EX-15.3

EX-15.3 10 d913469dex153.htm EX-15.3 EX-15.3

Exhibit 15.3

BRION ENERGY CORPORATION

RESERVES ASSESSMENT AND EVALUATION OF

CANADIAN OIL AND GAS PROPERTIES

THIRD PARTY CORPORATE SUMMARY

Effective December 31, 2014

1143014

THIRD PARTY CORPORATE SUMMARY

TABLE OF CONTENTS


	Page
COVERING LETTER		3

INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT		5

INTRODUCTION		6

SUMMARY		8

EVALUATION PROCEDURE		12

PRODUCT PRICE AND MARKET FORECASTS		16

APPENDIX I
Certificates of Qualification		17

LOGO

Principal Officers:

Keith M. Braaten, P. Eng.

President & CEO

Jodi L. Anhorn, M.Sc., P. Eng.

Executive Vice President & COO

Officers / Vice Presidents:

March 23, 2015

Project 1143014

Caralyn P. Bennett, P. Eng.

Tim R. Freeborn, P. Eng.

Leonard L. Herchen, P. Eng.

Myron J. Hladyshevsky, P. Eng.

Todd J. Ikeda, P. Eng.

Bryan M. Joa, P. Eng.

Mark Jobin, P. Geol.

John E. Keith, P. Eng.

Mr. Michael Fox

Brion Energy Corporation

1500, 250 – 6^th Avenue SW

Calgary, Alberta T2P 3H7

Dear Sir:

Re:

Brion Energy Corporation

Corporate Evaluation

Effective December 31, 2014

GLJ Petroleum Consultants (GLJ) has completed an independent reserves assessment and evaluation of the oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

This report has been prepared for the Company for the purpose of annual disclosure and other financial requirements. This evaluation has been prepared in accordance with reserves definitions, standards and procedures of the United States Securities and Exchange Commission (SEC).

It was GLJ’s primary mandate in this evaluation to provide an independent evaluation of the oil and gas reserves of the Company in aggregate. Accordingly it may not be appropriate to extract individual property or entity estimates for other purposes.

Reserves included in this report represent the consolidation of the Groundbirch Montney, Duvernay Joint Venture and CNPC International conventional assets.

Our engagement letter notes these limitations on the use of this report.

4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4H2 (403) 266-9500 Fax (403) 262-1855 GLJPC.com


		Page 2

It is trusted that this evaluation meets your current requirements. Should you have any questions regarding this analysis, please contact the undersigned.

Yours very truly,

GLJ PETROLEUM CONSULTANTS LTD.

LOGO

Trisha S. MacDonald, P. Eng.

Senior Engineer

LOGO

Jodi L. Anhorn, M. Sc., P. Eng.

Executive Vice President & COO

TSM/JLA/ljn

Attachments

INDEPENDENT PETROLEUM CONSULTANTS’ CONSENT

The undersigned firm of Independent Petroleum Consultants of Calgary, Alberta, Canada has prepared an independent evaluation of the Brion Energy Corporation (the “Company”) Canadian oil and gas properties and hereby gives consent to the use of its name and to the said estimates. The effective date of the evaluation is December 31, 2014.

In the course of the evaluation, the Company provided GLJ Petroleum Consultants Ltd. personnel with basic information which included land data, well information, geological information, reservoir studies, estimates of on-stream dates, contract information, current hydrocarbon product prices, operating cost data, capital budget forecasts, financial data and future operating plans. Other engineering, geological or economic data required to conduct the evaluation and upon which this report is based, were obtained from public records, other operators and from GLJ Petroleum Consultants Ltd. nonconfidential files. The Company has provided a representation letter confirming that all information provided to GLJ Petroleum Consultants Ltd. is correct and complete to the best of its knowledge. Procedures recommended in the United States Securities and Exchange Commission (SEC) to verify certain interests and financial information were applied in this evaluation. In applying these procedures and tests, nothing came to GLJ Petroleum Consultants Ltd.’s attention that would suggest that information provided by the Company was not complete and accurate. GLJ Petroleum Consultants Ltd. reserves the right to review all calculations referred to or included in this report and to revise the estimates in light of erroneous data supplied or information existing but not made available which becomes known subsequent to the preparation of this report.

The accuracy of any reserves, resources and production estimate is a function of the quality and quantity of available data and of engineering interpretation and judgment. While reserves, resources and production estimates presented herein are considered reasonable, the estimates should be accepted with the understanding that reservoir performance subsequent to the date of the estimate may justify revision, either upward or downward.

