John Langille – Vice Chairman Allan Markin – Chairman Steve Laut – President & COO Réal Doucet – SVP, Oil Sands Doug Proll – SVP, Finance & CFO

Arjun Murti – Goldman Sachs Greg Pardy – RBC Capital Markets Andrew Potter – UBS Eli Lapp [ph] – Tricadia Barbara Betanski – UBS Global Assets Peter Ogden – National Bank Financial

All participants please stand by. Your conference is ready to begin. Good morning ladies and gentlemen, welcome to the Canadian natural resources 2009 third quarter results conference call. I would now like to turn the meeting over to Mr. John Langille, Vice-Chairman of Canadian natural resources. Please go ahead, Mr. Langille.

Thank you very much operator, and good morning everyone. Thank you for attending this conference call. We will discuss our third quarter results, our outlook for the balance of 2009, and our capital budget for 2010, which were all covered in the press release issued earlier this morning. Participating with me today will be Allan Markin, our Chairman; Steve Laut, our President and Chief Operating Officer; Réal Doucet, our Senior Vice President of Oil Sands, and Doug Proll, our Senior Vice President of Finance. Before we start, I would refer you to the comments regarding forward-looking information contained in our press release and also note that all dollar amounts are in Canadian dollars and production and reserves are both expressed as before royalties unless otherwise stated. The third quarter continued to achieve meaning levels of operational cash flow with cash flow exceeding CapEx requirements by $1 billion. All of our business segments contributed to this free cash flow. As a result, we have strengthened our balance sheet further, and in the quarter, as expected, we repaid the remainder of a debt obligation within the due date timeframe and retired that portion of our outstanding debt. The business environment for the development and production of our heavy oil assets continues to be very positive with lower than historical levels of price differential and continuing low cost. We own extensive acreage over the heavy oil areas of Eastern Alberta, Western Saskatchewan which provide excellent recycle ratios and returns. The business environment for natural gas on the other hand continues to be challenging to achieve adequate returns. And Steve will provide greater detail on our development plans for these parts of our asset portfolios. And we continue to meet the challenges of ramping up our production levels at our mining project at Horizon and both Steve and Real will discuss this ramp up further. We have set our 2010 capital expenditure budget at almost $4 billion. Based on that level of expenditure, we will be able to achieve 7% year-over-year production growth while spending only 60% of our anticipated 2010 cash flow. With that I would like to ask Allan to make a few comments before Steve undertakes a detailed review of our operations. Allan?

Thanks John. Good morning. It was at this time last year that the world changed and commodity prices along with the rest of the marketplace dropped dramatically. It was at that time we reminded ourselves of the importance of adhering to our core values, spending where we need to, maintaining balance, and continuing our commitment to lower costs. It was through our core values that we were able to continually create value for our shareholders during the highly volatile business environment of the past year. As we returned to a new normalized state, effective strategy proven in all price environments will continue to pay dividends, particularly for the gas business in Alberta, the physical regimen remains punitive at higher gas prices. Looking to the third-quarter performance, there were some challenges at Horizon that resulted in less than targeted production. It was a disappointment, especially after a highly successful second quarter. However, these challenges are very manageable, and we have been doing a great job of identifying and mitigating the issues. Conventionally, we continue to execute on our conventional assets and look forward to another productive year, both in North America and internationally. Our 2010 budget has been released along with our third quarter results. Spending is up overall from 2009 as a record primary heavy oil program is rolled out, taking advantage of a strong oil price and favorable heavy oil differential. In addition, we continue to work on the development of Kirby, the next step in our defined thermal growth plan, Pelican Lake and other enhanced recoveries are also advancing. Conversely natural gas drilling remains challenged as near-term natural gas economics continue to be weak. 2010 spending at Horizon will be focused on Tranche 2 of the expansion, working towards reliability, uptime and debottlenecking. As always, our long-term objectives have not changed. The third-quarter and our 2010 budget are good examples of that. We are committed to consistent value creation for our shareholders to capital discipline the efficient capital allocation in a prudent approach to developing our world-class assets. We have the people, the plan and the assets. Steve?

