----

| /s/ T.S. Granger, P.Eng.                | /s/ C.W. Leigh Cassidy, CA CFA |
|-----------------------------------------|--------------------------------|
| President & Chief Executive Officer | Vice President Finance &   |
|                                    | Chief Financial Officer        |

----

|              | /s/ Grant Thornton LLP |
|-------------------|------------------------|
| Calgary, Canada   | Grant Thornton LLP     |
| February 25, 2010 | Chartered Accountants  |

----

|              | /s/ Grant Thornton LLP |
|-------------------|------------------------|
| Calgary, Canada   | Grant Thornton LLP     |
| February 25, 2010 | Chartered Accountants  |

----

----

----

| As at December 31,                              |   | 2009   |      |   | 2008   |   |
|-------------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Assets                                          |   |   |      |   |   |   |
| Current                                         |   |   |      |   |   |   |
| Cash                                            |   | $      | -         |   |   | $      | 3,892 |   |
| Accounts receivable                             |   |   | 37,389    |   |   |   | 65,217 |   |
| Risk management gain, note 15(b)                |   |   | 198       |   |   |   | 8,284 |   |
| Other current assets                            |   |   | 14,287    |   |   |   | 12,163 |   |
| Future income taxes, note 17(b)                 |   |   | 12        |   |   |   | - |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   |   | 51,886    |   |   |   | 89,556 |   |
|                                            |   |   |      |   |   |   |   |   |
| Property and equipment, note 4                  |   |   | 1,944,196 |   |   |   | 2,088,668 |   |
| Goodwill, note 19                               |   |   | -         |   |   |   | 9,933 |   |
| Other assets, note 16                           |   |   | 679       |   |   |   | 426 |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   | $      | 1,996,761 |   |   | $      | 2,188,583 |   |
|                                            |   |   |      |   |   |   |   |   |
| Liabilities                                     |   |   |      |   |   |   |   |   |
| Current                                         |   |   |      |   |   |   |   |   |
| Accounts payable                                |   | $      | 58,970    |   |   | $      | 125,292 |   |
| Bank debt, note 5                               |   |   | 107,183   |   |   |   | - |   |
| Risk management liability, note 15(b)           |   |   | 94        |   |   |   | - |   |
| MPP term financing, note 7                      |   |   | 4,601     |   |   |   | - |   |
| Future income taxes, note 17(b)                 |   |   | 58        |   |   |   | 2,403 |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   |   | 170,906   |   |   |   | 127,695 |   |
|                                            |   |   |      |   |   |   |   |   |
| Bank debt, note 5                               |   |   | -         |   |   |   | 289,401 |   |
| Senior term notes, note 6                       |   |   | 461,741   |   |   |   | 539,920 |   |
| Risk management loss, note 15(b)                |   |   | 1,331     |   |   |   | - |   |
| MPP term financing, note 7                      |   |   | 46,807    |   |   |   | - |   |
| Asset retirement obligations, note 9            |   |   | 41,812    |   |   |   | 34,281 |   |
| Future income taxes, note 17(b)                 |   |   | 277,728   |   |   |   | 302,834 |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   |   | 1,000,325 |   |   |   | 1,294,131 |   |
|                                            |   |   |      |   |   |   |   |   |
| Non-controlling interest, note 7                |   |   | 4,199     |   |   |   | 59,762 |   |
|                                            |   |   |      |   |   |   |   |   |
| Shareholders’ equity                      |   |   |      |   |   |   |   |   |
| Capital stock, note 10(b)                       |   |   | 386,706   |   |   |   | 237,703 |   |
| Share purchase warrants, note 10(c)             |   |   | 13,800    |   |   |   | - |   |
| Contributed surplus, note 12(a)                 |   |   | 36,104    |   |   |   | 33,030 |   |
| Retained earnings                               |   |   | 555,627   |   |   |   | 563,957 |   |
|                                            |   |   |      |   |   |   |   |   |
|                                            |   |   | 992,237   |   |   |   | 834,690 |   |
|                                            |   |   |      |   |   |   |   |   |
| Commitments and contingent liabilities, note 21 |   |   |      |   |   |   |   |   |
|                                            |   | $      | 1,996,761 |   |   | $      | 2,188,583 |   |

| /s/ M.F. Belich, Q.C. | /s/ J. Stephens Allan, C.A. |
|-----------------------|-----------------------------|
| Director              | Director                    |

----

----

----

| Years ended December 31,                                  |   | 2009   |    |   | 2008   |   |     | 2007   |   |
|-----------------------------------------------------------|--------|--------|---------|--------|--------|--------|----------|--------|--------|
|                                                      |   |   |    |   |   |   |     |   |   |
| Revenue                                                   |   |   |    |   |   |   |     |   |   |
| Oil and natural gas revenues                              |   | $      | 227,876 |   |   | $      | 610,298  |   |   | $ | 506,218 |   |
| Royalties                                                 |   |   | (27,674 | )      |   |   | (119,924 | )      |   |   | (102,678 | ) |
|                                                      |   |   | 200,202 |   |   |   | 490,374  |   |   |   | 403,540 |   |
| Expenses                                                  |   |   |    |   |   |   |     |   |   |   |   |   |
| Operating                                                 |   |   | 86,195  |   |   |   | 114,205  |   |   |   | 101,515 |   |
| Transportation                                            |   |   | 6,118   |   |   |   | 8,378    |   |   |   | 12,615 |   |
| Administrative                                            |   |   | 28,611  |   |   |   | 31,015   |   |   |   | 29,717 |   |
| Stock-based compensation, note 12(c)                      |   |   | 4,147   |   |   |   | 9,574    |   |   |   | 12,608 |   |
| Interest and finance charges, note 13                     |   |   | 56,886  |   |   |   | 60,911   |   |   |   | 63,493 |   |
| Foreign exchange and other (gains) losses, note 14        |   |   | (84,810 | )      |   |   | 113,782  |   |   |   | (73,486 | ) |
| Risk management gain, note 15(c)                          |   |   | (20,473 | )      |   |   | (21,539  | )      |   |   | (6,014 | ) |
| Depletion and depreciation                                |   |   | 134,710 |   |   |   | 157,973  |   |   |   | 151,411 |   |
| Accretion of asset retirement obligations, note 9         |   |   | 3,242   |   |   |   | 3,142    |   |   |   | 2,718 |   |
| Strategic review and restructuring, note 18               |   |   | 4,816   |   |   |   | 35,490   |   |   |   | - |   |
| Goodwill written-off, note 19                             |   |   | 9,933   |   |   |   | -        |   |   |   | - |   |
|                                                      |   |   | 229,375 |   |   |   | 512,931  |   |   |   | 294,577 |   |
|                                                      |   |   |    |   |   |   |     |   |   |   |   |   |
| Earnings (loss) before taxes and non-controlling interest |   |   | (29,173 | )      |   |   | (22,557  | )      |   |   | 108,963 |   |
| Income taxes, note 17(a)                                  |   |   |    |   |   |   |     |   |   |   |   |   |
| Current                                                   |   |   | 94      |   |   |   | 36       |   |   |   | 17 |   |
| Future                                                    |   |   | (24,196 | )      |   |   | 14,788   |   |   |   | (26,452 | ) |
|                                                      |   |   | (24,102 | )      |   |   | 14,824   |   |   |   | (26,435 | ) |
|                                                      |   |   |    |   |   |   |     |   |   |   |   |   |
| Earnings (loss) before non-controlling interest           |   |   | (5,071  | )      |   |   | (37,381  | )      |   |   | 135,398 |   |
| Non-controlling interest, note 7                          |   |   | 3,259   |   |   |   | 5,622    |   |   |   | 6,132 |   |
|                                                      |   |   |    |   |   |   |     |   |   |   |   |   |
| Net earnings (loss) and comprehensive income              |   | $      | (8,330  | )      |   | $      | (43,003  | )      |   | $ | 129,266 |   |
|                                                      |   |   |    |   |   |   |     |   |   |   |   |   |
| Net earnings (loss) per share, note 11                    |   |   |    |   |   |   |     |   |   |   |   |   |
| Basic                                                     |   | $      | (0.05   | )      |   | $      | (0.33    | )      |   | $ | 1.00 |   |
| Diluted                                                   |   | $      | (0.05   | )      |   | $      | (0.33    | )      |   | $ | 0.98 |   |

----

----

| Years ended December 31,                    |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                        |   |   |    |   |   |   |    |   |   |
| Retained earnings, beginning of year        |   |   |    |   |   |   |    |   |   |
| As previously reported                      |   | $      | 563,957 |   |   | $      | 609,852 |   |   | $ | 485,158 |   |
| Accounting policy adjustment                |   |   | -       |   |   |   | -       |   |   |   | (1,320 | ) |
| As adjusted                                 |   |   | 563,957 |   |   |   | 609,852 |   |   |   | 483,838 |   |
| Net earnings (loss)                         |   |   | (8,330  | )      |   |   | (43,003 | )      |   |   | 129,266 |   |
| Premium on redemption of shares, note 10(b) |   |   | -       |   |   |   | (2,892  | )      |   |   | (3,252 | ) |
|                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Retained earnings, end of year              |   | $      | 555,627 |   |   | $      | 563,957 |   |   | $ | 609,852 |   |

