ANNUAL REPORT 2011 - Connacher Oil and Gas

AR 2011
PG 15
Connacher Oil and Gas Limited 10% Present Value
31 - DEC - 10
of Future Net Revenue Based on Forecast Prices
($MM)
and Costs Combined Conventional and Bitumen
Reserves - Before Tax (9)
31 - DEC - 11
($MM)
12 MO
% ∆
Proved Conventional (1) 100 35 -65%
Proved Bitumen (1) 1,397 1,110 -21%
Total Proved (1P) (1) 1,497 1,145 -23%
Probable Conventional (2) 36 15 -59%
Probable Bitumen (2) 1,569 1,302 -17%
Total Probable (2) 1,605 1,317 -18%
Proved + Probable Conventional (1)(2) 135 50 -63%
Proved + Probable Bitumen (1)(2) 2,966 2,412 -19%
Total Proved + Probable (2P) (1)(2) 3,101 2,462 -21%
Total 3P Reserves (1)(2)(3) 3,849 3,183 -17%
Notes:
1) Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
2) Probable Reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the
estimated proved plus probable reserves.
3) Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus
probable plus possible reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
4) Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which
are not currently considered to be commercially recoverable due to one or more contingencies. These resource estimates are not currently classified as reserves, pending further reservoir delineation, project application,
facility and reservoir design work, preparation of firm development plans and Company approvals. Contingent resources entail additional commercial risk than reserves and adjustments for commercial risks have not been
incorporated in the summaries set forth herein. There is no certainty that it will be commercially viable to produce any portion of the contingent resources.
5) Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective
Resources have both an associated chance of discovery and a chance of development. The Prospective Resources estimates reflected herein have been risked for the chance of discovery but have not been risked for
the chance of development and hence are considered partially risked estimates. Prospective Resources entail additional commercial risk than reserves and adjustments for commercial risks have not been incorporated
in the summaries set forth herein. There is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the
resources. Moreover, if a discovery is made, there is no certainty that it will be developed. If it is developed, there is no certainty as to the timing of such development.
6) Low Estimate: this is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods
are used, there should be at least a 90 percent probability that the quantities actually recovered will equal or exceed the low estimate.
7) Best Estimate: this is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will exceed the best estimate. If probabilistic
methods are used, there should be at least a 50 percent probability that the quantities actually recovered will equal or exceed the best estimate.
8) High Estimate: this is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods
are used, there should be at least a 10 percent probability that the quantities actually recovered will equal or exceed the high estimate.
9) Does not include bitumen resources or undeveloped land value.
10) Pricing assumptions in the Year-End 2010 Report and Year-End 2011 Report were as follows:
BITUMEN
(wellhead) ($/bbl)
WTI
(US$/bbl)
NATURAL GAS
(AECO) ($/mmbtu)
Year-End 2010 Year-End 2011 Year-End 2010 Year-End 2011 Year-End 2010 Year-End 2011
2012 54.41 57.69 89.00 97.00 4.74 3.49
2013 55.39 60.24 90.00 100.00 5.31 4.13
2014 58.50 64.39 92.00 100.00 5.77 4.59
2015 60.88 66.00 95.17 100.00 6.22 5.05
2016 62.57 66.00 97.55 100.00 6.53 5.51
2017 64.51 65.90 100.26 100.00 6.76 5.97
2018 66.27 66.82 102.74 101.35 6.90 6.21
2019 68.21 68.27 105.45 103.38 7.06 6.33
2020 69.69 69.74 107.56 105.45 7.21 6.46
Thereafter +2%/yr +2%/yr +2%/yr +2%/yr +2%/yr +2%/yr
US$/CDN$ exchange rates were 0.98 in the Year End 2010 Report and 0.98 in the Year End 2011 Report.
11) Tables may not add due to rounding.
12) Estimated values disclosed do not represent fair market value.