Oil Gas Industry Presentation Introduction Energy Sector Analysis

Oil & Gas Industry Presentation Introduction Energy Sector Analysis – Global Energy Fundamentals and Canada’s Emergence as a Key Player of the Vital Resource Presenters: Allan Chim Caty Liu Marco Tang Kevin Zheng Eugene Wong November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Presentation Outline: 1. Oil Industry at a Glance – Allan Chim 2. Gas Industry at a Glance – Caty Liu 3. Case Study: Suncor Energy – Marco Tang 4. Case Study: Cenovus Energy – Kevin Zheng 5. Case Study: Encana Corp – Eugene Wong November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Proven Crude Oil Reserves: 1. 65 Trillion Bbls (approx. 40 years supply) 1. Saudi Arabia – 265. 4 B Bbls 2. Canada – 175. 2 B Bbls 3. Iran – 151. 17 B Bbls 4. Iraq – 143. 1 B Bbls 5. Africa – 132. 4 B Bbls November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Proven Oil Reserves by Geographic Region 2% 8% 9% Middle East Central & South America 48% 13% North America Europe Africa Asia Pacific 20% November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Global Oil Production: 76. 2% Crude Oil, 23. 8% Gas 1. Saudi Arabia – 11. 15 Million Bbl/day 2. Russia – 10. 23 Million Bbl/day 3. United States – 10. 23 Million Bbl/day 4. China – 4. 234 Million Bbl/day 5. Canada – 3. 6 Million Bbl/day OPEC produces ~30 million bbl/day, but level of influence lowered from 1970’s, when they produced close to 50% of world’s supply November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Global Oil Production 35% 30% 25% 20% Expected to double by 2020 15% 10% 5% 0% Other North America Canada United Central States & South America November 21, 2012 Asia Pacific Canadian Oil & Gas Industry Presentation Africa Europe Middle East BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Canadian Oil Sands & Conventional Production Total Canadian Oil Sands Conventional 7 6 Millions bbl/day 5 4 3 2 1 0 2011 November 21, 2012 2015 2020 Canadian Oil & Gas Industry Presentation 2025 2030 BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Crude Oil Properties Light/Heavy – Has to do with the viscosity of the oil. The heavier/thicker it is, the harder it is to transport. Bitumen from Canadian Oilsands requires to be blended with condenstate Sweet/Sour – Oil with high Sulfuric content (sour) requires further processing or else damages to pipes and refineries will occur November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Benchmark Crude Oil Grades 1. Brent – International Standard, light and sweet (North Sea) 2. WTI (Western Texas Intermediate) – Cushing, Oklahoma a) Light, sweet grade with main hub in Cushing; Bottleneck constraints 3. Western Canada Select – Heavy crude grade developed by Oil Sands producers, heavy bitumen blended with condensate 4. Others – SCO, Louisiana Light Sweet, Mayan Heavy Crude November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Crude Oil Benchmark Prices WTI Spot WCS Spot Brent Spot $140 $120 $100 $80 $60 $40 $20 $0 Jan-12 November 21, 2012 Apr-12 Jul-12 Canadian Oil & Gas Industry Presentation Oct-12 BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Cushing Bottleneck Alleviation? November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Technological Improvements 1. SAGD (Steam Assisted Gravity Drainage) – Alternative to mining/extracting crude from oil sands 2. Horizontal Drilling – Oil/gas producers able to access tight oil plays within shallow rocks 3. Hydraulic Fracturing – process of injecting highly pressurized fluid into oil site in order to increase surface area for extraction November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline SAGD Well Operation November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Hydraulic Fracturing Concepts November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline North American Drilling Activity US Active Rigs Canada Active Rigs 2500 600 1500 300 1000 200 500 100 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417 Nov-12 Sep-12 Jul-12 May-12 Mar-12 Jan-12 Nov-11 Sep-11 Jul-11 May-11 Mar-11 Jan-11 Nov-10 Sep-10 Jul-10 May-10 0 Mar-10 0 Jan-10 US Rig Counts 400 Can Rig Counts 500 2000

Oil & Gas Industry Presentation Oil Industry Outline Is Oil a Scarce Resource? 1. Using proven reserves, the world only has 40 years of supply 2. Recent research from Harvard and IEA suggests no “peak oil” in sight A. Worldwide recovery rates less than 35% of total original oil in place I. B. Wrong depletion rates (forecasters use 6 -10%) I. C. Technological improvements allowing previously untapped oil become economically feasible 70% of oil production is from oilfields producing for decades Factoring all risks, projected 17. 