EXHIBIT 1
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SUPPLEMENTARY OIL & GAS INFORMATION (UNAUDITED)
This supplementary crude oil and natural gas information is provided in
accordance with the United States FAS 69, "Disclosures about Oil and Gas
Producing Activities", and where applicable is reconciled to the US GAAP
financial information.
NET PROVED CRUDE OIL AND NATURAL GAS RESERVES
The Company retains qualified independent reserves evaluators to evaluate the
Company's proved crude oil and natural gas reserves.
o For the years ended December 31, 2006, 2005, and 2004 the reports by
Sproule Associates Limited ("Sproule") and Ryder Scott Company covered
100% of the Company's conventional reserves;
o For the year ended December 31, 2003, the reports by Sproule covered
100% of the Company's conventional reserves.
Proved crude oil and natural gas reserves are the estimated quantities of crude
oil, natural gas and natural gas liquids that geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions. Proved
developed reserves are reserves that can be expected to be recovered from
existing wells with existing equipment and operating methods.
Estimates of crude oil and natural gas reserves are subject to uncertainty and
will change as additional information regarding producing fields and technology
becomes available and as future economic and operating conditions change.
The following table summarizes the Company's proved and proved developed
conventional crude oil and natural gas reserves, net of royalties, as at
December 31, 2006, 2005, 2004 and 2003:
North North Offshore
Crude oil and NGLs (mmbbl) America Sea West Africa Total
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Net proved reserves
Reserves, December 31, 2003 588 222 85 895
Extensions and discoveries 17 - - 17
Improved recovery 25 45 - 70
Purchases of reserves in place 36 38 - 74
Sales of reserves in place - - - -
Production (66) (24) (4) (94)
Revisions of previous estimates 48 22 34 104
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Reserves, December 31, 2004 648 303 115 1,066
Extensions and discoveries 98 - - 98
Improved recovery 3 3 2 8
Purchases of reserves in place - - 15 15
Sales of reserves in place (3) - - (3)
Production (70) (25) (8) (103)
Revisions of previous estimates 18 9 10 37
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Reserves, December 31, 2005 694 290 134 1,118
Extensions and discoveries 53 3 - 56
Improved recovery 190 26 - 216
Purchases of reserves in place 26 - - 26
Sales of reserves in place - - - -
Production (75) (22) (13) (110)
Revisions of previous estimates (1) 2 9 10
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RESERVES, DECEMBER 31, 2006 887 299 130 1,316
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Net proved developed reserves:
December 31, 2003 348 138 23 509
December 31, 2004 367 218 20 605
December 31, 2005 402 214 80 696
DECEMBER 31, 2006 420 214 63 697
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North North Offshore
Natural gas (bcf) America Sea West Africa Total
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Net proved reserves
Reserves, December 31, 2003 2,426 62 64 2,552
Extensions and discoveries 334 - - 334
Improved recovery 80 - - 80
Purchases of reserves in place 182 10 - 192
Sales of reserves in place (8) - - (8)
Production (383) (18) (3) (404)
Revisions of previous estimates (40) (27) 11 (56)
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Reserves, December 31, 2004 2,591 27 72 2,690
Extensions and discoveries 506 - - 506
Improved recovery 30 - - 30
Purchases of reserves in place 6 - - 6
Sales of reserves in place (23) - - (23)
Production (411) (7) (1) (419)
Revisions of previous estimates 42 9 1 52
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Reserves, December 31, 2005 2,741 29 72 2,842
Extensions and discoveries 250 - - 250
Improved recovery 74 - - 74
Purchases of reserves in place 1,111 - - 1,111
Sales of reserves in place (1) - - (1)
Production (433) (5) (3) (441)
Revisions of previous estimates (37) 13 (13) (37)
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RESERVES, DECEMBER 31, 2006 3,705 37 56 3,798
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Net proved developed reserves:
December 31, 2003 2,140 46 12 2,198
December 31, 2004 2,213 12 5 2,230
December 31, 2005 2,300 16 10 2,326
DECEMBER 31, 2006 2,934 17 12 2,963
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CAPITALIZED COSTS RELATED TO CRUDE OIL AND NATURAL GAS ACTIVITIES
2006
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Proved properties $ 29,596 $ 3,346 $ 1,601 $ 14 $ 34,557
Unproved properties 2,244 24 84 24 2,376
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31,840 3,370 1,685 38 36,933
Less: accumulated depletion
and depreciation (9,878) (1,341) (481) (14) (11,714)
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Net capitalized costs $ 21,962 $ 2,029 $ 1,204 $ 24 $ 25,219
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2005
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Proved properties $ 20,886 $ 2,675 $ 1,365 $ 14 $ 24,940
Unproved properties 1,372 28 182 13 1,595
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22,258 2,703 1,547 27 26,535
Less: accumulated depletion
and depreciation (7,993) (1,022) (294) (14) (9,323)
