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Exhibit 14





REPORT OF

MANAGEMENT AND DIRECTORS

ON OIL AND GAS DISCLOSURE

Form 51-101

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TABLE OF CONTENTS

|                  |          |                                                                  | Pages
|----------------- | -------- | ---------------------------------------------------------------- | -----
|Glossary of Terms | 2       
|Form 51-101F1     |         
|                  | Item 2.1 | Reserves Data - Constant Prices and Costs                        | 4-5  
|                  | Item 2.2 | Reserves Data - Forecast Prices and Costs                        | 5-6  
|                  | Item 2.3 | Reserves Disclosure Varies with Accounting                       | 6    
|                  | Item 2.4 | Future Net Reserves Disclosure Varies with
      Accounting      | 6    
|                  | Item 3.1 | Constant Prices Used in Estimates                                | 7    
|                  | Item 3.2 | Forecast Prices Used in Estimates                                | 7    
|                  | Item 4.1 | Reserves Reconciliation                                          | 8    
|                  | Item 4.2 | Future Net Revenue Reconciliation                                | 9    
|                  | Item 5.1 | Undeveloped Reserves                                             | 9-10 
|                  | Item 5.2 | Significant Factors and Uncertainties                            | 10   
|                  | Item 5.3 | Future Development Costs                                         | 10   
|                  | Item 6.1 | Oil and Gas Properties and Wells                                 | 11-16
|                  | Item 6.2 | Undeveloped Properties Having No Attributed
      Reserves       | 17-18
|                  | Item 6.3 | Forward Contracts                                                | 18   
|                  | Item 6.4 | Additional Information - Abandonment
      and Reclamation Costs | 18   
|                  | Item 6.5 | Tax Horizon                                                      | 19   
|                  | Item 6.6 | Costs Incurred                                                   | 19   
|                  | Item 6.7 | Exploration and Development Activities                           | 19   
|                  | Item 6.8 | Production Estimates                                             | 20   
|                  | Item 6.9 | Production History                                               | 20-21
|Form 51-101F2     | 22-23   
|Form 51-101F3     | 24-25   

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|Glossary
      of Terms                      |  |                                                                                                                                                                                                                                                                                                                                                                        
|-------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Reserves                                     |  | Estimated
        reserves of natural gas, natural gas liquids and crude oil.                                                                                                                                                                                                                                                                                          
|Working
      interest                       |  | Those
        lands in which the Company receives its share acreage of net production
        revenues.                                                                                                                                                                                                                                                                
|Gross
      reserves                         |  | Estimated
        reserves before royalties based on working interest. Net reserves Estimated
        reserves after royalties based on working interest                                                                                                                                                                                                               
|Future
      net revenue                     |  | Working
        interest revenues after royalties, development costs, production costs
        and well abandonment costs, but before administrative, overhead and other
        such indirect costs. Future net revenue may be presented either before
        or after tax.                                                                                          
|NGL’s                                        |  | Natural
        gas liquids. Hydrocarbon components recovered from raw natural gas as
        liquids by processing through extraction plants or recovered from field
        separators, scrubbers or other gathering facilities. These liquids include
        the hydrocarbon components ethane, propane, butane and pentane plus, or
        combinations thereof. 
|Proved
      reserves                        |  | 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.                                                                                                                                                       
|Probable
      reserves                      |  | Reserves
        that are less certain than proved reserves at being recovered. 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                                                                                                                
|Developed reserves                           |  | Reserves
        that are expected to be recovered from existing wells and installed facilities
        or, if facilities have not been installed, that would involve a low expenditure
        (e.g. when compared to the cost of drilling a well) to put the reserves
        on production.                                                                         
|Developed
      producing
      reserves     |  | Reserves
        that are expected to be recovered from completion intervals open at the
        time of 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 certainty.                                           
|Developed
      non-producing
      reserves |  | 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.                                                                                                                                                                                         
|stb
      or stock tank barrel               |  | A
        42-gallon barrel of crude oil at standard conditions of temperature and
        pressure.                                                                                                                                                                                                                                                                    
|mbbl                                         |  | 1,000
        barrels of oil and/or natural gas liquids.                                                                                                                                                                                                                                                                                                               
|MMBtu                                        |  | A
        unit of heat equal to one million British thermal units.                                                                                                                                                                                                                                                                                                     
|mcf                                          |  | 1,000
        cubic feet of natural gas.                                                                                                                                                                                                                                                                                                                               
|bbl
      or barrel                          |  | 42
        U.S. gallons liquid volume of crude oil or natural gas liquids.                                                                                                                                                                                                                                                                                             
|Undeveloped reserves                         |  | Reserves that are expected to be recovered from known
        accumulation where a significant expenditure is required to render them
        capable of production (e.g. in comparison to the cost of drilling a well).
        Such reserves must fully meet the requirements of the reserves classification
        to which they are assigned (proved or probable).

2

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Form 51-101F1

STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION FOR DYNAMIC OIL & GAS, INC.

This is the form referred to in item 1 of section 2.1 ofNational Instrument 51-101Standards of Disclosure for Oil and Gas Activities(“NI 51-101”).

The following information is related to our reserves, future
  net revenue and discounted value of future net cash flow of natural gas, natural
  gas liquids, light/medium crude oil and heavy crude oil. Sproule Associates
  Limited (“Sproule”), independent qualified evaluators of Calgary,
  Alberta estimated these reserves effective December 31, 2004. We used these
  reserves in the preparation of our Financial Statements for the fiscal year
  ended December 31, 2004.

All our reserves are in Alberta, British Columbia and Saskatchewan,
  Canada.

The reserves on our properties described herein are estimates
  only. Actual reserves on our properties may be greater or less than those calculated.

The estimated future net revenue contained in the following
  tables does not necessarily represent the fair market value of our reserves.
  There is no assurance that forecast prices and costs assumed in the Sproule
  evaluation will be attained, and variances could be material. Assumptions and
  qualifications relating to costs and other matters are summarized in the notes
  to the following tables.

The following tables provide reserves data and a breakdown
  of future net revenue by commodity and reserve category using forecast prices
  and costs and/or constant prices and costs, based on our working interest portion
  before royalties (gross) and/or after royalties (net) (see “Glossary of
  Terms”).

The pricing used in tables that reflect constant and forecast
  price evaluations is set forth in Items 3.1 and 3.2, respectively.

In certain instances, numbers may not total due to computer-generated
  roundings. In such cases, differences are not material and amounts presented
  are as shown in the Sproule Report.

