----

|   | Suite 2100555 – 4th Ave. S.W.Calgary, AlbertaCanada  T2P 3E7                                                   Main: 403.249.9425Fax:403.225.2606                                                        www.opticanada.com |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |                          |
|-------------------------------|-------------------------------|
| (signed) Christopher Slubicki | (signed) Travis Beatty        |
| President &               | Vice-President, Finance & |
| Chief Executive Officer       | Chief Financial Officer       |
|                          |                          |
| March 15, 2010                |                          |

----

|   |                                                                                                                                                             |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  PricewaterhouseCoopers LLPChartered Accountants111 5 Avenue SW, Suite 3100Calgary, AlbertaCanada T2P 5L3Telephone +1 403 509 7500Facsimile +1 403 781 1825 |

----

“PricewaterhouseCoopers” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate legal entity.

----

----

|                                                                                    |   |   |      |   |   |   |
|-----------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| (amounts in thousands of Canadian dollars)                                              |   | 2009   |      |   | 2008   |   |
|                                                                                    |   |   |      |   |   |   |
| ASSETS                                                                                  |   |   |      |   |   |   |
| Current                                                                                 |   |   |      |   |   |   |
|        Cash and cash equivalents                     |   | $      | 357,723   |   |   | $      | 217,145 |   |
|        Accounts and other receivables                |   |   | 15,308    |   |   |   | 22,807 |   |
|        Inventory                                     |   |   | 8,496     |   |   |   | - |   |
|        Future income taxes (note 6)                  |   |   | -         |   |   |   | 2,709 |   |
|                                                                                    |   |   | 381,527   |   |   |   | 242,661 |   |
|                                                                                    |   |   |      |   |   |   |   |   |
| Property, plant and equipment (note 4)                                                  |   |   | 3,442,496 |   |   |   | 4,052,525 |   |
| Hedging instruments (note 3)                                                            |   |   | -         |   |   |   | 109,682 |   |
| Future income taxes (note 6)                                                            |   |   | -         |   |   |   | 67,534 |   |
|                                                                                    |   | $      | 3,824,023 |   |   | $      | 4,472,402 |   |
| LIABILITIES                                                                             |   |   |      |   |   |   |   |   |
| Current                                                                                 |   |   |      |   |   |   |   |   |
|        Accounts payable and accrued liabilities      |   | $      | 79,135    |   |   | $      | 199,907 |   |
|        Hedging instruments (note 3)                  |   |   | 134,099   |   |   |   | - |   |
|        Short-term revolving credit facility (note 5) |   |   | -         |   |   |   | 145,500 |   |
|                                                                                    |   |   | 213,234   |   |   |   | 345,407 |   |
|                                                                                    |   |   |      |   |   |   |   |   |
| Long-term debt (note 5)                                                                 |   |   | 2,272,992 |   |   |   | 2,618,000 |   |
| Obligation under capital lease (note 12)                                                |   |   | 20,616    |   |   |   | 30,195 |   |
| Other long-term liabilities (note 7)                                                    |   |   | 6,189     |   |   |   | 7,937 |   |
|                                                                                    |   |   | 2,513,031 |   |   |   | 3,001,539 |   |
| SHAREHOLDERS’ EQUITY (note 8)                                                     |   |   |      |   |   |   |   |   |
|  Capital stock                                                                     |   |   | 1,992,394 |   |   |   | 1,847,461 |   |
| Contributed surplus                                                                     |   |   | 32,432    |   |   |   | 31,080 |   |
| Deficit                                                                                 |   |   | (713,834  | )      |   |   | (407,678 | ) |
|                                                                                    |   |   | 1,310,992 |   |   |   | 1,470,863 |   |
|                                                                                    |   | $      | 3,824,023 |   |   | $      | 4,472,402 |   |

----

----

| (amounts in thousands of Canadian dollars, except per share amounts)                    |   | 2009   |     |   | 2008   |   |
|-----------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                                                    |   |   |     |   |   |   |
| Revenue                                                                                 |   |   |     |   |   |   |
|        Petroleum sales                               |   | $      | 140,780  |   |   | $      | 187,069 |   |
|         Power sales                             |   |   | 4,961    |   |   |   | 11,232 |   |
|        Royalties                                     |   |   | (1,905   | )      |   |   | (365 | ) |
|                                                                                    |   |   | 143,836  |   |   |   | 197,936 |   |
| Expenses                                                                                |   |   |     |   |   |   |   |   |
|        Operating expense                             |   |   | 146,331  |   |   |   | 83,759 |   |
|        Diluent and feedstock purchases               |   |   | 102,193  |   |   |   | 164,547 |   |
|        Transportation                                |   |   | 13,133   |   |   |   | 8,230 |   |
|        Interest, net (note 9)                        |   |   | 150,222  |   |   |   | 32,542 |   |
|        General and administrative                    |   |   | 17,339   |   |   |   | 17,616 |   |
|        Financing charges                             |   |   | 21,881   |   |   |   | 893 |   |
|        Realized gain on hedging instruments          |   |   | (40,323  | )      |   |   | (115,415 | ) |
|        Foreign exchange translation (gain) loss      |   |   | (294,415 | )      |   |   | 372,626 |   |
|        Unrealized loss (gain) on hedging instruments |   |   | 233,865  |   |   |   | (160,460 | ) |
|        Depletion, depreciation and accretion         |   |   | 26,114   |   |   |   | 17,067 |   |
|        Impairment of assets (note 14)                |   |   | -        |   |   |   | 369,353 |   |
|        Loss on disposal of assets                    |   |   | 1,614    |   |   |   | - |   |
|                                                                                    |   |   | 377,954  |   |   |   | 790,758 |   |
|                                                                                    |   |   |     |   |   |   |   |   |
| Loss before taxes                                                                       |   |   | (234,118 | )      |   |   | (592,822 | ) |
|                                                                                    |   |   |     |   |   |   |   |   |
| Income taxes                                                                            |   |   |     |   |   |   |   |   |
|        Future tax expense (recovery) (note 6)        |   |   | 72,038   |   |   |   | (115,900 | ) |
|                                                                                    |   |   |     |   |   |   |   |   |
| Net loss and comprehensive loss                                                         |   |   | (306,156 | )      |   |   | (476,922 | ) |
|                                                                                    |   |   |     |   |   |   |   |   |
| Retained earnings (deficit) - beginning of year                                         |   |   | (407,678 | )      |   |   | 85,908 |   |
| Expiration of call obligations (note 8)                                                 |   |   | -        |   |   |   | (16,664 | ) |
| Deficit - end of year                                                                   |   | $      | (713,834 | )      |   | $      | (407,678 | ) |
|                                                                                    |   |   |     |   |   |   |   |   |
| Loss per share, basic and diluted                                                       |   | $      | (1.28    | )      |   | $      | (2.43 | ) |

