Corporate Overview

Centaurus Energy is an independent international upstream oil and gas company whose main business activities include exploration, development and production of crude oil, natural gas liquids and natural gas.

David D. Tawil: Chief Executive Officer

David D. Tawil

William Schubin

Steven Balsam

Centaurus's strategy is to create value through the generation of a balanced portfolio of high quality oil and gas assets in proven hydrocarbon areas characterized by competitive fiscal terms and significant development potential.

Value creation for Centaurus is achieved by following some basic principles:

• Regional geographic focus - focus on those areas in which you have experience
• Focus on known oil and gas basins - increase prospectivity by being on trend with known discoveries and in close proximity to producing fields
• Underexplored areas - establish significant upside potential by securing large land positions in over-looked areas
• Low entry cost - manage capital commitments to minimize financing risk
• High working interests - secure high working interests and operatorship to control timing and development options
• High grade exploration areas - acquire new 3D seismic over prospective features
• Joint venture - manage capital exposure via joint ventures
• Drill high impact exploration and lower risk development targets
• Generate early cash flow - develop prospects that can generate good netbacks and early cash flow
• Develop new prospects - transition from exploration to development and utilize strong cash flow position to fund new projects

Corporate Governance: Mandate of the Board

Introduction to Stewardship Duties

The purposes and responsibilities outlined in this Mandate and accompanying Board materials are meant to serve as guidelines rather than inflexible rules and the Board may adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities.

The Board is responsible to shareholders and others for the stewardship of the Company. The Board is responsible to oversee management of the business affairs of the Company, as described, and to act with a view to the best interests of the Company, growing value and maximizing return to shareholders.

The Board has plenary power with respect to the Company. Any responsibility not delegated to management or a Committee of the Board remains with the Board.

General Legal Obligations of the Board

1. The Board is responsible for the following legal matters oversight:

1. overseeing management to ensure legal requirements have been met, and documents and records have been properly prepared, approved and maintained;
2. approving changes in the By-laws, Articles of Incorporation, matters requiring shareholder approval, and agendas for shareholder meetings; and
3. approving Centaurus's legal structure, names and brands, mission statement and vision statement, and any amendments thereto.

2. The following business matters are the responsibility of the Board generally:

1. the nomination for election, on recommendation of the Nomination and Corporate Governance Committee, directors who will represent the best interests of Centaurus, and also reflect the best interests of shareholders;
2. the acquisition of subsequent investments by the Company and the negotiation of management agreements respecting subsequent investments; and
3. any offering of securities of the Company including:
   
   
   
   1. the determination of any distribution record date other than the last date of each calendar year;
   2. the determination of any borrowing, issuing any guarantee, and granting any security and subordination; and
   3. the determination of the manner in which the Company shall exercise voting rights in respect of any securities owned by the Company;
   
   
4. all required administrative services of the Company , including, without limitation:
   
   
   
   1. the retention and monitoring, on behalf of the Company, of the transfer agent and other organizations serving the Company;
   2. the authorization and payment on behalf of the Company of operation expenses incurred on behalf of the Company;
   3. the preparation of accounting, management and other reports (including quarterly and annual reports to shareholders of the Company, financial statements, tax reporting to shareholders of the Company and income tax returns);
   4. keeping and maintaining the books and records of the Company and the supervision of compliance by the Company with record keeping requirements under applicable regulatory regimes;
   5. the calculation of the amount, and the determination of the frequency, of distributions by the Company;
   6. the handling of communications and correspondence with shareholders of the Company and the preparation of notices of distributions to shareholders of the Company;
   7. responding to investors' enquiries and general investor relations in respect of the Company;
   8. dealing with banks and other institutional lenders, including in respect of the maintenance of bank records and the negotiation and securing of bank financing or refinancing of one or more credit or debt facilities, hedging or swap facilities or other ancillary facilities;
   9. the preparation of the Company's reports to relevant securities regulatory authorities and any similar organization of any government or the committee of any stock exchange to which the Company is obligated to report and to otherwise deal with any such regulatory authorities;
   10. the organization of meetings of shareholders of the Company; and
   11. the provision of such other administrative services as may be reasonably required for the ongoing business and administration of the Company;
   