Revenue projections presented in this report are based in part on forecasts of market prices, currency exchange rates, inflation, market demand and government policy which are subject to many uncertainties and may, in future, differ materially from the forecasts utilized herein. Present values of revenues documented in this report do not necessarily represent the fair market value of the reserves evaluated herein.


PERMIT TO PRACTICE
GLJ PETROLEUM CONSULTANTS LTD.
Signature:

Date:		January 30, 2015


PERMIT NUMBER: P 2066
The Association of Professional Engineers and Geoscientists of Alberta

LOGO

INTRODUCTION

GLJ Petroleum Consultants (GLJ) was commissioned by Brion Energy Corporation (the “Company”) to prepare an independent evaluation of its oil and gas reserves and resources effective December 31, 2014. The locations of the most significant reserves properties are indicated on the attached index map.

The evaluation was initiated in November 2014 and completed by January 2015. Estimates of reserves, resources and projections of production were generally prepared using well information and production data available from public sources to approximately October 31, 2014. The Company provided land, accounting data and other technical information not available in the public domain to approximately January 22, 2015. In certain instances, the Company also provided recent engineering, geological and other information up to December 23, 2014. The Company has confirmed that, to the best of its knowledge, all information provided to GLJ is correct and complete as of the effective date.

The reserves definitions used in preparing this report (included herein under “Reserves Definitions”) are those required by the United States Securities Exchange Commission (SEC). The summary of reserves and value, using the SEC reserves definitions, uses the average historical prices derived from the first day of the month for January to December 2014.

Tables summarizing production, royalties, costs, revenue projections, reserves and present value estimates for various reserves and resources categories for individual properties and the Company total are provided in the tabbed sections of this Summary Report.

The Evaluation Procedure section outlines general procedures used in preparing this evaluation. The individual property reports, provided under separate cover, provide additional evaluation details. The following summarizes evaluation matters that have been included/excluded in cash flow projections:

•

processing income has been included as “Other Income”,

•

provisions for the abandonment of all of the Company’s wells to which reserves and resources have been attributed have been included; all other abandonment and reclamation costs have not been included,

•

general and administrative (G&A) costs and overhead recovery have not been included,

•

undeveloped land values have not been included.

•

Carbon taxes associated with greenhouse gas emissions as part of Alberta Environment and Sustainable Resource Development’s specified Gas Emitters Regulation have not been included.

Economic forecasts are provided on an after tax basis including tax pools provided by the Company in the “Evaluation Procedure” section.

Map 1

Index Map

Property Locations


Company: Brion Energy Corporation				Effective Date: December 31, 2014
Property: Western Canada				Scale 1:6,000,000 s1143014/indm01

LOGO


Company:	Brion Energy Corporation	Reserve Class:	Various
Property:	Corporate	Development Class:	Classifications
Description:	After Tax	Pricing:	SEC 2014-Dec-31 Posted (12 Month Avg.)
		Effective Date:	December 31, 2014

Summary of Reserves and Values


	Proved Producing		Proved Developed Non- Producing		Proved Undeveloped		Total Proved
MARKETABLE RESERVES

Light & Medium Oil (Mbbl)
Total Company Interest		669		0		0		669
Working Interest		669		0		0		669
Net After Royalty		542		0		0		542

Natural Gas (MMcf)
Total Company Interest		141,898		12,454		191,004		345,357
Working Interest		141,890		12,454		191,004		345,348
Net After Royalty		127,768		11,824		171,761		311,353

Natural Gas Liquids (Mbbl)
Total Company Interest		3,814		1,565		14,755		20,133
Working Interest		3,813		1,565		14,755		20,133
Net After Royalty		2,953		1,219		11,897		16,069

Oil Equivalent (Mboe)
Total Company Interest		28,132		3,640		46,589		78,361
Working Interest		28,131		3,640		46,589		78,360
Net After Royalty		24,790		3,189		40,523		68,503
BEFORE TAX PRESENT VALUE (M$)
0%		510,219		152,361		609,551		1,272,131
5%		418,458		124,989		354,762		898,209
8%		379,860		113,695		256,601		750,155
10%		358,641		107,543		205,613		671,797
12%		340,209		102,230		163,321		605,760
15%		316,685		95,486		112,440		524,611
20%		285,579		86,612		51,440		423,631
AFTER TAX PRESENT VALUE (M$)
0%		495,993		152,361		609,551		1,257,905
5%		410,504		124,989		354,762		890,255
8%		374,012		113,695		256,601		744,308
10%		353,803		107,543		205,613		666,959
12%		336,160		102,230		163,321		601,710
15%		313,520		95,486		112,440		521,446
20%		283,370		86,612		51,440		421,421


