Hearing Order OH-001-2014 2-12 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

2.7 Regional Initiatives

As a new in-situ oil sands operator in the Wabasca region Cavalier has focused on developing relationships with Project stakeholders (aboriginal, government, industry). Cavalier’s participation in regional initiatives to date reflects this focus.

Since November 2011, Cavalier has participated with other oil sands developers, Bigstone and the Municipal District of Opportunity No. 17 in the Wabasca Workforce Strategy. This Strategy is examining how the entire community, including governments, companies and support agencies, can work together to facilitate the training and development of local workers. To date, the participants have been gathering information from community studies, workshops and discussions to identify both barriers and solutions to accessing training and employment opportunities. Cavalier intends to actively participate and support the development of the Wabasca Workforce Strategy.

Cavalier also recognizes the importance of regional cooperation with other industries and oil sands developers. Cavalier has, and will continue to ensure the FMA holder in the region understands Cavalier’s current development plans, so that the Project footprint can be managed in accordance with the principles of Integrated Land Management.

Cavalier has also contacted area oil sands operators regarding development planning. As projects are implemented the importance of regional environmental initiatives to address the management of cumulative effects will become increasingly relevant. Cavalier’s Hoole property is located within the Land-use Framework’s Lower Peace Regional Plan area. Cavalier’s intention is to participate as the Lower Peace Regional Plan is developed, and to be involved as regional initiatives for environmental management are progressed in response. Baseline environment data (water well data, wildlife, soil, vegetation, aquatic resources, etc.) is currently being collected for the Hoole property to assist in development planning. This data will be collected in a manner that will facilitate its use in regional environmental management initiatives.

Cavalier is a member of the Canadian Association of Petroleum Producers (CAPP). CAPP membership and involvement provides a mechanism for tracking oil sands development initiatives related to marketing, environment and regulatory. Cavalier plans to become a member of the Western Canadian Spill Services Cooperative (WCSS) and will contribute and participate in Zone 4 Area D activities accordingly. Section 6.6.1.4 provides additional information with respect to WCSS membership.

CAVALIER ENERGY INC. 3-1 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

3 APPLICATION FOR APPROVAL 3.1 Existing Approvals

To date, Cavalier has received ESRD approval for oil sands exploration (OSE) programs in Townships 81 to 82, Ranges 24 to 23 W4M, which includes the PDA.

3.2 Request for Approval

Cavalier is seeking approval of the Project from:

1. The ERCB to:

construct and operate a bitumen recovery scheme, in accordance with Section 10 of the Oil Sands Conservation Act (OSCA); and

2. ESRD to:

a. construct, operate and reclaim the Project, in accordance with Division 2 of Part 2 and Section 66 of the Environmental Protection and Enhancement Act (EPEA); and b. construct, operate and reclaim components of the Project in accordance with Division 2 of Part 2 and Part 6 of the EPEA.

Under the EPEA Activities Designation Regulation (AR 276/2003) the scope of the Project meets the criteria set out in Schedule 1 and is, therefore, designated as an activity for which an approval is required under the EPEA. Cavalier received written confirmation from ESRD (June 19, 2012) that an environmental impact assessment report is not required for the Project (Appendix A).

This application satisfies the requirements for joint ERCB and ESRD approval as described in ERCB Directive 023 - Guidelines Respecting an Application for a Commercial Crude Bitumen Recovery and Upgrading Project (ERCB 1991a) and Environment Guide to Content for Industrial Approval Applications (AENV 1999a). Concordance tables for these two documents are presented in Appendix B.

