TD Securities

London Energy Conference

January 12-13, 2015
Ryan Kubik
President & Chief Executive Officer

Forward-looking Information
In the interest of providing you with information regarding Canadian Oil Sands Limited (the Corporation), including managements assessment of the Corporations future plans and operations, certain
statements and graphs throughout this presentation contain forward-looking information and forward-looking statements (collectively referred to as forward-looking statements) under applicable securities
laws. Forward-looking statements are typically identified by words such as anticipate, expect, believe, plan, intend or similar words suggesting future outcomes. Forward-looking statements in this
presentation include, but are not limited to, statements and graphs with respect to: the estimated value and amount of reserves recoverable and the time frame to recover such reserves; the estimated
reserve life; the estimated resources; plans regarding crude oil hedges in the future; the anticipated impact on cash flow from operations and cash flow from operations per share from increasing/decreasing
crude oil prices; all expectations regarding dividends; all expectations regarding net debt; all expectations regarding the amount of undrawn credit facilities; the estimated sales volume in 2015; the estimated
operating expenses in 2015; the estimated cash flow from operations and cash flow from operations per share in 2015; the estimated realized selling price for the Corporations product in 2015; the
anticipated break-even approximation; the belief that Syncrude production can grow from demonstrated levels through improved reliability initiatives, while at the same time reducing maintenance and repair
costs; the anticipated impact on cash flow from operations from increasing Syncrude production; the views on future additional steam and power utilities at Syncrude; the regulatory application relating to the
Mildred Lake mine extension (the MLX Project); the timing of construction and spending for the MLX Project; all expectations regarding future free cash flow; the views regarding the timing of
planned/announced market access pipelines; the Corporations views on future oil prices; the views on future demand for oil and global energy use; all views regarding the synthetic crude oil (SCO) and
West Texas Intermediate (WTI) and Brent differentials; the 2015 Syncrude production range of 95 to 110 million barrels (35 to 40 million barrels net to the Corporation); the Corporations 2015 budget
assumption of 103 million barrels (37.8 million barrels net to the Corporation); the anticipated benefits of the management services agreement with Imperial Oil; Crown royalties payable in the future; the
estimated amount of spending on the Syncrude major projects in 2015; the estimated amount of regular maintenance capital in 2015; the estimated amount of total capital expenditures in 2015 and the
expectations regarding the commissioning of the Mildred Lake mine train replacements.
You are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature,
forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections
and other forward-looking statements will not occur. Although the Corporation believes that the assumptions and expectations represented by such forward-looking statements are reasonable and reflect the
current views of the Corporation with respect to future events, there can be no assurance that such assumptions and expectations will prove to be correct.
The factors or assumptions on which the forward-looking statements are based include, but are not limited to: the assumptions outlined in the Corporations 2015 guidance documents as posted on the
Corporations website at www.cdnoilsands.com as of the date hereof and as subsequently amended or replaced from time to time, including without limitation, the assumptions as to production, operating
expenses and oil prices; the successful and timely implementation of capital projects; Syncrudes major project spending plans; the ability to obtain regulatory and joint venture owner approval; our ability to
either generate sufficient cash flow from operations to meet our current and future obligations or obtain external sources of debt and equity capital; the continuation of assumed tax, royalty and regulatory
regimes and the accuracy of the estimates of our reserves and resources volumes.
Some of the risks and other factors which could cause actual results or events to differ materially from current expectations expressed in the forward-looking statements contained in this presentation include,
but are not limited to: volatility of crude oil prices; volatility of the SCO to WTI differential; the impact that pipeline capacity and apportionment and refinery demand have on prices for SCO and our ability to
deliver SCO; the impacts of regulatory changes especially those which relate to royalties, taxation, tailings, water and the environment; the impact of new technologies on the cost of oil sands mining; the
impacts of rising costs associated with tailings and water management; the inability of Syncrude to obtain required consents, permits or approvals, including without limitation, the inability of Syncrude to
obtain approval to release water from its operations; the impact of Syncrude being unable to meet the conditions of its approval for its tailings management plan under Directive 074; various events which
could disrupt operations including fires, equipment failures and severe weather; unsuccessful or untimely implementation of capital or maintenance projects; the impact of technology on operations and
processes and how new complex technology may not perform as expected; the obtaining of required joint venture owner approvals from the Syncrude owners for expansions, operational issues and
contractual issues; labour turnover and shortages and the productivity achieved from labour in the Fort McMurray area; uncertainty of estimates with respect to reserves and resources; the supply and
demand metrics for oil and natural gas; the variances of stock market activities generally; currency and interest rate fluctuations; volatility of natural gas prices; the Corporations inability to either generate
sufficient cash flow from operations to meet our current and future obligations or obtain external sources of debt and equity capital; general economic, business and market conditions and such other risks
and uncertainties described in the Corporations Annual Information Form dated February 20, 2014 and in the reports and filings made with securities regulatory authorities from time to time by the
Corporation which are available on the Corporations profile on SEDAR at www.sedar.com and on the Corporations website at www.cdnoilsands.com.
You are cautioned that the foregoing list of important factors is not exhaustive. Furthermore, the forward-looking statements contained in this presentation are made as of the date of this presentation and
unless required by law, the Corporation does not undertake any obligation to update publicly or revise any of the included forward-looking statements, whether as a result of new information, future events or
otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.
In this presentation we refer to additional GAAP and non-GAAP financial measures that do not have any standardized meaning as prescribed by Canadian Generally Accepted Accounting Principles
(GAAP). We refer to additional GAAP financial measures such as cash flow from operations, cash flow from operations on a per share basis and net debt. For more information on additional GAAP
financial measures please refer to our 2014 Third Quarter Report which is available on the Corporations profile on SEDAR at www.sedar.com and on the Corporations website at www.cdnoilsands.com. In
this presentation we also refer to non-GAAP financial measures such as free cash flow, free cash flow per share, return on equity, enterprise value and the break-even approximation. For more information
on free cash flow and return on equity (referred to as return on average shareholders equity in our 2013 Annual Report) please refer to our 2013 Annual Report, which is available on the Corporations profile
on SEDAR at www.sedar.com and on the Corporations website at www.cdnoilsands.com. Enterprise value and the break-even approximation are discussed in this presentation.
Third party information: To the extent that information contained in this presentation, forward-looking or otherwise, has been derived from third party sources such as Bloomberg, the International Energy
Agency, CAPP, WorleyParsons, Muse Stancil and IHS CERA, the Corporation makes no representations or warranties, express or implied, as to the quality, accuracy and completeness of such information.