	BOE Factors:	HVY OIL	1.0	RES GAS	6.0	PROPANE	1.0	ETHANE	1.0
		COND	1.0	SLN GAS	6.0	BUTANE	1.0	SULPHUR	0.0

Run Date: March 25, 2015 10:28:49 1143014 Class (A,B1,B2,C), SEC 2014-Dec-31 Posted (12 Month Avg.), psum									March 25, 2015 10:35:34


Company:	Brion Energy Corporation	Reserve Class:	Various
Property:	Corporate	Development Class:	Classifications
Description:	After Tax	Pricing:	SEC 2014-Dec-31 Posted (12 Month Avg.)
		Effective Date:	December 31, 2014

Company and Net Reserves and Present Value Summary


			Company Interest Reserves										Net After Royalty Reserves										Before Income Tax Discounted Present Value (M$)								After Income Tax Discounted Present Value (M$)
Entity Description	Reserve Class		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		0%		8%		10%		12%		0%		5%		8%		10%		12%
*Proved Producing*
*Total*
*Brion Energy Corp*
*Joint Venture Gas Project*
*Duvernay*
Kaybob Duvernay				16,029		0		2,865		0		5,537		15,304		0		2,178		0		4,728		189,067		148,833		141,858		135,693		189,067		161,199		148,833		141,858		135,693
Simonette Montney				715		0		67		0		186		647		0		45		0		153		6,452		4,634		4,347		4,100		6,452		5,165		4,634		4,347		4,100
Willesden Green Duvernay				4,975		555		256		0		1,641		4,676		433		205		0		1,417		44,251		36,086		34,546		33,154		44,251		38,723		36,086		34,546		33,154

Total: Duvernay				21,719		555		3,188		0		7,364		20,627		433		2,428		0		6,298		239,770		189,553		180,751		172,946		239,770		205,087		189,553		180,751		172,946
Groundbirch Property		A		119,795		0		624		0		20,590		106,781		0		525		0		18,322		264,043		185,755		173,636		163,266		251,429		201,604		181,054		169,870		160,224

Total: Joint Venture Gas Project				141,514		555		3,812		0		27,953		127,408		433		2,953		0		24,620		503,813		375,308		354,387		336,212		491,199		406,691		370,607		350,622		333,171


Total: Brion Energy Corp				141,514		555		3,812		0		27,953		127,408		433		2,953		0		24,620		503,813		375,308		354,387		336,212		491,199		406,691		370,607		350,622		333,171
*CNPC International Canada Limited*
*Conventional Assets*
Drumheller		A		161		19		1		0		48		150		19		1		0		44		1,309		998		942		893		1,309		1,095		998		942		893
Lone Rock (Sask)		A		3		63		0		0		63		3		60		0		0		61		2,752		1,950		1,823		1,714		2,752		2,183		1,950		1,823		1,714
Twining		A		219		31		0		0		68		207		30		0		0		65		2,346		1,603		1,488		1,390		2,346		1,817		1,603		1,488		1,390

Total: Conventional Assets				384		113		1		0		179		361		109		1		0		171		6,406		4,551		4,254		3,997		6,406		5,095		4,551		4,254		3,997

Total: CNPC International Canada Limited				384		113		1		0		179		361		109		1		0		171		6,406		4,551		4,254		3,997		6,406		5,095		4,551		4,254		3,997

Total				141,898		669		3,814		0		28,132		127,768		542		2,953		0		24,790		510,219		379,860		358,641		340,209		497,605		411,787		375,159		354,876		337,168

Total: Proved Producing				141,898		669		3,814		0		28,132		127,768		542		2,953		0		24,790		510,219		379,860		358,641		340,209		497,605		411,787		375,159		354,876		337,168
*Proved Developed Non-Producing*
*Total*
*Brion Energy Corp*
*Joint Venture Gas Project*
*Duvernay*
Kaybob Duvernay				11,251		0		1,471		0		3,347		10,720		0		1,145		0		2,931		142,525		105,770		99,948		94,926		142,525		116,479		105,770		99,948		94,926
Simonette Montney				663		0		90		0		201		605		0		72		0		172		8,972		7,277		6,988		6,733		8,972		7,793		7,277		6,988		6,733
Willesden Green Duvernay				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Duvernay				11,914		0		1,562		0		3,547		11,325		0		1,216		0		3,104		151,497		113,047		106,936		101,660		151,497		124,272		113,047		106,936		101,660
Groundbirch Property		B1		541		0		3		0		93		498		0		2		0		85		864		647		607		570		864		717		647		607		570

Total: Joint Venture Gas Project				12,454		0		1,565		0		3,640		11,824		0		1,219		0		3,189		152,361		113,695		107,543		102,230		152,361		124,989		113,695		107,543		102,230

