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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F







| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2012

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report:

Commission file number: 001-33491









LOGO

DEJOUR ENERGY INC.

(Exact name of Registrant as specified in its charter)





Province of
British Columbia, Canada

(Jurisdiction of incorporation or organization)

598 - 999 Canada Place

Vancouver, British Columbia V6C 3E1

(Address of principal executive
offices)

David N. Matheson

598 - 999 Canada Place

Vancouver, British Columbia V6C 3E1

Tel: (604) 638-5050

Facsimile: (604) 638-5051

(Name, Telephone, E-mail and/or Facsimile
number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act:



|                                 |  |                                          
|-------------------------------- |  | -----------------------------------------
|Title of Each Class              |  | Name of each exchange on which registered
|Common Shares, without par value |  | NYSE Amex Equities                       

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None





Indicate the number of outstanding shares of each of the Registrants classes of capital or common stock as of the close of the period covered by the annual report: 148,916,374 common shares as at
April 25, 2013

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.    Yes   ̈    No  x

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.    Yes   ̈    No  x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes  x    No   ̈

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated
filer   ̈                Accelerated
filer   ̈                Non-accelerated filer   x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



|             |  |                                                       |  |         
|------------ |  | ----------------------------------------------------- |  | --------
|U.S. GAAP   ̈ |  | International Financial Reporting Standards as issued |  | Other   ̈
|             |  | by the International Accounting Standards Board  x    |  |         

If Other has been checked in response to the previous question, indicate by check mark which financial
statement item the registrant has elected to follow:    ̈ Item  17    ̈ Item  18

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x









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TABLE OF CONTENTS



|                                                     |  |                                                                              |    |  |    | 
|---------------------------------------------------- |  | ---------------------------------------------------------------------------- | -- |  | -- | 
|GENERAL INFORMATION                                  |  |                                                                              | 4  | 
|CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |  |                                                                              | 4  | 
|CURRENCY AND EXCHANGE RATES                          |  |                                                                              | 6  | 
|ABBREVIATIONS                                        |  |                                                                              | 6  | 
|PART I                                               |  |                                                                              | 8  | 
|ITEM 1.                                              |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                        |    |  | 8  | 
|ITEM 2.                                              |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                      |    |  | 8  | 
|ITEM 3.                                              |  | KEY INFORMATION                                                              |    |  | 8  | 
|ITEM 4.                                              |  | INFORMATION ON THE COMPANY                                                   |    |  | 20 | 
|ITEM 4A.                                             |  | UNRESOLVED STAFF COMMENTS                                                    |    |  | 40 | 
|ITEM 5.                                              |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 |    |  | 40 | 
|ITEM 6.                                              |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.                                  |    |  | 50 | 
|ITEM 7.                                              |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            |    |  | 66 | 
|ITEM 8.                                              |  | FINANCIAL INFORMATION                                                        |    |  | 68 | 
|ITEM 9.                                              |  | THE OFFER AND LISTING                                                        |    |  | 69 | 
|ITEM 10.                                             |  | ADDITIONAL INFORMATION                                                       |    |  | 71 | 
|ITEM 11.                                             |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   |    |  | 87 | 
|ITEM 12.                                             |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |    |  | 89 | 
|PART II                                              |  |                                                                              | 90 | 
|ITEM 13.                                             |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |    |  | 90 | 
|ITEM 14.                                             |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |    |  | 90 | 
|ITEM 15.                                             |  | CONTROLS AND PROCEDURES                                                      |    |  | 90 | 
|ITEM 16.                                             |  | [RESERVED]                                                                   |    |  | 91 | 
|ITEM 16A.                                            |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |    |  | 91 | 
|ITEM 16B.                                            |  | CODE OF ETHICS                                                               |    |  | 91 | 
|ITEM 16C.                                            |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |    |  | 92 | 
|ITEM 16D.                                            |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |    |  | 92 | 
|ITEM 16E.                                            |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS          |    |  | 93 | 
|ITEM 16F.                                            |  | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT                                 |    |  | 93 | 
|ITEM 16G.                                            |  | CORPORATE GOVERNANCE                                                         |    |  | 93 | 
|ITEM 16H.                                            |  | MINE SAFETY DISCLOSURE                                                       |    |  | 93 | 
|PART III                                             |  |                                                                              | 94 | 
|ITEM 17.                                             |  | FINANCIAL STATEMENTS                                                         |    |  | 94 | 
|ITEM 18.                                             |  | FINANCIAL STATEMENTS                                                         |    |  | 94 | 
|ITEM 19.                                             |  | EXHIBITS                                                                     |    |  | 95 | 
|SIGNATURES                                           |  |                                                                              | 97 | 



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##### Table of Contents

GENERAL INFORMATION

All references in this annual report on Form 20-F to the terms we, our, us, the Company and
Dejour refer to Dejour Energy Inc.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS

This annual report on Form 20-F and the documents incorporated herein by reference contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in the our operations in future periods, planned exploration and, if
warranted, development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not
yet determinable and assumptions of management.

Any statements that express or involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as expects or does not expect, is expected, anticipates or
does not anticipate, plans, estimates or intends, or stating that certain actions, events or results may, could, would, might or will be
taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. The forward-looking statements contained in this annual report on Form 20-F concern, among other things:



| |  |  | drilling inventory, drilling plans and timing of drilling, re-completion and tie-in of wells;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | productive capacity of wells, anticipated or expected production rates and anticipated dates of commencement of production;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | drilling, completion and facilities costs;
| | - |  | ------------------------------------------



| |  |  | results of our various projects;
| | - |  | --------------------------------



| |  |  | ability to lower cost structure in certain of our projects;
| | - |  | -----------------------------------------------------------



| |  |  | our growth expectations;
| | - |  | ------------------------



| |  |  | timing of development of undeveloped reserves;
| | - |  | ----------------------------------------------



| |  |  | the performance and characteristics of the Companys oil and natural gas properties;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | oil and natural gas production levels;
| | - |  | --------------------------------------



| |  |  | the quantity of oil and natural gas reserves;
| | - |  | ---------------------------------------------



| |  |  | capital expenditure programs;
| | - |  | -----------------------------



| |  |  | supply and demand for oil and natural gas and commodity prices;
| | - |  | ---------------------------------------------------------------



| |  |  | the impact of federal, provincial, and state governmental regulation on Dejour;
| | - |  | -------------------------------------------------------------------------------



| |  |  | expected levels of royalty rates, operating costs, general administrative costs, costs of services and other costs and expenses;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | expectations regarding our ability to raise capital and to continually add to reserves through acquisitions, exploration and development;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | treatment under governmental regulatory regimes and tax laws; and
| | - |  | -----------------------------------------------------------------



| |  |  | realization of the anticipated benefits of acquisitions and dispositions.
| | - |  | -------------------------------------------------------------------------

These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of our management.



4



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Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other
factors that could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:



| |  |  | risks related to the marketability and price of oil and natural gas being affected by factors outside our control;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to world oil and natural gas prices being quoted in U.S. dollars and our production revenues being adversely affected by an appreciation
in the Canadian dollar;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to our ability to execute projects being dependent on factors outside our control;
| | - |  | ------------------------------------------------------------------------------------------------



| |  |  | risks related to oil and gas exploration having a high degree of risk and exploration efforts failing;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | risks related to cumulative unsuccessful exploration efforts;
| | - |  | -------------------------------------------------------------



| |  |  | risks related to oil and natural gas operations involving hazards and operational risks;
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | risks related to seasonal factors and unexpected weather;
| | - |  | ---------------------------------------------------------



| |  |  | risks related to competition in the oil and gas industry;
| | - |  | ---------------------------------------------------------



| |  |  | risks related to the fact that we do not control all of the assets that are used in the operation of our business;
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to our ability to market oil and natural gas depending on its ability to transport the product to market;
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to high demand for drilling equipment;
| | - |  | ----------------------------------------------------



| |  |  | risks related to title to our properties;
| | - |  | -----------------------------------------



| |  |  | risks related to our ability to continue to meet its oil and gas lease or license obligations;
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | risks related to our anticipated substantial capital needs for future oil and gas exploration, development and acquisitions;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to our cash flow from reserves not being sufficient to fund its ongoing operations;
| | - |  | -------------------------------------------------------------------------------------------------



| |  |  | risks related to covenants in issued debt restricting the ability to conduct future financings;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | risks related to renewal or refinancing;
| | - |  | ----------------------------------------



| |  |  | risks related to our being exposed to third party credit risks;
| | - |  | ---------------------------------------------------------------



| |  |  | risks related to our being able to find, acquire, develop and commercially produce oil and natural gas;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | risks related to our properties not producing as projected;
| | - |  | -----------------------------------------------------------



| |  |  | risks related to our estimated reserves being based upon estimates;
| | - |  | -------------------------------------------------------------------



| |  |  | risks related to future oil and gas revenues not resulting in revenue increases;
| | - |  | --------------------------------------------------------------------------------



| |  |  | risks related to our managing growth;
| | - |  | -------------------------------------



| |  |  | risks related to our being dependent on key personnel;
| | - |  | ------------------------------------------------------



| |  |  | risks related to our operations being subject to federal, state, local and other laws, controls and regulations;
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | risks related to uncertainty regarding claims of title and right of aboriginal people;
| | - |  | --------------------------------------------------------------------------------------



| |  |  | risks related to environmental laws and regulations;
| | - |  | ----------------------------------------------------



| |  |  | risks related to our facilities, operations and activities emitting greenhouse gases;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | risks related to our not having paid dividends to date;
| | - |  | -------------------------------------------------------



| |  |  | risks related to our stock price being volatile; and
| | - |  | ----------------------------------------------------



| |  |  | risks related to our being a foreign private issuer.
| | - |  | ----------------------------------------------------



5



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This list is not exhaustive of the factors that may affect any of our forward-looking statements. Some of
the important risks and uncertainties that could affect forward-looking statements are described further under the section heading Item 3. Key Information  D. Risk Factors below. If one or more of these risks or uncertainties
materializes, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and
those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
Investors should consult our quarterly and annual filings with Canadian and U.S. securities commissions for additional information on risks and uncertainties relating to forward-looking statements. We do not assume responsibility for the accuracy
and completeness of these statements.

Forward-looking statements are based on our beliefs, opinions and expectations at the time they are
made, and we do not assume any obligation to update our forward-looking statements if those beliefs, opinions, or expectations, or other circumstances, should change, except as required by applicable law.

We qualify all the forward-looking statements contained in this annual report on Form 20-F by the foregoing cautionary statements.

CURRENCY AND EXCHANGE RATES

Canadian Dollars Per U.S. Dollar

Unless otherwise indicated, all references in this
annual report are to Canadian dollars ($ or Cdn$). Certain numbers in this annual report are rounded to the nearest thousands of Canadian dollars.

The following tables set forth the number of Canadian dollars required to buy one United States dollar (US$) based on the average, high and low nominal noon exchange rate as reported by the Bank of Canada
for each of the last five fiscal years and each of the last six months. The average rate means the average of the exchange rates on the last day of each month during the period.



|                       |  |                                      |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|---------------------- |  | ------------------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                       |  | Canadian Dollars Per One U.S. Dollar |       
|                       |  | 2012                                 |        |  | 2011 |  |        | 2010 |  |  | 2009   |  |  | 2008 |       
|Average for the period |  |                                      | 0.9996 |  |      |  | 0.9891 |      |  |  | 1.0345 |  |  |      | 1.1416 |  |  |  | 1.0592 | 



|                    |  |           |        |  |              |  |        |             |  |  |              |  |  |              |        |  |             |  |        |  |  |  |        | 
|------------------- |  | --------- | ------ |  | ------------ |  | ------ | ----------- |  |  | ------------ |  |  | ------------ | ------ |  | ----------- |  | ------ |  |  |  | ------ | 
|                    |  | March2013 |        |  | February2013 |  |        | January2013 |  |  | December2012 |  |  | November2012 |        |  | October2012 | 
|High for the period |  |           | 1.0314 |  |              |  | 1.0285 |             |  |  | 1.0078       |  |  |              | 0.9952 |  |             |  | 1.0028 |  |  |  | 1.0004 | 
|Low for the period  |  |           | 1.0156 |  |              |  | 0.9960 |             |  |  | 0.9839       |  |  |              | 0.9841 |  |             |  | 0.9927 |  |  |  | 0.9763 | 

Exchange rates are based on the Bank of Canada nominal noon exchange rates. The nominal noon exchange rate on
April 25, 2013 as reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars was US$1.00 = Cdn$1.0194.

ABBREVIATIONS



|                            |  |             |  |                               |  |        |  |  |  |                                      
|--------------------------- |  | ----------- |  | ----------------------------- |  | ------ |  |  |  | -------------------------------------
|Oil and Natural Gas Liquids |  | Natural Gas
|bbl                         |  |             |  | barrel                        |  | Mcf    |  |  |  | thousand cubic feet                  
|bbls                        |  |             |  | barrels                       |  | MCFD   |  |  |  | thousand cubic feet per day          
|BOPD                        |  |             |  | barrels per day               |  | MMcf   |  |  |  | million cubic feet                   
|Mbbls                       |  |             |  | thousand barrels              |  | MMcf/d |  |  |  | million cubic feet per day           
|Mmbtu                       |  |             |  | million British thermal units |  | Mcfe   |  |  |  | Thousand cubic feet of gas equivalent



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|      |  |  |  |                                                                                                                                                             
|----- |  |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|Other
|AECO  |  |  |  | Intra-Alberta Nova Inventory Transfer Price (NIT net price of natural gas).                                                                                 
|BOE   |  |  |  | Barrels of oil equivalent. A barrel of oil equivalent is determined by converting a volume of natural gas to barrels using the ratio of 6 Mcf to one barrel.
|BOE/D |  |  |  | Barrels of oil equivalent per day.                                                                                                                          
|BCFE  |  |  |  | Billion cubic feet equivalent.                                                                                                                              
|MBOE  |  |  |  | Thousand barrels of oil equivalent.                                                                                                                         
|NYMEX |  |  |  | New York Mercantile Exchange.                                                                                                                               
|WTI   |  |  |  | West Texas Intermediate, the reference price paid in U.S. dollars at Cushing Oklahoma for crude oil of standard grade.                                      



7



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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION



|A. | Selected Financial Data
|-- | -----------------------

Our selected
financial data and the information in the following tables for the years ended December 31, 2008  2012 was derived from our audited consolidated financial statements. These audited consolidated financial statements have been audited by
BDO Canada LLP, Chartered Accountants, for the years ended December 31, 2012, 2011 and 2010, and Dale Matheson Carr-Hilton LaBonte LLP, Chartered Accountants, for the years ended December 31, 2008  2009. Certain prior years
comparative figures have been reclassified, if necessary.

The information in the following table should be read in conjunction with the
information appearing under the heading Item 5. Operating and Financial Review and Prospects and our audited consolidated financial statements under the heading Item 18. Financial Statements.

On January 1, 2011, the Company adopted International Financial Reporting Standards (IFRS) for financial reporting purposes, using a
transition date of January 1, 2010. The Companys annual audited Consolidated Financial Statements for the year ended December 31, 2011, including 2010 required comparative information, have been prepared in accordance with IFRS, as
issued by the International Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC). Financial statements prior to the fiscal year ended
December 31, 2010 were prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP). Reference is made to Note 21 of our audited consolidated financial statements as at December 31, 2010 and
2009 and for the years ended December 31, 2010, 2009 and 2008 for a discussion of the material measurement differences between Canadian GAAP and United States generally accepted accounting principles (U.S. GAAP), and their effect on
our financial statements.

Financial information included in this annual report on Form 20-F for the years 2012, 2011 and 2010 is determined
using IFRS, which differ from U.S. GAAP and Canadian GAAP. Unless otherwise indicated, financial information included in this annual report on Form 20-F prior to year 2010 were in accordance with Canadian GAAP.

We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Our present policy is to
retain all available funds for use in our operations and the expansion of our business.



8



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The following table is a summary of selected audited consolidated financial information of the Company for
each of the three most recently completed financial years. The information presented is presented in accordance with IFRS:



|                                     |  |                          |         |   |      |    |         |      |  |    |         |  
|------------------------------------ |  | ------------------------ | ------- | - | ---- | -- | ------- | ---- |  | -- | ------- | -
|(Cdn$ in 000, except per share data) |  | Years Ended December 31, |        
|                                     |  | 2012                     |         |   | 2011 |    |         | 2010 | 
|Revenue (Oil and natural gas)        |  | $                        | 6,882   |   |      | $  | 8,824   |      |  | $  | 8,086   |  
|Net Loss for the Year                |  | ($                       | 11,753  | ) |      | ($ | 11,043  | )    |  | ($ | 5,124   | )
|Loss Per Share                       |  | ($                       | 0.08    | ) |      | ($ | 0.09    | )    |  | ($ | 0.05    | )
|Dividends Per Share                  |  |                          | Nil     |   |      |    | Nil     |      |  |    | Nil     |  
|Weighted Avg. Shares, basic (,000)   |  |                          | 141,056 |   |      |    | 120,300 |      |  |    | 99,789  |  
|Weighted Avg. Shares, diluted (,000) |  |                          | 141,056 |   |      |    | 120,300 |      |  |    | 99,789  |  
|Year-end Shares (,000)               |  |                          | 148,916 |   |      |    | 126,892 |      |  |    | 110,181 |  
|Working Capital (Deficiency)         |  | ($                       | 8,557   | ) |      | ($ | 7,756   | )    |  | ($ | 3,264   | )
|Resource properties and equipment    |  | $                        | 25,033  |   |      | $  | 25,043  |      |  | $  | 24,432  |  
|Long-term Investments                |  |                          |        |   |      |    |        |      |  |    |        |  
|Long-term Liabilities                |  | $                        | 6,622   |   |      | $  | 1,383   |      |  | $  | 738     |  
|Share Capital                        |  | $                        | 90,274  |   |      | $  | 85,076  |      |  | $  | 79,386  |  
|Retained Earnings (Deficit)          |  | ($                       | 88,262  | ) |      | ($ | 76,510  | )    |  | ($ | 65,467  | )
|                                     |  |                          |         |   |      |    |         |      |  |    |         |  
|Total Assets                         |  | $                        | 27,573  |   |      | $  | 29,438  |      |  | $  | 30,413  |  
|                                     |  |                          |         |   |      |    |         |      |  |    |         |  

The following table is a summary of selected audited consolidated financial information of the Company for the two fiscal
years ended December 31, 2009 and 2008. The information presented is presented in accordance with Canadian GAAP and is not comparable to the financial information presented in accordance with IFRS.



|                                     |  |                          |        |   |      |    |        |  
|------------------------------------ |  | ------------------------ | ------ | - | ---- | -- | ------ | -
|(Cdn$ in 000, except per share data) |  | Years Ended December 31, |       
|                                     |  | 2009                     |        |   | 2008 |   
|Revenue (Oil and natural gas)        |  | $                        | 6,471  |   |      | $  | 5,766  |  
|Net Loss for the Year                |  | ($                       | 12,807 | ) |      | ($ | 20,891 | )
|Loss Per Share                       |  | ($                       | 0.16   | ) |      | ($ | 0.29   | )
|Dividends Per Share                  |  |                          | Nil    |   |      |    | Nil    |  
|Weighted Avg. Shares, basic (,000)   |  |                          | 78,926 |   |      |    | 72,211 |  
|Weighted Avg. Shares, diluted (,000) |  |                          | 78,926 |   |      |    | 72,211 |  
|Year-end Shares (,000)               |  |                          | 95,791 |   |      |    | 73,652 |  
|Working Capital (Deficiency)         |  | ($                       | 20     | ) |      | ($ | 12,712 | )
|Resource Properties                  |  | $                        | 41,758 |   |      | $  | 57,684 |  
|Long-term Investments                |  |                          |       |   |      | $  | 2,722  |  
|Long-term Liabilities                |  | $                        | 2,594  |   |      | $  | 3,446  |  
|Share Capital                        |  | $                        | 72,560 |   |      | $  | 64,939 |  
|Retained Earnings (Deficit)          |  | ($                       | 39,386 | ) |      | ($ | 26,579 | )
|                                     |  |                          |        |   |      |    |        |  
|Total Assets                         |  | $                        | 45,886 |   |      | $  | 62,643 |  
|                                     |  |                          |        |   |      |    |        |  



9



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Canadian GAAP Adjusted to United States Generally Accepted Accounting Principles

Under U.S. GAAP the following financial information would be adjusted from Canadian GAAP, and certain prior years comparative figures have been
reclassified or restated, if necessary. The following table is a summary of selected audited consolidated financial information of the Company for the fiscal years ended December 31, 2009 and 2008. The information presented is in accordance
with U.S. GAAP:



|                                     |  |                          |        |   |      |    |        |  
|------------------------------------ |  | ------------------------ | ------ | - | ---- | -- | ------ | -
|(Cdn$ in 000, except per share data) |  | Years Ended December 31, |       
|                                     |  | 2009                     |        |   | 2008 |   
|Net Loss for the Year                |  | ($                       | 10,270 | ) |      | ($ | 34,181 | )
|Loss Per Share                       |  | ($                       | 0.13   | ) |      | ($ | 0.47   | )
|Resource Properties                  |  | $                        | 31,041 |   |      | $  | 44,232 |  
|Retained Earnings (Deficit)          |  | ($                       | 54,785 | ) |      | ($ | 44,515 | )
|                                     |  |                          |        |   |      |    |        |  
|Total Assets                         |  | $                        | 35,169 |   |      | $  | 49,192 |  
|                                     |  |                          |        |   |      |    |        |  

Exchange Rate History

See the disclosure under the heading Currency and Exchange Rates above.

Recently Adopted Accounting Policies and Future Accounting Pronouncements

IFRS

On January 1, 2011, we adopted IFRS and the accounting policies have been
applied in preparing the consolidated financial statements for the year ended December 31, 2011, the consolidated financial statements for the year ended December 31, 2010 and the opening IFRS balance sheet on January 1, 2010. The
detail accounting policies in accordance with IFRS were disclosed in Note 3 of the Companys audited consolidated financial statements and the details of transition to IFRS were disclosed in Note 25 of the Companys audited consolidated
financial statements under the heading Item 18. Financial Statements, below. Subsequent to transition, the Company has prepared its consolidated financial statement in accordance with IFRS.

Future Accounting Pronouncements

Certain pronouncements were issued by the International Accounting Standards Board (IASB) or the International Financial Reporting
Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning after January 1, 2013 or later periods.

The following new standards, amendments and interpretations, have not been early adopted in the Companys consolidated annual financial statements.
The Company is currently assessing the impact, if any, of this new guidance on the Companys future results and financial position:



| |  | IFRS 7 Financial Instruments: Disclosures, which requires disclosure of both gross and net information about financial instruments eligible for offset
in the balance sheet and financial instruments subject to master netting arrangements. Concurrent with the amendments to IFRS 7, the IASB also amended IAS 32, Financial Instruments: Presentation to clarify the existing requirements for offsetting
financial instruments in the balance sheet. The amendments to IAS 32 are effective as of January 1, 2014.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 9 Financial Instruments is part of the IASBs wider project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9
retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on the entitys business model and the contractual
cash flow characteristics of the financial asset. The standard is effective for annual periods beginning on or after January 1, 2015.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 10 Consolidated Financial Statements is the result of the IASBs project to replace Standing Interpretations Committee 12, Consolidation
 Special Purpose Entities and the consolidation requirements of IAS 27, Consolidated
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | and Separate Financial Statements. The new standard eliminates the current risk and rewards approach and establishes control as the single basis for determining the consolidation of an entity.
The standard is effective for annual periods beginning on or after January 1, 2013.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 11 Joint Arrangements is the result of the IASBs project to replace IAS 31, Interests in Joint Ventures. The new standard redefines joint
operations and joint ventures and requires joint operations to be proportionately consolidated and joint ventures to be equity accounted. Under IAS 31, joint ventures could be proportionately consolidated. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 12 Disclosure of Interests in Other Entities outlines the required disclosures for interests in subsidiaries and joint arrangements. The new
disclosures require information that will assist financial statement users to evaluate the nature, risks and financial effects associated with an entitys interests in subsidiaries and joint arrangements. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 13 Fair Value Measurement defines fair value, requires disclosures about fair value measurements and provides a framework for measuring fair value
when it is required or permitted within the IFRS standards. The standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRIC 20 Stripping costs in the production phase of a mine, IFRIC 20 clarifies the requirements for accounting for the costs of the stripping activity
in the production phase when two benefits accrue: (i) unusable ore that can be used to produce inventory and (ii) improved access to further quantities of material that will be mined in future periods. IFRIC 20 is effective for annual
periods beginning on or after January 1, 2013 with earlier application permitted and includes guidance on transition for pre-existing stripping assets.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 1, Presentation of Financial Statements was amended in June 2011. This standard requires companies preparing financial statements under IFRS to
group items within Other Comprehensive Income (OCI) that may be reclassified to the profit or loss. The amendments also reaffirm existing requirements that items in OCI and profit of loss should be presented as either a single statement or two
consecutive statements. The amendments to IAS 1 are effective as of January 1, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 28 Investments in Associates and Joint Ventures, prescribes the accounting for investments in associates and sets out the requirements for the
application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (associate or joint venture). The
standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. | Capitalization and Indebtedness
|-- | -------------------------------

Not
Applicable.



|C. | Reasons for the Offer and Use of Proceeds
|-- | -----------------------------------------

Not Applicable.



|D. | Risk Factors
|-- | ------------

An investment in a company
engaged in oil and gas exploration involves an unusually high amount of risk, both unknown and known, present and potential, including, but not limited to the risks enumerated below. An investment in our common shares is highly speculative and
subject to a number of known and unknown risks. Only those persons who can bear the risk of the entire loss of their investment should purchase our securities. An investor should carefully consider the risks described below and the other information
that we file with the SEC and with Canadian securities regulators before investing in our common shares. The risks described below are not the only ones faced. Additional risks that we are not currently aware of or that we currently believe are
immaterial may become important factors that affect our business. The risk factors set forth below and elsewhere in this annual report, and the risks discussed in our other filings with the SEC and Canadian securities regulators, may have a
significant impact on our business, financial condition and/or results of operations and could cause actual results to differ materially from those projected in any forward-looking statements. See Cautionary Note Regarding Forward-Looking
Statements.



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Our failure to successfully address the risks and uncertainties described below would have a material
adverse effect on our business, financial condition and/or results of operations, and the trading price of our common stock may decline and investors may lose all or part of their investment. We cannot assure you that we will successfully address
these risks or other unknown risks that may affect our business.

Risks related to commodity price fluctuations

The marketability and price of oil and natural gas are affected by numerous factors outside of our control. Material fluctuations in oil and
natural gas prices could adversely affect our net production revenue and oil and natural gas operations.

Prices for oil and natural
gas may fluctuate widely in response to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty and a variety of additional factors that are beyond our control, such as:



| |  |  | the domestic and foreign supply of and demand for oil and natural gas;
| | - |  | ----------------------------------------------------------------------



| |  |  | the price and quantity of imports of crude oil and natural gas;
| | - |  | ---------------------------------------------------------------



| |  |  | overall domestic and global economic conditions;
| | - |  | ------------------------------------------------



| |  |  | political and economic conditions in other oil and natural gas producing countries, including embargoes and continued hostilities in the Middle East
and other sustained military campaigns, and acts of terrorism or sabotage;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the level of consumer product demand;
| | - |  | -------------------------------------



| |  |  | weather conditions;
| | - |  | -------------------



| |  |  | the impact of the U.S. dollar exchange rates on oil and natural gas prices; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | the price and availability of alternative fuels.
| | - |  | ------------------------------------------------

Our ability to market our oil and natural gas depends upon our ability to acquire space on pipelines that deliver such commodities to commercial markets. We are also affected by deliverability
uncertainties related to the proximity of our reserves to pipelines and processing and storage facilities and operational problems affecting such pipelines and facilities, as well as extensive governmental regulation relating to price, taxes,
royalties, land tenure, allowable production, the export of oil and natural gas and many other aspects of the oil and natural gas business.

Both oil and natural gas prices are unstable and are subject to fluctuation. Any material decline in prices could result in a reduction of our net
production revenue. The economics of producing from some wells may change as a result of lower prices, which could result in reduced production of oil or natural gas and a reduction in the volumes and net present value of our reserves. We might also
elect not to produce from certain wells at lower prices. All of these factors could result in a material decrease in our net production revenue and a reduction in our oil and natural gas acquisition, development and exploration activities.

Because world oil and natural gas prices are quoted in U.S. dollars, our production revenues could be adversely affected by an
appreciation of the Canadian dollar.

World oil and natural gas prices are quoted in U.S. dollars, and the price received by Canadian
producers, including us, is therefore affected by the Canadian/U.S. dollar exchange rate, which will fluctuate over time. In recent years, the Canadian dollar has increased materially in value against the U.S. dollar, which may negatively affect our
production revenues. Further material increases in the value of the Canadian dollar would exacerbate this potential negative effect and could have a material adverse effect on our financial condition and results of operations. An increase in the
exchange rate for the Canadian dollar and future Canadian/U.S. exchange rates could also negatively affect the future value of our reserves as determined by independent petroleum reserve engineers.



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Risks related to operating an exploration, development and production company

Our ability to execute projects will depend on certain factors outside of our control. If we are unable to execute projects on time, on budget
or at all, we may not be able to effectively market the oil and natural gas that we produce.

We manage a variety of small and large
projects in the conduct of our business. Our ability to execute projects and market oil and natural gas will depend upon numerous factors beyond our control, including:



| |  |  | the availability of adequate financing;
| | - |  | ---------------------------------------



| |  |  | the availability of processing capacity;
| | - |  | ----------------------------------------



| |  |  | the availability and proximity of pipeline capacity;
| | - |  | ----------------------------------------------------



| |  |  | the availability of storage capacity;
| | - |  | -------------------------------------



| |  |  | the supply of and demand for oil and natural gas;
| | - |  | -------------------------------------------------



| |  |  | the availability of alternative fuel sources;
| | - |  | ---------------------------------------------



| |  |  | the effects of inclement weather;
| | - |  | ---------------------------------



| |  |  | the availability of drilling and related equipment;
| | - |  | ---------------------------------------------------



| |  |  | accidental events;
| | - |  | ------------------



| |  |  | currency fluctuations;
| | - |  | ----------------------



| |  |  | changes in governmental regulations; and
| | - |  | ----------------------------------------



| |  |  | the availability and productivity of skilled labor.
| | - |  | ---------------------------------------------------

Because of these factors, we could be unable to execute projects on time, on budget or at all, and may not be able to effectively market the oil and natural gas that we produce.

Oil and gas exploration has a high degree of risk and our exploration efforts may be unsuccessful, which would have a negative effect on our
operations.

There is no certainty that the expenditures to be made by us in the exploration of our current projects, or any
additional project interests we may acquire, will result in discoveries of recoverable oil and gas in commercial quantities. An exploration project may not result in the discovery of commercially recoverable reserves and the level of recovery of
hydrocarbons from a property may not be a commercially recoverable (or viable) reserve that can be legally and economically exploited. If exploration is unsuccessful and no commercially recoverable reserves are defined, we would be required to
evaluate and acquire additional projects that would require additional capital, or we would have to cease operations altogether.

Cumulative unsuccessful exploration efforts could result in us having to cease operations.

The expenditures to be made by us in the exploration of our properties may not result in discoveries of oil and natural gas in commercial quantities.
Many exploration projects do not result in the discovery of commercially recoverable oil and gas deposits, and this occurrence could ultimately result in us having to cease operations.

Oil and natural gas operations involve many hazards and operational risks, some of which may not be fully covered by insurance. If a significant accident or event occurs for which we are not
fully insured, our business, financial condition, results of operations and prospects could be adversely affected.

Our involvement in
the oil and natural gas exploration, development and production business subjects us to all of the risks and hazards typically associated with those types of operations, including hazards such as fire, explosion, blowouts, sour gas releases and
spills, each of which could result in substantial damage to oil and natural gas wells, production facilities, other property and the environment or personal injury. In particular, we may explore for and produce sour natural gas in certain areas. An
unintentional leak of sour natural gas could result in personal injury, loss of life or damage to property, and may necessitate an evacuation of populated areas, all of which could result in liability to us. In accordance with industry practice, we
are not fully insured against all of these risks. Although we maintain liability insurance in an amount that we consider consistent with industry practice, the nature of these risks is such that liabilities could exceed policy limits, in which event
we could incur significant costs that could have a material adverse effect upon our business, financial condition, results of operations and prospects. In addition, the risks we face are not, in all circumstances, insurable and, in certain
circumstances, we may elect not to obtain insurance to deal with specific risks due to the high premiums associated with such insurance or other reasons. For instance, we do not have insurance to protect against the risk from terrorism. Oil and
natural gas production operations are also subject to all of the risks typically associated with those operations, including encountering unexpected geologic formations or pressures, premature decline of reservoirs and the invasion of water into
producing formations. Losses resulting from the occurrence of any of these risks could have a material adverse effect on our business, financial condition, results of operations and prospects.



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Seasonal factors and unexpected weather patterns may lead to declines in exploration and production
activity.

The level of activity in the Canadian oil and natural gas industry is influenced by seasonal weather patterns. Oil and
natural gas development activities, including seismic and drilling programs in northern Alberta and British Columbia, are restricted to those months of the year when the ground is frozen. Wet weather and spring thaw may make the ground unstable.
Consequently, municipalities and provincial transportation departments enforce road bans that restrict the movement of rigs and other heavy equipment, thereby reducing activity levels. In addition, certain oil and natural gas producing areas are
located in areas that are inaccessible other than during the winter months because the ground surrounding the sites in these areas consists of swampy terrain, and additional seasonal weather variations will also affect access to these areas.
Seasonal factors and unexpected weather patterns may lead to declines in exploration and production activity during certain parts of the year.

The petroleum industry is highly competitive, and increased competitive pressures could adversely affect our business, financial condition, results
of operations and prospects.

The petroleum industry is competitive in all of its phases. We compete with numerous other organizations
in the search for, and the acquisition of, oil and natural gas properties and in the marketing of oil and natural gas. Our competitors include oil and natural gas companies that have substantially greater financial resources, staff and facilities
than us. Our ability to increase our reserves in the future will depend not only upon our ability to explore and develop our present properties, but also upon our ability to select and acquire other suitable producing properties or prospects for
exploratory drilling. Competitive factors in the distribution and marketing of oil and natural gas include price and methods and reliability of delivery and storage.

We do not control all of the assets that are used in the operation of our business and, therefore, cannot ensure that those assets will be operated in a manner favorable to us.

Other companies operate some of the assets in which we have an interest. As a result, we have a limited ability to exercise influence over the operation
of those assets or their associated costs, which could adversely affect our financial performance. Our return on assets operated by others will therefore depend upon a number of factors that may be outside of our control, including the timing
and amount of capital expenditures, the operators expertise and financial resources, the approval of other participants, the selection of technology and risk management practices.

Our ability to market oil and natural gas depends on our ability to transport our product to market. If we are unable to expand and develop the infrastructure in the areas surrounding certain
of our assets, we may not be able to effectively market the oil and natural gas that we produce.

Due to the location of some of our
assets, both in Canada and the United States, there is minimal infrastructure currently available to transport oil and natural gas from our existing and future wells to market. As a result, even if we are able to engage in successful
exploration and production activities, we may not be able to effectively market the oil and natural gas that we produce, which could adversely affect our business, financial condition, results of operations and prospects.

Demand and competition for drilling equipment could delay our exploration and production activities, which could adversely affect our business,
financial condition, results of operations and prospects.

Oil and natural gas exploration and development activities depend upon the
availability of drilling and related equipment (typically leased from third parties) in the particular areas where such activities will be conducted. Demand for such limited equipment or access restrictions may affect the availability of such
equipment to us and may delay exploration and development activities. To the extent we are not the operator of our oil and natural gas properties, we depend upon the operators of the properties for the timing of activities related to the properties
and are largely unable to direct or control the activities of the operators.

Title to our oil and natural gas producing properties
cannot be guaranteed and may be subject to prior recorded or unrecorded agreements, transfers, claims or other defects.

Although
title reviews may be conducted prior to the purchase of oil and natural gas producing properties or the commencement of drilling wells, those reviews do not guarantee or certify that an unforeseen defect in the chain of title will not arise to
defeat our claim. Unregistered agreements or transfers, or native land claims, may affect title. If title is



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disputed, we will need to defend our ownership through the courts, which would likely be an expensive and protracted process and have a negative effect on our operations and financial condition.
In the event of an adverse judgment, we would lose our property rights. A defect in our title to any of our properties may have a material adverse effect on our business, financial condition, results of operations and prospects.

We may be unable to meet all of the obligations necessary to successfully maintain each of the licenses and leases and working interests in
licenses and leases related to our properties, which could adversely affect our business, financial condition, results of operations and prospects.

Our properties are held in the form of licenses and leases and working interests in licenses and leases. If we or the holder of the license or lease fails to meet the specific requirement of a license or
lease, the license or lease may terminate or expire. None of the obligations required to maintain each license or lease may be met. The termination or expiration of our licenses or leases or the working interests relating to a license or lease may
have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks related to financing
continuing and future operations

We have a working capital deficiency and will be required to raise capital through financings. We
may not be able to obtain capital or financing on satisfactory terms, or at all.

As of December 31, 2012, the Company had a
working capital deficiency of approximately $8.6 million. Excluding the non-cash warrant liability of $1.4 million related to the fair value of US$ denominated warrants issued in current and previous equity financings and the non-current portion of
financial contract liability of $1.3 million, the working capital deficiency mainly consists of $6.0 million outstanding demand line of credit. On March 28, 2013, the Company renewed its revolving bank facility in the amount of $5.9 million.
Under the terms of the revised agreement with the Bank, the Company is obligated to make monthly principal payments of $200,000 commencing March 26, 2013 and pay its Bank $1,450,000 on June 30, 2013. We expect to incur general and
administration expenses of approximately $2.5 million over the next twelve months. We cannot assure you that debt or equity financing will be available to us, and even if debt or equity financing is available, it may not be on terms acceptable to
us. Our inability to access sufficient capital for our operations and our June 30, 2013 Bank payment would have a material adverse effect on our business, financial condition, results of operations and prospects.

The Companys ability to continue as a going concern is dependent upon attaining profitable operations and obtaining sufficient financing
to meet obligations and continue exploration and development activities. Whether and when the Company can attain profitability is uncertain. These uncertainties cast substantial doubt upon the Companys ability to continue as going concern.

During the year ended December 31, 2012, the Company incurred a loss of $11,752,525 and has an accumulated deficit of
$88,262,350. Whether and when the Company can attain profitability is uncertain. The Company also has a working capital deficiency of $8,557,281 as at December 31, 2012. These uncertainties cast substantial doubt upon the Companys ability
to continue as going concern in the next twelve months, because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt
financing, or any combination thereof, or on satisfactory terms or at all. Our independent auditors have included an explanatory paragraph in their report on our consolidated financial statements for the year ended December 31, 2012 that
describes uncertainties that cast substantial doubt about our ability to continue as a going concern. Our audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board applicable to a going concern, which implies we will continue to meet our obligations and continue our operations for the next twelve months. Realization values may be substantially different from carrying
values as shown, and our consolidated financial statements do not include any adjustments relating to the recoverability or classification of recorded asset amounts or the amount and classification of liabilities that might be necessary as a result
of the going concern uncertainty.



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We anticipate making substantial capital expenditures for future acquisition, exploration, development
and production projects. We may not be able to obtain capital or financing necessary to support these projects on satisfactory terms, or at all.

We anticipate making substantial capital expenditures for the acquisition, exploration, development and production of oil and natural gas reserves in the future. If our revenues or reserves decline, we
may not have access to the capital necessary to undertake or complete future drilling programs. Debt or equity financing, or cash generated by operations, may not be available to us or may not be sufficient to meet our requirements for capital
expenditures or other corporate purposes. Even if debt or equity financing is available, it may not be on terms acceptable to us. Our inability to access sufficient capital for our operations could have a material adverse effect on our
business, financial condition, results of operations and prospects.

Our cash flow from our reserves may not be sufficient to fund our
ongoing activities at all times, thereby causing us to forfeit our interest in certain properties, miss certain acquisition opportunities and reduce or terminate our operations.

Our cash flow from our reserves may not be sufficient to fund our ongoing activities at all times and we are currently utilizing our bank line of credit to fund our working capital deficit. From time to
time, we may require additional financing in order to carry out our oil and gas acquisition, exploration and development activities. Failure to obtain such financing on a timely basis could cause us to forfeit its interest in certain properties, not
be able to take advantage of certain acquisition opportunities and reduce or terminate our level of operations. If our revenues from our reserves decrease as a result of lower oil and natural gas prices or otherwise, our ability to expend the
necessary capital to replace our reserves or to maintain our production will be impaired. If our cash flow from operations is not sufficient to satisfy our capital expenditure requirements, there can be no assurance that additional debt or equity
financing will be available to meet these requirements or, if available, on favorable terms.

Debt that we incur in the future may limit
our ability to obtain financing and to pursue other business opportunities, which could adversely affect our business, financial condition, results of operations and prospects.

From time to time, we may enter into transactions to acquire assets or equity of other organizations. These transactions may be financed in whole or in part with debt, which may increase our debt levels
above industry standards for oil and natural gas companies of a similar size. Depending upon future exploration and development plans, we may require additional equity and/or debt financing that may not be available or, if available, may not be
available on acceptable terms. None of our organizational documents currently limit the amount of indebtedness that we may incur. The level of our indebtedness from time to time could impair our ability to obtain additional financing on a timely
basis to take advantage of business opportunities that may arise.

We may be exposed to the credit risk of third parties through certain
of our business arrangements. Non-payment or non-performance by any of these third parties could have an adverse effect on our financial condition and results of operations.

We may be exposed to third-party credit risk through our contractual arrangements with our current or future joint venture partners, marketers of our petroleum and natural gas production and other
parties. In the event those entities fail to meet their contractual obligations to us, those failures could have a material adverse effect on our financial condition and results of operations. In addition, poor credit conditions in the industry and
of joint venture partners may affect a joint venture partners willingness to participate in our ongoing capital program, potentially delaying the program and the results of the program until we find a suitable alternative partner.

Risks related to maintaining reserves and acquiring new sources of oil and natural gas

Our success depends upon our ability to find, acquire, develop and commercially produce oil and natural gas, which depends upon factors outside of our control.

Oil and natural gas operations involve many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome.
Our long-term commercial success depends upon our ability to find, acquire, develop and commercially produce oil and natural gas. We have only recently commenced production of oil and natural gas. There is no assurance that our other
properties or future properties will achieve commercial production. Without the continual addition of new reserves, our existing reserves and our production will decline over time as our reserves are exploited. A future increase in our reserves
will depend not only upon our ability to explore and develop any properties we may have from time to time, but also upon our ability to select and acquire new suitable producing properties or prospects. No assurance can be given that we will be able
to locate satisfactory properties for acquisition or participation. Moreover, if acquisitions or participations are identified, we may determine that current market conditions, the terms of any acquisition or participation arrangement, or pricing
conditions, may make the acquisitions or participations uneconomical, and further commercial quantities of oil and natural gas may not be produced, discovered or acquired by us, any of which could have a material adverse effect on our business,
financial condition, results of operations and prospects.



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Properties that we acquire may not produce as projected, and we may be unable to determine reserve
potential, identify liabilities associated with the properties or obtain protection from sellers against such liabilities.

Our
long-term commercial success depends upon our ability to find, acquire, develop and commercially produce oil and natural gas reserves. However, our review of acquired properties is inherently incomplete, as it generally is not feasible to review in
depth every individual property involved in each acquisition. Even a detailed review of records and properties may not necessarily reveal existing or potential problems, nor will it permit a buyer to become sufficiently familiar with the properties
to assess fully their deficiencies and potential. Inspections may not always be performed on every well, and environmental problems, such as ground water contamination, are not necessarily observable even when an inspection is undertaken.

Our estimated reserves are based on many assumptions that may prove to be inaccurate. Any material inaccuracies in the reserve
estimates or the underlying assumptions may adversely affect the quantities and present value of our reserves.

There are numerous
uncertainties inherent in estimating quantities of oil, natural gas reserves and the future cash flows attributed to the reserves. Our reserve and associated cash flow estimates are estimates only. In general, estimates of economically recoverable
oil and natural gas reserves and the associated future net cash flows are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of
capital expenditures, marketability of oil and gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially from actual results. All estimates are to some degree
speculative, and classifications of reserves are only attempts to define the degree of speculation involved. For those reasons, estimates of the economically recoverable oil and natural gas reserves attributable to any particular group of
properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary. Our actual production,
revenues, taxes and development and operating expenditures with respect to our reserves will vary from our estimates of them, and those variations could be material.

Estimates of proved reserves that may be developed and produced in the future are often based upon volumetric calculations and upon analogy to similar types of reserves rather than actual production
history. Recovery factors and drainage areas are estimated by experience and analogy to similar producing pools. Estimates based on these methods are generally less reliable than those based on actual production history. Subsequent evaluation of the
same reserves based upon production history and production practices will result in variations in the estimated reserves, and those variations could be material.

Our future oil and natural gas production may not result in revenue increases and may be adversely affected by operating conditions, production delays, drilling hazards and environmental damages.

Future oil and natural gas exploration may involve unprofitable efforts, not only from dry wells, but also from wells that are
productive but do not produce sufficient petroleum substances to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In
addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining
governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, insufficient storage or transportation capacity or other geological and mechanical conditions. While diligent well supervision and effective
maintenance operations can contribute to maximizing production rates over time, production delays and declines from normal field operating conditions cannot be eliminated and can be expected to adversely affect revenue and cash flow levels to
varying degrees.

Risks related to management of the Company

We may experience difficulty managing our anticipated growth.

We may be subject to
growth-related risks including capacity constraints and pressure on our internal systems and controls. Our ability to manage growth effectively will require us to continue to implement and improve our operational and



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financial systems and to attract and retain qualified management and technical personnel to meet the needs of our anticipated growth. Our inability to deal with this growth could have a material
adverse effect on our business, financial condition, results of operations and prospects.

We depend upon key personnel and the absence
of any of these individuals could result in us having to cease operations.

Our ability to continue our operation business depends, in
large part, upon our ability to attract and maintain qualified key management and technical personnel. Competition for such personnel is intense and we may not be able to attract and retain such personnel.

Strategic relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.

Our ability to successfully acquire additional licenses, to discover reserves, to participate in drilling opportunities and to identify and enter into
commercial arrangements depends on developing and maintaining close working relationships with industry participants and government officials and on our ability to select and evaluate suitable properties and to consummate transactions in a highly
competitive environment. We may not be able to establish these strategic relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic partners may require us to incur expenses
or undertake activities we would not otherwise be inclined to undertake in order to fulfill our obligations to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects may
be limited, which could diminish our ability to conduct our operations.

We cannot be certain that current expected expenditures and any
current or planned completion/testing programs will be realized.

We believe that the costs used to prepare internal budgets are
reasonable, however, there are assumptions, uncertainties, and risk that may cause our allocated funds on a per well basis to change as a result of having to alter certain activities from those originally proposed or programmed to reduce and
mitigate uncertainties and risks. These assumptions, uncertainties, and risks are inherent in the completion and testing of wells and can include but are not limited to: pipe failure, casing collapse, unusual or unexpected formation pressure,
environmental hazards, and other operating or production risk intrinsic in oil and or gas activities. Any of the above may cause a delay in any of our completion/testing programs or our ability to determine reserve potential.

Risks related to federal, state, local and other laws, controls and regulations

We are subject to complex federal, provincial, state, local and other laws, controls and regulations that could adversely affect the cost, manner and feasibility of conducting our oil and natural
gas operations.

Oil and natural gas exploration, production, marketing and transportation activities are subject to extensive
controls and regulations imposed by various levels of government, which may be amended from time to time. Governments may regulate or intervene with respect to price, taxes, royalties and the exportation of oil and natural gas. Regulations may be
changed from time to time in response to economic or political conditions. The implementation of new regulations or the modification of existing regulations affecting the oil and natural gas industry could reduce demand for crude oil and natural gas
and increase our costs, any of which may have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, in order to conduct oil and natural gas operations, we require licenses from various
governmental authorities. We cannot assure you that we will be able to obtain all of the licenses and permits that may be required to conduct operations that we may desire to undertake.

There is uncertainty regarding claims of title and rights of the aboriginal people to properties in certain portions of western Canada, and such a claim, if made in respect of our property or
assets, could adversely affect our business, financial condition, results of operations and prospects.

Aboriginal peoples have
claimed aboriginal title and rights to a substantial portion of western Canada. We are not aware that any claims have been made in respect of its property and assets. However, if a claim arose and was successful it would have an adverse effect on
our business, financial condition, results of operations and prospects.



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We are subject to stringent environmental laws and regulations that may expose us to significant costs
and liabilities, which could adversely affect our business, financial condition, results of operations and prospects.

All phases of
the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation under a variety of federal, provincial, state and local laws and regulations. Environmental legislation provides for, among other
things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and natural gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned
and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with legislation can require significant expenditures, and a breach of applicable environmental legislation may result in the imposition of fines and penalties, some
of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs. The discharge of
oil, natural gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy any discharge. Environmental laws may result in a curtailment of production or
a material increase in the costs of production, development or exploration activities, or otherwise adversely affect our business, financial condition, results of operations and prospects.

As a public company, our compliance costs and risks have increased in recent years.

Legal, accounting and other expenses associated with public company reporting requirements have increased significantly in the past few years. We
anticipate that general and administrative costs associated with regulatory compliance will continue to increase with on-going compliance requirements under the Sarbanes-Oxley Act of 2002, as well as any new rules implemented by the SEC, Canadian
Securities Administrators, the NYSE Amex Equities and the Toronto Stock Exchange in the future. These rules and regulations have significantly increased our legal and financial compliance costs and made some activities more time-consuming and
costly. We cannot assure you that we will continue to effectively meet all of the requirements of these regulations, including Section 404 of the Sarbanes-Oxley Act and National Instrument 52-109 of the Canadian Securities Administrators. Any
failure to effectively implement internal controls, or to resolve difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet reporting obligations, or result in our principal executive officer and
principal financial officer being required to give a qualified assessment of our internal control over financial reporting. Any such result could cause investors to lose confidence in our reported financial information, which could have a material
adverse effect on the trading price of our common shares and our ability to raise capital. These rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required
to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage in the future. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of
directors or as executive officers.

Risks Related to Our Being a Foreign Private Issuer

As a foreign private issuer, our shareholders may receive less complete and timely data.

We are a foreign private issuer as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934. Our equity securities are
accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act, pursuant to Rule 3a12-3 of the Exchange Act. Therefore, we are not required to file a Schedule 14A proxy statement in relation to our annual meetings of
shareholders. The submission of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information in connection with shareholder actions. The exemption from Section 16 rules
regarding reports of beneficial ownership and purchases and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having less data and there being fewer restrictions on insiders
activities in our securities.

It may be difficult to enforce judgments or bring actions outside the United States against us and
certain of our directors and officers.

It may be difficult to bring and enforce suits against us. We are incorporated in British
Columbia, Canada. Many of our directors and officers are not residents of the United States and some of our assets are located outside of the United States. As a result, it may be difficult for U.S. holders of our common shares to effect
service of process on these persons within the United States or to enforce judgments obtained in the U.S. based on the civil liability provisions of the U.S. federal securities laws against us or our officers and directors. In addition, a
shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or our officers or directors predicated



19



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upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or our officers
or directors predicated upon the U.S. federal securities laws or other laws of the United States.

Risks related to investing in our common
shares

We have not paid any dividends on our common shares. Consequently, your only opportunity currently to achieve a return
on your investment will be if the market price of our common shares appreciates above the price that you pay for our common shares.

We have not declared or paid any dividends on our common shares since our incorporation. Any decision to pay dividends on our common shares will be
made by our board of directors on the basis of our earnings, financial requirements and other conditions existing at such future time. Consequently, your only opportunity to achieve a return on your investment in our securities will be if the market
price of our common shares appreciates and you are able to sell your common shares at a profit.

Our common share price has been
volatile and your investment in our common shares could suffer a decline in value.

Our common shares are traded on the Toronto Stock
Exchange and the NYSE Amex Equities. The market price of our common shares may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include price fluctuations of precious metals, government
regulations, disputes regarding mining claims, broad stock market fluctuations and economic conditions in the United States.

Dilution
through officer, director, employee, consultant or agent options could adversely affect our shareholders.

Because our success is
highly dependent upon our officers, directors, employees, consultants and agents, we have granted to some or all of our key officers, directors, employees, consultants and agents options to purchase common shares as non-cash incentives. To the
extent that we grant significant numbers of options and those options are exercised, the interests of our other shareholders may be diluted.

The issuance of additional common shares may negatively affect the trading price of our common shares.

We have issued equity securities in the past and may continue to issue equity securities to finance our activities in the future, including to finance
future acquisitions, or as consideration for acquisitions of businesses or assets. In addition, outstanding options and warrants to purchase our common shares may be exercised, resulting in the issuance of additional common shares. The issuance by
us of additional common shares would result in dilution to our shareholders, and even the perception that such an issuance may occur could have a negative effect on the trading price of our common shares.



|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------



|A. | History and Development of the Company
|-- | --------------------------------------

Introduction

Our executive office
is located at:

598  999 Canada Place

Vancouver, British Columbia, Canada V6C 3E1

Telephone: (604) 638-5050

Facsimile: (604) 638-5051

Website:
www.dejour.com

Email: rhodgkinson@dejour.com or dmatheson@dejour.com

The contact person is: Mr. Robert L. Hodgkinson, Co-Chairman and Chief Executive Officer or Mr. David Matheson, Chief Financial Officer
and Corporate Secretary.

Our common shares trade on the Toronto Stock Exchange and the NYSE Amex Equities Stock Exchange under the symbol
DEJ.



20



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Our authorized capital consists of three classes of shares: an unlimited number of common voting shares; an
unlimited number of preferred shares designated as First Preferred Shares, issuable in series; and an unlimited number of preferred shares designated as Second Preferred Shares, issuable in series. There are no indentures or agreements limiting the
payment of dividends and there are no conversion rights, special liquidation rights, pre-emptive rights or subscription rights.

The First
Preferred Shares have priority over the Common Shares and the Second Preferred Shares with respect to the payment of dividends and in the distribution of assets in the event of a winding up of Dejour. The Second Preferred Shares have priority over
the Common Shares with respect to dividends and surplus assets in the event of a winding up of Dejour.

As of December 31, 2012, there
were 148,916,374 common shares issued and outstanding. As of December 31, 2012, there were no First Preferred Shares and no Second Preferred Shares issued and outstanding.

