Operator s Forecast Report. Prepared by Alberta Energy for Oil Sands Royalty Business Training November 9, 2017

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1 Operator s Forecast Report Prepared by Alberta Energy for Oil Sands Royalty Business Training November 9, 2017

2 Disclaimer: The information contained in this presentation is provided at the sole discretion of the Department of Energy (Department). The Department makes no warranties or representations regarding the information contained in the presentation, or any statements made during the course of the presentation. All information is provided for general information purposes only. You should not use or rely on this information for any other purpose. The information in the presentation and any statements made during the course of the presentation should not be relied upon as a representation of the Department s official position in law or policy. That material is publicly available through the Department s website at Reproduction of the presentation in any form is prohibited. 2

3 Background Required once per calendar year under Section 37 of the Oil Sands Royalty Regulation, The submission deadline is November 30 of the calendar year, or the first subsequent business day if November 30 falls on a weekend. Operator of an Oil Sands Project shall submit the operator s forecast of the information regarding the project relating to the current calendar year and subsequent 14 calendar years. Statement of Approval is NOT mandatory. Deadlines for submission is also listed in the annual Oil Sands Reporting Calendar. The latest report template can be downloaded at: 3

4 Operator Forecast Report Changes IB Starting November 30th, 2017, in addition to the data that was previously required in an operator s forecast, operators must submit the following information for each Oil Sands Royalty (OSR) Project: Project Technology Reclamation Capital Oil Sands Project Area / Region Number of New Production Wells Steam Injection Volume Number of Abandoned Production Wells Steam Name Plate Capacity Number of New Injection Wells Bitumen Name Plate Capacity Number of Abandoned Injection Wells Non-Condensable Gas Injected Volume Wells Strategic Capital Solvent Injected Volume Facilities Strategic Capital GHG Emission Intensity Wells Sustaining Capital GHG Emission Compliance Costs Facilities Sustaining Capital Abandonment Wells Capital Non-Gas Variable OPEX Abandonment Facilities Capital Fixed Operating OPEX 4

5 Late Fines The fine for late submission of the operator s forecast is $5,000 per month, per form. For example, if an operator has two OSR projects and submits both operator s forecasts on December 1 st, then the fine will be $10,000 (1 month x 2 forms). Another example: if an operator has four OSR projects and submits all four operator s forecast forms on January 2 nd, then the total fine will be $40,000 (2 months x 4 forms). This is pursuant to Oil Sands Royalty Regulation, 2009 section 44(1). 5

6 Report Structure The report workbook has 12 tabs: Instructions, Forecast Report Form, Input Checks, Volumes, Non-Energy Operating Costs, Capital Costs, Wells, Superscript Notes, Category Requirements, Validation & Checks, History of Revisions, and ADMIN Instructions A list of instructions for filling and submission of the form. DOE contact information. Forecast Report Form Inputs from operators for each oil sands project and links from sheets with specific phase information. Input Checks Auto-filled cells and charts for operator to double check key input forecasts. Sheets that contain phase specific information and feed into the Forecast Report Form tab include: Volumes Non-Energy Operating Costs Capital Costs Wells 6

7 Report Structure (con t) Superscript Notes Explanatory notes for each category in the Forecast Report Form. Category Requirements List required fields for different technologies. Validation & Checks Specifies data value range and decimal places. History of Revisions List of historical revisions to the report form. ADMIN For DOE internal use. 7

