NOTICE OF APPLICATION TO THE COURT OF QUEEN'S BENCH OF ALBERTA

NOTICES OF SPECIAL MEETINGS

and

NOTICE OF APPLICATION TO THE COURT OF QUEEN'S BENCH OF ALBERTA

and

JOINT INFORMATION CIRCULAR AND PROXY STATEMENT

with respect to a proposed

PLAN OF ARRANGEMENT

involving

CHARGER ENERGY CORP. AND ITS SHAREHOLDERS AVENEX ENERGY CORP. AND ITS SHAREHOLDERS

and

PACE OIL & GAS LTD. AND ITS SHAREHOLDERS

January 18, 2013

Neither the Toronto Stock Exchange, the TSX Venture Exchange Inc. nor any securities regulatory authority has in any way passed upon the merits of the transaction described in this information circular. These materials are important and require your immediate attention. They require shareholders of Charger Energy Corp., AvenEx Energy Corp. and Pace Oil & Gas Ltd. to make important decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal, tax or other professional advisors.

TABLE OF CONTENTS

Page

LETTER TO CHARGER SHAREHOLDERS viii

LETTER TO AVENEX SHAREHOLDERS xi

LETTER TO PACE SHAREHOLDERS xiv

CHARGER ENERGY CORP. NOTICE OF SPECIAL MEETING xvi

AVENEX ENERGY CORP. NOTICE OF SPECIAL MEETING xx

PACE OIL & GAS LTD. NOTICE OF SPECIAL MEETING xxii

NOTICE OF APPLICATION TO THE COURT OF QUEEN'S BENCH xxiv

JOINT INFORMATION CIRCULAR 1

GLOSSARY OF TERMS 7

CONVENTIONS 15

ABBREVIATIONS 15

CONVERSIONS 15

SUMMARY INFORMATION 16

THE ARRANGEMENT 32

THE ARRANGEMENT AGREEMENT 49

PROCEDURE FOR THE ARRANGEMENT TO BECOME EFFECTIVE 80

DISSENT RIGHTS 84

SECURITIES LAW MATTERS 86

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS 90

CERTAIN MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS 96

OTHER TAX CONSIDERATIONS 102

INTERESTS OF CERTAIN PERSONS OR COMPANIES IN THE MATTERS TO BE ACTED UPON 102

LEGAL DEVELOPMENTS 107

INTERESTS OF EXPERTS 107

EXPENSES OF THE ARRANGEMENT 108

RISK FACTORS 108

INFORMATION CONCERNING CHARGER 110

INFORMATION CONCERNING AVENEX 110

INFORMATION CONCERNING PACE 110

ELBOW RIVER TRANSACTION 110

PRO FORMA INFORMATION CONCERNING SPYGLASS FOLLOWING THE ARRANGEMENT 111

INDEBTEDNESS OF DIRECTORS AND OFFICERS 114

CHARGER GENERAL PROXY MATTERS 114

AVENEX GENERAL PROXY MATTERS 117

PACE GENERAL PROXY MATTERS 120

CONSENTS 124

APPENDICES

A ARRANGEMENT AGREEMENT B INTERIM ORDER

C CHARGER ARRANGEMENT RESOLUTION D AVENEX ARRANGEMENT RESOLUTION E PACE ARRANGEMENT RESOLUTION

F CHARGER FAIRNESS OPINION G AVENEX FAIRNESS OPINION H PACE FAIRNESS OPINION

I ADDITIONAL INFORMATION CONCERNING CHARGER J ADDITIONAL INFORMATION CONCERNING AVENEX K ADDITIONAL INFORMATION CONCERNING PACE

L ADDITIONAL INFORMATION CONCERNING SPYGLASS

M PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS OF SPYGLASS N SECTION 191 OF THE ABCA

January 18, 2013

Dear Charger Shareholders:

You are invited to attend a special meeting (the "Charger Meeting") of the holders of class A shares ("Charger Shares") of Charger Energy Corp. ("Charger") to be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 11:00 a.m. (Calgary time) on Tuesday, February 19, 2013. At the Charger Meeting, you will be asked to consider a special resolution to approve a proposed arm's length business combination involving Charger, AvenEx Energy Corp. ("AvenEx") and Pace Oil & Gas Ltd. ("Pace") to be completed by way of an arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Subject to receipt of all required approvals, the Arrangement is currently anticipated to be completed on or about February 19, 2013.

Charger, AvenEx and Pace have entered into an arrangement agreement dated December 20, 2012 (the "Arrangement Agreement"). Pursuant to the Arrangement Agreement and the accompanying plan of arrangement:

(a) the articles of Pace will be amended to subdivide the issued and outstanding common shares of Pace ("Pace Shares") on the basis of 1.3 post-subdivided Pace Shares for each 1.0 pre-subdivided Pace Share; (b) each Charger Share will be exchanged for 0.18 of a post-subdivided Pace Share; (c) each common share of AvenEx ("AvenEx Share") will be exchanged for 1.0 post-subdivided Pace Share; and (d) AvenEx, Charger and Pace will amalgamate to form "Spyglass Resources Corp." ("Spyglass") and each post-subdivided Pace Share (including the Pace Shares issued to holders of Charger Shares and AvenEx Shares) will be exchanged for one (1) common share of Spyglass ("Spyglass Share"). A total of 128.9 million Spyglass Shares are expected to be issued pursuant to the Arrangement for aggregate deemed consideration of approximately $344 million, based on the closing price of the AvenEx Shares on January 16, 2013.