6 mmbbl/day of oil production increase by 2020, IEA states that US could be energy self sufficent by 2020 I. Western Hemisphere will become key oil player by 2020 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Case Study – Kern River 1. Originally discovered in 1899. Estimated production life 50 years 2. Kern River is still producing today 3. Water Flooding and future technological developments can yield additional output November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Oil Industry Outline Projected Liquids Production from Shale Plays November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Natural Gas Industry November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview What is natural gas? • Conventional • Unconventional • Shale gas November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Industry: From Wellhead to Burner Tip • • • Exploration & Extraction Production Transportation Storage Distribution & Marketing November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Exploration & Extraction • Onshore • Offshore November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Onshore Drilling • Carbon tool drilling • Horizontal drilling November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Production • • Oil and condensate removal Water removal Separation of natural gas liquids Sulfur and carbon dioxide removal November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Transportation • Gathering system field lines • Transmission trunk lines • Distribution lines November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Storage • • Depleted gas reservoirs Aquifers Salt caverns Liquefied natural gas November 21, 2012 Canadian Oil & Gas Industry Presentation Underground BUS 417

Oil & Gas Industry Presentation Business Overview Distribution & Marketing November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Market structure • Natural gas demand • Natural gas supply November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Market Structure • Prior to deregulation and pipeline unbundling November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Market Structure • Simplified structure after pipeline unbundling Producer Marketers LDC End Users Transporter s November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Natural Gas Demand • Factors affecting short term demand – Cyclical cycle – Weather – Capacity to switch fuel – Economy November 21, 2012 • Factors affecting long term demand – Residential and commercial demand – Industrial demand – Electric generation demand – Transportation sector demand Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Natural Gas Supply • Short term barriers – Availability of skilled workers – Equipment permitting and well development – Weather and delivery disruptions November 21, 2012 • Other barriers – Onshore and offshore access – Pipeline infrastructure – Financial environment Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Regulations • Federal regulation • Provincial regulation November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Outlook • Drilling November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Outlook • Drilling • Production November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Outlook • Drilling • Production • Deliverability November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Outlook • • Drilling Production Deliverability Uncertainties November 21, 2012 • Future natural gas prices • Potential labour shortages • Future growth of U. S. shale gas production • Well production rates Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot • Mainly been trading flat for the year • Recently upgraded by JPM as they expect a dividend hike in the near future Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 1 Year Stock Chart Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 5 Year Stock Chart Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot Max Year Stock Chart November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 1 Year Stock Chart v. TSX Capped Energy (XEG) Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History • Sun Company Inc. opens in Canada as a supplier to war plants in the Montreal area 1917 1923 • Sun Company incorporates as Sun Oil Company Limited • First Sunoco branded stations open in Toronto, Montreal and Quebec City 1930 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History 1950 • Sun Company drills first Canadian producing well in Alberta • Suncor forms when all Canadian operations of the Sun Company are amalgamated with the Great Canadian Oil Sands 1979 • Federal government deregulates oil prices, allowing producers to sell at market value 1985 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History 1992 • Suncor becomes a publicly listed company (listed NYSE in 97) • Construction begins on the Project Millennium aimed at increasing oil sands production to 225, 000 by 2002 1999 • Suncor and Petro-Canada merged to create Canada’s largest energy company 2009 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History Petro Canada Suncor All-stock offer of $19 B More than a 100 years worth of reserves Creates a $43 B company (now at $50 B market cap) Canadian oil-sands centric strategy Petro-Canada shareholders get 40% of new company and Suncor shareholders get 60% $300 M/Y in cost savings and $1 B/Y in capital efficiencies November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Oil weighted assets are very Canada centric November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Oil Sands • Assets located in northeast Alberta • Recovers bitumen and upgrades the production into refinery feeds • Includes growth ventures that Suncor is a part of Fort Hills (40. 