Thanks, Al, and good morning, everyone. As both John and Al have said, Q3 was a solid quarter for Canadian Natural. Oil production was up 17% over the third quarter in 2008 driven by strong production volumes at Baobab and from our heavy oil assets. And with the exception of Horizon, all areas are within production guidance ranges. As expected, our operating costs remain low, and well within our operating cost guidance for this year, which we lowered in Q2. In these periods of commodity price volatility, Canadian Natural's strong, balanced and diverse asset portfolio combined with our focus on low-cost and effective operations have allowed the company to generate substantial free cash flow. In 2009, each component of our asset base, gas, light oil, heavy and thermal oil, as well as Horizon will generate free cash flow allowing us to significantly pay down debt. Our assets are strong and we're low-cost. Let me now briefly update you on each of our assets before I give you a brief update of where we're headed in 2010. Starting in gas at Canada, our gas production delivered as expected in Q3. With only 17 gas wells drilled, Q3 production declined as reflected in our Q3 guidance. For the remainder of 2009, we drilled another 25 gas wells, bringing the total gas wells for the year to 114. In comparison, our peak drilling for the gas occurred in 2005, when we drilled just under 900 gas wells. All gas wells that are being drilled in 2009 are being drilled to offset drainage, conserve land or are strategic in nature. With the current gas price and cost environment, it makes no sense to drill any gas wells for any other reason. On the other hand, oil activity in Canada was very robust and our oil drilling activity resulted in Canadian Natural being the most active driller in the third quarter in Western Canada, reflecting the strong pricing for oil and the narrow heavy oil differentials in Q3 and 2009 overall. On the primary heavy side, we drilled 217 wells in Q3, and we will drill another 166 wells in Q4 bringing the total primary heavy oil wells to 494 for 2009. We have been fairly active as well in our light oil properties with 10 wells drilled in Q3 and another 24 wells in Q4 for a total of 42 wells in 2009. At Pelican Lake, we drilled 19 wells in Q3 and we will drill another 19 in Q4, bringing our total to 69 for the year, as we continue to roll out the highly successful polymer flood at Pelican Lake. On the thermal side of the business, we drilled 24 wells at Primrose in Q3 and we will add 14 more in Q4, bringing the total to 82 for 2009. Primrose East, our most recent incremental step on the road to 300,000 barrels a day of incremental production. And as you know, we experienced containment event at Primrose East early in Q1. In the third quarter, we received breakthrough approval for diagnostic steaming to determine the root cause of the containment event. We are now well into the diagnostic steaming at Primrose East having completed the first phase of the diagnostic steaming and are now into second phase of our multiphase diagnostic program. At this point, we have not seen any indications that the containment event will recur. However, we are being very cautious and we will move forward in a very prudent manner. It'll take us some time to return to full production levels at Primrose East, likely near the end of 2010, as we slowly move to diagnostics steaming. In the North Sea, production has been steady and within guidance. On top of the turnaround completed in Ninian Central in early Q3, we completed Ninian South turnaround in Q3. Both these planned turnaround were completed successfully. In Côte d'Ivoire, production at both Baobab and Espoir continued to deliver steady and reliable production volumes well above guidance expectations. At Olowi in Gabon, production format has not met expectations in the C platform, and we're currently patch drilling on the B platform and expect to have two wells completed and reservoired before year end. Results from the platform B wells may effect the overall development plans for Olowi. It is too early at this point to address the ultimate reserve potential for Olowi, and we will monitor well performance and particularly results of the remaining wells on the next three platforms yet to be drilled closely before revising the reserve potential at Olowi. As far as progress on the overall development at Olowi, all three remaining jack up decks have been installed and we're now patch drilling our platform B. We expect to have the installation vessel back to arrive in the fourth quarter here and complete the hookup by the pipelines and umbilicals between platforms and the FPSO for competition schedule for early 2010. At Horizon, our world-class oil sands mining project, we have had a tough August, September in Q3 as well as a tough October. As you all know, we had a very strong production of 92,097 barrels a day in June and 83,572 barrels a day in July despite an unexpected failure on a wet gas compressor. The month of August and September have been difficult with more than expected equipment failures. Although equipment failures in the third quarter were numerous, we believe for the most part, these type of failures are now behind us. These failures which Real will describe more fully in a minute resulted in the loss of roughly 17,000 barrels and of average production in the quarter. In addition to these failures, we entered a high fine section of the mine in early September. We of course need to mine this portion of the second bench in the mine to reach a deeper higher quality bench three portion of the mine. The high fine section was not a surprise. We knew it was coming. However, based on the early performance of the bitumen production plant, we had anticipated no material impact on our ability to achieve production targets, as our bitumen production plant was running well above design capacities. However, the clay content within the fines themselves in this portion of the second bench, and it is a limited portion, has been significantly more difficult to process than first anticipated. As a result, we lost roughly 6600 barrels a day of production for the quarter, all of that coming in September where we roughly lost 20,000 barrels a day of production. These issues have continued into October and while we have taken a number of mitigating actions and we have recovered somewhat, in October, they are still likely to dog us until we get to the third bench, when we can effectively blend the fines at the ore dump and return production to our normal target levels. And we expect to be in the third bench by mid-2010 at the latest. Of course, all these issues reflect in our monthly production numbers as follows. In July, we had 83,573 barrels, August was 58,912 barrels, and September was $58,036. And here in October, we recovered somewhat and we are back up to 71,200 barrels a day. And before I get into 2010 budget and forward plan for each area, I'm going to turn it over to Real to give you more detail on the status of the issues we have faced and what we expect to face in the future, as well as our