delineation history

Hangingstone Project Update for AER October 2012 to September 2013

Presented 2013-11-05

Hangingstone Project - Introduction

Project Background

Subsurface

Facilities

Compliance

Future Plans

2

Project Background

AOC Hangingstone Lands outlined ( ) acquired and delineated between July 2006 and February 2010

Lands outlined ( ) acquired in October 2010 and delineated by March 2011 as Hangingstone Project 1 application submitted March 2011

Initial development area selected for its proximity to Infrastructure and to act as a central development node for the overall Hangingstone Asset.

Lands outlined ( ) acquired in October 2011 and delineated over the following two winters formulating the initial development for Hangingstone Expansion submitted in March of 2013

Asset Statistics & Development Overview 117 MMbbl reserves; 912 MMbbl contingent resource

Asset planned to be developed in three phases:

Hangingstone Project - Acquisition and Delineation History

Hangingstone Regional Development Map

Sales pipeline

Fuel Gas

Fort McMurray

Enbridge Cheecham

(1) Contingent resource best estimate

CPF

Project 1 - 12,000 bbl/d (approved & in construction)

Project 2 - 40,000 bbl/d (current EIA application)

Project 3 - 30,000 bbl/d (current EIA application)

4

5

Objective

Construct, operate and reclaim a bitumen recovery scheme using SAGD technology to produce bitumen up to a rate of 12,000 bpd.

Scope

20 km from Fort McMurray.

5 production pads.

25 horizontal well pairs.

CPF and associated facilities.

Offsite services and utilities.

Infrastructure:

Fuel Gas from TCPL.

Dilbit export to Enbridge Cheecham Terminal.

Diluent commercial negotiations ongoing.

Hangingstone Project - Background

Hangingstone Project Surface and Subsurface Layout

6

Hangingstone Project Scheme Map

7

Subsurface

Subsurface Data Overview

Stratigraphy and Reference Well from HS1

Depositional Environment of the McMurray Formation

McMurray Net Pay Map

McMurray Pay Structure and Fluid Isopach Maps

Caprock Geomechanics

Drilling and Completion

Scheme Performance

Hangingstone Project - Subsurface Section Outline

10

Hangingstone Project - Subsurface Data - Overview Vertical Wells Hangingstone Lease

Area (Km2)

MCMR Cored Wells

Image Logs

Caprock Core

Development Area 5.1 26 30 1

Project Area 5.6 26 30 1

11

Hangingstone Project - Subsurface Data - Overview Seismic

3D acquired in 2011 and 2012, merged in 2012.

Total Proprietary 2D ~ 450 km.

Total 3D Area ~98 km2 (Merged).

Covers Development Area.

3D Parameters:

Source Line/Source Spacing: 60 m/ 20m.

Receiver Line/Receiver Spacing: 60(40) m/20m.

2011 Hangingstone River 3D 2011 Hangingstone River North 3D 2012 Halfway Creek 3D 2012 Highway 3D Proprietary 2D

Hangingstone Project - Stratigraphy and Reference Well 1AA/03-31-086-09W4/00

12

Middle McMurray Target Reservoir

Depositional Model

Breccia

Sand

SIHS, MIHS

Mud

Middle McMurray Deposits Formed dominantly in a mixed tide and wave dominated estuary system.

Reservoir is composed of amalgamated point bar deposits dominated by fine-medium grained, channel sand. Mud clast breccia is commonly found near the base of the reservoir. The reservoir fines upwards into interbedded sand and mud (sandy and muddy IHS). Thin mud layers are typical towards the top of the reservoir.

Mudstone

Modern Analog Estuarine Environment (Digul River Estuary, Papua New Guinea)

Outer

MIHS SIHS (IHS) Breccia Channel Sand (CS)

Fining Upward

Digul River

Fly River

Hangingstone Project - Subsurface Depositional Environment of Middle McMurray

Reference Well

CS

IHS

CS

Breccia

Mud

CS

Wabiskaw

McMurray

Top Pay

Base Pay

Paleozoic

13

14

Hangingstone Project - Subsurface Definition of Net Pay and Map

Wabiskaw

McMurray

Top Pay

Base Pay

Paleozoic

Middle McMurray Gross Pay definition:

GR < 70 API Density > 27% Resistivity >18 ohm Water Saturation < 50% Includes less than 1 m thick mud. Net Pay thickness typically excludes mud.

So

15

A

Hangingstone Project - Subsurface Structural Cross Section NW-SE Across HS1 Area

A

A

Gross 36m Net 26m

Gross 36m Net 31m

Gross 38m Net 22m

Gross 43m Net 38m Gross 44m

Net 39m

Gross 36m Net 21m

A

A A

Wabiskaw

McMurray

Top Pay

Base Pay Paleozoic

16

B

Hangingstone Project - Subsurface Structural Cross Section W-E Across HS1 Area

B

B B

Gross 42m Net 32m

Gross 36m Net 31m

Gross 38m Net 30m

Gross 43m Net 38m

Gross 36m Net 27m

B B

Wabiskaw

McMurray

Top Pay

Base Pay Paleozoic

17

Range of elevation from 260 to 295 masl, highest over drainage pads.