Overview
1. Syncrude resource base
2. 2015 outlook

3. Debt and liquidity

4. Approach to dividends

5. 2015 focus areas at Syncrude

6. Market access and SCO pricing

7. Relative valuation

Syncrude: A High Quality Resource

Established production base
Fully upgraded light, sweet crude oil
Proven operator and proven
technology
Predictable reservoir recovery
over 90%

Non-declining production profile

40+ year 2P reserve life
4.5 billion barrels 2P reserves and 5.1 billion barrels contingent resources
all upgraded light crude oil
All amounts gross to Syncrude. COS, through its wholly-owned partnership, holds a 36.74% interest in Syncrude. Based on independent reserves and resources estimates by GLJ Petroleum
Consultants, Ltd. as of Dec. 31/13. See reserves and resources cautionary advisory in COS Annual Information Form dated Feb. 20/14 and definitions and forward-looking information advisory.

2015 Outlook 1
$ millions

$/barrel

Sales

3,074

81.23

Operating expenses

1,729

45.69

Crown royalties

176

4.65

Other expenses 2

319

8.43

Current taxes

120

3.17

Cash flow from operations

730

19.29

Capital expenditures

564

14.92

Free cash flow 3

166

4.37

1.
2.
3.

2015 Outlook issued December 3, 2014

Other expenses include: development expense, interest, administration, insurance, reclamation, and other.
Free cash flow and free cash flow per share are non-GAAP financial measures.

$/share

1.51

0.34

Oil Price Sensitivity 1

Cash flow from operations (per share)

Current 2015 Outlook 1

$2.06
$1.51
$0.95

2015F

USD $65/bbl WTI

1.

