January 2011 to September 2012 Kirby ERCB Directive 54 Annual Performance Presentation September 26, 2012 Premium Value Defined Growth Independent
OUTLINE PAGE # Kirby Approval 11475 (South) 5-69 Background of Scheme / Project 6-9 Geology - Stratigraphic Schematic - Strat Wells - Pay Maps - Type Logs / Cross Sections - Seismic Program - Cap Rock Exploitation - Subsurface Schematic - Volumetrics & Initial Pad and Well Layout Drilling and Completions - Injection / Production / Observation / Disposal Well Schematics 11 12 13-16 17-18 19 20-22 23 24-26 27-30 Artificial Lift / Instrumentation in Wells 31-32 Slide 2
OUTLINE PAGE # Future Plans - Drilling Update & Results - Potential Amendment Applications 33-34 35 Surface Facilities Overview / Modifications / Performance 37-44 Measurement and Reporting 45 Water Treatment Technology 46-47 Cavern Update 48 Water Production, Injection and Uses: - Water Forecast - Water Well Map - Water Source Wells UWIs - Waste Disposal Wells UWIs - Pressure Balance Scheme Update 49 50 51-52 53 54-59 Overview of 2010 Surface Activities 58-67 Slide 3
OUTLINE ERCB Approval Compliance Summary 68 PAGE # Environmental Summary - Compliance and Amendments - Monitoring Programs and Reclamation - Regional Initiatives 69 70 71-72 Kirby Approval 11472 (North) 73-76 Background and Approvals 74 Reservoir Mapping 75 Site Activities 76 Slide 4
Kirby Approval 11475 (South) September 26, 2012 Premium Value Defined Growth Independent
Background - Location of Kirby Project T Approved Project Area Slide 6
Scheme Approval 11475 Project Area ERCB defined Project Area Slide 7
Background Applications and Approvals Aug 31, 2010 Sept 22, 2010 Sept 28, 2010 Oct 1, 2010 Nov 25, 2010 Nov 29, 2011 EPEA Approval 237382-00-00 received from AENV ERCB Scheme 11475 approved ERCB Scheme Amendment A application submitted Directive 56 License F42290 received for CPF (LSD 00/13-21-073-07 W4M) ERCB Amendment 11475A approved (development of well pads A through G) ERCB Amendment 11475B approved (change interwell spacing for 2 well pairs in Drainage Area D) Slide 8
Background Applications and Approvals Dec 16, 2011 Dec 22, 2011 May 1, 2012 Kirby Expansion Project Application (includes Kirby North and Kirby South Project Areas) submitted as amendment to ERCB Approval 11475B ERCB Amendment 11475C approved (change interwell spacing for 2 well pair sets in Drainage Area B) ERCB Amendment 11475D approved (change interwell spacing of Drainage Area E) June 8, 2012 Aug 21, 2012 Sept 6, 2012 ERCB Amendment 11475E approved (evaluation of on-lease McMurray formation brackish water) ERCB Amendment 11475F approved (change interwell spacing of Drainage Area G) ERCB Amendment 11475G approved (change interwell spacing of Drainage Area F and addition of small area to Drainage Area D) Slide 9
Directive 54 Section 3.1.1 Subsurface Issues Related to Resource Evaluation and Recovery September 26, 2012 Premium Value Defined Growth Independent
Geology- Stratigraphic Schematic Slide 11
GEOLOGY: DRAINAGE AREAS & 2011, 2012 STRAT WELLS 2012 strat wells 2011 strat wells Future well pairs CPF site Slide 12
GEOLOGY: SAGD PAY ISOPACH 1 1 Slide 13
SAGD PAY BASE STRUCTURE Slide 14
SAGD PAY TOP STRUCTURE Slide 15
PROJECT AREA SAGD PAY ISOPACH Slide 16
GEOLOGY: TYPE WELL (1AA/05-21-73-7W4) Clearwater Shale Wabiskaw McMurray SAGD Pay Top Transition Zone Top Bottom Water Top SAGD Pay Base Paleozoic Slide 17
GEOLOGY: STRUCTURAL SECTION THROUGH DRAINAGE AREA A Clearwater Shale Wabiskaw McMurray SAGD Pay Top SAGD Pay Base Bottom Water Top Paleozoic Slide 18