----

----

|                                                                                    |   | 2009   |     |   | 2008   |   |
|-----------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| (amounts in thousands of Canadian dollars)                                              |   |   |     |   |   |   |
| Cash provided by (used in):                                                             |   |   |     |   |   |   |
| Operating activities                                                                    |   |   |     |   |   |   |
|     Net loss                                                        |   | $      | (306,156 | )      |   | $      | (476,922 | ) |
|     Items not affecting cash                                        |   |   |     |   |   |   |   |   |
|        Amortization and accretion expense            |   |   | 26,114   |   |   |   | 17,067 |   |
|        Stock-based compensation expense              |   |   | 870      |   |   |   | 1,895 |   |
|        Impairment of assets (note 14)                |   |   | -        |   |   |   | 369,353 |   |
|        Loss on disposal of assets                    |   |   | 1,614    |   |   |   |   |   |
|        Non-cash interest expense                     |   |   | 469      |   |   |   | 189 |   |
|        Unrealized (gain) loss on hedging instruments |   |   | 233,865  |   |   |   | (160,460 | ) |
|        Commodity hedge expense                       |   |   | 9,917    |   |   |   |   |   |
|        Foreign exchange translation loss (gain)      |   |   | (294,415 | )      |   |   | 372,626 |   |
|        Future tax expense (recovery)                 |   |   | 72,038   |   |   |   | (115,900 | ) |
|                                                                                    |   |   | (255,684 | )      |   |   | 7,848 |   |
|     Asset retirement costs incurred                                 |   |   | (1       | )      |   |   | (9 | ) |
|     Net change in non-cash working capital                          |   |   | 15,371   |   |   |   | 1,157 |   |
|                                                                                    |   |   | (240,314 | )      |   |   | 8,996 |   |
| Financing activities                                                                    |   |   |     |   |   |   |   |   |
|     Increase in debt                                                |   |   | 441,064  |   |   |   | 632,000 |   |
|     Repayments of debt                                              |   |   | (632,000 | )      |   |   | - |   |
|     Net proceeds from share issuances                               |   |   | 143,121  |   |   |   | 6,970 |   |
|     Decrease in principal portion of capital lease obligation       |   |   | (341     | )      |   |   | (305 | ) |
|     Net change in non-cash working capital                          |   |   | (3,725   | )      |   |   | 13,241 |   |
|                                                                                    |   |   | (51,881  | )      |   |   | 651,906 |   |
| Investing activities                                                                    |   |   |     |   |   |   |   |   |
|     Property, plant and equipment additions                         |   |   | (158,145 | )      |   |   | (890,324 | ) |
|     Sale of assets                                                  |   |   | 721,467  |   |   |   | - |   |
|     Decrease in interest reserve account                            |   |   | -        |   |   |   | 158,398 |   |
|     Net change in non-cash working capital                          |   |   | (117,203 | )      |   |   | (31,950 | ) |
|                                                                                    |   |   | 446,119  |   |   |   | (763,876 | ) |
| Foreign exchange gain (loss) on cash and cash                                           |   |   |     |   |   |   |   |   |
| equivalents held in foreign currency                                                    |   |   | (13,346  | )      |   |   | 9,615 |   |
|                                                                                    |   |   |     |   |   |   |   |   |
| Increase (decrease) in cash                                                             |   |   | 140,578  |   |   |   | (93,359 | ) |
|                                                                                    |   |   |     |   |   |   |   |   |
| Cash and cash equivalents - beginning of year                                           |   |   | 217,145  |   |   |   | 310,504 |   |
| Cash and cash equivalents - end of year                                                 |   | $      | 357,723  |   |   | $      | 217,145 |   |

----

----

| 1. | SUMMARY OF OPERATIONS |
|----|-----------------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

|   | a) | Property, plant and equipment |
|--------|----|-------------------------------|

|   | (i)    Petroleum and natural gas properties |
|--------|-----------------------------------------------------------------|

|   | (ii)   Major facilities |
|--------|----------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | (iii)  Asset retirement obligations |
|--------|------------------------------------------|

|   | (iv)   Corporate assets |
|--------|-----------------------------------|

|   | (v)    Maintenance and turnarounds |
|--------|---------------------------------------------------|

|   | (vi)   Capitalized interest |
|--------|---------------------------------------|

|   | b) | Joint venture |
|--------|----|---------------|

|   | c) | Inventory |
|--------|----|-----------|

|   | d) | Revenue recognition - Oil and gas products |
|--------|----|--------------------------------------------|

|   | e) | Revenue recognition - Power |
|--------|----|-----------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | f) | Transportation |
|--------|----|----------------|

|   | g) | Cash and cash equivalents |
|--------|----|---------------------------|

|   | h) | Accounts receivable |
|--------|----|---------------------|

|   | i) | Leases |
|--------|----|--------|

|   | j) | Income taxes |
|--------|----|--------------|

|   | k) | Financing costs |
|--------|----|-----------------|

|   | l) | Flow-through shares |
|--------|----|---------------------|

|   | m) | Stock-based compensation plans |
|--------|----|--------------------------------|

|   | n) | Foreign currency translation |
|--------|----|------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | o) | Financial instruments |
|--------|----|-----------------------|

|   | (i)     Held for trading |
|--------|----------------------------------------------|

|   | (ii)    Held-to-maturity |
|--------|-----------------------------------------|

|   | (iii)  Other financial liabilities |
|--------|-----------------------------------------|