   
5. to oversee the management of the business and affairs of Centaurus including the relationships among the Company and their respective affiliates with their executives, affiliates, shareholders, Directors and Officers;
6. to act honestly and in good faith with a view to the best interests of Centaurus;
7. to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances;
8. to act in accordance with its obligations contained in the Business Corporations Act (Alberta), the Securities Act of each province and territory of Canada, other relevant legislation, regulations and policies, and the Company's Articles and By-laws;
9. in particular, it should be noted that the following matters must be considered by the Board as a whole:
   
   
   
   1. submit to the shareholders of the Company any question or matter requiring the approval of the shareholders of the Company;
   2. fill a vacancy among the Directors or in the office of auditor;
   3. issue securities except in the manner and on the terms permitted by law and authorized by the Board;
   4. declare dividends;
   5. purchase, redeem or otherwise acquire shares issued by the Company;
   6. the payment of a commission to any person in consideration of that person purchasing or agreeing to purchase shares of the Company;
   7. approve management proxy circulars;
   8. approve take-over bid circulars or Directors' circulars;
   9. approve any financial statements; or
   10. adopt, amend or repeal By-laws of the Company.
   
   

Composition and Board Organization

Nominees for Directors are initially considered and recommended by the Nomination and Corporate Governance Committee of the Board, approved by the entire Board and appointed annually by the Company in accordance with the direction given to the Company by vote of the shareholders of the Company.

The Board will maintain an appropriate number of independent Directors to perform their duties and responsibilities. A majority of Directors comprising the Board must qualify as "independent" Directors in accordance with the definition of "independent" Director from time to time under the requirements or guidelines for Board service under applicable securities laws and the rules of any stock exchange on which the Company's shares are listed for trading. On at least an annual basis, the Board will conduct an analysis and make a determination as to the "independence" of each Board member.

The appropriate number of Directors from time to time will be determined to fairly reflect the investment in Centaurus by those shareholders other than a significant shareholder or significant group of shareholders.

Certain of the responsibilities of the Board referred to herein may be delegated to Committees of the Board. The responsibilities of those Committees will be as set forth in their respective mandates, as amended from time to time.

The Board's set of criteria for addressing composition of the Board will include the present and anticipated skill set needed by the Board, experience, ethics, education, time availability, involvement in activities that conflict with Centaurus's business, term and the number of other directorships held. Other matters may be included that vary from time to time.

Duties and Responsibilities

1. Managing the Affairs of the Board and Governance

The Board operates by delegating certain of its authorities, including spending authorizations, to management and by reserving certain powers to itself. The legal obligations of the Board are described under the heading "General Legal Obligations of the Board". Subject to these legal obligations and to the Articles and By-laws of the Company, the Board retains the responsibility for managing its own affairs, including:

1. developing the Board's approach to governance, including the development and maintenance of the Board Manual and the Governance Guidelines, which may be delegated to the Nomination and Corporate Governance Committee;
2. planning its composition and size;
3. selecting the Board Chair or "Lead Director";
4. nominating candidates for election to the Board;
5. appointing Committees;
6. determining Director compensation;
7. developing position descriptions or terms of reference for the Board Chair and the Chair of each Committee of the Board, as well as for the President, Chief Executive Officer and for individual Directors; and
8. assessing the effectiveness of the Board itself, Committees and individual Directors in fulfilling their responsibilities at least annually.