3

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Item 2.1 Reserves Data (Constant Prices and Costs)

Item 2.1(1)The following table shows our gross and
  net reserves by reserve category using constant prices and costs.

|                  | Light and  |           |                 |             |        |        |        
|----------------- | ---------- | --------- | --------------- | ----------- | ------ | ------ | -------
|                  | Medium Oil | Heavy Oil | Natural Gas (1) | Natural Gas
|                  |            |           |                 |             |        |        | Liquids
|                  | Gross      | Net       | Gross           | Net         | Gross  | Net    | Gross  
|Reserve Category  | (mbbl)     | (mbbl)    | (mbbl)          | (mbbl)      | (mmcf) | (mmcf) | (mbbl) 
|Proved            |            |           |                 |             |        |        |        
|Developed         | 205.3      | 172.9     | 314.3           | 248.4       | 14,300 | 11,859 | 835.5  
|producing         |            |           |                 |             |        |        |        
|Developed non-    |            |           |                 |             |        |        |        
|producing         | 13.5       | 11.7      | 82.5            | 67.7        | 672    | 528    | 6.6    
|Undeveloped       | 22.5       | 19.6      | 223.1           | 197.8       | 1,165  | 874    | 11.3   
|Total proved      | 241.3      | 204.2     | 619.9           | 513.9       | 16,137 | 13,261 | 853.4  
|Probable          | 408.7      | 337.8     | 711.6           | 599.2       | 11,044 | 8,829  | 378.9  
|Total proved plus |            |           |                 |             |        |        |        
|probable          | 650.0      | 542.0     | 1,331.5         | 1,113.1     | 27,181 | 22,090 | 1,232.4

Item 2.1(2)The following table shows the net present values of the future net revenue of our net reserves by reserve category using constant prices and costs.

|($000’s)                   | Before Income Taxes  |   | After Income Taxes   |  
|-------------------------- | -------------------- | - | -------------------- | -
|                           | Annual Discount Rate |   | Annual Discount Rate |  
|Reserve Category           | 0                    | % | 10                   | %
|Proved                     |                      |   |                      |  
|Developed producing        | 73,892               |   | 56,325               |  
|Developed non-producing    | 2,694                |   | 1,905                |  
|Undeveloped                | 3,719                |   | 2,357                |  
|Total proved               | 80,305               |   | 60,587               |  
|Probable                   | 52,089               |   | 27,726               |  
|Total proved plus probable | 132,394              |   | 88,313               |  

Item 2.1(3)(a)The following table shows the net present values of the future net revenue of our and (b)net reserves by reserve category using constant prices and costs, undiscounted.

|($000’s)    |         |           |           |             |             | Future Net    |        |              
|----------- | ------- | --------- | --------- | ----------- | ----------- | ------------- | ------ | -------------
|            |         |           |           |             | Well        | Revenue       |        | Future Net   
|Reserve     |         |           | Operating | Development | Abandonment | Before Income | Income | Revenue After
|Category    | Revenue | Royalties | Costs     | Costs       | Costs       | Taxes         | Taxes  | Income Taxes 
|Proved      | 156,341 | 28,902    | 42,112    | 3,678       | 1,342       | 80,305        | 10,359 | 69,946       
|Proved plus |         |           |           |             |             |               |        |              
|probable    | 273,141 | 51,652    | 70,612    | 16,726      | 1,757       | 132,394       | 26,237 | 106,157      

4

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Item 2.1(3)(c)The following table shows the net present
  values of the future net revenue of our net reserves by reserve category using
  constant prices and costs before deducting future income tax expenses using
  a 10% discount rate.

|($000’s)             |                                |  | Future Net Revenue Before
      Income
|-------------------- | ------------------------------ |  | --------------------------------------
|Reserves Category    | Production Group               |  | Taxes – Discounted Annually @         
|                     |                                |  | 10%                                   
|Proved reserves      | Light and medium crude oil (1) |  | 4,265                                 
|                     | Heavy oil (1)                  |  | 3,182                                 
|                     | Natural gas (2)                |  | 51,675                                
|Proved plus probable | Light and medium crude oil (1) |  | 9,417                                 
|                     | Heavy oil (1)                  |  | 2,971                                 
|                     | Natural gas (2)                |  | 74,031                                

Item 2.2 Reserves Data (Forecast Prices and Costs)

Item 2.2(1)The following table shows our gross and net reserves by reserve category using forecast prices and costs.

|                  | Light and  |           |                 |         |        | Natural Gas
|----------------- | ---------- | --------- | --------------- | ------- | ------ | -----------
|                  | Medium Oil | Heavy Oil | Natural Gas (1) | Liquids
|                  | Gross      | Net       | Gross           | Net     | Gross  | Net        
|Reserve Category  | (mbbl)     | (mbbl)    | (mbbl)          | (mbbl)  | (mmcf) | (mmcf)     
|Proved            |            |           |                 |         |        |            
|Developed         | 181.6      | 152.3     | 299.3           | 239.2   | 14,033 | 11,633     
|Producing         |            |           |                 |         |        |            
|Developed non-    |            |           |                 |         |        |            
|Producing         | 13.5       | 11.7      | 126.4           | 103.6   | 677    | 532        
|Undeveloped       | 22.5       | 19.7      | 233.1           | 187.6   | 1,162  | 872        
|Total proved      | 217.6      | 183.7     | 648.8           | 530.4   | 15,872 | 13,037     
|Probable          | 383.2      | 317.3     | 727.6           | 602.2   | 10,744 | 8,570      
|Total proved plus |            |           |                 |         |        |            
|Probable          | 600.8      | 501.0     | 1,376.4         | 1,132.6 | 26,616 | 21,607     

Item 2.2(2)The following table shows the net present value of future net revenue for our net reserves by reserve category using forecast prices and costs.

5

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|($000’s)      | Before Income Taxes  |   | After Income Taxes   |  
|------------- | -------------------- | - | -------------------- | -
|Reserve       | Annual Discount Rate |   | Annual Discount Rate |  
|Category      | 0                    | % | 5                    | %
|Proved        |                      |   |                      |  
|Developed     |                      |   |                      |  
|producing     | 60,991               |   | 54,781               |  
|Developed     |                      |   |                      |  
|non-producing | 3,137                |   | 2,769                |  
|Undeveloped   | 4,526                |   | 3,884                |  
|Total proved  | 68,654               |   | 61,434               |  
|probable      | 44,483               |   | 33,113               |  
|Total proved  |                      |   |                      |  
|plus probable | 113,137              |   | 94,547               |  

Item 2.2(3)(a)The following table shows the future net revenue of our net reserve by reserves and (b)category using forecast prices and costs, and undiscounted.

|($000’s) |         |           |           |             |             | Future Net    |        |              
|-------- | ------- | --------- | --------- | ----------- | ----------- | ------------- | ------ | -------------
|         |         |           |           |             | Well        | Revenue       |        | Future Net   
|Reserve  |         |           | Operating | Development | Abandonment | Before Income | Income | Revenue After
|Category | Revenue | Royalties | Costs     | Costs       | Costs       | Taxes         | Taxes  | Income Taxes 
|Proved   | 145,349 | 27,172    | 43,735    | 4,258       | 1,530       | 68,654        | 7,940  | 60,714       
|Proved   |         |           |           |             |             |               |        |              
|plus     |         |           |           |             |             |               |        |              
|probable | 255,654 | 48,960    | 74,130    | 17,320      | 2,107       | 113,137       | 20,832 | 92,305       

Item 2.2(3)(c) The following table shows the net present
  value of future net revenue of our net reserves by reserve category using forecast
  prices and costs before deducting future income tax expense, discounted at 10%.

