canadian oil & gas trusts group 4 owen hosford nick morneau parry pasricha angela meng
TRANSCRIPT
![Page 1: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/1.jpg)
Canadian Oil & Gas Trusts
Group 4 Owen HosfordNick MorneauParry PasrichaAngela Meng
![Page 2: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/2.jpg)
Agenda
• Canadian Oil & Gas Trusts
• Companies:
Canadian Oil Sands Trust
![Page 3: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/3.jpg)
INCOME TRUSTS
![Page 4: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/4.jpg)
What Are Income Trusts?• Corporate Trust Structures: - Entities that direct royalties or income to trust
holders - Payments from interest, royalty or lease
• Benefits: - Legally bypass corporate taxation (eliminates
double tax) - Allows for larger distributions
• Analysis: - Attractive for their high yields - Interest rate sensitive; inverse relationship
between interest rates and share price
![Page 5: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/5.jpg)
Income Trusts
![Page 6: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/6.jpg)
Evolution of Income Trusts
• Emerged in 1987 as ‘Royalty Trusts’
• Created to spur growth in Canada’s energy sector
• Four main Trust types
- REITS
- Business Trusts
- Energy Trusts
- Power & Pipeline
• By 2006, it had become a $200 billion industry
![Page 7: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/7.jpg)
October 31st 2006• “Tax Fairness Plan” applied to all trusts by Dec31st 2010
• Reduce tax avoidance & tax burden and increase Canadian
government revenues
- Loss of $300 federal taxes annually
- Loss of $300 provincial taxes annually
• Income Trust index plunged 20%
![Page 8: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/8.jpg)
Income Trusts Today
![Page 9: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/9.jpg)
Implications of Conversion Does it affect all Income Trusts?
• Real estate income trusts and mutual fund income trusts are not affected.
Will the Payouts change?
• Payouts to shareholders will be taxed at a 34% rate (31.5% starting in
2011) at the corporate level.
• Corporations will reduce their payout to account for the corporate taxes.
Will the prices of these securities dip?
• Current prices have the cost of the conversion built into it.
Benefits of the conversion?
• Flexibility of issuing shares more easily – like a corporation.
![Page 10: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/10.jpg)
ENERGY TRUSTS
![Page 11: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/11.jpg)
Energy Trusts
• Set up as a royalty trusts; royalties from production are distributed as dividends
• Profits are not taxed at the corporate level
• Key Driver is the Prices of Oil and natural gas
![Page 12: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/12.jpg)
S&P 500 vs Capped Energy Trust (1yr)
![Page 13: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/13.jpg)
S&P 500 vs Capped Energy Trust (5yr)
![Page 14: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/14.jpg)
Income Trust vs Energy Trust (1-yr)
![Page 15: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/15.jpg)
Income Trust vs Energy Trust (5-yr)
![Page 16: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/16.jpg)
OIL
![Page 17: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/17.jpg)
Petroleum Value Chain
• UpstreamExploration and Production
• MidstreamPipeline, Transportation, Storage
• DownstreamRefining, Marketing, Retailing
![Page 18: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/18.jpg)
![Page 19: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/19.jpg)
Oil Price Trend
Dow Jones vs. Oil Price
Price of Oil
![Page 20: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/20.jpg)
Oil Price Trend
![Page 21: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/21.jpg)
Crude Oil Uses• Bitumen for roads
• Roofing
• Fuel for ships and factories
• Lubricating oils, waxes,
polishes
•Diesel fuel
•Jet fuel
•Petrol
•Chemicals
•Liquefied petroleum gas
•Others include plastics
(Ethylene and propylene), …
![Page 22: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/22.jpg)
Proven Oil Reserves
![Page 23: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/23.jpg)
Canadian Oil & Gas
![Page 24: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/24.jpg)
• Main production occurs in Alberta ; Primarily in upstream operations
• Seventh largest oil producing country
• In 2009, it produced an average of 2.75M b/d
- 45% conventional crude oil
- 49.5% bitumen from oil sands
- 5.5% natural gas wells
• 1.7M b/d (65%) , was exported to USA
Canadian Oil & Gas
Cum. Rank Name Forbes
Rank
Rank among
oil compa
nies
Sales (bns USD)
Assets (bns USD
)
Forbes Market Value (bns USD)
1 Suncor 159 21 24.30 65.17 45.59
2 Canadian Natural Resources
275 29 9.67 39.13 37.24
3 Encana 279 30 11.11 33.83 25.35
4 Husky 304 34 14.28 25.08 21.92
5 Enbridge 329 36 11.89 26.87 17.07
6 Cenovus Energy
442 42 10.14 20.55 18.42
7 Talisman Energy
557 48 6.19 22.53 18.71
8 Nexen 611 54 5.54 21.84 11.89
![Page 25: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/25.jpg)
• Six billion barrels of oil located outside the oil sands
- Alberta 39% - Newfoundland 28% (offshore ) - Saskatchewan 27%
• Offshore Newfoundland and Labrador transport crude oil to markets by tanker.
