Harvest's upstream asset base offers improved recovery potential in both our conventional and oilsands opportunities. We are well positioned to realize significant short and longer term benefits by employing new technologies and methods to enhance recovery of our large hydrocarbon pools.

2009 EOR Projects - Wainwright Production – ASP Extends Field Life

• Polymer injection pilot with injection commencing early 2009
• Large Original Oil in Place of 133mmbbl poo; with ~35% recovery to date
• Existing infrastructure in the area supports economics of conducting pilot polymer flood
• Technical analysis indicates pool wide recovery could range from 47% up to 60%

Polymer Waterflood

2009 Projects - Bellshill Lake Enhanced Waterflood

• Enhanced water injection in Ellerslie Formation for pressure support
• Re-direct produced water from adjacent area to larger Bellshill pool for pressure enhancement
• Significant Original Oil in Place of 216mmboe with 50% recovery to date
• Modest capital investment of ~3MM
• Injection commenced in Q4 2008

Bellshill Lake Main Pool

Bellshill Lake Enhanced Waterflood - Risked & UNRISKED

Hay River, B.C.

• Acquired August, 2005
• Large OOIP (200mmbbl) bluesky pool with very low recovery to date (~9%)
• Produces medium gravity crude oil priced at a discount off Edmonton Light crude oil (a more valuable benchmark) and benefits from discounted heavy oil royalty rates
• Enhanced water injection into bluesky formation for pressure support
• Better than expected reservoir performance leads to large development program in 2009 of 39 wells (21 producers and 18 water injectors) 
• Rapid response to injection with ~1,600 boe/d incremental production over budget in Q4 2008.

Longer Term Opportunities – Oilsands at Red Earth, AB

In addition to our 13,000 net undeveloped acres in the Cold Lake oilsands area, Harvest also successfully acquired approximately 29,000 net undeveloped acres of oil sands leases at Red Earth, which falls within the Peace River oil sands region. We are very well positioned to develop this oil sands potential since we have existing infrastructure in the area, and also because we produce light oil and condensate at Red Earth that can be used for blending with the heavy oil to bring it up to pipeline specifications. We have drilled one strat test well designed to help us determine whether conventional cold production, thermal stimulation or some other technology represents the optimal development strategy to best exercise the value of this embedded option.

Our 2008 conventional oil production in Red Earth is expected to average approximately 2,800 boe/d, based on an annual capital budget of $20 million, focused on pool delineation, drilling and waterflooding.

Coal Bed Methane

• Current production: ~100 mcf/d from the Horseshoe Canyon Fairway
• ~125,000 net acres of land through the CBM corridor
• Focus on retaining large CBM interest for development as infrastructure comes available and economics allow