Hangingstone Project - Subsurface Structure Map of Top of Bitumen Pay

Wabiskaw

McMurray

Top Pay

Base Pay

Paleozoic

So

18

Hangingstone Project - Subsurface Structure Map of Base of Bitumen Pay

Range of elevation from 245 to 260 masl, low over drainage pads.

Wabiskaw

McMurray

Top Pay

Base Pay

Paleozoic

So

19

Hangingstone Project - Subsurface Isopach Middle McMurray Gas Map

Middle McMurray gas has minimal thickness and limited distribution within the Development Area.

Wabiskaw

McMurray

Top Pay

Base Pay Paleozoic

M. MCR Gas M. McMurray

So

20

Hangingstone Project - Subsurface Isopach Middle McMurray Bottom Water

Interbedded mud and water saturated sand

Wabiskaw

McMurray

Top Pay

Base Pay

Paleozoic

Basal Mud

M. McMurray

The permeability measured from core within the muddy interval between the bottom water and the bitumen reservoir through interval 193.80 to 193.85 m MD is 4.30 millidarcy (kV) and 71.0 millidarcy (kMax). Denoted on photo by

Basal Water Zone

21

Hangingstone Project - Subsurface OBIP and Reservoir Properties

Avg Porosity Avg So OBIP

(Vol Frac) (Vol Frac) (mln m)

Drainage Areas 0.35 0.75 13.0

Development Area 0.35 0.75 14.2

Project Area 0.35 0.75 14.3

Depth Typical Producer

Pres Initial @ 190mTVD

Tres Initial Reservoir Kh, avg

Reservoir Kv, avg

Bitumen Viscosity @ Tres Initial

(m TVD/masl) (kPaa) (C) (mD) (mD) (cP)

190/255 600 10 4,000 3,200 >1 mln

22

Hangingstone Project - Subsurface Caprock Description Core and Image Data

Caprock Core 1AA\10-30-86-9W4\00

Caprock is defined as the unit between the top of the Clearwater Formation and Wabiskaw.

Two main units within the caprock; lower argillaceous and upper silty mud.

Primary caprock is the lower argillaceous unit which ranges from the top of the Clearwater Argillaceous to the top of Wabiskaw.

Composed primarily of shales and siltstones

Prim

ary

Cap

rock

23

Hangingstone Project - Subsurface Caprock Description Seismic Analysis

Devonian Wabiskaw Clearwater

Variance attribute time slices through formations.

Seismic and image log analysis indicates laterally continuous competent caprock unit across the area.

1AA\

10-3

0

100\

04-3

1

102\

04-3

1

A A A

A A A

A A

Devonian

Wabiskaw

Clearwater Arg

Clearwater

Mini-Frac test performed February 2011 on 1AA/10-30-086-09 W4/00. Approval for 2,200 kPaa during circulation. Approval for 2,000 kPaa during SAGD mode.

Safety factor of 33% with respect to base of the Clearwater shale. Safety factor of 13% with respect to top of pay interval of the middle McMurray bitumen sands.

Mini-Hydraulic Fracture Test Summary, Gauge Pressures (1AA/10-30-086-09 W4/00)

24

Hangingstone Project - Subsurface Caprock Geomechanics Mini-Frac

Mini-Frac test depths

Interval Depth Fracture Gradient Fracture Pressure Operating Pressure Safety FactorMinimum Mini-Frac Test, Smin Minimum (MFP) Maximum (MOP) Minimum

Shale (m TVD) (kPag/m) (kPaa) (kPaa) (1 - MOP/MFP)CLWT Shale Base 136 21.20 2,983 2,000 33%

Top Middle MCM Pay 155 14.17 2,296 2,000 13%

11 tri-axial tests performed. 7 at room temperature (RT). 4 at high temperature (75 to 175 oC). XRD done on all samples.

Tri-axial tests showed thermally induced mechanical hardening.

Beneficial to SAGD operations. Geomechanical model created using only RT tri-axial data. Model supported safe operating pressure with respect to caprock integrity.

25

Hangingstone Project - Subsurface Caprock Geomechanics Tri-Axial Testing & Model

Tri-axial lab samples

Caprock Core 1AA\10-30-86-9W4\00

Prim

ary

Cap

rock

26

100 m interwell spacing

650 to 850 m slotted lateral section

~350 m (~450 mMD) displacement

to ICP

AA P1 to AA I5

Example, Pad AA

ICP 75 m

Tangent

Build

Slotted Liner

Lateral

Well pairs are numbered 1 to 5 from left-to-right, when facing down the well pairs trajectory.