Comments on this application can be submitted to:

Peter Millman, B.A., M.E.Des. Environment and Regulatory Specialist Cavalier Energy Inc. 2500, 255 -5th Avenue SW Calgary, Alberta T2P 3G6

Tel: 403-268-3950 E-mail: [email protected]

3.3 Associated Applications

Cavalier will file applications for other aspects of the Project under applicable legislation. The provincial application and approval requirements applicable to the Project that will be submitted under separate cover are:

CAVALIER ENERGY INC. 3-2 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

• Water Act, for diversion of groundwater for potable purposes and for makeup and utility water use; • Historical Resources Act, for clearance to construct the facilities; • Pipelines Act, for the construction and operation of pipelines between the processing facilities and the production well pads, the water source pipeline, and the fuel gas tie-ins; • Oil and Gas Conservation Act, for well and facility licenses; • Public Lands Act, for Crown land surface dispositions; • Municipal Government Act, for a development permit from the Municipal District of Opportunity No. 17; and • Safety Codes Act, for use of pressure containing equipment and piping.

CAVALIER ENERGY INC. 4-1 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

4 GEOLOGY AND RESERVOIR 4.1 Lease Area and Geologic Study Area

Cavalier’s Hoole leases span Townships 80 to 82 and Ranges 23 to 25 W4M. Included are fourteen Oil Sands Development Leases, covering 55.75 sections of land, with rights to the bitumen in the Mannville Formation (Table 4.1-1; Figure 4.1-1; Figure 4.1-2).

The Project is located within Township 81 Range 23 and 24 on three Cavalier Energy Inc. Oil Sands Leases (No. 7496090617, No. 7497010683 and No. 7498110013). The well pads and drainage patterns are located entirely within Oil Sands Lease No. 7496090617 and No. 7497010683. The CPF site is located within Oil Sands Lease No. 7498110013 (Figure 4.1-3). These leases cover the oil sands rights over a stratigraphic interval spanning the top to the base . The target oil sands reservoir for the Project is the Cretaceous Grand Rapids Formation.

Cavalier has identified a Geological Study Area (GSA) that consists of 12.25 sections located within Township 81, Ranges 23 and 24 W4M, and a Project Development Area (PDA) within the GSA (Figure 4.1-4 and Table 4.1-2). All 114 well pairs for the Project will be placed within the PDA within the drainage areas indicated in Figure 4.1-5.

Cavalier understands that a Project Area typically represents the boundaries within which bitumen recovery may occur over the life of the Project, and a Development Area to be the boundaries of the drainage areas for which representative geological cross sections and well trajectories are provided for at the time of application. In this application the Project Area and the Development Area will have the same boundary and will be referred to as the Project Development Area (PDA).

Cavalier has reviewed in-situ applications and is aware of the ERCB’s expectation that the applicant has undertaken an appropriate level of geological evaluation work to develop a good understanding of the resource, such that the development plan will allow for the optimal recovery of the resource. Cavalier has drilled 19 wells within the two and quarter sections that comprise the PDA. This corresponds to a well density of 8.4 wells per section. The data from these wells is the basis for the development plan outlined herein.

Information relevant to the applied for PDA can be found in the application as follows:

• description of proposed drainage area (Section 5.2); • a net bitumen isopach map (Figure 4.5-6); • OBIP and Recoverable Volumes (Section 5.2); • horizontal well pair placements on geological cross sections for all 9 well pads (Section 5.2); and • a discussion of well pad placement (Section 6.1).

