Letho Resources Corp. — M&A Activity 2022

Jul 14, 2022

AGREEMENT OF PURCHASE AND SALE

([name of area redacted], Alberta)

THIS AGREEMENT made as of the 7[th] day of July, 2022, BETWEEN:

VERMILION RESOURCES, a general partnership, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as "Vendor")

• and –

LETHO RESOURCES CORP. , a corporation, having an office in the City of Vancouver, in the Province of British Columbia (hereinafter referred to as "Purchaser")

WHEREAS Purchaser wishes to purchase the interest of Vendor in and to the Assets, subject to and in accordance with the terms and conditions hereof;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual covenants and agreements hereinafter set forth, the Parties have agreed as follows:

ARTICLE 1 INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires:

• (a) "Abandonment and Reclamation Obligations" means all past, present and future obligations in respect of the:

• (1) proper plugging and abandonment of the Wells;

• (2) the closure, decommissioning, dismantling and removal of structures, foundations, buildings, pipelines, equipment and other facilities, whether located within, on or under the White Map Area or lands pooled or unitized therewith or comprising all or part of the Assets, including the Tangibles; and

• (3) restoration, remediation, rehabilitation and reclamation of the surface and subsurface locations of each of those items described in section 1.1(a)(1) and section 1.1(a)(2), including all lands to which the Surface Rights relate,

all in accordance with generally accepted oil and gas industry practices in the jurisdiction where the Assets are located and in compliance with the Title Documents and all

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Applicable Laws, including such obligations relating to wells, structures, foundations, buildings, pipelines, equipment and other facilities which were abandoned or decommissioned prior to the date hereof that were located within, on or under the White Map Area or lands pooled or unitized therewith;

• (b) "Adjustment Date" means the hour of 12:01 a.m., Calgary time, on July 1, 2022;

• (c) "AER" means Alberta Energy Regulator and any predecessor thereof or successor thereto;

• (d) "AFEs" means the authorities for expenditure, operations notices, amounts budgeted pursuant to the Unit Agreements and mail ballots, if any, pertaining to the Assets, including those set out in Schedule "B" under the heading "AFEs";

• (e) "Alberta LMR" means the liability management rating of a licensee calculated in accordance with Directive 006 and Directive 088: Licensee Liability Rating (LLR) Program and Licence Transfer Process issued by the AER, as may be further amended, supplemented or replaced from time to time;

• (f) "Affiliate" means any Person which directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with, a Party. For purposes of this definition "control" means ownership of 50% or more of the voting rights or ownership interests in, or the power to direct or cause the direction of the management and policies, of the other Person, whether directly or indirectly, through one or more intermediaries or otherwise. For certainty, a partnership which is comprised of corporations which are Affiliates, as described above, shall be deemed to be an Affiliate of each such corporation and its other Affiliates;

• (g) "Applicable Law" means any law, statute, regulation, rule, ordinance, directive, order or judgment, enacted or issued by any Governmental Authority having jurisdiction over Vendor, Purchaser or the Assets, and the provisions and conditions of any permit, license, approval or other governmental or regulatory authorization in respect of the Assets or any of them;

• (h) "Arbitrator" has the meaning ascribed to that term in section 8.1(h);

• (i) "Assets" means the Petroleum and Natural Gas Rights, the Tangibles, the Miscellaneous Interests, and the Vendor’s entire interest in and to all of the Lands, Leases, Leased Substances, but excluding the Excluded Assets;

• (j) "Base Price" has the meaning ascribed to that term in section 2.7;

• (k) "Business Day" means a day other than a Saturday, a Sunday or a statutory holiday in Calgary, Alberta;

• (l) "Certificate" means a written certification of a matter or matters of fact which, if required from a corporation, shall be made by a senior officer of the corporation, on behalf of the corporation and not in any personal capacity;

• (m) "Closing" means the release from Escrow on the Final Closing Date of

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• (i) the Closing Documents to each of the Parties and

(ii) the Purchase Price to the Vendor;

• (n) "Closing Place" means the offices of Vendor, or such other place as may be agreed upon in writing by Vendor and Purchaser;

• (o) "Closing Time" means the hour of 2:00 p.m. on the Final Closing Date.

• (p) "Electronic Signatures" has the meaning ascribed thereto in section 13.16;

• (q) "Environmental Liabilities" means all past, present and future liabilities and obligations, whether under Applicable Law, in equity or otherwise, whether tortious, contractual, vicarious, statutory or otherwise, whether absolute or contingent and whether based on fault, strict liability, or otherwise, which arise in connection with or result from any damage, contamination or other environmental issues related to the Assets or the Lands, whether such liabilities and obligations arose or arise in connection with the prior, current or future ownership thereof or operations or activities conducted previously, on or after the date hereof in connection therewith, thereon or thereunder, including liabilities and obligations related to or arising from:

• (1) the manufacture, construction, processing, distribution, use, holding, collection, accumulation, generation, treatment, stabilization, handling, transportation, storage, or disposal of toxic or hazardous substances, Petroleum Substances, oilfield wastes or produced water to, from, on, under or within the White Map Area or lands pooled or unitized therewith;

• (2) the release, spill, escape or emission of toxic or hazardous substances, Petroleum Substances, oilfield wastes or produced water to, from, on, under or within the White Map Area or lands pooled or unitized therewith;

• (3) removal, assessment, monitoring, sampling, response, abatement, clean-up, investigation and reporting of pollution or contamination of or other adverse effects or problems on the environment;

• (4) compliance or non-compliance with, and violations of, Applicable Laws relating to environmental, health or safety matters;

• (5)

• Abandonment and Reclamation Obligations;

• (6) obligations to take action to prevent or rectify damage to or otherwise protect, conserve, reclaim, remediate, rectify or restore the environment;

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• (7) any other pollution or contamination of the surface, substrata, soil, air, ground water, surface water or marine environments; and

• (8) claims, demands, damages or losses arising or suffered by Third Parties as a result of the occurrences in subsections (i) to (vii) of this subsection,

regardless of when or where such liabilities and obligations arose or arise and, for purposes of this Agreement, the "environment" includes indoor and outdoor air, the surface and subsurface of the earth, bodies of water (including rivers, streams, lakes, aquifers and groundwater) and plant and animal life (including humans);

• (r) "ES Conveyance Documents" has the meaning ascribed thereto in section 13.16;

• (s) “Escrow Closing Date” means noon (Calgary time) on July 7, 2022, or such other date and time as may be agreed in writing by the Parties.

• (t) “Escrow Deadline” means noon (Calgary Time) on November 30, 2022, subject to any extension thereto;

• (u) “Escrowed Funds” has the meaning ascribed thereto in Section 2.3(d); (v) "Excluded Assets" means:

• (i) Petroleum Substances that, at the Adjustment Date, are in tanks or storage or beyond the point of sale to the buyer thereof which shall be adjusted on the Interim Statement of Adjustment;

• (ii) seismic and geophysical data, including the Seismic Data,

• (iv) proprietary technology;

• (v) interpretations, evaluations, forecasts analyses and similar items;

• (vi) tax returns and filings and related work papers and similar information;

• (vii) accounting and other financial information that is not exclusively and directly related to the Assets or operations relating thereto;

• (viii) all motor vehicles and any trailers;

• (ix) master road use agreements (or similar arrangements) that may now or in the future relate to roads serving properties in addition to the Assets;

• (x) any assets that are used primarily in respect of or otherwise primarily associated with the assets described in items (i) to (x) above;

• (w) "Facilities" means the facility or facilities located within, upon or under the White Map Area, including those set out in Schedule "B" under the heading "Facilities";

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• (x) “Final Closing Date means the date occurring 10 business days after the Well and Facility Licence Transfers (LTA) has been approved by AER.

• (y) "Final Statement of Adjustments" has the meaning ascribed to that term in subsection 8.1(e);

• (z) "General Conveyance" means the form of general conveyance attached hereto as Schedule "F";

• (aa) "Governmental Authority" means any government, whether federal, provincial, state, territorial, local, regional, municipal, or other political jurisdiction, and any agency, authority, instrumentality, court, tribunal, board, commission, bureau, arbitrator, arbitration tribunal or other tribunal, or any quasi-governmental or other entity, insofar as it exercises a legislative, judicial, regulatory, administrative, expropriation or taxing power or function of or pertaining to government having jurisdiction over the Assets, the Parties or the Transaction;

• (bb) "GST" means the goods and services tax levied under the Excise Tax Act (Canada) and the regulations thereto, and under any successor or parallel federal or provincial legislation that imposes a tax on the recipient of goods and services, in each case as amended from time to time;

• (cc) "IFRS Rules" means the international financial reporting standard rules adopted and applied by the Canadian Institute of Chartered Accountants at the relevant time;

• (dd) "Independent Accounting Firm" means an Independent Accounting Firm, if needed, to be selected by Vendor as outlined in section 8.1];

• (ee) "Interim Statement of Adjustments" has the meaning ascribed to that term in subsection 8.1(b);

• (ff) "Lands" means all lands within the White Map Area, including the lands set forth and described in Schedule "A-2" and (unless the context otherwise requires) the surface of and all geological zones and formations within, upon or under such lands, but excluding the Excluded Assets;

• (gg) "Leases" means the leases, licenses, grants, permits and similar documents of title by virtue of which the holder thereof is entitled to drill for, win, take, own or remove Petroleum Substances within, upon or under the White Map Area including as set forth on Schedule "A-2" or lands pooled or unitized therewith and includes, if applicable, all renewals and extensions of such documents;

• (hh) "Leased Substances" means all Petroleum Substances, rights to or in respect of which are granted, reserved or otherwise conferred by or under the Title Documents (but only to the extent that the Title Documents pertain to the Lands);

• (ii) "Licensee Liability Rating" means the Alberta LLR;

• (jj) "Losses and Liabilities" means, subject to section 7.4(a)(4), any and all:

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• (i) claims, demands, suits, proceedings, judgments, losses, charges, penalties, fines, fees, costs and expenses (including reasonable legal costs on a solicitor/client basis and reasonable costs of other professional advisors and reasonable costs of investigating and defending against such matters) sustained, suffered or incurred; and

• (ii) liabilities and obligations (whether under common law, in equity, under Applicable Law or otherwise), whether tortious, contractual, vicarious, statutory or otherwise, whether absolute or contingent and whether based on fault, strict liability or otherwise;

• (kk) “LTA” means the AER form of license transfer application as set forth and described in AER Directive 006 as amended by Directive 088: Licensee Management Program and License Transfer Process;

• (ll) "Miscellaneous Interests" means, subject to any and all limitations and exclusions provided for in this definition, Vendor’s entire right, title, estate and interest in and to all property, assets, interests and rights pertaining to the Lands, the Petroleum and Natural Gas Rights and the Tangibles, or any of them, but only to the extent that such property, assets, interests and rights pertain to the Lands, the Petroleum and Natural Gas Rights and the Tangibles, or any of them, including any and all of the following:

contracts and agreements relating directly to the Lands, the Petroleum and Natural Gas Rights and the Tangibles, or any of them, including the Title Documents , Firm Transportation Agreements and such: agreements for the transportation, processing or disposal of the Leased Substances or any of them or substances produced in connection with the Leased Substances or any of them; gas purchase and other marketing contracts; gas balancing or similar agreements pertaining to the Leased Substances or any of them; agreements to provide transportation, processing or disposal capacity or service to any Third Party; agreements for the construction, ownership and operation of facilities; and agreements for the contract operation by a Third Party of the Assets or any of them;

• (1) all records, books, documents, licences, reports and data which relate directly and exclusively to the Lands, the Petroleum and Natural Gas Rights and the Tangibles, or any of them;

• (2) the Surface Rights;

• (3) all licenses, permits and other authorizations relating to the Wells and the Tangibles; and

• (4) the Wells, including the wellbores and any and all casing;

