|                                                                 |   | Page   |   |
|----------------------------------------------------------------------|--------|--------|--------|
|                                                                 |   |   |   |
| Management’s Responsibility for Financial Reporting            |   |   | 2      |   |
|                                                                 |   |   |   |   |
| Independent Auditors’ Report                                   |   |   | 3      |   |
|                                                                 |   |   |   |   |
| Consolidated Statements of Financial Position                        |   |   | 4      |   |
|                                                                 |   |   |   |   |
| Consolidated Statements of Changes in Shareholders’ Deficiency |   |   | 5      |   |
|                                                                 |   |   |   |   |
| Consolidated Statements of Comprehensive Loss                        |   |   | 6      |   |
|                                                                 |   |   |   |   |
| Consolidated Statements of Cash Flows                                |   |   | 7      |   |
|                                                                 |   |   |   |   |
| Notes to the Consolidated Financial Statements                       |   |   | 8      |   |

----

----

| “Paul Heney”             |   |
|--------------------------------------|--------|
|                                 |   |
| Paul Heney                           |   |
| Chief Executive Officer and Director |   |
|                                 |   |
|                                 |   |
| “Bradley J. Moynes”      |   |
|                                 |   |
| Bradley J. Moynes                    |   |
| President and Director               |   |

----

----

----

----

|                           |   | Note   |   |   | December 31,2014 |       |   | December 31,2013 |   |
|--------------------------------|--------|--------|--------|--------|------------------|------------|--------|------------------|--------|
|                           |   |   |   |   |             | $          |   |             |   | $ |   |
| ASSETS                         |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
| CURRENT                        |   |   |   |   |             |       |   |             |   |   |   |
| Cash                           |   |   |   |   |             | -          |   |             |   | 6,754 |   |
| Prepaid Expenses               |   |   |   |   |             | 7,058      |   |             |   | - |   |
| GST Recoverable                |   |   |   |   |             | 8,490      |   |             |   | 6,300 |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             | 15,548     |   |             |   | 13,054 |   |
| NON-CURRENT                    |   |   |   |   |             |       |   |             |   |   |   |
| Property and Equipment         |   | 5      |   |   |             | 605        |   |             |   | 850 |   |
| Oil and Gas Property           |   | 6      |   |   |             | -          |   |             |   | 108,053 |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             | 16,153     |   |             |   | 121,957 |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
| LIABILITIES                    |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
| CURRENT                        |   |   |   |   |             |       |   |             |   |   |   |
| Bank Indebtedness              |   |   |   |   |             | 140        |   |             |   | - |   |
| Trade and Other Payables       |   | 7      |   |   |             | 243,995    |   |             |   | 207,527 |   |
| Promissory Notes               |   | 9      |   |   |             | 301,364    |   |             |   | 272,966 |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             | 545,499    |   |             |   | 480,493 |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
| SHAREHOLDERS' DEFICIENCY       |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             |       |   |             |   |   |   |
| Share Capital                  |   | 10     |   |   |             | 3,241,848  |   |             |   | 3,178,514 |   |
| Share Purchase Warrant Reserve |   |   |   |   |             | 18,600     |   |             |   | 276,310 |   |
| Deficit                        |   |   |   |   |             | (3,789,794 | )      |             |   | (3,813,360 | ) |
|                           |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             | (529,346   | )      |             |   | (358,536 | ) |
|                           |   |   |   |   |             |       |   |             |   |   |   |
|                           |   |   |   |   |             | 16,153     |   |             |   | 121,957 |   |

| “Paul Heney”                                     |   | “Bradley J. Moynes”           |   |
|--------------------------------------------------------------|--------|-------------------------------------------|--------|
| Paul Heney, Chief Executive Officer and Director   |   | Bradley J. Moynes, President and Director |   |