----

----

----

| Years ended December 31,                             |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                                 |   |   |     |   |   |   |     |   |   |
| Operating activities                                 |   |   |     |   |   |   |     |   |   |
| Net earnings (loss)                                  |   | $      | (8,330   | )      |   | $      | (43,003  | )      |   | $ | 129,266 |   |
| Amortization and other                               |   |   | (1,123   | )      |   |   | 7,422    |   |   |   | 8,648 |   |
| Depletion and depreciation                           |   |   | 134,710  |   |   |   | 157,973  |   |   |   | 151,411 |   |
| Unrealized foreign exchange and other (gains) losses |   |   | (80,100  | )      |   |   | 106,425  |   |   |   | (79,740 | ) |
| Future income taxes                                  |   |   | (24,196  | )      |   |   | 14,788   |   |   |   | (26,452 | ) |
| Stock-based compensation                             |   |   | 2,921    |   |   |   | 8,826    |   |   |   | 8,416 |   |
| Accretion of asset retirement obligations            |   |   | 3,242    |   |   |   | 3,142    |   |   |   | 2,718 |   |
| Asset retirement expenditure                         |   |   | (4,387   | )      |   |   | (2,768   | )      |   |   | (4,441 | ) |
| Unrealized risk management (gain) loss               |   |   | 9,510    |   |   |   | (2,546   | )      |   |   | 5,467 |   |
| Non-controlling interest                             |   |   | 3,259    |   |   |   | 5,622    |   |   |   | 6,132 |   |
| Goodwill written-off                                 |   |   | 9,933    |   |   |   | -        |   |   |   | - |   |
|                                                 |   |   | 45,439   |   |   |   | 255,881  |   |   |   | 201,425 |   |
| Change in non-cash working capital, note 20          |   |   | (16,605  | )      |   |   | 44,350   |   |   |   | (23,366 | ) |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                 |   |   | 28,834   |   |   |   | 300,231  |   |   |   | 178,059 |   |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Financing activities                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Issuance (repayment) of bank debt                    |   |   | (182,218 | )      |   |   | (109,025 | )      |   |   | 70,426 |   |
| Distributions to partner                             |   |   | (3,822   | )      |   |   | (9,172   | )      |   |   | (9,171 | ) |
| MPP term financing repayment                         |   |   | (3,592   | )      |   |   | -        |   |   |   | - |   |
| Proceeds from equity financing, net                  |   |   | 159,890  |   |   |   | 7,267    |   |   |   | 3,446 |   |
| Redemption of common shares                          |   |   | (200     | )      |   |   | (8,846   | )      |   |   | (3,976 | ) |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                 |   |   | (29,942  | )      |   |   | (119,776 | )      |   |   | 60,725 |   |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Investing activities                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Property and equipment additions                     |   |   | (53,344  | )      |   |   | (325,530 | )      |   |   | (391,070 | ) |
| Acquisition of leased property                       |   |   | (14,973  | )      |   |   | -        |   |   |   | - |   |
| Property acquisitions                                |   |   | (304     | )      |   |   | (10,940  | )      |   |   | (171,513 | ) |
| Property dispositions                                |   |   | 9,241    |   |   |   | 202,892  |   |   |   | 307,527 |   |
| Royalty dispositions                                 |   |   | 77,816   |   |   |   | -        |   |   |   | - |   |
| Change in non-cash working capital, note 20          |   |   | (21,220  | )      |   |   | (51,650  | )      |   |   | 13,061 |   |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
|                                                 |   |   | (2,784   | )      |   |   | (185,228 | )      |   |   | (241,995 | ) |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Change in cash                                       |   |   | (3,892   | )      |   |   | (4,773   | )      |   |   | (3,211 | ) |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash, beginning of year                              |   |   | 3,892    |   |   |   | 8,665    |   |   |   | 11,876 |   |
|                                                 |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash, end of year                                    |   | $      | -        |   |   | $      | 3,892    |   |   | $ | 8,665 |   |

----

----

----

----

|   | (i) | Capitalized costs |
|--------|-----|-------------------|

|   |   | The Corporation follows the full cost method of accounting for its petroleum and natural gas operations within one Canadian cost centre.  Under this method all costs related to the exploration for and development of petroleum and natural gas reserves are capitalized.  Costs include lease acquisition costs, geological and geophysical expenses, costs of drilling both producing and non-producing wells, productionfacilities, future asset retirement costs, and certain administrative expenses directly related to exploration and development activities. Proceeds from the sale of properties are applied against capitalized costs, without any gain or loss being realized, unless such sale would significantly alter the rate of depletion and depreciation. Expenditures related to renewals or betterments that improve the productive capacity or extend the life of an asset are capitalized.  Maintenance and repairs, other than major turnaround costs, are expensed as incurred.  Major turnaround costs are included in property and equipment when incurred and charged to depletion and depreciation in the consolidated statements of earnings (loss) and other comprehensiveincome over the estimated period of time to the next scheduled turnaround. Spare parts with an estimated useful life greater than one year are included in property and equipment, and depreciated on a unit of production basis. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | Depletion and depreciation |
|--------|------|----------------------------|

|   |   | Depletion and depreciation of property and equipment is provided using the unit-of-production method based upon estimated proved petroleum and natural gas reserves.  The costs of significant undeveloped properties are excluded from costs subject to depletion until it is determined whether or not proved reserves are attributableto the properties or impairment has occurred.  Estimated future costs to be incurred in developing proved reserves are included in costs subject to depletion and estimated salvage values are excluded from costs subject to depletion.  For depletion and depreciation purposes, relative volumes of natural gas production and reserves are converted at the energy equivalent conversion rate of six thousand cubic feet of natural gas to one barrel of crude oil. Depreciation of certain midstream facilities is provided for on a straight line basis over 30 years and depreciation of office equipment is provided for on a declining balance basis using rates which range from 20% to 30% per year. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii) | Impairment test |
|--------|-------|-----------------|

|   |   | At each reporting period, the Corporation performs an impairment test to determine the recoverability of capitalized costs associated with reserves.  An impairment loss is recognized when the carrying amount of a cost centre is not recoverable.  The carrying amount of the cost centre is not recoverable if the carrying amount exceeds the sum of the undiscounted cash flows from proved reserves plus the costsof unproved properties.  If the sum of the cash flows is less than the carrying amount, the impairment loss is limited to the amount by which the carrying amount exceeds the sum of the fair value of discounted proved and probable reserves and the costs of unproved properties that have been subject to a separate impairment test and contain no probable reserves. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | Asset retirement obligations |
|--------|------|------------------------------|

|   |   | The Corporation recognizes the present value of estimated asset retirement obligations on the consolidated balance sheet when a reasonable estimate can be made.  Asset retirement obligations include those legal obligations where the Corporation will be required to retire tangible long-lived assets such as well sites, pipelines, and facilities.  The asset retirement cost, equal to the initial estimated presentvalue of the asset retirement obligation, is capitalized as part of the cost of the related long-lived asset.  Changes in the estimated obligation resulting from revisions to estimated timing or amount of undiscounted cash flows are recognized as a change in the asset retirement obligation and the related asset retirement cost. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | Asset retirement costs are amortized using the unit-of-production method and are included in depletion and depreciation in the consolidated statements of earnings (loss) and other comprehensive income.  Increases in the asset retirement obligations resulting from the passage of time are recorded as accretion of asset retirement obligations in the consolidated statements of earnings (loss) and other comprehensive income. Actual expenditures incurred are charged against the accumulated obligation. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|    As at December 31, 2009      |   |   Cost |      |   | Accumulateddepletionanddepreciation |   |       |   Net |   |
|------------------------------------------------|--------|------------------|-----------|--------|-------------------------------------|--------|------------|-----------------|--------|
|                                           |   |             |      |   |                                |   |       |            |   |
| Exploration and development costs              |   | $                | 2,184,035 |   |                                | $      | (829,162   | )               |   | $ | 1,354,873 |   |
| Production equipment and processing facilities |   |             | 728,386   |   |                                |   | (165,109   | )               |   |   | 563,277 |   |
| Future asset retirement costs                  |   |             | 18,672    |   |                                |   | (6,182     | )               |   |   | 12,490 |   |
| Office equipment                               |   |             | 24,128    |   |                                |   | (10,572    | )               |   |   | 13,556 |   |
|                                           |   |             |      |   |                                |   |       |            |   |   |   |   |
|                                           |   | $                | 2,955,221 |   |                                | $      | (1,011,025 | )               |   | $ | 1,944,196 |   |

