Untitled - AltaCanada Energy Corporation

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Untitled - AltaCanada Energy Corporation Powered By Docstoc
					Q3
2009
                                                    HIGHLIGHTS
                                                                Three Months                     Nine Months
Period Ended September 30 (unaudited)                        2009              2008          2009              2008
FINANCIAL
Total Revenue ($)                                         424,713       1,866,259       2,700,047      6,549,220
Cash Flow (Deficit) from Operations ($)                 (258,154)       (180,048)       (979,470)        574,695
Per Common Share ($) – Basic/Diluted                         (0.00)             0.00        (0.01)             0.01
Net Loss and Comprehensive Loss ($)                    (6,673,774)        779,784      (8,622,003)    (1,769,276)
Per Common Share ($) – Basic/Diluted                        (0.09)              0.01        (0.12)         (0.03)
Capital Expenditures ($)                                  323,762       1,816,391       2,207,829      5,077,266
Net Debt at September 30 ($)                                                           16,853,608     11,588,140
Shareholders’ Equity at September 30 ($)                                               16,195,132     26,038,551
Total Assets at September 30 ($)                                                       35,244,195     41,169,087
Common Shares – (weighted average for the period)
 Basic                                                 74,381,538                      74,381,538     70,114,750
 Diluted                                               74,381,538                      74,381,538     70,114,750
Common Shares – (outstanding September 30)                                             74,381,538     74,381,538

OPERATIONS
Average Daily Sales:
 Natural Gas (Mcf/d)                                        1,918              2,516        1,986          2,720
 Oil and NGL (Bbls/d)                                            9                4             5                5
 Total (BOE/d)                                                329               424           336               459
 % Gas/Oil Ratio                                             97/3              99/1          99/1              99/1
Average Prices:
 Natural Gas ($/Mcf)                                          3.02              7.91         3.84              8.66
 Oil and NGL ($/Bbl)                                        26.75              92.36        41.12          65.39
 Total ($/BOE)                                              18.36              47.88        23.28          52.12

WELLS DRILLED
 Gross                                                            -               5             5                6
 Net                                                              -              2.5          2.7              2.75
                                                 PRESIDENT’S MESSAGE
Operations

AltaCanada continues to be challenged by the extended period of low natural gas prices. Over the past several years AltaCanada has focused upon the
acquisition of land and the development of infrastructure associated with the Corporation’s shallow gas play in Northern Montana. At the same time we have
positioned the Corporation through land acquisitions, seismic and geological work to pursue drilling targets on the Corporation’s Montana lands on trend with
Shaunavon oil activity being conducted immediately north in Canada. Unfortunately, with declining levels of natural gas prices and a high general level of
indebtedness there has been substantial erosion in the current equity value of the Corporation coupled with limited funds to pursue the attractive oil prospects
on the Corporation’s lands.

Management of AltaCanada have pursued a range of possible transactions to preserve value for AltaCanada’s shareholders. This has been very challenging in
the capital constrained environment associated with the international financial crisis. Regulatory hurdles and other issues have created unanticipated
impediments to the implementation of several potential transactions pursued by AltaCanada over the past six months. The prospects nonetheless remain
solid and there is considerable option value in the Corporation’s natural gas properties when prices recover to levels that will support new development.
AltaCanada is a low cost producer but is currently encumbered with a high level of debt. Management is focused on addressing that issue. Gas prices continue
to be very volatile. At today’s low prices some of our properties have poor economics, in response we shut in our ten Fort Belknap producing wells (55% ANG),
representing 275 mcf/d (150 mcf/net). When gas prices recover, these wells will be returned to production.

No drilling for natural gas is planned in the short term. Subject to our ability to implement an effective recapitalization plan, our efforts will be directed to 4 oil
opportunities for 3 Jurassic Shaunavon oil targets (100%) and a Bakken exploration well (50%).

Our large Montana block, (400,000 gross acres and 270,000 net acres) has few expiries. Many leases are held by the existing production.

Refinancing

AltaCanada has been exploring various refinancing structures in cooperation with its bank. The Corporation now proposes to pursue a refinancing plan where
two existing large shareholders of the Corporation will assume some of the Corporation’s current bank indebtedness on a subordinated basis and provide the
Corporation with some short term working capital in exchange for the Bank providing the Corporation with some flexibility and some time to pursue its value
enhancement program through drilling of oil targets.

On November 26, 2009 we agreed with our bank to arrange for payment of $2.75 million on the non-revolving portion of our bank loan before December 31,
2009. This reduces the amount of this loan to $1.25 million on the facility expiring on July 31, 2010. The other revolving loan facility of $8.25 million will
continue at an interest rate of prime plus 2%. Finalization of these terms is subject to final review by the bank’s credit committee expected by December 3,
2009. A second bridging facility from two of our shareholders of $3.0 million will be made available in January 2010, This further facility will have provisions
enabling the conversion to equity. All of this activity is a prelude to the equity financing that will likely be conducted in February.

Reorganization Proposal

As announced on October 27, 2009 AltaCanada intends to recommend to shareholders that the shares of the Corporation be consolidated on a 1 for 10 basis
and that the Corporation be renamed, Montana Exploration Corporation to more accurately reflect the Corporation’s business. Additional funds will be required
for drilling activities. The details are presently being negotiated but will likely involve an appropriately priced rights issue that may have some form of a
backstop. Some of the proceeds of the rights issue will be used to pay or redeem outstanding debentures. A shareholder meeting will be called in the near
future to approve these matters. A previously announced intention to proceed with a share issue at $0.08 has been cancelled.

Overhead Reductions

While some exceptional costs were included in Q3, that related to evaluation of two uncompleted deals, AltaCanada continues to reduce overhead as part of
the Corporation’s refinancing plan. Since June 30, 2009 we have reduced our staff by 3, to 8 full time employees, reduced the hours our consultants work,
reduced the cash costs of 4 salaried employees by issuing shares in lieu of payment, and sublet our office space with effect on December 1, 2009. Early in
December we will move to a smaller office at a considerably reduced lease rate located at 1300, 140-4th Ave SW. Our phone number will remain unchanged.
The combined effect, going forward, of these changes is an important cost reduction of $50,000 per month.

Write-down

The Corporation recorded a write-down of $5,200,000 during the period. Our independent engineering evaluator updated the December 31, 2008 reserves
appraisal using lower natural gas prices and AltaCanada’s reduced capital program. The evaluation was performed using a 5% discount factor, a standard
adopted by many other issuers. To reflect the reduced capital program AltaCanada’s undeveloped reserves were risked at 50%. The evaluation gives no value
for the Corporation’s undrilled Jurassic and Bakken targets. This study yielded a reduced reserve value $21.8 million. It was therefore determined that it was
appropriate to reduce the book value of our reserves.

On behalf of the Board of Directors,




Donald E. Foulkes

President & Chief Executive Officer

November 27, 2009




                                                                              3
                                                             AltaCanada Energy 2009 Third Quarter
                        MANAGEMENT’S DISCUSSION & ANALYSIS
Forward Looking Statements
This MD&A contains forward-looking statements. These statements relate to future events or future performance of the Corporation. When
used in this MD&A, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “seek”,
“propose”, “expect”, “potential”, “continue”, and similar expressions, are intended to identify forward-looking statements. These
statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements. Such statements reflect the Corporation’s current views with respect to certain
events, and are subject to certain risks, uncertainties and assumptions. Many factors could cause the Corporation’s actual results,
performance, or achievements to vary from those described in this MD&A. Should one or more of these risks or uncertainties materialize,
or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in
this MD&A as intended, planned, anticipated, believed, estimated, or expected. Specific forward-looking statements in this MD&A, among
others, include statements pertaining to the following:

      factors upon which the Corporation will decide whether or not to undertake a specific course of action;
      expectations regarding the Corporation’s ability to raise capital;
      commodity prices.
With respect to forward-looking statements in this MD&A, the Corporation has made assumptions, regarding, among other things:
      the impact of increasing competition;
      the Corporation’s ability to obtain additional financing on satisfactory terms;
      the Corporation’s ability to obtain exploration and development services and equipment on an absolute basis, or on terms considered by the
      Corporation to be justifiable; and
      the Corporation’s ability to attract and retain qualified personnel.
The Corporation’s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk
factors set forth below and elsewhere in this MD&A:

      general economic conditions;
      volatility in global market prices for oil and natural gas;
      competition;
      liabilities and risks, including environmental liability and risks, inherent in oil and gas operations;
      the availability of capital; and
      alternatives to and changing demand for petroleum products.
Furthermore, statements relating to “reserves” or “resources” are deemed to be forward-looking statements, as they involve the implied
assessment, based on certain estimates and assumptions, that the resources and reserves described can be profitable in the future.

The forward–looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement. These
statements speak only as of the date of this MD&A. The Corporation does not intend and does not assume any obligation, to update these
forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
Basis of Presentation
The financial results discussed below include the results of AltaCanada Energy Corp. and its wholly owned subsidiaries Alberta Selecta
Corporation (ASC), ANG Holding Corp., ANG Holding (USA) Corp., and Montana Land and Exploration, Inc. (ML&E) and AltaCanada Energy
Partnership formed June 1, 2003 by ANG and ASC.

The financial data presented below has been prepared in accordance with Canadian Generally Accepted Accounting Principles (“GAAP”).
The reporting and the measurement currency is the Canadian dollar. For the purpose of calculating unit costs, natural gas is converted to a
barrel equivalent (“BOE”) using six thousand cubic feet of natural gas equal to one barrel of oil.