----

----

|                                          |   | Note        |   |   | Number ofCommonShares |        |   | ShareCapital |   |      | ShareSubscriptionAdvance |   |   | Share Purchase WarrantReserve |   |   | Deficit |     |   | TotalShareholders’ Deficiency |   |
|-----------------------------------------------|--------|-------------|--------|--------|-----------------------|-------------|--------|--------------|--------|-----------|--------------------------|--------|--------|-------------------------------|--------|--------|---------|----------|--------|-------------------------------------|--------|
|                                          |   |        |   |   |                  |        |   |         | $      |      |                     |   | $      |                          |   |   | $       |     |   |                                | $      |   |   |   | $ |   |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |
| Balance, December 31, 2011                    |   |        |   |   |                  | 34,777,242  |   |         |   | 2,922,923 |                     |   |   | 41,064                        |   |   |    | 276,310  |   |                                |   | (3,366,620 | ) |   |   | (126,323 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Shares Issued for Cash, Net of Issuance Costs |   | 10(b)(i)    |   |   |                  | 1,330,000   |   |         |   | 26,051    |                     |   |   | (41,064                       | )      |   |    | -        |   |                                |   | - |   |   |   | (15,013 | ) |
| Shares Issued for Exercise of Warrants        |   | 10(b)(ii)   |   |   |                  | 2,200,000   |   |         |   | 44,137    |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 44,137 |   |
| Shares Repurchased and Cancelled              |   | 10(b)(iii)  |   |   |                  | (1,100,000  | )      |         |   | (22,097   | )                        |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | (22,097 | ) |
| Shares Reissued                               |   | 10(b)(iv)   |   |   |                  | 200,000     |   |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | - |   |
| Shares Issued for Services                    |   | 10(d)       |   |   |                  | 750,000     |   |         |   | 22,500    |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 22,500 |   |
| Net Comprehensive Loss                        |   |        |   |   |                  | -           |   |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | (226,261 | ) |   |   | (226,261 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Balance, December 31, 2012                    |   |        |   |   |                  | 38,157,242  |   |         |   | 2,993,514 |                     |   |   | -                             |   |   |    | 276,310  |   |                                |   | (3,592,881 | ) |   |   | (323,057 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Shares Issued in Settlement of Debt           |   | 10(b)(vi)   |   |   |                  | 10,000,000  |   |         |   | 10,000    |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 10,000 |   |
| Share Consolidation                           |   | 10(b)(v)    |   |   |                  | (47,190,898 | )      |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | - |   |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Balance, April 3, 2013                        |   |        |   |   |                  | 966,344     |   |         |   | 3,003,514 |                     |   |   | -                             |   |   |    | 276,310  |   |                                |   | (3,592,881 | ) |   |   | (313,057 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Shares Issued for Post-Consolidation Rounding |   | 10(b)(v)    |   |   |                  | 835         |   |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | - |   |
| Shares Issued in Settlement of Debts          |   | 10(b)(vi)   |   |   |                  | 50,250,000  |   |         |   | 115,000   |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 115,000 |   |
| Shares Issued for Cash                        |   | 10(b)(vii)  |   |   |                  | 1,200,000   |   |         |   | 60,000    |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 60,000 |   |
| Net Comprehensive Loss                        |   |        |   |   |                  | -           |   |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | (220,479 | ) |   |   | (220,479 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Balance, December 31, 2013                    |   |        |   |   |                  | 52,417,179  |   |         |   | 3,178,514 |                     |   |   | -                             |   |   |    | 276,310  |   |                                |   | (3,813,360 | ) |   |   | (358,536 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Shares Issued in Settlement of Debts          |   | 10(b)(viii) |   |   |                  | 28,000,000  |   |         |   | 56,000    |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 56,000 |   |
| Shares Held in Escrow                         |   | 10(e)       |   |   |                  | 75,000      |   |         |   | 7,334     |                     |   |   | -                             |   |   |    | -        |   |                                |   | - |   |   |   | 7,334 |   |
| Fair Value of Share Rights Expired            |   |        |   |   |                  | -           |   |         |   | -         |                     |   |   | -                             |   |   |    | (257,710 | )      |                                |   | 257,710 |   |   |   | - |   |
| Net Comprehensive Loss                        |   |        |   |   |                  | -           |   |         |   | -         |                     |   |   | -                             |   |   |    | -        |   |                                |   | (234,144 | ) |   |   | (234,144 | ) |
|                                          |   |        |   |   |                  |        |   |         |   |      |                     |   |   |                          |   |   |    |     |   |                                |   |   |   |   |   |   |   |
| Balance, December 31, 2014                    |   |        |   |   |                  | 80,492,179  |   |         |   | 3,241,848 |                     |   |   | -                             |   |   |    | 18,600   |   |                                |   | (3,789,794 | ) |   |   | (529,346 | ) |