Hangingstone Project - Subsurface HS1 Planned Well Layout

Injectors target

5 mTVD above

producers along

horizontal lateral

Delineation Wells Observation Wells

27

Hangingstone Project - Subsurface Typical SAGD Wellbore Schematic

Mechanical lift required to bring fluids to surface.

WHP of ~2000 kPaa (downhole MOP 2,000 kPaa). Gas lift cannot bring fluids to surface.

All-metal PCPs will be run in the 25 producers, with the option to trial ESPs at a future date.

Injector long string is a continuous pipe size (application showed a swedge in lateral heel).

28

Downhole Instrumentation

SS SS SS SS

Producer Only: Fiber (40 to 60pt temp FBG or DTS)

with 1 or 2 pressure sensors

SS: 4 injectors with Steam Splitters

Hangingstone Project - Subsurface Planned Instrumentation in SAGD Wells

Producer and Injector: Fiber (40 to 60pt temp FBG or DTS)

with 1 or 2 pressure sensors

Injectors will have continuous real-time monitoring at surface of casing (blanket) gas pressure to determine downhole heel pressure during SAGD phases.

Select injectors will also have downhole instrumentation and/or adjacent observation wells to monitor injection temperature and pressure.

Producers will have downhole temperature and pressure instrumentation.

Producers will also have casing gas pressure monitored during all SAGD phases.

29

15 observation (obs) wells in total.

15 observation wells will have thermocouples (TCs).

10 observation wells will have piezometers (piezo).

5 obs wells will have TCs in the upper McMurray, Wabiskaw, and Clearwater for proactive caprock monitoring.

102/03-31-086-09W4 also has piezos in these zones.

100/07-31-086-09W4 will have TCs in isolated bottom water.

100/11-30-086-09W4 has a piezo in isolated bottom water.

Typical Observation Well Completion

Hangingstone Project - Subsurface Planned Instrumentation in Observation Wells

30

AA AB

AC

AD

AE

5 Obs wells with 10 to 20 TCs

10 Obs well with 10 to 20 TCs and 3-6 piezometers (installed)

10 Vertical delineation well

Obs well also monitoring above pay (U MCM, Wab, and CLW caprock) Obs well also monitoring below pay (basal zone)

14 observation wells within drainage areas and 1 observation well adjacent to drainage area AC

Planned TC Sensor Interval

Piezometer

Planned Producer Placement

Hangingstone Project - Subsurface Planned Instrumentation in Observation Wells

AOC Hangingstone 100/03-31-086-09W4/0

Hangingstone Project - Subsurface Hangingstone Project Drilling Status

Hangingstone Project Drilling Program

Consists of 2 SAGD slant drilling rigs.

Drilling commenced August 4th, 2013.

Pad Drilling Order:

Rig 1 AA, AC, AE.

Rig 2 AD and AB.

As of September 30th, 2013:

Pad AA: Drilled 10 surface holes, 5 producer intermediates and 3 producer laterals with set liner.

Pad AD: Drilled 10 surface holes and 3 producer intermediates.

AA

AE

AD

AC

AB

Red Line indicates Laterals Drilled with liner set

31

A

A

A A

Actual Well Path

32

Total lateral length 846 mMD.

ICP Depth: 479 mMD and Total Depth 1,325 mMD.

Flat across the lateral section.

Well is placed low in reservoir in clean bitumen rich sand with 100% reservoir along wellbore.

Hangingstone Project Pad AA Pair 1 - Results

B

B

B B

Actual Well Path

33

Total lateral length 850 mMD.

ICP Depth: 454 mMD and Total Depth 1,304 mMD.

Flat across the lateral section.



D

D

Total lateral length 851.5 mMD.

ICP Depth: 454.5 mMD and Total Depth 1,306 mMD.

Gradual rise across lateral section.


Actual Well Path

34


35

Production History:

No production history.

First steam anticipated end Q4 2014.

Hangingstone Project - Subsurface Scheme Performance History

36

Pad Well Pairs Well Pair Length

OBIP Predicted RF

RBIP

(m) (mln m3) (%) (mln m3)

AA 5 850 2.79 50 1.39

AB 5 650 1.87 50 0.94

AC 5 750 2.70 50 1.35

AD 5 750 2.78 50 1.39

AE 5 850 2.90 50 1.45

TOTAL 25 13.0 50 6.52

Hangingstone Project - Subsurface Scheme Performance Pad Recoveries

37

Hangingstone Project - Subsurface Surface Heave Monitoring

AOC plans on monitoring surface heave.

Method and frequency are still being determined.

38

AOC plans on monitoring steam growth and conformance using 4D seismic.

Geophones will be buried over the five drainage areas to accommodate year round shooting.

4D baseline survey planned to be acquired in 2014.