• (mm) "Objection Date" has the meaning ascribed to that term in subsection 8.1(f);

• (nn) "Officer’s Certificates" means the form of Vendor’s Officer’s Certificate and Purchaser’s Officer’s Certificate attached hereto as Schedule "G";

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• (oo) "Party" means a party to this Agreement;

• (pp) "Permitted Encumbrances" means:

• (1) liens for taxes, assessments and governmental charges which are not due or the validity of which is being diligently contested in good faith by or on behalf of Vendor;

• (2) liens incurred or created in the ordinary course of business to a public utility, municipality or Governmental Authority in connection with development or operations pertaining to the Assets which are not due or the validity of which is being diligently contested in good faith by or on behalf of Vendor;

• (3) liens incurred or created in the ordinary course of business as security in favour of the Person who is conducting the development or operation of the property to which such liens relate for Vendor's proportionate share of the costs and expenses of such development or operation;

• (4) mechanics', builders' and materialmen's liens in respect of services rendered or goods supplied for which payment is not due or the validity of which is being diligently contested in good faith by or on behalf of Vendor;

• (5) easements, rights of way, servitudes and other similar rights in land, including rights of way and servitudes for highways and other roads, railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light, power, telephone, telegraph and cable television conduits, poles, wires and cables;

• (6) the right reserved to or vested in any Governmental Authority by the terms of any lease, licence, franchise, grant or permit or by any Applicable Law, to terminate any such lease, licence, franchise, grant or permit or to require annual or other periodic payments as a condition of the continuance thereof;

• (7) all Applicable Laws, and all rights of general application reserved to or vested in any Governmental Authority to regulate the Assets in any manner, including requirements and limitations as to production rates or operations, or to levy taxes on Petroleum Substances or any of them or the income therefrom;

• (8) statutory exceptions to title, and the reservations, limitations, provisos and conditions in any original grants from the Crown of any of the mines and minerals within, upon or under the Lands or lands pooled or unitized therewith;

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• (9) any security held by any Third Party encumbering Vendor's interest in and to the Assets or any part or portion thereof, in respect of which Vendor delivers a discharge or no interest letter to Purchaser at or prior to Closing;

• (10) the Production Contracts and agreement or agreements (if any) for the sale of Leased Substances that are terminable on not greater than 31 days' notice (without an early termination penalty or other cost);

• (11) all royalty burdens, liens, adverse claims, penalties, reductions in interests and other encumbrances set out in Schedule "A-2";

• (12) the terms and conditions of all Title Documents or any other agreements relating to the Assets (including pooling and unitization agreements), provided that any encumbrance constituting a royalty (other than any Crown royalties), net profits interest, carried interest, penalty, or reduction in interest created under or pursuant to any such Title Documents or agreements will be a Permitted Encumbrance only if it also satisfies another provision of this section;

• (13) trust obligations incurred in the ordinary course of business;

• (14) all Rights of First Refusal set out in Schedule "A-2" or Schedule "C";

• (15) any defects or deficiencies in or affecting the title of Vendor in and to any of the Assets; and

• (16) any other circumstance, matter or thing disclosed in the Data Room Materials or any Schedule hereto;

• (qq) "Person" means any individual (or group of individuals), corporation, limited or unlimited liability company, joint venture, partnership (limited or general), trust, trustee, executor or similar official, Governmental Authority or other legal entity;

• (rr) "Petroleum and Natural Gas Rights" means the Vendor's entire right, title, estate and interest (whether absolute or contingent, legal or beneficial, vested or not and whether or not an "interest in land") to drill for, explore for, extract, win, take, produce, save and market Petroleum Substances within, upon or under the Lands or any lands pooled or unitized therewith, including as set forth and described in Schedule "A-2", but excluding the Excluded Assets;

• (ss) "Petroleum Substances" means any of crude oil, crude bitumen and products derived therefrom, synthetic crude oil, petroleum, natural gas, condensate, natural gas liquids, coal bed methane, and any and all other substances related to any of the foregoing, whether liquid, solid or gaseous, and whether hydrocarbons or not, including sulphur;

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• (tt) "Prime Rate" means an annual rate of interest equal to the annual rate of interest announced from time to time by the main Calgary branch of Royal Bank of Canada as the reference rate then in effect for determining interest rates on Canadian dollar commercial loans in Canada, provided that for purposes of this Agreement such rate shall be determined on the last day of each month and applied to the next succeeding month;

• (uu) "Production Contracts" means the agreement or agreements, if any, set out in Schedule "D?"

• (vv) "Purchase Price" means the aggregate consideration payable by Purchaser to Vendor as set forth in section 2.7;

• (ww) “Purchaser’s Legal Counsel” means McMillan LLP;

• (xx) "Representatives" means, with respect to any Party, its Affiliates, and the respective directors, officers, servants, agents, advisors, employees and consultants of that Party and its Affiliates;

• (yy) "Specific Conveyances" means all conveyances, assignments, transfers, novations and other documents or instruments that are reasonably required or desirable to convey, assign and transfer the interest of Vendor in and to the Assets to Purchaser and to novate Purchaser in the place and stead of Vendor with respect to the Assets;

• (zz) "Surface Rights" means all rights of Vendor to use the surface of land in connection with the Lands or the Assets, including rights to enter upon and occupy the surface of land on which the Tangibles and the Wells are located and rights to cross or otherwise use the surface of land for access to the Assets, excluding any such rights that pertain only to a well or wells other than the Wells, and excluding the Excluded Assets;

• (aaa) "Take or Pay Obligations" means obligations to sell or deliver Petroleum Substances or any of them, rights to which are granted, reserved or otherwise conferred pursuant to the Title Documents, without being entitled in due course to receive and retain full payment for such Petroleum Substances;

• (bbb) "Tangibles" means, subject to any and all limitations and exclusions provided for in this definition, Vendor’s entire right, title, estate and interest in and to: (i) the Facilities; and (ii) all tangible depreciable property and assets other than the Facilities which are located within, upon or under the White Map Area or lands pooled or unitized therewith, but excluding the Excluded Assets;

• (ccc) "Third Party" means any Person other than Vendor and Purchaser or any Affiliates thereof, including any partnership, corporation, trust, unincorporated organization, union, government and any department and agency thereof and any heir, executor, administrator or other legal representative of an individual;

• (ddd) "Thirteenth Month Adjustment" means the accounting procedure performed annually by an operator of particular Tangibles for the purpose of redistributing certain revenues and expenses, including operating expenses, processing fee revenues, excess capacity

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utilization fees and recoveries, royalties and gas cost allowances (or similar cost allowances);

• (eee) "Title Documents" means, to the extent directly related to the Lands, the Petroleum and Natural Gas Rights or the Tangibles: (i) the Leases; (ii) Unit Agreements, assignments, trust declarations, trust agreements, operating agreements, royalty agreements, overriding royalty agreements, participation agreements, farm-in and farmout agreements, sale and purchase agreements, pooling agreements, common stream agreements, easements, surface leases, pipeline crossing agreements, and road use agreements; (iii) Production Contracts; (iv) agreements for construction, ownership and operation of the gas plants, gas gathering systems, pipelines and other facilities; (v) permits, licenses, authorizations and approvals; (vi) other documents and agreements which relate to the Lands, the Petroleum and Natural Gas Rights or the Tangibles or the ownership, operation or exploitation thereof, including those, if any, set forth in Schedule "A-2"; (vii) agreements that create or relate to Surface Rights; and (viii) trust declarations pursuant to which Vendor holds interests in the White Map Area or lands pooled or unitized therewith in trust for other Persons, but excluding all of the foregoing to the extent relating to the Excluded Assets;

• (fff) "Transaction" means the entering into of this Agreement, the sale of the Assets by Vendor to Purchaser and the assumption of the Environmental Liabilities by Purchaser pursuant to this Agreement;

• (ggg) “TSXV” means the TSX Venture Exchange;

• (hhh) "Unscheduled Assets" has the meaning ascribed to that term in section 2.10(a);

• (iii) "Wells" means the wells identified in Schedule "B" and all other wells located within, upon or under the White Map Area, the Lands or lands pooled or unitized therewith, including producing, suspended, standing, plugged or unplugged, shut-in, abandoned (both fully or partially reclaimed), reclamation certified and reclamation exempt, source, disposal and injection wells;

• (jjj) "White Map Area" means the areas outlined by the solid line on the map attached hereto as Schedule "A-1", and includes the surface of such area and the Petroleum Substances in all zones and formations within, upon or under such area, but excluding the Excluded Assets; and

• (kkk) "Wire Transfer Instructions" means the wire transfer instructions in respect of Vendor and Purchaser as set out on Schedule "H" attached hereto.

1.2 Headings

The expressions "Article", "section", "subsection", "clause", "subclause", "paragraph" and "Schedule" followed by a number or letter or combination thereof mean and refer to the specified article, section, subsection, clause, subclause, paragraph and schedule of or to this Agreement.

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1.3 Interpretation Not Affected by Headings

The division of this Agreement into Articles, sections, subsections, clauses, subclauses and paragraphs and the provision of headings for all or any thereof are for convenience and reference only and shall not affect the construction or interpretation of this Agreement.

1.4 Included Words

When the context reasonably permits, words suggesting the singular shall be construed as suggesting the plural and vice versa, and words suggesting gender or gender neutrality shall be construed as suggesting the masculine, feminine and neutral genders. The word "including" shall be construed for all purposes of this Agreement as "including, without limitation".

1.5 Schedules

There are appended to this Agreement the following schedules pertaining to the following matters:

Schedule "A-1"	-	White Map Area
Schedule "A-2"	-	Petroleum and Natural Gas Rights
Schedule "B"	-	Wells
Schedule "C"	-	AFEs
Schedule "D"	-	Joint Venture Contracts, Unit Agreements, Production Agreements,
		CO&O Agreements and Service Agreements
Schedule "E"	-	Firm Transportation Agreements
Schedule "F"	-	General Conveyance
Schedule "G"	-	Officer’s Certificates
Schedule "H"	-	Wire Transfer Instructions
Schedule "I"		Excluded Assets

Such schedules are incorporated herein by reference. Wherever any term or condition of such schedules conflicts or is at variance with any term or condition in the body of this Agreement, such term or condition in the body of this Agreement shall prevail.

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1.6 Monetary References

Any reference in this Agreement to a monetary amount, including the use of the term "Dollar" or the symbol "$", shall mean the lawful currency of Canada.

1.7 Interpretation if Closing does not Occur

If Closing does not occur, each provision of this Agreement that presumes that Purchaser has acquired the Assets hereunder will be construed as having been contingent upon Closing having occurred.

1.8 Miscellaneous Interpretation

Unless otherwise stated or the context otherwise necessarily requires, in this Agreement:

• (a) whenever the singular or masculine or neuter is used, it shall be interpreted as meaning the plural or feminine or body politic or corporate, and vice versa, as the context requires;

• (b) "this Agreement", "herein", "hereby", "hereunder", "hereof" and similar expressions refer to this Agreement as a whole (including Schedules) and not to any particular Article, section, subsection, clause or subclause on or other provision hereof;

• (c) a reference to any agreement or instrument, including this Agreement, is a reference to the agreement or instrument as varied, amended, modified, supplemented or replaced from time to time;

• (d) a reference to a statue means the statute as in force on the date hereof and the regulations made pursuant thereto;

• (e) unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences and including the day on which the period ends and by extending the period to the next Business Day if the last day of the period is not a Business Day; and

• (f) all documents executed and delivered pursuant to the provisions of this Agreement are subordinate to the provisions hereof and the provisions hereof shall govern and prevail in the event of a conflict.