Total: Brion Energy Corp				12,454		0		1,565		0		3,640		11,824		0		1,219		0		3,189		152,361		113,695		107,543		102,230		152,361		124,989		113,695		107,543		102,230
*CNPC International Canada Limited*
*Conventional Assets*
Drumheller				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Lone Rock (Sask)				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Twining				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Conventional Assets				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: CNPC International Canada Limited				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total				12,454		0		1,565		0		3,640		11,824		0		1,219		0		3,189		152,361		113,695		107,543		102,230		152,361		124,989		113,695		107,543		102,230


1143014 Class (A,B1,B2,B,C), SEC 2014-Dec-31 Posted (12 Month Avg.), grv				March 25, 2015 10:35:27

Page 2

Company and Net Reserves and Present Value Summary


			Company Interest Reserves										Net After Royalty Reserves										Before Income Tax Discounted Present Value (M$)								After Income Tax Discounted Present Value (M$)
Entity Description	Reserve Class		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		0%		8%		10%		12%		0%		5%		8%		10%		12%
Total: Proved Developed Non-Producing				12,454		0		1,565		0		3,640		11,824		0		1,219		0		3,189		152,361		113,695		107,543		102,230		152,361		124,989		113,695		107,543		102,230
*Proved Undeveloped*
*Total*
*Brion Energy Corp*
*Joint Venture Gas Project*
*Duvernay*
Kaybob Duvernay				69,731		0		13,131		0		24,753		66,575		0		10,535		0		21,631		390,365		150,612		114,799		84,907		390,365		218,766		150,612		114,799		84,907
Simonette Montney				3,320		0		371		0		924		3,093		0		302		0		817		21,004		10,714		9,181		7,893		21,004		13,624		10,714		9,181		7,893
Willesden Green Duvernay				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Duvernay				73,051		0		13,502		0		25,677		69,668		0		10,837		0		22,448		411,368		161,327		123,979		92,800		411,368		232,390		161,327		123,979		92,800
Groundbirch Property		B2		117,953		0		1,253		0		20,912		102,093		0		1,060		0		18,075		198,183		95,275		81,634		70,521		198,183		122,372		95,275		81,634		70,521

Total: Joint Venture Gas Project				191,004		0		14,755		0		46,589		171,761		0		11,897		0		40,523		609,551		256,601		205,613		163,321		609,551		354,762		256,601		205,613		163,321

Total: Brion Energy Corp				191,004		0		14,755		0		46,589		171,761		0		11,897		0		40,523		609,551		256,601		205,613		163,321		609,551		354,762		256,601		205,613		163,321
*CNPC International Canada Limited*
*Conventional Assets*
Drumheller				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Lone Rock (Sask)				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Twining				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Conventional Assets				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: CNPC International Canada Limited				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total				191,004		0		14,755		0		46,589		171,761		0		11,897		0		40,523		609,551		256,601		205,613		163,321		609,551		354,762		256,601		205,613		163,321

Total: Proved Undeveloped				191,004		0		14,755		0		46,589		171,761		0		11,897		0		40,523		609,551		256,601		205,613		163,321		609,551		354,762		256,601		205,613		163,321
*Total Proved Non-Producing*
*Total*
*Brion Energy Corp*
*Joint Venture Gas Project*
*Duvernay*
Kaybob Duvernay				80,982		0		14,603		0		28,100		77,295		0		11,680		0		24,563		532,890		256,382		214,747		179,833		532,890		335,245		256,382		214,747		179,833
Simonette Montney				3,982		0		461		0		1,125		3,698		0		373		0		990		29,975		17,992		16,169		14,627		29,975		21,417		17,992		16,169		14,627
Willesden Green Duvernay				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Duvernay				84,964		0		15,064		0		29,225		80,993		0		12,053		0		25,552		562,865		274,374		230,915		194,460		562,865		356,662		274,374		230,915		194,460
Groundbirch Property				118,494		0		1,255		0		21,004		102,592		0		1,062		0		18,161		199,047		95,922		82,240		71,091		199,047		123,089		95,922		82,240		71,091

Total: Joint Venture Gas Project				203,458		0		16,319		0		50,229		183,585		0		13,115		0		43,713		761,912		370,296		313,156		265,551		761,912		479,751		370,296		313,156		265,551

Total: Brion Energy Corp				203,458		0		16,319		0		50,229		183,585		0		13,115		0		43,713		761,912		370,296		313,156		265,551		761,912		479,751		370,296		313,156		265,551
*CNPC International Canada Limited*
*Conventional Assets*
Drumheller				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Lone Rock (Sask)				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0
Twining				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: Conventional Assets				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total: CNPC International Canada Limited				0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0		0

