EXHIBIT 1
SUPPLEMENTARY OIL & GAS INFORMATION FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008
SUPPLEMENTARY OIL & GAS INFORMATION (unaudited)
This supplementary crude oil and natural gas information is provided in
accordance with the United States Financial Accounting Standards Board Statement
69 ("FAS 69"), "Disclosures about Oil and Gas Producing Activities", and where
applicable is reconciled to the financial information prepared in accordance
with generally accepted accounting principles in the United States ("US GAAP").
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 year ended December 31, 2008, the reports by Sproule Associates
Limited ("Sproule") covered 100% of the Company's conventional reserves.
o For the years ended December 31, 2007, 2006, and 2005 the reports by
Sproule and Ryder Scott Company 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 ("NGLs") 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, 2008, 2007, 2006, and 2005:
- ------------------------------------------------------------------------------
North North Offshore
Crude oil and NGLs (mmbbl) America Sea West Africa Total
- ------------------------------------------------------------------------------
Net proved reserves
- ------------------------------------------------------------------------------
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 prior estimates (1) (1) 2 9 10
- ------------------------------------------------------------------------------
Reserves, December 31, 2006 887 299 130 1,316
- ------------------------------------------------------------------------------
Extensions and discoveries 30 - - 30
- ------------------------------------------------------------------------------
Improved recovery 13 6 - 19
- ------------------------------------------------------------------------------
Purchases of reserves in place 1 - - 1
- ------------------------------------------------------------------------------
Sales of reserves in place - (3) - (3)
- ------------------------------------------------------------------------------
Production (77) (20) (10) (107)
- ------------------------------------------------------------------------------
Revisions of prior estimates (1) 66 28 8 102
- ------------------------------------------------------------------------------
Reserves, December 31, 2007 920 310 128 1,358
- ------------------------------------------------------------------------------
Extensions and discoveries 51 - - 51
- ------------------------------------------------------------------------------
Improved recovery 17 6 4 27
- ------------------------------------------------------------------------------
Purchases of reserves in place - - - -
- ------------------------------------------------------------------------------
Sales of reserves in place - - - -
- ------------------------------------------------------------------------------
Production (76) (17) (8) (101)
- ------------------------------------------------------------------------------
Economic revisions due to prices 28 (81) 8 (45)
- ------------------------------------------------------------------------------
Revisions of prior estimates 8 38 10 56
- ------------------------------------------------------------------------------
Reserves, December 31, 2008 948 256 142 1,346
- ------------------------------------------------------------------------------
Net proved developed reserves
- ------------------------------------------------------------------------------
December 31, 2005 402 214 80 696
- ------------------------------------------------------------------------------
December 31, 2006 420 214 63 697
- ------------------------------------------------------------------------------
December 31, 2007 426 240 70 736
- ------------------------------------------------------------------------------
December 31, 2008 428 97 107 632
- ------------------------------------------------------------------------------
(1) Revisions of prior estimates for the years ended December 31, 2007 and 2006
include the impact of economic revisions due to prices.