CAVALIER ENERGY INC. 4-2 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

Table 4.1-1 Oil Sands Leases and Permits

Agreement Term Expiry Area Type Rights Legal Description Number (years) Date (ha) AB 0747406110002|1 Oil Sands 15 years 11/2/2024 948.8847 below Top of the Viking to Base T080-23W4: 32SE,NE;33 Development Lease of the Woodbend (D00006) AB 0747408040005|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 9;10 Development Lease of the Woodbend (D00006) AB 0747408040006|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 15;16 Development Lease of the Woodbend (D00006) AB 0747408040007|1 Oil Sands 15 years 4/3/2026 632.5898 below Top of the Viking to Base T081-24W4: 22 Development Lease of the Woodbend (D00006) AB 0747408040008|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 26;27 Development Lease of the Woodbend (D00006) AB 0747408040010|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 34;35 Development Lease of the Woodbend (D00006) AB 0747408050694|1 Oil Sands 15 years 5/29/2026 5060.7186 below Top of the Viking to Base T081-24W4: 7; 8;17; 18 Development Lease of the Woodbend (D00006) T081-25W4: 11; 12; 13; 14 AB 0747410080002|1 Oil Sands 15 years 8/5/2028 3162.9491 below Top of the Viking to Base T081-24W4: 29; 30; 31;32 Development Lease of the Woodbend (D00006) T081-25W4: 36 AB 0747410090311|1 Oil Sands 15 years 9/2/2028 1897.7695 below Top of the Viking to Base T082-25W4: 1;12;13 Development Lease of the Woodbend (D00006) AB 0747496090617|1 Oil Sands 15 years 9/19/2016 3162.9491 below Top of the Viking to Base T081-24W4: 13;14; 23;24;25 Development Lease of the Woodbend (D00006) AB 0747496090618|1 Oil Sands 15 years 9/19/2016 3795.5389 below Top of the Viking to Base T082-24W4: 2;3;10;11;14;15 Development Lease of the Woodbend (D00006) AB 0747497010683|1 Oil Sands 15 years 1/9/2017 6958.4881 below Top of the Viking to Base T081-23W4: Development Lease of the Woodbend (D00006) 4NW,SW;5;6;7NW,SW;18SW,NW;19SW,NW; 30SW,NW;31 T081-24W4: 36 T082-23W4: 6NW,SW;7SW,NW;18NW,SW T082-24W4: 1;12;13 AB 0747498110012|1 Oil Sands 15 years 11/19/2018 2530.3593 below Top of the Viking to Base T080-24W4: 25;26SE,NE;35SE,NE,NW;36 Development Lease of the Woodbend (D00006) AB 0747498110013|1 Oil Sands 15 years 11/19/2018 2530.3593 below Top of the Viking to Base T081-24W4: 1;2;11;12 Development Lease of the Woodbend (D00006) Note: Leases in bold font are leases from which resource will be withdrawn for the Project. Lease highlighted with red font is the lease on which the CPF and main access road are located.

CAVALIER ENERGY INC. 4-3 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

Table 4.1-2 GSA and PDA Legal Land Descriptions

Sections Legal Sub-Divisions 13-81-24 9-16 24-81-24 1-16 Development Area 18-81-24 11-14 19-81-24 3-6, 11-14 11-81-24 9-16 12-81-24 9-16 13-81-24 1-16 14-81-24 1-16 23-81-24 1-16 24-81-24 1-16 25-81-24 1-16 26-81-24 1-16 Geological Study Area 7-81-23 9-16 8-81-23 11-14 17-81-23 3-6,11-14 18-81-23 1-16 19-81-23 1-16 20-81-23 3-6,11-14 29-81-23 3-6,11-14 30-81-23 1-16

CAVALIER ENERGY INC. R 25 R 24 R 23 W4M Plot 1:1 = Letter (P)

T 82

T 81

T 80

Geologic Study Area Project Development Area Cavalier Asset Waterbody Hoole Grand Rapids Project River Road Cavalier Assets in Hoole Area Well Location

Date: Project: Technical: Reviewer: Drawn: 0.008 1 : 125,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 1250 0 1250 2500 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - RSA - Thursday, October 18, 2012 3:46:35 PM - Jason Kern entered into contract. 4.1-1 R 25 R 24 R 23 W4M Plot 1:1 = Letter (P)

Canadian Natural Resources Limited

Cenovus Energy Inc.

Perpetual Canadian Energy Natural Inc. Resources T 82 Limited

Sunshine Cenovus Oilsands Energy Ltd. Inc.

China National Petroleum Corporation

DeerGarden Resources Ltd. T 81 Canadian Natural Resources Limited

Land Solutions LP

Sunshine Oilsands Ltd.