Total				203,458		0		16,319		0		50,229		183,585		0		13,115		0		43,713		761,912		370,296		313,156		265,551		761,912		479,751		370,296		313,156		265,551

Total: Total Proved Non-Producing				203,458		0		16,319		0		50,229		183,585		0		13,115		0		43,713		761,912		370,296		313,156		265,551		761,912		479,751		370,296		313,156		265,551


1143014 Class (A,B1,B2,B,C), SEC 2014-Dec-31 Posted (12 Month Avg.), grv				March 25, 2015 10:35:27

Page 3

Company and Net Reserves and Present Value Summary


			Company Interest Reserves										Net After Royalty Reserves										Before Income Tax Discounted Present Value (M$)								After Income Tax Discounted Present Value (M$)
Entity Description	Reserve Class		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		Gas MMcf		Oil Mbbl		NGL Mbbl		Sulphur Mlt		Oil Eq. Mboe		0%		8%		10%		12%		0%		5%		8%		10%		12%
*Total Proved*
*Total*
*Brion Energy Corp*
*Joint Venture Gas Project*
*Duvernay*
Kaybob Duvernay				97,011		0		17,468		0		33,637		92,599		0		13,858		0		29,291		721,957		405,215		356,605		315,525		721,957		496,444		405,215		356,605		315,525
Simonette Montney				4,697		0		528		0		1,311		4,345		0		418		0		1,142		36,428		22,626		20,516		18,727		36,428		26,582		22,626		20,516		18,727
Willesden Green Duvernay				4,975		555		256		0		1,641		4,676		433		205		0		1,417		44,251		36,086		34,546		33,154		44,251		38,723		36,086		34,546		33,154

Total: Duvernay				106,683		555		18,252		0		36,588		101,620		433		14,481		0		31,850		802,635		463,927		411,667		367,406		802,635		561,749		463,927		411,667		367,406
Groundbirch Property				238,289		0		1,879		0		41,594		209,372		0		1,587		0		36,482		463,090		281,677		255,876		234,357		450,476		324,693		276,976		252,111		231,316

Total: Joint Venture Gas Project				344,973		555		20,132		0		78,183		310,993		433		16,068		0		68,333		1,265,725		745,604		667,543		601,762		1,253,111		886,442		740,903		663,777		598,721

Total: Brion Energy Corp				344,973		555		20,132		0		78,183		310,993		433		16,068		0		68,333		1,265,725		745,604		667,543		601,762		1,253,111		886,442		740,903		663,777		598,721
*CNPC International Canada Limited*
*Conventional Assets*
Drumheller		A		161		19		1		0		48		150		19		1		0		44		1,309		998		942		893		1,309		1,095		998		942		893
Lone Rock (Sask)		A		3		63		0		0		63		3		60		0		0		61		2,752		1,950		1,823		1,714		2,752		2,183		1,950		1,823		1,714
Twining		A		219		31		0		0		68		207		30		0		0		65		2,346		1,603		1,488		1,390		2,346		1,817		1,603		1,488		1,390

Total: Conventional Assets				384		113		1		0		179		361		109		1		0		171		6,406		4,551		4,254		3,997		6,406		5,095		4,551		4,254		3,997

Total: CNPC International Canada Limited				384		113		1		0		179		361		109		1		0		171		6,406		4,551		4,254		3,997		6,406		5,095		4,551		4,254		3,997

Total				345,357		669		20,133		0		78,361		311,353		542		16,069		0		68,503		1,272,131		750,155		671,797		605,760		1,259,517		891,538		745,454		668,032		602,718

Total: Total Proved				345,357		669		20,133		0		78,361		311,353		542		16,069		0		68,503		1,272,131		750,155		671,797		605,760		1,259,517		891,538		745,454		668,032		602,718


BOE Factors:	HVY OIL	1.0	RES GAS	6.0	PROPANE	1.0	ETHANE	1.0
	COND	1.0	SLN GAS	6.0	BUTANE	1.0	SULPHUR	0.0


1143014 Class (A,B1,B2,B,C), SEC 2014-Dec-31 Posted (12 Month Avg.), grv				March 25, 2015 10:35:27

EVALUATION PROCEDURE

The following outlines the methodology employed by GLJ Petroleum Consultants (GLJ) in conducting the evaluation of the Company’s oil and gas properties. GLJ evaluation procedures are in compliance with standards contained in the Canadian Oil and Gas Evaluation (COGE) Handbook.