plan to deal with these issues. Real? Réal Doucet: Thank you, Steve. I will divide my presentation into first the mechanical failures and the second one will be the fines and the clays encountered in the ore body. On the mechanical failures, we have several short term mechanical failures which right now have been solved and I would say the problem is behind us. In the naptha recovery unit, we had a pipe connection leak inside the vessel, which created steam impingement on the vessel wall. We had to fix this, so we had to stop the operation and get into the vessel, fix the leak and put it back into business. The problem has been fixed and the naptha recovery unit has been working really well since. That was several weeks ago and the plant is very reliable today. The wet gas compressor, this is a huge compressor, really, really big into thousands of horsepower. It is usually very, very reliable. However, we have the exciter cable and some diodes that came lose after a few hours of operation, so we had to change this exchanger, which is an Italian compressor, so we had to bring the parts from Italy. It's been changed, it's been tested, it's been put back into operation and has operated now for several weeks without a glitch, and we feel right now that this problem is behind us as well. On the hydrogen plant, we have those we call PSE [ph] valves. There are 72 valves that are opening and closing within two, three minutes, each continuously. There was a manufacturing defect which the stem of the valves were not to spec, they are some of them oversize, some of them undersize by a thousand to and thousand and half inch size which created on the long term movement of these valves that they seize and they score [ph]. The valves are getting rebuilt right now one by one and we have rebuilt several of them and we have changed also the operational programs of the PSE plant, such that when the valves fail now, it does not trigger a whole plant shutdown. We have brand new valves on orders, they have started to arrive here at the beginning of October, and we have started the total replacement of these valves which will be complete before year end. We will have all brand new valves and we're checking them all obviously to make sure that they're all within specs. So this problem by year end will be behind us as well. We have the secondary crusher which we were breaking teeth and we were producing oversized material as a product. So all the teeth assembly have been redesigned. The new arrangement also been tested, and one of the crusher is in operation right now through final testing in the field. The second crusher is coming up here in mid November and will be installed as soon as it arrives, and we're very confident right now that this problem also is behind us, and will be totally fully operational, well before year end as a matter of fact. We also had some high wear on our bitumen hydro transport lines and each as you know each ore preparation plant has one hydro transport line to bring the material in the slurry into the extraction plant. And we were experiencing high wear, higher than anticipated wear in those lines. We're adding a third hydro transport line which will replaced in the shift over such that when we are replacing lines and fixing them, we can still operate two of three of these two plants. So the third line has been designed, fabricated and is being installed right now in the field, and this problem also will be behind us at the end of the first quarter of 2010. We have to install these lines and weld them in the field. We had also hydrotreater exchanger leaking. We have two very sophisticated exchanger, one in the diesel plant, one in the gas ore plant that are susceptible to leak when the plant gets shut down, in other word equal to the thermal cycle. And the head bolts are leaking. We have been able to pull one out of there and we have installed a bypass and it is working. And in fact we realized that with the performance we have out of hydrogen plant, we don't need this exchanger. So one of them have been replaced with a bypass. The second one as soon as we have an opportunity will also be replaced but for the time being, we have repaired the head bolts and it is working perfectly. So this problem right now is consider behind us as well. So those were kind of the mechanical failure or early failure on start up of the plant that we have experienced, and right now we don't see any other major issue with these failures of the mechanical integrity of the plant itself. We have and we are in the process of completing right now our winterization for this coming winter and we will be in very good shape. Now talking about the fines and the clay problem, first of all, the fines and the clay were well defined in our ore body definition and in the pit design as well. So we knew that these fines that there, so we knew that these fines were there, we know that there was clay content with them, and we were positioning the plant design to deal with them. So our equipment design and the excess capacity of our froth treatment was deemed sufficient to deal with this issue. We underestimated the difficulties to process this high clay and the more blending that is required to minimize this issue. Since we're at the beginning of our pit operation, we don't have yet all the blending capability that we will have next year. We experienced this high clay on the second bench like Steve said. Our third bench however has a high quality of ore and also much lower fines and not quite acceptable yet until we have of course mined through our second bench. So the mitigating issue that we're doing right now is we're stockpiling our second bench and in fact we will be stockpiling. We have started also a month ago to stockpile 2.5 million tons of ore which we will trickle in over the next two years on a blend of about 10% ratio to make sure that the plant capability is well protected. We have also tested several chemicals in the separation cell and we have found one that is quite effective actually at separating these clays and fines from the rest of the material. We have also in the froth treatment plant installed additional instrumentation to allow faster plant behavior and formation and correction versus lab testing, like water content, for example, fine content and so on, if we can find them and define them as the process goes through, then it is a lot easier to react and make a higher performance. So the high fine and clay reduces our froth treatment capacity. It also affects the intermediate package which we call the diluted bitumen tank behavior because there is higher water content and because of the clay layer formation in the bank. We have installed three decanters machines to deal with this clay layer in the tank. The decanters are performing really well and we have learned how to keep the diluted bitumen at a high quality to feed the aggregator. So all in all right now, we believe that we do understand these issues. We have dealt with them, and it is just now a matter of short-term time for us here to get this problem behind us. Back to you Steve.