8 Forecast Report Form Operator's Forecast Report Form Id: OSRForecast For Submission to: Pursuant to Section 37 of the Oil Sands Royalty Regulation, 2009 Version #: 1.02 Notes: Project Name: AAA Oil Sands Thermal Project 1. For superscript explanations and definitions please click on the underlined term and follow the link to the 'Superscript Notes' worksheet. OSR Project Number: OSR Please include additional notes in the Additional Notes section at the bottom if further clarifications or explanations are needed. Project Operator Name: XYZ Project Operator ID: 1334 Oil Sands Project Area Athabasca Project Technology 0 Other Specify "Other" Project Technology Strategic Policy Division Data in Real Dollars as of YYYY: 2017 Current Year 2 Units Net Cumulative Balance 3 $ 50,000,000, Density (kg/m 3 ) Sulphur (%) TAN (mg KOH/g) Production Volumes 4 Cleaned Crude Bitumen RCP 1, % 4.20 m 3 /year 5,443, ,123, ,429, ,360, ,173, ,087, ,884, ,392, ,022, ,630, ,630, ,630, ,637, ,630, ,630,461.9 Steam Injection Volume 5 m 3 /year 13,609, ,881, ,881, ,646, ,656, ,242, ,244, ,499, ,509, ,099, ,102, ,354, ,364, ,958, ,961,257.2 Bitumen Price 6 Cleaned Crude Bitumen RCP 3 $/m Type of Diluent Solvent Diluent 7 Diluent Volume RCP m 3 /year 2,501, ,449, ,571, ,544, ,869, ,235, ,153, ,957, ,809, ,452, ,452, ,452, ,454, ,452, ,452,184.7 Pricing Location Hardisty Diluent Price 3 $/m Specify the Products Other Product Revenues 8 None $ Total Natural Gas Volume Used for Bitumen Production 9 GJ/year 43,993, ,954, ,413, ,802, ,523, ,090, ,095, ,086, ,248, ,124, ,819, ,064, ,336, ,073, ,158,037.0 Solution Gas Volume Used 10 GJ/year Natural Gas Price 11 $/GJ Allowed Costs 12 Non-Energy Operating Costs (Excluding natural gas, diluent, and greenhouse gas emission compliance costs) Non-Gas Variable Opex $ 363,005, ,005, ,995, ,219, ,694, ,243, ,351, ,613, ,447, ,501, ,387, ,504, ,091, ,186, ,534, Fixed Opex $ 72,601, ,601, ,199, ,643, ,538, ,648, ,470, ,522, ,889, ,100, ,477, ,100, ,618, ,237, ,706, Total $ 435,606, ,606, ,194, ,863, ,233, ,892, ,822, ,136, ,336, ,602, ,864, ,605, ,709, ,423, ,241, Capital Costs: Strategic Capital Wells $ 25,011, ,548, ,235, ,422, ,422, Facilities $ 125,056, ,742, ,179, ,112, ,112, Total $ 150,067, ,291, ,415, ,535, ,535, Sustaining Capital Wells $ 238,437, ,835, ,284, ,471, ,914, ,567, ,285, ,888, ,410, ,272, ,847, ,605, ,034, ,939, ,856, Facilities $ 23,843, ,483, ,128, ,247, ,991, ,256, ,528, ,988, ,641, ,927, ,684, ,560, ,203, ,093, ,385, Total $ 262,281, ,319, ,413, ,718, ,905, ,823, ,814, ,877, ,051, ,199, ,532, ,165, ,237, ,033, ,242, Abandonments and Reclamation Capital Abandonment Wells $ 6,570, ,734, ,902, ,075, ,252, ,433, ,619, ,809, ,004, ,205, ,410, ,620, ,835, ,056, ,283, Abandonment Facilities $ 3,942, ,040, ,141, ,245, ,351, ,460, ,571, ,685, ,802, ,923, ,046, ,172, ,301, ,434, ,569, Reclamation Capital $ 9,855, ,101, ,353, ,612, ,878, ,150, ,428, ,714, ,007, ,307, ,615, ,930, ,253, ,585, ,924, Total $ 20,367, ,876, ,398, ,933, ,481, ,043, ,619, ,209, ,815, ,435, ,071, ,723, ,391, ,076, ,778, Greenhouse Gas Emission Compliance Costs (debit as positive and credit as negative) $ Wells 13 Number of New Production Wells # Number of Abandoned Production Wells # Number of New Injection Wells # Number of Abandoned Injection Wells # GHG Emission Intensity 14 Project GHG Emission Intensity per m3 Tonnes/m Other Net Proceeds 15 $ Name Plate Capacity 16 Total Project Approved for Bitumen m 3 /day 9,000,000.0 Total Project Approved for Steam m 3 /day 14,400,000.0 Non-Condensable Gas Injection 17 m 3 /year 680, , , , , , , , , , , , , , ,062.9 Solvent Injection 18 m 3 /year 340, , , , , , , , , , , , , , ,031.4 Actual or Forecast of Project Payout Date 19 Main Contact Name: Position: Phone Number: Address: Date: Alternate Contact Name: Position: Phone Number: Address: Date: Additional Notes 20 8

9 The Forecast Report Form - Contents The form itself has three sections Project Information General project and operator information. Project Name: AAA Oil Sands Thermal Project OSR Project Number: OSR123 Project Operator Name: XYZ Project Operator ID: 1334 Oil Sands Project Area Athabasca Project Technology 0 Other Specify "Other" Project Technology Forecast Inputs Operator s forecast for production volumes, prices, crude quality, allowed costs, etc Some information is linked from sheets with specific phase information. Contact Information and Additional Notes Operator shall list two contacts in case DoE has questions regarding the submitted report. Alternate contact mandatory. Use Additional Notes section if further clarifications or explanations are needed.. 9

