1. THE INSIGHT BEHIND ENERGY SUCCESS 1 CALGARY LONDON HOUSTON THE INSIGHT BEHIND ENERGY SUCCESS The Energy Round Table 2006 Investment Drivers for Oil Sands Tom Ebbern Executive Managing Director Institutional Research

2. THE INSIGHT BEHIND ENERGY SUCCESS 2 Tristone Capital Inc. Full Service Global Energy Boutique Globally Positioned For Success in Energy  Calgary  Houston  London  3 Countries   100 People   Tristone Capital has main offices in Calgary, Houston and London  Tristone Capital is a fully integrated investment dealer that actively combines three primary advisory services: Capital Markets Institutional Research Institutional Sales Institutional Trading Asset Management Investment Banking Mergers & Acquisitions Strategic Advisory Equity Underwriting Fairness Opinions Valuations Property A&D Negotiated Sale Mid-Value Negotiated Land-Value Negotiated

3. THE INSIGHT BEHIND ENERGY SUCCESS 3 Drivers for Investors in Oil Sands  Long-term view for crude oil – fundamentals remain strong  Resource optionality  Increasing valuations and new players moving in (Total, Royal Dutch, Tech, China)  Competitive landscape for new projects – too much all at once?  Cost pressures have reduced or eliminated the benefit of higher prices  Synthetic or bitumen – where is the best return?  Growing differentiation of SCO

4. THE INSIGHT BEHIND ENERGY SUCCESS 4 Source: Tristone Capital Inc., Bloomberg, Investment Returns in Oil Sands  An index of oil sands (COS, OPC, SU, SYN, UTS, WTO) has increased 900% in the last 7 years (40% CAGR)

5. THE INSIGHT BEHIND ENERGY SUCCESS 5 Global Excess Capacity vs. Oil Prices  With virtually no surplus global production capacity, oil prices are expected to remain in the $60 range for many years Source: Tristone Capital Inc., Bloomberg,, EIA, IMF

6. THE INSIGHT BEHIND ENERGY SUCCESS 6 Global Refining Capacity  Excess global refining capacity has finally been used up – it means more capital is required to go from a resource in the ground to the end product Source: EIA, IEA, Oil & Gas Journal, Tristone Capital

7. THE INSIGHT BEHIND ENERGY SUCCESS 7 World Proved Oil Reserves  Investors are attracted to the enormous resource potential of the oil sands Source: Oil & Gas Journal Jan 1/06

8. THE INSIGHT BEHIND ENERGY SUCCESS 8 Alberta Oil Sands Land Sales – Very Little is Left Note: As of Aug 23 land sale Source: GeoScout

9. THE INSIGHT BEHIND ENERGY SUCCESS 9 Alberta Oil Sands Acquisition Prices Source: Company Reports  The value of undeveloped oil sands resources has increased significantly

10. THE INSIGHT BEHIND ENERGY SUCCESS 10 Proposed Mining Projects  Big growth plans – not likely to get done as currently planned Source: Company Reports

11. THE INSIGHT BEHIND ENERGY SUCCESS 11 Forecast Labour Market in Western Canada Source: Construction Owners Association of Alberta (COAA)  The system is already stressed at current levels of 15,000. How can we get to 30,000?

12. THE INSIGHT BEHIND ENERGY SUCCESS 12 Year over Year Forecast Labour Changes Source: Construction Owners Association of Alberta (COAA)  The reality is that project timing will get pushed back – we are already seeing it happen

13. THE INSIGHT BEHIND ENERGY SUCCESS 13 Forecast Scorecard – 2002 to 2006 Source: Company Reports, Tristone Capital  The oil sand industry has a history of over-promising which will get worse as the landscape becomes busier.

14. THE INSIGHT BEHIND ENERGY SUCCESS 14 Proposed In-Situ Projects Source: Company Reports  Impressive growth planned for thermal – with only two commercial SAGD projects currently running – we may see some surprises

15. THE INSIGHT BEHIND ENERGY SUCCESS 15 Cumulative Steam Oil Ratio Comparison Source: GeoScout  Mixed results from thermal projects are starting to add concern to investors

16. THE INSIGHT BEHIND ENERGY SUCCESS 16 Oil Sands Historical and Forecast Additions Cost Source: Company Reports  Costs have risen as fast as crude prices. Smaller projects (thermal without upgrading) have seen less cost pressure

17. THE INSIGHT BEHIND ENERGY SUCCESS 17 Mining & Upgrading Project Returns: Cost vs. Oil Prices (US$/b) Source: Tristone Capital  Costs have risen as fast as crude prices. Smaller projects (thermal without upgrading) have seen less cost pressure

18. THE INSIGHT BEHIND ENERGY SUCCESS 18 SAGD Project Returns: Costs vs. Oil Prices  Costs have risen as fast as crude prices. Smaller projects (thermal without upgrading) have seen less cost pressure Source: Tristone Capital

19. THE INSIGHT BEHIND ENERGY SUCCESS 19 Value Erosion  Long term crude forecast has increased 175% in five years, but rising costs – both capital and operating have eliminated the benefit to investors. Source: Tristone Capital

20. THE INSIGHT BEHIND ENERGY SUCCESS 20 Synthetic Crude Differentials to Edmonton Light Source: Company Reports, Tristone Capital  Differences in SCO quality (API, Cetane, Smoke Point, Sulphur etc) are becoming more important as SCO volumes increase.