----

| As at December 31, 2008                        |   | Cost   |      |   | Accumulateddepletionanddepreciation |   |     | Net    |   |
|------------------------------------------------|--------|--------|-----------|--------|-------------------------------------|--------|----------|--------|--------|
|                                           |   |   |      |   |                                |   |     |   |   |
| Exploration and development costs              |   | $      | 2,235,704 |   |                                | $      | (727,616 | )      |   | $ | 1,508,088 |   |
| Production equipment and processing facilities |   |   | 700,823   |   |                                |   | (137,607 | )      |   |   | 563,216 |   |
| Future asset retirement costs                  |   |   | 14,383    |   |                                |   | (5,604   | )      |   |   | 8,779 |   |
| Office leaseholds and equipment                |   |   | 17,684    |   |                                |   | (9,099   | )      |   |   | 8,585 |   |
|                                           |   |   |      |   |                                |   |     |   |   |   |   |   |
|                                           |   | $      | 2,968,594 |   |                                | $      | (879,926 | )      |   | $ | 2,088,668 |   |

| Years ended December 31,                |   | 2009   |     |   | 2008   |   |
|-----------------------------------------|--------|--------|----------|--------|--------|--------|
|                                    |   |   |     |   |   |   |
| Future capital expenditures             |   | $      | 152,700  |   |   | $      | 288,700 |   |
| Undeveloped properties                  |   |   | (69,900  | )      |   |   | (128,700 | ) |
| Estimated salvage values                |   |   | (124,500 | )      |   |   | (114,600 | ) |
|                                    |   |   |     |   |   |   |   |   |
| Total net additional (deductible) costs |   | $      | (41,700  | )      |   | $      | 45,400 |   |

|    As at December 31, 2009 |   | NaturalGas(AECO C)$ per MMbtu |   |   | Crude Oil(Edmontonpar 40 API)$ per bbl |   |   |  NGL$ per bbl |   |
|-------------------------------------------|--------|-------------------------------|--------|--------|----------------------------------------|--------|--------|--------------------|--------|
|                                      |   |                          |   |   |                                   |   |   |               |   |
| 2010                                      |   |                          | 5.79   |   |                                   |   | 82.06  |               |   |   | 84.47 |   |
| 2011                                      |   |                          | 6.61   |   |                                   |   | 86.96  |               |   |   | 89.49 |   |
| 2012                                      |   |                          | 6.88   |   |                                   |   | 90.52  |               |   |   | 93.17 |   |
| 2013                                      |   |                          | 7.27   |   |                                   |   | 94.35  |               |   |   | 97.09 |   |
| 2014                                      |   |                          | 7.60   |   |                                   |   | 98.57  |               |   |   | 101.45 |   |
| Approximate % increase thereafter         |   |                          | 2.0%   |   |                                   |   | 2.0%   |               |   |   | 2.0% |   |

----

| As at December 31,                        |   | 2009   |    |   | 2008   |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                      |   |   |    |   |   |   |
| Authorized senior credit facility         |   | $      | 220,000 |   |   | $      | 500,000 |   |
|                                      |   |   |    |   |   |   |   |   |
| Prime rate loans                          |   | $      | 37,000  |   |   | $      | 20,000 |   |
| Bankers’ acceptance term loans      |   |   | 70,000  |   |   |   | 270,000 |   |
| Prime rate revolving credit               |   |   | 1,462   |   |   |   | - |   |
| Discount to maturity                      |   |   | (1,279  | )      |   |   | (599 | ) |
|                                      |   |   |    |   |   |   |   |   |
| Advances under the senior credit facility |   | $      | 107,183 |   |   | $      | 289,401 |   |
|                                      |   |   |    |   |   |   |   |   |
| Current                                   |   | $      | 107,183 |   |   | $      | - |   |
| Non current                               |   |   | -       |   |   |   | 289,401 |   |
|                                      |   |   |    |   |   |   |   |   |
| Advances under the senior credit facility |   | $      | 107,183 |   |   | $      | 289,401 |   |

| As at December 31,                          |   | 2009   |    |   | 2008   |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                        |   |   |    |   |   |   |
| US$450 million, 7.625% due December 1, 2013 |   | $      | 470,970 |   |   | $      | 551,070 |   |
| Unamortized transaction costs               |   |   | (9,229  | )      |   |   | (11,150 | ) |
|                                        |   |   |    |   |   |   |   |   |
| Carrying value                              |   | $      | 461,741 |   |   | $      | 539,920 |   |

| December 31, 2009               | 103.813% |
|---------------------------------|----------|
| December 1, 2010                | 101.906% |
| December 1, 2011 and thereafter | 100.000% |

----

| As at December 31,                                |   | 2009   |    |   | 2008   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                              |   |   |    |   |   |   |
| Non-controlling interest, beginning of year       |   | $      | 59,762  |   |   | $      | 63,311 |   |
| Earnings attributable to non-controlling interest |   |   | 3,259   |   |   |   | 5,622 |   |
| Distributions to limited partner                  |   |   | (3,822  | )      |   |   | (9,171 | ) |
| MPP term financing                                |   |   | (55,000 | )      |   |   | - |   |
|                                              |   |   |    |   |   |   |   |   |
| Non-controlling interest, end of year             |   | $      | 4,199   |   |   | $      | 59,762 |   |

| As at December 31,            |   | 2009   |   |   | 2008   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|
|                          |   |   |   |   |   |   |
| Amortizing MPP term financing |   | $      | 24,287 |   |   | $      | - |   |
| Purchase option at renewal    |   |   | 27,800 |   |   |   | - |   |
| Discount to maturity          |   |   | (679   | )      |   |   | - |   |
|                          |   |   |   |   |   |   |   |   |
| MPP term financing            |   | $      | 51,408 |   |   | $      | - |   |

----

|   | (a) | ensure the Corporation can meet its financial obligations, |
|--------|-----|------------------------------------------------------------|

|   | (b) | retain an appropriate level of leverage relative to the risk of Compton’s underlying assets, and |
|--------|-----|--------------------------------------------------------------------------------------------------------|

|   | (c) | finance internally generated growth and potential acquisitions. |
|--------|-----|-----------------------------------------------------------------|

| As at December 31,                                                                                                                          |   | 2009   |      |   | 2008   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                                                                        |   |   |      |   |   |   |
| Senior term notes                                                                                                                           |   | $      | 470,970   |   |   | $      | 551,070 |   |
| Bank debt                                                                                                                                   |   |   | 107,000   |   |   |   | 290,000 |   |
| MPP term financing                                                                                                                          |   |   | 51,408    |   |   |   | - |   |
| Long-term instruments                                                                                                                       |   |   | 629,378   |   |   |   | 841,070 |   |
| Adjusted working capital deficiency*                                                                                                        |   |   | 7,748     |   |   |   | 44,020 |   |
| Total net debt                                                                                                                              |   |   | 637,126   |   |   |   | 885,090 |   |
| Total shareholders’ equity                                                                                                            |   |   | 992,237   |   |   |   | 834,690 |   |
|                                                                                                                                        |   |   |      |   |   |   |   |   |
| Total capitalization                                                                                                                        |   | $      | 1,629,363 |   |   | $      | 1,719,780 |   |
|                                                                                                                                        |   |   |      |   |   |   |   |   |
| Total net debt to capitalization ratio                                                                                                      |   |   | 39.1%     |   |   |   | 51.5% |   |
| * Adjusted working capital deficiency excludes risk management items, related future income taxes, current MPP term financing and bank debt |   |

----

| As at December 31,                        |   | 2009   |    |   | 2008   |   |
|-------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                      |   |   |    |   |   |   |
| Total net debt                            |   | $      | 637,126 |   |   | $      | 885,090 |   |
|                                      |   |   |    |   |   |   |   |   |
|                                      |   |   |    |   |   |   |   |   |
|                                      |   |   |    |   |   |   |   |   |
| 12 months ended December 31,              |   |   | 2009    |   |   |   | 2008 |   |
|                                      |   |   |    |   |   |   |   |   |
| Net earnings (loss)                       |   | $      | (8,330  | )      |   | $      | (43,003 | ) |
| Add (deduct)                              |   |   |    |   |   |   |   |   |
| Interest and finance charges              |   |   | 56,886  |   |   |   | 60,911 |   |
| Income taxes                              |   |   | (24,102 | )      |   |   | 14,824 |   |
| Depletion and depreciation                |   |   | 134,710 |   |   |   | 157,973 |   |
| Accretion of asset retirement obligations |   |   | 3,242   |   |   |   | 3,142 |   |
| Foreign exchange and other (gains) losses |   |   | (84,810 | )      |   |   | 113,782 |   |
| Goodwill written-off                      |   |   | 9,933   |   |   |   | - |   |
|                                      |   |   |    |   |   |   |   |   |
| Adjusted EBITDA                           |   | $      | 87,529  |   |   | $      | 307,629 |   |
|                                      |   |   |    |   |   |   |   |   |
| Total net debt to adjusted EBITDA         |   |   | 7.3x    |   |   |   | 2.9x |   |

| As at December 31,                              |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |
| Asset retirement obligations, beginning of year |   | $      | 34,281 |   |   | $      | 36,696 |   |
| Liabilities incurred                            |   |   | 285    |   |   |   | 2,923 |   |
| Liabilities settled and disposed                |   |   | (9     | )      |   |   | (6,345 | ) |
| Accretion expense                               |   |   | 3,242  |   |   |   | 3,142 |   |
| Revision of estimate                            |   |   | 4,013  |   |   |   | (2,135 | ) |
|                                            |   |   |   |   |   |   |   |   |
| Asset retirement obligations, end of year       |   | $      | 41,812 |   |   | $      | 34,281 |   |

----

| As at December 31,                           |   | 2009           |    |   | 2008         |   |
|----------------------------------------------|--------|----------------|---------|--------|--------------|--------|
|                                         |   | NumberofShares |    |   |  Amount |   |   | NumberofShares |   |   |  Amount |   |
|                                         |   |           |    |   |         |   |   |   |   |   |   |   |
| Common shares outstanding, beginning of year |   |           | 125,760 |   |         | $      | 237,703 |   |   |   | 129,098 |   |   | $ | 235,871 |   |
| Shares issued under public offering(1)       |   |           | 138,000 |   |         |   | 149,357 |   |   |   | - |   |   |   | - |   |
| Shares issued for services                   |   |           | -       |   |         |   | - |   |   |   | 50 |   |   |   | 490 |   |
| Shares issued under stock option plan        |   |           | -       |   |         |   | - |   |   |   | 1,388 |   |   |   | 10,363 |   |
| Shares repurchased                           |   |           | (187    | )      |         |   | (354 | ) |   |   | (4,776 | ) |   |   | (9,021 | ) |
|                                         |   |           |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Common shares outstanding, end of year       |   |           | 263,573 |   |         | $      | 386,706 |   |   |   | 125,760 |   |   | $ | 237,703 |   |