Spyglass intends to implement a monthly dividend of $0.03 per Spyglass Share following completion of the Arrangement, and, subject to prevailing and anticipated commodity prices, Spyglass will not reduce its monthly dividend rate on the Spyglass Shares for a period of six (6) months following the effective date of the Arrangement. Notwithstanding the foregoing, the dividend policy of Spyglass will be at the discretion of the board of directors of Spyglass following completion of the Arrangement, with the board of directors giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under applicable laws.

The Arrangement will provide holders of Charger Shares ("Charger Shareholders") with an interest in a Toronto Stock Exchange listed company with a balanced commodity profile and sustainable business model underpinned by 18,000 boe/d of stable, low decline oil and gas production. There are many other anticipated benefits of the proposed combination of Charger, AvenEx and Pace which are discussed in the accompanying joint information circular (the "Joint Information Circular"). Please give this material your careful consideration.

Under the terms of the Arrangement, the board of directors of Spyglass will be constituted with representatives from each of Charger, AvenEx and Pace, namely Randy Findlay, Dennis Balderston, Thomas Buchanan, Gary Dundas, Mike Shaikh, Jeff Smith, Fred Woods and John Wright. The current members of Charger management will become the management of Spyglass. Thomas Buchanan will serve as Chief Executive Officer, Dan O'Byrne will serve as President, Mark Walker will serve as Vice President, Finance and Chief Financial Officer, Kelly Cowan will serve as Vice President, Corporate Development and Land, John Milford will serve as Vice President, Exploration and Development and Dan Fournier will serve as General Counsel and Corporate Secretary.

After considering, among other things, the opinion of TD Securities Inc., that, as at December 17, 2012, based upon and subject to the various assumptions, qualifications and limitations set forth in its opinion, the consideration to be received by Charger Shareholders pursuant to the Arrangement is fair, from a financial point of view, to Charger Shareholders, the Board of Directors of Charger (other than two directors who

recused themselves from the process of considering the Arrangement due to a conflict of interest) has concluded that the Arrangement is in the best interests of Charger and is fair to Charger Shareholders, and recommends that the Charger Shareholders vote in favour of the Charger Arrangement Resolution (as defined below).

Under the terms of the Arrangement Agreement, holders of Charger stock options ("Charger Options"), holders of Charger warrants ("Charger Warrants") and holders of Charger deferred share units ("Charger DSUs") have entered into or will enter into prior to the effective time of the Arrangement (the "Effective Time") agreements with Charger pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Charger Options and Charger Warrants and redeem all Charger DSUs immediately prior to the Effective Time. The exercise of "in-the- money" Charger Options will be completed upon payment of the exercise price by the holder in accordance with the terms thereof, and "out-of-the-money" Charger Options and Charger Warrants will be surrendered and cancelled in consideration of payment from Charger of $0.001 per "out-of-the-money" Charger Option and Charger Warrant. Charger anticipates paying an aggregate of $64,400 in cash, as of the Effective Time, in satisfaction of all of the outstanding Charger DSUs (based on a market price per Charger Share of $0.46 as at January 16, 2013).

The resolution approving the Arrangement (the "Charger Arrangement Resolution") must be approved by not less than 66 2⁄3% of the votes cast by the Charger Shareholders present in person or by proxy at the Charger Meeting. Completion of the proposed Arrangement is also conditional upon approval by more than 66 2/3% of the votes cast by AvenEx shareholders and Pace shareholders present in person or by proxy at the respective meetings of such holders, approval by a majority of the votes cast by AvenEx Shareholders present in person or represented by proxy at the AvenEx Meeting after excluding the votes required to be excluded by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators, the closing of the Elbow River Transaction (as defined in the Joint Information Circular) by AvenEx, the approval of the Court of Queen's Bench of Alberta, the receipt of required regulatory and stock exchange approvals and satisfaction of certain other closing conditions that are customary for a transaction of this nature.

Immediately following completion of the Arrangement, Charger Shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace shareholders are anticipated to own the remaining 48% of the issued and outstanding Spyglass Shares.

All of the directors and officers of each of Charger, AvenEx and Pace have each entered into support agreements pursuant to which they have agreed, among other things, to support the Arrangement and vote their Charger Shares, AvenEx Shares and Pace Shares, as the case may be, in favour of the Arrangement, subject to certain conditions. As of December 20, 2012, these directors and officers own or exercise control or direction over an aggregate of 12% of the Charger Shares, 3.52% of the AvenEx Shares and 1.97% of the Pace Shares.