2015F

USD $75/bbl WTI

2015F

USD $85/bbl WTI

Based on assumptions contained in 2015 Guidance issued December 3, 2014: USD $75/bbl WTI, $0.88 CAD:USD FX, $45.69/bbl operating expenses and
sales of ~103,700 bbls/d; assumes COS continues to pay Crown royalties based on net deemed bitumen revenues; see December 3, 2014 guidance
document for other sensitivities.

Break-even cost
CAD $/barrel
Operating expenses 1
Capital expenditures
Crown royalties

Development expenses4 and reclamation

Syncrude break-even cost
COS interest, administration, insurance
and other

COS break-even cost

46
10-13
2-3
3-4
61-66

US$51 - US$56/bbl 5

66-71

US$55 - US$60/bbl 5

Cost to produce Syncrudes fully upgraded, light, sweet oil

1.
2.
3.
4.
5.

Based on 2015 Guidance issued December 3, 2014

Based on estimated spending of $400-$500 million over the next few years and single point production assumption from 2015 Guidance issued December 3,
2014; excludes 2015 spending on major capital projects
Minimum royalty based on approximate break-even oil price and generic royalty regime
Excludes 2015 development expense spending on major capital projects
Break-even is a non-GAAP financial measure and is calculated as shown above; assumes CAD:USD exchange rate of $0.84 to $0.85

Significantly Lower Capex Requirements

$ millions, net to Canadian Oil Sands
1400
Major Projects
1200
Regular Maintenance
1000
800
600
400
200
0
2011

2012

2013

2014E

2015E

Capital costs only; excludes capitalized interest.

2014E based on October 30/14 2014 Outlook; 2015E based on December 3/14 2015 Outlook
2016F shown for illustrative purposes and is based on the midpoint of a range between $400 and $500 million.

2016 F

Dividends Reflect Free Cash Flow Over Time (1,2)

$ millions
Annual Total Dividends

1.
2.

Cumulative Dividends/FCF

Includes distributions on trust units prior to Dec. 31/10

Free cash flow (FCF) is cash flow from operations less capital expenditures and is a non-GAAP measure

Strong Liquidity Position

Net debt target of $1 2 billion
-

net debt is expected to be ~ $1.9 billion at the end of 2014

Bond portfolio of USD 1.5 billion

-

next maturity in 2019

maintain debt-to-total capitalization of less than 55%

COS long-term debt-to-capitalization at Sept. 30, 2014 was 29%

Credit facilities totalling $1.5 billion

-

largely undrawn

maintain debt-to-total capitalization of less than 60%

committed syndicated facility expires June 2018

Focused on Operational Performance

2013-14 accomplishments:
Replacing/rebuilding mine train equipment completed in Q4 2014
Retrofitting and reconfiguring centrifuges to improve bitumen feed to upgrader
completed in Q1 2014
Replacing heat exchangers in all hydrogen plants completed in Q2 2014

2015 Focus Areas

Fully commission new Mildred Lake Mine trains and demonstrate
design rates
Upgrading implement design improvements to CO boilers and
modifications to Flue Gas Desulphurizer
Progress scoping and design of new utilities plant to provide steam and
power to support higher production rates
Leadership and workforce experience/training

High Value Syncrude Barrel

29

28

16

37

37

48

25

26

33

WTI

Bakken

Value
(as % of crude price)

Syncrude
barrel has
larger cuts
of the
premium
priced
fractions

Syncrude SCO

LPG

Naptha

Distillate

65%

100%

115+%

VGO

Resid

110%

65-70%

Based on analysis provided to COS by Muse Stancil; crude oil fractions shown assume a maximum distillate operating mode; the fraction values as percent of crude are
reflective of the pricing relationships for the period 2010-2014 on the U.S. Gulf Coast.

