JACKPINE MINE

Royal Dutch Shell announced the successful start of production of a 100,000 barrels per day expansion of its oil sands operations in Alberta, Canada. The new Jackpine Mine will combine with existing production from the Muskeg River Mine to feed the Scotford Upgrader, which processes the oil sands bitumen – heavy oil – for refined oil products. Construction for an expansion of the Scotford Upgrader is underway, and will come on-stream in 2011. Shell Canada Energy is 60% owner and operator of the Athabasca Oil Sands Project along with Chevron Canada Limited (20%) and Marathon Oil Corporation (20%). Athabasca Oil Sands Project includes the Muskeg River Mine, Jackpine Mine and Scotford Upgrader.

The Phase 1 expansion is on track and is anticipated to begin operations in the 2010/2011 timeframe. The Phase 1 expansion includes construction of mining and extraction facilities at the Jackpine mine, expansion of treatment facilities at the existing Muskeg River mine, expansion of the Scotford upgrader and development of related infrastructure.

Western Oil Sands announced its participation in a feasibility study of Expansion 2 of the AOSP. The feasibility study will evaluate Expansion 2 to increase production from the Jackpine Mine on the east area of Lease 13 and the extension of that mine to adjacent leases. The first phase of the Jackpine Mine is currently under construction as part of the first 100,000 barrel per day expansion. The Expansion 2 study will evaluate a bitumen mining, recovery and blending project expected to produce approximately 100,000 barrels per day of dry bitumen which will then be blended with other lighter hydrocarbon materials to produce a marketable bitumen blend product.