29 th USAEE/IAEE North American Conference October 14, 2010 Calgary, Alberta. Presented by Glen Schmidt, Chairman

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1 29 th USAEE/IAEE North American Conference October 14, 2010 Calgary, Alberta Presented by Glen Schmidt, Chairman 1

2 Agenda Where will you get your oil? Drillable oil sands One of the best choices for crude oil 2

3 In Situ Oil Sands Alliance What is IOSA? We drill wells (in situ) to develop bitumen production from the oil sands In situ is an emerging Canadian energy business. IOSA members have: > 20 billion barrels of recoverable bitumen > 1mmbbl/d production potential Independent, innovative Alberta-based in situ oil sands companies: Athabasca Oil Sands Corp. Connacher Oil & Gas Limited Laricina Energy Ltd. MEG Energy Corp. Osum Oil Sands Corp. Petrobank Energy and Resources Ltd. 3

4 IOSA OUR GOAL: To support its members and promote the innovative development of the oil sands using in situ technology in a responsible manner 4

Production Well Steam Chamber Steam Rises Producing Heat Hot

5 In Situ Techniques: SAGD Steam Assisted Gravity Drainage Well Pad Impermeable Cap Rock Layer Cap Rock Steam Injection Well Oil Production Well Steam Chamber Steam Rises Producing Heat Hot Bitumen Drops Down Source: IOSA Hot Bitumen Produced From Lower Well 5

6 In Situ - Reserves Source: CAPP as adapted from Oil and Gas Journal, December

7 Importance of In Situ or Drillable Oil Sands Development of the oil sands will help meet global energy demand 80% of future production growth from the oil sands will be developed by drillable oil sands (in situ) Will provide a safe, secure and reliable source of energy that is being developed responsibly Development contributes to a healthy North American economy Long term employment opportunities Long term economic stability Stable long term cost competitive energy supply 7

8 Energy Demand The Need for Oil Sands Population is a key driver for energy demand Over 2 billion more people by 2030 Source: Shell Energy Scenarios to

9 Global Energy Demand The Need for Oil Sands Source: OECD/IEA World Energy Outlook

10 Effective Energy Canadians can be proud of in situ oil sands In situ balances economic development with environment impact Compared to other energy sources Land footprint is small Potable water use is negligible Air emissions are competitive 10

11 Effective Energy Economic Benefit The oil sands represents a major economic force Over the next 25 years, oil sands development will generate: $1.7 trillion in GDP 11.4 million person years of employment $188 billion in federal tax revenue $118 billion in provincial tax revenue Economic benefits will be felt across Canada, not just Alberta $170 billion of GDP generated outside of Alberta over next 25 years Source: Canadian Energy Research Institute, July

12 In Situ - Land Energy Source Area to support 500 bopd or equivalent Area to support 100,000 bopd or equivalent Bitumen, SAGD 1 ha (2.5 acres) 200 ha Wind turbines (including roads, power lines) 50 ha 10,000 ha Ethanol, Iowa corn 7000 ha 1,400,000 ha 12

15% of leased lands will impacted by in situ development IOSA members will reclaim

13 In Situ - Land With multiple wells drilled from a single pad, in situ developments have a smaller footprint than most conventional oil and gas wells Only between 5% and 15% of leased lands will impacted by in situ development IOSA members will reclaim 100% of the land used as operations are concluded Connacher s SAGD projects minimize land use 13

14 In Situ Water In situ water use intensity is amongst the lowest of other energy sources Source: CAPP 14

15 In Situ Water For new projects, 80-95% of water is recycled Steam-oil-ratios have dropped from over 5.0 in the 1970 s to less than

16 In Situ Emissions IOSA member companies are working to minimize emissions through innovation and a commitment to increase efficiency in our production processes Cogeneration reduces GHG emissions from in situ production Electrical submersible pumps reduce steam: oil ratios and GHG by as much as one third Non-steam and steam/solvent approaches now being tested could dramatically reduce energy intensity and emissions for in situ oil sands projects 16

17 In Situ - Emissions Source: CAPP as adapted from Jacobs Consultancy, Life Cycle Assessment Comparison for North American and Imported Crudes, June

18 18 In Situ Needed Oil

19 19 In Situ Preferable Oil

20 Where will you get your oil? Canadian Oil Socially responsible Secure North American supply Competitive environmental footprint Needed source of energy 20

21 For Additional Information On IOSA To contact IOSA or for more information on what we do, please visit our website: 21

ALBERTA OIL SANDS: THE FACTS

ALBERTA OIL SANDS: THE FACTS Oil sands are comprised of grains of sand surrounded by a film of water and bitumen. Bitumen, a heavy and viscous oil, is solid in colder temperatures IN 209, THE WORLD IS