August 4 , 2009

The Fort Hills Project comprises oil sands Leases 008, 932 and 933 (the “Fort Hills Project Leases”) which cover a contiguous area of approximately 18,684 hectares (approximately 46,711 acres) and are located in north eastern Alberta, approximately 90 kilometres north of Fort McMurray and 500 kilometres northeast of Edmonton.

FORT HILLS PROJECT - Contingent Bitumen Resources*

UTS engaged Sproule Unconventional Limited to prepare an independent opinion of the contingent bitumen resources of UTS effective as of December 31, 2008. Sproule conducted a geological evaluation of the Fort Hills Project and also reviewed the methodology used to estimate these volumes based on the current mine plan. The results of the report are tabulated below.

* Contingent resources are defined in the Canadian Oil and Gas Evaluation Handbook (“COGEH”) as “those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies”. Please see UTS’ website or recent Annual Information Form filed on SEDAR for Forward Looking Statements.

FORT HILLS PROJECT - Project Engineering & Cost Estimates

The Fort Hills Partnership has agreed to defer indefinitely a decision on building the Sturgeon Upgrader. The degree of uncertainty surrounding the probability of realizing future benefits from costs incurred to engineer and design the upgrader has increased to a level which indicates that the majority of the upgrader costs incurred to date, with the exception of tangible items and land, be written off. The Company’s portion of the impairment expense, which was funded at 4%, totals $21,336,000.

A comprehensive cost reduction study for the mining and extraction portion of the Fort Hills Project has been carried out and focuses on the following areas:

• completeness and accuracy to ensure that no duplication is present;
• rebidding and negotiation of contracts to better reflect the current business environment; and
• examination of project scope, execution strategy and class of design.

Construction activities continue at the Fort Hills mine site at a much reduced level, using Fort Hills’ personnel and equipment and are focused on the completion of work that will not be impacted by a change in project configuration. The Alberta Government has extended the oil sands Lease 933, formerly Lease T05, and Lease 932, formerly Lease T52, for the Fort Hills Project through to 2019.

The availability of skilled personnel, particularly in respect of trades such as welders and electricians, is expected to present less of a challenge to the successful execution of major projects in Alberta over the near term. This change is expected to factor favourably into the revised cost estimate.

The cost estimate review of Phase I of a mine and bitumen extraction project of 160,000 barrels per day has made significant progress such that UTS expects a significant capital cost reduction. UTS believes that there is potential to reduce the costs of a stand-alone Phase I of a mine and bitumen extraction project of 160,000 barrels per day to between $8.0 billion and $10.0 billion (all costs being go-forward capital cost estimates excluding sunk costs of approximately $2.8 billion). UTS could have funding with available cash and remaining earn-in for almost three years or until the first quarter of 2012.

The integration of synergies with the existing Suncor facilities, potentially coupled with a smaller initial phase of one 80,000 barrels per day train is expected to further reduce the costs to first production. UTS believes that there is the potential to reduce the costs of a mine and bitumen extraction project of 80,000 barrels per day to between $5.0 billion and $6.5 billion (all costs being go-forward capital cost estimates excluding sunk costs of approximately $2.7 billion). UTS could potentially be potentially funded by available cash and remaining earn-in.

The purpose of two above noted UTS projections is to demonstrate UTS’ funding requirements. Investors should not rely on these projections for any other purpose. Given the current status of the Fort Hills Project, UTS believes sanction could be delayed to mid 2010 and that first bitumen production will occur in the fourth quarter of 2014.

FORT HILLS PROJECT – Regularly Activities

The major permits and approvals to proceed with development of mine and bitumen production facilities with production of up to 190,000 barrels per day of partially de-asphalted bitumen were granted by the Government of Alberta in December 2002.