INTEREST DESCRIPTIONS

The Company provided GLJ with current land interest information. The Company provided a representation letter confirming accuracy of land information. Certain cross-checks of land and accounting information were undertaken by GLJ as recommended in the COGE Handbook. In this process, nothing came to GLJ’s attention that indicated that information provided by the Company was incomplete or unreliable.

In GLJ’s reports, “Company Interest” reserves, resources and values refer to the sum of royalty interest* and working interest reserves and resources before deduction of royalty burdens payable. “Working Interest” reserves and resources equate to those reserves and resources that are referred to as “Company Gross” reserves and resources by the Canadian Securities Administrators (CSA) in NI 51-101.

In the Securities Reporting section, working interest (or Company Gross) volumes are presented in tables to correspond to NI 51-101 disclosure requirements.

*	Royalty interest reserves and resources include royalty volumes derived only from other working interest owners.

WELL DATA

Pertinent interest and offset well data such as drill stem tests, workovers, pressure surveys, production tests, etc., were provided by the Company or were obtained from other operators, public records or GLJ nonconfidential files.

ACCOUNTING SUMMARY

The Company provided GLJ with available accounting data on a property basis and for the corporate total for the period January 2014, to September 30, 2014. In some circumstances this information was also provided on a cost centre basis to address major reserves entities that are a subset of a Company property.

For reserves and resources attributable to the Company’s oil sands project, no historical accounting was provided by the Company, as these projects are undeveloped.

PRODUCTION FORECASTS

In establishing all production forecasts, consideration was given to existing gas contracts and the possibility of contract revisions, to the operator’s plans for development drilling and to reserves and resources and well capability. Generally, development drilling in an area was not considered unless there was some indication from the operator that drilling could be expected.

The on-stream date for currently shut-in reserves and resources was estimated with consideration given to the following:

•

proximity to existing facilities

•

plans of the operator

•

economics

AFTER TAX ANALYSIS

Canadian income taxes were calculated based on currently legislated federal and provincial tax rates, tax regulations and tax pool information provided by the Company. After tax values for reserves development status or production status subcategories (i.e. developed, undeveloped, producing, non-producing) are calculated by difference.

Tax Pools

The following tax pools as of the effective date were included in the income tax calculations:


Tax Pool Classification	Write-Off Rate (%)		Tax Pool (M$)
Canadian Oil and Gas Property Expense (COGPE)		10		335,823
Canadian Exploration Expense (CEE)		100		25,459
Non-Capital Losses		100		26,622
Canadian Development Expense (CDE)		30		765,851
Capital Cost Allowance: (CCA)
Class 1		10		73
Class 50		55		268,527

Tax Rates

Federal income tax calculations incorporate recently enacted reductions in general corporate income tax rates as follows:


Year	Federal Income Tax Rate
2015+		15.0	%

Allocation of revenues to Canadian provinces for income tax purposes depends on several factors in addition to the provincial origin of the resource revenues. The average future annual provincial tax rate has been calculated based on an allocation of provincial resource revenues and their respective tax rate as follows:

Reserves

Class

Year

Alberta
Tax Rate

Alberta
Allocation

B.C.
Tax Rate

B.C.
Allocation

Sask.
Tax Rate

Sask.
Allocation

Avg. Ann.
Tax Rate

Proved Producing

2015+

10.00

42.3

11.00

57.2

12.00

0.5

10.6

Company total after tax economic forecasts for all reserves categories are attached.

ECONOMIC PARAMETERS

Pertinent economic parameters are listed as follows:

a)	The effective date is December 31, 2014.

b)	Operating and capital costs were estimated in 2015 dollars and then escalated as summarized in the Product Price and Market Forecasts section of this report.

c)	Economic forecasts were prepared for each property on a before income tax basis. Detailed discounting of future cash flow was performed using a discount factor of 10.0 percent with all values discounted annually to December 31, 2014, on a mid-calendar-year basis.

d)	Royalty holidays applicable to existing wells or forecast drilling are included in individual well economics. These credits are itemized within the property reports.

e)	Gas processing allowances relating to remaining undepreciated capital bases, were included in individual property economic evaluations.

f)	Mineral taxes on freehold interests were included.

g)	Field level overhead charges have been included; recovery of overhead expenses has not been included.

h)	The Company’s office G&A costs have not been included.

i)	Well abandonment costs for all wells with reserves have been included at the property level. Additional abandonment costs associated with non-reserves wells, lease reclamation costs and facility abandonment and reclamation expenses have not been included in this analysis.

j)	The Saskatchewan Resource Surcharge was included.

OIL EQUIVALENT OR GAS EQUIVALENT

In this report, quantities of hydrocarbons have been converted to barrels of oil equivalent (boe); or to sales gas equivalent (sge) using factors of 6 Mcf/boe for gas, 1 bbl/boe for all liquids, and 0 boe for sulphur. Users of oil equivalent values are cautioned that while boe based metrics are useful for comparative purposes, they may be misleading when used in isolation.

