Exhibit
99.1







ANNUAL INFORMATION
FORM



YEAR ENDED
DECEMBER 31, 2014



March 25, 2015











TABLE OF
CONTENTS





|                                                                                   | Page
|---------------------------------------------------------------------------------- | ----
|                                                                                   |     
|GLOSSARY OF TERMS                                                                  | 1   
|ABBREVIATIONS                                                                      | 5   
|CONVERSION                                                                         | 5   
|FORWARD-LOOKING STATEMENTS                                                         | 6   
|NON-GAAP MEASURES                                                                  | 7   
|ADVANTAGE OIL & GAS LTD.                                                           | 8   
|GENERAL DEVELOPMENT OF THE BUSINESS                                                | 8   
|DESCRIPTION OF OUR BUSINESS AND OPERATIONS                                         | 11  
|STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION                       | 12  
|DIRECTORS AND OFFICERS                                                             | 26  
|DIVIDEND POLICY                                                                    | 29  
|DESCRIPTION OF THE CORPORATION'S SECURITIES                                        | 29  
|PRICE RANGE AND TRADING VOLUME OF SECURITIES                                       | 30  
|ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER | 32  
|LEGAL PROCEEDINGS                                                                  | 32  
|REGULATORY ACTIONS                                                                 | 32  
|INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS                         | 32  
|MATERIAL CONTRACTS                                                                 | 32  
|INTEREST OF EXPERTS                                                                | 32  
|AUDITORS, TRANSFER AGENT AND REGISTRAR                                             | 33  
|AUDIT COMMITTEE INFORMATION                                                        | 33  
|AUDIT COMMITTEE CHARTER                                                            | 34  
|AUDIT SERVICE FEES                                                                 | 38  
|INDUSTRY CONDITIONS                                                                | 39  
|RISK FACTORS                                                                       | 46  
|DISCLOSURE PURSUANT TO THE REQUIREMENTS OF THE NEW YORK STOCK EXCHANGE             | 59  
|ADDITIONAL INFORMATION                                                             | 59  







SCHEDULES



|"A" – | REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE                  
|----- | ------------------------------------------------------------------------------
|"B" – | REPORT ON RESERVES DATA BY INDEPENDENT QUALIFIED RESERVES EVALUATOR OR AUDITOR











GLOSSARY
OF TERMS



Selected Defined Terms



"5.00% Debentures" means
the 5.00% convertible unsecured subordinated debentures of the Corporation that matured on January 30, 2015;



"2012 Secondary Offering"
means the secondary offering by Advantage of 8,300,000 common shares of Longview at a price of $9.00 per common share, which closed
on May 22, 2012;



"2014 Secondary Offering"
means the secondary offering by Advantage of 21,150,010 common shares of Longview at a price of $4.45 per common share, which closed
on February 28, 2014;



"ABCA" means the Business
Corporations Act (Alberta), together with any or all regulations promulgated thereunder, as amended from time to time;



"AOG" or "Advantage"
or the "Corporation" means Advantage Oil & Gas Ltd., a corporation amalgamation under the ABCA. All references
to "AOG" or "Advantage" or the "Corporation", unless the context otherwise requires,
are references to Advantage Oil & Gas Ltd. and its predecessors;



"AOG Board of Directors"
or "Board of Directors" or "Board" means the board of directors of AOG;



"Common Shares" means
the common shares of AOG;



"GAAP" means generally
accepted accounting principles for publicly accountable enterprises in Canada which is currently in accordance with IFRS;



"IFRS" means International
Financial Report Standards as issued by the International Accounting Standards Board;



"Longview" means Longview
Oil Corp., a corporation incorporated under the ABCA;



"Longview Transaction"
means the purchase by Longview from Advantage of certain oil-weighted assets for consideration comprised of cash and 29,450,000
common shares of Longview;



"NYSE" means the New York
Stock Exchange;



"Shareholders" means the
holders from time to time of one or more Common Shares, as shown on the register of such holders maintained by the Corporation
or by the transfer agent of the Common Shares, on behalf of the Corporation;



"TSX" means the Toronto
Stock Exchange; and



"U.S." means the United
States of America.



Selected Defined
Oil and Gas Terms



"API" means the American
Petroleum Institute;



"API gravity" means the
American Petroleum Institute gravity expressed in degrees in relation to liquids, which is a measure of how heavy or light a petroleum
liquid is compared to water. If a petroleum liquid's API gravity is greater than 10, it is lighter and floats on water; if less
than 10, it is heavier than water and sinks. API gravity is thus a measure of the relative density of a petroleum liquid and the
density of water, but it is used to compare the relative densities of petroleum liquids;















"COGE Handbook" means
the Canadian Oil and Gas Evaluation Handbook prepared jointly by The Society of Petroleum Evaluation Engineers (Calgary Chapter)
and the Canadian Institute of Mining, Metallurgy & Petroleum (Petroleum Society) as amended from time to time;



"Current Production" means
average daily gross production for the three month period ended December 31, 2014;



"developed non-producing reserves"
are those reserves that either have not been on production, or have previously been on production, but are shut-in, and the date
of resumption of production is unknown;



"developed producing reserves"
are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves
may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production
must be known with reasonable certainly;



"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 (for example, when compared to the cost of drilling a well) to put the reserves on production.
The developed category may be subdivided into producing and non-producing;



"development
costs" means costs incurred to obtain access to reserves and to provide facilities for extracting, treating, gathering
and storing the oil and gas from reserves. More specifically, development costs, including applicable operating costs of support
equipment and facilities and other costs of development activities, are costs incurred to:



| | (a) | gain access to and prepare well locations for drilling, including surveying well locations for
the purpose of determining specific development drilling sites, clearing ground, draining, road building, and relocating public
roads, gas lines and power lines, to the extent necessary in developing the reserves;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | drill and equip development wells, development type stratigraphic test wells and service wells,
including the costs of platforms and of well equipment such as casing, tubing, pumping equipment and wellhead assembly;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | acquire, construct and install production facilities such as flow lines, separators, treaters,
heaters, manifolds, measuring devices and production storage tanks, natural gas cycling and processing plants, and central utility
and waste disposal systems; and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | provide improved recovery systems;
| | --- | ----------------------------------



"exploration
costs" means costs incurred in identifying areas that may warrant examination and in examining specific areas that are
considered to have prospects that may contain oil and gas reserves, including costs of drilling exploratory wells and exploratory
type stratigraphic test wells. Exploration costs may be incurred both before acquiring the related property (sometimes referred
to as "prospecting costs") and after acquiring the property. Exploration costs, which include applicable operating costs
of support equipment and facilities and other costs of exploration activities, are:



| | (a) | costs of topographical, geochemical, geological and geophysical studies, rights of access to properties
to conduct those studies, and salaries and other expenses of geologists, geophysical crews and others conducting those studies
(collectively referred to as "geological and geophysical costs");
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | costs of carrying and retaining unproved properties, such as delay rentals, taxes (other than income
and capital taxes) on properties, legal costs for title defence, and the maintenance of land and lease records;
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | dry hole contributions and bottom hole contributions;
| | --- | -----------------------------------------------------



| | (d) | costs of drilling and equipping exploratory wells; and
| | --- | ------------------------------------------------------



2







| | (e) | costs of drilling exploratory type stratigraphic test wells;
| | --- | ------------------------------------------------------------



"forecast
prices and costs" means future prices and costs that are:



| | (a) | generally accepted as being a reasonable outlook of the future; or
| | --- | ------------------------------------------------------------------



| | (b) | if, and only to the extent that, there are fixed or presently determinable future prices or costs
to which the Corporation is legally bound by a contractual or other obligation to supply a physical product, including those for
an extension period of a contract that is likely to be extended, those prices or costs rather than the prices and costs referred
to in subparagraph (a);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



"gross"
means:



| | (a) | in relation to an entity's interest in production and reserves, its "company gross reserves",
which are such entity's working interest (operating or non-operating) share before deduction of royalties and without including
any royalty interest of such entity;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | in relation to wells, the total number of wells in which an entity has an interest; and
| | --- | ---------------------------------------------------------------------------------------



| | (c) | in relation to properties, the total area of properties in which an entity has an interest;
| | --- | -------------------------------------------------------------------------------------------



"net"
means:



| | (a) | in relation to an entity's interest in production and reserves, such entity's working interest
(operating or non-operating) share after deduction of royalty obligations, plus the entity's royalty interests in production or
reserves;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | in relation to an entity's interest in wells, the number of wells obtained by aggregating an entity's
working interest in each of its gross wells; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | in relation to an entity's interest in a property, the total area in which an entity has an interest
multiplied by the working interest owned by it;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



"NI 51-101" means National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities;



"Oil and Natural Gas Properties"
or "Properties" means the working, royalty or other interests of AOG in any petroleum and natural gas rights,
tangibles and miscellaneous interests, including properties which may be acquired by AOG from time to time;



"probable reserves" are
those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining
quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves;



"proved reserves" are
those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated proved reserves;



"reserves" are estimated
remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of
a given date, based on: (i) analysis of drilling, geological, geophysical and engineering data; (ii) the use of established technology;
and (iii) specified economic conditions, which are generally accepted as being reasonable. Reserves are classified according to
the degree of certainty associated with the estimates;



"resource play" refers
to drilling programs targeted at regionally distributed crude oil or natural gas accumulations; successful exploitation of these
reservoirs is dependent upon technologies such as horizontal drilling and multi-stage fracture stimulation to access large rock
volumes in order to produce economic quantities of oil or natural gas;



3







"undeveloped reserves"
are those reserves expected to be recovered from known accumulations where a significant expenditure (for example, when compared
to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the
reserves classification (proved, probable) to which they are assigned.



Words importing the singular number only
include the plural, and vice versa, and words importing any gender include all genders. All dollar amounts set forth in
this annual information form are in Canadian dollars, except where otherwise indicated.



4







ABBREVIATIONS



|Oil and Natural Gas Liquids |                                                                                                                                  | Natural Gas
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | -----------
|                            |                                                                                                                                  |            
|bbls                        | barrels                                                                                                                          |            
|Mbbls                       | thousand barrels                                                                                                                 |            
|MMbbls                      | million barrels                                                                                                                  |            
|NGLs                        | natural gas liquids                                                                                                              |            
|stb                         | stock tank barrels of oil                                                                                                        |            
|Mstb                        | thousand stock tank barrels of oil                                                                                               |            
|MMboe                       | million barrels of oil equivalent                                                                                                |            
|boe/d                       | barrels of oil equivalent per day                                                                                                |            
|bbls/d                      | barrels of oil per day                                                                                                           |            
|                            |                                                                                                                                  |            
|Other                       |                                                                                                                                  |            
|                            |                                                                                                                                  |            
|BOE or boe                  | means barrel of oil equivalent, using the conversion factor of 6 Mcf of natural gas being equivalent to one bbl of oil.         
|mcfe                        | means thousand cubic feet of natural gas equivalent, using the ratio of 6 Mcf of natural gas being equivalent to one bbl of oil.
|mmcfe                       | means million cubic feet of natural gas equivalent, using the ratio of 6 Mcf of natural gas being equivalent to one bbl of oil. 
|WTI                         | means West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the crude oil standard grade   
|API                         | means the measure of the density or gravity of liquid petroleum products derived from a specific gravity.                       
|psi                         | means pounds per square inch.                                                                                                   



The term "boe" or barrels of
oil equivalent and “mcfe” or thousand cubic feet equivalent may be misleading, particularly if used in isolation. A
boe or mcfe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based
on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at
the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is
significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication
of value.



Certain other terms used herein but not
defined herein are defined in NI 51-101 and, unless the context otherwise requires, shall have the same meanings herein as
in NI 51-101.



CONVERSION



The following table sets forth certain
conversions between Standard Imperial Units and the International System of Units (or metric units).



|To Convert From |  | To           |  | Multiply By |       
|--------------- |  | ------------ |  | ----------- | ------
|                |  |              |  |             |       
|Mcf             |  | cubic metres |  |             | 28.317
|cubic metres    |  | cubic feet   |  |             | 35.315
|bbls            |  | cubic metres |  |             | 0.159 
|cubic metres    |  | bbls         |  |             | 6.289 
|feet            |  | metres       |  |             | 0.305 
|metres          |  | feet         |  |             | 3.281 
|miles           |  | kilometres   |  |             | 1.609 
|kilometres      |  | miles        |  |             | 0.621 
|acres           |  | hectares     |  |             | 0.405 
|hectares        |  | acres        |  |             | 2.471 
|gigajoules      |  | MMbtu        |  |             | 0.950 
|MMbtu           |  | gigajoules   |  |             | 1.0526



5







FORWARD-LOOKING
STATEMENTS



Certain statements contained in this annual
information form constitute forward-looking statements. These statements relate to future events or our future performance. All
statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but
not always, identified by the use of words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and similar
expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such forward-looking statements. We believe the expectations reflected in
those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct
and such forward-looking statements included in, or incorporated by reference into, this annual information form should not be
unduly relied upon. These statements speak only as of the date of this annual information form.



In particular, this annual information
form contains forward-looking statements pertaining to, but not limited to, the following:



| | · | the performance characteristics of our assets;
| | - | ----------------------------------------------

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

| | · | the size of the oil and natural gas reserves;
| | - | ---------------------------------------------

| | · | projections of market prices and costs;
| | - | ---------------------------------------

| | · | supply and demand for oil and natural gas;
| | - | ------------------------------------------

| | · | expectations regarding the ability to raise capital and to continually add to reserves through
acquisitions and development;
| | - | ----------------------------------------------------------------------------------------------------------------------------

| | · | drilling plans;
| | - | ---------------

| | · | estimated timing of capital expenditures;
| | - | -----------------------------------------

| | · | future development plans for the Corporation's assets, including the anticipated timing thereof;
| | - | ------------------------------------------------------------------------------------------------

| | · | targeted production at Glacier and the anticipated timing of achievement of such targets;
| | - | -----------------------------------------------------------------------------------------

| | · | management's belief that significant growth at Glacier exists beyond 2017;
| | - | --------------------------------------------------------------------------

| | · | focus of capital budget;
| | - | ------------------------

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

| | · | future abandonment and reclamation costs;
| | - | -----------------------------------------

| | · | tax horizons;
| | - | -------------

| | · | anticipated review of the Corporation's Credit Facility;
| | - | --------------------------------------------------------

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

| | · | capital expenditures programs.
| | - | ------------------------------



Statements relating to "reserves"
or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain
estimates and assumptions, that the reserves and resources described can be profitably produced in the future. Readers are cautioned
that the foregoing lists of factors are not exhaustive. The forward looking statements contained in this annual information form
are expressly qualified by this cautionary statement.



The actual results could differ materially
from those anticipated in these forward-looking statements as a result of the risk factors set forth below and elsewhere in this
annual information form:



| | · | volatility in market prices for oil and natural gas;
| | - | ----------------------------------------------------

| | · | liabilities inherent in oil and natural gas operations;
| | - | -------------------------------------------------------

| | · | uncertainties associated with estimating oil and natural gas reserves;
| | - | ----------------------------------------------------------------------

| | · | competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled
personnel;
| | - | ----------------------------------------------------------------------------------------------------------------

| | · | incorrect assessments of the value of acquisitions;
| | - | ---------------------------------------------------

| | · | fluctuation in foreign exchange or interest rates;
| | - | --------------------------------------------------

| | · | stock market volatility and market valuations;
| | - | ----------------------------------------------



6







| | · | changes in income tax laws or changes in tax laws and incentive programs relating to the oil and
gas industry;
| | - | --------------------------------------------------------------------------------------------------------------

| | · | geological, technical, drilling and processing problems and other difficulties in producing petroleum
reserves; and
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | the other factors discussed under "Risk Factors".
| | - | -------------------------------------------------



Although the forward-looking statements
contained in this annual information form are based upon assumptions which AOG believe to be reasonable, AOG cannot assure Shareholders
that actual results will be consistent with these forward-looking statements. With respect to forward-looking statements contained
in this annual information form, AOG has made assumptions regarding, but not limited to: current commodity prices and royalty regimes;
availability of skilled labour; timing and amount of capital expenditures; future exchange rates; the price of oil and natural
gas; the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related
equipment; effects of regulation by governmental agencies; royalty rates; future operating costs; that the Corporation will have
sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures
and requirements as needed; that the Corporation’s conduct and results of operations will be consistent with its expectations;
that the Corporation will have the ability to develop the Corporation’s oil and gas properties in the manner currently contemplated;
that current or, where applicable, proposed assumed industry conditions, laws and regulations will continue in effect or as anticipated
as described herein; and that the estimates of the Corporation’s reserves volumes and the assumptions related thereto (including
commodity prices and development costs) are accurate in all material respects.



AOG has included the above summary of assumptions
and risks related to forward-looking information provided in this annual information form in order to provide Shareholders with
a more complete perspective on the Corporation's current and future operations and such information may not be appropriate for
other purposes. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do so, what benefits AOG will derive therefrom.



These forward-looking statements are made
as of the date of this annual information form and AOG disclaims any intent or obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable
securities laws.



NON-GAAP
MEASURES



The Corporation discloses several financial
measures in this annual information form that do not have any standardized meaning prescribed under GAAP. These financial measures
include funds from operations and cash netbacks. Management believes that these financial measures are useful supplemental information
to analyze operating performance and provide an indication of the results generated by the Corporation’s principal business
activities. Investors should be cautioned that these measures should not be construed as an alternative to net income, comprehensive
income, and cash provided by operating activities or other measures of financial performance as determined in accordance with GAAP.
Advantage’s method of calculating these measures may differ from other companies, and accordingly, they may not be comparable
to similar measures used by other companies.



Funds from operations, as presented, is
based on cash provided by operating activities before expenditures on decommissioning liability and changes in non-cash working
capital reduced for finance expense excluding accretion. Cash netbacks are dependent on the determination of funds from operations
and include the primary cash sales and expenses on a per mcfe basis that comprise funds from operations.



7







ADVANTAGE
OIL & GAS LTD.



General



The Corporation was formed pursuant to
the amalgamation of Advantage Oil & Gas Ltd., 1335703 Alberta Ltd., SET Resources Inc. and Sound Exchange Co Ltd. under the
ABCA on September 5, 2007. On July 9, 2009 the articles of the Corporation were amended to change the number of issued and outstanding
Common Shares to equal the number of trust units of Advantage Energy Income Fund (the "Trust") outstanding immediately
prior to the plan of arrangement pursuant to Section 193 of the ABCA, which closed on July 9, 2009 and pursuant to which, among
other things, the Trust was dissolved and the Corporation became the resulting entity.



The Corporation is a reporting issuer in
each of the provinces of Canada and the Common Shares are listed on the TSX and NYSE under the symbol "AAV".



The head office of AOG is located at Suite
300, 440-2nd Avenue S.W., Calgary, Alberta T2P 5E9 and its registered office is located at 2400, 525 – 8th
Avenue S.W., Calgary, Alberta T2P 1G1.



Corporate Structure



As at December 31, 2014, the Corporation
did not have any material direct or indirect subsidiaries, as the total assets and sales and operating revenues of the Corporation's
subsidiaries, on a combined basis, does not exceed 10% of the consolidated assets and the consolidated sales and operating revenues
of the Corporation.



GENERAL
DEVELOPMENT OF THE BUSINESS



General



The Corporation and its subsidiaries are
actively engaged in the business of gas exploitation, development, acquisition and production in the Province of Alberta. The Corporation
is focused on development and growth of its extensive Montney natural gas play at Glacier, Alberta. See "Description of
our Business and Operations" below.



A detailed description of the historical
development of the business of the Corporation and its subsidiaries is outlined below. Unless the context otherwise requires, references
to "we", "us", "our" or similar terms refer to the Corporation.



Three Year History



2012



Credit Facilities



On May 17, 2012, Advantage announced that
the borrowing base under its credit facilities (the "Credit Facilities") had been increased from $275 million
to $300 million, comprised of a $20 million revolving operating loan facility and a $280 million extendible revolving credit facility.
Various borrowing options are available under the Credit Facilities, including prime rate based advances, U.S. base rate advances,
U.S. dollar LIBOR advances and bankers' acceptances loans. The Credit Facilities are secured by a $1 billion floating charge demand
debenture, a general security agreement and a subordination agreement from the Corporation covering all assets and cash flows.
The amounts available to the Corporation from time to time under the Credit Facilities are based upon the borrowing base determined
by the lenders and which is redetermined on a semi-annual basis by those lenders. The borrowing base constitutes a revolving facility
for a 364 day term which is extendible annually for a further 364 day revolving period, subject to a one year term maturity as
to lenders not agreeing to such annual extension.



2012 Secondary Offering



On May 22, 2012, Longview closed the 2012
Secondary Offering, pursuant to which 8,300,000 common shares of Longview held by Advantage were sold at a price of $9.00 per common
share for aggregate gross proceeds to Advantage of $74,700,000. As a result of the 2012 Secondary Offering, Advantage retained
an equity ownership interest of approximately 45.2% of the common shares of Longview. All of the net proceeds from the 2012 Secondary
Offering were initially used to reduce indebtedness under the Credit Facilities. Funds were subsequently utilized to finance additional
delineation drilling and development of the Middle Montney formation at Glacier.



8







Non-Core Asset Dispositions



On August 22, 2012, Advantage announced
that it had engaged RBC Capital Markets to market for sale all of the Corporation's non-core assets, being all corporate assets
excluding Advantage's core Glacier Montney natural gas asset and its common shares of Longview. The non-core assets produced a
total of approximately 6,350 boe/d (80% gas and 20% oil and NGL) during 2012 and had 27.8 MMboe of proved plus probable reserves
as at December 31, 2012. Advantage completed two non-core asset dispositions during the third quarter of 2012 for net cash proceeds
of $10.9 million and a third non-core asset disposition during the fourth quarter of 2012 for net cash proceeds of $3.0 million
(collectively, the "2012 Non-Core Asset Dispositions").



2013



Non-Core Asset Dispositions



On February 5, 2013, Advantage announced
that it had completed a fourth non-core asset disposition in the first quarter of 2013 for net cash proceeds of $13.9 million and
entered into a definitive agreement (the "Purchase and Sale Agreement") with Questfire Energy Corp. (the "Purchaser")
for the sale of non-core assets representing production of approximately 5,900 boe/d (the "Transaction") for consideration
consisting of $40.2 million of cash, a $32.6 million convertible senior secured debenture (the "Questfire Debenture")
and 1.5 million Class B shares (the "Class B shares"). The Transaction closed on April 30, 2013.



The net cash proceeds from all five transactions
were used to reduce outstanding bank indebtedness under the Credit Facilities. Upon closing of all five transactions, Advantage's
major asset was its Glacier Montney property, with production of 90 MMcf/d to 100 MMcf/d, the Corporation's 45.1% holding of the
issued and outstanding common shares of Longview, and the Questfire Debenture and Class B Shares issued pursuant to the Transaction.



Appointment of Financial Advisors and
Strategic Alternatives Process



Advantage announced on February 5, 2013
that it had retained FirstEnergy Capital Corp. ("FirstEnergy") and RBC Capital Markets ("RBC")
as co-advisors to provide advice as the Corporation initiated the review of strategic alternatives. The Board of Directors believed
that the Corporation's core Glacier asset was materially undervalued in the context of the Corporation's current market valuation
and Advantage committed to evaluating all options to maximize shareholder value. On February 26, 2013, the Corporation formed a
special committee of independent directors (the "Special Committee") comprised of Mr. Steven Sharpe, as Chairman
and Messrs. Stephen Balog and Ronald McIntosh, to oversee the strategic alternatives review process with the assistance of its
financial advisors, FirstEnergy and RBC. The financial advisors commenced a broad marketing effort to solicit interest in a sale
of the Corporation or other strategic transaction to maximize value for all shareholders. Technical presentations were completed
and following the bid date, the Corporation, along with its financial advisors, reviewed the proposals received from those parties
who submitted bids.