----

| Years ended December 31,                             |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                 |   |   |    |   |   |   |    |   |   |
| Weighted average common shares outstanding - basic   |   |   | 158,846 |   |   |   | 129,500 |   |   |   | 128,993 |   |
| Effect of stock options                              |   |   | 327     |   |   |   | 2,531   |   |   |   | 3,546 |   |
|                                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Weighted average common shares outstanding - diluted |   |   | 159,173 |   |   |   | 132,031 |   |   |   | 132,539 |   |

| As at December 31,             |   | 2009               |   |   | 2008                         |   |
|--------------------------------|--------|--------------------|--------|--------|------------------------------|--------|
|                           |   |  Stockoptions |   |   | Weightedaverageexerciseprice |   |   |  Stockoptions |   |   | Weightedaverageexerciseprice |   |
|                           |   |               |   |   |                         |   |   |   |   |   |   |   |
| Outstanding, beginning of year |   |               | 11,131 |   |                         | $      | 8.07 |   |   |   | 12,084 |   |   | $ | 8.49 |   |
| Granted                        |   |               | 5,981  |   |                         | $      | 1.11 |   |   |   | 1,512 |   |   | $ | 3.97 |   |
| Exercised                      |   |               | -      |   |                         | $      | - |   |   |   | (1,388 | ) |   | $ | 5.24 |   |
| Forfeited                      |   |               | (6,362 | )      |                         | $      | 7.29 |   |   |   | (1,077 | ) |   | $ | 10.66 |   |
|                           |   |               |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, end of year       |   |               | 10,750 |   |                         | $      | 4.66 |   |   |   | 11,131 |   |   | $ | 8.07 |   |
|                           |   |               |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Exercisable, end of year       |   |               | 4,001  |   |                         | $      | 8.50 |   |   |   | 7,428 |   |   | $ | 7.59 |   |

----

|                                 |   |   | Outstanding options                                                                                                                                             |   |   | Exercisable options                                                                                                                                                                                                                                               |   |
|--------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   Range of exercise prices |   |   |         Number of       options       outstanding |   |   |        Weighted       average       remaining       contractual       life (years) |   |   |        Weighted       average       exercise       price |   |   |         Number       options       outstanding |   |   |        Weighted       average       exercise       price |   |
|                                 |   |   |                                                                                                                                                            |   |   |                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |
| $0.79 - $1.99                        |   |   | 6,296                                                                                                                                                           |   |   |                                                                                                                                                                                                                                                              | 4.5    |   |   | $ | 1.12 |   |   |   | 328 |   |   | $ | 1.08 |   |
| $2.00 - $6.99                        |   |   |                                                                                                                                                            | 1,352  |   |                                                                                                                                                                                                                                                              |   | 1.6 |   |   | $ | 3.63 |   |   |   | 1,352 |   |   | $ | 3.63 |   |
| $7.00 - $11.99                       |   |   |                                                                                                                                                            | 1,515  |   |                                                                                                                                                                                                                                                              |   | 1.8 |   |   | $ | 10.91 |   |   |   | 981 |   |   | $ | 10.89 |   |
| $12.00 - $17.15                      |   |   |                                                                                                                                                            | 1,587  |   |                                                                                                                                                                                                                                                              |   | 0.9 |   |   | $ | 13.60 |   |   |   | 1,340 |   |   | $ | 13.49 |   |
|                                 |   |   |                                                                                                                                                            |   |   |                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |   |                                                                                                                                                            |   | 10,750 |                                                                                                                                                                                                                                                              |   |   | 3.2 |   |   | $ | 4.66 |   |   |   | 4,001 |   |   | $ | 8.50 |   |

| Years ended December 31,                       |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                           |   |   |   |   |   |   |   |   |   |
| Weighted average fair value of options granted |   | $      | 0.47   |   |   | $      | 1.20   |   |   | $ | 4.23 |   |
| Risk-free interest rate                        |   |   | 1.7%   |   |   |   | 2.3%   |   |   |   | 4.1% |   |
| Expected life (years)                          |   |   | 2.8    |   |   |   | 3.5    |   |   |   | 5.0 |   |
| Expected volatility                            |   |   | 60.4%  |   |   |   | 53.2%  |   |   |   | 39.0% |   |

| As at December 31,                                                   |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                 |   |   |   |   |   |   |
| Contributed surplus, beginning of year                               |   | $      | 33,030 |   |   | $      | 24,233 |   |
| Stock-based compensation expense                                     |   |   | 2,921  |   |   |   | 8,826 |   |
| Stock options exercised                                              |   |   | -      |   |   |   | (3,096 | ) |
| Excess of book value over purchase price on normal course issuer bid |   |   | 153    |   |   |   | 3,067 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Contributed surplus, end of year                                     |   | $      | 36,104 |   |   | $      | 33,030 |   |

----

| Years ended December 31,        |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                            |   |   |   |   |   |   |   |   |   |
| Stock option plan               |   | $      | 2,921  |   |   | $      | 8,826  |   |   | $ | 8,416 |   |
| Share appreciation rights plan  |   |   | -      |   |   |   | (970   | )      |   |   | - |   |
| Employee retention program      |   |   | -      |   |   |   | -      |   |   |   | 2,618 |   |
| Employee share purchase plan(1) |   |   | 1,226  |   |   |   | 1,718  |   |   |   | 1,574 |   |
|                            |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | $      | 4,147  |   |   | $      | 9,574  |   |   | $ | 12,608 |   |

| Years ended December 31,           |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                               |   |   |   |   |   |   |   |   |   |
| Interest on bank debt, net         |   | $      | 11,268 |   |   | $      | 20,280 |   |   | $ | 22,476 |   |
| Interest on senior term notes      |   |   | 41,032 |   |   |   | 38,228 |   |   |   | 38,345 |   |
| Other finance charges              |   |   | 4,586  |   |   |   | 2,403  |   |   |   | 2,672 |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest and finance charges |   | $      | 56,886 |   |   | $      | 60,911 |   |   | $ | 63,493 |   |

----

| Years ended December 31,                    |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|---------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                        |   |   |    |   |   |   |    |   |   |
| Foreign exchange on translation of US$ debt |   | $      | (80,100 | )      |   | $      | 106,425 |   |   | $ | (79,740 | ) |
| Other foreign exchange                      |   |   | (2,779  | )      |   |   | (82     | )      |   |   | 1,023 |   |
| Marketable securities valuation             |   |   | (1,931  | )      |   |   | 7,439   |   |   |   | 5,231 |   |
|                                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Foreign exchange and other (gains) losses   |   | $      | (84,810 | )      |   | $      | 113,782 |   |   | $ | (73,486 | ) |

| As at December 31,             |   | 2009           |    |   | 2008      |   |
|--------------------------------|--------|----------------|---------|--------|-----------|--------|
|                           |   | CarryingAmount |    |   | FairValue |   |   | CarryingAmount |   |   | FairValue |   |
| Financial assets               |   |           |    |   |      |   |   |   |   |   |   |   |
| Held for trading               |   |           |    |   |      |   |   |   |   |   |   |   |
| Cash                           |   | $              | -       |   |      | $      | - |   |   | $ | 3,892 |   |   | $ | 3,892 |   |
| Other current assets(1)        |   | $              | 14,287  |   |      | $      | 14,287 |   |   | $ | 12,163 |   |   | $ | 12,163 |   |
| Risk management assets         |   | $              | 198     |   |      | $      | 198 |   |   | $ | 8,284 |   |   | $ | 8,284 |   |
| Loans and receivables          |   |           |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Accounts receivable            |   | $              | 37,389  |   |      | $      | 37,389 |   |   | $ | 65,217 |   |   | $ | 65,217 |   |
|                           |   |           |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities          |   |           |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Held for trading               |   |           |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Risk management liabilities(2) |   | $              | 1,425   |   |      | $      | 1,425 |   |   | $ | - |   |   | $ | - |   |
| Other financial liabilities    |   |           |    |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable               |   | $              | 58,970  |   |      | $      | 58,970 |   |   | $ | 125,292 |   |   | $ | 125,292 |   |
| Bank debt                      |   | $              | 107,183 |   |      | $      | 108,462 |   |   | $ | 289,401 |   |   | $ | 289,401 |   |
| MPP term financing(2)          |   | $              | 51,408  |   |      | $      | 52,087 |   |   | $ | - |   |   | $ | - |   |
| Senior term notes              |   | $              | 461,741 |   |      | $      | 362,647 |   |   | $ | 539,920 |   |   | $ | 154,300 |   |