|($000’s)             |                                | Future Net Revenue Before Income 
|-------------------- | ------------------------------ | ---------------------------------
|Reserves Category    | Production Group               | Taxes – Discounted Annually @ 10%
|Proved reserves      | Light and medium crude oil (1) | 3,801                            
|                     | Heavy oil (1)                  | 7,995                            
|                     | Natural gas (2)                | 42,542                           
|Proved plus probable | Light and medium crude oil (1) | 7,537                            
|                     | Heavy oil (1)                  | 12,946                           
|                     | Natural gas (2)                | 59,685                           

Item 2.3 Reserves Disclosure Varies with Accounting

| | We have no subsidiary interests.
| | --------------------------------

Item 2.4 Future Net Reserves Disclosure Varies with Accounting

| | We have no subsidiary interests.
| | --------------------------------

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Item 3.1 Constant Prices Used in Estimates

| | The following table shows benchmark reference prices that have been used
      by Sproule in evaluating our reserves.
| | ---------------------------------------------------------------------------------------------------------------------

|Crude Oil    | Natural Gas     | Natural Gas Liquids
|------------ | --------------- | -------------------
|Edmonton Par | Hardisty Heavy, | Alberta            
|Price        | 1212o API Oil   | AECO-C             
|($Cdn/stb)   | ($Cdn/stb)      | ($Cdn/MMBtu)       
|46.51        | 15.26           | 6.78               

Item 3.2 Forecast Prices Used in Estimates

| | The following table shows historical and future pricing and inflation
      rate assumptions used by Sproule in evaluating our reserves.
| | ----------------------------------------------------------------------------------------------------------------------------------------

|           | Crude Oil | Natural Gas | Natural Gas Liquids |                                |           
|---------- | --------- | ----------- | ------------------- | ------------------------------ | ----------
|           | WTI       | Edmonton    | Hardisty            | Natural Gas (1)                | Pentanes  
|Year       | Cushing   | Par Price   | Heavy               | AECO Gas                       | plus FOB  
|           | Oklahoma  | 40oAPI      | 12oAPI              | Prices                         | Field Gate
|Historical | ($US/bbl) | ($Cdn/bbl)  | ($Cdn/bbl)          | ($Cdn/MMBtu)                   | ($Cdn/bbl)
|2001       | 25.94     | 39.06       | 18.05               | 6.23                           | 42.46     
|2002       | 26.09     | 40.12       | 27.58               | 4.04                           | 40.80     
|2003       | 31.14     | 43.23       | 27.39               | 6.66                           | 44.16     
|2004       | 41.41     | 52.91       | 30.40               | 6.87                           | 53.90     
|Forecast   |           |             |                     |                                |           
|2005       | 44.29     | 51.25       | 28.91               | 6.97                           | 52.49     
|2006       | 41.60     | 48.03       | 28.12               | 6.66                           | 49.19     
|2007       | 37.09     | 42.64       | 26.19               | 6.21                           | 43.67     
|2008       | 33.46     | 38.31       | 25.06               | 5.73                           | 39.23     
|2009       | 31.84     | 36.36       | 23.60               | 5.37                           | 37.24     
|Thereafter |           |             |                     | Various
      Escalation Rates |           

Notes: Product sale prices will reflect these reference prices with further adjustments for quality and transportation to point of sale.

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Item 4.1ReservesReconciliation

Item4.1(1)The following table sets forth a year-over-year reconciliation of the changes in our net light and medium crude oil, heavy oil and natural gas and natural gas liquids reserves.

|                    | Light/Medium Oil |   | Heavy Oil |          | Natural Gas |        | Natural Gas Liquids |         
|------------------- | ---------------- | - | --------- | -------- | ----------- | ------ | ------------------- | --------
|                    |                  |   |           | Net      |             |        |                     |         
|                    |                  |   |           | Proved   |             |        |                     |         
|                    |                  |   | Net       | plus     |             | Net    |                     | Net     
|                    | Net Proved       |   | Probable  | Probable |             | Proved |                     | Probable
|                    | (mbbl)           |   | (mbbl)    | (mbbl)   |             | (mbbl) |                     | (mbbl)  
|December 31, 2003   |                  |   |           |          |             |        |                     |         
|Remaining Reserves  | 407              |   | 245       | 652      |             | 4      |                     | 1       
|Extensions          | 30               |   | -         | 30       |             | -      |                     | -       
|Improved Recovery   | 41               |   | -         | 41       |             | -      |                     | -       
|Discoveries         | -                |   | -         | -        |             | 438    |                     | 480     
|Economic Factors    | -                |   | -         | -        |             | (16    | )                   | (2      
|Technical Revisions | (216             | ) | 93        | (123     | )           | -      |                     | -       
|Acquisition         | -                |   | -         | -        |             | 105    |                     | 120     
|Production          | (58              | ) | -         | (58      | )           | (17    | )                   | -       
|December 31, 2004   |                  |   |           |          |             |        |                     |         
|Remaining Reserves  | 204              |   | 338       | 542      |             | 514    |                     | 599     

8

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Item 4.2 Future Net Revenue Reconciliation

The following table sets forth changes between future net
  revenue estimates attributable to our net proved reserves as at December 31,
  2004 compared to such reserves as at January 1, 2004, using constant prices
  and costs.

|                                                                                  | 2004    |  
|--------------------------------------------------------------------------------- | ------- | -
|Period and Factor                                                                 | ($M)    |  
|Estimated Future Net Revenue After Tax at Beginning of Year (1)                   | 64,397  |  
|Sales and Transfers of Oil & Gas Produced. Net of Production Costs and Royalties  | (23,300 | )
|Net Change in Prices, Production Costs and Royalties Related to Future Production | (1,392  | )
|Change in Previously Estimated Development Costs Incurred During the Period       | 8,868   |  
|Change in Estimated Future Development Costs                                      | (3,402  | )
|Net Change from Extensions and Improved Recovery                                  | 6,623   |  
|Net Change from Discoveries                                                       | 1,556   |  
|Net Change due to Acquisitions                                                    | 377     |  
|Net Change due to Technical Revisions                                             | (21,675 | )
|Accretion of Discount                                                             | 4,989   |  
|Net Change in Income Taxes                                                        | 15,604  |  
|Miscellaneous Change                                                              | -       |  
|Estimated Future Net Revenue at End of Year                                       | 52,645  |  

Item 5.1 Undeveloped Reserves

Item 5.1(1)The following table sets forth the volumes of proved undeveloped reserves that were attributed for each of our reserve categories.

|       | Light and Medium Oil | Heavy Oil | Natural Gas | Natural Gas Liquids
|------ | -------------------- | --------- | ----------- | -------------------
|Period | (mbbl)               | (mbbl)    | (mmcf)      | (mbbl)             
|2003   | 158                  | -         | 3,678       | 20                 
|2004   | 22                   | 223       | 1,165       | 11                 

Of our total proved reserves as at December 31, 2004, only
  10% were undeveloped. Most of our undeveloped proved reserves are located where
  there is capital required to tie in tested wells. A portion of these projects
  have already been completed in the first quarter of 2005 and the remaining projects
  are expected for completion by the end of 2005. One of the projects is not scheduled
  for completion until the currently-producing zone is depleted.

