Alaska

Petro-Canada entered Alaska with Lease Sale success in the Foothills area north of the Brooks Mountain Range. By early 2006, Petro-Canada, Anadarko Petroleum Corporation and BG (Alaska) E&P Inc. had completed various arrangements to form a Foothills joint venture. Additional Lease Sale acquisitions in 2006 have given each company a net land position in the Alaska Foothills of approximately one million acres, including option acreage. After multiple years of seismic activity, the joint venture is transitioning into drilling activity, with plans to move one drilling rig into the area for drilling in the winter of 2008.

In 2004, Petro-Canada acquired a large position in the NW National Petroleum Reserve Alaska (NPR A). In early 2006, Petro-Canada and FEX L.P. (a subsidiary of Talisman Energy Inc.) cross-assigned selected leases in the NPR A and drilled the Aklaq 2 exploration well. In the latter part of 2006, FEX and Petro-Canada acquired additional leases at the NPR A Lease Sale and subsequently cross-assigned the majority of their NPR A leaseholdings, covering approximately 1.2 million acres. Today, Petro-Canada's net acreage position is just over 500,000 acres. In the first quarter of 2007, FEX and Petro-Canada drilled three exploration wells on their jointly held acreage and further evaluation is ongoing.

By year-end 2007 Petro-Canada will have invested close to C$200 million in Alaska, through its Petro-Canada (Alaska) Inc. subsidiary.

Mackenzie Delta and Corridor, Northwest Territories

With interests in six blocks covering approximately 730,000 net acres, we are a significant leaseholder in the Mackenzie Delta/Corridor.

Our holdings are comprised of four exploration licences and two Inuvialuit land concessions. Having secured what is believed to be the area’s most prospective acreage for future exploration, we will pace activities pending the anticipated approval and construction timeline for the Mackenzie pipeline.

We also hold a 100% interest in 73,000 acres covering two significant discovery areas in the Colville Hills area of the Mackenzie Corridor.