Notices

COMPANION POLICY 51-101CP STANDARDS OF DISCLOSURE FOR OIL AND GAS ACTIVITIES

TABLE OF CONTENTS PART 1. APPLICATION AND TERMINOLOGY 1.1 Supplements other Requirements 1.2 Materiality Standard 1.3 When Does NI 51-101 First Apply to a Reporting Issuer? 1.4 SPEE Standards 1.5 FASB Standard and Other FASB Statements 1.6 Qualified Evaluator Professional Membership 1.7 Use of Information by Others

PART 2. MEASUREMENT 2.1 Proved Reserves and Proved Oil and Gas Reserve Quantities 2.2 Forecast Prices and Costs 2.3 Constant Prices and Costs 2.4 Probability of Recovery 2.5 Consistency of Timing 2.6 Future Income Tax Expenses PART 3. RESPONSIBILITIES OF REPORTING ISSUERS AND DIRECTORS 3.1 Reserves Committee 3.2 Responsibility for Disclosure PART 4. REQUIREMENTS APPLICABLE TO ALL DISCLOSURE 4.1 Scope of Part 4 of NI 51-101 4.2 Estimates of Fair Value 4.3 Negative Assurance 4.4 Supporting Filings PART 5. ANNUAL FILING REQUIREMENTS 5.1 Annual Filings on SEDAR 5.2 Inapplicable or Immaterial Information 5.3 Use of Forms 5.4 Annual Information Form 5.5 Reservations in Independent Qualified Evaluators' Reports 5.6 Negative Assurance by Qualified Evaluator PART 6. MATERIAL CHANGE DISCLOSURE 6.1 Changes from Filed Information - i -

PART 7. INDEPENDENCE OF PROFESSIONALS 7.1 Independence of Qualified Evaluator 7.2 Unacceptable Qualified Evaluators or Valuators PART 8. EXEMPTIONS 8.1 Scope of Possible Exemptions 8.2 Exemption from Requirement for Independent Qualified Evaluator 8.3 Exemption from Requirement for Certain Reserves Data 8.4 Stacking of Exemptions APPENDIX - TERMINOLOGY AND STANDARDS Part 1. Definitions Part 2. Reserves Terminology and Classifications 2.1 Meaning of Reserves 2.2 Primary Classifications of Reserves 2.3 Development and Production Status 2.4 Levels of Certainty Schedule 1 - FASB Standard Schedule 2 - Tar Sands Mining Disclosure

- ii -

COMPANION POLICY 51-101CP STANDARDS OF DISCLOSURE FOR OIL AND GAS ACTIVITIES

This Companion Policy sets out views of the Canadian Securities Administrators (the "CSA") as to the manner in which National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") should be interpreted and how the securities regulatory authorities or regulators may exercise their discretion in respect of certain applications for exemptions from provisions of NI 51-101 1 . PART 1. APPLICATION AND TERMINOLOGY 1.1 Supplements other Requirements - NI 51-101 supplements other continuous disclosure requirements that apply to reporting issuers in all business sectors.

1.2 Materiality Standard - Section 1.2 of NI 51-101 states that NI 51-101 applies only in respect of information that is material.

NI 51-101 does not require any disclosure or filing of information that is not material. If information is not required to be disclosed because it is not material, it is unnecessary to disclose that fact.

Materiality for the purposes of NI 51-101 is a matter of judgement to be made in light of the circumstances, taking into account both qualitative and quantitative factors, and assessed in respect of the reporting issuer as a whole.

The reference in subsection 1.2(2) of NI 51-101 to a "reasonable investor" denotes an objective test: would a notional investor, broadly representative of investors generally and guided by reason, be likely to be influenced, in making an investment decision to buy, sell or hold a security of a reporting issuer, by an item of information or an aggregate of items of information. If so, then that item or aggregate of items of information is "material" in respect of that reporting issuer.