• In Western Canada, oil is transported by pipelines from the production facility to refineries where it is upgraded into gasoline, heating oil and jet fuel.
Canadian Conventional Oil Reserves
![Page 26: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/26.jpg)
• Refers to light, medium and heavy hydrocarbons
• Light oil can flow naturally to the surface
- extracted from the ground using pumpjacks.
• Pumpjacks are also used to remove heavy oil from the ground.
• Cheaper to produce. $5-10/barrel
Conventional Oil & Extraction
![Page 27: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/27.jpg)
UNCONVENTIONAL OIL
![Page 28: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/28.jpg)
Oil Sands (Heavy Oil)• Oil Sands: Combination of clay, sand, water,
and bitumen
• Extracting Bitumen from tar sands is more complex than conventional oil recovery.
• Strip mining or open pit techniques, or the oil is extracted by underground heating with additional upgrading.
![Page 29: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/29.jpg)
Separating the Bitumen • Oil sands recovery processes include• extraction and separation systems
• Separate bitumen from the clay, sand, and water that make up the tar sands.
• Bitumen also requires additional upgrading
• before it can be refined.
• Dilution with lighter hydrocarbons to make it transportable.
• 75% bitumen recovery. Process is water and energy intensive.
• Additional $20/barrel to upgrade the bitumen
![Page 30: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/30.jpg)
Methods of Extraction – Strip Mining• Surface Mining: Approximately $27/barrel (includes primary bitumen
extraction)• Just 10 - 20 per cent of the oil sands are recoverable through open-pit mining.• Use large hydraulic and electrically powered shovels to dig up tar sands and
load them into trucks that can carry up to 320 tons of tar sands per load.• 2 tons of oil sands = 1 barrel of oil
![Page 31: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/31.jpg)
In Situ Methods of Extraction
.• In situ techniques apply heat or solvents to heavy oil reservoirs beneath the
earth. Bringing it to the surface through pipes
• Ones which work best in the oil sands use heat. Steam injection has been the
favoured method
• In situ methods are more expensive; approx $36-$40/ barrel to break even
• These techniques include;
-steam injection (Cyclic Steam Stimulation)
- solvent injection
- firefloods
• Some of these extraction methods require
large amounts of both water and energy (for
heating and pumping).
• SAGD – Steam Assisted Gravity Drainage
![Page 32: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/32.jpg)
Oil Sand Projects
![Page 33: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/33.jpg)
Future for Oil in Canada
![Page 34: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/34.jpg)
NATURAL GAS
![Page 35: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/35.jpg)
Natural Gas • Natural gas when burned it gives off energy with few
emissions.• Found in deposits that are 1 to 2 miles below the earth's crust.• Consists primarily of methane, but includes ethane, propane,
butane and pentane• Before natural gas can be used as a fuel, it must undergo
processing to remove almost all materials other than methane We require energy constantly, to heat our homes, cook our food, and generate electricity. It is this need for energy that has elevated natural gas to such a level of importance in our society, and in our lives.
![Page 36: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/36.jpg)
Uses for Natural Gas Natural gas has many uses, residentially, commercially, and industrially
• Furnaces• Water Heaters• Stoves/Ranges• Transportation • Heavy-duty service vehicles• Input to manufacture pulp
and paper, metals, chemicals, stone, clay, glass
• Process certain foods. • Treat waste materials
There are over 120,000 natural gas vehicles operating on American roads.
