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Annual Information Form 2015 1 Glossary of Terms and Abbreviations SUNCOR ENERGY INC. ANNUAL INFORMATION FORM Dated February 25, 2016 ENERGY 21FEB201612084691 ANNUAL INFORMATION FORM DATED FEBRUARY 25, 2016 TABLE OF CONTENTS 1 Advisories 2 Glossary of Terms and Abbreviations 2 Common Industry Terms 4 Common Abbreviations 4 Conversion Table 5 Corporate Structure 5 Name and Incorporation 5 Intercorporate Relationships 6 General Development of the Business 6 Overview 8 Three-Year History 10 Narrative Description of Suncor’s Businesses 10 Oil Sands 15 Exploration and Production 19 Refining and Marketing 23 Other Suncor Businesses 24 Suncor Employees 25 Social and Environmental Policies 26 Statement of Reserves Data and Other Oil and Gas Information 28 Oil and Gas Reserves Tables and Notes 33 Future Net Revenues Tables and Notes 39 Additional Information Relating to Reserves Data 49 Industry Conditions 55 Risk Factors 63 Dividends 64 Description of Capital Structure 66 Market for Securities 67 Directors and Executive Officers 73 Audit Committee Information 75 Legal Proceedings and Regulatory Actions 75 Interest of Management and Others in Material Transactions 75 Transfer Agent and Registrar 75 Material Contracts 75 Interests of Experts 76 Disclosure Pursuant to the Requirements of the New York Stock Exchange 76 Additional Information 77 Advisory – Forward-Looking Information and Non-GAAP Financial Measures Schedules A-1 SCHEDULE ‘‘A’’ – AUDIT COMMITTEE MANDATE B-1 SCHEDULE ‘‘B’’ – SUNCOR ENERGY INC. POLICY AND PROCEDURES FOR PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES C-1 SCHEDULE ‘‘C’’ – FORM 51-101F2 REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR D-1 SCHEDULE ‘‘D’’ – FORM 51-101F2 REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR E-1 SCHEDULE ‘‘E’’ – FORM 51-101F3 REPORT OF MANAGEMENT AND DIRECTORS ON RESERVES DATA AND OTHER INFORMATION ADVISORIES In this Annual Information Form (AIF), references to ‘‘we’’, December 31, 2015. References to our MD&A mean ‘‘our’’, ‘‘us’’, ‘‘Suncor’’ or ‘‘the company’’ mean Suncor Suncor’s Management’s Discussion and Analysis, dated Energy Inc., its subsidiaries, partnerships and joint February 25, 2016. arrangements, unless the context otherwise requires. This AIF contains forward-looking statements based on References to the ‘‘Board of Directors’’ or the ‘‘Board’’ Suncor’s current plans, expectations, estimates, projections mean the Board of Directors of Suncor Energy Inc. and assumptions. This information is subject to a number All financial information is reported in Canadian dollars, of risks and uncertainties, including those discussed in this unless otherwise noted. Production volumes are presented document in the Risk Factors section, many of which are on a working-interest basis, before royalties, unless beyond the company’s control. Users of this information otherwise noted. are cautioned that actual results may differ materially. Refer References to the 2015 audited Consolidated Financial to the Advisory – Forward-Looking Information and Statements mean Suncor’s audited Consolidated Financial Non-GAAP Financial Measures section of this AIF for Statements prepared in accordance with Canadian information regarding risk factors and material assumptions generally accepted accounting principles (GAAP), which is underlying our forward-looking statements. within the framework of International Financial Reporting Information contained in or otherwise accessible through Standards (IFRS), the notes and the auditors’ report, as at Suncor’s website www.suncor.com does not form a part of and for each year in the two-year period ended this AIF and is not incorporated into the AIF by reference. SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2015 1 GLOSSARY OF TERMS AND ABBREVIATIONS Common Industry Terms Products Crude oil is a mixture consisting mainly of pentanes Natural gas liquids (NGLs) are hydrocarbon components (lighter hydrocarbons) and heavier hydrocarbons that exists that can be recovered from natural gas as a liquid, in the liquid phase in reservoirs and remains liquid at including, but not limited to, ethane, propane, butanes, atmospheric pressure and temperature. Crude oil may pentanes, and condensates. Liquefied petroleum gas contain small amounts of sulphur and other (LPG) consists predominantly of propane and/or butane non-hydrocarbons, but does not include liquids obtained in and, in Canada, frequently includes ethane. the processing of natural gas. Oil and gas exploration and development terms Bitumen is a naturally occurring solid or semi-solid hydrocarbon, consisting mainly of heavier Development costs are costs incurred to obtain access to hydrocarbons that are too heavy or thick to flow or be reserves and to provide facilities for extracting, treating, pumped