Charger has agreed to pay AvenEx a non-completion fee of $0.70 million and Pace a non-completion fee of $1.40 million if the Arrangement is not completed under certain circumstances. Charger will also receive a non- completion fee from AvenEx of $0.85 million and from Pace of $2.86 million if the Arrangement is not completed under certain circumstances.

The accompanying Joint Information Circular contains a detailed description of the Arrangement, as well as detailed information regarding Charger, AvenEx and Pace and certain pro forma and other selected financial and operational information regarding the combined company after giving effect to the Arrangement. It also includes certain risk factors relating to completion of the Arrangement and the potential consequences of Charger Shareholders exchanging their Charger Shares for Spyglass Shares in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

To be represented at the Charger Meeting, you must either attend the Charger Meeting in person or complete and sign the applicable enclosed form of proxy and forward it so as to reach or be deposited with Alliance Trust Company at #450, 407 - 2nd Street S.W., Calgary, Alberta T2P 2Y3, Attention: Proxy Department or by facsimile at

(403) 237-6181, not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the Charger Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Charger Meeting at his or her discretion and the Chairman of the Charger Meeting is

under no obligation to accept or reject any particular late proxy. The Chairman of the Charger Meeting may waive or extend the proxy cut-off without notice. If you are unable to attend the Charger Meeting, we encourage you to complete the enclosed forms of proxy, as applicable, as soon as possible.

If you are a non-registered holder of Charger Shares and have received these materials from your broker or another intermediary, please complete and return the form of proxy or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your Charger Shares not being eligible to be voted at the Charger Meeting.

If you have any questions or need assistance to vote, please contact Charger's proxy solicitation agent, CST Phoenix Advisors, by e-mail at inquiries@phoenixadvisorscst.com, by telephone at 1-866-822-1240 (toll-free within Canada or the United States) or 1-201-806-2222 (banks, brokers and collect calls outside Canada and the United States) or by fax at 1-888-509-5907 (North American Toll Free Facsimile) or 1-647-351-3176.

In order to receive their Spyglass Shares pursuant to the Arrangement, Charger Shareholders must deposit with Olympia Trust Company (the "Depositary") (at the address specified on the last page of the Charger letter of transmittal) a duly completed and executed Charger letter of transmittal, together with the certificates representing the holder's Charger Shares and such other documents and instruments as the Depositary may reasonably request. Please refer to "The Arrangement - Procedure for Exchange of Charger Shares, AvenEx Shares and/or Pace Shares" in the Joint Information Circular and the Charger letter of transmittal for further detailed instructions.

For information regarding the tax treatment relating to the exchange of the Charger Shares pursuant to the Arrangement, please refer to "Certain Canadian Federal Income Tax Considerations" and "Certain Material United States Federal Income Tax Considerations" in the Joint Information Circular.

On behalf of the board of directors of Charger, I would like to express our gratitude for the support our shareholders have demonstrated with respect to our decision to take the proposed Arrangement forward. We look forward to seeing you at the Charger Meeting.

Yours very truly,

(Signed) "Thomas Buchanan" Thomas Buchanan

Chairman and Chief Executive Officer

January 18, 2013

Dear AvenEx Shareholders:

You are invited to attend a special meeting (the "AvenEx Meeting") of the holders of common shares ("AvenEx Shares") of AvenEx Energy Corp. ("AvenEx") to be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 9:00 a.m. (Calgary time) on Tuesday, February 19, 2013. At the AvenEx Meeting, you will be asked to consider a special resolution to approve a proposed arm's length business combination involving Charger Energy Corp. ("Charger"), AvenEx and Pace Oil & Gas Ltd. ("Pace") to be completed by way of an arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Subject to receipt of all required approvals, the Arrangement is currently anticipated to be completed on or about February 19, 2013.

(a) the articles of Pace will be amended to subdivide the issued and outstanding common shares of Pace ("Pace Shares") on the basis of 1.3 post-subdivided Pace Shares for each 1.0 pre-subdivided Pace Share; (b) each Charger Share will be exchanged for 0.18 of a post-subdivided Pace Share; (c) each AvenEx Share will be exchanged for 1.0 post-subdivided Pace Share; and (d) AvenEx, Charger and Pace will amalgamate to form "Spyglass Resources Corp." ("Spyglass") and each post-subdivided Pace Share (including the Pace Shares issued to holders of Charger Shares and AvenEx Shares) will be exchanged for one (1) common share of Spyglass ("Spyglass Share"). A total of

128.9 million Spyglass Shares are expected to be issued pursuant to the Arrangement for aggregate deemed consideration of approximately $344 million, based on the closing price of the AvenEx Shares on January 16, 2013.

Spyglass intends to implement a monthly dividend of $0.03 per Spyglass Share following completion of the Arrangement, and, subject to prevailing and anticipated commodity prices, Spyglass will not reduce its monthly dividend rate on the Spyglass Shares for a period of six (6) months following the effective date of the Arrangement (the "Effective Date"). Notwithstanding the foregoing, the dividend policy of Spyglass will be at the discretion of the board of directors of Spyglass following completion of the Arrangement, with the board of directors giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under applicable laws.