![Page 37: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/37.jpg)
Natural Gas Reserves
![Page 38: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/38.jpg)
Natural Gas Production
![Page 39: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/39.jpg)
Natural Gas Price Trend
![Page 40: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/40.jpg)
Types Natural Gas
![Page 41: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/41.jpg)
Unconventional Forms of Natural Gas • Hydraulic fracturing is the process of
pumping a fluid or a gas down a well, many hundreds or thousands of metres below ground,
• The pressure this creates causes the surrounding rock to crack, or fracture
• When the pumping pressure is relieved, the water disperses leaving a thin layer of the sand to prop open the cracks
• This layer acts as a conduit to allow the natural gas to escape from tight formations and flow to the well so that it can be recovered
![Page 42: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/42.jpg)
Canadian Natural Gas & Outlook• Canada is the world’s third largest producer; average annual production of 6.4
trillion cubic feet
• Producing regions are concentrated primarily in the western provinces (B.C., Alberta and Saskatchewan)
- offshore fields in Canada’s Maritimes - minor production in Ontario and Northern Canada.
![Page 43: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/43.jpg)
TRANSPORTATION
![Page 44: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/44.jpg)
Transportation• Pipelines are necessary to transport raw materials from their
source to refineries and gas processing facilities and then to market.
• Pipelines provide a safe, economical and constant flow of crude oil, natural gas and petroleum products
• Cheaper than shipping and driving
• 580,000 km of pipeline in Canada
• 2.7 million barrels of crude oil per day travel through Canada’s crude oil pipeline network.
• 15.1 billion cubic feet of natural gas per day travel through Canada’s natural gas pipeline network.
• Revenues are generated from various type of usage contracts, example “take-or-pay” contracts
![Page 45: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/45.jpg)
Transportation• Pipeline costs depend on factors such as: -type of pipe -type of coating -length of pipeline -diameter of pipe -Environment and -terrain
• Cost calculations based on cost per pipe diameter per distance to estimate pipeline project costs.
• For example, $1,000 per millimetre diameter per kilometre. A 50-kilometre system consisting of 50 millimetre pipe may be roughed out as:
• 50 millimetres x 50 kilometres x $1,000 per kilometre = $2.5 million/km
![Page 46: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/46.jpg)
Transportation• Pipeline success fundamentally
dependent on oil demand/price
• Key Factors:- Human resources intensive- Capital intensive- Highly regulated
• Short Term Outlook: - pipeline growth to the west coast. Serve Asian
demand
• Long Term Outlook: - decline as alternative energies are sought
![Page 47: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/47.jpg)
![Page 48: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/48.jpg)
Company Snapshot
![Page 49: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/49.jpg)
18-Month Total Return
![Page 50: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/50.jpg)
1 year Vs. S&P Capped Energy Trusts
![Page 51: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/51.jpg)
5 year Vs. S&P Capped Energy Trusts
![Page 52: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/52.jpg)
Dividend History
Year Annual Dividend Declared
2010 1.56 at current rate
2009 2.04
2008 4.08
2007 4.08
![Page 53: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/53.jpg)
Company Overview• Long Term Debt $2.5 Billion
• 2010 Production averaged 164,087 boe per day
60 percent to liquids and 40 percent to natural gas
• 2010 Development Budget $0.9 – $1.0 billion
• Forecast 2011 Production 172,000 – 177,000 boe/d
• 2011 Development Budget $1.0 – $1.2 billion
• #1 Producer of Light & Medium oil in Western Canada
• 7 million acres of land base
![Page 54: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/54.jpg)
Production
Current Production: 164087 Boe/d
![Page 55: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/55.jpg)
Reserves
Proven + Probable Reserves: 687 mBoe Reserve Life: 11.1 years
![Page 56: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/56.jpg)
Relative Market Position
![Page 57: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/57.jpg)
Sector Decline
![Page 58: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/58.jpg)
Areas of Operation
![Page 59: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/59.jpg)
Development Cycle
![Page 60: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/60.jpg)
Cardium Amaranth Colorado CarbonatesRecoverable Resource 400-800mmboe 100-180mmboe 75-100mmboe 100-250mmboe
Operated wells 24 56 52 16
Drilled wells 42 77 69 28
2011 Expected wells 90-110 80-110 65-80 30-40
Economics/well
F&D $15-17/boe $15-17/boe $16-18/boe $15-20/boe
Cap Eff $25-27k/boe/d $21-23k/boe/d $28-30k/boe/d $25-28k/boe/d
IRR 40-60% 60-80% 70-80% 70-90%