|   | (iv)   Receivables |
|--------|------------------------------|

|   | (v)    Available-for-sale |
|--------|-----------------------------------------------|

|   | p) | Loss per share |
|--------|----|----------------|

| Number of shares (thousands)                |   | December 31, 2009 |    |   | December 31, 2008 |   |
|---------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
| Weighted average shares outstanding         |   |              | 238,856 |   |              |   | 195,690 |   |
| Diluted effect of stock options (1)         |   |              | -       |   |              |   | - |   |
| Weighted average diluted shares outstanding |   |              | 238,856 |   |              |   | 195,690 |   |
| Basic and fully diluted loss per share      |   | $                 | (1.28   | )      |              | $      | (2.43 | ) |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | q) | Use of estimates |
|--------|----|------------------|

|   | r) | New standards |
|--------|----|---------------|

|   | (i)  Goodwill and intangible assets |
|--------|------------------------------------------|

|   | (ii) Credit risk |
|--------|-----------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | (iii)   Financial instruments disclosures |
|--------|----------------------------------------------------------|

|   | • | Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities; |
|--------|---------|-------------------------------------------------------------------------------------------|

|   | • | Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------|

|   | • | Level 3 - Inputs that are not based on observable market data. |
|--------|---------|----------------------------------------------------------------|

|   | (iv)      Future accounting changes |
|--------|--------------------------------------------------------------|

|   | s) | Comparative figures |
|--------|----|---------------------|

| 3. | HEDGING INSTRUMENTS |
|----|---------------------|

| Liability (asset)                                  |   | 2009   |    |   | 2008   |   |
|----------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Foreign exchange hedging instruments (level 2) (i) |   | $      | 114,650 |   |   | $      | (31,679 | ) |
| Commodity hedging instruments (level 2) (ii)       |   |   | 19,449  |   |   |   | (78,003 | ) |
| Total hedge liability (asset)                      |   | $      | 134,099 |   |   | $      | (109,682 | ) |

|   | (i)    Foreign exchange hedging |
|--------|------------------------------------------------|

|   | (ii)   Commodity hedging |
|--------|------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 4. | PROPERTY, PLANT AND EQUIPMENT |
|----|-------------------------------|

|                                 |   | December 31, 2009 |      |
|--------------------------------------|--------|-------------------|-----------|
|                                 |   | Cost              |      |   | Accumulated DD&A |   |   | Net book value |   |
| Petroleum and natural gas properties |   | $                 | 680,491   |   |   | $ | (24,832 | ) |   | $ | 655,659 |   |
| Major facilities                     |   |              | 2,773,241 |   |   |   | (8,624 | ) |   |   | 2,764,617 |   |
| Corporate assets                     |   |              | 622       |   |   |   | (409 | ) |   |   | 213 |   |
| Capital lease                        |   |              | 22,719    |   |   |   | (712 | ) |   |   | 22,077 |   |
|                                 |   | $                 | 3,477,073 |   |   | $ | (34,577 | ) |   | $ | 3,442,496 |   |

|                                 |   | December 31, 2008 |      |
|--------------------------------------|--------|-------------------|-----------|
|                                 |   | Cost              |      |   | Accumulated DD&A |   |   | Net book value |   |
| Petroleum and natural gas properties |   | $                 | 811,990   |   |   | $ | (9,150 | ) |   | $ | 802,840 |   |
| Major facilities                     |   |              | 3,220,287 |   |   |   | (1,944 | ) |   |   | 3,218,343 |   |
| Corporate assets                     |   |              | 3,555     |   |   |   | (2,408 | ) |   |   | 1,147 |   |
| Capital lease                        |   |              | 30,195    |   |   |   | - |   |   |   | 30,195 |   |
|                                 |   | $                 | 4,066,027 |   |   | $ | (13,502 | ) |   | $ | 4,052,525 |   |

| 5. | DEBT FACILITIES |
|----|-----------------|

|                                     |   | 2009   |      |   | 2008   |   |
|------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Senior Notes (a)                         |   | $      | 2,272,992 |   |   | $      | 2,131,500 |   |
| Long term revolving credit facility (b)  |   |   | -         |   |   |   | 486,500 |   |
| Long-term debt                           |   |   | 2,272,992 |   |   |   | 2,618,000 |   |
|                                     |   |   |      |   |   |   |   |   |
| Short-term revolving credit facility (c) |   |   | -         |   |   |   | 145,500 |   |
| Total debt                               |   | $      | 2,272,992 |   |   | $      | 2,763,500 |   |

|   | a) | Senior Notes |
|--------|----|--------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | b) | Long term revolving credit facility |
|--------|----|-------------------------------------|

|   | c) | Short term revolving credit facility |
|--------|----|--------------------------------------|

| 6. | FUTURE INCOME TAXES |
|----|---------------------|

|                                                                                                    |  2009          | 2008        | 2009                  | 2008                   |
|---------------------------------------------------------------------------------------------------------|---------------------|-------------|-----------------------|------------------------|
| Recovery based on book loss - Federal rate                                                              | 19.0%               | 19.5%       | $  (44,483) | $  (115,601) |
| Recovery based on book loss - Provincial rate                                                           | 10.0%               | 10.0%       | (23,412)              | (59,282)               |
| Recovery based on book loss - total                                                                     | 29.0%               | 29.5%       | (67,895)              | (174,883)              |
| Impact of future tax rate and timing changes                                                            | 12,414              | 21,072      |
| (Non-taxable)/non-deductible portion of unrealized foreign exchange (gains)/losses on U.S. dollar debt  | (43,506)            | 58,517      |
| Non-deductible/(non-taxable) portion of realized foreign exchange losses/(gains) on hedging instruments | 21,218              | (22,179)    |
| Non-deductible/(non-taxable)  stocked based compensation expense                              | 170                 | 559         |
| Valuation allowance (a)                                                                                 | 148,596             | -           |
| Other                                                                                                   | 1,041               | 1,014       |
| Future tax expense (recovery)                                                                           | $  72,038 | $ (115,900) |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|                                               |   | 2009   |     |   | 2008   |   |
|----------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Book value in excess of tax value - capital assets |   | $      | 506,046  |   |   | $      | 242,934 |   |
| Book value in excess of tax value - long-term debt |   |   | 8,572    |   |   |   | (23,663 | ) |
| Asset retirement obligation                        |   |   | (1,547   | )      |   |   | (1,984 | ) |
| Benefit of share issuance costs                    |   |   | (10,926  | )      |   |   | (9,198 | ) |
| Losses for income tax purposes                     |   |   | (650,741 | )      |   |   | (278,331 | ) |
| Valuation allowance (a)                            |   |   | 148,596  |   |   |   | - |   |
| Future tax asset                                   |   |   | -        |   |   |   | (70,242 | ) |
| Short-term future tax asset                        |   |   | -        |   |   |   | (2,709 | ) |
| Long-term future tax asset                         |   | $      | -        |   |   | $      | (67,534 | ) |