----

----

|                                            |   | Note              |   |   | 2014   |       |   | 2013   |   |       | 2012   |   |
|-------------------------------------------------|--------|-------------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                            |   |              |   |   |   | $          |   |   |   | $          |   |   |   | $ |   |
| EXPENSES                                        |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Accounting, Audit, and Legal                    |   |              |   |   |   | 18,050     |   |   |   | 40,151     |   |   |   | 51,624 |   |
| Advertising, Promotion, and Website Development |   |              |   |   |   | 950        |   |   |   | 585        |   |   |   | - |   |
| Consulting                                      |   |              |   |   |   | 60,000     |   |   |   | 80,000     |   |   |   | 75,000 |   |
| Depreciation                                    |   |              |   |   |   | 245        |   |   |   | 346        |   |   |   | 201 |   |
| Filing and Transfer Agent Fees                  |   |              |   |   |   | 8,295      |   |   |   | 15,791     |   |   |   | 21,283 |   |
| Interest and Bank Charges                       |   |              |   |   |   | 4,672      |   |   |   | 516        |   |   |   | 459 |   |
| Investor Relations                              |   |              |   |   |   | -          |   |   |   | 3,663      |   |   |   | - |   |
| Management Fees                                 |   | 12(b)             |   |   |   | 60,000     |   |   |   | 60,000     |   |   |   | 60,000 |   |
| Office Expenses, Rent, and Telephone            |   |              |   |   |   | -          |   |   |   | (709       | )      |   |   | 632 |   |
| Property Investigation                          |   |              |   |   |   | 2,500      |   |   |   | 13,054     |   |   |   | - |   |
| Share-Based Compensation                        |   | 10(d)             |   |   |   | -          |   |   |   | -          |   |   |   | 22,500 |   |
| Travel                                          |   |              |   |   |   | -          |   |   |   | -          |   |   |   | 649 |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                            |   |              |   |   |   | 154,712    |   |   |   | 213,397    |   |   |   | 232,348 |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| LOSS BEFORE OTHER ITEMS                         |   |              |   |   |   | (154,712   | )      |   |   | (213,397   | )      |   |   | (232,348 | ) |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Foreign Exchange Loss                           |   |              |   |   |   | (14,005    | )      |   |   | (6,666     | )      |   |   | (783 | ) |
| Gain on Settlement of Debts                     |   | 10(b)(viii),12(c) |   |   |   | 42,626     |   |   |   | 334        |   |   |   | 6,870 |   |
| Settlement of Legal Claim                       |   | 8                 |   |   |   | -          |   |   |   | (750       | )      |   |   | - |   |
| Write-Off of Oil and Gas Property               |   | 6                 |   |   |   | (108,053   | )      |   |   | -          |   |   |   | - |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| NET LOSS FOR THE YEAR                           |   |              |   |   |   | (234,144   | )      |   |   | (220,479   | )      |   |   | (226,261 | ) |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Other Comprehensive Income                      |   |              |   |   |   | -          |   |   |   | -          |   |   |   | - |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| NET COMPREHENSIVE LOSS FOR THE YEAR             |   |              |   |   |   | (234,144   | )      |   |   | (220,479   | )      |   |   | (226,261 | ) |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| POST-SHARE CONSOLIDATION                        |   | 10(b)(v)          |   |   |   |       |   |   |   |       |   |   |   |   |   |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic and Diluted Loss per Share                |   |              |   |   |   | (0.004     | )      |   |   | (0.008     | )      |   |   | (0.301 | ) |
|                                            |   |              |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted Average Number of Shares Outstanding   |   |              |   |   |   | 52,758,205 |   |   |   | 28,866,035 |   |   |   | 751,051 |   |

