Exhibit 1.1







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ANNUAL INFORMATION FORM








(Except as otherwise noted the


information herein is given


as at December 31, 2013)





March 27, 2014







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TABLE OF CONTENTS








ABBREVIATIONS1CONVERSIONS1DEFINITIONS2GLOSSARY OF TECHNICAL TERMS4CURRENCY7NOTICE REGARDING PRIOR ESTIMATES OF CONTINGENT RESOURCES7FORWARD-LOOKING INFORMATION7SHARE CONSOLIDATION10SONDE RESOURCES CORP10GENERAL DEVELOPMENT OF THE BUSINESS11DESCRIPTION OF THE BUSINESS14PRINCIPAL PROPERTIES152013 CONTINGENT RESOURCES REPORT17STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION18RISK FACTORS22INDUSTRY CONDITIONS30DIVIDENDS31DESCRIPTION OF SHARE CAPITAL31MARKET FOR SECURITIES32PRIOR SALES32ESCROWED SECURITIES32DIRECTORS AND OFFICERS32AUDIT COMMITTEE34LEGAL AND REGULATORY PROCEEDINGS36INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS36TRANSFER AGENT AND REGISTRAR36MATERIAL CONTRACTS36INTERESTS OF EXPERTS36ADDITIONAL INFORMATION36APPENDIX "A"  REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSUREA1APPENDIX "B"  CHARTER OF THE AUDIT COMMITTEE OF SONDE RESOURCES CORPB1







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ABBREVIATIONS


In this Annual Information Form, the following abbreviations have the meanings set forth below.


Oil, Natural Gas Liquids and Natural GasbblbarrelMbblthousand barrelsbbl/dbarrel or barrels per dayMcfthousand cubic feetMMcfmillion cubic feetMcf/dthousand cubic feet per dayMMcf/dmillion cubic feet per dayMMBtumillion British Thermal UnitsOtherAECOa natural gas storage facility located at Suffield, AlbertaAPIAmerican Petroleum Institute°APIan indication of the specific gravity of crude oil measured on the API gravity scale. Liquid petroleum with a specified gravity of 28 °API or higher is generally referred to as light crude oilBOEbarrel of oil equivalent of natural gas and crude oil on the basis of 1 BOE for 6 Mcf of natural gas. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellheadBOE/dbarrels of oil equivalent per daym3cubic metresMBOE1,000 barrels of oil equivalentM$thousands of dollarsWTIWest Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for crude oil of standard grade3Dthree dimensional seismic


CONVERSIONS


The following table sets forth certain conversions between Standard Imperial Units and the International System of Units (or metric units). To Convert FromToMultiply ByMcf1,000 m3 of gas0.0281,000 m3 of gasMcf35.493bblm3 of oil0.158m3 of oilbbl6.290feetmetres0.305metresfeet3.281mileskilometres1.609kilometresmiles0.621acreshectares0.405hectaresacres2.471GJMMBtu0.950


2013 Annual Information Form |1


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DEFINITIONS


In this Annual Information Form, the following words and phrases have the meanings specified below, unless the context otherwise requires.


" 2013 Contingent Resources Report " means the contingent resources report dated June 11, 2013 prepared by Ryder Scott Company, independent reserves evaluators, containing estimates of contingent resources at of April 30, 2013.


" ABCA " means the Business Corporations Act (Alberta), including the regulations promulgated thereunder, as amended from time to time.


" Arrangement Agreement " means the arrangement agreement dated November 4, 2013 between the Company, Marquee, 1775412 Alberta Ltd. and 1771538 Alberta Ltd., as amended and restated on November 25, 2013, whereby Marquee Energy Ltd. acquired substantially all of the Western Canadian assets of Sonde, including all of its Southern Alberta properties, in exchange for the payment of CAD$15 million in cash and the issuance of 21,182,491 common shares of Marquee, pursuant to a plan of arrangement completed under the ABCA.


“ Bank Guarantee ” means the contemplated funding of a US$50.995 million bank guarantee in relation to the Viking Farm-Out for which Sonde was responsible for US$10.995 million and Viking was responsible for US$40.0 million.  Due to the termination of the farm-out Agreement on November 15, 2013, this bank guarantee was never issued.


" Board " means the board of directors of the Company.


“ Cash Election ” means Sonde’s right to elect to receive 0.34 of a Marquee Share for each outstanding Sonde Share, on a non-diluted basis, plus $15 million in cash as consideration pursuant to the Marquee Arrangement Agreement.


"Crown Lands" means leases granted by a Canadian Provincial authority.


" COGE Handbook " means the Canadian Oil and Gas Evaluation Handbook.


" Common Shares " means the common shares in the capital of the Company.


" Company " or " Sonde " means Sonde Resources Corp. and all of its subsidiaries, unless the context otherwise requires.


" EPSA " means the Exploration and Production Sharing Agreement dated August 27, 2008 between the Company and Joint Oil as amended on December 24, 2012.


“ EPSA Amendment ” means the amendment to the Exploration and Production Sharing Agreement, effective September 25, 2013.


“Farm-Out Agreement” means the agreement relating to the farm-out and carried interest of 66.67% of the Joint Oil Block in offshore North Africa by Viking, which was terminated on November 15, 2013.


“FirstEnergy” means FirstEnergy Capital Corp, the Company's financial advisor for the Western Canadian Strategic Alternatives Process.


"FPSO" means a floating production storage and offloading vessel which is used by the offshore oil and gas industry for the processing of hydrocarbons and storage of crude oil.


" GLJ " means GLJ Petroleum Consultants Ltd.


" GLJ Report " means the report dated February 19, 2013 prepared by GLJ evaluating the oil, NGL and natural gas reserves attributable to the properties of the Company effective December 31, 2012.


"Inert and Acid Gas Initiative" means  an initiative for the Gulf of Gabes operators offshore Tunisia to study options for sequestration of carbon dioxide and other inert and acid gases (which comprise a high percentage of all known oil and gas accumulations in the Gulf of Gabes, including the Joint Oil Block) to allow the currently stranded high inert content gas to be developed commercially and brought to the Tunisian market.


" Joint Oil " means the Joint Exploration, Production, and Petroleum Services Company that is owned equally by the Tunisian government via Enterprise Tunisienne d'Activities Petrolicres and the Libyan government via Libya Oil Holdings.


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" Joint Oil Block " means the area covering approximately 310,799 hectares (768,000 acres) located approximately 121 kilometres (75 miles) offshore Tunisia/Libya in the Mediterranean Gulf of Gabes as described in and subject to the terms of the EPSA.


"Joint Oil JOA" means the joint operating agreement relating to the Joint Oil Block.


“ Letter of Credit ” means a Confirmed Standby Letter of Credit in the amount of US$15 million which Sonde was required to deliver to Joint Oil by January 10, 2014 pursuant to the extension of the drilling for the Fisal-1exploration well.


" LNG Project " means the proposed development of a LNG regasification project in U.S. federal waters offshore New Jersey.


" Mariner Block " means the "Mariner" Block, covering approximately 11,246 hectares (27,790 acres) located approximately 9 kilometres (5.6 miles) northeast of Sable Island, offshore Nova Scotia as described in and subject to the terms of the Mariner Exploration License 2409.


" Mariner Swap Agreement " means the "Mariner" Block swap agreement dated August 27, 2008 between the Company and Joint Oil in respect of the Mariner Block.


“ Marquee ” means Marquee Energy Ltd.


" MG Block " means the "Mayaro/Guayaguayare" Block, covering approximately 23,522 hectares (58,080 acres) located approximately 6.4 kilometres (4 miles) off the east coast of Trinidad in the Columbus Basin as described in and subject to the terms of the Exploration and Production License.


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


" NI 51-102 " means National Instrument 51-102, Continuous Disclosure Obligations.


" Niko " means Niko Resources Ltd.


" Niko  Sale  Agreement " means the Sale Agreement dated December 21, 2010 between the Company and Niko in respect of the purchase of the Company’s interests in Block 5(c) and the assumption of certain liabilities in respect of the MG Block by Niko.


" NYSE MKT " means NYSE MKT LLC.


" OPEC " means the Organization of the Petroleum Exporting Countries.


" Options " means the options to acquire Common Shares issued under the stock option plan of the Company.


“ Plan of Arrangement ” means the plan of arrangement with Marquee in the form attached as Exhibit "A" to the Arrangement Agreement.


" Preferred Shares " means the preferred shares in the capital of the Company.


" Rights Plan " means the shareholder rights plan of the Company.


" Rights Plan Agreement " means the Rights Plan dated June 3, 2010 and confirmed by the shareholders on June 19, 2013 between the Company and Valiant Trust Company.


"SEDAR" means the System for Electronic Document Analysis and retrieval.


" Shareholders " means the holders of Common Shares and " Shareholder " means any one of them.


" TSX " means the Toronto Stock Exchange.


" TSXV " means the TSX Venture Exchange.


" UN " means the United Nations.


“ Unit Agreement ” means a cost sharing and division of production agreement between Sonde, Joint Oil and PA Resources.


2013 Annual Information Form |3


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" Unit Plan of Development " or " UPOD "  means the proposed unit plan of development for the area around the Zarat Field contained partially in the Joint Oil Block and partially in the Zarat license operated by PA Resources.  The proposed UPOD contemplates a cost sharing and division of production with a redetermination after the last development well has been drilled and a further reserve evaluation is performed.  The allocation of costs and production will be adjusted based on the results of the reserve evaluation.


" U.S. " or " United States " means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia.


“Viking Energy North Africa Limited” or “Viking Exploration and Production Tunisia Limited” or “Viking” means the private company that entered into a Farm-Out Agreement dated December 27, 2012, amended and restated on July 31, 2013, in which the company farmed out 66.67% of its interest in the Joint Oil Block, and which was terminated on November 15, 2013.


" Viking Farm-Out " means the transfer of an undivided interest in the Company's rights and obligations under the EPSA to Viking, in exchange for cash payments, the assumption of certain drilling and seismic obligations and the granting of a corporate guarantee as a backstop to the Company's obligations under the EPSA. This Farm-Out was terminated on November 15, 2013.


“Western Canada Strategic Alternatives Process” means the process initiated by the Board to explore and evaluate potential strategic alternatives with regard to the Company’s Western Canadian production and exploratory acreage, with a view to enhancing shareholder value.


" Zarat Field " means a portion of the Joint Oil Block surrounding the Zarat North-1 well, combined with an adjacent license owned by a third party.


GLOSSARY OF TECHNICAL TERMS


In this Annual Information Form, the following technical terms and acronyms have the meanings specified below.


" CCAA Proceedings " means the proceedings commenced by the Company, Canadian Superior Trinidad and Tobago Limited (now Sonde Resources Trinidad and Tobago Limited) and Seeker under the CCAA pursuant to an order of the Court dated March 5, 2009.





“CGU” means cash generating unit, a property grouping used for financial accounting purposes.


" CBM " means coal based methane.


" contingent resources " means those quantities of petroleum  estimated, as of a given date, to be potentially recoverable from known accumulations  using established technology or technology under development, but which are not currently considered to be commercially  recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources  the estimated discovered recoverable quantities associated with a project in the early evaluation stage.





" crude oil " or " oil " as described in the COGE Handbook means a mixture consisting mainly of pentanes and heavier hydrocarbons that exists in the liquid phase in reservoirs and remains liquid at atmospheric pressure and temperature. Crude oil may contain small amounts of sulphur and other non-hydrocarbons but does not include liquids obtained from the processing of natural gas.


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


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

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

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

(d)    provide improved recovery systems.


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


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


" development well " means a well drilled inside the established limits of an oil or gas reservoir, or in close proximity to the edge of the reservoir, to the depth of a stratigraphic horizon known to be productive.


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


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

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

(c)    dry hole contributions and bottom hole contributions;


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


(e)    costs of drilling exploratory type stratigraphic test wells.


" exploratory well " means a well that is not a development well, a service well or a stratigraphic test well.


" field " means a defined geographical area consisting of one or more pools.


" future net revenue " means the estimated net amount to be received with respect to the development and production of reserves (including synthetic oil, coal bed methane and other non-conventional reserves) estimated using constant prices or forecast prices and costs.


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


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


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

“GHG” means greenhouse gas.


" gross " means:


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

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


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|(c) | in relation to properties, the total area of properties in which the Company has an interest.

" LNG " means liquefied natural gas.


" natural gas " as described in the COGE Handbook, means a mixture of lighter hydrocarbons that exist either in the gaseous phase or in solution in crude oil in reservoirs but are gaseous at atmospheric conditions. Natural gas may contain sulphur or other non-hydrocarbon compounds.


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" natural gas liquids " or " NGL " as described in the COGE Handbook, means those hydrocarbon components that can be recovered from natural gas as liquids including, but not limited to, ethane, propane, butanes, pentanes plus, condensate and small quantities of non-hydrocarbons.


" net " means:


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

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

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|(c) | in relation to the Company's interest in a property, the total area in which the Company has an interest multiplied by the working interest owned by the Company.

" non-associated gas " means an accumulation of natural gas in a reservoir where there is no crude oil.


" operating costs " or " production costs " means costs incurred to operate and maintain wells and related equipment and facilities, including applicable operating costs of support equipment and facilities and other costs of operating and maintaining those wells and related equipment and facilities.


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


" production " means the cumulative quantity of petroleum that has been recovered at a given date.


" property " includes:


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|(a) | fee ownership or a lease, concession, agreement, permit, license or other interest representing the right to extract oil or gas subject to such terms as may be imposed by the conveyance of that interest;

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|(b) | royalty interests, production payments payable in oil or gas, and other non-operating interests in properties operated by others; and

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|(c) | an agreement with a foreign government or authority under which the Company participates in the operation of properties or otherwise serves as "producer" of the underlying reserves (in contrast to being an independent purchaser, broker, dealer or importer).

but does not include supply agreements, or contracts that represent a right to purchase, rather than extract, oil or gas.


" proved property " means a property or part of a property to which reserves have been specifically attributed.


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


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


" reservoir " means a porous and permeable subsurface rock formation that contains a separate accumulation of petroleum that is confined by impermeable rock or water barriers and is characterized by a single pressure system.


" service well " means a well drilled or completed for the purpose of supporting production in an existing field. Wells in this class are drilled for the following specific purposes: gas injection (natural gas, propane, butane or flue gas), water injection, steam injection, air injection, salt-water disposal, water supply for injection, observation, or injection for combustion.


" unproved property " means a property or part of a property to which no reserves have been specifically attributed.


" well abandonment costs " means costs of abandoning a well (net of salvage value) and of disconnecting the well from the surface gathering system. They do not include costs of abandoning the gathering system or reclaiming the well site.