The following management’s discussion and analysis (“MD&A”) should be read in conjunction with the Corporation’s unaudited
consolidated financial statements and related notes for the three months ended September 30, 2009, and the audited financial
statements for the year ended December 31, 2008. This MD&A is effective November 26, 2009. The accompanying consolidated financial
statements of AltaCanada have been prepared by management and approved by the Corporation’s Audit Committee and Board of
Directors. These consolidated financial statements have been prepared in accordance with Canadian Generally Accepted Accounting
Principles (“GAAP”) and have not been reviewed by the Corporation’s external auditors. Additional information relating to AltaCanada can
be found on the SEDAR website at www.sedar.com.

Non-GAAP Measures
This MD&A contains the terms “Cash flow from operations before non-cash working capital” and “Operating netbacks” which are non-GAAP
financial measures that do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar
measures presented by other issuers. Both “cash flow from operations before non-cash working capital” and “operating netbacks” provide




                                                                           4
                                                          AltaCanada Energy 2009 Third Quarter
useful information to investors and management since they are an indicator of the Corporation’s ability to fund future capital expenditures
which drive growth, and enable the Corporation to repay debt. Cash flow from operations before non-cash working capital is calculated as
cash flow from operating activities less net change in non-cash working capital balances. Operating netbacks is the net profit derived from
production i.e. sales, less royalties and production costs as calculated herein. The Corporation also uses “Net Debt” as an indicator of debt
levels that need to be serviced from cash flow from operations and monitors this balance to manage cash flow requirements. Net debt is
defined as long term debt, plus bank indebtedness less working capital (deficit) at period end.



Financial Highlights
                                                                                    Three months ended September 30             Nine months ended September 30
  ($, except where noted)                                                                       2009              2008                      2009               2008
  Petroleum and natural gas sales*                                                          555,770          1,866,259                2,148,712          6,549,220
  Cash flow (deficit) from operations, before non-cash working capital                     (258,154)         (180,048)                (979,470)            574,695
    Per unit – diluted                                                                          0.00               0.00                   (0.01)               0.01
  Net earnings (loss) and comprehensive earnings (loss)                                  (6,673,774)            779,784              (8,622,003)        (1,769,276)
    Per unit diluted                                                                           (0.09)               0.01                   (0.12)             (0.03)
  Shareholders’ Equity as at September 30                                                                                           16,195,132         26,038,551
  Net capital expenditures                                                                 323,762              1,816,391             2,207,829          5,077,266
  Net Debt as at September 30                                                                                                       16,853,608         11,588,140
* Including royalty income

Selected Quarterly Summary
                                                                           2009                                      2008                                          2007
  ($) unaudited                                             Q3               Q2           Q1              Q4             Q3             Q2            Q1               Q4
 Sales Volumes:
 Natural Gas (Mcf/d)                                     1,918            2,004         2,082          2,235          2,516          2,482         3,164         3,458
 Oil and NGL (Bbls/d)                                        9                 6            5              6                4             6             6              13
 Total (BOE/d)                                             329              340          352             378            424            420           533           604
 Average Prices:
 Natural Gas ($/Mcf)                                      3.02              3.41         5.03            6.56          7.91          10.69           7.68          6.04
 Oil and NGL ($/Bbl)                                     26.75            38.24         23.52          36.91          92.36          55.90         54.95         32.06
 Total ($/BOE)                                           18.36            20.75         30.07          39.35          47.88          64.03         46.15         36.14
 Wells drilled, net                                                            -         2.70            2.00          2.00               –          0.20          1.80
 Revenue                                               424,713          904,211     1,371,123     1,368,687       3,379,280       1,459,680     1,124,870     1,998,294
 Royalties                                             113,292          142,713       214,059        253,714        476,443        602,810       555,817       512,358
 Production and transportation                         306,889          373,772       536,876        711,300        552,163        474,957       498,067       733,757
 Operating Income                                        4,532          387,726       620,188        403,673      2,350,674        381,913        70,986       752,179
 General and Administrative                            534,446          487,597       572,152        522,961        499,666        622,716       650,033       610,914
 Interest                                              249,238          219,817       158,880        187,532        198,701        146,958       153,762       152,493
 Stock Based Compensation                               25,744           34,051        33,011         26,478         37,312        183,872        18,100         9,713
 Depletion, Depreciation and Accretion                 710,915          719,085       737,918        998,256        819,522        817,142       934,366      1,155,883
 Write-down of Property, Plant and Equipment         5,200,000
 Other                                                 (74,549)         (19,757)       13,389         74,415        (15,964)        (22,323)       (6,469)      141,647
 Earnings (Loss) before Income Taxes                (6,641,262)       (1,053,067)    (895,162)   (1,405,969)        811,437      (1,366,452)   (1,678,806)   (1,318,471)
 Current Income Tax Expense                             32,512                 -            –         30,499         31,653               –             –       50,041
 Future Income Tax (Recovery) Expense                         -                -            –              –                –        (6,288)     (489,910)     (743,128)
 Net Earnings (Loss)                                (6,673,774)       (1,053,067)    (895,162)   (1,436,468)        779,784      (1,360,164)   (1,188,896)     (625,384)
  Per Share - Basic                                      (0.09)            (0.01)       (0.01)         (0.02)           0.01          (0.02)        (0.02)        (0.01)
  Per Share - Diluted                                    (0.09)            (0.01)       (0.01)         (0.02)           0.01          (0.02)        (0.02)        (0.01)
 Cash Flow (Deficit) from Operations, before non-
                                                     (258,154)         (275,646)     (445,670)    (393,394)        (180,048)       253,467       501,277       331,768
  Cash working capital
  Per Share - Basic                                      (0.01)            (0.00)       (0.01)         (0.01)          0.00            0.00          0.01          0.01
  Per Share - Diluted                                    (0.01)            (0.00)       (0.01)         (0.01)          0.00            0.00          0.01          0.01



Bank Debt and Bridge Loan Facility

A new “Loan Agreement” was entered into with our bank on November 26, 2009 subject to approval of the bank’s credit committee. The
Loan Agreement will expire July 31, 2010. $2,750,000 will be repaid on the non-revolving demand loan by December 31, 2009 reducing
the loan to $1,250,000. This loan will bear interest of Bank Prime plus three percent. The Corporation’s $8,250,000 revolving demand
loan facility will continue with an interest rate of Bank Prime plus two percent. Funds for the repayment of the banks loan will come from
“Bridging Loan Facility” of $3,250,000 created with two existing shareholders leaving $500,000 for working capital. The “Bridging Loan
Facility” will bear interest of eight percent.




                                                                                   5
                                                                  AltaCanada Energy 2009 Third Quarter
Write-down of Property, Plant and Equipment
Management has concluded that due to the severe decline in the price of natural gas, the estimated discounted value of proved and
probable reserves is less than the net book value of property, plant and equipment recorded in the financial statements. Consequently, the
recorded cost of property, plant and equipment has been reduced by $5,200,000 (Canada- $0; Montana-$5,200,000)

Production Summary
                                                              For the three months ended                    For the three months ended
                                                                 September 30, 2009                            September 30, 2008
Average Daily Production                                   Montana         Canada             Total      Montana        Canada             Total
Natural Gas (Mcf/d)                                          1,367            551            1,918         1,792            724           2,516
Crude Oil (BBl/d)                                                 -              9               9               -            4                   4
Total Production (BOE/d)                                       228            101              329           299            125               424


                                                        Nine months ended September 30, 2009           Nine months ended September 30, 2008
Average Daily Production                                   Montana         Canada             Total      Montana        Canada             Total
Natural Gas (Mcf/d)                                          1,360            626            1,986         1,954            766           2,720
Crude Oil (BBl/d)                                                 -              5               5               -            5                   5
Total Production (BOE/d)                                       227            109              336           326            133               459
AltaCanada’s average daily production for the third quarter of 2009 decreased 22 percent to 329 BOE/d, from 424 BOE/d for the third
quarter of 2008. Due to capital restraints, limited funds were committed in an attempt to maintain production levels.

Revenue
Revenue Summary

                                                               For the three months ended                    For the three months ended
                                                                  September 30, 2009                            September 30, 2008
 ($)                                                       Montana          Canada            Total      Montana          Canada          Total
 Natural Gas                                               373,488        147,748          521,236      1,269,960       525,358       1,795,318
 Crude Oil                                                        -        23,005           23,005               -       35,838          35,838
 Royalty Income                                                   -        11,529           11,529               -       35,103          35,103
 Oil and Gas Sales                                         373,488       182,282        555,770         1,269,960       596,299       1,866,259
 Net Hedging Gain (Loss)                                          -     (131,057)      (131,057)                -      1,513,021       1,513,021
 Total Revenue                                             373,488         51,225          424,713      1,269,960      2,109,320      3,379,280
 Average Sales Price,
 Natural Gas ($/Mcf)                                          2.97           3.14             3.02            7.70          8.41           7.91
 Crude Oil ($/Bbl)                                                -         26.75            26.75                -        92.36          92.36
 Total Average Sales Price ( $/BOE)                          17.81          19.59            18.36          46.21          51.87          47.88




                                                                For the nine months ended                     For the nine months ended
                                                                   September 30, 2009                            September 30, 2008

 ($)                                                      Montana         Canada               Total     Montana        Canada            Total
 Natural Gas                                             1,395,974        652,964          2,048,938    4,571,170     1,783,224       6,354,394
 Crude Oil                                                        -        52,590             52,590             -       94,165          94,165
 Royalty Income                                                   -        47,184             47,184             -      100,661         100,661
 Oil and Gas Sales                                       1,395,974        752,738          2,148,712    4,571,170     1,978,050       6,549,220
 Net Hedging Gain (Loss)                                          -       551,335            551,335             -     (585,390)       (585,390)
 Total Revenue                                           1,395,974      1,304,073          2,700,047    4,571,170      1,392,660      5,963,830
 Average Sales Price
 Natural Gas ($/Mcf)                                          3.73            4.07             3.84          8.54          8.97            8.66
 Crude Oil ($/Bbl)                                                -          41.12            41.12              -        65.39           65.39
 Total Average Sales Price ( $/BOE)                          22.39           25.12            23.28         51.24         54.28           52.12


Total oil and gas sales decreased $1.3 million to $0.6 million in Q3 2009 from $1.9 million in the same quarter of 2008. This decline was
the result of a 22 percent reduction in sales volumes and a 62 percent drop in average sales prices.




