The Petroleum Registry of Alberta Energizing the flow of information

1. The Petroleum Registry of AlbertaEnergizing the flow of information Registry Information Session September 24, 2007

2. Agenda • REGISTRY TOPICS • Outside Jurisdiction Interest Update • CAPPA Conference Presentation • EUB TOPICS • Shale Reporting added to the Registry • Gas Equivalent Factors (GEF) Updates • “S” Report Submissions Deadlines • EUB Organization Update • Misc (AB MC) Codes • INDUSTRY TOPICS • Industry Planning Process & Outcomes 2008 • Allowable Costs Update • APMC Penalty Process • DID YOU KNOW? • Amalgamations – Impact on Facility Operator Changes • Registry Training Module Updates & Managing Red Folders • Registry Service Desk Stats and Services Provided • QUESTIONS • OIL/LPG PIPELINE SPLITS PROCESS • QUESTIONS

3. 1. REGISTRY TOPICS

4. Registry Topics • a) Interest from Outside Jurisdictions • British Columbia • Formal discussions continue. • Yukon • Sponsorship alignment achieved. • Registry Presence at 2007 CAPPA Conference (October 25, 2007). • 5th Anniversary Commemoration • Breakout Session and Registry booth

5. 2. EUB TOPICS

6. a) Shale Gas Reporting at the Registry

7. What is Shale Gas? • Shale gas is natural gas stored in organic rich rocks such as dark-colored shale, interbedded with layers of shaley siltstone and sandstone. • EUB defines shale in Section 1.020(2) 27.1 of the Oil and Gas Conservation Regulations(OGCR) as a “lithostratigraphic unit having less than 50% by weight organic matter, with: less than 10% of the sedimentary clasts having a grain size greater than 62.5 micrometers; and more than 10% of the sedimentary clasts having a grain size less than 4 micrometers”.

8. Why Shale Reporting? • EUB to distinguish gas production from different structures: • Conventional Gas • Coal bed Methane Gas • Shale Gas

9. When Will Shale Be Available? • December 2007 Calendar month for the production month of November 2007.

10. EUB will introduce three new fluid types for shale: Infrastructure - under Well Status: • SHG - Shale Gas Only (Fluid Code 25) • SHGOT - Shale Gas and other Sources (Fluid Code 24) • CBMSHGOT - CBM & Shale & Other Sources (Fluid Code 26)

11. Shale Gas Only (SHG) • For production from wells completed in shale(s) only. • Wells that are producing gas from the following formations are considered to be potential Shale Gas Only wells. Muskwa, Duvernay, Ireton, Fort Simpson, Exshaw, Fernie, Rierdon, Moosebar, Wilrich, Joli Fou, Harmon, Shaftesbury, Blackstone, Wapiabi, Kaskapau, Muskiki, Lea Park, Pakowki, Battle, Fish Scale, Second White Speckled Shale, Colorado Shale and First White Speckled Shale.

12. Shale Gas and Other Sources (SHGOT) • For production from wells completed in both shale(s) and other lithology; not including coal(s). • Perforations in the following formations/members are mainly non-marine and/or have low organic contents are not considered to contain shale gas but is other lithology. Whyte, Snake Indian, Stephen, Earlie, Deadwood, Sullivan, Bison Creek and Whitemud.

13. CBM, Shale Gas and Other Sources (CBMSHGOT) • For production from wells completed in coal(s), shale(s) and other lithology (eg. sandstone). • The EUB defines coal in Section 1.020(2) 3.1 of the OGCR as:‘a lithostratigraphic unit having 50% or greater by weight organic matter and being thicker than 0.30 metres’. • Perforations in the following organic horizons are not considered to contain shale gas. Glauconitic, Upper Mannville (and Provost equivalents), Foremost, Oldman, Dinosaur Park, Horseshoe Canyon, Scollard and Paskapoo.

14. Shale Reporting • Volumetric Reporting: • Same reporting process as conventional Gas.

15. b) Gas Equivalent Factor (GEF) Updates in the Registry

16. What Is It? • Gas Equivalent Factors (GEFs) are used to convert a liquid volume to a gas equivalent volume, which ensures proper metering balances. The PRA uses these factors to derive the activity shrinkage (SHR) at a gas plant or a gathering system. • The GEFs are obtained from the Gas Processors Association (GPA) Engineering Data Book.

17. Why is it Being Changed? • Since the Registry went live, the GEF’s have not been changed. • The GPA had published modifications in 2003 but changes were not significant enough to adopt. • Until now ...

18. What are the Changes? • GEFs for all other liquid components not mentioned above will remain unchanged. • This will affect your metering differences at your facilities.

19. When Will These Changes Take Effect? • Effective date: January Production An alert will be posted on the Registry one month prior to implementation. • Derived gas equivalents already in the Registry will not be changed. (No retroactive changes) • Gas equivalent calculations for any amendments prior to production month January 2008 will use the old GEF values. • Gas equivalent calculations for submissions and amendments starting January 2008 production month will use the new GEF values.

20. c) “S” Report Submissions Deadline

21. “S” Report Submissions Deadline • S-doc amendments until January 31st, 2008. • For production months prior to October 2002. • Allows clients to process documents amended from the fifth year. • Audit to review and submit any amendments they deem necessary. • After January 31st, 2008, you will not be able to amend production months prior to October 2002.