1.9 Knowledge or Awareness

In this Agreement, the stated knowledge, information, belief or awareness of Vendor consists only of the actual knowledge of the current officers of Vendor whose normal responsibilities relate to the matter in question in the course of their normal duties and does not include knowledge, information or belief and awareness of any other Person or any constructive or imputed knowledge. Vendor does not have any obligation to make inquiry of Third Parties or the files and records of any Third Party or Governmental Authority in connection with representations and warranties that are made to its knowledge, information, belief or awareness.

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ARTICLE 2 PURCHASE AND SALE AND CLOSING

2.1 Purchase and Sale

Subject to and in accordance with the terms of this Agreement, Vendor hereby agrees to sell, assign, transfer, convey and set over to Purchaser and Purchaser hereby agrees to purchase, assume and accept from Vendor, all of the right, title, estate and interest of Vendor (whether absolute or contingent, legal or beneficial) in and to the Assets.

2.2 Closing

• (a) Closing shall take place at the Closing Place at the Closing Time if there has been satisfaction or waiver of the conditions of Closing herein contained.

• (b) Subject to all other provisions of this Agreement, possession, risk and beneficial ownership of Vendor's interest in and to the Assets shall pass from Vendor to Purchaser at the Closing Time.

2.3 Escrow Closing

The Parties confirm, acknowledge, agree and undertake the following:

(a) Pursuant to the Alberta LMR Program, as a condition of the AER transferring the AER Well and Facility Licenses, the AER is entitled to require Purchaser to demonstrate it has an LMR sufficient for the AER to approve the registration of the Vendor LTA.

(b) Purchaser has submitted to the AER an application for licence eligibility meeting all of the requirements of the AER, including those set forth and described in AER Directive 067: Eligibility Requirements for Acquiring and Holding Energy Licences and Approvals, which application was approved conditionally by the AER by letter dated December 16, 2021.

(c) Purchaser shall also forthwith after the date hereof make application to the AER requesting that the AER exercise its discretion to approve the registration of the Vendor LTA, and Purchaser shall at all times hereafter continue to use its best efforts to persuade the AER to so exercise its discretion, including by the work plan that has been submitted and can be resubmitted in the D088 process. If an AER Waiver is issued, then the Purchaser shall:

(i) honor and comply with the terms and conditions of approval set out in such AER Waiver in all respects. Upon receipt by Purchaser of notification that the AER is prepared to exercise such discretion to accept and approve the Vendor LTA (the "AER Waiver"), Purchaser shall forthwith provide written notice thereof to Vendor; or

(ii) decline the terms and conditions of approval set out in such AER Waiver in all respects. However, if the terms and conditions of approval set out in such AER Waiver in all respects are AER reasonable conditions, in the opinion of Vendor, including but not limited to, requiring a deposit for future abandonment obligations with respect to the Assets of up to $800,000.00, then Purchaser shall pay Vendor $100,000.00 as consideration for terminating this agreement as per this Clause.

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(d) On the Escrow Closing Date, the Parties shall close the transaction contemplated herein in escrow, whereby both Parties shall fully execute and deliver copies of the Closing Documents, and Purchaser shall deliver to the Purchaser’s legal counsel on the Escrow Closing Date the amount of $1,500,000 (the “Escrowed Funds”), to be held in trust by the Purchaser’s legal counsel and released on the Final Closing Date in accordance with Section 2.7.

(e) Vendor shall electronically submit the Vendor LTA to the AER for approval of the transfer of the AER Well and Facility Licenses not later than five (5) Business Days following the execution of this agreement by the parties hereto, and Purchaser shall forthwith electronically ratify and accept such submission.

(f) If both (i) the AER has transferred all of the AER Well and Facility Licenses to Purchaser, and (ii) the TSXV has issued its approval of the Transaction, on or before the Escrow Deadline, then notwithstanding any event or circumstance occurring after the Escrow Closing Date:

(i) Purchaser shall forthwith deliver to Vendor written evidence that such transfer has been completed and approved, and that Purchaser has satisfied any and all other conditions and requirements imposed by the AER in connection with the transfer of the AER Well and Facility Licenses;

(ii) Purchaser’s legal counsel shall release the Escrowed Funds to Vendor and Purchaser shall forthwith deliver to Vendor the balance of the Purchase Price in accordance with Section 2.7

(iii) each Party shall forthwith after receipt by Vendor of the items under (i) and (ii) above, release the Closing Documents and the Purchase Price and Closing shall be deemed to have thereupon occurred; and

(vi) Purchaser shall have been deemed to have paid to Vendor the Purchase Price, subsequent to the release of the Purchase Price to Vendor as per subclause 2.3.f.ii.

(g) If (i) the AER has not transferred all of the AER Well and Facility Licenses to Purchaser, or (ii) the TSXV has not issued its approval of the Transaction, in each case on or before the Escrow Deadline and if the Parties have not agreed to extend the Escrow Deadline:

• (i) Closing shall be deemed not to have occurred,

• (ii) each Party shall destroy the Closing Documents.

• (iii) Purchaser’s legal counsel shall return the Escrowed Funds to Purchaser,

(iv) Vendor shall reimburse Purchaser for all expenses associated with the operation of the Assets that have been expended by Purchaser for the period of the Escrow Closing Date to the date of termination of this Agreement, and

(iii) this Agreement shall thereupon terminate and the Parties shall be released from all obligations and liabilities.

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(h) If the Vendor LTA has not been approved and all of the AER Well and Facility Licenses have not been transferred to Purchaser on or before the Escrow Deadline, and the sole reason therefore is either administrative processing delays at the AER or mis-descriptions or other minor deficiencies respecting the transfer of the AER Well and Facility Licenses, then Purchaser shall have the right, by written notice to Vendor no later than the expiry of the Escrow Deadline, to extend the Escrow Deadline to December 31, 2022.

(i) Purchaser shall on a timely and continuing basis keep Vendor fully apprised and informed regarding all communications Purchaser may have with the AER in connection with the transactions contemplated by this Agreement, including all communications respecting the Vendor LTA, and without limiting the generality of the foregoing Purchaser shall provide copies to Vendor of all related correspondence from Purchaser to the AER, and Purchaser shall instruct the AER to provide copies to Vendor of all related correspondence from the AER to Purchaser.

(j) If the AER has transferred any AER Well and Facility Licenses to Purchaser but Closing does not occur, Purchaser shall do all things necessary to forthwith effect a transfer of all such AER Well and Facility Licenses (and any other applicable Permits) back to Vendor, at Purchaser's sole cost and expense.

(k) After the Escrow Closing Date, and until the Closing Time, Vendor will continue to operate the Assets on Purchaser’s behalf.

(l) The operations outlined in the Purchaser’s work plan can be carried out in accordance with good oilfield practices, the Regulations, and Vendor's fiscal, asset integrity, health, safety and environment (HSE), and other applicable policies, and Vendor has personnel and other resources available to carry out such operations.

(m) Purchaser shall make all necessary filings and applications under the policies of the TSXV required on its part in connection with seeking approval of the TSXV for the Transaction, and the Vendor will cooperate in providing such information and documents that the TSXV may required in connection with its review of the Transaction.

2.4 Specific Conveyances

• (a) Vendor shall prepare the Specific Conveyances at its cost and use reasonable commercial efforts to provide the Specific Conveyances for execution and delivery at Closing, or as soon thereafter as reasonably possible and in any event no later than ten (10) days after Closing. All Specific Conveyances that are prepared and circulated to Purchaser a reasonable time prior to the Closing Time shall be executed and delivered by the Parties at Closing. Forthwith after Closing, Purchaser shall at its cost circulate and register, as the case may be, all Specific Conveyances and further assurances that by their nature may be circulated or registered, provided that to the extent electronic registration of the Specific Conveyances is permitted by a Government Authority, within three (3) Business Days following the Closing Time, Vendor shall at Purchaser’s cost prepare and electronically submit an application to the appropriate Government Authority to effect such registration and Purchaser shall electronically ratify and sign such application. Should any Government Authority deny any electronic application because of a misdescription or other minor deficiency in the application, Vendor shall promptly correct the application and amend and re-submit such application for the electronic transfer and Purchaser shall

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electronically ratify and confirm such application. For greater certainty, none of the Specific Conveyances shall confer or impose upon a Party any greater right or obligation than contemplated in this Agreement.

2.5 Title Documents and Miscellaneous Interests

Vendor shall use reasonable commercial efforts to deliver to Purchaser at Closing or as soon thereafter as reasonably possible, and in any event no later than ten (10) days after Closing, the original copies of the Title Documents and any other agreements and documents to which the Assets are subject and the original copies of contracts, agreements, records, books, documents, licences, reports and data comprising Miscellaneous Interests which are now in the possession of Vendor or of which it gains possession prior to Closing. Notwithstanding the foregoing, if and to the extent such Title Documents, contracts, agreements, records, books, documents, licences, reports and data also pertain to interests other than the Assets, photocopies or other copies may be provided to Purchaser in lieu of original copies. Purchaser shall, upon request and after reasonable notice, provide reasonable access, at the offices of Purchaser and during its normal business hours, to such of the Title Documents and other contracts, agreements, records, books, documents, licenses, reports and data comprising Miscellaneous Interests delivered by Vendor pursuant hereto, as Vendor may require for purposes concerning the interests which Vendor held in the Assets prior to the Closing Time and the calculation of adjustments prior to the finalization of same, subject always to the requirement that all such information shall remain confidential.

2.6 Form of Payment

All payments to be made pursuant to this Agreement shall be in Canadian funds. All payments shall be made by wire transfer in accordance with the Wire Transfer Instructions.

2.7 Purchase Price

The aggregate consideration to be paid by Purchaser to Vendor for Vendor's interest in and to the Assets shall be $2,100,000 (the "Base Price"), plus or minus the adjustments resulting from the operation of Article 8, minus the adjustments, in each case exclusive of GST and any other taxes payable pursuant to section 2.9, which amount shall be payable upon satisfaction of the conditions set forth in Section 2.3(f) as follows:

• (a) Purchaser’s legal counsel shall release the Escrowed Funds to Vendor and such Escrowed Funds will be applied towards payment of the Base Price, and

• (b) the balance of the Base Price, as adjusted in accordance with Article 8, if higher than the amount of the Escrowed Funds shall be paid by Purchaser to Vendor, or if lower than the amount of the Escrowed Funds then the difference shall be repaid by Vendor to Purchaser.

In determining the Base Price, the Parties agree that the extent and value of the Environmental Liabilities is unknown, and the Parties have not attributed a specific or agreed to value with regard to either (i) such liabilities, or (ii) the indemnities provided for in section 7.1(b), nor shall there be any adjustments made to the Purchase Price in relation thereto.

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2.8 Allocation of Purchase Price

The Parties shall allocate the Purchase Price as follows:

Petroleum and Natural Gas Rights $ 1,679,990.00 Tangibles $ 420,000.00 Miscellaneous Interests $ 10.00 Total $ 2,100,000.00

2.9 Payment of Taxes

• (a) The Purchase Price is exclusive of, and Purchaser shall be solely liable for and shall pay, all applicable GST and all other sales and transfer taxes, value added taxes, land transfer taxes, fees, duties, charges, levies, deposits or similar assessments which may be imposed by any Governmental Authority pertaining to the conveyance and transfer of the Assets to Purchaser or the circulation or registration of the Specific Conveyances, excluding any corporate income taxes which are required to be paid by Vendor pursuant to Applicable Laws. If Vendor, as agent for the Crown, is required to collect such taxes, Purchaser shall pay the aggregate amount of such taxes to Vendor at Closing. Vendor shall remit such amount to the appropriate Governmental Authority in accordance with Applicable Law.

• (b) Without limiting the generality of section 2.9(a), at Closing Purchaser shall pay to Vendor an amount equal to the statutory rate of GST on the portion of the Purchase Price allocated to the Tangibles and the Miscellaneous Interests pursuant to section 2.8. Vendor shall remit such amount to the appropriate taxation authorities in accordance with the Excise Tax Act (Canada). The GST registration number of Vendor is 864251525 RT0001 and the GST registration number of Purchaser is 831805072RT0001.