                                                                    6
                                                   AltaCanada Energy 2009 Third Quarter
Commodity Price Risk Management
Natural Gas Hedges
The following table summarizes the resulting gain (loss) from the use of financial instruments for the nine months ended September 30,
2009:
Natural Gas Price Risk Management (AECO pricing):

                                                                                          Realized Gain         Unrealized Gain (loss)
                                                                                     Nine months ended          Nine months ended at
Volume                                                                              September 30, 2009           September 30, 2009
(GJ/day)               $/GJ   Term                                                                  ($)                            ($)                    Total

 Put Option
1,000         $6.00           February 2009 to December 2009                              $       584,739               $    157,169             $     741,908
Call Option
1,000         $ 7.40          January 2010 to December 2010                                              –                  (119,347)                 (119,347)
 Fixed for Floating Swap - Forward Sale
500           $4.32           April 2009 to October 2009                                           97,126                      33,643                  130,769

1000          $5.42           April 2010 to March 2011                                                                      (216,293)                (216,293)
Collar
500           $5.00-$7.00     November 2009 to March 2010                                                                      14,299                   14,299

 Total                                                                                        $   681,865               $   (130,529)            $     551,336


The mark to market value of the hedges outstanding at September 30, 2009 was a financial derivative liability of $130,529 (2008-$0).

The Corporation’s operations in the United States are naturally hedged with respect to US$ exposure in that the commodity prices received
for natural gas sales (Canadian dollar AECO index) are highly correlated to U.S. dollar indices for natural gas pricing (NYMEX at Henry Hub)
and operating expenses and capital expenditures are incurred in U.S. dollars. At September 30, 2009 no foreign exchange hedges were in
place.

The Corporation is exposed to interest rate risks on bank indebtedness with a floating interest rate. A one percent change in interest rates
could result in a change of $90,000 to interest expense based on bank indebtedness at September 30, 2009.

Expenses
Royalties
Royalties include obligations to governments, freehold owners, and gross overriding royalties. AltaCanada’s average royalty rate was 20.4
percent in the three months ended September 30, 2009, compared to 25.5 percent in the same period for 2008. Reduced crown royalties
in Canada accounted for this reduction in royalties.

New wells brought on stream on Fort Belknap lands in the last 9 months have benefited from the Montana production tax incentive. This
incentive provides a reduction in production tax for the first year of production from 9.26% to 0.76%. The reduction in tax amounted to
approximately $4,100 for Q3 2009. The Fort Belknap wells were shut-in September 23, 2009.

Production and Transportation Expenses
                                                                       For the three months ended                       For the three months ended
                                                                          September 30, 2009                               September 30, 2008
                                                                   Montana          Canada             Total          Montana         Canada            Total
 Production & Transportation ($)                                   246,013        135,540           381,553           329,664        267,096         596,760
 Less: Processing Income ($)                                         (6,451)       (68,213)          (74,664)           (5,052)       (39,545)        (44,597)
 Net Production & Transportation ($)                               239,562         67,327           306,889           324,612        227,551         552,163
 Production & Transportation ($/BOE)                                 11.73          14.57             12.60             12.00          23.23           15.31
 Less: Processing Income ($/BOE)                                      (0.31)         (7.33)            (2.47)            (0.18)         (3.44)          (1.14)
 Net Production Expense ($/BOE)                                      11.42            7.24            10.13             11.82          19.79           14.17




                                                                            7
                                                           AltaCanada Energy 2009 Third Quarter
                                                                For the nine months ended                          For the nine months ended
                                                                   September 30, 2009                                 September 30, 2008
                                                           Montana          Canada               Total          Montana        Canada             Total
 Production & Transportation ($)                            973,927         485,275         1,459,202          1,093,452         564,568      1,658,020
 Less: Processing Income ($)                                 (24,176)      (217,489)         (241,665)            (13,189)      (119,644)      (132,833)
 Net Production & Transportation ($)                        949,751         267,786         1,217,537          1,080,263         444,924      1,525,187
 Production & Transportation ($/BOE)                          15.62           16.20             15.81              12.26           15.49          13.20
 Less: Processing Income ($/BOE)                              (0.39)          (7.26)            (2.62)             (0.15)          (3.28)         (1.06)
 Net Production Expense ($/BOE)                               15.23             8.94            13.19              12.11           12.21          12.14

Average production costs per BOE increased 20 percent to $15.81 for the nine month period ended September 30, 2009 compared to
$13.20 for the same period of 2008. Production volumes declined 28 percent in 2009 compared to 2008, resulting in an increase in
average costs. New production, commencing February 9, 2009, from Fort Belknap lands added to the increase in average production costs
due to one-time cost incurred in reconfiguring the gathering systems to accommodate this new production,

In the three month period ended September 30, 2009, production costs declined 36 percent compared to the same period in 2008.
Average production costs per BOE decreased to $12.60 compared to $15.31 for the third quarter of 2008 due reduced repairs and
maintenance in Canada.

In Canada, processing fees charged at Viking-Kinsella Compressor increased to $1.08 per Mcf from $0.47 per Mcf effective September
2008.
Summary of Operating Netbacks
                                                     For the three months ended September                       For the three months ended
                                                                    30, 2009                                       September 30, 2008
 ($/BOE)                                             Montana            Canada           Total           Montana               Canada             Total
 Sales Price                                            17.81            19.59          18.36               46.21                51.87            47.88
 Royalties                                              (4.55)           (1.93)         (3.74)             (12.84)               (10.75)          (12.22)
 Production Expenses                                   (11.43)           (7.24)        (10.14)             (11.82)               (19.79)          (14.17)
 Operating Netbacks                                      1.83            10.42           4.48                  21.55             21.33            21.49



                                                           For the nine months ended                            For the nine months ended
                                                              September 30, 2009                                   September 30, 2008
 ($/BOE)                                             Montana            Canada           Total           Montana               Canada             Total
 Sales Price                                            22.39            25.12          23.28                  51.24             54.28            52.12
 Royalties                                              (6.03)           (3.14)         (5.09)             (14.15)               (10.24)          (13.01)
 Production Expenses                                   (15.23)           (8.94)        (13.19)             (12.11)               (12.21)          (12.14)
 Operating Netbacks                                      1.13            13.04           5.00                  24.98             31.83            26.97

Q3 2009 price environment reduced netbacks to marginal levels in Montana. The majority of production expenses are fixed and would still
exist even if the Corporation chose to shut-in production. Therefore, AltaCanada continues to produce even at these extremely low netbacks.
Production on the Fort Belknap Indian Reservation was shut-in September 23, 2009 at the request of a joint venture partner because of the
low gas prices and low rate of production.
General & Administrative
                                                                 Three months ended September 30                   Nine months ended September 30
 ($)                                                                          2009               2008                      2009              2008
 Personnel Costs                                                           303,239                348,505                   944,556          1,149,752
 Office Expenses                                                           188,035                183,979                   641,164           635,700
 Shareholder Information Costs                                               5,183                       799                 31,446            46,351
 Professional Fees                                                         124,268                  71,923                  280,211           270,039
 Less: Capitalized G&A                                                     (77,977)               (96,804)              (251,635)            (315,852)
       Operator’s Overhead Recovery                                         (8,304)                 (8,736)                 (51,547)          (13,575)
 Total Expense                                                             534,444                499,666              1,594,195             1,772,415
 $/BOE-Gross Expense                                                         20.86                   15.53                    20.55              16.73


G&A costs increased in the third quarter of 2009 compared to the third quarter of 2008 primarily due to increases in professional fees and
a reduction in capitalized amounts offset by a reduction in personnel costs. Professional fees were higher in 2009 than in 2008 due to
increased legal costs and costs relating to the review of Q2 financial statements by our external auditors. Personnel costs were lower in
2009 than 2008 due to staff reductions.




                                                                    8
                                                   AltaCanada Energy 2009 Third Quarter
Stock Based Compensation

                                                   For the three months ended September 30           For the nine months ended September 30
$                                                  2009                     2008                     2009                     2008
Stock based compensation                           25,744                   37,312                   92,806                   239,284
$/BOE                                              0.85                     0.96                     1.01                     1.90
Stock Based Compensation expense decreased in 2009 because no stock options have been granted since May 6, 2008.