|   | a) | Valuation allowance |
|--------|----|---------------------|

| 7. | OTHER LONG-TERM LIABILITIES |
|----|-----------------------------|

| Continuity of asset retirement obligation        |   |   |   |
|--------------------------------------------------|--------|--------|--------|
| Present value of obligation at January 1, 2008   |   | $      | 7,070  |   |
| New obligations during the year                  |   |   | 309    |   |
| Asset retirement costs incurred                  |   |   | (9     | ) |
| Accretion expense                                |   |   | 567    |   |
| Present value of obligation at December 31, 2008 |   |   | 7,937  |   |
| Adjustment for working interest (note 14)        |   |   | (2,285 | ) |
| New obligations during the year                  |   |   | 88     |   |
| Asset retirement costs incurred                  |   |   | (1     | ) |
| Accretion expense                                |   |   | 450    |   |
| Present value of obligation at December 31, 2009 |   | $      | 6,189  |   |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 8. | SHAREHOLDERS’ EQUITY |
|----|----------------------------|

|   | b) | Issued and outstanding |
|--------|----|------------------------|

|                                                       |   | Number of shares(thousands) |    |   | Amount |   |
|------------------------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|
| Common shares - January 1, 2008                            |   |                        | 195,356 |   |   | $      | 1,853,917 |   |
| Common share options exercised                             |   |                        | 357     |   |   |   | 4,870 |   |
| Warrants exercised (d)                                     |   |                        | 217     |   |   |   | 3,750 |   |
| Share issue costs                                          |   |                        | -       |   |   |   | (71 | ) |
| Tax effect on flow-through shares and share issue costs    |   |                        | -       |   |   |   | (15,005 | ) |
| Common shares - December 31, 2008                          |   |                        | 195,930 |   |   |   | 1,847,461 |   |
| Issued for cash (c)                                        |   |                        | 85,720  |   |   |   | 150,010 |   |
| Share issue costs net of future taxes                      |   |                        | -       |   |   |   | (5,437 | ) |
| Common share options exercised                             |   |                        | 100     |   |   |   | 360 |   |
| Total common shares - December 31, 2009                    |   |                        | 281,750 |   |   | $      | 1,992,394 |   |
|                                                       |   |                        |    |   |   |   |   |   |
| Call obligations - January 1, 2008                         |   |                        | -       |   |   |   | (16,664 | ) |
| Expiration of call obligations (e)                         |   |                        | -       |   |   |   | 16,664 |   |
| Call obligations - December 31, 2008 and December 31, 2009 |   |                        | -       |   |   |   | - |   |
| Total capital stock - December 31, 2009                    |   |                        | 281,750 |   |   | $      | 1,992,394 |   |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| OPTIONS OUTSTANDING       |   | Options(thousands) |   |   | Exercise price(per share) |   |
|---------------------------|--------|--------------------|--------|--------|---------------------------|--------|
| Balance January 1, 2008   |   |               | 7,208  |   |                      | $      | 13.03 |   |
| Granted                   |   |               | 761    |   |                      |   | 15.74 |   |
| Forfeited                 |   |               | (452   | )      |                      |   | 17.80 |   |
| Exercised                 |   |               | (357   | )      |                      |   | 10.76 |   |
| Balance December 31, 2008 |   |               | 7,160  |   |                      | $      | 13.14 |   |
| Granted                   |   |               | 2,279  |   |                      |   | 2.53 |   |
| Forfeited                 |   |               | (4,186 | )      |                      |   | 15.23 |   |
| Exercised                 |   |               | (100   | )      |                      |   | 3.30 |   |
| Balance December 31, 2009 |   |               | 5,152  |   |                      | $      | 6.90 |   |

|                      |            |   |               |   |   | Options outstanding                |   |   | Exercisable options             |   |
|---------------------------|-----------------|--------|--------------------|--------|--------|------------------------------------|--------|--------|---------------------------------|--------|
| Exercise price range      |            |   | Options(thousands) |   |   | Remaining contractual life (years) |   |   | Weighted average exercise price |   |   | Options (thousands) |   |   | Weighted average exercise price |   |
| $                         | 1.59 to $4.99   |   |               |   | 2,250  |                               |   |   | 6.59                            |   |   | $ | 2.54 |   |   |   | - |   |   | $ | - |   |
| $                         | 5.00 to $9.99   |   |               |   | 2,513  |                               |   |   | 0.37                            |   |   |   | 9.29 |   |   |   | 2,473 |   |   |   | 9.36 |   |
| $                         | 10.00 to $14.99 |   |               |   | 134    |                               |   |   | 5.39                            |   |   |   | 10.96 |   |   |   | 104 |   |   |   | 10.95 |   |
| $                         | 15.00 to $19.99 |   |               |   | 155    |                               |   |   | 7.32                            |   |   |   | 18.40 |   |   |   | 78 |   |   |   | 18.32 |   |
| $                         | 20.00 to $22.56 |   |               |   | 100    |                               |   |   | 7.43                            |   |   |   | 21.35 |   |   |   | 38 |   |   |   | 21.44 |   |
| Balance December 31, 2009 |            |   | 5,152              |   |   |                               | 3.56   |   |                            | $      | 6.90 |   |   |   | 2,693 |   |   | $ | 9.84 |   |

