The document summarizes a technical luncheon given by Mike Seifert on benchmarking resource plays, which included defining resource plays, an overview of techniques used in Western Canada like stages completed and well lengths, and detailed analyses of the Northern Montney, Slave Point, and Cardium formations comparing operators and completion parameters.

1. Canadian Society for Unconventional Resources:
Technical Luncheon
February 15, 2012
BENCHMARKING
RESOURCE PLAYS
Implications for Exploitation &
Development
Mike Seifert, P. Geol.
Canadian Discovery Ltd.

2. AGENDA
 Introduction
 What is a Resource Play
 Benchmarking Process
 Western Canada Overview
 Montney
 Slave Point
 Integrated Analysis: Carrot Cr and Rat Creek

3. WHAT IS A RESOURCE PLAY?
“A 'play' is a family of pools and/or prospects that share a common history
of hydrocarbon generation, migration, reservoir development and trap
configuration.
A RESOURCE PLAY is a special category of
play which implies the use, or potential use,
of advanced drilling and/or completion
technology to make it economic.
Although specific wells may be exceptions, generally speaking a
RESOURCE PLAY is deemed to be historically uneconomic on a regional
basis without the use of advanced technology.”
Ed Fogg, Canadian Discovery Ltd.

4. RESOURCE PLAY DEF’N
 Requires Extensive Stimulation to
Produce
 Produces Little In-situ Water
 Does Not Exhibit an Obvious Seal or Trap
 Low Matrix Permeability (< 0.1 mD)
SPEE Monograph 3
“Guidelines For The Practical Evaluation of
Undeveloped Reserves in Resource Plays”

5. WHY BENCHMARK?
Internal Analysis
Competitor Analysis
Technologies and Methodologies
Logistics
Acquisition & Divestitures
Financial Metrics

6. RESOURCE PLAYS IN
WESTERN CANADA
Average Stages Completed / Year
25
20
2006
15 2007
2008
10 2009
2010
5 2011
0
Bakken Cardium Horn River Montney

7. RESOURCE PLAYS IN
WESTERN CANADA
Average Completed Length
2500
2000
2006
1500 2007
2008
1000 2009
2010
500 2011
0
Bakken Cardium Horn River Montney

8. RESOURCE PLAYS IN
WESTERN CANADA
Average Frac Spacing
350
300
250 2006
2007
200
2008
150 2009
100 2010
2011
50
0
Bakken Cardium Horn River Montney

9. RESOURCE PLAYS IN
WESTERN CANADA
Average Proppant / Stage (t)
250
200
2006
150 2007
2008
100 2009
2010
50 2011
0
Bakken Cardium Horn River Montney

10. RESOURCE PLAYS IN
WESTERN CANADA
1200 $1,800
IP BOE/d (6:1)
$1,600
1000
Completion Cost $1,553 $1,400
($K/Stage)
800 $1,200
$1,000
600
$800
400 $600
$337
$400
200 $11 $114
$200
0 $0
Bakken Cardium Horn River Montney
Average IP (BOE/D) & Completion Cost ($K/Stage)
2010 / 2011 Wells

11. Number of Wells by Resource Play Group
6,000
Horn River Gas
Montney/Doig Gas
Montney/Doig Oil 5,041
5,000
Deep Basin Gas
Slave Point/Swan Hills Oil
Glauconitic Hoadley Gas
3,860
Number of Wells
4,000 Cardium Oil
Viking Oil
Shaunavon Oil
Bakken/Torquay Oil
3,000
Spearfish/Amaranth Oil
Emerging Oil
Emerging Gas
2,000 1,922
1,753
1,000
0
2008 2009 2010 2011
Year

12. Completions Investment ($M) by Resource Play Group
8,000
$7.9 billion
Horn River Gas
Montney/Doig Gas
7,000
Montney/Doig Oil
Deep Basin Gas
6,000 Slave Point/Swan Hills Oil
Glauconitic Hoadley Gas $5.5 billion
Completion Cost (million $)
Cardium Oil
5,000 Viking Oil
Shaunavon Oil
Bakken/Torquay Oil
4,000
Spearfish/Amaranth Oil
Emerging Oil
Emerging Gas
3,000
$2.5 billion
$2.0 billion
2,000
1,000
0
2008 2009 2010 2011
Year

13. RESOURCE PLAYS IN
WESTERN CANADA
Increasing Stages
Increasing Well Length
Decreasing Frac Spacing
Proppant
Bakken Decreasing
Montney Increasing

14. NORTHERN MONTNEY
Source: CDL EDGE

15. NORTHERN MONTNEY
STAGES COMPLETED
16
14
12
10
8
6
4
2
0
01/06/2008 18/12/2008 06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011 01/04/2012
PROGRESS BONAVISTA CANBRIAN TALISMAN

16. NORTHERN MONTNEY
COMPLETED LENGTH (m)
2500
2000
1500
1000
500
0
01/06/2008 18/12/2008 06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011 01/04/2012
PROGRESS BONAVISTA CANBRIAN TALISMAN

17. NORTHERN MONTNEY
Completion Cost / Stage ($K)
1200
1000
800
600
400
200
0
01/06/2008 18/12/2008 06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011
Bonavista Canbriam Progress Talisman

18. NORTHERN MONTNEY
IP GAS (mcf/d)
12000
10000
8000
6000
4000
2000
0
01/06/2008 18/12/2008 06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011 01/04/2012
PROGRESS BONAVISTA CANBRIAN TALISMAN