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Net capitalized costs $ 14,265 $ 1,681 $ 1,253 $ 13 $ 17,212
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2004
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Proved properties $ 18,722 $ 2,506 $ 563 $ 14 $ 21,805
Unproved properties 1,028 44 528 8 1,608
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19,750 2,550 1,091 22 23,413
Less: accumulated depletion
and depreciation (6,410) (727) (190) (14) (7,341)
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Net capitalized costs $ 13,340 $ 1,823 $ 901 $ 8 $ 16,072
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COSTS INCURRED IN CRUDE OIL AND NATURAL GAS ACTIVITIES
2006
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Property acquisitions
Proved $ 5,627 $ - $ 1 $ - $ 5,628
Unproved 910 - - - 910
Exploration 238 4 1 11 254
Development 2,807 628 133 - 3,568
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Costs incurred $ 9,582 $ 632 $ 135 $ 11 $ 10,360
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2005
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Property acquisitions
Proved $ (448) $ (3) $ 63 $ - $ (388)
Unproved 210 - (52) - 158
Exploration 360 22 16 5 403
Development 2,386 232 439 - 3,057
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Costs incurred $ 2,508 $ 251 $ 466 $ 5 $ 3,230
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2004
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Other Total
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Property acquisitions
Proved $ 1,806 $ 530 $ - $ - $ 2,336
Unproved 298 4 - - 302
Exploration 290 11 36 1 338
Development 1,443 235 259 - 1,937
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Costs incurred $ 3,837 $ 780 $ 295 $ 1 $ 4,913
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RESULTS OF OPERATIONS FROM CRUDE OIL AND NATURAL GAS PRODUCING ACTIVITIES
The Company's results of operations from crude oil and natural gas producing
activities for the years ended December 31, 2006, 2005 and 2004 are summarized
in the following tables:
2006
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Crude oil and natural gas revenue,
net of royalties and blending costs $ 5,707 $ 1,310 $ 911 $ 7,928
Production (1,436) (390) (106) (1,932)
Transportation (326) (15) (1) (342)
Depletion, depreciation and amortization (1,894) (297) (189) (2,380)
Asset retirement obligation accretion (35) (31) (2) (68)
Petroleum revenue tax - (234) - (234)
Income tax (706) (172) (172) (1,050)
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Results of operations $ 1,310 $ 171 $ 441 $ 1,922
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2005
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Crude oil and natural gas revenue,
net of royalties and blending costs $ 5,727 $ 1,499 $ 472 $ 7,698
Production (1,211) (379) (53) (1,643)
Transportation (287) (20) - (307)
Depletion, depreciation and amortization (1,588) (306) (104) (1,998)
Asset retirement obligation accretion (34) (34) (1) (69)
Petroleum revenue tax - (172) - (172)
Income tax (1,007) (235) (110) (1,352)
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Results of operations $ 1,600 $ 353 $ 204 $ 2,157
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2004
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Crude oil and natural gas revenue,
net of royalties and blending costs $ 4,579 $ 1,203 $ 216 $ 5,998
Production (976) (370) (36) (1,382)
Transportation (256) (32) - (288)
Depletion, depreciation and amortization (1,438) (265) (53) (1,756)
Asset retirement obligation accretion (28) (22) (1) (51)
Petroleum revenue tax - (145) - (145)
Income tax (690) (148) (44) (882)
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Results of operations $ 1,191 $ 221 $ 82 $ 1,494
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STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM PROVED CRUDE OIL
AND NATURAL GAS RESERVES AND CHANGES THEREIN
The following standardized measure of discounted future net cash flows from
proved crude oil and natural gas reserves has been computed using year-end sales
prices and costs and year-end statutory income tax rates. A discount factor of
10% has been applied in determining the standardized measure of discounted
future net cash flows. The Company does not believe that the standardized
measure of discounted future net cash flows will be representative of actual
future net cash flows and should not be considered to represent the fair value
of the crude oil and natural gas properties. Actual net cash flows will differ
from the presented estimated future net cash flows due to several factors
including:
o Future production will include production not only from proved
properties, but may also include production from probable and
potential reserves;
o Future production of crude oil and natural gas from proved properties
will differ from reserves estimated;
o Future production rates will vary from those estimated;
o Future rather than year-end sales prices and costs will apply;
o Economic factors such as interest rates, income tax rates, regulatory
and fiscal environments and operating conditions will change;
o Future estimated income taxes do not take into account the effects of
future exploration expenditures; and
o Future development and asset retirement obligations will differ from
those estimated.
