. "Prospective resources" means those quantities of
petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated
chance of discovery and a chance of development. It should be noted that reserves, contingent resources and prospective resources involve different risks associated with achieving commerciality. There is
no certainty that it will be commercially viable to produce any portion of the resources described in this presentation. Further, there is no certainty that any portion of the prospective resources described in
this presentation will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the prospective resources. The prospective resource estimates set forth
herein have been risked for the chance of discovery but not for the chance of development and hence are considered partially risked estimates. If a discovery is made, there is no certainty that it will be
developed or, if it is developed, there is no certainty as to the timing of such development. In addition, the estimated future net revenues and values contained in this presentation do not necessarily
represent the market value of such reserves or resources.
In addition to the foregoing, investors are cautioned that this presentation contains forecasted netbacks. The forecasted netbacks represent AOS' revenue, less royalties and certain operating expenses. The
forecasted netbacks contained herein do not have any standardized meaning prescribed by Canadian generally accepted accounting principals and therefore are unlikely to be comparable to similar
measures presented by other companies and may not be appropriate for other purposes. Management believes that forecasted netbacks are useful supplemental measures as they provide an indication of
the ability of AOS to fund future growth through capital expenditures.
The forward-looking information contained herein is made as of the date of this presentation, and AOS assumes no obligation to update or revise it to reflect new events or circumstances, except as
required by law. Because of the risks, uncertainties and assumptions inherent in forward-looking information, prospective investors in the securities of AOS should not place undue reliance on this forward-
looking information.
The disclosure of barrels of oil equivalent ("boe") in this presentation may be misleading, particularly if used in isolation. A boe conversion ration of 6 mcf: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.

Corporate Overview
Alberta Oilsands Inc. (TSX-V:AOS) is a technically driven, high-growth
  energy company focused on creating sustainable value through the
         development of oil sands and conventional resources


                 Oil sands                     production

                                            exploration lands

                 Exploration Lands
                 Algar Lake & Grand

Oil Sands Leases

                           MacKay River
                               5 sections 100% WI

                                                                        2,820 MMB*
                                                Fort McMurray       32 sections 100% WI
                            Grand Rapids
                          18 sections 100% WI

                                                                     1,150 MMB*
                                                                38.5 sections 50% WI
                       Algar Lake
                          810 MMB*
                     51 sections 100% WI

                   144.5 sections of high working interest land
                   4.8 billion barrels of total PIIP (discovered and undiscovered)

     Future Oil Sands Project Plans
     • Multiple inventory of projects supported by a large land base
        – Phased development to manage capital exposure and grow production
        – Project funding will be financed on stand alone basis

Prospect \ Year          2010/11        2011/12        2012/13       2013/14        2014/15    2015/16        2016/17     2016/17

    Fort McMurray         Detailed
                                        Expected        First Oil                          Production 4,500 bpd
  Clearwater Phase I     Engineering
                                                                                                Approval                  Production
   Fort McMurray
                         Delineation 2 Delineation 3                 Project Plan               Expected      First Oil    15,000 to
 Clearwater Phase II
                                                                                               Construction               25,000 bpd
    Grand Rapids                       Delineation 1 Delineation 2          Project Plan        Expected      First Oil
                                                                                                                          10,000 bpd
                                                                            Project Plan                                  Production
     Algar Lake                        Delineation 1 Delineation 2                              Expected      First Oil
                                                                                                                          10,000 bpd
Hangingstone (Operated                                                      Project Plan                                  Production
                                       Delineation 2 Delineation 3                              Expected      First Oil
  by Connacher O&G)                                                                                                       10,000 bpd

  Corporate Strategy
       Develop and produce bitumen using steam assisted gravity drainage
   technology and secure funding by strong financial and industry partnerships