Interest Expense and Financing Charges

                                                   For the three months ended September 30           For the nine months ended September 30
$                                                  2009                     2008                     2009                     2008
Total Interest                                     249,238                  198,701                  627,935                  499,421
$/BOE                                              8.23                     3.85                     6.80                     3.97

Interest expense increased 70 percent for the three months ended September 30, 2009 compared to the same period in 2008. This
increase is due to the increase in the bank debt, the increase in the bank rate on the new credit facilities established in August 2009, and
the additional convertible debenture in the amount of $1,000,000 issued on May 12, 2009.
Foreign Exchange
Foreign exchange gains and losses are being recognized in connection with the Corporation’s US operations. Net foreign exchange gain for
the three months ended September 30, 2009 was $74,549 compared to a foreign exchange gain of $17,374 for the three months ended
September 30, 2008.
Asset Retirement Obligation
At September 30, 2009 the Corporation’s asset retirement obligation is $1.4 million. Increases to the asset retirement obligation were due
to new drilling and accretion expense. The ARO assumptions are reviewed each quarter and revised as new information is available. Any
changes to the ARO estimate are recognized prospectively.
 ($)                                                                                            Montana                    Canada                    Total
 Asset Retirement Obligation, December 31, 2007                                                 217,438                 1,044,199             1,261,637
 Liabilities Incurred                                                                            15,152                           –               15,152
 Abandonments                                                                                         –                    (35,301)              (35,301)
 Accretion Expense                                                                               17,813                     84,938              102,751
 Asset Retirement Obligation, December 31, 2008                                                 250,403                 1,093,836             1,344,239
 Liabilities Incurred                                                                             3,657                            -                3,657
 Adjustments                                                                                           -                     (6,815)               (6,815)
 Abandonments                                                                                          -                     (2,739)               (2,739)
 Accretion Expense                                                                               15,202                     62,723                77,925
 Asset Retirement Obligation, September 30, 2009                                                269,262                 1,147,005             1,416,267

Taxes
The Corporation has tax deductions available to reduce future taxable income however a full valuation allowance against the potential value
of all of its tax losses and deductions has been recorded since it cannot demonstrate that it is more likely than not that this potential value
will be realized.

A provision for current income taxes payable was recorded. This relates to amounts payable by Alberta Selecta Corporation.
Cash Flow and Net Loss Analysis Per BOE
                                                                                       Three Months                             Nine Months
For the period ended September 30, 2009 ($/BOE)                                        2009                2008                2009            2008
Crude Oil and Natural Gas Sales*                                                      18.36                 47.88             23.28             52.12
Realized Hedging Gain (Loss)                                                          11.81                  (5.13)             7.38             (3.16)
Royalty Expense                                                                       (3.74)               (12.22)            (5.09)           (13.01)
Production and Transportation Expense                                                (10.14)               (14.17)           (13.19)           (12.14)
General and Administrative Expense                                                   (17.65)               (12.82)           (17.27)           (14.11)
Financing Charges                                                                     (3.99)                 (4.15)           (5.41)             (3.68)
Current Income Tax Recovery (Expense)                                                 (1.07)                 (0.81)           (0.35)             (0.25)
Realized Foreign Exchange Gain (Loss)                                                   0.52                 (3.20)             0.07             (1.10)
Abandonment Costs                                                                     (0.09)                     -            (0.03)             (0.10)
Cash Flow from Operations before Non-Cash Working Capital                             (5.99)                (4.62)           (10.61)              4.57
Abandonment Costs Charged to Asset Retirement                                           0.09                      -             0.03              0.10
Stock Based Compensation                                                              (0.85)                 (0.96)           (1.00)             (1.90)
Non-Cash Hedging Gain (Loss)                                                         (16.14)                 43.95            (1.41)             (1.50)
Depletion, Depreciation and Accretion                                                (23.48)               (21.02)           (23.49)           (20.46)
Write-down of Property, Plant and Equipment                                         (171.78)                        -        (56.32)
Unrealized Foreign Exchange Gain (Loss)                                                 1.95                  3.64              0.80             1.52
Non-cash interest expense-convertible debt                                            (4.24)                 (0.35)           (1.39)            (0.29)
Bad Debt (Expense) Recovery                                                                 -                (0.03)                 -           (0.07)
Future Income Taxes Recovery (Expense)                                                      -                     -                 -            3.95
Net Loss                                                                            (220.44)                20.01            (93.39)           (14.08)


*including royalty income




                                                                        9
                                                       AltaCanada Energy 2009 Third Quarter
Cash Flow from Operations, Before Non-cash Working Capital Balances
The Corporation’s cash flow from operations (before working capital balances) declined $0.1 million to negative $0.3million (2008- negative
$0.2 million). Operating netbacks declined $0.7 million to $0.1 million in Q3 2009, from $0.8 million in Q3 2008. These declines were
offset by a realized hedging gain of $0.4 million in Q3 2009 compared to a realized hedging loss of $0.4 million in Q3 2008.

Management is examining production and general and administrative costs with a view further to reducing these costs wherever possible.
The staff count has been reduced by one employee and two contract positions. The hours paid to the remaining contractors will be
significantly reduced. Also, the Corporation will move to smaller and less expensive office premises. The cost reduction from these
initiatives will be approximately $0.6 million per year.

Capital Expenditures
AltaCanada’s capital expenditures (excluding asset retirement costs) in the third quarter of 2009 were $0.3 million with 82 percent of the
third quarter expenditures related to Montana. In Montana, third quarter capital expenditures included the purchase of additional acreage
on the Fort Belknap Reservation.

                                                         For the three months ended                                    For the three months ended
                                                          September 30, 2009                                              September 30, 2008
 $                                                  Canada              Montana                  Total             Canada               Montana                 Total
 Land and Lease                                       2,674             230,663            233,337                   1,142               357,605              358,747
 Geological & Geophysical Costs                      42,259              36,286                78,545              50,278                233,033              283,311
 Drilling and Completions                               671              (5,090)               (4,419)             22,404                515,041              537,445
 Lease and Well Equipment                            11,741               4,558                16,299              18,954                104,871              123,825
 Inventory                                                 -                     -                   -                       -           513,063              513,063
 Other Assets                                              -                     -                   -                       -                    -                     -
 Total Capital Expenditures                          57,345             266,417            323,762                 92,778              1,723,613         1,816,391


                                                          For the nine months ended                                    For the nine months ended
                                                             September 30, 2009                                           September 30, 2008
 $                                                   Canada             Montana                  Total             Canada               Montana                 Total
 Land and Lease                                       8,256             647,064            655,320                  20,973             2,716,371         2,737,344
 Geological & Geophysical Costs                    130,297              147,722            278,019                 173,225               648,701              821,926
 Drilling and Completions                            10,217             795,252            805,469                  26,116               807,091              833,207
 Lease and Well Equipment                            61,207             490,061            551,268                  49,872               114,920              164,792
 Inventory                                                 -            (82,247)           (82,247)                      -                503,797             503,797
 Other Assets                                              -                     -                   -              16,200                        -            16,200
 Total Capital Expenditures                        209,977            1,997,851           2,207,829                286,386             4,790,880         5,077,266


Segmented Drilling Results
There was no drilling activity in either Canada or Montana in the third quarter of 2009. Due to the poor gas price environment, drilling
programs are being deferred until gas prices improve.
Depletion, Depreciation & Site Restoration
                                                                          For the three months ended                             For the three months ended
                                                                             September 30, 2009                                     September 30, 2008
 $                                                                    Montana        Canada                Total     Montana               Canada                Total
 Depletion and Depreciation                                           515,549        167,140         682,689          600,782              193,153             793,935
 Accretion of Asset Retirement Obligation                               5,189         23,037             28,226          4,548              21,039              25,587
 Total                                                                520,738        190,177         710,915          605,330              214,192             819,522
 $/BOE                                                                  24.84          20.44              23.48          22.03               18.63               21.03


                                                                          For the nine months ended                              For the nine months ended
                                                                             September 30, 2009                                     September 30, 2008
 $                                                                     Montana         Canada              Total     Montana               Canada                Total
 Depletion and Depreciation                                       1,522,951           567,042      2,089,993        1,890,927              604,307           2,495,234
 Accretion of Asset Retirement Obligation                               15,202         62,723            77,925        13,104               62,692              75,796
 Total                                                            1,538,153           629,765      2,167,918        1,904,031              666,999           2,571,030
 $/BOE                                                                   24.67          21.02             23.48          21.34               18.30               20.46

Depletion, depreciation and accretion expense decreased 13 percent to $0.7 million in the third quarter of 2009 compared to $0.8 million
for the same period in 2008, primarily due to a 22 percent decrease in production.




                                                                        10
                                                        AltaCanada Energy 2009 Third Quarter
Liquidity and Capital Resources
At September 30, 2009 net debt, as set out in the table below, was $16.9 million (December 31, 2008 - $13.6 million).

The Corporation was not in compliance with the working capital covenant at September 30, 2009.

The bank conducted a review of the lending value of the oil and gas assets on August 12, 2009 and established new credit facilities. The
Revolving Operating Demand Loan was reduced to $8.25 million and a new Non-Revolving Demand Loan of $4.0 million was established.
The bank required that the Non-Revolving Demand Loan be repaid on or before October 30, 2009. This payment was not made as required.
The interest rate on the Revolving Operating Demand Loan was Bank Prime plus three percent and on the Non-Revolving Demand Loan was
Bank Prime plus five percent.

The Corporation is seeking new financing sources and evaluating alternative strategies to provide the financial resources to pay down the
Non-Revolving Bank Loan and to sustain development programs and operations. If these initiatives are not successful, the Corporation will
defer any further development and will scale back its operations and organization.