Incorporation and Name Changes

Dejour Energy Inc. (formerly Dejour Enterprises
Ltd.) is incorporated under the laws of British Columbia, Canada. The Company was originally incorporated as Dejour Mines Limited on March 29, 1968 under the laws of the Province of Ontario. By articles of amendment dated
October 30, 2001, the issued shares were consolidated on the basis of one (1) new for every fifteen (15) old shares and the name of the Company was changed to Dejour Enterprises Ltd. On June 6, 2003, the shareholders approved a
resolution to complete a one-for-three-share consolidation, which became effective on October 1, 2003. In 2005, the Company was continued in British Columbia under the Business Corporations Act (British Columbia). On March 9, 2011,
the Company changed its name from Dejour Enterprises Ltd. to Dejour Energy Inc.

Financings

We have financed our operations through funds from loans, public/private placements of common shares, common shares issued for property, common shares
issued in debt settlements, and shares issued upon exercise of stock options and share purchase warrants. The following table summarizes our financings for the past three fiscal years.



|            |  |                                                              |  |                  |                               |  |                       |  |                            | 
|----------- |  | ------------------------------------------------------------ |  | ---------------- | ----------------------------- |  | --------------------- |  | -------------------------- | 
|Fiscal Year |  | Nature of Share Issuance                                     |  | Number of Shares |                               |  | Gross Proceeds (Cdn$) | 
|            |  |                                                              | 
|Fiscal 2012 |  | Private Placement (1)                                        |  |                  | 18,130,305                    |  |                       |  | 4,909,133                  | 
|            |  |                                                              | 
|Fiscal 2011 |  | Public Offering (2)
Exercise of Warrants
Exercise of Options |  |                  | 11,010,0004,551,841
1,150,000 |  |                       |  | 3,288,6411,688,147
402,500 | 
|            |  |                                                              | 
|Fiscal 2010 |  | Private Placement (3)                                        |  |                  | 2,907,334                     |  |                       |  | 1,017,567                  | 
|            |  | Private Placement (4)                                        |  |                  | 2,000,000                     |  |                       |  | 750,000                    | 
|            |  | Public Offering/Private Placement (5)                        |  |                  | 7,142,858                     |  |                       |  | 2,000,000                  | 
|            |  | Private Placement (6)                                        |  |                  | 2,339,315                     |  |                       |  | 888,940                    | 



|(1) | In June 2012, we completed a private placement of 18,130,305 units at US $0.26 per unit. Each unit consists of one common share and 3/4 of one common share purchase
warrant. Each whole warrant entitles the holder to acquire one additional common share of the Company at US$0.40 per common share beginning 6 months from the date of issuance until June 4, 2017. Gross proceeds raised were Cdn$4,909,133
(US$4,713,879). In connection with this private placement, the Company paid finders fees of Cdn$294,655 (US$282,833) in cash and other related costs of Cdn$187,442 in cash.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In February 2011, we completed a public offering of 11,010,000 units at US $0.30 per unit. Each unit consists of one common share and one-half of one common share
purchase warrant. Each whole warrant entitles the holder to acquire one additional common share of the Company at US$0.35 per common share on or before February 10, 2012. Gross proceeds raised were Cdn$3,288,641 (US$3,303,000). In connection
with this private placement, the Company paid finders fees of Cdn$196,694 (US$199,710) in cash and other related costs of Cdn$119,602 in cash.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(3) | In March 2010, we completed a private placement and issued 2,907,334 flow-through units at Cdn$0.35 per unit. Each unit consists of 2,907,334 common shares and
1,453,667 share purchase warrants, exercisable at $0.45 per share on or before March 3, 2011. Gross proceeds raised were Cdn$1,017,567. In connection with this private placement, we paid finders fees of Cdn$54,575 and other related costs
of $52,819. We also issued 37,423 agents warrants, exercisable at Cdn$0.45 per share on or before March 3, 2011.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | In September 2010, we completed a private placement and issued 2,000,000 flow-through shares at Cdn$0.375 per share. Gross proceeds raised were Cdn$750,000. In
connection with this private placement, we paid finders fees of Cdn$37,500 and other related costs of Cdn$38,890.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | In November 2010, we completed an offering of 7,142,858 units at Cdn$0.28 per unit, partially pursuant to a public offering and partially pursuant to a private
placement. Each unit consists of one common share and 0.65 of a common share purchase warrant. Each whole common share purchase warrant is exercisable into one common share at Cdn$0.40 per share on or before November 17, 2015. Gross proceeds
raised were Cdn$2,000,000. In connection with this offering, we paid finders fees of Cdn$120,000 and other related costs of Cdn$123,423.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | In December 2010, we completed a private placement and issued 2,339,315 flow-through shares at Cdn$0.38 per share. Gross proceeds raised were Cdn$888,940. In connection
with this private placement, we paid finders fees of Cdn$53,337 and other related costs of Cdn$61,862. We also issued 140,359 agents warrants, exercisable at Cdn$0.38 per share on or before December 23, 2011. Directors and Officers
of the Company purchased 513,157 shares of this offering.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Past Capital Expenditures



|            |  |                                                    |           |    
|----------- |  | -------------------------------------------------- | --------- | ---
|Fiscal Year |  | Cash flows usedfor equipment andresourceproperties |          
|            | 
|Fiscal 2012 |  | Cdn$                                               | 4,485,000 | (1)
|Fiscal 2011 |  | Cdn$                                               | 8,360,000 | (2)
|Fiscal 2010 |  | Cdn$                                               | 5,039,000 | (3)



|(1) | $6,000 of these funds was spent on the purchase of corporate and other assets; and $4,479,000 was spent on our resource properties. (For a breakdown on the resource
property expenditures, see Notes 5 and 6 to our audited consolidated financial statements for the fiscal year ended December 31, 2012, filed with this annual report on Form 20-F.)
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | $29,000 of these funds was spent on the purchase of corporate and other assets; and $8,331,000 was spent on our resource properties. (For a breakdown on the resource
property expenditures, see Notes 5 and 6 to our audited consolidated financial statements for the fiscal year ended December 31, 2011, filed with this annual report on Form 20-F.)
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | $27,000 of these funds was spent on the purchase of corporate and other assets; and $5,012,000 was spent on our resource properties. (For a breakdown on the resource
property expenditures, see Notes 5 and 6 to our audited consolidated financial statements for the fiscal year ended December 31, 2011, filed with this annual report on Form 20-F.)
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Capital Expenditures

Dejour is
committed to future growth through its strategy to implement a full-cycle exploration and development program, augmented by strategic acquisitions with exploitation upside.

During the year ended December 31, 2012, Dejour incurred $2.2 million on drilling and completion operations. Equipment and facility expenditures were $1.4 million. The balance of $0.8 million was
mostly related to the capitalization of general and administrative costs and lease rentals on its oil and gas interests.

During the year
ended December 31, 2011, Dejour incurred $4.4 million on drilling and completion operations. Equipment and facility expenditures were $3.0 million. The balance of $1.0 million was mostly related to the capitalization of general and
administrative costs and lease rentals on its oil and gas interests.



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Additions to property and equipment and exploration and evaluation assets:



|                                       |  |                              |           |  |                              |  |       |   |  |  |            |  |  |          |       |   |  |  |     |  
|-------------------------------------- |  | ---------------------------- | --------- |  | ---------------------------- |  | ----- | - |  |  | ---------- |  |  | -------- | ----- | - |  |  | --- | -
|                                       |  | Year ended December 31, 2012 |           |  | Year ended December 31, 2011 |  |       |   | 
|                                       |  | $                            |           |  | % of total                   |  |       | $ |  |  | % of total |  |  | % change |      
|                                       |  |                              |           |  |                             
|Land acquisition and retention         |  |                              | 265,000   |  |                              |  | 5.9   | % |  |  | 242,000    |  |  |          | 2.9   | % |  |  | 10  | %
|Drilling and completion(1)             |  |                              | 2,179,000 |  |                              |  | 48.6  | % |  |  | 4,398,000  |  |  |          | 52.6  | % |  |  | -50 | %
|Facility and pipelines                 |  |                              | 1,388,000 |  |                              |  | 30.9  | % |  |  | 2,949,000  |  |  |          | 35.3  | % |  |  | -53 | %
|Capitalized general and administrative |  |                              | 646,000   |  |                              |  | 14.4  | % |  |  | 742,000    |  |  |          | 8.9   | % |  |  | -13 | %
|Other assets                           |  |                              | 7,000     |  |                              |  | 0.2   | % |  |  | 29,000     |  |  |          | 0.3   | % |  |  | -76 | %
|                                       |  |                              |           |  |                              |  |       |   |  |  |            |  |  |          |       |   |  |  |     |  
|                                       |  |                              | 4,485,000 |  |                              |  | 100.0 | % |  |  | 8,360,000  |  |  |          | 100.0 | % |  |  | -46 | %
|                                       |  |                              |           |  |                              |  |       |   |  |  |            |  |  |          |       |   |  |  |     |  



|(1) | excludes non-cash capital expenditures of $6,466,850 (US$6,500,000) related to joint venture financing (see Financial Contract section of the MD&A for
details)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

Daily Production



|                                     |  |                                 |     |  |                         |  |       |      |  |  |       |  |  |  |       | 
|------------------------------------ |  | ------------------------------- | --- |  | ----------------------- |  | ----- | ---- |  |  | ----- |  |  |  | ----- | 
|                                     |  | Three months ended December 31, |     |  | Year ended December 31, | 
|                                     |  | 2012                            |     |  | 2011                    |  |       | 2012 |  |  | 2011  | 
|By Product                           |  |                                 |     |  |                         |  |       |      |  |  |       |  |  |  |       | 
|Oil and natural gas liquids (bbls/d) |  |                                 | 193 |  |                         |  | 242   |      |  |  | 198   |  |  |  | 223   | 
|Natural gas (mcf/d)                  |  |                                 | 755 |  |                         |  | 1,376 |      |  |  | 1,040 |  |  |  | 1,184 | 
|                                     |  |                                 |     |  |                         |  |       |      |  |  |       |  |  |  |       | 
|Total (boe/d)                        |  |                                 | 319 |  |                         |  | 471   |      |  |  | 372   |  |  |  | 421   | 
|                                     |  |                                 |     |  |                         |  |       |      |  |  |       |  |  |  |       | 

The decrease in oil production for the current year was mainly the result of the temporary curtailment of production due
to the pump installation and maintenance required to handle higher future oil production associated with the main producing oil well at Drake/Woodrush.

Natural gas production for the fourth quarter of 2012 decreased in comparison with natural gas production in Q4 2011 was due to the depletion of the Halfway E pool gas cap and the
re-pressuring of the reservoir under waterflood combined with normal production declines.



|B. | Business Overview
|-- | -----------------

General

The Company is in the business of acquiring, exploring and developing energy projects with a focus on oil and gas exploration in
Canada and the United States. The Company holds oil and gas leases in the following regions:



| |  | The Peace River Arch of northwestern British Columbia and northeastern Alberta, Canada
|- |  | --------------------------------------------------------------------------------------



| |  | The Piceance, Paradox and Uinta Basins in the US Rocky Mountains
|- |  | ----------------------------------------------------------------

Summary

Over the past few years, the Company has evolved its forward focus from
acquiring resource potential toward conversion of resources into reserves. This process involved several distinct steps on the same continuum including:



| |  | Classification and prioritization of acreage based on economic promise, technical robustness, infrastructural and logistic advantage and commercial
maturity
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Evaluation and development planning for top tier acreage positions
|- |  | ------------------------------------------------------------------



| |  | Developing partnerships within financial and industry circles to speed the exploitation process, and
|- |  | ----------------------------------------------------------------------------------------------------



| |  | Bringing production on line where feasible
|- |  | ------------------------------------------



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As a result of these moves, the Companys asset characterization has moved toward more tangible low
risk near term development projects, moderate risk appraisal opportunities and moderate to high risk exploration potential.

Our business
objective is to grow our oil and gas production and generate sufficient cash flow to continue to expand company operations and enhance shareholder value.

Specialized Skill and Knowledge: Exploration for and development of petroleum and natural gas resources requires specialized skills and knowledge including in the areas of petroleum engineering,
geophysics, geology and title. The Company and its subsidiaries have obtained personnel with the required specialized skills and knowledge to carry out their respective operations. While the current labour market in the industry is highly
competitive, the Company expects to be able to attract and maintain appropriately qualified employees for fiscal 2013.

Cycles: All of
the Companys operations in Canada are affected by seasonal operating conditions. Dejour Energy (Alberta) Ltd., our wholly owned subsidiary, holds properties in northwestern Alberta and northeastern British Columbia which are accessible to
heavy equipment in winter only when the ground is frozen, typically between December to early April. For this reason drilling and pipeline construction ceases over the remainder of the year, limiting growth to winter only. Production operations
continue year round in these areas once production is established. The prices that the Company will receive for oil and gas production in the future are weighted to world benchmark prices and may be adversely affected by mild weather conditions.
Recently there has been a significant change in the supply demand balance and commodity prices have fallen dramatically. The Company expects this condition to persist for several months but the Company believes that a balance between production and
consumption and a stable price environment will be reestablished by the end of 2013. See Risk Factors  Risks related to operating an exploration, development and production company.

Environmental Protection: The Companys operations are subject to environmental regulations (including regular environmental impact
assessments and permitting) in the jurisdictions in which it operates. Such regulations cover a wide variety of matters, including, without limitation, emission of greenhouse gases, prevention of waste, pollution and protection of the environment,
labour regulations and worker safety. Under such regulations there are preventative obligations, clean-up costs and liabilities for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result
of its operations. Environmental legislation and legislation relating to exploration and production of oil and natural gas will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent
environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors and employees. Such stricter standards could impact the Companys costs and have an adverse effect on results of
operations. The Company expects to incur abandonment and site reclamation costs as existing oil and gas properties are abandoned and reclaimed; however, the Company does not anticipate making material expenditures beyond normal compliance with
environmental regulations in 2013 and future years.

Employees: The Company had the equivalent of approximately 17 full-time employees
and consultants during 2012.

Social or Environmental Policies: The health and safety of employees, contractors and the public, as well
as the protection of the environment, is of utmost importance to the Company. The Company endeavors to conduct its operations in a manner that will minimize adverse effects of emergency situations by:



| |  | complying with government regulations and standards;
|- |  | ----------------------------------------------------



| |  | following industry codes, practices and guidelines;
|- |  | ---------------------------------------------------



| |  | ensuring prompt, effective response and repair to emergency situations and environmental incidents; and
|- |  | -------------------------------------------------------------------------------------------------------



| |  | educating employees and contractors of the importance of compliance with corporate safety and environmental rules and procedures.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------

The Company believes that all Company personnel have a vital role in achieving excellence in environmental, health and
safety performance. This is best achieved through careful planning and the support and active participation of everyone involved.

Competitive Conditions: The Company operates in geographical areas where there is strong competition by other companies for reserve acquisitions,
exploration leases, licences and concessions and skilled industry personnel. The Companys competitors include major integrated oil and natural gas companies and numerous other independent oil and natural gas companies and individual producers
and operators, many of whom have greater financial and personnel



24



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##### Table of Contents

resources than the Company. The Companys ability to acquire additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter into
commercial arrangements with customers is dependent upon developing and maintaining close working relationships with its current industry partners and joint operators, and its ability to select and evaluate suitable properties and to consummate
transactions in a highly competitive environment.

Three Year History

2012

In 2012, the Company continued its focus on production optimization of the
Drake/Woodrush oilfield in northeastern British Columbia, Canada, while completing drilling and production activities at the Kokopelli and South Rangely bases in the Piceance Basin of Western Colorado.

During the year, the Company achieved the following:



|(1) | Executed a US$6.5 million financial contract with a private U.S. based oil and gas drilling fund whereby the parties agreed to form a partnership to complete the
initial well in the Kokopelli Field and drill and complete three additional wells in early 2013. Total program cost will be approximately US$8.2 million;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Executed a sale and farm-out agreement covering about 7,450 acres of 100% owned western Piceance Basin lands to a listed U.S. oil and natural gas exploration and
production company, for certain cash consideration and a commitment to carry the Company through the drilling and completion of three earning wells, with certain performance provisions. The Company will retain a 20% working interest in over 5,100
acres in this project;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tied in production at South Rangely from a discovery well drilled in 2011;
|--- | --------------------------------------------------------------------------

|(4) | Raised gross proceeds of US$4.7 million in equity, allowing the Company to support exploration, development and acquisition activities of its oil and gas properties and
provide for additional working capital;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Added about 31,000 net acres to the Companys current landholdings in northwestern Colorado through a restructuring of its exploration joint venture with
Brownstone Energy Inc., a joint venture partner;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | Completed construction of the first drilling pad and drilled the initial well in the Kokopelli area of the Piceance Basin;
|--- | --------------------------------------------------------------------------------------------------------------------------

|(7) | Formed a federal unit containing the leases adjacent to the lease on which the discovery well at South Rangely leasehold was drilled in 2011 in the Companys
Piceance Basin area of operations; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Completed and tied into production the 3rd oil well at the Companys Woodrush property, north of Fort St. John, British Columbia.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

2011

In 2011, the Companys focus
was on production optimization of the Drake/Woodrush property, while finalizing pre-drilling activities for the Kokopelli development and drilling a discovery well at South Rangely.

During the year, the Company achieved the following:



|(1) | Implementation and expansion of the Halfway E oil pool waterflood on the Companys Woodrush property.
|--- | -------------------------------------------------------------------------------------------------------

|(2) | Obtained a $7 million line of credit from a Canadian bank to refinance the bridge loan and to provide funds for general corporate purposes.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Generated positive operating cash flow for the second half of the year.
|--- | -----------------------------------------------------------------------

|(4) | Completed all requirements for drilling on the Companys federal leases at Gibson Gulch, Piceance Basin, Colorado, resulting in the first drilling permits being
issued in the fourth quarter of the year.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Completed and tested a discovery well at South Rangely. After the well was fractured and stimulated, the well flowed rich gas from the Mancos B Sand in
commercial quantities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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2010

During the year, the Company achieved the following:



|(1) | Extended the limits of the Woodrush halfway pool by drilling three successful development wells in 2010.
|--- | --------------------------------------------------------------------------------------------------------

|(2) | Received approval from the British Columbia Oil and Gas Commission to implement a waterflood in the Halfway E oil pool at Woodrush and began project
implementation in October.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Raised gross proceeds of $4.7 million in equity, allowing the Company to support the development of oil and gas properties in the Drake/Woodrush properties.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Obtained a bridge loan credit facility of up to $5 million, allowing the Company to refinance its existing bank facility and fund its working capital and capital
expenditures.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

United States vs. Foreign Sales/Assets



|                                     |  |        |           |  |               |  |   | 
|------------------------------------ |  | ------ | --------- |  | ------------- |  | - | 
|Gross Revenue for fiscal year ended: |  | Canada |           |  | United States | 
|                                     |  | $      |           |  | $             | 
|12/31/2010                           |  |        | 8,085,627 |  |               |  |  | 
|12/31/2011                           |  |        | 8,824,345 |  |               |  |  | 
|12/31/2012                           |  |        | 6,881,826 |  |               |  |  | 



|                      |  |        |            |  |               |  |            | 
|--------------------- |  | ------ | ---------- |  | ------------- |  | ---------- | 
|Asset Location as of: |  | Canada |            |  | United States | 
|                      |  | $      |            |  | $             | 
|12/31/2010            |  |        | 18,563,424 |  |               |  | 11,849,967 | 
|12/31/2011            |  |        | 20,622,433 |  |               |  | 8,816,003  | 
|12/31/2012            |  |        | 12,117,565 |  |               |  | 15,455,444 | 

Commodity Price Environment

Generally, the demand for, and the price of, natural gas increases during the colder winter months and decreases during the warmer summer months. Pipelines, utilities, local distribution companies and
industrial users utilize natural gas storage facilities and purchase some of their anticipated winter requirements during the summer, which can lessen seasonal demand fluctuations. Crude oil and the demand for heating oil are also impacted by
seasonal factors, with generally higher prices in the winter. Seasonal anomalies, such as mild winters, sometimes lessen these fluctuations.

Our results of operations and financial condition are significantly affected by oil and natural gas commodity prices, which can fluctuate dramatically.
The market for oil and natural gas is beyond our control and prices are difficult to predict. (See also Trend Information under item 5 Operating and Financial Review and Prospects)

Forward Contracts

The Company is
not bound by an agreement (including any transportation agreement) directly or through an aggregator, under which it may be precluded from fully realizing, or may be protected from the full effect of, future market prices for oil and gas. The
Company had no commodity contracts in place at December 31, 2012.

Additional Information Concerning Abandonment and Reclamation
Costs

For the Companys Canadian and US oil and gas interests, the well abandonment costs for all wells with reserves have been
included at the property level. The Company estimated the total undiscounted amount of the cash flows required to settle the decommissioning liabilities as at December 31, 2012 to be approximately $1,928,000. These obligations are expected to
be settled over the next 20 years with the majority of costs incurred between 2016 and 2030. Additional abandonment costs associated with non-reserves wells, lease reclamation costs and facility abandonment and reclamation expenses have not been
included.



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Government Regulations

Our oil and natural gas exploration, production and related operations, when developed, are subject to extensive laws and regulations promulgated by federal, state, tribal and local authorities and
agencies. These laws and regulations often require permits for drilling operations, drilling bonds and reports concerning operations, and impose other requirements relating to the exploration for and production of oil and natural gas. Many of the
laws and regulations govern the location of wells, the method of drilling and casing wells, the plugging and abandoning of wells, the restoration of properties upon which wells are drilled, temporary storage tank operations, air emissions from
flaring, compression, the construction and use of access roads, sour gas management and the disposal of fluids used in connection with operations.

Our operations are subject to environmental regulations (including regular environmental impact assessments and permitting) in the jurisdictions in which it operates. Such regulations cover a wide variety
of matters, including, without limitation, emission of greenhouse gases, prevention of waste, pollution and protection of the environment, labour regulations and worker safety. Under such regulations there are preventative obligations, clean-up
costs and liabilities for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result of its operations. Environmental legislation and legislation relating to exploration and production of oil
and natural gas will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their
directors and employees. Such stricter standards could impact our costs and have an adverse effect on results of operations.

The
Comprehensive Environmental, Response, Compensation, and Liability Act, or CERCLA, and comparable state statutes impose strict, joint and several liability on owners and operators of sites and on persons who disposed of or arranged for the disposal
of hazardous substances found at such sites. It is not uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages, or for neighboring
landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment. The Federal Resource Conservation and Recovery Act, or RCRA, and comparable state
statutes govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. Although CERCLA currently
excludes petroleum from its definition of hazardous substance, state laws affecting our operations may impose clean-up liability relating to petroleum and petroleum-related products. In addition, although RCRA classifies certain oil
field wastes as non-hazardous, such exploration and production wastes could be reclassified as hazardous wastes thereby making such wastes subject to more stringent handling and disposal requirements. CERCLA, RCRA and comparable state
statutes can impose liability for clean-up of sites and disposal of substances found on drilling and production sites long after operations on such sites have been completed. Other statutes relating to the storage and handling of pollutants include
the Oil Pollution Act of 1990, or OPA, which requires certain owners and operators of facilities that store or otherwise handle oil to prepare and implement spill response plans relating to the potential discharge of oil into surface waters. The
OPA, contains numerous requirements relating to prevention of, reporting of, and response to oil spills into waters of the United States. State laws mandate oil cleanup programs with respect to contaminated soil. A failure to comply with OPAs
requirements or inadequate cooperation during a spill response action may subject a responsible party to civil or criminal enforcement actions.

The Endangered Species Act, or ESA, seeks to ensure that activities do not jeopardize endangered or threatened animal, fish and plant species, or destroy
or modify the critical habitat of such species. Under the ESA, exploration and production operations, as well as actions by federal agencies, may not significantly impair or jeopardize the species or its habitat. The ESA has been used to prevent or
delay drilling activities and provides for criminal penalties for willful violations of its provisions. Other statutes that provide protection to animal and plant species and that may apply to our operations include, without limitation, the Fish and
Wildlife Coordination Act, the Fishery Conservation and Management Act, the Migratory Bird Treaty Act. Although we believe that our operations are in substantial compliance with these statutes, any change in these statutes or any reclassification of
a species as threatened or endangered or re-determination of the extent of critical habit could subject us to significant expenses to modify our operations or could force us to discontinue some operations altogether.

The National Environmental Policy Act, or NEPA, requires a thorough review of the environmental impacts of major federal actions and a
determination of whether proposed actions on federal and certain Indian lands would result in significant impact. For purposes of NEPA, major federal action can be something as basic as issuance of a required



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permit. For oil and gas operations on federal and certain Indian lands or requiring federal permits, NEPA review can increase the time for obtaining approval and impose additional regulatory
burdens on the natural gas and oil industry, thereby increasing our costs of doing business and our profitability.

The Clean Water Act, or
CWA, and comparable state statutes, impose restrictions and controls on the discharge of pollutants, including spills and leaks of oil and other substances, into waters of the United States. The discharge of pollutants into regulated waters is
prohibited, except in accordance with the terms of a permit issued by the Environmental Protection Agency (EPA) or an analogous state agency. The CWA regulates storm water run-off from oil and natural gas facilities and requires a storm water
discharge permit for certain activities. Such a permit requires the regulated facility to monitor and sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill
material in wetlands and other waters of the United States unless authorized by an appropriately issued permit. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges for oil and
other pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the release and for natural resource damages resulting from the release.

The Safe Drinking Water Act, or SDWA, and the Underground Injection Control (UIC) program promulgated thereunder, regulate the drilling and operation of
subsurface injection wells. EPA directly administers the UIC program in some states and in others the responsibility for the program has been delegated to the state. The program requires that a permit be obtained before drilling a disposal well.
Violation of these regulations and/or contamination of groundwater by oil and natural gas drilling, production, and related operations may result in fines, penalties, and remediation costs, among other sanctions and liabilities under the SWDA and
state laws. In addition, third party claims may be filed by landowners and other parties claiming damages for alternative water supplies, property damages, and bodily injury.

The Clean Air Act, as amended, restricts the emission of air pollutants from many sources, including oil and gas operations. New facilities may be required to obtain permits before work can begin, and
existing facilities may be required to incur capital costs in order to remain in compliance. In addition, the EPA has promulgated more stringent regulations governing emissions of toxic air pollutants from sources in the oil and gas industry, and
these regulations may increase the costs of compliance for some facilities.

Significant studies and research have been devoted to climate
change and global warming, and climate change has developed into a major political issue in the United States and globally. Certain research suggests that greenhouse gas emissions contribute to climate change and pose a threat to the environment.
Recent scientific research and political debate has focused in part on carbon dioxide and methane incidental to oil and natural gas exploration and production. Many state governments have enacted legislation directed at controlling greenhouse gas
emissions, and future state and federal legislation and regulation could impose additional restrictions or requirements in connection with our operations and favor use of alternative energy sources, which could increase operating costs and demand
for oil products. As such, our business could be materially adversely affected by domestic and international legislation targeted at controlling climate change.

We expect to incur abandonment and site reclamation costs as existing oil and gas properties are abandoned and reclaimed; however, we do not anticipate making material expenditures beyond normal
compliance with environmental regulations in 2012 and future years.

The health and safety of employees, contractors and the public, as well
as the protection of the environment, is of utmost importance to us. We endeavour to conduct our operations in a manner that will minimize adverse effects of emergency situations by:



| |  |  | complying with government regulations and standards;
| | - |  | ----------------------------------------------------



| |  |  | following industry codes, practices and guidelines;
| | - |  | ---------------------------------------------------



| |  |  | ensuring prompt, effective response and repair to emergency situations and environmental incidents; and
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | educating employees and contractors of the importance of compliance with corporate safety and environmental rules and procedures.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------

We believe that all of our personnel have a vital role in achieving excellence in environmental, health and safety
performance. This is best achieved through careful planning and the support and active participation of everyone involved.



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Competition

We operate in geographical areas where there is strong competition by other companies for reserve acquisitions, exploration leases, licences and concessions and skilled industry personnel. Our competitors
include major integrated oil and natural gas companies and numerous other independent oil and natural gas companies and individual producers and operators, many of whom have greater financial and personnel resources than us. Our ability to acquire
additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements with customers is dependent upon developing and maintaining close working relationships with its
current industry partners and joint operators, and its ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment.

We compete with many companies possessing greater financial resources and technical facilities for the acquisition of oil and gas properties, exploration and production equipment, as well as for the
recruitment and retention of qualified employees.

Seasonality

All of our operations in Canada are affected by seasonal operating conditions. Dejour Energy (Alberta) Ltd., our wholly owned subsidiary, holds properties in northwestern Alberta and northeastern British
Columbia which are accessible to heavy equipment in winter only when the ground is frozen, typically between December to early April. For this reason drilling and pipeline construction ceases over the remainder of the year, limiting growth to winter
only. Production operations continue year round in these areas once production is established. The prices that we will receive for oil and gas production in the future are weighted to world benchmark prices and may be adversely affected by mild
weather conditions.



|C. | Organizational Structure
|-- | ------------------------

Dejour Energy
Inc. (formerly Dejour Enterprises Ltd.) is incorporated under the laws of British Columbia, Canada. The Company was originally incorporated as Dejour Mines Limited on March 29, 1968 under the laws of the Province of Ontario. By
articles of amendment dated October 30, 2001, the issued shares were consolidated on the basis of one (1) new for every fifteen (15) old shares and the name of the Company was changed to Dejour Enterprises Ltd. On June 6, 2003,
the shareholders approved a resolution to complete a one-for-three-share consolidation, which became effective on October 1, 2003. In 2005, the Company was continued in British Columbia under the Business Corporations Act (British
Columbia). On March 9, 2011, the Company changed its name from Dejour Enterprises Ltd. to Dejour Energy Inc.

Intercorporate
Relationships

We have four 100% owned subsidiaries:



| |  |  | Dejour Energy (USA) Corp. (Dejour USA), a Nevada corporation, holds Dejours United States oil and gas interests,
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | Dejour Energy (Alberta) Ltd. (DEAL), an Alberta corporation, holds its Canadian oil and gas interests in northwestern Alberta and
northeastern British Columbia;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Wild Horse Energy Ltd. (Wild Horse), an inactive Alberta corporation, and
| | - |  | ---------------------------------------------------------------------------



| |  |  | 0855524 B.C. Ltd. (0855524), a British Columbia Corporation, which is currently inactive.
| | - |  | -------------------------------------------------------------------------------------------



|D. | Property, Plant and Equipment
|-- | -----------------------------

Our
executive offices are located in rented premises of approximately 2,519 sq. ft. at 598  999 Canada Place, Vancouver, British Columbia, V6C 3E1. We began occupying these facilities on July 1, 2009.



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Resource Properties

Our current focus is on oil and gas properties located in the United States and Canada and currently have oil and gas leases in the following regions:



| |  |  | The Piceance, Paradox and Uinta Basins in the US Rocky Mountains.
| | - |  | -----------------------------------------------------------------



| |  |  | The Peace River Arch of northeastern British Columbia and north western Alberta, Canada.
| | - |  | ----------------------------------------------------------------------------------------

US Oil and Gas Interests

Kokopelli, Piceance Basin

During 2012,
the Company drilled an initial well into the Williams Fork liquids-rich natural gas formation at Kokopelli to hold its 2,200 acres of leasehold interests. The Company also entered into a financial contract with an industry Drilling Fund to complete
the initial well and drill, complete, and tie-in an additional 3 wells. The Drilling Funds investment of US$6,500,000 represents about 80% of the total program costs of US$8,200,000. The primary producing geological horizons are the Williams
Fork and Lower Mancos zones.

The Companys 4-well drilling and completion program at Kokopelli will focus strictly on the Williams Fork
formation and is expected to be completed by June 30, 2013.

South Rangely, Piceance Basin

In June 2011, the Company drilled and cased an evaluation well on this 5,500 gross acre (4,490 net acre) lease which is located just south of the Rangely
field. The well was drilled and casing set on approximately 90 feet of gross Mancos B Sand and later successfully fractured and stimulated. The well flowed rich gas from the Mancos B Sand in commercial quantities. Analysis of
the gas showed a higher natural gas liquid (NGL) yield from the South Rangely discovery than that expected from our NGL development at Kokopelli.

West Grand Valley, Piceance Basin  Evolution of the Niobrara/Mancos Shale Resource Play

On the Companys West Grand Valley property, it executed a sale and farm-out agreement covering about 7,450 acres of 100% owned western Piceance Basin lands to a listed U.S. oil and natural gas
exploration and production company, for certain cash consideration and a commitment to carry the Company through the drilling and completion of three earning wells, with certain performance provisions. The Company will retain a 20% working interest
in over 5,100 acres in this project that is located in an area of active drilling by EnCana, Laramie Partners II and Axia. Success in developing the gas in the Lower Mancos (Niobrara) section has revitalized drilling interest in this area of the
Piceance Basin.

Future Exploration and Evaluation



| |  | North Rangely  This 33,000 acre (gross) project located north of the Rangely Field, is prospective for oil in the Lower Mancos (Niobrara),
Dakota, Morrison and Phosphoria formations.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Additionally, Dejour holds approximately 123,000 net acres prospective for oil
and gas exploitation in Colorado and Utah.

Canadian Activities

Drake/Woodrush Field

The Companys wholly-owned subsidiary, Dejour Energy (Alberta)
Ltd. (DEAL), currently has interests in oil and gas properties in the Peace River Arch located principally in northeastern British Columbia. DEAL holds approximately 7,000 net acres concentrated in the Peace River Arch.

Production and Development Projects

Woodrush/Drake

In December 2010, a waterflood
project application was expedited and approval was received. The project was implemented in early 2011 with water injection commencing in March 2011. In the first quarter of 2011, gross production from the field was reduced to approximately 544
barrels of oil equivalent/day (BOED) (408 BOED net) in response to the



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decreasing pressure in the Halfway oil sand. In October, Dejour received approval to operate the waterflood on a voidage replacement basis and in December drilled a third production well while
increasing total injection from 1200 BWPD to 2400 BWPD. The start-up and subsequent enhancement of the waterflood marked the end of major capital investments in Woodrush. During 2012, Dejour concentrated efforts on optimizing injection and
production in the waterflood, controlling cost and increasing margins on oil production. The reservoir reached fill up in the fourth quarter of 2012 and subsequent to achieving fill up oil production began increasing at a rate of approximately 25
barrels/day/month, a trend which continued through the first quarter of 2013.

Uranium Properties

The Company owns a 10% carried interest and a 1% Net Smelter Return on certain uranium exploration leases in Saskatchewan operated by Nexgen Energy Ltd.

Summary of Operational Highlights



|                                              |  |                         |         |  |      |  |         | 
|--------------------------------------------- |  | ----------------------- | ------- |  | ---- |  | ------- | 
|Production and Netback Summary                | 
|                                              |  | Year ended December 31, |        
|                                              |  | 2012                    |         |  | 2011 | 
|Production Volumes:                           |  |                         |         |  |      |  |         | 
|Oil and natural gas liquids (bbls)            |  |                         | 72,567  |  |      |  | 81,468  | 
|Natural gas (mcf)                             |  |                         | 380,780 |  |      |  | 432,199 | 
|                                              |  |                         |         |  |      |  |         | 
|Total (BOE)                                   |  |                         | 136,031 |  |      |  | 153,501 | 
|                                              |  |                        
|Average Price Received:                       |  |                         |         |  |      |  |         | 
|Oil and natural gas liquids ($/bbls)          |  |                         | 81.37   |  |      |  | 88.98   | 
|Natural gas ($/mcf)                           |  |                         | 2.57    |  |      |  | 3.64    | 
|                                              |  |                         |         |  |      |  |         | 
|Total ($/BOE)                                 |  |                         | 50.59   |  |      |  | 57.49   | 
|                                              |  |                        
|Royalties ($/BOE)                             |  |                         | 8.20    |  |      |  | 10.61   | 
|                                              |  |                        
|Operating and Transportation Expenses ($/BOE) |  |                         | 27.66   |  |      |  | 16.18   | 
|                                              |  |                         |         |  |      |  |         | 
|Netbacks ($/BOE)                              |  |                         | 14.73   |  |      |  | 30.70   | 
|                                              |  |                         |         |  |      |  |         | 

Operating Netback is defined as revenues less royalties and operating and transportation expenses.



|                           |  |                        |            |   |      |  |            |  
|-------------------------- |  | ---------------------- | ---------- | - | ---- |  | ---------- | -
|                           |  | Year ended December 31 |           
|                           |  | 2012                   |            |   | 2011 | 
|                           |  | $                      |            |   | $    | 
|Gross Revenues             |  |                        | 6,882000   |   |      |  | 8,824,000  |  
|Royalties                  |  |                        | (1,116,000 | ) |      |  | (1,623,000 | )
|                           |  |                        |            |   |      |  |            |  
|Revenues, net of royalties |  |                        | 5,766,000  |   |      |  | 7,196,000  |  
|Financial instrument Loss  |  |                        | (55,000    | ) |      |  | (59,000    | )
|Other income               |  |                        | 33,000     |   |      |  | 34,000     |  
|                           |  |                        |            |   |      |  |            |  
|Total revenue              |  |                        | 5.744000   |   |      |  | 7.171,000  |  
|                           |  |                        |            |   |      |  |            |  

For the year ended December 31, 2012 (fiscal 2012), the Company recorded $6,882,000 in oil and natural
gas sales as compared to $8,824,000 in oil and natural gas sales for the year ended December 31, 2011 (fiscal 2011). The decrease in gross revenues was due to lower realized oil and gas prices and lower oil and gas production.



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Royalties for fiscal 2012 decreased to $1,116,000 from $1,628,000 for fiscal 2011, due to lower oil and gas
production. Royalties are mainly driven by the varying production mix between oil and gas.

The following table summarizes the commodity
prices realized by the Company and the crude oil and natural gas benchmark prices for the years ended December 31, 2012 and 2011:



|                                      |  |                         |       |  |      |  |       | 
|------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | 
|                                      |  | Year ended December 31, |      
|                                      |  | 2012                    |       |  | 2011 | 
|                                      |  | $                       |       |  | $    | 
|Dejour Realized Average Prices        |  |                         |       |  |      |  |       | 
|Oil and natural gas liquids ($/bbl)   |  |                         | 81.37 |  |      |  | 93.00 | 
|Natural gas ($/mcf)                   |  |                         | 2.57  |  |      |  | 3.23  | 
|Total average price ($/boe)           |  |                         | 50.59 |  |      |  | 57.15 | 
|                                      |  |                        
|Average Benchmark Prices              |  |                         |       |  |      |  |       | 
|Edmonton Par ($/bbl)                  |  |                         | 86.53 |  |      |  | 97.87 | 
|Natural gas - AECO-C Spot ($ per mcf) |  |                         | 2.40  |  |      |  | 3.47  | 

For fiscal 2012, Dejours average realized natural gas prices reflected lower benchmark prices compared to fiscal
2011. Oil prices received for fiscal 2012 decreased to $81.37 per barrel (bbl), compared to $93.00 per bbl for fiscal 2011. The decrease was due to the general downturn of the global economy, leading to lower commodity prices. In
addition, the oil differential between West Texas Intermediate (WTI) oil to British Columbia light crude oil increased due to pipeline constraints, resulting in lower realized prices for the Companys oil.



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Reserve Data

The standards of the SEC require that proved reserves be estimated using existing economic conditions (constant pricing). Based on this methodology, the Companys results have been calculated
utilizing the 12-month average price for each of the years presented.

The Company reports in Canadian currency and therefore the Reserves
Data set forth in the tables below has been converted to Canadian dollars at the prevailing conversion rate at December 31, 2012. The conversion rate used per Bank of Canada is 0.9949.

In 2012, AJM Deloitte, independent petroleum engineering consultants based in Calgary, Alberta was retained by the Company to evaluate the Canadian properties of the Company. Their report, titled
Reserve and resource estimation and economic evaluation, Dejour Energy (Alberta) Ltd., is dated January 30, 2013 and has an effective date of December 31, 2012.

Gustavson Associates (Gustavson), an independent petroleum engineering consultants based in Denver, Colorado were retained by the Company to evaluate the US properties of the Company. Their
report, titled Reserve Estimate and Financial Forecast as to Dejours Interests in the Kokopelli Field Area, Garfield County, Colorado, and the South Rangely Field Area, Rio Blanco County, Colorado is dated April 6, 2013 and
has an effective date of January 1, 2013.

The reserves data set forth below (the Reserves Data), derived from AJM
Deloitte and Gustavsons reports, summarizes our oil, liquids and natural gas reserves.

The AJM Deloitte and Gustavson reports are based
on certain factual data supplied by the Company, and AJM Deloitte and Gustavsons opinion of reasonable practice in the industry. The extent and character of ownership and all factual data pertaining to the Companys petroleum properties
and contracts (except for certain information residing in the public domain) were supplied by the Company to AJM and Gustavson and accepted without any further investigation. AJM and Gustavson accepted this data as presented and neither title
searches nor field inspections were conducted. All statements relating to the activities of the Company for the year ended December 31, 2012 include a full year of operating data on the properties of the Company.

The reserve estimates of crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that
the estimated reserves will be recovered. Actual crude oil, natural gas liquids and natural gas reserves may be greater than or less than the estimates provided herein.

Controls Over Reserve Report Preparation

Our reserve estimates reports as of
December 31, 2012 are prepared by our independent qualified reserve evaluators, AJM and Gustavson. To ensure accuracy and completeness of the data prior to disclosure of reserve estimates to the public, our reserves committee does the
following: (1) reviews our procedures for providing information to the independent qualified reserve evaluators, (2) meets with the independent qualified reserves evaluators to determine whether any restrictions affected the ability of the
qualified reserves evaluators to report without reservation, (3) reviews the reserves data with management and the independent qualified reserves evaluator. If the reserve committee is satisfied with results of its evaluation it will approve
the content of our reserve disclosure. If any concerns arise in the reserve committees evaluation, the reserve committee will work with our management and the independent qualified reserves evaluators to resolve the issues before disclosure of
reserves is made public.

As of December 31, 2012, the Companys reserve committee was composed of: Harrison Blacker, Ross Gorrell
and Richard Bachmann. Please see Item 6. Directors, Senior Management and Employees, A. Directors and Senior Management for biographical information on the members of the reserve committee.



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Summary of Oil and Gas Reserves as of Fiscal Year-End Based on Average Fiscal Year Prices



|                         |  |              |     |  |                 |  |     |                   |  |  |                          |  |  |  |       | 
|------------------------ |  | ------------ | --- |  | --------------- |  | --- | ----------------- |  |  | ------------------------ |  |  |  | ----- | 
|                         |  | Net Reserves |    
|Proved Reserves Category |  | Oil(Mbbl)    |     |  | Condensate(MBO) |  |     | Natural Gas(Mmcf) |  |  | Natural GasLiquids(Mbbl) | 
|Developed                |  |              |     |  |                 |  |     |                   |  |  |                          |  |  |  |       | 
|Canada                   |  |              | 243 |  |                 |  |    |                   |  |  | 165                      |  |  |  | 2     | 
|United States            |  |              |    |  |                 |  | 1   |                   |  |  | 176                      |  |  |  | 19    | 
|Undeveloped              |  |              |     |  |                 |  |     |                   |  |  |                          |  |  |  |       | 
|Canada                   |  |              |    |  |                 |  |    |                   |  |  |                         |  |  |  |      | 
|United States            |  |              |    |  |                 |  | 339 |                   |  |  | 40,762                   |  |  |  | 4,440 | 
|                         |  |              |     |  |                 |  |     |                   |  |  |                          |  |  |  |       | 
|TOTAL PROVED             |  |              | 243 |  |                 |  | 340 |                   |  |  | 41,103                   |  |  |  | 4,461 | 
|                         |  |              |     |  |                 |  |     |                   |  |  |                          |  |  |  |       | 

Given acceptable commodity prices, 100% of the Companys undeveloped reserves are scheduled to be developed within
the five year period ending December 31, 2017.

Canada  Decrease in Total Proved Natural Gas Reserves of 306 MMcf:

During the year ended December 31, 2012, following the implementation of waterflood in 2011, an expected decrease in natural gas reserves as the
influx of water into the reservoir will replace some of the natural gas reserves-in-place. AJM Deloitte decreased, by way of a technical revision, the Companys total proved natural gas reserves by 306 MMcfs.

United States  Increase in Total Proved Natural Gas Liquids Reserves of 705 Mbbls and Natural Gas Reserves of 615 MMcf:

During the year ended December 31, 2012, an expected increase in the natural gas reserves and natural gas liquids reserves as the Companys
major competitors have strong upside reserves potential in the nearby areas of the Piceance Basin of Western Colorado. Gustavson increased, by way of a technical revision, the Companys total proved natural gas liquids reserves and natural gas
reserves by 705 Mbbls and 615 MMcfs respectively.

Total Proved Reserves

The table below compares our estimated proved reserves and associated present value (discounted at an annual rate of 10%) of the estimated future revenue before income tax.



|                                                          |  |                   |        |  |            |  |     |                    |  |  |         |  |  |                    |        |  |  |   |        |  
|--------------------------------------------------------- |  | ----------------- | ------ |  | ---------- |  | --- | ------------------ |  |  | ------- |  |  | ------------------ | ------ |  |  | - | ------ | -
|                                                          |  | December 31, 2012 |       
|Canada (Proved Developed and Undeveloped Reserves)        |  | Natural Gas       |        |  | Oil        |  |     | Natural GasLiquids |  |  | Total   |  |  | PV-10 (2)          |       
|                                                          |  | (Mmcf)            |        |  | (Mbbl)     |  |     | (Mbbl)             |  |  | (Mmcfe) |  |  | (in thousandsCdn$) |       
|                                                          |  |                   |        |  |           
|2012 12-month average prices (SEC)(1)                     |  |                   | 165    |  |            |  | 243 |                    |  |  | 2       |  |  |                    | 1,635  |  |  | $ | 7,502  |  
|                                                          | 
|                                                          |  | December 31, 2012 |       
|United States (Proved Developed and Undeveloped Reserves) |  | Natural Gas       |        |  | Condensate |  |     | Natural GasLiquids |  |  | Total   |  |  | PV-10 (2)          |       
|                                                          |  | (Mmcf)            |        |  | (Mbbl)     |  |     | (Mbbl)             |  |  | (Mmcfe) |  |  | (in thousandsCdn$) |       
|                                                          |  |                   |        |  |           
|2012 12-month average prices (SEC)(1)                     |  |                   | 40,938 |  |            |  | 340 |                    |  |  | 4,458   |  |  |                    | 69,726 |  |  | $ | (2,196 | )



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|                                                  |  |                   |        |  |        |  |     |            |  |  |                    |  |  |         |       |  |                    |  |        |  |  |   |       | 
|------------------------------------------------- |  | ----------------- | ------ |  | ------ |  | --- | ---------- |  |  | ------------------ |  |  | ------- | ----- |  | ------------------ |  | ------ |  |  | - | ----- | 
|                                                  |  | December 31, 2012 |       
|Total (Proved Developed and Undeveloped Reserves) |  | Natural Gas       |        |  | Oil    |  |     | Condensate |  |  | Natural GasLiquids |  |  | Total   |       |  | PV-10 (2)          | 
|                                                  |  | (Mmcf)            |        |  | (Mbbl) |  |     | (Mbbl)     |  |  | (Mbbl)             |  |  | (Mmcfe) |       |  | (in thousandsCdn$) | 
|2012 12-month average prices (SEC)(1)             |  |                   | 41,103 |  |        |  | 243 |            |  |  | 340                |  |  |         | 4,460 |  |                    |  | 71,361 |  |  | $ | 5,306 | 

Notes:



|(1) | The 12-month average prices (SEC) are calculated based on an average of market prices posted at or near the first of each month from January to December 2012, adjusted
for pipeline transportation costs from the wellhead to the interstate pipeline prevailing at December 31, 2012. The 12-month average prices (SEC) used for Canadian properties were Cdn$80.02 per barrel of oil and Cdn$2.45 per Mcf of natural
gas. The 12-month average prices (SEC) used for US properties were US$88.42 per barrel of condensate, US$12.46 per barrel of ethane, US$1.49 per Mcf of natural gas, US$59.99 per barrel of heavy NGLs for Kokopelli property and $51.81 per barrel of
heavy NGLs for South Rangely Field property.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Present value of estimated future net cash flows before income taxes (PV-10) is considered a non-GAAP financial measure as defined by the SEC. We believe that our
PV-10 presentation is relevant and useful to our investors because it presents the discounted future net cash flows attributable to our proved reserves before taking into account the related deferred income taxes, as such taxes may differ among
various companies because of differences in the amounts and timing of deductible basis, net operating loss carryforwards and other factors. We believe investors and creditors use our PV-10, before tax, as a basis for comparison of the relative
size and value of our proved reserves to the reserve estimates of other companies. PV-10 is not a measure of financial or operating performance under GAAP and is not intended to represent the current market value of our estimated oil and
natural gas reserves. PV-10, before tax, should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | US dollars are converted into Canadian dollars using the closing exchange rate on December 31, 2012, which is US$1.00 = Cdn$0.9949.
|--- | -----------------------------------------------------------------------------------------------------------------------------------

Oil and Gas Production, Production Prices and Production Costs

The following is our total net oil and gas production for the fiscal years ended December 31, 2012, 2011 and 2010. All production came from our Canadian properties. There was no production from our
United States properties in the fiscal years ended December 31, 2012, 2011, or 2010.



|                  |  |                                   |        |  |                  |  |         |            |  |  |         | 
|----------------- |  | --------------------------------- | ------ |  | ---------------- |  | ------- | ---------- |  |  | ------- | 
|Production        | 
|Fiscal Year Ended |  | Oil and Natural 
GasLiquids(bbls) |        |  | Natural Gas(Mcf) |  |         | Total(BOE) | 
|December 31, 2012 |  |                                   | 72,567 |  |                  |  | 380,780 |            |  |  | 136,031 | 
|December 31, 2011 |  |                                   | 81,468 |  |                  |  | 432,199 |            |  |  | 153,501 | 
|December 31, 2010 |  |                                   | 86,119 |  |                  |  | 548,890 |            |  |  | 177,599 | 

The following table includes the average prices the Company received for its production for the fiscal years ended
December 31, 2012, 2011 and 2010.



|                     |  |                                     |       |  |                    |  |      |              |  |  |       | 
|-------------------- |  | ----------------------------------- | ----- |  | ------------------ |  | ---- | ------------ |  |  | ----- | 
|Average Sales Prices | 
|Fiscal Year Ended    |  | Oil and Natural 
GasLiquids($/bbls) |       |  | Natural Gas($/Mcf) |  |      | Total($/BOE) | 
|December 31, 2012    |  |                                     | 81.37 |  |                    |  | 2.57 |              |  |  | 50.59 | 
|December 31, 2011    |  |                                     | 88.98 |  |                    |  | 3.64 |              |  |  | 57.49 | 
|December 31, 2010    |  |                                     | 67.46 |  |                    |  | 4.13 |              |  |  | 45.53 | 



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The following table includes the average production cost, not including ad valorem and severance taxes, per
unit of production for the fiscal years ended December 31, 2012, 2011 and 2010.



|                         |  |                                     |       |  |                    |  |      |              |  |  |       | 
|------------------------ |  | ----------------------------------- | ----- |  | ------------------ |  | ---- | ------------ |  |  | ----- | 
|Average Production
Costs | 
|Fiscal Year Ended        |  | Oil and Natural 
GasLiquids($/bbls) |       |  | Natural Gas($/Mcf) |  |      | Total($/BOE) | 
|December 31, 2012        |  |                                     | 36.64 |  |                    |  | 2.80 |              |  |  | 27.36 | 
|December 31, 2011        |  |                                     | 16.62 |  |                    |  | 2.60 |              |  |  | 16.15 | 
|December 31, 2010        |  |                                     | 13.01 |  |                    |  | 2.77 |              |  |  | 14.86 | 

Drilling and Other Exploratory and Development Activities

During the fiscal year ended December 31, 2012, we drilled the following wells:



|              |  |                       |   |  |                       |  |   |            |  |  |      |  |  |  |   | 
|------------- |  | --------------------- | - |  | --------------------- |  | - | ---------- |  |  | ---- |  |  |  | - | 
|              |  | Net Exploratory Wells |   |  | Net Development Wells | 
|Canada        |  | Productive            |   |  | Dry                   |  |   | Productive |  |  | Dry  | 
|              |  |                       |   | 
|Oil           |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Natural Gas   |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Dry Wells     |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Service Wells |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Suspended     |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|              |  |                       |   |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                       |   | 
|Total Wells   |  |                       |  |  |                       |  |  |            |  |  |     |  |  |  |  | 
|              |  |                       |   |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                      
|              |  | Net Exploratory Wells |   |  | Net Development Wells | 
|U.S.A         |  | Productive            |   |  | Dry                   |  |   | Productive |  |  | Dry  | 
|              |  |                       |   | 
|Natural Gas   |  |                       |  |  |                       |  |  |            |  |  | 0.20 |  |  |  |  | 
|              |  |                       |   |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                       |   | 
|Total Wells   |  |                       |  |  |                       |  |  |            |  |  | 0.20 |  |  |  |  | 
|              |  |                       |   |  |                       |  |   |            |  |  |      |  |  |  |   | 



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During the fiscal year ended December 31, 2011, we drilled the following wells:



|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|------------- |  | --------------------- | ---- |  | --------------------- |  | - | ---------- |  |  | ---- |  |  |  | - | 
|              |  | Net Exploratory Wells |      |  | Net Development Wells | 
|Canada        |  | Productive            |      |  | Dry                   |  |   | Productive |  |  | Dry  | 
|              |  |                       |      | 
|Oil           |  |                       |     |  |                       |  |  |            |  |  | 0.75 |  |  |  |  | 
|Natural Gas   |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Dry Wells     |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Service Wells |  |                       | 1.50 |  |                       |  |  |            |  |  | 2.25 |  |  |  |  | 
|Suspended     |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                       |      | 
|Total Wells   |  |                       | 1.50 |  |                       |  |  |            |  |  | 3.00 |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                      
|              |  | Net Exploratory Wells |      |  | Net Development Wells | 
|U.S.A         |  | Productive            |      |  | Dry                   |  |   | Productive |  |  | Dry  | 
|              |  |                       |      | 
|Natural Gas   |  |                       |     |  |                       |  |  |            |  |  | 0.50 |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                       |      | 
|Total Wells   |  |                       |     |  |                       |  |  |            |  |  | 0.50 |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 

During the fiscal year ended December 31, 2010, we drilled the following wells:



|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|------------- |  | --------------------- | ---- |  | --------------------- |  | - | ---------- |  |  | ---- |  |  |  | - | 
|              |  | Net Exploratory Wells |      |  | Net Development Wells | 
|Canada        |  | Productive            |      |  | Dry                   |  |   | Productive |  |  | Dry  | 
|              |  |                       |      | 
|Oil           |  |                       |     |  |                       |  |  |            |  |  | 1.50 |  |  |  |  | 
|Natural Gas   |  |                       | 0.75 |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Dry Wells     |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Service Wells |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|Suspended     |  |                       |     |  |                       |  |  |            |  |  |     |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 
|              |  |                       |      | 
|Total Wells   |  |                       | 0.75 |  |                       |  |  |            |  |  | 1.50 |  |  |  |  | 
|              |  |                       |      |  |                       |  |   |            |  |  |      |  |  |  |   | 

Delivery Commitments

We have no current delivery commitments for either oil or natural gas.