GEOLOGY: SEISMIC PROGRAM NO NEW SEISMIC ACQUIRED Sept 2011 to August 2012 Slide 19
GEOLOGY: CAP ROCK Cap rock interval varies in thickness from 9-11m 13-20 Mini-Frac location (2011) Source: Kirby South Project Application 2007 Volume 1 Figure B2.2-19 Slide 20
GEOLOGY: CAP ROCK 100/13-20-73-7W4 Kirby South Mini-Frac Well Colorado Grand Rapids Cap rock interval is defined from the top of informally named Clearwater A Shale to the top of the Wabiskaw Valley Fill Clearwater Clearwater A Shale Wabiskaw McMurray PLZC Slide 21
GEOLOGY: CAP ROCK Mini-Frac Test Results in the Kirby South Area (100/13-20-73-7W4): Clearwater A shale minimum stress is 7.7 MPa, and the stress gradient is 16.2 kpa/m Target Operating Pressure is 2.5 3.0 MPa Clearwater A Slide 22
Exploitation - Subsurface Schematic Slide 23
Exploitation - Project Area Volumetrics Average Pay Thickness (m) Average Oil Saturation (%) Average Porosity (%) DBIP (m3) DBIP (bbls) 2007 Kirby Project Application 19.1 72.5 33.7 53,000,000 332,000,000 2010 Kirby Project Amendment Application 19.9 74.9 33.3 55,000,000 346,000,000 Volumetric calculation: Area X Pay Thickness X Oil Sat. X Porosity No change from 2010 Application Slide 24
Exploitation Initial Drainage Area, Pad & Well Layouts CPF Drainage Area A B C D E F G # of Initial Well Pairs 6 7 7 8 6 7 8 Inter well Spacing (m) 100 100 100 80 80 50 80 Future well pairs F8, F9, F10 D9, D10 E7 N Initial Development 49 well pairs on 7 pads Slide 25
Exploitation Initial Drainage Area Volumetrics Drainage Area Area (m 2 ) Oil Saturation (%) Porosity (%) Pay Thickness (m) DBIP (m 3 ) DBIP (bbls) A 599,525 67.9% 33.3% 27.1 3,670,000 23,100,000 B 669,236 75.4% 32.8% 23.2 3,840,000 24,100,000 C 629,460 78.3% 33.4% 25 4,210,000 25,600,000 D 793,100 79.5% 33.3% 26.4 5,530,000 34,800,000 E 487,672 75.5% 34.2% 23.1 2,910,000 18,300,000 F 480,427 77.6% 33.3% 20.8 2,582,000 16,241,000 G 637,934 82.9% 33.2% 23.8 4,180,000 26,300,000 Slide 26
Drilling and Completions Injection Well Schematic 339.7 mm (13 3/8 ) Surface Casing set @ ~ 200.0 mkb 244.5 mm (9 5/8 ) Casing set @ ~ 750.0 mkb 88.9 mm (3 1/2 ) short tubing (Heel) @ ~ 750.0 mkb 88.9 mm (3 1/2 ) Long Tubing (Toe) @ ~ 1700.0 mkb Liner Hanger ~20 m behind ICP Slotted Liner 177.8 mm (7 ) 600-1000 m Hz sections Slide 27
Drilling and Completions Production Well Schematic 339.7 mm (13 3/8 ) Surface Casing set @ ~ 200.0 mkb 244.5 mm (9 5/8 ) Casing set @ ~ 750.0 mkb 114 mm (4 ½ ) tubing to Pump landed ~50 m behind Liner Hanger Pump Slotted Liner 177.8 mm (7 ) 48 mm (1.9 ) guide string for instrumentation Liner Hanger ~20 m behind ICP 600-1000 m Hz sections Slide 28
Drilling and Completions Observation Well Schematic 8 to 20 Temperature measurement points (Basal McMurray to CLWT) 222mm Surface Casing 139.7mm Production Casing Thermal cement to surface CLWTR WAB CLWTR A shale External casing pressure Transmitter (Pressure and Temperature sensor) Mid MCM MCM McMurray Transition zone or Water Note: Shows a plan for new drill observation wells, as existing wells won t have external casing transmitters Slide 29
Drilling and Completions Disposal Well Schematic 244.5 mm Surface Casing to ~450m TVD Cemented to surface 177.8 mm Production Casing to ~540m TVD Thermally Cemented to surface 88.9 mm Production Tubing ~10m of Perforations Slide 30
Artificial Lift Current plan is to use both rod pumps and ESP s depending on required production rates. Completion will be optimized as required. Slide 31
