A Compelling Case' A Clear Vision'

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Unconventional Natural Gas

• A Compelling Case. A Clear Vision.
• August 2006

SPI
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• DISCLOSURE STATEMENT
• The corporate information contained in this
  presentation contains forward-looking forecast
  information. The reader is cautioned that
  assumptions used in the preparation of such
  information, although considered reasonably
  accurate by Canadian Spirit Resources Inc. (CSRI)
  at the time of preparation, may prove to be
  incorrect. The actual results achieved during the
  forecast period will vary from the information
  provided herein and the variations may be
  material. Consequently, there is no
  representation by CSRI that actual results
  achieved during the forecast period will be the
  same in whole or in part as those forecast.

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Overview

• Unconventional natural gas One of the
  fastest-growing sectors of North America's energy
  industry
• Canadian Spirit Resources Focused on developing
  1.0 tcf of unconventional natural gas from coal
  (NGC)
• A huge resource play Farrell Creek, northeast
  British Columbia, 40,000 acres, 94 (average)
  owned by CSRI, 80 of land includes deep rights,
  30 million invested to date

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Current Status

• Seven test holes drilled and cased
• Two holes fracture-stimulated in the Gething
  Formation
• Both holes producing natural gas and water
• Dedicated a test hole to evaluate gas-bearing
  shales

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Resource Potential Farrell Creek

• Sproule Associates Limited Preliminary Report
• April 17, 2006
• Contingent gas-in-place resource potential
• Gething coals 12 16 bcf per section
• Gething shales 11 17 bcf per section
• Gates Moosebar shales 7 8 bcf per section

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Next Steps

• Measure production rates
• Develop pilot plan to drill and complete more
  test holes
• Focus on engineering, operational and marketing
  aspects of developing a commercial project

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Fast Facts
(As at June 5, 2006) ( Cdn)

• Shares outstanding 28.8 million
• Recent share price 2.25
• Market cap 65 million
• Land 62 sections (42,000 gross acres)
• Contingent resource
• Gething coals 12 16 bcf/section
• Gething shales 11 17 bcf/section
• Total contingent resource 1.4 2.0 tcf
• Estimated recovery rate 60
• Market cap / recoverable mcf 0.06 per mcf
• Largest shareholder Sprott Asset Management
  (18.8)
• (Sproule Associates, Apr 17/06, Gething
  Formation only, Farrell Creek, B.C.)

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Natural Gas from Coal (NGC)

• U.S. 10 years ahead of Canada
• Industry in Western Canada growing rapidly
• Production of unconventional gas similar to
  production of conventional gas
• Typically, to economically produce natural gas
  from coal, formation water must be removed first

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A Compelling Case

• NGC compared to conventional gas
• Coal can store up to 6 or 7 times more gas
• NGC well can have 3 times the life
• NGC recovery factors can be as high as 80

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A Clear Vision

• CSRI focused on unconventional gas, including NGC
• 2002 regional NGC assessment of WCSB
• Five-year plan explore for and develop 1.0 tcf
  of NGC within five years in an environmentally
  safe and responsible manner

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A Clear Vision (contd)

• Within four years
• Identified several large resource plays
• Assembled high working interest land position in
  northeast B.C.
• Began evaluating productive capability of
  principal resource property

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Coalbed Gas Potential in B.C.
CSRI area of interest
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Farrell Creek, NE B.C.
CSRI Test Area
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Farrell Creek Geology
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Resource Overview

• Gething Formation
• Multiple thin coal seams
• As many as 30 individual seams
• Net coal thickness 25 50 feet
• Gas content 230 550 scf/ton
• Contingent resource
• Coals 12 16 bcf/section
• Shales 11 17 bcf/section

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Resource Overview

• Moosebar/Gates (Shale Formation)
• Gas content 2.5 11 scf/ton
• Thickness 900 feet
• Cored 600 feet
• Additional prospects identified
• Bluesky, Cadomin, Halfway, Baldonnel,
  Doig/Montney
• Contingent resource
• Shales 7 8 bcf/section

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Farrell Creek Potential

• Land 62 sections
• Well spacing 4 8 wells per section
• Risked well locations 200 400
• Productivity per well 250 300 mcf/d
• Potential production 50 120 mmcf/d

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Farrell Creek 2006 Plan of Activities

• License 2 4 additional locations for summer
  drilling program
• Prepare and submit Feasibility Plan for
  provincial government approval
• Raise funds for pilot phase of production
• Drill, complete and test up to 4 additional wells
• Initiate application to tie-in to Duke Energy
  pipeline

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2006 Capital Program
( million Cdn)

• First Half (approved) 3.6
• Second Half (estimated) 9.0
• 12.6
• G A expense 1.4
• Net cash resources
• (Jan 1/06) 8.0

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Risks

• Farrell Creek productivity
• Equipment and service costs
• Commodity prices

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Strategic Advantages

• Resource knowledge and expertise of technical
  team
• Energy development experience of management and
  directors
• High working interest land position with multiple
  prospective targets

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In Summary

• Material land base of 62 sections
• 1.4 2.0 tcf (coals and shales, Gething only)
• Value/Market upside
• Additional potential (shallow and deep)
• Favorable commodity pricing
• 200 mmcf/d capacity in nearby Duke Energy pipeline

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A Compelling Case. A Clear Vision.

• A company with its eye on the prize
• 1.0 tcf of NGC

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• Canadian Spirit Resources Inc.
• Suite 1950, Ford Tower
• 633 6th Avenue S.W.
• Calgary, Alberta T2P 2Y5
• Telephone [phone]
• E-mail info_at_csri.ca
• TSX Venture SPI

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