Notes to Consolidated Financial Statements

Note 31 — Joint Venture with EnCana Corporation

In October 2006, we announced a business venture with EnCana Corporation (EnCana), to create an integrated North American heavy-oil business. The transaction closed on January 3, 2007. The venture consists of two 50/50 operating joint ventures, a Canadian upstream general partnership, FCCL Oil Sands Partnership, and a U.S. downstream limited liability company, WRB Refining LLC.

FCCL Oil Sands Partnership’s operating assets consist of EnCana’s Foster Creek and Christina Lake steam-assisted gravity drainage bitumen projects, both located in the eastern flank of the Athabasca oil sands in northeast Alberta. EnCana is the operator and managing partner of this joint venture. We expect to contribute $7.5 billion, plus accrued interest, to the joint venture over a 10-year period beginning in 2007. This interest-bearing cash contribution obligation will be recorded as a liability on our first quarter 2007 balance sheet. Upon the closing in January, we made an initial contribution of $188 million to this joint venture.

WRB Refining LLC’s operating assets consist of our Wood River and Borger refineries, located in Roxana, Illinois, and Borger, Texas, respectively. This joint venture plans to expand heavy-oil processing capacity at these facilities from 60,000 barrels per day to approximately 550,000 barrels per day by 2015. Total crude oil throughput at these two facilities is expected to increase from the current 452,000 barrels per day to approximately 600,000 barrels per day over the same time period. We are the operator and managing partner of this joint venture. EnCana is expected to contribute $7.5 billion, plus accrued interest to the joint venture over a 10-year period beginning in 2007. For the Wood River refinery, operating results will be shared 50/50 starting upon formation. For the Borger refinery, we are entitled to 85 percent of the operating results in 2007, 65 percent in 2008, and 50 percent in all years thereafter.