Credit Facilities



On April 30, 2013, Advantage announced
that the borrowing base under the Credit Facilities had been reduced to $230 million, comprised of a $20 million revolving operating
loan facility and a $210 million extendible revolving credit facility. The Credit Facilities were also amended to extend the duration
of commodity hedging for up to four years and increase the permitted production available to hedge to 65% of total estimated crude
oil and natural gas production on an annual basis over the first three years and 50% over the fourth year.



On October 24, 2013, Advantage announced
that its lenders completed their semi-annual review and the borrowing base under the Credit Facilities had been increased to $300
million.



9







Changes in Directors and Management



On June 12, 2013, Ms. Sheila O'Brien resigned
as a director of Advantage. On August 1, 2013, Mr. Kelly Drader resigned as Chief Financial Officer and a director of the Corporation
to focus on his role as President and Chief Executive Officer of Longview. Mr. Craig Blackwood, the Vice-President Finance of the
Corporation, assumed the role of Interim Chief Financial Officer and on February 4, 2014, Mr. Blackwood was appointed as Chief
Financial Officer of the Corporation. On November 28, 2013, Mr. Lionel Derochie resigned as Vice President Operations of the Corporation
and on December 31, 2013, Mr. Pat Cairns resigned as Senior Vice President of the Corporation in order to focus on their respective
roles at Longview.



2014



Strategic Alternatives Process Conclusion



On February 4, 2014, the Corporation announced
that its strategic alternatives review process had been completed and did not result in an acceptable proposal. During the process,
the Corporation received expressions of interest in respect of a variety of potential transactions; however, none of these proposals
were determined to be in the best interests of the Corporation and did not adequately reflect the intrinsic value of the Corporation
based upon its assets, operations and prospects for growth.



Three Year Development Plan and Glacier
Phase VII Budget Approval



On February 4, 2014, the Corporation announced
a three year development plan through to 2017 endorsed by the Board and approval of the Glacier Phase VII Capital and Operating
Budget for the 12 months ending March 31, 2015. The Corporation’s development plan targets doubling production at Glacier
to 245 mmcfe/d (40,800 boe/d) in 2017 including the extraction of natural gas liquids. Based on well results and cost performance,
Advantage expected this plan to be completed within its existing Credit Facilities with total capital expenditures during each
12 month development period to be between $210 million to $270 million with the drilling of approximately 33 wells per 12 month
period. The Board approved the Phase VII Glacier capital budget targets to increase current production to approximately 183 mmcfe/d
in the second quarter of 2015 including approximately 900 bbls/d of natural gas liquids from an initial 25 mmcf/d development in
the Middle Montney. Facility expenditures include additional compression, acid gas compression, and power generation. A shallow
cut liquids extraction process capable of accommodating future liquids rich gas production growth will be installed at Advantage’s
current Glacier Gas Plant. Management of Advantage believes significant growth potential exists beyond 2017 supported by the quality
and size of Advantage’s Montney resource and availability of future pipeline transportation capacity.



Termination of Technical Services Agreement



Concurrent with closing of the Longview
Transaction, AOG entered into a Technical Services Agreement (the "TSA") with Longview. Under the TSA, AOG provided
the necessary personnel and technical services to manage Longview's business and Longview reimbursed AOG on a monthly basis for
its share of administrative charges based on respective levels of production. During the term of the TSA, the officers of Longview
provided services to Longview under the TSA but remained as employees of Advantage. On February 4, 2014, the Corporation and Longview
announced that the TSA was formally terminated and appropriate staffing and systems were in place to enable both organizations
to run independently.



Credit Facilities



On May 29, 2014, Advantage announced that
its lenders completed their annual review and the borrowing base under the Credit Facilities had been increased to $400 million.



Change in Directors and Management



On February 4, 2014, Mr. Steven Sharpe
resigned from the Board. Mr Ron McIntosh was elected Chairman.



On March 27, 2014, Mr. Neil Bokenfohr,
Vice-President Exploitation was appointed as Senior Vice President.



On May 26, 2014, Mr. Grant Fagerheim was
appointed as a director of the Corporation.



10







2014 Secondary Offering



On February 28, 2014, Longview closed the
2014 Secondary Offering, pursuant to which 21,150,010 common shares of Longview held by Advantage were sold at a price of $4.45
per common share for net proceeds to Advantage of $90.0 million. As a result of the 2014 Secondary Offering, as of the date hereof,
Advantage does not own or control or direct, directly or indirectly, any common shares of Longview. All of the net proceeds from
the 2014 Secondary Offering were used to reduce indebtedness under the Credit Facilities.



Sale of Questfire Investments



On March 26, 2014, Advantage entered an
agreement for Questfire to redeem the Questfire Debenture at an aggregate purchase price of $13.6 million. In the second quarter
of 2014, Questfire also purchased, pursuant to an issuer bid, all of the Class B Shares held by Advantage at a purchase price of
$2.60 per share for gross proceeds of $3.9 million.



Recent Developments



2015 Guidance and Development Plan Update



On February 17, 2015, Advantage announced
that the Board had approved a $110 million reduction in the Corporation’s 2015 capitalprogram. The Corporation also
announced that despite the $110 million capital reduction, it would still achieve 12 months production growth of 36% from 135 mmcfe/d
to 183 mmcfe/d in July 2015.  As a result of improved capital efficiencies from slick water completed wells with higher initial
production rates and lower declines, fewer wells are required than were originally scheduled for the 2015 through 2017 period.
This has resulted in a $150 million reduced capital program for the entire 2015 to 2017 development period.



Anticipated Changes
in the Business



As
at the date hereof and other than as disclosed herein, we do not anticipate that any material change in our business will occur
during the balance of the 2015 financial year. See "General Development of the Business – Recent Developments".



Significant Acquisitions



The Corporation did not complete any acquisitions
during the year ended December 31, 2014 for which disclosure is required under Part 8 of National Instrument of 51-102 Continuous
Disclosure Obligations.



As part of its ongoing business, the Corporation
evaluates potential acquisitions of all types of petroleum and natural gas assets. The Corporation is normally in the process of
evaluating various potential acquisitions at any one time which individually or together could be material. As of the date hereof,
the Corporation has not reached agreement on the price or terms of any potential material acquisitions. The Corporation cannot
predict whether any current or future opportunities will result in one or more acquisitions for the Corporation.



DESCRIPTION
OF OUR BUSINESS AND OPERATIONS



General



AOG and its subsidiaries are actively engaged
in the business of gas exploitation, development, acquisition and production in the Province of Alberta.



Advantage's exploitation and development
program is focused at Glacier, Alberta where it is developing a significant natural gas resource play. As current and future practice,
AOG has established a financial hedging strategy and may manage the risk associated with changes in commodity prices by entering
into derivatives. See "Risk Factors". Although Advantage has a significant capital development program, it also
actively evaluates growth opportunities through oil and gas asset acquisitions, as well as through corporate acquisitions. AOG
targets acquisitions that support and augment its Montney development and long term strategy. It is currently intended that AOG
will finance any acquisitions and investments through the Credit Facilities, the issuance of additional Common Shares from treasury
and the issuance of subordinated convertible debentures or accessing long term debt instruments to maintain prudent leverage.



11







Reorganizations



As at the date hereof, except as disclosed
herein, there have been no material reorganizations of AOG and or any of our subsidiaries within the three most recently completed
financial years and there are currently no material reorganizations of AOG proposed for the current financial year. See "General
Development of the Business".



Bankruptcy and Similar
Procedures



There have been no bankruptcy, receivership
or similar proceedings against the Corporation or any of its subsidiaries or related entities, or any voluntary bankruptcy, receivership
or similar proceeding by the Corporation or any of its subsidiaries or related entities since the inception of the Corporation
or during or proposed for the current financial year.



Specialized Skill
and Knowledge



Advantage employs individuals with various
professional skills in the course of pursuing its business plan. These professional skills include, but are not limited to, geology,
geophysics, engineering, financial and business skills, which are widely available in the industry. Drawing on significant experience
in the oil and gas business, Advantage believes its management team has a demonstrated track record of bringing together all of
the key components to a successful exploration and production company: strong technical skills; expertise in planning and financial
controls; ability to execute on business development opportunities; capital markets expertise; and an entrepreneurial spirit that
allows Advantage to effectively identify, evaluate and execute on its business plan.



Human Resources



As at December 31, 2014, the Corporation
employed 27 full-time employees, 23 of which are located in the head office and 4 of which are located in the field. The Corporation
also retained 5 consultants in the head office.



STATEMENT
OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION



The report of management and directors
on oil and gas disclosure in Form 51-101F3 and the report on consolidated reserves data by Sproule Associates Limited ("Sproule")
in Form 51-101F2 are attached as Schedules "A" and "B" to this annual information form, respectively, which
forms are incorporated herein by reference.



The consolidated statement of reserves
data and other oil and gas information set forth below (the "Statement") is dated December 31, 2014. The effective
date of the Statement is December 31, 2014 and the preparation date of the Statement is February 5, 2015.



Disclosure of Reserves
Data



The reserves data set forth below (the
"Reserves Data") is based upon an evaluation by Sproule with an effective date of December 31, 2014 contained
in a consolidated report of Sproule dated February 5, 2015 (the "Sproule Report"). The Sproule Report evaluated,
as at December 31, 2014, the oil, NGLs and natural gas reserves of AOG and its consolidated subsidiaries. The Reserves Data summarizes
AOG's consolidated oil, NGLs and natural gas reserves and the net present values of future net revenue for these reserves using
forecast prices and costs.



The Sproule Report has been prepared in
accordance with the standards contained in the COGE Handbook and the reserve definitions contained in NI 51-101 and the COGE Handbook.
Additional information not required by NI 51-101 has been presented to provide continuity and additional information which the
Corporation believes is important to readers of this annual information form. Sproule was engaged to provide evaluations of proved
and proved plus probable reserves and no attempt was made to evaluate possible reserves.



12







All of our consolidated reserves are in
Canada and, specifically, in the Province of Alberta.



There are numerous uncertainties inherent
in estimating quantities of crude oil, natural gas and NGL reserves and the future cash flows attributed to such reserves. The
reserve and associated cash flow information set forth in this annual information form are estimates only. In general, estimates
of economically recoverable oil and natural gas reserves and the future net cash flows therefrom 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 natural gas, royalty rates, the assumed effects of regulation by governmental
agencies and future operating costs, all of which may vary materially from actual results. For those reasons, estimates of the
economically recoverable crude oil, NGL 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. The Corporation's actual production, revenues, taxes and development
and operating expenditures with respect to its consolidated reserves will vary from estimates thereof and such variations could
be material.



It should not be assumed that the estimates
of future net revenues presented in the tables below represent the fair market value of the reserves. There is no assurance that
the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates
of our crude oil, NGLs 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 and natural gas liquid reserves may be greater than or less than the
estimates provided herein.



The information relating to the Corporation's
consolidated crude oil, NGL and natural gas reserves contains forward-looking statements relating to future net revenues, forecast
capital expenditures, future development plans and costs related thereto, forecast operating costs, anticipated production and
abandonment costs. See "Forward-Looking Statements", "Industry Conditions" and "Risk
Factors – Reserves Estimates".



In certain of the tables set forth below,
the columns may not add due to rounding.



13









SUMMARY OF OIL AND GAS RESERVESas at December 31, 2014FORECAST PRICES AND COSTS



|                           |  | RESERVES             |    
|-------------------------- |  | -------------------- | ---
|                           |  | LIGHT AND MEDIUM OIL |    
|RESERVES CATEGORY          |  | Gross (Mbbl)         |    
|                           |  |                      |    
|PROVED                     |  |                      |    
|Developed Producing        |  |                      | 4.9
|Developed Non-Producing    |  |                      |    
|Undeveloped                |  |                      |    
|TOTAL PROVED               |  |                      | 4.9
|                           |  |                      |    
|PROBABLE                   |  |                      | 1.9
|TOTAL PROVED PLUS PROBABLE |  |                      | 6.8





|                           |  | RESERVES     |          
|-------------------------- |  | ------------ | ---------
|                           |  | NATURAL GAS  |          
|RESERVES CATEGORY          |  | Gross (MMcf) |          
|                           |  |              |          
|PROVED                     |  |              |          
|Developed Producing        |  |              | 270,361  
|Developed Non-Producing    |  |              | 32,469   
|Undeveloped                |  |              | 798,870  
|TOTAL PROVED               |  |              | 1,101,700
|                           |  |              |          
|PROBABLE                   |  |              | 607,516  
|TOTAL PROVED PLUS PROBABLE |  |              | 1,709,216







|                           |  | RESERVES             |          
|-------------------------- |  | -------------------- | ---------
|                           |  | TOTAL OIL EQUIVALENT |          
|RESERVES CATEGORY          |  | Gross (Mboe)         |          
|                           |  |                      |          
|PROVED                     |  |                      |          
|Developed Producing        |  |                      | 46,519.9 
|Developed Non-Producing    |  |                      | 5,910.9  
|Undeveloped                |  |                      | 139,632.6
|TOTAL PROVED               |  |                      | 192,063.4
|                           |  |                      |          
|PROBABLE                   |  |                      | 108,494.5
|TOTAL PROVED PLUS PROBABLE |  |                      | 300,557.9



14









SUMMARY OF NET PRESENT VALUES OF FUTURE
NET REVENUE

as at December 31, 2014

FORECAST PRICES AND COSTS







|                           |  | Before Income Tax Discounted at (%/year) |           |  | After Income Taxes Discounted at (%/year) |  |           | Unit Value Before Income Tax Discounted at 10%/ year(1) | 
|-------------------------- |  | ---------------------------------------- | --------- |  | ----------------------------------------- |  | --------- | ------------------------------------------------------- | 
|RESERVES                   |  | 0%                                       |           |  | 5%                                        |  |           | 10%                                                     | 
|CATEGORY                   |  | ($000's)                                 |           |  | ($000's)                                  |  |           | ($000's)                                                | 
|                           |  |                                          |           |  |                                           |  |           |                                                         | 
|PROVED                     |  |                                          |           |  |                                           |  |           |                                                         | 
|Developed Producing        |  |                                          | 943,305   |  |                                           |  | 734,105   |                                                         | 
|Developed Non-Producing    |  |                                          | 139,958   |  |                                           |  | 105,132   |                                                         | 
|Undeveloped                |  |                                          | 2,595,789 |  |                                           |  | 1,274,441 |                                                         | 
|TOTAL PROVED               |  |                                          | 3,679,052 |  |                                           |  | 2,113,679 |                                                         | 
|                           |  |                                          |           |  |                                           |  |           |                                                         | 
|PROBABLE                   |  |                                          | 2,900,935 |  |                                           |  | 1,528,061 |                                                         | 
|                           |  |                                          |           |  |                                           |  |           |                                                         | 
|TOTAL PROVED PLUS PROBABLE |  |                                          | 6,579,987 |  |                                           |  | 3,641,739 |                                                         | 



Notes:



| | (1) | The unit values are based on net reserve volumes.
| | --- | -------------------------------------------------

| | (2) | Values are calculated by considering existing tax pools for Advantage in the evaluation of Advantage's
oil and gas properties, and take into account current federal tax regulations. Values do not represent an estimate of the value
at the business entity level, which may be significantly different. For information at the business entity level, please see Advantage's
Consolidated Financial Statements and Management's Discussion and Analysis for the year ended December 31, 2014.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



TOTAL FUTURE NET REVENUE (UNDISCOUNTED)

as at December 31, 2014

FORECAST PRICES AND
COSTS



|RESERVES CATEGORY             |  | REVENUE ($000's) |            |  | ROYALTIES ($000's) |  |           | OPERATING COSTS ($000's) |  |  | DEVELOP- MENT COSTS ($000's) |  |  | ABANDONMENT AND RECLAMATION COSTS ($000's) |           |  | FUTURE NET REVENUE BEFORE FUTURE INCOME TAXES ($000's) |  |        | FUTURE INCOME TAXES ($000's) |  |  | FUTURE NET REVENUE AFTER FUTURE INCOME TAXES ($000's) | 
|----------------------------- |  | ---------------- | ---------- |  | ------------------ |  | --------- | ------------------------ |  |  | ---------------------------- |  |  | ------------------------------------------ | --------- |  | ------------------------------------------------------ |  | ------ | ---------------------------- |  |  | ----------------------------------------------------- | 
|                              |  |                  |            |  |                    |  |           |                          |  |  |                              |  |  |                                            |           |  |                                                        |  |        |                              |  |  |                                                       | 
|Proved Reserves               |  |                  | 6,769,642  |  |                    |  | 508,549   |                          |  |  | 1,093,073                    |  |  |                                            | 1,442,382 |  |                                                        |  | 46,586 |                              |  |  | 3,679,052                                             | 
|                              |  |                  |            |  |                    |  |           |                          |  |  |                              |  |  |                                            |           |  |                                                        |  |        |                              |  |  |                                                       | 
|Proved Plus Probable Reserves |  |                  | 11,105,042 |  |                    |  | 1,073,966 |                          |  |  | 1,654,935                    |  |  |                                            | 1,736,227 |  |                                                        |  | 59,927 |                              |  |  | 6,579,987                                             | 



Note:



| | (1) | Values are calculated by considering existing tax pools for Advantage in the evaluation of Advantage's
oil and gas properties, and take into account current federal tax regulations. Values do not represent an estimate of the value
at the business entity level, which may be significantly different. For information at the business entity level, please see Advantage's
Consolidated Financial Statements and Management's Discussion and Analysis for the year ended December 31, 2014.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15







FUTURE NET REVENUEBY PRODUCTION GROUPas at December 31, 2014FORECAST PRICES AND COSTS



|RESERVES CATEGORY |  | PRODUCTION GROUP                                                                              |  | FUTURE NET REVENUE BEFORE INCOME TAXES (discounted at 10%/year) ($000's) |           |  | UNIT VALUE ($/boe) | 
|----------------- |  | --------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | --------- |  | ------------------ | 
|                  |  |                                                                                               |  |                                                                          |           |  |                    | 
|Proved Reserves   |  | Light and Medium Crude Oil (including solution gas and other by-products)                     |  |                                                                          | -         |  |                    | 
|                  |  | Heavy Oil (including solution gas and other by-products)                                      |  |                                                                          | -         |  |                    | 
|                  |  | Natural Gas (including by-products but excluding solution gas and by-products from oil wells) |  |                                                                          | 1,359,035 |  |                    | 
|                  |  | Non-Conventional Oil and Gas Activities (Coalbed Methane)                                     |  |                                                                          | -         |  |                    | 
|                  |  | TOTAL                                                                                         |  |                                                                          | 1,359,035 |  |                    | 
|                  |  |                                                                                               |  |                                                                          |           |  |                    | 
|Proved Plus       |  | Light and Medium Crude Oil (including solution gas and other by-products)                     |  |                                                                          | -         |  |                    | 
|Probable Reserves |  | Heavy Oil (including solution gas and other by-products)                                      |  |                                                                          | -         |  |                    | 
|                  |  | Natural Gas (including by-products but excluding solution gas and by-products from oil wells) |  |                                                                          | 2,297,158 |  |                    | 
|                  |  | Non-Conventional Oil and Gas Activities (Coalbed Methane)                                     |  |                                                                          | -         |  |                    | 
|                  |  | TOTAL                                                                                         |  |                                                                          | 2,297,158 |  |                    | 



Pricing Assumptions



The following tables set forth the benchmark
reference prices, as at December 31, 2014, reflected in the Reserves Data. These price assumptions were provided to us by Sproule
and were Sproule's then current forecasts at the date of the Sproule Report.



SUMMARY OF PRICING AND INFLATION RATE
ASSUMPTIONS(1)
as at December 31, 2014
FORECAST PRICES AND COSTS



|Year       |  | WesternCanadaSelect20.5oAPI($Cdn/bbl) |       |   | CanadianLightSweetCrude Oil40oAPI($Cdn/bbl) |  |        | NATURAL
    GAS AECO- C Spot ($Cdn/ MMBtu) |  |  | NATURAL
    GAS LIQUIDS Edmonton Pentanes Plus ($Cdn/bbl) |   |  | NATURAL
    GAS LIQUIDS Edmonton Butanes ($Cdn/bbl) |        |   | INFLATION
    RATES %/Year |  |       | EXCHANGERATE(2)($US/$Cdn) | 
|---------- |  | ------------------------------------- | ----- | - | ------------------------------------------- |  | ------ | ------------------------------------------ |  |  | --------------------------------------------------------- | - |  | --------------------------------------------------- | ------ | - | -------------------------- |  | ----- | ------------------------- | 
|2015       |  |                                       | 60.50 |   |                                             |  | 70.35  |                                            |  |  | 3.32                                                      |   |  |                                                     | 78.60  |   |                            |  | 50.34 |                           | 
|2016       |  |                                       | 75.13 |   |                                             |  | 87.36  |                                            |  |  | 3.71                                                      |   |  |                                                     | 97.60  |   |                            |  | 62.51 |                           | 
|2017       |  |                                       | 84.52 |   |                                             |  | 98.28  |                                            |  |  | 3.90                                                      |   |  |                                                     | 109.80 |   |                            |  | 70.32 |                           | 
|2018       |  |                                       | 85.79 |   |                                             |  | 99.75  |                                            |  |  | 4.47                                                      |   |  |                                                     | 111.44 |   |                            |  | 71.37 |                           | 
|2019       |  |                                       | 87.07 |   |                                             |  | 101.25 |                                            |  |  | 5.05                                                      |   |  |                                                     | 113.12 |   |                            |  | 72.44 |                           | 
|2020       |  |                                       | 89.31 |   |                                             |  | 103.85 |                                            |  |  | 5.13                                                      |   |  |                                                     | 116.02 |   |                            |  | 74.31 |                           | 
|2021       |  |                                       | 90.65 |   |                                             |  | 105.40 |                                            |  |  | 5.22                                                      |   |  |                                                     | 117.76 |   |                            |  | 75.42 |                           | 
|2022       |  |                                       | 92.01 |   |                                             |  | 106.99 |                                            |  |  | 5.31                                                      |   |  |                                                     | 119.53 |   |                            |  | 76.55 |                           | 
|2023       |  |                                       | 93.39 |   |                                             |  | 108.59 |                                            |  |  | 5.40                                                      |   |  |                                                     | 121.32 |   |                            |  | 77.70 |                           | 
|2024       |  |                                       | 94.79 |   |                                             |  | 110.22 |                                            |  |  | 5.49                                                      |   |  |                                                     | 123.14 |   |                            |  | 78.87 |                           | 
|2025       |  |                                       | 96.21 |   |                                             |  | 111.87 |                                            |  |  | 5.58                                                      |   |  |                                                     | 124.99 |   |                            |  | 80.05 |                           | 
|Thereafter |  |                                       | 1.5   | % |                                             |  | 1.5    | %                                          |  |  | 1.5                                                       | % |  |                                                     | 1.5    | % |                            |  | 1.5   | %                         | 



Notes:



| | (1) | This summary table identifies benchmark reference pricing schedules that might apply to a reporting
issuer.
| | --- | -----------------------------------------------------------------------------------------------------------

| | (2) | The exchange rate used to generate the benchmark reference prices in this table.
| | --- | --------------------------------------------------------------------------------



Weighted average historical prices, including
hedging, realized by the Corporation for the year ended December 31, 2014, were $4.15/Mcf for natural gas, $93.26/bbl for crude
oil, and $66.97/bbl for NGLs.