Canadian Natural Resources Limited Canadian Natural Resources Koch Limited Exploration , Contiguous L.P. Sunshine Cenovus T 80 Oilsands Energy Inc. Ltd.

Canadian Natural Resources Limited Geologic Study Area Cenovus Energy Inc. Project Development Area China National Petroleum Corporation Cavalier Asset Contiguous Footprint Hoole Grand Rapids Project DeerGarden Resources Ltd. Waterbody Koch Exploration Canada, L.P. River Hoole Oil Sands Lease Agreement Map Land Solutions LP Road

Perpetual Energy Inc. Date: Project: Technical: Reviewer: Drawn: 0.008 1 : 125,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern Sunshine Oilsands Ltd. 1250 0 1250 2500 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: 'DWDREWDLQHGIURP$OWD/,6*HR%DVHŠDQG,+68VHGXQGHUOLFHQVH UTM83-12

F:\10572\Drafting\2012\10572-CGSP-12.dwg - OilRights - Thursday, October 25, 2012 9:40:43 AM - Jason Kern entered into contract. 4.1-2 R 24 R 23 W4M Plot 1:1 = Letter (P)

Cavalier Energy 0747497010683 Oil Sands Development Lease bt Viking tb Woodbend

Cavalier Energy 0747497030722 Oil Sands Development Lease bt Viking tb Woodbend - Xs Cavalier Energy 0747408040008 Oil Sands Development Lease bt Viking tb Woodbend

Cavalier Energy 0747496090617 Oil Sands Development Lease bt Viking tb Woodbend

T 81

CNRL 0747406080792 Oil Sands Development Lease bt Mannville tb Mannville

Cavalier Energy 0747498110013 Oil Sands Development Lease bt Viking tb Woodbend

Project Development Area CNRL Rights Cavalier Asset Cavalier Lease 0747408040008 Footprint Cavalier Lease 0747498110013 Waterbody Cavalier Lease 0747496090617 Hoole Grand Rapids Project River Cavalier Lease 0747497010683 Road Cavalier Lease 0747497030722 Hoole Project Area Oil Sands Rights

Date: Project: Technical: Reviewer: Drawn: 0.025 1 : 40,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 400 0 400 800 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - GSA-OR - Thursday, October 25, 2012 1:08:31 PM - Jason Kern entered into contract. 4.1-3 R 24 R 23 W4M Plot 1:1 = Letter (P)

T 81

Geologic Study Area Project Development Area Cavalier Asset Waterbody Hoole Grand Rapids Project River Road Geological Study Area and Well Location Project Development Area

Date: Project: Technical: Reviewer: Drawn: 0.025 1 : 40,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 400 0 400 800 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - GSA - Friday, October 19, 2012 1:53:32 PM - Jason Kern entered into contract. 4.1-4 R 24 R 23 W4M Plot 1:1 = Letter (P)

107 108 109

T 81 104 105 106

101 102 103

Project Development Area Drainage Box Cavalier Asset Waterbody Hoole Grand Rapids Project River Drainage Patterns

Date: Project: Technical: Reviewer: Drawn: 0.0667 1 : 15,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 150 0 150 300 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - Drain - Wednesday, October 24, 2012 9:05:09 AM - Jason Kern entered into contract. 4.1-5 4-9 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

4.2 Geologic Data and Well Control

The geological study area (GSA) contains 54 wells of which 47 were drilled as stratigraphic delineation wells that penetrate the Grand Rapids Formation, 24 of which were cored in the Grand Rapids. Forty-two of the delineation wells in the GSA were drilled by Cavalier with 20 of those cored in the Grand Rapids. The oldest stratum penetrated by the delineation wells is the Devonian .