Thanks Real. One thing I would like to point out before I get into the 2010 budget, although the third-quarter production in Horizon has missed guidance and is a disappointment for everyone involved, it does point out something that is very positive, that being the strength of our team, the ability to identify and troubleshoot problems and quickly and effectively implement solutions. If I had a choice, I would prefer to remain in the dark about the disability, but we didn't have a choice. The issues we have faced in Q3 have not been trivial. Our ability as a team to effectively deal with these issues while keeping production on and cost down is impressive, and bodes well for the future. Even with the lower production in a mostly fixed cost plant, plus the equipment failures, operating costs were $38.87 a barrel, trending towards the bottom end of our guidance range, a great result. Turning to the 2010 budget, I will give you an overall view and then a few highlights for each of the assets. Our capital program in 2010 will be $3.9 billion, up 26% from the 2009 capital program. With increased capital allocations to oil, about 80% of all capital and particularly primary heavy oil, Pelican Lake, Horizon expansion preparation, and enhanced oil recovery in our light oil projects, as well as kicking off the early stages in the first phase of the (inaudible) shale gas development. As a result of this capital program and the capital programs in prior years, we will see production grow 7% year-over-year and 17% entry to exit, generating a 12% increase in cash flow. And more importantly free cash flow in the 2 to $2.6 million range. Clearly this reflects the strength of Canadian Natural's assets and the soundness of our strategy. We are growing production and churning substantial free cash flow. We are in a great position. In 2010, Canadian Natural will allocate this free cash flow in the following three priorities. First, pay down debt and further strengthen the balance sheet. Secondly, allocate capital through additional asset development opportunities, acquisitions or share buybacks, and thirdly dividends. As Doug will address in a few minutes, our balance sheet has threatened considerably in 2009, and will strengthen even further in 2010. And with that mind, and depending on the environment, we expect a greater likelihood that the additional free cash flow in 2010 will be allocated to the second and the third priorities, and more so than we were in 2009. Treading in more detail, asset by asset, firstly gas in Canada, as you know, Canadian Natural has the largest plant based in Western Canada, Canadian Natural dominates the land base and infrastructure in our core areas, and as a result, we're a low-cost producer. Our gas plant base is very well positioned with strong assets and teams in conventional, foothills, resource and unconventional plays. Canadian Natural's plan in 2010 is not only to preserve but to strengthen our dominant gas assets base. We do not see a robust gas price environment in 2010 as we believe there is an abundant supply currently available and we believe supply response may overwhelm any positive gas price pressure. In light of this view, in 2010, we will plan to drill only 93 gas wells versus 114 expected for 2009. As in our 2009 gas program, it is mostly focused on strategic wells, line expiries and drainage concerns. However in 2010, we will shift more into deep tight unconventional targets with roughly 55% of the drilling focused in these areas versus 35% in 2009. A greater emphasis to deeper and longer life and more expensive wells will result in decline in our gas production effectively bottoming out in Q4 2010, and position us to return to gas growth in 2011. This is particularly impressive considering only drilling 93 gas wells in 2010 compared to 900 gas wells in 2005, when we are growing at 5%. This leads us to believe which I stated earlier that any positive price increase will be met with a significant supply response. Caution is prudent and it also reinforces the soundness of our balanced portfolio approach. Canadian Natural's heavy and thermal assets in Canada are very strong and will continue to add tremendous value to Canadian Natural shareholders. Our thermal assets alone have 33 billion barrels of oil in place and 5.6 billion barrels recoverable in our defined plan. Our plan is to add approximately 300,000 barrels a day of heavy oil production in a very stepwise disciplined and cost controlled manner. In 2010, we will continue to execute the defined plan with roughly $500 million allocated to our thermal properties. Most of this capital is allocated to continued development of Primrose at Primrose North, East and Wolf Lake. Production will average between 80,000 and 90,000 barrels a day in 2010 and since this is a cyclic process, we will see peaks and troughs of between 60,000 barrels to 100,000 barrels a day. At Kirby, our next incremental 45,000 barrels a day production division, we expect to receive regulatory approval in 2010. We have completed the detailed engineering design work and developed a more detailed cost estimate with a target of sanctioning Kirby in Q4 2010. We expect to take a very disciplined approach to engineering and construction at Kirby taking a more measured and a somewhat longer approach to achieve effective cost control. As a result we would expect first steam in, in mid 2013. At Pelican Lake, we will in 2010 continue our program to convert the field to our highly successful polymer flood. With roughly $450 million allocated to Pelican, we will push the areas of the field in our polymer flood from 28% to 40% by