NPV (10%discount rate) $2.2-2.7mm $1.2-1.5mm $2.1-2.4mm $3.5-4.2mm
Project Economics
![Page 61: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/61.jpg)
Near-Term Expansion
![Page 62: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/62.jpg)
Finding & Development Costs
![Page 63: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/63.jpg)
Drilling Technology
![Page 64: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/64.jpg)
Cost Efficiencies
![Page 65: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/65.jpg)
Operational Strategy
• Capital budget of approximately $800 million necessary to maintain current production levels
• Focus funds to increase pace of development in key play areas – anticipate $200 to $400 million for organic growth
• Timing for conversion at year-end 2010• Set dividend with objective to remain within funds flow for
sustaining capital, growth capital and dividend• Guidance for 2011 has been set at $1.0 - $1.2 billion capital
and average daily production of 172,000 – 177,000
![Page 66: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/66.jpg)
Financial Strategy
• Focus on oil upside• Protect capex vs. distribution• Countercyclical foreign exchange• Balance sheet strength
• Current Hedges• FX @ $1.06 to match 2011 debt obligation• 35% of 2011 production hedged between $80 -
$92
![Page 67: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/67.jpg)
• William E. Andrew(CEO) since 2005– Former President
until 1995-2008– On the Board of
Directors• Professional Engineer
with 35 years of oil and natural gas industry experience & 18 years with Penn West.
• Education– Engineering
Diploma (UPEI)– BEng (UNS)
Murray R. Nunns President & COO Previously on the
BOD Professional
Geologist with 30 years of oil and gas experience
Education BEng (UWO)
Todd Takeyasu Senior Vice
President & CFO 25 years of oil and
natural gas industry and public accounting experience.
Joined Penn West in 1994
Education BBA (University of
Lethbridge) CA
![Page 68: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/68.jpg)
Q3 Summary• Funds flow in the third quarter was $267 million
compared to $349 million in the third quarter of 2009. The decline was primarily due to lower realized risk management gains.
• Net loss was $25 million compared to a net income of $7 million in the third quarter of 2009. The decrease in net income in 2010 was mainly due to lower realized risk management gains and unrealized foreign exchange gains.
• Netback was $23.13 per boe compared to $25.91 per boe in the third quarter of 2009. The decline was primarily due to lower realized risk management gains.
![Page 69: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/69.jpg)
Q3 Summary
![Page 70: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/70.jpg)
Consolidated Balance Sheet
![Page 71: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/71.jpg)
Q3 Income Statement
![Page 72: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/72.jpg)
Cash Flows Statement
![Page 73: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/73.jpg)
Profitability vs. Oil Price2009 2008 % Change
![Page 74: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/74.jpg)
Business Risks
• Commodity Price Risk• Foreign Currency Rate Risk• Credit Risk• Interest Rate Risk• Liquidity Risk• Environmental & Climate Change Risk
![Page 75: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/75.jpg)
Sensitivity Analysis
![Page 76: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/76.jpg)
Recommendation
HOLD
![Page 77: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/77.jpg)
![Page 78: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/78.jpg)
Company Snapshot
![Page 79: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/79.jpg)
1 year Vs. S&P Capped Energy Trusts
![Page 80: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/80.jpg)
5 year Vs. S&P Capped Energy Trusts
![Page 81: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/81.jpg)
Overview
• established in 1997, owns and operates energy infrastructure in in western Canada, the United Kingdom, Germany and Ireland
• Long lived assets located near demand.• Long term risk reducing contracts.• Focused on organic growth but open to strategic acquisitions.
![Page 82: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/82.jpg)
![Page 83: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/83.jpg)
Cash Distribution Growth
![Page 84: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/84.jpg)
Growth
![Page 85: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/85.jpg)
Fundamentals
![Page 86: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/86.jpg)
Fee Based Contracts - a fixed fee is tied to usage.- volume risk.Commodity Based Contracts -Uses a variable price based on the commodity sale value less most costs.- Used for profit sharing.-Volume and commodity risks.
Cost of Service Contracts - Most stable- Provides for recovery of operating costs and a fixed capital charge.- Minimal volume risk and no commodity price exposure
Revenues & Contracts
![Page 87: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/87.jpg)
Oil Sands Play
Forecast revenues from expansion represent 60% of cash flow generated in 2009.