Please refer to Note 1-“Basis of Presentation and Going Concern” and Note 13-“Subsequent Event”: to the unaudited financial statements
for the period ended September 30, 2009.
Net Debt
  ($)                                                                                                September 30, 2009     December 31, 2008
 Bank Indebtedness                                                                                          12,003,850            10,043,823
 Convertible Debenture                                                                                          927,126                      -
 Working Capital Deficiency 1                                                                                 3,922,632            3,545,709
 Net Debt                                                                                                   16,853,608            13,589,532
1Includes $2,142,206 of Convertible Debentures


Outlook
Junior gas explorers currently face considerable challenges. With our huge land base and an inventory of high quality development and
exploration opportunities, our principle challenge lies in sourcing working capital. To date we have not attempted farmouts, preferring to
operate at a high working interest. Traditional sources of equity look expensive at our present share price, but we will continue to seek ways
to keep our drilling program going and add to share value.

AltaCanada has identified considerable oil potential in the deeper Jurassic and Bakken horizons which will be drilled when additional capital
is obtained. If gas prices improve, there is opportunity for further development of gas reserves on our existing Cherry Patch and Fort Belknap
acreage. However, if no additional capital programs are completed to support new drilling activities, production volumes will continue to
decline.
Future Accounting Pronouncements
In January 2006, the AcSB announced its decision to replace Canadian GAAP with International Financial Reporting Standards (“IFRS”) for
all Canadian Publicly Accountable Enterprises (“PAE”). On February 13, 2008 the AcSB confirmed January 1, 2011 as the official change-
over date for PAE’s to commence reporting under IFRS. Although IFRS is principles-based and uses a conceptual framework similar to
Canadian GAAP, there are significant differences and choices in accounting policies, as well as increased disclosure requirements under
IFRS. The Corporation is presently reviewing the standards to determine the potential impact of IFRS on its financial statements. Under the
sponsorship and guidance from AltaCanada’s Management, the Corporation anticipates engaging the services of an external advisor
specializing in assisting PAE’s with IFRS transition projects, to review the impact of converting to IFRS on the accounting policies,
information and computer systems, internal and disclosure controls, financial reporting in addition to the changes in the Corporation’s
financial statements. At this time, the impact on AltaCanada’s financial position and results is not reasonably determinable or estimable as
a result of the conversion to IFRS. The Corporation will monitor the changes in the adoption of IFRS and will update plans as necessary.




                                                                    11
                                                    AltaCanada Energy 2009 Third Quarter
                                  CONSOLIDATED BALANCE SHEETS
(Unaudited)                                                                                          September 30, 2009    December 31, 2008

ASSETS

Current Assets

       Cash                                                                                      $              68,664 $          1,535,763

       Accounts Receivable                                                                                     418,432            1,310,652

       Prepaid Expenses and Deposits                                                                           292,092              377,571

                                                                                                               779,188            3,223,986

Property, Plant and Equipment (Note 3)                                                                      34,465,007           39,562,331

                                                                                                 $          35,244,195 $         42,786,317

LIABILITIES

Current Liabilities

       Accounts Payable and Accrued Liabilities                                                  $           2,396,573 $          4,732,932

       Income Tax Payable                                                                                       32,512                     -

       Convertible Debentures (Note 6)                                                                       2,142,206            2,036,763

       Financial Derivatives Liability                                                                         130,529                     -

       Bank and Other Indebtedness (Note 5)                                                                 12,003,850           10,043,823

                                                                                                            16,705,670           16,813,518

Convertible Debenture (Note 6)                                                                                 927,126                     -

Asset Retirement Obligations (Note 4)                                                                        1,416,267            1,344,239



SHAREHOLDERS’ EQUITY

       Capital Stock                                                                                        28,030,416           28,030,416

       Convertible Debentures Equity Component (note 6)                                                        306,269              210,500

       Contributed Surplus (Note 8)                                                                          1,965,956            1,873,150

       Deficit                                                                                             (14,107,509)           (5,485,506)

                                                                                                            16,195,132           24,628,560

                                                                                                 $          35,244,195 $         42,786,317

Basis of Presentation and Going Concern (Note 1)
Subsequent Event (Note 13)

See accompanying notes to the consolidated financial statements


Approved by the Board of Directors




John R Moore                                              Michael J. Hibberd
Director                                                  Director




                                                                          12
                                                          AltaCanada Energy 2009 Third Quarter
                 CONSOLIDATED STATEMENT OF EARNINGS (LOSS),
                  COMPREHENSIVE EARNINGS (LOSS) & DEFICIT
                                                                           Three months ended September 30           Nine months ended September 30
(Unaudited)                                                                       2009              2008                 2009                2008

Revenue

     Petroleum and Natural Gas Sales                                   $         544,241      $    1,831,156     $      2,101,528    $      6,448,559

     Realized Gain (Loss) on Financial Instruments (Note 9)                      357,508           (200,124)              681,865            (397,123)

     Unrealized Gain (Loss) on Financial Instruments (Note 9)                   (488,565)          1,713,145             (130,530)           (188,267)

     Royalty Income                                                               11,529              35,103               47,184             100,661

     Total Revenue                                                               424,713           3,379,280            2,700,047           5,963,830

     Royalties                                                                  (113,292)          (476,443)             (470,064)         (1,635,070)

                                                                                 311,421           2,902,837            2,229,983           4,328,760

Expenses

     Production and Transportation                                               306,889             552,163            1,217,537           1,525,187

     General and Administrative                                                  534,446             499,666            1,594,195           1,772,415

     Interest                                                                    249,238             198,701              627,935             499,421

     Stock Based Compensation (Note 8)                                            25,744              37,312               92,806             239,284

     Accretion of Asset Retirement Obligation (Note 4)                            28,226              25,587               77,925              75,796

     Bad Debt Expense                                                                    --            1,410                     -              8,507

     Foreign Exchange Loss (Gain)                                                (74,549)            (17,374)             (80,917             (53,263)

     Write-down of Property, Plant and Equipment                               5,200,000                                5,200,000

     Depletion and Depreciation (Note 3)                                         682,689             793,935            2,089,993           2,495,234

                                                                               6,952,683           2,091,400           10,819,474           6,562,581



Earnings (Loss) Before Taxes                                                  (6,641,262)            811,437           (8,589,491)         (2,233,821)

Income Taxes (Note 7)

     Current                                                                      32,512              31,653               32,512              31,653

     Future                                                                              -                   -                   -           (496,198)

                                                                                  32,512              31,653               32,512            (464,545)

Net Earnings (Loss) and Comprehensive Earnings (Loss)                         (6,673,774)            779,784           (8,622,003)         (1,769,276)

Deficit and Accumulated Comprehensive Loss, Beginning of Period               (7,433,735)         (4,828,822)          (5,485,506)         (2,279,762)

Deficit and Accumulated Comprehensive Loss, End of Period              $     (14,107,509)     $   (4,049,038)    $    (14,107,509)   $     (4,049,038)



Earnings (Loss) per Common Share

     Basic                                                             $            (0.09)    $         0.01     $          (0.12)   $          (0.03)

     Diluted                                                           $            (0.09)    $         0.01     $          (0.12)   $          (0.03)

Weighted Average Number of Common Shares Outstanding

     Basic                                                                    74,381,538          74,381,538           74,381,538          70,114,750

     Diluted                                                                  74,381,538          74,381,538           74,381,538          70,114,750

See accompanying notes to consolidated financial statements




                                                                         13
                                                         AltaCanada Energy 2009 Third Quarter
                CONSOLIDATED STATEMENTS OF CASH FLOW
                                                                        Three months ended September 30         Nine months ended September 30

(Unaudited)                                                                         2009                2008              2009             2008

Operating Activities

 Net Earnings (Loss) and Comprehensive Earnings (Loss)                 $      (6,673,774)     $      779,784 $      (8,622,003) $   (1,769,276)

 Add/(Deduct) Items Not Affecting Cash

     Depletion and Depreciation                                                  682,689             793,935         2,089,993        2,495,234

      Write-down of Property, Plant and Equipment                              5,200,000                             5,200,000

     Accretion of Asset Retirement Obligations                                    28,226              25,587            77,925           75,796

     Stock Based Compensation                                                     25,744              37,312            92,806         239,284

     Unrealized Financial Derivatives Loss (Gain)                                488,565          (1,713,145)          130,530         188,267

     Unrealized Foreign Exchange Loss (Gain)                                     (58,906)          (142,011)           (74,320)       (190,888)

     Non-Cash Interest Expense on Convertible Debentures                          49,302              37,080           128,338           37,080

     Bad Debt Expense                                                                   -              1,410                  -           8,507

     Future Income Tax (Recovery)                                                       -                   -                 -        (496,198)

Abandonments                                                                            -                   -           (2,739)         (13,111)

                                                                               (258,154)           (180,048)          (979,470)         574,695

Change in Non-Cash Working Capital                                               224,264           1,059,997          (269,472)         844,294

                                                                                 (33,890)            879,949        (1,248,942)       1,418,989

Financing Activities
  Increase in Bank Indebtedness                                                  247,294          (1,033,191)        1,960,027         (768,896)

  Issue of Convertible Debenture                                                        -                   -        1,000,000        2,174,650

  Issue of Share Capital, Net of Share Issue Costs                                      -                   -                         1,602,179

  Change in Non-Cash Working Capital                                                                        -                        (1,632,000)

                                                                                 247,294          (1,033,191)        2,960,027        1,375,933

Investing Activities

 Additions to Property, Plant and Equipment                                    (323,762)          (1,816,391)       (2,207,829)      (2,757,266)

  Disposition of Property, Plant and Equipment                                          -                               12,000

 Change in Non-Cash Working Capital                                               29,762             765,338          (982,355)        (192,329)