the end of 2010. And as you know, Pelican Lake is a world-class pool with 4 billion barrels in place between 250 and 475 million barrels recoverable with the polymer flood, a very large pool with very robust development economics. Pelican Lake continues to generate significant value for shareholders. Our primary heavy oil program continues to roll on effectively and efficiently and this commodity and cost environment primarily heavy oil generates top decile returns on capital in our asset portfolio. Importantly, it also generates the quickest payout and largest cash on cash returns. In 2010, we will drill 600 primary heavy oil wells, a record number of primary wells at Canadian Natural, roughly 25% more than we drilled in 2009. Our dormant [ph] high-quality land base, infrastructure and effective operations allow us to drill this size of program on a very cost effective basis, making primary heavy oil one of the best value generators in our portfolio. Although we don't spend much time talking about our light oil portfolio in Canada, we have been quietly working these assets over the last number of years and the first of that work will begin to be executed on in 2010. We will allocate over $300 million to light oil in Canada, drill over a hundred wells, up from the 42 in 2009, and initiate the optimization and development of significant enhanced oil recovery projects on our existing light oil pools. In addition, we will drill 18 wells in 2010 on six new light oil exploration plays that have been developed in the past couple of years. In keeping with light oil, in the North Sea, we will spend roughly $200 million as we start up drill string in Ninian in April 2010 and drill two wells and complete three well (inaudible) and will take some sub sea work on the T Block and upgrade facilities on al five platforms. In the North Sea, we are also preserving our capability to allocate additional capital to start up a second drill string later in 2010. In offshore (inaudible) we will allocate 260 million of capital, roughly 200 million will be completed in Gabon Olowi in which we will complete the drilling and completion program and bring the remaining wells on stream over the FPSO. In addition, we will complete the Espoir compression upgrade and progress preparatory work required before we drill our exciting deepwater South African Big E exploration prospect. It is important to note that offshore West Africa has some of the highest returning capital projects in our portfolio and along with the North Sea generates significant free cash flow for Canadian Natural. Turning to Horizon, a world-class asset with over 6 billion barrels of recoverable oil, we have targeted increased production to phases two to three to 232,000 barrels a day and further expansion in phases four and five to just under 500,000 barrels a day or half a million barrels a day of light sweet crude with no declines for 40 years and virtually no reserve replacement cost. At Horizon, we will spend 785 million in 2010, up 40% from 2009. Sustaining capital projects make up about 160 million of this capital or roughly $4 to $5 a barrel of sustaining capital. Growth capital includes 475 million for continued work on Tranche 2 of our phase 2/3 expression. In addition, we will complete our detailed lessons learned from phase 1 as we incorporate our any cost reduction or effectiveness measures into future expansion. Along with this work, we will complete significant engineering on future expansions and prepare a more detailed cost estimate for roughly another $100 million, and in my mind $100 million is significant engineering. It is our expectation that we will have a more detailed cost estimate by Q4 2010 and a better understanding of any modifications we may want to make to our execution strategy. This work will be completed, give us better (inaudible) on costing in various environments. Canadian Natural is committed to the expansion of 232,000 barrels a day and ultimately just under 500,000 barrels a day of light sweet (inaudible). As always Canadian Natural is very focused on cost control and creating value for shareholders. And we will be sanctioning the expansion at Horizon but only when we can be sure that reasonable cost synergies can be achieved. It is clear that Canadian natural is in a very, very strong an enviable position. Horizon is a world-class asset that is and will continue to add tremendous values to shareholders. Our thermal heavy oil assets can add value similar in magnitude to Horizon yet more manageable sizes and in my opinion are the hidden gem in our portfolio. And in this low gas price environment generating greater value for shareholders. Our light oil assets both internationally and in Canada as well as our primary heavy oil assets in Canada are continuing to generate strong returns. And in this low cost price environment, our strategy of maintaining a well-balanced and the fact that we are low-cost producer will ensure that we will be able to weather as sustained period of low gas prices. Our teams are strong throughout the company and as Doug will point out, our balance sheet is strong and getting stronger. Our capital program is very flexible, given Canadian Natural the ability to not only maximize the value of our well-balanced portfolio, but also capture any options that will present themselves in this environment. Canadian Natural's strong and in today's environment with our team our strategy and our assets, I believe Canadian Natural has a clear competitive advantage. And with that, I will turn it over to Doug to update you on our financial position and our proven financial management.