2013 Annual Information Form |6


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


CURRENCY


All dollar amounts set forth in this Annual Information Form are expressed in Canadian dollars, except where otherwise indicated. References to Canadian dollars or "$" are to the currency of Canada and references to U.S. dollars or "US$" are to the currency of the United States.


The following table sets forth: (i) the exchange rate in effect at the end of each of the periods indicated; (ii) the average of exchange rates in effect on the first business day of each month during such periods; and (iii) the high and low exchange rates during each such periods, in each case based on the Bank of Canada noon buying rate for one Canadian dollar as expressed in U.S. dollars.


Year ended December 31201320122011Rate at end of periodUS$0.9402US$1.0051US$0.9833Average rate during periodUS$0.9707US$1.0006US$1.0111LowUS$0.9342US$0.9618US$0.9480HighUS$1.0165US$1.0327US$1.0607


NOTICE REGARDING PRIOR ESTIMATES OF CONTINGENT RESOURCES


The determination of oil and gas resources involves the preparation of estimates that have an inherent degree of associated uncertainty. Categories of low, best and high estimates of contingent resources have been established to reflect the level of these uncertainties and to provide an indication of the probability of recovery.


The estimation and classification of resources requires the application of professional judgment combined with geological and engineering knowledge to assess whether or not specific resources classification criteria have been satisfied. Knowledge of concepts including uncertainty and risk, probability and statistics, and deterministic and probabilistic estimation methods is required to properly use and apply resources definitions.





FORWARD-LOOKING INFORMATION





Certain information included in this Annual Information Form and the documents incorporated by reference herein constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions.


Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this Annual Information Form and the documents incorporated by reference herein include, but is not limited to, information with respect to:


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|• | the proposed unitization of the Zarat Field and development of a Unit Plan of Development;

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|• | the ability of the Company to attract a strategic investment in Sonde’s undeveloped acreage, a joint venture, or a merger or other business combination involving the Company’s Western Canada or North Africa assets;

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|• | volumes of the Company's contingent resources;

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|• | results of the 3D seismic data acquisition in respect of the Hadaf prospect;

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|• | the potential reduction of completion costs for Wabamun horizontal wells due to the presence of natural fracturing;

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|• | future liquidity, creditworthiness and financial capacity;

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|• | planned exploration and development activities;

2013 Annual Information Form |7


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|  |                                                               
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|• | obtaining a rig to drill Fisal-1 within the terms of the EPSA;

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|• | future results from operations and operating metrics;

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|• | future interest rates;

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|• | future costs, expenses and royalty rates;

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|• | future development, exploration and other expenditures;

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|• | possible use of derivative financial instruments as part of the Company's commodity risk management programs;

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|• | the amount and timing of future asset retirement obligations;

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|• | the Company's tax pools;

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|• | the Company's ability to raise capital, to farm-out or to obtain funding for the development of the Zarat field and the Joint Oil Block exploration wells and to continually add to reserves through acquisitions, exploration and development;

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|• | the  Company's ability to satisfy certain contractual obligations;

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|• | the ability of the Company to maintain listing requirements for the TSXV and/or the NYSE MKT;

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|• | future economic conditions; and

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|• | the impact of governmental controls, regulations and applicable royalty rates on the Company's operations.

Furthermore, information relating to “contingent resources” are deemed to be forward-looking information, as it involves the implied assessment, based on certain estimates and assumptions, that the reserves and/or resources described can be recovered and profitable in the future. The assumptions relating to the reserves and/or resources of the Company are discussed under "Contingent Resources".


Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this Annual Information Form and the documents incorporated by reference herein, assumptions have been made regarding and are implicit in, among other things:


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|• | the ability to reach agreement on all terms relating to unitization of the Zarat Field and UPOD for the Zarat Field;

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|• | field production rates and decline rates;

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|• | the ability of the Company to secure adequate product transportation and natural gas processing facilities;

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|• | the impact of increasing competition in or near the Company's properties;

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|• | the timely receipt of any required regulatory approvals and permits;

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|• | access to available sources of capital;

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|• | the ability of the Company to hire and retain qualified management, staff, equipment and services in a timely and cost efficient manner to develop its business;

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|• | the Company's ability to operate the properties in a safe, efficient and effective manner;

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|• | the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration;

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|• | the timing and costs of pipeline, storage and facility construction and expansion;

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|- | ----------------------------------
|• | future oil and natural gas prices;

2013 Annual Information Form |8


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|• | currency, exchange and interest rates;

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|• | the regulatory framework regarding royalties, taxes and environmental matters; and

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|• | the ability of the Company to successfully market its oil and natural gas products.

Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.


By its nature, forward-looking information is subject to a number of risks and uncertainties, which could cause actual results or other expectations to differ materially from those anticipated, including those material risks set forth under "Risk Factors" in this Annual Information Form, "Risk Management" in the financial statements of the Company for the year ended December 31, 2013 and "Risk Management" and "Risk Assessment" in the management discussion and analysis of the Company for the year ended December 31, 2013. The Company is exposed to a number of operational risks inherent in exploiting, developing, producing and marketing crude oil and natural gas. These risks include but are not limited to:


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|• | the unsettled and volatile political and security conditions in Tunisia and Libya;

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|• | the risk that the Company will not attract a strategic investment in Sonde’s undeveloped acreage, a joint venture, or a merger or other business combination involving the Company’s North Africa or Western Canada assets;

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|• | sufficient liquidity for future operations;

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|• | cost of capital risk to carry out the Company's operations;

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|• | economic risk of finding and producing reserves at a reasonable cost;

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|• | uncertainty of estimates of resources;

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|• | uncertainty regarding geological formations and the recovery of hydrocarbons therefrom;

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|• | financial risk of marketing oil and natural gas at an acceptable price given market conditions;

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|• | fluctuations in commodity prices, foreign exchange and interest rates;

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|• | operational matters related to non-operated properties;

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|• | delays in business operations, pipeline or facility restrictions, blowouts;

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|• | debt service and indebtedness may affect the market price of the Common Shares;

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|• | the continued availability of adequate debt and equity financing and cash flow to fund planned expenditures;

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|• | unforeseen title defects;

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|• | aboriginal land claims;

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|• | increased competition and the lack of availability of qualified personnel or management or the loss of key personnel;

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|• | ability to attract key personnel;

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|• | uncertainty of government policy changes;

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|• | the risk of carrying out operations with minimal environmental impact;

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|• | operational hazards and availability of insurance;

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|• | industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced;

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|• | general economic, market and business conditions;

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|- | --------------------------------------
|• | competitive action by other companies;

2013 Annual Information Form |9


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|- | ---------------------------------------------
|• | the ability of suppliers to meet commitments;

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|- | ------------------------
|• | stock market volatility;

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|- | ----------------------------------------------------------------------------------------
|• | the risk that the Company will not maintain its listing on the TSXV and/or the NYSE MKT;

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|- | -----------------------------------------------------------
|• | obtaining required approvals of regulatory authorities; and

|  |                                    
|- | -----------------------------------
|• | creditworthiness of counterparties.

The forward-looking information contained in this Annual Information Form and the documents incorporated by reference herein are made as of the date of such documents and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking information contained in this Annual Information Form and the documents incorporated by reference herein are expressly qualified by this cautionary statement.


SHARE CONSOLIDATION


On December 31, 2013, the Company consolidated the Common Shares on a 0.9 for 1 basis. As such, unless otherwise specifically stated, information contained herein in respect of the Company's share capital which is: (i) as of a date that is prior to December 31, 2013, is presented on a pre-consolidation basis; and (ii) as of a date that is on or after December 31, 2013, is presented on a post-consolidation basis.  This consolidation was effective on December 31, 2013; however, shares of Sonde were not traded on a consolidated basis on the NYSE MKT and the TSX until January 2, 2014 and January 3, 2014 respectively.


SONDE RESOURCES CORP.


General


The Company was incorporated pursuant to the provisions of the ABCA as "297272 Alberta Ltd." on March 21, 1983. Subsequently, the articles of the Company have been amended as follows:


|  |                                                                                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------
|• | on April 17, 1993 to change the name of the Company to "KapaIua Gold Mines Ltd." and to remove the private company restrictions;

|  |                                                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | on November 16, 1993 to change the name of the Company to "Prize-Energy Inc." and to consolidate the issued and outstanding Common Shares on a one-for-five basis;

|  |                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | on January 19, 1999 to permit the appointment of additional directors between annual meetings of Shareholders and to restate the articles in a consolidated form;

|  |                                                                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | on August 24, 2000 to change the name of the Company to "Canadian Superior Energy Inc." and toconsolidate the issued and outstanding Common Shares on a one-for-two basis;

|  |                                                                                                         
|- | --------------------------------------------------------------------------------------------------------
|• | on January 31, 2006 to add the Series A Preferred Shares to the authorized share capital of the Company;

|  |                                                                                                         
|- | --------------------------------------------------------------------------------------------------------
|• | on February 3, 2010 to add the Series B Preferred Shares to the authorized share capital of the Company;

|  |                                                                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | on June 3, 2010 to change the name of the Company to "Sonde Resources Corp." and to consolidate the issued and outstanding Common Shares on a one-for-five basis;  and

|  |                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | on January 1, 2012 the Company amalgamated with its wholly-owned subsidiaries, Seeker Petroleum Ltd., Sonde Resources Trinidad and Tobago Ltd. and Challenger Energy Corp;  and

|  |                                                                                              
|- | ---------------------------------------------------------------------------------------------
|• | on December 31, 2013 to consolidate the issued and outstanding shares on a 0.9 for one basis.

The Company is a reporting issuer, or the equivalent, in the provinces of British Columbia, Alberta, Saskatchewan, Ontario, Quebec, Manitoba, Nova Scotia and Newfoundland. On December 31, 2013 the Common Shares were listed and posted for trading on the TSX and the NYSE MKT under the symbol "SOQ".  On February 18, 2014, Sonde's common shares were delisted from the TSX and its Common Shares began trading on the TSXV under the same symbol “SOQ”.


The head office of the Company is located at 3100, 500 - 4th Avenue S.W., Calgary, Alberta, T2P 2V6 and its registered office is located at 3700, 400 - 3rd Avenue S.W., Calgary, Alberta, T2P 4H2. In addition, the Company has an office located in Tunis, Tunisia.


2013 Annual Information Form |10


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Inter-Corporate Relationships


The following diagram sets forth the intercorporate relationship among the Company and each of its direct and indirect subsidiaries.  The percentage of votes attaching to all voting securities of the subsidiary beneficially owned, or controlled or directed, directly or indirectly, by the Company as at December 31, 2013, as well as the jurisdiction where the subsidiary was incorporated, continued, formed or organized, as the case may be, is set forth below.





GENERAL DEVELOPMENT OF THE BUSINESS


General


The Company is engaged in the exploration for, and acquisition, development and production of, petroleum and natural gas with operations in North Africa and Western Canada. See "Principal Properties" and "Contingent Resources". The Company may also review new drilling opportunities and potential acquisitions, both domestic and international, to supplement its exploration and development activities.


Three Year History


The following is a description of the general development of the business of the Company over the last three financial years. For a description of the business of the Company, see "Description of the Business".


2011


On January 11, 2011, the Company announced the successful drilling and production testing of its 100% working interest in the Zarat North -1 well on the Joint Oil Block. The well has been temporarily abandoned while the Company evaluates the recoverable reserve scenarios, development options (including unitization) and cost estimates for the field's development.


On February 24, 2011, the Company announced that it had sold its subsidiary, Liberty Natural Gas LLC, which owned a 100% working interest in the LNG Project to an entity related to West Face Capital Inc. for US$1.0 million and an entitlement to receive a deferred cash consideration of US$12.5 million payable upon Liberty Natural Gas LLC's first successful gas delivery. The sale had an effective date of February 22, 2011.


On June 8, 2011, the Company declared Force Majeure on the Joint Oil Block because of UN sanctions adopted by the UN Security Council and Canada that prevented the Company from fulfilling its obligations under the EPSA.


On June 23, 2011, the Company completed the sale of its interests in Block 5(c) and the assumption of certain liabilities in respect of the MG Block through the Niko Sale Agreement for gross proceeds of US$75.5 million plus purchase price adjustments of US$1.5 million.


On September 23, 2011, the Company completed the acquisition of a block of producing and non-producing assets in Drumheller from a third party, which included the bulk of the producing interests in the Mannville “I” oil pool not previously owned by the Company, for an aggregate purchase price of $6.3 million.


On October 5, 2011, the Company lifted the Force Majeure declaration on the Joint Oil Block as a result of the Government of Canada and the United Nations repealing their unilateral sanctions against Libya on September 22, 2011.


On December 30, 2011, the Company redeemed all 150,000 outstanding Series “B” Preferred Shares for an aggregate amount of US$15,186,987.


2013 Annual Information Form |11


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2012


On January 1, 2012, the Company amalgamated Seeker Petroleum Ltd., Challenger Energy Corp. and Sonde Resources Trinidad and Tobago Ltd. into Sonde Resources Corp.


On January 15, 2012, the Company received a one year extension on the first phase of the exploration period on the Joint Oil Block until December 23, 2013. In addition, Sonde paid to Joint Oil US$12.5 million pursuant to the Mariner Swap Agreement.


On January 30, 2012, the Company announced that it had begun an initiative to identify and evaluate alternatives to finance its remaining North Africa obligations.  These initiatives resulted in the execution of the Farm-Out Agreement with Viking in December 2012.


On February 8, 2012, the Company completed the sale of 26,240 gross undeveloped acres (24,383 net acres) in its Kaybob Duvernay play in Alberta for aggregate proceeds of $75 million.  The sale resulted in a net gain of approximately $73 million.


On December 5, 2012, the Company announced it reached agreement to extend the three exploratory well drilling obligation into the second phase of the exploration period under the EPSA subject to final approval by Joint Oil, as well as principles relating to the UPOD with PA Resources. On December 24, 2012, Joint Oil’s Board and General Assembly approved the agreement to extend the three exploratory well drilling obligation into the second phase of the exploration under the EPSA.


On December 27, 2012, the Company announced the execution of the Viking Farm-Out Agreement.  The Viking Farm-Out is outlined in detail under the section Principal Properties - Offshore North Africa and the Material Change Report of the Company dated January 4, 2013, a copy of which is available on SEDAR at www.sedar.com. The Farm-Out was subsequently terminated on November 15, 2013.


2013


On January 9, 2013, Sonde announced that it had retained FirstEnergy to initiate the Western Canada Strategic Alternatives process. As financial advisor to the Board, FirstEnergy assisted in the process of analyzing and evaluating prospects and options available to the Company, which included, among other alternatives, a sale of all or a material portion of the Western Canadian assets of the Company, a strategic investment in Sonde’s undeveloped acreage, a joint venture, or a merger or other business combination involving Sonde. The Board established a Special Committee comprised of independent directors to oversee the strategic review process.