                     Clearwater                              Conventional Assets
Strategy                                                     Strategy
• Convert resources to proved reserves                       • Grow cash flow through
• Construct and produce from Clearwater Phase I                development of high-
  (approximately $100 mm of incremental capital)               impact conventional oil
• Establish development partnerships for Phase II              and gas prospects
Financing                                                    • Provide cash flow support
                                                               for near-term growth and
• Project funding (equity and debt) for Clearwater Phase I
                                                               cover G&A
• Joint venture or partner funding
                                                             • Equity funding
• Clearwater Phase II – develop commercial operations
                                                             • Joint venture partners
  targeting 15,000 to 25,000 barrels per day
• Reduce funding requirements for future phases
• De-risk equity and debt funding for AOS
• Pursue technology alliances with suppliers and produce

Investment Highlights
                               •   Sizeable and scalable assets on the Athabasca oil sands fairway
                               •   A total of 4.8 billion bbls. of bitumen initially in place
1. Significant Oil Sands
                               •   Clearwater contingent resources are 351 MMbbl.
   Resources                   •   Clearwater Phase I has 67.6 MMbbl. 3P reserves
                               •   Hangingstone contingent resources are 80 MMbbl.

                               • Oil sands
2. Experienced Management      • Conventional
                               • Financial

                               •   Clearwater Phase I driving toward application approval
3. Advanced Development Plan   •   Clearwater Phase I on track for production by 2012
   at Clearwater               •   Up to 4,500 bpd peak production
                               •   Experienced contractors in place for Phase I

                               • Currently financing to cover cost up to application approval
4. Financial Plan to fund
                               • Debt based project financing
   Clearwater Phase I          • Pursue JV partnership

                               • 161 boe/d of conventional production
5. Conventional Production     • Several high impact prospects
                               • Cash flow support

 Current Capitalization
Basic shares outstanding2                                                                                 118.4 million
Warrants/Options outstanding2                                                                              30.6 million
Market capitalization1                                                                                   $64.1 million
Working capital2                                                                                         $12.0 million
Capital raised since inception                                                                           $63.8 million
Debt                                                                                                             No debt
Trading liquidity (12-month average)                                                         ~300,000 shares/day
Management, board and staff ownership or control (fully diluted)                                                       8%

Contingent Resources (430.8 million bbl.)                Corporate Reserves (67.6 million bbl.)

             79.9                                                       16.3


        Clearwater        Hangingstone                         Possible Reserves                Probable Reserves

                                                      1. Based on $0.43 share price – fully diluted
                                                      2. As at November30, 2010                                         9
                                                      3. Clearwater contingent resources include 67.6 million barrels of reserves
Net Asset Value
                                                                                                                         Sept. 2010
                                                                                                                      $ mm (except per
                                                                                                                        share amounts)

P&NG Properties PV10
    - Conventional (P+P)                                                                                                          9.3(4)
    - Oil Sands
            - Clearwater
              - Contingent Resources                                                                                           236.1(3)
              - Reserves                                                                                                       159.3(1)
           - Hangingstone
              - Contingent Resources                                                                                            72.7 (2)
Other Land (at cost)                                                                                                               15.0
Working Capital                                                                                                                      3.0
Total                                                                                                                           495.4
    - Per Share Basic                                                                                                            $4.18
    - Per Share Diluted                                                                                                          $3.32
1 As evaluated by Ryder Scott Company Petroleum Consultants – March 31, 2010 Reserves and Income data, Constant Price and Cost Parameters
   based upon a 4,500 bbl/s development at Clearwater. Assumptions: Constant Oil Price of $US 83.76/bbl WTI; Bitumen - $CDN 55.13/bbl
2 As evaluated by GLJ – June 30, 2010 Best Estimate Contingent resource Volumes and Income, Constant Price and Cost Parameters
3 As evaluated by Ryder Scott Company Petroleum Consultants – February 1, 2010. Future Contingent Resource Volumes and Income, Constant

   Price and Cost Parameters based on a 10,000 bbls/day development at Clearwater less reserve value
4 As evaluated by Trimble Engineering Associates as at December 31, 2009

  Senior Leadership Team
                                            •   ConocoPhillips – International Projects
Shabir Premji, C.A.             32 years    •   Founded Alberta Resources Venture Inc. – 10x ROI in 6 years
Executive Chairman             experience   •   Founded 2 gas marketing firms – $130 million in revenue
                                            •   KPMG Calgary – Senior Manager