----

| As at December 31,           |   | 2009   |   |   | 2008   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
| Unrealized gain              |   |   |   |   |   |   |
| Current asset                |   | $      | 198    |   |   | $      | 8,284 |   |
| Unrealized loss              |   |   |   |   |   |   |   |   |
| Current liability            |   |   | (94    | )      |   |   | - |   |
| Non-current liability        |   |   | (1,331 | )      |   |   | - |   |
|                         |   |   |   |   |   |   |   |   |
| Total unrealized gain (loss) |   | $      | (1,227 | )      |   | $      | 8,284 |   |

| Commodity                              |   | Term              |   |  Volume |   |     Average      Price |   | Mark-to-MarketGain (Loss) |
|----------------------------------------|--------|-------------------|--------|--------------|--------|---------------------------------------------------------------------|--------|---------------------------|
| Natural Gas                            |   |              |   |         |   |                                                                |   |                      |
| Collar                                 |   | Jul./09 - Jun./10 |   | 14,000 GJ/d  |   | $4.50 - $5.80/GJ                                                    | $      | (156)                     |
| Collar                                 |   | Jul./09 - Jun./11 |   | 30,250 GJ/d  |   | $4.52 - $7.01/GJ                                                    |   | (545)                     |
| Collar                                 |   | Jul./09 - Oct./11 |   | 10,000 GJ/d  |   | $4.50 - $7.00/GJ                                                    |   | (403)                     |
| Electricity                            |   |              |   |         |   |                                                                |   |                      |
| Swap                                   |   | Jan./10 - Dec./11 |   | 84 MWh/d     |   | $50.74/MWh                                                          |   | (123)                     |
|                                   |   |              |   |         |   |                                                                |
| Total unrealized commodity gain (loss) |   |              |   |         | $      | (1,227)                                                             |

|  Years ended December 31,  |   | CommodityContracts |    |   | ForeignCurrency |   |   | 2009Total |   |   | 2008Total |   |   | 2007Total |    |
|---------------------------------|--------|--------------------|---------|--------|-----------------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|---------|
|                            |   |               |    |   |            |   |   |      |   |   |      |   |   |      |    |
| Unrealized change in fair value |   | $                  | 9,510   |   |            | $      | -      |      |   | $      | 9,510     |   |   | $         | (2,546  | ) |   | $ | 5,467 |   |
| Realized cash settlements       |   |               | (32,286 | )      |            |   | 2,303  |      |   |   | (29,983   | )      |   |      | (18,993 | ) |   |   | (11,481 | ) |
|                            |   |               |    |   |            |   |   |      |   |   |      |   |   |      |    |   |   |   |   |   |
| Total (gain) loss               |   | $                  | (22,776 | )      |            | $      | 2,303  |      |   | $      | (20,473   | )      |   | $         | (21,539 | ) |   | $ | (6,014 | ) |

----

----

| As at December 31,                                       |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                     |   |   |   |   |   |   |
| Accrued benefit obligation                               |   |   |   |   |   |   |
| Accrued benefit obligation - beginning of year           |   | $      | 6,087  |   |   | $      | 7,695 |   |
| Current service cost                                     |   |   | 245    |   |   |   | 377 |   |
| Interest cost                                            |   |   | 455    |   |   |   | 439 |   |
| Benefits paid                                            |   |   | (526   | )      |   |   | (167 | ) |
| Actuarial (gain) loss                                    |   |   | 1,082  |   |   |   | (2,257 | ) |
|                                                     |   |   |   |   |   |   |   |   |
| Accrued benefit obligation - end of year                 |   | $      | 7,343  |   |   | $      | 6,087 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Fair value of plan assets                                |   |   |   |   |   |   |   |   |
| Fair value of plan assets - beginning of year            |   | $      | 6,030  |   |   | $      | 6,897 |   |
| Employee contributions                                   |   |   | 93     |   |   |   | 92 |   |
| Employer contributions                                   |   |   | 518    |   |   |   | 461 |   |
| Benefits paid                                            |   |   | (526   | )      |   |   | (167 | ) |
| Actual return on plan assets                             |   |   | 1,572  |   |   |   | (1,253 | ) |
|                                                     |   |   |   |   |   |   |   |   |
| Fair value of plan assets - end of year                  |   | $      | 7,687  |   |   | $      | 6,030 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Accrued benefit asset                                    |   |   |   |   |   |   |   |   |
| Funded status - plan assets less than benefit obligation |   | $      | 344    |   |   | $      | (57 | ) |
| Unamortized net actuarial (gain) loss                    |   |   | (225   | )      |   |   | (158 | ) |
| Unamortized past service costs                           |   |   | 585    |   |   |   | 655 |   |
|                                                     |   |   |   |   |   |   |   |   |
| Accrued benefit asset, included in other assets(1)       |   | $      | 704    |   |   | $      | 440 |   |

| (1) | Included as a component of other long term assets |
|-----|---------------------------------------------------|

----

| Years ended December 31,                            |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                |   |   |   |   |   |   |
| Current service cost, net of employee contributions |   | $      | 151    |   |   | $      | 348 |   |
| Interest on accrued benefit obligation              |   |   | 455    |   |   |   | 439 |   |
| Return on assets                                    |   |   | (423   | )      |   |   | (495 | ) |
| Amortization of past service cost                   |   |   | 69     |   |   |   | 69 |   |
|                                                |   |   |   |   |   |   |   |   |
| Pension expense, included in operating expense      |   | $      | 252    |   |   | $      | 361 |   |

| Years ended December 31,                              |   | 2009     |   |     | 2008   |   |
|-------------------------------------------------------|--------|----------|--------|----------|--------|--------|
|                                                  |   |     |   |     |   |   |
| Discount rate                                         |   |     | 6.50   | %        |   |   | 7.50 | % |
| Expected rate of return on assets                     |   |     | 7.25   | %        |   |   | 7.00 | % |
| Rate of compensation increase                         |   |     | 3.00   | %        |   |   | 3.50 | % |
| Average remaining service period of covered employees |   | 16 years |   | 16 years |

| (a) | The following table reconciles income taxes calculated at the Canadian statutory rate with actual income taxes: |
|-----|-----------------------------------------------------------------------------------------------------------------|

| Years ended December 31,                                                      |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|-------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                          |   |   |    |   |   |   |    |   |   |
| Earnings (loss) before taxes and non-controlling interest                     |   | $      | (29,173 | )      |   | $      | (22,557 | )      |   | $ | 108,963 |   |
|                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Canadian statutory rates                                                      |   |   | 29.0%   |   |   |   | 29.5%   |   |   |   | 32.1% |   |
| Expected income taxes                                                         |   | $      | (8,460  | )      |   | $      | (6,654  | )      |   | $ | 34,977 |   |
| Effect on taxes resulting from:                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Non-deductible stock-based compensation                                       |   |   | 845     |   |   |   | 2,611   |   |   |   | 2,704 |   |
| Effect of tax rate changes and temporary differences recorded at future rates |   |   | (4,953  | )      |   |   | 1,870   |   |   |   | (50,470 | ) |
| Non-taxable capital (gains) losses                                            |   |   | (11,896 | )      |   |   | 14,260  |   |   |   | (11,651 | ) |
| Goodwill write-down                                                           |   |   | 2,881   |   |   |   | -       |   |   |   | - |   |
| Other                                                                         |   |   | (2,519  | )      |   |   | 2,737   |   |   |   | (1,995 | ) |
|                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Provision for income taxes                                                    |   | $      | (24,102 | )      |   | $      | 14,824  |   |   | $ | (26,435 | ) |
|                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Current                                                                       |   | $      | 94      |   |   | $      | 36      |   |   | $ | 17 |   |
| Future                                                                        |   |   | (24,196 | )      |   |   | 14,788  |   |   |   | (26,452 | ) |
|                                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                          |   | $      | (24,102 | )      |   | $      | 14,824  |   |   | $ | (26,435 | ) |

| (b) | Future income taxes are classified on the balance sheet as: |
|-----|-------------------------------------------------------------|

| As at December 31,                 |   | 2009   |    |   | 2008   |   |
|------------------------------------|--------|--------|---------|--------|--------|--------|
|                               |   |   |    |   |   |   |
| Current asset                      |   | $      | (12     | )      |   | $      | - |   |
| Current liability                  |   |   | 58      |   |   |   | 2,403 |   |
| Non-current liability              |   |   | 277,728 |   |   |   | 302,834 |   |
|                               |   |   |    |   |   |   |   |   |
| Net future income tax liability(1) |   | $      | 277,774 |   |   | $      | 305,237 |   |

----

| As at December 31,                             |   | 2009   |    |   | 2008   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                           |   |   |    |   |   |   |
| Future income tax liabilities                  |   |   |    |   |   |   |
| Property and equipment in excess of tax values |   | $      | 255,982 |   |   | $      | 283,948 |   |
| Timing of partnership items                    |   |   | 44,183  |   |   |   | 69,290 |   |
| Foreign exchange gain on long-term debt        |   |   | 5,298   |   |   |   | 3,170 |   |
| Other                                          |   |   | -       |   |   |   | 1,910 |   |
| Future income tax assets                       |   |   |    |   |   |   |   |   |
| Non-capital losses carried forward             |   |   | (12,481 | )      |   |   | (36,714 | ) |
| Attributed Canadian royalty income             |   |   | (2,729  | )      |   |   | (7,795 | ) |
| Asset retirement obligations                   |   |   | (10,454 | )      |   |   | (8,572 | ) |
| Other                                          |   |   | (2,025  | )      |   |   | - |   |
|                                           |   |   |    |   |   |   |   |   |
| Net future income tax liability                |   | $      | 277,774 |   |   | $      | 305,237 |   |

| Years ended December 31, |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                     |   |   |   |   |   |   |   |   |   |
| Strategic review costs   |   | $      | 2,550  |   |   | $      | 35,490 |   |   | $ | - |   |
| Restructuring costs      |   |   | 2,266  |   |   |   | -      |   |   |   | - |   |
|                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                     |   | $      | 4,816  |   |   | $      | 35,490 |   |   | $ | - |   |

| Years ended December 31,                     |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|----------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                         |   |   |    |   |   |   |    |   |   |
| Accounts receivable and other current assets |   | $      | 27,636  |   |   | $      | 18,204  |   |   | $ | (19,657 | ) |
| Accounts payable                             |   |   | (65,461 | )      |   |   | (25,504 | )      |   |   | 9,352 |   |
|                                         |   |   |    |   |   |   |    |   |   |   |   |   |
|                                         |   | $      | (37,825 | )      |   | $      | (7,300  | )      |   | $ | (10,305 | ) |
| Net change in non-cash working capital       |   |   |    |   |   |   |    |   |   |   |   |   |
| Relating to:                                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Operating activities                         |   | $      | (16,605 | )      |   | $      | 44,350  |   |   | $ | (23,366 | ) |
| Investing activities                         |   |   | (21,220 | )      |   |   | (51,650 | )      |   |   | 13,061 |   |
|                                         |   |   |    |   |   |   |    |   |   |   |   |   |
|                                         |   | $      | (37,825 | )      |   | $      | (7,300  | )      |   | $ | (10,305 | ) |

