---

Exhibit 14



REPORT OF

MANAGEMENT AND DIRECTORS

ON OIL AND GAS DISCLOSURE

Form 51-101

---

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                        | 6-7  
|                  |       |                                                                  |      
|Item 2.3          |       | Reserves Disclosure Varies with Accounting                       | 7    
|                  |       |                                                                  |      
|Item 2.4          |       | Future Net Reserves Disclosure Varies with Accounting            | 7    
|                  |       |                                                                  |      
|Item 3.1          |       | Constant Prices Used in Estimates                                | 8    
|                  |       |                                                                  |      
|Item 3.2          |       | Forecast Prices Used in Estimates                                | 8    
|                  |       |                                                                  |      
|Item 4.1          |       | Reserves Reconciliation                                          | 9    
|                  |       |                                                                  |      
|Item 4.2          |       | Future Net Revenue Reconciliation                                | 10   
|                  |       |                                                                  |      
|Item 5.1          |       | Undeveloped Reserves                                             | 10-11
|                  |       |                                                                  |      
|Item 5.2          |       | Significant Factors and Uncertainties                            | 11   
|                  |       |                                                                  |      
|Item 5.3          |       | Future Development Costs                                         | 11   
|                  |       |                                                                  |      
|Item 6.1          |       | Oil and Gas Properties and Wells                                 | 12-14
|                  |       |                                                                  |      
|Item 6.2          |       | Undeveloped Properties Having No Attributed Reserves             | 14-16
|                  |       |                                                                  |      
|Item 6.3          |       | Forward Contracts                                                | 17   
|                  |       |                                                                  |      
|Item 6.4          |       | Additional Information - Abandonment and Reclamation
      Costs | 17   
|                  |       |                                                                  |      
|Item 6.5          |       | Tax Horizon                                                      | 17   
|                  |       |                                                                  |      
|Item 6.6          |       | Costs Incurred                                                   | 17   
|                  |       |                                                                  |      
|Item 6.7          |       | Exploration and Development Activities                           | 18   
|                  |       |                                                                  |      
|Item 6.8          |       | Production Estimates                                             | 18   
|                  |       |                                                                  |      
|Item 6.9          |       | Production History                                               | 19   
|                  |       |                                                                  |      
|Form 51-101F2     | 20-21
|                  |       |                                                                  |      
|Form 51-101F3     | 22-23

---

|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 produciton,
        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

---

Form 51-101F1

STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION OF 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 and crude oil. Sproule Associates Limited (Sproule),
  independent qualified evaluators of Calgary, Alberta evaluated these reserves
  effective January 1, 2004. We used these reserves in the preparation of our
  Financial Statements for the fiscal year ended December 31, 2003.

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 component and reserve category using forecast prices
  and costs, constant prices and costs, on our Working Interest, Gross and Net
  Reserves basis (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

---

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.
|----------- | -----------------------------------------------------------------------------------------------------------------

|Summary of Reserves                |           
|---------------------------------- | ----------
|Based on Constant Prices and Costs |           
|                                   | Light and 
|                                   | Medium Oil
|                                   |           
|                                   | Gross     
|Reserve Category                   | (mbbl)    
|Proved                             |           
|Developed producing                | 261.1     
|Developed non-                     |           
|producing                          | 78.6      
|Undeveloped                        | 158.3     
|Total proved                       | 498.0     
|Probable                           | 295.5     
|Total proved plus                  |           
|probable                           | 793.5     

|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.
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Summary of Net Present Values of Future Net Revenue |                      |  |                      |  |         |  |        |  
|--------------------------------------------------- | -------------------- |  | -------------------- |  | ------- |  | ------ | -
|Based on Constant Prices and Costs                  |                      |  |                      |  |         |  |        |  
|($000s)                                            | Before Income Taxes  |  | After Income Taxes   | 
|                                                    | Annual Discount Rate |  | Annual Discount Rate | 
|Reserve Category                                    | 0%                   |  | 10%                  |  | 0%      |  | 10%    |  
|Proved                                              |                      |  |                      |  |         |  |        |  
|Developed producing                                 | 99,917               |  | 72,958               |  | 80,156  |  | 57,511 |  
|Developed non-producing                             | 4,684                |  | 2,756                |  | 728     |  | (486   | )
|Undeveloped                                         | 16,445               |  | 12,229               |  | 10,139  |  | 7,373  |  
|Total proved                                        | 121,046              |  | 87,943               |  | 91,023  |  | 64,397 |  
|Probable                                            | 76,545               |  | 42,693               |  | 48,215  |  | 26,052 |  
|Total proved plus probable                          | 197,591              |  | 130,636              |  | 139,238 |  | 90,449 |  