9

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Item 5.1(2) Probable Undeveloped Reserves

Of our total probable reserves as at December 31, 2004, approximately
  40% are classified as undeveloped. These probable undeveloped reserves relate
  to drilling projects at Cypress and Orion, British Columbia, St. Albert, Alberta
  and Mantario East, Saskatchewan, and a compressor project at St. Albert, Alberta.
  All of these projects are scheduled for completion in Fiscal 2005.

Item 5.2 Significant Factors and Uncertainties

The process of evaluating reserves is inherently complex.
  It requires significant judgements 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 current production
  forecasts, prices and economic conditions. These factors and assumptions include
  among others: (i) historical production in the area compared with production
  rates from analogous producing areas; (ii) initial production rates; (iii) production
  decline rates; (iv) ultimate recovery of reserves; (v) success of future development
  activities; (vi) marketability of production; (vii) effects of government regulation;
  and (viii) other government levies imposed over the life of the reserves.

As circumstances change and additional data becomes available,
  reserve estimates also change. Estimates are reviewed and revised, either upward
  or downward, as warranted by the new information. Revisions are often required
  due to changes in well performance, prices, economic conditions and governmental
  restrictions. Revisions to reserve estimates can arise from changes in year-end
  prices, reservoir performance and geologic conditions or production. These revisions
  can be either positive or negative.

Item 5.3 Future Development Costs

The table below sets out the future development costs deducted
  in the estimation of future net revenue attributable to proved reserves (using
  both constant and forecast prices and costs) and proved plus probable reserves
  (using forecast prices only).

|Future Development Costs |                           |                           |                           
|------------------------ | ------------------------- | ------------------------- | --------------------------
|                         | Total Proved              | Total Proved              | Total Proved Plus Probable
|($ 000’s)                | Estimated Using           | Estimated Using           | Estimated Using           
|Period                   | Constant Prices and Costs | Forecast Prices and Costs | Forecast Prices and Costs 
|2005                     | 3,148                     | 3,680                     | 16,653                    
|2006                     | 90                        | 92                        | 92                        
|2007                     | 90                        | 95                        | 95                        
|2008                     | -                         | -                         | -                         
|2009                     | 188                       | 207                       | 207                       
|Total for all years      |                           |                           |                           
|- undiscounted           | 3,678                     | 4,258                     | 17,320                    
|- 10%
      discounted   | 3,443                     | 4,003                     | 16,569                    

The future development costs are capital expenditures required
  in the future for us to convert proved undeveloped reserves and probable reserves
  into proved developed producing reserves.

On an ongoing basis, we will typically use internally-generated
  cash flow from operations, debt (where deemed appropriate) and new equity issues
  if available on favourable terms to finance our capital investment program.
  When financing corporate acquisitions, we may also assume certain future liabilities.

10

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Item 6.1 Oil and Gas Properties and Wells

Item 6.1(1) Important Properties, Plants, Facilities and Installations

The following is information describing our important properties,
  plants, facilities and equipment.

|St. Albert, Alberta    |  | St. Albert is located in central Alberta, northwest of the City of Edmonton
      and near the City of St. Albert.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Geological Description |  | The property is comprised of two reef structures
        that are associated with 16, separate pools of Cretaceous Age natural
        gas and Devonian Age crude oil that are stacked in seven productive formations.
        Four of the productive formations are natural gas and three are crude
        oil.For purposes of project identification, we refer to the two reef structures
        as the “north pool” and the “south pool”. In aggregate,
        both structures have historically produced in excess of 23.7 million barrels
        of crude oil and 121 billion cubic feet of raw natural gas.                                                                                                                                                                                                 
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Land Holdings          |  | We own 8,101 net acres (12,839 gross) of various
        crown and freehold petroleum and natural gas leases for a weighted average
        working interest of 63%. Of our net acreage, 28% is undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Seismic                |  | We own a 37.5% working interest in a proprietary
        3D seismic database covering 12 square kilometers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Wells and Facilities   |  | We own a weighted average 75% working interest in
        16 producing gas wells and a 75% working interest in nine producing oil
        wells. In addition, we own a 75% working interest in one oil battery,
        two saltwater disposal wells, one solution gas plant, one sour gas compressor,
        two sweet gas compressors and a 13 kilometer, 6” sour gas pipeline.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fiscal 2004 Activities |  | In the north pool we drilled one successful well targeting
        remaining oil reserves in the Leduc D-3 formation and Wabamun D-1 formation.
        The well is completed in both formations and is presently producing oil
        from the Wabumun D-1 formation. Also in the north pool, we drilled one
        unsuccessful well targeting shallow gas in the Belly River and Edmonton
        formations. In the south pool, we acquired a new water disposal well to
        address future water handling and disposal associated with our oil production.
      We re-completed two existing natural gas wells in the
        Ostracod formation to further optimize sweet gas production. Further,
        we optimized our sweet gas compressor and upgraded our salt-water disposal
        facilities.
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fiscal 2005            |  | Outlook Our Fiscal 2005 budget continues to focus
        on production optimization. Two capital projects are planned to slow the
        natural decline rate of oil and gas production and to improve operating
        efficiencies. All projects are geared toward enhanced recovery of remaining
        crude oil and natural gas reserves from known pools.
      One development well is planned for Fiscal 2005 targeting
        remaining oil in the Leduc D-3 and Wabamun D-1 formations in the north
        pool.                                                                                                                                                                                                                                                                                      

11

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|                       |  | Our investment at St. Albert includes numerous wells
        and facilities in close proximity to urban areas. For this reason, we
        will continue our commitment to “STAMP” (“St. Albert
        and Area Multi-Stakeholder Project”), which we helped create to
        bring oil and gas operators, regulators, local government and special
        interest groups together in a forum for open dialog and information exchange.
|---------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Halkirk, Alberta       |  | Halkirk is located in central Alberta approximately
        168 kilometers northeast of Calgary.                                                                                                                                                                                                                                                                                                                                           
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Geological Description |  | This area is prospective for multiple, sweet
        natural gas-bearing Cretaceous Age sandstone reservoirs. The primary target
        for reserves is the Viking formation with an average net pay thickness
        of approximately five meters.                                                                                                                                                                                      
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Land Holdings          |  | We own 6,336 net acres (6,720 gross) of crown and
        freehold petroleum and natural gas leases for a weighted average working
        interest of 94%. Of our net acreage, 45% is undeveloped.                                                                                                                                                                                                                                        
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Wells and Facilities   |  | We own a 100% working interest in four producing
        Viking gas wells and an 80% working interest (before payout of our initial
        capital expenditures), in three producing Viking gas wells. After payout,
        our working interest will convert to 48%. All of our natural gas production
        is processed at the Maple Glen Gas Plant under a custom processing agreement
        with the plant’s third-party owner. 
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Fiscal 2004            |  | Activities During the year, production operations
        were maintained without significant capital expenditures.                                                                                                                                                                                                                                                                                                                        
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Fiscal 2005            |  | Outlook Two infill development wells are planned
        and will target sweet natural gas in the Viking formation. Our existing
        gathering system will accommodate production from these wells.                                                                                                                                                                                                                                    
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Peavey/Morinville      |  | Peavey/Morinville is located a short distance from
        our St. Albert field and is approximately 19 kilometers north of the City
        of Edmonton.                                                                                                                                                                                                                                                                                  
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Geological Description |  | The area is comprised of natural-gas bearing sandstones
        and shales of Cretaceous Age that are structurally draped over highs in
        the Leduc D-3 formation.                                                                                                                                                                                                                                                                   
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Land Holdings          |  | We own 6,998 net acres (10,243 gross) of petroleum
        and natural gas rights for a weighted average working interest of 68%.
        Of our total net holdings, 33% is undeveloped.                                                                                                                                                                                                                                                   
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Seismic                |  | We own a licensed copy of a high quality, 3D seismic
        database covering 14 square kilometers.                                                                                                                                                                                                                                                                                                                                       
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Wells and Facilities   |  | We own a weighted average working interest of 77%
        in six producing natural gas wells.                                                                                                                                                                                                                                                                                                                                              
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Fiscal 2004            |  | Activities During the year, we equipped, tied in
        and began producing from one natural gas well that was drilled in a prior
        year. All other production operations were maintained without significant
        capital expenditures.                                                                                                                                                                                         
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Fiscal 2005            |  | Outlook Tie-in of one well and recompletion of another
        is planned for early in Fiscal 2005.                                                                                                                                                                                                                                                                                                                                        