Instrumentation Blanket gas pressures will be used to monitor bottom hole pressures for SAGD injection wells. SAGD production wells will have temperature monitoring along the lateral, surface bubble tubes for the heel and toe pressure. SAGD observation wells will gather multiple temperatures and pressures at various elevations. Slide 32
Drilling Update & Upcoming Drilling Plans Drilled: Pad A (6 WP) Pad C (7 WP) Pad B (7 WP) Pad D (8 WP) Currently drilling: Pad E (6 WP) Future well pairs F8, F9, F10 D9, D10 E7 N Upcoming drills: Pad F - Nov 2012 Pad G - Mar 2013 Slide 33
Drilling Results to Date A Pad Unforeseen bit wear. C Pad Slight toe-up trajectories used on multiple wells to maximize pay above the producers. Base of pay rises to the West. Drilled through a significant I.H.S. body sitting on a PLZC high during C1P (producer). B Pad Minor fluids losses encountered in a couple laterals. Occurred close to a mapped PLZC Karst feature. Able to continue drilling in all occasions. D Pad Full losses seen in all laterals except D1P, D1I & D2I. Losses corresponded with mapped PLZC Karst locations. Able to drill laterals to all planned total depths and landed all liners successfully. No losses while drilling build sections of producers or injectors. Slide 34
Future Plans Potential Amendment Applications 2017 production forecast requires an 8 th SAGD well pad. Therefore, a pad add amendment application is expected to be submitted to the ERCB in 2015. Slide 35
Directive 54 Section 3.1.2 Surface Operations, Compliance, and Issues Not Related to Resource Evaluation and Recovery September 26, 2012 Premium Value Defined Growth Independent
Surface Facilities Overview Detailed Site Plot Plans: Kirby SAGD Production Pad Plot Plan Dwg No. KBF-G-210-0001 Kirby In-Situ Oil Sands Project Central Plant Plot Plan Dwg No. DBP-00-210-0002 Simplified Schematic: Kirby In-Situ Oil Sands Project Simplified Schematic Slide 37
Surface Facilities Overview Summary of Modifications Since Sept 2011 Heat integration changes Added Inlet Emulsion Trim Cooler Removed PW/BFW Exchanger Temporary Salt Cavern Wash Water Filtration Slide 38
Facility Performance Salt cavern washing System commissioned December 2011 Initial filtration plugging issues Additional temporary filtration installed System operation has improved and continues to operate Slide 39
Facility Performance Gas Usage on a monthly basis Month Total Flared Gas e 3 m 3 October 2011 0.0 November 2011 0.0 December 2011 0.4 January 2012 2.9 February 2012 2.9 March 2012 7.2 April 2012 6.6 May 2012 15.8 June 2012 11.8 July 2012 12.9 Slide 40
Facilities Greenhouse Gas Emissions Kirby Greenhouse Gas Emissions Month tonne CO 2 October 2011 0 November 2011 0 December 2011 0.7 January 2012 5 February 2012 5 March 2012 13 April 2012 12 May 2012 29 June 2012 22 July 2012 24 Total 111 Slide 41
Measurement and Reporting MARP approved in October 2011 Will be reviewed against ERCB Thermal In Situ Water Use Directive when Directive is finalized MARP as submitted is compliant with all current regulatory requirements, including Directive 17 Slide 42
Water Treatment Technology Mechanical Vapor Compression (MVC) evaporators selected for BFW treatment Treatment of both recycled produced water and makeup water Evaporator blow down solids disposal to on-site salt cavern Silica Sorption process selected vs. high ph process from application Slide 43
Water Treatment Technology Mechanical Vapor Compression Evaporator: Slide 44
