Seal

The Company’s net bitumen reserves from in situ recovery projects increased from 28 million barrels in 2005 to 91 million barrels in 2006 due mainly to the addition of 68 million barrels from the acquisition of BlackRock. The majority of these additions are attributed to the Seal and Orion asset areas which contributed 28 million and 34 million barrels, respectively, to the year-end position.

Repairs to the Seal battery were complete following the June 30 fire.

Announced that a fire accident on its bitumen processing facility has been extinguished. Damage at the facility has been contained to up to 40% of the oil battery. Production rates decreased due to shut down of the damaged equipment. During the 1st Quarter 2006, drilled nine horizontal development wells on the Peace River block. Six of the nine wells have been put on production, four of the wells are producing approximately 500 barrels of oil per day each and the other two wells are each producing approximately 100 barrels of heavy oil per day. The other three wells drilled will be put on production in the next two weeks. Work continued on construction of an 18,000 barrel per day processing facility on the Peace River block with completion expected in the fourth quarter of 2006. Also a total of eight vertical stratigraphic test wells and three horizontal wells were driiled on the Northern and Cadotte blocks.