Markets for COS Syncrude Production

Kitimat

Syncrude
Edmonton
Burnaby

Hardisty

Quebec City
Montreal
Sarnia
Chicago

Patoka
Cushing

Current synthetic crude oil markets

Potential new markets

Houston

Crude Oil to Remain a Key Component of

World Energy Demand

Global energy needs expected to increase by 30%

Oil use is expected to increase 13% to 101 million barrels per day
Source: International Energy Agency, World Energy Outlook 2013

COS Demonstrates Compelling Valuation

Per flowing bbl of capacity

COS enterprise value

reflects mine infrastructure
PLUS:

$140,000
$120,000

Upgrader producing light,

$100,000
$80,000

$60,000

$40,000
$20,000
$0

Cost of Mine
Infrastructure 2
1.
2.

sweet crude oil

All of our reserves and
resources
Production today,
generating a high dividend
yield

COS 1

COS value per flowing bbl of capacity represents enterprise value based on market cap as at January 8/15 and net debt at September 30/14, divided by
production design capacity of 128,600 bbl/d; enterprise value is a non-GAAP measure.
Cost of Mine Infrastructure reflects range of costs and production capacities based on company estimates for the Fort Hills project (Suncor/Total/Teck) and Kearl
Lake (Imperial).

Appendix
Follow us:
Twitter @cdnoilsands
www.blog.cdnoilsands.com

COS: A Premier Pure-play Oil Sands Investment

Ticker: COS on Toronto Stock Exchange

Shares outstanding: 484.6 million1

52 week high / low / close1: $24.69/ $7.74 / $7.94
Market cap: $3.8 billion1
Enterprise value: $5.6 billion2

All figures in Canadian dollars

1. As at January 8/15.
2. As at January 8/15 and net debt at September 30/14; non-GAAP financial measure.

Syncrude Joint Venture Structure

Imperial Oil

Suncor

25%

36.74%

Canadian Oil Sands

(COS)

12%
7.23%

5%
Murphy Oil

Sinopec
Nexen
(CNOOC)

Mocal
(JX Nippon)

ExxonMobil and Imperial provide global best

practices, proprietary systems and staff expertise

Demonstrating Strong Return on

Shareholders Equity

Percentage Return

Canadian Oil Sands' ROE

45%

$45.00

40%

$40.00

35%

$35.00

30%

$30.00

25%

$25.00

20%

$20.00

15%

$15.00

10%

$10.00

5%

$5.00

0%

$0.00

Return on Equity
Average ROE of 24%
Average Share Price

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Average ROE of 24% since 2001

Return on Equity calculated as net income divided by average shareholders equity; Net income as per COS financial statements
Return on shareholders equity is a non-GAAP measure.

Mildred Lake Extension (MLX)

Syncrude Crown Royalty Terms*

All figures gross to Syncrude

Greater of 25% net bitumen revenue less capital and operating costs, or 1% of
gross bitumen revenue*
Previously based on Synthetic Crude Oil (upgraded from bitumen) revenues
and costs

Repay $1.25 billion plus interest over 25 years for previously deducted
upgrader growth capital
Payments deferred during minimum royalty periods

Pay an additional $975 million in royalties as per schedule:

2010

2011

2012

2013

2014

2015

Total

$75 mm

$75 mm

$100 mm

$150 mm

$225 mm

$350 mm

$975 mm

Amount will be prorated to extent Syncrude daily average bitumen production over 6year period less than 345 KBPD
* Terms and rates effective Jan. 1/09 to Dec. 31/15. The royalty agreements are available on the Corporations profile at
www.sedar.com. Effective Jan. 1/16 New Royalty Framework rates apply.

2015 Crown Royalty Calculation

Based on 2015 Outlook provided December 3/14

Revenue1
Operating expenses

% Mining

3,074

Bitumen
2,277

(1,729)

85%

(1,469)

Development expense

(169)

70%

(118)

Capital expenditures3

(529)

60%

(318)

Net revenue

372

Crown royalty2

93

Upgrader growth capital recapture payment

26

Additional Crown royalty expense4

57

Total Crown royalty

Crown royalty (per bbl)
1.
2.
3.
4.