Oil and Gas
Properties and Wells

As of December 31, 2012, we had 11 gross (7.33 net) producing or shut-in oil or natural gas wells.



|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|--------- |  | ----- | - |  | ----------- |  | ---- | ----- |  |  | --- |  |  |  | ---- | 
|          |  | Oil   |   |  | Natural Gas | 
|Canada    |  | Gross |   |  | Net         |  |      | Gross |  |  | Net | 
|          |  |       |   | 
|Producing |  |       | 3 |  |             |  | 2.25 |       |  |  | 5   |  |  |  | 3.63 | 
|Shut-In   |  |       |  |  |             |  |     |       |  |  | 1   |  |  |  | 0.75 | 
|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|TOTAL     |  |       | 3 |  |             |  | 2.25 |       |  |  | 6   |  |  |  | 4.38 | 
|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 



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|        |  |       |   |  |             |  |   |       |  |  |     |  |  |  |      | 
|------- |  | ----- | - |  | ----------- |  | - | ----- |  |  | --- |  |  |  | ---- | 
|        |  | Oil   |   |  | Natural Gas | 
|U.S.A   |  | Gross |   |  | Net         |  |   | Gross |  |  | Net | 
|        |  |       |   | 
|Shut-In |  |       |  |  |             |  |  |       |  |  | 2   |  |  |  | 0.70 | 
|        |  |       |   |  |             |  |   |       |  |  |     |  |  |  |      | 
|TOTAL   |  |       |  |  |             |  |  |       |  |  | 2   |  |  |  | 0.70 | 
|        |  |       |   |  |             |  |   |       |  |  |     |  |  |  |      | 

As of December 31, 2011, we had 10 gross (7.13 net) producing or shut-in oil or natural gas wells.



|            |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|----------- |  | ----- | - |  | ----------- |  | ---- | ----- |  |  | --- |  |  |  | ---- | 
|            |  | Oil   |   |  | Natural Gas | 
|Canada      |  | Gross |   |  | Net         |  |      | Gross |  |  | Net | 
|            |  |       |   | 
|Producing   |  |       | 3 |  |             |  | 2.25 |       |  |  | 5   |  |  |  | 3.63 | 
|Shut-In     |  |       |  |  |             |  |     |       |  |  | 1   |  |  |  | 0.75 | 
|            |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|TOTAL       |  |       | 3 |  |             |  | 2.25 |       |  |  | 6   |  |  |  | 4.38 | 
|            |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|            |  |      
|            |  | Oil   |   |  | Natural Gas | 
|U.S.A       |  | Gross |   |  | Net         |  |      | Gross |  |  | Net | 
|            |  |       |   | 
|Shut-In (1) |  |       |  |  |             |  |     |       |  |  | 1   |  |  |  | 0.50 | 
|            |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|TOTAL       |  |       |  |  |             |  |     |       |  |  | 1   |  |  |  | 0.50 | 
|            |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 

As of December 31, 2010, we had 9 gross (6.63 net) producing oil or natural gas wells.



|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|--------- |  | ----- | - |  | ----------- |  | ---- | ----- |  |  | --- |  |  |  | ---- | 
|          |  | Oil   |   |  | Natural Gas | 
|Canada    |  | Gross |   |  | Net         |  |      | Gross |  |  | Net | 
|          |  |       |   | 
|Producing |  |       | 3 |  |             |  | 2.25 |       |  |  | 3   |  |  |  | 2.19 | 
|Shut-In   |  |       |  |  |             |  |     |       |  |  | 3   |  |  |  | 2.19 | 
|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 
|TOTAL     |  |       | 3 |  |             |  | 2.25 |       |  |  | 6   |  |  |  | 4.38 | 
|          |  |       |   |  |             |  |      |       |  |  |     |  |  |  |      | 

Interest in Oil and Gas Properties

The following table sets forth information for our interest in oil and gas properties as of December 31, 2012 relating to our leasehold acreage. Developed acres are acres spaced or assigned to
productive wells including undrilled acreage held-by-production under the terms of a lease. Undeveloped acres are acres on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of gas or
oil, regardless of whether such acreage contains proved reserves. Gross acres are the total number of acres in which a working interest is owned. Net acres are the sum of the fractional working interests owned in gross acres expressed as whole
numbers and fractions thereof.

As at December 31, 2012, the Companys developed and undeveloped acres are as follows:



|       |  |                   |        |  |                     |  |        |       |  |  |         |  |  |       |         |  |     |  |         |  |  |  |         | 
|------ |  | ----------------- | ------ |  | ------------------- |  | ------ | ----- |  |  | ------- |  |  | ----- | ------- |  | --- |  | ------- |  |  |  | ------- | 
|       |  | Developed Acreage |        |  | Undeveloped Acreage |  |        | Total | 
|       |  | Gross             |        |  | Net                 |  |        | Gross |  |  | Net     |  |  | Gross |         |  | Net | 
|Canada |  |                   | 9,640  |  |                     |  | 6,324  |       |  |  | 4,780   |  |  |       | 1,024   |  |     |  | 14,420  |  |  |  | 7,348   | 
|U.S.A  |  |                   | 5,498  |  |                     |  | 4,081  |       |  |  | 169,779 |  |  |       | 119,484 |  |     |  | 175,277 |  |  |  | 123,565 | 
|       |  |                   |        |  |                     |  |        |       |  |  |         |  |  |       |         |  |     |  |         |  |  |  |         | 
|TOTAL  |  |                   | 15,138 |  |                     |  | 10,405 |       |  |  | 174,559 |  |  |       | 120,508 |  |     |  | 189,697 |  |  |  | 130,913 | 
|       |  |                   |        |  |                     |  |        |       |  |  |         |  |  |       |         |  |     |  |         |  |  |  |         | 



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##### Table of Contents

The Companys net undeveloped acres as of December 31, 2012, together with expiries for the period
from 2013 to 2015 and thereafter is as follows.



|                          |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 
|------------------------- |  | ------------------- | ------- |  | ---------------- |  | ----- | ---------------- |  |  | ------------------------------ |  |  |  | ------ | 
|                          |  | Undeveloped Acreage |        
|As of December 31, 2012   |  | Net                 |         |  | 2013 Expirations |  |       | 2014 Expirations |  |  | 2015 and thereafterExpirations | 
|                          |  |                     |         | 
|Canada:                   |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 
|Manning                   |  |                     | 1,024   |  |                  |  |      |                  |  |  |                               |  |  |  | 1,024  | 
|                          |  |                     |         | 
|U.S.A:                    |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 
|Ashley                    |  |                     | 480     |  |                  |  |      |                  |  |  |                               |  |  |  | 480    | 
|Bitter Creek              |  |                     | 240     |  |                  |  |      |                  |  |  |                               |  |  |  | 240    | 
|Bonanza                   |  |                     | 262     |  |                  |  |      |                  |  |  |                               |  |  |  | 262    | 
|Book Cliffs               |  |                     | 11,401  |  |                  |  |      |                  |  |  | 3,682                          |  |  |  | 7,718  | 
|Cisco                     |  |                     | 5,071   |  |                  |  | 320   |                  |  |  | 913                            |  |  |  | 3,838  | 
|Dinosaur                  |  |                     | 62,830  |  |                  |  |      |                  |  |  | 15,988                         |  |  |  | 46,842 | 
|Displacement Point        |  |                     | 223     |  |                  |  |      |                  |  |  |                               |  |  |  | 223    | 
|Gorge Spring              |  |                     | 986     |  |                  |  |      |                  |  |  |                               |  |  |  | 986    | 
|Gunnison                  |  |                     | 753     |  |                  |  |      |                  |  |  |                               |  |  |  | 753    | 
|Kokopelli                 |  |                     | 1,611   |  |                  |  |      |                  |  |  |                               |  |  |  | 1,611  | 
|Meeker                    |  |                     | 921     |  |                  |  |      |                  |  |  | 921                            |  |  |  |       | 
|Oil Shale                 |  |                     | 899     |  |                  |  |      |                  |  |  |                               |  |  |  | 899    | 
|Pinyon Ridge              |  |                     | 4,635   |  |                  |  | 1,340 |                  |  |  | 250                            |  |  |  | 3,045  | 
|Plateau                   |  |                     | 3,014   |  |                  |  |      |                  |  |  |                               |  |  |  | 3,014  | 
|N. Rangely                |  |                     | 19,822  |  |                  |  |      |                  |  |  | 14,912                         |  |  |  | 4,910  | 
|Roan Creek (Grand Valley) |  |                     | 5,180   |  |                  |  |      |                  |  |  | 5,160                          |  |  |  | 21     | 
|San Juan                  |  |                     | 169     |  |                  |  |      |                  |  |  | 169                            |  |  |  |       | 
|Sand Wash                 |  |                     | 70      |  |                  |  | 50    |                  |  |  |                               |  |  |  | 20     | 
|Seep Ridge                |  |                     | 160     |  |                  |  | 160   |                  |  |  |                               |  |  |  |       | 
|Tri County South          |  |                     | 677     |  |                  |  | 35    |                  |  |  | 160                            |  |  |  | 482    | 
|Waddle Creek              |  |                     | 80      |  |                  |  |      |                  |  |  |                               |  |  |  | 80     | 
|                          |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 
|Subtotal:                 |  |                     | 119,484 |  |                  |  | 1,905 |                  |  |  | 42,155                         |  |  |  | 75,423 | 
|                          |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 
|TOTAL:                    |  |                     | 120,508 |  |                  |  | 1,905 |                  |  |  | 42,155                         |  |  |  | 76,447 | 
|                          |  |                     |         |  |                  |  |       |                  |  |  |                                |  |  |  |        | 

Uranium Properties

The Company owns a 10% carried interest and a 1% Net Smelter Return on certain uranium exploration leases in Saskatchewan operated by Nexgen Energy Ltd.



39



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##### Table of Contents

|ITEM 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

Not
Applicable.



|ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------

The following is a discussion of our consolidated operating results and financial position, including all our wholly-owned subsidiaries. It should be read in conjunction with our audited consolidated
financial statements and notes for the year ended December 31, 2012 and related notes included therein under the heading Item 18. Financial Statements below.

The financial statements of the Company for the year ended December 31, 2012 and 2011 are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC).

Certain forward-looking statements are discussed in this Item 5 with respect to our activities and future financial results. These are subject to risks and uncertainties that may cause projected
results or events to differ materially from actual results or events. Readers should also read the Cautionary Note Regarding Forward-Looking Statements above and Item 3. Key Information  Risk Factors.

INTERNATIONAL FINANCIAL REPORTING STANDARDS

On January 1, 2011, the Company adopted IFRS for financial reporting purposes, with a transition date of January 1, 2010. The consolidated financial statements for the year ended
December 31, 2011, including required comparative information, have been prepared in accordance with IFRS. Previously, the Company prepared its financial statements in accordance with Canadian GAAP. Unless otherwise noted, 2010 comparative
financial statement information has been prepared in accordance with IFRS. Subsequent to transition, the Company has prepared its consolidated financial statements in accordance with IFRS.

The adoption of IFRS has not had a material impact on the Companys operations, strategic decisions, cash flow and capital expenditures. The most significant changes to the Companys accounting
policies related to the accounting for its property, plant and equipment and accounting for derivative financial instruments. Other impacted areas include stock-based compensation, foreign currency translation and accounting for flow through shares.

CRITICAL ACCOUNTING ESTIMATES

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in profit or loss in the period of the change, if the change
affects that period only; or in the period of the change and future periods, if the change affects both.

Information about critical judgments
in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated annual financial statements within the next financial year are
discussed below:

Decommissioning liability

Decommissioning liabilities have been recognized based on the Companys internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a
reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed at least annually and are based on
current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual decommissioning costs will ultimately depend on future market
prices for the decommissioning costs which will reflect the market conditions at the time the decommissioning costs are actually incurred. The final cost of the currently recognized decommissioning provisions may be higher or lower than currently
provided for.



40



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Exploration and evaluation expenditure

The application of the Companys accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the
Company, which is based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after the expenditure is capitalized, information becomes available suggesting that the
recovery of the expenditure is unlikely, the amount capitalized is written off in profit or loss in the period the new information becomes available.

Income taxes

The Company recognizes the net future tax benefit related to deferred tax
assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred tax assets requires the Company to make significant estimates related to expectations
of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly
from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Company operates could limit the ability
of the Company to obtain tax deductions in future periods. All tax filings are subject to audit and potential reassessment. Accordingly, the actual income tax liability may differ significantly from the estimated and recorded amounts.

Share-based payment transactions

The
Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining
the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility
and dividend yield.

Impairment

A CGU is defined as the lowest grouping of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The allocation of
assets into CGUs requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, similar exposure to market risks, shared infrastructures, and the way in which management monitors
the operations. The recoverable amounts of CGUs and individual assets have been determined based on the higher of fair value less costs to sell or value-in-use calculations. The key assumptions the Company uses in estimating future cash flows for
recoverable amounts are anticipated future commodity prices, expected production volumes and future operating and development costs. Changes to these assumptions will affect the recoverable amounts of CGUs and individual assets and may then require
a material adjustment to their related carrying value. At December 31, 2012, the Company has two CGUs in Canada (Drake/Woodrush and Saddle Hills) and two CGUs in the United States (Kokopelli and South Rangely).

Financial instrument

When estimating
the fair value of financial instruments, the Company uses third-party models and valuation methodologies that utilize observable market data. In addition to market information, the Company incorporates transaction specific details that market
participants would utilize in a fair value measurement, including the impact of non-performance risk.

Reserves

The estimate of reserves is used in forecasting the recoverability and economic viability of the Companys oil and gas properties, and in the
depletion and impairment calculations. The process of estimating reserves is complex and requires significant interpretation and judgment. It is affected by economic conditions, production, operating and development activities, and is performed
using available geological, geophysical, engineering, and economic data. Reserves are



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##### Table of Contents

evaluated at least annually by the Companys independent reserve evaluators and updates to those reserves, if any, are estimated internally. Future development costs are estimated using
assumptions as to the number of wells required to produce the commercial reserves, the cost of such wells and associated production facilities and other capital costs.

FUTURE ACCOUNTING PRONOUNCEMENTS

Certain pronouncements were issued by the
International Accounting Standards Board (IASB) or the International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning after January 1, 2013 or later periods.

The following new standards, amendments and interpretations, have not been early adopted in these consolidated annual financial statements.
The Company is currently assessing the impact, if any, of this new guidance on the Companys future results and financial position:



| |  | IFRS 7 Financial Instruments: Disclosures, which requires disclosure of both gross and net information about financial instruments eligible for offset
in the balance sheet and financial instruments subject to master netting arrangements. Concurrent with the amendments to IFRS 7, the IASB also amended IAS 32, Financial Instruments: Presentation to clarify the existing requirements for offsetting
financial instruments in the balance sheet. The amendments to IAS 32 are effective as of January 1, 2014.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 9 Financial Instruments is part of the IASBs wider project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9
retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on the entitys business model and the contractual
cash flow characteristics of the financial asset. The standard is effective for annual periods beginning on or after January 1, 2015.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 10 Consolidated Financial Statements is the result of the IASBs project to replace Standing Interpretations Committee 12, Consolidation
 Special Purpose Entities and the consolidation requirements of IAS 27, Consolidated and Separate Financial Statements. The new standard eliminates the current risk and rewards approach and establishes control as the single basis for
determining the consolidation of an entity. The standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 11 Joint Arrangements is the result of the IASBs project to replace IAS 31, Interests in Joint Ventures. The new standard redefines joint
operations and joint ventures and requires joint operations to be proportionately consolidated and joint ventures to be equity accounted. Under IAS 31, joint ventures could be proportionately consolidated. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 12 Disclosure of Interests in Other Entities outlines the required disclosures for interests in subsidiaries and joint arrangements. The new
disclosures require information that will assist financial statement users to evaluate the nature, risks and financial effects associated with an entitys interests in subsidiaries and joint arrangements. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 13 Fair Value Measurement defines fair value, requires disclosures about fair value measurements and provides a framework for measuring fair value
when it is required or permitted within the IFRS standards. The standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRIC 20 Stripping costs in the production phase of a mine, IFRIC 20 clarifies the requirements for accounting for the costs of the stripping activity
in the production phase when two benefits accrue: (i) unusable ore that can be used to produce inventory and (ii) improved access to further quantities of material that will be mined in future periods. IFRIC 20 is effective for annual
periods beginning on or after January 1, 2013 with earlier application permitted and includes guidance on transition for pre-existing stripping assets.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 1 Presentation of Financial Statements was amended in June 2011. This standard requires companies preparing financial statements under IFRS to
group items within Other Comprehensive Income (OCI) that may be reclassified to the profit or loss. The amendments also reaffirm existing requirements that items in OCI and profit of loss should be presented as either a single statement or two
consecutive statements. The amendments to IAS 1 are effective as of January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 28 Investments in Associates and Joint Ventures, prescribes the accounting for investments in associates and sets out the requirements for the
application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (associate or joint venture). The
standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|A. | Operating Results
|-- | -----------------

The Companys
annual audited Consolidated Financial Statements for the year ended December 31, 2012, including 2011 and 2010 required comparative information, have been prepared in accordance with IFRS.

All financial information is stated in Canadian dollars, the Companys presentation currency, unless otherwise noted.

Year ended December 31, 2012 compared to the year ended December 31, 2011



|1. | Revenues
|-- | --------

For the year ended
December 31, 2012 (fiscal 2012), the Company recorded $6,882,000 in oil and natural gas sales as compared to $8,824,000 in oil and natural gas sales for the year ended December 31, 2011 (fiscal 2011). The decrease
in gross revenues was due to lower realized oil and gas prices and lower oil and gas production.

Royalties for fiscal 2012 decreased to
$1,116,000 from $1,628,000 for fiscal 2011, due to lower oil and gas production. Royalties are mainly driven by the varying production mix between oil and gas.

The following table summarizes the commodity prices realized by the Company and the crude oil and natural gas benchmark prices for the years ended December 31, 2012 and 2011:



|                                      |  |                         |       |  |      |  |       | 
|------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | 
|                                      |  | Year ended December 31, |      
|                                      |  | 2012                    |       |  | 2011 | 
|                                      |  | $                       |       |  | $    | 
|Dejour Realized Avenge Prices         |  |                         |       |  |      |  |       | 
|Oil and natural gas liquids ($/bbl)   |  |                         | 81.37 |  |      |  | 93.00 | 
|Natural gas ($/mcf)                   |  |                         | 2.57  |  |      |  | 3.23  | 
|Total average price ($/boe)           |  |                         | 30.59 |  |      |  | 57.13 | 
|                                      |  |                        
|Average Benchmark Prices              |  |                         |       |  |      |  |       | 
|Edmonton Par ($/bbl)                  |  |                         | 86.53 |  |      |  | 97.87 | 
|Natural gas - AECO-C Spot ($ per mcf) |  |                         | 2.40  |  |      |  | 3.47  | 

For fiscal 2012, Dejours average realized natural gas prices reflected lower benchmark prices compared to fiscal
2011. Oil prices received for fiscal 2012 decreased to $81.37 per barrel (bbl), compared to $93.00 per bbl for fiscal 2011. The decrease was due to the general downturn of the global economy, leading to lower commodity prices. In
addition, the oil differential between West Texas Intermediate (WTI) oil to British Columbia light crude oil increased due to pipeline constraints, resulting in lower realized prices for the Companys oil.



|2. | Operating and Transportation Expenses
|-- | -------------------------------------

Operating and transportation expenses include all costs associated with the production of oil and natural gas and the transportation of oil and natural
gas to the processing plants. The major components of operating expenses include labour, equipment maintenance, workovers, fuel and power. Operating and transportation expenses for fiscal 2012 increased to $3,793,000 from $2,499,000 for fiscal 2011.
The increase was due to the expenditures associated with a major workover on one of the oil producing wells ($564,000), increased repairs and maintenance of oil wells, and higher waterflood implementation expenses.



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##### Table of Contents

|3. | General and Administrative Expenses
|-- | -----------------------------------

General and administrative expenses for fiscal 2012 decreased to $3,433,000 from $4,042,000 for fiscal 2011. The Board and managements decision to
not pay a bonus to employees for the year ended December 31, 2012 and the inclusion of such a bonus in 2011 accounted for much of the difference. Further, 2011 included non-recurring professional fees associated with the required conversion to
the International Financial Reporting Standards (IFRS).

Year ended December 31, 2011 compared to the year ended December 31,
2010



|1. | Revenues
|-- | --------

For fiscal 2011, the Company
recorded $8,824,000 in oil and natural gas sales as compared to $8,086,000 in oil and natural gas sales for the year ended December 31, 2010 (fiscal 2010). The increase in gross revenues was due to higher realized oil prices in
2011. This was partly offset by lower oil and gas production for the current year.

Royalties for fiscal 2011 increased to $1,628,000 from
$1,312,000 for fiscal 2010. The increase was attributable to higher oil revenue and the increase in the proportion of revenue attributed to oil. Oil production is subject to higher royalty rate compared to the royalty rate for natural gas.

The following table summarizes the commodity prices realized by the Company and the crude oil and natural gas benchmark prices for the year
ended December 31, 2011 and 2010:



|                                      |  |                         |       |  |      |  |       | 
|------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | 
|                                      |  | Year ended December 31, |      
|                                      |  | 2011                    |       |  | 2010 | 
|                                      |  | $                       |       |  | $    | 
|Dejour Realized Average Prices        |  |                         |       |  |      |  |       | 
|Oil and natural gas liquids ($/bbl)   |  |                         | 88.98 |  |      |  | 67.46 | 
|Natural gas ($/mcf)                   |  |                         | 3.64  |  |      |  | 4.13  | 
|                                      |  |                         |       |  |      |  |       | 
|Total average price ($/boe)           |  |                         | 57.49 |  |      |  | 45.53 | 
|                                      |  |                         |       |  |      |  |       | 
|                                      |  |                        
|Average Benchmark Prices              |  |                         |       |  |      |  |       | 
|Edmonton Par ($/bbl)                  |  |                         | 95.16 |  |      |  | 77.81 | 
|                                      |  |                         |       |  |      |  |       | 
|Natural gas - AECO-C Spot ($ per mcf) |  |                         | 3.67  |  |      |  | 4.13  | 
|                                      |  |                         |       |  |      |  |       | 

For fiscal 2011, Dejours average realized natural gas prices reflected lower benchmark prices compared to fiscal
2010. Oil prices received for fiscal 2011 increased to $88.98 per barrel (bbl), compared to $67.46 per bbl for fiscal 2010.



44



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##### Table of Contents

|2. | Operating and Transportation Expenses
|-- | -------------------------------------

Operating and transportation expenses include all costs associated with the production of oil and natural gas and the transportation of oil and natural
gas to the processing plants. The major components of operating expenses include labour, equipment maintenance, workovers, fuel and power. Operating and transportation expenses for fiscal 2011 decreased to $2,499,000 from $2,609,000 for fiscal 2010.
The decrease was due to lower oil and gas production. Operating costs per BOE for both years were comparable despite lower oil and gas production.



|3. | General and Administrative Expenses
|-- | -----------------------------------

General and administrative expenses for fiscal 2011 increased to $4,042,000 from $3,383,000 for fiscal 2010. The increase was mainly due to the year-end
bonus accrual for fiscal 2011 and the non-recurring professional fees associated with the required conversion to the International Financial Reporting Standards (IFRS).

Financial Instruments and Risk Management

The Companys financial instruments
consist of cash and cash equivalents, accounts receivable, bank line of credit, and accounts payable and accrued liabilities. Management has determined that the fair value of these financial instruments approximates their carrying values due to
their immediate or short-term maturity. Net smelter royalties and related rights to earn or relinquish interests in mineral properties constitute derivative instruments. No value or discounts have been assigned to such instruments as there is no
reliable basis to determine fair value until properties are in development or production and reserves have been determined.

From time to
time, the Company enters into derivative contracts such as forwards, futures and swaps in an effort to mitigate the effects of volatile commodity prices and protect cash flows to enable funding of its exploration and development programs. Commodity
prices can fluctuate due to political events, meteorological conditions, disruptions in supply and changes in demand.

The primary risks and
how the Company mitigates them are disclosed in Item 11  Quantitative and Qualitative Disclosures About Market Risk, below.



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##### Table of Contents

|B. | Liquidity and Capital Resources
|-- | -------------------------------

Going Concerns, Bank Credit Facility, and Subsequent Events

The financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its
assets and discharge its liabilities and commitments in the normal course of business. The Company has a working capital deficiency of $8,557,281 (of which $5,956,749 is represented by its bank line of credit) and accumulated deficit of
$88,262,350.

Subsequent to December 31, 2012, DEAL was informed by its Canadian Bank (Bank) that the value of the petroleum
and natural gas reserves assigned to the Bank by the Company as partial security for its $6,050,000 (December 31, 2012  $5,956,749) revolving line of credit was deficient for loan collateral purposes. On March 28, 2013, DEAL signed a new
Commitment Letter with the Bank to renew its $5,950,000 (December 31, 2012  $5,956,749) revolving operating demand loan under the following terms and conditions:



|(a) | Credit Facility A  Revolving Operating Demand Loan  $3,700,000, to be used for general corporate purposes, ongoing operations, capital
expenditures, and acquisition of additional petroleum and natural gas assets. Interest on Credit Facility A is at Prime + 1% payable monthly and all amounts outstanding are payable on demand any time, and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Credit Facility B  Non-Revolving Demand Loan  $2,250,000. Interest on Credit Facility B is at Prime + 3 1/2% payable monthly.
Monthly principal payments of $200,000 are due and payable commencing March 26, 2013 with all amounts outstanding under Credit Facility B ($1,450,000) due and payable in full on June 30, 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Collateral for Credit Facilities A and B (the Credit Facilities) is provided by a $10,000,000 first floating charge
over all the assets of DEAL, a general assignment of DEALs book debts, a $10,000,000 debenture with a first floating charge over all the assets of the Company and an unlimited guarantee provided by Dejour USA. The Credit Facilities are subject
to bank renewal on or before June 30, 2013.

Prior to each advance under the Credit Facilities, DEAL is required to (i) provide the
Bank with certain additional security required by the Bank; (ii) satisfy the Bank that no further default or event of default exists and that no material adverse effect has occurred with respect to DEAL, any guarantor or the collateral;
(iii) satisfy the Bank that all representations and warranties of DEAL and all guarantors are true and correct; and (iv) execute any other document that may be reasonably requested by the Bank.

Further, in the event the Company accesses the debt or equity markets to source cash during the period from March 26, 2013 to June 30, 2013, or
sells certain assets for cash, then the proceeds will be applied as follows: (i) full repayment of the balance outstanding under Credit Facility B on or before June 30, 2013 and (ii) a shortfall, if any, between the amount
of Credit Facility A at June 30, 2013 and the underlying value of the lenders collateral at that date.

Under the terms
of the facility, DEAL is required to maintain an adjusted working capital ratio of greater than 1:1 at all times. The working capital ratio is defined as the ratio of (i) current assets less unrealized hedging gains to (ii) accounts
payable less unrealized hedging losses.

The Companys ability to continue as a going concern is dependent upon attaining profitable
operations and obtaining sufficient financing to meet obligations and continue exploration and development activities. There is no assurance that these activities will be successful. These material uncertainties cast substantial doubt upon the
Companys ability to continue as a going concern.



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##### Table of Contents

Cash Balances

The Company had cash and cash equivalents of $1,508,000 as at December 31, 2012.

Financial Contract

On
December 31, 2012, Dejour USA entered into a financial contract with an unrelated U.S. oil and gas drilling fund (Drilling Fund) to drill three wells and complete up to four wells (the Tranche 1 Wells) in the State of
Colorado. By agreement:



|(a) | Dejour USA contributed four natural gas well spacing units, including one drilled and cased well with a cost of US$1,147,779;
|--- | -----------------------------------------------------------------------------------------------------------------------------



|(b) | The Drilling Fund contributed US$6,500,000 cash directly to a related party drilling company as prepaid drilling costs;
|--- | -----------------------------------------------------------------------------------------------------------------------



|(c) | Dejour USA will earn a before payout working interest of 10% to 14% and an after payout working interest of 28% to 39% in the net operating
profits from the Tranche 1 Wells based on the actual cash invested in the drilling program;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | The Drilling Fund has the right to require that Dejour USA purchase the Drilling Funds entire working interest in the Tranche 1 Wells 36 months after the
commencement of production from the initial Tranche 1 Well. In the event the Drilling Fund exercises its right, the purchase price to be paid by Dejour USA will equal 75% of the Drilling Funds actual investment less 75% of the Drilling
Funds share of working interest net profits from the Tranche 1 Wells, if any, for the 36-month period, plus a top-up amount so that the Drilling Fund earns a minimum 8% return, compounded annually and applied on a monthly basis, on
75% of its original investment over the 36-month period; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The Drilling Fund has the right to require Dejour USA to purchase all of the Drilling Funds interest in the Tranche 1 Wells if at any time Dejour USA plans to
divest of greater than 51% of its Working Interest in the Tranche 1 Wells and resigns as Operator (a Change of Control Event). The purchase price is equal to the future net profit from the Proven and Probable Reserves
attributable to the Drilling Funds working interest in the Tranche 1 Wells, discounted at 12%, as determined by a third party evaluator acceptable to both parties.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dejour USA considers the transaction to be a financial contract liability as the risks and rewards of ownership have not been substantially transferred at the Agreement date. On December 31, 2012 the
Drilling Fund had advanced US$6,500,000 to a drilling contractor for the Tranche 1 wells. On the Drilling Fund financing advance, the Company increased property and equipment and financial contract liability by $6,466,850 (US$6,500,000). On initial
recognition, the Company imputed its borrowing cost of 8.4% based on the estimated timing and amount of operating profit using the independent reserve engineers estimated future cash flows for the Drilling Funds working interest in the Tranche
1 Wells. Subsequent to initial measurement the financial contract liability will be increased by the imputed interest expense and decreased by the Drilling Funds net operating profit from the Tranche 1 Wells. Any changes in the estimated
timing and amount of the net operating profit cash flows will be discounted at the initial imputed interest rate with any change in the recognized liability recognized as a gain (loss) in the period of change. The Company has estimated the current
portion of the obligation based on the expected net operating profit to be paid to the Drilling Fund in the next twelve months.



|                                                      |  |     |            |   |      |  |            |  
|----------------------------------------------------- |  | --- | ---------- | - | ---- |  | ---------- | -
|                                                      |  | US$ |            |   | CAD$ | 
|Loan advance                                          |  |     | 6,500,000  |   |      |  | 6,466,850  |  
|Less: Current portion of financial contract liability |  |     | (1,311,969 | ) |      |  | (1,305,278 | )
|                                                      |  |     |            |   |      |  |            |  
|Non-current portion of financial contract liability   |  |     | 5,188,031  |   |      |  | 5,161,572  |  
|                                                      |  |     |            |   |      |  |            |  



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The estimated reduction in the financial contract liability is estimated to be:



|     |  |     |           |  |      |  |           | 
|---- |  | --- | --------- |  | ---- |  | --------- | 
|     |  | US$ |           |  | CAD$ | 
|2013 |  |     | 1,311,969 |  |      |  | 1,305,278 | 
|2014 |  |     | 917,943   |  |      |  | 913,261   | 
|2015 |  |     | 602,166   |  |      |  | 599,095   | 

Working Capital Position



|                                                         |  |   |            |  
|-------------------------------------------------------- |  | - | ---------- | -
|As at December 31, 2012                                  |  | $ |           
|Working capital deficit                                  |  |   | (8,557,000 | )
|Non-cash warrant liability                               |  |   | 1,425,000  |  
|Current portion of financial contract liability          |  |   | 1,305,000  |  
|                                                         |  |   |            |  
|Adjusted working capital deficit                         |  |   | (5,827,000 | )
|Add: Bank line of credit                                 |  |   | 5,957,000  |  
|                                                         |  |   |            |  
|Adjusted working capital (excluding bank line of credit) |  |   | 130,000    |  
|                                                         |  |   |            |  

Working capital is defined as current assets less current liabilities. As at December 31, 2012, the Company had a
working capital deficit of $8,557,000. Excluding the non-cash warrant liability of $1,425,000 related to the fair value of US$ denominated warrants issued in previous equity financings and the non-current portion of financial contract liability of
$1,305,000, the adjusted working capital deficit was $5.8 million. The majority of the working capital deficit relates to the $6.0 million outstanding bank line of credit, with a $0.7 million credit limit remaining.

The bank line of credit is classified as current liabilities because it is a demand loan, subject to periodic review by the lender. Nevertheless, the
Company intends to use it as a long-term financing due to the low cost of capital (currently 4% p.a.).

As noted in the GOING CONCERN, BANK
CREDIT FACILITY, and SUBSEQUENT EVENT section of this MD&A, on March 28, 2013, DEAL signed a new Commitment Letter with the Bank to renew its $5,950,000 (December 31, 2012  $5,956,749) revolving operating demand loan under
the following terms and conditions:



|(a) | Credit Facility A  Revolving Operating Demand Loan  $3,700,000, to be used for general corporate purposes, ongoing operations, capital
expenditures, and acquisition of additional petroleum and natural gas assets. Interest on Credit Facility A is at Prime + 1% payable monthly and all amounts outstanding are payable on demand any time; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Credit Facility B  Non-Revolving Demand Loan  $2,250,000. Interest on Credit Facility B is at Prime + 3 1/2% payable monthly.
Monthly principal payments of $200,000 are due and payable commencing March 26, 2013 with all amounts outstanding under Credit Facility B ($1,450,000) due and payable in full on June 30, 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Collateral for Credit Facilities A and B (the Credit Facilities) is provided by a $10,000,000 first floating charge
over all the assets of DEAL, a general assignment of DEALs book debts, a $10,000,000 debenture with a first floating charge over all the assets of the Company and an unlimited guarantee provided by Dejour USA. The Credit Facilities are subject
to bank renewal on or before June 30, 2013.

Prior to each advance under the Credit Facilities, DEAL is required to (i) provide the
Bank with certain additional security required by the Bank; (ii) satisfy the Bank that no further default or event of default exists and that no material adverse effect has occurred with respect to DEAL, any guarantor or the collateral;
(iii) satisfy the Bank that all representations and warranties of DEAL and all guarantors are true and correct; and (iv) execute any other document that may be reasonably requested by the Bank.



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Further, in the event the Company accesses the debt or equity markets to source cash during the period from
March 26, 2013 to June 30, 2013, or sells certain assets for cash, then the proceeds will be applied as follows: (i) full repayment of the balance outstanding under Credit Facility B on or before June 30, 2013 and
(ii) a shortfall, if any, between the amount of Credit Facility A at June 30, 2013 and the underlying value of the lenders collateral at that date.

Under the terms of the facility, DEAL is required to maintain an adjusted working capital ratio of greater than 1:1 at all times. The working capital ratio is defined as the ratio of (i) current
assets less unrealized hedging gains to (ii) accounts payable less unrealized hedging losses.

Subsequent to the year-end, the Company
has initiated discussions with a number of financial advisory firms to address the Companys financing requirements on a timely basis.

Capital Resources



|a) | Canada
|-- | ------

At Drake/Woodrush, the Company
successfully completed and tied into production a 3rd oil well and continued to optimize the waterflood implemented in 2012.



|b) | United States
|-- | -------------

Industry activity in the
Piceance Basin of Colorado continues to increase. Several major US companies and one large Canadian company are currently drilling and completing over 10 wells within a 5 mile radius of the Companys Kokopelli acreage in the eastern extremity
of the Piceance. At Kokopelli, the Company has started a drilling program to further develop the Williams Fork natural gas zone at 9,000 ft. consisting of the drilling of 3 wells and the completion and related tie-in of 4 wells. The total cost of
the program will be approximately US$8,200,000. Funding for the program has been primarily provided by a US$6,500,000 financing contract with an industry Drilling Find. Under the terms of the industry-standard agreement, the Company will earn a
before-payout (BPO) working interest of 10% to 14% and an after payout (APO) working interest of 28% to 39%. Payout to the Drilling Fund is defined as 125% of the capital investment amount
on a tranche by tranche basis.

The agreement with the Drilling Fund provides for an additional two tranches of drilling under the following
terms and conditions:



| |  | The Drilling Fund will have the right, but not the obligation, to invest up to an additional US$8,500,000 for a total of US$15,000,000 in two
additional tranches;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Tranche 3 estimated between US$4 to US$5 million, can only be initiated within two years after committing to the full US$4,000,000 to US$5,000,000 in
Tranche 2;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Dejour will receive a 10% BPO carried interest in all wells or partial wells drilled by the Drilling Fund, reverting to a 32.5% APO working interest;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Tranche 2 and 3 wells will be funded only in conjunction with Dejours plans for development of Kokopelli. If, for example, no development is
planned, the Drilling Funds option will remain in effect until Dejour presents a drilling plan to the Drilling Fund; and
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Drilling Fund does not earn the right to put its Tranche 2 and 3 working interests back to the Company under any circumstances.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------



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|C. | Research and Development, Patents and Licenses, etc.
|-- | ----------------------------------------------------

None.



|D. | Trend Information
|-- | -----------------

In 2012, our natural
gas and natural gas liquids production operations in the State of Colorados Piceance Basin, were negatively impacted by lower realized natural gas prices coupled with lower natural and liquids prices relative to 2011. Also, as a result of
declines in the forward market pricing curve, for natural gas prices, we recorded impairments of producing properties totalling $1,273,000. The marketability and price of oil and natural gas are affected by numerous factors outside of
the Companys control, and the US$ exchange rate (See Part 1, Section D Risk Factors). In northeastern British Columbia, Canada, pipeline restrictions have resulted in lower prices being paid to oil producers like Dejour. This
differential from NYMEX-WTI has averaged between Cdn. $11.00  $13.00 per barrel most of 2012. The Company expects no appreciable relief in narrowing this differential in the short run as increasing crude oil production in the
northern Canadian oil sands and the Bakken Trend in North Dakota have combined to limit access to the normal markets in the US for northern B.C. conventional crude oil. The Company, however, does not expect any curtailment of its oil production due
to pipeline access constraints as there is ample quota space in the marketing agreement between the purchaser of the Companys production and the pipeline transporter.



|E. | Off-Balance Sheet Arrangements
|-- | ------------------------------

The
Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our results of operations or financial condition at December 31, 2012.



|F. | Tabular Disclosure of Contractual Obligations
|-- | ---------------------------------------------

As of December 31, 2012, and in the normal course of business we have obligations to make future payments, representing contracts and other commitments that are known and committed.



|                                |  |      |       |  |      |  |       |      |  |  |      |  |  |      |   |  |            |  |   |       |  |  |     |  |  |  |       | 
|------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ---- |  |  | ---- | - |  | ---------- |  | - | ----- |  |  | --- |  |  |  | ----- | 
|(in thousands of dollars)       |  | 2013 |       |  | 2014 |  |       | 2015 |  |  | 2016 |  |  | 2017 |   |  | Thereafter |  |   | Total | 
|                                |  | $    |       |  | $    |  |       | $    |  |  | $    |  |  | $    |   |  | $          |  |   | $     | 
|Operating lease obligations     |  |      | 229   |  |      |  | 164   |      |  |  | 48   |  |  |      |  |  |            |  |  |       |  |  | Nil |  |  |  | 441   | 
|Bank line of credit             |  |      | 5,957 |  |      |  |      |      |  |  |     |  |  |      |  |  |            |  |  |       |  |  | Nil |  |  |  | 5,957 | 
|Financial contract liability(1) |  |      | 1,305 |  |      |  | 913   |      |  |  | 599  |  |  |      |  |  |            |  |  |       |  |  | Nil |  |  |  | 2,817 | 
|                                |  |      |       |  |      |  |       |      |  |  |      |  |  |      |   |  |            |  |   |       |  |  |     |  |  |  |       | 
|Total                           |  |      | 7,491 |  |      |  | 1,077 |      |  |  | 647  |  |  |      |  |  |            |  |  |       |  |  | Nil |  |  |  | 9,215 | 
|                                |  |      |       |  |      |  |       |      |  |  |      |  |  |      |   |  |            |  |   |       |  |  |     |  |  |  |       | 



|(1) | This represents the Companys obligations over the 36-month put option period until it expires. If the put option expires unexercised, both the property and
equipment and related liability of approximately $3,650,000 will be derecognized. See Note 11 to the consolidated financial statements for details.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|G. | Safe Harbor
|-- | -----------

The Company seeks safe
harbor for our forward-looking statements contained in Items 5.E and F. See the heading Cautionary Note Regarding Forward-Looking Statements above.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



|A. | Directors and Senior Management
|-- | -------------------------------

The
following table sets forth all current directors and executive officers of Dejour as of the date of this annual report on Form 20-F, with each position and office held by them in the Company and the period of service as such.



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|                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                       |           |  |                                                                                                          |  |      |                |  |                  
|------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------- | --------- |  | -------------------------------------------------------------------------------------------------------- |  | ---- | -------------- |  | -----------------
|Name, Jurisdiction of Residenceand Position (1)                                                                           |  | Principal occupation oremployment during the past 5 years                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Number of Dejour CommonShares beneficially owned,directly or
indirectly, orcontrolled or directed (2) |           |  | Percentage of DejourCommon
Sharesbeneficially owned, directlyor indirectly, or controlledor directed (2) |  |      | Director Since
|Robert L. HodgkinsonBritish Columbia, Canada Director, Chairman and Chief Executive Officer
(Age: 63)                     |  | President of a private company, Hodgkinson Equities Corporation, which provides consulting services to emerging businesses in the petroleum resource industry. Formerly a director
of Titan Uranium (TSX-V: TUE).                                                                                                                                                                                                                                                                                                    |  |                                                                                                       | 7,750,000 |  |                                                                                                          |  | 5.20 | %              |  | May 18, 2004     
|Stephen MutColorado, USA Director and Co-Chairman (Age: 62)                                                               |  | Mr. Mut has served as CEO of Nycon Energy Consulting since his retirement from Shell in mid-2009. At Shell, Mr. Mut served as chief executive officer of a unit of Shell
Exploration and Production Company from 2000 until his retirement in 2009. Prior to that, Mr. Mut served in various executive roles at Atlantic Richfield Corporation.                                                                                                                                                                      |  |                                                                                                       | 1,701,001 |  |                                                                                                          |  | 1.14 | %              |  | December 17, 2009
|Harrison Blacker(5)Colorado, U.S.A. Director, President and Chief Operating Officer of Dejour Energy (USA) Inc. (Age: 62) |  | President of Dejour Energy (USA) Inc. since April 2008. Over 30 years of expertise managing oil and gas operations. Held the positions of Chief Executive Officer with China
Oman Energy Company and Portfolio Manager, Latin American Business Unit and General Manager/ President of Venezuela Energy with Atlantic Richfield Corporation prior to joining Dejour USA.                                                                                                                                             |  |                                                                                                       | 525,678   |  |                                                                                                          |  | 0.35 | %              |  | April 2, 2008    
|Richard Bachmann(3)(4)(5)Louisiana, U.S.A. Director (Age: 68)                                                             |  | Mr. Bachmann previously served as President/CEO of EPL LLC, an energy consulting firm since his retirement from Energy Partners Ltd. in 2009. He was the founder, President and
CEO of Energy Partners, an U.S. independent oil and gas exploration and production company. Prior to that, he was President of Louisiana Land & Exploration, a prominent U.S. gulf coast oil and gas explorer and producer. He began his career
with Exxon serving in many executive positions both in the U.S. and internationally. |  |                                                                                                       |          |  |                                                                                                          |  |     |                |  | December 14, 2012



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|                                                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |                                                                                                       |         |  |                                                                                                          |  |      |                |  |                  
|------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------- | ------- |  | -------------------------------------------------------------------------------------------------------- |  | ---- | -------------- |  | -----------------
|Name, Jurisdiction of Residenceand Position (1)                          |  | Principal occupation oremployment during the past 5 years                                                                                                                                                                                                                                                                                                                                                                                       |  | Number of Dejour CommonShares beneficially owned,directly or
indirectly, orcontrolled or directed (2) |         |  | Percentage of DejourCommon
Sharesbeneficially owned, directlyor indirectly, or controlledor directed (2) |  |      | Director Since
|Dr. A. Gorrell(4)(5)British Columbia, Canada Director (Age: 68)          |  | Dr. Gorrell has over 30 years experience with both private and public oil and gas property exploration and development in Western Canada and China. Dr. Gorrell has served
as director, officer and controlling principal of several oil and gas ventures listed on the Toronto Stock Exchange. Currently, Dr. Gorrell is a director, President/CEO and Co-Chairman of Petromin Resources Ltd.                                                 |  |                                                                                                       |        |  |                                                                                                          |  |     |                |  | December 14, 2012
|Richard Kennedy(4)Alberta, Canada Director (Age: 57)                     |  | Mr. Kennedy is a prominent barrister, solicitor and partner at Kennedy Agrios LLP, an Edmonton, Alberta based law firm focusing on commercial real estate, administrative and
regulatory law.                                                                                                                                                                                                                                                   |  |                                                                                                       | 94,900  |  |                                                                                                          |  | 0.06 | %              |  | December 14, 2012
|Craig Sturrock(3)British Columbia, Canada Director (Age: 69)             |  | Tax lawyer since 1971. Currently, he is a partner at Thorsteinssons LLP, and his practice focuses primarily on civil and criminal tax litigation.                                                                                                                                                                                                                                                                                               |  |                                                                                                       | 650,000 |  |                                                                                                          |  | 0.44 | %              |  | August 22, 2005  
|David MathesonBritish Columbia, Canada Chief Financial Officer (Age: 63) |  | Mr. Matheson has over 30 years of executive experience in the oil and gas industry in both operations and finance. He previously served as CFO and then as President of Equatorial
Energy Ltd., a public Canadian oil and gas exploration & production company with operations in Canada and Indonesia. Mr. Matheson was admitted to the Institute of Chartered Accountants in British Columbia, the Northwest Territories, and Canada
in 1975. |  |                                                                                                       |        |  |                                                                                                          |  |     |                |  | N/A              



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|                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                                                                                       |        |  |                                                                                                          |  |      |               |  |    
|----------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------- | ------ |  | -------------------------------------------------------------------------------------------------------- |  | ---- | ------------- |  | ---
|Name, Jurisdiction of Residenceand Position (1)                                                 |  | Principal occupation oremployment during the past 5 years                                                                                                                                                                                                                                                                                                                                                                  |  | Number of Dejour CommonShares beneficially owned,directly or
indirectly, orcontrolled or directed (2) |        |  | Percentage of DejourCommon
Sharesbeneficially owned, directlyor indirectly, or controlledor directed (2) |  |      | DirectorSince
|Phillip Bretzloff, BA, LLBBritish Columbia, Canada Vice President and General Counsel (Age: 64) |  | Mr. Bretzloff has acted for oil, gas and energy companies, including extensive work for Canadian and offshore private and public corporations. Between 1980 and 1995, he was
Senior Counsel for Petro-Canada. Subsequently, he was a Partner for 8 years with Cumming Blackett Bretzloff Todesco, Gowlings, and Baker & McKenzie, where his clients included PetroChina, Shell, Exxon Mobil, GazProm and Veba Oil and
Gas. |  |                                                                                                       | 59,500 |  |                                                                                                          |  | 0.04 | %             |  | N/A
|Neyeska MutEVP Operations, Dejour Energy (USA) Corp. (Age: 55)                                  |  | Engineer. Since 2000, she has been President of Nycon Energy Consulting working as an advisor to two major oil companies. Prior to forming Nycon Energy Consulting Mrs. Mut
pursued international opportunities with Atlantic Richfield Corporation. Ms. Mut has been with Dejour since 2008.                                                                                                                              |  |                                                                                                       | 50,001 |  |                                                                                                          |  | 0.03 | %             |  | N/A



|(1) | Each director will
serve until the next annual general meeting of the Company or until a successor is duly elected or appointed in accordance with the Notice of Articles and Articles of the Company and the Business Corporations Act(British Columbia).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The number of
common shares beneficially owned, directly or indirectly, or over which control or direction is exercised is based upon information furnished to the Company by individual directors and executive officers.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Member of audit
committee.
|--- | --------------------------

|(4) | Member of
compensation and corporate governance committee.
|--- | ----------------------------------------------------------

|(5) | Member of reserve
committee.
|--- | ----------------------------

Directors and Executive Officers

Brief biographies for Dejours directors and executive officers are set forth below:

Robert L. Hodgkinson: Mr. Hodgkinson was the founder and Chairman of Optima Petroleum, which drilled wells in Alberta and the Gulf of Mexico
before merging to form Petroquest Energy, a NASDAQ traded company. Subsequently, he founded and was CEO of Australian Oil Fields, which would later merge to become Resolute Energy/Cardero Energy Inc. Mr. Hodgkinson was also a Vice-President and
partner of Canaccord Capital Corporation, and an early stage investor and original lease financier in Synenco Energys Northern Lights Project in the Alberta oil sands.

Stephen Mut: Mr. Mut most recently served as chief executive officer of a unit of Shell Exploration and Production Company. Prior to joining Shell in 2000, Mr. Mut dedicated much of his
career to operational and new business venture activities in the oil and gas, refining and marketing, and chemical and mining sectors at Atlantic Richfield Corporation, where he served in various internationally based executive roles in both
upstream and downstream businesses. His global expertise has contributed to industry successes in Europe, South America, the Asia Pacific and the United States.



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Harrison Blacker: Mr. Blacker is an accomplished senior executive with over 30 years of
expertise managing oil and gas operations with major corporations in the United States, South America, China and the Middle East. Prior to joining Dejour, Mr. Blacker was CEO of China Oman Energy Company, a joint venture between Oman Oil
Company, IPIC and China Gas Holdings, importing and distributing LNG and LPG from the Middle East into China. Mr. Blacker held positions as VP of Business Development and Senior Investor Advisor with Oman Oil Company and Portfolio Manager,
Latin American Business Unit and General Manager/ President of Venezuela Energy with Atlantic Richfield Corporation. Mr. Blacker began his career with Amoco Production Company working in offshore construction and field operations in the Gulf of
Mexico.

Richard Bachmann: Mr. Bachmann previously served as President/CEO of EPL LLC, an energy consulting firm since his
retirement from Energy Partners Ltd. in 2009. He was the founder, President and CEO of Energy Partners, an U.S. independent oil and gas exploration and production company. Prior to that, he was President of Louisiana Land &
Exploration, a prominent U.S. gulf coast oil and gas explorer and producer. He began his career with Exxon serving in many executive positions both in the U.S. and internationally.

Dr. A. Gorrell: Dr. Gorrell has over 30 years experience with both private and public oil and gas property exploration and development in Western Canada and China. Dr. Gorrell
has served as director, officer and controlling principal of several oil and gas ventures listed on the Toronto Stock Exchange. Currently, Dr. Gorrell is a director, President/CEO and Co-Chairman of Petromin Resources Ltd.

Richard Kennedy: Mr. Kennedy is a prominent barrister, solicitor and partner at Kennedy Agrios LLP, an Edmonton, Alberta based law firm
focusing on commercial real estate, administrative and regulatory law.

Craig Sturrock: Mr. Sturrock has served as a director and
founding member of various public and private companies. Admitted to the British Columbia Bar in 1969, he joined Thorsteinssons LLP, tax lawyers in 1971. He served for 15 years as a tax lawyer and partner at Birnie, Sturrock & Company
returning to Thorsteinssons as a partner in 1989. He is an author and speaker for the Canadian and British Columbia Bar Associations, the Continuing Legal Education Society of British Columbia and the Canadian Tax Foundation. He is also a former
member of the Board of Governors of the Canadian Tax Foundation.

David Matheson: Mr. Matheson has over 30 years of
executive experience in the oil and gas industry in both operations and finance. He previously served as CFO and then as President of Equatorial Energy Ltd., a public Canadian oil and gas exploration & production company with operations in
Canada and Indonesia. Mr. Matheson was admitted to the Institute of Chartered Accountants in British Columbia, the Northwest Territories, and Canada in 1975.

Phillip Bretzloff:Mr. Bretzloff has acted for oil, gas and energy companies, including extensive work for Canadian and offshore private and public corporations. Between 1980 and 1995,
he was Senior Counsel for Petro-Canada. Subsequently, he was a Partner for 8 years with Cumming Blackett Bretzloff Todesco, Gowlings, and Baker & McKenzie, where his clients included PetroChina, Shell, Exxon Mobil, GazProm and Veba Oil and
Gas.

Neyeska Mut: Since 2000, Ms. Mut has been President of Nycon Energy Consulting working as an advisor to two major oil
companies. Prior to forming Nycon Energy Consulting, Ms. Mut pursued international opportunities with Atlantic Richfield Corporation. Ms. Mut has been with Dejour since 2008.

Family Relationships

Stephen Mut, one of the Companys directors, and Neyeska
Mut, EVP Operations of Dejour Energy (USA) Corp., are hushand and wife.

Arrangements

There are no known arrangements or understandings with any major shareholders, customers, suppliers or others, pursuant to which any of the Companys
officers or directors was selected as an officer or director of the Company, other than indicated immediately above and at Item 7. Major Shareholders and Related Party Transactions  Related Party Transactions.



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Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the knowledge of the Company, no director or executive officer of the Company is, or has been in the last ten years, a director, chief executive
officer or chief financial officer of an issuer that, while that person was acting in that capacity, (a) was the subject of a cease trade order or similar order or an order that denied the issuer access to any exemptions under Canadian
securities legislation, for a period of more than 30 consecutive days, or (b) was subject to an event that resulted, after that person ceased to be a director, chief executive officer or chief financial officer, in the issuer being the subject
of a cease trade or similar order or an order that denied the issuer access to any exemption under Canadian securities legislation, for a period of more than 30 consecutive days. To the knowledge of the Company, no director or executive officer of
the Company, or a shareholder holding a sufficient number of securities in the Company to affect materially the control of the Company, is or has been in the last ten years, a director or executive officer of an issuer that, while or acting in that
capacity within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee appointed to hold its assets. To the knowledge of the Company, in the past ten years, no such person has become bankrupt, made a proposal under any legislation related to bankruptcy or
insolvency, or was subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold their assets.