1 For the convenience of readers, the Appendix to Companion Policy 51-101CP sets out the meanings of terms that are printed in italics in this Companion Policy (except words in italicized titles of documents, or in the forms of report set out in Part 9 which are printed entirely in italics) or in NI 51-101, Form 51-101F1, 51-101F2 or Form 51-101F3.

- 2 -This concept of materiality is consistent with the concept of materiality applied in connection with financial reporting pursuant to the Handbook of the CICA.

1.3 When Does NI 51-101 First Apply to a Reporting Issuer? - Part 9 of NI 51-101 specifies both the date on which NI 51-101 comes into force (section 9.1) and the timing of its first application to a reporting issuer (section 9.2). The two dates differ. NI 51-101 comes into force on [January 1, 2003]. That does not, however, itself trigger any immediate filing or other requirements for reporting issuers.

Section 9.2 of NI 51-101 in effect establishes a transition period, after the CSA announce their adoption of NI 51-101 and for a period after NI 51-101 itself comes into force, during which reporting issuers are expected to prepare for compliance with NI 51-101. The date on which they first become subject to the requirements of NI 51-101 will vary depending on their financial year-ends and, in some cases, on whether or not they choose to enter the NI 51-101 disclosure system earlier than required.

The first annual filings under Part 5 of NI 51-101 will be due at the same time as a reporting issuer is required to file its audited annual financial statements for its financial year that includes, or ends on, December 31, 2002. Those first annual oil and gas filings will include reserves data and other information that must be prepared as at the last day of that financial year and for that financial year. Some of this information will date back to the beginning of that financial year.

The other provisions of NI 51-101, including requirements relating to public disclosure generally and to material change 2 disclosure in particular, will apply to a reporting issuer only after it has filed its first annual oil and gas disclosure under Part 5, or the deadline for that filing, whichever is earlier.

The following examples, summarized in the table below, illustrate the effect of Part 9: · A reporting issuer with a financial year that coincides with the calendar year will be required to make its first annual oil and gas disclosure filing under Part 5 in the first 140 days of 2003, by May 20, 2003. The reserves data and other information included in that filing must be prepared as at December 31, 2002 and for the year ended on that date.

The other provisions of NI 51-101 will begin to apply to the reporting issuer as soon as it makes its first filing under Part 5, or on May 20, 2003, whichever occurs first.

2 "Material change" has the meaning ascribed to the term under current securities legislation in the jurisdiction.

- 3 -· A reporting issuer with a financial year that ends on June 30 will be required to make its first annual oil and gas disclosure filing under Part 5 within 140 days after June 30, 2003, by November 17, 2003. The reserves data and other information included in that filing must be prepared as at June 30, 2003 and for the financial year ended on that date.

The other provisions of NI 51-101 will begin to apply to the reporting issuer as soon as it makes its first filing under Part 5, or on November 17, 2003, whichever occurs first.

Financial Year-End December 31

June 30 November 17, 2003 (data for the year ended June 30, 2003)

Because the first annual filing must include information from the beginning of the financial year that includes or ends on December 31, 2002, reporting issuers should familiarize themselves with NI 51-101 and begin gathering information well before NI 51-101 applies to them.

1.4 SPEE Standards (1) Paragraph 2.2(1)(a) of NI 51-101 mandates adherence to SPEE standards in estimating reserves data and related information. Section 4.2 of NI 51-101 requires that public oil and gas disclosure be consistent with SPEE standards.

(2) Important terminology developed by the Canadian Institute of Mining, Metallurgy & Petroleum (CIM), including reserves categories and related definitions, is incorporated in the SPEE Handbook which, pursuant to subsection 1.3(2) of NI 51-101, applies for purposes of NI 51-101. The Appendix to this Companion Policy sets out certain of these and other terms used in NI 51-101.