Cavern Update Salt Cavern #1 102/4-28-73-07 W4M Cavern Volume (as of July 25, 2012 sonar) 9719 m 3 Wash Water (as of August 15, 2012) 139,197 m 3 Salt Cavern #2 100/13-21-73-07 W4M Cavern Volume (as of July 25, 2012 sonar) 4009 m 3 Wash Water (as of August 15, 2012) 94,169 m 3 Slide 45
Produced and Make-up Water Forecast Majority of steam generated from recycled produced water Most non-saline water used during start-up Rate (m3/d) 25,000 20,000 15,000 10,000 5,000 0 Produced Water Grand Rapids Fm Make-up McMurray PB Water Empress Fm Water Water Sources Saline McMurray Fm TDS = 14,500 ppm Pressure balancing, make-up and wash water Non-Saline Grand Rapids TDS 2,450 ppm Make-up and wash water Empress Fm TDS = 550 ppm Make-up and utility water 2013 2015 2017 2019 2021 2023 Year 2025 2027 2029 2031 2033 Disposal - 5 % Produced Water Recycle 95% Slide 46
Pressure Balancing, Source, Disposal and Observation Well Map WSW, WDW, Pressure Obs Wells and Surface Water Withdrawal Location Slide 47
Source Wells - Saline McMurray Source Wells Well Name Use Unique Well Identifier CNRL WSW01 Kirby 14-30-73-7 Make-up Source 1F1/14-30-73-7W4M CNRL WSW MC01 Kirby 10-33-73-8 Make-up Source 1F1/10-33-73-8 W4M CNRL WSW MC02 Kirby 10-33-73-8 Make-up Source 1F2/10-33-73-8 W4M McMurray Off-Lease Saline Source Evaluation Well CNRL WSW MC03 Kirby 11-13-73-6 Make-up Source 1F1/11-13-73-06W4M Slide 48
Source Wells Non-Saline GRAND RAPIDS Formation Grand Rapids Source Wells Well Name Use Unique Well Identifier CNRL WSW02 Kirby 14-30-73-7 Make-up Source 1F2/14-30-73-8W4M CNRL WSW GR01 Kirby 13-21-73-7 Make-up Source 1F3/13-21-73-7W4M EMPRESS Formation Source Wells CNRL WSW Kirby 13-21-73-7 Utility Source 1F2/13-21-73-07W4M RAX WS1 Kirby 13-21-73-7 Utility Source 1F1/13-21-73-07W4M MURIEL LAKE Formation - Source Wells CNRL WSW ML03 Kirby 13-21-73-7 Domestic Source 1F4/13-21-73-7W4M ETHEL LAKE Formation - Source and Standby Wells CNRL WSW EL01 Kirby 16-29-73-7 Domestic Source 1F1/16-29-73-7W4M CNRL WSW EL02 Kirby 15-29-73-7 Domestic Source No UWI No license required Slide 49
Disposal Wells McMurray Disposal Wells Well Name Use Unique Well Identifier RAX Kirby 9-34-73-8 Disposal 00/09-34-73-08W4M CNRL WDW01 Kirby 8-17-74-8 Disposal 00/08-17-74-08W4M CNRL WDW02 Kirby 10-17-74-8 Disposal 02/10-17-74-08W4M CNRL WDW03 Kirby 15-17-74-8 Disposal 00/15-17-74-08W4M Salt Cavern Wells CNRL CAVERN VERT KIRBY 13-21-73-7 Lotsburg 100/13-21-73-07W4M CNRL CAVERN DD KIRBY 4-28-73-7 Prairie Evaporate 102/4-28-073-07W4M Slide 50
Pressure Balance Scheme Update Salt cavern wash water being produced from: McMurray Formation Basal Aquifer (1F1/10-33-073-08W4/00 and 1F2/10-33-073-08W4/00) Rate ranges from 700 to 2,300 m 3 /d Lower Grand Rapids Formation Aquifer (1F2/14-30-073-07W4/00, TDL# 00311812-00-00) Production started in July 2012 at an average rate of 574 m 3 /d Slide 51
Pressure Balance Scheme Update Currently disposing of salt cavern wash water into McMurray Fm Basal Aquifer disposal wells at 102/10-17-074-08W4/00, 100/08-17-074-08W4/00 and 100/15-17-074-08W4/00 Disposal rate equal to McMurray and Grand Rapids production rate Starting July 2012, McMurray water disposal rate is greater than McMurray water production rate (574 m 3 /d average difference) Pressures in McMurray Fm Basal Aquifer being monitored below McMurray bitumen reservoir at 100/09-34-073-08W4/00, 1AA/05-36-073-08W4/00 and 100/16-25-073-08W4/00 Additional monitoring well located between McMurray Fm Basal Aquifer source and disposal locations at 100/01-17-074-08W4/00 Pressure instrumentation installed; currently fixing problems related to well completion and/or instrumentation Slide 52