4

---

|Item 2.1(3)(a) and (b) | 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, 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      |  | 208,888 |  | 42,668    |  | 34,886    |  | 9,163       |  | 1,125       |  | 121,046       |  | 30,023 |  | 91,605        | 
|Proved plus |  |         |  |           |  |           |  |             |  |             |  |               |  |        |  |               | 
|probable    |  | 347,212 |  | 72,569    |  | 58,810    |  | 16,874      |  | 1,368       |  | 197,591       |  | 58,353 |  | 139,238       | 

|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.
|-------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Future Net Revenue by Production
      Group |                                |                                  
|-------------------------------------------- | ------------------------------ | ---------------------------------
|Based on Constant Prices and
      Costs     |                                |                                  
|($000s)                                     |                                | Future Net Revenue Before Income 
|Reserves Category                            | Production Group               | Taxes  Discounted Annually @ 10%
|Proved reserves                              | Light and medium crude oil (1) | 9,866                            
|                                             | Heavy oil (1)                  | 60                               
|                                             | Natural gas (2)                | 76,677                           
|Proved plus probable                         | Light and medium crude oil (1) | 14,461                           
|                                             | Heavy oil (1)                  | 68                               
|                                             | Natural gas (2)                | 114,415                          

|(1) | Includes solution gas and other by-products.                           
|--- | -----------------------------------------------------------------------
|(2) | Includes by-products but excluding solution
        gas from oil wells.

5

---

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.
|----------- | ---------------------------------------------------------------------------------------------------------------

|Summary of Reserves                |            |  |          |  |                 |  |         |  |        |  |             |  |        
|---------------------------------- | ---------- |  | -------- |  | --------------- |  | ------- |  | ------ |  | ----------- |  | -------
|Based on Forecast Prices and Costs |            |  |          |  |                 |  |         |  |        |  |             |  |        
|                                   | Light and  |  |          |  |                 |  |         |  |        |  | Natural Gas | 
|                                   | Medium Oil |  | HeavyOil |  | Natural Gas (1) |  | Liquids | 
|                                   | Gross      |  | Net      |  | Gross           |  | Net     |  | Gross  |  | Net         |  | Gross  
|Reserve Category                   | (mbbl)     |  | (mbbl)   |  | (mbbl)          |  | (mbbl)  |  | (mmcf) |  | (mmcf)      |  | (mbbl) 
|Proved                             |            |  |          |  |                 |  |         |  |        |  |             |  |        
|Developed producing                | 261.1      |  | 215.1    |  | 4.5             |  | 3.9     |  | 18,249 |  | 14,959      |  | 962.0  
|Developed non-                     |            |  |          |  |                 |  |         |  |        |  |             |  |        
|producing                          | 78.6       |  | 56.1     |  | -               |  | -       |  | 2,710  |  | 1,856       |  | 4.9    
|Undeveloped                        | 158.3      |  | 137.7    |  | -               |  | -       |  | 3,691  |  | 2,768       |  | 20.2   
|Total proved                       | 498.0      |  | 408.9    |  | 4.5             |  | 3.9     |  | 24,650 |  | 19,584      |  | 987.2  
|probable                           | 295.3      |  | 246.0    |  | 1.5             |  | 1.2     |  | 17,508 |  | 13,627      |  | 405.9  
|Total proved plus                  |            |  |          |  |                 |  |         |  |        |  |             |  |        
|probable                           | 793.3      |  | 654.8    |  | 6.0             |  | 5.1     |  | 42,158 |  | 33,211      |  | 1,393.1

|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.
|----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|($000s)      | Before Income Taxes  |  | After Income Taxes   | 
|------------- | -------------------- |  | -------------------- | 
|Reserve       | Annual Discount Rate |  | Annual Discount Rate | 
|Category      | 0%                   |  | 5%                   | 
|Proved        |                      |  |                      | 
|Developed     | 72,899               |  | 61,982               | 
|producing     |                      |  |                      | 
|Developed     |                      |  |                      | 
|non-producing | 1,736                |  | 1,047                | 
|Undeveloped   | 11,294               |  | 9,669                | 
|Total proved  | 85,929               |  | 72,698               | 
|probable      | 51,246               |  | 36,698               | 
|Total proved  |                      |  |                      | 
|plus probable | 137,176              |  | 109,397              | 

6

---

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

|($000s) |  |         |  |           |  |           |  |             |  |             |  | Future Net    |  |        |  |                    | 
|-------- |  | ------- |  | --------- |  | --------- |  | ----------- |  | ----------- |  | ------------- |  | ------ |  | ------------------ | 
|         |  |         |  |           |  |           |  |             |  | Well        |  | Revenue       |  |        |  |                    | 
|Reserve  |  |         |  |           |  | Operating |  | Development |  | Abandonment |  | Before Income |  | Income |  | Future Net Revenue | 
|Category |  | Revenue |  | Royalties |  | Costs     |  | Costs       |  | Costs       |  | Taxes         |  | Taxes  |  | After Income Taxes | 
|Proved   |  | 166,386 |  | 32,876    |  | 37,134    |  | 9,188       |  | 1,259       |  | 85,929        |  | 17,918 |  | 68,011             | 
|Proved   |  |         |  |           |  |           |  |             |  |             |  |               |  |        |  |                    | 
|plus     |  |         |  |           |  |           |  |             |  |             |  |               |  |        |  |                    | 
|probable |  | 275,063 |  | 55,223    |  | 64,088    |  | 16,931      |  | 1,645       |  | 137,176       |  | 35,454 |  | 101,722            | 