10 Filling the Form Cells shaded in grey must be completed. The mandatory fields are subject to the project technology selected on the "Forecast Report Form" tab. Non-shaded cells are linked or computed values from other cells or tabs; cells shaded in black do not apply to the project. Please start with filling in the grey shaded cells in the Forecast Report Form tab and then moving on to fill in grey shaded cells in the following four tabs: "Volumes", "Non- Energy Operating Costs", "Capital Costs", and "Wells"; these tabs contain phase specific information and will be summed up in the "Forecast Report Form" tab. Make sure to use real dollar as of the current production year, i.e. use 2017 real dollar if the current production year is Please note there is no space between OSR and the project number. 10

11 Filling the Form - Forecast Inputs Input forecasts figures in grey cells for the current calendar year and subsequent 14 calendar years, i.e Unit for crude volume is in m³ (cubic meters) instead of barrels. Inputs for Net Cumulative Balance, Other Product Revenues, Natural Gas Volumes, Allowed Costs and Other Net Proceeds are no longer in thousands. For GHG intensity (Tonne/m3 Bitumen), Greenhouse Gas Emission Compliance costs: 2017 SGER, per OBA guidelines (debit as positive & credit as negative). Operator should distinguish the differences between Strategic Capital and Sustaining Capital. For further clarifications, please refer to the Superscript Notes and Royalty Guidelines. Each category s definition is hyperlinked to the Superscript Notes tab. 11

12 Filling the form: Phase Information Cleaned Crude Bitumen RCP (m 3 /year) Name Plate Capacity Project Name OSR Project Number Project Operator ID Phases Approved for Bitumen Phases Already Producing 28 AAA Oil Sands Thermal Project OSR123 A535 A - C 5,122, ,122, ,122, ,935, ,935, ,169, ,169, ,931, ,555, ,169, ,169, ,169, ,169, ,169, ,169, Phases not Producing Yet AAA Oil Sands Thermal Project OSR123 A535 D 320, ,000, ,306, ,230, ,233, ,230, ,230, ,230, ,233, ,230, ,230, ,230, ,233, ,230, ,230, AAA Oil Sands Thermal Project OSR123 A535 E , ,003, , , ,230, ,233, ,230, ,230, ,230, ,233, ,230, ,230, Total - 5,443, ,123, ,429, ,360, ,173, ,087, ,884, ,392, ,022, ,630, ,630, ,630, ,637, ,630, ,630, Steam Injection Volume (m 3 /year) Name Plate Capacity Project Name OSR Project Number Project Operator ID Phases Approved for Steam Phases Already Producing 29 AAA Oil Sands Thermal Project OSR123 A535 A - C 12,806, ,063, ,063, ,324, ,324, ,932, ,932, ,191, ,191, ,803, ,803, ,059, ,059, ,675, ,675, Phases not Producing Yet AAA Oil Sands Thermal Project OSR123 A535 D 802, , , , , , , , , , , , , , , AAA Oil Sands Thermal Project OSR123 A535 E 487, , , , , , , , , , , , Total - 13,609, ,881, ,881, ,646, ,656, ,242, ,244, ,499, ,509, ,099, ,102, ,354, ,364, ,958, ,961, Total Natural Gas Volume Used for Bitumen Production (GJ/year) Project Name OSR Project Number Project Operator ID Phases Phases Already Producing 30 AAA Oil Sands Thermal Project OSR123 A535 A - C 42,458, ,443, ,942, ,843, ,827, ,235, ,303, ,047, ,186, ,845, ,359, ,463, ,889, ,571, ,641, Phases not Producing Yet AAA Oil Sands Thermal Project OSR123 A535 D 1,534, ,511, ,470, ,460, ,206, ,247, ,460, ,019, ,531, ,003, ,184, ,239, ,142, ,189, ,190, AAA Oil Sands Thermal Project OSR123 A535 E ,498, ,489, ,608, ,331, ,019, ,531, ,275, ,275, ,360, ,303, ,313, ,325, Total 43,993, ,954, ,413, ,802, ,523, ,090, ,095, ,086, ,248, ,124, ,819, ,064, ,336, ,073, ,158, Non-Condensable Gas Injection (m3/year) Project Name OSR Project Number Project Operator ID Phases Phases Already Producing 36 AAA Oil Sands Thermal Project OSR123 A535 A - C 640, , , , , , , , , , , , , , , Phases not Producing Yet AAA Oil Sands Thermal Project OSR123 A535 D 40, , , , , , , , , , , , , , , AAA Oil Sands Thermal Project OSR123 A535 E , , , , , , , , , , , , Total 680, , , , , , , , , , , , , , , Solvent Injection (m3/year) Project Name OSR Project Number Project Operator ID Phases Phases Already Producing 36 AAA Oil Sands Thermal Project OSR123 A535 A - C 320, , , , , , , , , , , , , , , Phases not Producing Yet AAA Oil Sands Thermal Project OSR123 A535 D 20, , , , , , , , , , , , , , , AAA Oil Sands Thermal Project OSR123 A535 E , , , , , , , , , , , , Total 340, , , , , , , , , , , , , , ,