(3) With a view to maintaining consistency between the relevant standards of NI 51-101 and the SPEE Handbook, the CSA will monitor any proposal by the SPEE to amend the SPEE Handbook. The CSA will consider whether such an amendment should also apply for purposes of NI 51-101, which would likely be the case unless the CSA consider a proposed change to be inappropriate.

First Annual Filing Deadline May 20, 2003 (data for the year ended

- 4 -Unless and until the CSA implement a change made by the SPEE to the SPEE Handbook, such a change will not apply for purposes of NI 51-101.

1.5 FASB Standard and Other FASB Statements - NI 51-101 and the related forms refer to standards established by the FASB, notably FAS 19, FAS 69 and the FASB Standard. In accordance with the definitions of FAS 19 and FAS 69 in the Appendix to NI 51-101, references in NI 51-101 to any of these standards include changes from time to time made to such standards by the FASB. Users of those standards should consult FASB publications.

In accordance with the definition of FASB Standard in the Appendix to NI 51-101, references in NI 51-101 to the FASB Standard also include changes from time to time made by the FASB. The text of the FASB Standard as at [October 15, 2001] is reproduced in Schedule 1 to the Appendix to this Companion Policy. CSA staff will from time to time publish notice of changes made by the FASB to the FASB Standard.

1.6 Qualified Evaluator Professional Membership - One of the elements of eligibility to act as a qualified evaluator for purposes of NI 51-101 is membership in a self-regulatory organization of engineers, geologists, other geoscientists or other professionals (clause (ii) of the definition of qualified evaluator in the Appendix to NI 51-101, or clause (b) of the definition as it appears in the Appendix to this Companion Policy). Upon the coming into force of NI 51-101, each of the following organizations in Canada is an acceptable self-regulatory organization for this purpose:

· Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA) · Association of Professional Engineers and Geoscientists of the Province of British Columbia (APEGBC) · Association of Professional Engineers and Geoscientists of Saskatchewan (APEGS) · Association of Professional Engineers and Geoscientists of Manitoba (APEGM) · Professional Engineers of Ontario (PEO) · Ordre des ingenieurs du Québec (OIQ) · Ordre des Géologues du Québec (OGQ) · Association of Professional Engineers of Prince Edward Island (APEPEI) · Association of Professional Engineers and Geoscientists of New Brunswick (APEGNB) · Association of Professional Engineers of Nova Scotia (APENS) · Association of Professional Engineers and Geoscientists of Newfoundland (APEGN) · Association of Professional Engineers of Yukon (APEY) · Association of Professional Engineers, Geologists & Geophysicists of the Northwest Territories (NAPEGG) (representing the Northwest Territories and Nunavut Territory)

- 5 -Membership in such a body is a precondition to being a qualified evaluator but is not alone sufficient for that purpose. Reporting issuers should ensure that any person they appoint under section 3.2 of NI 51-101 as an independent qualified evaluator has, in addition to the requisite professional standing and independence, training and experience that are consistent with the SPEE standards and relevant to the particular reserves data to be reported upon.

Membership in a professional organization outside Canada does not currently satisfy the requirements of NI 51-101. A reporting issuer can apply under Part 8 of NI 51-101 for an exemption that would enable the reporting issuer to treat an individual who is a member of a foreign professional organization, and who has other satisfactory qualifications and experience, as a qualified evaluator. The CSA are also willing to consider whether particular foreign professional organizations should be accepted for purposes of NI 51-101 generally. In considering any such application or acceptance, the securities regulatory authorities or regulators are likely to take into account the degree to which a foreign professional organization's authority or recognition, admission criteria, standards, and disciplinary powers and practices are similar to, or differ from, those of organizations listed above.

1.7 Use of Information by Others - NI 51-101 requires that information relating to oil and gas activities and the extraction of hydrocarbons from shale, tar sands or coal be filed with securities regulatory authorities both as a source of information, and to support other disclosure concerning those activities, to assist the public and analysts in making investment decisions and recommendations.