On March 31, 2013, the Company entered into an agreement with Viking to extend the deadline for meeting the conditions precedent under the Farm-Out Agreement, which included obtaining the consent of Joint Oil to the transfer of a 66.67% interest in the Joint Oil Block to Viking, to June 7, 2013.


On May 3, 2013, the Company received Joint Oil’s approval to farm-out the Joint Oil Block to Viking under amended commercial terms.  The amended commercial terms included the funding of a US$50.995 million Bank Guarantee for which Sonde was responsible for US$10.995 million and Viking was responsible for US$40.0 million.  See “Offshore North Africa (Tunisia and Libya)” for a detailed summary of the revised commercial terms of the Farm-Out agreement.


On June 7, 2013, the Company entered into an agreement with Viking to extend the deadline for closing the Farm-Out Agreement to July 31, 2013.


On June 30, 2013, Mr. Jack Schanck ceased to be President and Chief Executive Officer and a director of the Company.  Mr. Bill Dirks was appointed President and Chief Operating Officer, reporting directly to the Board, effective June 30, 2013.


On July 16, 2013, the Company completed the sale of 45,671 net acres of undeveloped land primarily in the Montney play and 44,094 acres of undeveloped land in the Duvernay play in Central Alberta.  In addition, the Company sold related property, plant and equipment.  The sale resulted in a loss of approximately $2.3 million.


On July 31, 2013, the definitive form of the Farm-Out Agreement with Viking was executed by Sonde and Viking.  Formal closing remained conditional upon obtaining all of the necessary consents and approvals, including funding of the US$50.995 million Bank Guarantee.


On August 31, 2013, Mr. Kurt Nelson ceased to be Chief Financial Officer of the Company.  Mr. Rene Beaumier was appointed Chief Financial Officer, effective September 1, 2013.


2013 Annual Information Form |12


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On September 25, 2013, the Joint Oil’s Board of Directors and General Assembly approved the Assignments and the Amendment to the Exploration and Production Sharing Agreement (“EPSA Amendment”) required as conditions precedent to the closing of the previously announced Viking Farm-Out agreement.  Formal closing remained conditioned upon funding of the US$50.995 million Bank Guarantee.


On October 25, 2013, Viking requested an extension of the closing deadline for the Farm-Out Agreement to November 15, 2013.  Subsequently, Sonde requested a similar extension from Joint Oil.  The request to extend the closing date for the Farm-Out Agreement was granted, resulting in a new closing deadline of November 15, 2013.


On November 4, 2013, the Company entered into the Arrangement Agreement whereby Marquee would acquire substantially all of the Western Canadian assets of Sonde, including all of its Southern Alberta properties, pursuant to the Plan of Arrangement.


On November 15, 2013, the Viking Farm-Out was terminated due to Viking’s inability to fund its portion of the Bank Guarantee.


On November 20, 2013, the Company exercised its Cash Election option pursuant to the Arrangement Agreement.


On December 20, 2013, the Company reached an agreement with Joint Oil to extend the drilling of the first exploration well, Fisal-1, required under the EPSA, from December 2013 to November 2014.  The Agreement required Sonde to deliver to Joint Oil a Letter of Credit in the amount of US$15 million by no later than January 10, 2014.  The Company subsequently met this requirement.


On December 31, 2013, the Company received shareholder and court approval for its previously announced Plan of Arrangement with Marquee whereby Marquee acquired substantially all of the Western Canada assets of Sonde, including all of its Southern Alberta properties, for consideration of 21,182,492 common shares of Marquee plus $15 million in cash. The common shares of Marquee were distributed to Sonde's shareholders in accordance with the terms and conditions of the Plan of Arrangement.  Sonde retained the cash received.  The completed Plan of Arrangement resulted in a loss on disposition of $30.9 million.


2014


On January 3, 2014, Mr. Bill Dirks ceased to be President and Chief Operating Officer of the Company.  Mr. Toufic Nassif was appointed President and Chief Executive Officer, effective January 3, 2014.


On January 8, 2014, the Company was informed by National Bank of Canada that the Company’s $25 million revolving credit facility had been cancelled as a result of the divestiture of all of the Company’s assets pursuant to the Marquee Plan of Arrangement.


On February 18, 2014, the Company's common shares were de-listed from the TSX and on February 19, 2014, the Company's common shares were listed on the TSXV.





2013 Annual Information Form |13


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DESCRIPTION OF THE BUSINESS


General


The Company is engaged in the exploration for, and acquisition, development and production of, petroleum and natural gas with operations in North Africa and Western Canada. See "Principal Properties" and "Contingent Resources".  The Company also reviews new drilling opportunities and potential acquisitions, both international and domestic, to supplement its exploration and development activities.


Western Canada Strategic alternatives Process


In October 2012, the Board retained FirstEnergy as its financial advisor to explore and examine alternatives available to Sonde in connection with its producing Canadian oil and gas assets and its undeveloped exploratory acreage in Canada. At the time FirstEnergy was retained, Sonde was actively engaged in seeking additional capital to meet its obligations under the EPSA. On December 27, 2012, Sonde entered into the Farm-Out Agreement with Viking pursuant to which Sonde agreed to farm-out to Viking 66.67% of its interest in the Joint Oil Block and in exchange, Viking agreed to assume responsibility for the three well commitment and seismic data acquisition under the EPSA. Completion of the Viking Farm-Out was subject to a number of conditions, including the consent of Joint Oil to a partial assignment of Sonde's interest under the EPSA governing the Joint Oil Block.





With an arrangement in place to satisfy Sonde's work commitments under the EPSA, Sonde publicly announced on January 9, 2013 that it was formally commencing the Western Canada Strategic Alternatives Process  FirstEnergy completed a broad market canvass to assess the alternatives available to Sonde, including the sale of all or a material portion of producing oil and gas assets, a strategic investment in Sonde’s undeveloped Canadian acreage, joint ventures and mergers and other business combinations involving Sonde's Canadian assets.  The extensive review process undertaken by the Board and FirstEnergy ultimately led to the arm's length negotiation of the Arrangement Agreement with Marquee. Subsequently thereto, the Viking Farm-Out was terminated due to Viking's inability to fund their portion of the required Bank Guarantee.





Pursuant to the terms of the Arrangement Agreement, Marquee indirectly acquired substantially all of Sonde's Western Canadian exploration and production assets for total consideration valued at approximately $30.7 million, consisting of $15 million in cash and 21,182,491 common shares of Marquee.  Pursuant to the Plan of Arrangement, all of the common shares of Marquee were distributed to Shareholders of Sonde on December 31, 2013





As a consequence of the completion of the Plan of Arrangement, Sonde  no longer has any production, cash flow or reserves attributable to its oil and natural gas properties. Sonde's sole properties consist of: (i) the Joint Oil Block and (ii) indirectly, through its wholly-owned subsidiary Technec Petroleum Ltd., approximately 100,000 net acres of Western Canada exploration assets, split approximately equally between its northwestern Alberta Wabamun play and west central Alberta Duvernay play.





Foreign Operations


The Company’s major focus is the exploration for oil and natural gas in offshore North Africa. In addition, it has exploration properties located in Western Canada.  International oil and gas operations are subject to inherent risks and uncertainties which are beyond the control of the Company, particularly those associated with exploring for, and developing economic quantities of hydrocarbons, volatile commodity prices, political risks, foreign exchange rates, issues relating to global supply and demand, government regulations, and environmental matters. The Company's international exploration ventures may entail certain political and technical business risks. The Company's strategy is to mitigate such risks by aligning itself with partners and engaging personnel and consultants that have relevant international experience. See "Risk Factors - Foreign Political and Security Issues", "Risk Factors - Foreign Operations", "Risk Factors - Foreign Legal Systems" and "Risk Factors - Foreign Currency Rates".


Competitive Conditions


The oil and natural gas industry is intensely competitive in all its phases. The Company competes with numerous other participants in accessing equipment, services and personnel to exploit and develop oil and natural gas properties and in attracting and retaining experienced industry personnel. The Company's competitors include resource companies which have greater financial resources, access to human capital and facilities than those of the Company. The Company believes that its competitive position is equivalent to that of other oil and gas issuers of similar size and at a similar stage of development.  See "Risk Factors - Competition".


2013 Annual Information Form |14


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Cycles


The development of oil and gas reserves is dependent on access to areas where exploration and production is to be conducted. Seasonal weather variations, including freeze-up and break-up, affect access in certain circumstances, which can impact the timing of drilling and maintenance activities and production.


Environmental Protection


The oil and gas industry is subject to environmental regulations pursuant to applicable legislation. Such legislation provides for restrictions and prohibitions on release or emission of various substances produced in association with certain oil and gas industry operations, and requires that well and facility sites be abandoned and reclaimed to the satisfaction of environmental authorities. As at December 31, 2013, the Company had recorded an obligation on its statement of financial position of $1.3 million for the costs of decommissioning its oil and gas assets. The Company maintains an insurance program consistent with industry practice to protect against losses due to accidental destruction of assets, well blowouts, pollution and other operating accidents or disruptions. The Company also has operational and emergency response procedures and safety and environmental programs in place to reduce potential loss exposure. No assurance can be given that the application of environmental laws to the business and operations of the Company will not result in a material increase in the costs of production, development or exploration activities or otherwise adversely affect the Company's financial condition, results of operations or prospects. See "Risk Factors - Environmental Risks" and "Industry Conditions".


Employees


As at March 27, 2014, the Company has a total of four full-time employees and one full-time consultant in the Calgary office, one full-time employee and two part-time consultants in its Tunis office and one full-time employee in Houston.


Social or Environmental Policies


The health and safety of employees, contractors and the public, as well as the protection of the environment, is of utmost importance to the Company. To this end, the Company has instituted health and safety policies and programs and endeavors to conduct its operations in a manner that will minimize both adverse effects and consequences of emergency situations by:


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|• | complying with government regulations and standards, particularly relating to the environment, health and safety;

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|• | conducting operations consistent with industry codes, practices and guidelines;

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

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|• | providing training to employees and contractors to ensure compliance with corporate safety and environmental rules and procedures; and

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|• | communicating openly with members of the public regarding its activities.

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


PRINCIPAL PROPERTIES


A summary description of the Company's major exploration properties is set out below. References to gross volumes refer to total production. References to net volumes refer to the Company's working interest share before the deduction of royalties payable to others.


International


Offshore North Africa (Tunisia and Libya)


On August 27, 2008, the Company entered into an EPSA with a Tunisian company, Joint Oil. Joint Oil is owned equally by the governments of Tunisia and Libya. The EPSA contract area straddles the offshore border between Tunisia and Libya.  The EPSA encompasses the Joint Oil Block and required the drilling of the Zarat appraisal well and has a minimum work program of three exploratory wells and the shooting of seismic data.  The minimum work program was secured by a US$45 million corporate guarantee.


2013 Annual Information Form |15


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On December 24, 2012, Joint Oil approved an extension of the first phase of the exploration period to December 23, 2015. The extension provided for penalties for non-fulfillment of the minimum work program of US$15.0 million for each of the three exploratory wells, due December 23, 2013, December 23, 2014, and December 23, 2015, respectively.  In addition, the extension provided for the acquisition and processing of an additional 200 square kilometres of 3D seismic covering the sub-contract area “B” (Libyan) of the Joint Oil Block, beginning in the second quarter of 2013.  As of March 27, 2014, the Company has acquired and is in the process of processing the 3D seismic covering the sub-contract area “B” (Libyan) of the Joint Oil Block.


On December 27, 2012, the Company entered into an agreement with Viking providing for the farm-out of the Joint Oil Block.  On May 3, 2013, Sonde received approval from Joint Oil's Board of Directors to farm-out 66.67% of its potential Zarat Field Unit Area and 50% of the remainder of its interest in the Joint Oil Block to Viking, subject to approval of the definitive form of Assignment Agreement and format of the Bank Guarantee.


On July 31, 2013, the definitive form of the Farm-Out Agreement was executed by Sonde and Viking.


On September 25, 2013, Joint Oil approved the assignment to Viking and the definitive form of Assignment Agreement. The Assignment Agreement was subject to a condition that the Bank Guarantee of US$50.995 million to secure the minimum work commitment had to be funded prior to closing.  Sonde and Viking signed the Assignment Agreement in the form approved by Joint Oil on October 4, 2013, and on October 25, 2013, the deadline to fund the Bank Guarantee and to close the Farm-Out Agreement and Assignment Agreement, the Viking farm-out was extended to November 15, 2013.  On November 15, 2013, the Viking Farm-Out was terminated due to Viking’s inability to fund their portion of the Bank Guarantee.


On December 20, 2013, the Company reached an agreement with Joint Oil to extend the drilling of the first exploration well, Fisal-1, from December 2013 to November 2014.  The agreement required Sonde to deliver to Joint Oil a Letter of Credit in the amount of US$15 million by January 10, 2014.  The Company subsequently funded the US$15 million letter of credit as required.


With the Letter of Credit in place the corporate guarantee has been reduced to US$30.0 million to secure its minimum work program obligations. The potential cost of drilling the three exploration wells could exceed US$120.0 million.


Zarat Field Plan of Development


The Zarat North-1 well, which was the appraisal well for the Zarat Field and unit located offshore Tunisia, was temporarily abandoned on January 11, 2011. This well was the third well drilled on the large Zarat anticlinal feature, following two wells drilled by Marathon in 1992 and 1994, respectively.


The Zarat North-1 well encountered 240 net feet of gas/condensate and oil pay in the Eocene El Gueria limestone, with oil/water and gas/oil contacts at the same structural elevation found in the Marathon wells. Tested in three separate intervals, the Zarat North-1 flowed at sustained rates averaging 8 MMcf/d of natural gas plus 750 bbl/d of condensate.


In March 2012 the Company filed an original Unit Plan of Development with Joint Oil for the development of the Zarat field. Joint Oil deferred approval of the UPOD pending negotiations with PA Resources, the license holder of the Zarat field adjacent to Sonde, and Entreprise Tunisienne d’Activities Petrolicres (ETAP) on Unitization and a joint Unit Plan of Development for Zarat, which will in the Company’s opinion be heavily dependent on the outcome of the Inert and Acid Gases Initiative.


