Moving the Molecules: Sunrise/Heavy Oil Integration Tour September 23-24, 2015 1 Balanced Growth Strategy Delivering 2 Integrated Thermal Value Chain 3 Integrated Thermal Advantage • 118,000 boe/d of upstream heavy oil production1 Sunrise Lloyd Thermals Lloyd Upgrader Asphalt Refinery • 311,000 bbls/d of refining throughput capacity1 • 531,000 bbls/d of pipeline throughput1 • Free cash flow positive2 Long-term Hardisty & Lloyd Pipeline 1 See advisories for source of information. Storage Terminals Gathering System Capacity Lima Refinery Toledo Refinery 4 2 Free cash flow is a non-GAAP measure. See advisories. Integrated Thermal Advantage: Sunrise Value Chain Sunrise Toledo Refinery 5 Integrated Thermal Advantage: Lloyd Thermal Value Chain Lloyd Thermals Lloyd Upgrader Asphalt Refinery Hardisty & Lloyd Storage Terminals Gathering System Lima Refinery 6 Integrated Thermal Advantage Sunrise Lloyd Thermals Lloyd Upgrader Asphalt Refinery Long-term Hardisty & Lloyd Pipeline Storage Terminals Gathering System Capacity Lima Refinery Toledo Refinery 7 Realizing the Gold Standard 90.0 Sustaining Capital - Downstream Sustaining Capital - Upstream 75.0 Operating Costs - U.S. Refineries Transportation - Edmonton to Ohio 60.0 Transportation - Sunrise to Edmonton Transportation - Diluent bbl Royalties - Upstream 45.0 $CAD/ Full Cycle Cost of Operating Costs - Upgrader Refined Products: $42.90 Operating Costs - Upstream 30.0 Production Dated Brent Oil 15.0 Synthetic Crude (@ Edmonton) Full Cycle Cost of Total Cost of Refined Products: WCS (@ Hardisty) HSB: $15.69 $47.00 HSE Refined Products - Lloyd Thermal Value Chain Sunrise Value Chain * All crude prices and $/bbl costs reflect 1H/2015 averages All values in $CAD 8 (at full run rates) Integrated Thermal Advantage Contributes to Strong Cash Flow (1H’15) 20 18 16 Peers 1-18* 14 Husky 12 10 $CAD/BOE $CAD/BOE 8 6 4 2 0 • *Peers 1-18: Arc Resources, Baytex Energy, Canadian Oil Sands, Cenovus, CNRL, ConocoPhillips, Crescent Point Energy, Devon Energy, Encana, Exxon Mobil, Hess Energy, Imperial Oil, Marathon Oil, Murphy, Occidental Petroleum, Pengrowth Energy, Penn West Petroleum, Suncor • USD figures from U.S. peers have been converted to $CAD at a rate of $0.76 CAD/USD • Source: S & P Capital IQ 9 Takeaways • Sunrise and Lloydminster thermals key to transition to a low sustaining capital business • Physical integration maximizes margin capture • Suite of competitively advantaged assets • Running room to grow profitably 10 Integrated Thermal Advantage: Sunrise Value Chain Sunrise Configuration 12 Sunrise – Steady Ramp Up 100 14,000 90 Husky Sunrise Plant 1A Actual Production vs. Plan 80 12,000 11,350 bbls/d (Sept 22, 2015) 70 10,000 60 8,000 50 6,000 40 30 Steam Rate (% of Capacity) Bitumen Production (bbl/d) 4,000 20 2,000 10 0 0 1-Mar 1-Apr 1-May 1-Jun 1-Jul 1-Aug 1-Sep 1-Oct 0 1 2 3 4 5 6 7 8 9 10 11 12 Months Projects Compared: ConocoPhillips Surmont, Devon Jackfish 1, Devon Jackfish 2, Suncor Firebag 1, MEG Christina Lake Phase 1 & 2, Southern Pacific Mckay, Suncor Mackay River, Connocher Great Divide, Nexen Long Lake, Statoil Leismer, Cenovus Foster Creek A, Cenovus Christina Lake 1A Data Source: AccuMap 13 Checking the Boxes Source Water • No surface water used a Once-Through Steam Generator • Steady steam ramp-up a (OTSG) • Plants 1A and 1B delivered • Combination of gas lift and Startup ESPs used on startup a Emulsion Rates • Faster than forecast a Sales • Received at Toledo a 14 Sunrise In The Right Neighbourhood • Significant delineation • Vast well-based data • Room to grow 15 Current Efficiencies • Walking rig improving sustaining pad 310 m design Original pad design • Smaller well pad footprint • Multi-phase metering m 105 Drilling Days Per Well Comparison to Peers* 10.0 9.0 Peer Average 7.1 Days 8.0 185 m 7.0 6.0 5.0 Sustaining pad design Days 4.0 8.7 3.0 6.7 2.0 5.4 1.0 0.0 m 90 Sunrise - Ph 1 Sunrise - DA2 Sunrise - DA2 (Pad 05-21) (Pad 06-21) *Peers1-18: Arc Resources, Baytex Energy, Canadian Oil Sands, Cenovus, CNRL, ConocoPhillips, Crescent Point Energy, Devon Energy, Encana, Exxon Mobil, Hess Energy, Imperial Oil, Marathon Oil, Murphy, Occidental Petroleum, Pengrowth Energy, Penn West Petroleum, Suncor 16 Additional Efficiencies For Phase 1 • De-bottlenecking opportunities expected to surpass nameplate capacity • New sustaining pads provide ability to increase production 17 Sunrise Phase 2: A Bright Future • Regulatory approval for up to 200,000 bbls/d • Build on success and lessons learned from Phase 1 • Modular development approach • Scale of resource/opportunity to bring forward production • Leveraging existing infrastructure 1 cm = 407.0 m 18 Production Ahead of Plan • Production rates performing Sunrise Type Curve and Production Data 2000 ahead of plan • Expect average production