The CSA encourage registrants 3 and other persons and companies that wish to make use of information concerning these activities of a reporting issuer, including reserves data, to review the information filed on SEDAR under NI 51-101 by the reporting issuer and, if they are summarizing or referring to this information, to use the applicable terminology prescribed under NI 51-101.

PART 2. MEASUREMENT 2.1 Proved Reserves and Proved Oil and Gas Reserve Quantities - The CSA understand from the SPEE that an estimate of quantities of proved reserves prepared using constant prices and costs and applying SPEE standards would, in all material respects, satisfy the requirements of the FASB Standard for the estimation of proved oil and gas reserve quantities.

The CSA understand, however, that the reverse might not be true in all circumstances. 3 "Registrant" has the meaning ascribed to the term under current securities legislation in the jurisdiction.

- 6 -2.2 Forecast Prices and Costs - Forecast prices and costs are defined in the SPEE Handbook. Except to the extent that the reporting issuer is legally bound by fixed or presently determinable future prices or costs, forecast prices and costs are future prices and costs "generally recognized as being reasonable".

The CSA do not consider that future prices or costs would satisfy this requirement if they fall outside the range of forecasts of comparable prices or costs used, as at the same date, for the same future period, by major independent qualified evaluators.

2.3 Constant Prices and Costs - Constant prices and costs are discussed in the FASB Standard. In general, they are prices and costs that are assumed not to change, but rather to remain constant, throughout the life of a property, except to the extent of any fixed or presently determinable future prices or costs to which the reporting issuer is legally bound by contract or otherwise, including those for an extension period of a contract that is likely to be extended.

2.4 Probability of Recovery - Paragraph 2.2(1)(g) of NI 51-101 provides that estimates of proved oil and gas reserve quantities are to reflect a high degree of certainty of recovery by targeting a 90 percent probability that at least the estimated quantities will be recovered. Unless the estimation is made using the probabilistic method, this probability will be based on the qualified evaluator's professional judgement rather than being supported by a mathematical determination.

2.5 Consistency of Timing - Subsection 2.2(2) of NI 51-101 requires consistency in the timing of recording the effects of events or transactions for purposes both of annual financial statements and annual reserves data disclosure.

The fact that the effective date of information (for example, "as at and for the financial year ended on December 31, 20XX") is the same for a reporting issuer's annual financial statements and the statement filed under item 1 of section 5.1 of NI 51-101 does not by itself satisfy the requirement in subsection 2.2(2).

For example, an acquisition or sale of a property that is recorded in the reporting issuer's financial statements for the financial year ended on December 31, 20XX should also be given effect to in its reserves estimates prepared with the same effective date. For this purpose, something is "recorded" if it is reflected in the amounts set out in the body of the financial statements, rather than only being disclosed in a footnote to the financial statements.

However, an acquisition or sale not recorded in the financial statements for the financial year ended on December 31, 20XX, even if the acquisition or sale is disclosed in a footnote to the financial statements or has been publicly disclosed in some other fashion, should not be given effect to in the reserves estimates prepared as at that effective date.

- 7 -To ensure that the effects of events or transactions are recorded, disclosed or otherwise reflected consistently (in respect of timing) in all such documents, a reporting issuer will wish to ensure that both its auditors and its qualified evaluators, as well as its directors, are kept apprised of relevant events and transactions.

2.6 Future Income Tax Expenses - In estimating future net revenue or the standardized measure, estimated future income tax expenses (computed in accordance with the FASB Standard) are deducted.

The CSA consider that, for this purpose, future income tax expenses should be estimated year-by-year:

(a) making appropriate allocations of estimated unclaimed costs and losses carried forward for tax purposes, among oil and gas producing activities or the extraction of hydrocarbons from shale, tar sands or coal, and other business activities;

(b) without deducting estimated future costs (for example, Crown royalties) that are not deductible in computing taxable income; and

(c) taking into account estimated tax credits and allowances (for example, royalty tax credits).