----

| Years ended December 31,  |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                      |   |   |   |   |   |   |   |   |   |
| Interest paid             |   | $      | 56,041 |   |   | $      | 60,278 |   |   | $ | 60,976 |   |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Current income taxes paid |   | $      | 45     |   |   | $      | 44     |   |   | $ | 41 |   |

|                         |   | 2010   |    |   | 2011   |   |   | 2012   |   |   | 2013   |   |   | 2014   |    |   | Thereafter |   |
|------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|---------|--------|------------|--------|
|                         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |       |   |
| Bank debt                    |   | $      | 108,462 |   |   | $      | -      |   |   | $      | -      |   |   | $      | -       |   |       | $      | - |   |   | $ | - |   |
| Senior term notes (US $450m) |   |   | -       |   |   |   | -      |   |   |   | -      |   |   |   | 470,970 |   |       |   | - |   |   |   | - |   |
| MPP term financing           |   |   | 9,592   |   |   |   | 9,592  |   |   |   | 9,592  |   |   |   | 9,592   |   |       |   | 3,198 |   |   |   | - |   |
| Accounts payable             |   |   | 58,970  |   |   |   | -      |   |   |   | -      |   |   |   | -       |   |       |   | - |   |   |   | - |   |
| Operating leases             |   |   | 7,426   |   |   |   | 2,391  |   |   |   | 1,009  |   |   |   | -       |   |       |   | - |   |   |   | - |   |
| Office facilities            |   |   | 3,234   |   |   |   | 3,234  |   |   |   | 3,234  |   |   |   | 3,234   |   |       |   | 3,234 |   |   |   | 13,964 |   |
| Vacant office facilities     |   |   | 5,215   |   |   |   | 4,542  |   |   |   | 4,542  |   |   |   | 4,542   |   |       |   | 4,542 |   |   |   | 19,682 |   |
|                         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |    |   |       |   |   |   |   |   |   |   |
|                         |   | $      | 192,899 |   |   | $      | 19,759 |   |   | $      | 18,377 |   |   | $      | 488,338 |   |       | $      | 10,974 |   |   | $ | 33,646 |   |

----

| For the years ended December 31,          |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|-------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                      |   |   |     |   |   |   |     |   |   |
| Net earnings (loss) for year, as reported |   | $      | (8,330   | )      |   | $      | (43,003  | )      |   | $ | 129,266 |   |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Adjustments                               |   |   |     |   |   |   |     |   |   |   |   |   |
| Depletion and depreciation, net, note (a) |   |   | 39,819   |   |   |   | (21,806  | )      |   |   | (625 | ) |
| Business combination, net, note (e)       |   |   | 201      |   |   |   | -        |   |   |   | (201 | ) |
| Ceiling test write-down, net, note (a)    |   |   | (489,272 | )      |   |   | (566,441 | )      |   |   | - |   |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Net earnings (loss) - US GAAP             |   | $      | (457,582 | )      |   | $      | (631,250 | )      |   | $ | 128,440 |   |

----

| For the years ended December 31,                          |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|-----------------------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                                      |   |   |     |   |   |   |     |   |   |
| Revenue, net of royalties                                 |   | $      | 200,202  |   |   | $      | 490,374  |   |   | $ | 403,540 |   |
| Expenses                                                  |   |   |     |   |   |   |     |   |   |   |   |   |
| Operating                                                 |   |   | 86,195   |   |   |   | 114,205  |   |   |   | 101,515 |   |
| Transportation                                            |   |   | 6,118    |   |   |   | 8,378    |   |   |   | 12,615 |   |
| Strategic review and restructuring costs                  |   |   | 4,816    |   |   |   | 35,490   |   |   |   | - |   |
| Administrative                                            |   |   | 28,611   |   |   |   | 31,015   |   |   |   | 29,717 |   |
| Interest and finance charges                              |   |   | 56,886   |   |   |   | 60,911   |   |   |   | 63,493 |   |
| Depletion and depreciation, note (a)                      |   |   | 733,983  |   |   |   | 942,301  |   |   |   | 152,245 |   |
| Foreign exchange and other (gains) losses                 |   |   | (84,810  | )      |   |   | 113,782  |   |   |   | (73,486 | ) |
| Accretion of asset retirement obligations                 |   |   | 3,242    |   |   |   | 3,142    |   |   |   | 2,718 |   |
| Stock-based compensation, note (f)                        |   |   | 4,147    |   |   |   | 9,574    |   |   |   | 12,608 |   |
| Loss on equity investment, note (e)                       |   |   | -        |   |   |   | -        |   |   |   | 159 |   |
| Risk management gain                                      |   |   | (20,473  | )      |   |   | (21,539  | )      |   |   | (6,014 | ) |
| Goodwill written-off, note (e)                            |   |   | 9,774    |   |   |   | -        |   |   |   | - |   |
| Earnings (loss) before taxes and non-controlling interest |   |   | (628,287 | )      |   |   | (806,885 | )      |   |   | 107,970 |   |
| Income tax recovery, notes (a, e)                         |   |   | (173,964 | )      |   |   | (181,257 | )      |   |   | (26,602 | ) |
| Non-controlling interest                                  |   |   | 3,259    |   |   |   | 5,622    |   |   |   | 6,132 |   |
|                                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Net earnings (loss) - US GAAP                             |   | $      | (457,582 | )      |   | $      | (631,250 | )      |   | $ | 128,440 |   |
|                                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Net earnings (loss) per common share - US GAAP            |   |   |     |   |   |   |     |   |   |   |   |   |
| Basic                                                     |   | $      | (2.88    | )      |   | $      | (4.87    | )      |   | $ | 1.00 |   |
| Diluted                                                   |   | $      | (2.88    | )      |   | $      | (4.87    | )      |   | $ | 0.97 |   |

| For the years ended December 31,       |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|----------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                   |   |   |     |   |   |   |     |   |   |
| Net earnings (loss) - US GAAP          |   | $      | (457,582 | )      |   | $      | (631,250 | )      |   | $ | 128,440 |   |
| Defined benefit pension plan, note (d) |   |   | 102      |   |   |   | 434      |   |   |   | 67 |   |
|                                   |   |   |     |   |   |   |     |   |   |   |   |   |
| Comprehensive income (loss)            |   | $      | (457,480 | )      |   | $      | (630,816 | )      |   | $ | 128,507 |   |

| As at December 31,                     |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of year             |   | $      | (392   | )      |   | $      | (826   | )      |   | $ | (893 | ) |
| Defined benefit pension plan, note (d) |   |   | 102    |   |   |   | 434    |   |   |   | 67 |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, end of year                   |   | $      | (290   | )      |   | $      | (392   | )      |   | $ | (826 | ) |

----

| As at December 31,                                      |   | 2009       |      |   | 2008    |   |
|---------------------------------------------------------|--------|------------|-----------|--------|---------|--------|
|                                                    |   | Asreported |      |   | US GAAP |   |   | Asreported |   |   | US GAAPrestated |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |
| Assets                                                  |   |       |      |   |    |   |   |   |   |   |   |   |
| Cash                                                    |   | $          | -         |   |    | $      | - |   |   | $ | 3,892 |   |   | $ | 3,892 |   |
| Other current assets                                    |   |       | 51,886    |   |    |   | 51,886 |   |   |   | 85,664 |   |   |   | 85,664 |   |
| Property and equipment, note (a)                        |   |       | 1,944,196 |   |    |   | 549,834 |   |   |   | 2,088,668 |   |   |   | 1,293,579 |   |
| Goodwill, note (e)                                      |   |       | -         |   |    |   | - |   |   |   | 9,933 |   |   |   | 9,732 |   |
| Other assets, notes (c, d)                              |   |       | 679       |   |    |   | 8,960 |   |   |   | 426 |   |   |   | 9,605 |   |
| Future income taxes, notes (a, d)                       |   |       | -         |   |    |   | 71,285 |   |   |   | - |   |   |   | - |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   | $          | 1,996,761 |   |    | $      | 681,965 |   |   | $ | 2,188,583 |   |   | $ | 1,402,472 |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders’ equity              |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities                                     |   | $          | 170,906   |   |    | $      | 170,906 |   |   | $ | 127,695 |   |   | $ | 127,695 |   |
| Long-term debt, note (c)                                |   |       | 461,741   |   |    |   | 469,703 |   |   |   | 829,321 |   |   |   | 838,940 |   |
| Asset retirement obligations                            |   |       | 41,812    |   |    |   | 41,812 |   |   |   | 34,281 |   |   |   | 34,281 |   |
| Risk management loss                                    |   |       | 1,331     |   |    |   | 1,331 |   |   |   | - |   |   |   | - |   |
| Unfunded pension liability, note (d)                    |   |       | -         |   |    |   | - |   |   |   | - |   |   |   | 56 |   |
| MPP term financing, note (g)                            |   |       | 46,807    |   |    |   | 51,685 |   |   |   | - |   |   |   | - |   |
| Future income taxes, notes (a, d)                       |   |       | 277,728   |   |    |   | - |   |   |   | 302,834 |   |   |   | 103,607 |   |
| Non-controlling interest, note (g)                      |   |       | 4,199     |   |    |   | - |   |   |   | 59,762 |   |   |   | - |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |       | 1,004,524 |   |    |   | 735,437 |   |   |   | 1,353,893 |   |   |   | 1,104,579 |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Non-controlling interest, note (g)                      |   |       | -         |   |    |   | - |   |   |   | - |   |   |   | 59,762 |   |
| Capital stock, note (b)                                 |   |       | 386,706   |   |    |   | 416,693 |   |   |   | 237,703 |   |   |   | 267,690 |   |
| Share purchase warrants                                 |   |       | 13,800    |   |    |   | 13,800 |   |   |   | - |   |   |   | - |   |
| Contributed surplus                                     |   |       | 36,104    |   |    |   | 36,104 |   |   |   | 33,030 |   |   |   | 33,030 |   |
| Retained earnings (deficit)                             |   |       | 555,627   |   |    |   | (519,779 | ) |   |   | 563,957 |   |   |   | (62,197 | ) |
| Accumulated other comprehensive income (loss), note (d) |   |       | -         |   |    |   | (290 | ) |   |   | - |   |   |   | (392 | ) |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |       | 992,237   |   |    |   | (53,472 | ) |   |   | 834,690 |   |   |   | 297,893 |   |
|                                                    |   |       |      |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   | $          | 1,996,761 |   |    | $      | 681,965 |   |   | $ | 2,188,583 |   |   | $ | 1,402,472 |   |