12

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|Cypress/Chowade,
      British Columbia |  | Cypress/Chowade is located in the foothills
        of northern British Columbia approximately 100 kilometers northwest of
        Fort St. John.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Geological Description                  |  | The area is prospective for multiple,
        natural gas-bearing Triassic Age and deep Mississippian Age carbonate
        reservoirs contained within classic foothill anticlines that trend northwest/southeast
        through the area.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Land Holdings                           |  | We have crown petroleum and natural
        gas leases over 19,911 net acres (56,675 gross) for a weighted average
        working interest of 35%. Of our total net acreage, 75% is undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Seismic                                 |  | Our seismic database contains a total
        of 440 kilometers of licensed, trade 2D seismic data, as well as a 100%
        working interest in 15 kilometers of 2D proprietary seismic data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Wells and Facilities                    |  | We have four producing and six standing
        natural gas wells. In the four producing wells, we own a 50% working interest.
        Our working interests in the six standing wells are: 50% in three wells;
        100% in one; 30% in one; and 20% in the remaining well. In four of the
        ten wells in which we own a 50% working interest, our interest converts
        to a 30% working interest after payout. In addition, we own approximately
        40% of an 8”, 19-kilometer sales line that crosses beneath the Halfway
        River and connects Cypress to the Sikanni Gas plant.
      We split delivery of our 2004 gas production to Cypress
        Gas Plant and Sikanni Gas Plant under separate third-party custom processing
        agreements.                                                                                                                                           
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Fiscal 2004                             |  | Activities We participated in drilling
        five wells and completed an untested zone in an existing wellbore. These
        wells targeted multi-zone, natural-gas bearing reservoirs of Triassic
        and Mississippian Ages. Our working interests in the wells were: one at
        100% working interest; three at 50%; and two at 30%. Of the five wells
        that were drilled, three were completed as potential natural gas wells
        and two were unsuccessful. We also participated in the construction of
        the 8”, 19-kilometer pipeline mentioned above. We also acquired
        4,394 net acres (11,544 gross).
      During Fiscal 2004, costs related to three wells that
        were drilled and completed in Fiscal 2003 because the wells could not
        be classified as having proved reserves. Our working interest in two of
        these wells was 30% and 50% in the other.
|                                        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Fiscal 2005 Outlook                     |  | We plan to participate, at a 30% working
        interest, in drilling two exploratory outpost wells and shoot 15 kilometers
        of 2D seismic. We also plan to have two of our six standing shut-in gas
        wells on stream in the first quarter of Fiscal 2005. The remaining two
        shut-in wells require further development in the area to meet threshold
        reserves necessary for tie-in.
      In addition, we have budgeted for our 30% share of the
        cost to add field compression. The current processing capacities of two
        gas plants in the area are expected to meet our processing needs in Fiscal
        2005. We will continue to monitor and evaluate land acquisition opportunities
        in the area.                                                                                                                                                                 

13

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|Orion,British Columbia |  | Orion is strategically located between the Sierra and
        Helmet natural gas fields approximately 56 kilometers west of the Alberta
        border and 112 kilometers south of the Northwest Territories border. The
        property is dissected by the Sierra Yoyo Desan Road, which provides year-round
        access for drilling operations.
      A large independent Canadian oil and gas company has
        referred to the regional Devonian Age Jean Marie carbonate reservoir in
        this area as “The Greater Sierra Gas Play” and has described
        the area as the largest gas play discovered in Western Canada. Orion is
        a part of this area and is a key element in our long-term growth strategy.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Geological Description |  | The area is prospective for natural gas exploration
        and development in Cretaceous Age Bluesky sandstone reservoirs and Mississippian
        and Devonian Age Debolt, Jean Marie and Slave Point formation carbonate
        reservoirs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Land Holdings          |  | We hold under lease 46,802 net acres (66,614 gross)
        for a weighted average working interest of 70%. Approximately 91% of our
        net holdings are undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Wells and Facilities   |  | We own a 15% gross overriding royalty interest (before
        payout of our initial capital expenditures) in one potential Jean Marie
        gas well and a 100% working interest in one potential Bluesky gas well.
        The gross overriding royalty interest will convert to a 50% working interest
        after payout. Both wells are standing and awaiting further evaluation
        and area development. We also own a 100% working interest in two other
        standing cased wells with potential value for purposes of side-track drilling
        or water disposal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                       |  | Two major pipeline systems terminate at the edge
        of our property. To the southwest, the Duke Energy Pipeline System connects
        to Fort Nelson for delivery to Washington State and to the northeast.
        The Duke Energy Field Services Pipeline System connects to Tooga Compressor
        Station for delivery to Alberta.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fiscal 2004 Activities |  | During the first quarter, we conducted a two-phase
        3D seismic program covering 90 square kilometers of the property. Interpretation
        of the seismic has identified several drillable targets on our land. During
        the third and fourth quarters, we drilled three wells targeting gas in
        the Bluesky and Jean Marie formations. Two of these wells were drilled
        at a 100% working interest and one well was drilled at a 50% working interest.
        One of the 100% wells has been production tested and cased as a potential
        gas well and the other two wells were unsuccessful.
      We drilled one well at 100% working interest, targeting
        gas in the Slave Point formation. The Slave Point well was cased and production
        tested but did not produce commercial quantities of gas. The well is a
        standing gas well with further sidetrack drilling potential.
      During Fiscal 2004, costs related to two wells that
        were drilled and completed in Fiscal 2003 were expensed due to unsuccessful
        efforts to develop proved reserves. Our working interest in these two
        these wells was 100%.
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Fiscal 2005 Outlook    |  | We plan to drill one development well in the first
        quarter, targeting gas in a producing Bluesky gas pool that directly offsets
        company-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