Company expects oil sand segment to make up 50% of revenues in the future.
![Page 88: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/88.jpg)
Cold Lake (85% ownership)• Transports diluted bitumen • Governed by Cold Lake transportation services agreement
• Cost of service contract• Defined fee linked with volume transported• Minimum ship or pay of 27.8 million until Dec.
2011• After 2011 Shippers have option to uses
alternative
Corridor• Transports diluted bitumen • Governed by Corridor firm services agreement
• Long-term ship-or-pay contract• Modified cost of service contract• Extends to 2029.• Covers costs and a return on equity, which is linked to treasury bond yields.
Polaris• Originally part of corridor pipeline.•Connecting pipeline to Kearl and Sunrise oil sands projects.• 20+ year cost of service contract for shipping a committed 90,000 b/d.
Cold Lake Contract Structure
![Page 89: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/89.jpg)
Three facilities:• Cochrane• Empress V (50% 0wnership)• Empress II
Recovers Propane, Butane, Propane-plus, and ethane.
• Largest Ethane producer in Canada.
All three types of contracts in use with an average of 9 years remaining.
Strong customer base
Natural Gas Extraction
![Page 90: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/90.jpg)
Conventional Oil Pipelines• 3800 km of pipelines linking 143 producers.• Short term contracts with fixed tolling and no volume commitments.• Three major segments
• Oil gathering• Hardisty south transmission• Midstream Marketing
Bow River• 128km of new pipeline complete at the end of 2009.• Ships crude oil from Hardisty to refining markets in the US, under a 7 year take or pay agreement.
![Page 91: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/91.jpg)
Bulk Liquid Storage Segment
• Simon Storage wholly owned subsidiary.
• Europe based storage system with capacity to store 8 million barrels.
• Fee based revenue structure.
Revenue breakdown• 60% from lease
arrangements• 40% from throughput and
services • Many contracts expire in 5
years or less• Historically stable customer
base.
![Page 92: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/92.jpg)
David Fesyk - Director, President and CEO• Held position since 1997.• Bachelor of Science from Arizona
State University.• Master of Business
Administration from University of Calgary.
• Held executive positions in multiple Oil and gas related companies.
• Also worked for multiple geological consulting firms.
Management
![Page 93: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/93.jpg)
William van YzerlooChief Financial Officer
• Held position since April 2004.
• VP Corporate development 2003-2005.
• 17 years of executive experience.
• Certified general accountant since 1986.
• Attended the University of Idaho Energy Industry Leadership program.
Jeffery MarchantVP Oil Sands Development
• With company since 1997.
• Appointed VP Corporate planning in 2006.
• Appointed VP OSD 2007.
• Bachelor of Chemical Engineering from University of Alberta.
• Professional Engineering designation and member of APEGGA.
Paul MurphyVP NGL Extraction
• Held position since 2004.
• Over 25 years natural gas exploration, processing, extraction and transmission.
• Held multiple management positions relating to gas transmission and processing.
• Bachelor of Science in Geology from U of Alberta.
• Member of APPEGGA.
![Page 94: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/94.jpg)
Performance
![Page 95: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/95.jpg)
Annual Balance Sheet
![Page 96: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/96.jpg)
Quarterly Balance Sheet
![Page 97: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/97.jpg)
Annual Income Statement
![Page 98: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/98.jpg)
2008 NI per unit: $0.66
Quarterly Income Statement
![Page 99: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/99.jpg)
Annual Cash Flow Statement
![Page 100: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/100.jpg)
Quarterly Cash Flow Statement
![Page 101: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/101.jpg)
BUY
Recommendation
![Page 102: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/102.jpg)
![Page 103: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/103.jpg)
Company Snapshot
![Page 104: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/104.jpg)
UNIT TRADING ACTIVITY
• Toronto Stock Exchange (symbol COS.UN) • market capitalization of approximately $12
billion with 484 million Units outstanding
![Page 105: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/105.jpg)
Distribution and Returns
![Page 106: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/106.jpg)
1 Year Movement
![Page 107: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/107.jpg)
5 Years Movement
![Page 108: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/108.jpg)
Moving Average
![Page 109: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/109.jpg)
COS.UN vs. S&P/TSX Energy Trust
![Page 110: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/110.jpg)
COS.UN vs. Price of Crude Oil
![Page 111: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/111.jpg)
Background• Generates income from a 36.74% share of Syncrude oil
operation in the Alberta– Main operator of Syncrude Oil
• Organized as an Open-Ended Investment Trust
• Acts as a middleman between oil producers and pipeline
operators– Takes possession of the oil and markets it to pipelines
![Page 112: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/112.jpg)
Syncrude Oil• History:
– Syncrude was incorporated in December 1964– Site preparations at Mildred Lake, AB
• Product: – Syncrude currently produces a single, high-quality light synthetic crude oil – The final product is sent by pipeline to three Edmonton area refineries and to
pipeline terminals which ship it to refineries in Canada and the United States– Each Syncrude Participant receives its share of production in kind and is
responsible for the subsequent marketing
• Ownership
![Page 113: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/113.jpg)
Oil Sands Lease Map
![Page 114: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/114.jpg)
Production Syncrude Canadian Oil Sands, net*
Total (million bbls)
Daily average (bbl/d)
Total (million bbls)
Daily Average (bbl/d)
YTD 2010 85.6 281,600 31.5 103,500
YTD 2009 102.2 280,000 37.5 102,900
YTD 2008 105.8 289,100 38.9 106,200
based on a 36.74% Syncrude working interest.