8%) & Voyageur (51%) Exploration and Production • Consists of offshore on the East Coast of Canada and North Sea • Consists of onshore operations in North America, Libya* and Syria* Refining and Marketing • Refining into broad range of petroleum and petrochemical products with various locations in Canada and US Corporate, Energy Trading and Eliminations • Investments in renewable energy • Other activities not directly attributable to operating activities November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Cash from operations were $2. 74 B in 2012 Q 3 compared to $2. 721 B in 2011 Q 3 • Oil sands is the largest portion of operating CF as well as revenue Nine Months Ending September 30 2011 (Operating CF) Oil Sands 28% 43% Nine Months Ending September 30 2012 (Operating CF) Oil Sands 33% 44% Exploration and Production Refining and Marketing 28% November 21, 2012 Exploration and Production Refining and Marketing 23% Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Oil Sands • Production volumes averaged a record 341, 300 bbls/d for the third quarter of 2012 • Lower realized average sale prices ($80. 79 in 2012 Q 3 compared to $85. 09 in 2011 Q 3) • Projects • Syncrude Venture (12% Ownership) • Millenium, Firebag, Mac. Kay River (Fort Mc. Murray) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Average production from Firebag with the ramp up of operations and use of infill well technology (up from 54, 800 bbls/d 113, 000 bbls/d) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Exploration and Production • Production volumes down from 202. 4 (Mboe/d) in 2011 to 193. 8 (Mboe/d) in 2012 • Higher realized average sale prices ($84. 15 in 2012 Q 3 compared to $78. 86 in 2011 Q 3) • Projects • Eastern Canada (Terra Nova, White Rose, Hibernia) • International (Libya, Buzzard, Syria*) • North American Onshore (SW of Alberta, NE of BC) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Production volumes down from 2011 Q 3 to 2012 Q 3 • Due to maintenance in a East Coast Canada operation (zero production from Terra Nova) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Refining and Marketing • Refined product sales (gasoline from pumps) recorded 87. 5 (m 3/d) in 2012 Q 3 up slightly from 86. 7 (m 3/d) in 2011 Q 3 • Higher demand for gasoline in Western North America but lower demand in Eastern North America • Customers • Retail Consumers • Wholesale Consumers November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Higher demand high utilization rates in Western North America November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Corporate, Energy Trading and Eliminations • Small part of operations but it was a $(28 M) loss in 2012 Q 3 compared to a $84 M gain in 2011 Q 3 • Segments • Renewable Energy • Energy Trading • Corporate Activities • Group Eliminations November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Growth Opportunities November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile Richard George (Former CEO) November 21, 2012 • BSc in engineering from Colorado State University • Law degree from the University of Houston Law School • Graduate of the Harvard Business School Program for Management Development • Was Suncor CEO from 1991 to 2011 • Numerous awards for Top CEO and inducted into Canadian Petroleum Hall of Fame Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile • BSc in Chemical Engineering from Exeter University • Graduate of Advanced Management Program at Harvard Business School • Graduate of Business Economics Program at Oxford University • Been with Suncor since 2002 Steve Williams (President and CEO) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile • BA in Economics from University of Calgary • Honours graduate from the University of Calgary Management Development Program • Over 20 years of industry experience in strategy and Bart Demosky (Chief Financial Officer) development, finance, risk management and energy supply and trading • Been with Suncor since 2006 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile • BA in Economics from University of Calgary • MBA from the University of Alberta • Been with Suncor since 1996 Eric Axford (VP, Business Services) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Financial Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2011 Financial Highlights November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2012 Q 3 Financial Highlights November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2011 Balance Sheet November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2012 Q 3 Balance Sheet November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2011 Income Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2012 Q 3 Income Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2011 Cash Flow Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials 2012 Q 3 Cash Flow Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Recommendation BUY! November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot Cenovus Energy Inc. (CVE. TO) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 1 Year Stock Chart Source: Yahoo! Finance November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot Max Years Stock Chart Source: Yahoo! Finance November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot CVE vs Industry Source: Yahoo! Finance November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History • Headquartered in Calgary, Canada • Employs approx. 