Thank you Steve and good morning. The third-quarter marked the attainment of several financial goals Canadian Natural has set for itself in 2009. First we reduced long-term debt by 2.4 billion to 10.6 billion at the end of the third quarter. Second we strengthened our balance sheet, reducing debt to book capitalization from 41% at the beginning of the year to 36% at the end of the third quarter. Today book capitalization and debt to EBITDA are at the low-end or below our internal guidelines f 35% to 45% and 1.8 to 2.8 times respectively. Third, our liquidity position remains strong with over $1.2 billion of available bank credit facilities. Four, all of our operating the divisions, the Canadian Conventional, Horizon, the North Sea and Offshore West Africa are now generating positive free cash flow. And fifth, our capital expenditure plans were implemented within the knowledge that cash flow was secured by our hedging programs in a very volatile commodity price environment. In the third quarter, we generated $1.5 million of cash flow from operations or $2.78 a share and incurred $574 million in capital expenditures. We also generated $658 million of net earnings or $1.21 per share. This capacity to generate cash flow across a diverse and balanced asset base with production from light, medium, heavy and synthetic crude oil and natural gas, allows us to prepare our 2010 capital expenditure budget with confidence and puts us in a position to allocate excess cash flow to the highest return projects, new opportunities, and further strengthening of our balance sheet. In order to ensure that our capital expenditure programs are successfully carried out, we continue to underpin cash flow with an active commodity hedge program in both crude oil and natural gas. Close to 50% of our first half 2010 production is hedged with collars with a floor averaging over $60 WTI and ceilings of 75, 90 and $105 WTI. Second half production is hedged nearly 25% of budgeted production. We also have certain natural gas collars with a floor of (inaudible) or approximately 17% of our production. Details of these programs are provided in our financial statements and are also posted on our website. Thank you and I will now return you to John.