without being diluted or heated, and that is gathering and storing oil and gas from reserves. not primarily recoverable at economic rates through a Exploration costs are costs incurred in identifying areas well without the implementation of enhanced recovery that may warrant examination and in examining specific methods. After it is extracted, bitumen may be areas that are considered to have prospects that may upgraded into crude oil and other petroleum products. contain oil and gas reserves, including costs of drilling Light Crude Oil is crude oil with a relative density exploratory wells and exploratory-type stratigraphic greater than 31.1 degrees API gravity. test wells. Medium Crude Oil is crude oil with a relative density Field is a defined geographical area consisting of one or greater than 22.3 degrees API gravity and less than or more pools containing hydrocarbons. equal to 31.1 degrees API gravity. Reservoir is a subsurface rock unit that contains an Heavy Crude Oil is crude oil with a relative density accumulation of petroleum. greater than 10 degrees API gravity and less than or Wells: equal to 22.3 degrees API gravity. Delineation wells are drilled for the purpose of Oil sands are naturally occurring stratified deposits of assessing the stratigraphy, structure and bitumen unconsolidated sand/sandstone and other sedimentary saturation of an oil sands lease. The wells are also rocks saturated with varying amounts of water used to define known accumulations for the and bitumen. assignment of reserves. Synthetic crude oil (SCO) is a mixture of liquid Development wells are drilled inside the established hydrocarbons derived by upgrading bitumen, or limits of an oil or gas reservoir, or in close proximity to derived from gas to liquid conversion and may contain the edge of the reservoir, to the depth of a sulphur or other compounds. Yields of SCO from stratigraphic horizon known to be productive. Suncor’s upgrading processes are approximately 80% of bitumen feedstock input, and may vary depending Disposal wells are drilled in areas where waste fluids on the source of bitumen. SCO with lower sulphur can be injected for safe disposal. These wells are content is referred to as sweet synthetic crude oil, subject to regulatory requirement to avoid the while SCO with higher sulphur content is referred to contamination of freshwater aquifers. as sour synthetic crude oil. Dry holes are exploratory or development wells found Natural gas is a naturally occurring mixture of to be incapable of producing either oil or gas in hydrocarbon gases and other gases. sufficient quantities to justify the completion as an oil or gas well. Conventional natural gas is natural gas that has been generated elsewhere and has migrated as a result of Exploratory wells are drilled in a territory without hydrodynamic forces and is trapped in discrete existing proved reserves, with the intention of accumulations by seals that may be formed by localized discovering commercial reservoirs or deposits of crude structural, depositional or erosional geological features. oil and/or natural gas. 2 SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2015 Infill wells are drilled between existing development government and a resource extraction company that states wells to target regions of the reservoir containing how much of the resource produced each party will receive bypassed hydrocarbons or to accelerate production. and which parties are responsible for the development of the resource and operation of associated facilities. The Observation wells are used to monitor changes in a resource extraction company does not obtain title to the producing field. Parameters being monitored include product; however, the company is subject to the upstream fluid saturations and reservoir pressure. risks and rewards. An exploration and production Service wells are development wells drilled or sharing agreement (EPSA) is a form of PSC, which also completed for the purpose of supporting production in states which parties are responsible for exploration an existing field, such as wells drilled for the injection activities. of gas or water. Steam-to-oil ratio (SOR) is a metric used to quantify the Sidetrack wells are secondary wellbores drilled away efficiency of an in situ oil recovery process, which measures from an original wellbore. These enable the bypass of the cubic metres of water (converted to steam) required to an unusable section of the original wellbore or allow produce one cubic metre of oil. A lower ratio indicates for exploration of a nearby geological feature. more efficient use of steam. TM) is a process Stratigraphic wells are usually drilled without the Tailings Reduction Operations (TRO involving the conversion of fluid fine tailings into a solid intention of being completed
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