Sonde submitted a Zarat Unit Agreement and an updated Zarat Field Unit Plan of Development to the Tunisian authorities in Q4 2013. This updated Unit Plan of Development utilizes an FPSO vessel and encompasses the following key principles:


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|• | unit crude oil production is anticipated to begin in 2017 at approximately 24,000 barrels of oil per day;

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|• | projected design (five producing wells with subsea tieback to FPSO) achieves potentially 80% of the performance of original fixed structure development plan developed by Sonde and dramatically reduces front end capital expenditures;

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|• | produced gas will be re-injected for the first 7 years, allowing for an accelerated development timeline for the hydrocarbon liquids;

|  |                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | design will allow for immediate tie-in of Fisal prospect (exploratory well to be drilled in 2014), if proven productive, further enhancing its economics of development; and

|  |                                                                                                                                   
|- | ----------------------------------------------------------------------------------------------------------------------------------
|• | design will allow for future pipeline tie-in and production of the gas cap after the Inert and Acid Gas Initiative is implemented.

The Unit Agreement and the updated Unit Plan of Development is anticipated to be approved in the first half of 2014.


2013 Annual Information Form |16


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Management of Sonde believes that the work completed on the Joint Oil Block combined with an approved Unit Plan of Development and ratified Unit Agreement will enhance the marketability and market value of the Zarat Field, and has launched a revitalized marketing campaign for the Joint Oil Block seeking either a partner, external funding or both for Zarat Field development and the Joint Oil Block exploration commitments.





Western Canada


On January 9, 2013, Sonde announced that it had retained FirstEnergy to initiate a process to explore and evaluate potential strategic alternatives to enhance shareholder value with regard to Sonde's Western Canadian production and exploration properties.  As financial advisor to the Board, FirstEnergy assisted in the process of analyzing and evaluating prospects and options available to the Company, which included, among other alternatives, a sale of all or a material portion of the Western Canadian assets of the Company, a strategic investment in Sonde's undeveloped acreage, a joint venture or a merger or other business combination involving Sonde. The Board established a Special Committee comprised of independent directors to oversee the strategic review process.


On December 31, 2013 the Company completed the previously discussed Plan of Arrangement with Marquee.  See "Description of the Business".  As a result of the completion of the Plan of Arrangement, the Company no longer has production, cash flow or material reserves attributable to its operations in Western Canada.  The Company’s remaining Western Canadian oil and gas assets are primarily high working interest exploration properties that are geographically concentrated in west-central and northwestern Alberta and are described below.


The Company seeks to monetize all remaining Western Canada assets through a sale, a farm-out or similar arrangement.


Central CGU


Sturgeon Lake/Windfall


The Central CGU includes 44,021 net undeveloped acres of Duvernay mineral rights located in the Sturgeon Lake and Windfall properties in west-central Alberta. The Company has identified over 500 Duvernay oil locations on these lands.


Northern CGU


Eaglesham/Cindy


The Northern CGU includes 53,405 net acres of undeveloped Wabamun mineral rights located in the Eaglesham/Cindy property in northwestern Alberta.


These lands are prospective for light oil development with horizontal wells. Sonde believes that due to the presence of natural fracturing, Wabamun horizontal development wells may not require hydraulic fracturing or other stimulation procedures, thereby significantly reducing completion costs. The Company has developed an infill drilling scenario based on utilizing two to four wells per section, that if successful, would potentially accommodate 162 to 324 horizontal locations.


2013 CONTINGENT RESOURCES REPORT


As a result of the updated Unit Plan of Development which has been submitted to Joint Oil, the Company engaged Ryder Scott Company, independent reserves evaluator within the meaning of NI 51-101, to prepare the 2013 Contingent Resources Report, the results of which are set forth below.


Zarat Field (Joint Oil Block only)1Low Estimate(1C)3Best Estimate(2C)4High Estimate(3C)5Oil and condensate (MMstb)14.8828.4451.75Sales gas (Bscf)33.1556.5690.63


2013 Annual Information Form |17


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Entire Zarat Field1, 2Low Estimate(1C)3Best Estimate(2C)4High Estimate(3C)5Oil and condensate (MMstb)35.4856.2490.53Sales gas (Bscf)96.17131.10188.73


Notes:


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|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Joint Oil Block, and possibly the Zarat Field, straddles the Tunisia/Libya border. Only the Tunisian portion of the field is evaluated in the Ryder Scott Company Report as there is limited data on the Libyan side.

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|(2) | Estimates are gross for the Zarat Field and do not reflect Sonde's net unitization interest in such resources.

|    |                                                                                                                                                                                                                                                                                                                                                                                          
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|(3) | "Low Estimate (1C)" is considered to be a conservative estimate of the quantity of resources that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90% probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

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|(4) | "Best Estimate (2C)" is considered to be the best estimate of the quantity of resources that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50% probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

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|(5) | "High Estimate (3C)" is considered to be an optimistic estimate of the quantity of resources that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10% probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

The contingent resource volumes included in the 2013 Contingent Resources Report are estimates only and should not be construed as being exact quantities. The estimates may increase or decrease as a result of future technical data (including results from Sonde's 3D seismic program), evaluation studies, and unitization interest. There is no certainty that it will be commercially viable to produce any portion of the estimated resources.


The contingencies that prevented the classification of the remaining recoverable quantities as reserves are economic and legal. At this time the economic status of the contingent resources assigned to the entire Zarat Field and to that portion of the Zarat Field covered by the Joint Oil Block is undetermined. Once a detailed development plan, unitization, potential markets, processing options and pricing for the products are better known, development economics for the Zarat Field will be completed. Sonde continues to work with Joint Oil and the other parties with interests in the Zarat Field on finalizing a Unit Agreement and Unit Plan of Development for the Zarat Field. Completion of these milestones is required before reserves will be assigned for the Joint Oil Block. There is a risk that these milestones may not be achieved as approval of the Unit Plan of Development and the Unit Agreement are outside of the control of Sonde.





STATEMENT OF RESERVES DATA AND OTHER OIL AND GAS INFORMATION


Due to the completion of the Plan of Arrangement with Marquee the Company no longer has reserves assigned to its Western Canadian properties and hence no related future net revenue.  As such, the Company has not engaged an independent reserves evaluator to complete a reserve report in accordance with NI 51-101 and the COGE Handbook as at December 31, 2013.


All references to the GLJ Report refer to the report prepared by GLJ in accordance with NI 51-101 and the COGE Handbook as at December 31, 2012.  See the Company’s Prior AIFs for all information regarding the estimates, assumptions, summaries and details regarding the GLJ Report dated December 31, 2012.


Additionally, no reserves have been attributed to the Joint Oil Block in North Africa given its current stage of development.


Reconciliation of Company's Gross Reserves by Product Type


The following table sets forth the changes the Company's reserve volume estimates made as at December 31, 2013 and the corresponding estimates as at December 31, 2012, using forecast prices and costs.


2013 Annual Information Form |18


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Light and Medium Crude OilCBMNatural GasNGLsTotal Oil EquivalentGross ProvedGross ProbableGross Proved Plus ProbableGross ProvedGross ProbableGross Proved Plus ProbableGross ProvedGross ProbableGross Proved Plus ProbableGross ProvedGross ProbableGross Proved Plus ProbableGross ProvedGross ProbableGross Proved Plus ProbableFactors(Mbbl)(Mbbl)(Mbbl)(MMcf)(MMcf)(MMcf)(MMcf)(MMcf)(MMcf)(Mbbl)(Mbbl)(Mbbl)(MBOE)(MBOE)(MBOE)Dec. 31, 20129811,9122,8932,0582,3844,44220,11011,00031,1103902236135,0664,3669,432Extensions and Improved Recovery------------------------------Technical Revisions------------------------------Discoveries------------------------------Acquisitions------------------------------Dispositions(805)(1,918)(2,723)(1,988)(2,389)(4,377)(17,099)(10,813)(27,912)(329)(221)(550)(4,315)(4,340)(8,655)Economic Factors268(31)5(26)(257)(187)(444)(3)(2)(5)(49)(26)(75)Production(178)--(178)(39)--(39)(2,754)--(2,754)(58)--(58)(702)--(702)Dec. 31, 2013------------------------------





Oil and Gas Wells


The following table sets forth the number and status of wells in which the Company has a working interest as at December 31, 2013.


LocationLight and Medium Crude OilNatural GasProducingNon-ProducingProducingNon-ProducingGrossNetGrossNetGrossNetGrossNetBritish Columbia------8.03.0Alberta--------Saskatchewan--------Total------8.03.0





Properties With No Attributed Reserves


The following table summarizes the undeveloped gross and net acres of properties with no attributed reserves as at December 31, 2013 in which the Company has an interest and also the number of net acres for which the Company's rights to explore, develop or exploit will, absent further action, expire within one year of December 31, 2013.


LocationGross AcresNet AcresNet Acres ExpiringWithin One YearCentral CGU44,02144,0210Northern CGU54,79053,4890Other CGU32,79812,5722,640Offshore North Africa768,000768,0000Total899,609878,0822,640


2013 Annual Information Form |19


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On December 24, 2012, Joint Oil approved an extension of the first phase of the exploration period pursuant to the EPSA to December 23, 2015. The extension provided for penalties for non-fulfillment of the minimum work program of US$15.0 million for each of the three exploratory wells, due December 23, 2013, December 23, 2014, and December 23, 2015, respectively.  In addition, the extension provided for the acquisition and processing of 200 square kilometres of 3D seismic covering the sub-contract area “B” (Libyan) of the Joint Oil Block, beginning in the second quarter of 2013.  As of March 27, 2014, the Company has acquired and is processing the 3D seismic covering the sub-contract area “B” (Libyan) of the Joint Oil Block.


On December 20, 2013, the Company reached an agreement with Joint Oil to extend the drilling of the first exploration well, Fisal-1, from December 2013 to November 2014.  The agreement required Sonde to deliver to Joint Oil a Letter of Credit in the amount of US$15 million by January 10, 2014.  The Company subsequently funded the US$15 million letter of credit as required.


The Company has provided a corporate guarantee to a maximum of US$30.0 million and a Letter of Credit of US$15 million (see below) to secure its minimum work program obligations. The potential cost of drilling the three wells could exceed US$120.0 million.


Significant Factors or Uncertainties Relevant to Properties With No Attributed Reserves


The Company’s properties with no attributed reserves are subject to significant risks.  See “Risk Factors” for a comprehensive discussion of these risks.


Approval of the Unit Agreement and the Unit Plan of Development are outside of the control of Sonde.  Sonde continues to work towards finalizing a Unit Agreement and Unit Plan of Development for the Zarat Field so that reserves are capable of being assigned for the Joint Oil Block.  There is no certainty that it will be commercially viable to produce any portion of the contingent resources.


Forward Contracts


The Company may periodically enter into commodity sales agreements and certain derivative financial instruments to reduce its exposure to commodity price volatility. These financial instruments are to be entered into solely for hedging purposes and are not used for trading or other speculative purposes. As of December 31, 2013, the Company had not entered into any of these types of contracts.


Additional Information Concerning Abandonment and Reclamation Costs


The Company typically estimates abandonment and reclamation costs for surface leases, wells, facilities and pipelines, as applicable, on an area by area basis.


As a result of the completion of the Plan of Arrangement, the Company’s asset retirement obligation has decreased significantly.  The Company has recorded an asset retirement obligation of $1.3 million which includes the abandonment of 3 net wells, over the next three years.  The Company's net abandonment and reclamation cost is expected to be $1.3 million ($1.0 million discounted at 10%) during the next three financial years.


The Company is liable for its share of ongoing environmental obligations and for the ultimate reclamation of the properties held by it upon abandonment. Ongoing environmental obligations are expected to be funded out of the Company’s current cash position.


Costs Incurred


The following table summarizes capital expenditures (including capitalized general and administrative expenses) incurred by the Company for the year ended December 31, 2013:


Property Acquisition CostsExploration CostsDevelopment CostsProved PropertiesUnproved Properties(M$)(M$)(M$)(M$)01,1783,9909,313





Tax Horizon


Due to the fact that the Company does not currently have production, the Company estimates that it will not be required to pay income taxes in 2014 or 2015 and with continued exploration activity, the tax horizon could be pushed further.


2013 Annual Information Form |20


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Exploration and Drilling Activity


During the twelve months ended December 31, 2013, Sonde did not drill any wells due to the Western Canada Strategic Alternatives Process.





Sonde continued its well re-activation program concentrated on an extensive portfolio of suspended wells. Sonde performed 38 net work overs and recompletions in the twelve months ended December 31, 2013.  All wells associated with the re-activation program were divested to Marquee pursuant to the Plan of Arrangement.





Production Estimates


The Company does not anticipate that it will have any production until first production is achieved from Zarat, which is currently anticipated in 2017.


Production History


The following table sets forth, on a quarterly basis for the year ended December 31, 2013, certain information in respect of production, product prices received, royalties paid, operating expenses and resulting netback.


Three Months EndedMarch 31, 2013June 30, 2013September 30, 2013December 31, 2013Average Daily Production Volume (BOE/d)Light and Medium Oil (bbl/d)549461493456NGL (bbl/d)188161160133Natural Gas (Mcf/d)7,9347,4238,2447,082Total (BOE/d)2,0591,8582,0281,769Average Prices Received ($/BOE)Light and Medium Oil ($/bbl)79.5883.5897.7775.72NGL ($/bbl)57.0349.7262.4355.74Natural Gas ($/Mcf)3.303.902.523.99Total ($/BOE)39.1240.5939.0039.70Royalties Paid ($/BOE)Light and Medium Oil ($/bbl)8.937.5210.7711.90NGL ($/bbl)22.9116.8622.0028.58Natural Gas ($/Mcf)0.420.470.280.57Total ($/BOE)2.513.722.993.98Production Costs($/BOE)Light and Medium Oil and NGL ($/bbl)19.3515.8514.8811.93Natural Gas ($/Mcf)3.412.802.632.10Total ($/BOE)22.7618.6517.5114.03Transportation Costs ($/BOE)Light and Medium Oil and NGL ($/bbl)0.820.831.070.92Natural Gas ($/Mcf)0.140.150.190.16Total ($/BOE)0.960.981.261.08Netback Received(1)($/BOE)12.8917.2417.2420.61


Note:


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|--- | -------------------------------------------------------------------------------------------------
|(1) | Netback is calculated by subtracting royalties, operating costs and transportation from revenues.

2013 Annual Information Form |21


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RISK FACTORS


An investment in Common Shares is subject to certain risks. Investors should carefully consider the risk factors set out below and consider all other information contained herein and in the Company's other public filings. In order to mitigate these risks, the Company has qualified technical and financial personnel, with experience in the areas of North Africa and Canada. Further, the Company has focused on its foreign operations, and plans to target future operations, in known and prospective hydrocarbon basins in jurisdictions that have previously established long-term oil and gas ventures with oil and gas companies. Additional risks and uncertainties not currently known to the management of the Company may also have an adverse effect on the Company's business, prospects, financial condition, results of operations, cash flows or the trading prices of its securities and the information set out below does not purport to be an exhaustive summary of all risks affecting the Company.


