Good Good morning Update on Canadian Oil Sands and our Syncrude project 1
Presentation Presentation includes outlook for 2011 production and other forward-looking forward looking information, including without limitation, our future expansion plans Refer you to this notice that highlights the forward-looking…
COS COS is a unique investment vehicle and the definitive oil sands investment in our industry. These points highlight our investment merits and I will expand on each in the next few slides. 3
If you own oil sands for the exposure to WTI, we are: A pure crude oil investment Unlike many of our competitors, 100% of our production is upgraded to a light sweet crude oil As a result, we are one of the most highly correlated…
We We have intentionally positioned ourselves as an investment that is highly leveraged to crude oil prices. When oil goes up, we really benefit. This is the main reason why investors want to own us. II believe there is no other…
The The light heavy differential narrowed in 2008 but has since widened, which is more consistent with historic differentials. Syncrude production has been receiving strong premiums of 10 to 15 per barrel above WTI over the past several…
Our Our valuation relative to peers is competitive on a price to cash flow basis Perhaps on the low side when you consider our oil sands concentration and relatively lower risk profile. 7
COS COS has a 36.74% interest in the Syncrude joint venture. Syncrude is the largest producer of light, sweet synthetic crude oil from Canadas oil sands, and has been in operation since 1978. Each owner holds an undivided interest in…
Syncrude Syncrude is a responsible oil sands producer. We are committed to good environmental stewardship through the implementation of systems and programs that use resources efficiently and minimize effects on air, land and water.…
Furthermore Furthermore, Canada is an ethical producer of energy energy. Of the top ten countries with the largest oil reserves, Canada is the only liberal democracy. We compare very favourably to other oil producing regions when you…
Our Syncrude asset is a high-quality, long-life crude oil resource Leases cover some of the richest bitumen deposits in the oil sands All of our leases can be mined, which has important advantages Using proved technology with…
COS provides exposure to future crude oil prices through a very long resource life. During its 30 year history, Syncrude has produced over 2 billion barrels. Our independent reserve evaluator estimates that our proved plus probable…
Syncrude y is currently y operating p g at about 85% % of its integrated g design g capacity. p y There is a significant value opportunity in optimizing current operations to capture the remaining productive capacity. To date, all…
Syncrude Syncrude has struck a unique arrangement to help reach design capacity and optimize its capital project execution First, Imperial Oil, as a 25% owner in Syncrude, and its parent, Exxon Mobil have agreed to provide Syncrude with…
There e e is s a ssignificant g ca t ecoeconomic o cp prize e in reaching eac g des design g capac capacity. ty Costs are relatively fixed, so the incremental production would go largely to enhancing profitability Based on our…
Syncrude Syncrude has plans to grow capacity Bitumen productive capacity expected to grow by 50%, reaching 600,000 bbls/d before 2020. Plan to open undeveloped leases called Aurora South The The quality of the ore body across these…
Do Do not plan to construct a new greenfield upgrader for this bitumen while heavy/light spreads are narrow. Due to economically attractive debottlenecking opportunities existing in the upgrader in the form of coking capacity, most of…
By By the end of the decade, Syncrude is expected to have the capacity to produce 400,000 barrels per day of synthetic crude oil and 150,000 barrels per day of bitumen. We anticipate this production growth to have much less project…
Syncrude S ncr de is in investing esting in several se eral major projects o over er the ne nextt fe few years. ears OOurr costs are provided on this slide. The Syncrude Emissions Reduction project is a one-time environmental…
Here, H th the costs t outlined tli d on th the previous i slide lid are b broken k outt b by year. Of note, with the exception of 2011, this multi-year spending profile does not include investments in: Regular maintenance of…
This This schedule illustrates the planned timing for our major projects over this decade. Startup of the facilities is marked by the gold diamonds. 21
COS COS provides prudent and disciplined cash management. Intend to continue paying a quarterly dividend with the amount varying depending largely on crude oil prices and the investment cycle of Syncrudes projects. Our Syncrude asset…
We are in a very cyclical industry, which is why we have a history of paying a variable dividend. Crude oil prices are the most significant factor affecting dividends and capital expenditures are the next most significant. Our variable…
So, So, where do we stand today with our dividend relative to others Despite the variability in our dividend, we believe that, historically, we have generally provided an attractive yield when compared to other investments. It reflects…
Our Our strategy has delivered strong returns to date. We have outperformed most of our peers in the last 5 years; and We have outperformed all but one of our peers on a 10 year basis. Illustrates our commitment to delivering…
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