Bill

I am not an accountant. Just trying to do my DD the best I can.

Accelerated CCA which is being phased out by federal government will be helpful for POD1 project only(assets acquired before March 2007).It effects only FED TAX  and in long run is revenue neutral.

muched reduced Alberta Royalties

New Alberta Oil Sand Royalties rates (starting in Jan/2009) are substantially higher not reduced.

http://www.energy.gov.ab.ca/Org/pdfs/RoyaltyTerms_OilSands.pdf

2008 --- 1% on Gross Revenue --(old rates)

2009------6.5% on Gross Raveniu (Pre Payout new rates)

2010/11 ---35% on Net Revenue(Post Payout new rates)

Note:

1.WTI oil at $100

2. My estimate is that Total Accumulative Cost (above $600M)includes capital and operating cost related to POD1 project as well as Return Allowances which is 6% return on your investment will slide us to 35% rate in 2010/11