Conflicts of Interest

Certain of the Companys directors and officers serve or
may agree to serve as directors or officers of other reporting companies or have significant shareholdings in other reporting companies and, to the extent that such other companies may participate in ventures in which the Company may participate,
the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the event that such a conflict of interest arises at a meeting of the Companys directors, a
director who has such a conflict will abstain from voting for or against the approval of such participation or such terms and such director will not participate in negotiating and concluding terms of any proposed transaction. From time to time,
several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing
financial exposure in respect of any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the
assignment. Under the laws of the Province of British Columbia, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company. In determining whether or not the Company will participate in a
particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at that time. See also Description of the Business 
Risk Factors.



|B. | Compensation
|-- | ------------

Basis of Compensation
for Executive Officers

The Company compensates its executive officers through a combination of base compensation, bonuses and Common
Stock options. The base compensation provides an immediate cash incentive for the executive officers. Bonuses encourage and reward exceptional performance over the financial year. Common Stock options ensure that the executive officers are motivated
to achieve long term growth of the Company and continuing increases in shareholder value. In terms of relative emphasis, the Company places more importance on Common Stock options as long term incentives. Bonuses are related to performance and may
form a greater or lesser part of the entire compensation package in any given year. Each of these means of compensation is briefly reviewed in the following sections.

Base Compensation

Base compensation, including that of the Chief Executive Officer,
are set by the Compensation Committee and approved by the Board of Directors on the basis of the applicable executive officers responsibilities, experience and past performance. The compensation program is intended to provide a base
compensation competitive among companies of a comparable size and character in the oil and gas industry. In making such an assessment, the Board considers the objectives set forth in the Companys business plan and the performance of executive
officers and employees in executing the plan in combination with the overall result of the activities undertaken.



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Common Stock Options

The Company provides long term incentive compensation to its executive officers through the Common Stock Option Plan, which is considered an integral part of the Companys compensation program. Upon
the recommendation of management and approval by the Board of Directors, stock options are granted under the Companys Option Plan to new directors, officers and key employees, usually upon their commencement of employment with the Company. The
Board approves the granting of additional stock options from time to time based on its assessment of the appropriateness of doing so in light of the long term strategic objectives of the Company, its current stage of development, the need to retain
or attract key technical and managerial personnel in a competitive industry environment, the number of stock options already outstanding, overall market conditions, and the individuals level of responsibility and performance within the
Company.

The Board views the granting of stock options as a means of promoting the success of the Company and creating and enhancing returns
to its shareholders. As such, the Board does not grant stock options in excessively dilutive numbers. Total options outstanding are presently limited to 10% of the total number of shares outstanding under the rules of the TSX. Grant sizes are,
therefore, determined by various factors including the number of eligible individuals currently under the Option Plan and future hiring plans of the Company.

The Board granted a total of 4,350,000 stock options to the executive officers in 2012.



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Summary Compensation Table

The following table provides a summary of the compensation earned during the fiscal year ended December 31, 2012 for the Named Executive Officers and Directors listed in the table below.



|                                                               |  |      |               |  |                                       |            |                        |                                             |  |            |                        |  |  |            |                   |  |            |  |                        |                          |  |  |            |  |  |  |            |  |  |  |                  |    
|-------------------------------------------------------------- |  | ---- | ------------- |  | ------------------------------------- | ---------- | ---------------------- | ------------------------------------------- |  | ---------- | ---------------------- |  |  | ---------- | ----------------- |  | ---------- |  | ---------------------- | ------------------------ |  |  | ---------- |  |  |  | ---------- |  |  |  | ---------------- | ---
|                                                               |  |      |               |  | Annual Compensation                   |            |                        | Long Term Compensation                      |  |            |                        | 
|Name and principal position                                    |  | Year |               |  | Salary($)                             |            |                        | ConsultingFees($)                           |  |            | Bonus($)               |  |  | Awards     |                   |  | Payouts($) |  |                        | All
othercompensation($) | 
|                                                               |  |      |               |  | SecuritiesUnderOption/SARsGranted(#) |            |                        | Shares/UnitsSubject toResaleRestrictions($) |  |            |                       
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Robert Hodgkinson,Chief Executive Officer                      |  |      | 20122011
2010 |  |                                       |            | 78,00078,000
78,000    |                                             |  |            | 177,000177,000
177,000 |  |  |            | Nil100,000
Nil    |  |            |  | 775,000300,000
369,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | NilNil
Nil       |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Mathew Wong,Chief Financial Officer(1)                         |  |      | 20122011
2010 |  |                                       |            | 78,00078,000
78,000    |                                             |  |            | 151,000151,000
151,000 |  |  |            | Nil100,000
12,000 |  |            |  | 250,000300,000
217,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | NilNil
Nil       |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Harrison Blacker,Director and President of Dejour Energy (USA) |  |      | 20122011
2010 |  |                                       | US$US$ US$ | 326,688295,000
250,000 |                                             |  |            | NilNil
Nil             |  |  | US$US$ US$ | Nil135,000
60,000 |  |            |  | 775,000300,000
433,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | Nil58,000 Nil    | (2)
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Stephen Mut,Director and Co-Chairman                           |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  | US$US$ US$ | 17,191138,573
120,000  |  |  |            | NilNil
Nil        |  |            |  | 375,000300,000
250,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | NilNil
Nil       |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Craig Sturrock,Director                                        |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  |            | NilNil
Nil             |  |  |            | NilNil
Nil        |  |            |  | 250,000100,000
150,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | 7,5007,000
5,500 |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Robert Holmes,Director(3)                                      |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  |            | NilNil
Nil             |  |  |            | NilNil
Nil        |  |            |  | Nil100,000
150,000     |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | 3,5007,500
6,500 |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Richard Patricio,Director(4)                                   |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  |            | NilNil
Nil             |  |  |            | NilNil
Nil        |  |            |  | Nil100,000
150,000     |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | 3,5005,000
5,500 |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Darren Devine,Director(5)                                      |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  |            | NilNil
Nil             |  |  |            | NilNil
Nil        |  |            |  | 200,000100,000
200,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | 7,0007,000
5,500 |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Richard Bachmann                                               |  |      | 2012          |  |                                       |            | Nil                    |                                             |  |            | Nil                    |  |  |            | Nil               |  |            |  | 500,000                |                          |  |  | Nil        |  |  |  | Nil        |  |  |  | Nil              |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Dr. A. Gorrell                                                 |  |      | 2012          |  |                                       |            | Nil                    |                                             |  |            | Nil                    |  |  |            | Nil               |  |            |  | 300,000                |                          |  |  | Nil        |  |  |  | Nil        |  |  |  | 500              |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Richard Kennedy                                                |  |      | 2012          |  |                                       |            | Nil                    |                                             |  |            | Nil                    |  |  |            | Nil               |  |            |  | 300,000                |                          |  |  | Nil        |  |  |  | Nil        |  |  |  | 500              |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Neyeska Mut,EVP Operations of Dejour Energy (USA)              |  |      | 20122011
2010 |  |                                       | US$US$ US$ | 200,470200,470
200,470 |                                             |  |            | NilNil
Nil             |  |  | US$US$ US$ | Nil100,000
Nil    |  |            |  | 400,000306,000
194,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | NilNil
Nil       |    
|                                                               |  |      |               |  |                                       |            |                        |                                            
|Phil Bretzloff,VP and General Counsel                          |  |      | 20122011
2010 |  |                                       |            | NilNil
Nil             |                                             |  |            | 141,584130,984
77,401  |  |  |            | Nil13,320
Nil     |  |            |  | 225,000140,000
110,000 |                          |  |  | NilNil
Nil |  |  |  | NilNil
Nil |  |  |  | NilNil
Nil       |    



|(1) | On January 28, 2013, Mr. Wong resigned from his position as Chief Financial Officer and ceased to be an executive officer of the Corporation on the date of
his resignation.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | US$58,000 was paid for relocation expenses reimbursement.
|--- | ---------------------------------------------------------

|(3) | Mr. Holmes resigned from the Board on July 13, 2012.
|--- | ----------------------------------------------------

|(4) | Mr. Patricio resigned from the Board on September 21, 2012.
|--- | -----------------------------------------------------------

|(5) | Mr. Devine resigned from the Board on April 10, 2013.
|--- | -----------------------------------------------------



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Stock Option Grants



|                          |  |                          |           |  |                         |   |      |            |  |                   |  |                  
|------------------------- |  | ------------------------ | --------- |  | ----------------------- | - | ---- | ---------- |  | ----------------- |  | -----------------
|Name                      |  | Number ofOptions Granted |           |  | Exercise Priceper Share |   |      | Grant Date |  | Expiration Date  
|Robert Hodgkinson         |  |                          | 775,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Mathew Wong               |  |                          | 250,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Harrison Blacker          |  |                          | 775,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Stephen Mut               |  |                          | 375,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Craig Sturrock            |  |                          | 250,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Darren Devine             |  |                          | 200,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Richard Bachmann          |  |                          | 500,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Dr. A. Gorrell            |  |                          | 300,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Richard Kennedy           |  |                          | 300,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Neyeska Mut               |  |                          | 400,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Phil Bretzloff            |  |                          | 225,000   |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015
|Employees and Consultants |  |                          | 1,702,097 |  |                         | $ | 0.45 |            |  | February 1, 2012  |  | January 31, 2015 
|                          |  |                          | 72,904    |  |                         | $ | 0.45 |            |  | February 24, 2012 |  | February 23, 2015
|                          |  |                          | 350,000   |  |                         | $ | 0.35 |            |  | June 11, 2012     |  | June 10, 2015    
|                          |  |                          | 3,185,001 |  |                         | $ | 0.20 |            |  | December 18, 2012 |  | December 17, 2015

Director Compensation

The Company has compensation agreements for its Directors who are not executive officers. Under the agreements, Directors receive $2,500 per meeting for the first 4 meetings each year, and $1,500 for each
meeting thereafter. The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director. Per an amendment to the agreements approved by
the Board of Directors, effective January 1, 2010, the Directors received $1,000 per quarter plus $500 for each meeting.

Long Term
Incentive Plan Awards

Long term incentive plan awards (LTIP) means any plan providing compensation intended to
serve as an incentive for performance to occur over a period longer than one financial year, whether the performance is measured by reference to financial performance of the Company or an affiliate of the Company, the price of the Companys
shares, or any other measure, but does not include option or stock appreciation rights plans or plans for compensation through restricted shares or units. The Company did not award any LTIPs to any executive officer during the most recently
completed financial year ended December 31, 2012. There are no pension plan benefits in place for the executive officers.

Stock
Appreciation Rights

Stock appreciation rights (SARs) means a right, granted by the Company or any of its
subsidiaries as compensation for services rendered or in connection with office or employment, to receive a payment of cash or an issue or transfer of securities based wholly or in part on changes in the trading price of the Companys shares.
No SARs were granted to, or exercised by, any executive officer of the Company during the most recently completed financial year ended December 31, 2012.

Bonus/Profit Sharing/Non-Cash Compensation

The Board adopted a bonus plan for
eligible executives, which include the senior executives of the Company or any subsidiary of the Company, including but not limited to the CEO, President, Executive Vice-President and CFO who, by the nature of their positions are, in the opinion of
the Committee, in a senior position to contribute to the success of the Company.



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The bonus plan includes both non-discretionary and discretionary portions.



| | A) | Executives Non-Discretionary;
| | -- | -----------------------------

Each Eligible Executives will receive a USD$100,000 award should:



| | i) | Total Shareholder Return % exceeds Total XEG Return % by a minimum of 10% and in addition. For purposes of the bonus plan, XEG is defined as the
iShares CDN Energy Sector Index Fund, trading under the symbol XEG on the TSX. Total Shareholder Return and Total XEG Return are based on the 20 days average closing shares price of Dejour shares and XEG on the TSX at the end of
each fiscal year.;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | Total Shareholder Return is positive (the share price of Dejour shares is higher at the end of the year, in comparison to, the price of the shares at the beginning of
the year).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For example, for fiscal 2011, if Total Shareholder Return % is 20%, while Total XEG Return is 5%,
then Dejours stock outperformed the XEG by 15% and a USD$100,000 award is payable to each executives. However, this award would only be payable in the event that during the same period shareholder return is positive.



| | B) | Executives Discretionary;
| | -- | -------------------------

The
Compensation Committee, upon the recommendation of the CEO, shall review (i) performance goals and objectives (Performance Targets) for the Company and the subsidiaries for such period and (ii) target awards (Target
Awards) for each Participant which shall be based on, up to 30% of the Participants base compensation, provided however, the Performance Targets for each Executive Participants shall be exactly the same during each year, calculated based
on the same percentage of each Participants base compensation, unless otherwise agreed by the Participants.

Such Performance
Targets shall include but not be limited to the following:



| |  |  | Increase in oil & gas production;
| | - |  | ---------------------------------



| |  |  | Achievement of financial stability and working capital position including compliance with the Company loan covenants;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | Increase in Proved Developed Production (PDP) Reserves;
| | - |  | -------------------------------------------------------



| |  |  | Increase in Proved and Probable (2P) reserves;
| | - |  | ----------------------------------------------



| |  |  | Creating significant positive impact on the Company business as demonstrated by significant accomplishments not in the base budget/business plan;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increase in Operating Cash flow and Adjusted EBITDA;
| | - |  | ----------------------------------------------------



| |  |  | Reduce operation costs;
| | - |  | -----------------------



| |  |  | Reducing overhead costs;
| | - |  | ------------------------



| |  |  | Other factors or extraordinary success, that in the opinion of the Committee, enhance shareholder value.
| | - |  | --------------------------------------------------------------------------------------------------------

Pension/Retirement Benefits

No
funds were set aside or accrued by the Company during fiscal 2012 to provide pension, retirement or similar benefits for Directors or Senior Management.



|C. | Board Practices
|-- | ---------------

Compensation and
Corporate Governance Committee

The Company has a Compensation and Corporate Governance Committee composed of three Directors, Richard
Kennedy, Dr. A. Gorrell and Richard Bachmann.

Role of the Compensation and Corporate Governance Committee

The Compensation and Corporate Governance Committee exercises general responsibility regarding overall executive compensation. The Board sets the annual
compensation, bonus, options and other benefits of the Chief Executive Officer and approves compensation for all other executive officers of the Corporation after considering the recommendations of the Compensation and Corporate Governance
Committee. Each or the members of the Compensation and Corporate Governance Committee has extensive experience in management and compensation procedures.



59



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##### Table of Contents

The members of the Compensation and Corporate Governance Committee do not have fixed terms and are appointed
and replaced from time to time by resolution of the Board of Directors.

Audit Committee

The Companys Board of Directors has a separately-designated standing Audit Committee established for the purpose of overseeing the accounting and
financial reporting processes of the Company and audits of the Companys annual financial statements in accordance with Section 3(a)(58)(A) of the Exchange Act. As of the date of this annual report on Form 20-F, the Companys
Audit Committee is comprised of Craig Sturrock and Richard Bachmann.

In the opinion of the Companys Board of Directors, all the members
of the Audit Committee are independent (as determined under Rule 10A-3 of the Exchange Act and Section 803A of the NYSE Amex Company Guide). The Audit Committee meets the composition requirements set forth by Section 803B(2) of the
NYSE Amex Company Guide. All two members of the Audit Committee are financially literate, meaning they are able to read and understand the Companys financial statements and to understand the breadth and level of complexity of the issues
that can reasonably be expected to be raised by the Companys financial statements.

The members of the Audit Committee do not have fixed
terms and are appointed and replaced from time to time by resolution of the Board of Directors.

Terms of Reference for the Audit
Committee

Audit Committee Mandate

The primary function of the audit committee is to assist the Board in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the
Company to regulatory authorities and Shareholders, the Companys systems of internal controls regarding finance and accounting and the Companys auditing, accounting and financial reporting processes. Consistent with this function, the
audit committee will encourage continuous improvement of, and should foster adherence to, the Companys policies, procedures and practices at all levels. The audit committees primary duties and responsibilities are to:



| |  |  | Serve as an independent and objective party to monitor the Companys financial reporting and internal control system and review the Companys
financial statements;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Review and appraise the performance of the Companys external auditors; and
| | - |  | ---------------------------------------------------------------------------



| |  |  | Provide an open avenue of communication among the Companys auditors, financial and senior management and the Board.
| | - |  | --------------------------------------------------------------------------------------------------------------------

Composition

The audit committee shall
be comprised of three Directors as determined by the Board, the majority of whom shall be free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the audit
committee.

At least one member of the audit committee shall have accounting or related financial management expertise. All members of the
audit committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Companys Charter, the definition of
financially literate is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that
can presumably be expected to be raised by the Companys financial statements.

The members of the audit committee shall be elected by
the Board at its first meeting following the annual Shareholders meeting. Unless a Chair is elected by the full Board, the members of the audit committee may designate a Chair by a majority vote of the full audit committee membership.



60



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##### Table of Contents

Meetings

The audit committee shall meet a least twice annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the audit committee will meet at least annually with
the Chief Financial Officer and the external auditors in separate sessions.

Responsibilities and Duties

To fulfill its responsibilities and duties, the audit committee shall:

Documents/Reports Review



|(a) | Review and update this Charter annually.
|--- | ----------------------------------------



|(b) | Review the Companys financial statements, MD&A and any annual and interim earnings, press releases before the Company publicly discloses this information and
any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Approve, on behalf of the Board, the Corporations interim financial statements to be filed pursuant to section 4.3 of NI 51-102, before the Corporation publicly
discloses such information.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

External Auditors



|(a) | Review annually, the performance of the external auditors who shall be ultimately accountable to the Board and the audit committee as representatives of the
Shareholders of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Company, consistent with
Independence Standards Board Standard 1.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Take, or recommend that the full Board take, appropriate action to oversee the independence of the external auditors.
|--- | ---------------------------------------------------------------------------------------------------------------------



|(e) | Recommend to the Board the selection and, where applicable, the replacement of the external auditors nominated annually for Shareholder approval.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | At each meeting, consult with the external auditors, without the presence of management, about the quality of the Companys accounting principles, internal
controls and the completeness and accuracy of the Companys financial statements.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(g) | Review and approve the Companys hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the
Company.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the
Companys external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | i. | the aggregate amount of all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company
to its external auditors during the fiscal year in which the non-audit services are provided;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii. | such services were not recognized by the Company at the time of the engagement to be non-audit services; and
| | --- | ------------------------------------------------------------------------------------------------------------



| | iii. | such services are promptly brought to the attention of the audit committee by the Company and approved prior to the completion of the audit by the audit committee or by
one or more members of the audit committee who are members of the Board to whom authority to grant such approvals has been delegated by the audit committee.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Provided the pre-approval of the non-audit services is presented to the audit committees first scheduled meeting following such approval such authority may be delegated by the audit committee to one
or more independent members of the audit committee.



61



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##### Table of Contents

Financial Reporting Processes



|(a) | In consultation with the external auditors, review with management the integrity of the Companys financial reporting process, both internal and external.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Consider the external auditors judgments about the quality and appropriateness of the Companys accounting principles as applied in its financial reporting.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Consider and approve, if appropriate, changes to the Companys auditing and accounting principles and practices as suggested by the external auditors and
management.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such
judgments.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the
audit, including any restrictions on the scope of work or access to required information.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------



|(g) | Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | Review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters.
|--- | ----------------------------------------------------------------------------------------------------------------------



|(i) | Review certification process.
|--- | -----------------------------



|(j) | Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

Other

Review
any related-party transactions

Audit Committee Oversight

At no time since the commencement of the Companys most recently completed financial year was a recommendation of the audit committee to nominate or compensate an external auditor not adopted by the
Board of Directors.



|D. | Employees
|-- | ---------

The Company had the equivalent
of approximately 17 full-time employees and consultants during 2012 (Canada: 10 and United States: 7).



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##### Table of Contents

|E. | Share Ownership
|-- | ---------------

Directors and
Officer Beneficial Ownership

The following table discloses as of April 25, 2013, Directors and Senior Management who beneficially
own the Companys voting securities, consisting solely of common shares, and the amount of the Companys voting securities owned by the Directors and Senior Management as a group.

Shareholdings of Directors and Senior Management as of April 25, 2013



|               |  |                            |  |      |  |                                         |            |  |                  |  |       |  
|-------------- |  | -------------------------- |  | ---- |  | --------------------------------------- | ---------- |  | ---------------- |  | ----- | -
|Title of Class |  | Name of Beneficial Owner   |  | Note |  | Amount and Natureof BeneficialOwnership |            |  | Percent of Class | 
|               |  |                            |  |     
|Common         |  | Robert L. Hodgkinson       |  | (1)  |  |                                         | 9,981,818  |  |                  |  | 6.70  | %
|Common         |  | Stephen Mut                |  | (2)  |  |                                         | 2,776,001  |  |                  |  | 1.86  | %
|Common         |  | Harrison Blacker           |  | (3)  |  |                                         | 2,225,678  |  |                  |  | 1.49  | %
|Common         |  | Richard Bachmann           |  | (4)  |  |                                         | 500,000    |  |                  |  | 0.34  | %
|Common         |  | Dr. A. Gorrell             |  | (5)  |  |                                         | 300,000    |  |                  |  | 0.20  | %
|Common         |  | Richard Kennedy            |  | (6)  |  |                                         | 394,900    |  |                  |  | 0.27  | %
|Common         |  | Craig Sturrock             |  | (7)  |  |                                         | 1,300,000  |  |                  |  | 0.87  | %
|Common         |  | David Matheson             |  | (8)  |  |                                         | 750,000    |  |                  |  | 0.50  | %
|Common         |  | Neyeska Mut                |  | (9)  |  |                                         | 900,001    |  |                  |  | 0.60  | %
|Common         |  | Phillip Bretzloff          |  | (10) |  |                                         | 509,500    |  |                  |  | 0.34  | %
|               |  |                            |  |      |  |                                         |            |  |                  |  |       |  
|               |  | Total Directors/Management |  |      |  |                                         | 19,637,898 |  |                  |  | 13.17 | %
|               |  |                            |  |      |  |                                         |            |  |                  |  |       |  



|(1) | Of these shares, 7,750,000 are represented by common shares, 1,550,000 are represented by vested stock options and 681,818 are represented by currently exercisable
share purchase warrants. 1,500,000 of these shares are owned by 7804 Yukon Inc., a private company owned by Robert Hodgkinson; 3,400,000 are common shares owned by Hodgkinson Equities Corp., a private company owned by Robert Hodgkinson.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Of these shares, 1,701,001 are represented by common shares, 700,000 are represented by vested stock options and 375,000 are represented by currently exercisable share
purchase warrants.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Of these shares, 525,678 are represented by common shares, 1,550,000 are represented by vested stock options and 150,000 are represented by currently exercisable share
purchase warrants.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Of these shares, 150,000 are represented by vested stock options. A further 350,000 stock options have been granted but not yet vested.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(5) | Of these shares, 125,000 are represented by vested stock options. A further 175,000 stock options have been granted but not yet vested.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(6) | Of these shares, 94,900 are represented by common shares, 125,000 are represented by vested stock options. A further 175,000 stock options have been granted but not yet
vested.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | Of these shares, 650,000 are represented by common shares, 500,000 are represented by vested stock options and 150,000 are represented by currently exercisable share
purchase warrants.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) | Of these shares, 162,500 are represented by vested stock options. A further 587,500 stock options have been granted but not yet vested.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(9) | Of these shares, 50,001 are represented by common shares and 850,000 are represented by vested stock options.
|--- | -------------------------------------------------------------------------------------------------------------

|(10) | Of these shares, 59,500 are represented by common shares and 450,000 are represented by vested stock options.
|---- | -------------------------------------------------------------------------------------------------------------

All percentages based on 148,916,374 shares outstanding as of April 25, 2013.







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##### Table of Contents

Stock Option Plan

We have a Stock Option Plan (the Option Plan), the principal purposes of which is to (i) advance our interests by aiding us, and our subsidiaries, in motivating, attracting and retaining
key employees and directors capable of assuring the future success of the Company; and (ii) secure for us and our shareholders the benefits inherent in the ownership of our common shares by key employees and directors of the Company and our
subsidiaries. We also have a United States stock incentive sub-plan that was initially approved in 2009 and amended in 2012 (the Sub-Plan) and forms a part of the Option Plan. Any option granted under the Sub-Plan is also subject to the
terms and conditions of the Option Plan. Where there is a conflict between the terms and conditions of the Sub-Plan and the terms and conditions of the Option Plan, the terms and conditions of the Option Plan govern.

Directors, officers, employees and other insiders of us or any of our subsidiaries, as well as any person or corporation engaged to provide services for
us or for any entity controlled by us for an initial, renewable or extended period of twelve months or more (or a lesser period of time if approved by the committee that administers the Option Plan and acceptable to the Toronto Stock Exchange (the
TSX) (including individuals employed by such person or corporation), are eligible to participate in the Option Plan. Eligible participants who are natural persons resident in the United States, United States citizens, or are otherwise
subject to United States tax law may participate in the Sub-Plan.

At the time of grant of any option, the aggregate number of common shares
reserved for issuance under the Option Plan (which includes the Sub-Plan) that may be made subject to options any time and from time to time, together with common shares reserved for issuance at that time under any of our other share compensation
arrangements, may not exceed 10% of the total number of issued and outstanding common shares, on a non-diluted basis, on the date of grant of the option. Of this 10%, the number of common shares reserved for issuance to any one participant pursuant
to the Sub-Plan in any year may not exceed 5% of our total outstanding common shares on a non-diluted basis. Common shares subject to any option (or portion thereof) under the Option Plan that has been cancelled or otherwise terminated prior to the
issuance or transfer of such common shares will again be available for options under the Option Plan. The number of common shares authorized under the Option Plan may be increased, decreased or fixed by the Board of Directors. Subject to adjustment
in accordance with the Sub-Plan, a maximum of 18,500,000 common shares, less those common shares issued under the Option Plan, may be issued pursuant to stock options issued under the Sub-Plan. To clarify this rule, notwithstanding the number of
options permitted under the US Sub-Plan to a total of 18.5 million, the Company is still bound by its Option Plan whereby the maximum number of shares that can be awarded as options is still 10%, but within the 10% as permitted, up to
18,500,000 can be allocated to the US Sub-Plan. If a stock option terminates, is forfeited or is cancelled without the issuance of any common shares, or any common shares covered by a stock option or to which a stock option relates are not issued
for any other reason, then the number of common shares counted against the aggregate number of common shares available under the Sub-Plan with respect to such stock option, to the extent of any such termination, forfeiture, cancellation or other
event, will again be available for granting stock options under the Sub-Plan.

The option exercise price will be determined by the committee
that administers the Option Plan or the Sub-Plan administrator, as applicable. The exercise price may not be less than the last closing price per common share on the TSX on the trading day immediately preceding the day the options are granted, or if
the common shares are not listed on the TSX, on the most senior of any other exchange on which the common shares are then traded, on the last trading day immediately preceding the date of grant of such options.

The Option Plan may be terminated by the committee that administers the Option Plan at any time. The Sub-Plan terminates at midnight on January 5,
2022, unless it is terminated before then by our Board of Directors. Any option outstanding under the Option Plan or Sub-Plan at the time of termination shall remain in effect until such option has been exercised, has expired, has been surrendered
to us or has been terminated.

A copy of the Option Plan and Sub-Plan is incorporated by reference into this Form 20-F as Exhibits 4.17 and
4.18, respectively.



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##### Table of Contents

Stock Options Outstanding

The names and titles of the Directors/Executive Officers of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options is set forth in the
following table as of April 25, 2013:

Stock Options Outstanding as of April 25, 2013



|                         |  |                       |           |  |                        |  |           |                          |  |   |            |  |  |                |            |  |  |  |            | 
|------------------------ |  | --------------------- | --------- |  | ---------------------- |  | --------- | ------------------------ |  | - | ---------- |  |  | -------------- | ---------- |  |  |  | ---------- | 
|Name                     |  | Number of OptionsHeld |           |  | Number ofOptionsVested |  |           | Exercise Priceper Option |  |   | Grant Date |  |  | ExpirationDate |           
|                         |  |                       |           |  |                       
|Robert Hodgkinson        |  |                       | 775,000   |  |                        |  | 775,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 775,000   |  |                        |  | 775,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|Stephen Mut              |  |                       | 375,000   |  |                        |  | 375,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 325,000   |  |                        |  | 325,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|Harrison Blacker         |  |                       | 775,000   |  |                        |  | 775,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 775,000   |  |                        |  | 775,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|Richard Bachmann         |  |                       | 500,000   |  |                        |  | 150,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|Dr. A. Gorrell           |  |                       | 300,000   |  |                        |  | 125,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|Richard Kennedy          |  |                       | 300,000   |  |                        |  | 125,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|Craig Sturrock           |  |                       | 250,000   |  |                        |  | 250,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 250,000   |  |                        |  | 250,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|David Matheson           |  |                       | 500,000   |  |                        |  | 62,500    |                          |  | $ | 0.20       |  |  |                | 2/12/2013  |  |  |  | 2/11/2016  | 
|                         |  |                       | 250,000   |  |                        |  | 100,000   |                          |  | $ | 0.18       |  |  |                | 4/4//2013  |  |  |  | 4/3/2013   | 
|Neyeska Mut              |  |                       | 400,000   |  |                        |  | 400,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 450,000   |  |                        |  | 450,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|Phillip Bretzloff        |  |                       | 225,000   |  |                        |  | 225,000   |                          |  | $ | 0.20       |  |  |                | 12/18/2012 |  |  |  | 12/17/2015 | 
|                         |  |                       | 225,000   |  |                        |  | 225,000   |                          |  | $ | 0.18       |  |  |                | 4/4/2013   |  |  |  | 4/3/2016   | 
|Total Officers/Directors |  |                       | 7,450,000 |  |                        |  | 6,162,500 |                          |  |   |            |  |  |                |            |  |  |  |            | 
|                         |  |                       |           |  |                        |  |           |                          |  |   |            |  |  |                |            |  |  |  |            | 



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|ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
|------- | --------------------------------------------------



|A. | Major Shareholders
|-- | ------------------

Shareholders

The Company is aware of one person who each beneficially own 5% or more of the Registrants voting securities. The following
table lists as of April 25, 2013 persons and/or companies holding 5% or more beneficial interest in the Companys outstanding common stock.

5% or Greater Shareholders as of April 25, 2013



|               |  |                          |  |                                          |           |  |                  |  |      |  
|-------------- |  | ------------------------ |  | ---------------------------------------- | --------- |  | ---------------- |  | ---- | -
|Title of Class |  | Name of Owner            |  | Amount and Nature ofBeneficial Ownership |           |  | Percent of Class | 
|               |  |                          | 
|Common         |  | Robert L. Hodgkinson (1) |  |                                          | 9,981,818 |  |                  |  | 6.70 | %



|(1) | Of these shares, 7,750,000 are represented by common shares, 775,000 are represented by vested stock options and 681,818 are represented by currently exercisable share
purchase warrants. 1,500,000 of these shares are owned by 7804 Yukon Inc., a private company owned by Robert Hodgkinson; 3,600,499 are common shares owned by Hodgkinson Equities Corp., a private company owned by Robert Hodgkinson.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

All percentages based on 148,916,374 shares outstanding as of April 25, 2013.



Changes in ownership by major shareholders

To the best of the Companys knowledge there have been no changes in the ownership of the Companys shares other than
disclosed herein.

Voting Rights

The Companys major shareholders do not have different voting rights.

Shares Held in
the United States

As of April 25, 2013, there were approximately 7,225 registered holders of the Companys shares in the
United States, with combined holdings of 113,049,118 common shares.

Change of Control

As of the date of this annual report, there were no arrangements known to the Company which may, at a subsequent date, result in a change of control of
the Company.

Control by Others

To the best of the Companys knowledge, the Company is not directly or indirectly owned or controlled by another corporation, any foreign government, or any other natural or legal person, severally
or jointly.



|B. | Related Party Transactions
|-- | --------------------------

During the
years ended December 31, 2012 and 2011, the Company entered into the following transactions with related parties:



|(a) | Compensation awarded to key management included a total of salaries and consulting fees of $1,194,087 (2011  $1,771,981) and non-cash stock-based compensation of
$412,049 (2011  $451,071). Key management includes the Companys officers and directors. The salaries and consulting fees are included in general and administrative expenses. Included in accounts payable and accrued liabilities at
December 31, 2012 is $Nil (December 31, 2011  $396,618) owing to the companies controlled by the officers of the Company.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(b) | The Company incurred a total of $Nil (2011 - $2,301) in finance costs to a company controlled by an officer of the Company.
|--- | ---------------------------------------------------------------------------------------------------------------------------



|(c) | Included in interest and other income is $30,000 (2011 - $30,000) received from the companies controlled by officers of the Company for rental income.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | In December 2009, a company controlled by the CEO of the Company (HEC) became a 5% working interest partner in the Woodrush property. Included in accounts
payable and accrued liabilities at December 31, 2012 is $20,288 (December 31, 2011  $53,668) owing to HEC.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | With respect to the private placement of 11,010,000 units issued at US$0.30 per unit completed in February 2011, directors and officers of the Company purchased
2,000,000 units of this offering (see note 12 to the consolidated financial statements for details).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | In December 2011, HEC exercised 250,000 warrants with an exercise price of US$0.35 each that were issued in February 2011.
|--- | --------------------------------------------------------------------------------------------------------------------------



|(g) | In January 2012, directors and officers of the Company exercised 750,000 warrants with an exercise price of US$0.35 each that were issued in February 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | On December 31, 2012, Dejour USA entered into a financial contract with a U.S. oil and gas drilling fund (Drilling Fund) whereby the parties agreed to
form an industry-standard drilling partnership for purposes of drilling three wells and completing four wells in the State of Colorado (note 11 to the consolidated financial statements for details). A director of the Company provides investment
advice for a fee to the Drilling Fund. The director abstained from voting when the Board of Directors approved the Company signing a financial contract with the Drilling Fund.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C. | Interests of Experts and Counsel
|-- | --------------------------------

Not
Applicable.



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##### Table of Contents

|ITEM 8. | FINANCIAL INFORMATION.
|------- | ----------------------



|A. | Consolidated Statements and Other Financial Information
|-- | -------------------------------------------------------

Financial Statements



|                                                                                                                         |  |      |             | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | ----------- | 
|Description                                                                                                              |  | Page |            
|                                                                                                                         | 
|Consolidated Financial Statements for the Years Ended December 31, 2012 and 2011                                         |  |      | F-1 - F-41  | 
|                                                                                                                         | 
|Supplementary Oil and Gas Reserve Estimation and Disclosures (Unaudited) for the years ending December 31, 2012 and 2011 |  |      | F-42 - F-49 | 

Legal Proceedings

The Directors and the management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or
pending litigation.

The Directors and the management of the Company know of no active or pending proceedings against anyone that might
materially adversely affect an interest of the Company.

Dividend Policy

The Company has not paid any dividends on its common shares. The Company may pay dividends on its common shares in the future if it generates profits. Any
decision to pay dividends on common shares in the future will be made by the board of directors on the basis of the earnings, financial requirements and other conditions existing at such time.



|B. | Significant Changes
|-- | -------------------

None.



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|ITEM 9. | THE OFFER AND LISTING
|------- | ---------------------



|A. | Offering and Listing Details
|-- | ----------------------------

The
Companys common shares are traded on the Toronto Stock Exchange and on the NYSE Amex, in both cases under the symbol DEJ. The following tables set forth for the periods indicated, the high and low closing prices in Canadian dollars
of our common shares traded on the Toronto Stock Exchange and in United States dollars on the NYSE Amex. The Company traded on the Toronto Stock Exchange Venture Exchange in Vancouver, British Columbia, Canada, until November 20, 2008 when
it began trading on the Toronto Stock Exchange. The Company changed its symbol to DEJ after a one for three share consolidation effective October 1, 2003. The Company changed its Toronto Stock Exchange trading symbol on
May 23, 2007 to DEJ to coincide with its listing on the American Stock Exchange (now NYSE Amex) on the same day under the symbol DEJ.

The following table contains the annual high and low market prices for the five most recent fiscal years:



|                              |  |      |      |  |     |   |      | 
|----------------------------- |  | ---- | ---- |  | --- | - | ---- | 
|Toronto Stock Exchange (Cdn$) |  |      |      |  |     |  
|                              |  | High |      |  | Low |  
|                              |  |     
|2012                          |  | $    | 0.59 |  |     | $ | 0.12 | 
|2011                          |  | $    | 0.61 |  |     | $ | 0.24 | 
|2010                          |  | $    | 0.48 |  |     | $ | 0.29 | 
|2009                          |  | $    | 0.76 |  |     | $ | 0.23 | 
|2008                          |  | $    | 2.17 |  |     | $ | 0.23 | 
|                              |  |     
|NYSE Amex (US$)               |  |      |      |  |     |  
|                              |  | High |      |  | Low |  
|                              |  |     
|2012                          |  | $    | 0.57 |  |     | $ | 0.12 | 
|2011                          |  | $    | 0.61 |  |     | $ | 0.21 | 
|2010                          |  | $    | 0.50 |  |     | $ | 0.26 | 
|2009                          |  | $    | 0.67 |  |     | $ | 0.12 | 
|2008                          |  | $    | 2.17 |  |     | $ | 0.25 | 
|2007                          |  | $    | 2.95 |  |     | $ | 1.29 | 

The following table contains the high and low market prices for our common shares on the Toronto Stock Exchange and the
NYSE Amex for each fiscal quarter for the two most recent fiscal years and any subsequent period:



|                              |  |      |      |  |     |   |      | 
|----------------------------- |  | ---- | ---- |  | --- | - | ---- | 
|Toronto Stock Exchange (Cdn$) |  |      |      |  |     |  
|                              |  | High |      |  | Low |  
|                              |  |     
|2013                          |  |      |      |  |     |   |      | 
|Q1                            |  | $    | 0.25 |  |     | $ | 0.17 | 
|2012                          |  |      |      |  |     |   |      | 
|Q4                            |  | $    | 0.24 |  |     | $ | 0.16 | 
|Q3                            |  | $    | 0.26 |  |     | $ | 0.12 | 
|Q2                            |  | $    | 0.38 |  |     | $ | 0.23 | 
|Q1                            |  | $    | 0.59 |  |     | $ | 0.35 | 
|2011                          |  |      |      |  |     |   |      | 
|Q4                            |  | $    | 0.61 |  |     | $ | 0.24 | 
|Q3                            |  | $    | 0.34 |  |     | $ | 0.24 | 
|Q2                            |  | $    | 0.44 |  |     | $ | 0.30 | 
|Q1                            |  | $    | 0.51 |  |     | $ | 0.30 | 



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|                |  |      |      |  |     |   |      | 
|--------------- |  | ---- | ---- |  | --- | - | ---- | 
|NYSE Amex (US$) |  |      |      |  |     |  
|                |  | High |      |  | Low |  
|                |  |     
|2013            |  |      |      |  |     |   |      | 
|Q1              |  | $    | 0.25 |  |     | $ | 0.16 | 
|2012            |  |      |      |  |     |   |      | 
|Q4              |  | $    | 0.25 |  |     | $ | 0.16 | 
|Q3              |  | $    | 0.26 |  |     | $ | 0.12 | 
|Q2              |  | $    | 0.39 |  |     | $ | 0.21 | 
|Q1              |  | $    | 0.57 |  |     | $ | 0.34 | 
|2011            |  |      |      |  |     |   |      | 
|Q4              |  | $    | 0.61 |  |     | $ | 0.21 | 
|Q3              |  | $    | 0.40 |  |     | $ | 0.23 | 
|Q2              |  | $    | 0.45 |  |     | $ | 0.31 | 
|Q1              |  | $    | 0.53 |  |     | $ | 0.30 | 

The following table contains the high and low market prices for our common shares on the Toronto Stock Exchange and the
NYSE Amex for each of the most recent six months:



|                              |  |      |      |  |     |   |      | 
|----------------------------- |  | ---- | ---- |  | --- | - | ---- | 
|Toronto Stock Exchange (Cdn$) |  |      |      |  |     |  
|                              |  | High |      |  | Low |  
|                              |  |     
|March, 2013                   |  | $    | 0.22 |  |     | $ | 0.17 | 
|February, 2013                |  | $    | 0.23 |  |     | $ | 0.17 | 
|January, 2013                 |  | $    | 0.25 |  |     | $ | 0.20 | 
|December, 2012                |  | $    | 0.24 |  |     | $ | 0.17 | 
|November, 2012                |  | $    | 0.22 |  |     | $ | 0.16 | 
|October, 2012                 |  | $    | 0.24 |  |     | $ | 0.19 | 
|                              |  |     
|NYSE Amex (US$)               |  |      |      |  |     |  
|                              |  | High |      |  | Low |  
|                              |  |     
|March, 2013                   |  | $    | 0.22 |  |     | $ | 0.16 | 
|February, 2013                |  | $    | 0.25 |  |     | $ | 0.17 | 
|January, 2013                 |  | $    | 0.24 |  |     | $ | 0.20 | 
|December, 2012                |  | $    | 0.24 |  |     | $ | 0.19 | 
|November, 2012                |  | $    | 0.23 |  |     | $ | 0.16 | 
|October, 2012                 |  | $    | 0.25 |  |     | $ | 0.19 | 

On April 25, 2013, the closing price of our common shares on the TSX was Cdn $0.18 per common share and on the NYSE
was US $0.19 per common share.



|B. | Plan of Distribution
|-- | --------------------

Not Applicable.



|C. | Markets
|-- | -------

Our common shares, no par value,
are traded on the TSX under the symbol DEJ and are traded on the NYSE Amex under the symbol DEJ.



|D. | Selling Shareholders
|-- | --------------------

Not Applicable.



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|E. | Dilution
|-- | --------

Not Applicable.



|F. | Expenses of the Issue
|-- | ---------------------

Not Applicable.



|ITEM 10. | ADDITIONAL INFORMATION
|-------- | ----------------------



|A. | Share Capital
|-- | -------------

Not Applicable.



|B. | Memorandum and Articles of Association
|-- | --------------------------------------

Dejour Energy Inc. (formerly Dejour Enterprises Ltd.) is incorporated under the laws of British Columbia, Canada. The Company was originally incorporated
as Dejour Mines Limited on March 29, 1968 under the laws of the Province of Ontario. By articles of amendment dated October 30, 2001, the issued shares were consolidated on the basis of one (1) new for every fifteen
(15) old shares and the name of the Company was changed to Dejour Enterprises Ltd. On June 6, 2003, the shareholders approved a resolution to complete a one-for-three-share consolidation, which became effective on October 1, 2003. In
2005, the Company was continued in British Columbia under the Business Corporations Act (British Columbia) (the Act). Effective March 9, 2011, the Company changed its name from Dejour Enterprises Ltd. to Dejour Energy Inc.

There are no restrictions on what business the Company may carry on in the Articles of Incorporation.

Under Article 17 of the Companys Articles and under Part 5, Division 3 of the Act, a director must declare its interest in any existing or proposed
contract or transaction with the Company and is not allowed to vote on any transaction or contract with the Company in which has a disclosable interest, unless all directors have a disclosable interest in that contract or transaction, in which case
any or all of those directors may vote on such resolution. A director may hold any office or place of profit with the Company in conjunction with the office of director, and no director shall be disqualified by his office from contracting with the
Company. A director or his firm may act in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services. A director may become a director or other officer or employee of, or otherwise
interested in, any corporation or firm in whom the Company may be interested as a shareholder or otherwise. The director shall not be accountable to the Company for any remuneration or other benefits received by him from such other corporation or
firm subject to the provisions of the Act.

Article 16 of the Companys Articles addresses the powers and duties of the directors.
Directors must, subject to the Act, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers which are not required to be exercised by the shareholders as governed by the Act.
Article 19 of the Companys Articles addresses Committees of the Board of Directors. Directors may, by resolution, create and appoint an executive committee consisting of the director or directors that they deem appropriate. This executive
committee has, during the intervals between meetings of the Board, all of the directors powers, except the power to fill vacancies in the Board, the power to remove a Director, the power to change the membership of, or fill vacancies in, any
committee of the Board and any such other powers as may be set out in the resolution or any subsequent directors resolution. Directors may also by resolution appoint one or more committees other than the executive committee.

These committees may be delegated any of the directors powers except the power to fill vacancies on the board of directors, the power to remove a
director, the power to change the membership or fill vacancies on any committee of the directors, and the power to appoint or remove officers appointed by the directors. Article 18 of the Companys Articles details the proceedings of directors.
A director may, and the Secretary or Assistant Secretary, if any, on the request of a director must call a meeting of the directors at any time. The quorum necessary for the transaction of the business of the directors may be fixed by the directors
and if not so fixed shall be deemed to a majority of the directors. If the number of directors is set at one, it quorum is deemed to be one director.



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Article 8 of the Companys Articles details the borrowing powers of the directors. They may, on behalf
of the Company:



| |  |  | Borrow money in a manner and amount, on any security, from any source and upon any terms and conditions as they deem appropriate;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | Issue bonds, debentures, and other debt obligations either outright or as security for any liability or obligation of the Company or any other person
at such discounts or premiums and on such other terms as they consider appropriate;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Guarantee the repayment of money by any other person or the performance of any obligation of any other person; and
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | Mortgage, charge, or grant a security in or give other security on, the whole or any part of the present or future assets and undertaking of the
Company.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

A director need not be a shareholder of the Company, and there are no age limit requirements pertaining to the
retirement or non-retirement of directors. The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of directors, if any, will be
determined by the shareholders. The remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such who is also a director. The Company must reimburse each director for the reasonable
expenses that he or she may incur in and about the business of the Company. If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any
director is otherwise specially occupied in or about the Companys business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution and such remuneration may be either in
addition to, or in substitution for, any other remuneration that he or she may be entitled to receive. Unless other determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to
any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependents and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

Article 21 of the Companys Articles provides for the mandatory indemnification of directors, former directors, and alternate directors,
as well as his or hers heirs and legal personal representatives, or any other person, to the greatest extent permitted by the Act. The indemnification includes the mandatory payment of expenses actually and reasonably incurred by such person in
respect of that proceeding. The failure of a director, alternate director, or officer of the Company to comply with the Act or the Companys Articles does not invalidate any indemnity to which he or she is entitled. The directors may cause the
Company to purchase and maintain insurance for the benefit of eligible parties who:



|(a) | is or was a director, alternate director, officer, employee or agent of the Company;
|--- | ------------------------------------------------------------------------------------



|(b) | is or was a director, alternate director, officer employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other
unincorporated entity;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other
unincorporated entity;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

against any liability incurred by him or her as such director, alternate director, officer, employee or
agent or person who holds or held such equivalent position



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Under Article 9 of the Companys Articles and subject to the Act, the Company may alter its authorized
share structure by directors resolution or ordinary resolution, in each case determined by the directors, to:



|(a) | create one or more classes or series of shares or, if none of the shares of a series of a class or series of shares are allotted or issued, eliminate that class or
series of shares;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of
shares that the company is authorized to issue out of any class or series of shares for which no maximum is established;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | subdivide or consolidate all or any of its unissued, or fully paid issued, shares;
|--- | ----------------------------------------------------------------------------------



|(d) | if the Company is authorized to issue shares of a class or shares with par value;
|--- | ---------------------------------------------------------------------------------



| | (i) | decrease the par value of those shares; or
| | --- | ------------------------------------------



| | (ii) | if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;
| | ---- | -------------------------------------------------------------------------------------------------------------



|(e) | change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares
with par value;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | alter the identifying name of any of its shares; or
|--- | ---------------------------------------------------

by ordinary resolution otherwise alter its share or authorized share structure.

Subject to
Section9.2 of the Companys Articles and the Act, the Company may:



|(1) | by directors resolution or ordinary resolution, in each case determined by the directors, create special rights or restrictions for, and attach those special
rights or restrictions to, the shares of any class or series of shares, if none of those shares have been issued, or vary or delete any special rights or restrictions attached to the shares of any class or series of shares, if none of those shares
have been issued; and
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | by special resolution of the shareholders of the class or series affected, do any of the acts in Section 9.1 of the Companys Articles if any of the shares of
the class or series of shares has been issued.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company may by resolution of its directors or by ordinary resolution, in
each case as determined by the directors, authorize an alteration of its Notice of Articles in order to change its name.

The directors may,
whenever they think fit, call a meeting of shareholders. An annual general meeting shall be held once every calendar year at such time (not being more than 15 months after holding the last preceding annual meeting) and place as may be determined by
the Directors.

There are no limitations upon the rights to own securities.

There is no special ownership threshold above which an ownership position must be disclosed. However, any ownership level above 10% must be disclosed to the TSX and all applicable Canadian Securities
Commission.

Description of Share Capital

The Company is authorized to issue an unlimited number of common shares, preferred shares and series 1 preferred shares of which, as of April 25, 2013, 148,916,374 common shares, are issued and
outstanding. The rights, preferences and restrictions attaching to each class of the Companys shares are as follows:

Common Shares

All the common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in
assets. All common shareholders are entitled to receive notice of, attend and be heard at any meeting of



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shareholders of the Company, excepting a meeting of the holders of shares of another class, as such, and excepting a meeting of the holders of a particular series, as such. Holders of shares of
common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders, including the election of directors. Except as otherwise required by law the holders of the Companys common shares will
possess all voting power. Generally, all matters to be voted on by shareholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all common shares that are present in
person or represented by proxy. Subject to the special rights and restrictions attached to the shares of any class or series of classes, one holder of common shares issued, outstanding and entitled to vote, represented in person or by proxy, is
necessary to constitute a quorum at any meeting of our shareholders.

Upon liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, or other disposition of the property or assets of the Company, holders of shares of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities to the
holders of preferred shares or any other shares ranking senior to shares of common stock. No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for
cancellation, surrender, or sinking or purchase funds.

The holders of the Companys common shares will be entitled to such cash
dividends as may be declared from time to time by our Board of Directors but such dividend will rank junior to the holders of preferred shares and series 1 preferred shares.

In the event of any merger or consolidation with or into another company in connection with which the Companys common shares are converted into or exchangeable for shares, other securities or
property (including cash), all holders of the Companys common shares will be entitled to receive the same kind and amount of shares and other securities and property (including cash).

There are no indentures or agreements limiting the payment of dividends on the Companys common shares and there are no special liquidation rights or subscription rights attaching to the
Companys common shares.

Preferred Shares

Preferred shares may, at any time and from time to time, be issued in one or more series and the Company may, by directors resolution or ordinary resolution, do one or more of the following:



| |  |  | determine the maximum number of shares of any of those series of preferred shares that the Company is authorized to issue, determine that there is no
maximum number or alter any determination made or otherwise, in relation to a maximum number of those shares, and authorize the alteration of the Notice of Articles accordingly;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | alter the Articles of the Company, and authorize the alteration of the Notice of Articles, to create an identifying name by which the shares of any of
those series of preferred shares may be identified or to alter any identifying name created for those shares; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | alter the Articles of the Company, and authorize the alteration of the Notice of Articles, to attach special rights or restrictions to the shares of
any of those series of preferred shares or to alter any special rights or restrictions attached to those shares, subject to the special rights and restrictions attached to the preferred shares.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If the alterations, determinations or authorizations contemplated above are to be made in relation to a series of shares of which there are issued
shares, those alterations, determinations or authorizations may be made by ordinary resolution. However, no special rights or restrictions attached to a series of preferred shares shall confer on the series of preferred shares priority over another
series of preferred shares respecting (i) dividends or (ii) return of capital on the dissolution of the Company or on the occurrence of any event that entitles the shareholders holding the shares of all series of preferred shares to a
return of capital.

All holders of preferred shares shall not be entitled to receive notice of, attend and be heard at any meeting of or vote
at any meeting of shareholders of the Company, except any specific meeting of the holders of preferred shares.



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The holders of the Companys preferred shares will be entitled to such cash dividends as may be
declared from time to time by our Board of Directors and shall rank senior to the holders of our common shares and any other shares of the Company ranking junior to the preferred shares.

Upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or other disposition of the property or assets of the Company, holders of the holders of the Preferred Shares,
including the Series 1 Preferred Shares, shall be entitled to receive, for each preferred share held, from the property and assets of the Company, a sum equivalent to the amount paid up thereon together with the premium (if any) thereon and any
dividends declared thereon before any amount shall be paid or any property or asset of the Company is distributed to the holders of the common shares or any other shares ranking junior to the preferred shares with respect to repayment of capital.
After payment to the holders of the preferred shares of the amount so payable to them, the holders of the preferred shares shall not be entitled to share in any further distribution of the property or assets of the Company except as specifically
provided in special rights and restrictions attached to any particular series of preferred shares

Series 1 Preferred Shares

The Company may, at any time and from time to time, issue series 1 preferred shares. The Company may, by directors resolution or ordinary resolution
passed before the issue of any series 1 preferred shares, in each case as determined by the directors or, if there are issued series 1 preferred shares, by ordinary resolution, do one or more of the following:



| |  |  | determine the maximum number of the series 1 preferred shares that the Company is authorized to issue, determine that there is no maximum number or
alter any determination made in relation to a maximum number of those shares, and authorize the alteration of the Notice of Articles accordingly;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | alter the Articles of the Company, and authorize the alteration of the Notice of Articles, to alter the name of the series 1 preferred shares; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | alter the Articles of the Company, and authorize the alteration of the Notice of Articles, to attach special rights or restrictions to the series 1
preferred shares or to alter any special rights or restrictions attached to those shares, subject to the special rights and restrictions attached to the preferred shares.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The special rights and restrictions that may be attached to the series 1 preferred shares may include, without in any way limiting or restricting the generality of such paragraph, rights and restrictions
respecting the following:



| |  |  | the rate or amount of dividends, whether cumulative, non-cumulative or partially cumulative and the dates, places and currencies of payment thereof;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the consideration for, and the terms and conditions of, any purchase for cancellation or redemption thereof, including redemption after a fixed term or
at a premium, conversion or exchange rights;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the terms and conditions of any share purchase plan or sinking fund;
| | - |  | --------------------------------------------------------------------



| |  |  | the restrictions respecting the payment of dividends on, or the repayment of capital in respect of, any other shares of the Company;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------



| |  |  | voting rights; and
| | - |  | ------------------



| |  |  | the issuance of any shares of any other class or series of shares of the Company or any evidences of indebtedness or any other securities convertible
into or exchangeable for such shares
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

No special rights or restrictions attached to the series 1 preferred shares confers on
the series 1 preferred shares priority over another series of preferred shares respecting (i) dividends or (ii) return of capital on the dissolution of the Company or on the occurrence of any event that entitles the shareholders holding
the shares of all series of preferred shares to a return of capital.