----

----

|                                            |   | Note   |   |   | 2014   |     |   | 2013   |   |     | 2012   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                            |   |   |   |   |   | $        |   |   |   | $        |   |   |   | $ |   |
| CASH PROVIDED BY (USED IN):                     |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| OPERATING ACTIVITIES                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Net Loss for the Year                           |   |   |   |   |   | (234,144 | )      |   |   | (220,479 | )      |   |   | (226,261 | ) |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Non-Cash Items                                  |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Depreciation                                    |   |   |   |   |   | 245      |   |   |   | 346      |   |   |   | 201 |   |
| Shares-Based Payments                           |   |   |   |   |   | -        |   |   |   | -        |   |   |   | 22,500 |   |
| Gain on Settlement of Debts                     |   |   |   |   |   | (42,626  | )      |   |   | (334     | )      |   |   | (6,870 | ) |
| Write-Off Oil and Gas Property                  |   | 5      |   |   |   | 108,053  |   |   |   | -        |   |   |   | - |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   | (168,472 | )      |   |   | (220,467 | )      |   |   | (210,430 | ) |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Change in Non-Cash Working Capital Accounts     |   | 11(a)  |   |   |   | 34,554   |   |   |   | 49,635   |   |   |   | 121,896 |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   | (133,918 | )      |   |   | (170,832 | )      |   |   | (88,534 | ) |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| FINANCING ACTIVITIES                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Shares Issued for Cash, Net of Issuance Costs   |   |   |   |   |   | -        |   |   |   | 60,000   |   |   |   | 26,051 |   |
| Shares Subscription Advance                     |   |   |   |   |   | -        |   |   |   | -        |   |   |   | (41,064 | ) |
| Shares Issued on Exercise of Warrants           |   |   |   |   |   | -        |   |   |   | -        |   |   |   | 44,137 |   |
| Repurchase of Common Shares                     |   |   |   |   |   | -        |   |   |   | -        |   |   |   | (22,097 | ) |
| Issuance of Promissory Notes                    |   |   |   |   |   | 127,024  |   |   |   | 117,602  |   |   |   | 155,364 |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   | 127,024  |   |   |   | 177,602  |   |   |   | 162,391 |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| INVESTING ACTIVITY                              |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Acquisition of Oil and Gas Property             |   |   |   |   |   | -        |   |   |   | -        |   |   |   | (108,053 | ) |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| (DECREASE) INCREASE IN CASH                     |   |   |   |   |   | (6,894   | )      |   |   | 6,770    |   |   |   | (34,196 | ) |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash (Bank Indebtedness), Beginning of the Year |   |   |   |   |   | 6,754    |   |   |   | (16      | )      |   |   | 34,180 |   |
|                                            |   |   |   |   |   |     |   |   |   |     |   |   |   |   |   |
| (BANK INDEBTEDNESS) CASH, END OF THE YEAR       |   |   |   |   |   | (140     | )      |   |   | 6,754    |   |   |   | (16 | ) |

----

----

| a) | Basis of Presentation |
|----|-----------------------|

| b) | Statement of Compliance |
|----|-------------------------|

----

----

| c) | Basis of Consolidation |
|----|------------------------|

| Entity                       | Country of Incorporation | Holding        | Functional Currency |
|------------------------------|--------------------------|----------------|---------------------|
|                         |                     |           |                |
| Bit-X Financial Corporation  | Canada                   | Parent Company | Canadian Dollar     |
| Jaydoc Capital Corp.         | Canada                   | 100%           | Canadian Dollar     |
| Rainchief Renewable-1 S.R.L. | Italy                    | 100%           | Canadian Dollar     |

| d) | Foreign Currency |
|----|------------------|

|   | i) | Transactions and Balances in Foreign Currencies |
|--------|----|-------------------------------------------------|

|   | ii) | Foreign Operations |
|--------|-----|--------------------|

----

----

| e) | Property and Equipment |
|----|------------------------|

| f) | Oil and Gas Property |
|----|----------------------|

| g) | Impairment of Non-Current Assets |
|----|----------------------------------|

----

----

| h) | Provision for Restoration and Rehabilitation |
|----|----------------------------------------------|

| i) | Share Capital |
|----|---------------|

| j) | Share-Based Payments |
|----|----------------------|

| k) | Loss per Share |
|----|----------------|

| l) | Income Taxes |
|----|--------------|

|   | i) | Current Income Tax |
|--------|----|--------------------|

----

----

| l) | Income Taxes (Continued) |
|----|--------------------------|

|   | ii) | Deferred Income Tax |
|--------|-----|---------------------|

| m) | Financial Instruments |
|----|-----------------------|

|   | i) | Financial Assets |
|--------|----|------------------|

|   | · | Financial assets at fair value through profit or loss; |
|--------|--------|--------------------------------------------------------|

|   | · | Loans and receivables; |
|--------|--------|------------------------|

|   | · | Held-to-maturity investments; and |
|--------|--------|-----------------------------------|

|   | · | Available-for-sale financial assets. |
|--------|--------|--------------------------------------|