Substantial Capital Requirements


The Company has significant work commitments in connection with the EPSA in North Africa and the Company does not currently have any production or cash flow. This may limit the Company's ability to expend or access the capital necessary to undertake or complete future drilling programs and meet its commitments. There can be no assurance that debt or equity financing or other sources of funding will be available or sufficient to meet these requirements or for other corporate purposes or, if debt or equity financing is available, that it will be on terms acceptable to the Company. The inability of the Company to access sufficient capital for its operations could have a material adverse effect on the Company's financial condition, results of operations or prospects.  The Company has provided a corporate guarantee to a maximum of US$30.0 million and a Letter of Credit of US$15 million to secure its minimum work program obligations under the EPSA. The potential cost of drilling the three wells could exceed US$120.0 million. The Company's financial statements contain a "going concern" note based on the uncertainty of obtaining a partner, or external funding or both for Zarat development and the Joint Oil Block exploration commitments; potential developments involving the Company's three exploratory well obligation in respect of the Joint Oil Block; unitization of and plan of development on the Zarat Field; drilling rig availability; and, the resolution of the Inert and Acid Gas Initiative.


Additional financial information with respect to the foregoing is provided in the Company's financial statements and management discussion and analysis for the year ended December 31, 2013, copies of which are available on SEDAR at www.sedar.com .


The Company continues to explore and evaluate potential strategic alternatives to enhance shareholder value with regard to the Company's remaining Western Canadian exploratory properties.  There can be no assurance that this process will result in a sale of all or any of the Company's remaining Western Canadian assets or that a strategic investment, joint venture or business combination will be identified or consummated on terms acceptable to the Company or at all.


Capital Markets


The market events and conditions witnessed over the past three financial years, including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions, have caused significant volatility in commodity prices and increases in the rates at which the Company is able to borrow funds for its capital programs. While there have been recent signs which may suggest the beginning of a global economic recovery, there can be no certainty regarding the timing or extent of a potential recovery, and such continued uncertainty in the global economic situation means that the Company, along with all other oil and gas entities, may continue to face restricted access to capital and increased borrowing costs. This could have an adverse effect on the Company, as its ability to make future capital expenditures is dependent on, among other factors, the overall state of the capital markets and investor appetite for investments in the energy industry generally and the Company's securities in particular.


Additional Funding Requirements


The Company will require additional financing in order to carry out its exploration and development activities. Failure to obtain such financing on a timely basis could cause the Company to forfeit its interest in certain properties and reduce or terminate its operations. There can be no assurance that additional debt or equity financing will be available to meet these requirements or available on favorable terms.  The Company does not presently have access to conventional sources of debt financing such as a credit facility given the current stage of development of its oil and gas properties and the inherent risks and uncertainties associated therewith.





2013 Annual Information Form |22


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Corporate Guarantee


Sonde has provided a corporate guarantee in the amount of US$30 million to Joint Oil to secure its work commitments under the EPSA.  In addition, a US$15 million Letter of Credit has been posted for the benefit of Joint Oil.  Joint Oil will have a right to draw on the letter of credit if the Fisal-1 well is not drilled prior to November 30, 2014.  Additionally, joint Oil will have a right to collect on the corporate guarantee if Sonde does not meet its additional work commitments under the EPSA.


Contingent Resources


References to "contingent resources" do not constitute, and should be distinguished from, references to "reserves". Reserves are estimated remaining quantities of crude oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Contingent resources are those quantities of crude oil and natural gas estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. The contingencies that prevent the classification of reserves are economic, legal and political. See " Contingent Resources ". While Sonde, continues to work towards finalizing a Unit Agreement and Unit Plan of Development for the Zarat Field so that reserves are capable of being assigned for the Joint Oil Block, these milestones are outside of the control of Sonde and there is a risk that they may not be achieved. There is no certainty that it will be commercially viable to produce any portion of the contingent resources.


Exploration, Development and Production Risks


Oil and natural gas operations involve many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome. The long-term commercial success of the Company depends on its ability to find, acquire, develop and commercially produce oil and natural gas reserves. Without the continual addition of new reserves, any existing reserves the Company may have at any particular time, and the production therefrom will decline over time as such existing reserves are exploited. A future increase in the Company's reserves will depend not only on its ability to explore and develop any properties it may have from time to time, but also on its ability to select and acquire suitable producing properties or prospects. No assurance can be given that the Company will be able to continue to locate satisfactory properties for acquisition or participation. Moreover, if such acquisitions or participations are identified, management of the Company may determine that current markets, terms of acquisition and participation or pricing conditions make such acquisitions or participations uneconomic. There is no assurance that further commercial quantities of oil and natural gas will be discovered or acquired by the Company.


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


Oil and natural gas exploration, development and production operations are subject to all the risks and hazards typically associated with such operations, including hazards such as fire, explosion, blowouts, cratering, sour gas releases and spills, each of which could result in substantial damage to oil and natural gas wells, production facilities, other property and the environment or personal injury. In particular, the Company may explore for and produce sour natural gas in certain areas. An unintentional leak of sour natural gas could result in personal injury, loss of life or damage to property and may necessitate an evacuation of populated areas, all of which could result in liability to the Company. In accordance with industry practice, the Company is not fully insured against all of these risks, nor are all such risks insurable. Although the Company maintains liability insurance in an amount that it considers consistent with industry practice, the nature of these risks is such that liabilities could exceed policy limits, in which event the Company could incur significant costs that could have a material adverse effect upon its financial condition.


Oil and natural gas production operations are also subject to all the risks typically associated with such operations, including encountering unexpected formations or pressures, premature decline of reservoirs and the invasion of water into producing formations. Losses resulting from the occurrence of any of these risks could have a material adverse effect on the Company.


2013 Annual Information Form |23


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Project Risks


Project delays may delay expected revenues from operations. Significant project cost over-runs could make a project uneconomic. The Company's ability to execute projects and market oil and natural gas will depend upon numerous factors beyond the Company's control, including:


|  |                                                    
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|• | the availability of drilling and related equipment;

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|• | the availability of processing capacity;

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|• | the availability and proximity of pipeline capacity;

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|• | the availability of storage capacity;

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|• | the supply of and demand for oil and natural gas;

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|• | the availability of alternative fuel sources;

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|• | the effects of inclement weather;

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|• | unexpected cost increases;

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|• | accidental events;

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|• | currency fluctuations;

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|• | changes in regulations;

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|• | the availability and productivity of skilled labor in North Africa and Canada; and

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

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


Availability of Drilling Equipment and Access


Oil and natural gas exploration and development activities are dependent on the availability of drilling and related equipment (typically leased from third parties) in the particular areas where such activities will be conducted.  The availability of specialized drilling equipment, such as offshore drilling rigs, can be more limited, requiring longer lead times to secure.  Demand for such limited equipment or access restrictions may affect the availability of such equipment to the Company and may delay exploration and development activities or involve greater costs to secure such equipment.  To the extent the Company is not the operator of its oil and gas properties, the Company will be dependent on such operators for the timing of activities related to such properties and will be largely unable to direct or control the activities of the operators.


Prices, Markets and Marketing of Crude Oil and Natural Gas


The marketability and price of oil and natural gas that may be acquired or discovered by the Company is and will continue to be affected by numerous factors beyond its control. The Company's ability to market its oil and natural gas may depend upon its ability to contract capacity on pipelines that deliver natural gas to commercial markets. The Company may also be affected by deliverability uncertainties related to the proximity of its reserves to pipelines and processing and storage facilities and operational problems affecting such pipelines and facilities as well as extensive government regulation relating to price, taxes, royalties, land tenure, allowable production, the export of oil and natural gas and many other aspects of the oil and natural gas business.


The Company's revenues, profitability and future growth and the carrying value of its oil and gas properties are substantially dependent on prevailing prices of oil and gas. The Company's ability to borrow and to obtain additional capital on attractive terms is also substantially dependent upon oil and gas prices. Prices for oil and gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors beyond the control of the Company. These factors include economic conditions, in North Africa, the United States and Canada, the actions of the OPEC and Russia, governmental regulation, political stability in the Middle East and elsewhere, the foreign supply of oil and gas, the price of foreign imports and the availability of alternative fuel sources.


2013 Annual Information Form |24


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Any substantial and extended decline in the price of oil and gas would have an adverse effect on the Company's carrying value of its reserves, borrowing capacity, revenues, profitability and cash flows from operations.


Volatile oil and gas prices make it difficult to estimate the value of producing properties for acquisition and often cause disruption in the market for oil and gas producing properties, as buyers and sellers have difficulty agreeing on such value. Price volatility also makes it difficult to budget for and project the return on acquisitions and development and exploitation projects.


Pipeline and Processing Capacity


Although pipeline and facility expansions are ongoing, the lack of firm pipeline and natural gas processing capacity, together with interruptions in pipeline and processing service, continue to affect the oil and natural gas industry and potentially limit the ability to produce and market natural gas production in the future.


Insurance


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


Hydraulic Fracturing


Concern has been expressed over the potential environmental impact of hydraulic fracturing operations, including water aquifer contamination, other qualitative and quantitative effects on water resources as large quantities of water are used, and injected fluids either remain underground or flow back to the surface to be collected, treated and disposed of. Regulatory authorities in certain jurisdictions have announced initiatives in response to such concerns.  Federal, provincial and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities, could result in increased costs, additional operating restrictions or delays, and adversely affect the Company’s production and results of operations. Public perception of environmental risks associated with hydraulic fracturing can further increase pressure to adopt new laws or permitting requirements or lead to regulatory delays, legal proceedings and/or reputational impacts. Any new laws, or permitting requirements regarding hydraulic fracturing could lead to operational delay, increased operating costs, and third-party or governmental claims. This could also increase the Company’s cost of compliance and doing business as well as delay the development of hydrocarbon (natural gas and oil) resources from shale formations, which may not be commercial without use of hydraulic fracturing.


In the event federal, provincial, local, or municipal legal restrictions are adopted in areas where the Company in the future plans to conduct operations, the Company may incur additional costs to comply with such requirements that may be significant in nature, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from the drilling of wells. In addition, if hydraulic fracturing becomes subject to increased regulation, the Company’s fracturing activities could become subject to additional permitting requirements and result in permitting delays as well as potential increases in costs. Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas that the Company is ultimately able to produce from its reserves.


Legal Proceedings


The Company may from time to time be subject to litigation and regulatory proceedings arising in the normal course of its business. The Company cannot determine whether such litigation and regulatory proceedings will, individually or collectively, have a material adverse effect on its business, results of operations or financial condition. To the extent expenses incurred in connection with litigation or any potential regulatory proceeding or action (which may include substantial fees of lawyers and other professional advisors and potential obligations to indemnify officers and directors who may be parties to such actions) are not covered by available insurance, such expenses could adversely affect the Company's cash position.


2013 Annual Information Form |25


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Environmental Risks


All phases of the oil and natural gas business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and international, national, provincial, state and local law and regulation. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and gas operations. The legislation also requires that wells and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach of same can result in the imposition of clean-up orders, fines and/or penalties, some of which may be material, as well as possible forfeiture of requisite regulatory approvals obtained from the various governmental authorities. The discharge of GHG emissions and other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require the Company to incur costs to remedy such discharge. Although the Company believes that it is in material compliance with current applicable environmental regulations, no assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect its financial condition, results of operations or prospects. See "Industry Conditions".


Canadian Tax Considerations


As the Company is engaged in the oil and natural gas business its operations are subject to certain unique provisions of the Income Tax Act (Canada) and applicable provincial income tax legislation relating to characterization of costs incurred in their businesses which effects whether such costs are deductible and, if deductible, the rate at which they may be deducted for the purposes of calculating taxable income. The Company has reviewed its historical income tax returns with respect to the characterization of the costs incurred in the oil and natural gas business as well as other matters generally applicable to all corporations including the ability to offset future income against prior year losses. The Company has filed or will file all required income tax returns and believes that it is in full compliance with the provisions of the Income Tax Act (Canada) and applicable provincial income tax legislation, but such returns are subject to reassessment. In the event of a successful reassessment of the Company it may be subject to a higher than expected past or future income tax liability as well as potentially interest and penalties and such amount could be material.


Foreign Operations


International operations in North Africa are subject to political, economic and other uncertainties, including, among others: risk of war, risk of terrorist activities, revolution, border disputes, sanctions by other governments that limit or prevent certain actions, expropriation, renegotiations or modification of existing contracts, freezing of bank accounts and other assets, restrictions on repatriation of funds, import, export and transportation regulations and tariffs, taxation policies including royalty and tax increases and retroactive tax claims, exchange controls, limits on allowable levels of production, currency fluctuations, labor disputes, sudden changes in laws, government control over domestic oil and gas pricing, and other uncertainties arising out of foreign government sovereignty over the Company's international operations.


The Company's international operations may also be adversely affected by laws and policies of Canada, the United States and other jurisdictions affecting foreign trade, taxation and investment.  For example, the Company may be at a disadvantage in that it may compete against companies or other entities from countries that are not subject to Canadian laws and regulations, including the Corruption of Foreign Public Officials Act (or similar legislation of other jurisdictions).  Residents of nationals or countries not subject to such legal regimes may offer inducements to foreign governments and foreign public officials to entice such governments and officials to deal with them to the disadvantage of the Company.


Furthermore international oil and gas operations offshore North Africa involve substantial costs and are subject to certain risks owing to the underdeveloped nature of the oil and gas industry in Libya and Tunisia. The oil and gas industry in Libya and Tunisia is not as developed as the oil and gas industry in Canada. As a result, drilling and development operations may take longer to complete and may cost more than similar operations in Canada. The availability of technical expertise, specific equipment and supplies is more limited in various countries than in Canada and the United States. Such factors may subject oil and gas operations in other countries to economic and operating risks not experienced in Canada.


Foreign Legal Systems


Tunisia and Libya have less developed legal systems than in Canada which may result in risks such as: (i) effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation, or, in an ownership dispute, being difficult to obtain; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v) relative inexperience of the judiciary and courts in such matters.


2013 Annual Information Form |26


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In certain jurisdictions the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licenses and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licenses, license applications or other legal arrangements will not be adversely affected by the actions of government authorities and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured.


Foreign Currency Rates


A significant amount of the Company's activities are transacted in or referenced to the currencies of the United States and Tunisia. The Company's operating costs and certain of its payments in order to maintain property interests are to be in the local currency of the jurisdiction where the applicable property is located. As a result, fluctuations in the currencies of the United States and Tunisia against the Canadian dollar, and each of those currencies against currencies in jurisdictions where properties of the Company are located, could result in unanticipated fluctuations in the Company's financial results which are denominated in Canadian dollars. The Company does not currently manage its exposure to fluctuations in currency exchange rates.