19. NORTHERN MONTNEY
6 MO. CAL GAS RATE / STAGE (mcf/d)
1200
1000
800
600
400
200
0
09/09/2008
18/12/2008
28/03/2009
06/07/2009
14/10/2009
22/01/2010
02/05/2010
10/08/2010
18/11/2010
26/02/2011
06/06/2011
PROGRESS BONAVISTA CANBRIAN TALISMAN

20. NORTHERN MONTNEY
IP GAS (mcf/d) 6 Mo Cal Gas Rate (mcf/d)
12000 12000
10000 10000
8000 8000
6000 6000
4000 4000
2000 2000
0 0
0 50 100 150 200 250 300 350
Average Proppant / Stage (t)

21. NORTHERN MONTNEY
TOTAL FLUID PUMPED(m3)
50000
45000
40000
35000
30000
25000
20000
15000
10000
5000
0
0 50 100 150 200 250 300 350
Average Proppant / Stage (t)

22. NORTHERN MONTNEY
USE OF CLUSTER FRACS
No
Yes

23. North Montney Summary
TALISMAN VS PROGRESS
Longer Well Lengths
More Stages / Well
Greater Cum Production

24. SLAVE POINT
Source: CDL

25. SLAVE POINT
STAGES COMPLETED
35
30
25
20
15
10
5
0
10/10/2006 22/02/2008 06/07/2009 18/11/2010 01/04/2012
EVI OTTER
JUDY CR. ETHEL
SWAN HILLS SWAN HILLS SOUTH

26. SLAVE POINT
Completed Length (m)
2000
1800
1600
1400
1200
1000
800
600
400
200
0
06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011 01/04/2012
EVI OTTER
JUDY CR. ETHEL
SWAN HILLS SWAN HILLS SOUTH

27. SLAVE POINT
COMPLETION COST / STAGE ($K)
600
500
400
300
200
100
0
10/10/2006 22/02/2008 06/07/2009 18/11/2010 01/04/2012
EVI OTTER
JUDY CR. ETHEL
SWAN HILLS SWAN HILLS SOUTH

28. SLAVE POINT
IP OIL (bop/d)
600
500
400
300
200
100
0
06/07/2009 22/01/2010 10/08/2010 26/02/2011 14/09/2011
EVI OTTER
JUDY CR. ETHEL
SWAN HILLS SWAN HILLS SOUTH

29. SLAVE POINT
OTTER IP (bopd) EVI IP (bopd)
OTTER 6 Mo Rate (bopd) EVI 6 Mo Rate (bopd)
250
200
150
100
50
0
0 10 20 30 40 50 60
Average Proppant / Stage

30. SLAVE POINT
SLAVE POINT OIL RATE BY FIELD
250
200
150
100
50
0
OTTER EVI JUDY ETHEL SWAN SWAN
CR HILLS HILLS S.
IP OIL (bopd) 6 Mo Rate (bopd) 12 mo Rate (bopd)

31. SLAVE POINT
SLAVE POINT OIL CUMS BY FIELD
70
60
50
40
30
20
10
0
OTTER EVI JUDY ETHEL SWAN SWAN
CR HILLS HILLS S.
6 Mo. CUM OIL (mbo) 12 Mo. CUM OIL (mbo)
18 Mo. CUM OIL (mbo)

32. Slave Point Summary
EVI JUDY CREEK
Proppant No Proppant
~$125/stage ~$150/Stage
12 Stages 15 Stages
400 – 500 m 1,000 m
GEOLOGY MATTERS

33. CARDIUM
Rat Creek / Carrot Cr
Source: CDL Cardium Overview Study, 2010

34. CARDIUM
Rat Creek / Carrot Creek
Detail: Minimum Principal Stress , Pembina Field
T52
T46
R13 R7W5M
Source: Stress Analysis Study, RPCL & BJ, 2005 + Frac Database

35. CARDIUM
Rat Creek / Carrot Creek
Carrot Creek vs. Rat Creek
25
20
ATTEMPTED STAGES
15
Carrot Creek
Rat Creek
10
5
0
0 5 10 15 20 25
ACTUAL STAGES

36. CARDIUM
Rat Creek / Carrot Creek
Well Count vs. Completion Problem Time
30
24
25
23
20
Number of Wells
15 14
Carrot Creek
Rat Creek
10 9
6
5
5
3
1
0
<10% 10-30% 30-50% >50%
Estimated Completion Problem Time (%)

37. CARDIUM
Rat Creek / Carrot Creek
Initial Production vs. Base Fluid and Energizer
250
12
15
200
14 12
CARROT CREEK - N2
AVERAGE IP (BOPD)
150
14 CARROT CREEK -
UNENERGIZED
44
100 2 RAT CREEK - N2
3 13
RAT CREEK - UNENERGIZED
50
0
Oil Slickwater Water
BASE FLUID

38. Cardium Horizontal
3-Month Initial Production Rate Map
Base map generated with ArcMap ™

39. Carrot Creek vs. Rat Creek
Hz Wells - type Prod decline curves
Data Source IHS Energy

40. Average IP Rate by Wellbore
Orientation
46 - Number of Wells
Data Source IHS Energy

41. CARDIUM
Rat Creek / Carrot Creek
Rat Creek Higher Stress
Operational Failures
Base Fluids & Energizers
CDD Article “Stressed Out in the Cardium”

42. Acknowledgments:
• Meridee Fockler, P.Geol. • Daniel LaPlante
• Ally Masoud • Aliyyah Mohamed, B.A.
• Matt Baird • Neil Watson, P.Geol.
• Heather McCrank, MBA, CMA • Kevin Rakhit, B. Sc.
• Razan Das, E.I.T.
• Peter Singbeil, P. Eng. • John Siferd, R.E.T.
• Don Waters, P.Eng. • Andrea Nawolsky, C.E.T.
• Jean Beriault, P.Eng.