13 Filling the form: Phase Information Phase names are only needed to fill in the Volumes tab and then they are automatically carried over to other tables/tabs. New Volumes: Steam, Non-Condensable Gas & Solvent are added. Non Energy Operating Costs are separated into: Non-Gas Variable OPEX Fixed OPEX Capital Costs are now further divided into: Strategic Capital: Wells / Facilities Sustaining Capital: Wells / Facilities Abandonments and Reclamation Capital: Abandonment Wells / Facilities, and Reclamation Capital Wells tab is added: New Production Wells / Abandoned Production Wells New Injection Wells / Abandoned Injection Wells 13

14 Filling out the Form Non-Required Cells Cells now blacked out when not required Additional Notes 20 This is an example only. All information is fictious 14

Filling the Form - Verifying Key Inputs Key Metrics Input Checks - Data Value Production Volumes Inputs Check 22 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Cleaned

15 Filling the Form - Verifying Key Inputs Key Metrics Input Checks - Data Value Production Volumes Inputs Check Cleaned Crude Bitumen Volume - M3 / Year M / Year 5,443,742 6,123,709 6,429,328 6,360,974 7,173,116 8,087,600 7,884,442 7,392,545 7,022,788 8,630,462 8,630,462 8,630,462 8,637,204 8,630,462 8,630,462 3 Cleaned Crude Bitumen Volume - Bbl / Day Bbl / Day 93, , , , , , , , , , , , , , ,783 Y/Y % Change 0.0% 12.5% 5.0% -1.1% 12.8% 12.7% -2.5% -6.2% -5.0% 22.9% 0.0% 0.0% 0.1% -0.1% 0.0% Costs Inputs Check Non-Energy Operating Costs $ / Bbl Y/Y % Change 0.0% -10.8% 0.0% 38.8% -2.9% -11.2% 4.2% 5.8% 6.5% -16.4% 0.3% -0.3% -1.3% 0.6% 0.4% Capital Costs: Sustaining Capital $ / Bbl Change 99.4% -16.1% 35.6% -62.2% 29.0% 21.8% 23.6% -29.2% -2.3% Y/Y % 0.0% 0.7% 1.7% 1.9% 1.3% 0.6% Abandonments Capital - Wells $ / Well ,261 3,537,586 1,813,013 2,477,784 1,313,653 2,603,222 6,670,756 1,641,006 3,504,231 8,620,409 8,835, Y/Y % Change 0.0% % -48.8% 36.7% -47.0% 98.2% 156.3% -75.4% 113.5% 146.0% 2.5% - - Natural Gas Volume Inputs Check Natural Gas Volume Used for Bitumen Production GJ / Bbl Change -5.7% -4.1% -2.7% -10.4% -15.8% -2.3% -0.4% Y/Y % 0.0% 5.0% 2.6% 6.6% 5.6% 0.4% 0.4% 0.2% 15

16 Form Completed Now What? Operator has to submit the report workbook via ETS (Electronic Transfer System). Access to ETS can be obtained by following the process outlined on Alberta Energy s Website: If the submission is rejected, please refer to the turnaround report for reasons and also check the Category Requirements and Validation & Checks tabs to identify the exact errors. Please note the following changes:.xls files are no longer accepted. Blank numeric fields will be accepted as 0 Density, sulphur, and tan must meet validation rules (single numeric value; use the Additional Notes section if explanation is needed) Payout date (actual or forecast) now is mandatory Phase information is now expected to be filled Alberta Department of Energy may request the operator to give a presentation, in the following year, on the submitted forecasts. 16

17 Questions? 17

Statistical Series 59 Alberta Drilling Activity

Statistical Series 59 Alberta Drilling Activity Monthly Statistics August 2018 ALBERTA ENERGY REGULATOR Statistical Series 59: Alberta Drilling Activity Monthly Statistics Disclaimer: The information presented