Good Good afternoon Update on Canadian Oil Sands and our Syncrude project 1
Presentation Presentation includes our outlook for 2011 production and other forward- 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 light g heavy y differential narrowed in 2008 but has since widened,, which is more consistent with historic differentials. The important point here is that all of our production is upgraded to light, sweet synthetic crude oil, so…
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
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.…
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 p provides exposure p to future crude oil p prices through g a very y long g resource life. During its 30 year history, Syncrude has produced over 2 billion barrels. Our independent reserve evaluator estimates that our proved…
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, ExxonMobil 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 Operating costs are relatively fixed, so the incremental production would go largely to enhancing profitability…
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. 19
COS COS has a prudent and disciplined financial plan. We 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 in the long-term. long term. COS has maintained value during the 5 year-period, unlike many of our peers, and has outperformed all but one of our peers on a 10-year basis.…
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