3.72 km2 total area.

Hangingstone Project - Subsurface Planned 4D Seismic

Surface Operations

40

Hangingstone Project - Approved Plot Plan From D078 Amendment Application 1757038

Modifications from D078 Amendment Application: Location and footprint of admin and control buildings, communications tower finalized

41

Hangingstone Project - Facility Schematic

SEPARATOR TREATER

BFW

BFW GLYCOL

GLYCOL

EMULSION

FROM PRODUCTION PADS

DILUENT TANK

DILUENT

TRUCK IN

DILBIT TANKS (x2)

SALES OIL

TRUCK OUT

VAPOUR RECOVERYUNIT

TANK VAPOURS

VRU

VRU

EDUCTED VAPOURS

FROM PRODUCTION PADS

PG SEPARATOR

TO STEAM GENERATORS

GLYCOL

FUEL GAS

FROM SUPPLY PIPELINE

MIXED GASSEPARATOR

FUEL GAS

TO PRODUCTION PADS

UTILITYUSERS

PRODUCED GAS

DILUENTRECOV. SEP.

GLYCOL

TO DIRTY WATER

HEADER

TO SLOP OIL TANK

TO DIRTY WATER

HEADER

SKIM TANK

INDUCEDSTATIC

FLOTATIONPACKAGE

INTERMITTENT SOLIDSCONTAINING STREAMS

DESAND / DIRTY WATER SYSTEM

VRU

VRU

VRU

SOLIDS TRUCKED OUT

SERVICE WATER TANK

NON-SALINE WATER

FROM NON-SALINEWATER WELLS

DIRTY WATER HEADER

TO NON-SALINEWATER USERS

VRU

VRU LIQUIDS

SLOP OIL

PW TANK

VRU

SLOP OIL TANK

VRU

EVAPORATOR / CONCENTRATOR PACKAGES (x2)

EDUCTORS

WASTE WATER TANKS (x2)

TRUCK OUT

EDUCTORS

BFW TANK

HEAT EXCHANGE

HP STEAM

TO PRODUCTION PADS

HP STEAM GENERATORPACKAGES (x2)

INT. BLOWDOWN

VENT

E-18

BLOWDOWNTO DIRTY WATER

HEADER

MIXED GAS

GLYCOL

SLOP OILTREATING

PKG

TO DILBITTANKS

TO DESAND/DIRTY WATER SYSTEM

TO SEPARATOR

Hangingstone Project - Facility Performance

The facility is not yet in operation. As designed:

Material Rates:

Bitumen: 1,908 m3/d.

Steam: 6,677 m3/d.

Produced Water: 6,243 m3/d.

Diluent: 616 m3/d.

Greenhouse Gas Emissions:

CO2E: 0.565 Mt/y (site-generated).

Values are annual averages.

Solution gas is recovered and used as fuel in the steam generators.

42

Gas Usage:

Purchased: 475 103 m3/d.

Produced Gas: 7.12 103 m3/d.

Flared: 0.39 103 m3/d (purge gas).

Vented: 0.12 103 m3/d (truck loading).

Expected Power Consumption:

8.6 MW operating load.

6,278 MWh monthly import.

43

Measurement, Accounting and Reporting Plan (MARP) approval received on October 5, 2012.

MARP updated on February 11, 2013 to capture Directive 078 amendment application design changes and to align the MARP with the requirements of Directive 081.

Next MARP update to the AER on or before February 28, 2014 as per Approval.

Hangingstone Project - Measurement and Reporting

44

PRODUCTION BATTERYAB BT # # # # # # # # (344)19/ 30-86-09 W4M

TCPLAB MS # # # # # # #

DILUENT SOURCE

PIPELINE TERMINALAB TM # # # # # # #XXXXXXXX W4M

INJECTION FACILITYAB IF # # # # # # # # (506)19/ 30-86-09 W4M


HANGINGSTONE PROJECTMARP METERING SCHEMATIC

Pr oduct ion Bat t er y(Pg 1 of 3)

REV.2

EMULSION

FROM WELL PADS

RECOVERABLE UTILITY FSHWTR

RECOVERABLE STEAM/ WATER

01-T1300SKIM TANK[WATER]

DIRT

Y W

ATER

HEAD

ER

BITUMEN BUILDING SUMP

SAND SLURRY HEADER

WATERTRUCK OUT

SKIM

TAN

KHE

ADER01-T1520

DECANT TANK[WATER]

LI15200A

01-T1700SLOP OIL TANK

[OIL]

LI17000K

01-VZ1330ISF VESSEL

01-T1400PRODUCED

WATER TANK[WATER]

LI14000A

SECONDARY

DESAND FLUSH WATERTO SEPARATOR/TREATER

01-V1050SEPARATOR

01-V1100TREATER 04-T1300

DILBIT TANK[OIL]

