references-txpyr subsidized opportunity

8/6/2019 References-Txpyr Subsidized Opportunity

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Contact: Peter Truell(212) 412 7576

[email protected]

Kristin Friel(212) 412 7521

[email protected]

Christine Curtin(212) 412 7559

[email protected]

Barclays Capital Announces Investment in Enhance Energy

Made-in-Alberta Solution to Manage Greenhouse Gas Emissions Supported by Leading

Provider of Environmental Markets Solutions

NEW YORK (November 27, 2007) Barclays Capital, the investment banking division ofBarclays PLC, announced its Commodities Principal Investment business has completed asignificant investment in Enhanced Energy Inc (Enhance), a Calgary-based private company

specializing in CO2 enhanced oil recovery and sequestration.

The deal enables Enhance to proactively address Albertas CO2 emissions through geologicsequestration (also known as Carbon Capture and Storage) and enhanced oil recovery. These

techniques are widely recognized as an important means to significantly reduce green house gasemissions. As CO2 floods an existing reservoir, carbon is naturally sequestered within the rock,

while greater quantities of oil are recovered than would be possible with traditional primaryrecovery techniques. Enhance expects to be the first company to implement a large scale CO2

enhanced oil recovery project in Alberta using Upgrader CO2.

Alberta is the first province or state in North America to legislate a greenhouse gas emissionsscheme that includes mandatory reductions and the creation of tradable credits. Initiatives like

these may help pave the way towards a global carbon scheme, said Joe Gold, Managing Director

and Co-Head of Commodities, Barclays Capital. We are extremely pleased to be Enhances equity

partner in this new venture.

Enhance Energys management team has a proven track-record of success in executing

complicated projects. Susan Cole, President of Enhance, ran Canadas largest CO2 flood, and oneof the worlds most advanced greenhouse gas sequestration sites, at Weyburn, Saskatchewan.

For her achievements, Cole was named Saskatchewan Oilman of the Year in 2001.

It is a great opportunity to work with Barclays Capital, one of the top global commodity banks

and the premier intermediary in emissions markets, commented Cole. This substantial

investment will allow us to accelerate our development of new and necessary infrastructure tosequester carbon and maximize production in central Alberta. With Enhances strong technical

expertise, and Barclays Capitals extensive commodities capabilities, this investment will providesubstantial long-term benefits.

As the first bank to take physical delivery of EU allowances and the first bank to take delivery of

Certified Emissions Reductions (CERs), Barclays Capital continues to invest in its environmental


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markets origination and structuring capabilities. By applying traditional banking and riskmanagement techniques to existing and emerging carbon markets, the firm is able to provide

tailored carbon emissions solutions.

Enhance is aggressively taking action to sequester large quantities of CO2, and we are delightedto be backing them in pursuing this strategy, added Mark Brown, Managing Director and Head of

Commodities Principal Investments, Barclays Capital. This strategy supports the Alberta

governments plans to recognize value through emissions credits and offsets, an important

component of the businesses of both companies.

This investment is an extraordinary opportunity to show Barclays Capitals growing presence inCalgary and commitment to the commodities business in Canada, said Kien Tran, Director,

Commodities at Barclays Capital, based in Calgary.

###

About Barclays Capitals Commodities Principal InvestmentsCommodities Principal Investments at Barclays Capital provides capital to commodity-related businesses.Investment professionals are located in New York and London, and look to invest on a global basis inbusinesses with strong management teams and strategies which create long-term option value in thecommodities markets.

About Barclays Capital Environmental MarketsBarclay Capital has established itself as a leading intermediary in the environmental markets, an important

part of its leading commodity platform. The firm is focused on applying the full range of commodity tradingand risk management expertise to assist clients in efficiently managing their risks and maximizing theopportunities presented by their day-to day engagement with todays carbon markets.

As the first bank to take physical delivery of EU allowances and the first bank to take delivery of CERs,Barclays Capital has received widespread recognition for its environmental markets business including:Emissions Trading House of the Year from The Bankers Investment Banking Awards 2007, Best TradingCompany for two consecutive years from Point Carbons Carbon Market Awards 2007, #1 European ETS

Allowances Trading for two consecutive years from Risks Energy & Commodity Rankings 2007, and BestTrading Company from Environmental Finance 2006.