The Arrangement will provide holders of AvenEx Shares ("AvenEx Shareholders") with an interest in a Toronto Stock Exchange listed company with a balanced commodity profile and sustainable business model underpinned by 18,000 boe/d of stable, low decline oil and gas production. There are many other anticipated benefits of the proposed combination of Charger, AvenEx and Pace which are discussed in the accompanying joint information circular (the "Joint Information Circular"). Please give this material your careful consideration.

After considering, among other things, the opinion of Peters & Co. Limited, that, as at December 20, 2012, based upon and subject to the various assumptions, qualifications and limitations set forth in their opinion, the consideration to be received by AvenEx Shareholders pursuant to the Arrangement is fair, from a financial point of view, to AvenEx Shareholders, the Board of Directors of AvenEx has concluded that the Arrangement is in the best interests of AvenEx and is fair to AvenEx Shareholders, and unanimously recommends that the AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution (as defined below).

Under the terms of the Arrangement Agreement, holders of AvenEx stock options ("AvenEx Options") have entered into or will enter into prior to the effective time of the Arrangement (the "Effective Time") agreements with AvenEx pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised AvenEx Options immediately prior to the Effective Time. The exercise of "in-the-money" AvenEx Options will be completed upon payment of the exercise price by the holder or on a "cashless basis" in exchange for AvenEx Shares in accordance with the terms thereof, and "out-of-the-money" AvenEx Options will be surrendered and cancelled in consideration of payment from AvenEx of $0.001 per "out-of-the-money" AvenEx Option. Closing of the Arrangement will constitute a "change of control" under the terms and conditions of the restricted share units ("AvenEx RSUs") and, as a result, the vesting provisions of all such AvenEx RSUs will be accelerated, all such AvenEx RSUs will vest immediately prior to the Effective Time, AvenEx will issue AvenEx Shares to the holders thereof as soon as practicable after the vesting thereof (which will be automatically exchanged for Spyglass Shares pursuant to the Arrangement), and all such AvenEx RSUs will terminate on the Effective Date.

The resolution approving the Arrangement (the "AvenEx Arrangement Resolution") must be approved by: (i) not less than 66 ⁄23% of the votes cast by the AvenEx Shareholders present in person or by proxy at the AvenEx Meeting; and (ii) a majority of the votes cast by AvenEx Shareholders present in person or represented by proxy at the AvenEx Meeting after excluding the votes required to be excluded by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators. Completion of the proposed Arrangement is also conditional upon approval by more than 66 2/3% of the votes cast by Charger shareholders and Pace shareholders present in person or by proxy at the respective meetings of such holders, the closing of the Elbow River Transaction (as defined in the Joint Information Circular) by AvenEx, the approval of the Court of Queen's Bench of Alberta, the receipt of required regulatory and stock exchange approvals and satisfaction of certain other closing conditions that are customary for a transaction of this nature.

Immediately following completion of the Arrangement, Charger shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx Shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace shareholders are anticipated to own the remaining 48% of the issued and outstanding Spyglass Shares.

AvenEx has agreed to pay Charger a non-completion fee of $0.85 million and Pace a non-completion fee of $3.65 million if the Arrangement is not completed under certain circumstances. AvenEx will also receive a non- completion fee from Charger of $0.70 million and from Pace of $6.14 million if the Arrangement is not completed under certain circumstances.

The accompanying Joint Information Circular contains a detailed description of the Arrangement, as well as detailed information regarding Charger, AvenEx and Pace and certain pro forma and other selected financial and operational information regarding the combined company after giving effect to the Arrangement. It also includes certain risk factors relating to completion of the Arrangement and the potential consequences of AvenEx Shareholders exchanging their AvenEx Shares for Spyglass Shares in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

To be represented at the AvenEx Meeting, you must either attend the AvenEx Meeting in person or complete and sign the applicable enclosed form of proxy and forward it so as to reach or be deposited with Olympia Trust Company, Proxy Department, 2300, 125 – 9th Avenue S.E., Calgary, Alberta, T2G 0P6 or by facsimile at (403) 265-1455, not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the AvenEx Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the AvenEx Meeting at his or her discretion and the Chairman of the AvenEx Meeting is under no obligation to accept or reject any particular late proxy. The Chairman of the AvenEx Meeting may waive or extend the proxy cut-off without notice. If you are unable to attend the AvenEx Meeting, we encourage you to complete the enclosed forms of proxy, as applicable, as soon as possible.

If you are a non-registered holder of AvenEx Shares and have received these materials from your broker or another intermediary, please complete and return the form of proxy or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your AvenEx Shares not being eligible to be voted at the AvenEx Meeting.

If you have any questions or need assistance to vote, please contact AvenEx's proxy solicitation agent, Laurel Hill Advisory Group, by e-mail at assistance@laurelhill.com, or by telephone at 416-304-0211 (banks, brokers or collect calls) or 1-877-452-7184 (North American toll-free number).

