MESSAGE TO OUR SHAREHOLDERS
The end of the first quarter of 2013 continues to be characterized by a high degree of uncertainty in the economies of North America and the role of junior companies in the steadily growing Canadian oil sands industry. We continue to experience constrained market valuations in the energy sector but recognize that it is important for us to maintain our focus on creating value through execution of our development plans. As the US and global economies improve, we anticipate that investor interest will return to the junior energy sector.
During the first quarter we maintained our focus on our major asset, the Audet Lands, and were pleased to announce an almost 10% increase in our discovered resources from 1.69 billion barrels to 1.85 billion barrels of discovered petroleum initially-in-place. Our independent resource evaluator, Sproule Unconventional Limited, designated 68 million barrels of the discovered resources as Contingent Resources (best estimate). We continued our work on the engineering of a 12,000 barrel per day steam assisted gravity drainage commercial facility designed to produce about 120 million barrels of bitumen over its life. Management believes that there is potential to add significantly to the recoverable resource at Audet, and this will be addressed in the future.
During the first quarter of 2013 we went back to the field to gather more geological and geo-mechanical data at the Audet site and commenced gathering baseline environmental data. All of these activities are in support of our preparation of a regulatory application for the Audet project which we intend to submit to regulators in the fall of this year.
On our 100% working interest Birch Mountains Lands, we completed a 2D seismic program in the first quarter of 2013 and expect data analysis to be completed by the middle of this year. The primary objective of the seismic program is to identify prospective exploration drilling locations that could lead to further project opportunities.
We will stay focused on the exploration and development activities that we think will ultimately create long-term value for our shareholders as we advance our projects towards commercialization. We appreciate the support of our long term shareholders and welcome new shareholders who are recognizing the value creation opportunity in our company.
President and Chief Executive Officer
Calgary, Alberta, Canada
May 15, 2013