EXHIBIT 2
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                                AUDITORS' REPORT

                  TO THE SHAREHOLDERS OF WESTERN OIL SANDS INC.

We have audited the consolidated balance sheets of Western Oil Sands Inc. as at
December 31, 2004 and 2003 and the consolidated statements of operations and
retained earnings (deficit), and cash flows for the years then ended. These
financial statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with Canadian Generally Accepted Auditing
Standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of Western Oil Sands Inc. as at
December 31, 2004 and 2003 and the results of its operations and its cash flows
for the years then ended in accordance with Canadian Generally Accepted
Accounting Principles.

/s/ PRICEWATERHOUSECOOPERS LLP

CHARTERED ACCOUNTANTS

Calgary, Canada
February 25, 2005