----

----

| m) | Financial Instruments (Continued) |
|----|-----------------------------------|

|   | i) | Financial Assets (Continued) |
|--------|----|------------------------------|

|   | · | Financial assets at fair value through profit or loss – Financial assets at fair value through profit or loss include financial assets that are either classified as held for trading or that meet certain conditions and are designated at fair value through profit or loss upon initial recognition. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments. Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The Company’s cash falls into this category of financial instruments. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Loans and receivables – Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortized cost using the effective interest method less any provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Company currently does not hold financial assets in this category. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Held-to-maturity investments – Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity, other than loans and receivables. Investments are classified as held-to-maturity if the Company has the intention and ability to hold them until maturity. The Company currently does not hold financial assets in this category. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Available-for-sale financial assets – Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Company currently does not hold financial assets in this category. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| m) | Financial Instruments (Continued) |
|----|-----------------------------------|

|   | ii) | Financial Liabilities |
|--------|-----|-----------------------|

|   | · | Financial liabilities at fair value through profit or loss – Financial liabilities at fair value through profit or loss include financial liabilities that are either classified as held for trading or that meet certain conditions and are designated at fair value through profit or loss upon initial recognition. Liabilities in this category are measured at fair value with gains or losses recognized in profit or loss. The Company’s bank indebtedness falls into this category of financial instruments. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other financial liabilities – Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in the income statement when the liabilities are derecognized as well as through the effective interest rate method amortization process. The Company’s trade and other payables and promissory notes payable fall into this category of financial instruments. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| n) | Comparative Figures |
|----|---------------------|

| a) | Deferred Tax Assets |
|----|---------------------|

----

----

| b) | Oil and Gas Reserves and Resources |
|----|------------------------------------|

| c) | Provision for Restoration and Rehabilitation |
|----|----------------------------------------------|

----

----

|                     |   | ComputerEquipment |   |   | Furniture andEquipment |   |   | Total  |   |
|--------------------------|--------|-------------------|--------|--------|------------------------|--------|--------|--------|--------|
|                     |   |              | $      |   |                   |   | $      |   |   |   | $ |   |
| COST                     |   |              |   |   |                   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2012     |   |              | 5,236  |   |                   |   | 1,656  |   |   |   | 6,892 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| Additions                |   |              | -      |   |                   |   | -      |   |   |   | - |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2013     |   |              | 5,236  |   |                   |   | 1,656  |   |   |   | 6,892 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| Additions                |   |              | -      |   |                   |   | -      |   |   |   | - |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2014     |   |              | 5,236  |   |                   |   | 1,656  |   |   |   | 6,892 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| ACCUMULATED DEPRECIATION |   |              |   |   |                   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2012     |   |              | 4,168  |   |                   |   | 1,528  |   |   |   | 5,696 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| Depreciation             |   |              | 321    |   |                   |   | 25     |   |   |   | 346 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2013     |   |              | 4,489  |   |                   |   | 1,553  |   |   |   | 6,042 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| Depreciation             |   |              | 224    |   |                   |   | 21     |   |   |   | 245 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2014     |   |              | 4,713  |   |                   |   | 1,574  |   |   |   | 6,287 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| NET BOOK VALUE           |   |              |   |   |                   |   |   |   |   |   |   |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2013     |   |              | 747    |   |                   |   | 103    |   |   |   | 850 |   |
|                     |   |              |   |   |                   |   |   |   |   |   |   |   |
| At December 31, 2014     |   |              | 523    |   |                   |   | 82     |   |   |   | 605 |   |

----

----

|                                  |   | 2014   |    |   | 2013   |   |
|---------------------------------------|--------|--------|---------|--------|--------|--------|
|                                  |   |   | $       |   |   |   | $ |   |
|                                  |   |   |    |   |   |   |   |   |
| Trade Payables                        |   |   | 28,294  |   |   |   | 44,958 |   |
| Accrued Liabilities                   |   |   | 151,175 |   |   |   | 130,468 |   |
| Related Party Payable (Note 12(a)(i)) |   |   | 64,526  |   |   |   | 32,101 |   |
|                                  |   |   |    |   |   |   |   |   |
|                                  |   |   | 243,995 |   |   |   | 207,527 |   |