4.2.1 Delineation Drilling and Seismic Program

There are 19 delineation wells in the PDA, and 50 vertical delineation wells and 4 horizontal Wabiskaw production wells in the GSA (Figure 4.1-4). The drilling can be divided into those drilled by other operators referred to as historical wells, and those drilled by Cavalier/Paramount referred to as delineation wells. Data available for the GSA and PDA is summarized as follows:

• 12 Historical wells

o 3 cored o 4 horizontal Wabiskaw production wells • 42 delineation wells including:

o 20 cored in the Grand Rapids o 39 image logs; o 32 dipole sonic logs; o 3 pressure test logs within the Grand Rapids Formation; and o 1 well with mini-frac tests conducted in the Joli Fou caprock and the Grand Rapids Formation;

• 15 km of 2D proprietary and purchased seismic data is available within the GSA (Figure 4.2-1).

All the delineation wells drilled by Cavalier have a full suite of standard petrophysical logs including:

• gamma ray; • induction (shallow, medium and deep); • spontaneous potential; • bulk density and photoelectric; • neutron porosity; and • caliper and sonic logs.

The current delineation well density in the GSA is 50 wells over 12.25 sections or 4.1 wells/section. Within the PDA, the well density is currently 19 wells within 2.25 sections or 8.4 wells/section.

Appendix C includes a table summarizing all the wells within the GSA.

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T 81

Geologic Study Area Project Development Area Cavalier Asset Waterbody Hoole Grand Rapids Project River Seismic Data Seismic Coverage Within the GSA Road

Well Location Date: Project: Technical: Reviewer: Drawn: 0.025 1 : 40,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 400 0 400 800 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - SeismicGSA - Wednesday, October 24, 2012 12:13:40 PM - Jason Kern entered into contract. 4.2-1 4-11 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

4.3 Methods and Analysis

As outlined in Section 4.2, Cavalier has gathered a significant geological data set within the GSA. This data has been used to characterize and evaluate the Grand Rapids A reservoir. Integrating the information collected from wireline logs and core analysis, Cavalier developed a geological model for the area. Average reservoir properties were then used in the evaluation of the potential of the Grand Rapids A in a numerical reservoir simulation. The Core analysis was the primary source of reservoir porosity, bitumen saturation and grain density information acquired by Dean Stark analysis, while vertical and horizontal permeability was obtained from plug pairs. These average values are listed in Table 4.5-1.

4.4 Regional Geology

Cavalier’s Hoole property is situated within the western portion of the Athabasca Oil Sands Area. This area is underlain by the Pre- crystalline basement, topped by an unconformable sequence of Devonian, Cretaceous and Quaternary sediments. The Devonian Sediments are dipping to the south west at a higher angle than the overlying Cretaceous resulting in a series of sub-crops of the Devonian Strata at the Pre-Cretaceous . Above the Devonian is deposited an approximately 300 m thick section of Cretaceous strata. Exploitable bitumen accumulations in the Hoole region are found within clastic sediments of the Grand Rapids Formation of the Upper Cretaceous , while conventional heavy oil is locally present within the underlying Wabiskaw Member. The Cretaceous section is unconformably overlain by quaternary aged glacial drift and meltwater channels.

The GSA is described in Section 4.1 and illustrated in Figure 4.1 -4. The stratigraphic framework within the GSA covers Paleozoic to Middle Devonian strata and is presented as Figure 4.4-1.

The stratigraphic intervals defined and mapped within the GSA in order of increasing age are: the Quaternary, the Upper Colorado Shale Group, the Viking, the Joli Fou, the Grand Rapids, the Clearwater and the Wabiskaw-McMurray Formations of the Cretaceous Group and the Devonian Carbonates. All of the vertical wells drilled in the GSA penetrate down to the top of the , 12 penetrate the Wabiskaw-McMurray and 2 terminate in the Devonian Grosmont Formation.

