COURT FILE NUMBER

COURT

JUDICIAL CENTRE

PLAINTIFF(S)

DEFENDANT(S)

DOCUMENT

203 06534

COURT OF QUEEN'S BENCH OFALBERTA

EDMONTON

HER MAJESTY THE QUEEN INRIGHT OF ALBERTA

CANADIAN OIL SANDS PARTNERSHIP #1,

IMPERIAL OIL RESOURCES, NEXEN OIL

SANDS PARTNERSHIP, MOCAL ENERGY

LIMITED, MURPHY OIL COMPANY LTD.,

SUNCOR ENERGY OIL & GAS

PARTNERSHIP, SINOPEC OIL SANDS

PARTNERSHIP, and SYNCRUDE CANADALTD.

STATEMENT OF CLAIM

Form 10[Rule 3.25]

ADDRESS FOR SERVICEANDCONTACT INFORMATIONOFPARTY FILING THISDOCUMENT

JUSTICE and ATTORNEY GENERALLegal Services Division

9th Fir, 10011-109 StreetEdmonton, Alberta T5J 3S8

Doreen MuellerPhone: (780)644-5780Fax: (403)427-1230

NOTICE TO DEFENDANT(S)

You are being sued. You are a defendant.

Go to the end of this document to see what you can do and when you must do it.

Note: State below only facts and not evidence (Rule 13.6)

1. The Plaintiff is her Majesty the Queen in right of Alberta and at all material times wasrepresented by the Minister of Energy.

2. The Defendants, Canadian Oil Sands Partnership #1, Imperial Oil Resources, Nexen OilSands Partnership, Suncor Energy Oil and Gas Partnership, and Sinopec Oil Sands Partnershipare partnerships under the laws of Alberta.

3. The Defendant, Mocal Energy Limited., is a body corporate incorporated under the lawsof Alberta.

4. The Defendant, Murphy Oil Company Ltd., is a body corporate incorporated under the

laws of Canada.

5. Collectively, the Defendants referred to in paragraphs 2 through 4 inclusive in thisstatement of claim are participants (the "Defendant Participants") in a joint venture developingoil sands leases near Fort McMurray, Alberta known as the Syncrude Royalty Project. TheSyncrude Royalty Project is also known in the records of the Plaintiff as Project Approval OrderNo. OSR045.

6. The Defendant, Syncrude Canada Ltd., is a body corporate under the laws of Albertaand is the operator of the Syncrude Royalty Project.

Statement of facts relied on:

7. The Syncrude Royalty Project was established pursuant to a February 4, 1975 AibertaCrown Agreement, made under the authority of section 9 of the Mines and Minerals Act, R.S.A.2000, c. M-17. This agreement is amended by: (a) the January 1, 1983 Amendment totheAlberta Crown Agreement; (b) the January 1, 1986 Amendment to the Alberta CrownAgreement; (c) the 1987 Amendment to the Alberta Crown Agreement; (d) the August 15,1991 Amendment to the Alberta Crown Agreement; (e) the November 29, 1995 Amendmenttothe Alberta Crown Agreement; (f) the January 1, 1997 Amendment to the Alberta CrownAgreement (Amendment No. 6: Transition Terms and Post Transition Terms); (g) the January 1,2001 Amendment to the Alberta Crown Agreement (Amendment No. 7: Purchase of Utilities);(h) the November 18, 2008 Syncrude Bitumen Royalty Option Agreement (the "BRO"); and (i)the November 18, 2008 Syncrude Royalty Amending Agreement (the "RAA"), (collectively, the"Crown Agreement").

8. In relation to the Syncrude Royalty Project, all or some of the Defendants hold a numberof oil sands .leases with the Plaintiff which are included in the description of the SyncrudeRoyalty Project. In those leases, the Plaintiff has reserved a royalty on oil sands productsrecovered from the Syncrude Royalty Project.

9. In addition to the oil sands leases referred to in paragraph 8 above, the SyncrudeRoyalty Project and the Defendants' requirement to pay royalty are governed by the CrownAgreement and legislation, including but not limited to the Mines and Minerals Act, R.S.A. 2000,c. M-17, the 0/7 Sands Royalty Regulation, 1997 (AR 185/1997) (the "OSRR97"), and the Oil •Sands Royalty Regulation, 2009 (AR 223/2008) (the "OSRR09"). The Plaintiff pleads and relieson the provisions of this legislation.

10. Through the BRO, the Defendant Participants exercised an option, effective as ofJanuary 1, 2009, to pay royalty on bitumen volumes as opposed to paying royalty on upgradedoil sands products. The RAA recognized and confirmed this election to pay bitumen royalty.