----

| For the years ended December 31,          |   | 2009   |     |   | 2008   |   |     | 2007   |   |
|-------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|
|                                      |   |   |     |   |   |   |     |   |   |
| Operating activities                      |   |   |     |   |   |   |     |   |   |
| Net earnings (loss)                       |   | $      | (457,582 | )      |   | $      | (631,250 | )      |   | $ | 128,440 |   |
| Amortization and other                    |   |   | (1,123   | )      |   |   | 7,422    |   |   |   | 8,648 |   |
| Depletion and depreciation                |   |   | 733,983  |   |   |   | 942,301  |   |   |   | 152,245 |   |
| Accretion of asset retirement obligations |   |   | 3,242    |   |   |   | 3,142    |   |   |   | 2,718 |   |
| Unrealized foreign exchange (gain) loss   |   |   | (80,100  | )      |   |   | 106,425  |   |   |   | (79,740 | ) |
| Future income taxes                       |   |   | (174,058 | )      |   |   | (181,293 | )      |   |   | (26,619 | ) |
| Unrealized risk management (gain) loss    |   |   | 9,510    |   |   |   | (2,546   | )      |   |   | 5,467 |   |
| Other                                     |   |   | 1,793    |   |   |   | 11,680   |   |   |   | 10,266 |   |
| Goodwill                                  |   |   | 9,774    |   |   |   | -        |   |   |   | - |   |
| Change in non-cash working capital        |   |   | (16,605  | )      |   |   | 44,350   |   |   |   | (23,366 | ) |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash from operating activities            |   |   | 28,834   |   |   |   | 300,231  |   |   |   | 178,059 |   |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash from financing activities            |   |   | (29,942  | )      |   |   | (119,776 | )      |   |   | 60,725 |   |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash from investing activities            |   |   | (2,784   | )      |   |   | (185,228 | )      |   |   | (241,995 | ) |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Change in cash                            |   |   | (3,892   | )      |   |   | (4,773   | )      |   |   | (3,211 | ) |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash, beginning of year                   |   |   | 3,892    |   |   |   | 8,665    |   |   |   | 11,876 |   |
|                                      |   |   |     |   |   |   |     |   |   |   |   |   |
| Cash, end of year                         |   | $      | -        |   |   | $      | 3,892    |   |   | $ | 8,665 |   |

----

| As at December 31,                             |   | 2009   |    |   | 2008   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                           |   |   |    |   |   |   |
| Future income tax liabilities                  |   |   |    |   |   |   |
| Property and equipment in excess of tax values |   | $      | -       |   |   | $      | 84,825 |   |
| Timing of partnership items                    |   |   | 44,183  |   |   |   | 69,290 |   |
| Foreign exchange gain on long-term debt        |   |   | 5,298   |   |   |   | 3,170 |   |
| Other                                          |   |   | -       |   |   |   | 1,806 |   |
| Future income tax assets                       |   |   |    |   |   |   |   |   |
| Non-capital losses carried forward             |   |   | (12,481 | )      |   |   | (36,714 | ) |
| Property and equipment less than tax values    |   |   | (93,031 | )      |   |   | - |   |
| Attributed Canadian royalty income             |   |   | (2,729  | )      |   |   | (7,795 | ) |
| Asset retirement obligation                    |   |   | (10,454 | )      |   |   | (8,572 | ) |
| Other                                          |   |   | (2,025  | )      |   |   | - |   |
|                                           |   |   |    |   |   |   |   |   |
| Future income taxes                            |   | $      | (71,239 | )      |   | $      | 106,010 |   |
|                                           |   |   |    |   |   |   |   |   |
| Net future income taxes, less                  |   | $      | (71,239 | )      |   | $      | 106,010 |   |
| Current portion, net                           |   |   | 46      |   |   |   | 2,403 |   |
| Non-current future income taxes                |   | $      | (71,285 | )      |   | $      | 103,607 |   |

----

| As at December 31,                          |   | 2009   |   |   | 2008   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                        |   |   |   |   |   |   |
| Accounts receivable includes the following: |   |   |   |   |   |   |
| Revenue receivable                          |   | $      | 1,453  |   |   | $      | 2,096 |   |
| Joint interest receivable                   |   |   | 6,540  |   |   |   | 17,152 |   |
| Accruals                                    |   |   | 28,038 |   |   |   | 43,161 |   |
| Other receivables                           |   |   | 1,358  |   |   |   | 2,808 |   |
|                                        |   |   |   |   |   |   |   |   |
|                                        |   | $      | 37,389 |   |   | $      | 65,217 |   |
|                                        |   |   |   |   |   |   |   |   |
| Accounts payable includes the following:    |   |   |   |   |   |   |   |   |
| Trade payables                              |   | $      | 6,400  |   |   | $      | 24,133 |   |
| Royalties payable                           |   |   | 1,363  |   |   |   | 4,815 |   |
| Accruals                                    |   |   | 51,065 |   |   |   | 94,881 |   |
| Other payables                              |   |   | 142    |   |   |   | 1,463 |   |
|                                        |   |   |   |   |   |   |   |   |
|                                        |   | $      | 58,970 |   |   | $      | 125,292 |   |

|   | (i) | On January 1, 2009, Compton adopted, for US GAAP purposes, ASC Topic 810, “Consolidation”.  Under the standard, the non-controlling interest in a subsidiary is classified as a separate component of equity.  Also, the US consolidated statement of earnings presentation requires net earnings to include the amounts attributable to both the parent and the non-controlling interest andto disclose these respective amounts.  The presentation changes have been included in the consolidated financial statements as applicable. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (ii) | On January 1, 2009, the Corporation adopted, for US GAAP purposes, ASC Topic 805, “Business Combinations”.  This revised standard requires assets and liabilities acquired in a business combination, contingent consideration, and certain acquired contingencies to be measured at fair value as of the date of acquisition.  Also, transaction costs are to be recognized separately from thebusiness combination.  The adoption of the standard did not have a material impact on the consolidated financial statements. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | (iii) | On January 1, 2009, Compton adopted, for US GAAP purposes, ASC Topic 815, “Derivatives and Hedging”.  This statement is intended to improve qualitative disclosure about the objectives and strategies for using derivatives, quantitative data about the fair value of gains and losses on derivative contracts and details of credit-risk-related contingent features in hedged positions and transparencyabout the location and amounts of derivative instruments in an entity’s financial statements.  The Corporation does not designate any of its financial contracts as hedging instruments and has included additional disclosures in note 15 of the December 31, 2009 consolidated financial statements sufficient to meet the disclosure requirements of the new standard.  Consequently, the adoption of the standard did not have a material impact on the consolidated financial statements. |
|--------|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iv) | On April 1, 2009 the Corporation adopted for US GAAP purposes, ASC Topic 855, “Subsequent Events” which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued.  The adoption of this standard did not have a material impact on the consolidated financial statements. |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (v) | In December 2009, the Corporation adopted, for US GAAP purposes ASC Topic 715, “Compensation - Retirement Benefits”.  This position provides guidance on disclosures about plan assets of a defined benefit pension or other postretirement plans.  This requirement is effective for fiscal years ending after December 15, 2009.  The adoption of this standard has had no materialimpact on the consolidated financial statements. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (vi) | In 2010, the Corporation will be required to adopt for US GAAP purposes, ASC Topic 810, ”Consolidation”.  The revised standard changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting or similar rights should be consolidated.  The statement also requires ongoing reassessments of whether an enterprise is the primarybeneficiary of a variable interest entity and requires enhanced disclosures about an enterprise’s involvement in a variable interest entity.  The standard is effective at the beginning of the first annual reporting period after November 15, 2009.  The Corporation does not expect the adoption of this standard to have a material impact on the consolidated financial statements. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Years ended December 31,                    |   | 2009                       |   |   | 2008       |   |     | 2007                       |   |
|---------------------------------------------|--------|----------------------------|--------|--------|------------|--------|----------|----------------------------|--------|
|                                        |   | Crude oil& NGL’s |   |   | NaturalGas |   |     | Crude oil& NGL’s |   |   | NaturalGas |   |   | Crude oil& NGL’s |   |   | NaturalGas |   |
|                                        |   | (mbbls)                    |   |   | (mmcf)     |   |     | (mbbls)                    |   |   | (mmcf) |   |   | (mbbls) |   |   | (mmcf) |   |
|                                        |   |                       |   |   |       |   |     |                       |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of year                  |   |                       | 11,417 |   |       |   | 529,204  |                       |   |   | 20,886 |   |   |   | 602,981 |   |   |   | 27,620 |   |   |   | 553,331 |   |
| Revisions of previous estimates             |   |                       | (1,015 | )      |       |   | (132,051 | )                          |   |   | (3,961 | ) |   |   | (68,793 | ) |   |   | 2,247 |   |   |   | 14,217 |   |
| Extensions, discoveries and other additions |   |                       | 123    |   |       |   | 8,057    |                       |   |   | 1,213 |   |   |   | 64,467 |   |   |   | 932 |   |   |   | 48,434 |   |
| Acquisitions of minerals in place           |   |                       | -      |   |       |   | -        |                       |   |   | 41 |   |   |   | 1,923 |   |   |   | 1,091 |   |   |   | 38,286 |   |
| Dispositions of minerals in place           |   |                       | (1,127 | )      |       |   | (42,258  | )                          |   |   | (5,383 | ) |   |   | (29,147 | ) |   |   | (8,935 | ) |   |   | (9,288 | ) |
| Production                                  |   |                       | (876   | )      |       |   | (36,074  | )                          |   |   | (1,379 | ) |   |   | (42,227 | ) |   |   | (2,070 | ) |   |   | (41,999 | ) |
|                                        |   |                       |   |   |       |   |     |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, end of year                        |   |                       | 8,522  |   |       |   | 326,878  |                       |   |   | 11,417 |   |   |   | 529,204 |   |   |   | 20,885 |   |   |   | 602,981 |   |
|                                        |   |                       |   |   |       |   |     |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proved developed reserves                   |   |                       |   |   |       |   |     |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning of year                  |   |                       | 10,169 |   |       |   | 404,095  |                       |   |   | 17,829 |   |   |   | 452,871 |   |   |   | 23,334 |   |   |   | 411,075 |   |
| Balance, end of year                        |   |                       | 7,787  |   |       |   | 285,273  |                       |   |   | 10,169 |   |   |   | 404,095 |   |   |   | 17,829 |   |   |   | 452,871 |   |