16







Reconciliations
of Changes in Reserves



The following table sets forth a reconciliation
of the Corporation's total gross proved, total gross probable and total gross proved plus probable reserves as at December 31,
2014 against such reserves as at December 31, 2013 based on forecast prices and cost assumptions. This table does not include any
reserves attributable to Longview as at December 31, 2013.



RECONCILIATION OFGROSS RESERVESBY PRODUCT TYPE

FORECAST PRICES AND COSTS



|                    |  | Light And Medium Oil |      |   | Heavy Oil           |  |     | Natural Gas Liquids             | 
|------------------- |  | -------------------- | ---- | - | ------------------- |  | --- | ------------------------------- | 
|FACTORS             |  | Proved
    (Mbbl)    |      |   | Probable
    (Mbbl) |  |     | Proved
    Plus Probable (Mbbl) | 
|                    |  |                      |      |   |                     |  |     |                                 | 
|December 31, 2013   |  |                      | 6.0  |   |                     |  | 1.0 |                                 | 
|                    |  |                      |      |   |                     |  |     |                                 | 
|Extensions          |  |                      | -    |   |                     |  | -   |                                 | 
|Improved Recovery   |  |                      | -    |   |                     |  | -   |                                 | 
|Infill Drilling     |  |                      | -    |   |                     |  | -   |                                 | 
|Technical Revisions |  |                      | (0.5 | ) |                     |  | 0.9 |                                 | 
|Discoveries         |  |                      | -    |   |                     |  | -   |                                 | 
|Acquisitions        |  |                      | -    |   |                     |  | -   |                                 | 
|Dispositions        |  |                      | -    |   |                     |  | -   |                                 | 
|Economic Factors    |  |                      | -    |   |                     |  | -   |                                 | 
|Production          |  |                      | (0.6 | ) |                     |  | -   |                                 | 
|                    |  |                      |      |   |                     |  |     |                                 | 
|December 31, 2014   |  |                      | 4.9  |   |                     |  | 1.9 |                                 | 



|                    |  | Associated and Non-Associated Gas |           |   | Oil Equivalent      | 
|------------------- |  | --------------------------------- | --------- | - | ------------------- | 
|FACTORS             |  | Proved
    (MMcf)                 |           |   | Probable
    (MMcf) | 
|                    |  |                                   |           |   |                     | 
|December 31, 2013   |  |                                   | 992,325   |   |                     | 
|                    |  |                                   |           |   |                     | 
|Extensions          |  |                                   | 24,066    |   |                     | 
|Improved Recovery   |  |                                   | -         |   |                     | 
|Infill Drilling     |  |                                   | 12,250    |   |                     | 
|Technical Revisions |  |                                   | 121,053   |   |                     | 
|Discoveries         |  |                                   | -         |   |                     | 
|Acquisitions        |  |                                   | -         |   |                     | 
|Dispositions        |  |                                   | -         |   |                     | 
|Economic Factors    |  |                                   | (314      | ) |                     | 
|Production          |  |                                   | (47,679   | ) |                     | 
|                    |  |                                   |           |   |                     | 
|December 31, 2014   |  |                                   | 1,101,700 |   |                     | 



The following table sets forth a reconciliation
of the Corporation's total gross proved, total gross probable and total gross proved plus probable reserves as at December 31,
2014 against such reserves as at December 31, 2013 based on forecast prices and cost assumptions. This table represents the Corporation’s
and the Corporation’s consolidated subsidiaries interest including 100% of Longview’s reserves at December 31, 2013.
As a result of the 2014 Secondary Offering, the Longview reserves were removed from the Corporation’s consolidated reserves
as represented in the following table as “dispositions” in 2014.



17







RECONCILIATION OFGROSS RESERVESBY PRODUCT TYPE

FORECAST PRICES AND COSTS



|                    |  | Light And Medium Oil |           |   | Heavy Oil           |  |           | Natural Gas Liquids             | 
|------------------- |  | -------------------- | --------- | - | ------------------- |  | --------- | ------------------------------- | 
|FACTORS             |  | Proved
    (Mbbl)    |           |   | Probable
    (Mbbl) |  |           | Proved
    Plus Probable (Mbbl) | 
|                    |  |                      |           |   |                     |  |           |                                 | 
|December 31, 2013   |  |                      | 11,927.1  |   |                     |  | 10,741.2  |                                 | 
|                    |  |                      |           |   |                     |  |           |                                 | 
|Extensions          |  |                      | -         |   |                     |  | -         |                                 | 
|Improved Recovery   |  |                      | -         |   |                     |  | -         |                                 | 
|Infill Drilling     |  |                      | -         |   |                     |  | -         |                                 | 
|Technical Revisions |  |                      | (0.5      | ) |                     |  | 0.9       |                                 | 
|Discoveries         |  |                      | -         |   |                     |  | -         |                                 | 
|Acquisitions        |  |                      | -         |   |                     |  | -         |                                 | 
|Dispositions        |  |                      | (11,921.1 | ) |                     |  | (10,740.2 | )                               | 
|Economic Factors    |  |                      | -         |   |                     |  | -         |                                 | 
|Production          |  |                      | (0.6      | ) |                     |  | -         |                                 | 
|                    |  |                      |           |   |                     |  |           |                                 | 
|December 31, 2014   |  |                      | 4.9       |   |                     |  | 1.9       |                                 | 



|                    |  | Associated and Non-Associated Gas |           |   | Oil Equivalent      | 
|------------------- |  | --------------------------------- | --------- | - | ------------------- | 
|FACTORS             |  | Proved
    (MMcf)                 |           |   | Probable
    (MMcf) | 
|                    |  |                                   |           |   |                     | 
|December 31, 2013   |  |                                   | 1,018,018 |   |                     | 
|                    |  |                                   |           |   |                     | 
|Extensions          |  |                                   | 24,066    |   |                     | 
|Improved Recovery   |  |                                   | -         |   |                     | 
|Infill Drilling     |  |                                   | 12,250    |   |                     | 
|Technical Revisions |  |                                   | 121,053   |   |                     | 
|Discoveries         |  |                                   | -         |   |                     | 
|Acquisitions        |  |                                   | -         |   |                     | 
|Dispositions        |  |                                   | (25,693   | ) |                     | 
|Economic Factors    |  |                                   | (314      | ) |                     | 
|Production          |  |                                   | (47,679   | ) |                     | 
|                    |  |                                   |           |   |                     | 
|December 31, 2014   |  |                                   | 1,101,700 |   |                     | 



Additional Information
Relating to Reserves Data



Undeveloped
Reserves



Undeveloped reserves are attributed by
Sproule in accordance with standards and procedures contained in the COGE Handbook. Proved undeveloped reserves are those reserves
that can be estimated with a high degree of certainty and are expected to be recovered from known accumulations where a significant
expenditure is required to render them capable of production. Probable undeveloped reserves are those reserves that are less certain
to be recovered than proved reserves and are expected to be recovered from known accumulations where a significant expenditure
is required to render them capable of production. Proved and probable undeveloped reserves have been assigned in accordance with
engineering and geological practices as defined under NI 51-101.



In general, undeveloped reserves are planned
to be developed over the next two years. In some cases, it will take longer than two years to develop these reserves. There are
a number of factors that could result in delayed or cancelled development, including the following: (i) changing economic conditions
(due to pricing, operating and capital expenditure fluctuations); (ii) changing technical conditions (including production anomalies,
such as water breakthrough or accelerated depletion); (iii) multi-zone developments (for instance, a prospective formation completion
may be delayed until the initial completion is no longer economic); (iv) a larger development program may need to be spread out
over several years to optimize capital allocation and facility utilization; and (v) surface access issues (including those relating
to land owners, weather conditions and regulatory approvals). For more information, see "Risk Factors" herein.



18







The following tables set forth the proved
undeveloped reserves and the probable undeveloped reserves, each by product type, first attributed to us in each of the following
financial years.



Proved Undeveloped
Reserves



|              |  | Light and Medium Oil
    (Mbbl) |       |  | Heavy Oil
    (Mbbl)       |  |         | Natural Gas
    (MMcf) |  |  | NGLs
    (Mbbl)            | 
|------------- |  | ------------------------------- | ----- |  | -------------------------- |  | ------- | ---------------------- |  |  | -------------------------- | 
|Year          |  | First
    Attributed            |       |  | Cumulative
    at Year End |  |         | First
    Attributed   |  |  | Cumulative
    at Year End | 
|              |  |                                 |       |  |                            |  |         |                        |  |  |                            | 
|Prior thereto |  |                                 | 224.0 |  |                            |  | 2,843.0 |                        |  |  | -                          | 
|2012          |  |                                 | 11.0  |  |                            |  | 45.5    |                        |  |  | -                          | 
|2013          |  |                                 | -     |  |                            |  | -       |                        |  |  | -                          | 
|2014          |  |                                 | -     |  |                            |  | -       |                        |  |  | -                          | 



Sproule has assigned 139.6 MMboe of gross
proved undeveloped reserves in the Sproule Report under forecast prices and costs, together with $1.4 billion of associated undiscounted
future capital expenditures. Proved undeveloped capital spending in the first two forecast years of the Sproule Report accounts
for $287.7 million, or 20.0%, of the total forecast. These figures increase to $620.7 million or 43.2%, during the first five years
of the Sproule Report.



Probable Undeveloped
Reserves



|              |  | Light and Medium Oil
    (Mbbl) |       |  | Heavy Oil
    (Mbbl)       |  |         | Natural Gas
    (MMcf) |  |  | NGLs
    (Mbbl)            | 
|------------- |  | ------------------------------- | ----- |  | -------------------------- |  | ------- | ---------------------- |  |  | -------------------------- | 
|Year          |  | First
    Attributed            |       |  | Cumulative
    at Year End |  |         | First
    Attributed   |  |  | Cumulative
    at Year End | 
|              |  |                                 |       |  |                            |  |         |                        |  |  |                            | 
|Prior thereto |  |                                 | 661.0 |  |                            |  | 5,496.0 |                        |  |  | -                          | 
|2012          |  |                                 | 32.2  |  |                            |  | 468.6   |                        |  |  | -                          | 
|2013          |  |                                 | -     |  |                            |  | -       |                        |  |  | -                          | 
|2014          |  |                                 | -     |  |                            |  | -       |                        |  |  | -                          | 



Sproule has assigned 87.6 MMboe of gross
probable undeveloped reserves and has allocated future development capital of $291.8 million to all gross probable undeveloped
reserves with $49.4 million scheduled for the first five years.



Significant
Factors or Uncertainties



The process of estimating reserves is complex.
It requires significant judgments and decisions based on available geological, geophysical, engineering, and economic data. These
estimates may change substantially as additional data from ongoing development activities and production performance becomes available
and as economic conditions impacting oil and gas prices and costs change. The reserve estimates contained herein are based on production
forecasts, prices and economic conditions. The Corporation's reserves are evaluated by Sproule.



As circumstances change and additional
data become available, reserve estimates also change. Estimates made are reviewed and revised, either upward or downward, as warranted
by the new information. Revisions are often required due to changes in well performance, commodity prices, economic conditions
and governmental restrictions.



Although every reasonable effort is made
to ensure that reserve estimates are accurate, reserve estimation is an inferential science. As a result, the subjective decisions,
new geological or production information and a changing environment may impact these estimates. Revisions to reserve estimates
can arise from changes in year-end oil and gas prices, and reservoir performance. Such revisions can be either positive or negative.



19







Future Development
Costs



The following table sets forth development
costs deducted in the estimation of our future net revenue attributable to the reserve categories noted below.



|                                  |  | Forecast Prices and Costs |        
|--------------------------------- |  | ------------------------- | -------
|Year                              |  | Proved Reserves (MM$)     |        
|                                  |  |                           |        
|2015                              |  |                           | 128.5  
|2016                              |  |                           | 162.7  
|2017                              |  |                           | 139.3  
|2018                              |  |                           | 110.0  
|2019                              |  |                           | 85.2   
|Total: Undiscounted for all years |  |                           | 1,442.4



To fund our capital program, including
future development costs, we have many financing alternatives available, including partial retention of cash flow from operations,
bank debt financing, issuance of additional Common Shares, and issuance of convertible debentures. We evaluate the appropriate
financing alternatives closely and have made use of all these options dependent on the given investment situation and the capital
markets. We maintain a capital structure that is similar to our industry peer group and that are intended to maximize the investment
return to Shareholders as compared to the cost of financing. We expect to continue using all financing alternatives available to
continue pursuing our development strategy. The assorted financing instruments have certain inherent costs which we consider in
the economic evaluation of pursuing any development opportunity.



There can be no guarantee that funds will
be available or that we will allocate funding to develop all of the reserves attributed in the Sproule Report. Failure to develop
those reserves would have a negative impact on future production and cash flow and could result in negative revisions to our reserves.



The interest or other costs of external
funding are not included in the reserves and future net revenue estimates set forth above and would reduce the reserves and future
net revenue to some degree depending upon the funding sources utilized. The Corporation does not anticipate that interest or other
funding costs would make further development of any of the Corporation's assets uneconomic.



Other Oil and Gas
Information



AOG is a natural gas, pure play, growth-oriented
Corporation with a significant position in the Montney resource play at Glacier, Alberta. The Corporation operates 100% of its
Glacier assets, which allows the Corporation to control the nature and timing of the capital investments necessary to maximize
the potential in developing this asset.



Property
Descriptions



The following property descriptions are
as of December 31, 2014 unless otherwise noted and reserves quoted are as reported in the Sproule Report.



Glacier, Alberta



The Glacier property is located adjacent
to the provincial boundary between Alberta and British Columbia and is between Grande Prairie, Alberta and Dawson Creek, British
Columbia. The primary zones of interest are within the Triassic Montney and Doig formation siltstones. The Glacier property consists
of 82 gross (76 net) sections of land with Doig/Montney interests. The total thickness of the Lower Doig/Montney is up to 300 metres
and lends itself to multiple layers of development which contributes to the significant inventory of undrilled wells within this
resource play. Based on current reserves assignments as of December 31, 2014, Glacier has a proved plus probable reserve life index
("RLI") of 37 years at a production rate of 133 MMcf/d, which was the average production rate achieved at Glacier during
the fourth quarter of 2014.



20







Since the spud of the first horizontal
well on July 26, 2008 to the end of December 2014, Advantage has drilled and completed 137 gross (127.5 net) horizontal wells at
the Glacier property in either the Triassic Montney or Doig formation siltstones. In addition, two vertical wells drilled into
the underlying Belloy Formation are used for acid gas disposal and two vertical wells are used as a service wells that support
our water disposal system.



In 2014, Advantage drilled 38 gross (38
net) horizontal wells in the Montney and Lower Doig formations. Additionally, Advantage drilled one vertical well in the fourth
quarter of 2014 proximal to our acid gas disposal scheme that will serve as a backup acid gas disposal well.



During 2014 Advantage acquired an additional
9 gross (9 net) sections of new Montney acreage in close proximity to the producing Glacier asset that will be evaluated for prospective
natural gas and liquids potential. In aggregate Advantage now holds 129 net sections of land with either Doig or Montney potential
for both natural gas and NGLs.



During 2014 and Q1 2015, Advantage continued
with its program to delineate the Glacier land block vertically by drilling and testing wells in intervals other than the historically
drilled Doig and Lower Montney. To date, a total of 16 horizontal wells and 3 vertical recompletions have tested intervals other
than the Lower Doig or Lower Montney. This development has resulted in significant delineation and de-risking of the liquid rich
Middle Montney resource potential at Glacier.



Advantage owns and operates a 100% working
interest gas plant located at 5-02-76-12W6. The plant has a licenced throughput capacity of 160 MMcf/d of raw dry gas. A major
expansion of the plant will be completed in July 2015 to increase the capacity to 260 MMcf/d including the addition of a shallow
cut liquid extraction process. All gas is sold through Advantage’s 22 kilometer sales pipeline into the TransCanada pipeline
system. The operating cost structure of the Glacier field is very favorable with combined field and plant operating costs averaging
$0.32/Mcfe in 2014.



Glacier production is currently at approximately
135 MMcfe/d or 22,500 boe/d which represents virtually 100% of the Corporation's total production.



The Sproule Report assigns 1,097 bcf of
gross (1,030 bcf of net) proved natural gas reserves and 8.3 MMbbls of gross (6.5 MMbbls of net) proved NGL reserves to this property.
In addition, 606 bcf of gross (538 bcf of net) probable natural gas reserves and 7.2 MMbbls of gross (5.3 MMbbls of net) probable
NGL reserves have been assigned to this property.



21







Oil and Gas Wells



The following table sets forth the number
and status of wells as at December 31, 2014 in which we have a working interest.



|        |  | Oil Wells |   |  | Natural Gas Wells | 
|------- |  | --------- | - |  | ----------------- | 
|        |  | Producing |   |  | Non-Producing     | 
|        |  | Gross     |   |  | Net               | 
|        |  |           |   |  |                   | 
|Alberta |  |           | - |  |                   | 



Properties
with no Attributed Reserves



The following table sets out our unproved
properties as at December 31, 2014.



|        |  | Gross Acres |         |  | Net Acres | 
|------- |  | ----------- | ------- |  | --------- | 
|        |  |             |         |  |           | 
|Alberta |  |             | 108,939 |  |           | 



We expect that rights to explore, develop
and exploit 960 net acres of our undeveloped land holdings will expire by December 31, 2015. The land expirations do not consider
our 2015 exploitation and development program that may result in extending or eliminating such potential expirations. We closely
monitor land expirations as compared to our development program with the strategy of minimizing undeveloped land expirations relating
to significant identified opportunities. Development of the Corporation's properties with no attributed reserves are subject to
current industry conditions and uncertainties as indicated under "Risk Factors" herein.



Forward Contracts



Our operational results and financial condition
will be dependent on the prices received for oil and natural gas production. Oil and natural gas prices have fluctuated widely
in recent years. Such prices are primarily determined by economic, and in the case of oil prices, political factors. Supply and
demand factors, as well as weather, general economic conditions, and conditions in other oil and natural gas regions of the world
also impact prices. Any upward or downward movement in oil and natural gas prices could have an effect on our financial condition
and capital development.



Advantage approved a hedging policy using,
amongst others, costless collars and fixed price swaps to hedge up to 65% of its gross oil, NGLs and natural gas production for
a maximum period of three years and 50% over the fourth year. These hedging activities could expose the Corporation to losses or
gains. To the extent that the Corporation engages in risk management activities related to commodity prices, it will be subject
to credit risk associated with the parties with which it contracts. This credit risk will be mitigated by entering into contracts
with only stable and creditworthy parties and through the frequent review of the Corporation's exposure to these entities. See
"Risk Factors".



Advantage has the following derivatives
in place:



Natural gas - AECO



|                   |  | Average           |  | Average Price
|------------------ |  | ----------------- |  | -------------
|Period             |  | Production Hedged |  | AECO - $Cdn. 
|Q1 2015 to Q4 2015 |  | 82.9 MMcf/d       |  | $3.86/Mcf    
|Q1 2016 to Q4 2016 |  | 84.1 MMcf/d       |  | $3.69/Mcf    
|Q1 2017            |  | 80.6 MMcf/d       |  | $3.65/Mcf    



22







Additional Information Concerning
Abandonment and Reclamation Costs



We estimate the costs to abandon and reclaim
all our non-producing and producing wells, gas plants, pipelines, batteries, and other facilities. No estimate of salvage value
is netted against the estimated cost. Our model for estimating the amount of future abandonment and reclamation expenditures was
done on an individual well and facility level. Estimated expenditures for each well and facility are based on internal estimates
through consultation with our Health, Safety and Environment Department. Each well and facility are assigned an average cost for
abandonment and reclamation over a 60 year period. Timing of expenditures are based on budgets and estimates of such annual activities.
Facility reclamation costs are generally scheduled to begin shortly before the end of the reserve life of our associated reserves
and continue beyond the reserve life under the assumption that decommissioning of plant/facilities are generally mobile assets
with a long useful life.



We estimate that we will incur reclamation
and abandonment costs on 155 net producing and non-producing wells and 295 net abandoned wells. The approximate net cost to abandon
and reclaim all wells and facilities, discounted at 10%, totals $16.6 million ($53.6 million undiscounted), of which approximately
$1.6 million are included in the estimate of future net revenue ($59.9 million undiscounted). Abandonment and reclamation costs
undiscounted and expected to be paid over the next three years totals $4.0 million.



Tax Horizon



In 2014, we did not pay any income related
taxes and it is expected, based on current legislation that no cash income taxes are to be paid by AOG prior to 2021. See "Risk
Factors".



Capital Expenditures



The following tables summarize capital
expenditures (including capitalized general and administrative expenses) related to our activities for the year ended December
31, 2014:



|Capital Expenditures ($ thousands)                  |  | 2014 |        
|--------------------------------------------------- |  | ---- | -------
|                                                    |  |      |        
|Drilling, completions and workovers                 |  | $    | 195,802
|Well equipping and facilities                       |  |      | 37,662 
|Land and seismic                                    |  |      | -      
|Total expenditures on property, plant and equipment |  |      | 233,464
|Property Acquisition – Proved Properties            |  |      | -      
|Property Acquisition – Unproved Properties          |  |      | 3,237  
|Property dispositions                               |  |      | -      
|Exploration costs                                   |  |      | -      
|Development costs                                   |  |      | -      
|Total capital expenditures                          |  | $    | 236,701



Exploration
and Development Activities



The following table sets forth the gross
and net wells in which we participated during the year ended December 31, 2014:



|              |  | Exploratory |   |  | Development |  |   | Total | 
|------------- |  | ----------- | - |  | ----------- |  | - | ----- | 
|              |  | Gross       |   |  | Net         |  |   | Gross | 
|              |  |             |   |  |             |  |   |       | 
|Oil wells     |  |             | - |  |             |  | - |       | 
|Gas wells     |  |             | - |  |             |  | - |       | 
|Service wells |  |             | - |  |             |  | - |       | 
|Dry holes     |  |             | - |  |             |  | - |       | 
|Total         |  |             | - |  |             |  | - |       | 



Subject to, among other things, the availability
of drilling rigs and weather that permits access to drill sites, in the first six months of 2015, we plan to drill 10 net wells
and complete 6 net wells.



23







See "Other Oil and Gas Information
– Property Descriptions" for a description of the Corporation's exploration and development activities.