About Barclays Capital

Barclays Capital is the investment banking division of Barclays Bank PLC which has an AA long-term creditrating and a balance sheet of over US$2.3 trillion (1.1 trillion)*. With a distinctive business model, BarclaysCapital provides large corporate, government and institutional clients with solutions to their financing and

risk management needs. Barclays Capital has offices in 26 countries, employs over 15,700 people and hasthe global reach and distribution power to meet the needs of issuers and investors worldwide. For further

information about Barclays Capital, please visit our website www.barclayscapital.com.

*US$ figure was derived using the US$/ exchange rate at 30.06.07 of US$2.01/1

About Enhance Energy

Enhance Energy Inc. is a Calgary-based company that specializes in environmentally friendly secondary andtertiary oil and gas recovery projects. Enhance is developing a number of CO2 projects in Southern Albertafor both enhanced recovery and sequestration. Enhance Energy works with the owners of existing reservoirsas a technical partner and capital provider to recover greater quantities of oil from existing reservoirs thatare reaching the end of their economic life under primary recovery. To learn more, please visitwww.enhanceenergy.com.


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CANADIAN NATURAL RESOURCES LIMITED

(the CORPORATION)

INFORMATION CIRCULAR

FOR THE ANNUAL GENERAL MEETING

OF SHAREHOLDERS

TO BE HELD ON THURSDAY MAY 5, 2011 AT 3:00 P.M. (MDT)

AT THE METROPOLITAN CENTRE

333 - 4TH AVENUE S. W. CALGARY, ALBERTA

Contents of This Information Circular

Page

I. Information Respecting the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Statement of Corporate Governance Practices of the Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Other Corporate Governance Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Performance Graph . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Incentive Plan Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Common Shares Held by the Named Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Pension Plan Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Termination and Change of Control Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Report of the Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Directors Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Equity Compensation Plan Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Indebtedness of Executive Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Directors and Officers Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Interests of Informed Persons in Material Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

II. Information On Items To Be Acted Upon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Appointment of Proxy and Discretionary Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Beneficial Holder of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Voting Shares and Principal Holders Thereof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Appointment of Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Approval of Circular . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Schedule A Board of Directors Corporate Governance Guidelines . . . . . . . . . . . . . . . . . . . . . . . A-1

Unless otherwise indicated, all dollar figures stated in this Circular represent Canadian dollars. On December 31,2010, the reported Bank of Canada noon rate for one Canadian dollar was U.S. $1.0054 and 0.6446. OnDecember 31, 2010, the reported Bank of Canada noon rate for one U.S. dollar was $0.9946 and for one poundsterling was $1.5513.


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VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

March 16, 2011 is the record date for determination of Common Shares of the Corporation entitled to notice of

and to vote at the Meeting, provided that to the extent a shareholder transfers the ownership of any of his shares afterthe record date and the transferee of those shares establishes that he owns such shares and requests not later than5 days before the Meeting that his name be included on the shareholders list, such transferee is entitled to vote such

shares at the Meeting.

As at March 16, 2011 the Corporation has 1,095,369,534 voting securities outstanding as fully paid and

non-assessable Common Shares without par value, each share carrying the right to one vote.To the knowledge of the directors and officers of the Corporation no person or company beneficially owns, or

controls or directs, directly or indirectly, voting securities carrying 10% or more of the voting rights attached to allvoting securities of the Corporation.

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N. Murray Edwards Mr. N. M. Edwards is owner and President, Edco Financial Holdings Ltd. a(age 51) private management and consulting company. He has been a major contributorCalgary/Banff, Alberta to the success and growth of the Corporation since becoming a Director andCanada significant shareholder in 1988. Prior thereto he was a partner of the law firmVice-Chairman of the Board Burnet, Duckworth and Palmer in Calgary. He holds a Bachelor of CommerceDirector since September 1988 degree (Great Distinction) from the University of Saskatchewan and a BachelorNon-independent of Laws degree (Honours) from the University of Toronto.(Management)

Mr. N. M. Edwards is a member of the Canadian Council of Chief Executivesand is on the Board of Directors of the C. D. Howe Institute and is Chairman ofand serving on the board of directors of both Ensign Energy Services Inc. andMagellan Aerospace Corporation, both publicly traded companies.