• (c) After Closing, Purchaser shall be responsible for, and shall indemnify and save Vendor harmless in respect of any additional amounts of GST, and any sales and transfer taxes, value added taxes, land transfer taxes, fees, duties, charges, levies, deposits and similar assessments imposed by Applicable Laws or by any Governmental Authority (including interest and penalties) in respect of the purchase and sale of the Assets pursuant hereto which are in excess of the amounts collected by Vendor from Purchaser at Closing, provided that this indemnity shall not apply to any interest or penalties payable by Vendor as a result of the failure of Vendor to remit any amounts of GST or sales and transfer taxes, value added taxes, land transfer taxes, fees, duties, charges, levies, deposits or similar assessments collected from or paid by Purchaser to Vendor at Closing.

2.10 White Map Area

• (a) The Parties acknowledge that although Vendor has prepared, and Purchaser has reviewed, the Schedules attached hereto diligently and with good faith, they recognize that there may be unintended omissions or misdescriptions. As such, the Parties acknowledge and agree that it is their intention that, in addition to those Lands and Assets included and specified in the Schedules hereto, the Assets shall include the Vendor’s entire interest in and to all Lands, Petroleum and Natural Gas Rights, Tangibles and Miscellaneous Interests (as those terms are defined herein) which fall within the White

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Map Area (the "Unscheduled Assets"), and that the Purchase Price includes consideration for such Unscheduled Assets.

• (b) To the extent that any Unscheduled Assets are identified by either Party after the Closing Time, the Parties shall use all reasonable efforts to replace the affected Schedules attached hereto with corrected Schedules, which corrected Schedules shall be deemed to be the applicable Schedules as of the date hereof, and to take such additional steps as are necessary to specifically convey Vendor’s interest in such Unscheduled Assets to Purchaser.

ARTICLE 3 CONDITIONS OF CLOSING

3.1 Purchaser's Conditions

The obligation of Purchaser to purchase Vendor's interest in and to the Assets is subject to the following conditions precedent, which are inserted herein and made part hereof for the exclusive benefit of Purchaser and may be waived by Purchaser:

• (a) the representations and warranties of Vendor herein contained shall be true in all material respects when made and as of the Closing Time;

• (b) all covenants, obligations and agreements of Vendor contained in this Agreement to be performed prior to or at Closing shall have been timely performed in all material respects, and a Certificate to that effect shall have been delivered by Vendor to Purchaser at Closing;

• (c) there shall have been no material adverse uninsured damage to the Tangibles between the date hereof and the Closing Time, and a Certificate to that effect shall have been delivered by Vendor to Purchaser at Closing;

• (d) Vendor shall have delivered to Purchaser at or prior to Closing discharges of, or no interest letters in respect of, any security held by any Third Party representing a material encumbrance on Vendor's interest in and to the Assets or any part or portion thereof, which discharges or no interest letters are requested by Purchaser a reasonable time prior to Closing; and

• (e) each of Vendor and Purchaser shall have received all necessary regulatory approvals for the Transaction, including the approval for the TSXV.

If any one or more of the foregoing conditions precedent has or have not been satisfied, complied with, or waived by Purchaser, at or before the Closing Time, for reasons other than a breach by Purchaser hereunder, Purchaser may rescind this Agreement by written notice to Vendor.

3.2 Vendor's Conditions

The obligation of Vendor to sell its interest in and to the Assets is subject to the following conditions precedent, which are inserted herein and made part hereof for the exclusive benefit of Vendor and may be waived by Vendor:

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• (a) the representations and warranties of Purchaser herein contained shall be true in all material respects when made and as of the Closing Time, and a Certificate to that effect shall have been delivered by Purchaser to Vendor at Closing;

• (b) all covenants, obligations and agreements of Purchaser contained in this Agreement to be performed prior to or at Closing shall have been timely performed in all material respects, and a Certificate to that effect shall have been delivered by Purchaser to Vendor at Closing;

• (c) each of Vendor and Purchaser shall have received all necessary regulatory approvals for the Transaction, including the approval for the TSXV; and

• (d) all amounts to be paid by Purchaser to Vendor at Closing shall have been paid to Vendor in the form stipulated in this Agreement.

If any one or more of the foregoing conditions precedent has or have not been satisfied, complied with, or waived by Vendor, at or before the Closing Time, for reasons other than a breach by Vendor hereunder, Vendor may rescind this Agreement by written notice to Purchaser.

3.3 Efforts to Fulfil Conditions Precedent

Purchaser and Vendor shall proceed diligently and in good faith and use best efforts to satisfy and comply with and assist in the satisfaction and compliance with the conditions precedent. If there is a condition precedent that is to be satisfied or complied with prior to the Closing Time, and if, by the time the condition precedent is to be satisfied or complied with, the Party for whose benefit the condition precedent exists fails to notify the other Party whether or not the condition precedent has been satisfied or complied with, the condition precedent shall be conclusively deemed to have been satisfied or complied with

ARTICLE 4 CLOSING DELIVERIES

4.1 Deliveries at Closing

• (a) At the Closing Time, Vendor shall table the following:

• (1) the General Conveyance duly executed by Vendor;

• (2) the Specific Conveyances that have been prepared and are available at Closing duly executed by Vendor;

• (3) the Officer’s Certificate duly executed by Vendor;

• (4) registrable discharges of, or no interest letters in respect of, any security held by any Third Party materially encumbering Vendor's interest in and to the Assets or any part or portion thereof, as requested by Purchaser a reasonable time prior to Closing;

• (5) such other items as may be specifically required hereunder.

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• (b) At the Closing Time, Purchaser shall table the following:

• (1) the amounts payable at Closing on account of the Purchase Price pursuant to section 2.72.7, as adjusted, and GST and other taxes payable in accordance with section 2.9;

• (2) the General Conveyance duly executed by Purchaser;

• (3) the Specific Conveyances that have been prepared and are available at Closing duly executed by Purchaser;

• (4) the Officer’s Certificate duly executed by Purchaser; and

• (5) such other items as may be specifically required hereunder.

Each Party will duly execute all documents requiring execution by it and to be tabled at Closing.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES

5.1 Representations and Warranties of Vendor

Vendor represents and warrants to Purchaser that:

• (a) Standing: Vendor is a partnership duly formed and validly existing under the laws of the jurisdiction of formation of Vendor, is authorized to carry on business in the Province in which the Lands are located, and now has good right, full power and absolute authority to sell, assign, transfer, convey and set over the interest of Vendor in and to the Assets according to the true intent and meaning of this Agreement;

• (b) Requisite Authority: the execution, delivery and performance of this Agreement has been duly and validly authorized by any and all requisite partnership and partner actions and will not result in any violation of, be in conflict with or constitute a default under any partnership agreement to which Vendor is bound;

• (c) No Conflicts: the execution, delivery and performance of this Agreement will not result in any violation of, be in conflict with or constitute a default under any judgment, decree, order, statute, regulation, rule or license applicable to Vendor;

• (d) Enforceability: this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of Vendor enforceable against Vendor in accordance with their terms, subject however to the effects of bankruptcy, insolvency, reorganization and other laws for the protection of creditors;

• (e) No Approvals or Authorizations Required: no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority exercising jurisdiction over the Assets is required for the due execution, delivery and performance by Vendor of this Agreement, other than authorizations, approvals or exemptions from

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requirement therefor, previously obtained and currently in force or those ordinarily obtained after Closing;

• (f) Finders' Fees: Vendor has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of this Agreement or the Transaction to be effected by it for which Purchaser shall have any obligation or liability;

• (g) Canadian Resident: Vendor is not a non-resident within the meaning of section 116 of the Income Tax Act (Canada) and the interest of Vendor in and to the Assets does not constitute all or substantially all the property of Vendor;

• (h) Title: Vendor does not warrant title to the Assets, but Vendor does warrant that, except for the Permitted Encumbrances or as otherwise disclosed in the Schedules: (i) at Closing the Assets will be free and clear of all liens, royalties, conversion rights and other adverse claims of Third Parties, created by, through or under Vendor or of which Vendor has knowledge; and (ii) Vendor has done no act or thing and has no awareness of a circumstance, matter or thing whereby any of the Assets may be reduced, cancelled or determined in any material respect;

• (i) Quiet Enjoyment: subject to the Permitted Encumbrances, and to the rents, covenants, conditions and stipulations in the Leases and the Title Documents to be paid, performed and observed, Purchaser may enter into and upon, hold and enjoy the Leases for the residue of their respective terms and all renewals or extensions thereof for Purchaser's own use and benefit without any material interruption of or by Vendor or any other Person claiming by, through or under Vendor;

• (j) ROFRs: Vendor’s interest in and to the Assets is not subject to any ROFR rights created by, through or under Vendor or of which Vendor has knowledge that become operative by virtue of this Agreement or the Transaction;

• (k) No Adverse Claims: Vendor has not received notice from any Third Party claiming an interest in and to the Assets adverse to the interest of Vendor that would reasonably be expected to have a material adverse effect on the aggregate value of the Assets which claim remains outstanding, and to Vendor’s knowledge it has no reason to believe that any such claim may be made;

• (l) Compliance with Agreements: Vendor has not received notice of a material default or material breach, and to the knowledge of Vendor, it is not in any material default or material breach as of the date of this Agreement under any of the Title Documents, any Applicable Laws or any order, writ, injunction, or decree of any court or any commission or administrative agency, in each case that would reasonably be expected to have a material adverse effect on the aggregate value of the Assets;

• (m) No Actions or Proceedings: no suit, action or other proceeding before any Governmental Authority has been commenced against Vendor or, to the knowledge of Vendor, has been threatened against Vendor, which would reasonably be expected to have a material adverse effect on the aggregate value of the Assets;

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• (n) Amounts Payable: to Vendor’s knowledge, all ad valorem and property taxes, and all production, severance and similar taxes based upon or measured by the ownership or production of the Leased Substances payable to Third Parties prior to the date hereof and pertaining to the Assets have been fully paid;

• (o) Outstanding AFEs: except as set forth in Schedule "C", to Vendor’s knowledge there are no approved AFEs in respect of the Assets which are due as of the date hereof or which may become due by virtue of matters occurring or arising prior to the date hereof, other than those AFEs for which Vendor's share is less than $50,000;

• (p) Removal of Tangibles: no material tangible depreciable property that would otherwise form part of the Tangibles have been removed from its location since the Adjustment Date, other than in the ordinary course of business;

• (q) Areas of Mutual Interest: to Vendor’s knowledge there are no active area of mutual interest provisions in any of the Title Documents;

• (r) Take or Pay Obligations: except as set forth in the Firm Transportation Agreements, there are no Take or Pay Obligations affecting Vendor’s interests in and to the Assets;

• (s) Disclosure: to Vendor’s knowledge it has made available to Purchaser all material data and information (other than data and information available in the public domain) within its possession or control that relates to its interests in the Assets;

• (t) Insurance Policies:

• (1) Purchaser has provided Vendor with true and correct copies of all insurance policies applicable to the Assets;

• (2) such insurance policies are in full force and effect and shall not be cancelled or otherwise terminated as a result of the transactions contemplated hereunder;

5.2 Limitations

• (a) Each of the foregoing representations and warranties of Vendor shall be qualified as at the date hereof and as of the Closing Time, as applicable, by excepting therefrom all matters disclosed in the Schedules. Vendor makes no representations or warranties with respect to the Assets or the White Map Area except as expressly contained in section 5.1. Purchaser acknowledges that, except as expressly contained in the applicable subsections of section 5.1, Vendor has not made, and Vendor hereby expressly disclaims and negates any liability or responsibility for any representation or warranty that may have been made or alleged to have been made with respect to the Assets or the White Map Area including any express or implied warranty contained in any document or statement made or communicated to Purchaser including any information memorandum, opinion, notice, information or advice provided to Purchaser by Vendor or any Representative or shareholder of Vendor in respect of:

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• (1) the quantity, quality or recoverability of Petroleum Substances within or under the Lands;

• (2) estimates of prices or future cash flows arising from the sale of Petroleum Substances produced from the Lands or estimates of other revenues attributable to the Assets or the availability or continued availability of transportation to sell those Petroleum Substances;

• (3) any environmental data or reports or other interpretations or evaluation of Environmental Liabilities arising in connection with or related to the Assets or the White Map Area and any assessments or evaluations of the accuracy, completeness, volume, nature or estimated cost of the work required to fully satisfy and discharge the Environmental Liabilities or, for greater certainty, the Abandonment and Reclamation Obligations;

• (4) any implied or express warranty regarding compliance with Applicable Laws relating to the environment, or regarding the release of materials into the environment including natural occurring radioactive material or asbestos, or protection of the environment or health or safety;

• (5) any express or implied warranty regarding Vendor’s title to any of the Assets;

• (6) any engineering, geological or other interpretations or economic evaluations respecting the Assets including, but not limited to, the accuracy, completeness, or materiality of any information, data, records or other material contained therein;

• (7) the quality, condition, fitness or suitability for purpose or merchantability of any of the Assets, or their conformity to models or samples of materials; or

• (8) the legal, tax, or other consequences of the Transaction.