Production Estimates



The following table sets out the volume
of our production estimated for the year ended December 31, 2015 reflected in the estimate of future net revenue disclosed
in the tables contained under "Disclosure of Reserves Data".



|                               |  | Light and Medium Oil |   |  | Heavy Oil |  |   | Natural Gas |  |  | Natural Gas Liquids |  |  | Total   |  
|------------------------------ |  | -------------------- | - |  | --------- |  | - | ----------- |  |  | ------------------- |  |  | ------- | -
|                               |  | (bbls/d)             |   |  | (bbls/d)  |  |   | (Mcf/d)     |  |  | (bbls/d)            |  |  | (Boe/d) |  
|                               |  | Gross                |   |  | Net       |  |   | Gross       |  |  | Net                 |  |  | Gross   |  
|Proved Producing               |  |                      | 1 |  |           |  | 1 |             |  |  | -                   |  |  |         | -
|Proved Developed Non-Producing |  |                      | - |  |           |  | - |             |  |  | -                   |  |  |         | -
|Proved Undeveloped             |  |                      | - |  |           |  | - |             |  |  | -                   |  |  |         | -
|Total Proved                   |  |                      | 1 |  |           |  | 1 |             |  |  | -                   |  |  |         | -
|Total Probable                 |  |                      | - |  |           |  | - |             |  |  | -                   |  |  |         | -
|Total Proved Plus Probable     |  |                      | 1 |  |           |  | 1 |             |  |  | -                   |  |  |         | -



The following table indicates our production
estimated from our important fields for the year ended December 31, 2015:



|           |  | Natural Gas |         |  | NGLs     |  |     | Crude Oil |  |  | Total   | 
|---------- |  | ----------- | ------- |  | -------- |  | --- | --------- |  |  | ------- | 
|Properties |  | (Mcf/d)     |         |  | (bbls/d) |  |     | (bbls/d)  |  |  | (boe/d) | 
|           |  |             |         |  |          |  |     |           |  |  |         | 
|Alberta    |  |             | 163,238 |  |          |  | 581 |           |  |  | 1       | 
|Glacier    |  |             | 162,216 |  |          |  | 541 |           |  |  | -       | 



Production
History



The following tables summarize certain
information in respect of production, prices received, royalties paid, operating expenses and resulting netback for the periods
indicated below:



|                                       |  | Quarter Ended 2014 |         |   | Year Ended | 
|-------------------------------------- |  | ------------------ | ------- | - | ---------- | 
|                                       |  | Mar. 31            |         |   | June 30    | 
|Average Daily Production(1)            |  |                    |         |   |            | 
|Crude Oil (bbls/d)                     |  |                    | 154     |   |            | 
|Gas (Mcf/d)                            |  |                    | 122,481 |   |            | 
|NGLs (bbls/d)                          |  |                    | 10      |   |            | 
|Combined (mcfe/d)                      |  |                    | 123,465 |   |            | 
|                                       |  |                    |         |   |            | 
|Average Net Production Prices Received |  |                    |         |   |            | 
|Crude Oil ($/bbl)                      |  |                    | 96.53   |   |            | 
|Gas ($/Mcf)                            |  |                    | 5.21    |   |            | 
|NGLs ($/bbl)                           |  |                    | 55.36   |   |            | 
|Combined ($/mcfe)                      |  |                    | 5.29    |   |            | 
|                                       |  |                    |         |   |            | 
|Gain/(Loss) on Derivatives             |  |                    |         |   |            | 
|Crude Oil ($/bbl)                      |  |                    | -       |   |            | 
|Gas ($/mcfe)                           |  |                    | (0.32   | ) |            | 
|Combined ($/mcfe)                      |  |                    | (0.32   | ) |            | 
|                                       |  |                    |         |   |            | 
|Royalties Paid                         |  |                    |         |   |            | 
|Crude Oil ($/bbl)                      |  |                    | 3.75    |   |            | 
|Gas ($/Mcf)                            |  |                    | 0.24    |   |            | 
|NGLs ($/bbl)                           |  |                    | 7.94    |   |            | 
|Combined ($/mcfe)                      |  |                    | 0.24    |   |            | 



24







|                         |  | Quarter Ended 2014 |       |  | Year Ended | 
|------------------------ |  | ------------------ | ----- |  | ---------- | 
|                         |  | Mar. 31            |       |  | June 30    | 
|Operating Expenses(2)(3) |  |                    |       |  |            | 
|Crude oil ($/bbl)        |  |                    | 1.56  |  |            | 
|Natural gas ($/Mcf)      |  |                    | 0.28  |  |            | 
|NGLs ($/bbl)             |  |                    | 2.34  |  |            | 
|Combined ($/mcfe)        |  |                    | 0.28  |  |            | 
|                         |  |                    |       |  |            | 
|Netback Received(4)      |  |                    |       |  |            | 
|Crude Oil ($/bbl)        |  |                    | 91.22 |  |            | 
|Gas ($/Mcf)              |  |                    | 4.37  |  |            | 
|NGLs ($/bbl)             |  |                    | 45.08 |  |            | 
|Combined ($/mcfe)        |  |                    | 4.45  |  |            | 



Notes:



| | (1) | Before deduction of royalties.
| | --- | ------------------------------

| | (2) | This figure includes all field operating expenses.
| | --- | --------------------------------------------------

| | (3) | We do not record operating expenses on a commodity basis. Information in respect of operating expenses
for crude oil and NGLs ($/bbl) and natural gas ($/Mcf) has been determined by allocating expenses on a relative volume of crude
oil, NGLs and natural gas production basis.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Information in respect of netbacks received for crude oil and NGLs ($/bbl) and natural gas ($/Mcf)
is calculated using operating expense figures for crude oil and NGLs ($/bbl) and natural gas ($/Mcf), which figures have been estimated.
See note (3) above.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The following table indicates our approximate
average daily production from our important fields for the year ended December 31, 2014:



|           |  | Natural Gas |         |  | NGLs     |  |   | Crude Oil |  |  | Total    | 
|---------- |  | ----------- | ------- |  | -------- |  | - | --------- |  |  | -------- | 
|Properties |  | (Mcf/d)     |         |  | (bbls/d) |  |   | (bbls/d)  |  |  | (mcfe/d) | 
|           |  |             |         |  |          |  |   |           |  |  |          | 
|Alberta    |  |             |         |  |          |  |   |           |  |  |          | 
|Glacier    |  |             | 129,980 |  |          |  | - |           |  |  | 132      | 



Marketing



Our natural gas and NGL production is primarily
sold through marketing companies at current market prices. Risk management price hedging is done outside of our marketing contracts.
Natural gas contracts are for one year and are cancellable on 30 days notice. None of our natural gas production is sold to aggregators
who accumulate production from various producers and market the gas on behalf of the group. NGL contracts are renegotiated annually
and run for one year and are cancellable on 30 days notice.



Cyclical and Seasonal
Impact of Industry



Our operational results and financial condition
will be dependent on the prices received for oil and natural gas production. Oil and natural gas prices have fluctuated widely
during recent years and are determined by supply and demand factors, including weather and general economic conditions, as well
as conditions in other oil and natural gas regions. Any decline in oil and natural gas prices could have an adverse effect on our
financial condition. We mitigate such price risk through closely monitoring the various commodity markets and establishing hedging
programs, as deemed necessary, to lock-in netbacks on production volumes. See "Other Oil and Gas Information – Forward
Contracts" for our current hedging program.



Environmental Considerations



We are pro-active in our approach to environmental
concerns. Procedures are in place to ensure that significant care is taken in the day-to-day management of our oil and gas properties.
Government regulations and procedures are followed in strict adherence to the law. We believe in well abandonment and site restoration
in a timely manner to ensure minimal damage to the environment and lower overall costs to us. Our Environmental Management System
is continuously updated and meets or exceeds the Canadian Association of Petroleum Producers ("CAPP") Environmental
Management Guidelines.



25







Health, Safety and
Environmental



AOG is committed to a comprehensive and
effective health, safety and environmental program that meets or exceeds regulatory and corporate requirements.



AOG participates in the Certificate of
Recognition ("COR") Safety Program and has received certification for the last four years. The COR Health and
Safety Auditing and the COR Safety Program requires commitment to continuous improvement in the environment, health and safety
management practices including sound planning and implementation. The program is audited externally every 3 years and internally
every other year. The program ensures open communication and measured performance to maintain such program.



Management, employees and all contractors
are responsible and accountable for the overall health, safety and environmental program. AOG will operate in compliance with all
applicable regulations and will ensure all staff and contractors employ sound practices to protect the environment and to ensure
employee and public health and safety.



In 2014, the Corporation met the AER Enhanced
Production Audit Program with a compliance rating for Glacier of 100% satisfactory, which exceeds the industry average, and Advantage's
incident ratings in 2014 were significantly below industry averages. In addition, a reclamation certificate was received by Advantage
in 2014. Advantage's spill volumes in the last three years were negligible.



The Corporation maintains and will maintain
a safe and environmentally responsible work place and provide training, equipment and procedures to all individuals in adhering
to our policies. The Corporation will also solicit and take into consideration input from our neighbours, communities and other
stakeholders in regard to protecting people and the environment.



Competitive Conditions



There is considerable competition in the
worldwide oil and natural gas industry, including the Province of Alberta where the Company's assets, activities, and employees
are located. We are a member of the petroleum industry, which is highly competitive at all levels. We compete with other companies
for all of our business inputs, including exploitation and development prospects, access to commodity markets, acquisition opportunities,
available capital and staffing. We strive to be competitive by maintaining a strong financial condition and by utilizing current
technologies to enhance exploitation, development and operational activities. See "Risk Factors".



DIRECTORS
AND OFFICERS



The following table sets forth the name,
place of residence, date first elected as a director of AOG and positions for each of the directors and officers of AOG as at the
date hereof, together with their principal occupations during the last five years.



|Name, Province andCountry of Residence |  | Position Held andPeriod Served as aDirector orOfficer(4)(5)                                                       |  | Principal Occupations During Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                       |  |                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Andy J. Mah
        Alberta, Canada    |  | President since April 21, 2011, Chief Executive Officer since January 27, 2009 and a Director since June 23, 2006 |  | President since April 21, 2011. Chief Executive Officer since January 27, 2009.  President and Chief Operating Officer from June 23, 2006 to January 27, 2009.  Chief Operating Officer of Longview from December 15, 2010 to November 7, 2013. Prior thereto, President of Ketch Resources Ltd. from October 2005 to June 2006. Chief Operating Officer of Ketch Resources Ltd. from January 2005 to September 2005.  Prior thereto, Executive Officer and Vice President, Engineering and Operations of Northrock Resources Ltd. from August 1998 to January 2005.



26







|Name, Province andCountry of Residence              |  | Position Held andPeriod Served as aDirector orOfficer(4)(5)                                     |  | Principal Occupations During Past Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------------------------------- |  | ----------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Ronald A. McIntosh(2)(3)(7)
        Alberta, Canada |  | Director since September 25, 1998(6)Chairman since February 4, 2014                             |  | Chairman of North American Energy Partners Inc., a publicly traded corporation and a director of Fortaleza Energy Inc., previously known as Alvopetro Inc., formerly named Fortress Energy Inc. Mr. McIntosh has extensive experience in the energy business. His previous roles included President and Chief Executive Officer of Navigo Energy, Chief Operating Officer of Gulf Canada, Vice President Exploration and International of PetroCanada and Chief Operating Officer of Amerada Hess Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Stephen E. Balog(1)(2)(3)
        Alberta, Canada   |  | Director since August 16, 2007                                                                  |  | Principal of Alconsult International Ltd. and President, West Butte Management Inc., private consulting companies that provide technical and business advisory services to oil and gas operators. Prior thereto, President and Chief Operating Officer and a Director of Tasman Exploration Ltd. from 2001 to June, 2007. Mr. Balog has extensive oil and gas industry experience in the management and operation of senior and junior production companies.  He was a key contributor to the development and use of the Canadian Oil & Gas Evaluation Handbook as an industry standard for reserves evaluation, and has previously served on the Petroleum Advisory Committee, Alberta Securities Commission.                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Grant Fagerheim(1)(2)
        Alberta, Canada       |  | Director since May 26, 2014                                                                     |  | Chairman, President and Chief Executive Officer of Whitecap Resources Inc., a public oil and gas company, since June, 2008.  Prior thereto, Mr. Fagerheim was the President and Chief Executive Officer and a Director of Cadence Energy Inc. (formerly, Kereco Energy Ltd.), a public oil and gas company, from January 2005 to September 2008. Mr. Fagerheim received his Bachelor's degree in Education (Economics Minor) from the University of Calgary in 1983 and attended the Executive MBA at Queen's University in 1995.  Mr. Fagerheim currently sits on the board of directors of PRD Energy Inc., a public oil and gas company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Paul Haggis(1)(2)(3)
        Alberta, Canada        |  | Director since November 7, 2008                                                                 |  | Mr. Haggis' was President and Chief Executive Officer of Ontario Municipal Employees Retirement System (OMERS) from September 2003 to March 2007, Interim Chief Executive Officer of the Public Sector Pension Investment Board (PSPIB) during 2003 and Executive Vice-President, Development and Chief Credit Officer of Manulife Financial in 2002. Mr. Haggis has extensive financial markets and public board experience having served on the Board of Directors of Canadian Tire Bank until March 30, 2012.  He was a director and Chair of the Investment Committee of the Insurance Corporation of British Columbia and currently serves as an advisor to the committee. He was also Chair of the Audit Committee of C.A. Bancorp and Prime Restaurants Royalty Income Fund. Currently he is on the Board of UBC Investment Management Inc., Canadian Pacific Railway, Athabasca Oil Corporation and is Chairman of Alberta Enterprise Corp. Mr. Haggis holds a Bachelor of Arts degree from the University of Western Ontario and is certified as a Chartered Director through the Directors College at McMaster University.
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Craig Blackwood
        Alberta, Canada             |  | Vice President, Finance since January 27, 2009 and Chief Financial Officer since August 1, 2013 |  | Chief Financial Officer of AOG since August 1, 2013. Vice President, Finance of AOG since January 27, 2009. Chief Financial Officer of Longview from March 4, 2010 to February 4, 2014. Mr. Blackwood is a Chartered Accountant and was the Director of Finance of AOG from November 2004 to January 27, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Neil Bokenfohr
        Alberta, Canada              |  | Senior Vice President, since March 27, 2014                                                     |  | Senior Vice President since March 27, 2014. Vice-President, Exploitation of AOG from June 23, 2006 to March 27, 2014. Vice-President, Exploitation of Longview from May 13, 2011 to November 7, 2013. Prior thereto, Vice President Exploitation and Operations of Ketch Resources Ltd. from January 2005 to June 2006; Vice President, Engineering of Bear Creek Energy Ltd. (and Crossfield Gas Corp. prior thereto) from March 2002 to January 2005. Prior thereto, Director of Exploitation for Calpine Canada Natural Gas Company from December 2000 to March 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                    |  |                                                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Jay P. Reid
        Alberta, Canada                 |  | Corporate Secretary, Since April, 2001                                                          |  | Partner at the Calgary based law firm of Burnet, Duckworth & Palmer LLP and has practiced corporate and securities law since 1990.  He has served as a director or officer of a number of publicly listed issuers and currently serves as Corporate Secretary for Gear Energy Ltd., Madalena Energy Inc., Pinecrest Energy Inc. and a number of private issuers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



27







Notes:



| | (1) | Member of the Audit Committee.
| | --- | ------------------------------

| | (2) | Member of the Human Resources, Compensation and Corporate Governance Committee.
| | --- | -------------------------------------------------------------------------------

| | (3) | Member of the Independent Reserve Evaluation Committee.
| | --- | -------------------------------------------------------

| | (4) | AOG does not have an executive committee of the Board.
| | --- | ------------------------------------------------------

| | (5) | AOG's directors shall hold office until the next annual general meeting of Shareholders or until
each director's successor is appointed or elected pursuant to the ABCA.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | The period of time served by Ronald A. McIntosh as a director of AOG includes the period of time
served as a director of Search prior to the Amalgamation, where applicable. Mr. McIntosh was appointed a director of post-Reorganization
Search on May 24, 2001.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Mr. McIntosh is a director of Fortress Energy Inc. ("Fortress"). On March 2, 2011,
the Court of Queen’s Bench of Alberta granted an order (the "Order") under the Companies’ Creditors
Arrangement Act (Canada) ("CCAA") staying all claims and actions against Fortress and its assets and allowing
Fortress to prepare a plan of arrangement for its creditors if necessary. Fortress took such step in order to enable Fortress to
challenge a reassessment issued by the Canada Revenue Agency ("CRA"). As a result of the reassessment, if Fortress
had not taken any action, it would have been compelled to immediately remit one half of the reassessment to the CRA and Fortress
did not have the necessary liquid funds to remit, although Fortress had assets in excess of its liabilities with sufficient liquid
assets to pay all other liabilities and trade payables. Fortress believed that the CRA’s position was not sustainable and
vigorously disputed the CRA’s claim. Fortress filed a Notice of Objection to the reassessment and on October 20, 2011 announced
that its Notice of Objection was successful, CRA having confirmed there were no taxes payable. As the CRA claim had been vacated
and no taxes or penalties were owing Fortress no longer required the protection of the Order under the CCAA and on October 28,
2011 the Order was removed. On March 3, 2011 the TSX suspended trading in the securities of Fortress due to Fortress having been
granted a stay under the CCAA. In addition the securities regulatory authorities in Alberta, Ontario and Quebec issued a cease
trade order with respect to Fortress for failure to file its annual financial statements for the year ended December 31, 2010 by
March 31, 2011. The delay in filing was due to Fortress being granted the CCAA order on March 2, 2011 and the resulting additional
time required by its auditors to deliver their audit opinion. The required financial statements and other continuous disclosure
documents were filed on April 29, 2011 and the cease trade order was subsequently removed. On September 1, 2010 Fortress closed
the sale of substantially all of its oil and gas assets. As a result of the sale Fortress was delisted from the TSX on March 30,
2011 as it no longer met minimum listing requirements. Fortress was renamed Alvopetro Inc. on November 24, 2012. Alvopetro Inc.
was renamed Fortaleza Energy Inc. in November 2013.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As at March 25, 2015 the directors
and executive officers of AOG, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 2,135,212
Common Shares, or approximately 1.25% of the issued and outstanding Common Shares.



Cease Trade Orders,
Bankruptcies, Penalties or Sanctions



Other than as disclosed above:



| | (a) | no director or executive officer of AOG has, within the last ten years prior to the date of this
annual information form, been a director, chief executive officer or chief financial officer of any issuer (including AOG) that,
(i) while the person was acting in the capacity as director, chief executive officer or chief financial officer, was the subject
of a cease trade or similar order or an order that denied the company access to any exemption under securities legislation, that
was in effect for a period of more than thirty (30) consecutive days; or (ii) was subject to an order that was issued after the
director or executive officer ceased to be a director, chief executive officer or chief financial officer of an issuer, in the
issuer being the subject of a cease trade or similar order or an order that denied the relevant issuer access to any exemption
under securities legislation, for a period of more than thirty (30) consecutive days, which resulted from an event that occurred
while that person was acting as a director, chief executive officer or chief financial officer of the issuer;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | no director or executive officer of AOG or security holder holding a sufficient number of securities
of AOG to affect materially the control of AOG is, as at the date of this annual information form, or has, within the last ten
years prior to the date of this annual information form, been a director or executive officer of any company (including AOG) that,
while such person was acting in that capacity, or 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
for compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | no director or executive officer of AOG or securityholder holding a sufficient number of securities
of AOG to affect materially the control of AOG has, within the last ten years prior to the date of this document, become bankrupt,
made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director,
officer or securityholder; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28







| | (d) | no director or executive officer of AOG or securityholder holding a sufficient number of securities
of AOG to affect materially the control of AOG has been subject to: (i) any penalties or sanctions imposed by a court relating
to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities
regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered
important to a reasonable investor in making an investment decision.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Conflicts of Interest



The directors and officers of AOG may,
from time to time, be involved in the business and operations of other issuers, in which case a conflict may arise. The ABCA provides
that in the event a director has an interest in a contract or proposed contract or agreement, the director shall disclose his interest
in such contract or agreement and shall refrain from voting on any matter in respect of such contract or agreement unless otherwise
provided under the ABCA. To the extent that conflicts of interests arise, such conflicts will be resolved in accordance with the
provisions of the ABCA.



As at March 25, 2015, other than as disclosed
herein, the Corporation was not aware of any existing or potential material conflicts of interest between the Corporation and a
subsidiary of the Corporation and a director or officer of the Corporation or of a subsidiary of the Corporation.



DIVIDEND
POLICY



The Corporation does not anticipate paying
dividends in the immediate future and will instead direct cash flow to capital expenditures and debt repayment. The amount of future
cash dividends, if any, is not assured and will be subject to the discretion of the Board of Directors and may vary depending on
a variety of factors, including fluctuations in commodity prices, production levels, capital expenditure requirements, debt service
requirements, operating costs, royalty burdens, foreign exchange rates, contractual restrictions, financing agreement covenants,
solvency tests imposed by corporate law and other factors that the Board of Directors may deem relevant. See "Risk
Factors".



DESCRIPTION
OF THE CORPORATION'S SECURITIES



Share Capital



The Corporation is authorized to issue
an unlimited number of Common Shares, non-voting shares, preferred shares and exchangeable shares. As of December 31, 2014, there
were 170,067,650 Common Shares issued and outstanding and there were no non-voting shares, preferred shares or exchangeable shares
issued and outstanding.



The following is a description of the rights
attaching to the Common Shares, non-voting shares and the preferred shares.



Common Shares



Each Common Share entitles its holder to
receive notice of and to attend all meetings of the shareholders of AOG and to one vote at such meetings. The holders of Common
Shares are, at the discretion of the AOG Board of Directors and subject to applicable legal restrictions, entitled to receive any
dividends declared by the AOG Board of Directors on the Common Shares. The holders of Common Shares are entitled to share equally
in any distribution of the assets of AOG upon the liquidation, dissolution, bankruptcy or winding-up of AOG or other distribution
of its assets among its shareholders for the purpose of winding-up its affairs. Such participation is subject to the rights, privileges,
restrictions and conditions attaching to any instruments having priority over the Common Shares.



29







Non-Voting
Shares



The non-voting shares have identical rights
to the Common Shares except that holders of non-voting shares are not generally entitled to receive notice of or attend at meetings
of shareholders of AOG or to vote their shares at such meetings.



Preferred
Shares



The preferred shares may be issued, from
time to time, in one or more series, each series consisting of such number of preferred shares as determined by the AOG Board of
Directors, who may also fix the designations, rights, privileges, restrictions and conditions attached to the shares of each series
of preferred shares. No preferred shares are presently issued and outstanding. The preferred shares of each series shall, with
respect to payment of dividends and distributions of assets in the event of liquidation, dissolution or winding-up of AOG, whether
voluntary or involuntary, or any other distribution of the assets of AOG among its shareholders for the purpose of winding-up its
affairs, rank on a parity with the preferred shares of every other series and shall be entitled to preference over the Common Shares
and the shares of any other class ranking junior to the preferred shares.



5.00% Debentures



On January 30, 2015, the 5.00% Debentures
matured and the Corporation satisfied its obligation to repay to holders of the 5.00% Debentures the principal amount of all of
the 5.00% Debentures outstanding on the maturity date, together with all accrued and unpaid interest thereon, in cash, with the
exception of $10,000, which was converted by holders of the Debentures into 1,162 Common Shares prior to the maturity date.



The 5.00% Debentures paid interest semi-annually
and were convertible at the option of the holder into Common Shares at the conversion price per Common Share noted below plus accrued
and unpaid interest. The details of the 5.00% Debentures including the balance outstanding as at December 31, 2014 are as follows:



|                 | 5.00%        
|---------------- | -------------
|Trading symbol   | AAV.DB.H     
|Issue date       | Dec. 31, 2009
|Maturity date    | Jan. 30, 2015
|Conversion price | $8.60        
|Outstanding      | $86,250,000  



PRICE
RANGE AND TRADING VOLUME OF SECURITIES



Common Shares



The Common Shares are listed and trade
on the TSX and the NYSE and commenced trading under the symbol "AAV" on July 9, 2009. The following table sets forth
the trading history of the Common Shares for the periods indicated.