Committee Memberships Securities held/market value of Common Shares

Reserves Common Shares22,339,987/$1,026,299,003Stock Options2,450,000

Timothy W. Faithfull Mr. T. W. Faithfull is an independent businessman and corporate director. Until(age 66) July 2003, when he retired, he was President and Chief Executive Officer of

Oxford, United Kingdom Shell Canada Limited. He joined the Royal Dutch Shell Group of companies inDirector since November, 2010 1967 and throughout his 36 year international career with them he held everIndependent increasing senior positions including Vice-President Crude Oil Shell

International Trading and Shipping Company from 1993 to 1996 and mostrecently Chairman and CEO Shell Companies in Singapore from 1996 to 1999before culminating in his appointment as President and Chief Executive Officerof Shell Canada Limited. Between 1999 and July 2003 he also served on theboards of the Calgary Health Trust and Epcor Centre for the Performing Artsand is a Trustee of the Starehe Endowment Fund in the UK and a CouncilMember of the Canada UK Colloquia. Mr. T. W. Faithfull graduated fromthe University of Oxford (Keble College), with an M. A. (Philosophy, Politicsand Economics) and is an alumnus of the London Business School (SeniorExecutive Program).

Mr. T. W. Faithfull currently serves on the board of directors of TransAltaCorporation, Canadian Pacific Railway, AMEC plc and Shell Pension TrustLimited

Committee Memberships Securities held/market value of Common Shares

Audit Common SharesHealth, Safety and Environmental 2,500/$114,850

DSU1,000/$45,940

34


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Board Members, Canadian Museum of Making.

:: SEARCH THEMUSEUM

Go!

EVENTS &LINKS

|ABOUT THE

MUSEUM| ACQUISITIONS | CONTACT US | HOME

Ian MacGregor, B.Sc. Mechanical Engineering (University of Calgary)

Ian MacGregor has thirty years of experience in developing and managing energy-relatedbusinesses, primarily with operations in Alberta. He is a partner with North West CapitalInc., a firm which is engaged in restructuring and rehabilitation of under performingbusiness. North West is also a major shareholder of Enhance Energy, a companyinvolved in the secondary recovery business, and North West Upgrading, who is buildinga $6 billion heavy oil upgrader near Edmonton Alberta. Prior to his current position he hadsenior management responsibilities with White Pass Capital Inc. and the Solex group ofcompanies.

Ian is married with two children. He is an alternate member for the Development AppealBoard in the Municipal District of Big Horn and a member of the Board of Directors forEnmax Energy the LDC for the City of Calgary.

Dr. S.C. (Chan) Wirasinghe, P.Eng.

Dr. Wirasinghe obtained his B.Sc. in Civil Engineering from the University of Ceylon (nowSri Lanka) in 1968. Subsequently he won a full US Fulbright Scholarship to studytransportation engineering at the University of California at Berkeley where he completedhis M.S. in 1973 and Ph.D. in 1976.

Dr. Wirasinghe became the founding Associate Dean (Research) in the Faculty ofEngineering at the University of Calgary in 1988 and was one of the originators of thesuccessful Research Chairs and Professorships Program with over 25 currently in place.He became Dean of the Faculty of Engineering in 1994. He chairs the Faculty Promotionsand Tenure Committees. He chaired the National Council of Deans of Engineering andApplied Sciences in 1999/2000. He is the senior Dean at U of C, and is the senior Dean ofEngineering in Canada.

Dr. Wirasinghes research interests are in the area of transportation planning andengineering. He has written well over 135 papers and has over 100 citations of his work.He recently received recognition from NSERC for holding a Discovery Grant continuouslyfor over 25 years. He is also the grant holder for the NSERC Canadian DesignEngineering Network (C-DEN). He is a life member of the International AdvisoryCommittee of the triennial International Symposium on Transportation and Traffic Theory,the most prestigious symposium in the field. He is the Editor-in-Chief of the Journal ofAdvanced Transportation, an international journal in its 38th year of publication.

