North American Natural Gas Markets July 27 th 2009 J. Cameron Bailey CFA President and Chief Executive Officer

FFEI: TSX July 27, 2009 Historical Decline Rates US Production Declining by 35% per annum

FFEI: TSX July 27, 2009 Natural Gas Directed Rig Count The drop in rig count will soon have a greater impact on production We estimate up to a six month delay of well drilling top producing a well. Source: Baker Hughes

FFEI: TSX July 27, 2009 US Production US Natural Gas Production - Declining Source: Bentek

FFEI: TSX July 27, 2009 Canadian Gas Drilling Rig Count Acquire and Exploit Lowest levels witnessed in 10 years

FFEI: TSX July 27, 2009 Canadian Gas Production - Declining Acquire and Exploit Canadian gas production is declining leaving less for exports to the US

FFEI: TSX July 27, 2009 US Wellhead Prices vs US Natural Gas Rig Count Acquire and Exploit

FFEI: TSX July 27, 2009 The Growing US Supply Deficit

FFEI: TSX July 27, 2009 Forecast Gas Storage Levels – 700 Rigs Operating Acquire and Exploit 2.7 TCF Storage Not enough gas to fill storage

FFEI: TSX July 27, 2009 Natural Gas - Investment Cycle Concept Land Acquisition Permits Rig Count – Baker Hughes Rig Count Completions Pipeline Construction & Tie-in Production – Daily Estimates Acquire and Exploit Six Month Delay?

FFEI: TSX July 27, 2009 Delayed Production Response – Natural Gas Drilling Activity in Texas Acquire and Exploit New well permits are down 73% but there still remained an inventory of Barnett Shale wells to complete

FFEI: TSX July 27, 2009 Delayed Production Response – Natural Gas Drilling Activity in Barnett Shales Acquire and Exploit

FFEI: TSX July 27, 2009 Shale Gas Plays – Texas Barnett Shale 10,539 Wells on Production since % of Texas production 2008 Drilling Permits issued were 4,145 representing 75% of all drilling activity in Texas Well permits have decreased 73% YOY Texas Production represents 33% of US total production. Acquire and Exploit

FFEI: TSX July 27, 2009 Texas - Natural Gas Production Acquire and Exploit

FFEI: TSX July 27, 2009 Total US Demand More affected by weather than recession Source: Bentek 2009

FFEI: TSX July 27, 2009 Recession and Demand? – Industrial Demand Acquire and Exploit Industrial demand is off 1.3 bcf/d which is 2.7% of total demand

FFEI: TSX July 27, 2009 Recession and Demand? – Power Demand Acquire and Exploit The loss of Industrial demand has been more than made up by the increase in Power demand

FFEI: TSX July 27, 2009 LNG and Canadian Imports Acquire and Exploit