Commodity price risk related to conventional and synthetic crude oil prices is our most significant market risk exposure. Crude oil and natural gas prices are sensitive to numerous worldwide factors, including the current global financial crisis, many of which are beyond our control, and are generally sold at contract or posted prices. Changes in world crude oil and natural gas prices may significantly affect our results of operations and cash generated from operating activities. Consequently, such prices also may affect the value of our oil and gas properties and our level of spending for exploration and development.

Our crude oil prices are based on various reference prices, primarily WTI and Brent and other prices which generally track the movement of WTI and Brent. Adjustments are made to the reference prices to reflect quality differentials and transportation. WTI, Brent and other international reference prices are affected by numerous and complex worldwide factors such as supply and demand fundamentals, economic outlooks, production quotas set by the Organization of Petroleum Exporting Countries and political events. Quality differentials are affected by local supply and demand factors.

We are also exposed to natural gas price movements. Natural gas prices are generally influenced by oil prices and supply and demand fundamentals, and to a lesser extent local market conditions.

In 2008, WTI averaged US$99.65/bbl, reaching a high of US$147.27/bbl and a low of US$32.40/bbl. Dated Brent, on which approximately 64% of our production is priced, averaged US$96.99/bbl, reaching a high of US$144.22/bbl and a low of US$33.66/bbl. NYMEX natural gas prices averaged US$8.90/mmbtu in 2008, reaching a high of US$13.69/mmbtu and a low of US$5.21/mmbtu. Our sensitivities to commodity prices and the expected impact on our 2009 cash flow from operating activities and net income are as follows:

These sensitivities are based on our estimated 2009 oil and gas production and assume a Canadian/US dollar exchange rate of $0.83. Our estimated oil and gas production range for 2009 is between 255,000 and 270,000 boe/d before royalties, of which approximately 16% is gas.

The majority of our oil and gas production is sold under short-term contracts, exposing us to short-term price movements. Other energy contracts we enter into also expose us to commodity price risk between the time we purchase and sell contracted volumes. From time to time, we actively manage these risks by using commodity futures, forwards, swaps and options.

In 2008, we purchased Dated Brent put options to manage the commodity price risk exposure on a portion of our oil production in 2009. These put options have established an annual average Dated Brent floor price of US$60/bbl on about 45,000 bbls/d of production.