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All holders of series 1 preferred shares are not entitled to receive notice of, attend and be heard at any
meeting of or vote at any meeting of shareholders of the Company, except any specific meeting of the holders of series 1 preferred shares.

The holders of the Companys series 1 preferred shares will be entitled to such cash dividends as may be declared from time to time by the
Companys Board of Directors and will rank senior to the holders of the Companys common shares and any other shares of the Company ranking junior to the preferred shares.

Dividend Record

The Company has not paid any dividends on its common shares and has
no policy with respect to the payment of dividends.

Ownership of Securities and Change of Control

There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights
on the securities imposed by foreign law or by the constituent documents of the Company.

Any person who beneficially owns, directly or
indirectly, or exercises control or direction over more than 10% of the Companys voting shares is considered an insider, and must file an insider report with the Canadian regulatory commissions within ten days of becoming an insider,
disclosing any direct or indirect beneficial ownership of, or control or direction over securities of the Company. In addition, if the Company itself holds any of its own securities, the Company must disclose such ownership.

There are no provisions in the Companys Articles or Notice of Articles that would have an effect of delaying, deferring or preventing a change in
control of the Company operating only with respect to a merger, acquisition or corporate restructuring involving the Company or its subsidiaries.

Differences from Requirements in the United States

Except for the Companys
quorum requirements, certain requirements related to related party transactions and the requirement for notice of shareholder meetings, discussed above, there are no significant differences in the law applicable to the Company, in the areas outlined
above, in Canada versus the United States. In most states in the United States, a quorum must consist of a majority of the shares entitled to vote. Some states allow for a reduction of the quorum requirements to less than a majority of the shares
entitled to vote. Having a lower quorum threshold may allow a minority of the shareholders to make decisions about the Company, its management and operations. In addition, most states in the United States require that a notice of meeting be mailed
to shareholders prior to the meeting date. Additionally, in the United States, a director may not be able to vote on the approval of any transaction in which the director has an interest.



|C. | Material Contracts
|-- | ------------------

The following are
material contracts to which the Company is a party:

Financial Contract with an Unrelated U.S. Oil and Gas Drilling Fund

On December 31, 2012, Dejour USA entered into a financial contract with an unrelated U.S. oil and gas drilling fund
(Drilling Fund) to drill up to three wells and complete up to four wells (the Tranche 1 Wells) in the State of Colorado. By agreement:



|(a) | Dejour USA contributed four natural gas well spacing units, including one drilled and cased well with a cost of US$1,147,779;
|--- | -----------------------------------------------------------------------------------------------------------------------------



|(b) | The Drilling Fund contributed US$6,500,000 cash directly to a related party drilling company as prepaid drilling costs;
|--- | -----------------------------------------------------------------------------------------------------------------------



|(c) | Dejour USA will earn a before payout working interest of 10% to 14% and an after payout working interest of 28% to 39% in the net operating
profits from the Tranche 1 Wells based on the actual cash invested in the drilling program;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | The Drilling Fund has the right to require that Dejour USA purchase the Drilling Funds entire working interest in the Tranche 1 Wells 36 months
after the commencement of production from the initial Tranche 1 Well. In the event
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | the Drilling Fund exercises its right, the purchase price to be paid by Dejour USA will equal 75% of the Drilling Funds actual investment less 75% of the Drilling Funds share of
working interest net profits from the Tranche 1 Wells, if any, for the 36-month period, plus a top-up amount so that the Drilling Fund earns a minimum 8% return, compounded annually and applied on a monthly basis, on 75% of its original
investment over the 36-month period; and
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The Drilling Fund has the right to require Dejour USA to purchase all of the Drilling Funds interest in the Tranche 1 Wells if at any time Dejour USA plans to
divest itself of greater than 51% of its Working Interest in the Tranche 1 Wells and resigns as Operator (a Change of Control Event). The purchase price is equal to the future net profit from the Proven and Probable Reserves
attributable to the Drilling Funds working interest in the Tranche 1 Wells, discounted at 12%, as determined by a third party evaluator acceptable to both parties.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dejour USA considers the transaction to be a financial contract liability as the risks and rewards of ownership have not been substantially transferred at the Agreement date. On December 31, 2012 the
Drilling Fund had advanced US$6,500,000 to a drilling contractor for the Tranche 1 wells. On the Drilling Fund financing advance, the Company increased property and equipment and financial contract liability by $6,466,850 (US$6,500,000). On initial
recognition, the Company imputed its borrowing cost of 8.4% based on the estimated timing and amount of operating profit using the independent reserve engineers estimated future cash flows for the Drilling Funds working interest in the Tranche
1 Wells. Subsequent to initial measurement the financial contract liability will be increased by the imputed interest expense and decreased by the Drilling Funds net operating profit from the Tranche 1 Wells. Any changes in the estimated
timing and amount of the net operating profit cash flows will be discounted at the initial imputed interest rate with any change in the recognized liability recognized as a gain (loss) in the period of change. The Company has estimated the current
portion of the obligation based on the expected net operating profit to be paid to the Drilling Fund in the next twelve months.

Bank
Line of Credit

On December 31, 2012, DEAL had a $6,700,000 revolving operating demand loan (line of credit) including
a letter of credit facility to a maximum of $600,000. The line of credit bore interest at Prime + 1% (total 4% per annum) and was collateralized by a $10,000,000 debenture over all assets of DEAL and a $10,000,000 guarantee from Dejour Energy
Inc. At December 31, 2012, a total of $5,956,749 was outstanding on this facility.

Under the terms of the facility, DEAL was required to
maintain a working capital ratio of greater than 1:1 at all times. The working capital ratio is defined as the ration of (i) current assets (including any undrawn and authorized availability under the facility) less unrealized hedging gains to
(ii) current liabilities (excluding the current portion of outstanding balances of the facility) less unrealized hedging losses. At December 31, 2012 the Company was in compliance with the working capital ratio requirement.

On March 28, 2013, DEAL signed a new Commitment Letter with the Bank to renew its $5,950,000 (December 31, 2012  $5,956,749)
revolving operating demand loan under the following terms and conditions:



|(c) | Credit Facility A  Revolving Operating Demand Loan  $3,700,000, to be used for general corporate purposes, ongoing operations, capital
expenditures, and acquisition of additional petroleum and natural gas assets. Interest on Credit Facility A is at Prime + 1% payable monthly and all amounts outstanding are payable on demand any time, and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Credit Facility B  Non-Revolving Demand Loan  $2,250,000. Interest on Credit Facility B is at Prime + 3 1/2% payable monthly.
Monthly principal payments of $200,000 are due and payable commencing March 26, 2013 with all amounts outstanding under Credit Facility B ($1,450,000) due and payable in full on June 30, 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Collateral for Credit Facilities A and B (the Credit Facilities) is provided by a $10,000,000 first floating charge
over all the assets of DEAL, a general assignment of DEALs book debts, a $10,000,000 debenture with a first floating charge over all the assets of the Company and an unlimited guarantee provided by Dejour USA. The Credit Facilities are subject
to bank renewal on or before June 30, 2013.

Prior to each advance under the Credit Facilities, DEAL is required to (i) provide the
Bank with certain additional security required by the Bank; (ii) satisfy the Bank that no further default or event of default exists and that no material adverse effect has occurred with respect to DEAL, any guarantor or the collateral;
(iii) satisfy the Bank that all representations and warranties of DEAL and all guarantors are true and correct; and (iv) execute any other document that may be reasonably requested by the Bank.



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Further, in the event the Company accesses the debt or equity markets to source cash during the period from
March 26, 2013 to June 30, 2013, or sells certain assets for cash, then the proceeds will be applied as follows: (i) full repayment of the balance outstanding under Credit Facility B on or before June 30, 2013 and
(ii) a shortfall, if any, between the amount of Credit Facility A at June 30, 2013 and the underlying value of the lenders collateral at that date.

Under the terms of the facility, DEAL is required to maintain an adjusted working capital ratio (as described above) of greater than 1:1 at all times.



|D. | Exchange Controls
|-- | -----------------

There are no
governmental laws, decrees, or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends, or other payments to non-resident holders of the Companys common stock. Any
remittances of dividends to United States residents are, however, subject to a 15% withholding tax (10% if the shareholder is a corporation owning at least 10% of the outstanding Common Stock of the Company) pursuant to Article X of the reciprocal
tax treaty between Canada and the United States.

Except as provided in the Investment Canada Act (the ICA), there are no
limitations specific to the rights of non-Canadians to hold or vote the common shares of the Company under the laws of Canada or the Province of British Columbia or in the charter documents of the Company.

Management of the Company considers that the following general summary is materially complete and fairly describes those provisions of the ICA pertinent
to an investment by an American investor in the Company.

The ICA requires a non-Canadian making an investment which would result in the
acquisition of control of a Canadian business, the gross value of the assets of which exceed certain threshold levels or the business activity of which is related to Canadas cultural heritage or national identity, to either notify, or file an
application for review with, Investment Canada, the federal agency created by the ICA.

The notification procedure involves a brief statement
of information about the investment of a prescribed form which is required to be filed with Investment Canada by the investor at any time up to 30 days following implementation of the investment. It is intended that investments requiring only
notification will proceed without government intervention unless the investment is in a specific type of business activity related to Canadas cultural heritage and national identity.

If an investment is reviewable under the ICA, an application for review in the form prescribed is normally required to be filed with Investment Canada prior to the investment taking place and the
investment may not be implemented until the review has been completed and the Minister responsible for Investment Canada is satisfied that the investment is likely to be of net benefit to Canada. If the Minister is not satisfied that the investment
is likely to be of net benefit to Canada, the non-Canadian must not implement the investment or, if the investment has been implemented, may be required to divest himself of control of the business that is the subject of the investment.

The following investments by non-Canadians are subject to notification under the ICA:



|(a) | an investment to establish a new Canadian business; and
|--- | -------------------------------------------------------



|(b) | an investment to acquire control of a Canadian business that is not reviewable pursuant to the ICA.
|--- | ---------------------------------------------------------------------------------------------------

An investment is reviewable under the ICA if there is an acquisition by a non-Canadian of a Canadian business and the asset value of the Canadian
business being acquired equals or exceeds the following thresholds:



|(a) | for non-WTO Investors, the threshold is $5,000,000 for a direct acquisition and over $50,000,000 for an indirect acquisition. The $5,000,000 threshold will apply
however for an indirect acquisition if the asset value of the Canadian business being acquired exceeds 50% of the asset value of the global transaction;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(b) | except as specified in paragraph (c) below, a threshold is calculated annually for reviewable direct acquisitions by or from WTO Investors. The threshold for 2012
is $330,000,000. Pursuant to Canadas international commitments, indirect acquisitions by or from WTO Investors are not reviewable; and
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | the limits set out in paragraph (a) apply to all investors for acquisitions of a Canadian business that is a cultural business.:
|--- | --------------------------------------------------------------------------------------------------------------------------------

WTO Investor as defined in the ICA means:



|(a) | an individual, other than a Canadian, who is a national of a WTO Member or who has the right of permanent residence in relation to that WTO Member;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | a government of a WTO Member, whether federal, state or local, or an agency thereof;
|--- | ------------------------------------------------------------------------------------

an entity that is not a Canadian-controlled entity, and that is a WTO investor-controlled entity, as determined in accordance with the
ICA;



|(c) | a corporation or limited partnership:
|--- | -------------------------------------



| | (i) | that is not a Canadian-controlled entity, as determined pursuant to the ICA;
| | --- | ----------------------------------------------------------------------------



| | (ii) | that is not a WTO investor within the meaning of the ICA;
| | ---- | ---------------------------------------------------------



| | (iii) | of which less than a majority of its voting interests are owned by WTO investors;
| | ----- | ---------------------------------------------------------------------------------



| | (iv) | that is not controlled in fact through the ownership of its voting interests; and
| | ---- | ---------------------------------------------------------------------------------



| | (v) | of which two thirds of the members of its board of directors, or of which two thirds of its general partners, as the case may be, are any combination of Canadians and
WTO investors;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | a trust:
|--- | --------



| | (i) | that is not a Canadian-controlled entity, as determined pursuant to the ICA;
| | --- | ----------------------------------------------------------------------------



| | (ii) | that is not a WTO investor within the meaning of the ICA;
| | ---- | ---------------------------------------------------------



| | (iii) | that is not controlled in fact through the ownership of its voting interests, and
| | ----- | ---------------------------------------------------------------------------------



| | (iv) | of which two thirds of its trustees are any combination of Canadians and WTO investors, or
| | ---- | ------------------------------------------------------------------------------------------



|(e) | any other form of business organization specified by the regulations that is controlled by a WTO investor.
|--- | ----------------------------------------------------------------------------------------------------------

WTO Member as defined in the ICA means a member of the World Trade Organization.

Generally, an acquisition is direct if it involves the acquisition of control of the Canadian business or of its Canadian parent or grandparent and an acquisition is indirect if it involves the
acquisition of control of a non-Canadian parent or grandparent of an entity carrying on the Canadian business. Control may be acquired through the acquisition of actual or de jure voting control of a Canadian corporation or through the acquisition
of substantially all of the assets of the Canadian business. No change of voting control will be deemed to have occurred if less than one-third of the voting control of a Canadian corporation is acquired by an investor.

The ICA specifically exempts certain transactions from either notification or review. Included among the category of transactions is the acquisition of
voting shares or other voting interests by any person in the ordinary course of that persons business as a trader or dealer in securities.



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|E. | Taxation
|-- | --------

CANADIAN
FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes the principal Canadian federal income tax considerations generally
applicable to a holder who is the beneficial holder of common shares of the Company and who, at all relevant times, for the purposes of the application of the Income Tax Act (Canada) and the Income Tax Regulations (collectively, the Canada
Tax Act) (i) deals at arms length with the Company, (ii) is not affiliated with the Company, (iii) holds the common shares as capital property, and (iv) who, for the purposes of the Canada Tax Act and the Canada
 United States Income Tax Convention (the Treaty), is at all relevant times resident in and only in the United States, is a qualifying person entitled to all of the benefits of the Treaty, and (v) does not use or hold
and is not deemed to use or hold the shares in carrying on a business in Canada (a U.S. Holder). Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer or authorized foreign bank that carries
on business in Canada and elsewhere.

This summary is based on the current provisions of the Canada Tax Act and the current published
administrative policies and assessing practices of the Canada Revenue Agency (CRA) published in writing prior to the date hereof. This summary also takes into account all specific proposals to amend the Canada Tax Act and
Regulations publicly announced by the Minister of Finance (Canada) prior to the date hereof (collectively, the Tax Proposals) and assumes all Tax Proposals will be enacted in the form proposed. There is no certainty that the Tax
Proposals will be enacted in the form proposed, if at all. This summary does not otherwise take into account or anticipate any changes in laws or administrative policy or assessing practice whether by judicial, regulatory, administrative or
legislative decision or action nor does it take into account provincial, territorial or foreign income tax legislation or considerations.

This summary is of a general nature only and is not, and is not intended to be, nor should it be construed to be, legal or tax advice to any particular
purchaser of Units. This summary is not exhaustive of all Canadian federal income tax considerations. Accordingly, purchasers should consult their own tax advisors regarding the income tax consequences of purchasing Units based on their particular
circumstances.

Dividends

Dividends paid or credited or deemed to be paid or credited to a U.S. Holder by the Company will be subject to Canadian withholding tax at the rate of 25%
under the Canada Tax Act, subject to any reduction in the rate of withholding to which the U.S. Holder is entitled under the Treaty. For example, if the U.S. Holder is entitled to benefits under the Treaty and is the beneficial owner of the
dividends, the applicable rate of Canadian withholding tax is generally reduced to 15%. The rate of Canadian withholding tax for such U.S. Holder will generally be further reduced under the Treaty to 5% if such holder is a corporation that
beneficially owns at least 10% of the voting shares of the Company, and may be further reduced to nil if such holder is a qualifying pension fund or charity.

Dispositions

A U.S. Holder will not be subject to tax under the Canada Tax Act on any
capital gain realized on a disposition of a common share (including a deemed disposition on death), unless the common share is or is deemed to be taxable Canadian property to the U.S. Holder for the purposes of the Canada Tax Act and the
U.S. Holder is not entitled to relief under the Treaty.

Generally, provided the Shares are listed on a designated stock exchange
as defined in the Canada Tax Act (which includes the TSX) at the time of disposition, the Shares will not constitute taxable Canadian property of a U.S. Holder, unless at any time during the 60-month period immediately preceding the disposition, the
U.S. Holder, persons with whom the U.S. Holder did not deal at arms length, or the U.S. Holder together with all such persons, owned 25% or more of the issued shares of any class of shares of the Company and more than 50% of the fair market
value of those shares was derived directly or indirectly from any one or combination of (i) real or immovable property situated in Canada,(ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect
of, or interests in, or for civil rights law rights in, property described in any of (i) to (iii), whether or not that property exists.

U.S. Holders whose common shares may constitute taxable Canadian property should consult with their own tax advisors.



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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from
and relating to the acquisition, ownership, and disposition of common shares of the Company.

This summary is for general information purposes
only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In
addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder
under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. Each U.S. Holder should consult its own tax advisor regarding
the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of common shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the IRS) has been requested, or will be obtained,
regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to,
the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the positions taken in this summary.

Scope of this Summary

Authorities

This summary is based on the
Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, U.S. court decisions, the Convention Between
Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the Treaty), and U.S. court decisions that are applicable and, in each case, as in effect and available,
as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis which could affect the
U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective
basis.

U.S. Holders

For
purposes of this summary, the term U.S. Holder means a beneficial owner of common shares that is for U.S. federal income tax purposes:



| |  |  | an individual who is a citizen or resident of the U.S.;
| | - |  | -------------------------------------------------------



| |  |  | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof
or the District of Columbia;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate whose income is subject to U.S. federal income taxation regardless of its source; or
| | - |  | ----------------------------------------------------------------------------------------------



| |  |  | a trust that (a) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial
decisions or (b) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-U.S. Holders

For purposes of this
summary, a non-U.S. Holder is a beneficial owner of common shares that is not a U.S. Holder. This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the



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acquisition, ownership, and disposition of common shares. Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S.
federal estate and gift, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.

U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including the following U.S. Holders:
(a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real
estate investment trusts, or regulated investment companies; (c) U.S. Holders that are dealers in securities or currencies or U.S. Holders that are traders in securities that elect to apply a mark-to-market accounting method; (d) U.S.
Holders that have a functional currency other than the U.S. dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more
than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset
within the meaning of Section 1221 of the Code (generally, property held for investment purposes); (h) partnerships and other pass-through entities (and investors in such partnerships and entities); or (i) U.S. Holders that own or
have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders
who are: (a) U.S. expatriates or former long-term residents of the U.S. subject to Section 877 of the Code; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Act;
(c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute taxable Canadian
property under the Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Treaty. U.S. Holders that are subject to special provisions under the Code, including U.S. Holders described immediately above,
should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of common
shares.

If an entity that is classified as a partnership (or pass-through entity) for U.S. federal income tax purposes holds common shares,
the U.S. federal income tax consequences to such partnership and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners. Partners of entities that are classified as partnerships
for U.S. federal income tax purposes should consult their own tax advisor regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.

Tax Consequences Not Addressed

This
summary does not address the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. Each U.S.
Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences of the acquisition, ownership, and disposition of common shares.

U.S. Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition of Common Shares

If the Company is not considered a passive foreign investment company (a PFIC, as defined below) at any time during a U.S.
Holders holding period, the following sections will generally describe the U.S. federal income tax consequences to U.S. Holders of the acquisition, ownership, and disposition of the Companys common shares.

Distributions on Common Shares

A U.S.
Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax
withheld from such distribution) to the extent of the current or accumulated earnings and profits of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income
tax rates. To the extent that a distribution exceeds the current and accumulated earnings and profits of



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the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holders tax basis in the common shares and thereafter as gain from the sale or
exchange of such common shares (see Sale or Other Taxable Disposition of Common Shares below). However, the Company does not intend to maintain the calculations of earnings and profits in accordance with U.S. federal income tax
principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income. Dividends received on common shares generally will not be eligible for the
dividends received deduction.

Dividends paid by the Company generally will be taxed at the preferential tax rates applicable to
long-term capital gains if (a) the Company is a qualified foreign corporation (as defined below), (b) the U.S. Holder receiving such dividend is an individual, estate, or trust, and (c) certain holding period requirements
are met. The Company generally will be a qualified foreign corporation under Section 1(h)(11) of the Code (a QFC) if (a) the Company is eligible for the benefits of the Treaty, or (b) common shares of the
Company are readily tradable on an established securities market in the U.S. However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC if the Company is a PFIC for the taxable year during which
the Company pays a dividend or for the preceding taxable year. (See the section below under the heading Passive Foreign Investment Company Rules).

If the Company is a QFC, but a U.S. Holder otherwise fails to qualify for the preferential tax rate applicable to dividends discussed above, a dividend paid by the Company to a U.S. Holder, including a
U.S. Holder that is an individual, estate, or trust, generally will be taxed at ordinary income tax rates (and not at the preferential tax rates applicable to long-term capital gains). The dividend rules are complex, and each U.S. Holder should
consult its own tax advisor regarding the dividend rules.

Sale or Other Taxable Disposition of Common Shares

A U.S. Holder will recognize gain or loss on the sale or other taxable disposition of common shares in an amount equal to the difference, if any, between
(a) the amount of cash plus the fair market value of any property received and (b) such U.S. Holders tax basis in such common shares sold or otherwise disposed of. Subject to the PFIC rules discussed below, any such gain or loss
generally will be capital gain or loss, which will be long-term capital gain or loss if, at the time of the sale or other disposition, such common shares are held for more than one year.

Gain or loss recognized by a U.S. Holder on the sale or other taxable disposition of common shares generally will be treated as U.S. source for purposes of applying the U.S. foreign tax credit
rules unless the gain is subject to tax in Canada and is sourced as foreign source under the Treaty and such U.S. Holder elects to treat such gain or loss as foreign source.

Preferential tax rates apply to long-term capital gains of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax
rates for long-term capital gains of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

Receipt of Foreign Currency

The amount of any distribution paid in foreign currency to a
U.S. Holder in connection with the ownership of common shares, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. dollar value of such foreign currency based on the exchange rate applicable on
the date of receipt (regardless of whether such foreign currency is converted into U.S. dollars at that time). A U.S. Holder that receives foreign currency and converts such foreign currency into U.S. dollars at a conversion rate other than the rate
in effect on the date of receipt may have a foreign currency exchange gain or loss, which generally would be treated as U.S. source ordinary income or loss. If the foreign currency received is not converted into U.S. dollars on the date of receipt,
a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition of the foreign
currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Each U.S. Holder should consult its own U.S. tax advisor
regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.



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Foreign Tax Credit

A U.S. Holder who pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on common shares generally will be entitled, at the election of such U.S. Holder, to
receive either a deduction or a credit for such Canadian income tax paid. Generally, a credit will reduce a U.S. Holders U.S. federal income tax liability on a dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holders
income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S.
Holders U.S. federal income tax liability that such U.S. Holders foreign source taxable income bears to such U.S. Holders worldwide taxable income. In applying this limitation, a U.S. Holders various items of
income and deduction must be classified, under complex rules, as either foreign source or U.S. source. Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains
recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code.
However, the amount of a distribution with respect to the common shares that is treated as a dividend may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign
tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. Dividends paid by the Company generally will constitute foreign source income and generally will
be categorized as passive income.

The foreign tax credit rules are complex, and each U.S. Holder should consult its own tax
advisor regarding the foreign tax credit rules.

Additional Tax on Passive Income

For tax years beginning after December 31, 2012, certain individuals, estates and trusts whose income exceeds certain thresholds will be required to
pay a 3.8% Medicare surtax on net investment income including, among other things, dividends and net gain from disposition of property (other than property held in a trade or business). U.S. Holders should consult with their own tax
advisors regarding the effect, if any, of this tax on their ownership and disposition of common shares.

Information Reporting; Backup
Withholding Tax For Certain Payments

Under U.S. federal income tax law and regulations, certain categories of U.S. Holders must file
information returns with respect to their investment in, or involvement in, a foreign corporation. For example, recently enacted legislation generally imposes new U.S. return disclosure obligations (and related penalties) on U.S. Holders that hold
certain specified foreign financial assets in excess of $50,000. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by
a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may
be subject to these reporting requirements unless their common shares are held in an account at a domestic financial institution. Penalties for failure to file certain of these information returns are substantial. U.S. Holders of common shares
should consult with their own tax advisors regarding the requirements of filing information returns, these rules, including the requirement to file an IRS Form 8938.

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares generally will be subject to
information reporting and backup withholding tax, at the rate of 28% (and increasing to 31% for payments made after December 31, 2012), if a U.S. Holder (a) fails to furnish such U.S. Holders correct U.S. taxpayer identification
number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or
(d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However,
certain exempt persons, such as corporations, generally are excluded from these information reporting and backup withholding tax rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S.
Holders U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting
and backup withholding rules.



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Passive Foreign Investment Company Rules

If the Company were to constitute a PFIC (as defined below) for any year during a U.S. Holders holding period, then certain different and potentially adverse tax consequences would apply to such
U.S. Holders acquisition, ownership and disposition of common shares.

The Company generally will be a PFIC under Section 1297 of
the Code if, for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income (the income test) or (b) 50% or more of the value of its average quarterly assets held by the Company either
produce passive income or are held for the production of passive income, based on the fair market value of such assets (the asset test). Gross income generally includes all revenues less the cost of goods sold, plus income
from investments and from incidental or outside operations or sources, and passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains
from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporations commodities are (a) stock in trade of such
foreign corporation or other property of a kind which would properly be included in inventory of such foreign corporation, or property held by such foreign corporation primarily for sale to customers in the ordinary course of business,
(b) property used in the trade or business of such foreign corporation that would be subject to the allowance for depreciation under Section 167 of the Code, or (c) supplies of a type regularly used or consumed by such foreign
corporation in the ordinary course of its trade or business, and certain other requirements are satisfied.

In addition, for purposes of the
PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another foreign corporation, the Company will be treated as if it (a) held a proportionate
share of the assets of such other foreign corporation and (b) received directly a proportionate share of the income of such other foreign corporation. In addition, for purposes of the PFIC income test and asset test described above,
passive income does not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a related person (as defined in Section 954(d)(3) of the Code), to the extent such items are
properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Company is a
PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company which is also a PFIC (a Subsidiary PFIC), and will be subject to U.S. federal income tax on (i) a distribution on the shares of a
Subsidiary PFIC or (ii) a disposition of shares of a Subsidiary PFIC, both as if the holder directly held the shares of such Subsidiary PFIC.

The Company does not believe that it was a PFIC during the tax year ending December 31, 2012. However, PFIC classification is fundamentally factual in nature, generally cannot be determined until the
close of the tax year in question, and is determined annually. Additionally, the analysis depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. Furthermore, if for any given
year the Company reaches either of the test standards (i.e., income test and asset test), it remains a PFIC forever, no matter how active it becomes in the future. Consequently, there can be no assurance that the Company has
never been and will not become a PFIC for any tax year during which U.S. Holders hold common shares.

If the Company were a PFIC in any tax
year and a U.S. Holder held common shares, such holder generally would be subject to special rules with respect to excess distributions made by the Company on the common shares and with respect to gain from the disposition of common
shares. An excess distribution generally is defined as the excess of distributions with respect to the common shares received by a U.S Holder in any tax year over 125% of the average annual distributions such U.S. Holder has received
from the Company during the shorter of the three preceding tax years, or such U.S. Holders holding period for the common shares. Generally, a U.S. Holder would be required to allocate any excess distribution or gain from the disposition of the
common shares ratably over its holding period for the common shares. Such amounts allocated to the year of the disposition or excess distribution would be taxed as ordinary income, and amounts allocated to prior tax years would be taxed as ordinary
income at the highest tax rate in effect for each such year and an interest charge at a rate applicable to underpayments of tax would apply.



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While there are U.S. federal income tax elections that sometimes can be made to mitigate these adverse tax
consequences (including, without limitation, the QEF Election and the Mark-to-Market Election), such elections are available in limited circumstances and must be made in a timely manner. U.S. Holders should be aware that, for
each tax year, if any, that the Company is a PFIC, the Company can provide no assurances that it will satisfy the record keeping requirements of a PFIC, or that it will make available to U.S. Holders the information such U.S. Holders require to make
a QEF Election under Section 1295 of the Code with respect of the Company or any Subsidiary PFIC. U.S. Holders are urged to consult their own tax advisers regarding the potential application of the PFIC rules to the ownership and disposition of
common shares, and the availability of certain U.S. tax elections under the PFIC rules.



|F. | Dividends and Paying Agents
|-- | ---------------------------

Not
Applicable.



|G. | Statements by Experts
|-- | ---------------------

Not Applicable.



|H. | Documents on Display
|-- | --------------------

We are subject to
the informational requirements of the Exchange Act and file reports and other information with the SEC. You may read and copy any of our reports and other information at, and obtain copies upon payment of prescribed fees from, the Public Reference
Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. In addition, the SEC maintains a Website that contains reports, proxy and information statements and other information regarding registrants that file
electronically with the SEC at http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

We are required to file reports and other information with the securities commissions in Canada. You are invited to read and copy any reports, statements or other information, other than confidential
filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) (http://www.sedar.com), the Canadian
equivalent of the SECs electronic document gathering and retrieval system.

We incorporate by reference information that we
file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this Form 20-F and more recent information
automatically updates and supersedes more dated information contained or incorporated by reference in this Form 20-F.

As a foreign
private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders.

We will provide without charge to each person, including any beneficial owner, to whom a copy of this annual report has been delivered, on the written or
oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this annual report (not including exhibits to such incorporated information that are not specifically
incorporated by reference into such information). Requests for such copies should be directed to us at the following address: 598  999 Canada Place, Vancouver, British Columbia, Canada V6C 3E1, Telephone: (604) 638-5050, Facsimile:
(604) 638-5051.



|I. | Subsidiary Information
|-- | ----------------------

Not applicable.



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|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

The Company is engaged primarily in mineral and oil and gas exploration and production and manages related industry risk issues directly. The Company may be at risk for environmental issues and
fluctuations in commodity pricing. Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations.

The Companys functional currency is the Canadian dollar. The Company operates in foreign jurisdictions, giving rise to significant exposure to market risks from changes in foreign currency rates.
The financial risk is the risk to the Companys operations that arises from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to
foreign currency risk.

The Company also has exposure to a number of risks from its use of financial instruments including: credit risk,
liquidity risk, and market risk. This note presents information about the Companys exposure to each of these risks and the Companys objectives, policies and processes for measuring and managing risk, and the Companys management of
capital.

The Board of Directors has overall responsibility for the establishment and oversight of the Companys risk management
framework. The Board has implemented and monitors compliance with risk management policies. The Companys risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and
controls, and to monitor risks and adherence to market conditions and the Companys activities.



|(a) | Credit Risk
|--- | -----------

Credit risk arises from
credit exposure to receivables due from joint venture partners and marketers included in accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets.

The Company is exposed to third party credit risk through its contractual arrangements with its current or future joint venture partners, marketers of
its petroleum and natural gas production and other parties. In the event such entities fail to meet their contractual obligations to the Company, such failures may have a material adverse effect on the Companys business, financial condition,
and results of operations.

The objective of managing the third party credit risk is to minimize losses in financial assets. The Company
assesses the credit quality of the partners, taking into account their financial position, past experience, and other factors. The Company mitigates the risk of non-collection of certain amounts by obtaining the joint venture partners share of
capital expenditures in advance of a project and by monitoring accounts receivable on a regular basis. As at December 31, 2012 and 2011, no accounts receivable has been deemed uncollectible or written off during the year.

As at December 31, 2012, the Companys receivables consist of $29,973 (2011  $64,583) from joint interest partners, $493,900 (2011 
$774,100) from oil and natural gas marketers and $24,739 (2011  $48,498) from other trade receivables.

The Company considers all
amounts outstanding for more than 90 days as past due. Currently, there is no indication that amounts are non-collectable; thus an allowance for doubtful accounts has not been set up. As at December 31, 2012, $Nil (2011  $5,787) of
accounts receivable are past due.



|(b) | Liquidity Risk
|--- | --------------

Liquidity risk is the
risk that the Company will not be able to meet its financial obligations as they are due. The nature of the oil and gas industry is capital intensive and the Company maintains and monitors a certain level of cash flow to finance operating and
capital expenditures.

The Companys ongoing liquidity and cash flow are impacted by various events and conditions. These events and
conditions include but are not limited to commodity price fluctuations, general credit and market conditions, operation and regulatory factors, such as government permits, the availability of drilling and other equipment, lands and pipeline access,
weather, and reservoir quality.

To mitigate the liquidity risk, the Company closely monitors its credit facility, production level and
capital expenditures to ensure that it has adequate liquidity to satisfy its financial obligations.



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The following are the contractual maturities of financial liabilities as at December 31, 2012:



|                                         |  |                |           |  |      |  |           | 
|---------------------------------------- |  | -------------- | --------- |  | ---- |  | --------- | 
|                                         |  | Carryingamount |           |  | 2013 | 
|                                         |  | $              |           |  | $    | 
|Accounts payable and accrued liabilities |  |                | 2,018,542 |  |      |  | 2,018,542 | 
|Bank line of credit                      |  |                | 5,956,749 |  |      |  | 5,956,749 | 
|                                         |  |                |           |  |      |  |           | 
|                                         |  |                | 7,975,291 |  |      |  | 7,975,291 | 
|                                         |  |                |           |  |      |  |           | 

For the contractual maturities of financial contract liability as at December 31, 2012, see note 11 to the 2012
consolidated financial statements for details.



|(c) | Market Risk
|--- | -----------

Market risk is the risk that
changes in market prices, such as foreign exchange rates, commodity prices, and interest rates will affect the Companys net earnings. The objective of market risk management is to manage and control market risk exposures within acceptable
limits, while maximizing returns. The Company utilizes financial derivatives to manage certain market risks. All such transactions are conducted in accordance with the risk management policy that has been approved by the Board of Directors.



|(i) | Foreign Currency Exchange Risk
|--- | ------------------------------

Foreign
currency exchange rate risk is the risk that the fair value of financial instruments or future cash flows will fluctuate as a result of changes in foreign exchange rates. Although substantially all of the Companys oil and natural gas sales are
denominated in Canadian dollars, the underlying market prices in Canada for oil and natural gas are impacted by changes in the exchange rate between the Canadian and United States dollars. Given that changes in exchange rate have an indirect
influence, the impact of changing exchange rates cannot be accurately quantified. The Company had no forward exchange rate contracts in place as at or during the year ended December 31, 2012 and 2011.

The Company was exposed to the following foreign currency risk at December 31:



|                                         |  |      |           |   |      |  |            |  
|---------------------------------------- |  | ---- | --------- | - | ---- |  | ---------- | -
|                                         |  | 2012 |           |   | 2011 | 
|Expressed in foreign currencies          |  | CND$ |           |   | CND$ | 
|Cash and cash equivalents                |  |      | 1,031,318 |   |      |  | 1,772,982  |  
|Accounts receivable                      |  |      | 29,973    |   |      |  | 69,667     |  
|Accounts payable and accrued liabilities |  |      | (869,430  | ) |      |  | (1,346,564 | )
|                                         |  |      |           |   |      |  |            |  
|Balance sheet exposure                   |  |      | 191,861   |   |      |  | 496,085    |  
|                                         |  |      |           |   |      |  |            |  

The following foreign exchange rates applied for the year ended and as at December 31:



|                                 |  |      |        |  |      |  |        | 
|-------------------------------- |  | ---- | ------ |  | ---- |  | ------ | 
|                                 |  | 2012 |        |  | 2011 | 
|YTD average USD to CAD           |  |      | 0.9999 |  |      |  | 1.0170 | 
|December 31, reporting date rate |  |      | 0.9949 |  |      |  | 0.9893 | 

The Company has performed a sensitivity analysis on its foreign currency denominated financial instruments. Based on the
Companys foreign currency exposure noted above and assuming that all other variables remain constant, a 10% appreciation of the US dollar against the Canadian dollar would result in the decrease of net loss of $19,186 at December 31, 2012
(2011  $49,609). For a 10% depreciation of the above foreign currencies against the Canadian dollar, assuming all other variables remain constant, there would be an equal and opposite impact on net loss.



|(ii) | Interest Rate Risk
|---- | ------------------

Interest rate risk is
the risk that future cash flows will fluctuate as a result of changes in market interest rates. During the year ended December 31, 2012, the Company was exposed to interest rate fluctuations on its credit facility which bore a



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floating rate of interest. Assuming all other variables remain constant, an increase or decrease of 1% in market interest rate in the year ended December 31, 2012 would have increased or
decreased net loss by $58,279. The Company had no interest rate swaps or financial contracts in place at or during the year ended December 31, 2012 and 2011.



|(iii) | Commodity Price Risk
|----- | --------------------

Revenues and
consequently cash flows fluctuate with commodity prices and the US/Canadian dollar exchange rate. Commodity prices are determined on a global basis and circumstances that occur in various parts of the world are outside of the control of the Company.
The Company may protect itself from fluctuations in prices by using the financial derivative sales contracts. The Company may enter into commodity price contracts to manage the risks associated with price volatility and thereby protect its cash
flows used to fund its capital program. Assuming all other variables remain constant, an increase or decrease of oil price of $1 per bbl and gas price of $0.01 per mcf in the year ended December 31, 2012 would have decreased or increased net
loss by $76,375. The Company had no commodity contracts in place at December 31, 2012.



|(d) | Capital Management Strategy
|--- | ---------------------------

The
Companys policy on capital management is to maintain a prudent capital structure so as to maintain financial flexibility, preserve access to capital markets, maintain investor, creditor and market confidence, and to allow the Company to fund
future developments. The Company considers its capital structure to include share capital, cash and cash equivalents, bank line of credit, and working capital. In order to maintain or adjust capital structure, the Company may from time to time issue
shares or enter into debt agreements and adjust its capital spending to manage current and projected operating cash flows and debt levels.

The Companys current borrowing capacity is based on the lenders review of the Companys oil and gas reserves. The Company is also
subject to various covenants. Compliance with these covenants is monitored on a regular basis and at December 31, 2012, the Company is in compliance with all covenants (notes 8 and 24).

The Companys share capital is not subject to any external restrictions. The Company has not paid or declared any dividends, nor are any contemplated in the foreseeable future. There have been no
changes to the Companys capital management strategy during the year ended December 31, 2012.



|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------

A.-C.

Not applicable.



|D. | American Depositary Receipts
|-- | ----------------------------

The Company
does not have securities registered as American Depositary Receipts.



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PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF
SECURITY HOLDERS AND USE OF PROCEEDS

A.  D.

None.



|E. | Use of Proceeds
|-- | ---------------

Not Applicable.



|ITEM 15. | CONTROLS AND PROCEDURES
|-------- | -----------------------



|A. | Disclosure Controls and Procedures
|-- | ----------------------------------

As of
the end of the fiscal year ended December 31, 2012, an evaluation of the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act
of 1934, as amended (the Exchange Act), was performed by the Companys management, under the supervision and with the participation of the Companys Chief Executive Officer and Chief Financial Officer. Based on that evaluation,
the Companys CEO and CFO have concluded that the Companys disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits
under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and (ii) accumulated and communicated to management, including its principal executive and
principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management concluded that our disclosure controls and procedures were effective. The applicable information was filed on a timely basis with the
Canadian securities regulators on SEDAR and was publicly accessible on www.SEDAR.com and on the Companys website, but was not timely furnished on Edgar on Form 6-K. We have taken steps designed to ensure that future information required
to be furnished on Form 6-K will be so furnished on a timely basis.



|B. | Managements Report on Internal Control over Financial Reporting
|-- | ----------------------------------------------------------------

The Companys management, including the Companys Chief Executive Officer and the Companys Chief Financial Officer, is responsible for establishing and maintaining adequate internal
control over the Companys internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. The Companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with International Financial Reporting Standards. It should be noted that a control
system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

The Companys management, (with the participation of the Companys Chief Executive Officer and the Companys Chief Financial Officer), conducted an evaluation of the effectiveness of the
Companys internal control over financial reporting as of December 31, 2012. This evaluation was based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on its assessment, management has concluded that, as of December 31, 2012, the Companys internal control over financial reporting was effective and managements assessment did not identify material weaknesses.



90



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|C. | Attestation Report of the Registered Public Accounting Firm
|-- | -----------------------------------------------------------

Because the Company is not an accelerated filer or large accelerated filer within the meaning of such terms under the Exchange Act, this Annual Report is not required to include an
attestation report of the Companys independent auditors regarding the Companys internal control over financial reporting.



|D. | Changes in Internal Control Over Financial Reporting
|-- | ----------------------------------------------------

There were no amendments to the Companys system of internal control over financial reporting during the year ended December 31, 2012 and the Company is not aware of any amendments to its system
of internal control that should be implemented to strengthen its system of internal control over financial reporting.



|ITEM 16. | [RESERVED]
|-------- | ----------



|ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT
|--------- | --------------------------------

The
Company does not have a financial expert, as defined by the US Securities and Exchange Commission, serving on the Companys Audit Committee. In 2011, the Company adopted International Financial Reporting Standards
(IFRS) to comply with Canadian public company reporting standards. The Audit Committee members do not, as yet, have sufficient experience and in-depth understanding of IFRS to qualify as experts.



|ITEM 16B. | CODE OF ETHICS
|--------- | --------------

The Board of Directors of
the Company has adopted a Code of Conduct and Ethics that outlines the Companys values and its commitment to ethical business practices in every business transaction. This code applies to all directors, officers, and employees of the Company
and its subsidiaries and affiliates. A copy of the Companys Code of Business Conduct and Ethics is available on the Companys website at www.dejour.com.

Reporting Unethical and Illegal Conduct/Ethics Questions

The Company is committed
to taking prompt action against violations of the Code of Conduct and Ethics and it is the responsibility of all directors, officers and employees to comply with the Code and to report violations or suspected violations to the Companys
Compliance Officer. Employees may also discuss their concerns with their supervisor who will then report suspected violations to the Compliance Officer.

The Compliance Officer is appointed by the Board of Directors and is responsible for investigating and resolving all reported complaints and allegations and shall advise the President and CEO, the CFO
and/or the Audit Committee.

During the fiscal year ended December 31, 2012, the Company did not substantially amend, waive, or
implicitly waive any provision of the Code with respect to any of the directors, executive officers or employees subject to it.



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|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

The following table sets out the fees billed to the Company by BDO Canada LLP for professional services rendered during fiscal years ended
December 31, 2012 and December 31, 2011. During these years, BDO Canada LLP was our external auditors.



|                          |  |                             |         |  |                             |  |         | 
|------------------------- |  | --------------------------- | ------- |  | --------------------------- |  | ------- | 
|                          |  | Year endedDecember 31, 2012 |         |  | Year endedDecember 31, 2011 | 
|                          |  | $                           |         |  | $                           | 
|Audit Services(1)         |  |                             | 229,950 |  |                             |  | 152,639 | 
|Audit Related Services(2) |  |                             | 100,430 |  |                             |  | 251,853 | 
|Tax Services(3)           |  |                             | 11,210  |  |                             |  | Nil     | 
|All Other Fees(4)         |  |                             | 27,850  |  |                             |  | 24,691  | 

NOTES:



|(1) | Audit fees consist of fees for the audit of the Companys annual financial statements and review of the Companys quarterly financial statements, or services
that are normally provided in connection with statutory and regulatory filings or engagements.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Companys
financial statements and are not reported as Audit fees. During fiscal 2012 and 2011, the services provided in this category included reviews on IFRS conversion, consultation on accounting and audit-related matters, and review of reserves
disclosure.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Tax fees consist of fees for tax compliance services, tax advice and tax planning. During fiscal 2012 and 2011, the services provided in this category included
assistance and advice in relation to the preparation of corporate income tax returns.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | During fiscal 2012 and 2011, the aggregate fees in this category consist of Canadian Public Accountability Board (CPAB) fees and administration costs.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------

Pre-Approval Policies and Procedures

Generally, in the past, prior to engaging the Companys auditors to perform a particular service, the Companys audit committee has, when possible, obtained an estimate for the services to be
performed. The audit committee in accordance with procedures for the Company approved all of the services described above.

In relation to the
pre-approval of all audit and audit-related services and fees the Companys audit committee charter provides that the audit committee shall:

Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Companys external auditors. The
pre-approval requirement is waived with respect to the provision of non-audit services if:



|i. | the aggregate amount of all such non-audit services provided to the Company constitutes not more than five percent of the total amount of revenues paid by the Company
to its external auditors during the fiscal year in which the non-audit services are provided;
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|ii. | such services were not recognized by the Company at the time of the engagement to be non-audit services; and
|--- | ------------------------------------------------------------------------------------------------------------



|iii. | such services are promptly brought to the attention of the Committee by the Company and approved prior to the completion of the audit by the Committee or by one or more
members of the Committee who are members of the Board to whom authority to grant such approvals has been delegated by the Committee.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Provided the pre-approval of the non-audit services is presented to the Committees first scheduled meeting following such approval such authority may be delegated by the Committee to one or more
independent members of the Committee.

We did not rely on the de minimus exemption provided by Section (c)(7)(i)(C) of Rule 2-01 of SEC
Regulation S-X in 2012.



|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|--------- | ----------------------------------------------------------

None.



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|ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS
|--------- | -------------------------------------------------------------------

The Company did not repurchase any common shares in the fiscal year ended December 31, 2012.



|ITEM 16F. | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | --------------------------------------------

Not applicable.



|ITEM 16G. | CORPORATE GOVERNANCE
|--------- | --------------------

The Companys
common shares are listed on the NYSE Amex. Section 110 of the NYSE Amex Company Guide permits the NYSE Amex to consider the laws, customs and practices of foreign issuers in relaxing certain NYSE Amex listing criteria, and to grant exemptions
from NYSE Amex listing criteria based on these considerations. A company seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home
country law. A description of the significant ways in which the Companys governance practices differ from those followed by domestic companies pursuant to NYSE Amex standards is as follows:

Shareholder Meeting Quorum Requirement: The NYSE Amex minimum quorum requirement for a shareholder meeting is one-third of the
outstanding shares of common stock. In addition, a company listed on NYSE Amex is required to state its quorum requirement in its bylaws. The Companys quorum requirement is set forth in its Articles and bylaws. A quorum for a meeting of
members of the Company is one holder of common shares issued, outstanding and entitled to vote, represented in person or by proxy.

Proxy Delivery Requirement: NYSE Amex requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant
to a proxy statement that conforms to SEC proxy rules. The Company is a foreign private issuer as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth
in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.

Shareholder Approval Requirement: The Company will follow Toronto Stock Exchange rules for shareholder approval of new issuances of its common shares. Following Toronto Stock Exchange rules,
shareholder approval is required for certain issuances of shares that: (i) materially affect control of the Company; or (ii) provide consideration to insiders in aggregate of 10% or greater of the market capitalization of the listed issuer
and have not been negotiated at arms length. Shareholder approval is also required, pursuant to TSX rules, in the case of private placements: (x) for an aggregate number of listed securities issuable greater than 25% of the number of
securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of closing of the transaction if the price per security is less than the market price; or (y) that during any six month period are to insiders for
listed securities or options, rights or other entitlements to listed securities greater than 10% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of the closing of the first private
placement to an insider during the six month period.

The foregoing is consistent with the laws, customs and practices in Canada.

In addition, the Company may from time-to-time seek relief from NYSE Amex corporate governance requirements on specific transactions under
Section 110 of the NYSE Amex Company Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, the Company shall make the disclosure of such
transactions available on the Companys website at www.dejour.com. Information contained on its website is not part of this annual report.



|ITEM 16H |  MINE SAFETY DISCLOSURE
|-------- | ------------------------

Not
Applicable.



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PART III



|ITEM 17. | FINANCIAL STATEMENTS
|-------- | --------------------

The Company has
elected to provide financial statements pursuant to Item 18.



|ITEM 18. | FINANCIAL STATEMENTS
|-------- | --------------------

Report of
Independent Registered Chartered Accountants, dated March 28, 2013

Consolidated Balance Sheets at December 31, 2012 and 2011

Consolidated Statements of Comprehensive Loss for the years ending December 31, 2012, 2011 and 2010.

Consolidated Statements of Changes in Shareholders Equity for the years ended December 31, 2012, 2011 and 2010.

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010.

Notes to the Consolidated Financial Statements

Supplementary Oil and Gas Reserve Estimation and Disclosures (Unaudited) for the years ending December 31, 2012 and 2011



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|ITEM 19. | EXHIBITS
|-------- | --------

Financial Statements



|                                                                                                                         |  |      |             | 
|------------------------------------------------------------------------------------------------------------------------ |  | ---- | ----------- | 
|Description                                                                                                              |  | Page |            
|                                                                                                                         | 
|Consolidated Financial Statements for the Years Ended December 31, 2012 and 2011.                                        |  |      | F-1 - F-41  | 
|                                                                                                                         | 
|Supplementary Oil and Gas Reserve Estimation and Disclosures (Unaudited) for the years ending December 31, 2012 and 2011 |  |      | F-42 - F-49 | 





|              |  |                                                                                                                                       
|------------- |  | --------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                           
|              | 
|1.1           |  | Articles (1)                                                                                                                          
|              | 
|1.2           |  | Notice of Articles (1)                                                                                                                
|              | 
|1.3           |  | Certificate of Continuation (1)                                                                                                       
|              | 
|1.4           |  | Notice of Alteration (1)                                                                                                              
|              | 
|1.5           |  | Certificate of Name Change (1)                                                                                                        
|              | 
|1.6           |  | Amendment to Articles to Include Special Rights (1)                                                                                   
|              | 
|4.1           |  | Participation Agreement between the Registrant, Retamco Operating, Inc. and Brownstone Ventures (US) dated July 14, 2006 (3)          
|              | 
|4.2           |  | Purchase and Sale Agreement between the Registrant, Retamco Operating, Inc., and Brownstone Ventures (US) Inc. dated June 17, 2008 (4)
|              | 
|4.3           |  | Loan Agreement between DEAL and HEC dated May 15, 2008 (5)                                                                            
|              | 
|4.4           |  | Loan Agreement between the Company and HEC dated August 11, 2008 (5)                                                                  
|              | 
|4.5           |  | Loan Agreement between the Company and HEC dated June 22, 2009 (5)                                                                    
|              | 
|4.6           |  | Loan Agreement between the Company and Brownstone Ventures (US) Inc. dated June 22, 2009 (5)                                          
|              | 
|4.7           |  | Purchase and Sale Agreement between the Registrant and Pengrowth Corporation dated April 17, 2009 (5)                                 
|              | 
|4.8           |  | Purchase and Sale Agreement between the Registrant and John James Robinson dated June 10, 2009 (5)                                    
|              | 
|4.9           |  | Purchase and Sale Agreement between the Registrant and C.U. YourOilRig Corp. dated June 15, 2009 (5)                                  
|              | 
|4.10          |  | Purchase and Sale Agreement between the Registrant and Woodrush Energy Partners LLC dated July 8, 2009 (5)                            
|              | 
|4.11          |  | Purchase and Sale Agreement between the Registrant and RockBridge Energy Inc. dated July 31, 2009 (5)                                 
|              | 
|4.12          |  | Purchase and Sale Agreement between the Registrant and HEC dated December 31, 2009 (5)                                                
|              | 
|4.13          |  | Loan Agreement between the Registrant and Toscana Capital Corporation dated February 19, 2010 (6)                                     
|              | 
|4.14          |  | Amended Loan Agreement between the Registrant and Toscana Capital Corporation dated September 1, 2010 (6)                             
|              | 
|4.15          |  | Credit Facility Agreement between DEAL and Canadian Western Bank dated August 3, 2011 (7)                                             
|              | 
|4.16          |  | Credit Facility Renewal Letter between DEAL and Canadian Western Bank dated December 29, 2011 (7)                                     



95



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|              |  |                                                                                                                                                                                                                                                    
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  | DESCRIPTION                                                                                                                                                                                                                                        
|              | 
|4.17          |  | Option Plan (1)                                                                                                                                                                                                                                    
|              | 
|4.18          |  | Option Plan (Sub-Plan) (1)                                                                                                                                                                                                                         
|              | 
|4.19          |  | Credit Facility Renewal Letter between DEAL and Canadian Western Bank dated May 11, 2012*                                                                                                                                                          
|              | 
|4.20          |  | Credit Facility Renewal Letter between DEAL and Canadian Western Bank dated October 3, 2012*                                                                                                                                                       
|              | 
|4.21          |  | Financial Contract with Bakken Drilling Fund III, LP dated December 31, 2012*                                                                                                                                                                      
|              | 
|4.22          |  | Credit Facility Renewal Letter between DEAL and Canadian Western Bank dated March 25, 2013*                                                                                                                                                        
|              | 
|8.1           |  | List of Subsidiaries (7)                                                                                                                                                                                                                           
|              | 
|12.1          |  | Certification of CEO Pursuant to Rule 13a-14(a)*                                                                                                                                                                                                   
|              | 
|12.2          |  | Certification of CFO Pursuant to Rule 13a-14(a)*                                                                                                                                                                                                   
|              | 
|13.1          |  | Certification of CEO Pursuant to 18 U.S.C. Section 1350*                                                                                                                                                                                           
|              | 
|13.2          |  | Certification of CFO Pursuant to 18 U.S.C. Section 1350*                                                                                                                                                                                           
|              | 
|15.1          |  | Consent of BDO Canada LLP*                                                                                                                                                                                                                         
|              | 
|15.2          |  | Consent Letter from AJM Deloitte, LLP*                                                                                                                                                                                                             
|              | 
|15.3          |  | Consent Letter from Gustavson Associates*                                                                                                                                                                                                          
|              | 
|99.1          |  | Reserve and Resource Estimation and Economic Evaluation of Dejours Canadian Oil and Gas Properties Prepared by AJM Deloitte, Effective December 31, 2012*                                                                                         
|              | 
|99.2          |  | Reserve Estimate and Financial Forecast as to Dejours Interests in the Kokopelli Field Area, Garfield County, Colorado, and the South Rangely Field Area, Rio Blanco County,
Colorado Prepared by Gustavson Associates, Effective January 1, 2013*



|(1) | Incorporated by reference to the Registrants registration statement on Form S-8, filed with the commission on February 16, 2012.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference to the Registrants annual report on Form 20-F, filed July 14, 2006.
|--- | ----------------------------------------------------------------------------------------------

|(3) | Incorporated by reference to the Registrants annual report on Form 20-F/A amendment no. 2, filed December 7, 2007.
|--- | -------------------------------------------------------------------------------------------------------------------

|(4) | Incorporated by reference to the Registrants annual report on Form 20-F, filed on June 30, 2009.
|--- | -------------------------------------------------------------------------------------------------

|(5) | Incorporated by reference to the Registrants annual report on Form 20-F, filed on June 30, 2010.
|--- | -------------------------------------------------------------------------------------------------

|(6) | Incorporated by reference to the Registrants annual report on Form 20-F, filed on June 30, 2011.
|--- | -------------------------------------------------------------------------------------------------

|(7) | Previously Filed.
|--- | -----------------

|* | Filed herewith
|- | --------------



96



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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.



|       |  |                |  |  |  |  |  |                         
|------ |  | -------------- |  |  |  |  |  | ------------------------
|       |  |                |  |  |  |  |  | DEJOUR Energy Inc.      
|       |  |                |  | 
|Dated: |  | April 25, 2013 |  |  |  |  |  | /s/ Robert L. Hodgkinson
|       |  |                |  |  |  |  |  | Robert L. Hodgkinson    
|       |  |                |  |  |  |  |  | Chairman & CEO          



97



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##### Table of Contents



LOGO

CONSOLIDATED FINANCIAL STATEMENTS (AUDITED)

December 31, 2012



F-1



---

##### Table of Contents

|     |                   |                   |                           |                |  | 
|---- | ----------------- | ----------------- | ------------------------- | -------------- |  | 
|LOGO |                   | Tel: 403 266 5608 |                           | BDO Canada LLP |  | 
|     | Fax: 403 233 7833 |                   | 620, 903 - 8th Avenue SW  |                | 
|     | www.bdo.ca        |                   | Calgary AB T2P 0P7 Canada |                | 





Report of Independent Registered Chartered Accountants





To the Shareholders of Dejour Energy Inc.

