Operations Overview

North Peace’s primary asset consists of approximately 86,400 acres of oil sands leases in north central Alberta with 2.0 to 3.1 billion barrels of Discovered Petroleum Initially-In-Place⁽¹⁾⁽²⁾. North Peace has 100 percent working interest.

North Peace has drilled and cored 17 wells on this asset since the company’s establishment.

Having completed internal resource characterization and thermal recovery modeling, North Peace is focusing on Block B (South) of its land base initially. ERCB approval for a 1,000 bbl/d pilot Cyclic Steam Stimulation (CSS) recovery project was granted in June 2008. North Peace is progressing with this pilot project, and the Company anticipates that construction on the pilot will begin in summer 2008 followed by first steam and oil production during winter 2008/09.

⁽¹⁾

Discovered Petroleum Initially-In-Place (equivalent to discovered resources) 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 petroleum initially in place includes production, reserves, and contingent resources; the remainder is unrecoverable.

⁽²⁾

Sproule Associates Ltd independent report dated December 31, 2006