|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%.
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Future Net Revenue by Production Group |                                |                                  
|-------------------------------------- | ------------------------------ | ---------------------------------
|Based on Forecast Prices and Costs     |                                |                                  
|($000s)                               |                                | Future Net Revenue Before Income 
|Reserves Category                      | Production Group               | Taxes  Discounted Annually @ 10%
|Proved reserves                        | Light and medium crude oil (1) | 7,820                            
|                                       | Heavy oil (1)                  | 48                               
|                                       | Natural gas (2)                | 54,204                           
|Proved plus probable                   | Light and medium crude oil (1) | 11,205                           
|                                       | Heavy oil (1)                  | 55                               
|                                       | Natural gas (2)                | 78,360                           

|(1) | Includes solution gas and other by-products.                         
|--- | ---------------------------------------------------------------------
|(2) | Includes by-products but excluding solution gas from oil
      wells.

|Item 2.3 Reserves Disclosure Varies with Accounting                 
|--------------------------------------------------------------------
|                                                                    
|                                                                    
|                                                                    
|Item 2.4 Future Net Reserves Disclosure Varies
      with Accounting
|                                                                    
|                                                                    

7

---

|Item 3.1 Constant Prices Used in Estimates
|------------------------------------------
|                                          
|                                          

|Summary of Pricing Assumptions     |            |               
|---------------------------------- | ---------- | --------------
|Based on Constant Prices and Costs |            |               
|Oil                                |            | Natural Gas   
|                                   |            |               
|Edmonton Par Price                 | Heavy Oil  | Alberta AECO-C
|($Cdn/stb)                         | ($Cdn/stb) | ($Cdn/mmcf)   
|39.69                              | 39.69      | 6.18          

|Item 3.2 Forecast Prices Used in Estimates
|------------------------------------------
|                                          
|                                          

|               |  | Oil                      |  | Natural Gas Liquids
      and Sulphur | 
|-------------- |  | ------------------------ |  | ------------------------------------- | 
|               |  |                          |  |                                       | 
|               |  | WTI                      |  | Edmonton                              | 
|               |  | Cushing                  |  | Par Price                             | 
|Year           |  | Oklahoma                 |  | 40oAPI                                | 
|Historical (4) |  | ($US/bbl)                |  | ($Cdn/bbl)                            | 
|2000           |  | 30.30                    |  | 44.03                                 | 
|2001           |  | 25.94                    |  | 39.06                                 | 
|2002           |  | 26.09                    |  | 40.12                                 | 
|2003           |  |                          |  |                                       | 
|(Year End)     |  | 31.13                    |  | 43.21                                 | 
|Forecast       |  |                          |  |                                       | 
|2004           |  | 29.63                    |  | 37.99                                 | 
|2005           |  | 26.80                    |  | 34.24                                 | 
|2006           |  | 25.76                    |  | 32.87                                 | 
|2007           |  | 26.14                    |  | 33.37                                 | 
|2008           |  | 26.53                    |  | 33.87                                 | 
|Thereafter     |  | Various Escalation Rates | 

|(1) | This Summary table identifies benchmark
        reference pricing schedules that might apply to a reporting issuer.                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Inflation rates for forecasting prices
        and costs.                                                                                                                                        
|(3) | Exchange rates used to generate the
        benchmark reference prices in this table.                                                                                                            
|(4) | Item 3.2(1)(b) of Form 51-101F1 also
        requires disclosure of the reporting issuers weighted average historical
        prices for the most recent financial year (2003, in this example).

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

8

---

|Item 4.1 Reserves Reconciliation
|--------------------------------
|                                
|Item 4.1(1)                     

Reconciliation of Company Interest Net Reserves (after Royalties)
  Based on Constant Prices and Costs

|                    | Light and Medium Oil |  | Heavy Oil |  | Natural Gas |  | Natural Gas Liquids | 
|------------------- | -------------------- |  | --------- |  | ----------- |  | ------------------- | 
|                    |                      |  |           |  | Net Proved  |  |                     | 
|                    | Net                  |  | Net       |  | plus        |  | Net                 | 
|                    | Proved               |  | Probable  |  | Probable    |  | Proved              | 
|                    | (mbbl)               |  | (mbbl)    |  | (mbbl)      |  | (mbbl)              | 
|                    |                      |  |           |  |             |  |                     | 
|January 1, 2003     | 996.8                |  | 673.2(1)  |  | 1,670.0(2)  |  | 2.2                 | 
|                    |                      |  |           |  |             |  |                     | 
|Extensions          | 83.6                 |  | 8.2       |  | 91.8        |  | -                   | 
|                    |                      |  |           |  |             |  |                     | 
|Technical Revisions | (490.8)              |  | (436.6)   |  | (927.5)     |  | 2.0                 | 
|                    |                      |  |           |  |             |  |                     | 
|Discoveries         | -                    |  | -         |  | -           |  | -                   | 
|                    |                      |  |           |  |             |  |                     | 
|Production          | (182.4)              |  | -         |  | (182.4)     |  | (0.3)               | 
|                    |                      |  |           |  |             |  |                     | 
|January 1, 2004     | 407.2                |  | 244.8     |  | 652.0       |  | 3.9                 | 