11. The realization of this bitumen royalty option required a change in the location of theSyncrude Royalty Project's royalty calculation point, which was moved from the outlet of theSyncrude upgrader (the "Previous RCP") to the outlet of certain diluent recovery units at thefront end of the Syncrude upgrader (the "New RCP").

12. In addition, effective January 1, 2009, the Plaintiff enacted a new oil sands royaltyregulation, the OSRR09, which further changed the requirement to pay royalty. Prior to January1, 2009, payment of royalty for an oil sands product in relation to a post-payout Period wascalculated based on the volumes of the Plaintiffs royalty share disposed of, consumed or usedwithin that post-payout Period. With the enactment of the OSRR09, payment of royalty for an oilsands product in relation to a post-payout Period is based on the volumes of the Plaintiff'sroyalty share that passed a royalty calculation point within that post-payout Period, and whichwere deemed by that regulation to be disposed.

13. The change in the location of the royalty calculation point for the Syncrude RoyaltyProject gave rise to certain volumes of oil sands products which had never crossed the PreviousRCP, and which would never cross the New RCP ("Transitional Inventory"). Also, sincepayment of royalty was no longer triggered by the actual disposition of the Plaintiff's royaltyshare, certain volumes of oil sands products had crossed the Previous RCP prior to January 1,2009, but had not been disposed of, consumed, or used prior to this date ("CustomaryInventory").

14. The Plaintiff amended the OSRR97 by including section 38.2 to address payment ofproceeds for the Plaintiffs royalty share of the Transitional Inventory and Customary Inventoryin relation to the Syncrude Royalty Project. Payment of the royalty proceeds for the royaltyshare of the Transitional Inventory and Customary Inventory in relation to the Syncrude RoyaltyProject according to section 38.2 was due on April 30, 2010.

15. All or some of the Defendants are obligated to pay proceeds for the Plaintiffs royaltyshare of Transitional Inventory and Customary Inventory in relation to the Syncrude RoyaltyProject pursuant to the provisions of the terms of the oil sands leases held by the Defendants;the terms of the Crown Agreement; the Mines and Minerals Act, R.SA 2000, c. M-17; and theOSRR97 and the OSRR09 as amended.

16. The Defendants have failed to pay such proceeds in breach of the [eases, the CrownAgreement and legislation, and the Plaintiff is entitled to judgment for payment of such unpaidroyalty including interest. The Defendants are justly and truly indebted to the Plaintiff for theunpaid royalty proceeds in the approximate amount of $100,000,000 or such other amount aswill be proved at trial.

17. Despite demands, the Defendants have refused to pay the unpaid royalty proceeds orany part thereof and the same remains a just debt improperly withheld.

18. In the alternative, the Defendants hold the Plaintiffs royalty share in trust and have failedto pay royalty proceeds to the Plaintiff for the royalty share of the Transitional Inventory andCustomary Inventory in relation to the Syncrude Royalty Project in breach of trust.

19. In the further alternative, the Defendants have been unjustly enriched by retention of theroyalty proceeds owed to the Plaintiff. The Plaintiff has been correspondingly deprived of thevalue of its royalty share. There is no juristic reason for the enrichment of the Defendants.

Remedy sought:

20. The Plaintiff seeks:

(a) Judgment or damages in the amount of $100,000,000, or such otheramount as will be proven at trial;

(b) In the alternative, a declaration that the Defendants hold the royalty sharein trust for the Plaintiff and a judgment directing the Defendants to payroyalty proceedings owing to the Plaintiff;

(c) In the further alternative, a declaration that the Defendants have beenunjustly enriched by retention of the of the royalty proceeds and ajudgment directing the Defendants to pay the said royalty proceeds to thePlaintiff;

(d) Penalties pursuant to the Mines and Minerals Act and the OSRR97 andOSRR09;

/(e) Interest as appropriate pursuant to the leases, the Mines and Minerals

Act and the OSRR97 and OSRR09 and pursuant to the JudgmentInterest Act R.S.A. 2000, c.J-1.;

(f) Costs; and

(g) Such further and other relief as this Court deems just.

NOTICE TO THE DEFENDANT(S)

You only have a short time to do something to defend yourself against this claim:

20 days if you are served in Alberta

1 month if you are served outside Alberta but in Canada

2 months if you are served outside Canada.

You can respond by filing a statement of defence or a demand for notice in the office of theclerk of the Court of Queen's Bench at Edmonton, Alberta, AND serving your statement ofdefence or a demand for notice on the plaintiff s(s') address for service.

WARNING

If you do not file and serve a statement of defence or a demand for notice within your timeperiod, you risk losing the law suit automatically. If you do not file, or do not serve, or are latein doing either of these things, a court may give a judgment to the plaintiffs) against you.