22. d) EUB Organization Update

23. EUB Organization Update Effective January 1st, 2008 EUB will be split into two different organizations: • Energy Resources Conservation Board (ERCB). • Alberta Utilities Commission (AUC). • There will be no impact to the Industry except for the new names and logos. • There will be two different web sites. • Other changes will follow – watch for EUB communication updates.

24. e) Miscellaneous (AB MC) Codes

25. Use Of Miscellaneous (AB MC) Codes In The Registry Miscellaneous Codes (AB MC) can be used in the following circumstances: • For Gas Fires. • For Oil deliveries to “downstream” facilities that are not on the Registry, such as an Asphalt Plant. • Water received from or delivered to a pit. • For your “unique” situation, please call the PA Helpdesk.

26. MIS-USE Of Miscellaneous Codes In The Registry Miscellaneous Codes (AB MC) should NOT be used in the following circumstances: • To balance facilities. • For outside Province or State deliveries or receipts. Use province or state codes e.g. SK, BC or TX. • For Oil Fire, Theft or Spill. Show as INVADJ.

27. Ensure AB MC Codes Are Used Correctly • Proper source documents MUST be kept on file such as Meter or Truck Tickets. • Usage of MC codes may be subject to an audit.

28. MC Oil DISP Usage Volume M3 PRODUCTION MONTH

29. MC Oil REC Usage Volume M3 PRODUCTION MONTH

30. For More Help… Contact the EUB • PA Helpdesk @ EUB 297-8952 option 3 email: PA.help@eub.ca. • Can provide more information and instructions on all of the topics covered today. • Wells Records Helpdesk@ EUB 297-8696

31. INDUSTRY TOPICS

32. a) Industry Registry Planning Process and Outcomes 2008

33. Industry Planning Process Overview • Industry’s Registry Priorities for 2008

34. Industry Planning Process for the Registry1a. Priority Identification • On an annual basis, the CAPP/SEPAC Industry Benefits Committee (IBC) identifies and prioritizes Registry-related areas of focus for the IBC and the Industry Registry Team (IRT). • “Focus Priorities” can be grouped as: a. Operational and O&M Change Management Items b. Major Registry Enhancements c. Registry-related Business Support Priorities • The IBC rates its priorities on a scale ranging from: 0 = no value, to 5 = highest value Note that perspectives summarized in this presentation are consensus views. Opinions vary between companies.

35. Industry Planning Process for the Registry1b. Approval Process • The IBC’s priorities are reviewed and endorsed by: • CAPP Accounting Committee • CAPP Fiscal EPG • SEPAC Finance Committee • These groups also review and make decisions on IRT staffing and funding for the coming year. Note that Industry’s Registry governance processes require business cases to be prepared and reviewed with the CAPP Fiscal EPG and SEPAC Finance Committee where any Industry funding and/or significant Industry time resources are required. Endorsement of “priorities” during the annual planning exercise does not constitute project approval.

36. Industry’s Registry Priorities for 20082a. Operational and Change Management Items

37. Industry’s Registry Priorities for 20082b. Major Registry Enhancements

38. Industry’s Registry Priorities for 20082c. Registry-related Business Support Items

39. Industry’s Registry Priorities for 2008Summary and Conclusions • The annual planning process is valuable in identifying and prioritizing areas for focus by the IBC and IRT. • The IBC is a valuable forum for providing input to senior CAPP and SEPAC committees, the IRT and the Registry. • The IBC is also a valuable venue for Industry companies to share best practices in working with the Registry. Your company’s involvement is encouraged! (Contact an IRT or IBC rep for information on how to get involved). • The Registry has other venues for providing input: • Service Desk calls • Online Suggestion Forms available on the Registry website

40. Allowable Costs

41. Allowable Cost Update • GCA Subcommittee Update • AC1 Delete • Allowable Cost Submission Tools And Tips

42. GCA Subcommittee Update • The GCA Subcommittee is a subcommittee of the CAPP/SEPAC Industry Benefits Committee (IBC). • Overall the GCA Subcommittee provided very positive feedback on the 2006 GCA season. • The Industry Registry Team (IRT) and the GCA Subcommittee are working with the DOE Gas Royalty group on a number of matters (joint meeting planned for early October). • Any new developments will be communicated subsequent to that meeting.

43. AC1 Delete • Effective October 4, 2007, an AC1 can be deleted from the Registry under the following circumstances • There have been no AC2s, AC3s or AC4s filed for this FCC Id. • There has been only one operator for the FCC. • The FCC Id has not been referred to on any other FCC (ie previous FCC Id). • If you need to delete an AC1 but cannot due to the above rules then you must perform the current two step process of: • shutting in the FCC. • terminating it.

47. AC Submission Tools and Tips • DOE reports delivered to Ministry Invoices and Statements. • Energy Adjusted Gas Equivalent Volumes Report (EGAV). • Identifies all royalty trigger facilities where a BA has been allocated volumes. • Use this report to ensure that an AC2 and/or an AC5 has been filed for each facility listed on this report. • Expected AC5 Report • Identifies facilities where a BA has been named as a Custom user on an AC2 • You may still file an AC5 if a facility where you have paid custom processing fees is not on the Expected AC5 Report IF it is listed on the EGAV Report.

48. AC Submission Tools and Tips(Cont’d) 3. Expected AC2 Report. • Identifies FCCs where a BA is the operator. • To avoid penalties the BA must make an AC2 submission.