Chan Wirasinghe is married to Dhamitha Wirasinghe, has three adult daughters, and twogrand children. He is an amateur Mozart historian, a collector of books on Sri Lanka, andreads for relaxation.

Page 1 of 2About the Museum

22/01/2010http://www3.museumofmaking.org/dbtw-wpd/machine_aboutus_board.htm


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North West Updgrading is planning to keep 1.2 million tonnes of carbon dioxide out of the atmosphere. The companys

proposed bitumen upgrading facility will instead use the CO2 to help recover more than a billion barrels of oil in Alberta.

The company is planning to build a facility north-east of Edmonton that it says will reduce emissions as much as removing

300,000 cars off the road and help the oil and gas industry better manage its CO 2.

Components for the very large hydrocracking vessels

are unloaded. The parts are so large and specialized,they're made in only two places in he world and

take several years to be assembled.

We think its sort of a vector for the future, says the chairman of North West, Ian MacGregor. All of this stuff has been

done before, but not all together in one place.

North West will upgrade and refine the bitumen into diesel fuel and other products at one location, in pretty much one step.

You add hydrogen to the heavy oil and when you add enough, it turns into fuel, explains MacGregor. You can either add all

the hydrogen in one place, like us, or you can add it in intermediate places and then make synthetic crude oil and then move

that synthetic crude oil somewhere else, where they add some more hydrogen.

North Wests gasification process essentially burning the heavy bottom of the bitumen barrel with pure oxygen produces

the hydrogen needed to turn bitumen into fuel. It also produces massive amounts of pure CO2. The greenhouse gas is

undesirable when released into the atmosphere, but its a valuable product for getting oil out of mature reservoirs, a process

called enhanced oil recovery (EOR).

Think of an old paint tin in your garage, with about 40 per cent of the paint in there but its all dried up, explains MacGregor.

If you take that and put CO2 in it, its like putting solvent in the paint tin. You slosh it around and it makes the oil less viscous

and more mobile in the formation, so you can get 15 to 20 per cent of the original oil in place out.The CO2 used in EOR stays in the reservoir. MacGregor says Alberta doesnt have a sufficient supply of pure CO2 thats needed

for economical EOR. You can produce pure CO2 by making hydrogen from natural gas, but typically its contaminated with

nitrogen and its very expensive to purify it so it can be used for EOR.

North West will capture its CO2 and supply it to an independent company, Enhance Energy Inc. Enhance plans to use the CO 2

in its own EOR projects as well as distribute it to EOR customers by building the provinces first CO 2 pipeline system. The CO2

will remain in EOR reservoirs, where it will stay safely stored.

WANT TO KNOW MORE?North West Upgrading Inc.

(www.northwestupgrading.com)

Carbon Capture and Storage - Government

of Alberta

(www.energy.alberta.ca)

Canadian Association of Petroleum Producers

Home Energy Supply Innovation Stories & Technologies Air & Climate Change One Stop Shopping For CO2

One Stop Shopping For CO2

We think its sort of a vector for the future. All of this stuff has been done before, but not all together in one place. - Ian MacGregor, North West Upgrading

Tuesday, December 01, 2009 http://www.capp.ca/energySupply/i...


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Learn more about Carbon Capture and Storage

(CCS) from the Government of Alberta

(www.energy.alberta.ca)Its the best opportunity of my life, says MacGregor, a 35-year veteran of the oil and gas industry. Its just a great place to

do this, weve got the reservoirs, weve got the CO2 sources. Sure there are problems, but thats where opportunities are

made.

If all goes as planned, and pending approvals, MacGregor says the North West Upgrader could be up and running by 2013.

2009 CAPP. All rights reserved.

Tuesday, December 01, 2009 http://www.capp.ca/energySupply/i...


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November 24, 2009

New pipeline will enhance carbon capture and storage

Enhance Energy to build large-capacity CO2 pipeline

Edmonton... The Alberta government signed a Letter of Intent with Enhance Energy and North

West Upgrading to construct a 240-km carbon dioxide (CO2) pipeline system that will greatlyincrease the capacity for future carbon capture and storage projects in the province.