Competition


The Company competes for reserve acquisitions, exploration leases, licences and concessions, development properties, production and skilled industry personnel with a substantial number of other oil and gas companies, many of which have significantly greater financial resources than the Company. The Company's competitors include major integrated oil and natural gas companies, state owned oil and gas companies and numerous other independent oil and natural gas companies and individual producers and operators. Competition may also be presented by alternate energy sources.


The Company's ability to successfully bid on and acquire additional property rights, to discover reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements with customers will be dependent upon developing and maintaining close working relationships with its future industry partners and joint operators and its ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment.


Reserve Replacement


The Company's future oil and natural gas reserves, production, and cash flows to be derived therefrom are highly dependent on the Company successfully acquiring or discovering new reserves. A future increase in the Company's reserves will depend not only on the Company's ability to develop any properties it may have from time to time, but also on its ability to select and acquire suitable producing properties or develop or acquire prospects. There can be no assurance that the Company's future exploration and development efforts will result in the discovery and development of additional commercial accumulations of oil and natural gas.


Reliance on Industry Partners


In order to carry out certain of its business and operations, the Company relies on its industry partners (certain of which include suppliers, contractors and joint venture parties and operators). Accordingly, the Company is exposed to third party risk. Should such industry partners fail to fulfill those duties and obligations each owes to the Company, such failure could have a material adverse effect on the Company's business and/or operations.


Reliance on Key Employees


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


2013 Annual Information Form |27


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Permits, Licences and Approvals


The Company's properties are held in the form of licences and leases, and in the case of its interest in North Africa, pursuant to a production sharing agreement. If the Company fails to meet the specific requirements of a licence, lease or the EPSA, the licence, lease or EPSA, as the case may be, may terminate or expire. There can be no assurance that any of the obligations required to maintain each licence, lease or EPSA will be met. The termination or expiration of the Company's licences, leases or EPSA may have a material adverse effect on its results of operations and business.


Royalties, Incentives and Production Taxes


In addition to federal regulations, each province in Canada has legislation and regulations which govern land tenure, royalties, production rates, environmental protection and other matters. The royalty regime is a significant factor in the profitability of oil and natural gas production. Royalties payable on production from lands other than Crown Lands are determined by negotiations between the mineral owner and the lessee. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, and the rate of royalties payable generally depends in part on prescribed reference prices, well productivity, geographical location, field discovery date and the type or quality of the petroleum product produced.


From time to time, the Governments of Canada, Alberta and British Columbia have established incentive programs which have included royalty rate reductions, royalty holidays and tax credits for the purpose of encouraging oil and natural gas exploration or enhanced planning projects.  There can be no assurance that, if implemented, these incentive programs will be continued.


Land Tenure


Crude oil and natural gas located in the Canadian western provinces is owned predominantly by the respective provincial governments. Provincial governments grant rights to explore for and produce oil and natural gas pursuant to leases, licences and permits for varying terms and on conditions set forth in provincial legislation including requirements to perform specific work or make payments. Oil and natural gas located in such provinces can also be privately owned and rights to explore for and produce such oil and natural gas are granted by lease on such terms and conditions as may be negotiated.


Title to Properties


Although title reviews may be conducted prior to the purchase of producing properties or the commencement of drilling wells, such reviews do not guarantee or certify that an unforeseen defect in the chain of title will not arise to defeat the Company's claim which could result in a reduction of the revenue received by the Company.


Contingent Resource Information


There are numerous uncertainties inherent in estimating quantities of contingent resources and future net revenues to be derived therefrom, including many factors beyond the control of the Company.


References to "contingent resources" do not constitute, and should be distinguished from, references to "reserves". Reserves are estimated remaining quantities of crude oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Contingent resources are those quantities of crude oil and natural gas estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. The contingencies that prevent the classification of reserves are economic, legal and political. See "Contingent Resources". While Sonde continues to work towards finalizing a Unit Agreement and Unit Plan of Development for the Zarat Field so that reserves are capable of being assigned for the Joint Oil Block, these milestones are outside of the control of Sonde and there is a risk that they may not be achieved. There is no certainty that it will be commercially viable to produce any portion of the contingent resources.


Dilutive Effect of Financings and Acquisitions


The Company may make future acquisitions or enter into financing or other transactions involving the issuance of securities of the Company which may be dilutive to its current shareholders.


2013 Annual Information Form |28


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Dividends


The Company has not paid any dividends on its outstanding Common Shares nor is expected to in the near future.


Volatile Trading Price


The trading price of the Common Shares is subject to substantial volatility often based on factors related and unrelated to our financial performance or prospects.  Factors unrelated to the Company's financial performance could include macroeconomic developments nationally, within North America or globally; domestic and global commodity prices or current perceptions of the oil and gas market.  Similarly the market price of the Common Shares could be subject to significant fluctuations in response to the Company’s operating results, financial condition, liquidity and other internal factors.  Factors that could affect the market price of the Common Shares that are unrelated to performance include domestic and global commodity prices and the market perceptions of attractiveness of particular industries.  The price which the Common Shares will trade cannot be accurately predicted.


Third Party Credit Risk


The Company may be exposed to third party credit risk through its contractual arrangements with future joint venture partners, marketers of its petroleum and natural gas production and other parties. In the event such entities fail to meet their contractual obligations to the Company, such failures could have a material adverse effect on the Company and its cash flow from operations. In addition, poor credit conditions in the industry and of joint venture partners may impact a joint venture partner's willingness to participate in the Company's ongoing capital program, potentially delaying the program and the results of such program until the Company finds a suitable alternative partner.


Failure to Realize Anticipated Benefits of Acquisitions and Dispositions


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


Hedging


Historically the Company has entered into commodity price contracts and the Company may enter into such contracts in the future.  As of December 31, 2013, all contracts have expired.  Similarly, from time to time the Company may enter into agreements to fix the exchange rate of Canadian to United States dollars in order to offset the risk of revenue losses if the Canadian dollar increases in value compared to the United States dollar; however, if the Canadian dollar declines in value compared to the United States dollar, the Company will not benefit from the fluctuating exchange rate.


Aboriginal Claims


The Canadian First Nations have made rights and title claims to a significant portion of Western Canada. At present the Company is unable to assess what, if any, impact such claims will have on the business and operations that it conducts in Western Canada.


Conflict of Interest


Certain of the directors of the Company are also directors and officers of other oil and gas companies involved in natural resource exploration and development, and conflicts of interest may arise between their duties as directors of the Company and as officers and directors of such other companies. Such conflicts must be disclosed in accordance with, and are subject to such other procedures and remedies as apply under the ABCA.





2013 Annual Information Form |29


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INDUSTRY CONDITIONS


The oil and natural gas industry is subject to extensive controls and regulations governing its operations (including land tenure, exploration, environmental, development, production, refining, transportation, and marketing) imposed by legislation enacted by various levels of government and with respect to export and taxation of oil and natural gas by agreements among the governments of Canada, British Columbia, Alberta and Saskatchewan, among others, (including the governments of the United States, Tunisia and Libya), all of which should be carefully considered by investors in the oil and gas industry. It is not expected that any of these controls or regulations will affect the Company's operations in a manner materially different than they would affect other oil and gas companies of similar size. All current legislation is a matter of public record and the Company is currently unable to predict what additional legislation or amendments may be enacted. Outlined below are some of the principal aspects of environmental legislation and regulations relevant to the oil and gas industry in the jurisdictions in which the Company has properties.


Canadian Government Regulations


Over the last several years, the federal Government has undertaken a number of initiatives to achieve domestic GHG reductions.  These measures include regulations, codes and standards, targeted investments, incentives, tax measures and programs that directly reduce GHG emissions.


Going forward, the Government has announced that it will focus on a sector-by-sector regulatory approach, beginning with the largest sources of emissions.  Given the high degree of economic integration between Canada and the U.S., Canada has stated that it will be aligned with future U.S. emissions reduction regulations where it is appropriate and in Canada's best interests to do so.  This regulatory agenda will continue to be supported by targeted complementary measures designed to advance Canada's transition to a clean energy economy.


Under Canada's plan to address climate change, actions have been taken regarding two of the largest sources of GHG emissions:  the electricity and transportation sectors.  The oil sands industry is expected to be a sector of the economy where the federal Government will next regulate GHG emissions.


There has been much public debate surrounding Canada's ability to meet emission reduction targets and the strategies proposed for controlling climate change and GHG emissions. It is likely that any such strategies which are eventually adopted by the Canadian government will materially impact the nature of oil and gas operations, including those carried out by the Company. At present, it is not possible to predict the impact such strategies will have on the business, operations and/or finances of the Company.


Alberta


Environmental legislation in the Province of Alberta has largely been consolidated into the Environmental Protection and Enhancement Act (Alberta), the Water Act (Alberta) and the Oil and Gas Conservation Act (Alberta). These statutes impose environmental standards, require compliance, reporting and monitoring obligations, and impose penalties. In addition, the emissions reduction requirements in the Climate Change and Emissions Management Act (Alberta) came into effect on July 1, 2007. Under this legislation, Alberta facilities emitting more than 50,000 tonnes of GHG emissions per year must report such emission to Alberta Environment and Sustainable Resource Development and to Environment Canada while facilities emitting more than 100,000 tonnes of GHG emissions per year must reduce their emissions intensity by 12 percent.


The Company has four options to choose from in order to meet the reduction requirements outlined in this legislation, and these are: making improvement to operations that result in reductions; purchasing emission credits from other sectors or facilities that have reduced their emissions below the required emission intensity reduction levels; purchasing off-set credits from other sectors or facilities that have emissions below the 100,000 tonne threshold and are voluntarily reducing their emissions in Alberta; or contributing to the 'Climate Change and Emissions Management Fund'. The Company can choose one of these options or a combination thereof, however it should be noted that the price of off-set credits could be raised, and the required reductions in GHG emissions intensity presently set forth could be increased to unspecified levels.


2013 Annual Information Form |30


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In January of 2008 Alberta introduced its Climate Change Strategy which includes three broad themes: (i) conserving and using energy efficiently; (ii) implementing carbon capture and storage; and (iii) greening energy production. Under the Climate Change Strategy, Alberta has indicated its intention to meet the following emission reduction targets: a 20 megatonne reduction by 2010, a 50 megatonne reduction by 2020 and a 200 megatonne reduction by 2050, all while maintaining economic growth. In furtherance of this Climate Change Strategy, the Government of Alberta has begun enacting legislation including the 2009 Carbon Capture and Storage Funding Act and the 2010 Carbon Capture and Storage Statutes Amendment Act .


DIVIDENDS


The Company has not declared or paid any dividends on the Common Shares since incorporation. It is not currently expected that dividends will be paid in respect of the Common Shares during the current phase of development of the Company's business and operations. The payment of dividends in the future will be at the discretion of the Board and will be dependent on the future earnings and financial condition of the Company and such other factors as the Board considers appropriate.


DESCRIPTION OF SHARE CAPITAL


The Company's authorized share capital consists of an unlimited number of Common Shares and an unlimited number of Preferred Shares, issuable in series. As of the date hereof, 56.1 million Common Shares and no Preferred Shares are issued and outstanding.


Common Shares


The holders of Common Shares are entitled to notice of and to vote at all meetings of Shareholders (except meetings at which only holders of a specified class or series of shares are entitled to vote) and are entitled to one vote per Common Share. The holders of Common Shares are entitled to receive such dividends as the Board may declare and, upon liquidation, to receive such assets of the Company as are distributable to holders of Common Shares.


Preferred Shares


Preferred Shares may be issued in one or more series with each series to consist of such number of shares as may, before the issue of the series, be fixed by the Board.  The Board is authorized, before the issue of the series, to determine the designation, rights, restrictions, conditions and limitations attaching to the Preferred Shares of each series.


Preferred Shares of each series rank equally with respect to the payment of dividends and the distribution of assets in the event of liquidation, dissolution or winding-up and in priority to the Common Shares and any other shares of the Company ranking junior to the Preferred Shares.  In addition, if any amount of a fixed cumulative dividend or an amount payable on return of capital in respect of shares of a series of Preferred Shares is not paid in full, the shares of the series are entitled to participate rateably with the shares of any other series of the same class in respect of such amounts.


Rights Plan


The Company adopted the Rights Plan in accordance with the Rights Plan Agreement. Pursuant to the terms of the Rights Plan Agreement, the Rights Plan will expire on the date that the annual meeting of Shareholders to be held in 2016 terminates unless re-approved by the Shareholders.  For more information with respect to the Rights Plan, see the Information Circular of the Company relating to the 2013 annual and special meeting of Shareholders and the Rights Plan Agreement, copies of which are available on SEDAR at www.sedar.com and are incorporated by reference herein.


2013 Annual Information Form |31


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MARKET FOR SECURITIES


The Common Shares are currently listed and posted for trading on the TSXV and the NYSE MKT under the symbol "SOQ".  On February 18, 2014, Sonde's common shares were delisted from the TSX and its Common Shares began trading on the TSXV on February 19, 2014 under the same symbol “SOQ”.   The following table sets forth the price ranges and volume of Common Shares traded as reported by the TSX for the periods indicated.


The prices below have not been adjusted for the 0.9 for 1 share consolidation which took place as a result of the Marquee Plan of Arrangement.  The Common Shares of Sonde began trading on a post-consolidation basis on the NYSE MKT on January 2, 2014 and on the TSX on January 3, 2014.


2013High($)Low($)Close($)VolumeJanuary1.851.381.603,668,600February1.591.401.402,648,500March1.401.251.401,659,800April1.311.081.081,380,100May1.140.940.983,876,900June0.970.740.88699,600July0.980.760.801,641,000August1.020.650.991,642,800September1.060.821.00429,200October1.000.800.82220,700November0.950.620.701,249,900December0.730.610.73360,900





PRIOR SALES


During the year ended December 31, 2013, no Options, being the only unlisted securities of the Company that were issued, were granted.


ESCROWED SECURITIES


To the knowledge of management of the Company, none of its securities are subject to escrow conditions or contractual restrictions on transfer.


DIRECTORS AND OFFICERS


Directors and Officers


The following sets forth, as at the date hereof, the residence of the directors and executive officers of the Company, their offices or positions with the Company, their principal occupations during the past five years and the period during which each director has served as a director. The term of the directors' office expires at the next annual meeting of Shareholders.