|                                  |   | 2009    |         |     | 2008   |   |
|---------------------------------------|--------|---------|--------------|----------|--------|--------|
| Expected life of options(1)           |   | 7 years |         | 10 years |
| Expected dividend yield of options(2) |   |    | 0            | %        |   |   | 0 | % |
| Expected volatility(3)                |   |    | 75           | %        |   |   | 45 | % |
| Risk free interest rate(4)            |   |    | 3.00% - 3.25 | %        |   |   | 2.75% - 3.75 | % |
| Estimated forfeiture rate(5)          |   |    | 15           | %        |   |   | 15 | % |

|   | (2) | The expected dividend yield of options is 0% since OPTI has not historically paid dividends, nor does it intend to. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------|

|   | (3) | Expected volatility is based on the annual historical volatility of OPTI’s share price from the date of OPTI’s initial public offering. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | The risk free rate is based upon interest rates for a zero coupon 10 year Government of Canada bond. |
|--------|-----|------------------------------------------------------------------------------------------------------|

|   | (5) | The estimated forfeiture rate is based on historical forfeitures. |
|--------|-----|-------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|                                 |   |   |   |
|--------------------------------------|--------|--------|--------|
| Balance January 1, 2008              |   | $      | 11,897 |   |
| Capitalized stock-based compensation |   |   | 3,181  |   |
| Expensed stock-based compensation    |   |   | 1,895  |   |
| Reclassified expired warrants        |   |   | 15,137 |   |
| Stock options exercised              |   |   | (1,030 | ) |
| Balance December 31, 2008            |   | $      | 31,080 |   |
| Capitalized stock-based compensation |   |   | 482    |   |
| Expensed stock-based compensation    |   |   | 870    |   |
| Balance December 31, 2009            |   | $      | 32,432 |   |

|   | 9. | NET INTEREST EXPENSE |
|--------|----|----------------------|

|                 |   | 2009   |    |   | 2008   |   |
|----------------------|--------|--------|---------|--------|--------|--------|
| Interest income      |   | $      | (1,140  | )      |   | $      | (5,985 | ) |
| Interest expense     |   |   | 151,362 |   |   |   | 38,527 |   |
| Net interest expense |   | $      | 150,222 |   |   | $      | 32,542 |   |

| 10. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT |
|-----|-------------------------------------------|

|   | a) | Fair values |
|--------|----|-------------|

|   | OPTI’s financial instruments include cash equivalents, accounts receivable and accounts payable and accrued liabilities. Due to the short-term nature of the instruments, the carrying values approximate the fair values.. Accounts receivable are all current and less than 30 days outstanding and primarily from one customer.  The commodity contracts and foreign exchange contracts are consideredto be held-for-trading and are recorded at fair value.  OPTI’s senior notes and the revolving credit facilities are recorded at amortized cost. At December 31, 2009, the estimated fair value of the notes is US$1,868 million (CDN$1,963 million) and the carrying value of the revolving credit facilities approximates their fair value due to their variable rate, first priority security position and short-term duration of instruments outstanding under the facilities. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| In $ millions                                                        |   | Total  |   |   | 2010   |   |   |   | 2011 - 2012 |   |   |   | 2013 - 2014 |   |   | Thereafter |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|------------|--------|
| Accounts payable and accrued liabilities(1)                          |   | $      | 68     |   |   | $      | 68     |   |        | $      | -      |   |        | $      | -      |       |   | $ | - |   |
| Hedging instruments - commodity contracts (note 3)                   |   |   | 19     |   |   |   | 19     |   |        |   | -      |   |        |   | -      |       |   |   | - |   |
| Hedging instruments - foreign exchange contracts  (note 3) |   |   | 115    |   |   |   | 115    |   |        |   | -      |   |        |   | -      |       |   |   | - |   |
| Long-term debt (Senior Notes - principal)(2)                         |   |   | 2,286  |   |   |   | -      |   |        |   | 447    |   |        |   | 1,839  |       |   |   | - |   |
| Long-term debt (Senior Notes - interest)(3)                          |   |   | 719    |   |   |   | 192    |   |        |   | 378    |   |        |   | 149    |       |   |   | - |   |
| Capital leases(5)                                                    |   |   | 68     |   |   |   | 3      |   |        |   | 6      |   |        |   | 6      |       |   |   | 53 |   |
| Total commitments                                                    |   | $      | 3,275  |   |   | $      | 397    |   |        | $      | 831    |   |        | $      | 1,994  |       |   | $ | 53 |   |

|   | b) | Risk management |
|--------|----|-----------------|

|   | OPTI provides a risk management discussion as required by the CICA handbook section 3862 “Financial Instruments - Disclosures” on its exposure to and management of credit risk, liquidity risk and market risk in the 2009 annual MD&A under the heading “Financial Instruments”. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | c) | Foreign exchange hedging instruments |
|--------|----|--------------------------------------|

|   | At December 31, 2009, OPTI has foreign exchange forward contracts that provide for a fixed payment of Canadian dollars in exchange for receipt of U.S. dollars. OPTI’s foreign exchange hedging instruments are derivatives and accounted for as held for trading financial instruments and are recorded at fair value. Fair values are based upon quoted market prices available from active markets (level 2) orare otherwise determined using a variety of valuation techniques and models using quoted market prices. See note 2(o) and note 3. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Commodity contracts |
|--------|----|---------------------|

|   | During 2009, OPTI purchased put options that provide a fixed price for a portion of its anticipated 2010 production.  OPTI’s commodity hedging instruments are derivatives and accounted for as held for trading financial instruments and are recorded at fair value. Fair values are based upon quoted market prices available from active markets (level 2) or are otherwise determined using a varietyof valuation techniques and models using quoted market prices. See note 2(o) and note 3. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 11. | CAPITAL MANAGEMENT |
|-----|--------------------|

