Operations

Laricina has assembled what has become a deep inventory of potential resources, creating a broad-based portfolio of projects not only within the oil sands near Fort McMurray but also outside this highly inflationary and competitive trend. Laricina's portfolio was assembled on the principles of value-based asset quality, proximity to infrastructure and potential for large, meaningful scale of operations.

Laricina's land base provides exposure to the familiar oil sands in the McMurray Formation as well as the less developed and less mature Grand Rapids and Carbonate plays, all which offer significant resource potential. From this portfolio of assets, four development areas have been identified at Germain, Saleski, Poplar Creek and Conn Creek that present in aggregate, gross production potential in excess of 300,000 barrels of bitumen per day.

Laricina holds additional oil sands acreage in other exploratory areas throughout the Athabasca Oil Sands region that are at an earlier stage of resource identification and project potential. The Burnt Lakes carbonate play, approximately 150 kilometres north of Wabasca, Alberta, is the most recent addition to Laricina's project portfolio and could emerge as a fifth development area.

Poplar Creek and Conn Creek are located within the central area of the Athabasca Oil Sands region. The main reservoir target for these projects is the Lower McMurray Formation which generally consists of clean porous sands. Both Poplar Creek and Conn Creek are expected to be developed using existing SAGD technology.

Germain and Saleski are located within the West Athabasca Oil Sands region approximately 100 - 130 kilometres southwest of Fort McMurray, Alberta. The main reservoir target at Germain is within the Grand Rapids Formation of the Mannville Group. The Grand Rapids comprises the upper part of the regressive Upper Mannville Group and consists dominantly of thick sandstones. The Grand Rapids is a regional marine deposit at an average depth of 225 metres. Its unique features - clean sand with a homogeneous and continuous reservoir pay - increase the predictability and consistency of the reservoir. The Germain project will utilize existing SAGD technology on the initial development and will investigate enhanced oil recovery potential using innovative reservoir optimization and exploitation strategies.

A secondary target zone at Germain is the Winterburn Formation, which is a bitumen-bearing carbonate complex that lies approximately 200 metres beneath the Grand Rapids. The Winterburn has favourable reservoir properties and high oil saturation. Laricina will lever the existing infrastructure at Germain by also developing the underlying Winterburn Formation using thermal recovery processes such as, cyclic steam stimulation or modified SAGD.

The target zone at Saleski is the Grosmont Formation which lies at an average depth of approximately 325 metres. The Grosmont Formation is a dolomitized, shallow marine and tidal flat carbonate complex. The reservoir is characterized by extensive vertical fracturing, karsting and high permeability with potential thermal intervals of bitumen greater than 50 metres on average over an extensive land area. The targeted development zones are the Grosmont C and D units, which at Saleski are separated by a thin marl unit. Laricina has determined that modern horizontal well SAGD technology is a viable recovery process for this reservoir.

Laricina's Burnt Lakes project builds on the geological and technical knowledge of the Grosmont carbonate complex gained at Saleski. Located within the Grosmont trend, Burnt Lakes has a similarly attractive Grosmont D unit with reservoir properties such as; karsting at the subscrop, downdip of the erosional edge and updip of bottom water. Laricina believes Burnt Lakes could develop into a project similar in quality as Saleski.

Laricina is currently developing pilot projects at both Germain and Saleski and has submitted regulatory applications for each. Subsequent commercial applications, beginning with a 10,000 barrel per day project will follow. Laricina's expansion plans will be refined with the initial results of these pilots as we grow our production in a series of staged developments over the next 10 years.