In order to receive their Spyglass Shares pursuant to the Arrangement, AvenEx Shareholders must deposit with Olympia Trust Company (the "Depositary") (at the address specified on the last page of the AvenEx letter of transmittal) a duly completed and executed AvenEx letter of transmittal, together with the certificates representing the holder's AvenEx Shares and such other documents and instruments as the Depositary may reasonably request. Please refer to "The Arrangement - Procedure for Exchange of Charger Shares, AvenEx Shares and/or Pace Shares" in the Joint Information Circular and the AvenEx letter of transmittal for further detailed instructions.

For information regarding the tax treatment relating to the exchange of the AvenEx Shares pursuant to the Arrangement, please refer to "Certain Canadian Federal Income Tax Considerations" and "Certain Material United States Federal Income Tax Considerations" in the Joint Information Circular.

On behalf of the board of directors of AvenEx, I would like to express our gratitude for the support our shareholders have demonstrated with respect to our decision to take the proposed Arrangement forward. We look forward to seeing you at the AvenEx Meeting.

Yours very truly,

(Signed) "William Gallacher" William Gallacher

President and Chief Executive Officer

January 18, 2013

Dear Pace Shareholders:

You are invited to attend a special meeting (the "Pace Meeting") of the holders of common shares ("Pace Shares") of Pace Oil & Gas Ltd. ("Pace") to be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 10:00 a.m. (Calgary time) on Tuesday, February 19, 2013. At the Pace Meeting, you will be asked to consider a special resolution to approve a proposed arm's length business combination involving Charger Energy Corp. ("Charger"), AvenEx Energy Corp. ("AvenEx") and Pace to be completed by way of an arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Subject to receipt of all required approvals, the Arrangement is currently anticipated to be completed on or about February 19, 2013.

(a) the articles of Pace will be amended to subdivide the issued and outstanding Pace Shares on the basis of 1.3 post- subdivided Pace Shares for each 1.0 pre-subdivided Pace Share; (b) each class A share of Charger ("Charger Share") will be exchanged for 0.18 of a post-subdivided Pace Share; (c) each common share of AvenEx ("AvenEx Share") will be exchanged for 1.0 post-subdivided Pace Share; and (d) AvenEx, Charger and Pace will amalgamate to form "Spyglass Resources Corp." ("Spyglass") and each post-subdivided Pace Share (including the Pace Shares issued to holders of Charger Shares and AvenEx Shares) will be exchanged for one (1) common share of Spyglass ("Spyglass Share"). A total of 128.9 million Spyglass Shares are expected to be issued pursuant to the Arrangement for aggregate deemed consideration of approximately $344 million, based on the closing price of the AvenEx Shares on January 16, 2013.

Spyglass intends to implement a monthly dividend of $0.03 per Spyglass Share following completion of the Arrangement, and, subject to prevailing and anticipated commodity prices, Spyglass will not reduce its monthly dividend rate on the Spyglass Shares for a period of six (6) months following the effective date of the Arrangement (the "Effective Date"). Notwithstanding the foregoing, the dividend policy of Spyglass will be at the discretion of the board of directors of Spyglass following completion of the Arrangement, with the board of directors giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under applicable laws.

The Arrangement will provide holders of Pace Shares ("Pace Shareholders") with an interest in a Toronto Stock Exchange listed company with a balanced commodity profile and sustainable business model underpinned by 18,000 boe/d of stable, low decline oil and gas production. There are many other anticipated benefits of the proposed combination of Charger, AvenEx and Pace which are discussed in the accompanying joint information circular (the "Joint Information Circular"). Please give this material your careful consideration.

After considering, among other things, the opinion of National Bank Financial Inc., that, as at January 11, 2013, based upon and subject to the various assumptions, qualifications and limitations set forth in their opinion, the consideration to be received by Pace Shareholders pursuant to the Arrangement is fair, from a financial point of view, to Pace Shareholders, the Board of Directors of Pace (other than two directors who recused themselves from the process of considering the Arrangement due to a conflict of interest) has concluded that the Arrangement is in the best interests of Pace and is fair to Pace Shareholders, and recommends that the Pace Shareholders vote in favour of the Pace Arrangement Resolution (as defined below).

Under the terms of the Arrangement Agreement, holders of Pace stock options ("Pace Options") have entered into or will enter into prior to the effective time of the Arrangement (the "Effective Time") agreements with Pace pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Pace Options immediately prior to the Effective Time. The exercise of "in-the-money" Pace Options will be completed upon payment of the exercise price by the holder or on a "cashless basis" in exchange for Pace Shares in accordance with the terms thereof, and "out-of-the-money" Pace Options will be surrendered and cancelled in consideration of payment from Pace of $0.001 per "out-of-the-money" Pace Option. The Arrangement will constitute a "change of control" under the terms and conditions of the Pace restricted share awards ("Pace RSAs"), Pace performance share awards ("Pace PSAs") and Pace deferred share awards ("Pace DSAs") and, as a result, the vesting provisions and settlement dates in respect of all such Pace RSAs, Pace PSAs and Pace DSAs will be accelerated and all settlement amounts in respect of the Pace RSAs, Pace PSAs and Pace DSAs will be paid by Pace on the date which is immediately prior to the Effective Date in accordance with the terms of the plan governing the Pace RSAs, Pace PSAs and Pace DSAs. Pace anticipates paying an aggregate of $4,129,515 in cash in settlement of all Pace RSAs, Pace PSAs and Pace DSAs as of the Effective Date (based on a market price per Pace Share of $3.38 as at January 16, 2013).