14

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|                           |  | owned lands. We also plan to drill one exploration
        well in the fourth quarter targeting gas in a similar, but separate, Bluesky
        structure. Both wells are planned at 100% working interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Mantario East,Saskatchewan |  | Mantario East is located 30 kilometers southwest
        of the Town of Kindersley and 30 kilometers east of the Alberta Border.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Geological Description     |  | The area is prospective for multiple Cretaceous,
        Mississippian and Devonian aged sandstone and carbonate reservoirs. Primary
        targets include natural gas-bearing Viking, Upper Mannville and Bakken
        formations and heavy-oil in the Basal Mannville and Birdbear formations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Land Holdings              |  | We hold under lease 7,502 net acres (12,603 gross)
        for a weighted average working interest of 60%. Approximately 81% of our
        net holdings are undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Wells and Facilities       |  | We have 11 heavy-oil wells at Mantario East - five
        are in production and six are standing awaiting tie-in. In three of the
        five producing wells, our ownership is a 100% working interest (before
        payout of our original capital expenditures), converting to a 75% working
        interest after payout. In the two producing and the six standing wells,
        we own a 75% working interest. At Sandgren, we own a 100% working interest
        before payout in one cased and standing gas well that converts to a 75%
        working interest after payout.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 2004 Activities     |  | We discovered a new pool of oil in the Basal Mannville
        at Mantario East. The oil is classified by regulation as Basal Mannville
        heavy-gravity crude. The nearest analogs to our heavy-oil discovery is
        located directly west of us on lands owned by others (non-owned) at Marengo,
        Mantario North, and Mantario East. The nearest pools on non-owned lands
        at Mantario East, have produced over three million barrels of heavy-oil
        from 36 wells in pool sizes of approximately 800 acres. On our lands at
        Mantario East, the number of pools and their sizes has not yet been determined.
      In total, we drilled 15 wells in the Mantario area during
        the third and fourth quarter of Fiscal 2004. Of these, five were earning
        wells drilled at 100% working interest under a farmout agreement and 10
        were non-earning wells drilled at 75% with an industry partner. The 15-well
        drilling program resulted in: five producing heavy crude oil wells, six
        cased and standing heavy crude oil wells; one cased and standing natural
        gas well; and three unsuccessful wells.
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|Fiscal 2005 Outlook        |  | We have budgeted to drill four exploration oil and/or
        natural gas wells and a 15-well in-fill drilling program targeting Basal
        Mannville oil, a gathering system and an oil battery facility in Fiscal
        2005. We also plan to equip and tie-in two of six standing oil wells in
        the first quarter of Fiscal 2005 and the remaining four in the second
        quarter. Funds have also been budgeted to acquire additional lands and
        seismic in the area.
      The gathering system and oil battery is a two-phase
        construction project. Phase I is scheduled for completion by April 1,
        2005 and will include tie-in of eight oil wells to a central oil battery
        facility capable of processing up to 1,500 barrels of oil per day. Phase
        II will include tie-in of remaining wells as they are drilled and will
        expand the oil                                                                                                                                                                                                                                                                         

15

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|                          |  | processing capacity of the battery to 2,500 barrels per day from an estimated
      25 wells.                                                                                                                                                                                                                                  
|------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |  |                                                                                                                                                                                                                                                                                                                                
|Other Non-Core Properties |  | Alberta properties include: Alexander; Stanmore; Westlock; Simonette;
      and Quirk Creek. Saskatchewan properties include: Elmore; and Rapdan. In
      total, these properties comprise 9,064 net acres (13,769 gross) with a weighted
      average working interest of 66%. Of our total net acreage, 71% is undeveloped.

Item 6.1(2) Oil and Gas Wells

The following table sets forth the number and status of wells
  in which we had a working interest as at December 31, 2004. The stated interests
  are subject to landowner’s and other royalties, where applicable, in addition
  to usual crown royalties and mineral taxes. All the following wells are located
  in the Western Provinces of Canada, as noted.

|                 | Producing | Non-Producing
|---------------- | --------- | -------------
|                 | Oil       | Natural Gas  
|                 | Gross (1) | Net(2)       
|Alberta          |           |              
|Alexander        | -         | -            
|St. Albert       | 6         | 4.5          
|Halkirk          | -         | -            
|Wimborne         | -         | -            
|Redwater         | -         | -            
|Stanmore         | -         | -            
|Westlock         | -         | -            
|Peavey/          |           |              
|Morinville       | -         | -            
|Simonette        | -         | -            
|Virgo            | -         | -            
|                 |           |              
|British Columbia |           |              
|Cypress/         |           |              
|Chowade          | -         | -            
|Orion            | -         | -            
|                 |           |              
|Saskatchewan     |           |              
|Mantario         |           |              
|East             | 9         | 7.5          
|Elmore           | -         | -            
|Rapdan           | 1         | 0.1          
|Flaxcombe        | -         | -            
|Sandgren         | -         | -            
|Total            | 16        | 12.1         

16

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Item 6.2 Undeveloped Properties Having No Attributed Reserves

|Wimborne, Alberta                |  | Wimborne is located in south-central Alberta approximately
        112 kilometers northeast of Calgary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Geological Description           |  | The area is prospective for multiple Cretaceous
        Age sandstone reservoirs containing natural gas and natural gas liquids.
        Additional potential exists for crude oil and natural gas within deeper
        Mississippian and Devonian Age carbonate reservoirs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Land Holdings                    |  | We own 7,755 net acres (9,675 gross) of petroleum
        and natural gas rights for a weighted average working interest of 80%.
        Of our total net holdings, 74% is undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Seismic                          |  | We own a licensed copy of a high quality, 3D seismic
        database covering 260 square kilometers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Wells and Facilities             |  | We own a 100% working interest in one standing gas
        well. The property is in close proximity to existing natural gas pipelines
        and processing facilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Fiscal 2004 Activities           |  | We participated at a 50% working interest in the
        drilling of two wells targeting gas in Cretaceous Age formations. Both
        wells were unsuccessful.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Fiscal 2005 Outlook              |  | Our large 3D seismic database has identified multiple
        undrilled exploration targets on our lands. While we have no drilling
        plans for Fiscal 2005, the area remains prospective for third-party farmout
        opportunities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Cypress/Chowade,British Columbia |  | Cypress/Chowade is located in the foothills of northern
        British Columbia approximately 100 kilometers northwest of Fort St. John.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Land Holdings                    |  | We have crown petroleum and natural gas leases over
        19,911 net acres (56,675 gross) for a weighted average working interest
        of 35%. Of our total net acreage, 75% is undeveloped.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Fiscal 2004 Activities           |  | We participated in drilling five wells and completed
        an untested zone in an existing wellbore. These wells targeted multi-zone,
        natural-gas bearing reservoirs of Triassic and Mississippian Ages. Our
        working interests in the wells were: one at 100% working interest; three
        at 50%; and two at 30%. Of the five wells that were drilled, three were
        completed as potential natural gas wells and two were unsuccessful. We
        also participated in the construction of the 8”, 19-kilometer pipeline
        mentioned above. We also acquired 4,394 net acres (11,544 gross).
      During Fiscal 2004, costs related to three wells that
        were drilled and completed in Fiscal 2003 were expensed due to unsuccessful
        efforts to develop proved reserves. Our working interest in two of these
        wells was 30% and 50% in the other.
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Fiscal 2005 Outlook              |  | We plan to participate, at a 30% working interest,
        in drilling two exploratory outpost wells and shoot 15 kilometers of 2D
        seismic. We also plan to have two of our four standing shut-in gas wells
        on stream in the first quarter of Fiscal 2005. The remaining two shut-in
        wells require further development in the area to meet threshold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