In December 2006, PCOSI, on behalf of the Fort Hills Partnership, filed an application with the Energy Resources Conservation Board (“ERCB”) and Alberta Environment (“AENV”) to construct, operate and reclaim a 340,000 barrels per day oil sands bitumen upgrader referred to as the Sturgeon Upgrader. Formal regulatory approval was received from the ERCB on March 30, 2009. The approval for the upgrader expires by December 31, 2010 unless an extension is approved. The Fort Hills Partnership will need to determine if it is worthwhile to retain this approval.

On July 27, 2007, PCOSI filed a revised application with the ERCB and AENV to amend the existing mine approval to be consistent with the FEED design basis and extend the life of the mine. On April 1, 2009, the Alberta Government issued conditional approval for most aspects of the proposed mine amendment. Expansion of the mine plan and an increase in the total recoverable resource is conditional on submission and approval of a revised mine plan, coupled with an assessment of the environmental effects, both to be submitted prior to December 31, 2009. PCOSI requested a one year extension to this date in order to allow
sufficient time for additional mine planning to occur.

Amended operating approvals under the Environmental Protection and Enhancement Act and the Water Act for the Fort Hills mine were issued by AENV on May 15, 2009.

In March of 2009, PCOSI, on behalf of the Fort Hills Partnership agreed with Alberta Energy on a Fort Hills Lease Substitution Agreement to replace Lease T05 with Lease 933 and Lease T52 with Lease 932 and remove the development milestones that were previously associated with the original Oil Sands Lease Agreements. The extension and removal of milestones was provided in exchange for a commitment to upgrade bitumen production within Alberta from Phase II of the Fort Hills Project. Under the terms of the Fort Hills Lease Substitution Agreement, the upgrading commitment for bitumen from Phase II could be satisfied by direct ownership of facilities, equity in a corporate body, trust or partnership, or joint venture, or an agreement, having a fixed term of 10 years or longer, securing upgrading capacity in an Alberta upgrader. The terms of the new leases will run through to July 31, 2019. In the event that the Fort Hills Project does not meet the terms of the Fort Hills Lease Substitution Agreement, the Fort Hills Partnership will pay the Province of Alberta damages for lost provincial revenue that could total $500 million.

FORT HILLS PROJECT – Funding

The deferral of Fort Hills Project work has been reflected in the revised capital expenditure forecast of approximately $360 - $400 million for 2009 on a gross basis, with the UTS share being in the range of $18 - $20 million. The Fort Hills Partnership has only approved $339 million of the 2009 budget at this stage and UTS believes that continued downward pressure on costs and expenditure will result in total expenditure for the year less than $400 million.

UTS, Teck and Suncor are respectively committed to pay $0.350 billion, $2.225 billion and $4.925 billion of the first $7.500 billion to fully earn their share of the Fort Hills Project. Given the following inputs, UTS forecasts that Fort Hills Project funding from the earn-ins will extend until at least the first quarter of 2012:

• Fort Hills Partnership’s near term decision to approve a 160,000 barrels per day mining and extraction project;
• Fort Hills Partnership's capital forecast for 2009;
• UTS’ analysis of the preliminary capital estimate for the Fort Hills Project; and
• UTS’ expectations with respect to overall project budget reductions

This potentially provides UTS with funding for almost three years of project expenditures assuming mid 2010 sanction. UTS expects that sanctioning of the Fort Hills Project will occur once commodity prices and financial markets stabilize, and with the recently approved Petro- Canada and Suncor merger.

FORT HILLS PARTNERSHIP LEASES
(Leases 437, 438 and 634)

In addition to the leases that make up the Fort Hills Project, the Fort Hills Partnership holds Leases 437, 438 and 634 to the northeast of the Fort Hills Project Leases with a total area of 14,400 acres. UTS’ working interest is 20 percent. During the 2005/2006 and 2006/2007 winter drilling seasons, a total of 99 core holes were drilled to assess the resource potential of these leases.

The results of this program suggest that the resource potential of these leases is limited. As such, these leases are expected to provide additional planning flexibility for the development of the Fort Hills Project Leases. Several options are being considered by the Fort Hills Partnership.

For Further Details on the Fort Hills Project