                                                                               (294,000)          (1,051,053)       (3,178,184)      (2,949,595)

 Increase (Decrease) in Cash                                                     (80,596)         (1,204,295)       (1,467,099)        (154,673)

 Cash, Beginning of Period                                                       149,260           1,799,644         1,535,763          750,022

 Cash, End of Period                                                   $          68,664 $           595,349 $          68,664 $        595,349



Supplemental Cash Flow Information

 Cash Income Taxes Paid                                                $                - $           69,433 $                - $        69,433

 Net Cash Interest Paid                                                $         222,659 $           117,772 $         507,087 $        410,535



See accompanying notes to consolidated financial statements




                                                                         14
                                                         AltaCanada Energy 2009 Third Quarter
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009       (unaudited)
All amounts are stated in Canadian dollars unless otherwise noted
1. Basis of Presentation and Going Concern
The interim financial statements of AltaCanada Energy Corp. (the “Corporation” or “AltaCanada”) have been prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP) and follow the same accounting policies and methods of computation as the
financial statements of the Corporation for the year ended December 31, 2008.
The disclosures provided below are incremental to those included within the annual financial statements and certain disclosures which are
normally required to be included in the notes to the annual financial statements have been condensed or omitted. These interim financial
statements should be read in conjunction with the statements and notes in the Corporation’s annual report for the year ended December
31, 2008.
These unaudited consolidated financial statements have been prepared in accordance with Canadian Generally Accepted Accounting
Principles as applicable to a going concern. They do not give effect to adjustments that would be necessary should the Corporation be
unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities and commitments in other
than the normal course of business and at amounts different from those in the accompanying financial statements. AltaCanada had
negative cash flow from operations, before changes in non-cash working capital for the last three quarters, reported a loss of $6,673,774 in
the current quarter and has negative debt adjusted working capital of $1,780,426 at September 30, 2009. The Corporation was not in
compliance with a bank working capital covenant at September 30, 2009. On August 12, 2009, the bank established a new credit facility of
$12.25 million consisting of $8.25 million of revolving demand loan and a $4.0 million non-revolving demand loan. The $4.0 million non-
revolving demand loan was required to be repaid on or before October 30, 2009. Subsequent to the quarter the Corporation entered into a
new loan agreement with the bank (see “Subsequent Events”) subject to approval by the banks credit committee to repay $2,750,000 of
the $4.0 million non-revolving loan prior to December 31, 2009 using funds from a new subordinated facility of $3,250,000 being provided
by two AltaCanada shareholders. Additional financing will be required to repay the non-revolving demand loan and to finance ongoing
corporate programs and operations. If new sources of financing are not found, Management assesses there is significant doubt as to the
appropriateness of the use of the going concern accounting principle. Please refer to Note 13 “Subsequent Event” to the unaudited
financial statements for the period ended September 30, 2009.
The Corporation requires financing for working capital and the exploration and development of its properties. The Corporation’s continuance
as a going concern is dependent upon its ability to obtain adequate financing and to reach profitable levels of operation. It is not possible to
predict whether financing efforts will be successful or if the Corporation will attain profitable levels of operations. If the Corporation ceased
to be a going concern, adjustments necessary to the recoverability and classification of recorded assets and liabilities could be material.
2. Future Accounting Policy Changes
International Financial Reporting Standards
On February 13, 2008, the Canadian Accounting Standards Board confirmed that publicly accountable profit-oriented enterprises will be
required to use International Financial Reporting Standards (“IFRS”) in interim and annual financial statements for fiscal years beginning on
or after January 1, 2011. For the Corporation, this will mean that interim and annual consolidated financial statements will be prepared in
accordance with IFRS for 2011 fiscal year, and will include comparative figures for the 2010 fiscal year prepared in accordance with IFRS as
well. Over the next three years, Canadian GAAP will be modified to converge with IFRS.
The Corporation’s financial executives are familiarizing themselves with the new IFRS principles and requirements through formalized
training and industry focus groups, and in particular, those that apply specifically to companies with petroleum and natural gas operations
and exploration and development activities. An evaluation of IFRS conversion requirements that pertain to the Corporation will be conducted
this year, which will then lead to the development of an implementation plan to transition the Corporation’s financial reporting process,
including internal controls and information systems to IFRS. The evaluation will also allow the Corporation to be in a position to estimate the
initial financial impact of the transition to IFRS so key stakeholders and users of the financial information can begin to understand the
overall consequences of this process.
3. Property, plant and equipment
                                              September 30, 2009                               December 31, 2008
                                                  Accumulated                                     Accumulated
                                                   Depletion &        Net Book                     Depletion &        Net Book
 ($)                                  Cost        Depreciation           Value          Cost      Depreciation           Value
 Oil and gas properties          87,667,366         53,577,036       34,090,330   85,392,448        46,304,412       39,088,035
 Materials Inventory (at cost)     304,905                       -     304,905       387,152                     -     387,152
 Office equipment                  317,355             264,387          52,968       317,355           251,877           65,478
 Automobile                         36,412              19,608          16,804        36,412            14,746           21,666

                                 88,326,038         53,861,031       34,465,007   86,133,367        46,571,036       39,562,331



The Corporation recorded a write-down of $5,200,000 during the current period.




                                                                      15
                                                      AltaCanada Energy 2009 Third Quarter
The Corporation capitalizes general and administrative costs attributable to acquisition, exploration and development activities. In the first
nine months of 2009, the Corporation capitalized Canadian personnel costs of $65,148 (2008-$86,613). In Montana, for the first nine
months of 2009, personnel costs of $130,297 (2008-$142,627) were capitalized. Additional office overhead costs of $65,148 (2008-
$86,613) were capitalized.
Unproved Properties
Included in oil and gas properties at September 30, 2009 are costs of $220,000 (2008 - $280,092) related to Canadian unproved
properties and $10,969,068 (2008 - $10,001,989) related to Montana unproved properties, valued at cost, that have been excluded from
costs subject to depletion. In Montana, $304,905 (2008 - $816,438) of materials inventory has also been excluded from costs subject to
depletion.

4. Asset Retirement Obligations
Management has estimated the total future asset retirement obligation based on the Corporation’s net ownership interest in all wells and
facilities. This includes all estimated costs to dismantle, remove, reclaim and abandon the wells and facilities and the estimated time period
during which these costs will be incurred in the future.
                                                                                                                                         2009
 Asset Retirement Obligation, December 31, 2008                                                                                $    1,344,239
 Adjustments                                                                                                                           (6,815)
 Liabilities incurred                                                                                                                    3,657
 Abandonments                                                                                                                          (2,739)
 Accretion expense                                                                                                                     77,925
 Asset Retirement Obligation, September 30, 2009                                                                               $    1,416,267


The undiscounted amount of estimated cash flows required to settle the obligation is $6.0 million.

The estimated cash flow has been discounted using a credit adjusted risk free rate of 8.0 percent and inflated at 2.0 percent per annum.
The expected period until settlement ranges from a minimum of 2 years to a maximum of 40 years.

5. Bank Indebtedness
At September 30, 2009, total bank indebtedness was $12,003,850 (2008 - $8,468,891).

The bank conducted a review of the credit facilities in August, 2009 and agreed to new credit facilities consisting of $8.25 million of
revolving demand loan and a $4.0 million non-revolving demand loan. The $4.0 million non-revolving demand loan was to be repaid by
October 30, 2009.

The interest rate on the Revolving Demand Loan was Bank Prime plus three percent and on the Non-Revolving Demand Loan was Bank
Prime plus five percent. The terms of the Corporation’s banking agreement require the Corporation to maintain a 1 : 1 working capital ratio
adjusted for borrowings and available capacity under the bank line and subordinated debt (“Debt Adjusted Working Capital”). The
Corporation was not in compliance with the working capital covenant at September 30, 2009. Please refer to Note-13 “Subsequent Event”
to the unaudited financial statements for the period ended September 30, 2009 for the terms of the new loan agreement entered in with
the bank November 26, 2009.

6. Convertible Debentures
On June 27, 2008, the Corporation issued unsecured subordinated convertible debentures for gross proceeds of $2,174,650. The
debentures mature on December 23, 2009, unless converted prior to that date, and bear interest at an annual rate of eight percent payable
semi-annually in arrears. The first interest payment was due January 1, 2009. At the option of the holder, the debentures are convertible to
common shares of AltaCanada at a conversion price of $0.35 per common share. At any time after June 27, 2009 that the simple average
of the closing price of AltaCanada’s shares on the TSX Venture Exchange for any ten consecutive trading days exceeds $0.50 then the
debentures shall be deemed to be converted to common shares of AltaCanada at a conversion price of $0.35 per common share.

On May 12, 2009, the Corporation issued an unsecured subordinated convertible debenture for gross proceeds of $1,000,000. The
debenture will mature January 30, 2011, unless converted prior to that date, and bear interest at an annual rate of nine percent payable
semi-annually in arrears. The first interest payment is due November 1, 2009. At the option of the holder, the debenture is convertible to
common shares of AltaCanada at a conversion price of $0.10 per common share.

The convertible debentures are compound financial instruments and as such have been recorded as a liability and as equity. The residual
valuation method was used to determine the equity portion of the debentures. Under this approach, the liability component was valued first
in the amount of $1,964,150 for the debentures issued June 27, 2008 and $904,231 for the debenture issued May 12, 2009. The
difference between the proceeds of the debentures and the fair value of the liability, amounting to $210,500 for the debentures issued
June 27, 2008 and $95,769 for the debenture issued May 12, 2009, $306,269 in total, was assigned to the equity component. The
present value of the liability was calculated using a discount rate of 15% which approximated the interest rate that would have been
applicable to non-convertible subordinated debt of the Corporation at the time the debentures were issued. The liability component of the
debenture will be accreted to the face value of the debenture over the life of the debenture with a resulting charge to interest expense. At
September 30, 2009 the liability component of the debentures are $2,142,206 for the debentures issued June 27, 2008 and $927,126 for
the debenture issued May 12, 2009.