2013 Annual Information Form |32


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Name and ResidenceOffice or PositionDirector SincePrincipal Occupation During the Last Five YearsKerry R. Brittain(1)(3)Texas, United StatesChairman of the BoardSeptember 2009Retired from private law. Prior to July 2007, Senior Vice President, General Counsel and Secretary for Harvest Natural Resources Inc., a U.S. public oil and gas company.W. Gordon Lancaster(1)(2)British Columbia, CanadaDirectorApril 2011From November 2009 to present, an independent business consultant. From January 2004 to November 2009, Chief Financial Officer of Ivanhoe Energy Inc., a public oil and gas company.Dr. William J.F. Roach(1)(4)Alberta, CanadaDirectorSeptember 2009From January 2012 to present, Chief Executive Officer of Cavalier Energy Inc., a private oil sands company. From October 2010 to December 2011, Chief Executive Officer of Calera Corporation, a carbon capture company. Prior thereto, from October 2004 to October 2010, President and Chief Executive Officer of UTS Energy Inc., a public oil and gas company.James A. EdmistonTexas, United StatesDirectorMarch 2014From October 2005 to present, President and Chief Executive Officer and Director of Harvest Natural Resources, Inc., a public oil and gas company.D. Michael AdamsAlberta, CanadaDirectorMarch 2014From April 2013 to present, an independent business consultant for private oil and gas companies and from January 2004 to April 2013,  Vice President, Global Business Development of Talisman Energy Inc., a public oil and gas company.Toufic Nassif                         Texas, United StatesPresident, Chief Executive Officer and DirectorMarch 2014From January 2014 to present, President and Chief Executive Officer of the Company. From November 2011 to present, President Sonde North Africa.  From September 2010 to November 2011 President of T P Nassif and Associates an oil and gas consultancy firm based in Houston. From April 2004 to September 2010 VP and Commercial Director, BP Libya, Director for BP Exploration North Africa and BP Exploration Libya Ltd.Rene P. BeaumierCalgary, CanadaChief Financial OfficerN/AFrom September 2013 to present, Chief Financial Officer of the Company.  Prior thereto, from October 2010 to August 2013, Consultant, including acting as CFO for Anglo Canadian Oil Corp., a public oil and gas company trading on the TSXV. From April 2002 to September 2010, VP Finance and Administration Nexen Petroleum Nigeria Limited.


Notes:


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

|    |                                      
|--- | -------------------------------------
|(2) | Member of the Compensation Committee.

|    |                                              
|--- | ---------------------------------------------
|(3) | Member of the Corporate Governance Committee.

|    |                                                                  
|--- | -----------------------------------------------------------------
|(4) | Member of the Health, Safety, Environment and Reserves Committee.

As at December 31, 2013, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over 153,000 Common Shares representing less than one percent  of the issued and outstanding Common Shares.


2013 Annual Information Form |33


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Corporate Cease Trade Orders or Bankruptcies


To the knowledge of management, no director or executive officer of Sonde is, or has been, within the past 10 years before the date hereof, a director or executive officer of any issuer that, while that person was acting in that capacity: (i) was the subject of a cease trade or similar order or an order that denied the issuer access to any exemption under securities legislation for a period of more than 30 consecutive days; or (ii) was subject to an event that resulted, after the person ceased to be a director or executive officer, in the issuer being the subject of a cease trade or similar order or an order that denied the issuer access to any exemption under securities legislation for a period of more than 30 consecutive days, other than:


To the knowledge of management, no director, executive officer of Sonde or controlling Shareholder is, or has been, within the past 10 years before the date hereof, a director or executive officer of any issuer that, while that person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, other than:


|  |                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------
|• | Messrs. Brittain and Roach were appointed directors of the Company in connection with the completion of the CCAA Proceeding.

Personal Bankruptcies


To the knowledge of management, no director, executive officer of Sonde or controlling Shareholder has, within the 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold such person's assets.


Penalties or Sanctions


To the knowledge of management, no director, executive officer of Sonde or controlling Shareholder has: (i) been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority, other than penalties for late filing of insider reports; or (ii) been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.


Conflicts of Interest


Certain of the directors of the Company are directors and/or officers of other private and public companies. Some of these private and public companies may, from time to time, be involved in business transactions or banking relationships which may create situations in which conflicts might arise. Any such conflicts shall be resolved in accordance with the procedures and requirements of the relevant provisions of the ABCA, including the duty of such directors to act honestly and in good faith with a view to the best interests of the Company.


AUDIT COMMITTEE


Composition of the Audit Committee


The Audit Committee operates pursuant to a charter that sets out its responsibilities and composition requirements. A copy of the charter is attached to this Annual Information Form as Appendix "B". The Audit Committee consists of Messrs. Lancaster (Chair), Brittain and Roach. All members of the Audit Committee are independent and financially literate (as determined by National Instrument 52-110, Audit Committees ). In addition, Mr. Lancaster is a “financial expert” as defined under National Instrument 52-110, Audit Committees.


In considering criteria for the determination of financial literacy, the Board looked at the ability to read and understand a balance sheet, an income statement and cash flow statement of a public company as well as the director's past experience in reviewing or overseeing the preparation of financial statements. The following sets out the education and experience of each director relevant to the performance of his duties as a member of the Audit Committee.


2013 Annual Information Form |34


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W. Gordon Lancaster


Gord Lancaster is a Chartered Accountant and completed a 20-year career in public accounting with Deloitte LLP (formerly Deloitte & Touche LLP) with the last five years as a partner in that firm’s Vancouver office. He spent the next 27 years as a Chief Financial Officer of large and medium sized publicly traded companies. Mr. Lancaster also currently serves as the Chair of the audit committee of a TSX listed forestry company and as a member of the audit committee for a TSX and HKSE listed coal mining company. Mr. Lancaster is a Chartered Accountant certified in British Columbia and is a member of the Institute of Corporate Directors.


Kerry R. Brittain


Kerry Brittain retired from private law practice after 35 years' experience advising companies on acquisitions, dispositions and other domestic and international transactions in the oil and gas industry. Mr. Brittain previously served as Senior Vice President, General Counsel and Secretary of a U.S. public oil and gas company and, in that role, was responsible for reporting at the Board of Directors' level on governance and compliance matters.  Mr. Brittain holds a Bachelor of Arts degree and a Juris Doctor degree.


Dr. William J. F. Roach


Dr. Roach is the Chief Executive Officer of Cavalier Energy Inc., a private oil sands company and from October 2004 until October 2010, Dr. Roach was the President and Chief Executive Officer of UTS Energy Inc., a public oil sands company.  Dr. Roach has been responsible for overseeing the preparation of financial statements and related financial and operating reporting in accordance with NI 51-102 and the rules of the TSX.  In his prior roles Dr. Roach has been responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting, and providing annual and quarterly certifications in connection therewith. Dr. Roach is also a member of the Audit Committee of Kior Inc., a NASDAQ listed company. Dr. Roach holds a Bachelor Science degree in Metallurgy, a Doctorate degree in Metallurgy and is a Chartered Engineer in the United Kingdom and a Professional Engineer in Canada.


Auditors' Fees


Deloitte LLP is the external auditor of the Company and is independent to the Company within the meaning of the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta. Fees paid to the Company's auditors for the years ended December 31, 2013 and 2012 are detailed below.


FeeFor the year ended December 31, 2013For the year ended December 31, 2012Audit Fees$319,395$352,725Audit-Related Fees(1)$30,709$6,125Tax Fees(2)$33,705$66,554Other Fees(3)$—$—Total$383,809$425,404


Notes:


|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | "Audit-Related Fees" include the aggregate fees paid to the external auditors for services related to the audit services, including reviewing quarterly financial statements and management's discussion thereon, assurance procedures in connection with filings statements and information circulars and services related to offerings, conversion to International Financial Reporting Standards and consulting with the Board and Audit Committee regarding financial reporting and accounting standards.

|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | "Tax Fees" include the aggregate fees paid to external auditors for tax compliance, tax advice, tax planning and advisory services, including namely preparation of tax returns.

All permissible categories of non-audit services to be provided by the external auditor must be pre-approved by the Audit Committee subject to certain statutory exceptions.


2013 Annual Information Form |35


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LEGAL AND REGULATORY PROCEEDINGS


Except as disclosed herein, Sonde is not a party to any legal proceeding nor was it a party to, nor is or was any of its property the subject of any legal proceeding, during the year ended December 31, 2013, nor is management of the Company aware of any such contemplated legal proceedings, which involve a claim for damages, exclusive of interest and costs, that may exceed 10% of the current assets of the Company.


From time to time, the Company may be involved in various claims and litigation arising in the ordinary course of business.  The Company maintains insurance, which in the opinion of the Company, is in place to address any future claims as to matters insured.


During the year ended December 31, 2013, there were no: (i) penalties or sanctions imposed against the Company by a court relating to securities legislation or by a securities regulatory authority; (ii) penalties or sanctions imposed by a court or regulatory body against the Company that would likely be considered important to a reasonable investor in making an investment decision; or (iii) settlement agreements the Company entered into before a court relating to securities legislation or with a securities regulatory authority.


INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS


Except as disclosed herein, no director or executive officer of the Company, or any person or company that is the beneficial owner of, or who exercises control or direction of, more than 10% of the Common Shares or any associate or affiliate of any of the foregoing persons has had any material interest, direct or indirect, in any transaction in the three most recently completed financial years or during the current financial year that has materially affected or will materially affect Sonde.


TRANSFER AGENT AND REGISTRAR


Valiant Trust Company at its principal offices in Calgary, Alberta and Toronto, Ontario, is the transfer agent and registrar for the Common Shares.


MATERIAL CONTRACTS


Except for contracts entered into in the ordinary course of business, the Company has not entered into any material contracts within the most recently completed financial year, or before the most recently completed financial year that are still in effect, other than:


|  |                                                                          
|- | -------------------------------------------------------------------------
|• | Rights Plan Agreement - see "Description of Share Capital - Rights Plan";

|  |                                                                    
|- | -------------------------------------------------------------------
|• | The Arrangement Agreement and Plan of Arrangement with Marquee; and

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|• | Amending Agreement for the Joint Oil Block Exploration and Production Sharing Agreement.

INTERESTS OF EXPERTS


Reserve estimates contained in this Annual Information Form were prepared by GLJ effective December 31, 2012. As at December 31, 2012, the effective date of those estimates, the principals, directors, officers and associates of GLJ, as a group, owned, directly or indirectly, less than one percent of the outstanding Common Shares.  No evaluation of the company's reserves was completed at December 31, 2013.


Deloitte LLP is the external auditor of the Company and is independent within the Rules of Professional Conduct of the Institute of Chartered Accountants of Alberta.


ADDITIONAL INFORMATION


Additional information relating to the Company may be found on SEDAR at www.sedar.com. Specifically, information as to directors' and officers' remuneration and indebtedness, principal holders of the Company's securities and securities authorized for issuance under equity compensation plans is contained in the Information Circular of the Company prepared in connection with the most recent annual meeting of Shareholder that involved the election of directors. Additional financial information is provided in the Company's financial statements and management discussion and analysis for the year ended December 31, 2013.





2013 Annual Information Form |36


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A 1


APPENDIX "A"





REPORT OF MANAGEMENT AND DIRECTORS ON OIL AND GAS DISCLOSURE


Terms to which a meaning is ascribed in National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities have the same meaning herein.


Management of Sonde Resources Corp. (the "Company") is 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 are estimates of proved and probable reserves and related future net revenue as at December 31, 2013, estimated using forecast prices and costs.


An independent qualified reserves evaluator has not evaluated the Company's reserves data as at December 31, 2013 as all reserves were divested to Marquee Energy Ltd. The last report of the independent qualified reserves evaluator is presented in Appendix "A" to the Annual Information Form of the Company, effective as at December 31, 2012.


The Health, Safety, Environment and Reserves 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 Health, Safety, Environment and Reserves Committee, approved:


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

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




(signed)"Toufic Nassif"(signed)"Rene P. Beaumier"Toufic NassifRene P. BeaumierPresident & Chief Executive OfficerChief Financial Officer(signed)"William Roach"(signed)"James M. Funk"William J.F. RoachJames M. FunkDirectorDirectorDated March 27, 2014







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B 1


APPENDIX "B"














AUDIT COMMITTEE CHARTER


ESTABLISHMENT OF COMMITTEE


|   |                
|-- | ---------------
|1. | Audit Committee

The Board of Directors (the “Board”) of Sonde Resources Corp. (the “Corporation”) has established an audit committee (the “Audit Committee” or the “Committee”).


The primary objective of the Audit Committee is to act as a liaison between the Board and the Corporation’s independent external auditor and to assist the Board in fulfilling its oversight responsibilities with respect to:


|    |                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------
|(a) | the financial statements and other financial information provided by the Corporation to its shareholders, the public and others;

|    |                                                                     
|--- | --------------------------------------------------------------------
|(b) | the Corporation’s compliance with legal and regulatory requirements;

|    |                                                                              
|--- | -----------------------------------------------------------------------------
|(c) | the qualification, independence and performance of the external auditors; and

|    |                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------
|(d) | the Corporation’s risk management and internal financial and accounting controls, and management information systems.

Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee is oversight.  The members of the Committee are not full-time employees of the Corporation and may or may not be accountants or auditors by profession or experts in the fields of  accounting or auditing  and, in any event, do not serve in such capacity.  Consequently it is not the duty of the Committee to conduct audits or to determine that the Corporation’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations.  These are the responsibilities of management.


|   |                         
|-- | ------------------------
|2. | Composition of Committee

|    |                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | the Audit Committee will consist of at least three directors. All members of the Committee must be independent as defined in applicable securities laws (subject to permitted exemptions under those laws) and the rules of any stock exchange on which the Corporation’s securities are listed for trading.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | each member of the Audit Committee must be financially literate, or become financially literate within a reasonable period of time following his or her appointment to the Committee (provided that the Board has determined that this will not materially adversely affect the ability of the Committee to satisfy its responsibilities).  A member is financially literate under applicable securities laws if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements.

|   |                                 
|-- | --------------------------------
|3. | Appointment of Committee Members

Members of the Audit Committee will be appointed by the Board and re-appointed at the meeting of the Board immediately following each annual meeting of shareholders. Committee members will hold office until the next annual meeting or earlier if their successors are appointed, they are removed by the Board or they cease to be directors of the Corporation.




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B 2








|   |                                  
|-- | ---------------------------------
|4. | Compensation of Committee Members

The Board will fix the remuneration of the members of the Audit Committee and may provide additional remuneration to the Chair of the Committee. Other than as remuneration for acting in his or her capacity as a member of the Board or any Board committee, or as a part-time chair or vice- chair of the Board or any Board committee, or as otherwise permitted by applicable securities laws, no consulting, advisory or other compensatory fee will be paid to a member of the Audit Committee by the Corporation or any subsidiary of the Corporation.


|   |          
|-- | ---------
|5. | Vacancies

When a vacancy occurs in the membership of the Audit Committee, it may be filled by the Board and must be filled by the Board if the membership of the Committee as a result of the vacancy is less than three directors. Any member may be removed or replaced at any time by the Board. Any member will cease to be a member upon ceasing to be a director.