LI13000K

04-T1310DILBIT TANK

[OIL]

LI13100K

TRUCK IN

04-T1000DILUENT TANK

[COND]

LI10000A

01-V1220DILUENT RECOVERY

SEPARATOR

01-V1700MIXEDGAS

SEPAR-ATOR

PRODUCED GAS

FROM WELL PADS

00-V1520PRODUCED GAS

SEPARATOR

TO DIRTY WATERHEADER

TO DIRTY WATERHEADER

PURCHASED GAS

FROM TCPL

BLANKET/ BUBBLE GAS

TO WELL PADS

01-Z5040/ 5050VRU

COMPRESSORPACKAGES

BLANKET GASRETURNS

BLANKET GAS TO TANKSAND ISF VESSEL

UTILITY FUEL GAS HEADER

CRITICAL FUEL GAS HEADER

00-Z3300GLYCOL HEATER

PACKAGE

GLYCOL EXPANSION DRUM BLANKET

01-V5500HP FKOD

HP FLARE HEADER

HP FKODPURGE

TO SLOP OIL HEADER

FLARE PILOT

05-SF1000HP FLARE

STACKNC

NO

SECONDARY

MP FUEL GAS HEADER

SEPARATOR, TREATER, PG SEPARATOR, DILUENT RECOVERY SEPARATOR BLANKET GAS

MAK

EUP

FUEL

GAS

SAND TOSAND SLURRY HEADER

OFFSPEC

PW TRANSFERPUMPS

WATERTRUCK OUT

NC

SLOP

OIL

HE

ADER

RAG LAYERS TOSLOP OIL HEADER

NC

SP

SP

PRODUCTION BATTERYSERVICE WATER

TO PUMP SEAL FLUSHESTO BITUMEN BUILDING SUMP

TRUCKTICKETS

UNIT 00 FLARE HEADER PURGE

UNIT 01 FLARE HEADER PURGE

GLYCOL EXPANSIONDRUM BLANKET RETURN

VRU

VRU

VRU

VRU

VRUVRU

VRU

RELIEVE TO HP FLARE

RELIEVE TO HP FLARE

VRU

RELIEVE TO HP FLARE

RELIEVE TO HP FLARE

REV. DESCRIPTION DATE BY0 IFA SW1 RE-IFA2

28/ 03/ 1205/ 06/ 12 SW

2 RE-IFA 01/ 02/ 13 SW

FLOW & DENSITY

OILTRUCKOUT

EST.

UNIT 01 FLARE SUBHEADER PURGE

FROM PSVs (NNF)

FE16106

FE00010

FE00030

FE16101

FE55005

FE55002

FE14001

M

FE1410214152

M

FE10005

FRESH WATER

INJECTION FACILITYUTILITY FSHWATER

FE00020

M

FE30102B

M

PRIMARY

PRIMARY

FE63007

PRODUCED WATER

TO EVAPORATOR PACKAGE

TO EXCESS TRUCK OUT

VENT CONDENSEREDUCTOR

EDUCTOR MOTIVE GAS

PRODUCED GASESFROM EVAPORATORS AND WW TRUCKOUT

TANKSMIXED FUEL GAS

TO STEAM GENERATORS

TO STEAM GENERATORS

FEA0201

TCPLMETER


FEA0370

V

FEB0370

V

ESTIMATE

ESTIMATE FROM

FE-21033

TRUCK OUT

TRUCKTICKETS

TRUCKTICKETS

TRUCKTICKETS

NC

DILUENT

SALES OIL

DILUENT

STREAMS

GASSTEAMBITUMENWATER

VORTEX METER

V

M

ULTRASONIC METER

CORIOLIS METER

MAGNETIC METER

V-CONE METER

METER TYPES

TAGS

EQUIPMENT TAGS PRECEDED BY HCP-INSTRUMENT TAGS PRECEDED BY HCP-XX- WHERE XX IS THE UNIT IDENTIFIER

ABBREVIATIONSAE ANALYZER CBD CONTINUOUS BLOWDOWNFE FLOW ELEMENT (ACCOUNTING METER)H20 WATER CUTIBD INTERMITTENT BLOWDOWNLI LEVEL METER (RADAR TYPE)NC NORMALLY CLOSEDNNF NORMALLY NO FLOWNO NORMALLY OPENSP SAMPLE POINT

LEGEND

WELL TYPES

WATER SOURCE WELL

STEAM INJECTION WELL

OIL WELL

FEXXXXX

FEXXXXX

PETRINEX ACCOUNTINGMETER

METER NOT REPORTINGTO PETRINEX

DILUENTPUMPS

OFFSPECPUMPS

DESANDPUMP

ISF SKIM OILPUMPS

ISF DISCHARGEPUMPS

DECANT RECYCLE

PUMPS

SAND QUENCH

MAKEUP

SLOP OILPUMPS

RECOVERED DILUENT TRANSFER PUMPS

HP FKODPUMP

01-Z1800SLOP OIL TREATING PACKAGERECYCLE

NC

Hangingstone Project - Measurement Schematics Battery

45


Inj ect ion Facil it y(Pg 2 of 3)

