1. Manitoba 2011-12 Oil Activity Review Bismarck, ND May 22, 2012 20 th Williston Basin Petroleum Conference

2. Manitoba 2011-12 Oil Activity Bakken – Three Forks Play Lower Amaranth (Spearfish) Play Public Concerns Record Breaking Year

3. Manitoba Drilling Activity

4. Manitoba Completion Activity

5. MANITOBA OIL FIELD MAP >6 wells drilled per Township 0 wells drilled per Township 1-5 wells drilled per TownshipOil Field Boundaries Producing oil wells (colour corresponds to Period in Strat. column) Oil shows (colour corresponds to Period in Strat. column) (Where Devonian oil show occurs in Devonian producing area, show is deeper than surrounding producing wells).

6. Manitoba’s Top Drillers – 2011 578 wells drilled by 28 different companies

7. Manitoba Daily Oil Production

9. Initial Oil Production (Oil per Hour (m 3 )) Data presented in NAD 83 Zone 14 co-ordinates.

10. Bakken TVD (m) Subcrop edge of the Bakken Formation BAKKEN -THREE FORKS PRODUCERS 400 600 800 1000 1200 1300

11. BAKKEN -THREE FORKS PRODUCERS Legend Bakken Producing Wells Oil Field Boundaries Subcrop edge of the Bakken Formation Bakken TVD (m)

12. Daily Production 17,325 BOPD Avg Waterflood Projects 12 Daly Sinclair Field Bakken- Three Forks Completions

13. LOWER AMARANTH DEVELOPMENT Triassic Lower Amaranth Wells Lower Amaranth / Mississippian Wells Mississippian Mission Canyon Wells Pool Boundaries Field Boundary Waskada Field Pierson Field

14. WASKADA FIELD DEVELOPMENT Triassic Lower Amaranth Wells Mississippian Mission Canyon Wells Pool Boundaries Field Boundary Plotted on the Dominion Land Survey System Grid

15. Common Public Concerns about Fracing Fracing can contaminate groundwater Fracing uses a lot of water Frac fluids are not properly managed Fracing causes earthquakes Frac fluid additives are toxic

16. Fracing in Manitoba Fracing in Manitoba is regulated under The Oil & Gas Act Fracing has been used to increase oil production from Manitoba wells for over 60 years There is currently no shale gas development in Manitoba Manitoba has shale gas potential Natural gas prices and other economic factors make near-term shale gas development in Manitoba unlikely

17. Protection of Groundwater There has never been a known case where fracing has resulted in groundwater contamination in Manitoba. In Manitoba, oil reservoirs are located 400 – 1000 metres below groundwater aquifers. This separation distance coupled with the regulatory requirements for the drilling, construction and operation of oil wells minimizes the risk of groundwater contamination from fracing.

18. Frac Fluid Management Frac fluids in Manitoba are managed from cradle to grave Frac fluids are stored in tankage before being injected into a well Frac fluids produced back from a well are disposed of into an approved underground disposal zone using a disposal well permitted for that purpose Closed loop approach minimizes potential adverse environment impacts associated with fracing

19. Fracing - Water Use Oil industry water use in Manitoba is regulated Fracing operations in Manitoba use significantly less water than shale gas fracing in other jurisdictions. Average frac job in Manitoba uses 400 -700 cubic metres of water The average family of 4 uses 500 cubic metres of water a year

20. Fracing - Earthquakes Seismic activity potentially resulting from fracturing measures less than 3.5 on the Richter scale Richter Scale (worldwide): 2 or less 8,000 / day Not felt 2 – 2.91,000 / dayNot felt, recorded 3 – 3.949,000 / yearOften felt, rarely causes damage Note: Each level on scale is 10 x stronger than the previous level Damaging earthquakes reported in the news have 10,000 times more energy than earthquakes linked to fracing

21. Fracing – What’s Next Oil industry has been proactive in adopting new policies and procedures for fracing to address public concerns Petroleum Branch is reviewing adoption of new guidelines and regulations in Manitoba to ensure that fracing remains safe and public concerns are addressed Initiatives under review –Enhanced submissions requirements –Disclosure of frac fuid contents –Baseline water well testing –Collection of water source and usage date