Thank you very much, Steve, Real, and Doug, for all of your comments. Consistent with our mission statement in our company, we will always strive to develop our extensive asset base in the most appropriate manner to create value for our shareholders. We do that on a consistent basis time after time after time. With that operator, I would now like to open up the conference call to questions that people may have.

Thank you. We will now take questions from the telephone lines. (Operator instructions). Thank you for your patience. Our first question is from Arjun Murti of Goldman Sachs. Please go ahead. Arjun Murti – Goldman Sachs: Thank you. Steve, I think you mentioned that both Kirby and Horizon you have updates cost estimates around the fourth quarter of 2010, it sounded like you're more confident that Kirby will be sanctioned, I think Horizon, you left more wiggle room, just wanted to make sure I understand the distinction there, maybe you are just further along on the Kirby spending, and then perhaps the related fall off would simply be? Is there some minimum oil price you need to have confidence in relative to the cost estimates to move forward with Horizon? Thank you.

: Arjun Murti – Goldman Sachs: So it is possible that the cost coming in and between continuing to run phase 1 that it is not inconceivable that you end up sanctioning Horizon as well at the end of next year? Do we really need to think about that as sort of 2011 type event?

I would think there is a greater likelihood that it will be early 2011 and late 2010, but it all depends what the market is and how quickly we can pull our strategy together. Arjun Murti – Goldman Sachs: That's great. And if I could just ask one balance sheet question, I believe you said you are within your comfort debt range of 35% to 45% debt to cap, and I think there is a second metric as well. Just curious given the substantial free cash flow, obviously we're just coming off this terrible recession and big downdraft in oil prices, having given consideration to actually using that free cash would have a much stronger balance sheet perhaps a much lower debt level going forward, especially given that you're all looking at some of these big long-lived long, long lead time type projects? Thank you.

I think that we are -- one of the focuses of the company is always to strengthen our balance sheet and we have stretched it from time to time, primarily due to acquisitions in the past, and we have always brought it back into line. I think that one of the goals that we have for 2010 is to further strengthen the balance sheet and to further reduce debt levels. Arjun Murti – Goldman Sachs: That is great. Thank you very much.

Thank you. Our next question is from Greg Pardy of RBC Capital Markets. Please go ahead. Greg Pardy – RBC Capital Markets: Hi, good morning. Could you, Steve, can you – you touched on your offshore African exploration program, could you give a little bit of color on that?

I assume you are talking about South Africa, Greg? Greg Pardy – RBC Capital Markets: I am.

Obviously you know South Africa is what we call Big E exploration project, we have got four very large structures. They are billion barrel type in size, we don't know if they are full of oil or full of water but they are full of something. And we have -- it is in deepwater, it is high current, so it will be a very difficult and expensive well to drill. And we are just making sure we got everything lined up before we do drill. I expect we will drill but more likely in 2011 before we drill. Greg Pardy – RBC Capital Markets: Okay. Thanks Steve.

Thank you. Our next question is from Andrew Potter of UBS Securities. Please go ahead. Andrew Potter – UBS: Hi guys. Seems like you are talking a little bit more about Septimus and the potential development in the Montney, could you give us a little bit more background in terms of how do you Montney well, you've drilled it, and what kind of results you had, and maybe a little bit in terms of what kind of running room you have at Septimus right now?

Andrew, we have as you know a fairly good land position here. We have over 110 sections, we have 8 wells down now, results are very good and getting better with each new well. We optimized our completion technique and lowered the cost and we got better production results. So our last well here looks very, very strong, and we are just completing a well now and the cost there is coming in probably 20% or 30% lower than the well we just built previously. So we are learning very quickly. There is quite a bit of running room. We will build a 50 million a day plant here in 2010, we will monitor it, I would say there are significant running room here, probably to take this thing maybe up to about 200 million a day, but there is no hurry to do that, particularly in this gas price environment. Andrew Potter – UBS: Okay. And what's your -- just your thoughts what sort of gas price would you need on this development to pursue that 200 million a day development and how does that compare versus the conventional opportunity. Like is it really seeming to be part of a lower cost, part of the portfolio I guess?