The resolution approving the Arrangement (the "Pace Arrangement Resolution") must be approved by not less than 66 2⁄3% of the votes cast by the Pace Shareholders present in person or by proxy at the Pace Meeting. Completion of the proposed Arrangement is also conditional upon approval by more than 66 2/3% of the votes cast by Charger shareholders and AvenEx shareholders present in person or by proxy at the respective meetings of such holders, approval by a majority of the votes cast by AvenEx Shareholders present in person or represented by proxy at the AvenEx Meeting after excluding the votes required to be excluded by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators, the closing of the Elbow River Transaction (as defined in the Joint Information Circular) by AvenEx, the approval of the Court of Queen's Bench of Alberta, the receipt of required regulatory and stock exchange approvals and satisfaction of certain other closing conditions that are customary for a transaction of this nature.

Immediately following completion of the Arrangement, Charger shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace Shareholders are anticipated to own the remaining 48% of the issued and outstanding Spyglass Shares.

Pace has agreed to pay Charger a non-completion fee of $2.86 million and AvenEx a non-completion fee of $6.14 million if the Arrangement is not completed under certain circumstances. Pace will also receive a non-completion fee from Charger of $1.40 million and from AvenEx of $3.65 million if the Arrangement is not completed under certain circumstances.

their Pace Shares for Spyglass Shares in connection with the Arrangement. Please give this material your careful consideration and, if you require assistance, consult your financial, tax or other professional advisors.

To be represented at the Pace Meeting, you must either attend the Pace Meeting in person or complete and sign the applicable enclosed form of proxy and forward it so as to reach or be deposited with Computershare Trust Company of Canada: (i) by mail using the enclosed return envelope or one addressed to Computershare Trust Company of Canada, Proxy Department, 135 West Beaver Creek, P.O. Box 300, Richmond Hill, Ontario, L4B 4R5; (ii) by hand delivery to Computershare Trust Company of Canada, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; (iii) by facsimile to (416) 263-9524 or 1-866-249-7775; or (iv) through the internet at www.investorvote.com, not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the Pace Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Pace Meeting at his or her discretion and the Chairman of the Pace Meeting is under no obligation to accept or reject any particular late proxy. The Chairman of the Pace Meeting may waive or extend the proxy cut-off without notice. If you are unable to attend the Pace Meeting, we encourage you to complete the enclosed forms of proxy, as applicable, as soon as possible.

If you are a non-registered holder of Pace Shares and have received these materials from your broker or another intermediary, please complete and return the form of proxy or other authorization form provided to you by your broker or intermediary in accordance with the instructions provided. Failure to do so may result in your Pace Shares not being eligible to be voted at the Pace Meeting.

If you have any questions or need assistance to vote, please contact Pace's proxy solicitation agent, Kingsdale Shareholder Services Inc., by email at contactus@kingsdaleshareholder.com, by telephone at 1-888-518-1558 (toll- free within Canada or the United States) or call 1-416-867-2272 (for collect calls outside Canada and the U.S.) or by fax at 1-866-545-5580 (North American Toll Free Facsimile) or 1-416-867-2271.

In order to receive their Spyglass Shares pursuant to the Arrangement, Pace Shareholders must deposit with Olympia Trust Company (the "Depositary") (at the address specified on the last page of the Pace letter of transmittal) a duly completed and executed Pace letter of transmittal, together with the certificates representing the holder's Pace Shares and such other documents and instruments as the Depositary may reasonably request. Please refer to "The Arrangement - Procedure for Exchange of Charger Shares, AvenEx Shares and/or Pace Shares" in the Joint Information Circular and the Pace letter of transmittal for further detailed instructions.

For information regarding the tax treatment relating to the exchange of the Pace Shares pursuant to the Arrangement, please refer to "Certain Canadian Federal Income Tax Considerations" and "Certain Material United States Federal Income Tax Considerations" in the Joint Information Circular.

On behalf of the board of directors of Pace, I would like to express our gratitude for the support our shareholders have demonstrated with respect to our decision to take the proposed Arrangement forward. We look forward to seeing you at the Pace Meeting.