OPTI’s objectives when managing its capital are: 

|   | • | to manage capital in a manner that will address compliance with its financial covenants; |
|--------|---------|------------------------------------------------------------------------------------------|

|   | • | to manage a capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business; |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | • | to maintain an appropriate balance between debt and equity sources of financing; and |
|--------|---------|--------------------------------------------------------------------------------------|

|   | • | to maintain sufficient cash and undrawn credit capacity to provide liquidity. |
|--------|---------|-------------------------------------------------------------------------------|

|   | • | capital stock; and |
|--------|---------|--------------------|

|   | • | debt, including long and short-term portions. |
|--------|---------|-----------------------------------------------|

| Financial Ratio       | Covenant | Calculated ratio at December 31, |
|----------------------------|----------|----------------------------------|
| 2009                       | 2008     |
| Debt to Capitalization (1) | Maximum  | 70%                              | 65% |
| Actual                     | 58%      | 64%                              |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 12. | COMMITMENTS |
|-----|-------------|

|   | a) | Lease obligations and other commitments |
|--------|----|-----------------------------------------|

|                     |   |   |    |
|--------------------------|--------|--------|---------|
| 2010                     |   | $      | 3,251   |   |
| 2011                     |   |   | 3,251   |   |
| 2012                     |   |   | 3,019   |   |
| 2013                     |   |   | 2,903   |   |
| 2014                     |   |   | 2,903   |   |
| Thereafter               |   |   | 52,737  |   |
| Total including interest |   |   | 68,064  |   |
| Less imputed interest    |   |   | (47,448 | ) |
| Capital lease obligation |   | $      | 20,616  |   |

|       |   |   |   |
|------------|--------|--------|--------|
| 2010       |   | $      | 10,389 |   |
| 2011       |   |   | 9,916  |   |
| 2012       |   |   | 10,157 |   |
| 2013       |   |   | 10,239 |   |
| 2014       |   |   | 5,084  |   |
| Thereafter |   |   | 26,235 |   |
| Total      |   | $      | 72,020 |   |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 13. | SUPPLEMENTAL INFORMATION TO STATEMENT OF CASH FLOW |
|-----|----------------------------------------------------|

|                                              |   | 2009   |    |   | 2008   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Cash interest received                            |   | $      | 1,272   |   |   | $      | 5,909 |   |
| Cash interest paid                                |   |   | 161,279 |   |   |   | 173,511 |   |
| Non-cash changes to property, plant and equipment |   |   | (19,312 | )      |   |   | (358,760 | ) |
| Non-cash changes to capital stock                 |   |   | (1,813  | )      |   |   | (13,246 | ) |

|                                                       |   | 2009   |     |   | 2008   |   |
|------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| Change in non-cash working capital                         |   |   |     |   |   |   |
|    Accounts and other receivables           |   | $      | 7,492    |   |   | $      | (10,224 | ) |
|    Accounts payable and accrued liabilities |   |   | (113,049 | )      |   |   | (7,328 | ) |
| Net change in non-cash working capital                     |   |   | (105,557 | )      |   |   | (17,552 | ) |
|                                                       |   |   |     |   |   |   |   |   |
| Operating activities                                       |   |   | 15,371   |   |   |   | 1,157 |   |
| Financing activities                                       |   |   | (3,725   | )      |   |   | 13,241 |   |
| Investing activities                                       |   |   | (117,203 | )      |   |   | (31,950 | ) |
| Net change in non-cash working capital                     |   | $      | (105,557 | )      |   | $      | (17,552 | ) |

| 14. | ASSET SALE |
|-----|------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| 15. | RECONCILATION TO U.S. GAAP |
|-----|----------------------------|

|   | a) | Net loss and comprehensive loss reconciliation |
|--------|----|------------------------------------------------|

| (amounts in thousands of Canadian dollars, except per share amounts) |   | Year-ended December 31 |     |
|----------------------------------------------------------------------|--------|------------------------|----------|
|                                                                 |   | 2009                   |     |   | 2008 |   |
|                                                                 |   |                   |     |   |   |   |
| Net loss in accordance with CDN GAAP                                 |   | $                      | (306,156 | ) |   | $ | (476,922 | ) |
| Decrease / (Increase)  in net loss Under US GAAP:          |   |                   |     |   |   |   |   |   |
| Standby charges capitalized (c)                                      |   |                   | (375     | ) |   |   | (1,603 | ) |
| Flow-through share premium (d)                                       |   |                   | -        |   |   |   | 13,778 |   |
| Tax effect of flow-through shares (d)                                |   |                   | -        |   |   |   | (15,005 | ) |
| Deferred financing charges (e)                                       |   |                   | 21,881   |   |   |   | 893 |   |
| Deferred financing amortization (e)                                  |   |                   | (12,449  | ) |   |   | (7,481 | ) |
| Property plant and equipment impairment under Canadian GAAP (f)      |   |                   | -        |   |   |   | 369,353 |   |
| Property plant and equipment impairment under US GAAP (f)            |   |                   | -        |   |   |   | (353,877 | ) |
| Depletion, depreciation and accretion (g)                            |   |                   | 2,737    |   |   |   | - |   |
| Tax effect of adjustments (c,e,f)                                    |   |                   | 6,169    |   |   |   | (1,821 | ) |
| Net loss and comprehensive loss in accordance with US GAAP           |   | $                      | (288,193 | ) |   | $ | (472,685 | ) |
| Loss per share in accordance with US GAAP, basic and diluted         |   | $                      | (1.21    | ) |   | $ | (2.41 | ) |

|   | b) | Balance sheet reconciliation |
|--------|----|------------------------------|