17

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|                                       |  | reserves necessary for tie-in.
      In addition, we have budgeted for our 30% share of the
        cost to add field compression. The current processing capacities of two
        gas plants in the area are expected to meet our processing needs in Fiscal
        2005. We will continue to monitor and evaluate land acquisition opportunities
        in the area.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Fraser Valley
      (Under Moratorium) |  | The property is located in the lower mainland area
        of southwestBritish Columbia near Vancouver.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Land Holdings                          |  | Under a joint venture agreement with Conoco Canada
        Limited, we continue to hold a weighted average working interest of 34%
        in approximately 18,278 net acres (54,502 gross) of undeveloped onshore
        and offshore petroleum and natural gas rights associated with Permit 802,
        a validated British Columbia Exploration Permit.
        Permit 802 is under provincial jurisdiction and includes offshore petroleum
        and natural gas rights in the Georgia Basin, located in the Strait of
        Georgia between the Lower Mainland and Vancouver Island.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Fiscal 2004 Activities                 |  | We were inactive in the Fraser Valley area during
        Fiscal 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Fiscal 2005 Outlook                    |  | Presently, areas offshore are subject to a restricted-access
        moratorium for petroleum and natural gas activities, however, discussions
        are underway between the Provincial and Federal Governments in regards
        to lifting the moratorium. The Provincial Government has indicated its
        desire to move forward and the Federal Government is currently conducting
        a public review to identify environmental and social concerns arising
        from offshore activities along the Pacific West Coast. A final decision
        on the matter is not expected in 2005.
      We have identified through analysis of our proprietary
        onshore 2D seismic data, a large structural feature approximately 19 square
        kilometersin size extending offshore. Government-owned gravity
        data supports our interpretations and refers to the feature as the Robert’s
        Bank Gravity Anomaly. The Geological Survey of Canada has assigned the
        Georgia Basin a reserve estimate of 6.5 trillion cubic feet of natural
        gas. A commercial quantity of gas is yet to be discovered in the area.
        We plan to be inactive in the Fraser Valley in 2005.

Item 6.3 Forward Contracts

We have no forward contracts as at December 31, 2004.

Item 6.4 Additional Information Concerning Abandonment and Reclamation Costs

The following table discloses the abandonment and reclamation
  costs of our anticipated costs at December 31, 2004, calculated on an undiscounted
  and a 10% discount rate with a portion thereof anticipated for settlement in
  each of the next three years. We currently anticipate incurring abandonment
  and reclamation costs in respect of 91.1 net wells.

18

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|($ 000s)            | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | Remainder | Total | Discounted
|------------------- | ---- | ---- | ---- | ---- | ---- | ---- | ---- | --------- | ----- | ----------
|                    |      |      |      |      |      |      |      |           |       | at 10%    
|Wells with reserves |      |      |      |      |      |      |      |           |       |           
|assigned            | 46   | 160  | 127  | 168  | 78   | 42   | 242  | 1,013     | 1,876 | 717       
|Wells with no       |      |      |      |      |      |      |      |           |       |           
|reserves assigned   | 83   | 153  | 133  | 142  | 132  | 25   | 111  | 962       | 1,741 | 677       
|                    |      |      |      |      |      |      |      |           |       |           
|Plants              | -    | -    | -    | -    | -    | -    | -    | 1,044     | 1,044 | 197       
|                    |      |      |      |      |      |      |      |           |       |           
|Total               | 129  | 313  | 260  | 310  | 210  | 67   | 353  | 3,019     | 4,661 | 1,591     

Item 6.5 Tax Horizon

We are not required to pay income taxes with respect to our Fiscal 2004.

Item 6.6 Costs Incurred

The following table summarizes the capital expenditures made by us on oil and natural gas properties for the fiscal year ended December 31, 2004.

|Property Acquisition Costs | Exploration Costs   | Development Costs
|-------------------------- | ------------------- | -----------------
|(M$)                       | (M$)                | (M$)             
|Proved Properties          | Unproved Properties |                  
|66                         | 4,088               | 18,488           

We own interests in certain properties located in the Western
  Provinces of Canada. For purposes of identification, discussion and differentiation,
  we have named them based on their location. They are as follows:

|                  |                  |                 | Southern     
|----------------- | ---------------- | --------------- | -------------
|Central Alberta   | British Columbia | Saskatchewan   
|St. Albert        | Westlock         | Cypress/Chowade | Mantario East
|Halkirk           | Simonette        | Orion           | Elmore       
|Peavey/Morinville | Wimborne         | Fraser Valley   | Rapdan       
|Alexander         | Quirk Creek      |                 | Flaxcombe    
|Stanmore          |                  |                 | Sandren      

Item 6.7 Exploration and Development Activities

The following table sets forth the number of exploratory and development wells which we completed during our 2004 financial year.

|                      | Exploratory Wells | Development Wells
|--------------------- | ----------------- | -----------------
|                      | Gross(1)          | Net (2)          
|Oil Wells             | 4                 | 4.0              
|Gas Wells             | 4                 | 4.0              
|Dry Holes             | 4                 | 2.5              
|Total Completed Wells | 12                | 10.5             

19

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Item 6.8 Production Estimates

The following table sets forth our estimated total production
  volumes for Fiscal 2005. Our fields at St. Albert and Mantario East are the
  only fields that individually meet or exceed 20% of our estimated total production.

|              | Light & Medium Oil | Heavy Oil | Natural Gas | Natural Gas Liquids
|------------- | ------------------ | --------- | ----------- | -------------------
|Total Proved  | (mbbl)             | (mbbl)    | (mmcf)      | (mbbl)             
|All Fields    | 54,000             | 311,000   | 3,989       | 168,000            
|St. Albert    | 54,000             | -         | 2,593       | 168,000            
|Mantario East | -                  | 311,000   | -           | -                  

Item 6.9 Production History

Item 6.9(1)The following table sets forth certain
  information in respect of production, product prices received, royalties,
  production costs and netbacks received by us for each quarter of our Fiscal
  2004.