• (b) Purchaser acknowledges it has made, and will continue prior to Closing Time to make, its own independent examination, investigation, analysis, evaluation and verification of the Assets, including Vendor’s title thereto, Purchaser’s own estimate and appraisal of the extent and value of the Petroleum Substances attributable to the Assets and the extent of the liabilities and obligations it will be assuming hereunder and, except for the representations and warranties in section 5.1, it has relied and will continue to rely solely on same as to its assessment of the condition (environmental or otherwise), quantum and value of the Assets and the extent of those liabilities and obligations.

• (c) Purchaser forever releases and discharges Vendor and its Representatives from any claims and all Losses and Liabilities to Purchaser or Purchaser’s assigns and successors, as a result of the use or reliance upon advice, information or materials pertaining to the

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Assets or the White Map Area which was delivered or made available to Purchaser by Vendor or its Representatives prior to or pursuant to this Agreement, including any of the Data Room Materials, any evaluations, projections, reports and interpretive or nonfactual materials prepared by or for Vendor, or otherwise in Vendor’s possession or control, and neither Vendor nor its Representatives shall have any liability or obligations as a result of any inaccuracy, error or omission therein.

• (d) Purchaser acknowledges that it has not relied on or been induced to enter into this Agreement by any representation and warranty except as expressly set out in section 5.1 of this Agreement.

• (e) Purchaser and Vendor each acknowledge that, except for and to the extent of the representations and warranties in section 5.1, it is their express intention that: (i) the Assets shall be conveyed to Purchaser "as is" and in their present condition and state of repair; and (ii) Purchaser will accept the Assets "as is, where is" in their present condition and state of repair and assume the liabilities and obligations as provided for herein.

5.3 Representations and Warranties of Purchaser

Purchaser represents and warrants to the Vendor that:

• (a) Standing: Purchaser is a corporation duly formed and validly existing under the laws of the jurisdiction of formation of Purchaser, is authorized to carry on business in the Province in which the Lands are located, and now has good right, full power and absolute authority to purchase the interest of Vendor in and to the Assets according to the true intent and meaning of this Agreement;

• (b) Requisite Authority: the execution, delivery and performance of this Agreement has been duly and validly authorized by any and all requisite corporate, partners’ shareholders' and directors' actions and will not result in any violation of, be in conflict with or constitute a default under any articles, charter, bylaw or other governing document to which Purchaser is bound;

• (c) No Conflicts: the execution, delivery and performance of this Agreement will not result in any violation of, be in conflict with or constitute a default under any term or provision of any agreement or document to which Purchaser is party or by which Purchaser is bound, nor under any judgment, decree, order, statute, regulation, rule or license applicable to Purchaser;

• (d) Enforceability: this Agreement and any other agreements delivered in connection herewith constitute valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their terms, subject however to the effects of bankruptcy, insolvency, reorganization and other laws for the protection of creditors;

• (e) No Approvals or Authorizations Required: Except if any approval is required by TSXV, no authorization or approval or other action by, and no notice to or filing with, any Governmental Authority exercising jurisdiction over the Assets is required for the due execution, delivery and performance by Purchaser of this Agreement, other than

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authorizations, approvals or exemptions from requirement therefor, previously obtained and currently in force or those ordinarily obtained after Closing;

• (f) Finders' Fees: Purchaser has not incurred any obligation or liability, contingent or otherwise, for brokers' or finders' fees in respect of this Agreement or the Transaction to be effected by it for which Vendor shall have any obligation or liability;

• (g) Investment Canada: Purchaser is not a non-Canadian for the purposes of the Investment Canada Act ;

• (h) Availability of Funds: Purchaser has currently available all funds necessary to pay the Purchase Price, all taxes thereon and all adjustments thereto and any other amounts contemplated by this Agreement to be paid by Purchaser at and after Closing. Purchaser's ability to consummate the Transaction is not contingent on its ability to complete any public or private placement of securities prior to or upon Closing; and

• (i) Purchaser is and at Closing will continue to be a registrant in good standing with all applicable Governmental Authorities.

• 5.4 Purchaser’s Knowledge

Purchaser shall not be entitled to claim that any fact, circumstance or matter constitutes a breach of Vendor’s representations or warranties contained herein to the extent that such fact, circumstance or matter is known by Purchaser or any of its Representatives on or prior to the date hereof, whether such fact, circumstance or matter is known to Purchaser or its Representatives through (a) conducting due diligence and investigation of the Assets or the White Map Area and the Transaction (including information disclosed or available in the Data Room Materials), or (b) information being available in the public domain, or (c) information otherwise provided to Purchaser or any of its Representatives by Vendor or any of its Representatives. Furthermore, and for greater certainty, Purchaser shall not be entitled to claim that any fact, circumstance or matter disclosed in the Data Room or on any Schedule to this Agreement constitutes a breach of any of Vendor’s representations or warranties contained herein.

ARTICLE 6

INDEMNITIES FOR REPRESENTATIONS AND WARRANTIES

6.1 Vendor's Indemnities for Representations and Warranties

Subject to sections 5.2, 5.4 and 6.3 and article 7 in its entirety, Vendor shall be liable to Purchaser for and shall, in addition, indemnify Purchaser from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Purchaser which would not have been suffered, sustained, paid or incurred had all of the representations and warranties contained in section 5.1 been accurate and truthful, provided however that nothing in this section 6.1 shall be construed so as to cause Vendor to be liable to or indemnify Purchaser in connection with any representation or warranty contained in section 5.1 if and to the extent that Purchaser did not rely upon such representation or warranty.

6.2 Purchaser's Indemnities for Representations and Warranties

Subject to section 6.3 and section 7.4(a), Purchaser shall be liable to Vendor for and shall, in addition, indemnify Vendor from and against, all Losses and Liabilities suffered, sustained, paid or incurred

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by Vendor which would not have been suffered, sustained, paid or incurred had all of the representations and warranties contained in section 5.3 been accurate and truthful, provided however that nothing in this section 6.2 shall be construed so as to cause Purchaser to be liable to or indemnify Vendor in connection with any representation or warranty contained in section 5.3 if and to the extent that Vendor did not rely upon such representation or warranty.

• 6.3 Time Limitation

• (a) No claim under or in connection with this article 6 shall be made or be enforceable by a Party unless written notice of such claim, with reasonable particulars, is given by such Party to the Party against whom the claim is made within a period of twelve (12) months from the Closing Time. No claim shall be made by a Party in respect of the representations and warranties made by the other Party in this Agreement except pursuant to article 6.

• (b) The Parties acknowledge and agree that an obligation under this Agreement to provide written notice of a claim within twelve (12) months from the Closing Time and in a manner specified under this Agreement is intended by the Parties as a limitation of liability that represents a fair and equitable allocation of the risks and liabilities that each Party has agreed to assume in connection with the subject matter hereof and is not an agreement within the provision of section 7(2) of the Limitations Act (Alberta).

ARTICLE 7 GENERAL INDEMNITIES

7.1 Purchaser Indemnity

In addition to the other indemnities provided by Purchaser in this Agreement, provided Closing occurs Purchaser shall be liable to Vendor for and shall, in addition, indemnify Vendor and Vendor’s Representatives from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Vendor or any of Vendor’s Representatives which arise out of, result from or are attributable to:

• (a) any act, omission, matter or thing occurring or accruing on or after the Closing Time and which relates in any manner to the Assets or the White Map Area; and

• (b) a failure by Purchaser to perform or observe any obligation, agreement or covenant to be performed or observed by Purchaser in this Agreement.

7.2 Vendor Indemnity

In addition to the other indemnities provided by Vendor in this Agreement, provided Closing occurs Vendor shall be liable to Purchaser for and shall, in addition, indemnify Purchaser and Purchaser's Representatives from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Purchaser or any of Purchaser's Representatives which arise out of, result from or are attributable to a failure by Vendor to perform or observe any obligation, agreement or covenant to be performed or observed by Vendor in this Agreement.

7.3 Environmental Matters

In addition to the other indemnities provided by Purchaser in this Agreement, provided Closing occurs Purchaser shall be liable to Vendor for and shall, in addition, indemnify Vendor and Vendor’s

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Representatives from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Vendor or any of Vendor’s Representatives as a result of any matter or thing arising out of, attributable to or connected with any Environmental Liabilities, whether pertaining to or caused by the Assets or the White Map Area, operations thereon or related thereto, or otherwise, however and by whomsoever caused, and whether such Environmental Liabilities occur or arise in whole or in part prior to, at or subsequent to the Closing Time. This indemnity shall apply indefinitely without limit and without regard to cause or causes, including the negligence, whether sole, concurrent, gross, active, passive, primary or secondary, or the wilful misconduct of Vendor or any of its Representatives. Purchaser shall not be entitled to exercise and hereby waives any rights or remedies Purchaser may now or in the future have against Vendor with respect to any or all of such Environmental Liabilities, whether such rights and remedies are pursuant to the common law, in equity, Applicable Law or otherwise, including the right to name Vendor as a third party to any action commenced by any Third Party against Purchaser. Nothing in this section 7.1(b) will operate to limit Purchaser’s right to make a claim against Vendor for a breach of the representation and warranty made by Vendor, subject always to the limitations in sections 5.2, 5.4 and 6.3 and article 7 in its entirety.

In addition to the foregoing, Purchaser shall ensure timely performance of all Abandonment and Reclamation Obligations which in the absence of this Agreement would be the responsibility of Vendor.

7.4 Limitations

• (a) Notwithstanding any other provision in this Agreement:

• (1) the indemnities provided in sections 6.1 and 6.2 shall not apply to Losses and Liabilities to the extent caused by the gross negligence, willful default or misconduct of the indemnified Party;

• (2) the sole and exclusive remedy after Closing for a Party’s breach of a representation and warranty in this Agreement shall be the indemnities provided in sections 6.1 and 6.2;

• (3) if an indemnified Party’s Losses and Liabilities at any time subsequent to the making of an indemnity payment by the indemnifying Party are reduced by any net tax benefit or recovery, the amount of such reduction shall promptly be repaid by the indemnified Party to the indemnifying Party; and

• (4) nothing contained in this Agreement shall impose any liability on either Party for any indirect or consequential damages, indirect losses or loss of profit, including business loss and economic loss, suffered by the other Party or its Representatives, provided that this section 7.4(a)(4) shall not preclude a Party from entitlement to indemnification for such Party's liability to a Third Party for consequential or indirect damages or losses which such Third Party suffers, sustains, pays or incurs.