This new pipeline will significantly advance Albertas capacity for future carbon capture andstorage projects , said Premier Ed Stelmach. The Alberta Carbon Trunk Line will be thebackbone of CO2 transportation for Alberta. It will be built with long-term capacity in mind so asmore companies capture CO2, they will be able connect to the line.

The pipeline will connect the Industrial Heartland near Fort Saskatchewan south to producing oilfields near Clive, north of Red Deer. Construction is scheduled to begin in 2011, with operation tobegin in late 2012. The province will invest $495 million in the project, over 15 years. Provincial

funding for this project is part of Albertas $2 billion commitment to carbon capture and storage.

Susan Cole, president of Enhance Energy, says this project has been in the works for many yearsand will initially connect the Industrial Heartland to producing oil fields near Clive.

The ACTL will enable the sustainable development of Albertas vast oil reserves while increasingproduction from existing reservoirs and helping to store 14 million tonnes of CO2 annually, saidCole.

Building critical infrastructure for future economic growth is a key element of Alberta's plan for astrong economic recovery. The Way Forwardwill bring Alberta back into a surplus position in three

years by trimming government spending; using cash reserves to protect key programs;continuing to invest in public infrastructure; and ensuring that our province's industries arecompetitive and continue to attract investment to provide jobs and prosperity.

-30-

Backgrounder: Carbon Capture and Storage Pipeline

Media inquiries may be directed to:Jerry Bellikka, Director of Communications

Sunday, December 20, 2009 http://alberta.ca/acn/200911/27386...


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Alberta Energy [email protected]

To call toll free within Alberta dial 310-0000.



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November 24, 2009

Carbon Capture and Storage (CCS) project details

Enhance Energy and North West Upgrading - Alberta Carbon Trunk Line(ACTL)

The Alberta Carbon Trunk Line will be an essential delivery system for many CO2 sourcesthroughout Alberta.

The initial supplies of CO2 will come from the Agrium Redwater Complex and once its built, theNorth West Upgrader located in the Industrial Heartland near Fort Saskatchewan. The North West

Upgrader will upgrade bitumen from Albertas oil sands and the captured CO2 will be transportedto depleting conventional oilfields and used in enhanced oil recovery (EOR).

EOR is a method of producing oil from conventional oil reservoirs. The injected CO2 createspressure in the reservoir which pushes the oil into the pipe and up to the surface more easily. Thismeans more tough-to-reach oil is produced which also increases royalties for all Albertans.

EOR is also environmentally efficient as existing infrastructure such as roads and wells can beused and it ensures we produce as much oil as possible from existing reservoirs.

The Alberta Carbon Trunk Line (ACTL) will be designed to carry about 40,000 tonnes of CO2 perday - 14 million tonnes per year. Initial throughput is expected to be about 5,100 tonnes per day.There will be a variety of options for CO2 producers to connect to the system and take advantageof this new pipeline.

The 240-kilometre line will run from Fort Saskatchewan south to Clive, near Red Deer.Construction is scheduled to begin in 2011 with throughput beginning in late 2012.

CCS project funding detailsThe Alberta government has committed $2 billion to advance CCS technology. Projects will beeligible to receive up to a maximum of 75 percent of the total incremental cost to capture, transportand store CO2. A maximum of up to 40 percent of the approved funding will be distributed duringthe design and construction stage based on achieved milestones and up to an additional 20

percent of the approved funding will be granted upon commercial operation. The remaining 40percent of the funding will be paid as CO2 is captured and stored over a maximum period of 10years. No funds will be dispersed until the companies enter into a funding agreement.

-30-

Media inquiries may be directed to:Jerry BellikkaEnergy Communications780-422-3667

Tyler PinderSAWTM Public Relations403-619-2302



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FAIRBORNE ENERGY LTD.BENEFITS FROM ALBERTA CARBON TRUNK LINE FUNDING

Calgary, Alberta, November 24, 2009. Fairborne Energy Ltd. (Fairborne or the Company) (TSX FEL) is pleased to announce that its enhanced oil recovery project in partnership with Enhance EnergyInc. (Enhance) has received two significant funding incentives.