30







|Period               |  | High |      |  | Low |  |      | Volume | 
|-------------------- |  | ---- | ---- |  | --- |  | ---- | ------ | 
|                     |  | ($)  |      |  | ($) |  |      |        | 
|TSX Trading          |  |      |      |  |     |  |      |        | 
|2014                 |  |      |      |  |     |  |      |        | 
|January              |  |      | 4.93 |  |     |  | 4.41 |        | 
|February             |  |      | 4.62 |  |     |  | 3.84 |        | 
|March                |  |      | 5.62 |  |     |  | 4.29 |        | 
|April                |  |      | 6.98 |  |     |  | 5.47 |        | 
|May                  |  |      | 7.06 |  |     |  | 6.04 |        | 
|June                 |  |      | 7.85 |  |     |  | 6.67 |        | 
|July                 |  |      | 7.18 |  |     |  | 5.66 |        | 
|August               |  |      | 6.93 |  |     |  | 5.71 |        | 
|September            |  |      | 6.72 |  |     |  | 5.45 |        | 
|October              |  |      | 5.77 |  |     |  | 4.54 |        | 
|November             |  |      | 5.85 |  |     |  | 4.54 |        | 
|December             |  |      | 6.24 |  |     |  | 4.51 |        | 
|                     |  |      |      |  |     |  |      |        | 
|2015                 |  |      |      |  |     |  |      |        | 
|January              |  |      | 5.75 |  |     |  | 4.94 |        | 
|February             |  |      | 7.27 |  |     |  | 5.19 |        | 
|March (1 to 25)      |  |      | 6.88 |  |     |  | 6.09 |        | 
|                     |  |      |      |  |     |  |      |        | 
|NYSE Trading (U.S.$) |  |      |      |  |     |  |      |        | 
|2014                 |  |      |      |  |     |  |      |        | 
|January              |  |      | 4.57 |  |     |  | 4.03 |        | 
|February             |  |      | 4.18 |  |     |  | 3.47 |        | 
|March                |  |      | 5.10 |  |     |  | 3.85 |        | 
|April                |  |      | 6.37 |  |     |  | 4.95 |        | 
|May                  |  |      | 6.45 |  |     |  | 5.56 |        | 
|June                 |  |      | 7.23 |  |     |  | 6.11 |        | 
|July                 |  |      | 6.73 |  |     |  | 5.27 |        | 
|August               |  |      | 6.33 |  |     |  | 5.21 |        | 
|September            |  |      | 6.17 |  |     |  | 4.91 |        | 
|October              |  |      | 5.16 |  |     |  | 4.04 |        | 
|November             |  |      | 5.21 |  |     |  | 3.97 |        | 
|December             |  |      | 5.36 |  |     |  | 3.95 |        | 
|                     |  |      |      |  |     |  |      |        | 
|2015                 |  |      |      |  |     |  |      |        | 
|January              |  |      | 4.79 |  |     |  | 3.89 |        | 
|February             |  |      | 5.83 |  |     |  | 4.12 |        | 
|March (1 to 25)      |  |      | 5.49 |  |     |  | 4.72 |        | 
|                     |  |      |      |  |     |  |      |        | 



5.00% Debentures



The 5.00% Debentures were listed for trading
on the TSX under the symbol "AAV.DB.H" during the year-ended December 31, 2014. The following table sets forth the high
and low trading prices and the aggregate trading volume of the 5.00% Debentures as reported by the TSX for the period indicated.
The 5.00% Debentures were delisted from trading on the TSX on January 30, 2015.



|Period    |  | High |        |  | Low |  |        | Volume | 
|--------- |  | ---- | ------ |  | --- |  | ------ | ------ | 
|          |  | ($)  |        |  | ($) |  |        |        | 
|2014      |  |      |        |  |     |  |        |        | 
|January   |  |      | 101.00 |  |     |  | 100.51 |        | 
|February  |  |      | 101.03 |  |     |  | 100.53 |        | 
|March     |  |      | 101.20 |  |     |  | 100.76 |        | 
|April     |  |      | 101.87 |  |     |  | 101.00 |        | 
|May       |  |      | 102.85 |  |     |  | 101.50 |        | 
|June      |  |      | 105.00 |  |     |  | 102.45 |        | 
|July      |  |      | 103.00 |  |     |  | 101.50 |        | 
|August    |  |      | 101.94 |  |     |  | 101.29 |        | 
|September |  |      | 101.94 |  |     |  | 100.71 |        | 
|October   |  |      | 100.99 |  |     |  | 100.31 |        | 
|November  |  |      | 100.49 |  |     |  | 100.10 |        | 
|December  |  |      | 100.46 |  |     |  | 99.95  |        | 
|          |  |      |        |  |     |  |        |        | 
|2015      |  |      |        |  |     |  |        |        | 
|January   |  |      | 100.18 |  |     |  | 100.02 |        | 



31







Prior Sales



During the year ended December 31, 2014,
the Corporation granted 3,777,255 stock options with a weighted average exercise price of $5.00 and granted 409,702 Performance
Awards.



ESCROWED
SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER



There are presently no AOG securities held
in escrow or subject to contractual restrictions on transfer.



LEGAL
PROCEEDINGS



There are no outstanding legal proceedings
and Advantage and its subsidiaries were not involved in any legal proceedings during the year ended December 31, 2014, which involved
claims in excess of 10% of the Corporation's current asset value and to which Advantage or its subsidiaries were a party or in
respect of which any of its properties are subject, nor are there any such proceedings known to be contemplated.



REGULATORY
ACTIONS



During the year ended December 31, 2014
there were: (i) no penalties or sanctions imposed against AOG or its subsidiaries by a court relating to securities legislation
or by a securities regulatory authority; (ii) no other penalties or sanctions imposed by a court or regulatory body against AOG
or its subsidiaries that would likely be considered important to a reasonable investor in making an investment decision; and (iii)
no settlement agreements AOG or its subsidiaries entered into before a court relating to a securities legislation or with a securities
regulatory authority.



INTEREST
OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS



Other than as disclosed below, there were
no material interests, direct or indirect, of directors and executive officers of AOG or its subsidiaries or nominees for director
of AOG or its subsidiaries, any Shareholder who beneficially owns or directs or controls more than 10% of the Common Shares or
any known associate or affiliate of such persons in any transaction during the year ended December 31, 2014 or in any proposed
transaction which has materially affected or would materially affect AOG or its subsidiaries.



Craig Blackwood (Chief Financial Officer)
was an officer of Longview from March 4, 2010 to February 4, 2014. The officers of Longview provided services to Longview under
the TSA but remained as employees of Advantage. On February 4, 2014 the Corporation and Longview announced that the TSA was formally
terminated. See "General Development of the Business – 2014".



MATERIAL
CONTRACTS



Except for contracts entered into by us
in the ordinary course of business or otherwise disclosed herein, the only agreement which is material to AOG is the Credit Facility,
a copy of which is available at www.sedar.com. See "General Development of the Business – Three Year History".



INTEREST
OF EXPERTS



There is no person or company whose profession
or business gives authority to a statement made by such person or company and who is named as having prepared or certified a statement,
report or valuation described or included in a filing, or referred to in a filing, made under National Instrument 51-102 Continuous
Disclosure Obligations by us during, or related to, our most recently completed financial year other than Sproule Associates
Limited, our independent engineering evaluator and PricewaterhouseCoopers LLP, our current auditors. As at the date hereof, none
of the principals of Sproule Associates Limited had any registered or beneficial interests, direct or indirect, in any securities
or other property of AOG or of our associates or affiliates either at the time they prepared the statement, report or valuation
prepared by it, at any time thereafter or to be received by them. PricewaterhouseCoopers LLP have confirmed that they are independent
in accordance with the relevant rules and related interpretation prescribed by the Institute of Chartered Accountants of Alberta
and the rules of the SEC and the relevant legislation and requirements of the Public Company Accounting Oversight Board (PCAOB).



32







In addition, none of the aforementioned
persons or companies, nor any director, officer or employee of any of the aforementioned persons or companies, is or is expected
to be elected, appointed or employed as a director, officer or employee of AOG or of any associate or affiliate of AOG.



AUDITORS,
TRANSFER AGENT AND REGISTRAR



Our auditors are PricewaterhouseCoopers
LLP, Calgary, Alberta.



Computershare Trust Company of Canada at
its offices in Calgary, Alberta and Toronto, Ontario acts as the transfer agent and registrar for the Common Shares.



AUDIT
COMMITTEE INFORMATION



Composition of the
Audit Committee



The audit committee (the "Audit
Committee") is comprised of Messrs. Paul Haggis, Stephen Balog and Grant Fagerheim. The following chart sets out
the assessment of each Audit Committee member's independence, financial literacy and relevant educational background and experience
supporting such financial literacy.



|Name, Province andCountry of Residence  |  | Independent |  | FinanciallyLiterate |  | Relevant Education and Experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--------------------------------------- |  | ----------- |  | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                        |  |             |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Grant Fagerheim
        Alberta, Canada |  | Yes         |  | Yes                 |  | Chairman, President and Chief Executive Officer of Whitecap Resources Inc., a public oil and gas company, since June, 2008.  Prior thereto, Mr. Fagerheim was the President and Chief Executive Officer and a Director of Cadence Energy Inc. (formerly, Kereco Energy Ltd.), a public oil and gas company, from January 2005 to September 2008. Mr. Fagerheim received his Bachelor's degree in Education (Economics Minor) from the University of Calgary in 1983 and attended the Executive MBA at Queen's University in 1995.  Mr. Fagerheim currently sits on the board of directors of PRD Energy Inc., a public oil and gas company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                        |  |             |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Paul Haggis
        Alberta, Canada     |  | Yes         |  | Yes                 |  | Mr. Haggis' was President and Chief Executive Officer of Ontario Municipal Employees Retirement System (OMERS) from September 2003 to March 2007, Interim Chief Executive Officer of the Public Sector Pension Investment Board (PSPIB) during 2003 and Executive Vice-President, Development and Chief Credit Officer of Manulife Financial in 2002. Mr. Haggis has extensive financial markets and public board experience having served on the Board of Directors of Canadian Tire Bank until March 30, 2012.  He was a director and Chair of the Investment Committee of the Insurance Corporation of British Columbia and currently serves as an advisor to the committee. He was also Chair of the Audit Committee of C.A. Bancorp and Prime Restaurants Royalty Income Fund. Currently he is on the Board of UBC Investment Management Inc., Canadian Pacific Railway, Athabasca Oil Corporation and is Chairman of Alberta Enterprise Corp. Mr. Haggis holds a Bachelor of Arts degree from the University of Western Ontario and is certified as a Chartered Director through the Directors College at McMaster University.
|                                        |  |             |  |                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Stephen Balog
        Alberta, Canada   |  | Yes         |  | Yes                 |  | Principal of Alconsult International Ltd. and President, West Butte Management Inc., private consulting companies that provide technical and business advisory services to oil and gas operators. Prior thereto, President and Chief Operating Officer and a Director of Tasman Exploration Ltd. from 2001 to June, 2007. Mr. Balog has extensive oil and gas industry experience in the management and operation of senior and junior production companies.  He was a key contributor to the development and use of the Canadian Oil & Gas Evaluation Handbook as an industry standard for reserves evaluation, and has previously served on the Petroleum Advisory Committee, Alberta Securities Commission.                                                                                                                                                                                                                                                                                                                                                                                                                      



33







Pre-Approval of
Policies and Procedures



We have adopted policies and procedures
with respect to the pre-approval of audit and permitted non-audit services to be provided by PricewaterhouseCoopers LLP as set
forth in item 22 of the Audit Committee charter, which is reproduced below under the heading "Audit Committee Charter".
The Audit Committee has approved the provision of a specified list of audit and permitted non-audit services that the audit committee
believes to be typical, reoccurring or otherwise likely to be provided by PricewaterhouseCoopers LLP during the current fiscal
year. The list of services is sufficiently detailed as to the particular services to be provided to ensure that the audit committee
knows precisely what services it is being asked to pre-approve and it is not necessary for any member of management to make a judgment
as to whether a proposed service fits within pre-approved services.



AUDIT
COMMITTEE CHARTER



The following is a summary of our Audit
Committee Charter which was originally approved by the AOG Board of Directors on April 30, 2002 and amended in April 2003, April
2004, June 2005, August 2005, October, 2005 and September, 2009:



Purpose



The primary function of the Audit Committee
is to assist the Board of Directors of AOG in fulfilling its responsibilities by reviewing: the financial reports and other financial
information provided by AOG to any governmental body or the public; AOG's systems of internal controls regarding finance, accounting,
legal compliance and ethics that management and the Board have established; and AOG's auditing, accounting and financial reporting
processes generally. Consistent with this function, the Audit Committee should endeavour to encourage continuous improvement of,
and should endeavour to foster adherence to, AOG's policies, procedures and practices at all levels. In performing its duties,
the external auditor is to report directly to the Audit Committee.



The Audit Committee's primary objectives
are:



| | 1. | To assist directors meet their responsibilities (especially for accountability) in respect of the
preparation and disclosure of the financial statements of AOG and related matters;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | To provide better communication between directors and external auditors;
| | -- | ------------------------------------------------------------------------



| | 3. | To assist the Board's oversight of the auditor's qualifications and independence;
| | -- | ---------------------------------------------------------------------------------



| | 4. | To assist the Board's oversight of the credibility, integrity and objectivity of financial reports;
| | -- | ---------------------------------------------------------------------------------------------------



| | 5. | To strengthen the role of the outside directors by facilitating discussions between directors on
the Audit Committee, management and external auditors;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | To assist the Board's oversight of the performance of the Corporation's internal audit function
and independent auditors; and
| | -- | -----------------------------------------------------------------------------------------------------------------------------



| | 7. | To assist the Board's oversight of the Corporation's compliance with legal and regulatory requirements.
| | -- | -------------------------------------------------------------------------------------------------------



34









Composition



The Audit Committee shall be comprised
of three or more directors as determined by the Board of Directors, none of whom are members of management of AOG and all of whom
are "independent" (as such term is defined in: (a) National Instrument 52-110 — Audit Committees ("NI
52-110"); and (b) Section 303A.02 of the Corporate Governance Rules of the New York Stock Exchange). All of the members
of the Audit Committee shall be "financially literate". The Board of Directors has adopted the definition for "financial
literacy" used in NI 52-110. Audit Committee members may enhance their familiarity with finance and accounting by participating
in educational programs conducted by AOG or an outside consultant. In addition, at least one member of the Audit Committee must
have accounting or related financial management expertise, as the Corporation's Board of Directors interprets such qualification
in its business judgment.



The members of the Audit Committee shall
be elected by the Board of Directors and remain as members of the Audit Committee until their successors shall be duly elected
and qualified. Unless a Chair is elected by the full Board of Directors, the members of the Audit Committee may designate a Chair
by majority vote of the full Audit Committee membership.



In connection with its annual review procedures,
the Board will determine whether any member or proposed nominee for the Audit Committee serves on the Audit Committees of more
than three public companies. To the extent that any member or proposed nominee of AOG serves on the Audit Committees of more than
three public companies, the Board will make a determination as to whether such simultaneous services would impair the ability of
such member to effectively serve on AOG's Audit Committee and will disclose such determination in AOG's annual information circular
and annual report on Form 40-F filed with the Securities and Exchange Commission.



Meetings



The Audit Committee shall meet at least
four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Audit Committee
should meet at least annually with management, internal auditors and the independent auditors in separate executive sessions to
discuss any matters that the Audit Committee or each of these groups believe should be discussed privately. In addition, the Audit
Committee or at least its Chair should meet with the independent auditors and management quarterly to review AOG's financials consistent
with Section IV.4 below. The Audit Committee should also meet with management and independent auditors on an annual basis to review
and discuss annual financial statements and the management's discussion and analysis of financial conditions and results of operations.



A quorum for meetings of the Audit Committee
shall be a majority of its members, and the rules for calling, holding, conducting and adjourning meetings of the Audit Committee
shall be the same as those governing the Board.



Responsibilities
and Duties



To fulfill its responsibilities and duties,
the Audit Committee shall endeavour to:



Documents/Reports
Review



| | 1. | Review and update this Charter periodically, at least annually, as conditions dictate.
| | -- | --------------------------------------------------------------------------------------



| | 2. | Review the organization's annual and interim financial statements, MD&A, earnings press releases
and any reports or other financial information submitted to any governmental body or the public, including any certification, report,
opinion or review rendered by the independent auditors.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Review the reports to management prepared by the independent auditors and management's responses.
| | -- | -------------------------------------------------------------------------------------------------



| | 4. | Review with financial management and the independent auditors the quarterly financial statements
prior to their filing or prior to the release of earnings. The Chair of the Audit Committee may represent the entire Audit Committee
for purposes of this review.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35







| | 5. | Review significant findings during the year, including the status of previous significant audit
recommendations.
| | -- | ----------------------------------------------------------------------------------------------------------------



| | 6. | Periodically assess the adequacy of procedures for the review of corporate disclosure that is derived
or extracted from the financial statements.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Periodically discuss guidelines and policies to govern the processes by which the Chief Executive
Officer and senior management assess and manage the Corporation's exposure to risk.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Report regularly to the Board any issues that arise with respect to the quality or integrity of
the Corporation's financial statements, compliance with legal or regulatory requirements, performance and independence of the Corporation's
auditors, or performance of the internal audit function.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9. | To prepare, if required, an Audit Committee report to be included in AOG's annual information circular
and proxy statement.
| | -- | ---------------------------------------------------------------------------------------------------------------------------



| | 10. | Preparing an annual performance evaluation of the Audit Committee.
| | --- | ------------------------------------------------------------------



| | 11. | At least annually, obtaining and reviewing the report by the independent auditors describing AOG's
internal quality control procedures, any material issues raised by the most recent interim quality-control review, or peer review,
of AOG or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting
one or more independent audits carried out by the firm, and any steps to deal with any such issues.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Independent Auditors



| | 12. | Recommend to the Board the external auditors to be nominated for appointment by the Shareholders.
| | --- | -------------------------------------------------------------------------------------------------



| | 13. | Approve the compensation of the external auditors.
| | --- | --------------------------------------------------



| | 14. | On an annual basis, the Audit Committee should review and discuss with the auditors all significant
relationships the auditors have with AOG to determine the auditors' independence. In addition, the Audit Committee will ensure
the rotation of the lead audit partner every five years and, in order to ensure continuing auditor independence, consider the rotation
of the audit firm itself.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 15. | Review and, as appropriate, resolve any material disagreements between management and the independent
auditors and review, consider and make a recommendation to the Board regarding any proposed discharge of the auditors when circumstances
warrant.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 16. | When there is to be a change in auditors, review the issues related to the change and the information
to be included in the required notice to securities regulators of such change.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 17. | Periodically consult with the independent auditors, without the presence of management, about internal
controls and the fullness and accuracy of the organization's financial statements.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 18. | Oversee the establishment of an internal audit function.
| | --- | --------------------------------------------------------



| | 19. | Periodically assess the Corporation's internal audit function, including the Corporation's risk
management processes and system of internal controls.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | 20. | Review the audit scope and plan of the independent auditor.
| | --- | -----------------------------------------------------------



| | 21. | Oversee the work of the external auditors engaged for the purpose of preparing or issuing an auditor's
report or performing other audit, review or attest services for AOG.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



36







| | 22. | Pre-approve the completion of any non-audit services by the external auditors and determine which
non-audit services the external auditor is prohibited from providing. The Audit Committee may delegate to one or more members of
the Audit Committee authority to pre-approve non-audit services in satisfaction of this requirement and if such delegation occurs,
the pre-approval of non-audit services by the Audit Committee member to whom authority has been delegated must be presented to
the Audit Committee at its first scheduled meeting following such pre-approval. The Audit Committee shall be entitled to adopt
specific policies and procedures for the engagement of non-audit services if:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | the pre-approval policies and procedures are detailed as to the particular service;
| | --- | -----------------------------------------------------------------------------------



| | (b) | the Audit Committee is informed of each non-audit service; and
| | --- | --------------------------------------------------------------



| | (c) | the procedures do not include delegation of the Audit Committee's responsibilities to management.
| | --- | -------------------------------------------------------------------------------------------------



The Audit Committee will satisfy
the pre-approval requirement set forth in this paragraph 22 if:



| | (d) | the aggregate amount of all non-audit services that were not pre-approved is reasonably expected
to constitute no more than 5% of the total amount of fees paid by AOG and its subsidiary entities to the auditors during the fiscal
year in which the services are provided;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (e) | AOG or the subsidiary entity, as the case may be, did not recognize the services as non-audit services
at the time of the engagement;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | (f) | the services are promptly brought to the attention of the Audit Committee and approved, prior to
completion of the audit, by the Audit Committee or by one or more of its members to whom authority to grant such approvals has
been delegated by the Audit Committee; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 23. | Review, setand approve hiring policies relating to staff of current and former auditors.
| | --- | ----------------------------------------------------------------------------------------



Financial Reporting Processes



| | 24. | In consultation with the independent auditors, annually review the integrity of the organization's
financial reporting processes, both internal and external.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 25. | In consultation with the independent auditors, consider annually the quality and appropriateness
of the Corporation's accounting principles as applied in its financial reporting.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 26. | Consider and approve, if appropriate, major changes to AOG's auditing and accounting principles
and practices as suggested by the independent auditors or management.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 27. | Review risk management policies and procedures of AOG (i.e., litigation and insurance).
| | --- | ---------------------------------------------------------------------------------------



Process Improvement



| | 28. | Request reporting to the Audit Committee by each of management and the independent auditors of
any significant judgments made in the management's preparation of the financial statements and the view of each group as to appropriateness
of such judgments.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 29. | Following completion of the annual audit, review separately with each of management and the independent
auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work
or access to required information.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 30. | Review any significant disagreements among management and the independent auditors in connection
with the preparation of the financial statements.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------



37







| | 31. | Review with the independent auditors and management the extent to which changes or improvements
in financial or accounting practices, as approved by the Audit Committee, have been implemented. (This review should be conducted
at an appropriate time subsequent to implementation of changes or improvements, as decided by the Audit Committee.)
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 32. | Conduct and authorize investigations into any matters brought to the Audit Committee's attention
and within the Audit Committee's scope of responsibilities. The Audit Committee shall be empowered to retain and to approve compensation
for any independent counsel and other professionals to assist in the conduct of any investigation.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 33. | Review the systems that identify and manage principal business risks.
| | --- | ---------------------------------------------------------------------



| | 34. | Establish a procedure for:
| | --- | --------------------------



| | (a) | the receipt, retention and treatment of complaints received by AOG regarding accounting, internal
accounting controls or auditing matters; and
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the confidential, anonymous submission by employees of AOG of concerns regarding questionable accounting
or auditing matters;
| | --- | -----------------------------------------------------------------------------------------------------------------------------



which procedure shall be set
forth in a "whistle blower program" to be adopted by the Audit Committee in connection with such matters.



Ethical and Legal Compliance



| | 35. | Establish, review and update periodically a Code of Ethical Conduct and ensure that management
has established a system to enforce this code.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | 36. | Review management's monitoring of AOG's compliance with the organization's Ethical Code.
| | --- | ----------------------------------------------------------------------------------------



| | 37. | In consultation with the auditors, consider the review system established by management regarding
the Corporation's financial statements, reports and other financial information disseminated to governmental organizations and
the public in the context of the applicable legal requirements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 38. | On at least an annual basis, review with AOG's auditors or counsel, as appropriate, any legal matters
that could have a significant impact on the organization's financial statements, AOG's compliance with applicable laws and regulations
and inquiries received from regulators or government agencies.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 39. | Review with the organization's counsel legal compliance matters including the trading policies
of securities.
| | --- | -------------------------------------------------------------------------------------------------------------



Other



| | 40. | Perform any other activities consistent with this Charter, AOG's by-laws and governing law, as
the Audit Committee or the Board of Directors deems necessary or appropriate.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 41. | In connection with the performance of its responsibilities as set forth above, the Audit Committee
shall have the authority to engage outside advisors and to pay outside auditors and advisors.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



AUDIT
SERVICE FEES



Auditor Services
Fees



The following table discloses fees billed
to us by our auditors, PricewaterhouseCoopers LLP.