Yours very truly,

(Signed) "Fred Woods" Fred Woods

President and Chief Executive Officer

CHARGER ENERGY CORP.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the special meeting (the "Charger Meeting") of the holders ("Charger Shareholders") of class A shares (the "Charger Shares") of Charger Energy Corp. ("Charger") will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 11:00 a.m. (Calgary time) on Tuesday, February 19, 2013 for the following purposes:

1. to consider, pursuant to an interim order (the "Interim Order") of the Court of Queen's Bench of Alberta dated January 14, 2013, and, if deemed advisable, to pass, with or without variation, a special resolution (the "Charger Arrangement Resolution"), the full text of which is set forth in Appendix C to the accompanying joint information circular of Charger, AvenEx Energy Corp. ("AvenEx") and Pace Oil & Gas Ltd. ("Pace"), dated January 18, 2013 (the "Information Circular"), to approve a plan of arrangement (the "Arrangement") under Section 193 of the Business Corporations Act (Alberta) (the "ABCA") involving Charger, Charger Shareholders, AvenEx, the shareholders of AvenEx, Pace and the shareholders of Pace, all as more particularly described in the Information Circular; and

2. to transact such further and other business as may properly be brought before the Charger Meeting or any adjournment thereof.

Charger Shareholders are referred to the attached Information Circular, accompanying this Notice, for more detailed information with respect to the matters to be considered at the Charger Meeting.

The record date for the determination of Charger Shareholders entitled to receive notice of and to vote at the Charger Meeting is January 14, 2013. Only Charger Shareholders whose names have been entered in the register of Charger Shareholders as at the close of business on January 14, 2013 will be entitled to receive notice of and to vote at the Charger Meeting.

Each Charger Share entitled to be voted in respect of the Charger Arrangement Resolution at the Charger Meeting will entitle the holder to one vote at the Charger Meeting. The Charger Arrangement Resolution must be approved by at least 66 ½% of the votes cast by Charger Shareholders present in person or by proxy at the Charger Meeting.

If you are a registered Charger Shareholder and are unable to attend the Charger Meeting in person, please date and sign the enclosed form of proxy and deliver or mail it in the enclosed envelope to Alliance Trust Company at #450, 407 - 2nd Street S.W., Calgary, Alberta T2P 2Y3 or by facsimile at (403) 237-6181. In order to be valid and acted upon at the Charger Meeting or any adjournment thereof, proxies must be received at the aforesaid address not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the commencement of the Charger Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Charger Meeting at his or her discretion and the Chairman of the Charger Meeting is under no obligation to accept or reject any particular late proxy. The Chairman of the Charger Meeting may waive or extend the proxy cut-off without notice. If a Charger Shareholder receives more than one form of proxy because such holder owns Charger Shares registered in different names or addresses, each form of proxy should be completed and returned.

Beneficial owners of Charger Shares that are registered in the name of a broker, custodian, nominee or other intermediary should follow the instructions provided by their broker, custodian, nominee or other intermediary in order to vote their Charger Shares.

A proxyholder has discretion under the accompanying forms of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the Charger Meeting, or any adjournment thereof. As of the date hereof, management of Charger knows of no amendments, variations or other matters to come before the Charger Meeting other than the matters set forth in this Notice. Charger Shareholders who are planning on returning the form of proxy are encouraged to review the Information Circular carefully before submitting the proxy form.

It is the intention of the persons named in the applicable enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote in favour of the Charger Arrangement Resolution.

Pursuant to the Interim Order, registered holders of Charger Shares have been granted the right to dissent with respect to the Charger Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of their Charger Shares in accordance with the provisions of Section 191 of the ABCA. A registered Charger Shareholder's right to dissent is more particularly described in the Information Circular, the Interim Order and the text of Section 191 of the ABCA, which are set forth in Appendices B and O, respectively, to the accompanying Information Circular. To exercise such right: (a) a dissenting Charger Shareholder must send to Charger, c/o Norton Rose Canada LLP, 3700, 400 - 3rd Avenue S.W., Calgary, Alberta, Canada T2P 4H2, Attention: Kirk Litvenenko, a written objection to the Charger Arrangement Resolution, which written objection must be received by 5:00 p.m. (Calgary time) on February 11, 2013 or in the case of any adjournment or postponement of the Charger Meeting, by no later than 5:00 p.m. (Calgary time) on the second business day which is immediately preceding the date of the adjourned or postponed Charger Meeting; (b) the Charger Shareholder shall not have voted in favour of the Charger Arrangement Resolution; and (c) the Charger Shareholder must have otherwise strictly complied with the provisions of Section 191 of the ABCA, as modified by the terms of the Interim Order.

Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the terms of the Interim Order, may result in the loss of any right of dissent. Persons who are beneficial owners of Charger Shares registered in the name of a broker, dealer, bank, trust company or other nominee who wish to dissent should be aware that only the registered holders of such Charger Shares are entitled to dissent. Accordingly, a beneficial owner of Charger Shares desiring to exercise the right of dissent must make arrangements for the Charger Shares beneficially owned by such holder to be registered in the holder's name prior to the time the written objection to the Charger Arrangement Resolution is required to be received by Charger or, alternatively, make arrangements for the registered Charger Shareholders of such Charger Shares to dissent on behalf of the beneficial holder. It is strongly suggested that any Charger Shareholders wishing to dissent seek independent legal advice, as the failure to comply strictly with the provisions of the ABCA, as modified by the terms of the Interim Order, may prejudice such Charger Shareholder's right to dissent.

