British Columbia - A Leading Canadian Oil and Gas Province

1. British Columbia- A Leading Canadian Oil and Gas Province 2008 AAPG Annual Convention and Exhibition International Pavilion April 21, 2008 San Antonio, Texas

2. British Columbia Canada United States Mexico Canada Victoria Vancouver United States Mexico

3. B.C.’s Oil and Gas Connectivity • British Columbia is a reliable and environmentally responsible energy supplier • Well connected to markets • 2nd largest provider of natural gas in Canada • 4th largest oil producer

4. Oil and Gas Resource Map • Commercial oil and gas production occurs in northeast British Columbia within the Western Canada Sedimentary Basin (55° to 60 °N) • Well developed infrastructure with extensive road and pipeline network • Other areas in province contain significant quantities of sedimentary rock that may yield future production in (e.g. interior basins, coalbed gas areas)

5. 2006 Oil & Gas Production and Reserves Annual Production • Raw Natural Gas Production over 1.1 Tcf • Crude Oil Production over 10 million barrels Reserve Numbers • Natural Gas (remaining marketable reserves) 13.5 Tcf with a reserve to production ratio of 16.5 years • Oil (remaining established reserves) 115 million barrels with an R/P ratio of 11.2 years

7. Petroleum and Natural Gas Rights • 90% of petroleum and natural gas rights are owned and administered by the Crown • Dispositions, by public tender, are held monthly • Parcel postings based on industry requests • Variable tenure options available (permit, drilling • licence, lease) • Petroleum Titles Online at: www.ptonline.gov.bc.ca

10. Resource Numbers Undiscovered Resource Potential (all basins) • 95 Tcf Unconventional Gas Resource Potential • 300 Tcf of tight gas • 250 Tcf of shale gas • 84 Tcf of coalbed gas

11. Active Established Plays Complex and Rich Geology • Jean Marie • Mississippian • Triassic • Cretaceous • Deep Basin Gas – sweet spots • Fort St. John Region • Selective Foothills

12. Active EmergingPlays Complex and Rich Geology • Regional HydrothermalDolomite (HTD) • Slave Point, Wabamun, Debolt • Shallow Gas • Spirit River/Notikewin • Deep Basin – Tight Gas • Cadomin/Cutbank Ridge • Northern Foothills • Triassic & Debolt Cypress/Chowade/M-K • Liard Basin • Nahanni/Mattson

13. Shale Gas in British Columbia • Industry interest in shale gas is high in northeast BC – testing of several units ongoing; production has just started • Two recent studies released on Devonian and Triassic Shale Gas Potential – copies available at our booth (IP6) • New net profit royalty scheme to be applicable to shale gas

14. British Columbia – Shale Gas Hot Spot In 2007: A total of 595,559 hectares were disposed Average price of $1,758/ha Total bonuses of $1.05 Billion Of this:$928.7 Million may have been attributed to shale gas plays

15. Why is Shale Gas in NEBC so HOT? • Enormous potential • Industry interest high • Testing of several units ongoing • Proven production (Upper Montney) • New net profit royalty scheme will be applicable

16. Devonian – Horn River Basin/Cordova Embayment • Muskwa/Evie are primary targets • Apache, Devon, Encana, EOG and Nexen all active with experimental schemes • HRB focus for activity and sales – Cordova new play area for 2007

17. Devonian – Horn River Basin

18. Devonian – Cordova Embayment

19. SOURCE: http://www.eogresources.com/media/slides/ac_bctrinidad0208.pdf

20. Triassic – Upper Montney play • The Upper Montney has seen exceptional growth in production from ~26 MMcf/d in 2005 to > 80 MMcf/d in 2007

21. Triassic – Upper Montney play • Play area was defined by 2006 Open File Report • The Upper Montney play area had a total bonus of $526 M in 2007

22. Geoscience Releases • Compilation of non-confidential core analysis data from various wells. • Contains more than 4 GB of data scanned and compiled relating to potential shale gas units in NEBC. SHALE GAS POTENTIAL:CORE AND CUTTING ANALYSIS Petroleum Geology Open File 2007–01

23. Geoscience Releases Also Available: • OIL & GAS EXPLORATIONACTIVITY REPORT 2006 • Information Circular 2007 – 01 • A compilation of BC’s Oil and Gas activity for 2006. • Provides a summary of the exploration, production, growth and decline of activity by geographic areas and geology • Regional “Shale Gas” Potential of the Triassic Doig and Montney Formations, Northeastern British Columbia • Petroleum Geology Open file 2006-02 • Gas Shale potential of Devonian Strata, Northeastern British Columbia • Petroleum Geology Special Paper 2005-1

24. B.C. Government Support • Lower royalties • Reduced regulations • Improved road access • High quality geoscience information • Full access to drill core and cuttings for all wells

25. Royalty Incentives • Existing royalty reductions for deep gas, marginal plays (e.g. small or shallow pools), coalbed gas, summer drilling • New net profit royalty - small royalty on production before payout of capital investment • Royalty Credit Program for roads and pipelines

26. Infrastructure • More than $390 million in new infrastructure investment in the province • Allocated over $215 million in royalty credits to oil and gas companies • Developed 62 new road-based projects and 39 new pipeline projects

27. State of Oil and Gas Industry • Capital Spending by Industry in 2006 • $6.1 Billion • Public Road Improvements since 2004 • $174 Million • Total Sales of Oil & Gas Production in 2006 • Over $7 Billion

28. Information on British Columbia’s oil and gas industry is available in this brochure. Booth IP6