We have audited the accompanying consolidated
financial statements of Dejour Energy Inc., which comprise the consolidated balance sheets as at December 31, 2012, and December 31, 2011 and the statements of comprehensive loss, changes in shareholders equity and cash flows for
each of the years ended December 31, 2012, December 31, 2011 and December 31, 2010, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Consolidated Financial Statements

Management is
responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and the Standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The
procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Dejour Energy Inc. as at December 31, 2012, and December 31, 2011 and
its financial performance and its cash flows for each of the years ended December 31, 2012, December 31, 2011 and December 31, 2010 in accordance with International Financial Reporting Standards, as issued by the International
Accounting Standards Board.

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company
limited by guarantee, and forms part of the international BDO network of independent member firms.



---

##### Table of Contents



LOGO

Emphasis of Matter

Without qualifying our audit opinion, we draw attention to the Note 2 in the consolidated financial statements that indicates that the Company has a working capital deficiency of $8,557,281, an
accumulated deficit of $88,262,350 and was presented subsequent to year end with a Commitment Letter for a new demand credit facility totaling $5,950,000 comprised of a $3,700,000 revolving operating loan and a $2,250,000 non-revolving demand loan.
The $2,250,000 non-revolving demand loan is repayable by monthly installments of $200,000 commencing March 26, 2013 and a final payment of $1,450,000 on June 30, 2013. These conditions, with the other matters described in Note 2, indicate
the existence of a material uncertainty that cause substantial doubt about the Companys ability to continue as a going concern.



|                     
|---------------------
|CHARTERED ACCOUNTANTS
|                     
|/s/ BDO Canada LLP   
|Calgary, Alberta     
|March 28, 2013       



---

##### Table of Contents

DEJOUR ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian Dollars)



|                                                |  |      |  |                  |             |   |                  |  |             |  
|----------------------------------------------- |  | ---- |  | ---------------- | ----------- | - | ---------------- |  | ----------- | -
|                                                |  | Note |  | December 31,2012 |             |   | December 31,2011 | 
|                                                |  |      |  | $                |             |   | $                | 
|ASSETS                                          |  |      |  |                  |             |   |                  |  |             |  
|Current                                         |  |      |  |                  |             |   |                  |  |             |  
|Cash and cash equivalents                       |  |      |  |                  | 1,508,237   |   |                  |  | 2,487,850   |  
|Accounts receivable                             |  |      |  |                  | 548,612     |   |                  |  | 887,181     |  
|Share subscription receivable                   |  | 12   |  |                  |            |   |                  |  | 516,246     |  
|Prepaids and deposits                           |  |      |  |                  | 91,526      |   |                  |  | 100,848     |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Current Assets                                  |  |      |  |                  | 2,148,375   |   |                  |  | 3,992,125   |  
|Non-current                                     |  |      |  |                  |             |   |                  |  |             |  
|Deposits                                        |  |      |  |                  | 391,651     |   |                  |  | 403,764     |  
|Exploration and evaluation assets               |  | 5    |  |                  | 3,889,110   |   |                  |  | 5,282,652   |  
|Property and equipment                          |  | 6    |  |                  | 21,143,873  |   |                  |  | 19,759,897  |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Total Assets                                    |  |      |  |                  | 27,573,009  |   |                  |  | 29,438,438  |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|                                                |  |      | 
|LIABILITIES                                     |  |      |  |                  |             |   |                  |  |             |  
|Current                                         |  |      |  |                  |             |   |                  |  |             |  
|Bank line of credit                             |  | 8    |  |                  | 5,956,749   |   |                  |  | 5,545,457   |  
|Accounts payable and accrued liabilities        |  |      |  |                  | 2,018,542   |   |                  |  | 3,957,893   |  
|Warrant liability                               |  | 9    |  |                  | 1,425,087   |   |                  |  | 2,245,210   |  
|Current portion of financial contract liability |  | 11   |  |                  | 1,305,278   |   |                  |  |            |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Current Liabilities                             |  |      |  |                  | 10,705,656  |   |                  |  | 11,748,560  |  
|Non-current                                     |  |      |  |                  |             |   |                  |  |             |  
|Decommissioning liability                       |  | 10   |  |                  | 1,428,928   |   |                  |  | 1,338,853   |  
|Other liabilities                               |  |      |  |                  | 31,670      |   |                  |  | 43,989      |  
|Financial contract liability                    |  | 11   |  |                  | 5,161,572   |   |                  |  |            |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Total Liabilities                               |  |      |  |                  | 17,327,826  |   |                  |  | 13,131,402  |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|SHAREHOLDERS EQUITY                            |  |      |  |                  |             |   |                  |  |             |  
|Share capital                                   |  | 12   |  |                  | 90,273,576  |   |                  |  | 85,075,961  |  
|Contributed surplus                             |  | 14   |  |                  | 8,802,360   |   |                  |  | 8,133,877   |  
|Deficit                                         |  |      |  |                  | (88,262,350 | ) |                  |  | (76,509,825 | )
|Accumulated other comprehensive loss            |  | 21   |  |                  | (568,403    | ) |                  |  | (392,977    | )
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Total Shareholders Equity                      |  |      |  |                  | 10,245,183  |   |                  |  | 16,307,036  |  
|                                                |  |      |  |                  |             |   |                  |  |             |  
|Total Liabilities and Shareholders Equity      |  |      |  |                  | 27,573,009  |   |                  |  | 29,438,438  |  
|                                                |  |      |  |                  |             |   |                  |  |             |  

Subsequent Event - Note 24

Approved on behalf of the Board:



|                             |  |  |  |                         
|---------------------------- |  |  |  | ------------------------
|signed Robert Hodgkinson   |  |  |  | signed Darren Devine  
|Robert Hodgkinson - Director |  |  |  | Darren Devine - Director



|                                                                                        |  |    
|--------------------------------------------------------------------------------------- |  | ---
|The accompanying notes are an integral part of these consolidated financial statements. |  | F-4



---

##### Table of Contents

DEJOUR ENERGY INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in Canadian Dollars)



|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|----------------------------------------------- |  | ---- |  | ---------------------- | ----------- | - | ---- |  | ----------- | ---- |  |  | ---------- | -
|                                                |  |      |  | Year ended December 31 |            
|                                                |  | Note |  | 2012                   |             |   | 2011 |  |             | 2010 | 
|                                                |  |      |  | $                      |             |   | $    |  |             | $    | 
|REVENUES AND OTHER INCOME                       |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Gross revenues                                  |  |      |  |                        | 6,881,826   |   |      |  | 8,824,345   |      |  |  | 8,085,627  |  
|Royalties                                       |  |      |  |                        | (1,116,004  | ) |      |  | (1,627,881  | )    |  |  | (1,311,767 | )
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Revenues, net of royalties                      |  |      |  |                        | 5,765,822   |   |      |  | 7,196,464   |      |  |  | 6,773,860  |  
|Financial instrument gain (loss)                |  |      |  |                        | (54,819     | ) |      |  | (58,728     | )    |  |  | 67,922     |  
|Other income                                    |  |      |  |                        | 32,609      |   |      |  | 33,627      |      |  |  | 36,602     |  
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Total Revenues and Other Income                 |  | 20   |  |                        | 5,743,612   |   |      |  | 7,171,363   |      |  |  | 6,878,384  |  
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                |  |      |  |                       
|EXPENSES                                        |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Operating and transportation                    |  |      |  |                        | 3,793,227   |   |      |  | 2,499,480   |      |  |  | 2,608,889  |  
|General and administrative                      |  |      |  |                        | 3,432,952   |   |      |  | 4,042,328   |      |  |  | 3,383,266  |  
|Finance costs                                   |  |      |  |                        | 587,542     |   |      |  | 867,645     |      |  |  | 1,092,092  |  
|Stock based compensation                        |  | 14   |  |                        | 866,586     |   |      |  | 662,338     |      |  |  | 765,443    |  
|Foreign exchange loss (gain)                    |  |      |  |                        | 189,084     |   |      |  | 97,987      |      |  |  | 27,692     |  
|Loss on settlement of decommissioning liability |  |      |  |                        | 91,898      |   |      |  |            |      |  |  |           |  
|Gain on disposal of E&E assets                  |  |      |  |                        | (299,088    | ) |      |  |            |      |  |  |           |  
|Amortization, depletion and impairment losses   |  | 7    |  |                        | 10,676,023  |   |      |  | 8,651,632   |      |  |  | 4,684,867  |  
|Change in fair value of warrant liability       |  | 9    |  |                        | (1,842,087  | ) |      |  | 1,580,380   |      |  |  | (68,097    | )
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Total Expenses                                  |  |      |  |                        | 17,496,137  |   |      |  | 18,401,790  |      |  |  | 12,494,152 |  
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                |  |      |  |                       
|Loss before income taxes                        |  |      |  |                        | (11,752,525 | ) |      |  | (11,230,427 | )    |  |  | (5,615,768 | )
|                                                |  |      |  |                       
|Deferred tax recovery                           |  | 17   |  |                        |            |   |      |  | 187,145     |      |  |  | 491,863    |  
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                |  |      |  |                       
|Loss for the period                             |  |      |  |                        | (11,752,525 | ) |      |  | (11,043,282 | )    |  |  | (5,123,905 | )
|                                                |  |      |  |                       
|Foreign currency translation adjustment         |  |      |  |                        | (175,426    | ) |      |  | 292,025     |      |  |  | (685,002   | )
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                |  |      |  |                       
|Comprehensive gain (loss)                       |  |      |  |                        | (11,927,951 | ) |      |  | (10,751,257 | )    |  |  | (5,808,907 | )
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                |  |      |  |                       
|Loss per common share  basic and diluted       |  | 15   |  |                        | (0.083      | ) |      |  | (0.092      | )    |  |  | (0.051     | )
|                                                |  |      |  |                        |             |   |      |  |             |      |  |  |            |  



|                                                                                        |  |    
|--------------------------------------------------------------------------------------- |  | ---
|The accompanying notes are an integral part of these consolidated financial statements. |  | F-5



---

##### Table of Contents

DEJOUR ENERGY INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY

(Expressed in Canadian Dollars)



|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|----------------------------------------------------------- |  | ---- |  | --------------- | ----------- |  | ------------ |  | ---------- | ------------------ |  |  | --------- | - |  | -------- | ----------- | - | ----- |  | -------- | - |  |  | ----------- | -
|                                                            |  | Note |  | Numberof Shares |             |  | ShareCapital |  |            | ContributedSurplus |  |  | Deficit   |   |  | AOCI(L)* |             |   | Total | 
|                                                            |  |      |  |                 |             |  | $            |  |            | $                  |  |  | $         |   |  | $        |             |   | $     | 
|Balance as at January 1, 2012                               |  |      |  |                 | 126,892,386 |  |              |  | 85,075,961 |                    |  |  | 8,133,877 |   |  |          | (76,509,825 | ) |       |  | (392,977 | ) |  |  | 16,307,036  |  
|Shares issued via private placements, net of issuance costs |  | 12   |  |                 | 18,130,305  |  |              |  | 3,248,011  |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 3,248,011   |  
|Issue of shares on exercise of warrants and options         |  | 12   |  |                 | 3,893,683   |  |              |  | 1,465,812  |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 1,465,812   |  
|Warrant liability reallocated on exercise of warrants       |  | 12   |  |                 |             |  |              |  | 285,689    |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 285,689     |  
|Contributed surplus reallocated on exercise of options      |  | 12   |  |                 |             |  |              |  | 198,103    |                    |  |  | (198,103  | ) |  |          |             |   |       |  |          |   |  |  |            |  
|Stock-based compensation                                    |  | 13   |  |                 |             |  |              |  |            |                    |  |  | 866,586   |   |  |          |             |   |       |  |          |   |  |  | 866,586     |  
|Net loss                                                    |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          | (11,752,525 | ) |       |  |          |   |  |  | (11,752,525 | )
|Foreign currency translation adjustment                     |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  | (175,426 | ) |  |  | (175,426    | )
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|Balance as at December 31, 2012                             |  |      |  |                 | 148,916,374 |  |              |  | 90,273,576 |                    |  |  | 8,802,360 |   |  |          | (88,262,350 | ) |       |  | (568,403 | ) |  |  | 10,245,183  |  
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|                                                            |  |      |  |                 |             |  |             
|Balance as at January 1, 2011                               |  |      |  |                 | 110,180,545 |  |              |  | 79,385,883 |                    |  |  | 7,638,609 |   |  |          | (65,466,543 | ) |       |  | (685,002 | ) |  |  | 20,872,947  |  
|Shares issued via private placements, net of issuance costs |  |      |  |                 | 11,010,000  |  |              |  | 2,693,813  |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 2,693,813   |  
|Issue of shares on exercise of warrants and options         |  |      |  |                 | 5,701,841   |  |              |  | 2,090,647  |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 2,090,647   |  
|Warrant liability reallocated on exercise of warrants       |  |      |  |                 |             |  |              |  | 738,548    |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 738,548     |  
|Contributed surplus reallocated on exercise of options      |  | 12   |  |                 |             |  |              |  | 167,070    |                    |  |  | (167,070  | ) |  |          |             |   |       |  |          |   |  |  |            |  
|Stock-based compensation                                    |  | 13   |  |                 |             |  |              |  |            |                    |  |  | 662,338   |   |  |          |             |   |       |  |          |   |  |  | 662,338     |  
|Net loss                                                    |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          | (11,043,282 | ) |       |  |          |   |  |  | (11,043,282 | )
|Foreign currency translation adjustment                     |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  | 292,025  |   |  |  | 292,025     |  
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|Balance as at December 31, 2011                             |  |      |  |                 | 126,892,386 |  |              |  | 85,075,961 |                    |  |  | 8,133,877 |   |  |          | (76,509,825 | ) |       |  | (392,977 | ) |  |  | 16,307,036  |  
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|                                                            |  |      |  |                 |             |  |             
|Balance as at January 1, 2010                               |  |      |  |                 | 95,791,038  |  |              |  | 75,810,350 |                    |  |  | 6,873,166 |   |  |          | (60,342,637 | ) |       |  | (99,894  | ) |  |  | 22,240,985  |  
|Shares issued via private placements, net of issuance costs |  | 12   |  |                 | 14,389,507  |  |              |  | 3,575,533  |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  | 3,575,533   |  
|Stock-based compensation                                    |  | 13   |  |                 |             |  |              |  |            |                    |  |  | 765,443   |   |  |          |             |   |       |  |          |   |  |  | 765,443     |  
|Net loss                                                    |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          | (5,123,905  | ) |       |  |          |   |  |  | (5,123,905  | )
|Realized financial instrument loss                          |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  | 99,894   |   |  |  | 99,894      |  
|Foreign currency translation adjustment                     |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  | (685,002 | ) |  |  | (685,002    | )
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  
|Balance as at December 31, 2010                             |  |      |  |                 | 110,180,545 |  |              |  | 79,385,883 |                    |  |  | 7,638,609 |   |  |          | (65,466,543 | ) |       |  | (685,002 | ) |  |  | 20,872,947  |  
|                                                            |  |      |  |                 |             |  |              |  |            |                    |  |  |           |   |  |          |             |   |       |  |          |   |  |  |             |  



|* | Accumulated other comprehensive income (loss)
|- | ---------------------------------------------



|                                                                                        |  |    
|--------------------------------------------------------------------------------------- |  | ---
|The accompanying notes are an integral part of these consolidated financial statements. |  | F-6



---

##### Table of Contents

DEJOUR ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)



|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|--------------------------------------------------------------------- |  | ---- |  | ---------------------- | ----------- | - | ---- |  | ----------- | ---- |  |  | ---------- | -
|                                                                      |  |      |  | Year ended December 31 |            
|                                                                      |  | Note |  | 2012                   |             |   | 2011 |  |             | 2010 | 
|                                                                      |  |      |  | $                      |             |   | $    |  |             | $    | 
|CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES                        |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Net loss for the period                                               |  |      |  |                        | (11,752,525 | ) |      |  | (11,043,282 | )    |  |  | (5,123,905 | )
|Adjustment for items not affecting cash:                              |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Amortization, depletion and impairment losses                         |  |      |  |                        | 10,676,023  |   |      |  | 8,651,632   |      |  |  | 4,684,867  |  
|Stock based compensation                                              |  |      |  |                        | 866,586     |   |      |  | 662,338     |      |  |  | 765,443    |  
|Non-cash general and administrative expenses                          |  |      |  |                        | 52,884      |   |      |  | 21,993      |      |  |  | 99,804     |  
|Loss on settlement of decommissioning liability                       |  |      |  |                        | 91,898      |   |      |  |            |      |  |  |           |  
|Gain on disposal of E&E assets                                        |  |      |  |                        | (299,088    | ) |      |  |            |      |  |  |           |  
|Deferred tax recovery                                                 |  |      |  |                        |            |   |      |  | (187,145    | )    |  |  | (491,863   | )
|Change in fair value of warrant liability                             |  |      |  |                        | (1,842,087  | ) |      |  | 1,580,380   |      |  |  | (68,097    | )
|Amortization of deferred leasehold inducement                         |  |      |  |                        | (12,313     | ) |      |  | (8,207      | )    |  |  | (8,205     | )
|                                                                      |  |      |  |                       
|Changes in non-cash operating working capital                         |  | 15   |  |                        | (1,008,559  | ) |      |  | 442,315     |      |  |  | 488,024    |  
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Total Cash Flows from (used in) Operating Activities                  |  |      |  |                        | (3,227,181  | ) |      |  | 120,024     |      |  |  | 346,068    |  
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                                      |  |      |  |                       
|CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES                        |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Deposits                                                              |  |      |  |                        | 12,113      |   |      |  | 38,497      |      |  |  | (12,855    | )
|E&E expenditures                                                      |  |      |  |                        | (447,933    | ) |      |  | (225,379    | )    |  |  | (539,233   | )
|Additions to property and equipment                                   |  |      |  |                        | (4,037,552  | ) |      |  | (8,134,997  | )    |  |  | (4,499,478 | )
|Proceeds from sale of E&E assets                                      |  |      |  |                        | 352,559     |   |      |  |            |      |  |  |            |  
|Proceeds from sale of property and equipment                          |  |      |  |                        | 2,266       |   |      |  | 1,238       |      |  |  | 1,603,971  |  
|Changes in non-cash investing working capital                         |  | 15   |  |                        | (582,901    | ) |      |  | 888,236     |      |  |  | (357,424   | )
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Total Cash Flows from (used in) Investing Activities                  |  |      |  |                        | (4,701,448  | ) |      |  | (7,432,405  | )    |  |  | (3,805,019 | )
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                                      |  |      |  |                       
|CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                        |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Advance (repayment) of line of credit                                 |  |      |  |                        | 411,292     |   |      |  | 5,545,457   |      |  |  | (850,000   | )
|Advance (repayment) of bridge loan                                    |  |      |  |                        |            |   |      |  | (4,800,000  | )    |  |  | 4,800,000  |  
|Advance (repayment) of loans from related parties & other liabilities |  |      |  |                        |            |   |      |  | (229,512    | )    |  |  | (2,208,067 | )
|Shares issued on exercise of warrants and options                     |  |      |  |                        | 1,465,812   |   |      |  | 2,090,647   |      |  |  |           |  
|Shares issued for cash, net of share issue costs                      |  |      |  |                        | 4,555,666   |   |      |  | 3,004,429   |      |  |  | 3,983,509  |  
|Changes in non-cash financing working capital                         |  | 15   |  |                        | 516,246     |   |      |  | (568,315    | )    |  |  | (241,662   | )
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|Total Cash Flows from (used in) Financing Activities                  |  |      |  |                        | 6,949,016   |   |      |  | 5,042,706   |      |  |  | 5,483,780  |  
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                                      |  |      |  |                       
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      |  |      |  |                        | (979,613    | ) |      |  | (2,269,675  | )    |  |  | 2,024,829  |  
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                        |  |      |  |                        | 2,487,850   |   |      |  | 4,757,525   |      |  |  | 2,732,696  |  
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  
|                                                                      |  |      |  |                       
|CASH AND CASH EQUIVALENTS, END OF PERIOD                              |  |      |  |                        | 1,508,237   |   |      |  | 2,487,850   |      |  |  | 4,757,525  |  
|                                                                      |  |      |  |                        |             |   |      |  |             |      |  |  |            |  

Supplemental cash flow information - Note 15



|                                                                                        |  |    
|--------------------------------------------------------------------------------------- |  | ---
|The accompanying notes are an integral part of these consolidated financial statements. |  | F-7



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)





NOTE 1  CORPORATE INFORMATION

Dejour Energy Inc. (the Company) is a
public company trading on the New York Stock Exchange AMEX (NYSE - AMEX) and the Toronto Stock Exchange (TSX), under the symbol DEJ. The Company is in the business of exploring and developing energy projects with
a focus on oil and gas in North America. On March 9, 2011, the Company changed its name from Dejour Enterprises Ltd. to Dejour Energy Inc. The address of its registered office is 598 - 999 Canada Place, Vancouver, British Columbia.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Dejour Energy (USA) Corp. (Dejour
USA), incorporated in Nevada, Dejour Energy (Alberta) Ltd. (DEAL), incorporated in Alberta, Wild Horse Energy Ltd. (Wild Horse), incorporated in Alberta, and 0855524 B.C. Ltd., incorporated in British Columbia. All
intercompany transactions are eliminated upon consolidation.

The consolidated financial statements are presented in Canadian dollars, which
is also the functional currency of the parent company. These consolidated financial statements were authorized and approved for issuance by the Board of Directors on March 28, 2013.

NOTE 2  BASIS OF PRESENTATION



|(a) | Basis of presentation
|--- | ---------------------

The consolidated
financial statements (the financial statements) are presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board and interpretations of the Internal Financial
Reporting Interpretations Committee (IFRIC) and adopted by the Canadian Institute of Chartered Accountants (CICA). A summary of the Companys significant accounting policies under IFRS is presented in note 3.



|(b) | Going concern
|--- | -------------

The financial statements
were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course
of business. The Company has a working capital deficiency of $8,557,281 and accumulated deficit of $88,262,350.

Subsequent to
December 31, 2012, DEAL was informed by its Canadian Bank (Bank) that the value of the petroleum and natural gas reserves assigned to the Bank by the Company as partial security for its $6,050,000 (December 31, 2012 - $5,956,749)
revolving line of credit was deficient for loan collateral purposes. On March 28, 2013, DEAL signed a new Commitment Letter with the Bank to renew its $5,950,000 (December 31, 2012 - $5,956,749) as a revolving operating demand loan
as Credit Facility A in the amount of $3,700,000 and a non-revolving demand loan Credit Facility B in the amount of $2,250,000. The terms and conditions of the new Credit Facilities including Credit Facility B
loan repayments of $200,000 per month commencing March 26, 2013 and all amounts outstanding under Credit Facility B ($1,450,000) payable in full on June 30, 2013, are described in note 8.

The Companys ability to continue as a going concern is dependent upon attaining profitable operations and obtaining sufficient financing to meet
obligations and continue exploration and development activities. There is no assurance that these activities will be successful. These material uncertainties cast substantial doubt upon the Companys ability to continue as a going concern.
These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used that would be necessary if the going concern
assumptions were not appropriate.



F-8



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 2  BASIS OF PRESENTATION (continued)



|(c) | Basis of measurement
|--- | --------------------

The consolidated
annual financial statements have been prepared on the historical cost basis except for the revaluation of certain financial assets and liabilities to fair value as explained in the accounting policies in note 3.



|(d) | Use of estimates and judgments
|--- | ------------------------------

The
preparation of consolidated annual financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Companys accounting policies.
The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.



|(e) | Functional and presentation currency
|--- | ------------------------------------

These consolidated annual financial statements are presented in Canadian dollars, which is the Companys presentation currency. Subsidiaries measure
items using the currency of the primary economic environment in which the entity operates with entities having a functional currency different from the parent company, translated into Canadian dollars.

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated annual financial statements and have been applied consistently by the Companys
entities.



|(a) | Basis of consolidation
|--- | ----------------------

The consolidated
annual financial statements include the financial statements of the Company and subsidiaries controlled by the Company. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and
continue to be consolidated until the date that such control ceases. All intra-group balances, transactions, income and expenses are eliminated in full on consolidation.

The financial statements of the subsidiaries are prepared using the same reporting period as the parent company, using consistent accounting policies.

Exploration, development, and production activities may be conducted jointly with others and accordingly, the Company only reflects its proportionate
interest in such activities from the date that joint control commences until the date that it ceases.



|(b) | Foreign currency
|--- | ----------------

Items included in the
financial statements of each consolidated entity in the group are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented
in Canadian dollars, which is the Companys presentation and functional currency.

The financial statements of entities within the
consolidated group that have a functional currency different from that of the Company (foreign operations) are translated into Canadian dollars as follows: assets and liabilities - at the closing rate as at the balance sheet date, and
income and expenses - at the average rate of the period (as this is considered a reasonable approximation to actual rates). All resulting changes are recognized in other comprehensive income (loss) as cumulative translation differences.



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DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(b) | Foreign currency (continued)
|--- | ----------------------------



When the Company disposes of its entire interests in a foreign operation, or loses control, joint
control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income (loss) related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an
interest in a foreign operation which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary are reallocated between controlling and non-controlling
interests.

Transactions in foreign currencies are translated into the functional currency at exchange rates at the date of the transactions.
Foreign currency differences arising on translation are recognized in profit or loss. Foreign currency monetary assets and liabilities are translated at the functional currency exchange rate at the balance sheet date. Nonmonetary items that are
measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined.

Exchange differences recognized in the profit or loss statement of the Companys entities
separate financial statements on the translation of monetary items forming part of the Companys net investment in the foreign operation are reclassified to foreign exchange reserve on consolidation.



|(c) | Cash and cash equivalents
|--- | -------------------------

Cash and cash
equivalents consist of cash and highly liquid investments having maturity dates of three months or less from the date of acquisition that are readily convertible to cash.



|(d) | Resource properties
|--- | -------------------

Exploration and
evaluation (E&E) costs

Pre-license costs are expensed in the period in which they are incurred.

E&E costs are initially capitalized as either tangible or intangible E&E assets according to the nature of the assets acquired. Intangible
E&E assets may include costs of license acquisition, technical services and studies, seismic acquisition, exploration drilling and testing and directly attributable overhead and administration expenses. The costs are accumulated in cost centers
by well, field or exploration area pending determination of technical feasibility and commercial viability.

E&E assets are assessed for
impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For purposes of impairment testing, exploration and
evaluation assets are assessed at the individual asset level. If it is not possible to estimate the recoverable amount of the individual asset, exploration and evaluation assets are allocated to cash-generating units (CGUs). Such CGUs
are not larger than an operating segment.

Exploration assets are not depleted and are carried forward until technical feasibility and
commercial viability of extracting a mineral resource is considered to be determinable or sufficient/continued progress is made in assessing the commercial viability of the E&E assets. The technical feasibility and commercial viability of
extracting a mineral resource is considered to be determinable when proven reserves are determined to exist. A review of each exploration license or field is carried out, at least annually, to confirm whether the Company intends further appraisal
activity or to otherwise extract value from the property. When this is no longer the case, the costs are written off. Upon determination of proven reserves, E&E assets attributable to those reserves are first tested for impairment and then
reclassified from E&E assets to oil and natural gas properties.



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DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(d) | Resource properties (continued)
|--- | -------------------------------



The Company may occasionally enter into joint venture arrangements, whereby the Company will transfer
part of an oil and gas interest, as consideration, for an agreement by the transferee to meet certain exploration and evaluation expenditures which would have otherwise been undertaken by the Company. The Company does not record any expenditures
made by the transferee. Any cash consideration received from the agreement is credited against the costs previously capitalized to the oil and gas interest given up by the Company, with any excess cash accounted for as a gain on disposal.

Oil and gas properties and other property and equipment costs

Items of property and equipment, which include oil and gas development and production assets, are measured at cost less accumulated depletion and depreciation and accumulated impairment losses.

The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into
operation, the initial estimate of the decommissioning obligation and, for qualifying assets, borrowing costs. The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the
asset.

When significant parts of an item of property and equipment, including oil and natural gas interests, have different useful lives,
they are accounted for as separate items (major components).

Depletion and Depreciation

Oil and gas development and production assets are depreciated, by significant component, on a unit-of-production basis over proved and probable reserve
volumes, taking into account estimated future development costs necessary to bring those reserves into production. Future development costs are estimated by taking into account the level of development required to produce the reserves. These
estimates are reviewed by independent reserve engineers at least annually. Changes in reserve estimates are dealt with prospectively. Proved and probable reserves are estimated using independent reserve engineer reports and represent the estimated
quantities of oil, natural gas and gas liquids.

Other property and equipment are depreciated based on a declining balance basis, which
approximates the estimated useful lives of the asset, at the following rates:



|                               |  |  |               |  
|------------------------------ |  |  | ------------- | -
|Office furniture and equipment |  |  | 20            | %
|Computer equipment             |  |  | 45            | %
|Vehicle                        |  |  | 30            | %
|Leasehold improvements         |  |  | term of lease |  

Depreciation methods, useful lives and residual values are reviewed at each reporting date. Other property and equipment
are allocated to each of the Companys primary cash-generating units, based on estimated future net revenue, consistent with the recoverable values applied in the most recent impairment test.

Derecognition

The carrying amount of an
item of property and equipment is derecognized on disposal, when no beneficial interest is retained, or when no future economic benefits are expected from its use or disposal. The gain or loss arising from derecognition is included in profit or loss
when the item is derecognized and is measured as the difference between the net disposal proceeds, if any, and the carrying amount of the item. The date of disposal is the date when the Company is no longer subject to the risks of ownership and is
no longer the beneficiary of the rewards of ownership. Where the asset is derecognized, the date of disposal coincides with the date the revenue from the sale of the asset is recognized.

On the disposition of an undivided interest in a property, where an economic benefit remains, the Company recognizes the farm out only on the receipt of consideration by reducing the carrying amount of
the related property with any excess recognized in profit or loss of the period.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(d) | Resource properties (continued)
|--- | -------------------------------



Major maintenance and repairs

The costs of day-to-day servicing are expensed as incurred. These primarily include the costs of labor, consumables and small parts. Material costs of replaced parts, turnarounds and major inspections are
capitalized as it is probable that future economic benefits will be received. The carrying value of a replaced part is derecognized in accordance with the derecognition principles above.

Jointly controlled assets and operations

The Company has certain exploration and
production activities that are conducted under joint operating agreements whereby two or more parties jointly control the assets. These financial statements reflect only the Companys share of these jointly controlled assets and, once
production commences, a proportionate share of the relevant revenue and related costs.



|(e) | Provisions
|--- | ----------

A provision is recognized if,
as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the liability.

Decommissioning liability

A decommissioning liability is recognized when the Company has a
present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can be made. A corresponding amount
equivalent to the provision is also recognized as part of the cost of the related asset. The amount recognized is managements estimated cost of decommissioning, discounted to its present value using a risk free rate. Changes in the estimated
timing of decommissioning or decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision and a corresponding adjustment to the related asset unless the change arises from production. The unwinding of the
discount on the decommissioning provision is included as a finance cost. Actual costs incurred upon settlement of the decommissioning liability are charged against the provision to the extent the provision was established.



|(f) | Earnings (loss) per share
|--- | -------------------------

Basic earnings
(loss) per share figures have been calculated using the weighted average number of common shares outstanding during the respective periods.

Diluted earnings (loss) per common share is calculated by dividing the profit or loss applicable to common shares by the sum of the weighted average
number of common shares issued and outstanding and all additional common shares that would have been outstanding if potentially dilutive instruments were converted. The diluted earnings (loss) per share figure is equal to that of basic earnings
(loss) per share since the effects of options and warrants have been excluded as they are anti-dilutive.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(g) | Share based payments
|--- | --------------------

Where
equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity
instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that will eventually vest. Where equity instruments are granted to employees, they
are recorded at the instruments grant date fair value.

Where the terms and conditions of options are modified before they vest, the increase
in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in profit or loss, unless they are related to the issuance of shares. Amounts
related to the issuance of shares are recorded as a reduction of share capital.

When the value of goods or services received in exchange for
the share-based payment to non-employees cannot be reliably estimated, the fair value of the share-based payment is measured by use of a valuation model to measure the value of the equity instruments issued. The expected life used in the model is
adjusted, based on managements best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

All equity-settled share based payments are reflected in contributed surplus, until exercised. Upon exercise, shares are issued from treasury and the amount reflected in contributed surplus is credited to
share capital along with any consideration received.

Where a grant of options is cancelled or settled during the vesting period, excluding
forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder
of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrument granted, measured at the repurchase
date. Any such excess is recognized as an expense.



|(h) | Revenue recognition
|--- | -------------------

Revenue from the
sale of oil and petroleum products is recognized when the significant risks and rewards of ownership have been transferred, which is when title passes to the customer. This generally occurs when the product is physically transferred into a vessel,
pipe or other delivery mechanism. Revenue is stated after deducting sales taxes, excise duties and similar levies.

Revenue from the
production of oil and natural gas in which the Company has an interest with other producers is recognized based on the Companys working interest and the terms of the relevant production sharing contracts.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(i) | Financial instruments
|--- | ---------------------

Financial
assets

Financial assets are classified as one of the following categories. All transactions related to financial instruments are recorded
on a trade date basis. The Companys accounting policy for each category is as follows:

Loans and receivables

These assets are non-derivative financial assets resulting from the delivery of cash or other assets by a lender to a borrower in return for a promise to
repay on a specified date or dates, or on demand. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue and subsequently carried at amortized cost, using the effective
interest rate method, less any impairment losses. Amortized cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction costs. Gains and
losses are recognized in profit or loss when the loans and receivables are derecognized or impaired, as well as through the amortization process. The Companys loans and receivables comprise cash and cash equivalents and accounts and other
receivables.

Held-to-maturity investments

Held to maturity investments are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method, less any impairment losses. The Company does not
currently have any held-to-maturity investments.

Available-for-sale assets

Available-for-sale assets are measured at fair value, with unrealized gains and losses recorded in other comprehensive income (loss) until the asset is realized or impairment is viewed as other than
temporary, at which time they will be recorded in profit or loss. The Company does not currently have any available-for-sale assets.

Financial assets at fair value through profit or loss

An instrument is classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Financial instruments are designated at fair value through
profit or loss if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Companys risk management or investment strategy. Upon initial recognition, attributable transaction
costs are recognized in profit or loss when incurred. Financial instruments at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss. The Company does not have any financial assets at fair
value through profit or loss.

Financial liabilities

Financial liabilities are classified as either fair value through profit or loss or other financial liabilities, based on the purpose for which the liability was incurred.

The Companys other financial liabilities comprise accounts payable and accrued liabilities, line of credit and financial contract liabilities.
These liabilities are initially recognized at fair value, net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method, which ensures that
any interest expense over the period of repayment is at a constant rate on the balance of the liability carried in the balance sheet. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as
any interest or coupon payable while the liability is outstanding. Any revision to the amount or timing of cash flows related to an instrument is reflected in its carrying amount by computing the present value of the revised cash flows at the
instruments initial effective interest rate. The change in carrying amount is reflected in profit or loss of the period. Accounts payable represent liabilities for goods and services provided to the Company prior to the end of the period which
are unpaid. Trade payable amounts are unsecured and are usually paid within 30 days of recognition.

Financial liabilities are classified as
held-for-trading if they are acquired for the purpose of selling in the near term. Derivatives are also categorized as held for trading unless they are designated as hedges.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(i) | Financial instruments (continued)
|--- | ---------------------------------



The Company has derivative financial instruments in the form of warrants issued in US dollars and
contracts entered into to manage its exposure to volatility in commodity prices. These commodity contracts are not used for trading or other speculative purposes. Such derivative financial instruments are initially recognized at fair value at the
date at which the derivatives are issued and are subsequently re-measured at fair value. These derivatives do not qualify for hedge accounting and changes in fair value are recognized immediately in profit and loss. The Company does not have any
further derivative instruments.

As warrants are exercised, immediately before exercise, the liability on these exercised warrants is
re-measured and the valuation change is recorded in the consolidated statement of comprehensive income (loss). Upon exercise, the re-measured warrant liability on these exercised warrants is eliminated and there is an offsetting entry to share
capital. At each reporting period, for those outstanding warrants, the liability change between reporting periods is recorded in the consolidated statement of comprehensive income (loss).

Financial instrument measurement

If the market value for a financial instrument is not
active the Company establishes fair value by using a valuation technique. Valuation techniques include using recent arms length market transaction between knowledgable, willing parties, if available, reference to the current fair value of
another instrument that is substantially the same, discounted cash flow analysis and option pricing models. The fair value of a financial instrument will be based on one or more factors that may include the time value of money, credit risk,
commodity prices, equity prices, volatility, servicing costs and other factors.



|(j) | Impairment
|--- | ----------

Impairment of financial
assets

At each reporting date, the Company assesses whether there is objective evidence that a financial asset is impaired. If such
evidence exists, the Company recognizes an impairment loss, as follows:

Financial assets carried at amortized cost: The loss is the
difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instruments original effective interest rate. The carrying amount of the asset is reduced by this
amount either directly or indirectly through the use of an allowance account.

Impairment losses on financial assets carried at amortized cost
are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized.

Non-financial assets

For the purpose of impairment testing, assets are grouped together in
CGUs, which are the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. The carrying value of long-term assets is reviewed at each period for
indicators that the carrying value of an asset or a CGU may not be recoverable. The Company uses geographical proximity, geological similarities, analysis of shared infrastructure, commodity type, assessment of exposure to market risks and
materiality to define its CGUs. If indicators of impairment exist, the recoverable amount of the asset or CGU is estimated. If the carrying value of the asset or CGU exceeds the recoverable amount, the asset or CGU is written down with an impairment
recognized in profit or loss.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to
sell. Fair value is determined to be the amount for which the asset could be sold in an arms length transaction. For resource properties, fair value less costs to sell may be determined by using discounted future net cash flows of proved and
probable reserves using forecast prices and costs. Value in use is determined by estimating the net present value of future net cash flows expected from the continued use of the asset or CGU. Refer to note 3(d) for more details.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(j) | Impairment (continued)
|--- | ----------------------



Impairment losses recognized in prior years are assessed at each reporting date for any indication that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only to the extent that the assets carrying amount
does not exceed the carrying amount that would have been determined, net of depletion and depreciation, if no impairment loss had been recognized.



|(k) | Taxes
|--- | -----

Income taxes

Income tax expense comprises current and deferred tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in equity.

Current tax is the expected tax payable on the taxable income for
the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognized on temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and affects neither accounting profit nor taxable profit. In addition, deferred tax is not recognized for
taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when the asset is realized or the liability is settled, based on the
laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, when they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference
can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Production taxes

Royalties, resource rent taxes and revenue-based taxes are accounted for
under International Accounting Standards (IAS) 12 when they have characteristics of an income tax. This is considered to be the case when they are imposed under Government authority and the amount is payable based on taxable income,
rather than based on quantity produced or as a percentage of revenue, after adjustment for temporary differences. For such arrangements, current and deferred tax is provided on the same basis as described above for other forms of taxation.
Obligations arising from royalty arrangements that do not satisfy these criteria are recognized as a reduction of revenues.



|(l) | Share capital
|--- | -------------

The Companys common
shares, stock options, share purchase warrants and flow-through shares are classified as equity instruments only to the extent that they do not meet the definition of a financial liability or financial asset. Incremental costs directly attributable
to the issue of equity instruments are shown in equity as a deduction, net of tax, from the proceeds.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(m) | Flow-through shares
|--- | -------------------

The Company will
from time to time, issue flow-through common shares to finance a significant portion of its exploration program. Pursuant to the terms of the flow-through share agreements, these shares transfer the tax deductibility of qualifying resource
expenditures to investors. On issuance, the Company separates the flow-through share into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability and;
ii) share capital. Upon expenditures being incurred, the Company derecognizes the liability and recognizes a deferred tax liability for the amount of tax reduction renounced to the shareholders. The premium is recognized as deferred income tax
recovery and the related deferred tax is recognized as a tax provision. To the extent that the Company has available tax pools for which the benefit has not been previously recognized, that are probable to be utilized, a deferred income tax recovery
is recognized at the time of renunciation of the tax pools. The Company may also be subject to a Part XII.6 tax on flow-through proceeds renounced under the Look-back Rule, in accordance with Government of Canada flow-through regulations. When
applicable, this tax is accrued as a financial expense until paid.



|(n) | Borrowing costs
|--- | ---------------

Borrowing costs directly
associated with the acquisition, construction or production of a qualifying asset are capitalized when a substantial period of time is required to make the asset ready for its intended use. To the extent general borrowings are used for the purpose
of obtaining a qualifying asset, the related costs are capitalized based on the weighted average of the borrowing costs applicable to the total outstanding borrowings in the period other than those made specifically for the purpose of the
acquisition, construction or production of a qualifying asset. All other borrowing costs are recognized as an expense in the period in which they are incurred.



|(o) | Future accounting pronouncements
|--- | --------------------------------

Certain
pronouncements were issued by the International Accounting Standards Board (IASB) or the International Financial Reporting Interpretations Committee (IFRIC) that are mandatory for accounting periods beginning after
January 1, 2013 or later periods.

The following new standards, amendments and interpretations, have not been early adopted in these
consolidated annual financial statements. The Company is currently assessing the impact, if any, of this new guidance on the Companys future results and financial position:



| |  | IFRS 7 Financial Instruments: Disclosures, which requires disclosure of both gross and net information about financial instruments eligible for offset
in the balance sheet and financial instruments subject to master netting arrangements. Concurrent with the amendments to IFRS 7, the IASB also amended IAS 32, Financial Instruments: Presentation to clarify the existing requirements for offsetting
financial instruments in the balance sheet. The amendments to IAS 32 are effective as of January 1, 2014.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 9 Financial Instruments is part of the IASBs wider project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9
retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value. The basis of classification depends on the entitys business model and the contractual
cash flow characteristics of the financial asset. The standard is effective for annual periods beginning on or after January 1, 2015.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 10 Consolidated Financial Statements is the result of the IASBs project to replace Standing Interpretations Committee 12, Consolidation -
Special Purpose Entities and the consolidation requirements of IAS 27, Consolidated and Separate Financial Statements. The new standard eliminates the current risk and rewards approach and establishes control as the single basis for determining the
consolidation of an entity. The standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



|(o) | Future accounting pronouncements (continued)
|--- | --------------------------------------------



| |  | IFRS 11 Joint Arrangements is the result of the IASBs project to replace IAS 31, Interests in Joint Ventures. The new standard redefines joint
operations and joint ventures and requires joint operations to be proportionately consolidated and joint ventures to be equity accounted. Under IAS 31, joint ventures could be proportionately consolidated. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 12 Disclosure of Interests in Other Entities outlines the required disclosures for interests in subsidiaries and joint arrangements. The new
disclosures require information that will assist financial statement users to evaluate the nature, risks and financial effects associated with an entitys interests in subsidiaries and joint arrangements. The standard is effective for annual
periods beginning on or after January 1, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRS 13 Fair Value Measurement defines fair value, requires disclosures about fair value measurements and provides a framework for measuring fair value
when it is required or permitted within the IFRS standards. The standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IFRIC 20 Stripping costs in the production phase of a mine, IFRIC 20 clarifies the requirements for accounting for the costs of the stripping activity
in the production phase when two benefits accrue: (i) unusable ore that can be used to produce inventory and (ii) improved access to further quantities of material that will be mined in future periods. IFRIC 20 is effective for annual
periods beginning on or after January 1, 2013 with earlier application permitted and includes guidance on transition for pre-existing stripping assets.
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 1, Presentation of Financial Statements was amended in June 2011. This standard requires companies preparing financial statements under IFRS to
group items within Other Comprehensive Income (OCI) that may be reclassified to the profit or loss. The amendments also reaffirm existing requirements that items in OCI and profit or loss should be presented as either a single statement or two
consecutive statements. The amendments to IAS 1 are effective as of January 1, 2013.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | IAS 28 Investments in Associates and Joint Ventures, prescribes the accounting for investments in associates and sets out the requirements for the
application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (associate or joint venture). The
standard is effective for annual periods beginning on or after January 1, 2013.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 4  CRITICAL ACCOUNTING
ESTIMATES AND JUDGMENTS

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and
liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may
differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in
profit or loss in the period of the change, if the change affects that period only; or in the period of the change and future periods, if the change affects both.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 4  CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)



Information about critical judgments in applying accounting policies that have the most significant risk
of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated annual financial statements within the next financial year are discussed below:

Decommissioning liability

Decommissioning liabilities have been recognized based on the
Companys internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material
changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed at least annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and
techniques will result in changes to provisions from period to period. Actual decommissioning costs will ultimately depend on future market prices for the decommissioning costs which will reflect the market conditions at the time the decommissioning
costs are actually incurred. The final cost of the currently recognized decommissioning provisions may be higher or lower than currently provided for.

Exploration and evaluation expenditure

The application of the Companys accounting
policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which is based on assumptions about future events or circumstances. Estimates and
assumptions made may change if new information becomes available. If, after the expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the amount capitalized is written off in profit or
loss in the period the new information becomes available.

Income taxes

The Company recognizes the net future tax benefit related to deferred tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future.
Assessing the recoverability of deferred tax assets requires the Company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the
application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realize the net deferred tax assets recorded at the reporting date
could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Company operates could limit the ability of the Company to obtain tax deductions in future periods. All tax filings are subject to audit and potential
reassessment. Accordingly, the actual income tax liability may differ significantly from the estimated and recorded amounts.

Share-based
payment transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This
estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield.

Impairment

A CGU is defined as the lowest grouping of integrated assets that generate
identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The allocation of assets into CGUs requires significant judgment and interpretations with respect to the integration between assets, the
existence of active markets, similar exposure to market risks, shared infrastructures, and the way in which management monitors the operations. The recoverable amounts of CGUs and individual assets have been determined based on the higher of fair
value less costs to sell or value-in-use calculations. The key assumptions the Company uses in estimating future cash flows for recoverable amounts are anticipated future commodity prices, expected production volumes and future operating and
development costs. Changes to these assumptions will affect the recoverable amounts of CGUs and individual assets and may then require a material adjustment to their related carrying value. At December 31, 2012, the Company has two CGUs in
Canada (Drake/Woodrush and Saddle Hills) and two CGUs in the United States (Kokopelli and South Rangely).



F-19



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 4  CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)



Financial instrument

When estimating the fair value of financial instruments, the Company uses third-party models and valuation methodologies that utilize observable market data. In addition to market information, the Company
incorporates transaction specific details that market participants would utilize in a fair value measurement, including the impact of non-performance risk.

Reserves

The estimate of reserves is used in forecasting the recoverability and economic
viability of the Companys oil and gas properties, and in the depletion and impairment calculations. The process of estimating reserves is complex and requires significant interpretation and judgment. It is affected by economic conditions,
production, operating and development activities, and is performed using available geological, geophysical, engineering, and economic data. Reserves are evaluated at least annually by the Companys independent reserve evaluators and updates to
those reserves, if any, are estimated internally. Future development costs are estimated using assumptions as to the number of wells required to produce the commercial reserves, the cost of such wells and associated production facilities and other
capital costs.

NOTE 5  EXPLORATION AND EVALUATION (E&E) ASSETS



|                                             |  |                           |         |  |                              |  |         |                                   |  |  |            |   |  |  |            |  
|-------------------------------------------- |  | ------------------------- | ------- |  | ---------------------------- |  | ------- | --------------------------------- |  |  | ---------- | - |  |  | ---------- | -
|                                             |  | CanadianUraniumProperties |         |  | Canadian Oiland GasInterests |  |         | United StatesOil and GasInterests |  |  | Total      |  
|                                             |  | $                         |         |  | $                            |  |         | $                                 |  |  | $          |  
|Cost:                                        |  |                           |         |  |                              |  |         |                                   |  |  |            |   |  |  |            |  
|Balance at January 1, 2011                   |  |                           | 533,085 |  |                              |  | 41,060  |                                   |  |  | 27,500,879 |   |  |  | 28,075,024 |  
|Additions                                    |  |                           |        |  |                              |  | 22,727  |                                   |  |  | 966,980    |   |  |  | 989,707    |  
|Transfers to property and equipment (Note 6) |  |                           |        |  |                              |  |        |                                   |  |  | (1,352,620 | ) |  |  | (1,352,620 | )
|Change in decommissioning provision          |  |                           |        |  |                              |  | 9,246   |                                   |  |  |           |   |  |  | 9,246      |  
|Disposals                                    |  |                           |        |  |                              |  | (1,481  | )                                 |  |  |           |   |  |  | (1,481     | )
|Foreign currency translation and other       |  |                           |        |  |                              |  |        |                                   |  |  | 657,088    |   |  |  | 657,088    |  
|                                             |  |                           |         |  |                              |  |         |                                   |  |  |            |   |  |  |            |  
|Balance at December 31, 2011                 |  |                           | 533,085 |  |                              |  | 71,552  |                                   |  |  | 27,772,327 |   |  |  | 28,376,964 |  
|Additions                                    |  |                           |        |  |                              |  | 2,488   |                                   |  |  | 314,928    |   |  |  | 317,416    |  
|Change in decommissioning provision          |  |                           |        |  |                              |  | (23,298 | )                                 |  |  |           |   |  |  | (23,298    | )
|Disposals                                    |  |                           |        |  |                              |  |        |                                   |  |  | (2,132,074 | ) |  |  | (2,132,074 | )
|Foreign currency translation and other       |  |                           |        |  |                              |  | (28,240 | )                                 |  |  | (492,498   | ) |  |  | (520,738   | )
|                                             |  |                           |         |  |                              |  |         |                                   |  |  |            |   |  |  |            |  
|Balance at December 31, 2012                 |  |                           | 533,085 |  |                              |  | 22,502  |                                   |  |  | 25,462,683 |   |  |  | 26,018,270 |  
|                                             |  |                           |         |  |                              |  |         |                                   |  |  |            |   |  |  |            |  



F-20



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 5  EXPLORATION AND EVALUATION (E&E) ASSETS (continued)



|                                       |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|-------------------------------------- |  | ------------------------- | -------- | - | ---------------------------- |  | ------ | --------------------------------- |  |  | ----------- | - |  |  | ----------- | -
|                                       |  | CanadianUraniumProperties |          |   | Canadian Oiland GasInterests |  |        | United StatesOil and GasInterests |  |  | Total       |  
|                                       |  | $                         |          |   | $                            |  |        | $                                 |  |  | $           |  
|Accumulated impairment losses:         |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|Balance at January 1, 2011             |  |                           | (9,880   | ) |                              |  |       |                                   |  |  | (17,807,885 | ) |  |  | (17,817,765 | )
|Impairment losses (Note 7)             |  |                           |         |   |                              |  |       |                                   |  |  | (4,886,261  | ) |  |  | (4,886,261  | )
|Foreign currency translation and other |  |                           |         |   |                              |  |       |                                   |  |  | (390,286    | ) |  |  | (390,286    | )
|                                       |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|Balance at December 31, 2011           |  |                           | (9,880   | ) |                              |  |       |                                   |  |  | (23,084,432 | ) |  |  | (23,094,312 | )
|Impairment losses (Note 7)             |  |                           | (261,000 | ) |                              |  |       |                                   |  |  | (1,244,731  | ) |  |  | (1,505,731  | )
|Disposals                              |  |                           |         |   |                              |  |       |                                   |  |  | 2,083,245   |   |  |  | 2,083,245   |  
|Foreign currency translation and other |  |                           |         |   |                              |  |       |                                   |  |  | 387,638     |   |  |  | 387,638     |  
|                                       |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|Balance at December 31, 2012           |  |                           | (270,880 | ) |                              |  |       |                                   |  |  | (21,858,280 | ) |  |  | (22,129,160 | )
|                                       |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|                                       |  |                           |          |  
|                                       |  | CanadianUraniumProperties |          |   | Canadian Oiland GasInterests |  |        | United StatesOil and GasInterests |  |  | Total       |  
|                                       |  | $                         |          |   | $                            |  |        | $                                 |  |  | $           |  
|Carrying amounts:                      |  |                           |          |   |                              |  |        |                                   |  |  |             |   |  |  |             |  
|At December 31, 2011                   |  |                           | 523,205  |   |                              |  | 71,552 |                                   |  |  | 4,687,895   |   |  |  | 5,282,652   |  
|At December 31, 2012                   |  |                           | 262,205  |   |                              |  | 22,502 |                                   |  |  | 3,604,403   |   |  |  | 3,889,110   |  

Exploration and evaluation (E&E) assets consist of the Companys exploration projects which are
pending the determination of proven reserves.

United States Exploration and Evaluation Properties

As at December 31, 2012, the Company holds oil and gas leases in the Piceance, Parados and Uinta Basins in the US Rocky Mountains, of which a portion
was classified as E&E assets.

During the year ended December 31, 2012, the Company sold its working interests in certain oil and gas
leases in the areas of Colorado and Utah to unrelated third parties for gross proceeds of $351,078 (US$352,306).