2. Management and Human Resources

The Board has oversight responsibility for:

1. the appointment and succession of the CEO and evaluating the CEO's performance, approving CEO compensation and providing advice and counsel to the CEO in the execution of the CEO's duties;
2. satisfying itself as to the integrity of the CEO and that the CEO and other Executive Officers create a culture of integrity throughout the organization;
3. approving a position description or terms of reference for the CEO;
4. reviewing CEO performance at least annually against agreed upon written goals and objectives that the CEO is responsible for meeting and that have been approved by the Board;
5. approving decisions relating to senior management, including appointment and discharge of Officers, compensation and benefits for Executive Officers, acceptance of outside directorships on public companies by Executive Officers (other than not-for-profit organizations), and special arrangements with Executive Officers, or other employee groups;
6. ensuring succession planning programs are in place, including programs to train and develop management; and
7. approving certain matters relating to all employees, including:
   
   
   
   1. the annual salary policy/program for employees;
   2. new benefit programs or material changes to existing programs; and
   3. material benefits granted to retiring employees outside of benefits received under any approved pension and other benefit programs.
   
   

3. Strategy and Plans

The Board has oversight responsibility to:

1. participate with management in the development of, and ultimately approve, Centaurus's strategic plan, which strategic plan will take into account, among other things, the opportunities and risks of the business;
2. approve the annual business plans that enable Centaurus to realize its objectives;
3. approve annual capital and operating budgets that support Centaurus's ability to meet its strategic objectives;
4. approve any political or charitable donations policy or budget;
5. approve the entering into, or withdrawing from, lines of business or geographic markets that are, or are likely to be, material to Centaurus;
6. approve financial and operating objectives used in determining compensation if they are different from the strategic, capital or operating plans referred to above;
7. approve material divestitures and acquisitions;
8. approve major leases; and
9. monitor Centaurus's progress towards its goals, and to revise and alter its direction through management in light of changing circumstances.

4. Financial and Corporate Issues

The Board has oversight responsibility to:

1. take reasonable steps to ensure the implementation and integrity of Centaurus's internal control and management information systems;
2. monitor operational and financial results;
3. approve the Audit Committee recommendation to appoint external auditors and approve auditors' fees;
4. approve annual and quarterly financial results as approved by the Audit Committee and to approve release thereof by management;
5. approve any management proxy circular, annual information form and any documents incorporated by reference therein;
6. approve distributions on or in respect of the Company's shares;
7. approve financings, changes in authorized capital, issue and repurchase of shares, issue of debt securities, listing of shares and other securities, issue of commercial paper, and related prospectuses;
8. approve banking resolutions and significant changes in banking relationships;
9. approve appointments, or material changes in relationships with corporate trustees;
10. review coverage, deductibles and key issues regarding corporate insurance policies;
11. approve contracts, arrangements or commitments that may have a material impact on Centaurus; and
12. approve the commencement or settlement of litigation that may have a material impact on Centaurus.

5. Business and Risk Management

The Board has oversight responsibility for the following functions, which may be delegated to one or more Committees of the Board:

1. ensure management identifies the principal business and financial risks and implements appropriate systems to manage these risks;
2. review operating and financial performance relative to budgets or objectives;
3. receive reports from management on matters relating to, among others, ethical conduct, environmental management, employee health and safety, human rights, and related party transactions;
4. to the extent the same have not been delegated to the Audit Committee, to assess and monitor management control systems:
   
   
   
   1. assess information provided by management and others (e.g., internal and external auditors) about the effectiveness of management control systems; and
   2. understand principal risks and review whether Centaurus achieves a proper balance between risk and returns, and that management ensures that systems are in place to address the risks identified.
   
   

6. Policies and Procedures

The Board has oversight responsibility to:

1. approve and monitor compliance with all significant policies and procedures by which Centaurus is operated;
2. direct management to ensure Centaurus operates at all times within applicable laws and regulations and according to the Code of Conduct adopted by Centaurus; and
3. review significant new corporate policies or material amendments to existing policies.

7. Compliance Reporting and Communications

The Board has oversight responsibility to:

1. ensure Centaurus has in place effective communication processes with shareholders of the Company and other stakeholders and financial, regulatory and other recipients;
2. approve interaction with shareholders of the Company on all items requiring shareholder response or approval;
3. ensure that the financial performance of the Company is reported to shareholders, other securityholders and regulators in compliance with applicable law and regulations on a timely and regular basis, fairly and in accordance with generally accepted accounting principles;
4. ensure the timely reporting of any other developments that have a significant and material impact on the value of the Company; and
5. report annually to shareholders of the Company on the Board governance for the preceding year.