|(1) | Amount equals 50% of Probable reserves
        reported in our January 1, 2003 reserves report.                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Proved plus Probable figures for January
        1, 2003 represent Proved plus 50% Probable (Established) reserves from
        our January 1, 2003 reserves report.

9

---

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 January 1, 2004
  compared to such reserves as at January 1, 2003, using constant prices and costs.

|                                                                                        | 2003    |  
|--------------------------------------------------------------------------------------- | ------- | -
|Period and Factor                                                                       | ($M)    |  
|Estimated Future Net Revenue after tax at Beginning of Year
      (1)                   | 77,087  |  
|Sales and Transfers of Oil & Gas Produced. Net of Production
      Costs and Royalties  | (27,499 | )
|Net Change in Prices, Production Costs and Royalties Related
      to Future Production | 9,747   |  
|Changes in Previously Estimated Development Costs Incurred
      During the Period      | 15,560  |  
|Changes in Estimated Future Development Costs                                           | (1,802  | )
|Extensions and Improved Recovery                                                        | 1,639   |  
|Discoveries                                                                             | 3,016   |  
|Net Change Resulting from Revisions in Quantity Estimates                               | (28,660 | )
|Accretion of Discount                                                                   | 8,610   |  
|Net Change in Income Taxes                                                              | 5,217   |  
|Miscellaneous Changes                                                                   | 1,483   |  
|Estimated Future Net Revenue at End
      of Year                                       | 64,397  |  

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.
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------

|Proved Undeveloped Reserves by Year |                      |          
|----------------------------------- | -------------------- | ---------
|                                    | Light and Medium Oil | Heavy Oil
|Period                              | (mbbl)               | (mbbl)   
|2002                                | 737                  | -        
|2003                                | 158                  | -        

Of our total proved reserves in 2003, only 14% 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 has already been completed
  in the first quarter of 2004 and the remaining projects are expected for completion
  by the end of 2004. One of the projects is not scheduled for completion until
  the currently-producing zone is depleted.

10

---

|Item 5.1(2) | Probable Undeveloped Reserve**s**
|----------- | ---------------------------------

Of our total probable reserves in 2003, only 49% are classified
  as undeveloped. These probable undeveloped reserves relate to drilling projects
  at Cypress, BC and St. Albert, AB. All of these projects are scheduled for completion
  in 2004.

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 changes. 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
  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
      Proven Plus Probable | 
|($000s)                 |  | Estimated Using           |  | Estimated Using           |  | Estimated Using                  | 
|Period                   |  | Constant Prices and Costs |  | Forecast Prices and Costs |  | Forecast Prices and Costs        | 
|2004                     |  | 8,868                     |  | 8,868                     |  | 16,092                           | 
|2005                     |  | 0                         |  | 0                         |  | 305                              | 
|2006                     |  | 0                         |  | 0                         |  | 0                                | 
|2007                     |  | 45                        |  | 47                        |  | 47                               | 
|2008                     |  | 0                         |  | 0                         |  | 0                                | 
|Total for all years      |  |                           |  |                           |  |                                  | 
|-
      undiscounted     |  | 9,163                     |  | 9,188                     |  | 16,931                           | 
|- 10%
      discounted   |  | 8,588                     |  | 8,602                     |  | 15,788                           | 

The future development costs are capital expenditures required
  in the future for us to convert proved undeveloped reserves and probable reserves
  in proved development 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 its capital expenditure program.
  When financing corporate acquisitions, we may also assume certain future liabilities.