----

----

| a) | Authorized Capital |
|----|--------------------|

| b)  | Issued and Outstanding Common Shares |
|----------|--------------------------------------|

|   | i) | On January 17, 2012, the Company completed a private placement of 1,330,000 units at US$0.03 per unit, raising gross proceeds of US$39,900 ($41,064). Each unit consists of one common share and one share purchase warrant exercisable into one common share at US$0.03 per share until December 31, 2013. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii) | During the year ended December 31, 2012, the Company issued a total of 2,200,000 common shares upon the exercise of warrants at an exercise price of US$0.02 per share for total gross proceeds of US$44,000 ($44,137). |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iii) | On March 2, 2012, the Company repurchased 1,100,000 units at US$0.02 per unit for a total cost of US$22,000 ($22,097). These units were initially issued in a private placement completed in May 2010 at a subscription price of US$0.02 per unit for total gross proceeds of US$22,000 ($22,097). Each unit consisted of one common share and one warrant exercisable into one common share at US$0.02 per share until March 30, 2015. These units were returned to treasury and cancelled. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | iv) | On March 21, 2012, the Company issued 200,000 common shares to the President of the Company and a person related to the President. The related parties purchased these shares in the Company in 2002; however, the share certificates evidencing the share subscription were not recorded by the share transfer agent as a result of a clerical oversight. Accordingly, the Directors of the Company authorized the issuance of share certificates to the related parties as evidence of their ownership of the shares and to accurately reflect the number of common shares outstanding. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | v) | Effective April 3, 2013, the common shares of the Company were consolidated at the ratio of one new common share for every 50 old common shares. The Company issued 835 shares to round up fractional entitlements resulting from the consolidation. The basic loss per share calculations disclosed in the consolidated statements of comprehensive loss for the years ended December 31, 2012 and 2011, has been adjusted to reflect the share consolidation. |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | vi) | In January 2013, the Company entered into a debt settlement agreement with a company controlled by a Director and Officer of the Company to settle outstanding accounts payable of $10,000. The Company agreed to issue 10,000,000 pre-April 3, 2013, share consolidation shares. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | vii) | On August 13, 2013, the Company completed a private placement of 1,200,000 shares at US$0.05 per share, raising gross proceeds of $60,000. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| b) | Issued and Outstanding Common Shares (continued) |
|----|--------------------------------------------------|

|   | viii) | On March 27, 2014, the Company issued 28,000,000 common shares with a fair value of $56,000 for settlement of convertible promissory notes totaling $96,626 (including US$63,500), recording a gain of $42,626 on settlement of these debts. |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c) | Share Purchase Warrants |
|----|-------------------------|

| Expiry Date                     |   | ExercisePrice |     |   | December 31,2013 |   |    | Issued |   |   | Exercised |   |   | Expired |   |   | December 31,2014 |   |
|---------------------------------|--------|---------------|----------|--------|------------------|--------|---------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|------------------|--------|
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |
| June 30, 2014                   |   |          | US$40.00 |   |             |   | 6,400   |   |   |   | -         |   |   |    | -      |   |             |   | (6,400 | ) |   |   | - |   |
| March 30, 2015                  |   |          | US$1.00  |   |             |   | 116,200 |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 116,200 |   |
| October 15, 2015                |   |          | US$2.00  |   |             |   | 10,000  |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 10,000 |   |
| October 28, 2015                |   |          | US$1.00  |   |             |   | 20,000  |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 20,000 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |   |   |   |   |   |   |
| Total                           |   |          |     |   |             |   | 152,600 |   |   |   | -         |   |   |    | -      |   |             |   | (6,400 | ) |   |   | 146,200 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |   |   |   |   |   |   |
| Weighted Average Exercise Price |   |          |     |   |             |   | US$2.70 |   |   |   | -         |   |   |    | -      |   |             |   | US$40.00 |   |   |   | US$1.07 |   |