5000 people • December 1, 2009 - Became independent from En. Cana Corporation – En. Cana split into: 1. En. Cana 2. Cenovus Energy • Cenovus retained assets from Pan. Canadian and Alberta Energy Company – These 2 companies originally merged to form En. Cana in 2002 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Canadian oil company • Products includes: bitumen, crude oil, natural gas, and natural gas liquids (NGL) *bitumen: deposits of extremely heavy crude oil Main operations includes… 1) Oil Producing Projects 2) Emerging Oil Projects 3) Natural Gas Projects 4) Refining Projects November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Oil Sands & Conventional Oil • 2 types 1. Oil sands needs to be processed to separate the bitumen so that it can be upgraded for usage “Oil sands are a thick, viscous mixture of bitumen hydrocarbons combined with water, sand, heavy metal and clay” – Alberta Canada 2. Conventional oil is oil that can flow through a pipeline without processing or dilution. “Mixture of mainly pentanes and heavier hydrocarbons recoverable at a well from an underground reservoir and liquid at atmospheric pressure and temperature” – Alberta Canada November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Oil Sands & Conventional Oil Production Breakdown for Third Quarter 2012 Conventiona l Oil, 75, 725 bbls/day 44% November 21, 2012 Oil Sands, 95, 625 bbls/day 56% Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Oil Sands • Two 50/50 Venture Oil Sands Operations with Conoco. Phillips 1. Foster Creek, Alberta Oil Sands (36. 9% of Total Oil Production for Third Quarter 2012) -Production increased 12% in third quarter 2012 from third quarter 2011 2. Christina Lake, Alberta Oil Sands (18. 9% of Total Oil Production for Third Quarter 2012) -Production grew more than threefold in third quarter 2012 compared to 2011 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Oil Sands At Christina Lake and Foster Creek… – The oil is 350 -450 m below surface. – Primary technology used is steam-assisted gravity drainage (SAGD) • Process which injects steam to soften the oil so that it can be pumped to the surface. – Average Steam to Oil Ratio (SOR) of 2 – approx. 2 barrels of steam needed for 1 barrel of oil • Current industry average in Alberta is around 3 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Conventional Oil • Two conventional oil producing projects in 1. Pelican Lake, Northern Alberta (Heavy oil assets) (13. 7% of Total Oil Production for Third Quarter 2012) -Third quarter 2012 production increased 16% compared to same quarter in 2011 (Averaging more than 23, 500 bbls/d) 2. Weyburn Facility, Southeast Saskatchewan (9. 4% of Total Oil Production for Third Quarter 2012) – Third quarter 2012 production same as third quarter 2011 (Averaging around 16, 000 bbls/day) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Oil Producing Projects Increases in Production – Significant increase in volume produced since 2010 especially at Christina Lake and Foster Creek November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Emerging Oil Projects • Three Main Operations in 1. Telephone Lake -Expected to produce 90, 000 bbls/day in initial phase with potential to produce 300, 000 bbls/day 2. Narrows Lake -Expected to produce 130, 000 bbls/day at full capacity 3. Grand Rapids -Expected to produce 180, 000 bbls/day at full capacity November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Natural Gas Projects • Operations – Majority from shallow gas play that covers more than 3 million acres in Southeast Alberta – More than 25, 000 gross producing natural gas wells in the Suffield, Brooks, and Langevin areas that produced an average of 577 million cubic feet per day (MMcf/d) in Q 3 2012 – Declined about 12% from Q 3 2011: mainly due to expected natural declines and divestures of non-core property in first quarter 2012 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Refining & Marketing Projects • Refining crude oil products into petroleum and chemical products – Converting to regular gas November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Refining & Marketing Projects • Benefits of refining due to rising price of regular unleaded gasoline and decline in price of crude oil November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview What is Generating Cash? November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile HISTORY Joined predecessor (Alberta Energy Company) (1984) Became En. Cana’s Executive Vice-President & CFO (2006) Became Cenovus’ President & CEO (2009) EDUCATION Bachelor of Commerce - University of Alberta (1980) Brian Ferguson Executive Management Program - University President of Western Ontario (1993) Chief Executive Officer Director (Non-independent) Chartered Accountant (1983) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile HISTORY Joined in 2001 as a Senior Vice-President Was Managing Director for International & New Ventures (2003 -2007) Became Executive Vice-President and COO (2010) John Brannan Chief Operating Officer Executive Vice-President November 21, 2012 EDUCATION Bachelor of Science degree in mechanical engineering – Texas A&M University Member of the Association of Professional Engineers, Geologists, and Geophysicists of Alberta Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile HISTORY Joined in 2006 as Vice-President, Finance of the Corporate Finance Group Became CFO and Executive Vice-President (2009) Used to be a Managing Partner of KMPG LLP in Edmonton (1998 -2006) EDUCATION Ivor Ruste Bachelor of Commerce - University of Chief Financial Officer Alberta Executive Vice-President Fellow Chartered Accountant November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Balance Sheet – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Balance Sheet – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Income Statement – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Income Statement – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Shareholders’ Equity Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Cash Flow Statement – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Cash Flow Statement – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Valuation Advantages of Cenovus Energy • Hedges – Refining Operations – Natural Gas • Cost efficiencies – SOR 2: 1 (industry average 3: 1) • Superior properties – Christina Lake & Foster Creek November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Valuation • METHOD: Cash Flow Multiple Valuation with Comparable Companies 1. Husky Energy Inc. 2. Imperial Oil Ltd. 3. Suncor Energy Inc. November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Valuation Price/Cash. Flow FY 1 Husky Energy Inc. 5. 456455489 Imperial Oil Limited 8. 441097887 Suncor Energy 4. 824105231 Average 6. 240552869 Cenovus Energy Inc. November 21, 2012 Cash Flow per Share FY 1 4. 951827774 Target Price per Share $ 30. 90 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Recommendation HOLD November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot • Trending up with the appreciation of natural gas prices • Price increase with speculation on buyout of liquids rich assets Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 1 Year Stock Chart Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 5 Year Stock Chart Source: The Globe and Mail November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot Max Year Stock Chart November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company Snapshot 1 Year Stock Chart v. TSX Capped Energy (XEG) November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History 2002 2003 2005 2007 2009 2010 2012 • Originated from two Canadian independent oil companies in 2002: • Pan Canadian Energy Corporation • Alberta Energy Company Ltd. • Acquires Cutbank Ridge natural gas resource play and commences storage expansion in the States • Gulf of Mexico Assets sold to Statoil • Upstream oil interests in Chad and Brazil are sold • Encana and Conoco. Phillips create integrated NA business • Company split into to focused companies - Cenovus (integrated oil) and Encana (natural gas) • 3 Year Joint Venture with Kogas Canada Ltd. • First LNG station in Louisiana • Announcement of 40% interest by Mitsubishi in Cutbank Ridge Partnership November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Company History Encana Cenovus Focus in Natural Gas Assets Focus in Integrated Oil Operations Shareholders of Encana received 1 share of Cenovus for every one share of Encana Canadian oil-sands centric strategy Fallen from its high of $60/share Risen from $25. 50 November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Goal: Encana's goal is to be the lowest-cost, highest-growth senior natural gas producer in North America through the following six-faceted strategy: 1. 2. 3. 4. 5. 6. 7. Comprehensive disclosure of reserves and resources. Accelerated pace of development. Advancing resource play hub design and development. Increasing exposure to oil and natural gas liquids. Attracting third-party investments in undeveloped reserves and resources. Growing the market for North American natural gas November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Strategy: unlock the tremendous value unrecognized within our asset base – investing in the highest-return projects – establishing increased liquids weighting and diversifying revenue sources – maintaining industry-leading cost structures – leveraging third-party funding through farm-outs, partnerships and joint ventures November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Natural gas, • NGLs and Crude Oil • Refined petroleum products Production Breakdown for 2011 Natural Gas Crude Oil & NGLs Other 1% 11% 