                                                                    16
                                                    AltaCanada Energy 2009 Third Quarter
7. Income Taxes
The Corporation has recorded a full valuation allowance against the potential value of all of its tax losses and deductions since it cannot
currently demonstrate that it is more likely than not that this potential value will be realized. A provision for estimated current income
payable by the Corporation’s subsidiary, Alberta Selecta Corporation, was recorded.
8. Stock Based Compensation
Stock Option Plan

The Corporation has implemented a long-term incentive plan that allows management to award stock options to eligible directors, officers,
employees and contractors for up to a maximum of 10 percent of its issued and outstanding common shares at market price at the date of
the grant. The outstanding options under this plan will vest over three years and have a term of five years. At September 30, 2009, the
following common shares were reserved for issuance:
                                                                                            Equivalent            Weighted
                                                                       Exercise                Shares         Average Years                Vested
                                                                       Price ($)       Outstanding (#)             To Expiry           Options (#)
Stock Option Plan                                                         0.30             2,090,000                    3.6            1,403,329
                                                                          0.45               375,000                    2.8              375,000
                                                                          0.56                30,000                    0.6               30,000
                                                                          0.60               470,000                    0.4              470,000
                                                                          0.63               845,000                    1.0              845,000
                                                                          0.68               165,000                    1.9              165,000
                                                                          0.82             1,155,000                    1.6            1,155,000
Total                                                                                      5,130,000                    2.1            4,443,329

The weighted average exercise price of the 4,443,329 options exercisable (vested) at September 30, 2009 is $0.56 per share.
A continuity of the option plan for the nine months ended September 30, 2009 is as follows:
                                                                                                                  Weighted
                                                                                             Number                 Average                  Total
                                                                                           of Options         Exercise Price                Value
Balance, December 31, 2008                                                                5,590,000                  $ 0.53           $ 2,956,244
Forfeited and expired                                                                     (460,000)                  $ 0.59             (270,043)
Balance, September 30, 2009                                                               5,130,000                  $ 0.52           $2,686,201


Of the 5,130,000 options outstanding at September 30, 2009, 4,443,329 are vested and none are “in-the-money”. The Corporation has
recorded a compensation expense of $ 92,806 for the nine months ended September 30, 2009 (2008-$239,284) representing the fair
value of outstanding options, with a corresponding credit to Contributed Surplus.

Contributed Surplus

 Balance, December 31, 2008                                                                                                         $ 1,873,150
 Stock Based Compensation Expense                                                                                                        92,806
 Balance, September 30, 2009                                                                                                        $1,965,956


9. Financial Instruments
All financial instruments are required to be measured at fair value on initial recognition of the instruments. Measurement in subsequent
periods depends on whether the financial instrument has been classified as “held-for-trading”, “available for sale”, “held –to-maturity”,
“loans and receivables” or “other financial liabilities” as defined by the standard.

Cash is defined as “held-for-trading” and is measured at carrying value. Accounts receivable are designated as “loans and receivable” and
are carried at cost. Accounts payable and bank debt are designated as “other financial liabilities” and are carried at cost. Convertible
debentures are designated as “other financial liabilities” and carried at amortized cost using the effective interest method.

The Corporation’s financial instruments at September 30, 2009 and December 31, 2008, are comprised of cash, accounts receivable,
accounts payable and accrued liabilities, financial derivative liabilities, convertible debentures and bank indebtedness. The carrying
amounts of these financial instruments approximate their estimated market values due to short maturities.

In January 2009, the Emerging Issues Committee of the CICA issued EIC-173, “Credit Risk and the Fair Value of Financial Assets and
Financial Liabilities” which applies to interim and annual financial statements for periods ending on or after January 20, 2009. The
adoption of this standard had no impact on the Corporation’s presentation of its financial position or results of operations as at September
30, 2009.

The Corporation has exposure to the following from its use of financial instruments:

Credit Risk

Credit risk is the risk of financial loss to the Corporation if a customer or counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Corporation’s receivables from joint venture partners and petroleum and natural gas marketers.




                                                                      17
                                                      AltaCanada Energy 2009 Third Quarter
As at September 30, 2009 the Corporation’s receivables consisted of $ 207,000 (2008-$680,000) from joint venture partners, $ 204,000
(2008-$501,000) from petroleum and natural gas marketers and $7,000 (2008-$71,000) of other trade receivables.

Receivables from petroleum and natural gas marketers are normally collected on the 25th day of the month following production. The
Corporation’s policy to mitigate credit risk associated with these balances is to establish marketing relationships with reputable purchasers.
The Corporation historically has not experienced any material collection issues with its petroleum and natural gas marketers. Joint venture
receivables are typically collected within one to three months of the joint venture bill being issued to the partner.

The carrying amount of accounts receivable represents the maximum credit exposure. The Corporation does not have an allowance for
doubtful accounts.

Liquidity risk

Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. AltaCanada’s financial
liabilities on the balance sheet consist of accounts payable, bank debt, financial derivatives liabilities and convertible debentures. At
September 30, 2009, the Corporation had drawn $12.0 million on its credit facility and had a working capital deficiency (excluding
derivative contracts, convertible debentures and bank indebtedness) of $1.6 million. The new credit facility established on August 12, 2009
was to be reduced by $4.0 million, to $8.25 million, on October 30, 2009. This $4.0 million reduction did not occur. Convertible debentures
in the amount of $2.2 million mature on December 23, 2009.

Please refer to Note 13-“Subsequent Event” to the unaudited financial statements for the period ended September 30, 2009 for details of
the new financing sources planned by the Corporation.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, commodity prices, and interest rates will affect the
Corporation’s net earnings or the value of financial instruments. The objective of market risk management is to manage and control market
risk exposure within acceptable limits, while maximizing returns. The Corporation utilizes both financial derivatives and physical delivery
sales contracts to manage market risks. All such transactions are conducted in accordance with the risk management guidelines that have
been authorized by the Board of Directors.

Foreign Currency risk

Foreign currency risk is the risk that future cash flows will fluctuate as a result of changes in foreign exchange rates. The Corporation’s
foreign exchange translation exposure principally reflects the impact of fluctuations in the Canadian/United States exchange rate on
monetary and non-monetary assets and liabilities and revenues and expenses of the Corporation. In addition, the underlying market prices
for petroleum and natural gas are impacted by changes in the exchange rate between the Canadian and United States dollar.

AltaCanada’s subsidiary, Montana Land and Exploration, Inc. operates in Montana and therefore has financial transactions denominated in
the United States dollar. These transactions relate to the addition of natural gas assets and royalty and operating expenses. Since the
Corporation reports in Canadian dollars, foreign exchange gains and losses will occur as Canadian/US dollar exchange rates shift. If foreign
exchange rates had changed by $0.01, with all other variables held constant, net loss for the three months ended September 30, 2009
would change by an estimated $6,000.

Commodity price risk

Commodity price risk is the risk that the fair value or future funds flow will fluctuate as a result of changes in commodity prices. Commodity
prices for petroleum and natural gas are impacted by not only the relationship between the Canadian and United States dollar, as outlined
above, but also world economic events that dictate the levels of supply and demand. The Corporation has attempted to mitigate commodity
price risk through the use of various financial derivatives.

Financial instruments utilized in the nine months ended September 30, 2009 are:
Natural Gas Price Risk Management (AECO pricing):

                                                                                         Realized Gain      Unrealized Gain (loss)
                                                                                    Nine months ended       Nine months ended at
Volume                                                                             September 30, 2009        September 30, 2009
(GJ/day)               $/GJ   Term                                                                 ($)                         ($)           Total

 Put Option
1,000         $6.00           February 2009 to December 2009                              $       584,739           $    157,169     $    741,908
Call Option
1,000         $ 7.40          January 2010 to December 2010                                            –                (119,347)        (119,347)
Fixed for Floating Swap - Forward Sale
500           $4.32           April 2009 to October 2009                                           97,126                  33,643         130,769

1000          $5.42           April 2010 to March 2011                                                                  (216,293)        (216,293)
Collar
500           $5.00-$7.00     November 2009 to March 2010                                                                  14,299          14,299




                                                                           18
                                                           AltaCanada Energy 2009 Third Quarter
 Total                                                                                  $     681,865             $       (130,529)             $     551,336


The mark to market value of the hedges outstanding at September 30, 2009 was a financial derivative liability of $130,529 (2008 - $0).

10. Capital Structure
The Corporation’s objective when managing capital is to maintain a flexible capital structure enabling it to execute on its capital expenditure
program. In the management of capital, the Corporation includes share capital and net debt (defined as long term debt, plus bank
indebtedness less working capital (deficit)) in the definition of capital. In order to maintain or adjust the capital structure, the Corporation
may from time to time issue shares, sell assets, and adjust its capital spending to manage its current and projected debt levels. The key
measure that the Corporation utilizes in managing capital is positive debt adjusted working capital (defined as current assets plus available
but undrawn borrowing under the bank line less current liabilities and subordinated debt). This requirement is also an externally imposed
requirement in that it is a condition under the terms of the Corporation’s bank loans. The Corporation manages its capital structure and
makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying petroleum and natural
gas assets. The Corporation’s share capital is not subject to external restrictions; however, the bank debt facility is assessed based on
petroleum and natural gas assets. The Corporation has not paid or declared any dividends since the date of incorporation, nor are any
contemplated in the foreseeable future.
Bank indebtedness is described in Note 5-“Bank and Other Indebtedness” to these financial statements.
11. Related Party Transactions
Mr. C.V. Selby, Chairman and Director of the Corporation is President of Selby Professional Corporation. In return for services that Mr. Selby
provides to the Corporation, office space and health care benefits are provided to Selby Professional Corporation. For the nine months
ended September 30, 2009, the value of these services amounted to $47,816 (2008 - $40,710).