11

---

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 Devonian-Age reef structures, which are associated with 16, separate
        Cretaceous-Age natural gas and Devonian-Age crude oil pools stacked in
        seven productive formations, four are natural gas and three crude oil.
        For purposes of project identification, we refer to these structures as
        the north pool and the south pool. Historically,
        the property has produced in excess of 22.5 million barrels of crude oil
        and 109 billion cubic feet of raw natural gas from both pools. They continue
        to remain prospective for recoverable oil from six established Devonian-Age
        pools in the Leduc D-3, Nisku D-2 and Wabamun D-1 formations.
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Land Holdings                    |  | We hold 9,210 net acres
        (13,750 gross) of various crown and freehold petroleum and natural gas
        leases for a weighted average working interest of 67%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Seismic                          |  | We own a 37.5% working
        interest in a proprietary 3D seismic database covering 12 square kilometers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Wells and Facilities             |  | We own a 75% working interest
        in 17 producing gas wells; from a 44% to 77% working interest in another
        four; and a 75% working interest in seven producing oil wells. In addition,
        we own a 75% working interest in one oil battery, one solution gas plant,
        one sour gas compressor, two sweet gas compressors and a 13 kilometer,
        6 sour gas pipeline.                                                                                                                                                                                                                                                                                                                                                       
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Fiscal 2003 Activities           |  | In the south pool, we drilled
        three wells targeting remaining Devonian-Age oil reserves. Two of these
        wells encountered oil pay in the Leduc formation and one well, while unsuccessful
        in the Leduc formation, was later completed as a Nisku formation oil well.
        In the north pool, we drilled one well also targeting remaining Devonian-Age
        oil reserves. While the well was unsuccessful in the Leduc formation,
        it was later completed as a Nisku formation oil well.                                                                                                                                                                                                                             
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                 |  | We drilled two successful
        wells targeting remaining natural gas in the Ostracod formation. We were
        able to minimize surface and environmental impacts by re-entering existing
        well bores in all of our drilling activity. We addressed declining reservoir
        pressures in various sweet gas pools by adding third-party owned compression
        at the nearby Villeneuve and Carbondale gas plants.                                                                                                                                                                                                                                                                                                                     
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|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 sandstone and carbonate reservoirs
        and deep Mississippian carbonate reservoirs contained within classic foothill
        anticlines that trend northwest-southeast through the area.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

12

---

|Land Holdings                                     |  | We have crown petroleum
        and natural gas leases over 15,517 net acres (45,130 gross) for a weighted
        average working interest of 34%. Of our total net acreage, 83% is undeveloped.                                                                                                                                                                                                                                                                                                                                 
|------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Seismic                                           |  | We own a licensed copy
        of a large 2D seismic database and a 100% working interest in 15 kilometers
        of 2D proprietary seismic data.                                                                                                                                                                                                                                                                                                                                                                                
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Wells and Facilities                              |  | We own between 30% - 50%
        working interests in two producing gas wells and six standing shut-in
        gas wells, which are currently producing. In five of these eight wells,
        our interest converts from 50% working interest to 30% working interest
        at payout. All of our fiscal 2003 gas production was processed at Cypress
        Gas Plant under a third-party custom processing agreement. A major expansion
        of pipeline and processing facilities is required to develop this area.     
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Fiscal 2003 Activities                            |  | We participated in drilling
        two successful exploration wells targeting multi-zone natural-gas bearing
        reservoirs of Triassic age. We also participated in one exploration well
        to test and evaluate the Mississippian-Age Debolt formation. While the
        well was unsuccessful in the Debolt formation, it was cased as a potential
        gas well in two Triassic-Age formations. We acquired 9,356 net acres (28,350
        gross), equipped four wells for tie-in and added a field compressor.
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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%.                                                                                                                                                                                                                                                                                                                                                                       
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Wells and Facilities                              |  | We own a 100% working interest
        in five producing and two standing natural gas wells. We also own an 80%
        before-payout working interest and a 48% after- payout working interest
        in three producing gas wells. All of our natural gas production is processed
        at the Maple Glen Gas Plant under a third-party custom processing agreement.                                                                                                                                                         
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Fiscal 2003 Activities                            |  | We drilled one successful
        infill Viking gas well and one unsuccessful step-out well. A step-out
        well is a well drilled near a proven well, but located in an unproven
        area to determine the boundaries of the producing formation. We acquired
        320 net acres (100%) of new petroleum and natural gas rights.                                                                                                                                                                                    
|                                                  |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Other Non-Core PropertiesAlberta and Saskatchewan |  | Peavey/Morinville, Quirk
        Creek, Alexander, Simonette, Stanmore, and Westlock in Alberta and Elmore
        and Rapdan in Saskatchewan comprise 16,916 net acres (24,980 gross) with
        a weighted average working interest of 68%.                                                                                                                                                                                                                                                                                   

13

---

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 January 1, 2004. The stated interests
  are subject to land owner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.

|                 | Producing | Non-Producing    
|---------------- | --------- | -----------------
|                 | Oil       | Natural
      Gas
|                 | Gross (1) | Net
      (2)    
|Alberta          |           |                  
|Alexander        |           |                  
|St. Albert       | 7         | 5.3              
|Halkirk          |           |                  
|Legal            |           |                  
|Westlock         |           |                  
|Peavey           |           |                  
|Simonette        |           |                  
|British Columbia |           |                  
|Cypress          |           |                  
|Orion            |           |                  
|Saskatchewan     |           |                  
|Elmore           | 3         | 0.2              
|Rapdan           | 1         | 0.1              
|Total            | 11        | 5.6              

|(1) | Gross wells are defined
        as the total number of wells in which we have an interest.                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Net wells are defined as
        the aggregate of the numbers obtained by multiplying each gross well by
        our percentage working interest therein.