Pressure Balance Scheme Update McMurray Disposal, Pressure Balance and Pressure Observation Well Locations Slide 53
Pressure Balance Scheme Update Pressure readings in observation wells beneath reservoir Pressure declines in McMurray Fm basal aquifer are greater than predicted Approximate 300 kpa decline noted about 1.8 km away Grand Rapids Fm water produced as of July 2012 to manage McMurray Fm pressure drop Pressure oscillation at MC02 source well due discontinuous pumping. pump was only on during day shift until May, 2012 and is shut-off frequently thereafter for maintenance Slide 54
Pressure Balance Scheme Update Changes to observation well pressures do not correlate to changes in wellhead pressures at disposal wells Pressure at observation wells more influenced by nearby source wells 10000 Kirby Disposal Wells Wellhead Pressure with Basal McMurray Aquifer Observation Well Pressure 3000 Disposal Well Average Daily Wellhead Pressure (kpa) 9000 8000 7000 6000 5000 4000 3000 2000 Approximate McMurray Formation Pressure 8-17-074-08 Disposal Well 10-17-074-08 Disposal Well 15-17-074-08 Disposal Well 16-25 OBS Well Pressure 05-36-73 OBS Well Pressure 9-34-73 OBS Well Pressure 2900 2800 2700 2600 2500 2400 2300 2200 Observation Well Reservoir Pressure (kpa) 1000 2100 0 2000 01-Jan-12 31-Jan-12 02-Mar-12 01-Apr-12 02-May-12 01-Jun-12 02-Jul-12 01-Aug-12 Date Slide 55
Pressure Balance Scheme Modelling In order to calibrate model, Basal Aquifer connectivity needed to be reduced (more compartmentalized) Low permeability cells Slide 56
Overview of 2012 Surface Activities Central Plant Major project infrastructure completed including temporary power, camp, roads, etc. Equipment foundations completed Major equipment set in place across plant plot area, i.e. Evaporator towers / Steam Generators Major piperack modules set in place Field mechanical and electrical installation in progress Process building erection underway Admin / Control Room building constructed and occupied by Operations staff Pads Earthwork completed on 6 of the 7 pads prepared; surface facility construction has commenced on Pads A and C Pipelines Main connecting pipelines from pads to Central Plant completed and ready for commissioning Steam-in date planned for Q4, 2013 Slide 57
Kirby Central Plant Q4 2011 Slide 58
Kirby Central Plant Q3 2012 Slide 59
Kirby Central Plant Flare Stack Lift Q1 2012 Slide 60
Evaporator Lift Q2 2012 Slide 61
Inlet Pipelines Q2 2012 Slide 62
Steam Generators Q2 2012 Slide 63
Central Facility Q3 2012 Slide 64
2011/2012 Compliance Summary Scheme Approval 11475E Clause 14 Pressure balance monitoring at 100/01-17-074-08W4/00 Not in compliance due to pressure instrumentation problems ERCB self disclosure letter sent August 27, 2012 ESRD Water Act Compliance Reporting 1F4/13-21-73-7W4M Construction Office Domestic Water produced for 3 months prior to receipt of license following application TDL received September 2011 Term License received Dec 12, 2011 16-29-73-7W4M - Construction Camp Domestic Three monthly water levels not measured Three monthly water diversion amounts recorded but not reported 1F2/13-21-73-7-W4M Drilling and Construction Water Production for approximately 1 month after TDL expired New TDL acquired August 21, 2012 Slide 65
