Reserves

The purpose of the Reserves Committee is to assist the Board in carrying out its responsibilities with respect to annual and interim reviews of the Corporation’s oil and natural gas reserves.

COMPOSITION

The Committee shall be comprised of at least three directors and shall be appointed annually, following the annual general meeting of the Corporation. At least one member shall have oil and gas operations expertise. A majority of the members shall be independent/unrelated. The Committee shall select or re-appoint a Chairman annually.

FINANCIAL AUTHORITY

The Committee may incur expenses without prior board approval up to a limit of $100,000 for any one occurrence to, among other things, hire consultants and conduct inspections.

MEETINGS

The Committee shall meet at least twice annually, and as deemed necessary in order to carry its duties effectively, and shall maintain minutes of each meeting.

DUTIES AND RESPONSIBILITIES

In carrying out its responsibilities, the Committee shall:

1. Review the Committee Charter annually and recommend changes when necessary.
2. Review Management’s annual assessment of the current independent evaluators, and, if deemed advisable, instruct Management to obtain bids from other evaluators.
3. Recommend to the Board the preferred independent evaluators and the terms of the engagement.
4. Review the Corporation’s procedures for providing information to the independent evaluator with respect to its oil and natural gas reserves.
5. Review the Corporation’s procedures relating to the disclosure of information with respect to its reserves and recommendation to the Board.
6. Review Management’s disclosure regarding the Corporation’s reserves to assist Management with the obligation to comply with regulatory and legal disclosure requirements.
7. Review the scope of the annual review of the reserves by the independent evaluator, including findings and any disagreements with management.
8. Approve which portion of the assets of the Corporation should be evaluated by the Corporation’s staff and the frequency of such evaluation.
9. Meet independently of management with the independent evaluator.
10. Determine whether any restrictions affect the ability of the independent evaluator to report on the Corporation’s reserve data.
11. Receive annually, a signed independent evaluator’s report and a certificate of compliance/due diligence from management.
12. Sign off on the year end reserve evaluation.
13. Recommend the approval of the Corporation’s annual reserves report by the Board of Directors and instruct management to ensure that such report was created in compliance wth all applicable disclosure requirements.
14. Generally ensure that all actions necessary have been taken to conform to regulatory and legal requirements.

ACCOUNTABILITY

The Committee Chairman shall present a verbal or written report regarding the Committee meetings/discussions at scheduled meetings of the Board.

TIMETABLE

The Committee’s work schedule will be as attached but may be amended, from time to time, by the Chairman of the Committee.

ANNUAL WORK PLAN

	J	F	M	A	M	J	J	A	S	O	N	D
Year end reserves evaluation
Review procedures
Review compliance
Review reserve data with Management and independent evaluator
Sign off on year end reserve evaluation
Receive Management’s Reserves Questionnaire responses
Reserve Analysis
Detailed year end reserve analysis
Detailed analysis of two major properties
Mid-year review of reserves data
Review procedures
Review compliance
Review reserve data with Management
Assess independent evaluators
Recommend appointment of the independent evaluators
Review preliminary results of yearend reserves evaluation
Review of Charter and Work Plan of the Committee