Enhance has signed a letter of intent with the Government of Alberta that awards the Alberta CarbonTrunk Line (ACTL) project $495 million in funding from the Carbon Capture and Storage program. TheACTL project was also awarded a total of $63 million from the Federal Governments ecoEnergyTechnology initiative and the Clean Energy Fund.

The funding will help build the ACTL project, which initially consists of carbon capture near FortSaskatchewan, a 240 kilometer pipeline that will transport carbon dioxide (CO2), and CO2 facilitiesnecessary for a joint Fairborne and Enhance CO2 flood project at Fairbornes Clive Field in centralAlberta. Enhance will operate the pipeline and capture facilities. Fairborne will operate the enhanced oilrecovery project at Clive, an oilfield that was discovered in the early 1950s and has produced 70 millionbarrels of light oil to date from an estimated 166 million barrels oil of discovered petroleum initially-in-place. The project is being designed to recover additional light oil from Nisku and Leduc reservoirsthrough CO2 injection and extend the producing life of the Clive field by up to another 20 years.Internally evaluated best estimate of Fairborne's working interest contingent resources associated with theCO2 flood is 24 million barrels of oil. Subject to the terms and conditions of a previously announcedagreement with Enhance that includes payment of earning capital, Fairborne will retain 60% of its current

working interest and contingent resources. The oil produced will pay royalties and taxes to both theGovernment of Alberta and Freehold land owners over the life of the project. The CO2 will then bepermanently stored deep underground within the depleted oil pools.

Fairborne has plans for additional enhanced oil recovery projects in the Clive area using CO 2 injectionafter the initial project is established.

Final funding agreements, internal and regulatory approvals are still required prior to implementation ofthe enhanced oil recovery project.

Fairborne is a natural gas and crude oil exploration, development and production company headquarteredin Calgary, Alberta, Canada. Its common shares trade on the Toronto Stock Exchange under the symbol

FEL.

For more information please contact:

Steven R. VanSickle Aaron Grandberg

President & CEO Chief Financial OfficerFairborne Energy Ltd. Fairborne Energy Ltd.Phone: (403) 290-7759 Phone: (403) 290-3217Email: [email protected] Email: [email protected]


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Advisories

Forward Looking Statements

This news release contains certain forward-looking statements, which include the Company's plans with respect tothe project outlined at Fairborne's Clive Field, who will operate certain aspects of the project, the effect of the

project including what may be recovered from the project and the effect on the life of the Clive Field and theCompany's plans for additional projects. The reader is cautioned that assumptions used in the preparation of suchinformation may prove to be incorrect. All such forward-looking statements involve substantial known and unknownrisks and uncertainties, certain of which are beyond Fairborne's control. Certain assumptions related to the foregoingare outlined above and also include that final funding agreements are entered into in connection with the project inaccordance with the foregoing and all internal and regulatory approvals are obtained, that the project is adequatelyfunded to be completed within the time schedule and the design parameters as proposed, including that the partiesare able to secure additional financing that will be required to complete the project and that it performs asanticipated. Such risks, and uncertainties include, without limitation, risks associated with whether the foregoingassumptions are correct, risks associated with oil and gas exploration, development, exploitation, production,marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision ofreserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and otherservices, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient

capital from internal and external sources, the impact of general economic conditions in Canada and the UnitedStates, industry conditions, changes in laws and regulations (including the adoption of new environmental laws andregulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability ofqualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility andmarket valuations of companies with respect to announced transactions and the final valuations thereof, andobtaining required approvals of regulatory authorities. Fairborne's actual results, performance or achievements coulddiffer materially from those expressed in, or implied by, these forward-looking statements and, accordingly, noassurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur,or if any of them do, what benefits, including the amount of proceeds, that Fairborne will derive therefrom. Readersare cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whetherwritten or oral, attributable to Fairborne or persons acting on its behalf are expressly qualified in their entirety bythese cautionary statements. Furthermore, the forward-looking statements contained in this news release are made asat the date of this news release and Fairborne does not undertake any obligation to update publicly or to revise any

of the included forward-looking statements, whether as a result of new information, future events or otherwise,except as may be required by applicable securities laws.