rates 1600 of ~1,200 bbls/d per well pair /day • Type curve estimate calibrated bbl 1200 for operating pressure and well length Sunrise 800m Well Type Curve 800 Oil Rate Per Pair, 400 0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Time, Yr 19 Sunrise Development • Site development reflects numerous high quality analogs • Significant project experience across the team • Superior reservoir characteristics Metric Sunrise Comments Average for Phase 1 Oil saturation 78% main pay zone Improves Well length 800 m conformance Reservoir Pressure 450 kpag 170m depth Average depth to Reservoir Depth 170 m producers Average for Phase 1 Porosity 32% main pay zone Permeability 3-8D 20 Optimal Well Placement • Optimal well placement key to Well Effectiveness Dogleg Severity (Target < 3°) project success (Target > 85%) • Targeted metrics carefully monitored during drilling process Gamma > 65 API DLS > 3° • Exceptional wellbore and cap rock integrity Well Radial Separation Gyro Ellipse (5m<Target < 6m) 5 m of Uncertainty > 6m < 5m Gyro < Uncertainty cone 21 Well Bore Effectiveness INJECTOR PRODUCER B05-21 B06-21 97.9% B06-21 96.0% B05-21 98.9% 96.0% B16-17 B15-16 99.2% 96.5% B16-17 B15-16 67.9% 81.3% B13-16 B13-16 99.8% 70.6% B08-17 B08-17 93.1% 85.3% B05-16 85.8% B05-16 75.0% B13-08 B14-08 B16-08 B13-09 B13-08 B14-08 B16-08 B13-09 94.4% 94.9% 95.5% 96.5% 90.7% 88.4% 79.6% 66.7% Steady Sunrise Ramp Up 50 45 40 35 30 25 20 15 Bitumen Rate (% of Capacity) 10 5 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Months Projects Compared: ConocoPhillips Surmont, Devon Jackfish 1, Devon Jackfish 2, Suncor Firebag 1, MEG Christina Lake Phase 1 & 2, Southern Pacific Mckay, Suncor Mackay River, Connocher Great Divide, Nexen Long Lake, Statoil Leismer, Cenovus Foster Creek A, Cenovus Christina Lake 1A Data Source: AccuMap Building Ideal Steam Chambers • Deliberate ramp up developing ideal steam chambers • Minimizing steam breakthroughs to reduce re-drilling • Targeting better than industry average results 24 Real Time Monitoring and Response • Tight operational control along each well enhancing results • Continuous temperature monitoring along each well • Use of high quality instrumentation 25 Efficiency Opportunities • New subsurface technologies to reduce SORs and enhance oil recovery, under test now or planned for the near future. Near Term Opportunity Reduce Recovery SOR Factor Sidetrack re-entry wells (Husky patent pending) a a Global variable models a Ultra-low pressure SAGD a Inflow control devices a Gas injection a Solvent startup a • ESP-compatible wellheads • Early ESP installations with VIT injectors • FACSrite production liner, slotted injector • Wire Wrap Screen Producers • VIT injector • Precise Punch Slot Producers • Well Spacing Experiment • Early ESP – No VIT Takeaways • Sunrise is ahead of plan • Efficiencies are being implemented • Opportunities to further reduce costs • Capturing incremental value from every barrel • Future developments being evaluated Integrated Thermal Advantage: Lloyd Thermal Value Chain Heavy Oil Transformation Non-Thermal Production Thermal Production Op Cost/bbl1 $20 $10 F & D/bbl1 $18-20 $10-12 Sustaining Cost/bbl1 $18-20 $5-7 Project Life <8 yrs >15 yrs Reserve Recoveries <10% >50% 1 See advisories. Annual Production from Heavy Oil End of 2016 Forecast 2014 2010 21% 40% 65% Thermal : 18,300 bbls/d Thermal: 43,800 bbls/d Thermal: 80,000 bbls/d Non-Thermal Heavy Oil Production Thermal Heavy Oil Production Proven Thermal Formula: Reservoir Certainty Husky Lands Wells Evaluated Existing Thermals New 2016 Thermals Alberta Saskatchewan Proven Thermal Formula: Unmatched Land/Infrastructure Position Alberta Saskatchewan Proven Thermal Formula: Assembly Line Approach • Engineer once, build many times • Time and cost efficiencies / modular approach • Low execution risk Edam and Vawn Well Pad Modules Proven Thermal Formula: Putting The Pieces Together • Seasoned construction expertise • In-house construction and fabrication management team • Peak construction staff of 250 In-Shop Fabrication • Building efficiently • Most construction occurs in the shop Gas Processing Modules • Thermal plants reassembled on site Heat Exchanger Modules Proven Thermal Formula: Operating Efficiencies • Efficiencies driven by: • Proximity to Lloydminster • Minimal onsite workforce required • Duplication of parts and plants RushPikes Lake Peak South Sandall Rush Lake Room to Run Current/ ~Barrels Forecast Net Produced Thermal First Oil Production (mm /bbls) • 35,000 bbls/d of Lloyd heavy oil Project Date Rate* (bbls/d) thermal production to be added by the Pikes Peak 1984 4,400 74.0 end of 2016, including Rush Lake Bolney 1996 9,250 35.0 Celtic 1996 9,250 32.0 • Seven projects in production and Paradise Hill 2012 4,000 5.0 seven more in