Reserves & Resources

Reserves

Reserves are a measure of the quantity of oil or gas that is estimated to be recovered from the assets an oil and gas producer owns. In Canada, we report our reserves on a proved plus probable basis at year end in accordance with National Instrument 51-101 based on evaluations from third party reserve engineers. As of December 31, 2010, we had 306 MMBOE of proved plus probable reserves, over 50% of which were crude oil and liquids. This represents a reserve life index of 10.7 years.

Reserves Summary (as at December 31, 2010)

Opportunity within our Portfolio

We also have a considerable amount of contingent resources associated with some of our assets. They are quantities of petroleum that are estimated to be potentially recoverable from known accumulations using established technology or technology under development, but are not commercially recoverable due to certain contingencies, including economic, legal, environmental, political or other factors. If these conditions or contingencies are clarified or removed then contingent resources would be expected to become reserves over time. It is also appropriate to classify estimated discovered recoverable quantities of oil or gas associated with projects in early evaluation stages as contingent resources.

In June 2011, we sold a portion of our non-operated assets in the Marcellus, reducing our contingent resource estimate in the region from 3.9 Tcf at the end of 2010 to 2.3 Tcf. We currently have best estimates of contingent resources on our Bakken, Marcellus and some waterflood assets, totaling over 500 MMBOE which is nearly double our booked reserves: