CO&O Software Technology for Construction Ownership and Operation

1. HOUSTON  DALLAS  CALGARY

2. Annual Joint Conference Topic:Construction Ownership and Operation (CO&O) Software Technology Brief Nov 12, 2008

3. Agenda • Brief Quorum Overview • Industry Needs and Challenges • Our Approach to Developing a Solution • CO&O Accounting Capabilities • Implementation Considerations and Options • Benefits • Questions

4. Quorum Overview

5. Quorum Business Solutions For over 10 years, Quorum has helped companies build and maintain leadership positions in the oil & gas market Quorum Expertise Capabilities / Deliverables Client Benefits • Industry • Process • Technology • Consulting • Process Solutions • Software Solutions • Solve complex problems • Improve operating efficiency • Build a competitive edge

6. Company Profile Solutions Consulting Firm • Founded in 1998 • Houston, Dallas, Calgary • 300+ employees • Employee owned; consistently profitable • Strategic growth • Oil & Gas • Other emerging markets • Upstream, Midstream, Marketing, Transportation • Business Intelligence Industry Expertise • 90+ clients • Multiple projects with many Clients Clients Project Experience • 400+ successful projects

7. Client Profiles Large Integrated Energy Companies Interstate Gas Pipelines Midstream Companies Gas Marketers Gas Processors Intrastate Gas Pipelines Producer Marketers E & P Companies Gas Gathering Companies Gas Storage Operators Royalty Owners LDCs Wind Generation Operators LNG Facility Operators Outsourced Service Providers Industrial Gas Consumers

8. Quorum Energy Software Suite

9. Industry Needs and Challenges

10. Industry’s Needs and Challenges • Basic monthly accounting requirements of CO&Os • Charge to Owners: • Excess Usage Fees • Distribute to Owners Revenue from: • Custom Processing Fees (a.k.a. Facility Charges) • Excess Usage Fees • Many methods to compute fees & distribute revenues • DOI%, Throughput Volume, Surplus Volume, etc…

11. Industry’s Needs and Challenges • Basic annual accounting requirements of CO&Os • Compute actual Operating Cost fee rate • (actual operating expenses) ÷ (throughput volume) • 13th Month Adjustment of Custom Processing Fees • Redistribute to Owners Revenue from Adjusted Fees • Equalize Actual Operating Expenses Among Owners

12. Industry’s Needs and Challenges • CO&O Accounting Challenges • Detached from primary accounting systems • Tight integration w/ Production Accounting is rare • Often unable to amend fees after 13th Month Adj. • Typically in spreadsheets • Manual effort intensive • Controls and auditability lacking • Reliance on one or two Subject Matter Experts • No scalability for growth and acquisition

13. Our Approach to Developing a Solution

14. Our Approach to Developing a Solution • Modular addition to TIPS – The Intelligent Plant System • Key TIPS functions • Production Accounting (Allocation, Registry Reporting) • Settlement (Product Valuation, Fees, and Taxes) • Journals • Design and Development w/ a consortium of 3 clients • AltaGas, Keyera, and Pengrowth • Solution design is a superset of their requirements • Subsequent implementation has added additional capabilities and reporting • SemCAMS • Summary: Designed and Developed for real cases

15. CO&O Accounting Capabilities

16. CO&O Accounting Capabilities • Data requirements • Functional Unit Definition • Owners • Capacity • Wells & Receipt Points Behind • Volume Identification • Functional Unit Ownership Terms • Excess Usage Fee Rate • Expense and Revenue Types • Method(s) to determine Owners’ share of Expenses and Revenues • Detail of Functional Unit Throughput Volumes • Detail of Fees Charged • Detail of Expenses Incurred

17. CO&O Accounting Capabilities • Processes • Monthly CO&O Owner Accounting • 13th Month Adjustment and Annual Equalization • Processes run by Functional Unit or Group of Functional Units • Report samples provided • Plant Ownership Summary (Monthly) • Equalization Summary (Annual) • Other reports available • 13th Month Adjustment Invoice to Custom Processor • Annual Equalization Invoice to Plant / Functional Unit Owner

18. Implementation Considerations and Options

19. Implementation Considerations and Options • Key accounting functions for plant / facility operators: 1 2 3 4 • We have experience implementing several combinations of these functions onto TIPS • #2 only (integrated w/ another PA system) • #1, #2 • #1, #2, #3, #4 • #2, #3, #4 (integrated w/ another PA system) • #3, #4 (integrated w/ other PA and Fee systems) Allocations & Registry Reporting (PA) Custom Processing Fees & Invoicing 13th Month Adj. & Annual Equalization Monthly CO&O

20. Benefits

21. Benefits • Improved controls and auditability • Improved reporting and receivables • Distinguish yourself among your peers • Easier to scale with growth and acquisition • Give your accountants the right tools • Do a quality job more efficiently • Lift constraints and headaches • Gain the capability of revising fees after 13th Month

22. Quorum Contactswww.qbsol.comEric Hazeldine, Vice President – Quorum Canada 403-806-2568 eric_hazeldine@qbsol.comCam Smith, Director Sales403-806-2559 cameron_smith@qbsol.com Please stop by our booth to discuss a specific scenario and/or a proof of concept.

23. Questions? HOUSTON  DALLAS  CALGARY