4.4.1 Devonian

Top Depth Range: 491 to 501 mKB

Reference: Figure 4.4-2 Devonian Depth

The Surface of the Devonian Package within the GSA is the Sub-Cretaceous unconformity representing a significant period of subaerial exposure and erosion. Within the GSA, two wells were drilled into the Devonian. The Devonian can be subdivided into additional formations, namely the Grosmont, Nisku and Winterburn. Within the GSA, the Devonian is a mix of dolomitic rocks and mudstones. In the GSA much of the Devonian Strata is underpressured with high permeability which results in a total lack of cuttings returns during drilling operations. It is Cavalier’s intention to use the Devonian formations as disposal zones.

CAVALIER ENERGY INC. 4-12 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

4.4.2 Wabiskaw-McMurray

Top Depth Range: 425 to 448 mKB

Reference: Figure 4.4-3 Wabiskaw Depth

In the GSA the Wabiskaw-McMurray consists of the terrestrial to estuarine McMurray capped by three coarsening upwards shoreface successions that make up the Wabiskaw. These shoreface sands are the target reservoir for the adjacent Brintnell-Pelican Lake development but are not considered prospective within the Project area. The Wabiskaw-McMurray Package reaches thicknesses of up to 50 m; however, lack of control on the basal contact makes it difficult to map.

4.4.3 Clearwater Formation

Top Depth Range: 330 to 350 mKB

Thickness: 95 to 101 m

Reference: Figure 4.4-4 Clearwater Structure Figure 4.4-5 Clearwater Isopach

Within the GSA the Clearwater formation represents a series of cyclical shoreface to offshore deposits approximately 100 m thick. The environment of deposition of this formation represents a deeper water condition than either of the Wabiskaw-McMurray or the Grand Rapids. While the Clearwater interval does contain some thin water filled sands, it is composed primarily of mudstones. This formation is seen to be a barrier between the lower Wabiskaw-McMurray and the younger Grand Rapids.

4.4.4 Grand Rapids

Top Depth Range: 242 to 266 mKB

Thickness: 85 to 92 m

Reference: Figure 4.4-6 Grand Rapids Member Figure 4.4-7 Grand Rapids Depth Figure 4.4-8 Grand Rapids Structure Figure 4.4-9 Grand Rapids Isopach Figure 4.4-10 Grand Rapids A Isopach Figure 4.4-11 Grand Rapids B Isopach Figure 4.4-12 Grand Rapids C Isopach

Within the GSA the Grand Rapids is a sequence of prograding shoreface sands and shales. Cavalier has divided the Grand Rapids into three members, the Grand Rapids C, Grand Rapids B, and Grand Rapids A. Figure 4.4-6 log shows the three Grand Rapids members. These members represent the three regionally correlatable parasequences showing a progradation from more distal interbeded sands and shales to very fine to medium-grained sandstones capped by a flooding surface. The target sequence of the Project is the uppermost Grand Rapids A, while the lower Grand Rapids B and Grand Rapids C units (Lower Grand Rapids) are the targets for source water. The Grand Rapids A is primarily composed of quartz and is fine grained.

CAVALIER ENERGY INC. 4-13 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project

4.4.5 Joli Fou

Top Depth Range: 225 to 250 mKB Thickness: 13 to 15 m

Reference: Figure 4.4-13 Joli Fou Depth Figure 4.4-14 Joli Fou Structure Figure 4.4-15 Joli Fou Isopach

The Marine Shales of the Joli Fou Formation form the primary cap rock for the Grand Rapids A. Over the GSA it is a minimum of 13 m thick. It is a grey laminated mudstone that represents a major flooding event capping the Grand Rapids and is correlatable over a large area.

4.4.6 Viking

Top Depth Range: 204 to 224 mKB Thickness: 14 to 26 m

Reference: Figure 4.4-16 Viking Depth Figure 4.4-17 Viking Structure

The Viking in the GSA is a coarsening upwards package of siltstones and sands, representing a shoreface environment. The sandy portion of the Viking can reach 7 m in thickness with porosities over 30%, however within the GSA it is water filled.