| Expiry Date                     |   | ExercisePrice |     |   | December 31,2012 |   |    | Issued |   |   | Exercised |   |   | Expired |   |   | December 31,2013 |   |
|---------------------------------|--------|---------------|----------|--------|------------------|--------|---------|--------|--------|--------|-----------|--------|--------|---------|--------|--------|------------------|--------|
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |
| December 31, 2013               |   |          | US$1.50  |   |             |   | 26,600  |   |   |   | -         |   |   |    | -      |   |             |   | (26,600 | ) |   |   | - |   |
| June 30, 2014                   |   |          | US$40.00 |   |             |   | 6,400   |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 6,400 |   |
| March 30, 2015                  |   |          | US$1.00  |   |             |   | 116,200 |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 116,200 |   |
| October 15, 2015                |   |          | US$2.00  |   |             |   | 10,000  |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 10,000 |   |
| October 28, 2015                |   |          | US$1.00  |   |             |   | 20,000  |   |   |   | -         |   |   |    | -      |   |             |   | - |   |   |   | 20,000 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |   |   |   |   |   |   |
| Total                           |   |          |     |   |             |   | 179,200 |   |   |   | -         |   |   |    | -      |   |             |   | (26,600 | ) |   |   | 152,600 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |   |   |             |   |   |   |   |   |   |   |
| Weighted Average Exercise Price |   |          |     |   |             |   | US$2.49 |   |   |   | -         |   |   |    | -      |   |             |   | US$1.50 |   |   |   | US$2.70 |   |

----

----

| c) | Share Purchase Warrants (continued) |
|----|-------------------------------------|

|  Expiry Date               |   | ExercisePrice |     |   | December 31,2011 |   |    | Issued |   |   | Exercised |   |   | Expired |    |   | December 31,2012 |   |
|---------------------------------|--------|---------------|----------|--------|------------------|--------|---------|--------|--------|--------|-----------|--------|--------|---------|---------|--------|------------------|--------|
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |    |   |             |   |
| December 31, 2013               |   |          | US$1.50  |   |             |   | -       |   |   |   | 26,600    |   |   |    | -       |   |             |   | - |   |   |   | 26,600 |   |
| June 30, 2014                   |   |          | US$40.00 |   |             |   | 6,400   |   |   |   | -         |   |   |    | -       |   |             |   | - |   |   |   | 6,400 |   |
| March 30, 2015                  |   |          | US$1.00  |   |             |   | 182,200 |   |   |   | -         |   |   |    | (44,000 | )      |             |   | (22,000 | ) |   |   | 116,200 |   |
| October 15, 2015                |   |          | US$2.00  |   |             |   | 10,000  |   |   |   | -         |   |   |    | -       |   |             |   | - |   |   |   | 10,000 |   |
| October 28, 2015                |   |          | US$1.00  |   |             |   | 20,000  |   |   |   | -         |   |   |    | -       |   |             |   | - |   |   |   | 20,000 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |    |   |             |   |   |   |   |   |   |   |
| Total                           |   |          |     |   |             |   | 218,600 |   |   |   | 26,600    |   |   |    | (44,000 | )      |             |   | (22,000 | ) |   |   | 179,200 |   |
|                            |   |          |     |   |             |   |    |   |   |   |      |   |   |    |    |   |             |   |   |   |   |   |   |   |
| Weighted Average Exercise Price |   |          |     |   |             |   | US$2.19 |   |   |   | US$1.50   |   |   |    | US$1.00 |   |             |   | US$1.00 |   |   |   | US$2.49 |   |

| d) | Share-Based Payments |
|----|----------------------|

| e) | Escrow Shares |
|----|---------------|

----

----

|   |                                        |   | 2014   |   |   | 2013   |   |    | 2012   |   |
|--------|---------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|
|   |                                        |   |   | $      |   |   |   | $       |   |   |   | $ |   |
| a)     | Change in Non-Cash Working Capital Accounts |   |   |   |   |   |   |    |   |   |   |   |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
|   | GST/HST Recoverable                         |   |   | (2,190 | )      |   |   | 34,465  |   |   |   | (15,537 | ) |
|   | Prepaid Expenses                            |   |   | (7,058 | )      |   |   | -       |   |   |   | - |   |
|   | Trade and Other Payables                    |   |   | 43,802 |   |   |   | 15,170  |   |   |   | 137,433 |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
|   |                                        |   |   | 34,554 |   |   |   | 49,635  |   |   |   | 121,896 |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
| b)     | Significant Non-Cash Financing Activities   |   |   |   |   |   |   |    |   |   |   |   |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
|   | Shares Issued for Settlement of Debts       |   |   | 56,000 |   |   |   | 125,000 |   |   |   | - |   |
|   | Shares Issued for Services                  |   |   | -      |   |   |   | -       |   |   |   | 22,500 |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
|   |                                        |   |   | 98,626 |   |   |   | 125,000 |   |   |   | 22,500 |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
| c)     | Other Information                           |   |   |   |   |   |   |    |   |   |   |   |   |
|   |                                        |   |   |   |   |   |   |    |   |   |   |   |   |
|   | Interest Paid                               |   |   | 4,134  |   |   |   | -       |   |   |   | 40 |   |
|   | Income Taxes Paid                           |   |   | -      |   |   |   | -       |   |   |   | - |   |