8. Standards of Liability

Nothing contained in this Mandate is intended to expand applicable standards of liability under statutory, regulatory, common law or any other legal requirements for the Board or members of its Committees. The purposes and responsibilities outlined in this Mandate and accompanying Board materials are meant to serve as guidelines rather than inflexible rules and the Board may adopt such additional procedures and standards as it deems necessary from time to time to fulfill its responsibilities.

Audit Committee Mandate and Terms of Reference for Audit Committee Chair

Our Audit Committee Charter outlines the specific roles and duties of the Committee's members.

GENERAL FUNCTIONS, AUTHORITY, AND ROLE

The Audit Committee is a Committee of the Board of Directors appointed to assist the Board in monitoring (1) the integrity of the financial statements of the Company, (2) compliance by the Company with legal and regulatory requirements related to financial reporting, (3) qualifications, independence and performance of the Company's independent auditors, and (4) performance of the Company's internal controls and financial reporting process.

The Audit Committee has the power to conduct or authorize investigations into any matters within its scope of responsibilities, with full access to all books, records, facilities and personnel of the Company, its auditors and its legal advisors. In connection with such investigations or otherwise in the course of fulfilling its responsibilities under this charter, the Audit Committee has the authority to independently retain special legal, accounting, or other consultants to advise it, and may request any Officer or employee of the Company, its independent legal counsel or independent auditor to attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee. The Audit Committee also has the power to create specific sub-committees with all of the investigative powers described above.

The Company's independent auditor is ultimately accountable to the Board of Directors and to the Audit Committee; and the Board of Directors and Audit Committee, as representatives of the Company's shareholders, have the ultimate authority and responsibility to evaluate the independent auditor, and to nominate annually the independent auditor to be proposed for shareholder approval, and to determine appropriate compensation for the independent auditor. In the course of fulfilling its specific responsibilities hereunder, the Audit Committee must maintain free and open communication between the Company's independent auditors, Board of Directors and management. The responsibilities of a member of the Audit Committee are in addition to such member's duties as a member of the Board of Directors.

While the Audit Committee has the responsibilities and powers set forth in this charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete, accurate, and in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor (other than disagreements regarding financial reporting), or to assure compliance with laws and regulations or the Company's own policies.

MEMBERSHIP

The membership of the Audit Committee will be as follows:

• The Committee will consist of a minimum of three members of the Board of Directors, appointed annually, each of whom is affirmatively confirmed as independent by the Board of Directors, with such affirmation disclosed in the Company's annual securityholder materials.
• The Board will elect, by a majority vote, one member as chairperson.
• A member of the Audit Committee may not, other than in his or her capacity as a member of the Audit Committee, the Board of Directors, or any other Board Committee, accept any consulting, advisory, or other compensatory fee from the Company, and may not be an affiliated person of the Company or any subsidiary thereof.

RESPONSIBILITIES

The responsibilities of the Audit Committee shall be as follows:

1. Frequency of Meetings

• Meet quarterly or as often as may be deemed necessary or appropriate in its judgment, either in person or telephonically.
• Meet with the independent auditor at least quarterly, either in person or telephonically.

2. Reporting Responsibilities

• Provide to the Board of Directors proper Committee minutes.
• Report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate.
• Provide a report for the Company's Annual Information Circular.

3. Charter Evaluation

• Annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board of Directors for approval.

4. Whistleblower Mechanisms

• Adopt and review annually a mechanism through which employees and others can directly and anonymously contact the Audit Committee with concerns about accounting and auditing matters. The mechanism must include procedures for responding to, and keeping of records of, any such expressions of concern.