PART 3. RESPONSIBILITIES OF REPORTING ISSUERS AND DIRECTORS 3.1 Reserves Committee - Section 3.4 of NI 51-101 enumerates certain responsibilities of the board of directors of a reporting issuer in connection with oil and gas disclosure.

The CSA believe that certain of these responsibilities can in many cases be better fulfilled by a smaller group of directors who bring particular experience or abilities to the task.

Section 3.5 of NI 51-101 permits a board of directors to delegate these responsibilities (other than the responsibility to approve the content or filing of certain documents) to a committee of directors, a majority of whose members are independent of management. Although section 3.5 is not mandatory, the CSA encourage reporting issuers and their directors to adopt this approach.

3.2 Responsibility for Disclosure - NI 51-101 requires the involvement of an independent qualified evaluator in preparing or reporting on certain oil and gas information disclosed by a reporting issuer, and in section 3.2 mandates the appointment of an independent qualified evaluator to report on reserves data.

- 8 -The CSA do not intend, and do not believe, that either the requirements in NI 51-101 for involvement of an independent qualified evaluator, or compliance with those requirements:

(a) relieve the reporting issuer of responsibility for information disclosed by it, including information filed by it under Part 5 of NI 51-101; or

(b) by themselves constitute or demonstrate reasonable investigation, on the part of the reporting issuer or its directors or officers, as to the accuracy and completeness of disclosure by the reporting issuer.

PART 4. REQUIREMENTS APPLICABLE TO ALL DISCLOSURE 4.1 Scope of Part 4 of NI 51-101 - Part 4 of NI 51-101 imposes requirements and restrictions that apply to all disclosure (or, in some cases, all written disclosure) described in section 4.1. Part 4 applies to disclosure that is either:

· filed by a reporting issuer with the securities regulatory authority; or · if not filed, otherwise made to the public or made in circumstances in which, at the time of making the disclosure, the reporting issuer expects, or ought reasonably to expect, the disclosure to become available to the public.

As such, Part 4 applies to a broad range of disclosure including: · the annual filings required under Part 5 of NI 51-101; · other continuous disclosure filings, including material change reports (which themselves may also be subject to Part 6 of NI 51-101);

· public disclosure documents, whether or not filed, including news releases; · public disclosure made in connection with a distribution of securities, including a prospectus; and

· except in respect of provisions of Part 4 that apply only to written disclosure, public speeches and presentations made by representatives of the reporting issuer on behalf of the reporting issuer.

For these purposes, the CSA consider written disclosure to include any writing, map or other printed representation whether produced, stored or disseminated on paper or electronically.

- 9 -To ensure compliance with the requirements of Part 4, the CSA encourage reporting issuers to involve a qualified evaluator, or other professional who is familiar with SPEE standards, in the preparation, review or approval of all such oil and gas disclosure.

4.2 Estimates of Fair Value - Section 4.9 of NI 51-101 sets out requirements applicable to disclosure of certain estimates of fair value -- for example, an estimate of fair value of an oil and gas prospect.

Such an estimate must, unless paragraph 4.9(2)(a) applies, satisfy the requirements of paragraph 4.9(2)(b), which among other things requires that the estimate have been prepared or agreed to by a professional valuator. The CSA do not consider that such an estimate would be an appropriate basis for disclosure if it is prepared or agreed to as at a date more than 6 months before the date of the disclosure.

The three-part range of values required under subparagraph 4.9(2)(b)(ii) should consist of a reasonable low value reflecting a pessimistic estimate, a reasonable middle value reflecting the most likely estimate, and a reasonable high value reflecting an optimistic estimate, with each such value being estimated by a professional valuator in accordance with applicable professional standards based on the course of action that the valuator reasonably expects the reporting issuer to follow.