REV.2

04-T3000WATER TANK

[FSHWTR]

LI30000A

RECOVERABLE SERVICE WATERif pump seal f l ushes

FSHWTRPLTUSE

MIXED FUEL GAS

PRODUCED WATER02-Z1100/ 1300EVAPORATOR

PACKAGES03-T1000

BFWTANK

[WATER]

LI10000A

02-T6300WW TRUCKOUT

TANK[WATER]

02-T6310WW TRUCKOUT

TANK[WATER]

HP STEAM

HP STEAMLETDOWN

03-V1500INTER-

MITTENTBD

VESSEL

IBD VENT

SECONDARY

PRIMARY

SECONDARY

PRIMARY

BLOW

DOW

N

EXCESS PW

FRESH WATER

PRIMARY

CBD

CBD


NNFPRIMARY

TRUCKTICKETS

LI63000

LI63100

RECOVERABLE STEAM/ WATERt o dir t y wat er header via sumps

IBD

03-Z2100HP STEAM

GENERATORPACKAGE

03-Z2200HP STEAM

GENERATORPACKAGE

FROM PW TRANSFER PUMPS

EDUCTOR

EDUCTOR


28/ 03/ 1205/ 06/ 12 SW

2 RE-IFA 01/ 02/ 13 SW

VRU

WATER UTILevapor at ive l osses

NITROGEN

BLANKET GAS

NC

NC

IBD

NO

NO

PRIMARY

PRIMARY

FE21033

FEA0201

FE63007

FEB3040

FEA3040

FEA3530

FEB3530

FE00020

M

WAFE1010

M

WBFE1010

M

WCFE1010

M

FE30001

M

FE30102B

M

FEA0370

V

FEA4310

V

FEB4310

V

ESRD-LICENSED WATER SOURCEAB WS # # # # # # # # (901)ESRD LICENCE 00316166-00-00


FEB0370

V

AB WI # # # # # # # # # # # #15-33-085-W4SOURCE WATER WELLFSHWTR

AB WI # # # # # # # # # # # #06-12-086-09-W4SOURCE WATER WELLFSHWTR

AB WI # # # # # # # # # # # #04-08-086-08-W4SOURCE WATER WELLFSHWTR

EDUCTOR

TO WELL PADS

ESTIMATE


WASTE FACILITYAB WP # # # # # # # # (# # # )19/ 30-86-09 W4M

ESTIMATE

ESTIMATE

FSHWTR UTILevapor at ive l osses

ESTIMATE

ESTIMATE

RECOVERABLE UTILITY FSHWTRt o dir t y wat er header via sumps

ESTIMATE

ESTIMATE

ESTIMATE

LP STEAM LOSS

IBD

NC

TRUCK OUT

WASTE WATER

DILUENT

STREAMS


VORTEX METER

V

M

ULTRASONIC METER

CORIOLIS METER

MAGNETIC METER

V-CONE METER

METER TYPES

TAGS

EQUIPMENT TAGS PRECEDED BY HCP-INSTRUMENT TAGS PRECEDED BY HCP-XX- WHERE XX IS THE UNIT IDENTIFIER


LEGEND

WELL TYPES

WATER SOURCE WELL


OIL WELL

FEXXXXX

FEXXXXX



BFW PUMPS

WATER PUMPS

NITROGEN SOURCE

Hangingstone Project - Measurement Schematics Injection Facility

46

HP STEAM

FEAA111

FEAA121

FEAA211

FEAA221

FEAA311

FEAA321

FEAA411

FEAA421

FEAA511

FEAA521

AA01IINJECTION WELLSTEAM





AA01PPRODUCTION WELLEMULSIONPUMP JACK (ELECTRIC)





TESTSEPAR-ATOR

AA-V3000

AE30002

SP30002

NNF

AA-T3010POP TANK

VENT(ESTIMATE)


Wel l Pads(Pg 3 of 3)

REV.2


28/ 03/ 1205/ 06/ 12 SW

2 RE-IFA 01/ 02/ 13 SW

GROUP

TEST

PRODUCED GAS

EMULSION

TYPICAL WELL PAD AA

AA01I 105/04-31-086-09W4/0 AB01I 106/03-31-086-09W4/0 AC01I 103/16-30-086-09W4/0 AD01I 100/02-30-086-09W4/0 AE01I 116/03-31-086-09W4/0

AA02I

AA03I

AA04I

AA05I

AA01P

AA02P

AA03P

AA04P

AA05P

106/04-31-086-09W4/0 AB02I 107/03-31-086-09W4/0 AC02I 100/16-30-086-09W4/0 AD02I 108/02-31-086-09W4/0 AE02I 114/04-31-086-09W4/0