| Proved undeveloped reserves |   |   |   |   |   |   |    |   |   |   |   |   |   |   |    |   |   |   |
|-----------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|
| Balance, beginning of year  |   |   | 1,248  |   |   |   | 125,109 |   |   |   | 3,056  |   |   |   | 150,110 |   |   |   | 4,288 |   |   |   | 142,256 |   |
| Balance, end of year        |   |   | 735    |   |   |   | 41,605  |   |   |   | 1,248  |   |   |   | 125,109 |   |   |   | 3,056 |   |   |   | 150,110 |   |

| As at December 31,                     |   | 2009                                                       |      |   | 2008   |   |
|----------------------------------------|--------|------------------------------------------------------------|-----------|--------|--------|--------|
|                                   |   |     (in thousands of Canadian dollars) |      |
|                                   |   |                                                       |      |   |   |   |
| Proved properties                      |   | $                                                          | 2,654,789 |   |   | $      | 2,671,816 |   |
| Unproved properties:                   |   |                                                       |      |   |   |   |   |   |
| Acquisition                            |   |                                                       | 119,319   |   |   |   | 118,350 |   |
| Exploration                            |   |                                                       | 101,155   |   |   |   | 97,022 |   |
| Accumulated depletion and depreciation |   |                                                       | (992,188  | )      |   |   | (864,384 | ) |
|                                   |   |                                                       |      |   |   |   |   |   |
|                                   |   | $                                                          | 1,883,075 |   |   | $      | 2,022,804 |   |

----

| Years ended December 31,                   |   | 2009                                                                                                             |    |   | 2008   |   |     | 2007   |   |
|--------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|---------|--------|--------|--------|----------|--------|--------|
|                                       |   |              (in thousands of Canadian dollars) |    |
|                                       |   |                                                                                                             |    |   |   |   |     |   |   |
| Acquisition costs (net of disposition)     |   |                                                                                                             |    |   |   |   |     |   |   |
| Proved properties                          |   | $                                                                                                                | (86,753 | )      |   | $      | (192,934 | )      |   | $ | (109,262 | ) |
| Unproved properties                        |   |                                                                                                             | 969     |   |   |   | (41,228  | )      |   |   | 28,245 |   |
| Development costs                          |   |                                                                                                             |    |   |   |   |     |   |   |   |   |   |
| Development of proved undeveloped reserves |   |                                                                                                             | 50,258  |   |   |   | 195,459  |   |   |   | 293,335 |   |
| Other                                      |   |                                                                                                             | (1,873  | )      |   |   | 148,568  |   |   |   | (41,550 | ) |
| Exploration costs                          |   |                                                                                                             | 18,963  |   |   |   | 23,451   |   |   |   | 79,492 |   |
|                                       |   |                                                                                                             |    |   |   |   |     |   |   |   |   |   |
| Total costs incurred                       |   | $                                                                                                                | (18,436 | )      |   | $      | 133,316  |   |   | $ | 250,260 |   |

| (C) | Standardized Measure of Discounted Future Net Cash Flows and Changes in the Summary of Discounted Cash Flows |
|-----|--------------------------------------------------------------------------------------------------------------|

| Years ended December 31,                                 |   | 2009                                                                                                             |       |   | 2008   |   |       | 2007   |   |
|----------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|------------|--------|--------|--------|------------|--------|--------|
|                                                     |   |              (in thousands of Canadian dollars) |       |
|                                                     |   |                                                                                                             |       |   |   |   |       |   |   |
| Future cash inflows                                      |   | $                                                                                                                | 1,903,420  |   |   | $      | 3,695,769  |   |   | $ | 5,740,433 |   |
| Future production costs                                  |   |                                                                                                             | (1,031,097 | )      |   |   | (1,598,944 | )      |   |   | (2,183,122 | ) |
| Future development costs                                 |   |                                                                                                             | (91,530    | )      |   |   | (285,452   | )      |   |   | (340,215 | ) |
|                                                     |   |                                                                                                             |       |   |   |   |       |   |   |   |   |   |
| Future net cash flows                                    |   |                                                                                                             | 780,793    |   |   |   | 1,811,373  |   |   |   | 3,217,096 |   |
| Income taxes                                             |   |                                                                                                             | -          |   |   |   | (192,809   | )      |   |   | (518,136 | ) |
|                                                     |   |                                                                                                             |       |   |   |   |       |   |   |   |   |   |
| Total undiscounted future net cash flows                 |   |                                                                                                             | 780,793    |   |   |   | 1,618,564  |   |   |   | 2,698,960 |   |
| 10% annual discount for estimated timing of cash inflows |   |                                                                                                             | (387,389   | )      |   |   | (842,453   | )      |   |   | (1,340,535 | ) |
|                                                     |   |                                                                                                             |       |   |   |   |       |   |   |   |   |   |
| Standardized measure of discounted future net cash flows |   | $                                                                                                                | 393,404    |   |   | $      | 776,111    |   |   | $ | 1,358,425 |   |

----

| Years ended December 31,                                                            |   | 2009                               |     |   | 2008   |   |      | 2007   |   |
|-------------------------------------------------------------------------------------|--------|------------------------------------|----------|--------|--------|--------|-----------|--------|--------|
|                                                                                |   | (in thousands of Canadian dollars) |     |
|                                                                                |   |                               |     |   |   |   |      |   |   |
| Beginning of year                                                                   |   | $                                  | 776,111  |   |   | $      | 1,358,425 |   |   | $ | 1,261,120 |   |
| Sales of production, net of production costs                                        |   |                               | (102,421 | )      |   |   | (360,246  | )      |   |   | (286,961 | ) |
| Net change in sales prices, net of production costs                                 |   |                               | (335,943 | )      |   |   | (606,466  | )      |   |   | 18,800 |   |
| Extensions, discoveries and additions                                               |   |                               | 16,852   |   |   |   | 68,199    |   |   |   | 117,276 |   |
| Changes in estimated future development costs                                       |   |                               | (1,095   | )      |   |   | 83,174    |   |   |   | 202 |   |
| Development costs incurred during the period which reduced future development costs |   |                               | 29,034   |   |   |   | 244,579   |   |   |   | 281,269 |   |
| Revisions in quantity estimates                                                     |   |                               | 19,386   |   |   |   | (125,668  | )      |   |   | 58,269 |   |
| Accretion of discount                                                               |   |                               | 81,150   |   |   |   | 153,239   |   |   |   | 144,449 |   |
| Purchase of reserves                                                                |   |                               | -        |   |   |   | 4,863     |   |   |   | 116,362 |   |
| Sales of reserves                                                                   |   |                               | (100,837 | )      |   |   | 148,740   |   |   |   | 211,215 |   |
| Net change in income tax                                                            |   |                               | 35,820   |   |   |   | 138,145   |   |   |   | 9,411 |   |
| Changes in production rates (timing) and other                                      |   |                               | (24,653  | )      |   |   | (330,873  | )      |   |   | (572,987 | ) |
|                                                                                |   |                               |     |   |   |   |      |   |   |   |   |   |
| Standardized measure, end of year                                                   |   | $                                  | 393,404  |   |   | $      | 776,111   |   |   | $ | 1,358,425 |   |

----