| a) | Related Party Balances |
|----|------------------------|

|   | (i) | Trade and Other Payables |
|--------|-----|--------------------------|

|   | (ii) | Promissory Notes |
|--------|------|------------------|

----

----

| b) | Compensation of Key Management Personnel |
|----|------------------------------------------|

|                              |   | 2014   |   |   | 2013   |   |   | 2012   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                              |   |   | $      |   |   |   | $      |   |   |   | $ |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Management Fees                   |   |   | 60,000 |   |   |   | 60,000 |   |   |   | 60,000 |   |
| Share-Based Payments (Note 10(d)) |   |   | -      |   |   |   | -      |   |   |   | 22,500 |   |
|                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                              |   |   | 60,000 |   |   |   | 60,000 |   |   |   | 82,500 |   |

| c) | Settlement of Debt |
|----|--------------------|

| a) | Deferred Tax Assets and Liabilities |
|----|-------------------------------------|

|                   |   | December 31, |      |   | December 31, |   |
|------------------------|--------|--------------|-----------|--------|--------------|--------|
|                   |   | 2014         |      |   | 2013         |   |
|                   |   |         | $         |   |         |   | $ |   |
|                   |   |         |      |   |         |   |   |   |
| Non-Capital Losses     |   |         | 3,673,825 |   |         |   | 3,549,994 |   |
| Capital Losses         |   |         | 2,718     |   |         |   | 2,718 |   |
| Property and Equipment |   |         | 137,600   |   |         |   | 29,302 |   |
| Share Issuance Costs   |   |         | 10,464    |   |         |   | 25,789 |   |
|                   |   |         |      |   |         |   |   |   |
|                   |   |         | 3,824,607 |   |         |   | 3,607,803 |   |

| 2015   |   |   | 43,700    |   |
|--------|--------|--------|-----------|--------|
| 2026   |   |   | 313,100   |   |
| 2027   |   |   | 515,300   |   |
| 2028   |   |   | 367,400   |   |
| 2029   |   |   | 1,157,900 |   |
| 2030   |   |   | 307,400   |   |
| 2031   |   |   | 301,400   |   |
| 2032   |   |   | 233,000   |   |
| 2033   |   |   | 250,800   |   |
| 2034   |   |   | 183,800   |   |
|   |   |   |      |   |
|   |   |   | 3,673,800 |   |

----

----

| b) | Income Tax Expense |
|----|--------------------|

|                                                             |   | 2014   |    |   | 2012   |   |    | 2011   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                             |   |   | $       |   |   |   | $       |   |   |   | $ |   |
|                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Recovery of Income Tax Calculated at the Statutory Rate of 13.5% |   |   | (31,609 | )      |   |   | (31,268 | )      |   |   | (30,545 | ) |
| Permanent Differences                                            |   |   | -       |   |   |   | -       |   |   |   | 3,038 |   |
| Deferred Tax Assets Not Recognized                               |   |   | 29,268  |   |   |   | 31,268  |   |   |   | 29,534 |   |
| Effect of Change in Tax Rates                                    |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Expiration of Non-Capital Losses and Other                       |   |   | 2,341   |   |   |   | -       |   |   |   | (2,027 | ) |
|                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Income Tax Expense                                               |   |   | -       |   |   |   | -       |   |   |   | - |   |

| a) | Liquidity Risk |
|----|----------------|

| b) | Interest Rate Risk |
|----|--------------------|

| c) | Credit Risk |
|----|-------------|

----

----

| d) | Commodity Price Risk |
|----|----------------------|

| e) | Foreign Exchange Risk |
|----|-----------------------|

| f) | Fair Values |
|----|-------------|

|   | Leve l: | Quoted prices in active markets for identical assets or liabilities. |
|--------|---------|----------------------------------------------------------------------|

|   | Leve 2: | Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Leve 3: | Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------|

----

----

| a) | Convertible Promissory Notes |
|----|------------------------------|

| b) | Private Placement |
|----|-------------------|

| c) | Crypto-Currency Deposit and Exchange Services Agreement |
|----|---------------------------------------------------------|

----