2008 Canadian Energy Survey* Survey of 2007 Results John Williamson National Energy & Utilities Leader PwC *connectedthinking 9/18/2018

PricewaterhouseCoopers’ Energy & Utility Practice 2008 Canadian Energy Survey PricewaterhouseCoopers’ Energy & Utility Practice PricewaterhouseCoopers LLP has been serving the energy industry for more than 100 years and is the leading provider of business solutions to the global energy industry. More than 550 professionals assist our Canadian energy clients in every market sector More than 3,100 Energy specialists are assigned full time to the Global Energy Group and excess of 300 partners serve Global Energy companies worldwide This Survey provides a performance outlook in numerous sectors that comprise Canada’s energy industry and summarizes the financial and operating information of the top 100 Canadian public oil & gas companies and 24 oil & gas income trusts for the fiscal years ended in 2007. 9/18/2018

2008 Canadian Energy Survey Tax Update 9/18/2018

2008 Canadian Energy Survey Tax Update In December 2007, the federal government enacted additional tax rate reductions - decreasing corporate tax rates from 22.12 per cent in 2007 to 15 per cent in 2012 Canadian companies are ‘casting their nets out further’ – PwC can assist in ensuring provincial allocation rules are met, while advising on short and long term implications of international ownership and financing arrangements 9/18/2018

Scientific Research and Experimental Development (SR&ED) 2008 Canadian Energy Survey Scientific Research and Experimental Development (SR&ED) The 2008 federal budget has enhanced SR&ED tax incentives by increasing: Annual expenditure limits Taxable income and capital phase-out ranges Provisions now allow for certain salary or wages incurred outside Canada to quality for the SR&ED credit The Alberta government has introduced a SR&ED credit of up to 10 per cent - up to $4 million of eligible expenditures incurred, for a maximum annual credit of $400,000. This applies to all eligible expenditures incurred after December 31, 2008 PwC’s SR&ED team can help you with: Scoping of projects Claim preparation Audit defense and appeals, if necessary 9/18/2018

2008 Canadian Energy Survey IFRS Update 9/18/2018

2008 Canadian Energy Survey IFRS Update The CICA has approved Canada’s move to IFRS effective January 1, 2011 Extractive industries are struggling to assess the impact that IFRS will have on current accounting frameworks Oil and gas companies are paying particular attention to the identification of Cash Generating Units (CGUs), as this will impact impairment assessments of resource properties The message for all companies is to start asking questions about this now PwC is actively involved with many energy clients in IFRS evaluations through a proven testing methodology used in the UK and other IFRS-adopted countries 9/18/2018

2008 Canadian Energy Survey Junior Oil and Gas 9/18/2018

2008 Canadian Energy Survey Junior Oil and Gas Continues to be an important part of the Canadian energy industry Junior market will continue to strengthen in two main areas: technology and resource exploration Canadian energy sector remains well-represented around the world with our knowledge of complex resources and advanced recovery techniques 9/18/2018

2008 Canadian Energy Survey Oil Sands 9/18/2018

2008 Canadian Energy Survey Oil Sands A clear economic shift is occurring due to oil sands development. We are seeing a movement from central to western Canada It is estimated that within the next 10 years, in excess of $250 billion will be spent on construction alone in Alberta PwC has a broad range of expertise to assist your company through acquisitions, joint ventures, production sharing or diversification 9/18/2018

2008 Canadian Energy Survey Environmental 9/18/2018

2008 Canadian Energy Survey Environmental Since January 1, 2007, significant environmental developments have taken place at the federal and provincial levels with respect to greenhouse gas regulations A ‘patchwork’ of environmental management initiatives have emerged across the country, with Alberta being the first province in Canada to pass regulations requiring both reporting and reductions of greenhouse gas emissions Ontario, British Columbia and Manitoba have expressed their intentions to participate in an international carbon trading scheme. And Quebec has introduced a carbon tax on petroleum products PwC’s Climate Change practice can assist companies with: Green technology feasibility assessments Verification of project emission reductions 9/18/2018

2008 Canadian Energy Survey Statistics 9/18/2018

2008 Canadian Energy Survey Financial Statistics The Top 100 E&P companies showed growth in financial performance compared with 2006: gross revenues grew an average 17 per cent Among the Top 100 E&P companies, average cash flow from operations increased by 10 per cent to $443 million Capital expenditures grew 8 per cent to an average of $464 million 9/18/2018

Operational Statistics 2008 Canadian Energy Survey Operational Statistics Operating costs increased again this year - rising 9 per cent due largely to escalating labour and materials costs Among all companies, gas reserves as a percentage of total reserves averaged 57 per cent in 2007 – a 1 per cent increase from the previous year 9/18/2018

2008 Canadian Energy Survey Trusts Trusts included in the 2008 Canadian Energy Survey decreased from 32 to 24 as a result of merger and acquisition in 2007 Total market capitalization of the trusts in the survey decreased to $60 billion, a decline of 6 per cent from the prior year The average cash flow per share for conventional trusts has increased to $3.42 in 2007 from $3.39 in 2006 due mainly to the higher crude oil and natural gas liquids prices Distributable income increased by 11 per cent 9/18/2018

2008 Canadian Energy Survey 2008 Outlook 9/18/2018

2008 Canadian Energy Survey 2008 Outlook For first quarter 2008, crude oil prices have continued to be strong Commodity prices are expected to remain at high levels for 2008 given projected growth in Asia and continued and escalating geo-political unrest in certain OPEC nations The pressures of rising costs, a strong Canadian dollar and the commitment to manage environmental concerns are impacting earnings We are an energy reliant society, therefore we will see continued exploration and development by companies of all sizes Long term - the impact of proposed spending in the energy industry will reach across the entire country and will provide benefits to many 9/18/2018

Thank you. John Williamson +1 403 509 7507 john.m.williamson@ca.pwc.com © 2008 PricewaterhouseCoopers. All rights reserved. PricewaterhouseCoopers refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers. PwC 9/18/2018