The Saleski Pilot is unique in that it is designed to enhance industry’s proven SAGD extraction method – by combining steam with solvents, a process called solvent-cyclic SAGD or SC-SAGD. The primary objective of the Saleski Pilot is to understand the technical parameters of the reservoir in order to optimize the application of the SC-SAGD process for commercial development. As of July 2011, Laricina is seeking regulatory approval for Phase 1 expansion at Saleski. This is the first of six potential phases of the Saleski Project’s expansion. Phase 1 is a expansion that will bring the total field production to . Laricina is taking a staged approach to expand bitumen production capacity to over a 30-year period. In March 2013, Laricina became the first company to assign probable reserves in the Grosmont formation. The company assigned 128 million barrels of probable reserves to the first phase of its Saleski development. Saleski Commercial Project In July 2013 Laricina received Government approval to proceed with Phase 1 of its Saleski commercial project, a $520-million project that aimed to have 12,500 barrels per day of bitumen capacity by late 2015. Germain Commercial Demonstration Project In October 2011 Laricina received Order in Council approval from the Alberta Government for its Germain Commercial Demonstration solvent-cyclic steam-assisted gravity drainage (SC-SAGD) project. The Germain project is currently under construction with first steam injection taking place in June 2013 and first bitumen production expected in the fourth quarter of 2013. Stony Mountain Pipeline In May 2013 Laricina received approval from the Energy Resources Conservation Board of Alberta for its Stony Mountain Pipeline in the western Athabasca oil sands region. The project will be able to carry 200,000 barrels per day of blended bitumen through a 187 km, 24 inch pipeline from Saleski to Cheecham south of Fort McMurray. The project also will have a 12 inch diluent return line with capacity of 70,000 barrels per day. A tank farm about 2 km northeast of the Saleski pilot is also planned. Laricina expects to start up the blend line in mid to late 2015 as Saleski Phase 1 commercial production begins. The company expects to receive diluent by truck until the diluent return line enters service about a year later. Corporate responsibility The Company has established a five-year scholarship program, called the Laricina Energy Scholarships in Engineering. The scholarships provide financial assistance based on academic merit to continuing undergraduate