Future net revenues, development, production and restoration costs have been
based upon the estimates referred to above. The following tables summarize the
Company's future net cash flows relating to proved crude oil and natural gas
reserves based on the standardized measure as prescribed in FAS 69:
2006
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Future cash inflows $ 63,368 $ 20,815 $ 7,779 $ 91,962
Future production costs (21,634) (8,077) (2,517) (32,228)
Future development and asset
retirement obligations (7,029) (4,348) (824) (12,201)
Future income taxes (9,118) (5,623) (1,372) (16,113)
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Future net cash flows 25,587 2,767 3,066 31,420
10% annual discount for timing
of future cash flows (11,214) (956) (1,258) (13,428)
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Standardized measure of future
net cash flows $ 14,373 $ 1,811 $ 1,808 $ 17,992
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2005
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Future cash inflows $ 52,266 $ 19,961 $ 8,515 $ 80,742
Future production costs (17,310) (6,130) (1,803) (25,243)
Future development and asset
retirement obligations (3,916) (3,099) (1,032) (8,047)
Future income taxes (10,272) (6,631) (2,092) (18,995)
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Future net cash flows 20,768 4,101 3,588 28,457
10% annual discount for timing
of future cash flows (7,793) (1,144) (1,068) (10,005)
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Standardized measure of future
net cash flows $ 12,975 $ 2,957 $ 2,520 $ 18,452
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2004
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North North Offshore
(millions of Canadian dollars) America Sea West Africa Total
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Future cash inflows $ 31,727 $ 15,526 $ 5,249 $ 52,502
Future production costs (10,995) (6,302) (1,137) (18,434)
Future development and asset
retirement obligations (2,944) (2,832) (631) (6,407)
Future income taxes (6,438) (3,783) (1,242) (11,463)
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Future net cash flows 11,350 2,609 2,239 16,198
10% annual discount for timing
of future cash flows (4,385) (691) (634) (5,710)
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Standardized measure of future
net cash flows $ 6,965 $ 1,918 $ 1,605 $ 10,488
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The principal sources of change in the standardized measure of discounted future
net cash flows are summarized in the following table:
(millions of Canadian dollars) 2006 2005 2004
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Sales of crude oil and natural gas produced,
net of production costs $ (5,635) $ (5,785) $ (4,331)
Net changes in sales prices and production costs (2,420) 11,056 (553)
Extensions, discoveries and improved recovery 4,769 3,596 2,120
Changes in estimated future development costs (1,885) (971) (894)
Purchases of proved reserves in place 2,406 469 1,386
Sales of proved reserves in place (2) (130) (20)
Revisions of previous reserve estimates 81 961 1,431
Accretion of discount 3,112 1,812 1,558
Changes in production timing and other (2,156) 1,414 1,357
Net change in income taxes 1,270 (4,458) (997)
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Net change (460) 7,964 1,057
Balance - beginning of year 18,452 10,488 9,431
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Balance - end of year $ 17,992 $ 18,452 $ 10,488
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