38







|Type of Service Provided |  | 2014 |         |  | 2013 |  
|------------------------ |  | ---- | ------- |  | ---- | -
|                         |  |      |         |  |      |  
|Audit Fees(1)            |  | $    | 355,000 |  |      | $
|Audit-Related Fees(2)    |  |      | 68,000  |  |      |  
|Tax Fees(3)              |  |      | 35,000  |  |      |  
|Other Fees(4)            |  |      | 42,000  |  |      |  
|Total                    |  | $    | 500,000 |  |      | $



Notes:



| | (1) | "Audit Fees" include fees necessary to perform the annual audit of the Corporation's
consolidated financial statements.
| | --- | -----------------------------------------------------------------------------------------------------------------------

| | (2) | "Audit-Related Fees" include services that are traditionally performed by the auditor.
These audit-related services include quarterly reviews of the Corporation's consolidated financial statements.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | "Tax Fees" include fees for all tax services other than those included in "Audit
Fees" and "Audit-Related Fees". This category includes fees for tax compliance, tax planning and general tax advice,
including the preparation and filing of Scientific Research & Experimental Development Tax Credits.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | "Other Fees" represents fees related to the 2014 Secondary Offering.
| | --- | --------------------------------------------------------------------



INDUSTRY
CONDITIONS



Companies operating in the oil and natural
gas industry are subject to extensive regulation and control of operations (including land tenure, exploration, development, production,
refining and upgrading, transportation, and marketing) as a result of legislation enacted by various levels of government with
respect to the pricing and taxation of oil and natural gas through agreements among the governments of Canada and Alberta all of
which should be carefully considered by investors in the oil and gas industry. All current legislation is a matter of public record
and the Corporation is unable to predict what additional legislation or amendments may be enacted. Outlined below are some of the
principal aspects of legislation, regulations and agreements governing the oil and gas industry in western Canada.



Pricing and Marketing



Oil



In Canada, the producers of oil are entitled
to negotiate sales contracts directly with oil purchasers, which results in the market determining the price of oil. Worldwide
supply and demand factors primarily determine oil prices; however, prices are also influenced by regional market and transportation
issues. The specific price depends in part on oil quality, prices of competing fuels, distance to market, availability of transportation,
value of refined products, the supply/demand balance and contractual terms of sale. Oil exporters are also entitled to enter into
export contracts with terms not exceeding one year in the case of light crude oil and two years in the case of heavy crude oil,
provided that an order approving such export has been obtained from the National Energy Board of Canada (the "NEB").
Any oil export to be made pursuant to a contract of longer duration (to a maximum of 25 years) requires an exporter to obtain an
export licence from the NEB. The NEB is currently undergoing a consultation process to update the regulations governing the issuance
of export licences. The updating process is necessary to meet the criteria set out in the federal Jobs, Growth and Long-term
Prosperity Act (Canada) (the "Prosperity Act") which received Royal Assent on June 29, 2012. In this transitory
period, the NEB has issued, and is currently following an "Interim Memorandum of Guidance concerning Oil and Gas Export Applications
and Gas Import Applications" under Part VI of the National Energy Board Act (Canada).



Natural Gas



Alberta's natural gas market has been deregulated
since 1985. Supply and demand determine the price of natural gas and price is calculated at the sale point, being the wellhead,
the outlet of a gas processing plant, on a gas transmission system such as the Alberta "NIT" (Nova Inventory Transfer),
at a storage facility, at the inlet to a utility system or at the point of receipt by the consumer. Accordingly, the price for
natural gas is dependent upon such producer's own arrangements (whether long or short term contracts and the specific point of
sale). As natural gas is also traded on trading platforms such as the Natural Gas Exchange (NGX), Intercontinental Exchange or
the New York Mercantile Exchange (NYMEX) in the United States, spot and future prices can also be influenced by supply and demand
fundamentals on these platforms. Natural gas exported from Canada is subject to regulation by the NEB and the Government of Canada.
Exporters are free to negotiate prices and other terms with purchasers, provided that the export contracts continue to meet certain
other criteria prescribed by the NEB and the Government of Canada. Natural gas (other than propane, butane and ethane) exports
for a term of less than two years or for a term of two to 20 years (in quantities of not more than 30,000 m3/day) must
be made pursuant to an NEB order. Any natural gas export to be made pursuant to a contract of longer duration (to a maximum of
25 years) or for a larger quantity requires an exporter to obtain an export licence from the NEB.



39







The North American
Free Trade Agreement



The
North American Free Trade Agreement ("NAFTA") among the governments of Canada,
the United States and Mexico came into force on January 1, 1994. In the context of energy resources, Canada continues to remain
free to determine whether exports of energy resources to the United States or Mexico will be allowed, provided that any export
restrictions do not: (i) reduce the proportion of energy resources exported relative to the total supply of goods of the party
maintaining the restriction as compared to the proportion prevailing in the most recent 36 month period; (ii) impose an export
price higher than the domestic price (subject to an exception with respect to certain measures which only restrict the volume of
exports); and (iii) disrupt normal channels of supply.



All
three signatory countries are prohibited from imposing a minimum or maximum export price requirement in any circumstance where
any other form of quantitative restriction is prohibited. The signatory countries are also prohibited from imposing a minimum or
maximum import price requirement except as permitted in enforcement of countervailing and anti-dumping orders and undertakings.
NAFTA requires energy regulators to ensure the orderly and equitable implementation of any regulatory
changes and to ensure that the application of those changes will cause minimal disruption to contractual arrangements and avoid
undue interference with pricing, marketing and distribution arrangements, all of which are important for Canadian oil and natural
gas exports. NAFTA contemplates the reduction of Mexican restrictive trade practices in
the energy sector and prohibits discriminatory border restrictions and export taxes.



Royalties and Incentives



General



In addition to federal regulation, each
province has legislation and regulations that govern royalties, production rates and other matters. The royalty regime in a given
province is a significant factor in the profitability of oilsands projects, crude oil, natural gas liquids, sulphur and
natural gas production. Royalties payable on production from lands other than Crown lands are determined by negotiation between
the mineral freehold owner and the lessee, although production from such lands is subject to certain provincial taxes and royalties.
Royalties from production on Crown lands are determined by governmental regulation and are generally calculated as a percentage
of the value of gross production. The rate of royalties payable generally depends in part on prescribed reference prices, well
productivity, geographical location, field discovery date, method of recovery and the type or quality of the petroleum product
produced. Other royalties and royalty-like interests are carved out of the working interest owner's interest, from time to time,
through non-public transactions. These are often referred to as overriding royalties, gross overriding royalties, net profits interests,
or net carried interests.



Occasionally the governments of the western
Canadian provinces create incentive programs for exploration and development. Such programs often provide for royalty rate reductions,
royalty holidays or royalty tax credits and are generally introduced when commodity prices are low to encourage exploration and
development activity by improving earnings and cash flow within the industry.



Alberta



Producers of oil and natural gas from Crown
lands in Alberta are required to pay annual rental payments, currently at a rate of $3.50 per hectare, and make monthly royalty
payments in respect of oil and natural gas produced.



40







Royalties are currently paid pursuant to
"The New Royalty Framework" (implemented by the Mines and Minerals (New Royalty Framework) Amendment Act, 2008)
and the "Alberta Royalty Framework", which was implemented in 2010. Royalty rates for conventional oil are set by a single
sliding rate formula, which is applied monthly and incorporates separate variables to account for production rates and market prices.
The maximum royalty payable under the royalty regime is 40%. Royalty rates for natural gas under the royalty regime are similarly
determined using a single sliding rate formula with the maximum royalty payable under the royalty regime set at 36%



Oil sands projects are also subject to
Alberta's royalty regime. Prior to payout of an oil sands project, the royalty is payable on gross revenues of an oil sands project.
Gross revenue royalty rates range between 1% - 9% depending on the market price of oil, determined using the average monthly price,
expressed in Canadian dollars, for WTI crude oil at Cushing, Oklahoma. Rates are 1% when the market price of oil is less than or
equal to $55 per barrel and increase for every dollar of market price of oil increase to a maximum of 9% when oil is priced at
$120 or higher. After payout, the royalty payable is the greater of the gross revenue royalty based on the gross revenue royalty
rate of 1% - 9% and the net revenue royalty based on the net revenue royalty rate. Net revenue royalty rates start at 25% and increase
for every dollar of market price of oil increase above $55 up to 40% when oil is priced at $120 or higher. In addition, concurrent
with the implementation of The New Royalty Framework, the Government of Alberta renegotiated existing contracts with certain oil
sands producers that were not compatible with the new royalty regime.



Producers of oil and natural gas from freehold
lands in Alberta are required to pay freehold mineral tax. The freehold mineral tax is a tax levied by the Government of Alberta
on the value of oil and natural gas production from non-Crown lands and is derived from the Freehold Mineral Rights Tax
Act(Alberta). The freehold mineral tax is levied on an annual basis on calendar year production using a tax formula that
takes into consideration, among other things, the amount of production, the hours of production, the value of each unit of production,
the tax rate and the percentages that the owners hold in the title. The basic formula for the assessment of freehold mineral tax
is: revenue less allocable costs equals net revenue divided by wellhead production equals the value based upon unit of production.
If payors do not wish to file individual unit values, a default price is supplied by the Crown. On average, the tax levied is 4%
of revenues reported from fee simple mineral title properties.



The Government of Alberta has from time
to time implemented drilling credits, incentives or transitional royalty programs to encourage oil and gas development and new
drilling. For example, the Innovative Energy Technologies Program (the "IETP") has the stated objectives of increasing
recovery from oil and gas deposits, finding technical solutions to the gas over bitumen issue, improving the recovery of bitumen
by in-situ and mining techniques and improving the recovery of natural gas from coal seams. The IETP provides royalty adjustments
to specific pilot and demonstration projects that utilize new or innovative technologies to increase recovery from existing reserves.



In addition, the Government of Alberta
has implemented certain initiatives intended to accelerate technological development and facilitate the development of unconventional
resources (the "Emerging Resource and Technologies Initiative"). Specifically:



| | · | Coalbed methane wells will receive a maximum royalty rate of 5% for 36 producing months up to 750
MMcf of production, retroactive to wells that began producing on or after May 1, 2010;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Shale gas wells will receive a maximum royalty rate of 5% for 36 producing months with no limitation
on production volume, retroactive to wells that began producing on or after May 1, 2010;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Horizontalgaswells will receive a maximum royalty rate of 5% for 18 producing months
up to 500 MMcf of production, retroactive to wells that commenced drilling on or after May 1, 2010; and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Horizontal oil wells and horizontal non-project oil sands wells will receive a maximum royalty
rate of 5% with volume and production month limits set according to the depth of the well (including the horizontal distance),
retroactive to wells that commenced drilling on or after May 1, 2010.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41







Land Tenure



The respective provincial governments predominantly
own the rights to crude oil and natural gas located in the western provinces. Provincial governments grant rights to explore for
and produce oil and natural gas pursuant to leases, licences, and permits for varying terms, and on conditions set forth in provincial
legislation including requirements to perform specific work or make payments. Private ownership of oil and natural gas also exists
in such provinces and rights to explore for and produce such oil and natural gas are granted by lease on such terms and conditions
as may be negotiated.



Alberta has implemented legislation providing
for the reversion to the Crown of mineral rights to deep, non-productive geological formations at the conclusion of the primary
term of a lease or license.



Alberta also has a policy of "shallow
rights reversion" which provides for the reversion to the Crown of mineral rights to shallow, non-productive geological formations
for all leases and licenses. For leases and licenses issued subsequent to January 1, 2009, shallow rights reversion will be applied
at the conclusion of the primary term of the lease or license.



Production and Operation
Regulations



The oil and natural gas industry in Canada
is highly regulated and subject to significant control by provincial regulators. Regulatory approval is required for, among other
things, the drilling of oil and natural gas wells, construction and operation of facilities, the storage, injection and disposal
of substances and the abandonment and reclamation of well-sites. In order to conduct oil and gas operations and remain in good
standing with the applicable provincial regulator, we must comply with applicable legislation, regulations, orders, directives
and other directions (all of which are subject to governmental oversight, review and revision, from time to time). Compliance with
such legislation, regulations, orders, directives or other directions can be costly and a breach of the same may result in fines
or other sanctions.



Environmental Regulation



The oil and natural gas industry is currently
subject to regulation pursuant to a variety of provincial and federal environmental legislation, all of which is subject to governmental
review and revision from time to time. Such legislation provides for, among other things, restrictions and prohibitions on the
spill, release or emission of various substances produced in association with certain oil and gas industry operations, such as
sulphur dioxide and nitrous oxide. In addition, such legislation sets out the requirements with respect to oilfield waste handling
and storage, habitat protection and the satisfactory operation, maintenance, abandonment and reclamation of well and facility sites.
Compliance with such legislation can require significant expenditures and a breach of such requirements may result in suspension
or revocation of necessary licenses and authorizations, civil liability and the imposition of material fines and penalties.



Federal



Pursuant to the Prosperity Act,
the Government of Canada amended or repealed several pieces of federal environmental legislation and in addition, created a new
federal environment assessment regime that came in to force on July 6, 2012. The changes to the environmental legislation under
the Prosperity Act are intended to provide for more efficient and timely environmental assessments of projects that previously
had been subject to overlapping legislative jurisdiction.



42







Alberta



The regulatory landscape in Alberta has
undergone a transformation from multiple regulatory bodies to a single regulator for upstream oil and gas, oil sands and coal development
activity. On June 17, 2013, the Alberta Energy Regulator (the "AER") assumed the functions and responsibilities
of the former Energy Resources Conservation Board, including those found under the Oil and Gas Conservation Act ("ABOGCA").
On November 30, 2013, the AER assumed the energy related functions and responsibilities of Alberta Environment and Sustainable
Resource Development ("AESRD") in respect of the disposition and management of public lands under the Public
Lands Act. On March 29, 2014, the AER assumed the energy related functions and responsibilities of AESRD in the areas of environment
and water under the Environmental Protection and Enhancement Act and the Water Act, respectively. The AER's responsibilities
exclude the functions of the Alberta Utilities Commission and the Surface Rights Board, as well as Alberta Energy's responsibility
for mineral tenure. The objective behind the transformation to a single regulator is the creation of an enhanced regulatory regime
that is efficient, attractive to business and investors, and effective in supporting public safety, environmental management and
resource conservation while respecting the rights of landowners.



In December 2008, the Government of Alberta
released a new land use policy for surface land in Alberta, the Alberta Land Use Framework (the "ALUF"). The ALUF
sets out an approach to manage public and private land use and natural resource development in a manner that is consistent with
the long-term economic, environmental and social goals of the province. It calls for the development of seven region-specific land
use plans in order to manage the combined impacts of existing and future land use within a specific region and the incorporation
of a cumulative effects management approach into such plans.



Proclaimed in force in Alberta on October
1, 2009, the Alberta Land Stewardship Act (the "ALSA") provides the legislative authority for the Government
of Alberta to implement the policies contained in the ALUF. Regional plans established under the ALSA are deemed to be legislative
instruments equivalent to regulations and will be binding on the Government of Alberta and provincial regulators, including those
governing the oil and gas industry. In the event of a conflict or inconsistency between a regional plan and another regulation,
regulatory instrument or statutory consent, the regional plan will prevail. Further, the ALSA requires local governments, provincial
departments, agencies and administrative bodies or tribunals to review their regulatory instruments and make any appropriate changes
to ensure that they comply with an adopted regional plan. The ALSA also contemplates the amendment or extinguishment of previously
issued statutory consents such as regulatory permits, licenses, registrations, approvals and authorizations for the purpose of
achieving or maintaining an objective or policy resulting from the implementation of a regional plan. Among the measures to support
the goals of the regional plans contained in the ALSA are conservation easements, which can be granted for the protection, conservation
and enhancement of land; and conservation directives, which are explicit declarations contained in a regional plan to set aside
specified lands in order to protect, conserve, manage and enhance the environment.



On August 22, 2012, the Government of Alberta
approved the Lower Athabasca Regional Plan ("LARP") which came into force on September 1, 2012. The LARP is the
first of seven regional plans developed under the ALUF. LARP covers a region in the northeastern corner of Alberta that is approximately
93,212 square kilometres in size. The region includes a substantial portion of the Athabasca oil sands area, which contains approximately
82% of the province's oil sands resources and much of the Cold Lake oil sands area.



LARP establishes six new conservation areas
and nine new provincial recreation areas. In conservation and provincial recreation areas, conventional oil and gas companies with
pre-existing tenure may continue to operate. Any new petroleum and gas tenure issued in conservation and provincial recreation
areas will include a restriction that prohibits surface access. In contrast, oil sands companies' tenure has been (or will be)
cancelled in conservation areas and no new oil sands tenure will be issued. While new oil sands tenure will be issued in provincial
recreation areas, new and existing oil sands tenure will prohibit surface access.



In July 2014, the Government of Alberta
approved the South Saskatchewan Regional Plan ("SSRP") which came into force on September 1, 2014. The SSRP is
the second regional plan developed under the ALUF. The SSRP covers approximately 83,764 square kilometres and includes 44% of the
provincial population.



The SSRP creates four new and four expanded
conservation areas, and two new and six expanded provincial parks and recreational areas. Similar to LARP, the SSRP will honour
existing petroleum and natural gas tenure in conservation and provincial recreational areas. However, any new petroleum and natural
gas tenures sold in conservation areas, provincial parks, and recreational areas will prohibit surface access. However, oil and
gas companies must minimize impacts of activities on the natural landscape, historic resources, wildlife, fish and vegetation when
exploring, developing and extracting the resources. Freehold mineral rights will not be subject to this restriction.



43







With the implementation of the new Alberta
regulatory structure under the AER, AESRD will remain responsible for development and implementation of regional plans. However,
the AER will take on some responsibility for implementing regional plans in respect of energy related activities.



Liability Management Rating Programs



Alberta



In Alberta, the AER implements the Licensee
Liability Rating Program (the "AB LLR Program"). The AB LLR Program is a liability management program governing
most conventional upstream oil and gas wells, facilities and pipelines. The ABOGCA establishes an orphan fund (the "Orphan
Fund") to pay the costs to suspend, abandon, remediate and reclaim a well, facility or pipeline included in the AB LLR
Program if a licensee or working interest participant ("WIP") becomes defunct. The Orphan Fund is funded by licensees
in the AB LLR Program through a levy administered by the AER. The AB LLR Program is designed to minimize the risk to the Orphan
Fund posed by unfunded liability of licensees and prevent the taxpayers of Alberta from incurring costs to suspend, abandon, remediate
and reclaim wells, facilities or pipelines. The AB LLR Program requires a licensee whose deemed liabilities exceed its deemed assets
to provide the AER with a security deposit. The ratio of deemed liabilities to deemed assets is assessed once each month and failure
to post the required security deposit may result in the initiation of enforcement action by the AER.



Effective May 1, 2013, the AER implemented
important changes to the AB LLR Program that resulted in a significant increase in the number of oil and gas companies in Alberta
that are required to post security. Some of the important changes include:



| | · | a 25% increase to the prescribed average reclamation cost for each individual well or facility
(which will increase a licensee's deemed liabilities);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------



| | · | a $7,000 increase to facility abandonment cost parameters for each well equivalent (which will
increase a licensee's deemed liabilities);
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



| | · | a decrease in the industry average netback from a five-year to a three-year average (which will
affect the calculation of a licensee's deemed assets, as the reduction from five to three years means the average will be more
sensitive to price changes); and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | a change to the present value and salvage factor, increasing to 1.0 for all active facilities from
the current 0.75 for active wells and 0.50 for active facilities (which will increase a licensee's deemed liabilities).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These changes will be implemented over
a three-year period. The first phase was implemented in May of 2013, the second phase was implemented in May of 2014 and the final
phase will be implemented in May of 2015. The changes to the AB LLR Program stem from concern that the previous regime significantly
underestimated the environmental liabilities of licensees.



On July 4, 2014, the AER introduced the
inactive well compliance program (the "IWCP") to address the growing inventory of inactive wells in Alberta and
to increase the AER's surveillance and compliance efforts under Directive 013: Suspension Requirements for Wells("Directive
013"). The IWCP applies to all inactive wells that are noncompliant with Directive 013 as of April 1, 2015. The objective
is to bring all inactive noncompliant wells under the IWCP into compliance with the requirements of Directive 013 within 5 years.
As of April 1, 2015, each licensee will be required to bring 20% of its inactive wells into compliance every year, either by reactivating
or suspending the wells in accordance with Directive 013 or by abandoning them in accordance with Directive 020: Well Abandonment.



44









Climate Change Regulation



Federal



Climate change regulation at both the federal
and provincial level has the potential to significantly affect the regulatory environment of the oil and natural gas industry in
Canada. Such regulations, surveyed below, impose certain costs and risks on the industry.



The Government of Canada is a signatory
to the United Nations Framework Convention on Climate Change(the "UNFCCC") and a participant to the Copenhagen
Accord (a non-binding agreement created by the UNFCCC which represents a broad political consensus and reinforces commitments to
reducing greenhouse gas ("GHG") emissions). On January 29, 2010, Canada inscribed in the Copenhagen Accord its
2020 economy-wide target of a 17% reduction of GHG emissions from 2005 levels. This target is aligned
with theUnited States target.In a report dated October 2013, the Government stated
that this target represents a significant challenge in light of strong economic growth (Canada's economy is projected to be approximately
31% larger in 2020 compared to 2005 levels).



On April 26, 2007, the Government of Canada
released "Turning the Corner: An Action Plan to Reduce Greenhouse Gases and Air Pollution" (the "Action Plan")
which set forth a plan for regulations to address both GHGs and air pollution. An update to the Action Plan, "Turning the
Corner: Regulatory Framework for Industrial Greenhouse Gas Emissions" was released on March 10, 2008 (the "Updated
Action Plan"). The Updated Action Plan outlines emissions intensity-based targets, for application to regulated sectors
on a facility-specific basis, sector-wide basis or company-by-company basis. Although the intention was for draft regulations aimed
at implementing the Updated Action Plan to become binding on January 1, 2010, the only regulations being implemented are in the
transportation and electricity sectors. The federal government indicates that it is taking a sector-by-sector regulatory approach
to reducing GHG emissions and is working on regulations for other sectors. Representatives of the Government of Canada have indicated
that the proposals contained in the Updated Action Plan will be modified to ensure consistency with the direction ultimately taken
by the United States with respect to GHG emissions regulation. In June 2012, the second US-Canada Clean Energy Dialogue Action
Plan was released. The plan renewed efforts to enhance bilateral collaboration on the development of clean energy technologies
to reduce GHG emissions.



Alberta



As part of Alberta's 2008 Climate Change
Strategy, the province committed to taking action on three themes: (a) conserving and using energy efficiently (reducing GHG emissions);
(b) greening energy production; and (c) implementing carbon and capture storage.