• (b) Notwithstanding any other provision of this Agreement, the total liability of the Vendor pursuant to or in connection with any of the indemnities, covenants, representations or

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warranties in this Agreement (other than the adjustments to be effected pursuant to article 8) or the Specific Conveyances shall not exceed in the aggregate an amount equal to fifty percent (50%) of the Base Price. In addition, no claim may be made by Purchaser under any such indemnities, or for a breach of or non-compliance with any of Vendor’s covenants, representations or warranties unless and until the individual value of an unrelated claim shall exceed $50,000 and the aggregate value of all such claims exceeds five percent (50%) of the Base Price, and then only to the extent that the: (i) individual value of each such unrelated claim exceeds $50,000; and (ii) aggregate value exceeds five percent (50%) of the Base Price but is less than fifty percent (50%) of the Base Price.

ARTICLE 8 ADJUSTMENTS

8.1 Adjustments

• (a) Except as otherwise provided in any other provision in this Agreement and without duplication, the Parties will adjust and apportion costs, expenses, obligations and revenues of every kind and nature accruing, payable or paid, receivable or received, in respect of the Assets including operating, maintenance, development and capital costs and net proceeds from the sale of Petroleum Substances as at the Adjustment Date between Vendor and Purchaser on an accrual basis in accordance with Canadian generally accepted accounting principles, including, if applicable, IFRS Rules, consistently applied, provided that:

• (i) Vendor's share of all Petroleum Substances produced from the Assets and beyond the wellhead at the Adjustment Date do not comprise part of the Assets, and those Petroleum Substances shall be credited to Vendor at the market price in effect at the Adjustment Date for such Petroleum Substances determined in accordance with the applicable sales contract or consistent with past practices;

• (ii) there will be no adjustments for royalty tax credits or similar incentives that accrue to a Party because of financial or organizational attributes specific to it;

• (iii) costs and expenses of work done, services provided and goods supplied shall be deemed to accrue for the purposes of this section 8.1 when the work is done or the goods (other than inventory) or services are provided, regardless of when such costs and expenses become payable;

• (iv) all freehold mineral taxes, surface and mineral lease rentals and any similar payments that relate to the Assets and are payable in respect of a period of time that straddles the Adjustment Date shall be apportioned between Vendor and Purchaser on a per diem basis as of the Adjustment Date and the amount allocated to Purchaser shall be deemed to be a cost incurred between the Adjustment Date and Closing;

• (v) cash call advances, operating fund advances and similar cash advances made by Vendor in respect of the costs of operations relating to the Assets which are not applicable to costs incurred or accrued prior to the Adjustment Date will be

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transferred to Purchaser and an adjustment will be made in favour of Vendor equal to the amount of the advance transferred;

• (vi) non-cash deposits made by Vendor relative to operations relating to the Assets shall, at the option of Vendor, either be returned to Vendor and replaced by Purchaser, or be transferred to Purchaser and an adjustment will be made in favour of Vendor equal to the amount of the deposit transferred;

• (vii) from the Adjustment Date until the end of the month in which Closing occurs: (1) Vendor, where it is the operator of any of the Assets, shall be entitled to retain all overhead recoveries and operator’s fees payable pursuant to any Title Documents and such items shall be excluded for purposes of calculating any adjustments hereunder; and (2) Vendor, where it owns a 100% in any of the Assets, shall be entitled to an adjustment in its favor for such period in an amount equal to overhead recoveries and operator’s fees that are consistent with normal industry rates for the area; and

• (viii) fees or revenues from or relating to gathering, transmission or processing of Petroleum Substances for or on behalf of Persons other than Vendor shall be apportioned on the basis of the date of such gathering, transmission or processing.

• (b) Vendor shall prepare and deliver to Purchaser for approval a statement no later than three (3) Business Days prior to the Closing Time that shall set forth a written statement of adjustments to be made in accordance with this Agreement (the "Interim Statement of Adjustments") and Vendor will make available to representatives of Purchaser all information reasonably necessary for Purchaser to confirm the calculations in the statement. The Interim Statement of Adjustments shall be based on Vendor’s good faith estimate of the costs and expenses accrued prior to Closing and the revenues received and accrued by Vendor prior to Closing.

• (c) The Parties acknowledge that there will be adjustments required to power bills for a minimum period of nine (9) months following the month of consumption of such power. The Party responsible to pay for such adjustments will promptly and without dispute pay such amounts to the Party owed such amounts upon receipt of evidence of such amounts being outstanding.

• (d) If Vendor or its Affiliates receive any revenues pertaining to the Assets after the Closing Time which accrue after the Adjustment Date, Vendor shall be entitled to deduct any reasonable and documented out-of-pocket costs, expenses and other payments made by Vendor in respect of the Assets that accrued after the Adjustment Date, in each case to the extent not accounted for in the Interim Statement of Adjustments, and Vendor shall pay the net amount of such revenues to the Purchaser within forty five (45) days following receipt of such revenues.

• (e) Within one hundred and eighty (180) days following the Closing Time, the Vendor shall prepare, with Purchaser’s cooperation, and deliver to Purchaser a final statement of all adjustments to be made pursuant to this Agreement (the "Final Statement of Adjustments"). Purchaser shall provide, or cause to be provided, to Vendor and its

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Affiliates full access to, and Vendor shall be entitled to audit, the relevant records to aid in the preparation of such statement. Vendor shall provide to Purchaser at Purchaser’s own expense the right to review the Final Statement of Adjustments and full access to the working papers of Vendor to aid in such review. The net amount will be remitted by the Party who in the net result is obliged to make payment within thirty (30) Business Days of receipt by Purchaser of the Final Statement of Adjustments. No subsequent adjustment shall be made pursuant to this article 8 unless and only to the extent expressly provided for in this article 8.

• (f) If Purchaser is of the opinion that any change is required to be made to the Final Statement of Adjustments as prepared by Vendor, it shall, on or before that date which is thirty (30) days after the delivery of the Final Statement of Adjustments by Vendor to Purchaser (the "Objection Date"), give written notice to Vendor of any such proposed change, including the reason for such change. If Purchaser does not notify Vendor of any proposed change on or before the Objection Date, then Purchaser shall be deemed to have accepted the Final Statement of Adjustments.

• (g) If Purchaser gives written notice to Vendor of any proposed change to the Final Statement of Adjustments on or before the Objection Date, and if the proposed change is disputed by Vendor and the Parties fail to resolve the dispute within ten (10) Business Days after the Objection Date, then the Independent Accounting Firm shall immediately be engaged by the Parties to resolve forthwith the dispute and the Independent Accounting Firm shall be requested to render its decision without qualifications, other than the usual qualifications relating to engagements of this nature, within fourteen (14) days after the dispute is referred to it. The decision of the Independent Accounting Firm shall be final and binding upon Vendor and Purchaser and shall not be subject to appeal by either such Party. The fees and expenses of the Independent Accounting Firm shall be shared, one half to Vendor and one half to Purchaser.

• (h) If the Independent Accounting Firm cannot or will not make a decision in the manner provided above, Purchaser and Vendor shall refer such matter to a mutually acceptable Third Party (the "Arbitrator") to arbitrate the dispute as a single arbitrator in accordance with the Arbitration Act (Alberta) within sixty (60) days after the Objection Date. If agreement cannot be reached between Vendor and Purchaser as to the Arbitrator, a judge of the Court of Queen’s Bench (Calgary) shall select either Purchaser’s or Vendor’s designate. The fees and expenses of the Arbitrator shall be shared, one half to Vendor and one half to Purchaser.

• (i) Upon agreement with respect to all matters in dispute, or upon a decision of the Independent Accounting Firm or the Arbitrator with respect thereto, such amendments shall be made to the Final Statement of Adjustments as may be necessary to reflect such agreement or such decision, as the case may be. The net amount will then be remitted promptly by the Party who in the net result is obliged to make payment. In such event, references in the Agreement to the Final Statement of Adjustments shall refer to the Final Statement of Adjustments, as so amended.

• (j) Notwithstanding section 8.1(e) accounting and adjustments resulting from:

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• (1) a Thirteenth Month Adjustment, operator error adjustments, errors established by joint venture audits or non-Crown royalty audits and arising within twenty six (26) months after the end of the year in which the Closing Time occurs; and

• (2) errors established by a Crown royalty audit or other review of Crown lessor royalty payments that is conducted under Applicable Law or the Leases within four (4) years after the end of the year in which the Closing Time occurs or such later time as may be prescribed by Applicable Law,

shall be made as they occur and payment for them shall be made within sixty (60) days of the Parties reaching agreement on the determination of each adjustment and shall be made by the Party required to make the payment hereunder. In the case of freehold mineral taxes, an adjustment shall be made upon receipt of the freehold mineral tax statement for the applicable year.

• (k) All payments made after the Closing Time are to be paid within thirty (30) days after the amount is determined. Any amounts not paid within the stipulated time period will thereafter bear interest until paid at a rate of interest equal to the Prime Rate plus one (1%) percent compounded monthly.

• (l) All adjustments made pursuant to this Article 8 shall be allocated to the Petroleum and Natural Gas Rights.

ARTICLE 9 MAINTENANCE OF ASSETS

9.1 Maintenance of Assets

Until the Closing Time, Vendor shall, to the extent that the nature of its interest permits, and subject to the Title Documents and any other agreements and documents to which the Assets are subject:

• (a) maintain and operate the Assets in a proper and prudent manner in accordance with generally accepted oil and gas industry practices consistent with Vendor’s past practices and in compliance with Applicable Laws;

• (b) pay or cause to be paid all costs and expenses relating to the Assets which become due from the date hereof to the Closing Time;

• (c) perform and comply with in all material respects all covenants and conditions contained in the Title Documents and any other agreements and documents to which the Assets are subject; and

• (d) maintain adequate insurance in accordance with good oil and gas industry practices to cover the risks associated with the Assets and the operations thereof.

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9.2 Consent of Purchaser

Notwithstanding section 9.1, Vendor shall not, without the written consent of Purchaser, which consent shall not be unreasonably withheld by Purchaser and which, if provided, shall be provided in a timely manner:

• (a) make any commitment or propose, initiate or authorize any capital expenditure with respect to the Assets of which Vendor's share is in excess of $50,000, except in case of an emergency or in respect of amounts which Vendor may be committed to expend or be deemed to authorize for expenditure without its consent;

• (b) surrender or abandon any of the Assets;

• (c) amend or terminate any material Title Document or any other material agreement or document to which the Assets are subject, or enter into any new material agreement or commitment relating to the Assets;

• (d) sell, encumber or otherwise dispose of any of the Assets or any part or portion thereof excepting sales of the Leased Substances or any of them in the normal course of business; or

• (e) fail to use commercially reasonable efforts to cause Vendor's current insurance policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect and shall pay all premiums in respect of such insurance policies that become due.

9.3 Post-Closing Administration

Following Closing, to the extent that Purchaser must be recognized by Third Parties under the Title Documents, Vendor shall:

• (a) hold legal title to the Assets as bare trustee for Purchaser until all necessary notifications, registrations and other similar steps have been completed to so recognize Purchaser; and

• (b) represent Purchaser and receive and hold, as bare trustee and agent of Purchaser, all payments received by Vendor after the Closing Time which relate to the Assets and accrue after the Adjustment Date pursuant to the Title Documents, and the following provisions shall apply:

• (1) Vendor shall promptly remit such amounts to Purchaser and in any event no later than 45 days after receipt thereof, provided however Vendor shall be entitled to retain any portion of such payments to satisfy any amounts owing or payable hereunder or to satisfy any amounts owing to Third Parties by Purchaser under the Title Documents, and Vendor shall also be entitled to retain

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any portion of such payments to which it is entitled under Article 8;

• (2) Vendor shall forward to Purchaser all statements, notices and other information received by it pursuant to the Title Documents that pertain to the Assets as soon as practicable following their receipt by Vendor;

• (3) Vendor shall forward to Third Parties to the Title Documents such notices and elections pursuant to the Title Documents pertaining to the Assets as Purchaser may reasonably request;

• (4) Vendor shall pay on behalf of Purchaser all Lease rentals and shut-in royalty payments which are due and payable on or before November 30, 2022 for Leases issued by the Crown, and on or before December 31, 2022 for Leases respecting mineral freehold lands, provided that Purchaser agrees that to the extent that a party other than Vendor has been paying such rental payments, such party shall continue to be responsible for the payment thereof; and

• (5) Vendor will be responsible for production accounting and joint venture billing for the production month of November 2022, and Purchaser will be responsible for production accounting and joint venture billing for all production months thereafter.