During the year ended
December 31, 2012, the Company capitalized $103,547 (December 31, 2011 - $38,257) of general and administrative costs related to its US oil and gas interests.

The E&E asset impairment is $1,244,731, $4,886,261 and $822,015 for the year ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively. The impairment was
recognized upon a review of each exploration license or field, carried out, at least annually, to confirm whether the Company intends further appraisal activity or to otherwise extract value from the property. The impairment was recognized based on
the difference between the carrying value of the assets and their recoverable amounts. The recoverable amount was the higher of fair value less costs to sell or value in use. The fair value was estimated based on comparable market prices for which
the asset could be sold in an arms length transaction less estimated costs to sell. There was no recoverable amount on expired leases.



F-21



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 6  PROPERTY AND EQUIPMENT



|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|---------------------------------------------------------- |  | ---------------------------- | ----------- | - | --------------------------------- |  | ---------- | ------------------------- |  |  | -------- | - |  |  | ----------- | -
|                                                           |  | Canadian Oiland GasInterests |             |   | United StatesOil and GasInterests |  |            | Corporate andOther Assets |  |  | Total    |  
|                                                           |  | $                            |             |   | $                                 |  |            | $                         |  |  | $        |  
|Cost:                                                      |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at January 1, 2011                                 |  |                              | 16,191,797  |   |                                   |  | 1,695,655  |                           |  |  | 298,057  |   |  |  | 18,185,509  |  
|Additions                                                  |  |                              | 6,457,404   |   |                                   |  | 866,097    |                           |  |  | 28,867   |   |  |  | 7,352,368   |  
|Transfers from exploration and evaluation assets           |  |                              |            |   |                                   |  | 1,352,620  |                           |  |  |         |   |  |  | 1,352,620   |  
|Change in decommissioning provision                        |  |                              | 500,284     |   |                                   |  | 121,030    |                           |  |  |         |   |  |  | 621,314     |  
|Disposals                                                  |  |                              |            |   |                                   |  |           |                           |  |  | (2,407   | ) |  |  | (2,407      | )
|Foreign currency translation and other                     |  |                              |            |   |                                   |  | 40,372     |                           |  |  | 1,395    |   |  |  | 41,767      |  
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at December 31, 2011                               |  |                              | 23,149,485  |   |                                   |  | 4,075,774  |                           |  |  | 325,912  |   |  |  | 27,551,171  |  
|Additions                                                  |  |                              | 1,420,285   |   |                                   |  | 9,074,706  |                           |  |  | 6,718    |   |  |  | 10,501,709  |  
|Change in decommissioning provision                        |  |                              | 130,694     |   |                                   |  | (658       | )                         |  |  |         |   |  |  | 130,036     |  
|Disposals                                                  |  |                              |            |   |                                   |  |           |                           |  |  | (16,957  | ) |  |  | (16,957     | )
|Foreign currency translation and other                     |  |                              |            |   |                                   |  | (74,030    | )                         |  |  | (1,664   | ) |  |  | (75,694     | )
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at December 31, 2012                               |  |                              | 24,700,464  |   |                                   |  | 13,075,792 |                           |  |  | 314,009  |   |  |  | 38,090,265  |  
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|                                                           |  |                              |             |  
|                                                           |  | Canadian Oiland GasInterests |             |   | United StatesOil and GasInterests |  |            | Corporate andOther Assets |  |  | Total    |  
|                                                           |  | $                            |             |   | $                                 |  |            | $                         |  |  | $        |  
|Accumulated amortization, depletion and impairment losses: |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at January 1, 2011                                 |  |                              | (3,814,045  | ) |                                   |  |           |                           |  |  | (196,483 | ) |  |  | (4,010,528  | )
|Amortization and depletion (Note 7)                        |  |                              | (2,366,156  | ) |                                   |  |           |                           |  |  | (37,198  | ) |  |  | (2,403,354  | )
|Impairment losses (Note 7)                                 |  |                              | (937,939    | ) |                                   |  | (424,078   | )                         |  |  |         |   |  |  | (1,362,017  | )
|Disposals                                                  |  |                              |            |   |                                   |  |           |                           |  |  | 1,169    |   |  |  | 1,169       |  
|Foreign currency translation and other                     |  |                              |            |   |                                   |  | (15,832    | )                         |  |  | (712     | ) |  |  | (16,544     | )
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at December 31, 2011                               |  |                              | (7,118,140  | ) |                                   |  | (439,910   | )                         |  |  | (233,224 | ) |  |  | (7,791,274  | )
|Amortization and depletion (Note 7)                        |  |                              | (2,736,968  | ) |                                   |  |           |                           |  |  | (29,411  | ) |  |  | (2,766,379  | )
|Impairment losses (Note 7)                                 |  |                              | (4,912,572  | ) |                                   |  | (1,491,341 | )                         |  |  |         |   |  |  | (6,403,913  | )
|Disposals                                                  |  |                              |            |   |                                   |  |           |                           |  |  | 10,055   |   |  |  | 10,055      |  
|Foreign currency translation and other                     |  |                              |            |   |                                   |  | 4,295      |                           |  |  | 824      |   |  |  | 5,119       |  
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|Balance at December 31, 2012                               |  |                              | (14,767,680 | ) |                                   |  | (1,926,956 | )                         |  |  | (251,756 | ) |  |  | (16,946,392 | )
|                                                           |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|                                                           |  |                              |             |  
|                                                           |  | Canadian Oiland GasInterests |             |   | United StatesOil and GasInterests |  |            | Corporate andOther Assets |  |  | Total    |  
|                                                           |  | $                            |             |   | $                                 |  |            | $                         |  |  | $        |  
|Carrying amounts:                                          |  |                              |             |   |                                   |  |            |                           |  |  |          |   |  |  |             |  
|At December 31, 2011                                       |  |                              | 16,031,345  |   |                                   |  | 3,635,864  |                           |  |  | 92,688   |   |  |  | 19,759,897  |  
|At December 31, 2012                                       |  |                              | 9,932,784   |   |                                   |  | 11,148,836 |                           |  |  | 62,253   |   |  |  | 21,143,873  |  



F-22



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 6  PROPERTY AND EQUIPMENT (continued)



Canadian Oil and Gas Interests

At December 31, 2012, the Company had 5 property leases held on its behalf by a third party.

Amortization and depletion is computed using the unit of production method by reference to the total production for the CGU over the estimated net proven
reserves of oil and gas for the CGU determined by independent consultants. The calculation of amortization and depletion for the year ended December 31, 2012 included estimated future development costs of $Nil (December 31, 2011 - $Nil;
December 31, 2010 - $3,970,000) associated with the development of proved undeveloped reserves. There was no depletion on US properties during the year as US properties were not tied into production as of December 31, 2012.

During the year ended December 31, 2012, the Company capitalized $1,625 (December 31, 2011 - $87,424) of general and administrative costs related to
its Canadian oil and gas interests.

At December 31, 2012, the Company performed an impairment test on certain oil and gas interests to
assess the recoverable value of these properties when indicators of impairment were present.

The Developed and Proved (D&P) asset
impairment is $4,912,572, $937,939 and $360,268 for the year ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively. The impairment was recognized because the carrying value of certain cash generating
units exceeded the recoverable amount. The impairment was recognized based on the difference between the carrying value of cash generating unit and their recoverable amounts. The recoverable amount was the higher of fair value less costs to sell or
value in use. The fair value was estimated based on observable market prices for which the asset could be sold in a comparable arms length transaction, less estimated costs to sell.

The benchmark prices on which the December 31, 2012 impairment indicators were assessed are as follows:



|                                                                                    |  |                                |      |  |                                               |  |       |                                    |  |  |       | 
|----------------------------------------------------------------------------------- |  | ------------------------------ | ---- |  | --------------------------------------------- |  | ----- | ---------------------------------- |  |  | ----- | 
|                                                                                    |  | Natural gas(AECO)Cdn $ / mmbtu |      |  | Condensate(Edmonton Pentanes Plus)Cdn $ / bbl |  |       | Crude oil(Edmonton Par)Cdn $ / bbl | 
|2013                                                                                |  |                                | 3.20 |  |                                               |  | 89.25 |                                    |  |  | 85.00 | 
|2014                                                                                |  |                                | 3.75 |  |                                               |  | 88.95 |                                    |  |  | 84.70 | 
|2015                                                                                |  |                                | 4.05 |  |                                               |  | 93.90 |                                    |  |  | 89.45 | 
|2016                                                                                |  |                                | 4.35 |  |                                               |  | 95.75 |                                    |  |  | 91.20 | 
|2017                                                                                |  |                                | 4.65 |  |                                               |  | 94.30 |                                    |  |  | 89.80 | 
|                                                                                    |  |                                |      |  |                                               |  |       |                                    |  |  |       | 
|Each benchmark price increased on average approximately 2% from 2017 and thereafter | 

United States Oil and Gas Interests

During the year ended December 31, 2012, the Company capitalized $538,634 (December 31, 2011$617,090) of general and administrative costs related to its US oil and gas interests. During fiscal
2012 and 2011, the Company did not have any production from its US oil and gas interests and accordingly did not deplete any of its US oil and gas interests.

The D&P asset impairment is $1,491,341, $424,078 and nil for the year ended December 31, 2012, December 31, 2011 and December 31, 2010, respectively. The impairment was recognized
upon a review of each exploration license or field, carried out, at least annually, to confirm whether the Company intends further appraisal activity or to otherwise extract value from the property. The impairment was recognized based on the
difference between the carrying value of the assets and their recoverable amounts. The recoverable amount was the higher of fair value less costs to sell or value in use. Value in use was determined using cash flows discounted at 13%.



F-23



---

##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 6  PROPERTY AND EQUIPMENT (continued)



The benchmark prices on which the December 31, 2012 impairment indicators were assessed are as
follows:



|                    |  |                                   |      | 
|------------------- |  | --------------------------------- | ---- | 
|                    |  | Natural gas(Henry Hub)US$ / mmbtu |     
|2013                |  |                                   | 2.33 | 
|2014                |  |                                   | 2.81 | 
|2015                |  |                                   | 3.02 | 
|2016                |  |                                   | 3.21 | 
|2017                |  |                                   | 3.46 | 
|2018                |  |                                   | 3.64 | 
|2019                |  |                                   | 3.75 | 
|2020                |  |                                   | 4.00 | 
|2021                |  |                                   | 4.26 | 
|2022                |  |                                   | 4.52 | 
|2023                |  |                                   | 4.82 | 
|2024                |  |                                   | 5.11 | 
|2025 and thereafter |  |                                   | 5.46 | 



|* | At December 31, 2012, the US$ to CAD$ exchange rate was 0.9949.
|- | ---------------------------------------------------------------

NOTE 7  AMORTIZATION, DEPLETION AND IMPAIRMENT LOSSES



|                                               |  |                        |            |  |      |  |           |      |  |  |           | 
|---------------------------------------------- |  | ---------------------- | ---------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                                               |  | Year ended December 31 |           
|                                               |  | 2012                   |            |  | 2011 |  |           | 2010 | 
|                                               |  | $                      |            |  | $    |  |           | $    | 
|Exploration and Evaluation Assets (E&E assets) |  |                        |            |  |      |  |           |      |  |  |           | 
|Impairment losses (Note 5)                     |  |                        | 1,505,731  |  |      |  | 4,886,261 |      |  |  | 831,895   | 
|                                               |  |                        |           
|Property and Equipment (D&P assets)            |  |                        |            |  |      |  |           |      |  |  |           | 
|Amortization and depletion (Note 6)            |  |                        | 2,766,379  |  |      |  | 2,403,354 |      |  |  | 3,492,704 | 
|Impairment losses (Note 6)                     |  |                        | 6,403,913  |  |      |  | 1,362,017 |      |  |  | 360,268   | 
|                                               |  |                        |            |  |      |  |           |      |  |  |           | 
|                                               |  |                        | 10,676,023 |  |      |  | 8,651,632 |      |  |  | 4,684,867 | 
|                                               |  |                        |            |  |      |  |           |      |  |  |           | 

NOTE 8  BANK LINE OF CREDIT

On December 31, 2012, DEAL had a $6,700,000 revolving operating demand loan (line of credit) including a letter of credit facility to a maximum of $600,000. The line of credit bore
interest at Prime + 1% (total 4% per annum) and was collateralized by a $10,000,000 debenture over all assets of DEAL and a $10,000,000 guarantee from Dejour Energy Inc. At December 31, 2012, a total of $5,956,749 was outstanding on this
facility.

Under the terms of the facility, DEAL was required to maintain a working capital ratio of greater than 1:1 at all times. The
working capital ratio is defined as the ration of (i) current assets (including any undrawn and authorized availability under the facility) less unrealized hedging gains to (ii) current liabilities (excluding the current portion of
outstanding balances of the facility) less unrealized hedging losses. At December 31, 2012 the Company was in compliance with the working capital ratio requirement.



F-24



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 8  BANK LINE OF CREDIT (continued)



On March 28, 2013, DEAL signed a new Commitment Letter with the Bank to renew its
$5,950,000 (December 31, 2012 - $5,956,749) revolving operating demand loan under the following terms and conditions:



|(a) | Credit Facility A - Revolving Operating Demand Loan - $3,700,000, to be used for general corporate purposes, ongoing operations, capital expenditures,
and acquisition of additional petroleum and natural gas assets. Interest on Credit Facility A is at Prime +1% payable monthly and all amounts outstanding are payable on demand any time, and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Credit Facility B - Non-Revolving Demand Loan - $2,250,000. Interest on Credit Facility B is at Prime + 3 1/2% payable monthly. Monthly
principal payments of $200,000 are due and payable commencing March 26, 2013 with all amounts outstanding under Credit Facility B ($1,450,000) due and payable in full on June 30, 2013.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Collateral for Credit Facilities A and B (the Credit Facilities) is provided by a $10,000,000 first floating charge
over all the assets of DEAL, a general assignment of DEALS book debts, a $10,000,000 debenture with a first floating charge over all the assets of the Company and an unlimited guarantee provided by Dejour USA. The Credit Facilities are subject
to bank renewal on or before June 30, 2013.

Prior to each advance under the Credit Facilities, DEAL is required to (i) provide the
Bank with certain additional security required by the Bank; (ii) satisfy the Bank that no further default or event of default exists and that no material adverse effect has occurred with respect to DEAL, any guarantor or the collateral;
(iii) satisfy the Bank that all representations and warranties of DEAL and all guarantors are true and correct; and (iv) execute any other document that may be reasonably requested by the Bank.

Further, in the event the Company accesses the debt or equity markets to source cash during the period from March 26, 2013 to June 30, 2013, or
sells certain assets for cash, then the proceeds will be applied as follows: (i) full repayment of the balance outstanding under Credit Facility B on or before June 30, 2013 and (ii) a shortfall, if any, between the amount
of Credit Facility A at June 30, 2013 and the underlying value of the lenders collateral at that date.

Under the terms
of the facility, DEAL is required to maintain an adjusted working capital ratio (as described above) of greater than 1:1 at all times.

NOTE 9  WARRANT LIABILITY

Warrants that have their exercise prices denominated in currencies other than the Companys functional currency of Canadian dollars, other than
agents warrants, are accounted for as derivative financial liabilities. These warrants are recorded at the fair value at each reporting date with the change in fair value for the period recorded in profit or loss for the period.



|                                                    |  |   |            |   |   |  |            |  
|--------------------------------------------------- |  | - | ---------- | - | - |  | ---------- | -
|                                                    |  | # |            |   | $ | 
|                                                    |  |  
|Balance at January 1, 2010                          |  |   | 8,075,000  |   |   |  | 1,160,859  |  
|Change in fair value                                |  |   |           |   |   |  | (68,097    | )
|                                                    |  |   |            |   |   |  |            |  
|Balance at December 31, 2010                        |  |   | 8,075,000  |   |   |  | 1,092,762  |  
|Granted, investor warrants                          |  |   | 5,505,002  |   |   |  | 310,616    |  
|Exercise of warrants  value reallocation           |  |   | (3,460,418 | ) |   |  | (738,548   | )
|Change in fair value                                |  |   |           |   |   |  | 1,580,380  |  
|                                                    |  |   |            |   |   |  |            |  
|Balance at December 31, 2011                        |  |   | 10,119,584 |   |   |  | 2,245,210  |  
|Granted, investor warrants                          |  |   | 13,597,729 |   |   |  | 1,307,653  |  
|Exercise of warrants  value reallocation (Note 12) |  |   | (2,419,584 | ) |   |  | (285,689   | )
|Change in fair value                                |  |   |           |   |   |  | (1,842,087 | )
|                                                    |  |   |            |   |   |  |            |  
|Balance at December 31, 2012                        |  |   | 21,297,729 |   |   |  | 1,425,087  |  
|                                                    |  |   |            |   |   |  |            |  



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 9  WARRANT LIABILITY (continued)



As described in Note 12, in June 2012, the Company issued 13,597,729 investor warrants each of which
entitles the holder to purchase one common share of the Company at an exercise price of US$0.40 beginning 6 months from the date of issuance until June 4, 2017. The fair value of these granted investor warrants were estimated using the
Hull-White Trinomial option pricing model under the following weighted average inputs:



|                        |  |                  |            |   |             |     |        |                  |  |     |            |  
|----------------------- |  | ---------------- | ---------- | - | ----------- | --- | ------ | ---------------- |  | --- | ---------- | -
|As at                   |  | December 31,2012 |            |   | June 4,2012 |     |        | December 31,2011 | 
|                        |  |                  |           
|Exercise price          |  | US$              | 0.40       |   |             | US$ | 0.40   |                  |  | US$ | 0.39       |  
|Share price             |  | US$              | 0.22       |   |             | US$ | 0.24   |                  |  | US$ | 0.52       |  
|Expected volatility     |  |                  | 85         | % |             |     | 91     | %                |  |     | 83         | %
|Expected life           |  |                  | 3.55 years |   |             |     | 5 year |                  |  |     | 2.29 years |  
|Dividends               |  |                  | 0.0        | % |             |     | 0.0    | %                |  |     | 0.0        | %
|Risk-free interest rate |  |                  | 0.5        | % |             |     | 0.7    | %                |  |     | 0.3        | %

During the year ended December 31, 2012, 2,419,584 US$ warrants were exercised (December 31, 2011 - 3,460,418).

NOTE 10  DECOMMISSIONING LIABILITY

The total decommissioning liabilities were estimated based on the Companys net ownership interest in all wells and facilities, the estimated cost to abandon and reclaim the wells and facilities and
the estimated timing of the cost to be incurred in future periods. The Company estimated the total undiscounted amount of the cash flows required to settle the decommissioning liabilities as at December 31, 2012 to be approximately $1,928,000
(December 31, 2011 - $1,635,000). These decommissioning liabilities are expected to be settled over the next 20 years with the majority of costs incurred between 2016 and 2030.



|                                      |  |                                  |           |   |                                       |  |         |       |  |  |           |  
|------------------------------------- |  | -------------------------------- | --------- | - | ------------------------------------- |  | ------- | ----- |  |  | --------- | -
|                                      |  | CanadianOil and GasProperties(1) |           |   | United StatesOil and GasProperties(1) |  |         | Total | 
|                                      |  | $                                |           |   | $                                     |  |         | $     | 
|Balance at January 1, 2011            |  |                                  | 706,082   |   |                                       |  |        |       |  |  | 706,082   |  
|Liabilities incurred during the year  |  |                                  | 231,767   |   |                                       |  | 118,567 |       |  |  | 350,334   |  
|Change in estimated future cash flows |  |                                  | 277,764   |   |                                       |  | 2,463   |       |  |  | 280,227   |  
|Actual costs incurred                 |  |                                  | (18,332   | ) |                                       |  |        |       |  |  | (18,332   | )
|Unwinding of discount                 |  |                                  | 19,642    |   |                                       |  | 900     |       |  |  | 20,542    |  
|                                      |  |                                  |           |   |                                       |  |         |       |  |  |           |  
|Balance at December 31, 2011          |  |                                  | 1,216,923 |   |                                       |  | 121,930 |       |  |  | 1,338,853 |  
|Change in estimated future cash flows |  |                                  | 107,400   |   |                                       |  | (688    | )     |  |  | 106,712   |  
|Disposals                             |  |                                  | (34,363   | ) |                                       |  |        |       |  |  | (34,363   | )
|Actual costs incurred and other       |  |                                  | (4,256    | ) |                                       |  | (2,661  | )     |  |  | (6,917    | )
|Unwinding of discount                 |  |                                  | 22,478    |   |                                       |  | 2,165   |       |  |  | 24,643    |  
|                                      |  |                                  |           |   |                                       |  |         |       |  |  |           |  
|Balance at December 31, 2012          |  |                                  | 1,308,182 |   |                                       |  | 120,746 |       |  |  | 1,428,928 |  
|                                      |  |                                  |           |   |                                       |  |         |       |  |  |           |  



|(1) | relates to property and equipment (note 6)
|--- | ------------------------------------------



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 10  DECOMMISSIONING LIABILITY (continued)



The present value of the decommissioning liability was calculated using the following weighted average
inputs:



|                         |  |                               |      |   |                                    |  |      |  
|------------------------ |  | ----------------------------- | ---- | - | ---------------------------------- |  | ---- | -
|                         |  | Canadian Oiland GasProperties |      |   | United StatesOil and GasProperties | 
|As at December 31, 2012: |  |                               |      |   |                                    |  |      |  
|Discount rate            |  |                               | 1.72 | % |                                    |  | 1.82 | %
|Inflation rate           |  |                               | 2.50 | % |                                    |  | 2.50 | %
|                         |  |                              
|As at December 31, 2011: |  |                               |      |   |                                    |  |      |  
|Discount rate            |  |                               | 1.67 | % |                                    |  | 1.72 | %
|Inflation rate           |  |                               | 2.00 | % |                                    |  | 2.00 | %

NOTE 11  FINANCIAL CONTRACT LIABILITY

On December 31, 2012, Dejour USA entered into a financial contract with an unrelated U.S. oil and gas drilling fund (Drilling Fund) to drill up to three wells and complete up to four
wells (the Tranche 1 Wells) in the State of Colorado. By agreement:



|(a) | Dejour USA contributed four natural gas well spacing units, including one drilled and cased well with a cost of US$1,147,779;
|--- | -----------------------------------------------------------------------------------------------------------------------------



|(b) | The Drilling Fund contributed US$6,500,000 cash directly to a related party drilling company as prepaid drilling costs;
|--- | -----------------------------------------------------------------------------------------------------------------------



|(c) | Dejour USA will earn a before payout working interest of 10% to 14% and an after payout working interest of 28% to 39% in the net operating
profits from the Tranche 1 Wells based on the actual cash invested in the drilling program;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | The Drilling Fund has the right to require that Dejour USA purchase the Drilling Funds entire working interest in the Tranche 1 Wells 36 months after the
commencement of production from the initial Tranche 1 Well. In the event the Drilling Fund exercises its right, the purchase price to be paid by Dejour USA will equal 75% of the Drilling Funds actual investment less 75% of the Drilling
Funds share of working interest net profits from the Tranche 1 Wells, if any, for the 36-month period, plus a top-up amount so that the Drilling Fund earns a minimum 8% return, compounded annually and applied on a monthly basis, on
75% of its original investment over the 36-month period; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | The Drilling Fund has the right to require Dejour USA to purchase all of the Drilling Funds interest in the Tranche 1 Wells if at any time Dejour USA plans to
divest itself of greater than 51% of its Working Interest in the Tranche 1 Wells and resigns as Operator (a Change of Control Event). The purchase price is equal to the future net profit from the Proven and Probable Reserves
attributable to the Drilling Funds working interest in the Tranche 1 Wells, discounted at 12%, as determined by a third party evaluator acceptable to both parties.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dejour USA considers the transaction to be a financial contract liability as the risks and rewards of ownership have not been substantially transferred at the Agreement date. On December 31, 2012 the
Drilling Fund had advanced US$6,500,000 to a drilling contractor for the Tranche 1 wells. On the Drilling Fund financing advance, the Company increased property and equipment and financial contract liability by $6,466,850 (US$6,500,000). On initial
recognition, the Company imputed its borrowing cost of 8.4% based on the estimated timing and amount of operating profit using the independent reserve engineers estimated future cash flows for the Drilling Funds working interest in the Tranche
1 Wells. Subsequent to initial measurement the financial contract liability will be increased by the imputed interest expense and decreased by the Drilling Funds net operating profit from the Tranche 1 Wells. Any changes in the estimated
timing and amount of the net operating profit cash flows will be discounted at the initial imputed interest rate with any change in the recognized liability recognized as a gain (loss) in the period of change. The Company has estimated the current
portion of the obligation based on the expected net operating profit to be paid to the Drilling Fund in the next twelve months.



F-27



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 11  FINANCIAL CONTRACT LIABILITY (continued)



|                                                      |  |     |            |   |      |  |            |  
|----------------------------------------------------- |  | --- | ---------- | - | ---- |  | ---------- | -
|                                                      |  | US$ |            |   | CAD$ | 
|Loan advance                                          |  |     | 6,500,000  |   |      |  | 6,466,850  |  
|Less: Current portion of financial contract liability |  |     | (1,311,969 | ) |      |  | (1,305,278 | )
|                                                      |  |     |            |   |      |  |            |  
|Non-current portion of financial contract liability   |  |     | 5,188,031  |   |      |  | 5,161,572  |  
|                                                      |  |     |            |   |      |  |            |  

The reduction in the financial contract liability is estimated to be:



|     |  |     |           |  |      |  |           | 
|---- |  | --- | --------- |  | ---- |  | --------- | 
|     |  | US$ |           |  | CAD$ | 
|2013 |  |     | 1,311,969 |  |      |  | 1,305,278 | 
|2014 |  |     | 917,943   |  |      |  | 913,261   | 
|2015 |  |     | 602,166   |  |      |  | 599,095   | 

NOTE 12  SHARE CAPITAL

Authorized

The Company is authorized to issue an unlimited number of common voting shares,
an unlimited number of first preferred shares issuable in series, and an unlimited number of second preferred shares issuable in series. No preferred shares have been issued and the terms of preferred shares have not been defined.

Issued and outstanding



|                                                              |  |               |             |  |                   |  |            |  
|------------------------------------------------------------- |  | ------------- | ----------- |  | ----------------- |  | ---------- | -
|                                                              |  | Common Shares |            
|                                                              |  | # of Shares   |             |  | $ Value of shares | 
|Balance at January 1, 2010                                    |  |               | 95,791,038  |  |                   |  | 75,810,350 |  
| Shares issued via private placements, net of issuance costs |  |               | 14,389,507  |  |                   |  | 3,983,508  |  
| flow through share liability                                |  |               |            |  |                   |  | (407,975   | )
|                                                              |  |               |             |  |                   |  |            |  
|Balance at December 31, 2010                                  |  |               | 110,180,545 |  |                   |  | 79,385,883 |  
| Issue of shares on exercise of warrants and options         |  |               | 4,751,841   |  |                   |  | 1,574,401  |  
| Warrant liability reallocated on exercise of warrants       |  |               |            |  |                   |  | 738,548    |  
| Contributed surplus reallocated on exercise of options      |  |               |            |  |                   |  | 167,070    |  
| Shares issued via private placements, net of issuance costs |  |               | 11,010,000  |  |                   |  | 2,693,813  |  
| Subscriptions receivable on exercise of options             |  |               | 950,000     |  |                   |  | 516,246    |  
|                                                              |  |               |             |  |                   |  |            |  
|Balance at December 31, 2011                                  |  |               | 126,892,386 |  |                   |  | 85,075,961 |  
| Issue of shares on exercise of warrants and options         |  |               | 3,893,683   |  |                   |  | 1,465,812  |  
| Warrant liability reallocated on exercise of warrants       |  |               |            |  |                   |  | 285,689    |  
| Contributed surplus reallocated on exercise of options      |  |               |            |  |                   |  | 198,103    |  
| Shares issued via private placements, net of issuance costs |  |               | 18,130,305  |  |                   |  | 3,248,011  |  
|                                                              |  |               |             |  |                   |  |            |  
|Balance at December 31, 2012                                  |  |               | 148,916,374 |  |                   |  | 90,273,576 |  
|                                                              |  |               |             |  |                   |  |            |  

During the year ended December 31, 2012, the Company completed the following:

In June 2012, the Company completed a private placement of 18,130,305 units at US$0.26 per unit. Each unit consists of one common share and 3/4 of one
common share purchase warrant. Each whole warrant entitles the holder to acquire one additional common share of the Company at US$0.40 per common share beginning 6 months from the date of issuance until June 4, 2017. Gross proceeds raised were
$4,909,133 (US$4,713,879). In connection with this private placement, the Company paid finders fees of $294,655 (US$282,833) and other related costs of $ 187,442. The grant date fair value of the warrants, estimated to be $1,307,653, has been
recognized as a derivative financial liability (Note 9). Issue costs of $128,628 related to the warrants were expensed.



F-28



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 12  SHARE CAPITAL (continued)



During the year ended December 31, 2012, 2,968,683 warrants denominated in US dollars (including
549,099 agents warrants) were exercised with an average common share market price of US$0.47 and 925,000 stock options were exercised with an average common share market price of $0.51.

During the year ended December 31, 2011, the Company completed the following:

At
December 31, 2011 the Company had subscriptions receivable in the amount of $516,246. The subscriptions receivable balance was received in full in January 2012.

In February 2011, the Company completed a private placement of 11,010,000 units at US$0.30 per unit. Each unit consists of one common share and one-half of one common share purchase warrant. Each whole
warrant entitles the holder to acquire one additional common share of the Company at US$0.35 per common share on or before February 10, 2012. Gross proceeds raised were $3,288,641 (US$3,303,000). In connection with this private placement, the
Company paid finders fees of $196,694 (US$199,710) and other related costs of $119,602. The grant date fair value of the warrants, estimated to be $310,616, has been recognized as a derivative financial liability (Note 9). Issue costs of
$32,084 related to the warrants were expensed. Directors and Officers of the Company purchased 2,000,000 units of this offering.

In January
2011, the Company renounced $888,940 flow-through funds to investors, using the look-back rule. The flow- through funds had been fully spent by February 28, 2011. As a result of the renunciation, a deferred income tax recovery of $187,145 was
recognized on settlement of the flow-through share liability.

During the year ended December 31, 2010, the Company completed the
following:

In December 2010, the Company renounced $1,767,567 flow-through funds to investors, using the general rule. The flow-through
funds had been fully spent by December 31, 2010. As a result of the renunciation, a deferred income tax recovery of $220,830 was recognized on settlement of the flow-through share liability.

In December 2010, the Company completed a private placement and issued 2,339,315 flow-through shares at $0.38 per share. Gross proceeds raised were
$888,940. In connection with this private placement, the Company paid finders fees of $53,337 and other related costs of $61,862. The Company also issued 140,359 agents warrants, exercisable at $0.38 per share on or before
December 23, 2011. The grant date fair values of the agents warrants, estimated to be $4,211, have been included in share capital on a net basis and accordingly have not been recorded as a separate component of shareholders equity.
Directors and Officers of the Company purchased 513,157 shares of this offering.

In November 2010, the Company completed a private placement
and issued 7,142,858 units at $0.28 per unit. Each unit consists of one common share and 0.65 of a common share purchase warrant. Each whole common share purchase warrant is exercisable into one common share of the Company at $0.40 per share on or
before November 17, 2015. Gross proceeds raised were $2,000,000. In connection with this private placement, the Company paid finders fees of $120,000 and other related costs of $123,423. The grant date fair values of the warrants,
estimated to be $381,078, have been included in share capital on a net basis and accordingly have not been recorded as a separate component of shareholders equity.

In September 2010, the Company completed a private placement and issued 2,000,000 flow-through shares at $0.375 per share. Gross proceeds raised were $750,000. In connection with this private placement,
the Company paid finders fees of $37,500 and other related costs of $38,890.

In March 2010, the Company completed a private placement
and issued 2,907,334 flow-through units at $0.35 per unit. Each unit consists of one common share and one-half of a common share purchase warrant. Each whole common share purchase warrant is exercisable into one common share of the Company at $0.45
per share on or before March 3, 2011. Gross proceeds raised were $1,017,567. In connection with this private placement, the Company paid finders fees of $54,575 and other related costs of $52,819. The Company also issued 37,423
agents warrants, exercisable at $0.45 per common share on or before March 3, 2011. The grant date fair values of the warrants and agents warrants, estimated to be $45,563 and $2,245 respectively, have been included in share capital
on a net basis and accordingly have not been recorded as a separate component of shareholders equity. Directors and Officers of the Company purchased 412,500 units of this offering and no finders fee was paid on their participation in
the offering.



F-29



---

##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 12  SHARE CAPITAL (continued)



In January 2010, the Company renounced $1,626,199 flow-through funds to investors, using the look-back
rule. The flow- through funds had been fully spent by February 28, 2010. As a result of the renunciation, a deferred income tax recovery of $271,033 was recognized on settlement of the flow-through share liability.

NOTE 13  STOCK OPTIONS AND SHARE PURCHASE WARRANTS



|(a) | Stock Options
|--- | -------------

The Stock Option Plan (the
Plan) is a 10% rolling plan pursuant to which the number of common shares reserved for issuance is 10% of the Companys issued and outstanding common shares as constituted on the date of any grant of options.

The Plan provides for the grant of options to purchase common shares to eligible directors, senior officers, employees and consultants of the Company
(Participants). The exercise periods and vesting periods of options granted under the Plan are to be determined by the Company with approval from the Board of Directors. The expiration of any option will be accelerated if the
participants employment or other relationship with the Company terminates. The exercise price of an option is to be set by the Company at the time of grant but shall not be lower than the market price (as defined in the Plan) at the time of
grant.

The following table summarizes information about outstanding stock option transactions:



|                              |  |                  |            |   |                                |  |      | 
|----------------------------- |  | ---------------- | ---------- | - | ------------------------------ |  | ---- | 
|                              |  | Number ofoptions |            |   | Weighted averageexercise price | 
|                              |  |                  |            |   | $                              | 
|Balance at January 1, 2010    |  |                  | 4,416,682  |   |                                |  | 0.45 | 
|Options granted               |  |                  | 3,573,000  |   |                                |  | 0.35 | 
|Options cancelled (forfeited) |  |                  | (400,000   | ) |                                |  | 0.39 | 
|Options expired               |  |                  | (643,182   | ) |                                |  | 0.46 | 
|                              |  |                  |            |   |                                |  |      | 
|Balance at December 31, 2010  |  |                  | 6,946,500  |   |                                |  | 0.40 | 
|Options granted               |  |                  | 3,212,500  |   |                                |  | 0.35 | 
|Options exercised             |  |                  | (1,150,000 | ) |                                |  | 0.35 | 
|Options forfeited             |  |                  | (200,000   | ) |                                |  | 0.40 | 
|Options expired               |  |                  | (305,000   | ) |                                |  | 0.45 | 
|                              |  |                  |            |   |                                |  |      | 
|Balance at December 31, 2011  |  |                  | 8,504,000  |   |                                |  | 0.39 | 
|Options granted               |  |                  | 9,660,002  |   |                                |  | 0.25 | 
|Options exercised (Note 12)   |  |                  | (925,000   | ) |                                |  | 0.38 | 
|Options cancelled             |  |                  | (2,335,001 | ) |                                |  | 0.43 | 
|Options forfeited             |  |                  | (514,375   | ) |                                |  | 0.42 | 
|                              |  |                  |            |   |                                |  |      | 
|Balance at December 31, 2012  |  |                  | 14,389,626 |   |                                |  | 0.29 | 
|                              |  |                  |            |   |                                |  |      | 

Details of the outstanding and exercisable stock options as at December 31, 2012 are as follows:



|      |  |                  |            |  |                  |  |      |                         |  |  |                  |  |  |               |            |  |                         |  |      |  |  |  |      | 
|----- |  | ---------------- | ---------- |  | ---------------- |  | ---- | ----------------------- |  |  | ---------------- |  |  | ------------- | ---------- |  | ----------------------- |  | ---- |  |  |  | ---- | 
|      |  | Outstanding      |            |  | Exercisable      | 
|      |  |                  |            |  | Weighted average |  |      |                         |  |  | Weighted average | 
|      |  | Number ofoptions |            |  | exerciseprice    |  |      | contractuallife (years) |  |  | Number ofoptions |  |  | exerciseprice |            |  | contractuallife (years) | 
|      |  |                  |            |  | $                |  |      |                         |  |  |                  |  |  | $             |            |  |                         | 
|$0.20 |  |                  | 7,535,001  |  |                  |  | 0.20 |                         |  |  | 2.68             |  |  |               | 6,213,088  |  |                         |  | 0.20 |  |  |  | 2.69 | 
|$0.35 |  |                  | 4,219,000  |  |                  |  | 0.35 |                         |  |  | 1.67             |  |  |               | 4,219,000  |  |                         |  | 0.35 |  |  |  | 1.67 | 
|$0.45 |  |                  | 2,635,625  |  |                  |  | 0.45 |                         |  |  | 1.11             |  |  |               | 2,227,875  |  |                         |  | 0.45 |  |  |  | 1.11 | 
|      |  |                  |            |  |                  |  |      |                         |  |  |                  |  |  |               |            |  |                         |  |      |  |  |  |      | 
|      |  |                  | 14,389,626 |  |                  |  | 0.29 |                         |  |  | 2.10             |  |  |               | 12,659,963 |  |                         |  | 0.29 |  |  |  | 2.07 | 
|      |  |                  |            |  |                  |  |      |                         |  |  |                  |  |  |               |            |  |                         |  |      |  |  |  |      | 



F-30



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 13  STOCK OPTIONS AND SHARE PURCHASE WARRANTS (continued)



|(a) | Stock Options (continued)
|--- | -------------------------



The fair value of the options issued during the period was estimated using the Black Scholes option
pricing model with the following weighted average inputs:



|                               |  |      |            |   |      |   |            |      |  |   |            |  
|------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | ---------- | -
|For the year ended December 31 |  | 2012 |            |   | 2011 |   |            | 2010 | 
|                               |  |      |           
|Fair value at grant date       |  | $    | 0.08       |   |      | $ | 0.15       |      |  | $ | 0.19       |  
|Exercise price                 |  | $    | 0.25       |   |      | $ | 0.35       |      |  | $ | 0.35       |  
|Share price                    |  | $    | 0.25       |   |      | $ | 0.36       |      |  | $ | 0.35       |  
|Expected volatility            |  |      | 82.70      | % |      |   | 74.33      | %    |  |   | 103.48     | %
|Expected option life           |  |      | 1.59 years |   |      |   | 2.10 years |      |  |   | 2.04 years |  
|Dividends                      |  |      | 0.0        | % |      |   | 0.0        | %    |  |   | 0.0        | %
|Risk-free interest rate        |  |      | 1.12       | % |      |   | 1.65       | %    |  |   | 1.41       | %

Expected volatility is based on historical volatility and average weekly stock prices were used to calculate volatility.
Management believes that the annualized weekly average of volatility is the best measure of expected volatility. A weighted average forfeiture rate of 5.90% (2011 - 9.92% and 2010 - 10.10%) is used when recording stock based compensation. This
estimate is adjusted to the actual forfeiture rate. Stock based compensation of $866,586 (December 31, 2011 - $662,338 and December 31, 2010 - $765,443) was expensed during the year ended December 31, 2012.



|(b) | Share Purchase Warrants
|--- | -----------------------

The following
table summarizes information about warrant transactions:



|                             |  |                   |            |   |                                |  |      | 
|---------------------------- |  | ----------------- | ---------- | - | ------------------------------ |  | ---- | 
|                             |  | Number ofwarrants |            |   | Weighted averageexercise price | 
|                             |  |                   |            |   | $                              | 
|Balance at January 1, 2010   |  |                   | 14,736,150 |   |                                |  | 0.47 | 
|Warrants granted             |  |                   | 6,274,305  |   |                                |  | 0.41 | 
|                             |  |                   |            |   |                                |  |      | 
|Balance at December 31, 2010 |  |                   | 21,010,455 |   |                                |  | 0.44 | 
|Warrants granted             |  |                   | 5,505,002  |   |                                |  | 0.37 | 
|Warrants exercised           |  |                   | (4,551,841 | ) |                                |  | 0.37 | 
|Warrants expired             |  |                   | (3,540,026 | ) |                                |  | 0.48 | 
|                             |  |                   |            |   |                                |  |      | 
|Balance at December 31, 2011 |  |                   | 18,423,590 |   |                                |  | 0.43 | 
|Warrants granted             |  |                   | 13,597,729 |   |                                |  | 0.40 | 
|Warrants exercised (Note 12) |  |                   | (2,968,683 | ) |                                |  | 0.37 | 
|                             |  |                   |            |   |                                |  |      | 
|Balance at December 31, 2012 |  |                   | 29,052,636 |   |                                |  | 0.42 | 
|                             |  |                   |            |   |                                |  |      | 



F-31



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 13  STOCK OPTIONS AND SHARE PURCHASE WARRANTS (continued)



|(b) | Share Purchase Warrants (continued)
|--- | -----------------------------------



Details of the outstanding and exercisable warrants as at December 31, 2012 are as follows:



|         |  |                   |            |  |                  |  |      |                         |  |  |                   |  |  |               |            |  |                         |  |      |  |  |  |      | 
|-------- |  | ----------------- | ---------- |  | ---------------- |  | ---- | ----------------------- |  |  | ----------------- |  |  | ------------- | ---------- |  | ----------------------- |  | ---- |  |  |  | ---- | 
|         |  | Outstanding       |            |  | Exercisable      | 
|         |  |                   |            |  | Weighted average |  |      |                         |  |  | Weighted average  | 
|         |  | Numberof warrants |            |  | exerciseprice    |  |      | contractuallife (years) |  |  | Numberof warrants |  |  | exerciseprice |            |  | contractuallife (years) | 
|         |  |                   |            |  | $                |  |      |                         |  |  |                   |  |  | $             |            |  |                         | 
|$0.40    |  |                   | 3,642,856  |  |                  |  | 0.40 |                         |  |  | 2.88              |  |  |               | 3,642,856  |  |                         |  | 0.40 |  |  |  | 2.88 | 
|$0.55    |  |                   | 4,015,151  |  |                  |  | 0.55 |                         |  |  | 1.47              |  |  |               | 4,015,151  |  |                         |  | 0.55 |  |  |  | 1.47 | 
|$0.40 US |  |                   | 7,700,000  |  |                  |  | 0.40 |                         |  |  | 1.98              |  |  |               | 7,700,000  |  |                         |  | 0.40 |  |  |  | 1.98 | 
|$0.40 US |  |                   | 13,597,729 |  |                  |  | 0.40 |                         |  |  | 4.42              |  |  |               | 13,597,729 |  |                         |  | 0.40 |  |  |  | 4.42 | 
|$0.46 US |  |                   | 96,900     |  |                  |  | 0.46 |                         |  |  | 1.84              |  |  |               | 96,900     |  |                         |  | 0.46 |  |  |  | 1.84 | 
|         |  |                   |            |  |                  |  |      |                         |  |  |                   |  |  |               |            |  |                         |  |      |  |  |  |      | 
|         |  |                   | 29,052,636 |  |                  |  | 0.42 |                         |  |  | 3.17              |  |  |               | 29,052,636 |  |                         |  | 0.42 |  |  |  | 3.17 | 
|         |  |                   |            |  |                  |  |      |                         |  |  |                   |  |  |               |            |  |                         |  |      |  |  |  |      | 

Warrants that have their exercise prices denominated in currencies other than the Companys functional currency of
Canadian dollars are accounted for as derivative financial liabilities, other than agents warrants (Note 9). 13,597,729 warrants with an exercise price of US$0.40 and expiry date of June 4, 2017 can be exercised after December 4,
2012.

NOTE 14  CONTRIBUTED SURPLUS

Contributed surplus is used to recognize the value of stock option grants and share warrants prior to exercise. Details of changes in the Companys contributed surplus balance are as follows:



|                                         |  |   |           |  
|---------------------------------------- |  | - | --------- | -
|                                         |  | $ |          
|Balance of January 1, 2010               |  |   | 6,873,166 |  
|Stock based compensation                 |  |   | 765,443   |  
|                                         |  |   |           |  
|Balance at December 31, 2010             |  |   | 7,638,609 |  
|Stock based compensation                 |  |   | 662,338   |  
|Exercise of options  value reallocation |  |   | (167,070  | )
|                                         |  |   |           |  
|Balance at December 31, 2011             |  |   | 8,133,877 |  
|Stock based compensation                 |  |   | 866,586   |  
|Exercise of options  value reallocation |  |   | (198,103  | )
|                                         |  |   |           |  
|Balance at December 31, 2012             |  |   | 8,802,360 |  
|                                         |  |   |           |  



F-32



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 15  SUPPLEMENTAL INFORMATION



|(a) | Changes in non-cash working capital consisted of the following:
|--- | ---------------------------------------------------------------



|                                         |  |                                 |            |   |      |  |           |      |  |  |          |  
|---------------------------------------- |  | ------------------------------- | ---------- | - | ---- |  | --------- | ---- |  |  | -------- | -
|                                         |  | For the year ended December 31, |           
|                                         |  | 2012                            |            |   | 2011 |  |           | 2010 | 
|                                         |  | $                               |            |   | $    |  |           | $    | 
|Changes in non-cash working capital:     |  |                                 |            |   |      |  |           |      |  |  |          |  
|Accounts receivable                      |  |                                 | 338,569    |   |      |  | (198,555  | )    |  |  | 36,147   |  
|Share subscription receivable            |  |                                 | 516,246    |   |      |  | (516,246  | )    |  |  |         |  
|Prepaids and deposits                    |  |                                 | 9,322      |   |      |  | (8,110    | )    |  |  | 33,528   |  
|Accounts payable and accrued liabilities |  |                                 | (1,939,351 | ) |      |  | 1,485,147 |      |  |  | (180,737 | )
|                                         |  |                                 |            |   |      |  |           |      |  |  |          |  
|                                         |  |                                 | (1,075,214 | ) |      |  | 762,236   |      |  |  | (111,062 | )
|                                         |  |                                 |            |   |      |  |           |      |  |  |          |  
|                                         |  |                                 |           
|Comprised of:                            |  |                                 |            |   |      |  |           |      |  |  |          |  
|Operating activities                     |  |                                 | (1,008,559 | ) |      |  | 442,315   |      |  |  | 488,024  |  
|Investing activities                     |  |                                 | (582,901   | ) |      |  | 888,236   |      |  |  | (357,424 | )
|Financing activities                     |  |                                 | 516,246    |   |      |  | (568,315  | )    |  |  | (241,662 | )
|                                         |  |                                 |            |   |      |  |           |      |  |  |          |  
|                                         |  |                                 | (1,075,214 | ) |      |  | 762,236   |      |  |  | (111,062 | )
|                                         |  |                                 |            |   |      |  |           |      |  |  |          |  
|                                         |  |                                 |           
|Other cash flow information:             |  |                                 |            |   |      |  |           |      |  |  |          |  
|Cash paid for interest                   |  |                                 | 234,290    |   |      |  | 439,987   |      |  |  | 576,549  |  
|Income taxes paid                        |  |                                 |           |   |      |  |          |      |  |  |         |  



|(b) | Per share amounts:
|--- | ------------------

Basic loss per share
amounts has been calculated by dividing the net loss for the year attributable to the shareholders of the Company by the weighted average number of common shares outstanding. Stock options and share purchase warrants were excluded from the
calculation. The basic and diluted net loss per share is the same as there are no dilutive effects on earnings. The following table summarizes the common shares used in calculating basic and diluted net loss per common share:



|                                           |  |                         |             |  |      |  |             |      |  |  |            | 
|------------------------------------------ |  | ----------------------- | ----------- |  | ---- |  | ----------- | ---- |  |  | ---------- | 
|                                           |  | Year ended December 31, |            
|                                           |  | 2012                    |             |  | 2011 |  |             | 2010 | 
|Weighted average common shares outstanding |  |                         |             |  |      |  |             |      |  |  |            | 
|Basic                                      |  |                         | 141,056,221 |  |      |  | 120,300,214 |      |  |  | 99,788,625 | 
|Diluted                                    |  |                         | 141,056,221 |  |      |  | 120,300,214 |      |  |  | 99,788,625 | 



|(c) | The Company had the following non-cash transaction:
|--- | ---------------------------------------------------



|                                                                               |  |                         |           |  |      |  |   |      |  |  |   | 
|------------------------------------------------------------------------------ |  | ----------------------- | --------- |  | ---- |  | - | ---- |  |  | - | 
|                                                                               |  | Year ended December 31, |           |  |      | 
|                                                                               |  | 2012                    |           |  | 2011 |  |   | 2010 | 
|                                                                               |  |                         |           |  |      |  |   |      |  |  |   | 
|                                                                               |  | $                       |           |  | $    |  |   | $    | 
|Non-cash financing for drilling operations of property and equipment (note 11) |  |                         | 6,466,850 |  |      |  |  |      |  |  |  | 



F-33



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 16  RELATED PARTY TRANSACTIONS

During the years ended December 31, 2012, 2011 and 2010, the Company entered into the following transactions with related parties:



|(a) | Compensation awarded to key management included a total of salaries and consulting fees of $1,194,087 (2011 - $1,771,981 and 2010 - $1,215,191) and non-cash stock-based
compensation of $412,049 (2011 - $451,071 and 2010 - $486,018). Key management includes the Companys officers and directors. The salaries and consulting fees are included in general and administrative expenses. Included in accounts payable and
accrued liabilities at December 31, 2012 is $Nil (December 31, 2011 - $396,618 and December 31, 2010 - $12,000) owing to the companies controlled by the officers of the Company.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | The Company incurred a total of $Nil (2011 - $2,301 and 2010 - $268,440) in finance costs to a company controlled by an officer of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Included in interest and other income is $30,000 (2011 - $30,000 and 2010 - $30,000) received from the companies controlled by officers of the Company for rental
income.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | In December 2009, a company controlled by the CEO of the Company (HEC) became a 5% working interest partner in the Woodrush property. Included in accounts
receivable at December 31, 2012 is $Nil (December 31, 2011 - $Nil and December 31, 2010 - $967) owing from HEC. Included in accounts payable and accrued liabilities at December 31, 2012 is $20,288 (December 31, 2011 - $53,668 and
December 31, 2010 - $166,139) owing to HEC.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | With respect to the private placement of 11,010,000 units issued at US$0.30 per unit completed in February 2011, directors and officers of the Company purchased
2,000,000 units of this offering (see Note 12).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | In December 2011, HEC exercised 250,000 warrants with an exercise price of US$0.35 each that were issued in February 2011.
|--- | --------------------------------------------------------------------------------------------------------------------------



|(g) | In January 2012, directors and officers of the Company exercised 750,000 warrants with an exercise price of US$0.35 each that were issued in February 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | On December 31, 2012, Dejour USA entered into a financial contract with a U.S. oil and gas drilling fund (Drilling Fund) whereby the parties agreed to
form an industry-standard drilling partnership for purposes of drilling three wells and completing four wells in the State of Colorado (note 11). A director of the Company provides investment advice for a fee to the Drilling Fund. The director
abstained from voting when the Board of Directors approved the Company signing a financial contract with the Drilling Fund.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | In July 2008, Brownstone Ventures Inc. (Brownstone) became a 28.53% working interest partner in the US properties. Previously, Brownstone controlled more
than 10% of outstanding common shares of the Company. Effective September 28, 2011, Brownstone ceased to control more than 10% of outstanding common shares of the Company. Included in accounts receivable at December 31, 2012 is $Nil
(December 31, 2011 - $Nil and December 31, 2010 - $168,771) owing from Brownstone.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-34



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 17  INCOME TAXES

The actual income tax provisions differ from the expected amounts calculated by applying the Canadian combined federal and provincial corporate income tax rates to the Companys loss before income
taxes. The components of these differences are as follows:



|                                                                   |  |      |             |   |      |  |             |      |  |  |            |  
|------------------------------------------------------------------ |  | ---- | ----------- | - | ---- |  | ----------- | ---- |  |  | ---------- | -
|                                                                   |  | 2012 |             |   | 2011 |  |             | 2010 | 
|                                                                   |  | $    |             |   | $    |  |             | $    | 
|Loss before income taxes                                           |  |      | (11,752,525 | ) |      |  | (11,230,427 | )    |  |  | (5,615,768 | )
|Corporate tax rate                                                 |  |      | 28.48       | % |      |  | 33.36       | %    |  |  | 30.87      | %
|                                                                   |  |      |             |   |      |  |             |      |  |  |            |  
|                                                                   |  |      |            
|Expected tax recovery                                              |  |      | (3,346,875  | ) |      |  | (3,746,974  | )    |  |  | (1,733,630 | )
|Increase (decrease) resulting from:                                |  |      |             |   |      |  |             |      |  |  |            |  
|Differences in foreign tax rates and change in effective tax rates |  |      | 474,836     |   |      |  | (319,388    | )    |  |  | 89,488     |  
|Impact of foreign exchange rate changes                            |  |      | 259,422     |   |      |  | (219,610    | )    |  |  | 471,405    |  
|Change in unrecognized deferred tax assets                         |  |      | 2,799,056   |   |      |  | 3,582,881   |      |  |  | 132,578    |  
|Stock based compensation and share issue costs                     |  |      | (196,546    | ) |      |  | 220,956     |      |  |  | 72,159     |  
|Non deductible amounts                                             |  |      | (120,524    | ) |      |  | 347,217     |      |  |  |           |  
|Other adjustments                                                  |  |      | 130,631     |   |      |  | (52,227     | )    |  |  | 476,137    |  
|                                                                   |  |      |             |   |      |  |             |      |  |  |            |  
|Deferred income tax recovery                                       |  |      |            |   |      |  | (187,145    | )    |  |  | (491,863   | )
|                                                                   |  |      |             |   |      |  |             |      |  |  |            |  

No deferred tax asset has been recognized in respect of the following losses and deductable temporary differences as it
is not considered probable that sufficient future taxable profit will allow the deferred tax assets to be recovered.



|                                               |  |      |            |  |      |  |            | 
|---------------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | 
|                                               |  | 2012 |            |  | 2011 | 
|                                               |  | $    |            |  | $    | 
|Deferred income tax assets                     |  |      |            |  |      |  |            | 
|Non-capital losses available                   |  |      | 11,290,028 |  |      |  | 11,211,431 | 
|Capital losses available                       |  |      | 1,030,304  |  |      |  | 1,030,304  | 
|Resource tax pools in excess of net book value |  |      | 8,928,083  |  |      |  | 6,226,327  | 
|Share issue costs and other                    |  |      | 246,902    |  |      |  | 228,199    | 
|                                               |  |      |            |  |      |  |            | 
|Unrecognized deferred tax assets               |  |      | 21,495,317 |  |      |  | 18,696,261 | 
|                                               |  |      |            |  |      |  |            | 



F-35



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 17  INCOME TAXES (continued)



The Company has the approximate amounts of tax pools available as follows:



|                                         |  |      |            |  |      |  |            | 
|---------------------------------------- |  | ---- | ---------- |  | ---- |  | ---------- | 
|As at December 31                        |  | 2012 |            |  | 2011 | 
|                                         |  | $    |            |  | $    | 
|Canada:                                  |  |      |            |  |      |  |            | 
|Exploration and development expenditures |  |      | 17,218,000 |  |      |  | 18,439,000 | 
|Unamortized share issue costs            |  |      | 988,000    |  |      |  | 913,000    | 
|Capital losses                           |  |      | 8,242,000  |  |      |  | 8,242,000  | 
|Non-capital losses                       |  |      | 22,762,000 |  |      |  | 18,416,000 | 
|                                         |  |      |            |  |      |  |            | 
|                                         |  |      | 49,210,000 |  |      |  | 46,010,000 | 
|                                         |  |      |            |  |      |  |            | 
|                                         |  |     
|United States:                           |  |      |            |  |      |  |            | 
|Exploration and development expenditures |  |      | 33,287,000 |  |      |  | 28,553,000 | 
|Non-capital losses                       |  |      | 15,324,000 |  |      |  | 11,883,000 | 
|                                         |  |      |            |  |      |  |            | 
|                                         |  |      | 48,611,000 |  |      |  | 40,436,000 | 
|                                         |  |      |            |  |      |  |            | 
|                                         |  |     
|Total                                    |  |      | 97,821,000 |  |      |  | 86,446,000 | 
|                                         |  |      |            |  |      |  |            | 

The described 2011 US tax pools are updated for a typographical correction from the amount disclosed in the
Companys annual consolidated financial statements filed on SEDAR.