Item 6.2 Undeveloped Properties Having No Attributed Reserves

The following table sets forth the number and status of wells
  in which we had a working interest as at January 1, 2004. The stated interests
  are subject to land owner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.

|Wimborne, Alberta      |  | Wimborne is located in
        the plains region of south-central Alberta, approximately 144 kilometers
        northwest of Calgary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Fiscal 2004 Activities |  | We have budgeted three
        exploration gas wells, scheduled for drilling in the third quarter of
        2004. Our estimated resource potential of each well is eight bcf with
        approximate production rates ranging from four  six mmcf/d. Each
        well is budgeted at a 30% working interest. We are prospecting for Cretaceous
        Age sandstone reservoirs in a complex, fluvial environment using an extensive
        database of 3D seismic. Each well is targeting a separate and distinct
        seismic anomaly. One of these seismic anomalies is analogous to a multi-well
        producing gas pool approximately ten kilometers away.
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                       |  | The area is accessible
        year round and is in close proximity to third-party transportation and
        processing facilities. If successful, we expect tie-in to occur late in
        2004, subject to regulatory approvals and negotiation of third-party agreements.                                                                                                                                                                                                                                                                                                                                                                                            

14

---

|Cypress/Chowade,British Columbia |  | Cypress/Chowade is located
        in the foothills of northern British Columbia approximately 100 kilometers
        northwest of Fort St. John.                                                                                                                                                                                                                                                                                                                                            
|-------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Fiscal 2004 Activities           |  | We have budgeted three,
        exploration multi-zone outpost gas wells, scheduled for drilling in the
        second and third quarters of 2004. Based on nearby wells, our estimated
        resource potential of each of our wells ranges between three and five
        bcf per zone, and approximate production rates range between one 
        five mmcf/d per zone. Each well is budgeted at a 30% working interest.                                                              
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                 |  | During 2003, we participated
        in nine wells resulting in eight gas wells and one unsuccessful well,
        for an overall drilling success rate of 89%. Our 2004 wells are targeting
        multi-zone, natural gas-bearing Triassic Age sandstone and carbonate reservoirs.
        Our locations have been selected by correlating 2D seismic data and drilling
        results.                                                                                                  
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Orion,British Columbia           |  | Orion is strategically
        located between the Sierra and Helmut natural gas fiels 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 carbonate reservoirs.                                                                                                                                                                                                                                                       
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Land Holdings                    |  | We hold under lease 46,469
        net acres (66,614 gross) for a weighted average working interest of 70%.
        Approximately 97% of our net holdings are undeveloped.                                                                                                                                                                                                                                                                                                                   
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Wells and Facilities             |  | The property presently
        has three potential gas wells, one Bluesky formation and two Devonian
        Age Jean Marie horizontal wells. All three wells are standing awaiting
        further evaluation. We own a 100% working interest in the Bluesky formation
        and one Devonian Age Jean Marie formation well, a 15% gross overriding
        royalty (before payout) and a 50% working interest (after payout) in the
        other Devonian Age Jean Marie formation well.
|                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                 |  | 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 2003 Activities           |  | We drilled one horizontal
        well at 100% working interest to test the Devonian Age Jean Marie formation.
        The well tested gas at rates below commercial quantities and is being
        retained as a potential gas well pending further evaluation.                                                                                                                                                                                                                            

15

---

|Fiscal 2004 Activities          |  | We have budgeted two 100%
        exploration gas wells, scheduled for drilling in the third quarter of
        2004. One is drilling for a Slave Point target and the other a Bluesky
        formation target.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  | Based on information available
        to us on an offset Slave Point formation producing well, we estimate our
        Slave Point well could encounter an estimated pool size of 25 bcf and
        produce between five  ten mmcf/d. Similar information on several
        producing offset Bluesky formation wells suggests we could reasonably
        expect our Bluesky formation well to encounter an estimated pool size
        of 12 bcf and produce between one  three mmcf/d per well.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  | The proposed Slave Point
        well is approximately two kilometers away from a producing Slave Point
        formation gas well in the adjacent spacing unit. The proposed Bluesky
        formation well is offset by a multi-well, producing Bluesky formation
        gas pool approximately the same distance away. Both wells are targeting
        seismic features identified on our lands using 3D seismic data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  | The nearest tie-in point
        for the wells is two kilometers away. If one or both wells are successful,
        tie-ins are expected to occur in late 2004 or early 2005. Tie-ins are
        subject to regulatory approvals, winter access-only conditions, availability
        of equipment, and negotiation of third-party transportation and processing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Fraser Valley(Under Moratorium) |  | The property is located
        in the lower mainland area of southwest British Columbia near Vancouver.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |  | 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          |  | 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 is expected in 2004. We have identified through
        analysis of our proprietary onshore 2D seismic data, a large structural
        feature approximately 19 square kilometers in 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 2004.

---

Item 6.3 Forward Contracts

We have no forward contracts as at December 31, 2003.