![Page 115: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/115.jpg)
Marketing• Markets its synthetic crude
oil production to refineries in both Canada and the United States
• Responsible for the transportation beyond Edmonton and delivery directly to the refinery
• customers take delivery in Canada and are responsible for the transportation costs
![Page 116: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/116.jpg)
Expansion Plan• Unlock production potential in the existing upgrading facility•Build bitumen supply that result in volume growth from 2015 to 2020• Capitalize on investments already made in the existing plant• Provide Syncrude with operational flexibility andCanadian Oil Sands with the ability to market multiple
![Page 117: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/117.jpg)
Marcel R. Coutu - President and Chief Executive Officer
• Wholly owned Canadian Oil Sands Limited
• Chairman of the Board of Syncrude Canada Ltd. and chairs the Syncrude Joint Venture CEO and Management Committees
• H.B.Sc. in geology from the University of Waterloo (1976), an MBA from the University of Western Ontario (1980)
Management
![Page 118: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/118.jpg)
Donald J. Lowry - Chairman of the Board (Oct 1,2009)
• He currently is the President and Chief Executive Officer of EPCOR Utilities Inc.
• B.Comm. (Hons) and MBA from the University of Manitoba
• Graduate of the Harvard Advanced Management Program and the Banff School of Management.
![Page 119: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/119.jpg)
Ryan M. Kubik - Chief Financial Officer(April,2007)
• He also represents Canadian Oil Sands as Chair of the Syncrude Audit and Business Controls Sub-Committee.
• He was in senior finance positions with EnCana Corporation, PanCanadian Energy and PricewaterhouseCoopers
• CA and CFA designations and a Bachelor of Commerce degree from the University of Calgary.
![Page 120: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/120.jpg)
Trevor R. Roberts - Chief Operations Officer (2005)
• He also represents Canadian Oil Sands on the Syncrude Management Committee and Chairs the Syncrude Growth Development Planning and Major Projects Sub-Committee.
• He was Senior Vice President, Operations with Suncor Energy
• Bachelor of Chemical Engineering degree from the University of Waterloo
![Page 121: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/121.jpg)
Financial Strategy
• Maintain a strong financial position. • Mitigate impact of trust taxation through tax
pools, anticipated to total $2 billion by the end of 2010.
• Convert to a corporation on or about December 31, 2010.
• Further develop plans to add bitumen supply from Aurora South and debottleneck the upgrader.
![Page 122: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/122.jpg)
Sensitivity Analysis
![Page 123: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/123.jpg)
Third Quarter Highlights 2010
![Page 124: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/124.jpg)
SUMMARY OF QUARTERLY RESULTS
![Page 125: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/125.jpg)
Annual Balance Sheet
![Page 126: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/126.jpg)
UnitholderEquity
![Page 127: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/127.jpg)
Quarterly Cash Flow Statement
![Page 128: Canadian Oil & Gas Trusts Group 4 Owen Hosford Nick Morneau Parry Pasricha Angela Meng](https://reader035.vdocuments.net/reader035/viewer/2022062321/56649e2d5503460f94b1dccb/html5/thumbnails/128.jpg)
BUY
Recommendation