                                            •   EnCana – Pelican Lake Heavy Oil Waterflood Project Application
                                28 years
Michael Lee, P. Eng.           experience   •   Burlington Resources – grew production from 10 to 100 mmcf/d
President                                   •   Anderson Exploration – Peace River Arch Exploitation Manager
                                            •   Amoco Canada Petroleum – Reservoir and Exploitation Engineer

Andrew Constantinidis, MBA                  •   Eurogas Corp – Vice President and CFO
Vice President                  26 years    •   Deutsche Bank (Singapore) – Director
Finance and Business           experience   •   Citibank (Hong Kong) – Vice President, Head of New Development
Development                                 •   ExxonMobil (Hong Kong) – Administration Manager, Mobil Oil China

Dr. Claes Palmgren,                         •   Oilsands Quest Inc. - Vice-President, Reservoir Engineering;
P. Eng.                                         led the design and implementation of a bitumen production test
                                20 years
Vice President                 experience   •   StatoilHydro Canada Ltd. - Manager, Reservoir Process Technology
Engineering - Resource
                                            •   Petro-Canada from 2000 to 2006

Ian Walker, B. Sc., P. Geol.                •   20 years as a Petroleum Geologist in exploration and production
                                25 years
Vice President                              •   Drilled over 800 wells in the Western Canadian Sedimentary Basin
Exploration                                 •   Vermilion Resources and Renaissance Energy - Senior exploration roles

 Independent Directors
                             • Scotia Waterous – Co-head of USA operations
                             • Investment banking and merger and acquisition experience
Adrian Goodisman, MSc.       • Society of Petroleum Engineers (SPE) including: Chairman, Canadian
Director                       Section; Chairman, International Membership Committee
                             • Chair, Reserves Committee

                             •   Alliance Pipeline - COO and EVP
Jack Crawford, P. ENG, MBA   •   Altex Energy Ltd. - CEO, AMOCO Canada, Dome Petroleum
Director                     •   APEGGA Member
                             •   Chair, Compensation Committee

                             • Founder and CEO of Result Energy
Bill Matheson, B.COMM        • Advisor to the Petroleum Marketing Commission, Alberta Stock
Director                       Exchange
                             • ICD.D certification as granted by the Institute of Corporate Directors

                             •   Vice Chairman, President of National Holdings Corp.
                             •   Co-founder, Executive Chairman, CEO of Finance Inc.
Leonard Sokolow, BA,CPA
                             •   Founder of Americas Growth Fund Inc.
Director                     •   Chair, Audit Committee

Clearwater Development
Clearwater: Approach and Keys to Success
                          Confirm commerciality and
                             demonstrate safety

                          1. Operational integrity
                            Safety design, monitoring and
                            response plan
                          2. Confirm reservoir
                            Production rate, SOR
                          3. Validate economics
                            % Solvent retention
                          4. Commercial operation
                             Build full-scale 15,000 to 25,000
                             barrel per day commercial
                             operation in Phase II

Clearwater: Phase I
• Demonstrate safe bitumen
• Confirm commercial
  bitumen production

• $25 million spent to date
• $100 million of additional
  CAPEX to first steam

Summary Timeline:
• Application submitted in
  January 2010
• Approval expected in Q4 2011
• Construction Begins Q1 2012
• First steam Q2 2012
• First oil Q4 2012

Analog Reservoir Quality Comparison
Property                                  McKay         Clearwater        Units
Bitumen Gravity                               8               8            API
Net pay range                               15-35          35-45            m
Reservoir depth                            90-130          75-125           m
Base of Clearwater shale (cap-rock)           86             64             m
Porosity                                      32             32             %
Permeability HZ                              6.4             3.9          Darcie
Permeability vertical                        3.4            2.9           Darcie
Saturation                                   80              80             %
Weight Bitumen                                14             15             %
Bitumen viscosity at T (res.)              1-3 mm         1.5 mm        centiPoise
Initial Temp                                   7              6         C degrees
Initial pressure                          300-500        200-300           kPa