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, 2003, 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 anticipates incurring abandonment
  and reclamation costs in respect of forty-two net wells.

|                  |      |  |      |  |      |  |      |  |      |  |      |  |      |  |           |  |       |  | Discounted | 
|----------------- | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | ---- |  | --------- |  | ----- |  | ---------- | 
|($000s)           | 2004 |  | 2005 |  | 2006 |  | 2007 |  | 2008 |  | 2009 |  | 2010 |  | Remainder |  | Total |  | at 10%     | 
|Proved producing  | 0    |  | 27   |  | 90   |  | 111  |  | 114  |  | 115  |  | 36   |  | 353       |  | 846   |  | 427        | 
|Total proved      | 0    |  | 50   |  | 102  |  | 182  |  | 135  |  | 163  |  | 36   |  | 591       |  | 1259  |  | 649        | 
|Total proved plus |      |  |      |  |      |  |      |  |      |  |      |  |      |  |           |  |       |  |            | 
|probable          | 0    |  | 3    |  | 25   |  | 59   |  | 141  |  | 149  |  | 107  |  | 1,161     |  | 1,645 |  | 599        | 

Item 6.5 Tax Horizon

We are required to pay income taxes with respect to our Fiscal
  2003.

Item 6.6 Costs Incurred

The following table sets forth the number and status of wells
  in which we had a working interest as at January 1, 2004. The stated interests
  are subject to land owner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.

The following table summarizes the capital expenditures made
  by us on oil and natural gas properties for the fiscal year ended December 31,
  2003.

|Property Acquisition Costs |  | Exploration Costs   |  | Development Costs | 
|-------------------------- |  | ------------------- |  | ----------------- | 
|(M$)                       |  | (M$)                |  | (M$)              | 
|Proved Properties          |  | Unproved Properties |  |                   | 
|-                          |  | -                   |  | 51,717            | 

17

---

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            | Stanmore         | Cypress/Chowade (northeast) | Elmore  
|Halkirk               | Westlock         | Orion (northeast)           | Rapdan  
|Peavey/Morinville     | Wimborne         | Fraser Valley (southwest)   |         
|Alexander             | Quirk Creek      |                             |         
|Simonette             |                  |                             |         

Item 6.7 Exploration and Development Activities

The following table sets forth the number of exploratory and
  development wells which we completed during its 2003 financial year.

|                | Exploratory
      Wells |  | Development
      Wells | 
|--------------- | ----------------------- |  | ----------------------- | 
|                | Gross (1)               |  | Net (2)                 | 
|Oil Wells       | -                       |  | -                       | 
|Gas Wells       | 3                       |  | 1.8                     | 
|Service Wells   | -                       |  | -                       | 
|Dry Holes       | 2                       |  | 2.0                     | 
|Total completed |                         |  |                         | 
|wells           | 5                       |  | 3.8                     | 

|(1) | Gross wells are defined
        as the total number of wells in which we have an interest.                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Net wells are defined as
        the aggregate of the numbers obtained by multiplying each gross well by
        our percentage working interest therein.

Item 6.8 Production Estimates

The following table sets forth our estimated total production
  volumes for Fiscal 2004. Our fields at St. Albert and Cypress/Chowade 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)      | (mmcf)             
|All fields      | 184                | -         | 6,099       | 223                
|St. Albert      | 184                | -         | 3,229       | 219                
|Cypress/Chowade | -                  | -         | 1,770       | -                  

18

---

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 2003.
|----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             |  | Three Months   |  | Three Months  |  | Three Months   |  | Three Months  | 
|---------------------------- |  | -------------- |  | ------------- |  | -------------- |  | ------------- | 
|                             |  | Ended          |  | Ended         |  | Ended          |  | Ended         | 
|                             |  | March 31, 2003 |  | June 30, 2003 |  | Sept. 30, 2003 |  | Dec. 31, 2003 | 
|Average Daily Production     |  |                |  |               |  |                |  |               | 
|Light and Medium Oil (bbl/d) |  | 755            |  | 694           |  | 741            |  | 252           | 
|Heavy Oil (bbl/d)            |  | >1             |  | >1            |  | >1             |  | >1            | 
|Natural Gas (mcf/d)          |  | 12,249         |  | 11,616        |  | 14,292         |  | 14,011        | 
|Natural Gas Liquids (bbl/d)  |  | 639            |  | 576           |  | 707            |  | 724           | 
|Average Net Prices           |  |                |  |               |  |                |  |               | 
|Received(1)                  |  |                |  |               |  |                |  |               | 
|Light and Medium Oil ($/bbl) |  | 49.58          |  | 40.70         |  | 40.53          |  | 36.94         | 
|Heavy Oil ($/bbl)            |  | 43.14          |  | 32.00         |  | 35.56          |  | 29.85         | 
|Natural Gas ($/mcf)          |  | 8.09           |  | 6.87          |  | 5.80           |  | 5.73          | 
|Natural Gas Liquids ($/bbl)  |  | 33.28          |  | 26.02         |  | 26.17          |  | 25.58         | 
|Royalties                    |  |                |  |               |  |                |  |               | 
|Light and Medium Oil ($/bbl) |  | 23.54          |  | 20.54         |  | 18.92          |  | 9.55          | 
|Heavy Oil ($/bbl)            |  | 1.97           |  | 3.42          |  | 1.36           |  | 0.56          | 
|Natural Gas ($/mcf)          |  | 1.74           |  | 1.98          |  | 1.39           |  | 1.33          | 
|Natural Gas Liquids ($/bbl)  |  | 5.47           |  | 4.43          |  | 2.67           |  | 3.41          | 
|Production Costs             |  |                |  |               |  |                |  |               | 
|Light and Medium Oil ($/bbl) |  | 2.56           |  | 3.67          |  | 2.29           |  | 3.27          | 
|Heavy Oil ($/bbl)            |  | 7.78           |  | 5.34          |  | 12.46          |  | 11.81         | 
|Natural Gas ($/mcf)          |  | 0.98           |  | 1.00          |  | 1.13           |  | 0.98          | 
|Natural Gas Liquids ($/bbl)  |  | 5.89           |  | 6.01          |  | 6.80           |  | 7.43          | 
|Netback Received             |  |                |  |               |  |                |  |               | 
|Light and Medium Oil ($/bbl) |  | 23.48          |  | 16.49         |  | 19.32          |  | 24.12         | 
|Heavy Oil ($/bbl)            |  | 33.39          |  | 23.24         |  | 21.74          |  | 17.48         | 
|Natural Gas ($/mcf)          |  | 5.37           |  | 3.89          |  | 3.28           |  | 3.42          | 
|Natural Gas Liquids ($/bbl)  |  | 21.92          |  | 15.58         |  | 16.70          |  | 14.74         | 