103/04-31-086-09W4/0 AB01P 109/03-31-086-09W4/0 AC01P 106/16-30-086-09W4/0 AD01P 102/02-31-086-09W4/0 AE01P 104/03-31-086-09W4/0





AOC WELL NAMES AND UNIQUE IDs

BUBBLE GAS

BUBBLE GAS

BUBBLE GAS

BUBBLE GAS

BUBBLE GAS

TO CPF



BLANKET/ BUBBLE GAS

FROM CPF

FROM CPF

FE30002

FE00010

H20

FE30006

DILUENT

STREAMS


VORTEX METER

V

M

ULTRASONIC METER

CORIOLIS METER

MAGNETIC METER

V-CONE METER

METER TYPES

TAGS

EQUIPMENT TAGS PRECEDED BY HAF-INSTRUMENT TAGS PRECEDED BY HAF-AA- WHERE AA IS THE WELL PAD IDENTIFIER (TYPICAL)


LEGEND

WELL TYPES

WATER SOURCE WELL


OIL WELL

FEXXXXX

FEXXXXX



Hangingstone Project - Measurement Schematics Well Pads

Well Production and Injection Volumes

Each well pad has a dedicated test separator with liquid flow meter and water cut analyzer to determine well bitumen and water production.

Wells will be individually put on test for one valid testing hour for every 20 hours of operation. Valid well test criteria per approved MARP.

Well gas production prorated from Battery Level GOR using a proration factor of 1. Battery Level GOR will be updated monthly.

Steam injection is metered at each individual wellhead. Primary and secondary steam production metering available at the central steam plant.

Battery Sales Oil

Sales oil will be trucked from the Hangingstone Battery. Custody transfer metering will be done at the receiving facility.

Measurement Technology

Well testing uses standard method of test separators with microwave water cut analyzers. New technologies such as multiphase flow meters may be evaluated later.

47

Hangingstone Project - Measurement Methodology

48

Fresh Water Wells

Water Diversion Licence 00316166-00-00 received on March 8, 2013 for 479,975 m3 annually.

ESRD-licenced fresh water source wells:

Wells are less than 150 m in depth and not licenced with the AER. Well IDs are AOC internal identifiers, not UWIs.

Well ID Location Formation TDS (mg/L) Maximum Rate of Diversion (m3/d)

WSW153308508W400 15-33-085-08-W4 Quaternary 286 3,000



Hangingstone Project Water Production, Injection and Uses

49

Water volumes

Values are annual averages; Makeup includes recoverable utility water.

Evaporator blowdown (Disposal) is not recycled.

Disposal water will be 90oC at atmospheric pressure, trucked out.

Split sump concentrating evaporator design minimizes disposal volumes.

Waste will be sent to approved off-site disposal facilities.

Due to access restrictions AOC is currently obtaining water under TDLs to address water requirements for drilling and construction.

Fresh Source Water

Time Bitumen Steam Produced

Water Returned to Environment

Unrecoverable Utility Makeup TOTAL Disposal PW

(Years) (m3/cd) (m3/cd) (m3/cd) (m3/cd) (m3/cd) (m3/cd) (m3/cd) (m3/cd) Recycle 1 1,369 4,790 3,718 100 60 1,155 1,315 83 98% 2 1,908 6,677 6,024 100 60 778 938 125 98% 3 1,908 6,677 6,231 100 60 575 735 129 98% 4 1,908 6,677 6,231 100 60 575 735 129 98% 5 1,908 6,677 6,231 100 60 575 735 129 98% 6 1,908 6,677 6,231 100 60 575 735 129 98% 7 1,908 6,677 6,231 100 60 575 735 129 98% 8 1,908 6,677 6,231 100 60 575 735 129 98% 9 1,868 6,539 6,102 100 60 557 717 120 98% 10 1,348 4,716 4,400 100 60 406 566 90 98% 11 0 0 0 0 0 0 0 0 0%

Hangingstone Project Water Production, Injection and Uses

50

Sulphur production under one tonne/day, no recovery.

Sulphur balance (from SIR 2):

RESERVOIR BITUMEN TREATING

WATER TREATINGSTEAM GENERATION

Bitumen 107 t/cd S 114 t/sd S

Produced Gas 0.077 t/cd S0.082 t/sd S

Produced Water 1.0 t/cd S 1.1 t/sd S

Diluent 1.1 t/cd S for Gas Condensate1.2 t/sd S for Gas Condensate

Sales Oil 108.1 t/cd S for Gas Condensate115.2 t/sd S for Gas Condensate

Produced Water 1.0 t/cd S 1.1 t/sd S

Disposal Water 1.0 t/cd S 1.1 t/sd S

Boiler Feed Water 0 t/cd S 0 t/sd S

HP Steam 0 t/cd S 0 t/sd S

Natural Gas0 t/cd S0 t/sd S

Produced Gas 0.077 t/cd S0.082 t/sd S

Emissions 0.077 t/cd S0.082 t/sd S

Saline Water 0 t/cd S0 t/sd S

Non-Saline Water 0 t/cd S0 t/sd S

Hangingstone Project Sulphur Production

Hangingstone Project - Timeline

March 31, 2011 Filed Application.