LIST OF ABBREVIATIONS


AOF		absolute open flow
bbl		barrels
Bcf		billion cubic feet of gas at standard conditions
BIIP		bitumen initially-in-place
boe		barrel of oil equivalent, in this evaluation determined using 6 Mcf/boe for gas, 1 bbl/boe for all liquids, and 0 boe for sulphur
bopd		barrels of oil per day
Btu		British thermal units
bwpd		barrels of water per day
DSU		drilling spacing unit
GCA		gas cost allowance
GIIP		gas initially-in-place
GOC		gas-oil contact
GOR		gas-oil ratio
GORR		gross overriding royalty
GWC		gas-water contact
Mbbl		thousand barrels
Mboe		thousand boe
Mcf		thousand cubic feet of gas at standard conditions
Mcfe		thousand cubic feet of gas equivalent
Mlt		thousand long tons
M$		thousand dollars
MM$		million dollars
MMbbl		million barrels
MMboe		million boe
MMBtu		million British thermal units
MMcf		million cubic feet of gas at standard conditions
MRL		maximum rate limitation
Mstb		thousand stock tank barrels
MMstb		million stock tank barrels
NGL		natural gas liquids (ethane, propane, butane and condensate)
NPI		net profits interest
OIIP		oil initially-in-place
ORRI		overriding royalty interest
OWC		oil-water contact
P&NG		petroleum and natural gas
PIIP		petroleum initially-in-place


psia		pounds per square inch absolute
psig		pounds per square inch gauge
PVT		pressure-volume-temperature
RLI		reserves life index, calculated by dividing reserves by the forecast of first year production
scf		standard cubic feet
sge		sales gas equivalent – if presented in this evaluation, determined using 1 barrel of oil or natural gas liquid = 6 Mcfe; 0 for sulphur
stb		stock tank barrel
WI		working interest
WTI		West Texas Intermediate

GLJ Petroleum Consultants

Crude Oil and Natural Gas Liquids

SEC 2014-Dec-31 Posted (12 Month Avg.)

Effective January 01, 2015

Table 1

Inflation %

Bank of
Canada
Average Noon
Exchange Rate
USD/CAD

NYMEX WTI
Near Month
Futures Contract
Crude Oil at
Cushing
Oklahoma

Brent Blend
Crude Oil
FOB North Sea

Light, Sweet
Crude Oil
(40 API, 0.3%S)
at Edmonton

Bow River
Crude Oil
Stream
Quality at
Hardisty

WCS
Crude Oil
Stream
Quality at
Hardisty

Heavy
Crude Oil
Proxy
(12 API)
at Hardisty

Light Sour
Crude Oil
(35 API, 1.2%S)
at Cromer

Medium
Crude Oil
(29 API, 2.0%S)
at Cromer

Alberta Natural Gas Liquids
(Then Current Dollars)

Constant
2014 $
USD/bbl

Then
Current
USD/bbl

Then
Current
CAD/bbl

Spec
Ethane
CAD/bbl

Edmonton
Propane
CAD/bbl

Edmonton
Butane
CAD/bbl

Edmonton
C5+
Stream
Quality
CAD/bbl

0.0

0.9099

95.28

101.30

94.74

82.69

82.63

75.39

95.01

89.56

15.12

48.89

70.49

103.42

GLJ Petroleum Consultants

Natural Gas and Sulphur

SEC 2014-Dec-31 Posted (12 Month Avg.)

Effective January 01, 2015

Table 2

Midwest
Price at Chicago

Alberta Plant Gate

Henry Hub Nymex
Near Month Contract

AECO/NIT
Spot

Spot

Saskatchewan Plant Gate

British Columbia

Constant
2014 $
USD/
MMBtu

Then Current
USD/MMBtu

Then
Current
USD/
MMBtu

Then
Current
CAD/
MMBtu

Constant
2014 $
CAD/
MMBtu

Then
Current
CAD/
MMBtu

ARP
CAD/
MMBtu

Alliance
CAD/
MMBtu

SaskEnergy
CAD/
MMBtu

Spot
CAD/
MMBtu

Sumas Spot
USD/
MMBtu

Westcoast
Station 2
CAD/
MMBtu

Spot
Plant Gate
CAD/
MMBtu

Sulphur
FOB
Vancouver
USD/lt

Alberta
Sulphur
at Plant
Gate
CAD/lt

4.35

7.36

4.58

4.34

6.61

4.44

4.50

4.44

4.30

4.10

145.41

109.81

GLJ Petroleum Consultants

International and Frontier

SEC 2014-Dec-31 Posted (12 Month Avg.)