|Item 6.9(2) | The following table shows our total production before royalties during
      Fiscal 2003 from our core property, St. Albert.
|----------- | ----------------------------------------------------------------------------------------------------------------------------

|             | Light & Medium Oil | Heavy Oil | Natural Gas | Natural Gas Liquids
|------------ | ------------------ | --------- | ----------- | -------------------
|Total Proved | (mbbl)             | (mbbl)    | (mmcf)      | (mmcf)             
|St. Albert   | 222                | -         | 3,627       | 239                

19

---

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 January 1, 2004. The reserves data consist of the
        following:                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (a)(i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (b)(i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|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.                                                                                                                                                                                   

20

---

|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 January 1, 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:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ($000s)     |                        |             |                                                                  |           |          |       
| | ------------ | ---------------------- | ----------- | ---------------------------------------------------------------- | --------- | -------- | ------
| | Independent  |                        |             | Net
      Present Value of Future Net Revenue(10% Discount Rate)
| | Qualified    | Description            |            
| | Reserves     | and Preparation        | Location of |                                                                  |           |          |       
| | Evaluator or | Date of Evaluation     | Reserves    |                                                                  |           |          |       
| | Auditor      | Report                 | (Country)   | Audited                                                          | Evaluated | Reviewed | Total 
| | Sproule      | Evaluation of the      | Canada      |                                                                  |           |          |       
| |              | P&NG Reserves of       |             |                                                                  |           |          |       
| |              | Dynamic Oil & Gas      |             |                                                                  |           |          |       
| |              | Inc., as of January 1, |             |                                                                  |           |          |       
| |              | 2004 prepared          |             |                                                                  |           |          |       
| |              | January to March 2004  |             |                                                                  |           |          |       
| | Total        |                        |             | -                                                                | 91,311    | -        | 91,311

|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 
  April 6, 2004

George Fukushima George F. Fukushima, P.Eng., 
  Project Manager & Associate

Michael Maughan 
  Michael W. Maughan, C.P.G., P.Geol. 
  Manager, Geoscience, & Associate

Ken Crowther 
  Ken H. Crowther, P.Eng. 
  President

21

---

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 51-101have the same meaning in this form. {1}                 
|-- | -----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                  
|2. | The report referred to in item 3 of
        section 2.1 of NI 51-101shall 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 January
      1, 2004 using forecast prices and costs;
| | -- | ---------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                            
| | b) | the related estimated future net revenue;                                                                                  
| |    |                                                                                                                            
| | c) | proved oil and gas reserves estimated as at January 1, 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                                                                                                         
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                
| | b) | Sproule Associates Limited;                                                                                                                                                    
| |    |                                                                                                                                                                                
| | c) | met with Sproule Associates Limited to determine
        whether any restrictions affected the ability of Sproule Associates Limited
        to report without reservation; and
| |    |                                                                                                                                                                                
| | d) | 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:

22

---



| | 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. Bardell                                                                                                                  
|Chief Financial Officer & Corporate Secretary                                                                                       
|                                                                                                                                    
|                                                                                                                                    
|William B. Thompson                                                                                                               
|William B. Thompson                                                                                                                 
|Director                                                                                                                            
|                                                                                                                                    
|                                                                                                                                    
|John Lagadin                                                                                                                      
|John Lagadin                                                                                                                        
|Director                                                                                                                            

23

---