SCO

176
$4.65

Bitumen revenue is based on an SCO yield of 85% and a bitumen price equal to 60% of C$WTI.
Royalty rate is the greater of 25% of net revenue or 1% of revenue.
Before capitalized interest.
As part of the transition to the generic royalty regime, Syncrude is obligated to pay additional Crown Royalties of $975 million over 20102015. The $57 million shown above is COS share of the 2015 expense based on accrual accounting; actual cash payments are per the
schedule on previous slide. In any given year, the difference will be reflected as a change in Crown royalty payable. The cash payment in 2015
is expected to be approximately $129 million
See COS 2013 Annual MD&A dated Feb. 20/14 for further discussion on Crown royalties.

Quality and Location Differentials

Cdn $/bbl

Trailing 3-Month Average

$130

$120

$110

$100

$90

Brent
SCO
WTI

$80

WCS
Bitumen

$70

$60

$50

$40
Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14

Canadian & US Crude Oil Pipeline Proposals

Source: CAPP

Canadian Pipeline Capacity

vs 2014 Supply Forecast

Enbridge Mainline
PADD IV
Trans Mountain
Express

Source: CAPP

Syncrude: A Leader in Responsible

Oil Sands Development
Reflects industry best practices

Aboriginal relations

Mining Association Toward Sustainable Mining

Canadian Association of Petroleum Producers Responsible

Canadian Energy Program

Recognized with Gold Level accreditation by the Canadian

Council of Aboriginal Business (CCAB) in their Progressive
Aboriginal Relations (PAR) program; only oil sands operator
to achieve this level.

Canadian Council for Aboriginal Business Progress

Aboriginal Relations Program

One of Canadas largest employers of Aboriginal people

about 9% of workforce.

Canadian Business for Social Responsibility

Canadian Industry Program for Energy Conservation

Total cumulative spending with Aboriginal-owned businesses

is over $2 billion

Leading Research and Development

Operates the industrys only dedicated R&D centre

Spends $60 million on R&D each year; one of top 50

spenders in Canada

Member of COSIA, an alliance of oil sands producers focused

on accelerating the pace of improvement in environmental
performance through collaborative action and innovation.

For more information, see Syncrudes sustainability report at www.Syncrude.com

Wells-to-Wheels CO2 Emissions

Average oil
sands is
only 9%
more GHG
intensive
than
average
U.S. barrel

Source: IHS CERA Special Report Oil Sands Dialogue: Oil Sands, Greenhouse Gases, and US Oil Supply: Getting the Numbers Right, November 2012

International Comparison of Leading Oil

and Gas Producing Regions1
An independent study compared Alberta, Canada with other world-class oil producing
regions around the world in terms of their environmental policies, laws and regulatory
system

The study compared environmental laws and government process with respect to:
1) Stringency how comprehensive are the environmental laws?
2) Transparency how easily can the public get information?
3) Compliance which country has rules to ensure compliance?

The report is available at http://www.capp.ca/library/third-party-reports/Pages/default.aspx

Alberta, Canada is among the top three leading regions in

environmental policies, laws and regulatory systems
1) Independent study WorleyParsons, 2014, commissioned by CAPP

Stringency How Comprehensive are the

Environmental Laws?
Stringency Factors:
Requirements, time
and costs for project
approvals
Number of regulators
reviewing applications
Opportunities for
public to review and
comment
Requirements for
monitoring, facility
license renewals,
closure planning, and
decommissioning

Alberta, Canada is among the top three leading regions in

environmental policies, laws and regulatory systems
Independent study WorleyParsons, 2014, commissioned by CAPP

Transparency How Easily Can the Public

Get Information?
Transparency Factors:
Public access to
project and/or facility
information
Monitoring reports and
closure plans
Stakeholder
engagement
processes and
requirements
Government disclosure
of decisions, liabilities
and industry
information
Audits, incident
reporting and appeals

Alberta, Canada is among the top three leading regions in

environmental policies, laws and regulatory systems
Independent study WorleyParsons, 2014, commissioned by CAPP

Compliance Which Country Has Rules

to Ensure Compliance?
Compliance Factors:
Mechanisms to
monitor compliance
Consequences for
non-compliance or
non-performance
Enforcement of
regulations,
penalties, default
rates, approval
requirements, and
post-closure longterm monitoring

Alberta, Canada is among the top three leading regions in

environmental policies, laws and regulatory systems
Independent study WorleyParsons, 2014, commissioned by CAPP