In circumstances in which paragraph 4.9(2)(b) applies, in order to ensure that the reporting issuer is not making public disclosure of misleading information, the CSA expect the reporting issuer to provide all relevant information to the valuator to enable the valuator to prepare the estimate and provide the report referred to in that paragraph.

4.3 Negative Assurance - The CSA are of the view that a report of a qualified evaluator that is based on or conveys only negative assurance -- for example, a statement to the effect that “Nothing has come to my attention which would indicate the reserves data have not been prepared in accordance with principles and definitions established by the SPEE” --can be misinterpreted as providing a higher degree of assurance than intended or warranted.

The CSA believe that reporting issuers should avoid making any public disclosure of, or based on, such a report. In the rare case, if any, in which there are compelling reasons for making such disclosure, the CSA believe that, to avoid providing information that could be misleading, the reporting issuer should include in such disclosure useful explanatory and cautionary statements. Such statements should explain the limited nature of the work undertaken by the qualified evaluator and the limited scope of the assurance expressed, noting that it does not amount to a positive opinion.

4.4 Supporting Filings - Part 4 of NI 51-101 requires that certain information, if disclosed publicly, must be supported by consistent information in a supporting filing.

- 10 -The definition of "supporting filing" in the Appendix to NI 51-101 does not specify any particular type of document, nor a maximum age or an expiry date for any such document. If the information in a filed document has not been rendered inaccurate or misleading by events subsequent to its filing, the document can continue to serve as a supporting filing.

Part 6 of NI 51-101 requires that reports of material changes include, in certain circumstances, information concerning the effect that the material change would, but for the timing of its occurrence, have had on information in an annual filing under Part 5.

The CSA do not consider that a document filed under Part 5 of NI 51-101 would cease to qualify as a supporting document merely by reason of the occurrence of a material change referred to in Part 6 of NI 51-101, provided that the material change disclosure required by Part 6 is filed.

PART 5. ANNUAL FILING REQUIREMENTS 5.1 Annual Filings on SEDAR - The information required under section 5.1 of NI 51-101 must be filed electronically on SEDAR. Consult National Instrument 13-101 SEDAR and the current CSA SEDAR Filer Manual for information about filing documents electronically.

5.2 Inapplicable or Immaterial Information - Section 5.1 of NI 51-101 does not require the filing of any information, nor a reference to information or to a disclosure requirement, even if specified in NI 51-101 or in a form referred to in NI 51-101, if that information is inapplicable or not material in respect of the reporting issuer. See section 1.2 of this Companion Policy for a discussion of materiality.

If an item of prescribed information is not disclosed because it is inapplicable or immaterial, it is also unnecessary to state that fact or to make reference to the disclosure requirement.

5.3 Use of Forms - Section 5.1 of NI 51-101 requires the annual filing of information set out in Form 51-101F1 and reports in accordance with Form 51-101F2 and Form 51-101F3.

NI 51-101, and the instructions within each form, give the reporting issuer considerable flexibility in presenting this information for filing, provided that all required information is filed. It is not necessary to identify any of the information by form name or number or title, to include the headings or numbering, or to follow the ordering of items, in the forms.

Information presented once in documents filed under Part 5 need not be repeated in other documents filed under Part 5 at the same time, with one exception: reserves data are to be disclosed together (Item 2.1 of Form 51-101F1) in a complete, concise presentation, even if parts of that information are also presented elsewhere.

- 11 -The information specified in all three forms, or any two of the forms, can be combined in a single document. A reporting issuer may wish to include statements indicating the relationship between documents or parts of one document. For example, the reporting issuer may wish to accompany the report of the independent qualified evaluator (Form 51-101F2) with a reference to the reporting issuer's disclosure of reserves data (Item 2.1 of Form 51-101F1), and vice versa.

The report of management in Form 51-101F3 may be combined with management's report on financial statements, if any, in respect of the same financial year.

5.4 Annual Information Form - Section 5.3 of NI 51-101 permits reporting issuers to satisfy the requirements of section 5.1 of NI 51-101 by presenting the information required under section 5.1 in an annual information form.

