Reserves are one of the most important assets an oil and gas company has. Our success depends on our ability to find (or acquire), develop and produce reserves at low-cost. Each year-end, we report our proved and probable reserves estimates according to regulatory requirements.

Estimating Reserves
The process of estimating reserves is complex and requires significant judgement on geological, geophysical, engineering and economic data. Our management is responsible for the reserve estimates and has established standards and processes of review and approval to ensure the quality and integrity of our estimates. Each year, we internally evaluate 100% of our reserves and require that at least 80% of our proved reserves be audited by independent, qualified reserve consultants appointed by our Board. Our Board has established a Reserves Review Committee to assist the Board and the Audit and Conduct Review Committee to oversee the annual review of our reserves and related disclosures. Read more ( 2pg, 32KB) from our Form 10-K on our process for estimating reserves.

Exemption from Certain Canadian Reserves Disclosures
Because we are an SEC registrant and file a Form 10-K and related forms, our proved reserves estimates and securities regulatory disclosures generally follow SEC requirements. Our disclosures will differ from those Canadian companies who have not received exemption permitting US style disclosure under National Instrument 51-101— Standards of Disclosure for Oil and Gas Activities (NI 51-101). Read our Special Note to Canadian Investors which discusses the exemptions obtained and resulting differences.

Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to discuss only proved reserves that are supported by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. In this disclosure, we may refer to “recoverable reserves”, “probable reserves” and “recoverable resources” which are inherently more uncertain than proved reserves. These terms are not used in our filings with the SEC. Our reserves and related performance measures represent our working interest before royalties, unless otherwise indicated. Please refer to our Annual Report on Form 10-K available from us or the SEC for further reserve disclosure.

In addition, under SEC regulations, the Syncrude oil sands operations are considered mining activities rather than oil and gas activities. Production, reserves and related measures in this disclosure include results from the Company’s share of Syncrude. Under SEC regulations, we are required to recognize bitumen reserves rather than the upgraded premium synthetic crude oil we will produce and sell from Long Lake.

Probable Reserves
Our probable reserves disclosure applies the Society of Petroleum Engineers/World Petroleum Council (SPE/WPC) definition for probable reserves. The Canadian Oil and Gas Evaluation Handbook states there should not be a significant difference in estimated probable reserve quantities using the SPE/WPC definition versus NI 51-101.