Shale is a fine-grained, carbon-rich rock. It is the most common sedimentary rock in the world, composed primarily of clay or mud. Shale forms over millions of years from organic material in ancient sea beds and swamps. Shale gas is natural gas stored within this rock.

Our foray into shale gas

• our activity in shale gas has focused primarily on production in the Barnett Shale of North Texas
• since 2003, we've been securing a leading presence in two of the most exciting plays in North America: the Haynesville Shale play (Louisiana and Texas), and the Horn River Shale play (northeast British Columbia)

Combined, these plays have the potential to be among the largest sources of natural gas growth in North America.

The unconventional nature of shale gas

• shale gas is unconventional - it requires special stimulation and production techniques to extract the resource
• we use long-reach horizontal wells and multi-stage hydraulic fracturing technology

These technologies reduce our environmental footprint.

Haynesville Shale - northwest Louisiana and east Texas

• formed roughly 150 million years ago
• more than 10,000 feet below the earth's surface
• newer technology and processes have opened up extensive drilling and production activity in the area
• noted for its vast potential - widely considered one of the most prolific natural gas resource plays in North America

In 2008, we added approximately 435,000 net acres to our Haynesville Shale play.

Horn River Basin - northeast British Columbia

• the Basin covers more than three million acres; the shale play likely covers about one million of those acres
• lies in deep muskeg about 100 kilometres northeast of Fort Nelson, B.C.
• estimated to have as much as 500 trillion cubic feet of natural gas in-place, ranking among the largest natural gas find in North America

In 2008, we added approximately 260,000 net acres to our Horn River Shale play.