| (amounts in thousands of Canadian dollars)               |   | At December 31, 2009 |      |   | At December 31, 2008 |   |
|----------------------------------------------------------|--------|----------------------|-----------|--------|----------------------|--------|
|                                                     |   | CDN GAAP             |      |   | US GAAP              |   |   | CDN GAAP |   |   | US GAAP |   |
|                                                     |   |                 |      |   |                 |   |   |   |   |   |   |   |
| Assets                                                   |   |                 |      |   |                 |   |   |   |   |   |   |   |
|   Property, plant and equipment, gross (c,f,i) |   | $                    | 3,477,073 |   |                 | $      | 3,435,134 |   |   | $ | 4,066,027 |   |   | $ | 4,024,463 |   |
|   Accumulated depletion and depreciation       |   |                 | (34,577   | )      |                 |   | (35,323 | ) |   |   | (13,502 | ) |   |   | (16,985 | ) |
|   Net property, plant and equipment            |   |                 | 3,442,496 |   |                 |   | 3,399,811 |   |   |   | 4,052,525 |   |   |   | 4,007,478 |   |
|   Deferred financing charges (e)               |   |                 | -         |   |                 |   | 48,794 |   |   |   | - |   |   |   | 39,362 |   |
| Liabilities                                              |   |                 |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|   Future tax liability (asset)                 |   |                 | -         |   |                 |   | - |   |   |   | (70,242 | ) |   |   | (64,074 | ) |
| Shareholders’ equity                               |   |                 |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|   Capital stock (d)                            |   |                 | 1,992,394 |   |                 |   | 2,076,248 |   |   |   | 1,847,461 |   |   |   | 1,931,315 |   |
|   Deficit                                      |   |                 | (713,834  | )      |                 |   | (754,689 | ) |   |   | (407,678 | ) |   |   | (466,496 | ) |
|   Total Shareholders’ equity             |   |                 | 1,310,992 |   |                 |   | 1,353,991 |   |   |   | 1,470,863 |   |   |   | 1,495,898 |   |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | c) | Under Canadian GAAP, during the construction period, standby fees associated with borrowing facilities are capitalized. Under US GAAP, during the construction period, these costs would be expensed as incurred. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | d) | Under Canadian GAAP, the proceeds from the issuance of flow-through shares are recorded in equity at their face value. Under US GAAP, the proceeds must be allocated between the sale of the common shares and the sale of the tax benefit. A liability is created for the difference between the market price of the common shares and the price the investor paid for the flow-through shares.  When the taxbenefits are renounced to shareholders, the difference between this liability and the value of the tax basis given up is recorded as tax expense. Under Canadian GAAP the value of the tax basis given up reduces the value of the flow-through shares issued. During March 2008, OPTI fully renounced all of the tax deductions to investors in relation to the flow-through shares issued previously and recorded the related entries to future tax. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | Under Canadian GAAP, the Company expenses all transactions costs relating to financial assets and financial liabilities, such as financing costs on its senior notes. Under US GAAP, debt financing costs are recorded as an asset on the balance sheet and amortized using the effective interest method over the contractual life of the associated debt. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | f) | Under Canadian GAAP, OPTI recognized an impairment of $369 million at December 31, 2008 related to the sale of its 15% working interest in its joint venture assets relating to the Long Lake Project (Note 14).  The carrying value of these assets under US GAAP was lower due to differences in depletion, depreciation and accretion, stand by charges and pre-development expenses which resulted in a lowerimpairment charge. For purposes of this reconciliation of net loss, the Canadian GAAP impairment was added back, and the impairment calculated using the US GAAP asset value was deducted. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | g) | As a result of differing carrying values of the property, plant and equipment under US and Canadian GAAP described above there is an adjustment to Depreciation, depletion and amortization required |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | h) | The statement of cash flows are prepared in accordance with Canadian GAAP and conform in all material respects to US GAAP except that Canadian GAAP allows for the presentation of a subtotal within operating cash flow before changes in non-cash working capital in the statement of cash flows. This subtotal is not permitted under US GAAP. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | i) | Under Canadian full cost accounting rules, impairment is recognized if the carrying amount of the PP&E exceeds the sum of the undiscounted cash flows expected to result from proved reserves using estimated future prices and costs (the “ceiling test”). Under the full cost method of accounting as set forth by the US Securities and Exchange Commission, the ceiling test differs from Canadian GAAPin that future net revenues from proved reserves are based on prices and costs in the prior 12-month period (“constant dollar pricing”) and are discounted at 10 percent. Management has reviewed the valuation of the Long Lake Project and other oil sands properties and estimates that the recoverable value of these properties exceeds their carrying amount. Therefore no difference is recorded. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | j) | Recent Accounting Pronouncements |
|--------|----|----------------------------------|

|   | (i) | In June 2009, the U.S. Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update (ASU) 2009-01, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.” This update establishes the FASB Accounting Standards Codification (“Codification”) asthe source of authoritative U.S. generally accepted accounting principles effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Codification did not change existing requirements under U.S. GAAP and as a result, did not impact OPTI’s Financial Statements. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | (ii) | As of December 31, 2009, OPTI was required to prospectively adopt the new reserves requirements that arise from the completion of the SEC’s project, Modernization of Oil and Gas Reporting. The new rules include provisions that permit the use of new technologies to establish proved reserves if those technologies have been demonstratedempirically to lead to reliable conclusions about reserves volumes. Additionally, oil and gas reserves was reported using an average price based upon the prior 12-month period rather than year-end prices. The new rules will affect the reserve estimate used in the calculation of DD&A and the ceiling test for U.S. GAAP purposes. The new rules and standards were adopted prospectively by OPTI on December 31, 2009 and affected the reserve estimate of future cash flows used in the calculation of the ceilingtest for U.S. GAAP. |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | a) | Reserve Quantity Information |
|--------|----|------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|  Thousands of barrels                                                             |   | Total Proved Reserves |    |
|----------------------------------------------------------------------------------------|--------|-----------------------|---------|
|                                                                                   |   |                  |    |
|  Balance at January 1, 2008 1                                                     |   |                  | 235,354 |   |
|      Extensions                                               |   |                  | 9,661   |   |
|      Revisions of previous estimates of total proved reserves |   |                  | 31,293  |   |
|   Production                                                                 |   |                  | (1,439  | ) |
| Balance at December 31, 2008 1                                                         |   |                  | 274,869 |   |
| Disposition                                                                            |   |                  | (82,461 | ) |
| Production                                                                             |   |                  | (1,568  | ) |
| Technical revision                                                                     |   |                  | 830     |   |
| Changes due to pricing                                                                 |   |                  | (25,540 | ) |
| Subtotal of bitumen only reserves 1                                                    |   |                  | 166,130 |   |
| Changes due to SEC rule transition 2                                                   |   |                  | (29,535 | ) |
| Balance at December 31, 2009 3                                                         |   |                  | 136,595 |   |

|   | 1. | Represents bitumen reserves rather than upgraded synthetic crude oil reserves (PSCTM ) |
|--------|----|---------------------------------------------------------------------------------------------|