The annual information form can be in Form 44-101F1 AIF if it is a "current AIF" under National Instrument 44-101 Short Form Prospectus Distributions, or if it is filed for other purposes such as Ontario Securities Commission Rule 51-501 AIF and MD&A, section 159 of the Regulation under the Securities Act (Québec) or Multilateral Instrument 45-102 Resale of Securities.

The annual information form can also be a current annual report on Form 10-K or Form 20-F under the United States Securities and Exchange Act of 1934, if the reporting issuer is eligible to file such a report.

An annual information form containing the information required under section 5.1 need not be filed twice (that is, once as an AIF and again under section 5.1). However, as a convenience to the public, the CSA urge reporting issuers who rely on section 5.3 to file on SEDAR, under the category for the section 5.1 filings, a statement directing readers to the annual information form. This statement could be a copy of the news release mandated by section 5.2 of NI 51-101.

5.5 Reservations in Independent Qualified Evaluators' Reports - A report of an independent qualified evaluator on reserves data will not satisfy the requirements of item 2 of section 5.1 of NI 51-101 if the report contains a reservation, the cause of which can be removed by the reporting issuer (subsection 5.4(2)).

The CSA do not generally consider time and cost considerations to be causes of a reservation that cannot be removed by the reporting issuer.

A report containing a reservation may, however, be acceptable if the reservation is caused by a limitation in the scope of the evaluator’s evaluation or audit resulting from an event that clearly limits the availability of necessary records and which is beyond the control of the reporting issuer. This could be the case if, for example, necessary records have been

- 12 ­inadvertently destroyed and cannot be recreated or if necessary records are in a country at war and access is not practicable.

5.6 Negative Assurance by Qualified Evaluator - A qualified evaluator conducting a review may wish to express only negative assurance -- for example, in a statement such as “Nothing has come to my attention which would indicate that the reserves data have not been prepared in accordance with principles and definitions established by the SPEE”.

As discussed above in section 4.3 of this Companion Policy, in respect of public disclosure generally, the CSA are of the view that such statements can be misinterpreted as providing a higher degree of assurance than intended or warranted.

The CSA believe that a statement of negative assurance would constitute so material a departure from the report prescribed in Form 51-101F2 as to fail to satisfy the requirements of item 2 of section 5.1 of NI 51-101.

PART 6. MATERIAL CHANGE DISCLOSURE 6.1 Changes from Filed Information - Part 6 of NI 51-101 requires the inclusion of specified information in disclosure of certain material changes.

The information to be filed each year under Part 5 of NI 51-101 is prepared as at, or for a period ended on, the reporting issuer's most recent financial year-end. That date is the effective date referred to in subsection 6.1(1) of NI 51-101. When a material change occurs after that date, the filed information may no longer, as a result of the material change, convey meaningful information, or the original information may have become misleading in the absence of updated information. . Part 6 of NI 51-101 requires that the disclosure of the material change include a discussion of the reporting issuer's reasonable expectation of how information that had been filed under Part 5 would differ, had the material change occurred before rather than after that original information was prepared.

This material change disclosure can reduce the likelihood of investors being misled, and maintain the usefulness of the original filed oil and gas information when the two are read together.

PART 7. INDEPENDENCE OF PROFESSIONALS 7.1 Independence of Qualified Evaluator - "Independence", in respect of the relationship between a reporting issuer and a qualified evaluator engaged to evaluate, review or audit

- 13 ­reserves data or other reserves information, is defined in the Appendix to NI 51-101 as having the meaning ascribed to the term in the SPEE standards.

Under the SPEE standards, a qualified evaluator would generally be considered to be independent of a client reporting issuer when the qualified evaluator neither has, nor expects to receive, a direct or indirect interest in either a property to be evaluated or reported on, or in securities of the client or of an affiliate of the client.