As part of its efforts to reduce GHG emissions,
Alberta introduced legislation to address GHG emissions: the Climate Change and Emissions Management Act(the "CCEMA")
enacted on December 4, 2003 and amended through the Climate Change and Emissions Management Amendment Act, which received
royal assent on November 4, 2008. The CCEMA is based on an emissions intensity approach and aims for a 50% reduction from 1990
emissions relative to GDP by 2020. The accompanying regulations include the Specified Gas Emitters Regulation("SGER"),which imposes GHG limits, and the Specified Gas Reporting Regulation, which imposes GHG emissions reporting requirements.
Alberta facilities emitting more than 100,000 tonnes of GHGs a year are subject to compliance with the CCEMA. Alberta is the first
jurisdiction in North America to impose regulations requiring large facilities in various sectors to reduce their GHG emissions.



The SGER, effective July 1, 2007, applies
to facilities emitting more than 100,000 tonnes of GHGs in 2003 or any subsequent year, and requires reductions in GHG emissions
intensity (e.g. the quantity of GHG emissions per unit of production) from emissions intensity baselines established in accordance
with the SGER. The SGER distinguishes between "Established Facilities" and "New Facilities". Established Facilities
are defined as facilities that completed their first year of commercial operation prior to January 1, 2000 or that have completed
eight or more years of commercial operation. Established Facilities are required to reduce their emissions intensity by 12% of
their baseline emissions intensity for 2008 and subsequent years. Generally, the baseline for an Established Facility reflects
the average of emissions intensity in 2003, 2004 and 2005. New Facilities are defined as facilities that completed their first
year of commercial operation on December 31, 2000, or a subsequent year, and have completed less than eight years of commercial
operation, or are designated as New Facilities in accordance with the SGER. New Facilities are required to reduce their emissions
intensity by 2% from their baseline in the fourth year of commercial operation, 4% of their baseline in the fifth year, 6% of their
baseline in the sixth year, 8% of their baseline in the seventh year and 10% of their baseline in the eighth year. The CCEMA does
not contain any provision for continuous annual improvements in emissions intensity reductions beyond those stated above.



45







The CCEMA provides that regulated emitters
can meet their emissions intensity targets by contributing to the Climate Change and Emissions Management Fund at a rate of $15
per tonne of CO2 equivalent. The funds contributed by industry to the Climate Change and Emissions Management Fund will
be used to drive innovation and test and implement new technologies for greening energy production. Emissions credits can also
be purchased from regulated emitters that have reduced their emissions below the 100,000 tonne threshold or non-regulated emitters
that have generated emissions offsets through activities that result in emissions reductions in accordance with established protocols
published by the Government of Alberta.



Alberta is also the first jurisdiction
in North America to direct dedicated funding to implement carbon capture and storage technology across industrial sectors. Alberta
will invest $2 billion into demonstration projects that will begin commercializing the technology on the scale needed to be successful.
On December 2, 2010, the Government of Alberta passed theCarbon Capture and Storage Statutes Amendment Act, 2010. It deemed
the pore space underlying all land in Alberta to be, and to have always been, the property of the Crown and provided for the assumption
of long-term liability for carbon sequestration projects by the Crown, subject to the satisfaction of certain conditions.



RISK
FACTORS



The following is a summary of certain risk
factors relating to the business of AOG. The following information is a summary only of certain risk factors and is qualified in
its entirety by reference to, and must be read in conjunction with, the detailed information appearing elsewhere in this annual
information form.



Investors should carefully consider
the risk factors set out below and consider all other information contained herein and in the Corporation's other public filings
before making an investment decision.



Prices, Markets
and Marketing



Numerous factors beyond the Corporation's
control do, and will continue to, affect the marketability and price of oil and natural gas acquired or discovered by the Corporation.
The Corporation's ability to market its oil and natural gas may depend upon its ability to acquire space on pipelines that deliver
natural gas to commercial markets or contract for the delivery of crude oil by rail. Deliverability uncertainties related to the
distance the Corporation's reserves are from pipelines, railway lines, processing and storage facilities, operational problems
affecting pipelines, railway lines and facilities as well as government regulation relating to prices, taxes, royalties, land tenure,
allowable production, the export of oil and natural gas and many other aspects of the oil and natural gas business may also affect
the Corporation.



Prices for oil and natural gas are subject
to large fluctuations 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 beyond the control of the Corporation. These factors include economic conditions, in the United
States, Canada and Europe, the actions of Organization of the Petroleum Exporting Countries ("OPEC"), governmental
regulation, political stability in the Middle East, Northern Africa and elsewhere, the foreign supply and demand of oil and natural
gas, risks of supply disruption, the price of foreign imports and the availability of alternative fuel sources. Prices for oil
and natural gas are also subject to the availability of foreign markets and the Corporation's ability to access such markets. Oil
prices are expected to remain volatile and may decline in the near future as a result of global excess supply due to the increased
growth of shale oil production in the United States, the decline in global demand for exported crude oil commodities, and OPEC's
recent decisions pertaining to the oil production of OPEC member countries, among other factors. A material decline in prices could
result in a reduction of the Corporation's net production revenue. The economics of producing from some wells may change because
of lower prices, which could result in reduced production of oil or natural gas and a reduction in the volumes of the Corporation's
reserves. The Corporation might also elect not to produce from certain wells at lower prices.



All these factors could result in a material
decrease in the Corporation's expected net production revenue and a reduction in its oil and natural gas acquisition, development
and exploration activities. Any substantial and extended decline in the price of oil and natural gas would have an adverse effect
on the Corporation's carrying value of its reserves, borrowing capacity, revenues, profitability and cash flows from operations
and may have a material adverse effect on the Corporation's business, financial condition, results of operations and prospects.



46







Oil and natural gas prices are expected
to remain volatile for the near future because of market uncertainties over the supply and the demand of these commodities due
to the current state of the world economies, OPEC actions, sanctions imposed on certain oil producing nations by other countries
and ongoing credit and liquidity concerns. Volatile oil and natural gas prices make it difficult to estimate the value of producing
properties for acquisitions and often cause disruption in the market for oil and natural gas producing properties, as buyers and
sellers have difficulty agreeing on such value. Price volatility also makes it difficult to budget for and project the return on
acquisitions and development and exploitation project.



In addition, bank borrowings available
to the Corporation may, in part, be determined by the Corporation's borrowing base. A sustained material decline in prices from
historical average prices could reduce the Corporation's borrowing base, therefore reducing the bank credit available to the Corporation
which could require that a portion, or all, of the Corporation's bank debt be repaid.



Global Financial
Markets



Recent market events and conditions, including
disruptions in the international credit markets and other financial systems and the American and European sovereign debt levels,
have caused significant volatility in commodity prices. These events and conditions have caused a decrease in confidence in the
broader United States and global credit and financial markets and have created a climate of greater volatility, less liquidity,
widening of credit spreads, a lack of price transparency, increased credit losses and tighter credit conditions. Notwithstanding
various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks, investment
banks, insurers and other financial institutions caused the broader credit markets to further deteriorate and stock markets to
decline substantially. These factors have negatively impacted company valuations and are likely to continue to impact the performance
of the global economy going forward. Worldwide crude oil commodity prices are expected to remain volatile in the near future as
a result of global excess supply, recent actions taken by OPEC, and ongoing global credit and liquidity concerns. This volatility
may affect the Corporation's ability to obtain equity or debt financing on acceptable terms.



Exploration, Development
and Production Risks



Oil and natural gas operations involve
many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome. The long-term commercial
success of the Corporation depends on its ability to find, acquire, develop and commercially produce oil and natural gas reserves.
Without the continual addition of new reserves, the Corporation's existing reserves, and the production from them, will decline
over time as the Corporation produces from such reserves. A future increase in the Corporation's reserves will depend on both the
ability of the Corporation to explore and develop its existing properties and its ability to select and acquire suitable producing
properties or prospects. There is no assurance that the Corporation will be able continue to find satisfactory properties to acquire
or participate in. Moreover, management of the Corporation may determine that current markets, terms of acquisition, participation
or pricing conditions make potential acquisitions or participations uneconomic. There is also no assurance that the Corporation
will discover or acquire further commercial quantities of oil and natural gas.



Future oil and natural gas exploration
may involve unprofitable efforts from dry wells as well as from wells that are productive but do not produce sufficient petroleum
substances to return a profit after drilling, completing (including hydraulic fracturing), operating and other costs. Completion
of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs.



Drilling hazards, environmental damage
and various field operating conditions could greatly increase the cost of operations and adversely affect the production from successful
wells. Field operating conditions include, but are not limited to, delays in obtaining governmental approvals or consents, and
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, it is not possible to eliminate production delays and declines from normal field operating conditions,
which can negatively affect revenue and cash flow levels to varying degrees.



47







Oil and natural gas exploration, development
and production operations are subject to all the risks and hazards typically associated with such operations, including, but not
limited to, fire, explosion, blowouts, cratering, sour gas releases, spills and other environmental hazards. These typical risks
and hazards could result in substantial damage to oil and natural gas wells, production facilities, other property, the environment
and personal injury. Particularly, the Corporation 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 the Corporation.



Oil and natural gas production operations
are also subject to all the risks typically associated with such operations, including encountering unexpected 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 may have a material adverse effect on the Corporation's business, financial condition, results of operations and
prospects.



As is standard industry practice, the Corporation
is not fully insured against all risks, nor are all risks insurable. Although the Corporation maintains liability insurance in
an amount that it considers consistent with industry practice, liabilities associated with certain risks could exceed policy limits
or not be covered. In either event the Corporation could incur significant costs.



Project Risks



The Corporation manages a variety of small
and large projects in the conduct of its business. Project delays may delay expected revenues from operations. Significant project
cost over-runs could make a project uneconomic. The Corporation's ability to execute projects and market oil and natural gas depends
upon numerous factors beyond the Corporation's control, including:



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

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

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

| | · | the availability of, and the ability to acquire, water supplies needed for drilling and hydraulic
fracturing, or the Corporation's ability to dispose of water used or removed from strata at a reasonable cost and in accordance
with applicable environmental regulations;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | 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;
| | - | ---------------------------------------------------

| | · | unexpected cost increases;
| | - | --------------------------

| | · | accidental events;
| | - | ------------------

| | · | currency fluctuations;
| | - | ----------------------

| | · | regulatory changes;
| | - | -------------------

| | · | the availability and productivity of skilled labour; and
| | - | --------------------------------------------------------

| | · | the regulation of the oil and natural gas industry by various levels of government and governmental
agencies.
| | - | -------------------------------------------------------------------------------------------------------------



Because of these factors, the Corporation
could be unable to execute projects on time, on budget, or at all, and may be unable to market the oil and natural gas that it
produces effectively.



Reserve
Estimates



There are numerous uncertainties inherent
in estimating quantities of oil, natural gas and natural gas liquids reserves and the future cash flows attributed to such reserves.
The reserve and associated cash flow information set forth in this document are estimates only. Generally, estimates of economically
recoverable oil and natural gas reserves and the future net cash flows from such estimated reserves are based upon a number of
variable factors and assumptions, such as:



| | · | historical production from the properties;
| | - | ------------------------------------------



48







| | · | production rates;
| | - | -----------------

| | · | ultimate reserve recovery;
| | - | --------------------------

| | · | timing and amount of capital expenditures;
| | - | ------------------------------------------

| | · | marketability of oil and natural gas;
| | - | -------------------------------------

| | · | royalty rates; and
| | - | ------------------

| | · | the assumed effects of regulation by governmental agencies and future operating costs (all of which
may vary materially from actual results).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------



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. The Corporation's actual production, revenues, taxes and development and operating expenditures
with respect to its reserves will vary from estimates and such variations could be material.



The estimation 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 were 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. Such variations could be material.



In accordance with applicable securities
laws, the Corporation's independent reserves evaluator has used forecast prices and costs in estimating the reserves and future
net cash flows as summarized herein. 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.



Actual production and cash flows derived
from the Corporation's oil and natural gas reserves will vary from the estimates contained in the reserve evaluation, and such
variations could be material. The reserve evaluation is based in part on the assumed success of activities the Corporation intends
to undertake in future years. The reserves and estimated cash flows to be derived therefrom and contained in the reserve evaluation
will be reduced to the extent that such activities do not achieve the level of success assumed in the reserve evaluation. The reserve
evaluation is effective as of a specific effective date and, except as may be specifically stated, has not been updated and therefore
does not reflect changes in the Corporation's reserves since that date.



Gathering and Processing Facilities,
Pipeline Systems and Rail



The Corporation delivers its products through
gathering and processing facilities and pipeline systems some of which it does not own. The amount of oil and natural gas that
the Corporation can produce and sell is subject to the accessibility, availability, proximity and capacity of these gathering and
processing facilities, pipeline systems and railway lines. The lack of availability of capacity in any of the gathering and processing
facilities, pipeline systems and railway lines, and in particular the processing facilities, could result in the Corporation's
inability to realize the full economic potential of its production or in a reduction of the price offered for the Corporation's
production. Although pipeline expansions are ongoing, the lack of firm pipeline capacity continues to affect the oil and natural
gas industry and limit the ability to produce and market oil and natural gas production. In addition, the pro-rationing of capacity
on inter-provincial pipeline systems continues to affect the ability to export oil and natural gas. Furthermore, producers are
increasingly turning to rail as an alternative means of transportation. In recent years, the volume of crude oil shipped by rail
in North America has increased dramatically and it is projected to continue in this upward trend. Any significant change in market
factors or other conditions affecting these infrastructure systems and facilities, as well as any delays in constructing new infrastructure
systems and facilities could harm the Corporation's business and, in turn, the Corporation's financial condition, results of operations
and cash flows.



Following major accidents in Lac-Megantic,
Quebec and North Dakota, the Transportation Safety Board of Canada and the U.S. National Transportation Board have recommended
additional regulations for railway tank cars carrying crude oil. These recommendations include, among others, the imposition of
higher standards for all DOT-111 tank cars carrying crude oil and the increased auditing of shippers to ensure they properly classify
hazardous materials and have adequate safety plans in place. The increased regulation of rail transportation may reduce the ability
of railway lines to alleviate pipeline capacity issues and add additional costs to the transportation of crude oil by rail.



49







A portion of the Corporation's production
may, from time to time, be processed through facilities owned by third parties and over which the Corporation does not have control.
From time to time these facilities may discontinue or decrease operations either as a result of normal servicing requirements or
as a result of unexpected events. A discontinuation or decrease of operations could have a materially adverse effect on the Corporation's
ability to process its production and deliver the same for sale.



Substantial Capital
Requirements



The Corporation anticipates making substantial
capital expenditures for the acquisition, exploration, development and production of oil and natural gas reserves in the future.
As future capital expenditures will be financed out of cash generated from operations, borrowings and possible future equity sales,
the Corporation's ability to do so is dependent on, among other factors:



| | · | the overall state of the capital markets;
| | - | -----------------------------------------

| | · | the Corporation's credit rating (if applicable);
| | - | ------------------------------------------------

| | · | interest rates;
| | - | ---------------

| | · | royalty rates;
| | - | --------------

| | · | tax burden due to current and future tax laws; and
| | - | --------------------------------------------------

| | · | investor appetite for investments in the energy industry and the Corporation's securities in particular.
| | - | --------------------------------------------------------------------------------------------------------



Further, if the Corporation's revenues
or reserves decline, it may not have access to the capital necessary to undertake or complete future drilling programs. There can
be no assurance that debt or equity financing, or cash generated by operations will be available or sufficient to meet these requirements
or for other corporate purposes or, if debt or equity financing is available, that it will be on terms acceptable to the Corporation.
The inability of the Corporation to access sufficient capital for its operations could have a material adverse effect on the Corporation's
business financial condition, results of operations and prospects.



Additional Funding
Requirements



The Corporation's cash flow from its reserves
may not be sufficient to fund its ongoing activities at all times and from time to time, the Corporation may require additional
financing in order to carry out its oil and natural gas acquisition, exploration and development activities. There is risk that
if the economy and banking industry experienced unexpected and/or prolonged deterioration, the Corporation's access to additional
financing may be affected.



Because of global economic volatility,
the Corporation may from time to time have restricted access to capital and increased borrowing costs. Failure to obtain such financing
on a timely basis could cause the Corporation to forfeit its interest in certain properties, miss certain acquisition opportunities
and reduce or terminate its operations. If the Corporation's revenues from its reserves decrease as a result of lower oil and natural
gas prices or otherwise, it will affect the Corporation's ability to expend the necessary capital to replace its reserves or to
maintain its production. To the extent that external sources of capital become limited, unavailable or available on onerous terms,
the Corporation's ability to make capital investments and maintain existing assets may be impaired, and its assets, liabilities,
business, financial condition and results of operations may be affected materially and adversely as a result. In addition, the
future development of the Corporation's petroleum properties may require additional financing and there are no assurances that
such financing will be available or, if available, will be available upon acceptable terms. Failure to obtain any financing necessary
for the Corporation's capital expenditure plans may result in a delay in development or production on the Corporation's properties.



50







Credit Facility
Arrangements



The
Corporation currently has a credit facility and the amount authorized thereunder is dependent on the borrowing base determined
by its lenders. The Corporation is required to comply with covenants under its credit facility which may, in certain cases, include
certain financial ratio tests, which from time to time either affect the availability, or price, of additional funding and in the
event that the Corporation does not comply with these covenants, the Corporation's access to capital could be restricted or repayment
could be required. Events beyond the Corporation’s control may contribute to the failure of the Corporation to comply with
such covenants. A failure to comply with covenants could result in the default under the Corporation's credit facility, which could
result in the Corporation being required to repay amounts owing thereunder. Even if the Corporation is able to obtain new financing,
it may not be on commercially reasonable terms or terms that are acceptable to the Corporation. If the Corporation is unable to
repay amounts owing under credit facilities, the lenders under the credit facility could proceed to foreclose or otherwise realize
upon the collateral granted to them to secure the indebtedness. The acceleration of the Corporation's indebtedness under one agreement
may permit acceleration of indebtedness under other agreements that contain cross default or cross-acceleration provisions. In
addition, the Corporation's credit facility may impose operating and financial restrictions on the Corporation that could include
restrictions on, the payment of dividends, repurchase or making of other distributions with respect to the Corporation's securities,
incurring of additional indebtedness, the provision of guarantees, the assumption of loans, making of capital expenditures, entering
into of amalgamations, mergers, take-over bids or disposition of assets, among others.



The
Corporation’s lenders use the Corporation’s reserves, commodity prices, applicable discount rate and other factors,
to periodically determine the Corporation’s borrowing base. A material decline in commodity prices could reduce the Corporation's
borrowing base, reducing the funds available to the Corporation under the credit facility which could result in the requirement
to repay a portion, or all, of the Corporation's bank indebtedness.



Hedging



From time to time, the Corporation may
enter into agreements to receive fixed prices on its oil and natural gas production to offset the risk of revenue losses if commodity
prices decline. However, to the extent that the Corporation engages in price risk management activities to protect itself from
commodity price declines, it may also be prevented from realizing the full benefits of price increases above the levels of the
derivative instruments used to manage price risk. In addition, the Corporation's hedging arrangements may expose it to the risk
of financial loss in certain circumstances, including instances in which:



| | · | production falls short of the hedged volumes or prices fall significantly lower than projected;
| | - | -----------------------------------------------------------------------------------------------

| | · | there is a widening of price-basis differentials between delivery points for production and the
delivery point assumed in the hedge arrangement;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the counterparties to the hedging arrangements or other price risk management contracts fail to
perform under those arrangements; or
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | · | a sudden unexpected event materially impacts oil and natural gas prices.
| | - | ------------------------------------------------------------------------



Similarly, from time to time the Corporation
may enter into agreements to fix the exchange rate of Canadian to United States dollars or other currencies in order to offset
the risk of revenue losses if the Canadian dollar increases in value compared to other currencies. However, if the Canadian dollar
declines in value compared to such fixed currencies, the Corporation will not benefit from the fluctuating exchange rate.



Management of Growth



The Corporation may be subject to growth
related risks including capacity constraints and pressure on its internal systems and controls. The ability of the Corporation
to manage growth effectively will require it to continue to implement and improve its operational and financial systems and to
expand, train and manage its employee base. The inability of the Corporation to deal with this growth may have a material adverse
effect on the Corporation's business, financial condition, results of operations and prospects.



51







Reliance on Key Personnel



The Corporation's success depends in large
measure on certain key personnel. The loss of the services of such key personnel may have a material adverse effect on the Corporation's
business, financial condition, results of operations and prospects. The Corporation does not have any key person insurance in effect
for the Corporation. The contributions of the existing management team to the immediate and near term operations of the Corporation
are likely to be of central importance. In addition, the competition for qualified personnel in the oil and natural gas industry
is intense and there can be no assurance that the Corporation will be able to continue to attract and retain all personnel necessary
for the development and operation of its business. Investors must rely upon the ability, expertise, judgment, discretion, integrity
and good faith of the management of the Corporation.



Competition



The petroleum industry is competitive in
all of its phases. The Corporation competes with numerous other entities in the search for, and the acquisition of, oil and natural
gas properties and in the marketing of oil and natural gas. The Corporation's competitors include oil and natural gas companies
that have substantially greater financial resources, staff and facilities than those of the Corporation. The Corporation's ability
to increase its reserves in the future will depend not only on its ability to explore and develop its present properties, but also
on its 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, methods, and reliability of delivery and storage.



Hydraulic Fracturing



Hydraulic fracturing involves the injection
of water, sand and small amounts of additives under pressure into rock formations to stimulate the production of oil and natural
gas. Specifically, hydraulic fracturing enables the production of commercial quantities of oil and natural gas from reservoirs
that were previously unproductive. Any new laws, regulations or permitting requirements regarding hydraulic fracturing could lead
to operational delays, increased operating costs, third party or governmental claims, and could increase the Corporation's costs
of compliance and doing business as well as delay the development of oil and natural gas resources from shale formations, which
are not commercial without the use of hydraulic fracturing. Restrictions on hydraulic fracturing could also reduce the amount of
oil and natural gas that the Corporation is ultimately able to produce from its reserves.



Due to recent seismic activity reported
in the Fox Creek area of Alberta, the Alberta Energy Regulator has announced new seismic monitoring and reporting requirements
for hydraulic fracturing operators in the Duvernay Zone in the Fox Creek area. These requirements include, among others, an assessment
of the potential for seismicity prior to operations, the implementation of a response plan to address potential events, and the
suspension of operations if a seismic event above a particular threshold occurs. The Alberta Energy Regulator continues to monitor
seismic activity around the province and may extend these requirements to other areas of the province if necessary.



Availability of
Drilling Equipment and Access



Oil and natural gas exploration and development
activities are dependent on 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 the Corporation and may delay exploration and development activities.



Seasonality



The level of activity in the Canadian oil
and natural gas industry is influenced by seasonal weather patterns. 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. Seasonal factors and unexpected weather patterns may lead to declines in exploration and production activity
and corresponding decreases in the demand for the goods and services of the Corporation.



52







Variations in Foreign
Exchange Rates and Interest Rates



World oil and natural gas prices are quoted
in United States dollars. The Canadian/United States dollar exchange rate, which fluctuates over time, consequently affects the
price received by Canadian producers of oil and natural gas. Material increases in the value of the Canadian dollar relative to
the United States dollar will negatively affect the Corporation's production revenues. Accordingly, Canadian/United States exchange
rates could affect the future value of the Corporation's reserves as determined by independent evaluators.



To the extent that the Corporation engages
in risk management activities related to foreign exchange rates, there is a credit risk associated with counterparties with which
the Corporation may contract.



An increase in interest rates could result
in a significant increase in the amount the Corporation pays to service debt, resulting in a reduced amount available to fund its
exploration and development activities, and if applicable, the cash available for dividends and could negatively impact the market
price of the Common Shares.