2011/2012 Environmental Summary - Compliance & Amendments Compliance issues for non-ercb approvals - Contravention Notification ESRD Reference #257539: request for extension for submission of Wildlife Mitigation and Monitoring Program not received by ESRD Amendments to non-ercb approvals - EPEA Approval 237382 Amendment Application (submitted Dec 16, 2011) via the Kirby Expansion Project Application Slide 66
2011/2012 Environmental Summary - Monitoring Programs / Reclamation Environmental Monitoring - Wildlife sighting cards provided to workers and compiled information reported to ESRD through the Fish and Wildlife Management Information System - Environmental Monitor on site to oversee construction - Water quality testing of accumulated water on construction site prior to being pumped-off (EPEA Approval No. 237382-00-00 and Directive 55) - Approved Wetlands / Hydrology Monitoring Program (as req by EPEA Approval) commenced Q3 2012 - Wildlife Monitoring Program (as req by EPEA Approval) expected to commence in 2013 Reclamation Programs - No reclamation required or conducted in 2011/2012 Slide 67
2011/2012 Environmental Summary - Provincial/Federal Programs Alberta Biodiversity Monitoring Program and associated Ecological Monitoring Initiatives Canadian Oil Sands Innovation Alliance (COSIA) Lower Athabasca Regional Plan (LARP) Ongoing participation in the development and implementation of regional frameworks Joint Canada/Alberta Implementation Plan for Oil Sands Environmental Monitoring Participation in the implementation of the program Cumulative Environmental Management Association (CEMA) Participation in various Working Groups/subgroups Oil Sands Developers Group Participation in various committees Slide 68
2011/2012 Environmental Summary - Provincial/Federal Programs Regional Aquatics Monitoring Program (RAMP) Participation in various subcommittees Regional Groundwater Monitoring Evaluation and Reporting (MER) Group for the Athabasca Oil Sands Participation in various subcommittees Wood Buffalo Environmental Association (WBEA) Participation in various committees Provincial and Federal Woodland Caribou Draft Policies Plan to contribute to range-level planning and subsequent implementation Slide 69
Kirby Approval 11472 (North) September 26, 2012 Premium Value Defined Growth Independent
Background Applications and Approvals Sept 22, 2010 Sept 27, 2010 Nov 18, 2011 ERCB Approval 11472 to Enerplus for Kirby North 2010 Canadian Natural purchases all Enerplus assets in Kirby region ERCB Approval 11472A to revise Project Area Dec 2, 2011 Dec 16, 2011 ERCB Approval 11472B to relocate Kirby North 2010 CPF Kirby Expansion Project Application submitted (includes Kirby North and Kirby South Project Areas) Slide 71
Updated Reservoir Mapping Updated Reservoir Mapping Slide 72
Site Activities To Date Facility License F44051 issued Dec 16, 2011 CPF site has been cleared Access road constructed Slide 73
THE FUTURE CLEARLY DEFINED Premium Value Defined Growth Independent
Diluent Tank Diluent from Pipeline Prod Gas Butane Storage Vessels (x2) Trucked-in Butane Pads Emulsion Prod Gas Inlet Separator Inlet Separator Emulsion Prod Gas Free Water Knock Emulsion Out Oily Prod Water Oil Treaters (x2) Dilbit Gas Boot Sales Oil Tanks (x2) Dilbit to Sales Slop Oil Centrifuge Slop Oil Tanks (x2) Skim Tanks (x2) Source Water Tank Source Water Wells Fuel Gas from Pipeline Mixed Gas Drum ISF Deoiled Prod Water Mixed Fuel Gas Produced Water Storage Tank Steam Steam Generators Boiler Feed Water Evaporator Trains (x3) Evaporator Blowdown Salt Caverns Disposal Water Tanks Disposal Wells Magnesium Oxide & Sodium Hydroxide KIRBY IN-SITU OIL SANDS PROJECT SIMPLIFIED SCHEMATIC 9/15/2011 REV 0.