Effective January 01, 2015

Table 3


Inflation %	Bank of Canada Average Noon Exchange Rate USD/CAD						NYMEX WTI Near Month Futures Contract Crude Oil at Cushing Oklahoma				Light Louisiana Sweet Crude Oil				Maya Crude Oil				Brent Blend Crude Oil FOB North Sea				Henry Hub Spot				Nova Scotia Goldboro				National Balancing Point (UK)
Inflation %	Bank of Canada Average Noon Exchange Rate USD/CAD		CAD - GBP Exchange Rate CAD/GBP		CAD - EURO Exchange Rate CAD/EUR		Then Current USD/bbl		Then Current CAD/bbl		Then Current USD/bbl		Then Current CAD/bb		Then Current USD/bbl		Then Current CAD/bbl		Then Current USD/bbl		Then Current CAD/bbl		Then Current USD/ MMBtu		Then Current CAD/ MMBtu		Then Current USD/ MMBtu		Then Current CAD/ MMBtu		Then Current USD/ MMBtu		Then Current CAD/ MMBtu
0.0		0.910		1.8185		1.4680		95.28		104.71		95.32		104.76		88.57		97.34		101.30		111.33		4.35		4.78		7.38		8.11		8.36		9.19

APPENDIX I

CERTIFICATES OF QUALIFICATION

Jodi L. Anhorn

Chad P. Lemke

Mirek Zaoral

Mano M. Catania

Trisha S. MacDonald

Miranda L. Stoffman

Warren R. Bindon

Natasha Gvozdenovic

CERTIFICATION OF QUALIFICATION

I, Jodi L. Anhorn, Professional Engineer, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am a principal officer of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Calgary and that I graduated with a Master of Science Degree in Chemical and Petroleum Engineering in 1992; that I am a Registered Professional Engineer in the Province of Alberta; and that I have in excess of twenty-two years experience in engineering studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Chad P. Lemke, Professional Engineer, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Calgary where I graduated with a Bachelor of Science Degree in Mechanical Engineering in 2004; that I am a Registered Professional Engineer in the Province of Alberta; and, that I have in excess of eleven years of experience in engineering studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Mirek Zaoral, Professional Geologist, 4100, 400 – 3rd Avenue S.W. Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Calgary and that I graduated in 1977 with a Bachelor of Science Degree with honours in Geology; that I am a registered Professional Geologist in the Province of Alberta; and, that I have in excess of thirty-seven years experience in geological studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Mano M. Catania, Professional Engineer, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Regina where I graduated with a Bachelor of Applied Science Degree in Industrial Systems Engineering in 1995; that I am a Registered Professional Engineer; and, that I have in excess of seventeen years experience in engineering studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Trisha S. MacDonald, Professional Engineer, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Calgary where I graduated with a Bachelor of Science Degree in Oil and Gas Engineering in 2004; that I am a Registered Professional Engineer in the Province of Alberta; and, that I have in excess of ten years of experience in engineering studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Miranda L. Stoffman, Professional Geologist, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

That I attended the University of Calgary where I graduated with two Bachelor of Science Degrees in Geology and Applied and Environmental Geology in 2005; that I am a Registered Professional Geologist in the Province of Alberta; and, that I have in excess of seven years of experience in geological studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

LOGO

CERTIFICATION OF QUALIFICATION

I, Warren R. Bindon, Geoscientist In Training, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

3.	That I attended the University of Alberta where I graduated with a Master’s of Science Degree in Geology in 2011; and, that I am a Geoscientist In Training and have in excess of four years of experience in geological studies relating to oil and gas fields.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

Warren R. Bindon, M.Sc., G.I.T.

CERTIFICATION OF QUALIFICATION

I, Natasha Gvozdenovic, Engineer In Training, 4100, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada hereby certify:

1.	That I am an employee of GLJ Petroleum Consultants Ltd., which company did prepare a detailed analysis of Canadian oil and gas properties of Brion Energy Corporation (the “Company”). The effective date of this evaluation is December 31, 2014.

2.	That I do not have, nor do I expect to receive any direct or indirect interest in the securities of the Company or its affiliated companies.

3.	That I attended the University of Calgary, where I graduated with a Bachelor’s Degree in Chemical Engineering in 2014; and, that I am an Engineer In Training.

4.	That a personal field inspection of the properties was not made; however, such an inspection was not considered necessary in view of the information available from public information and records, the files of the Company, and the appropriate provincial regulatory authorities.

Natasha Gvozdenovic, E.I.T.