James W. Collins, Director of the Corporation, subscribed for $1,000,000 of the convertible debentures issued May 12, 2009.

Michael J. Hibberd, James W. Collins, Donald E. Foulkes and Brian A. Page, Directors and Officers of the Corporation, subscribed for an
aggregate of $1,699,650 of the convertible debentures issued June 27, 2008.

12. Segmented Information
The Corporation’s geographical segmented information is as follows:

                                                 Three months ended September 30, 2009                    Nine months ended September 30, 2009
                                                  Montana            Canada                 Total         Montana                Canada                  Total
 Production (BOE/d)                                   228               101                 329                227                    109                 336
 Total Revenue ($)                                373,488            51,225            424,713           1,395,974            1,304,073             2,700,047
 Depletion, Depreciation and Accretion            520,738           190,177            710,915           1,538,153              629,765             2,167,918
 Write-down of Property, Plant and
                                                5,200,000                       -    5,200,000           5,200,000                       -          5,200,000
 Equipment
 Interest                                                     -                 -      249,238                        -                  -           627,935
 Stock Based Compensation                                     -                 -       25,744                        -                  -            92,806
 Foreign Exchange loss (gain)                                 -                 -      (74,549)                       -                  -           (80,917)
 (Loss) before income tax                      (5,840,978)        (800,284)         (6,641,262)         (7,018,285)          (1,571,206)         (8,589,491)
 (Loss) after income tax                       (5,840,978)        (832,796)         (6,673,774)         (7,018,285)          (1,603,718)         (8,622,003)
 Property, Plant & Equipment ($)                              -                 -                       29,794,990            4,670,017          34,465,007
 Total Assets ($)                                             -                 -                       30,618,503            4,625,692          35,244,195
 Net Capital Expenditures ($)                     266,417            57,345            323,762           1,997,852              209,977             2,207,829



                                                 Three months ended September 30, 2008                    Nine months ended September 30, 2008
                                                Montana            Canada                Total          Montana                 Canada                 Total
   Production (BOE/d)                                299              125                   424               326                     133               459
   Total Revenue ($)                           1,269,960          2,109,320         3,379,280           4,571,170             1,392,660          5,963,830
   Depletion, Depreciation and Accretion         605,330           214,192            819,522           1,904,031               666,999          2,571,030
   Interest                                               -                     -     198,701                     -                         -       499,421
   Stock Based Compensation                               -                     -      37,312                     -                         -       239,284
   Foreign Exchange loss (gain)                           -                     -     (17,374)                    -                         -       (53,263)
   (Loss) before income tax                     (134,785)          946,222            811,437            (67,583)            (2,166,238))       (2,233,821)
   (Loss) after income tax                      (134,785)          914,569            779,784            (67,583)            (1,701,693))       (1,769,276)
   Property, Plant & Equipment ($)                        -                 -                    -   33,861,960               5,100,547         38,962,507
   Total Assets ($)                                       -                 -                    -   35,667,337               5,501,750         41,169,087
   Net Capital Expenditures ($)                1,723,613            92,778          1,816,391           4,790,880               286,386          5,077,266




                                                                     19
                                                     AltaCanada Energy 2009 Third Quarter
13. Subsequent Event
A new “Loan Agreement” was entered in with our bank on November 26, 2009 subject to approval by the bank’s credit committee. This
Loan Agreement will expire July 31, 2010. $2,750,000 will be paid on the non-revolving demand loan by December 31, 2009 reducing the
balance on the loan to $1,250,000. This loan will bear interest of Bank Prime plus three percent. The Corporation’s $8,250,000 revolving
demand loan facility will continue with an interest rate of Bank Prime plus two percent. A “Bridging Loan Facility” of $3,250,000 will be
created with two existing shareholders to provide the funds for the required payment to the bank and to provide $500,000 of working
capital. This loan will bear interest of eight percent. It is a condition of the new “Loan Agreement” that AltaCanada shall have closed on
financing for an additional minimum of $2,500,000 by way of equity or additional subordinated bridge financing by February 28, 2010.




                                                                   20
                                                   AltaCanada Energy 2009 Third Quarter
Board of Directors
                                                                               ALTACANADA ENERGY CORP.
CHARLES V. SELBY, B.SC. (HONS.) LLB., P.ENG.                                   2100, 101-6TH Avenue SW,
                                                                               Calgary, Alberta, Canada T2P 3P4
Mr. Selby has more than 30 years of involvement in all aspects of
                                                                               Tel: 403.265.9091 Fax: 403.265.9021
the oil and gas industry. Mr. Selby was employed with Chevron                  E-mail: infor@altacanada.com
Standard in Alberta and in the Kingdom of Saudi Arabia, and                    www.altacanada.com
practised law with two major legal firms in Calgary for ten years prior
to pursuing independent professional and investment activities in              CORPORATE OFFICERS
August 1994 as President of Selby Professional Corporation. Mr.                Charles V. Selby
Selby is presently Vice President and Corporate Secretary of                   Chairman
Pengrowth Corporation and serves on the boards of several public
and private companies related to the oil and gas industry and the              Donald E. Foulkes
provision of technology to that industry.                                      President and Chief Executive Officer

                                                                               Donald L. Jackson
DONALD E. FOULKES, B.SC., P.GEOL.                                              Executive Vice-President and Chief Operating Officer
Mr. Foulkes has over 39 years of oil and gas experience with private
                                                                               Brian A. Page
and public companies in Canada, the United States and                          Vice-President, Finance and Chief Financial Officer
internationally. Prior to joining AltaCanada, Mr. Foulkes was
Chairman and Chief Executive Officer of Causeway Energy Corp.                  SENIOR TEAM MEMBERS
from 1998 until its sale to Pan–Canadian in August of 2001.                    Roger Baines, Senior Geologist
                                                                               Sharon Cooper, Land Manager
MICHAEL J. HIBBERD, BA, MBA, LLB. *                                            Dale Stoodley, MT Operations Manager

Mr. Hibberd has extensive capital markets and mergers and                      LEGAL COUNSEL
acquisitions experience. He spent 12 years with Scotia McLeod Inc.             Gowling Lafleur Henderson LLP
in Toronto and Calgary and was Senior Vice–President and Director              Calgary, Alberta
in corporate finance when he left in early 1995 to establish his own
                                                                               BANKERS
corporate finance consulting business (MJH Services Inc.). Mr.
                                                                               National Bank of Canada
Hibberd serves on a number of public company boards and acts as
                                                                               Calgary, Alberta
a financial advisor to a number of Calgary based companies with
North American and international oil and gas operations.                       AUDITORS
                                                                               PricewaterhouseCoopers LLP
JOHN R. MOORE, BASC., P.ENG. *                                                 Calgary, Alberta

Mr. Moore has over 40 years of experience in oil and gas                       EVALUATION ENGINEERS
engineering, operations and management, with an emphasis on                    GLJ Petroleum Consultants Ltd.
property evaluation and development. This experience was primarily             Calgary, Alberta
with Gulf Canada Resources, Dome Petroleum Limited, and with
private consulting firms.                                                      REGISTRAR AND TRANSFER AGENT
                                                                               Inquiries regarding changes of address, registered shareholdings, stock
                                                                               transfers or lost certificates should be directed to:
JAMES W. COLLINS *
                                                                               Computershare Trust Company of Canada
Mr. Collins is an independent businessman and corporate director. He
                                                                               Attention: Stock Transfer Department
is Chairman of Rioco Corp. Real Estate Services, LLC, McAllen, Texas, a
                                                                               630, 530-8th Avenue SW
commercial brokerage, management and investment real estate
                                                                               Calgary, Alberta T2P 3S8
Corporation. Mr. Collins is also President of Mayfair Properties, LLC.         Tel: 403.267.6555
McAllen, Texas, involved in real estate, oil and gas, agri-business and        Fax: 403.267.6529
investments. Prior to this he was Corporate Secretary and Assistant
Vice President, Sunshine Mining Corporation, Dallas, Texas, a                  STOCK EXCHANGE
Corporation with interests in silver, mining, oil and gas and                  The TSX Venture Exchange, Symbol: ANG
manufacturing. Mr. Collins serves on the Board of Directors of several
Corporations and Institutions, and was previously on the Board of both         VOLUME REPORTING
Causeway Energy Corp., and Bushmills Energy Corp. He achieved an               Where volumes are reported in barrels of oil equivalent, gas is converted
                                                                               to oil at six thousand cubic feet per barrel, unless stated otherwise.
MBA in Finance, Accounting and Real Estate from Southern Methodist
University, Dallas, Texas.
                                                                               FINANCIAL REPORTING
                                                                               All amounts are in Canadian dollars, unless otherwise stated.
* Member of Audit Committee                                                    AltaCanada’s fiscal year-end is December 31.




                                                                         21
                                                         AltaCanada Energy 2009 Third Quarter

				
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