Governance Policies

Board Mandate
The Board of Directors has approved and adopted an informal verbal mandate, which includes, among other duties and responsibilities: to approve and monitor the strategic, business and financial plans of the Corporation; to supervise performance and succession planning of senior officers; to assess the principal risk factors relating to the business of the Corporation; and to monitor and oversee the integrity of its financial reporting and disclosure. The Board of Directors is responsible for the overall stewardship of the Corporation, and for dealing with issues which are pivotal in determining the Corporation's strategy and direction. As part of the Board of Directors' mandate, the board meets a minimum of four times per year. The Board of Directors has put in place an effective system for monitoring the implementation of corporate strategies. The Board of Directors is not involved in the day-to-day operations of the Corporation, as these operations are conducted by the Corporation's management. The Board of Directors meets regularly to consider and approve the Corporation's strategic objectives, and management plans designed to accomplish those objectives. Where appropriate, key management personnel and professional advisors are invited to attend meetings to speak to these issues. The Board of Directors also meets, as necessary, to consider specific developments and opportunities as they arise, including asset acquisitions and dispositions and financing proposals. The Board of Directors approves, among other things, all issuances of securities of the Corporation, the appointment of officers, the entering into of lines of credit or other significant borrowing activities and all significant transactions. Every Director is required to act honestly, in good faith, and in the best interests of the Corporation; and to exercise the care, diligence and skill of a reasonably prudent person. Responsibilities not delegated to senior management or to a committee of the Board of Directors remain those of the full Board of Directors.

Position Descriptions
The Board of Directors does not have written position descriptions for the lead director of the Board of Directors or the Chair of each committee. As the lead director of the Board of Directors has significant senior executive experience, the Board of Directors does not believe that a written position description is necessary. Additionally, the Chair of each committee has extensive board and business experience. The Board of Directors has not developed a written position description for the Chief Executive Officer of the Corporation.

The Board of Directors is actively involved in discussing and approving the strategic direction of the Corporation. A principal responsibility of the Chief Executive Officer is to execute the strategic plan. The Board of Directors communicates its expectations to the Chief Executive Officer directly and monitors his performance.

Orientation and Continuing Education of Board Members
New board members receive an information package, which includes the Corporation's Internal Financial Control Document and Policies and Procedures for Information Technology Compliance, both for the purposes of Multilateral Instrument 52-109 – Certificate of Disclosure in Issuer's Annual and Interim Filings; the Corporation's internal policies, reports on operations and results; and public disclosure filings by the Corporation. Meetings of the Board of Directors are usually held at the Corporation's facilities and are combined with presentations by the Corporation's management and employees to give the directors additional insight into the Corporation's business. In addition, management of the Corporation makes itself available for discussion with all directors.

Compensation
The Nominating, Compensation and Corporate Governance Committee is responsible for reviewing annually (and other times if necessary) and making recommendations to the Board of Directors regarding: (a) management compensation policies, practices and overall philosophy; (b) the compensation of the Corporation's directors, management and consultants;(c) the granting of long-term incentive compensation to directors, management and consultants; (d) the evaluation of corporate and individual management and consultant performance from the previous year and longer-term results; (e) the overall level and type of compensation for staff; (f) all option awards; and (g) the executive compensation disclosure contained in the Corporation's information circular. In making these recommendations, the committee takes into account the time commitment, risks and responsibilities of each position and takes into account data from comparative surveys of similar sized Canadian corporations involved in the oil and gas industry.

Assessments
In 2010, the Board of Directors had no formal process to assess the effectiveness of the board, board committees or individual directors. The Board of Directors verbally reviewed at the end of 2010 the composition and performance of the board and committees, and determined that all are effective.