Southern District

Natural gas in our Southern District is a base of varied assets with the characteristices similar to our Northern Alberta assets, but with the added advantage of having year-round access.  The following is a description of our Southern District oil and natural gas properties as at December 31, 2007:

Birchwavy West -  Operations in this region expanded significantly with the Birchwavy Aquisition resulting in PET creatingthis core area in 2007.  The operations are comprised of conventional and tight unconventional shallow natural gas assets in the Warwick, Bruce and Killiam areas of Central Alberta.

In 2007 this core area comprised of 407,766 gross (227,475.4 net) developed acres produced an average of 12.4 MMcfe/d of natural gas production from 293 gross (193.2 net) producing wells.

Birchwavy East - Production from this core area is primarily from multiple opjectives in the Cretaceous Mannville zone as well as unconventional tight shallow gas from the Viking formation.  Mannville and Duvernay are the largest properties in this core area and the area also includes oil-producing assets in the Viking-Kinsella area.  These assets were primarily acquired through the Birchwavy Acquisition but also include assets that were obtained directly through and as a follow-up to the acquisition of a private oil and gas exploration company in 2006.

In 2007 this core area comprised of 365,544 gross (241,876.7 net) acres produced an average of 18.7 MMcfe/d of natural gas production from 345 gross (279.2 net) producing wells.

East Central - This core area is comprised of conventional natural gas assets in east central Alberta aquired through the acquisition of the private oil and gas exploration company in 2006 and supplemented with additional acquisition and follow-on exploration activity in 2007 including assets included in the Birchwavy Aquisition.  East Central Alberta is spearated from the Birchwavy core areas by the North Saskatchewan River.

In 2007 this core area comprised of 65,659 gross (40,333.5 net) acres produced an average of 2.7 MMcfe/d of natural gas production from 73 gross (59.5 net) producing wells.

_{1 square = 6 miles X 6 miles}