COMMITTEE PROCEDURES


|   |                
|-- | ---------------
|6. | Committee Chair

The Board will appoint a Chair for the Audit Committee.


|   |                           
|-- | --------------------------
|7. | Absence of Committee Chair

If the Chair is not present at any meeting of the Audit Committee, one of the other members of the


Committee present at the meeting will be chosen by the Committee to preside at the meeting.


|   |                       
|-- | ----------------------
|8. | Secretary of Committee

The Secretary of the Company shall be the secretary to the Committee unless the Committee designates otherwise.


|   |         
|-- | --------
|9. | Meetings

The Audit Committee will meet at least four times per year. All Committee members are expected to attend each meeting, in person or by telephone - or video-conference. The Committee shall only act on the affirmative vote of a majority of members. A resolution in writing, signed by all the Audit Committee members entitled to vote on that resolution at a meeting of the Committee, is as valid as if it had been passed at a meeting of the Committee.


|    |                   
|--- | ------------------
|10. | Notice of Meetings

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | A meeting of the Audit Committee may be called by any member of the Committee, by the Chairman of the Board, the chief executive officer or the chief financial officer of the Corporation (or persons holding equivalent offices) or by the external auditor. Notice of the time and place of a meeting will be given in writing or by electronic communication to each member of the Committee and to the external auditor prior to the time fixed for the meeting.

|    |                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | A member of the Audit Committee may in any manner waive notice of a Committee meeting.  Attendance of a member at a Committee meeting is a waiver of notice of the meeting, except where a member attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

|    |                         
|--- | ------------------------
|11. | Quorum and Participation

|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(a) | A majority of the number of members of the Audit Committee appointed by the Board constitutes a quorum at any meeting of the Committee.

|    |                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | A member of the Audit Committee may, if all the members of the Committee consent, participate in a meeting of the Committee by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting. A member participating in a Committee meeting by those means is deemed to be present at that meeting.






---

B 3


|    |                                          
|--- | -----------------------------------------
|12. | Attendance by External Auditor and Others

|    |                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The external auditor is entitled, at the expense of the Corporation, to attend and be heard at every meeting of the Audit Committee, and, if so requested by a member of the Committee, shall attend every meeting of the Committee held during the term of office of the external auditor.

|    |                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | At the invitation of the Chair of the Audit Committee, one or more officers or employees of the Corporation or directors who are not members of the Committee may attend a meeting of the Committee.

|    |                                 
|--- | --------------------------------
|13. | Procedure, Records and Reporting

The chair of the Committee shall report regularly to the Board on the Committee’s activities, findings and re commendations.  Minutes of all meetings shall be made available to the Board, and all information reviewed and discussed by the Committee at any meeting shall be retained and made available for examination by the Board upon request of the chair.


|    |                     
|--- | --------------------
|14. | Independent Advisors

The Audit Committee may engage independent counsel and other advisors as it determines necessary to carry out its duties. Furthermore, the Committee has the authority to set and pay the compensation for any such advisors which are employed by the Committee.  The Corporation will provide the Committee adequate funds to cover fees and other costs incurred in carrying out its duties and responsibilities.


|    |                                            
|--- | -------------------------------------------
|15. | Review of Committee Performance and Charter

At least annually the Committee will review its performance and effectiveness and report the results to the Board. The annual review will include an assessment of the adequacy of this Charter and the Committee will recommend any proposed changes to the Board for approval.


|    |                    
|--- | -------------------
|16. | Duties and Reliance

|    |                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | In exercising their powers and discharging their duties under this charter and applicable law, each member of the Audit Committee must (i) act honestly and in good faith with a view to the best interests of the Corporation and (ii) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

|    |                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------
|(b) | Each member of the Audit Committee will be entitled to reasonable reliance, or reliance in good faith, on:

|    |                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i) | financial statements of the Corporation represented to the member of the Committee by an officer of the Corporation or in a written report of the external auditor of the Corporation to reflect fairly the financial condition of the Corporation;

|     |                                                                                                                                                                                                      
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | the Corporation’s disclosure compliance system and on the Corporation’s officers, employees and others whose duties would in the ordinary course have given them knowledge of the relevant facts; and

|      |                                                                                                                                                                                                                                                                                                             
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iii) | a report, statement or opinion of an expert, being a person or company whose profession gives authority to a statement made in a professional capacity by the person or company including, without limitation, an accountant, actuary, appraiser, auditor, engineer, financial analyst, geologist or lawyer.

MANDATE OF COMMITTEE


|    |                 
|--- | ----------------
|17. | External Auditor

|    |                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The external auditor will report directly to the Audit Committee, be responsible for planning with the Corporation and carrying out the audit of the annual financial statements (and any requested review of quarterly financial statements) and ultimately be accountable to the Audit Committee and the Board as the representatives of the shareholders.

|    |                                                 
|--- | ------------------------------------------------
|(a) | The Audit Committee will recommend to the Board:

|    |                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i) | the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation; and

|     |                                          
|---- | -----------------------------------------
|(ii) | the compensation of the external auditor.



---

B 4


|    |                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The Audit Committee will be directly responsible for overseeing the work of the external auditor engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Corporation, including the following:

|    |                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i) | review of the mandate of the external auditor, including the annual engagement letter, audit plan, audit scope and the factors considered in determining the audit scope, including the major risk factors; and confirmation as to whether or not any limitations have been placed on the scope or nature of the external auditor’s audit procedures;

|     |                                                                                                                                                                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | review of significant accounting and reporting principles, practices and procedures applied by the Corporation in preparing its financial statements, including discussions with the external auditor of its judgments about the quality, not just the acceptability, of the Corporation’s accounting principles used in financing reporting;

|      |                                                                                                                                                                                                                                                                                                                                     
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iii) | review of the independence of the external auditor, and obtain from the external auditors, at least annually, a formal written statement delineating all relationships between the external auditors and the Company as contemplated by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees;

|     |                                                                                                                                                                                                                
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(iv) | review any rotation of the partners assigned to the audit in accordance with applicable laws and professional standards, the internal quality control findings of the external auditor’s firm and peer reviews;

|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(v) | review of the performance of the external auditor, including the relationship between the external auditor and management and the evaluation of the lead partner of the external auditor;

|     |                                                                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|(vi) | termination or resignation of the external auditor if circumstances warrant, after due inquiry and discussion with management and the external auditor;

|      |                                                                                                       
|----- | ------------------------------------------------------------------------------------------------------
|(vii) | resolution of disagreements between management and the external auditor regarding financial reporting;

|       |                                                                                       
|------ | --------------------------------------------------------------------------------------
|(viii) | review of material written communications between the external auditor and management;

|     |                                                                                                                                                                                                                                  
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ix) | review of the annual management letter from the external auditor regarding internal controls and opportunities for improvement or efficiency, plus management’s response and follow-up in respect of any identified weakness; and

|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(x) | communication with the external auditor regarding such other matters as are required by the Canadian Institute of Chartered Accountants Handbook and other professional standards.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | As necessary or desirable, but in any case at least quarterly the Audit Committee will meet or communicate directly with the external auditor and members of management, in separate executive sessions, as required or appropriate to discharge the responsibilities of the Committee.  The Committee will discuss with the external auditor, without management being present, (a) the quality of the Corporation’s financial and accounting personnel, and (b) the completeness and accuracy of the Corporation’s financial statements.  Also, the Committee will elicit the comments of management regarding the responsiveness of the external auditors to the Corporation’s needs.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | The Audit Committee will have a  predetermined arrangement with  the  external auditor that  it  will  advise the Committee, through its Chair and management of the Corporation, of any matters identified through procedures followed for the review of interim quarterly financial statements of the Corporation, and that such notification is to be made prior to the related press release. The Audit Committee will also receive a written confirmation provided by the external auditor at the end of each of the first three quarters of the year that it has nothing to report to the Committee, if that is the case, or the written enumeration of required reporting issues.

|    |                   
|--- | ------------------
|18. | Non-Audit Services

|    |                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Audit Committee will pre-approve all non-audit services to be provided to the Corporation or its subsidiaries by the external auditor.

|    |                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The Audit Committee may delegate to one or more of its members the authority to pre- approve non-audit services. The pre-approval of non-audit services by any member to whom authority has been delegated must be presented to the Committee at its first scheduled meeting following such pre-approval.

|    |                                                                  
|--- | -----------------------------------------------------------------
|(c) | Pre-approval ofde minimusnon-audit services will be satisfied if:



---

B 5


|    |                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(i) | the aggregate amount of all the non-audit services that were not pre-approved is reasonably expected to constitute no more than five per cent of the total amount of fees paid by the Corporation and its subsidiaries to the Corporation’s external auditor during the fiscal year in which the services are provided;

|     |                                                                                                                                               
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(ii) | the Corporation or the subsidiary, as the case may be, did not recognize the services as non-audit services at the time of the engagement; and

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

|    |                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d) | Pre-approval of non-audit services will also be satisfied if the Audit Committee adopts specific policies and procedures for the engagement of non-audit services and:

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

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

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

|    |                               
|--- | ------------------------------
|19. | Financial and Other Disclosure

|    |                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | The Audit Committee will review, discuss with management (and the external auditor where required or appropriate) and, if required or appropriate, approve or recommend that the Board approve the following Corporation documents prior to public disclosure:

|   |                                                                                      
|-- | -------------------------------------------------------------------------------------
|i. | annual audited financial statements and related management’s discussion and analysis;

|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|ii. | quarterly unaudited financial statements and related management’s discussion and analysis;

|     |                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|iii. | certifications by the chief executive officer and chief financial officer of annual and quarterly filings, disclosure controls and procedures and internal controls over financial reporting;

|    |                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|iv. | news releases announcing financial results, containing financial information based on unreleased financial results or non-GAAP financial measures or providing earnings guidance or forward-looking financial information; and

|   |                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|v. | financial information contained in  any  annual information form, information circular, prospectus, take-over bid circular, issuer bid circular or rights offering circular.

|    |                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The Audit Committee will be satisfied that adequate procedures are in place for the review of the Corporation’s public disclosure of financial information extracted or derived from the Corporation’s financial statements and will periodically assess the adequacy of those procedures.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The Audit Committee will review the disclosure required by applicable securities laws to be included in its annual information form and cross-referenced in management information circular to solicit proxies from the shareholders of the Corporation for the purpose of electing directors to the Board. That disclosure will consist of the text of this charter, the composition of the Audit Committee, the relevant education and experience of Committee members, reliance on certain exemptions from securities laws relating to audit committees, oversight of the nomination and compensation of the external auditor, policies and procedures for non-audit services and external auditor service fees.

|    |                              
|--- | -----------------------------
|20. | Financial Reporting Processes

|    |                                                                          
|--- | -------------------------------------------------------------------------
|(a) | The Audit Committee will review with management and the external auditor:

|   |                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------
|i. | the appropriateness of the Corporation’s accounting principles and policies and financial reporting;

|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ii. | any changes to the Corporation’s accounting principles and policies and financial reporting as such changes are recommended by management or the external auditor;

|     |                                                                 
|---- | ----------------------------------------------------------------
|iii. | the accounting treatment of significant risks and uncertainties;

|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|iv. | key  estimates  and  judgments  of  management  that  may  be  material  to  the Corporation’s financial



---

B 6


reporting;


|   |                                                   
|-- | --------------------------------------------------
|v. | significant changes to the audit plan, if any; and

|    |                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|vi. | any serious disputes or difficulties with management encountered during the audit and the cooperation received by the external auditor during its audit, including access to all requested records, data and information.

|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(b) | The Audit Committee will in particular review the following specific matters, where material:

|   |                                                     
|-- | ----------------------------------------------------
|i. | the effect of regulatory and accounting initiatives;

|    |                            
|--- | ---------------------------
|ii. | extraordinary transactions;

|     |                                     
|---- | ------------------------------------
|iii. | the use of special purpose entities;

|    |                                
|--- | -------------------------------
|iv. | off-balance sheet transactions;

|   |                                                             
|-- | ------------------------------------------------------------
|v. | financial risk management, including the use of derivatives;

|    |                                             
|--- | --------------------------------------------
|vi. | asset retirement or reclamation obligations;

|     |                     
|---- | --------------------
|vii. | pension obligations;

|      |                                           
|----- | ------------------------------------------
|viii. | commitments, contingencies and guarantees;

|    |                            
|--- | ---------------------------
|ix. | related party transactions;

|   |                                                               
|-- | --------------------------------------------------------------
|x. | actual or pending legal claims, tax or regulatory matters; and

|    |                                                  
|--- | -------------------------------------------------
|xi. | any other matters of accounting or auditing risk.

|    |                       
|--- | ----------------------
|21. | Other Responsibilities

|    |                                                   
|--- | --------------------------------------------------
|(a) | The Audit Committee will establish procedures for:

|   |                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|i. | the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters; and

|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|ii. | the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(b) | The Audit Committee will review on a timely basis all discovered incidents of fraud within the Corporation, regardless of monetary value;

|    |                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(c) | The Audit Committee will oversee any auditing or accounting reviews or similar procedures or investigations and may conduct its own investigations with full access to books, records, facilities and personnel of the Corporation.

|    |                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------
|(d) | The Audit Committee will at least annually provide oversight of the Corporation’s risk management policies.

|    |                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(e) | The Audit Committee will review and approve the Corporation’s policies regarding officer and director expenses, perquisites and use of corporate assets, and may review expenses actually incurred by the chief executive officer and other senior officers.

|    |                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(f) | The Audit Committee will review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and any former external auditor of the Corporation.

|    |                                                                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(g) | Review with management, internal audit and the external auditors the methods used to establish and monitor the Corporation’s policies with respect to unethical or illegal activities by Corporation employees that may have a material impact on the financial statements.

|    |                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(h) | Generally as part of the review of the annual financial statements, receive a report(s), at least annually, concerning legal, regulatory and compliance matters that may have a material impact on the financial statements.

|    |                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------
|(i) | Coordinate with the Reserves Committee as necessary concerning the disclosure of information with respect to



---

B 7


the Corporation’s oil and gas reserves, including the Corporation’s procedures for complying with the disclosure requirements and restrictions of applicable regulations.


|    |                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------
|(j) | Review with the external auditor the internal controls on computerized information system controls and security.

The Audit Committee will review and/or approve any other matters specifically delegated to the Committee by the Board and undertake on behalf of the Board such other activities as may be necessary or desirable to assist the Board in fulfilling its responsibilities.