Operations Overview

Crew's operations are divided into five main operating areas: Princess, greater Pine Creek/Edson and other W4 properties in Alberta, and Septimus and Inga in northeast British Columbia. Crew will focus on the development of its main operating areas in 2011 and has budgeted capital expenditures of $260 million towards the continued growth of these core areas. This development will be the foundation upon which the Corporation will continue to grow its base production and will include the drilling of an estimated 130 net wells in 2011.

Included in the 2011 capital program will be up to 25 exploration wells on the undeveloped lands in the Company's core areas. These wells will be focused on the expansion of the Company's reserve base, expansion of existing play concepts and the proof of new play types in our core areas.

Princess, Alberta

The Princess area comprises 442 contiguous sections of Crew controlled freehold and crown land directly south of Brooks, Alberta. The area lies in a unique geographic position in Alberta where the structural effects of the Sweetgrass Arch and the regional dip of the Western Canadian Sedimentary basin intersect to form an area where the subsurface structure is essentially flat. Numerous northwest trending Mannville channels have eroded the Mississippian Pekisko formation forming hydrocarbon traps on the subcrop edge (Tilley and West Tide Lake) and in elongated outliers (Alderson). These outliers can be two to three miles wide and up to 12 miles long. Crew has three dimensional seismic control over the block and has in excess of 1,000 drilling locations identified. In 2010, production from this area averaged 5.8 mmcf/d of natural gas and 3,693 bbl/d of oil and ngls. At December 31, 2010 the Corporation owned 22 (18.7 net) producing gas wells, 150 (148.2 net) producing oil wells and 24 (22.1 net) service wells in the area along with three 100% owned oil batteries. In 2010, Crew drilled 62 (62.0 net) wells in this area resulting in 54 (54.0 net) oil wells and 8 (8.0 net) service wells.

Crew plans to drill 73 net horizontal wells, 25 net vertical wells, and 21 net service wells in 2011 in the Princess area.

Pine Creek/Edson, Alberta

The greater Pine Creek area is in west central Alberta including Crew's operations west of Edmonton. Production from this area is mainly characterized by high heat content natural gas with associated natural gas liquids produced from several Cretaceous, Jurassic and Devonian formations. At December 31, 2010 the Corporation had 42 (27.6 net) producing gas wells in the area. Production averaged 405 bbl/d of oil and ngls along with 10.2 mmcf/d of natural gas in 2010. In 2010, Crew drilled four (1.5 net) wells in the area resulting in two (0.7 net) natural gas wells and two (0.8 net) oil wells.

Crew lands in the Pine Creek area include 27 net sections of land that have been identified as prospective for the Cardium resource play. Crew plans to drill two Cardium horizontal wells and 3 wells targeting liquids rich gas in the Mannville group in 2011 in the Pine Creek area where over 170 locations have been identified.

In April 2010, the Company disposed of natural gas producing assets and infrastructure in the Edson area for gross proceeds of $126 million. At the time, these assets were producing approximately 1,700 boe per day and included total proved plus probable reserves of 7.1 mmboe. In conjunction with the disposition the Company entered into a farm-out arrangement with respect to the Cardium Formation rights on the same lands. Under this arrangement the Farmee drilled two horizontal Cardium wells and earned a 50% interest in eight sections of Cardium rights. In early 2011, the Farmee notified Crew that they have elected not to drill any further wells under this arrangement and therefore ended the option segment of the agreement.

Other W4 Properties, Alberta

Other W4 Properties includes minor properties in east central Alberta including Wimborne, Plain Lake, Provost and Killam and is comprised of light oil and shallow natural gas properties. At December 31, 2010 the Corporation had 55 (26.9 net) producing oil wells and 203 (99.2 net) producing gas wells in the area. Production averaged 244 bbl/d of oil and ngls along with 7.4 mmcf/d of natural gas in 2010. In 2010, Crew did not drill any wells in this area.

At Provost, the Company has identified more than 30 locations targeting light oil in the Viking formation. The Company plans to drill two wells targeting the Viking oil in the area in 2011.

Septimus, British Columbia

The Septimus area is located 15 kilometers south of Fort St. John, British Columbia. The Corporation's operations at Septimus include natural gas production from the Montney formation. The Montney formation in the Septimus area is a 300 meter thick tight siltstone formation which is accessed with long reach horizontal wells that are currently completed with up to five multi-stage water-based fracs. At December 31, 2010 the Corporation had an interest in 21 (19.7 net) producing gas wells in this area. Production averaged 523 bbl/d of oil and ngls along with 15.8 mmcf/d of natural gas in 2010. The Corporation drilled a total of 9 (8.5 net) wells in the Septimus area in 2010.

In 2009, Crew constructed a 25 mmcf per day Septimus gas plant which became operational on October 1, 2009 allowing the Company to increase production volumes. In December 2009, Crew completed the sale of the Septimus gas processing facility to a third party for the as built cost of approximately $19.1 million. In the fourth quarter of 2010, the Company amended the agreement with the owner of this facility. Under the terms of the amended agreement, Crew undertook construction of the facility expansion to double the capacity to 50 mmcf/d during the fourth quarter of 2010 and then subsequently sold the Septimus facility expansion upon its completion in February, 2011. Upon completion of the expansion, Crew was reimbursed for the full cost of the facility expansion of $16.9 million in return for an expanded processing commitment that will extend to December 2020. Crew has also retained the option to re-purchase a 50% interest in the facility at certain dates prior to January 1, 2014, at a cost of 50% of the total expanded facility's construction cost.

Current plans for 2011 are to drill six wells targeting the Montney formation in the Septimus area.

Inga, British Columbia

The greater Inga area includes Crew's other operations situated in north east British Columbia between Fort St. John and Fort Nelson. At December 31, 2010 the Corporation had 93 (42.0 net) producing gas wells and 13 (6.6 net) producing oil wells in the area. Production averaged 339 bbl/d of oil and ngls along with 4.6 mmcf/d of natural gas in 2010. Production from this area is mainly characterized by high heat content natural gas with associated natural gas liquids produced from several Cretaceous and Triassic age reservoirs. The Corporation drilled four (2.2 net) gas wells in the Inga area in 2010.