The exploration and development expenditures at December 31,
2012 can be carried forward to reduce future income taxes indefinitely. The non-capital losses for income tax purposes expire as follows:



|     |  |         |            |  |                |  |            |        |  |  |            | 
|---- |  | ------- | ---------- |  | -------------- |  | ---------- | ------ |  |  | ---------- | 
|     |  | Canada$ |            |  | United States$ |  |            | Total$ | 
|2015 |  |         | 1,729,000  |  |                |  |           |        |  |  | 1,729,000  | 
|2026 |  |         |           |  |                |  | 2,007,000  |        |  |  | 2,007,000  | 
|2027 |  |         | 4,152,000  |  |                |  | 2,676,000  |        |  |  | 6,828,000  | 
|2028 |  |         | 4,674,000  |  |                |  | 201,000    |        |  |  | 4,875,000  | 
|2029 |  |         | 3,373,000  |  |                |  | 2,590,000  |        |  |  | 5,963,000  | 
|2030 |  |         | 2,070,000  |  |                |  | 2,201,000  |        |  |  | 4,271,000  | 
|2031 |  |         | 2,407,000  |  |                |  | 2,216,000  |        |  |  | 4,623,000  | 
|2032 |  |         | 4,357,000  |  |                |  | 3,433,000  |        |  |  | 7,790,000  | 
|     |  |         |            |  |                |  |            |        |  |  |            | 
|     |  |         | 22,762,000 |  |                |  | 15,324,000 |        |  |  | 38,086,000 | 
|     |  |         |            |  |                |  |            |        |  |  |            | 

The Company does not recognize deferred tax assets related to the foregoing tax pools because it is not probable that
future taxable profit will be available against which the tax pools can be utilized.



F-36



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 18  COMMITMENTS

The Company has entered into a lease agreement for a vehicle that is used to accelerate the production in the waterflood at Woodrush. Future minimum annual lease payments under the lease are as follows:



|     |  |   |        | 
|---- |  | - | ------ | 
|     |  | $ |       
|2013 |  |   | 34,202 | 
|     |  |   |        | 
|     |  |   | 34,202 | 
|     |  |   |        | 

The Company has entered into lease agreements on office premises for its various locations. Future minimum annual lease
payments under the leases are as follows:



|     |  |   |         | 
|---- |  | - | ------- | 
|     |  | $ |        
|2013 |  |   | 194,565 | 
|2014 |  |   | 163,820 | 
|2015 |  |   | 48,800  | 
|     |  |   |         | 
|     |  |   | 407,185 | 
|     |  |   |         | 

NOTE 19  PERSONNEL EXPENSES

The aggregate compensation expense of key management was as follows:



|                                         |  |                        |           |   |      |  |           |      |  |  |           |  
|---------------------------------------- |  | ---------------------- | --------- | - | ---- |  | --------- | ---- |  |  | --------- | -
|                                         |  | Year ended December 31 |          
|                                         |  | 2012                   |           |   | 2011 |  |           | 2010 | 
|                                         |  | $                      |           |   | $    |  |           | $    | 
|Salaries, benefits and fees              |  |                        | 1,194,087 |   |      |  | 1,771,981 |      |  |  | 1,215,191 |  
|Non-cash stock-based compensation        |  |                        | 412,049   |   |      |  | 451,071   |      |  |  | 486,018   |  
|                                         |  |                        |           |   |      |  |           |      |  |  |           |  
|                                         |  |                        | 1,606,136 |   |      |  | 2,223,052 |      |  |  | 1,701,209 |  
|Capitalized portion of salaries and fees |  |                        | (193,132  | ) |      |  | (154,368  | )    |  |  | (159,373  | )
|                                         |  |                        |           |   |      |  |           |      |  |  |           |  
|                                         |  |                        | 1,413,004 |   |      |  | 2,068,684 |      |  |  | 1,541,836 |  
|                                         |  |                        |           |   |      |  |           |      |  |  |           |  

NOTE 20  OPERATING SEGMENTS

Segment information is provided on the basis of geographic segments as the Company manages its business through two geographic regions - Canada and the United States. The two geographic segments presented
reflect the way in which the Companys management reviews business performance. The Companys revenue and losses of each geographic segment are as follows:



|                                           |  |        |            |   |               |  |            |       |  |  |            |   |  |      |            |   |      |  |            |      |  |  |            |   |  |      |             |   |  |  |             |   |  |  |            |  
|------------------------------------------ |  | ------ | ---------- | - | ------------- |  | ---------- | ----- |  |  | ---------- | - |  | ---- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | - |  | ---- | ----------- | - |  |  | ----------- | - |  |  | ---------- | -
|                                           |  | Canada |            |   | United States |  |            | Total | 
|                                           |  | 2012   |            |   | 2011          |  |            | 2010  |  |  | 2012       |   |  | 2011 |            |   | 2010 |  |            | 2012 |  |  | 2011       |   |  | 2010 |            
|                                           |  | $      |            |   | $             |  |            | $     |  |  | $          |   |  | $    |            |   | $    |  |            | $    |  |  | $          |   |  | $    |            
|Year ended December 31                     |  |        |            |   |               |  |            |       |  |  |            |   |  |      |            |   |      |  |            |      |  |  |            |   |  |      |             |   |  |  |             |   |  |  |            |  
|Revenues and other income                  |  |        | 5,743,612  |   |               |  | 7,171,363  |       |  |  | 6,878,384  |   |  |      |           |   |      |  |           |      |  |  |           |   |  |      | 5,743,612   |   |  |  | 7,171,363   |   |  |  | 6,878,384  |  
|Segmented loss Amortization, depletion and |  |        | (8,363,283 | ) |               |  | (4,662,246 | )     |  |  | (3,506,122 | ) |  |      | (3,389,242 | ) |      |  | (6,381,036 | )    |  |  | (1,617,783 | ) |  |      | (11,752,525 | ) |  |  | (11,043,282 | ) |  |  | (5,123,905 | )
|impairment losses                          |  |        | 7,927,339  |   |               |  | 3,330,811  |       |  |  | 3,862,852  |   |  |      | 2,748,684  |   |      |  | 5,320,821  |      |  |  | 822,015    |   |  |      | 10,676,023  |   |  |  | 8,651,632   |   |  |  | 4,684,867  |  
|Interest expense                           |  |        | 233,115    |   |               |  | 439,771    |       |  |  | 576,549    |   |  |      | 1,175      |   |      |  | 216        |      |  |  |           |   |  |      | 234,290     |   |  |  | 439,987     |   |  |  | 576,549    |  
|Deferred tax recovery                      |  |        |           |   |               |  | 187,145    |       |  |  | 491,863    |   |  |      |           |   |      |  |           |      |  |  |           |   |  |      |            |   |  |  | 187,145     |   |  |  | 491,863    |  
|                                           |  |        |            |   |               |  |            |       | 
|As at December 31                          |  |        |            |   |               |  |            |       |  |  |            |   |  |      |            |   |      |  |            |      |  |  |            |   |  |      |             |   |  |  |             |   |  |  |            |  
|Total capital expenditures                 |  |        | 1,422,773  |   |               |  | 6,480,131  |       |  |  | 4,219,843  |   |  |      | 9,389,634  |   |      |  | 1,833,077  |      |  |  | 802,322    |   |  |      | 10,812,407  |   |  |  | 8,313,208   |   |  |  | 5,022,165  |  



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 21  ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss were as follows:



|                                        |  |                   |         |  |                   |  |         |                   |  |  |         | 
|--------------------------------------- |  | ----------------- | ------- |  | ----------------- |  | ------- | ----------------- |  |  | ------- | 
|As at                                   |  | December 31, 2012 |         |  | December 31, 2011 |  |         | December 31, 2010 | 
|                                        |  | $                 |         |  | $                 |  |         | $                 | 
|Foreign currency translation adjustment |  |                   | 568,403 |  |                   |  | 392,977 |                   |  |  | 685,002 | 
|                                        |  |                   |         |  |                   |  |         |                   |  |  |         | 
|                                        |  |                   | 568,403 |  |                   |  | 392,977 |                   |  |  | 685,002 | 
|                                        |  |                   |         |  |                   |  |         |                   |  |  |         | 

NOTE 22  DETERMINATION OF FAIR VALUES

A number of the Companys accounting policies and disclosures require the determination of fair value, for financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that financial asset or financial liability. Due to the use of
subjective judgments and uncertainties in the determination of these fair values the values should not be interpreted as being realizable in an immediate settlement of the financial instruments.

At December 31, 2012 and December 31, 2011, the carrying value of warrant liability included in the consolidated balance sheets approximate its
fair value. The fair value of these warrants is measured using the Hull-White Trinomial option pricing model with significant unobservable inputs (Level 3). The financial contract liability is measured at the initial transaction price, which is
deemed to be fair value, and subsequently measured based on netbacks in accordance with the Joint Operating Agreement. This model also has significant unobservable inputs (Level 3).

The Company classifies the fair value of financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instruments:



| |  | Level 1: Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Level 2: Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for
substantially the full term of the asset or liability.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Level 3: Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value
measurement.
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE 23  FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT

The Companys functional currency is the Canadian dollar. The Company operates in the United States, giving rise to exposure to market risks from
changes in foreign currency rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

The Company also has exposure to a number of risks from its use of financial instruments including: credit risk, liquidity risk, and market risk. This
note presents information about the Companys exposure to each of these risks and the Companys objectives, policies and processes for measuring and managing risk, and the Companys management of capital.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 23  FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT (continued)



|(a) | Credit Risk
|--- | -----------

Credit risk arises from
credit exposure to receivables due from joint venture partners and marketers included in accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets.

The Company is exposed to third party credit risk through its contractual arrangements with its current or future joint venture partners, marketers of
its petroleum and natural gas production and other parties. In the event such entities fail to meet their contractual obligations to the Company, such failures may have a material adverse effect on the Companys business, financial condition,
and results of operations.

The objective of managing the third party credit risk is to minimize losses in financial assets. The Company
assesses the credit quality of the partners, taking into account their financial position, past experience, and other factors. The Company mitigates the risk of non-collection of certain amounts by obtaining the joint venture partners share of
capital expenditures in advance of a project and by monitoring accounts receivable on a regular basis. As at December 31, 2012 and 2011, no accounts receivable has been deemed uncollectible or written off during the year.

As at December 31, 2012, the Companys receivables consist of $29,973 (2011 - $64,583) from joint interest partners, $493,900 (2011 - $774,100;
2010 - $54,276) from oil and natural gas marketers and $24,739 (2011 - $48,498) from other trade receivables.

The Company considers all
amounts outstanding for more than 90 days as past due. Currently, there is no indication that amounts are non-collectable; thus an allowance for doubtful accounts has not been set up. As at December 31, 2012, $Nil (2011 - $5,787) of accounts
receivable are past due.



|(b) | Liquidity Risk
|--- | --------------

Liquidity risk is the
risk that the Company will not be able to meet its financial obligations as they are due. The nature of the oil and gas industry is capital intensive and the Company maintains and monitors a certain level of cash flow to finance operating and
capital expenditures.

The Companys ongoing liquidity and cash flow are impacted by various events and conditions. These events and
conditions include but are not limited to commodity price fluctuations, general credit and market conditions, operation and regulatory factors, such as government permits, the availability of drilling and other equipment, lands and pipeline access,
weather, and reservoir quality.

To mitigate the liquidity risk, the Company closely monitors its credit facility, production level and
capital expenditures to ensure that it has adequate liquidity to satisfy its financial obligations.

The following are the contractual
maturities of financial liabilities as at December 31, 2012:



|                                         |  |                 |           |  |      |  |           | 
|---------------------------------------- |  | --------------- | --------- |  | ---- |  | --------- | 
|                                         |  | Carrying amount |           |  | 2013 | 
|                                         |  | $               |           |  | $    | 
|Accounts payable and accrued liabilities |  |                 | 2,018,542 |  |      |  | 2,018,542 | 
|Bank line of credit                      |  |                 | 5,956,749 |  |      |  | 5,956,749 | 
|                                         |  |                 |           |  |      |  |           | 
|                                         |  |                 | 7,975,291 |  |      |  | 7,975,291 | 
|                                         |  |                 |           |  |      |  |           | 

For the contractual maturities of financial contract liability as at December 31, 2012, see note 11 for details.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 23  FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT (continued)



|(c) | Market Risk
|--- | -----------

Market risk is the risk that
changes in market prices, such as foreign exchange rates, commodity prices, and interest rates will affect the Companys net earnings. The objective of market risk management is to manage and control market risk exposures within acceptable
limits, while maximizing returns. The Company utilizes financial derivatives to manage certain market risks. All such transactions are conducted in accordance with the risk management policy that has been approved by the Board of Directors.



|(i) | Foreign Currency Exchange Risk
|--- | ------------------------------

Foreign
currency exchange rate risk is the risk that the fair value of financial instruments or future cash flows will fluctuate as a result of changes in foreign exchange rates. Although substantially all of the Companys oil and natural gas sales are
denominated in Canadian dollars, the underlying market prices in Canada for oil and natural gas are impacted by changes in the exchange rate between the Canadian and United States dollars. Given that changes in exchange rate have an indirect
influence, the impact of changing exchange rates cannot be accurately quantified. The Company had no forward exchange rate contracts in place as at or during the year ended December 31, 2012 and 2011.

The Company was exposed to the following foreign currency risk at December 31:



|                                         |  |          |           |   |          |  |            |  
|---------------------------------------- |  | -------- | --------- | - | -------- |  | ---------- | -
|Expressed in foreign currencies          |  | 2012CND$ |           |   | 2011CND$ | 
|Cash and cash equivalents                |  |          | 1,031,318 |   |          |  | 1,772,982  |  
|Accounts receivable                      |  |          | 29,973    |   |          |  | 69,667     |  
|Accounts payable and accrued liabilities |  |          | (869,430  | ) |          |  | (1,346,564 | )
|                                         |  |          |           |   |          |  |            |  
|Balance sheet exposure                   |  |          | 191,861   |   |          |  | 496,085    |  
|                                         |  |          |           |   |          |  |            |  

The following foreign exchange rates applied for the year ended and as at December 31:



|                                 |  |      |        |  |      |  |        | 
|-------------------------------- |  | ---- | ------ |  | ---- |  | ------ | 
|                                 |  | 2012 |        |  | 2011 | 
|YTD average USD to CAD           |  |      | 0.9999 |  |      |  | 1.0170 | 
|December 31, reporting date rate |  |      | 0.9949 |  |      |  | 0.9893 | 

The Company has performed a sensitivity analysis on its foreign currency denominated financial instruments. Based on the
Companys foreign currency exposure noted above and assuming that all other variables remain constant, a 10% appreciation of the US dollar against the Canadian dollar would result in the decrease of net loss of $19,186 at December 31, 2012
(2011 - $49,609; 2010 - $54,276). For a 10% depreciation of the above foreign currencies against the Canadian dollar, assuming all other variables remain constant, there would be an equal and opposite impact on net loss.



|(ii) | Interest Rate Risk
|---- | ------------------

Interest rate risk is
the risk that future cash flows will fluctuate as a result of changes in market interest rates. During the year ended December 31, 2012, the Company was exposed to interest rate fluctuations on its credit facility which bore a floating rate of
interest. Assuming all other variables remain constant, an increase or decrease of 1% in market interest rate in the year ended December 31, 2012 would have increased or decreased net loss by $58,279. The Company had no interest rate swaps or
financial contracts in place at or during the year ended December 31, 2012 and 2011.



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##### Table of Contents

DEJOUR ENERGY INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the Year Ended December 31, 2012, 2011 and 2010

(Expressed in Canadian
dollars)







NOTE 23  FINANCIAL INSTRUMENTS AND CAPITAL MANAGEMENT (continued)



|(c) | Market Risk (continued)
|--- | -----------------------



|(iii) | Commodity Price Risk
|----- | --------------------

Revenues and
consequently cash flows fluctuate with commodity prices and the US/Canadian dollar exchange rate. Commodity prices are determined on a global basis and circumstances that occur in various parts of the world are outside of the control of the Company.
The Company may protect itself from fluctuations in prices by using the financial derivative sales contracts. The Company may enter into commodity price contracts to manage the risks associated with price volatility and thereby protect its cash
flows used to fund its capital program. Assuming all other variables remain constant, an increase or decrease of oil price of $1 per bbl and gas price of $0.01 per mcf in the year ended December 31, 2012 would have decreased or increased net
loss by $76,375. The Company had no commodity contracts in place at December 31, 2012.



|(d) | Capital Management Strategy
|--- | ---------------------------

The
Companys policy on capital management is to maintain a prudent capital structure so as to maintain financial flexibility, preserve access to capital markets, maintain investor, creditor and market confidence, and to allow the Company to fund
future developments. The Company considers its capital structure to include share capital, cash and cash equivalents, bank line of credit, and working capital. In order to maintain or adjust capital structure, the Company may from time to time issue
shares or enter into debt agreements and adjust its capital spending to manage current and projected operating cash flows and debt levels.

The Companys current borrowing capacity is based on the lenders review of the Companys oil and gas reserves. The Company is also
subject to various covenants. Compliance with these covenants is monitored on a regular basis and at December 31, 2012, the Company is in compliance with all covenants (notes 8 and 24).

The Companys share capital is not subject to any external restrictions. The Company has not paid or declared any dividends, nor are any contemplated in the foreseeable future. There have been no
changes to the Companys capital management strategy during the year ended December 31, 2012.

NOTE 24  SUBSEQUENT EVENT

Subsequent to December 31, 2012, DEAL was informed by its Canadian Bank (Bank) that the value of the petroleum and
natural gas reserves assigned to the Bank as partial security for its $6,050,000 revolving line of credit was deficient for loan collateral purposes. On March 28, 2013, DEAL signed a new Commitment Letter with the Bank to renew its
$5,950,000 as a revolving operating demand loan by Credit Facility A in the amount of $3,700,000 and a non-revolving demand loan Credit Facility B in the amount of $2,250,000. See notes 2 and 8 for details.



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##### Table of Contents

SUPPLEMENTARY OIL AND GAS RESERVE ESTIMATION AND DISCLOSURES  ASC 932
(UNAUDITED)

Select supplementary oil and gas reserve estimation and disclosure are provided in accordance with U.S. disclosure
requirements. The standards of the SEC require that proved reserves be estimated using existing economic conditions (constant pricing). Based on this methodology, the Companys results have been calculated utilizing the 12-month average
price for each of the years presented within this supplementary disclosure.

The Companys 2012, 2011 and 2010 financial results were
prepared in accordance with IFRS.

The Company reports in Canadian currency and therefore the Reserves Data pertaining to the Companys
reserves in the United States set forth in the tables below has been converted to Canadian dollars at the prevailing conversion rate at December 31, 2012. The conversion rate used per Bank of Canada is 0.9949.



|(a) | Net proved oil and gas reserves
|--- | -------------------------------

As at
December 31, 2012, the Companys oil and gas reserves are located in both Canada and the United States.

Deloitte & Touche
LLP (AJM Deloitte or AJM) of Calgary, Alberta, independent petroleum engineering consultants based in Calgary, Alberta were retained by the Company to evaluate the Canadian properties of the Company. Their report, titled
Reserve and Resource Estimation and Economic Evaluation, Dejour Energy (Alberta) Ltd., is dated January 30, 2013 and has an effective date of December 31, 2012.

Gustavson Associates (Gustavson), an independent petroleum engineering consultants based in Denver, Colorado were retained by the Company to evaluate the US properties of the Company. Their
report, titled Reserve Estimate and Financial Forecast as to Dejours Interests in the Kokopelli Field Area, Garfield County, Colorado, and the South Rangely Field Area, Rio Blanco County, Colorado is dated April 6, 2013 and
has an effective date of January 1, 2013.

In accordance with the US Securities and Exchange Commissions (SEC)
definitions and guidelines, AJM Deloitte, and Gustavson Associates (Gustavson), have used constant prices and costs in estimating the reserves and future net cash flows contained in their reports. Actual future net cash flows will be
affected by other factors, such as actual production levels, supply and demand for oil and natural gas, curtailments or increases in consumption by oil and natural gas purchasers, changes in governmental regulation or taxation and the impact of
inflation on costs.

The tables in this section set forth oil and gas information prepared by the Company in accordance with U.S. disclosure
standards, including Accounting Standards Codification 932 (ASC 932). Reserves have been estimated in accordance with the US Securities and Exchange Commissions (SEC) definitions and guidelines. The changes in our net
proved reserve quantities are outlined below.

Net reserves are Dejour royalty and working interest remaining reserves, less all Crown,
freehold, and overriding royalties and interests that are not owned by Dejour.

Proved reserves are those estimated quantities of crude oil,
natural gas and natural gas liquids that can be estimated with a high degree of certainty to be economically recoverable under existing economic and operating conditions. It is likely that the actual remaining quantities recovered will exceed the
estimated proved reserves.

Proved developed reserves are those reserves that are expected to be recovered from existing wells and installed
facilities or, if facilities have not been installed, that would involve a low expenditure (e.g. when compared to the cost of drilling a well) to put the reserves on production. Developed reserves may be subdivided into producing and non-producing.

Proved undeveloped reserves are those reserves that are expected to be recovered from known accumulations where a significant expenditure
(e.g. when compared to the cost of drilling a well) is required to render them capable of production.

The Company cautions users of this
information as the process of estimating crude oil and natural gas reserves is subject to a level of uncertainty. The reserves are based on economic and operating conditions; therefore, changes can be made to future assessments as a result of a
number of factors, which can include new technology, changing economic conditions and development activity.



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|(a) | CONSTANT PRICES AND COSTS  YEAR ENDED DECEMBER 31, 2012
|--- | --------------------------------------------------------

Net Proved Developed and

Proved Undeveloped Reserves



|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   |  |                  |      |   |                          |  |     |                   |  |  |                                 |   |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |   |  |  |        |   |  |  |        |  
|----------------------- |  | ------------------------- | --- | - | ------------------------ |  | -- | ----------------- |  |  | ------------------------------- | - |  | ---------------- | ---- | - | ------------------------ |  | --- | ----------------- |  |  | ------------------------------- | - |  | ------------------------- | ------ | - | ---------------- |  | ------ | ------------------------ |  |  | ----------------- | - |  | ------------------------------- | --- | - |  |  | ----- | - |  |  | ------ | - |  |  | ------ | -
|                        |  | Canada                    |     |   | United States            |  |    | Total             | 
|                        |  | Light andMedium Oil(Mbbl) |     |   | Natural GasLiquids(Mbbl) |  |    | Natural Gas(MMcf) |  |  | Barrels of OilEquivalent(Mbo e) |   |  | Condensate(Mbbl) |      |   | Natural GasLiquids(Mbbl) |  |     | Natural Gas(MMcf) |  |  | Barrels of OilEquivalent(Mbo e) |   |  | Light andMedium Oil(Mbbl) |        |   | Condensate(Mbbl) |  |        | Natural GasLiquids(Mbbl) |  |  | Natural Gas(MMcf) |   |  | Barrels of OilEquivalent(Mbo e) |    
|December 31, 2011       |  |                           | 317 |   |                          |  | 4  |                   |  |  | 752                             |   |  |                  | 446  |   |                          |  | 287 |                   |  |  | 3,863                           |   |  |                           | 41,314 |   |                  |  | 11,035 |                          |  |  | 317               |   |  |                                 | 287 |   |  |  | 3,867 |   |  |  | 42,066 |   |  |  | 11,481 |  
|Technical Revisions     |  |                           | (18 | ) |                          |  | (1 | )                 |  |  | (306                            | ) |  |                  | (70  | ) |                          |  | 54  |                   |  |  | 705                             |   |  |                           | 615    |   |                  |  | 862    |                          |  |  | (18               | ) |  |                                 | 54  |   |  |  | 704   |   |  |  | 309    |   |  |  | 792    |  
|Economic Factors        |  |                           |    |   |                          |  |   |                   |  |  |                                |   |  |                  |     |   |                          |  | (1  | )                 |  |  | (110                            | ) |  |                           | (991   | ) |                  |  | (276   | )                        |  |  |                  |   |  |                                 | (1  | ) |  |  | (110  | ) |  |  | (991   | ) |  |  | (276   | )
|Production              |  |                           | (56 | ) |                          |  | (1 | )                 |  |  | (281                            | ) |  |                  | (104 | ) |                          |  |    |                   |  |  |                                |   |  |                           |       |   |                  |  |       |                          |  |  | (56               | ) |  |                                 |    |   |  |  | (1    | ) |  |  | (281   | ) |  |  | (104   | )
|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   |  |                  |      |   |                          |  |     |                   |  |  |                                 |   |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |   |  |  |        |   |  |  |        |  
|December 31, 2012       |  |                           | 243 |   |                          |  | 2  |                   |  |  | 165                             |   |  |                  | 272  |   |                          |  | 340 |                   |  |  | 4,458                           |   |  |                           | 40,938 |   |                  |  | 11,621 |                          |  |  | 243               |   |  |                                 | 340 |   |  |  | 4,460 |   |  |  | 41,103 |   |  |  | 11,893 |  
|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   |  |                  |      |   |                          |  |     |                   |  |  |                                 |   |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |   |  |  |        |   |  |  |        |  
|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   | 
|Developed Producing     |  |                           | 243 |   |                          |  |   |                   |  |  | 104                             |   |  |                  | 260  |   |                          |  |    |                   |  |  | 11                              |   |  |                           | 109    |   |                  |  | 29     |                          |  |  | 243               |   |  |                                 |    |   |  |  | 11    |   |  |  | 213    |   |  |  | 289    |  
|Developed Non-producing |  |                           |    |   |                          |  | 2  |                   |  |  | 61                              |   |  |                  | 12   |   |                          |  | 1   |                   |  |  | 7                               |   |  |                           | 68     |   |                  |  | 19     |                          |  |  |                  |   |  |                                 | 1   |   |  |  | 9     |   |  |  | 129    |   |  |  | 31     |  
|Undeveloped             |  |                           |    |   |                          |  |   |                   |  |  |                                |   |  |                  |     |   |                          |  | 339 |                   |  |  | 4,440                           |   |  |                           | 40,761 |   |                  |  | 11,573 |                          |  |  |                  |   |  |                                 | 339 |   |  |  | 4,440 |   |  |  | 40,761 |   |  |  | 11,573 |  
|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   |  |                  |      |   |                          |  |     |                   |  |  |                                 |   |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |   |  |  |        |   |  |  |        |  
|Total                   |  |                           | 243 |   |                          |  | 2  |                   |  |  | 165                             |   |  |                  | 272  |   |                          |  | 340 |                   |  |  | 4,458                           |   |  |                           | 40,938 |   |                  |  | 11,621 |                          |  |  | 243               |   |  |                                 | 340 |   |  |  | 4,460 |   |  |  | 41,103 |   |  |  | 11,893 |  
|                        |  |                           |     |   |                          |  |    |                   |  |  |                                 |   |  |                  |      |   |                          |  |     |                   |  |  |                                 |   |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |   |  |  |        |   |  |  |        |  



|(1) | Canada - Decrease in Total Proved Natural Gas Reserves of 306 MMcf:
|--- | -------------------------------------------------------------------

During the year ended December 31, 2012, following the implementation of waterflood in 2011, an expected decrease in natural gas reserves as the influx of water into the reservoir will replace some
of the natural gas reserves-in-place. AJM Deloitte decreased, by way of a technical revision, the Companys total proved natural gas reserves by 306 MMcfs.



|(2) | United States - Increase in Total Proved Natural Gas Liquids Reserves of 705 Mbbls and Natural Gas Reserves of 615 MMcf:
|--- | ------------------------------------------------------------------------------------------------------------------------

During the year ended December 31, 2012, an expected increase in the natural gas reserves and natural gas liquids reserves as the
Companys major competitors has strong upside reserves potential in the nearby areas of the Piceance Basin of Western Colorado. Gustavson increased, by way of a technical revision, the Companys total proved natural gas liquids reserves
and natural gas reserves by 705 Mbbls and 615 MMcfs respectively.



F-43



---

##### Table of Contents

CONSTANT PRICES AND COSTS  YEAR ENDED DECEMBER 31, 2011

Net Proved Developed and

Proved
Undeveloped Reserves



|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   |  |                  |     |   |                          |  |     |                   |  |  |                                 |  |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |  |  |  |        |   |  |  |        |  
|------------------- |  | ------------------------- | --- | - | ------------------------ |  | - | ----------------- |  |  | ------------------------------- | - |  | ---------------- | --- | - | ------------------------ |  | --- | ----------------- |  |  | ------------------------------- |  |  | ------------------------- | ------ | - | ---------------- |  | ------ | ------------------------ |  |  | ----------------- | - |  | ------------------------------- | --- | - |  |  | ----- |  |  |  | ------ | - |  |  | ------ | -
|                    |  | Canada                    |     |   | United States            |  |   | Total             | 
|                    |  | Light andMedium Oil(Mbbl) |     |   | Natural GasLiquids(Mbbl) |  |   | Natural Gas(MMcf) |  |  | Barrels of OilEquivalent(Mbo e) |   |  | Condensate(Mbbl) |     |   | Natural GasLiquids(Mbbl) |  |     | Natural Gas(MMcf) |  |  | Barrels of OilEquivalent(Mbo e) |  |  | Light andMedium Oil(Mbbl) |        |   | Condensate(Mbbl) |  |        | Natural GasLiquids(Mbbl) |  |  | Natural Gas(MMcf) |   |  | Barrels of OilEquivalent(Mbo e) |    
|December 31, 2010   |  |                           | 167 |   |                          |  | 4 |                   |  |  | 936                             |   |  |                  | 327 |   |                          |  | 326 |                   |  |  |                                |  |  |                           | 45,308 |   |                  |  | 7,877  |                          |  |  | 167               |   |  |                                 | 326 |   |  |  | 4     |  |  |  | 46,244 |   |  |  | 8,204  |  
|Discoveries         |  |                           |    |   |                          |  |  |                   |  |  |                                |   |  |                  |    |   |                          |  |    |                   |  |  | 93                              |  |  |                           | 1,078  |   |                  |  | 273    |                          |  |  |                  |   |  |                                 |    |   |  |  | 93    |  |  |  | 1,078  |   |  |  | 273    |  
|Technical Revisions |  |                           | 190 |   |                          |  |  |                   |  |  | (24                             | ) |  |                  | 186 |   |                          |  | (39 | )                 |  |  | 3,770                           |  |  |                           | (5,072 | ) |                  |  | 2,885  |                          |  |  | 190               |   |  |                                 | (39 | ) |  |  | 3,770 |  |  |  | (5,096 | ) |  |  | 3,071  |  
|Dispositions        |  |                           |    |   |                          |  |  |                   |  |  |                                |   |  |                  |    |   |                          |  |    |                   |  |  |                                |  |  |                           |       |   |                  |  |       |                          |  |  |                  |   |  |                                 |    |   |  |  |      |  |  |  |       |   |  |  |       |  
|Economic Factors    |  |                           |    |   |                          |  |  |                   |  |  |                                |   |  |                  |    |   |                          |  |    |                   |  |  |                                |  |  |                           |       |   |                  |  |       |                          |  |  |                  |   |  |                                 |    |   |  |  |      |  |  |  |       |   |  |  |       |  
|Production          |  |                           | (40 | ) |                          |  |  |                   |  |  | (160                            | ) |  |                  | (67 | ) |                          |  |    |                   |  |  |                                |  |  |                           |       |   |                  |  |       |                          |  |  | (40               | ) |  |                                 |    |   |  |  |      |  |  |  | (160   | ) |  |  | (67    | )
|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   |  |                  |     |   |                          |  |     |                   |  |  |                                 |  |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |  |  |  |        |   |  |  |        |  
|December 31, 2011   |  |                           | 317 |   |                          |  | 4 |                   |  |  | 752                             |   |  |                  | 446 |   |                          |  | 287 |                   |  |  | 3,863                           |  |  |                           | 41,314 |   |                  |  | 11,035 |                          |  |  | 317               |   |  |                                 | 287 |   |  |  | 3,867 |  |  |  | 42,066 |   |  |  | 11,481 |  
|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   |  |                  |     |   |                          |  |     |                   |  |  |                                 |  |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |  |  |  |        |   |  |  |        |  
|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   | 
|Developed           |  |                           | 317 |   |                          |  | 4 |                   |  |  | 752                             |   |  |                  | 446 |   |                          |  |    |                   |  |  | 14                              |  |  |                           | 158    |   |                  |  | 40     |                          |  |  | 317               |   |  |                                 |    |   |  |  | 18    |  |  |  | 910    |   |  |  | 486    |  
|Undeveloped         |  |                           |    |   |                          |  |  |                   |  |  |                                |   |  |                  |    |   |                          |  | 287 |                   |  |  | 3,849                           |  |  |                           | 41,156 |   |                  |  | 10,995 |                          |  |  |                  |   |  |                                 | 287 |   |  |  | 3,849 |  |  |  | 41,156 |   |  |  | 10,995 |  
|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   |  |                  |     |   |                          |  |     |                   |  |  |                                 |  |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |  |  |  |        |   |  |  |        |  
|Total               |  |                           | 317 |   |                          |  | 4 |                   |  |  | 752                             |   |  |                  | 446 |   |                          |  | 287 |                   |  |  | 3,863                           |  |  |                           | 41,314 |   |                  |  | 11,035 |                          |  |  | 317               |   |  |                                 | 287 |   |  |  | 3,867 |  |  |  | 42,066 |   |  |  | 11,481 |  
|                    |  |                           |     |   |                          |  |   |                   |  |  |                                 |   |  |                  |     |   |                          |  |     |                   |  |  |                                 |  |  |                           |        |   |                  |  |        |                          |  |  |                   |   |  |                                 |     |   |  |  |       |  |  |  |        |   |  |  |        |  



|(1) | Canada - Increase in Total Proved Oil Reserves of 190 Mbbls and decrease in Total Proved Natural Gas Reserves of 24 MMcf:
|--- | -------------------------------------------------------------------------------------------------------------------------

During the year ended December 31, 2011, the Company received approval from the British Columbia Oil and Gas Commission to implement
a waterflood pressure maintenance system (waterflood) at its Woodrush property in northeastern British Columbia, Canada. Based on this approval and the Companys commitment to spend approximately $4,000,000 to implement the
waterflood, AJM Deloitte increased, by way of a technical revision, the Companys total proved oil reserves by 190 Mbbls. There was no related increase in natural gas reserves as the impact of the waterflood is not expected to increase
recoverable natural gas reserves. Rather, there is expected to be a decrease in natural gas reserves as the influx of water into the reservoir will replace some of the natural gas reserves-in-place. This decrease of 24 MMcf has been reflected in the
above table.



|(2) | United States - Increase in Total Proved Natural Gas Liquids Reserves of 3,770 Mbbls:
|--- | -------------------------------------------------------------------------------------

During the year ended December 31, 2011, the Company amended its method of reporting natural gas liquids to separate them from the
Companys natural gas reserves and show them separately. This resulted in an increase of 3,770 Mbbls of natural gas liquids and a related decrease of 5,072MMcf of natural gas.



F-44



---

##### Table of Contents

|(b) | Capitalized Costs
|--- | -----------------



|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|-------------------------------------- |  | ---------- | ----------- | - | ---------- | - | ----------- | ------------------------ |  | - | ----------- | -
|As at December 31,                     |  | 2012       |             |   | 2011       |   |             | 2010                     | 
|                                       |  | (Per IFRS) |             |   | (Per IFRS) |   |             | (As Restated under IFRS) | 
|Canada                                 |  |            |             |   |            |   |             |                          |  |   |             |  
|Proved oil and gas properties          |  | $          | 24,700,464  |   |            | $ | 23,149,485  |                          |  | $ | 16,191,797  |  
|Unproved oil and gas properties        |  |            | 22,502      |   |            |   | 71,552      |                          |  |   | 41,060      |  
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|Total capital costs                    |  |            | 24,722,966  |   |            |   | 23,221,037  |                          |  |   | 16,232,857  |  
|Accumulated depletion and depreciation |  |            | (8,556,901  | ) |            |   | (5,819,933  | )                        |  |   | (3,453,777  | )
|Impairment                             |  |            | (6,210,779  | ) |            |   | (1,298,207  | )                        |  |   | (360,268    | )
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|Net capitalized costs                  |  | $          | 9,955,286   |   |            | $ | 16,102,897  |                          |  | $ | 12,418,812  |  
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|                                       |  |            |            
|United States                          |  |            |             |   |            |   |             |                          |  |   |             |  
|Proved oil and gas properties          |  | $          | 13,075,792  |   |            | $ | 4,075,774   |                          |  | $ | 1,695,655   |  
|Unproved oil and gas properties        |  |            | 25,462,683  |   |            |   | 27,772,327  |                          |  |   | 27,500,879  |  
|Total capital costs                    |  |            | 38,538,475  |   |            |   | 31,848,101  |                          |  |   | 29,196,534  |  
|Impairment                             |  |            | (23,785,236 | ) |            |   | (23,524,342 | )                        |  |   | (17,807,885 | )
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|Net capitalized costs                  |  | $          | 14,753,239  |   |            | $ | 8,323,759   |                          |  | $ | 11,388,649  |  
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|                                       |  |            |            
|Total                                  |  |            |             |   |            |   |             |                          |  |   |             |  
|Proved oil and gas properties          |  | $          | 37,776,256  |   |            | $ | 27,225,259  |                          |  | $ | 17,887,452  |  
|Unproved oil and gas properties        |  |            | 25,485,185  |   |            |   | 27,843,879  |                          |  |   | 27,541,939  |  
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|Total capital costs                    |  |            | 63,261,441  |   |            |   | 55,069,138  |                          |  |   | 45,429,391  |  
|Accumulated depletion and depreciation |  |            | (8,556,901  | ) |            |   | (5,819,933  | )                        |  |   | (3,453,777  | )
|Impairment                             |  |            | (29,996,015 | ) |            |   | (24,822,549 | )                        |  |   | (18,168,153 | )
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  
|Net capitalized costs                  |  | $          | 24,708,525  |   |            | $ | 24,426,656  |                          |  | $ | 23,807,461  |  
|                                       |  |            |             |   |            |   |             |                          |  |   |             |  



|Note: | Capitalized costs were disclosed under US GAAP as of December 31, 2010. Effective January 1, 2011, the Company has adopted IFRS. Therefore, 2010 figures
were restated under IFRS.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-45



---

##### Table of Contents

|(c) | Costs Incurred
|--- | --------------



|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|------------------------------- |  | ---------- | --------- |  | ---------- | - | --------- | ------------------------ |  | - | --------- | 
|For the years ended December 31 |  | 2012       |           |  | 2011       |   |           | 2010                     | 
|                                |  | (Per IFRS) |           |  | (Per IFRS) |   |           | (As Restated under IFRS) | 
|Canada                          |  |            |           |  |            |   |           |                          |  |   |           | 
|Property acquisition costs (1)  |  |            |           |  |            |   |           |                          |  |   |           | 
|Proved oil and gas properties   |  | $          | 13,629    |  |            | $ | 47,158    |                          |  | $ | 10,659    | 
|Unproved oil and gas properties |  |            | 605       |  |            |   | 8,548     |                          |  |   | 26,601    | 
|Exploration costs (2)           |  |            | 132,400   |  |            |   | 32,482    |                          |  |   | 60,856    | 
|Development costs (3)           |  |            | 1,406,655 |  |            |   | 6,410,244 |                          |  |   | 4,121,724 | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|Capital Expenditures            |  | $          | 1,553,289 |  |            | $ | 6,498,432 |                          |  | $ | 4,219,840 | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|                                |  |            |          
|United States                   |  |            |           |  |            |   |           |                          |  |   |           | 
|Property acquisition costs (1)  |  |            |           |  |            |   |           |                          |  |   |           | 
|Proved oil and gas properties   |  | $          | 39,579    |  |            | $ | 40,143    |                          |  | $ | 14,640    | 
|Unproved oil and gas properties |  |            | 211,382   |  |            |   | 146,062   |                          |  |   | 220,937   | 
|Exploration costs (2)           |  |            | 103,547   |  |            |   | 38,287    |                          |  |   | 556,347   | 
|Development costs (3)           |  |            | 2,568,277 |  |            |   | 1,608,585 |                          |  |   |          | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|Capital Expenditures            |  | $          | 2,922,785 |  |            | $ | 1,833,077 |                          |  | $ | 791,924   | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|                                |  |            |          
|Total                           |  |            |           |  |            |   |           |                          |  |   |           | 
|Property acquisition costs (1)  |  |            |           |  |            |   |           |                          |  |   |           | 
|Proved oil and gas properties   |  | $          | 53,208    |  |            | $ | 87,301    |                          |  | $ | 25,299    | 
|Unproved oil and gas properties |  |            | 211,987   |  |            |   | 154,610   |                          |  |   | 247,538   | 
|Exploration costs (2)           |  |            | 235,947   |  |            |   | 70,769    |                          |  |   | 617,203   | 
|Development costs (3)           |  |            | 3,974,932 |  |            |   | 8,018,829 |                          |  |   | 4,121,724 | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 
|Capital Expenditures            |  | $          | 4,476,074 |  |            | $ | 8,331,509 |                          |  | $ | 5,011,764 | 
|                                |  |            |           |  |            |   |           |                          |  |   |           | 



|(1) | Acquisitions are not net of disposition of properties.
|--- | ------------------------------------------------------

|(2) | Geological and geophysical capital expenditures and drilling costs for exploration wells drilled
|--- | ------------------------------------------------------------------------------------------------

|(3) | Includes equipping and facilities capital expenditures
|--- | ------------------------------------------------------



F-46



---

##### Table of Contents

|(d) | Results of Operations of Producing Activities
|--- | ---------------------------------------------



|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|----------------------------------------------------------- |  | ------ | ---------- | - | ------ | - | ---------- | ------ |  | - | ---------- | -
|For the years ended December 31                             |  | 2012   |            |   | 2011   |   |            | 2010   | 
|                                                            |  | (IFRS) |            |   | (IFRS) |   |            | (IFRS) | 
|Canada                                                      |  |        |            |   |        |   |            |        |  |   |            |  
|Oil and gas sales, net of royalties and commodity contracts |  | $      | 5,765,822  |   |        | $ | 7,196,464  |        |  | $ | 6,773,860  |  
|Operating costs and capital taxes                           |  |        | (3,101,128 | ) |        |   | (1,975,294 | )      |  |   | (2,101,046 | )
|Transportation costs                                        |  |        | (660,813   | ) |        |   | (507,959   | )      |  |   | (507,843   | )
|Depletion, depreciation and accretion                       |  |        | (2,753,767 | ) |        |   | (2,392,870 | )      |  |   | (3,485,186 | )
|Income taxes (1)                                            |  |        |           |   |        |   |           |        |  |   |           |  
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|Results of operations                                       |  | $      | (749,886   | ) |        | $ | 2,320,341  |        |  | $ | 679,785    |  
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|                                                            |  |        |           
|United States                                               |  |        |            |   |        |   |            |        |  |   |            |  
|Oil and gas sales, net of royalties and commodity contracts |  | $      |           |   |        | $ |           |        |  | $ |           |  
|Operating costs and capital taxes                           |  |        | (31,286    | ) |        |   | (16,227    | )      |  |   |           |  
|Transportation costs                                        |  |        |           |   |        |   |           |        |  |   |           |  
|Depletion, depreciation and accretion                       |  |        | (12,612    | ) |        |   | (10,483    | )      |  |   | (7,518     | )
|Income taxes (1)                                            |  |        |           |   |        |   |           |        |  |   |           |  
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|Results of operations                                       |  | $      | (43,898    | ) |        | $ | (26,710    | )      |  | $ | (7,518     | )
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|                                                            |  |        |           
|Total                                                       |  |        |            |   |        |   |            |        |  |   |            |  
|Oil and gas sales, net of royalties and commodity contracts |  | $      | 5,765,822  |   |        | $ | 7,196,464  |        |  | $ | 6,773,860  |  
|Lease operating costs and capital taxes                     |  |        | (3,132,414 | ) |        |   | (1,991,521 | )      |  |   | (2,101,046 | )
|Transportation costs                                        |  |        | (660,813   | ) |        |   | (507,959   | )      |  |   | (507,843   | )
|Depletion, depreciation and accretion                       |  |        | (2,766,379 | ) |        |   | (2,403,353 | )      |  |   | (3,492,704 | )
|Income taxes (1)                                            |  |        |           |   |        |   |           |        |  |   |           |  
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  
|Results of operations                                       |  | $      | (793,784   | ) |        | $ | 2,293,631  |        |  | $ | 672,267    |  
|                                                            |  |        |            |   |        |   |            |        |  |   |            |  



|(1) | Dejour is currently not taxable.
|--- | --------------------------------



|(e) | Standardized Measure of Discounted Future Net Cash Flows and Changes Therein
|--- | ----------------------------------------------------------------------------

The standardized measure of discounted future net cash flows is based on estimates made by AJM Deloitte and Gustavson of net proved
reserves. Future cash inflows are computed based on the average of the first day constant prices in each of the 12 months for the year ended December 31, 2012 and cost assumptions applied against annual future production from proved crude oil
and natural gas reserves. Future development and production costs are computed based on the average of the first day constant prices in each of the 12 months for the year ended December 31, 2012 and assume the continuation of existing economic
conditions. Future income taxes are calculated by applying statutory income tax rates. The Company is currently not taxable. The standardized measure of discounted future net cash flows is computed using a 10 percent discount factor.

The Company cautions users of this information that the discounted future net cash flows relating to proved oil and gas reserves are
neither an indication of the fair market value of our oil and gas properties, nor of the future net cash flows expected to be generated from such properties. The discounted future cash flows do not include the fair market value of exploratory
properties and probable or possible oil and gas reserves, nor is consideration given to the effect of anticipated future changes in crude oil and natural gas prices, development, asset retirement and production costs and possible changes to tax and
royalty regulations. The prescribed discount rate of 10 percent is arbitrary and may not appropriately reflect future interest rates.



F-47



---

##### Table of Contents

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows relating to our estimated proved reserves as of December 31, 2012 is presented below:



|                                                        |  |        |         |   |     |   |         |       |  |   |          |  
|------------------------------------------------------- |  | ------ | ------- | - | --- | - | ------- | ----- |  | - | -------- | -
|As at December 31, 2012                                 |  |        |         |   |     |   |         |       | 
|(in thousands of Canadian dollars)                      |  | Canada |         |   | USA |   |         | Total | 
|                                                        |  |        |        
|Future cash from revenues after royalties               |  | $      | 20,069  |   |     | $ | 234,374 |       |  | $ | 254,443  |  
|Future production, abandon and salvage costs            |  |        | (10,835 | ) |     |   | (90,466 | )     |  |   | (101,301 | )
|Future development costs                                |  |        | (153    | ) |     |   | (95,180 | )     |  |   | (95,333  | )
|Future income taxes                                     |  |        | (2,270  | ) |     |   | (15,592 | )     |  |   | (17,862  | )
|                                                        |  |        |         |   |     |   |         |       |  |   |          |  
|Future net cash flows                                   |  |        | 6,811   |   |     |   | 33,136  |       |  |   | 39,947   |  
|Less: 10% annual discount factor                        |  |        | (1,181  | ) |     |   | (33,293 | )     |  |   | (34,474  | )
|                                                        |  |        |         |   |     |   |         |       |  |   |          |  
|                                                        |  |        |        
|Standardized measure of discounted future net cash flow |  | $      | 5,630   |   |     | $ | (157    | )     |  | $ | 5,473    |  
|                                                        |  |        |         |   |     |   |         |       |  |   |          |  

The standardized measure of discounted future net cash flows relating to our estimated proved reserves as of
December 31, 2011 is presented below:



|                                                        |  |        |         |   |     |   |          |       |  |   |          |  
|------------------------------------------------------- |  | ------ | ------- | - | --- | - | -------- | ----- |  | - | -------- | -
|As at December 31, 2011                                 |  |        |         |   |     |   |          |       | 
|(in thousands of Canadian dollars)                      |  | Canada |         |   | USA |   |          | Total | 
|                                                        |  |        |        
|Future cash from revenues after royalties               |  | $      | 32,005  |   |     | $ | 298,776  |       |  | $ | 330,781  |  
|Future production costs                                 |  |        | (10,900 | ) |     |   | (72,833  | )     |  |   | (83,733  | )
|Future development costs                                |  |        | (150    | ) |     |   | (88,377  | )     |  |   | (88,527  | )
|Future income taxes                                     |  |        | (931    | ) |     |   |         |       |  |   | (931     | )
|                                                        |  |        |         |   |     |   |          |       |  |   |          |  
|Future net cash flows                                   |  |        | 20,024  |   |     |   | 137,566  |       |  |   | 157,590  |  
|Less: 10% annual discount factor                        |  |        | (1,565  | ) |     |   | (104,104 | )     |  |   | (105,669 | )
|                                                        |  |        |         |   |     |   |          |       |  |   |          |  
|                                                        |  |        |        
|Standardized measure of discounted future net cash flow |  | $      | 18,459  |   |     | $ | 33,462   |       |  | $ | 51,921   |  
|                                                        |  |        |         |   |     |   |          |       |  |   |          |  



F-48



---

##### Table of Contents

|(f) | Changes in Standardized Measure of Discounted Future Net Cash Flows
|--- | -------------------------------------------------------------------

The principal sources of changes in the standardized measure of the future net cash flows for the year ended December 31, 2012 are presented below:



|                                                                                |  |        |        |   |     |   |         |       |  |   |         |  
|------------------------------------------------------------------------------- |  | ------ | ------ | - | --- | - | ------- | ----- |  | - | ------- | -
|For the Year Ended December 31, 2012                                            |  |        |        |   |     |   |         |       | 
|(in thousands of Canadian dollars)                                              |  | Canada |        |   | USA |   |         | Total | 
|                                                                                |  |        |       
|Beginning Balance, January 1, 2012                                              |  | $      | 18,459 |   |     | $ | 33,462  |       |  | $ | 51,921  |  
|                                                                                |  |        |       
|Sales and transfers of oil and gas produced, net of production costs            |  |        | (1,973 | ) |     |   |        |       |  |   | (1,973  | )
|                                                                                |  |        |       
|Net changes in sales and transfer prices, net of production costs and royalties |  |        | (8,514 | ) |     |   | (42,572 | )     |  |   | (51,086 | )
|Changes in estimated future development costs                                   |  |        | (3     | ) |     |   |        |       |  |   | (3      | )
|Revisions of quantity estimates and timing of estimated production              |  |        | (2,924 | ) |     |   | 5,319   |       |  |   | 2,395   |  
|                                                                                |  |        |       
|Accretion of discount                                                           |  |        | (385   | ) |     |   |        |       |  |   | (385    | )
|Net change in income taxes                                                      |  |        | 970    |   |     |   | 3,634   |       |  |   | 4,604   |  
|                                                                                |  |        |        |   |     |   |         |       |  |   |         |  
|                                                                                |  |        |       
|Ending Balance, December 31, 2012                                               |  | $      | 5,630  |   |     | $ | (157    | )     |  | $ | 5,473   |  
|                                                                                |  |        |        |   |     |   |         |       |  |   |         |  

The principal sources of changes in the standardized measure of the future net cash flows for the year
ended December 31, 2011 are presented below:



|                                                                     |  |        |        |   |     |   |         |       |  |   |         |  
|-------------------------------------------------------------------- |  | ------ | ------ | - | --- | - | ------- | ----- |  | - | ------- | -
|For the Year Ended December 31, 2011                                 |  |        |        |   |     |   |         |       | 
|(in thousands of Canadian dollars)                                   |  | Canada |        |   | USA |   |         | Total | 
|                                                                     |  |        |       
|Beginning Balance, January 1, 2011                                   |  | $      | 2,931  |   |     | $ | 25,948  |       |  | $ | 28,879  |  
|                                                                     |  |        |       
|Sales and transfers of oil and gas produced, net of production costs |  |        | 9,528  |   |     |   |        |       |  |   | 9,528   |  
|Net changes in prices, production costs and royalties                |  |        | 3,143  |   |     |   | (25,191 | )     |  |   | (22,048 | )
|Extensions, discovery, less related costs                            |  |        |       |   |     |   | 840     |       |  |   | 840     |  
|Development costs incurred during the period                         |  |        | 6,410  |   |     |   |        |       |  |   | 6,410   |  
|Revisions of previous quantity estimates                             |  |        |       |   |     |   |        |       |  |   |        |  
|Accretion of discount                                                |  |        |       |   |     |   |        |       |  |   |        |  
|Net change in income taxes                                           |  |        |       |   |     |   |        |       |  |   |        |  
|Changes resulting from technical revisions and others                |  |        | (3,553 | ) |     |   | 31,865  |       |  |   | 28,312  |  
|                                                                     |  |        |        |   |     |   |         |       |  |   |         |  
|                                                                     |  |        |       
|Ending Balance, December 31, 2011                                    |  | $      | 18,459 |   |     | $ | 33,462  |       |  | $ | 51,921  |  
|                                                                     |  |        |        |   |     |   |         |       |  |   |         |  



F-49