September 30, 2011 Project Update and SIR 1 submitted.

March 6, 2012 Project Update and SIR 2 submitted.

October 3, 2012 Order in Council 307/2012 and AER Commercial Approval 11888.

October 5, 2012 MARP Approval (AER) 1949359.

October 29, 2012 EPEA Approval 289664-00-00.

November 6, 2012 Historical Resources Act Clearance 003119951.

February 7, 2013 D78 Pad Shift Approval (AER) 11888A.

March 20, 2013 Water Act Licence Approval 00316166-00-00.

April 29, 2013 D78 Pad Shift Approval (AESRD) 289664-00-00.

51

Hangingstone Project - Timeline

May 24, 2013 CPF Amendment Approval (AER) 11888B.

May 31, 2013 Groundwater Management Proposal Approval 289664-00-00.

June 7, 2013 D56 Fuel Gas Pipeline (AER) Licence 55219.

June 20, 2013 D56 CPF Amendment ( AER) Licence F45426.

July 11, 2013 Caribou Monitoring and Mitigation Plan Approved.

July 2, 2013 Substation Application submitted 1609725.

July 30, 2013 Water Act Amendment received 00316166-00-01.

September 9, 2013 D56 Pad AA (AER) Licence F46483.

September 12, 2013 CPF Amendment approved (AESRD) 289664-00-01.

September 20, 2013 D56 Residue Fuel Gas Pipeline (AER) Licence 55432.

52

Compliance

54

Zero non-compliance instances related to EPEA Approval 289664-00-01.

3 trespass incidents were self disclosed to the AESRD Forestry Officer.

1 AER High Risk non-compliance for the filing of Fuel Gas Pipeline (AER) Licence 55219 prior to signed PLAs being issued.

Corrective action was taken on December 14, 2012 by filing an amendment to change the status to non-construct.

A new application was filed on May 27, 2013 with the signed PLAs.

1 AER reportable spill.

5.5 m3 water based polymer drilling mud released while drilling 109/04-31-086-09 W4M on Pad AA.

In compliance with DFO guidelines and regulations.

AOC has not started reclamation for the approved footprint as it is currently under construction.

54

Hangingstone Project - Compliance

Hangingstone Project - Regional Initiatives

55

AOC is a funding member of:

Wood Buffalo Environmental Association,

Oil Sands Developers Group,

Alberta Biodiversity Monitoring Institute, and

Joint Oil Sands Monitoring Program.

55

Future Plans

Hangingstone Project - Future Plans

57

AOC filed an application for the Hangingstone Expansion Project in May 2013.

The Expansion includes:

increase the bitumen recovery capacity from the existing approved 1,908 m3/d (12,000 bpd) to 13,037 m3/d (82,000 bpd) to be developed in two phases:

HS2 will add an incremental 6,360 m3/d (40,000 bpd) and

HS3 will add an incremental 4,770 m3/d (30,000 bpd).

Extension of the production life from 10 to 40 years,

CPF expansion from 35 ha to 76 ha,

Field facilities and,

Offsite and utility services.

57

Corporate Office 2000, 250 6 Ave SW

Calgary, Alberta, T2P 3H7 Telephone: 403-237-8227

Fax: 403-264-4640 www.atha.com

Hangingstone Project Update for AER October 2012 to September 2013Hangingstone Project - IntroductionSlide Number 3Slide Number 4Slide Number 5Hangingstone Project Surface and Subsurface Layout Slide Number 7Slide Number 8Slide Number 9Slide Number 10Slide Number 11Slide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17Slide Number 18Slide Number 19Slide Number 20Slide Number 21Slide Number 22Slide Number 23Slide Number 24Slide Number 25Slide Number 26Slide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Slide Number 32Slide Number 33Slide Number 34Slide Number 35Slide Number 36Slide Number 37Slide Number 38Slide Number 39Slide Number 40Slide Number 41Slide Number 42Slide Number 43Slide Number 44Slide Number 45Slide Number 46Slide Number 47Slide Number 48Slide Number 49Slide Number 50Hangingstone Project - TimelineHangingstone Project - TimelineSlide Number 53Slide Number 54Slide Number 55Slide Number 56Slide Number 57Slide Number 58

delineation history

Documents

hangingstone project

project area

hangingstone expansion

construction project

d area

overall hangingstone

hangingstone river north

initial development