Discovered Petroleum Initially-In-Place and Contingent Resources

Discovered petroleum initially-in-place ("DPIIP") is that quantity of petroleum that is estimated, as of a given date,to be contained in known accumulations prior to production. The recoverable portion of discovered petroleuminitially in place includes production, reserves, and contingent resources; the remainder is unrecoverable.

Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverablefrom known accumulations using established technology or technology under development, but which are notcurrently considered to be commercially recoverable due to one of more contingencies. Contingencies may includefactors such as economic, legal, environmental, political, and regulatory matters or a lack of markets. The internalestimate of DPIIP in the Clive Field and the contingent resources associated with a CO2 flood in the Clive D-2(Nisku) and D-3A (Leduc) pools has an effective date of November 1, 2009. The internal estimates are based onresults from a Clive CO2 flood study conducted by Epic Consulting Services Ltd. Fairborne has a 94.04% interest inthe Clive D-3A Unit No. 1 and a 98.87% interest in the Clive D-2 Unit No. 1. The contingent resources identifiedherein have been classified as contingent resources and not reserves due to economic uncertainty and the significantamount of new infrastructure required for the project that includes the CO2 pipeline. The resource estimatesprovided herein are estimates only and the actual resources may be greater than or less than the estimates providedherein. There is no certainty that it will be commercially viable to produce any portion of the resources.


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New Technology Magazine

3/7/2011 6:13:00 PM - 0 comments

With Funding Secured, Enhance AdvancesPlans For CO2 Capture, EOR Pipeline

By: Pat Roche

A project to supply carbon dioxide for enhanced oil recovery (EOR) in Alberta is on track to breakground next year.

Enhance Energy Inc. plans to start construction in 2012 of CO2 capture facilities at the Agrium Inc.fertilizer plant in the Redwater area near Edmonton, said Susan Cole, president of Enhance.

Cole discussed the project in a luncheon presentation to the Resource Industry Suppliers Association(RISA) in Calgary and in an interview afterwards.

Enhance will build capture facilities and buy CO2 from Agrium under a previously negotiatedagreement. Enhance also has an agreement with North West Upgrading Inc. to take the CO2 from abitumen upgrader/refinery North West plans to build across the road from Agrium.

Construction of the first phase of the upgrader/refinery - known at the Redwater refinery - should beassured because 100 per cent of its bitumen feedstock capacity has been secured (75 per cent from theAlberta government's royalty bitumen and 25 per cent from Canadian Natural Resources Limited'sthermal oil operations).

All of Enhance's government funding agreements have been signed and the small privately heldcompany is moving ahead with its project, Cole said.

Work on the CO2 capture facilities will start first because those will take longer to build than thepipeline, which is slated for construction in the summer of 2013, Cole said.

The 240-kilometre pipeline will initially deliver CO2 from Agrium and North West to the Cliveoilfield operated by Fairborne Energy Ltd. in central Alberta.

The Alberta government has conditionally committed $495 million to Enhance over 10 years forconstruction of an Alberta CO2 pipeline network and CO2 capture facilities.

In explaining the rationale for government involvement, Cole uses the analogy of the Alberta GasTrunk Line - the natural gas gathering system created in 1954 by then Alberta Premier ErnestManning to spur growth of the province's natural gas industry.

In the United States - where there are thousands of kilometres of CO2 pipelines -- EOR projectsproduce a total of 260,000 bbls of oil a day, Cole said. The Weyburn project operated by CenovusEnergy Inc. in southern Saskatchewan produces more than 25,000 bbls of oil a day using CO2 fromNorth Dakota.

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Many studies have highlighted the fact that only about three of every 10 bbls of light oil discovered inAlberta now get produced -- and that there are many mature oilfields that would be amenable to CO2flooding, But because there's never been an economically available supply of CO2, only a few tinyCO2 EOR projects now operate in the province.