9.4 Ratification and Indemnity

Purchaser ratifies and confirms all actions taken, or refrained from being taken, by Vendor under sections 9.1 and 9.3 hereof, and Purchaser shall indemnify and save harmless Vendor from and against all Losses and Liabilities arising as a consequence of the provisions of sections 9.1 and 9.3 hereof, except to the extent caused by the gross negligence or wilful misconduct of Vendor or its servants, agents or employees. Acts or omissions taken by Vendor or its servants or agents with the approval or concurrence of Purchaser shall not constitute gross negligence or wilful misconduct.

ARTICLE 10 CONSENTS AND RIGHTS OF FIRST REFUSAL

10.1 Consents

• (a) Where a Title Document provides that Vendor shall obtain the written consent from a Third Party prior to the disposition of any rights subject to the Title Document to Purchaser, the failure to obtain such consent prior to the Closing Time shall not constitute grounds for failing to close the Transaction and shall not constitute a breach of any of Vendor's representations and warranties. To the extent that an attempt is made to obtain any such consents prior to Closing, Vendor shall give prompt written notice to Purchaser of all written consents sought for which consents are either granted or refused. If any Third Party notifies Vendor that it refuses to give the consent required pursuant to the Title Document, the Parties shall cooperate in attempting to obtain such consent. If the

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consent is not obtained prior to Closing, Vendor shall, after Closing, hold Purchaser's beneficial interest in that Title Document in trust for Purchaser as bare trustee in accordance with sections 9.3 and 9.4 and both Parties shall continue to seek such written consent from the Third Party.

• (b) To the extent not acquired prior to Closing, the Parties shall, after Closing, cooperate in securing all further consents required to permit the conveyance of the Assets to Purchaser and each Party shall take such further actions as reasonably required to permit such conveyance, including in the case of Purchaser, providing such deposits, letters of credit or other financial assurances as required by the Third Party in accordance with the terms of the applicable Title Document or other agreements or contracts relating to the Assets.

ARTICLE 11

PRE-CLOSING INFORMATION

11.1 Production of Documents

During normal business hours from the date hereof until the Closing Time, Vendor shall make available to Purchaser and Purchaser's Representatives in Vendor's offices in Calgary the following information pertaining to the Assets of which Vendor has possession or which are within Vendor’s control:

• (a) all of the Title Documents together with the files containing such Title Documents and agreements, and any title opinions or title reports prepared for Vendor; and

• (b) all environmental assessments and reports pertaining to the Assets.

11.2 Access to Assets

Vendor shall, from the date hereof until the Closing Time, provide Purchaser with a reasonable opportunity during normal business hours and upon reasonable prior notice to Vendor, to conduct a field assessment at the locations of the Wells and Tangibles for the purpose of Purchaser’s assessment of the environmental condition of the Lands, all at the sole cost, risk and expense of Purchaser.

ARTICLE 12

TITLE DEFECTS AND ENVIRONMENTAL DEFECTS

12.1 Notice of Title Defects

From time to time, as soon as reasonably practicable after determination, and in any event no later than seven (7) Business Days before the Escrow Closing Date, Purchaser shall notify Vendor in writing of any Title Defects. Such notice shall include a description of each Title Defect and the interests affected thereby, the value allocated by Purchaser acting reasonably to each affected interest and the amount, in Purchaser's opinion acting reasonably, by which the value of each affected interest has been reduced by the Title Defect. Failure to include a Title Defect in a written notice shall be deemed to be a waiver of that Title Defect.

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12.2 Rectification by Vendor

Prior to the Closing Time, Vendor shall be entitled to use reasonable commercial efforts to cure or rectify the Title Defects of which Purchaser gives notice pursuant to section 12.1. If any such Title Defects are not cured or removed no later than three (3) Business Days prior to the Closing Time:

• (a) where the cumulative amount by which the value of the affected interests subject to the uncured Title Defects has been reduced is less than or equal to thirty percent (30%) of the Base Price, Purchaser shall complete the purchase of Vendor's interest in and to the Assets without adjustment of the Purchase Price on account of such Title Defects, and Purchaser shall be deemed to have waived for all purposes hereunder such Title Defects; and

• (b) where the cumulative amount by which the value of such affected interests has been reduced is greater than thirty percent (30%) of the Base Price:

• (1) the Parties may, if they so agree, delay Closing to a mutually agreeable time and date, in which case:

(a) Vendor shall be entitled to make further attempts to cure or remove the uncured Title Defects; and

(b) when such mutually agreeable time and date arrives, the elections pursuant to this section 12.2 shall once again be made; or

(2) Purchaser may elect to:

(a) waive the uncured Title Defects, in which case all of Vendor's interest in and to the Assets shall be purchased by Purchaser without an adjustment to the Base Price, and Purchaser shall be deemed to have waived for all purposes hereunder such Title Defects; or

(b) by notice in writing to Vendor no less than three (3) Business Days prior to the Escrow Closing Date, reduce the Base Price equal to the amount by which such cumulative amount exceeds ten percent (10%) of the Base Price but is less than twenty percent (20%) of the Base Price, in which case the Parties will proceed to Closing with the Base Price adjusted accordingly and, upon Closing occurring, Purchaser shall be deemed to permanently waive all Title Defects.

If Purchaser fails to make such election by no later than three (3) Business Days preceding the Escrow Closing Date, Purchaser shall be deemed to have made an election to waive the uncured Title Defects.

• (c) where the cumulative amount by which the value of all of the affected interests subject to the uncured Title Defects has been reduced is equal to or more than twenty percent (50%) of the Base Price, either Party may elect, by notice in writing delivered to the other Party at least one (1) Business Day prior to the Escrow Closing Date, to terminate this Agreement and the Parties shall have no further obligations to each other except for obligations arising under section 13.14.

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12.3 Environmental Defects

Purchaser acknowledges it completed its environmental review in respect of the Assets prior to the date this Agreement was executed, and that each environmental defect and deficiency of which it became aware prior to the date hereof is hereby waived for all purposes under this Agreement

ARTICLE 13 GENERAL

13.1 Further Assurances

Each Party will, from time to time and at all times after Closing, without further consideration, do such further acts and deliver all such further assurances, deeds and documents as shall be reasonably required in order to fully perform and carry out the terms of this Agreement.

13.2 No Merger

The covenants, representations, warranties and indemnities contained in this Agreement shall be deemed to be restated in any and all assignments, conveyances, transfers and other documents conveying the interests of Vendor in and to the Assets to Purchaser, subject to any and all time and other limitations contained in this Agreement. There shall not be any merger of any covenant, representation, warranty or indemnity in such assignments, conveyances, transfers and other documents notwithstanding any rule of law, equity or statute to the contrary and such rules are hereby waived.

13.3 Entire Agreement

The provisions contained in any and all documents and agreements collateral hereto shall at all times be read subject to the provisions of this Agreement and, in the event of conflict, the provisions of this Agreement shall prevail. This Agreement supersedes all other agreements (executed and unexecuted), documents, writings and verbal understandings among the Parties relating to the subject matter hereof and expresses the entire agreement of the Parties with respect to the subject matter hereof. Notwithstanding the foregoing, it is understood and agreed that the Confidentiality Agreement shall, with respect to the Assets, terminate as of the Closing Time, but, with respect to any other properties covered thereby not included within the Assets, shall remain in full force and effect in accordance with its terms and is not superseded or modified by this Agreement. Notwithstanding anything to the contrary in this Agreement, Vendor shall retain all rights and obligations of Vendor pursuant to the ROFR Escrow Agreement and the Specific Conveyances and Purchaser shall not assume nor be assigned nor responsible for any such rights or obligations.

13.4 Subrogation

The assignment and conveyance to be effected by this Agreement is made, to the extent permitted, with full right of substitution and subrogation of Purchaser in and to all covenants, representations, warranties and indemnities previously given or made by others in respect of the Assets or any part or portion thereof.

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13.5 Governing Law

This Agreement shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and Applicable Laws of Canada and shall, in all respects, be treated as a contract made in the Province of Alberta. The Parties irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of or in connection with this Agreement.

13.6 Enurement

This Agreement may not be assigned by either Party without the prior written consent of the other Party. No assignment of this Agreement shall relieve the assigning Party of its obligations under this Agreement without the express written release of the other Party to this Agreement. This Agreement shall be binding upon and shall enure to the benefit of the Parties and their respective administrators, trustees, receivers, successors and permitted assigns.

13.7 Time of Essence

Time shall be of the essence in this Agreement.

13.8 Notices

The addresses for service and the fax numbers of the Parties shall be as follows:

[contact details redacted]

All notices, communications and statements required, permitted or contemplated hereunder shall be in writing, and shall be delivered as follows:

• (a) by personal service on a Party at the address of such Party set out above, in which case the item so served shall be deemed to have been received by that Party when personally served;

• (b) by confirmed facsimile transmission to a Party to the fax number of such Party set out above, in which case the item so transmitted shall be deemed to have been received by that Party when transmitted; or

• (c) except in the event of an actual or threatened postal strike or other labour disruption that may affect mail service, by mailing first class registered post, postage prepaid, to a Party at the address of such Party set out above, in which case the item so mailed shall be deemed to have been received by that Party on the third Business Day following the date of mailing (the date of mailing being the Business Day immediately prior to the postmarked date of the envelope containing the notice, communication or statement or if the subject envelope has been lost or destroyed, the date of such notice, communication or statement or if undated the date of the transmittal letter accompanying the same).

A Party may from time to time change its address for service or its fax number or both by giving written notice of such change to the other Party.

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13.9 Operatorship and Removal of Signs

• (a) Purchaser acknowledges that Vendor is unable to assign to Purchaser operatorship of the Assets, if any, operated by Vendor and in respect of which Vendor does not have a 100% interest. Vendor shall, however, use reasonable commercial efforts to assist Purchaser in its attempts to obtain operatorship. Vendor shall have no liability to Purchaser for any Losses or Liabilities suffered or sustained by Purchaser as a result of not being designated as the operator of any of the Assets (including the Tangibles) whether or not operated by Vendor or its Affiliates prior to Closing.

• (b) As soon as practicable after Closing, and in any event by no later than sixty (60) days after Closing, Purchaser shall modify or remove any signs which indicate the ownership or operation of the Assets by Vendor, as to remove such indication. Purchaser will be responsible to modify, erect or install signs required by Governmental Authorities to indicate where applicable that Purchaser is the operator of the Assets and to notify other working interest owners, gas purchasers, suppliers, contractors, Governmental Authorities and other Third Parties of Purchaser's interest in the Assets on and after Closing.

13.10 Invalidity of Provisions

In case any of the provisions of this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality or enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

13.11 Waiver

Except as otherwise provided in this Agreement, no failure on the part of any Party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any right or remedy in law or in equity or by statute or otherwise conferred. No waiver of any provision of this Agreement, including this section, shall be effective otherwise than by an instrument in writing dated subsequent to the date hereof, executed by a duly authorized representative of the Party making such waiver.