- ------------------------------------------------------------------------------
North North Offshore
Natural gas (bcf) America Sea West Africa Total
- ------------------------------------------------------------------------------
Net proved reserves
- ------------------------------------------------------------------------------
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 prior estimates (1) (37) 13 (13) (37)
- ------------------------------------------------------------------------------
Reserves, December 31, 2006 3,705 37 56 3,798
- ------------------------------------------------------------------------------
Extensions and discoveries 134 - - 134
- ------------------------------------------------------------------------------
Improved recovery 132 3 - 135
- ------------------------------------------------------------------------------
Purchases of reserves in place 12 - - 12
- ------------------------------------------------------------------------------
Sales of reserves in place - - - -
- ------------------------------------------------------------------------------
Production (503) (5) (4) (512)
- ------------------------------------------------------------------------------
Revisions of prior estimates (1) 41 46 12 99
- ------------------------------------------------------------------------------
Reserves, December 31, 2007 3,521 81 64 3,666
- ------------------------------------------------------------------------------
Extensions and discoveries 140 - - 140
- ------------------------------------------------------------------------------
Improved recovery 52 (1) 6 57
- ------------------------------------------------------------------------------
Purchases of reserves in place 77 - - 77
- ------------------------------------------------------------------------------
Sales of reserves in place (1) - - (1)
- ------------------------------------------------------------------------------
Production (449) (4) (4) (457)
- ------------------------------------------------------------------------------
Economic revisions due to prices (19) (56) 6 (69)
- ------------------------------------------------------------------------------
Revisions of prior estimates 202 47 22 271
- ------------------------------------------------------------------------------
Reserves, December 31, 2008 3,523 67 94 3,684
- ------------------------------------------------------------------------------
Net proved developed reserves
- ------------------------------------------------------------------------------
December 31, 2005 2,300 16 10 2,326
- ------------------------------------------------------------------------------
December 31, 2006 2,934 17 12 2,963
- ------------------------------------------------------------------------------
December 31, 2007 2,731 58 53 2,842
- ------------------------------------------------------------------------------
December 31, 2008 2,690 45 89 2,824
- ------------------------------------------- ----------------------------------
(1) Revisions of prior estimates for the years ended December 31, 2007 and 2006
include the impact of economic revisions due to prices.
CAPITALIZED COSTS RELATED TO CRUDE OIL AND NATURAL GAS ACTIVITIES
- ---------------------------------------------------------------------------------------------------
2008
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Proved properties $ 34,386 $ 4,155 $ 2,076 $ 14 $ 40,631
- ---------------------------------------------------------------------------------------------------
Unproved properties 2,271 12 595 26 2,904
- ---------------------------------------------------------------------------------------------------
36,657 4,167 2,671 40 43,535
- ---------------------------------------------------------------------------------------------------
Less: accumulated depletion
and depreciation (21,857) (3,366) (777) (14) (26,014)
- ---------------------------------------------------------------------------------------------------
Net capitalized costs $ 14,800 $ 801 $ 1,894 $ 26 $ 17,521
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
2007
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Proved properties $ 32,061 $ 3,164 $ 1,695 $ 14 $ 36,934
- ---------------------------------------------------------------------------------------------------
Unproved properties 2,259 10 138 25 2,432
- ---------------------------------------------------------------------------------------------------
34,320 3,174 1,833 39 39,366
- ---------------------------------------------------------------------------------------------------
Less: accumulated depletion
and depreciation (12,213) (1,446) (645) (14) (14,318)
- ---------------------------------------------------------------------------------------------------
Net capitalized costs $ 22,107 $ 1,728 $ 1,188 $ 25 $ 25,048
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
2006
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Proved properties $ 29,596 $ 3,346 $ 1,601 $ 14 $ 34,557
- ---------------------------------------------------------------------------------------------------
Unproved properties 2,244 24 84 24 2,376
- ---------------------------------------------------------------------------------------------------
31,840 3,370 1,685 38 36,933
- ---------------------------------------------------------------------------------------------------
Less: accumulated depletion (9,878) (1,341) (481) (14) (11,714)
and depreciation
- ---------------------------------------------------------------------------------------------------
Net capitalized costs $ 21,962 $ 2,029 $ 1,204 $ 24 $ 25,219
- ---------------------------------------------------------------------------------------------------
COSTS INCURRED IN CRUDE OIL AND NATURAL GAS ACTIVITIES
- ---------------------------------------------------------------------------------------------------
2008
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Property acquisitions
- ---------------------------------------------------------------------------------------------------
Proved $ 299 $ (7) $ 44 $ - $ 336
