1. www.ir.gov.sk.ca The Saskatchewan Natural Gas Advantage Availability of Crown Mineral Rights Ed Dancsok, P Eng., P Geo. Director Geology & Petroleum Lands Branch

2. www.ir.gov.sk.ca Outline 1.“The Lay of the Land” 2.Disposition Types 3.Gas Areas 4.Land Values

3. www.ir.gov.sk.ca MINERAL RIGHTS IN SASKATCHEWAN (SURVEYED AREA) CLASS AREA PERCENTAGE Millions of Ha. FREEHOLD 7.1 22% DOMINION CROWN 1.0 3% PROVINCIAL CROWN 24.3 75% Total 32.4 100 DISPOSITION TYPES - SPECIAL EXPLORATORY PERMITS - EXPLORATION LICENCES - LEASES

4. www.ir.gov.sk.ca Crown Oil and Gas Rights (Dispositions) March 31, 2004 March 31, 2005 NumberHectaresNumberHectares Leases19,3964,588,35120,1604,703,556 Exploration Licences445960,606347787,256 Special Exploratory Permits13734,81414821,051 Lease of Space Agreements2526,49928 26,547 Total19,8796,310,26820,5496,338,410

5. www.ir.gov.sk.ca Oil Shale/Oil Sands Dispositions

6. www.ir.gov.sk.ca CROWN DISPOSITIONS

7. www.ir.gov.sk.ca SE SASK

8. www.ir.gov.sk.ca SW SASK

9. www.ir.gov.sk.ca

10. Special Exploratory Permits SIZE:UP TO 200,000 HECTARES (OVER 770 SECTIONS) TERM:5 YEARS - NO EXTENSIONS RENTAL:25 CENTS PER HECTARE PER YEAR COMMITMENT:FIRST 2 YRSAT LEAST $2.00 PER HECTARE LAST 3 YRS$4.00 PER HECTARE *TO BE SPENT ON APPROVED EXPLORATION ACTIVITY (DRILLING OR SEISMIC) *** TECHNICAL MATERIAL MUST ACCOMPANY SEISMIC CLAIMS *** *DRILL A MINIMUM OF ONE WELL. IF PERMIT EXCEEDS 100,000 HA THEN DRILL TWO WELLS EXPECTATIONS:TO CONVERT 25% TO A LEASE ** NO PRODUCTION WITHOUT GOING TO LEASE **

11. www.ir.gov.sk.ca Lease Selections *No discovery* 25% of permit area Blocks no larger than 3 x 3 sections Blocks must be separated by at least one mile Blocks can touch at corners 60 days after permit termination to make selections

12. www.ir.gov.sk.ca Lease Selections *Discovery* Can be made any time during term of permit 25% of permit area Any configuration for zone of discovery Must demonstrate commercial discovery Can have up six months to make selection Normal leasing on remaining zones

13. www.ir.gov.sk.ca CROWN DISPOSITIONS

14. www.ir.gov.sk.ca Exploration Licences SIZE:FROM 1 TO 36 SECTIONS TERM:2 YEARS FOR MOST OF THE PROVINCE 3 TO 4 YEARS FOR NORTHERN AREAS RENTAL:$1.75 PER HECTARE COMMITMENT:TO DRILL A WELL LEASE SELECTION:SECTIONS OF LAND EARNED ON THE BASIS OF DEPTH OF WELLS DRILLED. RIGHT TO EXPLORE AND PRODUCE OIL OR GAS *

15. www.ir.gov.sk.ca Leases SIZE: UP TO 3,173 HECTARES (49 QUARTERS) (FROM PERMITS ONLY) Leases from sales are usually one section or less, however, postings of up to four sections will be accepted. TERM: 5 YEAR PRIMARY TERM Then continuance as long as production is obtained or other special conditions prevail (e.g. Gas area) ***Complete continuance guidelines located on website at: Land Tenure/Resource Assessment RENTAL: $3.50 PER HECTARE

16. www.ir.gov.sk.ca Criteria Required Gas Area Designations Poor market conditions Poor economics due to low prices Lack of accessible pipeline facilities Environmental restrictions Resource conservation restrictions

17. www.ir.gov.sk.ca LANDSALE VALUES ($/HECTARE)

18. www.ir.gov.sk.ca LAND PRICE COMPARISON 2005 LANDSALE AVERAGES Saskatchewan -$275/ha. Alberta -$609/ha. 1 British Columbia -$823/ha. 1 ***The REAL Saskatchewan Advantage!*** 1 Nickel’s DAILY OIL BULLETIN

19. www.ir.gov.sk.ca

20. Landsale Notices and Results Go to: www.ir.gov.sk.ca/publicofferings