Project North StarDiscussion Materials

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SPP runs a significant volume of North Dakota Light (“NDL”) crude oil

Recent test runs indicate SPP can run XX% more NDL than it has historically

Neither NTE or SPP have shipping capacity in Enbridge’s Portal system proportional to our supply needs

Therefore, we are subject to “skimming” by marketers

Situation Overview SPP is a final market for NDL producers

and has the potential to generate the highest netback to the well head

Trucking and shipping costs have been escalating due to infrastructure bottleneck

NTE’s BOD has approved the development and construction of pipeline from ND to MN sponsored by NTE

We would like for Oxy to become an anchor tenant

NDL – WTI Historical Differential

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Bakken Rail Alternatives

1: Cushing• EOG unit train is

50,000 bpd unload• WTI Cushing basis

is not optimal, but “clears” supply

2: Gulf Coast• Rail unload into Plains

& NuStar = XXX,XXX bpd unload capacity

• Ideal alternative – LLS has covered transportation burden this year

3: BakersfieldRail switching, short lines, lack of service makes this difficult

4: Albany/PADD I• New market to Global’s

Albany terminal—barged to Sun Philadelphia

• Truck, rail, terminal to barge is expensive

5: Anacortes • Tesoro committed

“space” to Rangeland’s Epping ND terminal

• Estimated 20,000 bpd could land via rail to Anacortes

Model Comments• High transportation costs make rail

alternatives difficult

• Service is not reliable, shortage of switch engines and destinations

• The LLS premium temporarily covers rail transportation

• As the arbitrage weakens, it pressures the cost of rail back to the lease in North Dakota

$XX

$XX

$XX

$XX

$XX

$XX

Emerging rail from other fields competes for the same unload spots

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Well Head

3rd Party Truck$X.XX/bbl

3rd Party Truck$3.00/bbl

$1.50/bbl Transload Fee

LR$3.50/bbl

Gathering$0.71/bbl

NTE Pipeline$2.40/bbl

Saint Paul Park Refinery

Cottage Grove Storage

Gathering$.XX/bbl Tariff

Minnesota P/L$X.XX/bbl Tariff

Enbridge Portal$2.00 Shipper Margin +

$X.XX/bbl Tariff

Clearbrook Storage

Current DynamicsRail Crude & Pipeline Supply Options

Difference off WTI, $/bbl MPL Rail NTE P/L

Third Party Truck X.XX X.XX X.XXGathering Cost X.XX - X.XXShipper Margin X.XX - -Transload Fee - X.XX -Pipeline Tariff X.XX - X.XXRail Cost - X.XX -MPL Tariff X.XX - -SPP Delivered Cost (X.XX) (X.XX) (X.XX)