In 2007, Statoil acquired North American Oil Sands Corporation (NAOSC) and operatorship of the Kai Kos Dehseh (KKD) leases. The KKD comprise 1,129 square kilometres of oil sands located in the Athabasca region of Alberta.

Our KKD leases are estimated to contain more than two billion barrels of recoverable resources, and we plan to produce more than 200,000 barrels per day from these leases for thirty years or more.

In November 2010, we sold a 40 per cent interest in the Kai Kos Dehseh leases to PTT Exploration and Production of Thailand. We will continue to operate all project facilities, related infrastructure and project development.

Leismer Demonstration Project
The Leismer Demonstration Project (LDP) is the first phase of Statoil Canada's oil sands development plan. The LDP facility has a capacity of approximately 18,800 barrels per day of bitumen.

Since the oil on our leases is located deep beneath the earth's surface, it will be developed in situ using Steam Assisted Gravity Drainage (SAGD) technology. SAGD is the principal in situ recovery method applied commercially in the Athabasca oil sands.

SAGD involves drilling two parallel wells vertically and then horizontally into the reservoir. The upper well is used to inject steam into the reservoir to heat the bitumen, which is too thick to flow naturally. After several months of steam injection, the bitumen becomes liquid enough to drain by gravity into the lower well and is pumped to the surface.

At Leismer, steam was first injected in September 2010 with first oil production in Q1, 2011. We expect to reach production capacity within 24 months. Continued development of our leases will occur in phases to build our understanding of this resource and benefit from our findings.