• Suncor Energy Inc.’s MacKay River SAGD project; widely recognized as a
  premier in-situ project, is a direct analogue to Clearwater based on reservoir
  characteristics; however, Clearwater West is over 10 meters thicker on average

• Clearwater reservoir compares favorably to existing SAGD projects on key

Clearwater: Markets & Transportation
                             • Area up-graders underutilized
                                – Suncor
                                – Opti/ Nexen Long Lake
                             • Transportation
                                – Trucking to terminals
            AOS Clearwater
                             • Sources
                                – Gulf Coast, West Coast
                                – Ft. Saskatchewan, Redwater
                             • Trucking, Rail

Clearwater: Phase I
        Building blocks for safe and optimal bitumen production

                                                                                   Proactive Monitoring
       Airport (FMAA)                             Observation Wells              • 155 tilt meters >20 meters below ground
• Strategic partnership                      • Steam chamber growth              • Steam Chamber
• Access area/GORR area of 1.75 sections     • History match simulations         • Heave/Subsidence, measured differential

                                                                                    Competent Caprock
  Water Source & Disposal                                                        • Mini Frac – Average closer 1,140Kpa (“frac
• Municipality of Fort McMurray for supply                                       pressure”)
for initial phase supply                                                         • 3D Geo mechanical model shows 1000Kpa
• Lowers OPEX for initial phase                                                  MOP
• Zone identified – Phase II                                                     • 235⁰ Gas/steam intrusion <3NanoDarcies
• Analog to Texaco Pilot Disposal                                                • Long-term @ 235⁰C< .0001mD
                                                                                 • ERT: Lateral continuity

                                                                                 Reservoir Performance
 Regulatory Application                                                          • 183 MMB contingent resources – Ryder
• Submitted Q1 2010                             Enhanced Recovery                Scott (RS)
• Drifter Projects – Lead contractor         • Electro-Magnetic-SAGD (Siemens)   • (PETREL-Schlumberger)3-D model
• Millennium (MEMS) – Environment            • Expanding Solvent-SAGD            • (CMG STARS) Reservoir simulation
• AMEC/BDR – Surface facility                                                    • Geo-mechanics study and hydrology study
• Approval expected :Q3 2011                                                     ongoing
                                                                                 •67.6 MMbbl reserves – RS

 Clearwater: Key Contractors
 AOS has assembled a team with significant oil sands experience

Contractor                                                       Role
                                     •   Project manager
Drifter Projects
                                     •   Coordinated Connacher Great Divide and Algar projects

AMEC/BDR                             •   Engineering of the facilities

                                     •   Cap Rock Integrity
RPS Energy, University of Alberta,
                                     •   Maximum Operating Pressure
Petroleum Geomechanics
                                     •   LP-SAGD Production Profile

Millennium                           •   Environmental Support

RCS Energy                           •   Manage Drilling and Completions Operations

                                     •   Core flood measurements - caprock integrity
Hycal (Weatherford)
                                     •   Slotted liner design measurements
                                     •   Stakeholder consultation
Wildside Environment & Land
                                     •   Regulatory support for exploration

Pinnacle (Halliburton)               •   Advanced Reservoir Monitoring (Tilt Meter Array)

   Clearwater Phase I: Project Schedule
   • Approval expected Q4 2011
   • First Oil Q4 2012
   • Incremental capital $100 million to first steam

                                             Project Schedule
                                                 2010                           2011                       2012
                                    Q1      Q2          Q3    Q4      Q1   Q2          Q3   Q4   Q1   Q2          Q3   Q4