88% November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Reserves November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Production Profile November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Canadian Core Assets • • • Cutbank Ridge – 4500 wells with EUR of 4 -16 Bcfe – Production of 600 MMcfe/d – Montney formation: liquids rich gas – Horizontal & Multi-stage hydraulic fracture – Oil gravity: 45 -65 API Bighorn – 1400 wells with EUR of 2 -12 Bcfe – Oil gravity: 55 -60 API – Well inventory: 1400 wells Coalbed Methane – Production of 475 MMcfe/d – Sweet natural gas with high methane content (over 90%) – Oil gravity: 55 -60 API – Well inventory: 1400 wells November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – US Core Assets • • Haynesville – Production of 508 MMcfe/e – $1. 018 B capex spent in expansion of assets and drilling program – Reserves: 5. 0 Tcfe Jonah – Production of 497 MMcfe/e – Reserve life: 40 -60 years – Joint venture with Northwest Natural November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Joint Ventures • Cutbank Ridge Partnership – Mitsubishi acquring 40% of the property for $2. 9 billion – $1. 45 billion upfront to fuel commitments on the projects – Alleviates capital commitments for Encana • Kogas Joint Venture – Extension of former JV agreement for partnership in Horn River operations – Invest a further $185 million in 20, 000 additional acres • Kitimat LNG – BC’s first LNG export facility – Partners may include: Apache, EOG, and Encana (30% interest) – Proposed plant capacity is 700 MMcf/d of LNG – Pending final investment decision November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Kitimat LNG November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Natural Gas Capital Efficiency November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Liquids Capital Efficiency November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Resource Play Hub November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview • Higher demand high utilization rates in Western North America November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Operations – Shifting Exposure November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Business Overview Hedging November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Executive Profile November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Management Team HISTORY Joined in Encana’s predecessor companies in 1980 Chief Operating Officer (2002) EDUCATION Bachelor of Science in Petroleum Engineering – Northern Alberta Institute of Technology Randy Eresman President Chief Executive Officer ASSOCIATION Association of Professional Engineers, Geologists, and Geophysicists of Alberta World Presidents’ Organization Canadian Council of Chief Executives

Management Team HISTORY Joined in Encana’s predecessor companies in 1985 Vice President of Strategic Planning & Portfolio Management (2007) EDUCATION Bachelor’s Degree in Economics – University of Calgary Sherri Brillon Chief Financial Officer Executive Vice-President

Management Team HISTORY Joined in Encana’s predecessor companies in 1985 Roles in asset management, business development, acquisitions and divestitures EDUCATION Bachelor of Science in Engineering – Dalhousie University Bachelor of Science in Mechanical Engineering – Nova Scotia Technical College Bob Grant Corporate Development ASSOCIATION Executive Vice-President Association of Professional Engineers, Geologists, and Geophysicist of Alberta Society of Petroleum Engineers

Management Team HISTORY Promoted to Vice President (2009) Promoted to Vice-President of the South Rockies Business Unit (2002) Joined in Encana’s predecessor companies (2000) Production/Operations Manager at Questar EDUCATION Bachelor of Science in Petroleum Engineering – University of Wyoming Eric Marsh Senior Vice President (USA Division) Executive Vice-President ASSOCIATION Canadian Natural Gas Initiative Executive Committee ANGA Cross Border Committee

Management Team HISTORY Joined in Encana’s predecessor companies (2000) Leadership roles at Taxaco Canada and Imperial Oil EDUCATION Bachelor of Science in Mechanical Engineering – Concordia University Awarded the Mechanical Engineering Medal Mike Mc. Allister Senior Vice President (Canadian Division) Executive Vice-President

Oil & Gas Industry Presentation Financials Financial Statement Analysis November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Balance Sheet – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Balance Sheet – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Income Statement – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Income Statement – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Shareholders’ Equity Statement November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Cash Flow Statement – Quarterly Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Financials Cash Flow Statement – Annual Data November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417

Oil & Gas Industry Presentation Recommendation SELL November 21, 2012 Canadian Oil & Gas Industry Presentation BUS 417