5. Independent Auditor

• Nominate annually the independent auditor to be proposed for shareholder approval.
• Approve the compensation of the independent auditor, and evaluate the performance of the independent auditor.
• Establish policies and procedures for the engagement of the independent auditor to provide non-audit services.
• Ensure that the independent auditor is not engaged for any activities not allowed by any of the Canadian provincial securities commissions, the SEC or any securities exchange on which the Company's shares are traded.
• Ensure that the auditors are not engaged for any of the following nine types of non-audit services contemporaneous with the audit:
  
  
  • bookkeeping or other services related to accounting records or financial statements of the Company;
  • financial information systems design and implementation;
  • appraisal or valuation services, fairness opinions, or contributions-in-kind reports;
  • actuarial services;
  • internal audit outsourcing services;
  • any management or human resources function;
  • broker, dealer, investment advisor, or investment banking services;
  • legal services; and
  • expert services related to the auditing service.
  
  

6. Hiring Practices

• Ensure that no senior officer who is, or in the past full year has been, affiliated with or employed by a present or former auditor of the Company or an affiliate, is hired by the Company until at least one full year after the end of either the affiliation or the auditing relationship.

7. Independence Test

• Take reasonable steps to confirm the independence of the independent auditor, which shall include:
  
  
  • insuring receipt from the independent auditor of a formal written statement delineating all relationships between the independent auditor and the Company, consistent with the Independence Standards Board Standard No. 1 and related Canadian regulatory body standards;
  • considering and discussing with the independent auditor any relationships or services, including non-audit services, that may impact the objectivity and independence of the independent auditor; and
  • as necessary, taking, or recommending that the Board of Directors take, appropriate action to oversee the independence of the independent auditor.
  
  

8. Audit Committee Meetings

• At the request of the independent auditor, convene a meeting of the Audit Committee to consider matters the auditor believes should be brought to the attention of the Directors or shareholders.
• Keep minutes of its meetings and report to the Board for approval of any actions taken or recommendations made.

9. Restrictions

• Ensure no restrictions are placed by management on the scope of the auditors' review and examination of the Company's accounts.
• Ensure that no Officer or Director attempts to fraudulently influence, coerce, manipulate or mislead any accountant engaged in auditing of the Company's financial statements.

AUDIT AND REVIEW PROCESS AND RESULTS

10. Scope

• Consider, in consultation with the independent auditor, the audit scope and plan of the independent auditor.

11. Review Process and Results

• Consider and review with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61, as the same may be modified or supplemented from time to time.
• Review and discuss with management and the independent auditor at the completion of the annual examination:
  
  
  • the Company's audited financial statements and related notes;
  • the Company's MD&A and news releases related to financial results;
  • the independent auditor's audit of the financial statements and its report thereon;
  • any significant changes required in the independent auditor's audit plan;
  • any non-GAAP related financial information;
  • any serious difficulties or disputes with management encountered during the course of the audit; and
  • other matters related to the conduct of the audit, which are to be communicated to the Audit Committee under generally accepted auditing standards.
  
  
• Review, discuss with management and approve annual and interim quarterly financial statements prior to public disclosure.
• Review and discuss with management and the independent auditor the adequacy of the Company's internal controls that management and the Board of Directors have established and the effectiveness of those systems, and inquire of management and the independent auditor about significant financial risks or exposures and the steps management has taken to minimize such risks to the Company.
• Meet separately with the independent auditor and management, as necessary or appropriate, to discuss any matters that the Audit Committee or any of these groups believe should be discussed privately with the Audit Committee.
• Review and discuss with management and the independent auditor the accounting policies which may be viewed as critical, including all alternative treatments for financial information within generally accepted accounting principles that have been discussed with management, and review and discuss any significant changes in the accounting policies of the Company and industry accounting and regulatory financial reporting proposals that may have a significant impact on the Company's financial reports.
• Review with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures, if any, on the Company's financial statements.
• Review with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Company's financial statements or accounting policies.
• Review with the Company's General Counsel legal matters that may have a material impact on the financial statements, the Company's financial compliance policies and any material reports or inquiries received from regulators or governmental agencies related to financial matters.