|                             | Three Months   | Three Months  | Three Months   | Three Months 
|---------------------------- | -------------- | ------------- | -------------- | -------------
|                             | Ended          | Ended         | Ended          | Ended        
|                             | March 31, 2004 | June 30, 2004 | Sept. 30, 2004 | Dec. 31, 2004
|Average Daily Production     |                |               |                |              
|Light and Medium Oil (bbl/d) | 273            | 170           | 111            | 145          
|Heavy Oil (bbl/d)            | -              | -             | -              | 242          
|Natural Gas (mcf/d)          | 13,644         | 12,936        | 12,435         | 11,703       
|Natural Gas Liquids (bbl/d)  | 684            | 512           | 535            | 554          
|Average Net Prices           |                |               |                |              
|Received(1)                  |                |               |                |              
|Light and Medium Oil ($/bbl) | 49.57          | 40.70         | 55.02          | 57.14        
|Heavy Oil ($/bbl)            | -              | -             | -              | 21.07        
|Natural Gas ($/mcf)          | 6.90           | 6.87          | 6.51           | 6.70         
|Natural Gas Liquids ($/bbl)  | 28.25          | 26.02         | 32.85          | 33.35        
|Royalties                    |                |               |                |              
|Light and Medium Oil ($/bbl) | 8.27           | 10.84         | 11.32          | 14.45        
|Heavy Oil ($/bbl)            | -              | -             | -              | 4.79         
|Natural Gas ($/mcf)          | 1.66           | 1.70          | 1.64           | 1.34         
|Natural Gas Liquids ($/bbl)  | 3.79           | 3.74          | 4.96           | 3.93         
|Production Costs             |                |               |                |              
|Light and Medium Oil ($/bbl) | 5.87           | 11.21         | 28.14          | 14.07        
|Heavy Oil ($/bbl)            | -              | -             | -              | 3.25         
|Natural Gas ($/mcf)          | ..99           | 1.37          | 1.40           | 1.76         
|Natural Gas Liquids ($/bbl)  | 7.26           | 8.12          | 8.89           | 9.42         
|Netback Received             |                |               |                |              
|Light and Medium Oil ($/bbl) | 35.43          | 18.65         | 15.56          | 28.62        
|Heavy Oil ($/bbl)            | -              | -             | -              | 13.03        
|Natural Gas ($/mcf)          | 4.25           | 3.80          | 3.47           | 3.60         
|Natural Gas Liquids ($/bbl)  | 17.20          | 14.16         | 19.00          | 19.99        

20

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Item 6.9(2)The following table shows our total production before royalties during Fiscal 2004 from our core property, St. Albert.

|             | Light & Medium Oil | Heavy Oil | Natural Gas | Natural Gas Liquids
|------------ | ------------------ | --------- | ----------- | -------------------
|Total Proved | (mbbl)             | (mbbl)    | (mmcf)      | (mbbl)             
|St. Albert   | 64                 | -         | 2,779       | 208                



21

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Form 51-101F2

REPORT ON RESERVES DATA BY INDEPENDENT 
  QUALIFIED RESERVES EVALUATOR OR AUDITOR

Report on Reserves Data

To the Board of Directors of Dynamic Oil & Gas Inc. (the “Company”):

|1. | We have evaluated the Company’s Reserves Data as at December 31,
      2004. The reserves data consist of the following:
|-- | ------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                         

| | (a)(i) | proved and proved plus probable oil and gas reserves
        estimated as at December 31, 2004 using forecast prices and costs; and
| | ------ | -----------------------------------------------------------------------------------------------------------------------------------
| |        |                                                                                                                                    
| | (ii)   | the related estimated future net revenue; and                                                                                      
| |        |                                                                                                                                    
| | (b)(i) | proved oil and gas reserve quantities were estimated
        as at December 31, 2004 using constant prices and costs; and          
| |        |                                                                                                                                    
| | (ii)   | the related estimated future net revenue.                                                                                          
| |        |                                                                                                                                    

|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.                                                                                                                                                                                   

22

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|4. | The following table sets forth the estimated future net revenue attributed
      to proved plus probable reserves, estimated using forecast prices and costs
      on a before tax basis and calculated using a discount rate of 10%, included
      in the reserves data of the Company evaluated by us as of December 31, 2004,
      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  |                         |             | Net Present Value of Future Net Revenue
| | ------------ | ----------------------- | ----------- | ---------------------------------------
| | Qualified    |                         |             | (10% Discount Rate)                    
| | Reserves     | Description             | Location of |                                        
| | Evaluator or | and Preparation Date    | Reserves    | Audited                                
| | Auditor      | of Evaluation Report    | (Country)   | (M$)                                   
| | Sproule      | Evaluation of the P&NG  | Canada      |                                        
| |              | Reserves of Dynamic Oil |             |                                        
| |              | & Gas Inc., as of       |             |                                        
| |              | December 31, 2004       |             |                                        
| |              | prepared December       |             |                                        
| |              | 2004 to January 2005    |             |                                        
| | 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.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                      
|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 
  Calgary, Alberta
  February 4, 2005

“Cameron P. Six”
  Cameron P. Six, P.Eng. 
  Senior Petroleum Engineer

“Michael Maughan”
  Michael W. Maughan, C.P.G., P.Geol. 
  Manager, Geoscience, & Associate

“Robert N. Johnson”
  Robert N. Johnson, P.Eng. 
  Manager, Engineering, 
  And Corporate Secretary

23

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Form 51-101F3

REPORT OF MANAGEMENT AND DIRECTORS 
  ON OIL AND GAS DISCLOSURE

This is the form referred to in item 3 of section 2.1 ofNational Instrument 51-101

Standards of Disclosure for Oil and Gas Activities(“NI
  51-101”). This form does not apply in British Columbia

|1. | Terms to which a meaning is ascribed in NI 51-101 have the same
      meaning in this form. {1}                 
|-- | ----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                 
|2. | The report referred to in item 3 of section 2.1 of NI 51-101 shall
      in all material respects be as follows:

Report of Management and Directors 
  On Reserves Data and Other Information

Management of Dynamic Oil & Gas, Inc. (the “Company”)
  are responsible for the preparation and disclosure of information with respect
  to the Company’s oil and gas activities in accordance with securities
  regulatory requirements. This information includes reserves data, which consist
  of the following:

| | a) | proved and proved plus probable oil and gas reserves estimated as at December
      31, 2004 using forecast prices and costs;
| | -- | -----------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                              
| | b) | the related estimated future net revenue;                                                                                    
| |    |                                                                                                                              
| | c) | proved oil and gas reserves estimated as at December 31, 2004 using constant
      prices and costs; and                     
| |    |                                                                                                                              
| | d) | the related estimated future net revenue.                                                                                    

Sproule Associates Limited, an independent qualified reserves
  evaluator, has evaluated the Company’s reserves data. The report of Sproule
  Associates Limited is presented above on Form 51-101F2.

The Reserves Audit Committee of the Board of Directors of
  the Company has:

| | a) | reviewed the Company’s procedures for providing
        information to Sproule Associates Limited;                                                                             
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                
| | b) | met with Sproule Associates Limited to determine
        whether any restrictions affected the ability of Sproule Associates Limited
        to report without reservation; and
| |    |                                                                                                                                                                                
| | c) | reviewed the reserves data with Management and Sproule
        Associates Limited.                                                                                             

The Reserves Audit Committee of the Board of Directors has
  reviewed the Company’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 Reserves
  Audit Committee, approved:

24

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| | a) | the content and filing with securities regulatory authorities of the
      reserves data and other oil and gas information;
| | -- | ---------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                            
| | b) | the filing of the report of Sproule Associates Limited on the reserves
      data; and                                     
| |    |                                                                                                                            
| | c) | the content and filing of this report.                                                                                     

The reserves data are based on judgements regarding future
  events. Actual results may vary and the variations may be material.

“Wayne J. Babcock”

________________________________
  Wayne J. Babcock President & Chief Executive Officer

“Michael A. Bardell”

________________________________
  Michael A. BardellChief Financial Officer & Corporate Secretary

“William B. Thompson”

________________________________
  William B. ThompsonDirector

“John Lagadin”

________________________________
  John LagadinDirector

25

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