Bow Valley Energy

Capex

The Company has approved a capital budget of $96 million for 2008, which includes $13 million to fund the Company's Alaska exploration and testing program; $31 million to fund the remaining development capital at the Ettrick field, $50 million for North Sea exploration and $2 million for other capital expenditures.

Future Plans

Production, cash flow and earnings are beginning to grow due to the achievement of first production at the Enoch and Blane fields. With the Chestnut field expected to reach first production late in the first quarter of 2008, and the Ettrick field expected to reach first production in mid-2008, sales volumes, cash flow and earnings are expected to continue to grow substantially over the next twelve months.

Production

Sales volumes averaged 1,817 boe/d in 2007, an increase of 181% compared to 2006. Fourth quarter sales volumes averaged 3,769 boe/d, an increase of 629% compared to the fourth quarter of 2006. Production, including accruals and accrual adjustments averaged 4,388 boe/d in the fourth quarter of 2007. Actual production for the fourth quarter was estimated to be 4,134 boe/d. As production exceeded sales, oil inventory grew by 57,300 barrels in the quarter, ending at 130,300 barrels.

Sales volumes averaged 2,443 boe/d in 2006, down 24% compared to 2005. Fourth quarter sales volumes averaged 2,107 boe/d, down 24% compared to the fourth quarter of 2005.

Sales volumes averaged 3,227 boe/d in 2005, up 22% compared to 2004. Fourth quarter sales volumes were 2,785 boe/d, up 5% compared to the fourth quarter of 2004.

Reserves

Proved plus probable reserves increased 100% to 26.7 million boe, due to the acquisition of an interest in the Peik field. Total proved reserves increased 36% to 6.7 million boe due to the Enoch and Blane fields reaching first production. The net present value (NPVBT10 forecast pricing) of proved plus probable reserves increased 103% to $711.6 million.

In 2006, corporate total proved reserves increased 7% to 7.4 mmboe, total proved plus probable reserves remained flat at 17.2 mmboe.

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