SECURITIES REGULATORY FILINGS

• Review filings with the Canadian provincial securities commissions and the SEC and other published documents containing the Company's financial statements.
• Review, with management and the independent auditor, prior to filing with regulatory bodies, the interim quarterly financial reports (including related notes and MD&A) at the completion of any review engagement or other examination. The designated financial expert of the Audit Committee may represent the entire Audit Committee for purposes of this review.

RISK ASSESSMENT

• Meet periodically with management to review the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures.
• Assess risk areas and policies to manage risk including, without limitation, environmental risk, insurance coverage and other areas as determined by the Board of Directors from time to time.

AMENDMENTS TO AUDIT COMMITTEE CHARTER

Annually review this Charter and propose amendments to be ratified by a simple majority of the Board of Directors.

AUDIT COMMITTEE CHAIR

The Chair is appointed annually by and reports to the Board. The Chair's primary role is managing the affairs of the Committee, including ensuring the Committee is organized properly, functions effectively and meets its obligations and responsibilities. The Chair works with the Chief Operating Officer ("COO") of the Company to ensure effective relations with Committee members. The Chair maintains on-going communications with the COO and with such other Officers of the Company as the Chair determines appropriate. The Chair, in conjunction with the Committee, maintains ongoing communications with the Company's external auditors. The Chair has the responsibility to lead the Committee and report to the Board after each Committee meeting.

The Chair also has the responsibility to ensure the Committee is alert to its obligations to the Board and pursuant to law and to chair Committee meetings. The Chair must also:

1. assist the Board in its recommendation of Committee members and its review of the performance and suitability of the Committee;
2. ensure the co-ordination of the agenda, information packages and related events for Committee meetings in conjunction with the Board Chair, the COO and the Corporate Secretary;
3. maintain a liaison and communication with Committee members, other Directors and the Board Chair to co-ordinate input from Committee members and Directors, and optimize the effectiveness of the Committee;
4. in collaboration with the COO and other Officers, ensure information requested by Committee members is provided and meets their needs;
5. in conjunction with the Nomination and Corporate Governance Committee, the Board and the Board Chair, review and assess Committee attendance, performance and compensation and the size and composition of the Committee; and
6. in conjunction with the Compensation Committee, lead the Committee in assessing the performance of the Company's financial management team.

Reserves Committee Mandate and Terms of Reference for Reserves Committee Chair

Role and Objective

The Reserves Committee (the "Committee") is a committee of the Board of Centaurus to which the Board has delegated the responsibility for the matters set forth herein in respect of certain responsibilities of the Board in accordance with National Instrument 51-101 ("NI 51-101").

Membership of Committee

1. The Committee will be comprised of at least three (3) directors of Centaurus or such greater number as the Board may determine from time to time, a majority of whom shall be:

1. individuals who are not and have not been, during the preceding 12 months:
   
   
   1. an officer or employee of Centaurus or of an affiliate of Centaurus;
   2. a person who beneficially owns 10% or more of the outstanding voting securities of Centaurus; or
   3. a relative of a person referred to in subparagraphs (i) or (ii), residing in the same home as that person; and
   
   
2. free from any business or other relationship which could reasonably be seen to interfere with the exercise of their independent judgment.

2. The Board may from time to time designate one of the members of the Committee to be the Chair of the Committee.

Zandate and Responsibilities of the Committee

The Committee is responsible for:

1. reviewing the Company's procedures relating to the disclosure of information with respect to oil and gas activities including reviewing its procedures for complying with its disclosure requirements and restrictions set forth under applicable securities requirements;
2. reviewing the Company's procedures for providing information to the independent evaluator;
3. meeting, as considered necessary, with management and the independent evaluator to determine whether any restrictions placed by management affect the ability of the evaluator to report without reservation on the Reserves Data (as defined in NI 51-101) (the "Reserves Data") and to review the Reserves Data and the report of the independent evaluator thereon (if such report is provided);
4. reviewing the appointment of the independent evaluator and, in the case of any proposed change to such independent evaluator, determining the reason therefor and whether there have been any disputes with management;
5. providing a recommendation to the Board of Directors as to whether to approve the content or filing of the statement of the Reserves Data and other information that may be prescribed by applicable securities requirements including any reports of the independent engineer and of management in connection therewith;
6. reviewing the Company's procedures for reporting other information associated with oil and gas producing activities;
7. generally reviewing all matters relating to the preparation and public disclosure of estimates of the Company's reserves;
8. co-ordinate meetings with the Audit Committee of the Company, the Company's senior engineering management, independent evaluating engineers and auditors as required to address matters of mutual concern in respect of the Company's evaluation of petroleum and natural gas reserves.

Meetings and Administrative Matters

1. At all meetings of the Committee every question shall be decided by a majority of the votes cast. In case of an equality of votes, the Chairman of the meeting shall be entitled to a second or casting vote.
2. The Chair will preside at all meetings of the Committee, unless the Chair is not present, in which case the members of the Committee that are present will designate from among such members the Chair for purposes of the meeting.
3. A quorum for meetings of the Committee will be a majority of its members, and the rules for calling, holding, conducting and adjourning meetings of the Committee will be the same as those governing the Board unless otherwise determined by the Committee or the Board.
4. Meetings of the Committee should be scheduled to take place at least once per year and at such other times as the Chair of the Committee may determine.
5. The Committee shall meet at the end of or during its regular annual meeting and, if deemed appropriate by the Chair, any other meeting of the Committee, without members of management being present.
6. Agendas, approved by the Chair, will be circulated to Committee members along with background information on a timely basis prior to the Committee meetings.
7. The Committee may invite such officers, directors and employees of the Company as it sees fit from time to time to attend at meetings of the Committee and assist in the discussion and consideration of the matters being considered by the Committee.
8. Minutes of the Committee will be recorded and maintained and circulated to directors who are not members of the Committee or otherwise made available at a subsequent meeting of the Board.
9. The Committee may retain persons having special expertise and may obtain independent professional advice to assist in fulfilling its responsibilities at the expense of the Company.
10. Any members of the Committee may be removed or replaced at any time by the Board and will cease to be a member of the Committee as soon as such member ceases to be a director. The Board may fill vacancies on the Committee by appointment from among its members. If and whenever a vacancy exists on the Committee, the remaining members may exercise all its powers so long as a quorum remains. Subject to the foregoing, following appointment as a member of the Committee, each member will hold such office until the Committee is reconstituted.
11. Any issues arising from these meetings that bear on the relationship between the Board and management should be communicated to the Chairman of the Board by the Committee Chair.

RESERVES COMMITTEE CHAIR

The Chair is appointed annually and reports to the Board. The Chair's primary role is managing the affairs of the Committee, including ensuring the Committee is organized properly, functions effectively and meets its obligations and responsibilities.

The Chair works with the CEO of the Company to ensure effective relations with Committee members.

The Chair maintains ongoing communications with the CEO and with such other Officers of the Company as the Chair determines appropriate.

The Chair has the responsibility to lead the Committee in overseeing management's formulation of and compliance with reserves policies and procedures and report to the Board after each Committee meeting.

The Chair also has the responsibility to ensure the Committee is alert to its obligations to the Board and pursuant to law and to chair Committee meetings.

The Chair is responsible to:

1. assist the Board in its recommendation of Committee members and its review of the performance and suitability of the Committee;
2. ensure the co-ordination of the agenda, information packages and related events for Committee meetings in conjunction with the Board Chair, the General Counsel and the Corporate Secretary;
3. maintain a liaison and communication with Committee members, other Directors and the Board Chair to co-ordinate input from Committee members and Directors, and optimize the effectiveness of the Committee;
4. in collaboration with the General Counsel and other Officers, ensure information requested by Committee members is provided and meets their needs; and
5. in conjunction with the Reserves Committee, Board and the Board Chair, review and assess Committee attendance, performance and compensation and the size and composition of the Committee.