Stakeholder Consultation

Submit Application & Update        Submit                    Update

Pre-Approval Development

Application Approval

Drilling and Completion

Facilities Construction



Clearwater: Summary
 8 km southeast of Fort McMurray.
 Significant oil sands bitumen resources.
 Development of Clearwater Phase I to commence in 2011.
Strong resource base
   Ryder Scott – Reserves and Resource assessments
    •   67.6 MMbbl reserves for CW-West Phase 1 (March 1, 2010)
                                                                      2007/2008 (15 cores)    2009/2010 (1 core)
    •   182 MMbbl contingent resources for CW-West (June 1,           2008/2009 (16 cores)
    •   351 MMbbl contingent resources for full Clearwater                                   Clearwater East
        Project (June 1, 2009)                                    Clearwater West            Project Area
                                                                  Project Area
Low cost project development
   Resource quality, scalability                                 YMM runway
   Proximity to infrastructure
   Application of technologies to reduce costs
   Phase 1 fully delineated (23 core holes)
Project development                                                                             CN Railyard
(production capacity)
                                                                                    Former Texaco
   Phase I - 4,500 bpd                                                             steam pilot
   Phase II – 15,000 to 25,000 bpd

Clearwater Phase I Capital
                                           Clearwater Phase I: Capital
                                           • $100 million to first steam

                                                                             Capital Expenditure Profile (pre-production)

                                          16.0                                                                                                                                                              $120.0
                                                                                       Order                                                Drilling & Construction
Monthly Capital Expenditures $MM (bars)


                                                                                                                                                                                                                     Cumulative Capital Expenditures $MM
                                          14.0                                         Items                                                                                                                $100.0

                                          10.0                                                                                                                                                     i

                                           8.0                                                                                                                                                     s        $60.0
                                                                                                                                                                                                   S        $40.0

                                           0.0                                                                                                                                                              $0.0








       Clearwater Phase I: Capital
  • Attractive investment economics
         • Capex per flowing barrel: $23,000
            o Easy access

            o Infrastructure in place

            o Proximity to Ft. McMurray

                             Capital Expenditure Summary ($MM)

                                                         Regulatory and Stakeholders          0.9
  Reservoir           Drilling and            9%         Project Management and Operations    4.8
 Surveillance         Completion
     6%                  30%                             Facilities                          39.5
                                          Regulatory &
                                          Stakeholders   Supporting Infrastructure            8.6
 Supporting                                    1%
                                                         Reservoir Surveillance               6.4
Infrastructure        Facilities
      9%                40%                              Drilling and Completion             29.5
                                         Management      Sub Total                           89.7
                                        and Operations
                                              5%         Contingency                          9.0
                                                         Total                               98.6

         Clearwater Phase I: Economics
                                            Clearwater Forecasted Netbacks

             ES-SAGD increases oil
         productivity by 30% resulting in
           significantly improved NPV

         Clearwater Phase 1 NPV (BT10%)
(million of Canadian Dollars)




 $100                     $219

                   ES-SAGD       SAGD

Clearwater Phase II
• 15,000 to 25,000 barrel per day commercial project
                                                                 R8                                                                             R7W4

                              32                 33         34                                35               36                          31          32

                                                                               InterPipe Bitumen Pipeline
                              29                 28         27                                26              25                           30          29

                                                        Phase I
                              20                 21         22                                23              24                           19          20

         T88                                                                                                                                                                            T88

                                                                                                                                                 Phase II
                                           PHASE II                                                                                              Plant Site
                              17                 16         15                                                                                         17

                                             Well Pad
                                                                                              14              13                           18

                                             Satellite                                        Hwy 69

                              8                   9         10                                11
                                                                                                   CN Rail Terminal
                                                                                                              12                           7           8

                                   Land Purchased in November 2010                                                                                     5
                              5                   4         3                                 2                1                           6

                                                                 R8                                                                             R7W4
       File: AOS Clrwtr_Phase_II.MAP     Datum: NAD27             Projection: Stereographic                 Center: N56.64214 W111.15365                    Created in AccuMap™, a product of IHS

Hangingstone & Grand Rapids
Hangingstone – Bitumen Pay Map

                           AOS - CLL

   Bitumen Pay
   Contour Interval: 5 m

 • Drilled 13 core holes in Q1-2010
 • AOS has drilled 32 core holes on the Hangingstone East property
 • 50% interest in 38.5 contiguous sections of oil sands rights