|   | 2. | As a result of the SEC rule transition “Impact of SEC Modernization of Oil and Gas Reporting Requirements” these reserves include PSCTM, Butane and Bitumen. The reserves amounts are lower due to the yield of approximately 80% conversion of bitumen to PSCTM. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Represents PSCTM, Butane and bitumen reserve volumes. |
|--------|----|------------------------------------------------------------|

|   | 4. | Proved reserves are the estimated quantities that geological and engineering data demonstrate with reasonable certainty can be recovered in future years from known reservoirs under existing economic and operating conditions.  Reserves are considered "proved" if they can be produced economically, as demonstrated by either actual production or conclusive formation testing. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b) | Capitalized costs |
|--------|----|-------------------|

|                                                     |   | As at December 31, |   |
|----------------------------------------------------------|--------|--------------------|--------|
|   Cdn$ millions                                |   | 2009               |   |   | 2008 |   |
| Proved Properties                                        |   | $                  | 1,419  |   |   | $ | 1,074 |   |
| Unproved Properties                                      |   |               | 326    |   |   |   | 352 |   |
| Proved Properties - Changes due to SEC rule transition 1 |   |               | 1,690  |   |   |   | - |   |
|                                                     |   |               | 3,435  |   |   |   | 1,426 |   |
| Depreciation, depletion and amortization                 |   |               | 35     |   |   |   | 14 |   |
| Net Capitalized Costs                                    |   | $                  | 3,400  |   |   | $ | 1,412 |   |

|   | 1. | As a result of the SEC rule transition “Impact of SEC Modernization of Oil and Gas Reporting Requirements” reserves include PSCTM, Butane and Bitumen sales. As such, capitalized costs previously excluded from Oil and Gas assets are now included. These additions include the upgrader and shared facilities related to proved reserves. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

|   | c) | Costs incurred |
|--------|----|----------------|

|  Cdn$ millions        |   | Years ended |   |
|----------------------------|--------|-------------|--------|
|                       |   | 2009        |   |   | 2008 |   |
| Property Acquisition Costs |   |        |   |   |   |   |
| Proved                     |   | $           | 8      |   |   | $ | - |   |
| Unproved                   |   |        | 6      |   |   |   | - |   |
| Exploration costs          |   |        | 10     |   |   |   | 71 |   |
| Development costs          |   |        | 86     |   |   |   | 268 |   |
| Asset retirement costs     |   |        | -      |   |   |   | - |   |
| Total Costs Incurred       |   | $           | 110    |   |   | $ | 339 |   |

|   | d) | Results of operations for oil and gas producing properties |
|--------|----|------------------------------------------------------------|

| Cdn$ millions                                   |   | Years ended |   |
|-------------------------------------------------|--------|-------------|--------|
|                                            |   |        | 2009   | 1 |   |   | 2008 |   |
|                                            |   |        |   |   |   |   |   |   |
| Revenues                                        |   | $           | 128    |   |   | $ | 257 |   |
|                                            |   |        |   |   |   |   |   |   |
| Production costs                                |   |        | 245    |   |   |   | 358 |   |
| Depreciation, depletion and amortization        |   |        | 21     |   |   |   | 14 |   |
|                                            |   |        | 266    |   |   |   | 372 |   |
| Results of operations from producing activities |   | $           | (138   | ) |   | $ | (115 | ) |

|   | 1. | As a result of the SEC rule transition “Impact of SEC Modernization of Oil and Gas Reporting Requirements” reserves include PSCTM, Butane and Bitumen sales. As such, capitalized costs previously excluded from Oil and Gas assets are now included. Accordingly, the results of the operations of these assets are now included in the ‘results of operations’ schedule |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | e) | Standardized Measure of Discounted Future Net Cash Flows and Changes Therein |
|--------|----|------------------------------------------------------------------------------|

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|

----

----

| Cdn$ millions                        |   | As at December 31, |   |
|--------------------------------------|--------|--------------------|--------|
|                                 |   | 2009               |   |   | 2008 |   |
| Future revenue net of royalties      |   | $                  | 9,139  |   |   | $ | 9,030 |   |
| Less future:                         |   |               |   |   |   |   |   |   |
| Production costs                     |   |               | 4,554  |   |   |   | 5,466 |   |
| Development costs                    |   |               | 1,271  |   |   |   | 1,662 |   |
| Asset retirement obligation payments |   |               | 13     |   |   |   | 36 |   |
| Income taxes                         |   |               | -      |   |   |   | 27 |   |
| Future net cash flow                 |   |               | 3,301  |   |   |   | 1,839 |   |
| Less effect of 10% annual discount   |   |               | 1,950  |   |   |   | 1,193 |   |
| Discounted future net cash flow      |   | $                  | 1,351  |   |   | $ | 646 |   |

| Cdn$ millions                                       |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Discounted net cash flow - beginning of year        |   | $      | 646    |   |   | $      | 2,115 |   |
| Changes due to disposition of reserves              |   |   | (194   | )      |   |   | - |   |
| Changes due to prices                               |   |   | 1,440  |   |   |   | (1,423 | ) |
| Actual development costs during the period          |   |   | 109    |   |   |   | 268 |   |
| Changes in future development costs                 |   |   | (55    | )      |   |   | (300 | ) |
| Accretion of discount                               |   |   | 45     |   |   |   | 253 |   |
| Net changes in income taxes                         |   |   | (276   | )      |   |   | 415 |   |
| Changes resulting from changes to royalty regime    |   |   | -      |   |   |   | (221 | ) |
| Changes resulting from technical reserves revisions |   |   | 1      |   |   |   | 290 |   |
| Changes resulting from effects of production timing |   |   | (108   | )      |   |   | (250 | ) |
| Changes from production costs                       |   |   | 173    |   |   |   | (501 | ) |
| Changes due to SEC rule transition                  |   |   | (430   | )      |   |   | - |   |
| Discounted net cash flow - end of year              |   | $      | 1,351  |   |   | $      | 646 |   |

| TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS EXCEPT AS NOTED |
|-------------------------------------------------------------|