13.12 Amendment

This Agreement shall not be varied in its terms or amended by oral agreement or by representations or otherwise other than by an instrument in writing dated subsequent to the date hereof, executed by a duly authorized representative of each Party.

13.13 Agreement not Severable

This Agreement extends to the whole of the Assets and is not severable without Purchaser's express written consent or as otherwise herein provided.

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13.14 Confidentiality and Public Announcements

• (a) Neither Party shall disseminate, nor shall it allow the dissemination of, any announcement to the general public, by press release or otherwise, relating to this Agreement, the other Party or the transactions hereunder without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed. However, nothing in this section 13.14 shall prevent a Party from furnishing any information to:

• (1) any Governmental Authority insofar only as it is required by law or regulation, including securities laws, applicable to such Party;

• (2) such Party's financial institution and the representatives thereof; or

• (3) any of its agents, employees, advisors, consultants or officers;

provided that any Party that proposes to make public disclosure as contemplated in subsection (1) above shall, to the extent reasonably possible, provide the other Party with a draft of such statement a sufficient time prior to its release to enable such other Party to review such draft and advise that Party of any comments it may have with respect thereto.

• (b) Subject to section 13.14(a), the Parties shall cooperate with each other in relaying to Third Parties whom need to know information concerning this Agreement and the transactions contemplated herein, and shall discuss drafts of all press releases and other releases of information for dissemination to the public pertaining hereto.

13.15 Securities Act Disclosure

At any time prior to Closing or in the one (1) year period following Closing, should Purchaser require an audited operating statement with respect to the Assets pursuant to Applicable Law including any disclosure requirements under securities’ legislation, for a period during which the Assets were owned by Vendor, then:

• (a) Vendor shall provide access as set forth below during normal business hours to the records of Vendor relevant to preparation of such an operating statement during such period;

• (b) the audit shall be performed by Vendor’s auditor, or if such auditor is unable or unwilling to perform such audit, by a firm of independent auditors selected by Vendor, and Purchaser shall be responsible for all costs incurred in connection with the audit and the preparation of any statements or reports and Vendor shall not be required to provide direct access to Vendor’s records to Purchaser or its other Representatives; and

• (c) if the auditor requires the assistance of Vendor’s personnel to find, collect or interpret the necessary information from Vendor’s records, Vendor shall cause such assistance to be provided and Purchaser shall pay reasonable hourly costs to Vendor as compensation for the time devoted by such personnel.

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Notwithstanding the generality of the foregoing, Purchaser hereby acknowledges and agrees that:

• (d) all information provided by Vendor to Purchaser or any auditor pursuant to this section 13.15 is provided on the express condition that Vendor and its Representatives assume no liability, whatsoever, to Purchaser or any other Person in respect of such information, or the accuracy or sufficiency thereof or in connection with any claim in respect of such information;

• (e) Vendor and its Representatives make no representation or warranty regarding such information and expressly disclaim any implied or constructive representation or warranty; and

• (f) in addition to the other indemnities provided by Purchaser in this Agreement, Purchaser shall be liable to Vendor for and shall, in addition, indemnify Vendor and Vendor’s Representatives from and against, all Losses and Liabilities suffered, sustained, paid or incurred by Vendor or any of Vendor’s Representatives which arise out of, result from or are attributable to any use of or reliance by any Person on the information referred to herein or the audited operating statement.

13.16 Electronic Signatures

The Parties agree that all Specific Conveyances to be delivered and/or executed in connection with this Agreement and the transactions contemplated herein, except for the General Conveyance, records that create or transfer interests in land or that are registrable at a Land Titles Office, documents of title and such other documents excluded by section 7 of the Electronic Transactions Act, RSA 2001, c E- 5.5, as amended from time to time (the " ES Conveyance Documents "), shall be executed by use of electronic signatures (the " Electronic Signatures "). Prior to Closing, the Parties shall exchange a listing of one another's individual representatives which listing shall include the subject individual's name, title and a sample Electronic Signature. The Electronic Signatures of the individuals set out in such listing and which appear on any ES Conveyance Documents shall be sufficient to cause such ES Conveyance Documents to be valid and binding obligations of the Party represented by such individual, without need for original signatures to appear thereon and shall be of the same legal effect, validity or enforceability as a manually executed signature. The Parties shall receive and use the Electronic Signatures solely for the purpose of embedding the same into the ES Conveyance Documents and for no other purpose whatsoever, and neither Party shall be entitled to use Electronic Signatures at any time after sixty (60) days from the Closing Time.

13.17 Counterparts and Electronic Transmission

This Agreement may be executed in separate counterparts and delivered by facsimile, and each counterpart when so executed and delivered shall be deemed to be an original and when taken together shall constitute one and the same instrument, and production of an originally executed or facsimile copy of each counterpart execution page will be sufficient for purposes of proof of execution and delivery of this Agreement. Each Party delivering this Agreement by facsimile undertakes to deliver, within a reasonable time, an executed original; any failure to do so shall not adversely affect the effect of the foregoing.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first above written.

• 41 -

VERMILION RESOURCES , by its Managing Partner, VERMILION ENERGY INC.

Per:

Per:

LETHO RESOURCES CORP.

Per:

Per:

SCHEDULE "A-1" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR AND LETHO RESOURCES CORP. AS PURCHASER

WHITE MAP AREA

[schedule redacted]

• 2 -

SCHEDULE "A-2" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR AND LETHO RESOURCES CORP. AS PURCHASER

[schedule redacted]

• 3 -

SCHEDULE "B" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR, AND LETHO RESOURCES CORP., AS PURCHASER

[schedule redacted]

SCHEDULE "C" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR AND LETHO RESOURCES CORP., AS PURCHASER

AFEs

To be populated.

SCHEDULE "D" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR AND LETHO RESOURCES CORP., AS PURCHASER

[schedule redacted]

• 2 -

SCHEDULE "E" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR AND LETHO RESOURCES CORP., AS PURCHASER

[schedule redacted]

SCHEDULE "F" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR, AND LETHO RESOURCES CORP., AS PURCHASER

GENERAL CONVEYANCE

THIS AGREEMENT made as of the [CLOSING DATE].

BETWEEN:

VERMILION RESOURCES , a general partnership, having an office in the City of Calgary, in the Province of Alberta (hereinafter referred to as " Vendor ")

• and -

LETHO RESOURCES CORP. a corporation, having an office in the City of Vancouver, in the Province of British Columbia (hereinafter referred to as " Purchaser ")

WHEREAS:

• (A) Vendor and Purchaser entered into that Agreement of Purchase and Sale made as of the _______ (the " Sale Agreement ") with respect to the sale and purchase of the Assets in accordance with the terms thereof; and

• (B) All of the conditions precedent to the obligations of the parties hereto to close the Transactions contemplated by the Sale Agreement have either been fulfilled or waived in the manner provided for waiver in the Sale Agreement.

NOW THEREFORE in consideration of the premises hereto and the covenants and agreements hereinafter set forth and contained, the parties hereto covenant and agree as follows:

1. Capitalized terms used but not defined in this general conveyance shall have meanings ascribed to them in the Sale Agreement

2. Vendor hereby sells, assigns, transfers, conveys and sets over to Purchaser, and Purchaser hereby purchases, assumes and accepts from Vendor, the Assets, to have and hold the same, together with all benefit and advantage to be derived therefrom, absolutely, subject to the terms of the Sale Agreement, the Permitted Encumbrances and the Title Documents.

3. If any term or provision hereof should conflict with any term or provision of the Sale Agreement, the term and provision of the Sale Agreement shall prevail and this general conveyance shall at all times be read subject to all terms and conditions of the Sale Agreement.

4. 2 -

5. This general conveyance shall, in all respects, be subject to, interpreted, construed and enforced in accordance with and under the laws of the Province of Alberta and Applicable Laws of Canada and shall, in all respects, be treated as a contract made in the Province of Alberta. The parties hereto irrevocably attorn and submit to the exclusive jurisdiction of the courts of the Province of Alberta and courts of appeal therefrom in respect of all matters arising out of or in connection with this general conveyance.

6. This general conveyance shall be binding upon and shall enure to the benefit of each of the parties hereto and their respective successors and permitted assigns.

7. This general conveyance may be executed in separate counterparts and delivered by facsimile, and each counterpart when so executed and delivered shall be deemed to be an original and when taken together shall constitute one and the same instrument, and production of an originally executed or facsimile copy of each counterpart execution page will be sufficient for purposes of proof of execution and delivery of this general conveyance. Each Party delivering this general conveyance by facsimile undertakes to deliver, within a reasonable time, an executed original; any failure to do so shall not adversely affect the effect of the foregoing

IN WITNESS WHEREOF the parties hereto have executed this general conveyance as of the date first above written.

VERMILION RESOURCES , by its Managing LETHO RESOURCES CORP. Partner, VERMILION ENERGY LTD.

Per:

Per:

Per: Per:

SCHEDULE "G" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR, AND LETHO RESOURCES CORP., AS PURCHASER

OFFICER'S CERTIFICATE OF VENDOR

TO: LETHO RESOURCES CORP.. (" Purchaser ")

The undersigned, being an officer of Vermilion Resources,

,by its managing partner Vermilion Energy Ltd. (" Vendor "), does hereby certify, for and on behalf of Vendor and not in his/her personal capacity, as follows:

1. The undersigned is personally familiar, in his/her capacity as an officer of the aforesaid managing partner of Vendor, with the matters hereinafter mentioned.

2. This certificate is made pursuant to an Agreement of Purchase and Sale made as of the July 7, 2022 between Vendor and Purchaser (the " Sale Agreement ").

3. The definitions contained in the Sale Agreement are herein adopted and wherever used shall have the meanings ascribed to them in the Sale Agreement.

4. The representations and warranties of Vendor contained in the Sale Agreement were true in all material respects when made and are true in all material respects as of the date hereof.

5. All obligations of Vendor contained in the Sale Agreement to be performed prior to or at Closing have been timely performed in all material respects.

6. There has been no uninsured material adverse damage to the Tangibles between [THE SIGNING DATE] and the date hereof. [NTD: Applicable condition precedent under review]

DATED at Calgary, Alberta, as of the [CLOSING DATE].

Vermilion Resources, ,by its managing partner Vermilion Energy Ltd.

[Name of Officer]

OFFICER'S CERTIFICATE OF PURCHASER

TO: Vermilion Resources, ,by its managing partner Vermilion Energy Ltd.(" Vendor ")

The undersigned, , being an officer of LETHO RESOURCES

CORP., (" Purchaser "), does hereby certify, for and on behalf of Purchaser and not in his/her personal capacity, as follows:

1. The undersigned is personally familiar, in his/her capacity as an officer of Purchaser, with the matters hereinafter mentioned.

2. This certificate is made pursuant to an Agreement of Purchase and Sale made as of the July 7, 2022 between Vendor and Purchaser (the " Sale Agreement ").

3. The definitions contained in the Sale Agreement are herein adopted and wherever used shall have the meanings ascribed to them in the Sale Agreement.

4. The representations and warranties of Purchaser contained in the Sale Agreement were true in all material respects when made and are true in all material respects as of the date hereof.

5. All obligations of Purchaser contained in the Sale Agreement to be performed prior to or at Closing have been timely performed in all material respects.

DATED at Calgary, Alberta, as of the [CLOSING DATE].

LETHO RESOURCES CORP.

[Name of Officer]

SCHEDULE "H" ATTACHED TO AND AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN VERMILION RESOURCES , AS VENDOR, AND LETHO RESOURCES CORP., AS PURCHASER

[schedule redacted]

SCHEDULE "I" ATTACHED TO AND FORMING PART OF AN AGREEMENT OF PURCHASE AND SALE MADE AS OF THE 7[th] DAY OF JULY, 2022, BETWEEN AND VERMILION RESOURCES , AS VENDOR, AND LETHO RESOURCES CORP., AS PURCHASER

EXCLUDED ASSETS

none