Marketable         Low Estimate        Best Estimate        Best Estimate High          High
Resources          Contingent          Contingent           Contingent + Estimate       Estimate
Heavy Oil                                                   Best Estimate Contingent    Contingent +
(Mbbl)                                                      Prospective                 High
 Gross Lease                  65,397             159,817          190,257       236,551        312,654

Total Company                32,699              79,908            95,128       118,276        156,327

  GLJ Petroleum Consultants, effective date June 30, 2010

  Grand Rapids Exploration Land
                                                                  INITIAL CORING

                                                       LARICINA   •10 Locations
                                                                  • 8 Contingent
              AOSC          Rapids

AOS, Algar           STP                                  AOS,

                           Atco (Power), Nova (Gas),                               30
                           Williams (Oil) Corridor
Grand Rapids
Exploration Lands

McMurray Isopach:                Bitumen Potential:
30-45 m of accommodation space   10 m upper, 5 m lower

                                         UNDER DRILLED AREA
   Algar exploration Lands               •51 sections
                                         •3 drills
                                         (1958, 1958, 1960)
                                         •Well density = 1/4352
                                 AOSC    Ha’s
                                         (1 well/17 sections)

          Algar North
CNRL                                     STP
                         STP             Hangingstone

 BROKER       AOS,
           Algar South GRIZZLY
                                         GRIZZLY Algar

10-12-85-14W4   Algar exploration:
                McMurray Isopach

                                 PIIP= 17million
                                 Cold Flow potential

                                     Key well: 10-12

                                     McMurray thin:
                                     Space issue

Conventional Assets
Conventional Assets
• Supports G&A
• Farm out possibilities                                               ALBERTA
• Monetize as appropriate

• Leduc, Alberta : 6 sections                               Ladyfern
     •45 bopd light oil
•Miscellaneous Alberta properties                            Hines Creek
     •5 boepd
• Ladyfern Area, Alberta : 11 sections (net)                  Mahaska
     •111 boepd of natural gas and liquids                              Leduc   Edmonton
     •One producing gas well and one drill prospect
• Wildmint, B.C : 4 sections (net)
     • Exploration gas prospect
• Mahaska, AB : 18 sections

• Hines Creek, AB : 17 sections

Contact Information

Shabir Premji, C.A.                       Andrew Constantinidis, MBA
Executive Chairman                        VP Finance & Bus. Development

Tel: 403.232.3341                         Tel: 403.538.3191
Email:              Email:

                      800, 350 – 7th Ave S.W.
                      Calgary, AB T2P 3N9
                      Tel: 403.263.6700
                      Fax: 403.263.6702


Clearwater :Phase I
McMurray Channel                    Pilot Area: 60 Acres (24 Ha)

                                                    Pilot Area

  Land Purchased in November 2010

Clearwater West: Quality Resource
                                                                                              Permeability                 2 to 5 Darcies
  Well 1AA-05-22-88-08w4
                                                                                              Porosity                               33%
                                                                                              Saturation                 >80% by volume
                                                                                              Thickness                             42 m
                                   High Bitumen Saturation
               Neutron - Density

                                                             High Permeability
Gamma Ray

                                                                                 Clean Sand

                                                                                                    Core sample from 106 to 110 metres

CW Phase I Pairs and Basement Wells

Clearwater Phase I McMurray Thickness

Clearwater Phase I Production
              (future average well pair)

Clearwater: Our Neighbours

Clearwater Sensitivity Analysis

   Non Fuel OPEX                                 0.8%                  1.0%

   SOR's (∆ 10%)                                      0.5%           0.7%

   Natural Gas (∆
                                               1.0%                     1.2%

   Differentials (∆ 1%)                        1.0%                     1.2%

   FX (∆ $0.05)                        1.9%                                     2.3%

   Well Productivity (∆
                                    2.2%                                        2.3%

   CAPEX (∆ 10%)                   2.4%                                                  3.0%

   WTI (∆ $US5.00)          3.0%                                                           3.0%

20.9%       21.5%         22.1%    22.7%      23.3%          23.9%      24.5%    25.1%          25.7%   26.3%   26.9%
                                                         IRR (BT)

3-D Geological Model – Facies: North to South