4.4.7 Upper Colorado Shale

Top Depth Range: 87 to 101 mKB Thickness: greater than 115 m

Reference: Figure 4.4-18 Second White Specks Marker Depth Figure 4.4-19 Second White Specks Marker Elevation

The upper Colorado is a thick succession of mudstones that overlay the Viking and are truncated within the GSA by Quaternary Sediments. Although in the region there are major quaternary channels, there is no evidence of such events in the GSA. The Base of Fish Scales marker is present in all wells, and the Second White Specks Markers is present everywhere that wireline logs were recorded over the relevant depth. The top of the Colorado shales is difficult to determine using wireline open hole logs as the contact between the Quaternary and the shales is generally behind surface casing.

4.4.8 Quaternary

Depth: surface Thickness: up to 100 m

The Quaternary section consists of glacially derived sediment composed of gravels to muds. In the GSA the thickness is interpreted to be variable, but as mentioned, it can be difficult to interpret the basal contact. Cavalier has relied on the presence of Colorado Markers to determine the maximum thickness, specifically the Second White Specks. This has resulted in an interpreted thickness of up to 100 m.

CAVALIER ENERGY INC. F:\10572\Drafting\2012\10572-CHT-12.cdr Plot\ 1:1\ =\ Letter\ Reference: Precambrian Basement Carbonate Deposits Shale Deposits Clastic Deposits Glacial Deposits Years Ago Millions of 97.5 119 113 1.6 Precambrian Era Paleozoic Mesozoic Cenozoic Mississippian - Period

Devonian Upper Lower Cretaceous Cretaceous Quaternary Cenomanian Coniancian Santonian Turonian Stage Aptian Pleostocene West

Winterburn Group Date: icamr PreparedsolelyfortheuseofCavalier EnergyInc.asspecified intheaccompanyingreport.No Disclaimer: Clearwater ShaleFormation Grand RapidsFormation 08 Oct2012 McMurray Formation entered intocontract. representation of anykindismadetotheother partieswithwhichCavalierEnergy Inc.hasnot Wabiskaw Member Joli FouFormation Viking Formation Upper Colorado Woodbend Group GSA StratigraphicFramework SWS Marker Project: Bfs Marker 10572-CHT-12 Hoole GrandRapidsProject Technical: B. Robinson Reviewer: T. Hodgson East Drawn: Figure 4.4-1 J. Kern R 24 R 23 W4M Plot 1:1 = Letter (P)

T 81

Geologic Study Area Project Development Area Cavalier Asset Well Location Hoole Grand Rapids Project Devonian Depth (mTVD) Devonian Depth

Date: Project: Technical: Reviewer: Drawn: 0.025 1 : 40,000 metres 08 Oct 2012 10572-CGSP-12 B. Robinson T. Hodgson J. Kern 400 0 400 800 Disclaimer: Prepared solely for the use of Cavalier Energy Inc. as specified in the accompanying report. No Figure representation of any kind is made to the other parties with which Cavalier Energy Inc. has not Reference: UTM83-12 F:\10572\Drafting\2012\10572-CGSP-12.dwg - DEV_TVD - Thursday, October 25, 2012 3:37:54 PM - Jason Kern entered into contract. 4.4-2

F:\10572\Drafting\2012\10572-CHT-12.cdr Plot\ 1:1\ =\ Letter\ Reference: Grand RapidsB Grand Rapids A Grand RapidsC 1AA/04-19-081-23W4/00 354 Date: icamr PreparedsolelyfortheuseofCavalier EnergyInc.asspecified intheaccompanyingreport.No Disclaimer: 350 300 250 08 Oct2012 entered intocontract. representation of anykindismadetotheother partieswithwhichCavalierEnergy Inc.hasnot Project: 10572-CHT-12 Grand RapidsMember Hoole GrandRapidsProject Technical: B. Robinson Reviewer: T. Hodgson Drawn: Figure 4.4-6 J. Kern