It is a lower cost portion of our portfolio. We do have some deep basin gases, probably with compete. The bigger issue for all our gas prospects, even the best ones is can they compete with our oil prospects. And that is a difficult thing to do. Andrew Potter – UBS: Sure. And one last question just on the conventional heavy oil side, I think if we end up in this period event type differential, I mean how quickly you – or how far can we grow the conventional production base, your conventional heavy oil over the next couple of years?

You know the conventional primary heavy oil is you drill a lot of wells, you add a lot of production and they are very short life and they decline quickly, so the production growth overall is moderate. I think we can probably take it up to close to 100,000 barrels a day and hold it there. But it is very difficult to get the big growth there because wells do decline quickly. Andrew Potter – UBS: :

Thank you. (Operator instructions). Our next question this from Eli Lapp [ph] of Tricadia. Please go ahead. Eli Lapp – Tricadia: Yes, thank you. Could you tell me how much is drawn on the credit facility and then perhaps sort of as an add on to that what your intentions would be with that facility, is it to term it out, is it just to use the free cash to pay it down, et cetera?

Okay. We have in place bank revolvers, one for 2.2 billion and another one for 1.5 billion. They both mature in June of 2012, so we have a good life there. At the end of September, we had about $2.6 million drawn on the two facilities. They are revolving facilities, so we can pay them down and draw them back up. We would like to leave those two facilities in place through their term and then look at the financial and the credit markets in 2011 and 2012 prior to the maturity to determine what we would do, but in my estimation, we would keep those facilities in place. Eli Lapp – Tricadia: Okay, thank you.

The one thing that I might add there is that in terms of maturity levels, debt maturity levels, we really only have the 400 million dollars Canadian coming due in December of 2010. So debt retirement is on our mind but obligatory debt retirement is a ways away. Eli Lapp – Tricadia: Perfect, thank you.

Thank you. Our next question is from Barbara Betanski of UBS Global Assets. Please go ahead. Barbara Betanski – UBS Global Assets: Thanks. I am just wondering if you could elaborate a little bit on the light exploration, light oil exploration play that you referred to, those 18 wells, and what the potential is there, and how much you are spending?

Hi, Barb. We have six different plays that we have been working on for a while. We drilled 18 wells on them as you said earlier, they are in southeast Saskatchewan, they are also in the Grand Prairie or northwest Alberta region, and a little bit in BC. So, these are smaller pools that are not big large pools, but they do have enduring value, so I would think the would range anywhere from maybe a five to 10 well pool up to 20 well pool but they are smaller light oil pools and in some cases we think we can probably put them water for increase recovery. So we are just stepping out and trying to define that in 2010. Barbara Betanski – UBS Global Assets: Thank you very much.

Thank you. Our next question is from Peter Ogden of National Bank Financial. Please go ahead. Peter Ogden – National Bank Financial: Good morning. Just a quick question given the free cash flow you have in 2010, kind of maybe some more color on what your thoughts are on the acquisition market right now. And I mean what's your overall view on gas prices, you've seen relatively bearish in 2010, does that color your view on gas acquisitions I think going into 2011, would you buy something to set yourself up for 2011 and what's going to change in the gas market that makes your more bullish in 2011 for gas markets?

Let me answer the last part of that question first. I think what will make us more bullish on gas prices in 2011 is that we see a muted supply response and we believe shale gas is real tight gas is real, part of that is because we've got a pretty significant holding here in Canada, so we know the cost. So we feel pretty confident that if prices go up, it won't take long for a strong supply response and bringing those prices back down. So if that supply response is not as what we would anticipate, then gas prices would probably would be stronger than we think in 2011. As far as acquisition, as you know, we are optimistic or opportunistic, and we look at anything that is in our core area, and if we can see value, and we can add value, then we will look at those acquisition, but we don't ever sort of throw the gauntlet down say we will do them, we only take them as they come. Peter Ogden – National Bank Financial: Perfect, thank you.

Thank you. There are no further questions registered at this time, Mr. Langille.

Thank you very much operator and thank you ladies and gentlemen for attending this conference call. And as usual if you have any further questions do not hesitate to call us.