- ---------------------------------------------------------------------------------------------------
Unproved 84 1 1 - 86
- ---------------------------------------------------------------------------------------------------
Exploration 144 3 - 1 148
- ---------------------------------------------------------------------------------------------------
Development 1,810 195 772 - 2,777
- ---------------------------------------------------------------------------------------------------
Costs incurred $ 2,337 $ 192 $ 817 $ 1 $ 3,347
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
2007
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Property acquisitions
- ---------------------------------------------------------------------------------------------------
Proved $ 55 $ (38) $ - $ - $ 17
- ---------------------------------------------------------------------------------------------------
Unproved 13 1 - - 14
- ---------------------------------------------------------------------------------------------------
Exploration 239 19 - 1 259
- ---------------------------------------------------------------------------------------------------
Development 2,173 380 148 - 2,701
- ---------------------------------------------------------------------------------------------------
Costs incurred $ 2,480 $ 362 $ 148 $ 1 $ 2,991
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
2006
- ---------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa Other
- ---------------------------------------------------------------------------------------------------
Property acquisitions
- ---------------------------------------------------------------------------------------------------
Proved $ 5,627 $ - $ 1 $ - $ 5,628
- ---------------------------------------------------------------------------------------------------
Unproved 910 - - - 910
- ---------------------------------------------------------------------------------------------------
Exploration 238 4 1 11 254
- ---------------------------------------------------------------------------------------------------
Development 2,807 628 133 - 3,568
- ---------------------------------------------------------------------------------------------------
Costs incurred $ 9,582 $ 632 $ 135 $ 11 $ 10,360
- ---------------------------------------------------------------------------------------------------
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, 2008, 2007, and 2006 are summarized
in the following tables:
- ------------------------------------------------------------------------------------------------------
2008
- ------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- ------------------------------------------------------------------------------------------------------
Crude oil and natural gas revenue, net of $ 8,126 $ 1,731 $ 801 $ 10,658
royalties and blending costs
- ------------------------------------------------------------------------------------------------------
Production (1,881) (457) (102) (2,440)
- ------------------------------------------------------------------------------------------------------
Transportation (327) (10) (1) (338)
- ------------------------------------------------------------------------------------------------------
Depletion, depreciation and amortization (1) (9,661) (1,564) (132) (11,357)
- ------------------------------------------------------------------------------------------------------
Asset retirement obligation accretion (42) (27) (2) (71)
- ------------------------------------------------------------------------------------------------------
Petroleum revenue tax - (143) - (143)
- ------------------------------------------------------------------------------------------------------
Income tax 1,128 235 (141) 1,222
- ------------------------------------------------------------------------------------------------------
Results of operations $ (2,657) $ (235) $ 423 $ (2,469)
- ------------------------------------------------------------------------------------------------------
(1) Includes the impact of a ceiling test impairment at December 31, 2008 of
$8,665 million, pre-tax.
- ------------------------------------------------------------------------------------------------------
2007
- ------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- ------------------------------------------------------------------------------------------------------
Crude oil and natural gas revenue, net of $ 7,441 $ 1,522 $ 709 $ 9,672
royalties and blending costs
- ------------------------------------------------------------------------------------------------------
Production (1,642) (432) (94) (2,168)
- ------------------------------------------------------------------------------------------------------
Transportation (335) (16) (1) (352)
- ------------------------------------------------------------------------------------------------------
Depletion, depreciation and amortization (2,359) (340) (165) (2,864)
- ------------------------------------------------------------------------------------------------------
Asset retirement obligation accretion (38) (30) (2) (70)
- ------------------------------------------------------------------------------------------------------
Petroleum revenue tax - (141) - (141)
- ------------------------------------------------------------------------------------------------------
Income tax (997) (282) (121) (1,400)
- ------------------------------------------------------------------------------------------------------
Results of operations $ 2,070 $ 281 $ 326 $ 2,677
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
2006
- ------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- ------------------------------------------------------------------------------------------------------
Crude oil and natural gas revenue, net of $ 5,707 $ 1,310 $ 911 $ 7,928
royalties and blending costs
- ------------------------------------------------------------------------------------------------------
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)