Environmental



All phases of the oil and natural gas business
present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of federal, provincial
and local laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on the
spill, release or emission of various substances produced in association with certain oil and gas industry operations. In addition,
such legislation sets out the requirements with respect to oilfield waste handling and storage, habitat protection and the satisfactory
operation, maintenance, abandonment and reclamation of well and facility sites.



Compliance with environmental 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 the Corporation to incur costs to remedy such discharge. Although the Corporation believes that it will be in material
compliance with current applicable environmental legislation, no assurance can be given that environmental laws will not result
in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise
have a material adverse effect on the Corporation's business, financial condition, results of operations and prospects.



Regulatory



Various levels of governments impose extensive
controls and regulations on oil and natural gas operations (including exploration, development, production, pricing, marketing
and transportation). Governments may regulate or intervene with respect to exploration and production activities, prices, taxes,
royalties and the exportation of oil and natural gas. Amendments to these controls and regulations may occur from time to time
in response to economic or political conditions. See "Industry 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 the Corporation's costs, either of which may have a material adverse effect on the Corporation's business, financial
condition, results of operations and prospects. In order to conduct oil and natural gas operations, the Corporation will require
regulatory permits, licenses, registrations, approvals and authorizations from various governmental authorities. There can be no
assurance that the Corporation will be able to obtain all of the permits, licenses, registrations, approvals and authorizations
that may be required to conduct operations that it may wish to undertake. In addition to regulatory requirements pertaining to
the production, marketing and sale of oil and natural gas mentioned above, the Corporation's business and financial condition could
be influenced by federal legislation affecting, in particular, foreign investment, through legislation such as the Competition
Act (Canada) and the Investment Canada Act(Canada).



53







Insurance



The Corporation's involvement in the exploration
for and development of oil and natural gas properties may result in the Corporation becoming subject to liability for pollution,
blow outs, leaks of sour natural gas, property damage, personal injury or other hazards. Although the Corporation maintains insurance
in accordance with industry standards to address certain of these risks, such insurance has limitations on liability and may not
be sufficient to cover the full extent of such liabilities. In addition, certain risks are not, in all circumstances, insurable
or, in certain circumstances, the Corporation may elect not to obtain insurance to deal with specific risks due to the high premiums
associated with such insurance or other reasons. The payment of any uninsured liabilities would reduce the funds available to the
Corporation. The occurrence of a significant event that the Corporation is not fully insured against, or the insolvency of the
insurer of such event, may have a material adverse effect on the Corporation's business, financial condition, results of operations
and prospects.



Third Party Credit
Risk



The Corporation may be 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 Corporation,
such failures may have a material adverse effect on the Corporation's business, financial condition, results of operations and
prospects. In addition, poor credit conditions in the industry and of joint venture partners may affect a joint venture partner's
willingness to participate in the Corporation's ongoing capital program, potentially delaying the program and the results of such
program until the Corporation finds a suitable alternative partner.



Liability Management



Alberta has developed a liability management
program designed to prevent taxpayers from incurring costs associated with suspension, abandonment, remediation and reclamation
of wells, facilities and pipelines in the event that a licensee or permit holder becomes defunct. These programs generally involve
an assessment of the ratio of a licensee's deemed assets to deemed liabilities. If a licensee's deemed liabilities exceed its deemed
assets, a security deposit is required. Changes of the ratio of the Corporation' deemed assets to deemed liabilities or changes
to the requirements of liability management programs may result in significant increases to the security that must be posted. See
"Industry Conditions".



Tax Horizon



It is expected, based upon current legislation,
the projections contained in the Sproule Report and various other assumptions that no cash income taxes are to be paid by the Corporation
prior to 2021. A lower level of capital expenditures than those contained in the Sproule Report or should the assumptions used
by the Corporation prove to be inaccurate, the Corporation may be required to pay cash income taxes sooner than anticipated, which
will reduce cash flow available to the Corporation.



Operational Dependence



Other companies operate some of the assets
in which the Corporation has an interest. The Corporation has limited ability to exercise influence over the operation of those
assets or their associated costs, which could adversely affect the Corporation's financial performance. The Corporation's return
on assets operated by others depends upon a number of factors that may be outside of the Corporation's control, including, but
not limited to, 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.



54







Title to Assets



Although title reviews may be conducted
prior to the purchase of oil and natural gas producing properties or the commencement of drilling wells, such reviews do not guarantee
or certify that an unforeseen defect in the chain of title will not arise. The actual interest of the Corporation in properties
may accordingly vary from the Corporation's records. If a title defect does exist, it is possible that the Corporation may lose
all or a portion of the properties to which the title defect relates, which may have a material adverse effect on the Corporation's
business, financial condition, results of operations and prospects. There may be valid challenges to title or legislative changes,
which affect the Corporation's title to the oil and natural gas properties the Corporation controls that could impair the Corporation's
activities on them and result in a reduction of the revenue received by the Corporation.



Expiration of Licences
and Leases



The Corporation's properties are held in
the form of licences and leases and working interests in licences and leases. If the Corporation or the holder of the licence or
lease fails to meet the specific requirement of a licence or lease, the licence or lease may terminate or expire. There can be
no assurance that any of the obligations required to maintain each licence or lease will be met. The termination or expiration
of the Corporation's licences or leases or the working interests relating to a licence or lease may have a material adverse effect
on the Corporation's business, financial condition, results of operations and prospects.



Failure to Realize
Anticipated Benefits of Acquisitions and Dispositions



The Corporation considers acquisitions
and dispositions of businesses and assets in the ordinary course of business. Achieving the benefits of acquisitions depends on
successfully consolidating functions and integrating operations and procedures in a timely and efficient manner and the Corporation's
ability to realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations with
those of the Corporation. The integration of acquired businesses may require substantial management effort, time and resources
diverting management's focus from other strategic opportunities and operational matters. Management continually assesses the value
and contribution of services provided and assets required to provide such services. In this regard, non-core assets may be periodically
disposed of so the Corporation can focus its efforts and resources more efficiently. Depending on the state of the market for such
non-core assets, certain non-core assets of the Corporation, if disposed of, may realize less than their carrying value on the
financial statements of the Corporation.



In addition, acquisitions of oil and gas
properties or companies are based in large part on engineering, environmental and economic assessments made by the acquiror, independent
engineers and consultants. These assessments include a series of assumptions regarding such factors as recoverability and marketability
of oil and natural gas, environmental restrictions and prohibitions regarding releases and emissions of various substances, future
prices of oil and gas, future operating costs, future capital expenditures and royalties and other government levies which will
be imposed over the producing life of the reserves. Many of these factors are subject to change and are beyond the control of the
Corporation. All such assessments involve a measure of geologic, engineering, environmental and regulatory uncertainty that could
result in lower production and reserves or higher operating or capital expenditures than anticipated. Although select title and
environmental reviews are conducted prior to any purchase of resource assets, such reviews cannot guarantee that any unforeseen
defects in the chain of title will not arise to defeat the Corporation's title to certain assets or that environmental defects,
liabilities or deficiencies do not exist or are greater than anticipated. Such deficiencies or defects could adversely affect the
value of the assets acquired and the Corporation's securities.



Climate Change



The Corporation's exploration and production
facilities and other operations and activities emit greenhouse gases which may require the Corporation to comply with greenhouse
gas ("GHG") emissions legislation at the provincial or federal level. Climate change policy is evolving at regional,
national and international levels, and political and economic events may significantly affect the scope and timing of climate change
measures that are ultimately put in place. As a signatory to the United Nations Framework Convention on Climate Change(the
"UNFCCC") and a participant to the Copenhagen Agreement (a non-binding agreement created by the UNFCCC), the Government
of Canada announced on January 29, 2010 that it will seek a 17% reduction in GHG emissions from 2005 levels by 2020. These GHG
emission reduction targets are not binding, however. Some of the Corporation's significant facilities may ultimately be subject
to future regional, provincial and/or federal climate change regulations to manage GHG emissions. The direct or indirect costs
of compliance with these regulations may have a material adverse effect on the Corporation's business, financial condition, results
of operations and prospects. Given the evolving nature of the debate related to climate change and the control of greenhouse gases
and resulting requirements, it is not possible to predict the impact on the Corporation and its operations and financial condition.



55







Geo-Political Risks



Political events throughout the world that
cause disruptions in the supply of oil continuously affect the marketability and price of oil and natural gas acquired or discovered
by the Corporation. Conflicts, or conversely peaceful developments, arising outside of Canada have a significant impact on the
price of oil and natural gas. Any particular event could result in a material decline in prices and result in a reduction of the
Corporation's net production revenue.



In addition, the Corporation's oil and
natural gas properties, wells and facilities could be the subject of a terrorist attack. If any of the Corporation's properties,
wells or facilities are the subject of terrorist attack it may have a material adverse effect on the Corporation's business, financial
condition, results of operations and prospects. The Corporation does not have insurance to protect against the risk from terrorism.



Aboriginal Claims



Aboriginal peoples have claimed aboriginal
title and rights in portions of western Canada. The Corporation is not aware that any claims have been made in respect of its properties
and assets; however, if a claim arose and was successful, such claim may have a material adverse effect on the Corporation's business,
financial condition, results of operations and prospects



Issuance of Debt



From time to time, the Corporation may
enter into transactions to acquire assets or shares of other organizations. These transactions may be financed in whole or in part
with debt, which may increase the Corporation's debt levels above industry standards for oil and natural gas companies of similar
size. Depending on future exploration and development plans, the Corporation may require additional debt financing that may not
be available or, if available, may not be available on favourable terms. Neither the Corporation's articles nor its by-laws limit
the amount of indebtedness that the Corporation may incur. The level of the Corporation's indebtedness from time to time could
impair the Corporation's ability to obtain additional financing on a timely basis to take advantage of business opportunities that
may arise.



Market Price of Common Shares



The trading price of securities of oil
and natural gas issuers is subject to substantial volatility often based on factors related and unrelated to the financial performance
or prospects of the issuers involved. Factors unrelated to the Corporation's performance could include macroeconomic developments
nationally, within North America or globally, domestic and global commodity prices or current perceptions of the oil and gas market.
Similarly, the market price of the Common Shares could be subject to significant fluctuations in response to variations in the
Corporation's operating results, financial condition, liquidity and other internal factors. The price at which the Common Shares
will trade cannot be accurately predicted.



Dilution



The Corporation may make future acquisitions
or enter into financings or other transactions involving the issuance of securities of the Corporation which may be dilutive.



Conflicts of Interest



Certain directors or officers of the Corporation
may also be directors or officers of other oil and natural gas companies and as such may, in certain circumstances, have a conflict
of interest. Conflicts of interest, if any, will be subject to and governed by procedures prescribed by the ABCA which require
a director of officer of a corporation who is a party to, or is a director or an officer of, or has a material interest in any
person who is a party to, a material contract or proposed material contract with the Corporation disclose his or her interest and,
in the case of directors, to refrain from voting on any matter in respect of such contract unless otherwise permitted under the
ABCA. See "Directors and Officers – Conflicts of Interest".



56







Dividends



The Corporation has not paid any dividends
on its outstanding shares. The amount of future cash dividends paid by the Corporation, if any, will be subject to the discretion
of the board of directors of the Corporation and will depend on a variety of factors and conditions existing from time to time,
including fluctuations in commodity prices, production levels, capital expenditure requirements, debt service requirements, operating
costs, royalty burdens, foreign exchange rates and the satisfaction of the liquidity and solvency tests imposed by applicable corporate
law for the declaration and payment of dividends. See "Dividend Policy".



Internal Controls



Effective internal controls are necessary
for the Corporation to provide reliable financial reports and to help prevent fraud. Although the Corporation will undertake a
number of procedures in order to help ensure the reliability of its financial reports, including those imposed on it under Canadian
securities laws, the Corporation cannot be certain that such measures will ensure that the Corporation will maintain adequate control
over financial processes and reporting. Failure to implement required new or improved controls, or difficulties encountered in
their implementation, could harm the Corporation's results of operations or cause it to fail to meet its reporting obligations.
If the Corporation or its independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied,
could reduce the market's confidence in the Corporation's financial statements and harm the trading price of the Common Shares.



Cost of New Technologies



The oil industry is characterized by rapid
and significant technological advancements and introductions of new products and services utilizing new technologies. Other oil
companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may
in the future allow them to implement new technologies before the Corporation. There can be no assurance that the Corporation will
be able to respond to such competitive pressures and implement such technologies on a timely basis or at an acceptable cost. One
or more of the technologies currently utilized by the Corporation or implemented in the future may become obsolete. In such case,
the Corporation's business, financial condition and results of operations could be affected adversely and materially. If the Corporation
is unable to utilize the most advanced commercially available technology, its business, financial condition and results of operations
could also be adversely affected in a material way.



Alternatives to and Changing Demand
for Petroleum Products



Full conservation measures, alternative
fuel requirements, increasing consumer demand for alternatives to oil and natural gas and technological advances in fuel economy
and energy generation devices could reduce the demand for oil, natural gas and other liquid hydrocarbons. The Corporation cannot
predict the impact of changing demand for oil and natural gas products, and any major changes may have a material adverse effect
on the Corporation's business, financial condition, results of operations and cash flows.



Royalty Regimes



There can be no assurance that the federal
government and the provincial governments of the western provinces will not adopt new royalty regimes or modify the existing royalty
regimes which may have an impact on the economics of the Corporation's projects. An increase in royalties would reduce the Corporation's
earnings and could make future capital investments, or the Corporation's operations, less economic. See "Industry Conditions
– Royalties and Incentives".



57









Litigation



In the normal course of the Corporation's
operations, it may become involved in, named as a party to, or be the subject of, various legal proceedings, including regulatory
proceedings, tax proceedings and legal actions, related to personal injuries, property damage, property tax, land rights, the environment
and contract disputes. The outcome of outstanding, pending or future proceedings cannot be predicted with certainty and may be
determined adversely to the Corporation and as a result, could have a material adverse effect on the Corporation's assets, liabilities,
business, financial condition and results of operations.



Breach of Confidentiality



While discussing potential business relationships
or other transactions with third parties, the Corporation may disclose confidential information relating to the business, operations
or affairs of the Corporation. Although confidentiality agreements are signed by third parties prior to the disclosure of any confidential
information, a breach could put the Corporation at competitive risk and may cause significant damage to its business. The harm
to the Corporation's business from a breach of confidentiality cannot presently be quantified, but may be material and may not
be compensable in damages. There is no assurance that, in the event of a breach of confidentiality, the Corporation will be able
to obtain equitable remedies, such as injunctive relief, from a court of competent jurisdiction in a timely manner, if at all,
in order to prevent or mitigate any damage to its business that such a breach of confidentiality may cause.



Income Taxes



The Corporation files all required income
tax returns and believes that it is in full compliance with the provisions of the Income Tax Act (Canada) and all other
applicable provincial tax legislation. However, such returns are subject to reassessment by the applicable taxation authority.
In the event of a successful reassessment of the Corporation, whether by re-characterization of exploration and development expenditures
or otherwise, such reassessment may have an impact on current and future taxes payable.



Income tax laws relating to the oil and
natural gas industry, such as the treatment of resource taxation or dividends, may in the future be changed or interpreted in a
manner that adversely affects the Corporation. Furthermore, tax authorities having jurisdiction over the Corporation may disagree
with how the Corporation calculates its income for tax purposes or could change administrative practices to the Corporation's detriment.



Expansion into New Activities



The operations and expertise of the Corporation's
management are currently focused primarily on oil and gas production, exploration and development in the Western Canada Sedimentary
Basin. In the future the Corporation may acquire or move into new industry related activities or new geographical areas, may acquire
different energy related assets, and as a result may face unexpected risks or alternatively, significantly increase the Corporation's
exposure to one or more existing risk factors, which may in turn result in the Corporation's future operational and financial conditions
being adversely affected.



Forward-Looking Information May Prove
Inaccurate



Shareholders and prospective investors
are cautioned not to place undue reliance on the Corporation's forward-looking information. By its nature, forward-looking information
involves numerous assumptions, known and unknown risk and uncertainties, of both a general and specific nature, that could cause
actual results to differ materially from those suggested by the forward-looking information or contribute to the possibility that
predictions, forecasts or projections will prove to be materially inaccurate. Additional information on the risks, assumption and
uncertainties are found under "Forward-Looking Statements".



58







DISCLOSURE
PURSUANT TO THE REQUIREMENTS OF THE NEW YORK STOCK EXCHANGE



As a foreign private issuer listed on the
NYSE, AOG is not required to comply with most of the NYSE rules and listing standards and instead may comply with domestic Canadian
requirements. AOG is, however, required to comply with the following NYSE Rules: (i) AOG must have an audit committee that satisfies
the requirements of Rule 10A-3 under the United States Securities Exchange Act of 1934, as amended; (ii) the Chief Executive Officer
must promptly notify the NYSE in writing after an executive officer becomes aware of any non-compliance with the applicable NYSE
Rules; (iii) submit an executed Section 303A annual written affirmation to the NYSE, as well as a Section 303A interim affirmation
each time certain changes occurs to the audit committee; and (iv) provide a brief description of any significant differences between
its corporate governance practices and those followed by U.S. domestic issuers under NYSE listing standards. AOG has reviewed the
NYSE listing standards followed by U.S. domestic issuers listed under the NYSE and confirms that its corporate governance practices
do not differ significantly from such standards.



ADDITIONAL
INFORMATION



Additional information relating to the
Corporation can be found on SEDAR at www.sedar.com and the Corporation’s website at www.advantageog.com.



Additional information, including directors'
and officers' remuneration and indebtedness, principal holders of Common Shares and securities authorized for issuance under equity
compensation plans, will be contained in the Corporation's Information Circular for the most recent annual meeting of shareholders
that involved the election of directors of AOG. Additional financial information is provided for in the Corporation's Consolidated
financial statements and management's discussion and analysis for the year ended December 31, 2014.



59







SCHEDULE
"A"



REPORT OF
MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE

(Form 51-101F3)



Management of Advantage Oil & Gas Ltd.
("AOG") is responsible for the preparation and disclosure of information with respect to AOG's oil and gas activities
in accordance with securities regulatory requirements. This information includes reserves data which are estimates of proved reserves
and probable reserves and related future net revenue as at December 31, 2014, estimated using forecast prices and costs.



An independent qualified reserves evaluator
has evaluated AOG's reserves data. The report of the independent qualified reserves evaluator is presented below.



The independent reserves evaluation committee
of the board of directors of AOG has:



| | (a) | reviewed AOG's procedures for providing information to the independent qualified reserves evaluator;
| | --- | ----------------------------------------------------------------------------------------------------



| | (b) | met with the independent qualified reserves evaluator to determine whether any restrictions affected
the ability of the independent qualified reserves evaluator to report without reservation; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | reviewed the reserves data with management and the independent qualified reserves evaluator.
| | --- | --------------------------------------------------------------------------------------------



The independent reserves evaluation committee
of the board of directors of AOG has reviewed AOG's procedures for assembling and reporting other information associated with oil
and gas activities and has reviewed that information with management. The board of directors has, on the recommendation of the
independent reserves evaluation committee, approved:



| | (a) | the content and filing with securities regulatory authorities of Form 51-101F1 containing
reserves data and other oil and gas information;
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | the filing of Form 51-101F2 which is the report of the independent qualified reserves evaluator
on the reserves data; and
| | --- | -------------------------------------------------------------------------------------------------------------------------



| | (c) | the content and filing of this report.
| | --- | --------------------------------------



Because the reserves data are based on
judgments regarding future events, actual results will vary and the variations may be material.



|(signed)"Andy Mah"                    | (signed) "Craig Blackwood"                         
|------------------------------------- | ---------------------------------------------------
|Andy Mah                              | Craig Blackwood                                    
|President and Chief Executive Officer | Vice President, Finance and Chief Financial Officer
|                                      |                                                    
|                                      |                                                    
|(signed) "Ronald A. McIntosh"         | (signed) "Stephen Balog"                           
|Ronald A. McIntosh                    | Stephen Balog                                      
|Director                              | Director                                           
|                                      |                                                    
|March 25, 2015                        |                                                    











SCHEDULE
"B"



REPORT ON
RESERVES DATA

BY INDEPENDENT
QUALIFIED RESERVES EVALUATOR OR AUDITOR

(Form 51-101F2)



To the Board of Directors of Advantage
Oil & Gas Ltd. (the "Company"):



| | 1. | We have evaluated the Company's Reserves Data as at December 31, 2014. The reserves data are estimates
of proved reserves and probable reserves and related future net revenue as at December 31, 2014, estimated using forecast prices
and costs.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | The Reserves Data are the responsibility of the Company's management. Our responsibility is to
express an opinion on the Reserves Data based on our evaluation.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



We carried out our evaluation
in accordance with standards set out in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"),
prepared jointly by the Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Canadian Institute of Mining, Metallurgy
& Petroleum (Petroleum Society).



| | 3. | Those standards require that we plan and perform an evaluation to obtain reasonable assurance as
to whether the reserves data are free of material misstatement. An evaluation also includes assessing whether the reserves data
are in accordance with principles and definitions presented in the COGE Handbook.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | The following table sets forth the estimated future net revenue (before deduction of income taxes)
attributed to proved plus probable reserves, estimated using forecast prices and costs and calculated using a discount rate of
10 percent, included in the reserves data of the Company evaluated by us for the year ended December 31, 2014, and identifies the
respective portions thereof that we have audited, evaluated and reviewed and reported on to the Company's management and Board
of Directors:
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Independent Qualified         |  |                                                                   |  | Location of       |  | Net Present Value of Future Net Revenue Before Income Taxes (10% Discount Rate)
|----------------------------- |  | ----------------------------------------------------------------- |  | ----------------- |  | -------------------------------------------------------------------------------
|Reserves Evaluator or Auditor |  | Description and Preparation Date of Evaluation Report             |  | Reserves (County) |  | Audited (M$)                                                                   
|                              |  |                                                                   |  |                   |  |                                                                                
|Sproule Associates Limited    |  | Evaluation of the P&NG Reserves of Advantage Oil & Gas Ltd.       |  | Canada            |  |                                                                                
|                              |  |                                                                   |  |                   |  |                                                                                
|                              |  | As of December 31, 2014, prepared  December 2014 to February 2015 |  |                   |  | Nil                                                                            
|Total                         |  |                                                                   |  |                   |  | Nil                                                                            



| | 5. | In our opinion, the reserves data evaluated by us have, in all material respects, been determined
and are presented in accordance with the COGE Handbook, consistently applied. We express no opinion on the reserves data that we
reviewed but did not audit or evaluate.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | We have no responsibility to update the report referred to in paragraph 4 for events and circumstances
occurring after its preparation date.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | Because the reserves data are based on judgements regarding future events, actual results will
vary and the variations may be material.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------











Executed
as to our report referred to above:





|Sproule Associates Limited | Original Signed by Attila A. Szabo, P. Eng.     
|-------------------------- | ------------------------------------------------
|Calgary, Alberta           | Attila A. Szabo, P. Eng.                        
|February 5, 2015           | Vice-President, Engineering, Canada and Director
|                           |                                                 
|                           | Original Signed by Nora T. Stewart, P. Eng.     
|                           | Nora T. Stewart, P. Eng.                        
|                           | Senior Vice-President, Canada and Director      
|                           |                                                 
|                           | Original Signed by Brent A. Hawkwood, C.E.T..   
|                           | Brent A. Hawkwood, C.E.T.                       
|                           | Senior Petroleum Technologist and Partner       
|                           |                                                 
|                           | Original Signed by Victor Verkhogliad, P.Geol.  
|                           | Victor Verkhogliad, P.Geol.                     
|                           | Senior Petroleum Geologist and Partner          





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