So once the 240-kilometre Alberta CO2 pipeline is built, Enhance hopes it will strike deals with otherproducers like it did with Fairborne. Enhance, which plans to operate more as an oil producer than a

pipeline operator or CO2 seller, will take a stake in the oilfields to which it supplies CO2.

At Clive, for example, Enhance has a 40 per cent working interest. Agrium and North West will sellCO2 to Enhance.

"Our business model is that we are developing enhanced oil recovery projects. So we're not amarketer of CO2," Cole said. "We buy the CO2 for our own account. And we're going to use the CO2in enhanced oil recovery. So we don't sell the CO2."

Cole said most of the detailed engineering has been done for Enhance's capture facilities at theAgrium plant, a 4,800-horsepower compressor has been purchased and bid packages are beingprepared for other components. For example, the Agrium CO2 is wet, so Enhance is seeking bids for

the dehydration equipment.

CO2 from North West's gasification process will be dry, so all Enhance will have to do is compress itfor pipelining. Enhance is just at the front-end engineering and design (FEED) stage for the NorthWest capture facilities.

Enhance's large compressor system at North West will convert the CO2 from a gas at essentiallyatmospheric pressure to at liquid at 2,600 pounds per square inch. The target for start-up is 2014.

Except for a small 12-inch-diameter section in the Redwater area, the pipeline will be 16 inches.

The pipeline's capacity can be increased by adding pumping stations. But pumping won't be necessary

initially as the pipeline will only deliver about 5,000 tonnes a day of CO2 from Agrium and NorthWest to the Clive oilfield.

With all the pumping stations added, the pipeline will have a maximum capacity of 40,000 tonnes aday. While Agrium and North West will only be capable of filling up to one-eighth of the pipeline'sultimate capacity, Enhance and the Alberta government believe that once the CO2 distributionnetwork is in place, the economics will be attractive for other EOR operators.

Two of the three elements needed for a home-grown CO2 EOR industry - CO2 emissions and themature oilfields - have been available in Alberta for many years. Now that the third element - CO2capture and distribution infrastructure -- is being added with the help of government funding, more

CO2 EOR projects are expected to start.

"Before it was a situation where no one could afford to do these projects because ... they couldn'tsupport building the infrastructure," Cole said, adding that rising oil prices can only makes EOR evenmore attractive.

Support for increased EOR has been voiced by local industry groups such as the Petroleum ServiceAssociation of Canada (PSAC), the Small Explorers and Producers Association of Canada (SEPAC)and Petroleum Technology Alliance Canada (PTAC).

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Apart from the economic spinoff, the payback for the province will be the royalties it collects on theincreased light oil production. And that's a key difference between CO2 EOR and pure carbon captureand storage (CCS) into deep saline aquifers.

"We don't need to really go to aquifer storage right now when we have so much potential for EOR inthe province," Cole said. Enhance believes it can eventually fill the pipeline with 40,000 tonnes ofCO2 a day and keep it going for many decades supplying EOR projects in Alberta.

She added: "CCS is really economically challenged. The only way to make this work is to have arevenue stream. And so enhanced oil recovery gives us that."

Answering supplier's questions, Cole said there are four components to the project - the Agriumcompression, the North West compression, the pipeline and the EOR.

Asked whether the CO2 capture technology that will be used at North West and Agrium could beapplied at existing plants, Cole said there are a variety of Alberta facilities that could feed CO2 intothe pipeline. In some cases the gas would have to be cleaned up to meet the pipeline specification. Shenoted there's nothing new about any of the technology that will be used.

In response to a question about whether the CO2 gathering network would eventually extend to thenew Keephills 3 power plant, Cole said Enhance has looked at designing laterals to go west toWabamun area but nothing has been decided yet.

While a CO2 gathering pipeline from oilsands operations in the Fort McMurray may eventually makesense, it's "economically challenged" at present, Cole said. She said roughly half of the province'sCO2 emissions come from central Alberta. Refining and bitumen upgrading plants in the Edmontonarea - which produce the pure or near-pure CO2 streams needed for EOR - could eventually tie intothe Enhance pipeline.

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