Shell Canada Limited

Shell Canada Limited

February 28, 1996

Mr. A. P Cox Vice. President

Newgate Resources Limited

#1030 520 5th Avenue S.W.

Calgary, Alberta T2P 3R7

Dear Mr. Cox:

In response to your request to comment on our company’s experience to date with the “Enercat” tool from Para-Tech Inc., the following brief summary has been prepared. The information presented is our initial field data, and as such is subject to considerable variability. This information is provided without warranty and is not an endorsement of the product and represents only the recent events surrounding our use of the Enercat tool.

The Enercat tool was first used at our thermal Oil Sands project at Peace River, Alberta, in May 1995, in a well which had a history of chronic pump failures (seizing) as a result primarily of scale build-up. This particular well was subject to pump failures within three to six weeks of start-up operation. After running the pump in with the Enercat tool in May, the pump was checked after three months of operation, and no scale was found. In addition, the Corod tubing which had previously had some scale build-up was observed to be clean. This pump continued in service and subesequently failed in November 1995, after approximately 6 months run time. Failure occurred after pumping at a gross fluid rate of double the design rate for the well for a period of several weeks.

Based on the positive initial experience, three additional wells were equipped with Enercat tools in August through November 1995, and these pumps are currently still performing. Our experience with all the wells using the tool is that our pump change frequency is significantly reduced to the point that we have not had any pump failures while operating within the design gross fluid rate for each application. In addition, we have seen significant improvements in the gross fluid production of these wells and consequently in the oil production.

We currently have four new tools on site which we are in the process of running in to other problem wells.