- ------------------------------------------------------------------------------------------------------
Results of operations $ 1,310 $ 171 $ 441 $ 1,922
- ------------------------------------------------------------------------------------------------------
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 possible 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:
- -----------------------------------------------------------------------------------------------------------
2008
- -----------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- -----------------------------------------------------------------------------------------------------------
Future cash inflows $ 51,913 $ 13,681 $ 6,789 $ 72,383
- -----------------------------------------------------------------------------------------------------------
Future production costs (23,747) (6,845) (3,000) (33,592)
- -----------------------------------------------------------------------------------------------------------
Future development and asset retirement
obligations (9,238) (4,674) (364) (14,276)
- -----------------------------------------------------------------------------------------------------------
Future income taxes (3,097) (2,011) (1,061) (6,169)
- -----------------------------------------------------------------------------------------------------------
Future net cash flows 15,831 151 2,364 18,346
- -----------------------------------------------------------------------------------------------------------
10% annual discount for timing of future
cash flows (6,872) (76) (1,011) (7,959)
- -----------------------------------------------------------------------------------------------------------
Standardized measure of future net cash flows $ 8,959 $ 75 $ 1,353 $ 10,387
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
2007
- -----------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- -----------------------------------------------------------------------------------------------------------
Future cash inflows $ 71,069 $ 30,269 $ 9,921 $ 111,259
- -----------------------------------------------------------------------------------------------------------
Future production costs (23,729) (9,316) (2,419) (35,464)
- -----------------------------------------------------------------------------------------------------------
Future development and asset retirement
obligations (7,938) (4,021) (621) (12,580)
- -----------------------------------------------------------------------------------------------------------
Future income taxes (9,508) (11,376) (1,978) (22,862)
- -----------------------------------------------------------------------------------------------------------
Future net cash flows 29,894 5,556 4,903 40,353
- -----------------------------------------------------------------------------------------------------------
10% annual discount for timing of future
cash flows (13,952) (2,176) (2,505) (18,633)
- -----------------------------------------------------------------------------------------------------------
Standardized measure of future net cash flows $ 15,942 $ 3,380 $ 2,398 $ 21,720
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
2006
- -----------------------------------------------------------------------------------------------------------
(millions of Canadian dollars) North North Offshore Total
America Sea West Africa
- -----------------------------------------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------------------------------------
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)
- -----------------------------------------------------------------------------------------------------------
Standardized measure of future net cash flows $ 14,373 $ 1,811 $ 1,808 $ 17,992
- -----------------------------------------------------------------------------------------------------------
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) 2008 2007 2006
- -----------------------------------------------------------------------------------------------------
Sales of crude oil and natural gas produced, net of $ (9,679) $ (7,150) $ (5,635)
production costs
- -----------------------------------------------------------------------------------------------------
Net changes in sales prices and production costs (14,680) 7,412 (2,420)
- -----------------------------------------------------------------------------------------------------
Extensions, discoveries and improved recovery 820 1,429 4,769
- -----------------------------------------------------------------------------------------------------
Changes in estimated future development costs (715) (169) (1,885)
- -----------------------------------------------------------------------------------------------------
Purchases of proved reserves in place 113 39 2,406
- -----------------------------------------------------------------------------------------------------
Sales of proved reserves in place (1) (103) (2)
- -----------------------------------------------------------------------------------------------------
Revisions of previous reserve estimates 112 2,380 81
- -----------------------------------------------------------------------------------------------------
Accretion of discount 3,468 2,760 3,112
- -----------------------------------------------------------------------------------------------------
Changes in production timing and other 767 508 (2,156)
- -----------------------------------------------------------------------------------------------------
Net change in income taxes 8,462 (3,378) 1,270
- -----------------------------------------------------------------------------------------------------
Net change (11,333) 3,728 (460)
- -----------------------------------------------------------------------------------------------------
Balance - beginning of year 21,720 17,992 18,452
- -----------------------------------------------------------------------------------------------------
Balance - end of year $ 10,387 $ 21,720 $ 17,992
- -----------------------------------------------------------------------------------------------------