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Development Strategy

AOS has chosen a phased approach to Clearwater development. The first phase will demonstrate the safety and commerciality of Clearwater bitumen production and the larger Phase II will fully develop the bitumen resource.

The key goal of the Clearwater Phase I Project is to demonstrate commercial viability using the chosen operating design as applied to this reservoir. Demonstrating commercial viability will include verifying key design parameters, including the productivity gain and SOR reduction achieved through solvent co-injection, plus the addition of basement well production, as well as other features.

AOS has achieved the following results as of fall 2011:

• Assembled the Clearwater leases;
• Conducted three rounds of winter delineation drilling;
• Acquired (“shot”) and interpreted 2D and 3D seismic data;
• Evaluated and substantiated the resource;
• Designed and conducted initial engineering on the SAGD well plan and surface facilities;
• Prepared and submitted the regulatory application and project update;
• Assembled a network of qualified technical consultants and sub-contractors; and
• Consulted with stakeholders, including the Fort McMurray Airport Authority (FMAA) as well as local residents, businesses and aboriginal groups, a process that will continue throughout the life of the project.