The attached Information Circular contains important information regarding the business to be conducted at the Charger Meeting. Charger Shareholders are strongly urged to review this information carefully.

DATED at Calgary, Alberta this 18th day of January, 2013.

BY ORDER OF THE BOARD OF DIRECTORS OF CHARGER ENERGY CORP.

(Signed) "Thomas Buchanan" Thomas Buchanan

Chairman and Chief Executive Officer

AVENEX ENERGY CORP.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the special meeting (the "AvenEx Meeting") of the holders ("AvenEx Shareholders") of common shares (the "AvenEx Shares") of AvenEx Energy Corp. ("AvenEx") will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 9:00 a.m. (Calgary time) on Tuesday, February 19, 2013 for the following purposes:

1. to consider, pursuant to an interim order (the "Interim Order") of the Court of Queen's Bench of Alberta dated January 14, 2013, and, if deemed advisable, to pass, with or without variation, a special resolution (the "AvenEx Arrangement Resolution"), the full text of which is set forth in Appendix D to the accompanying joint information circular of Charger Energy Corp. ("Charger"), AvenEx and Pace Oil & Gas Ltd. ("Pace"), dated January 18, 2013 (the "Information Circular"), to approve a plan of arrangement (the "Arrangement") under Section 193 of the Business Corporations Act (Alberta) (the "ABCA") involving Charger, the shareholders of Charger, AvenEx, AvenEx Shareholders, Pace and the shareholders of Pace, all as more particularly described in the Information Circular; and

2. to transact such further and other business as may properly be brought before the AvenEx Meeting or any adjournment thereof.

AvenEx Shareholders are referred to the attached Information Circular, accompanying this Notice, for more detailed information with respect to the matters to be considered at the AvenEx Meeting.

The record date for the determination of AvenEx Shareholders entitled to receive notice of and to vote at the AvenEx Meeting is January 14, 2013. Only AvenEx Shareholders whose names have been entered in the register of AvenEx Shareholders as at the close of business on January 14, 2013 will be entitled to receive notice of and to vote at the AvenEx Meeting.

Each AvenEx Share entitled to be voted in respect of the AvenEx Arrangement Resolution at the AvenEx Meeting will entitle the holder to one vote at the AvenEx Meeting. The AvenEx Arrangement Resolution must be approved by: (i) at least 66 ½% of the votes cast by AvenEx Shareholders present in person or by proxy at the AvenEx Meeting; and (ii) a majority of the votes cast by AvenEx Shareholders present in person or represented by proxy at the AvenEx Meeting after excluding the votes required to be excluded by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators.

If you are a registered AvenEx Shareholder and are unable to attend the AvenEx Meeting in person, please date and sign the enclosed form of proxy and deliver or mail it in the enclosed envelope to Olympia Trust Company, Proxy Department, 2300, 125 – 9th Avenue S.E., Calgary, Alberta, T2G 0P6 or by facsimile at (403) 265-1455. In order to be valid and acted upon at the AvenEx Meeting or any adjournment thereof, proxies must be received at the aforesaid address not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the commencement of the AvenEx Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the AvenEx Meeting at his or her discretion and the Chairman of the AvenEx Meeting is under no obligation to accept or reject any particular late proxy. The Chairman of the AvenEx Meeting may waive or extend the proxy cut-off without notice. If an AvenEx Shareholder receives more than one form of proxy because such holder owns AvenEx Shares registered in different names or addresses, each form of proxy should be completed and returned.

Beneficial owners of AvenEx Shares that are registered in the name of a broker, custodian, nominee or other intermediary should follow the instructions provided by their broker, custodian, nominee or other intermediary in order to vote their AvenEx Shares.

A proxyholder has discretion under the accompanying forms of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the AvenEx Meeting, or any adjournment thereof. As of the date hereof, management of AvenEx knows of no amendments, variations or other matters to come before the AvenEx Meeting other than the matters set forth in this Notice. AvenEx Shareholders who are planning on returning the form of proxy are encouraged to review the Information Circular carefully before submitting the proxy form.

It is the intention of the persons named in the applicable enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote in favour of the AvenEx Arrangement Resolution.

Pursuant to the Interim Order, registered holders of AvenEx Shares have been granted the right to dissent with respect to the AvenEx Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of their AvenEx Shares in accordance with the provisions of Section 191 of the ABCA. A registered AvenEx Shareholder's right to dissent is more particularly described in the Information Circular, the Interim Order and the text of Section 191 of the ABCA, which are set forth in Appendices B and O, respectively, to the accompanying Information Circular. To exercise such right: (a) a dissenting AvenEx Shareholder must send to AvenEx, c/o Burnet, Duckworth & Palmer LLP, 2400, 525-8th Avenue S.W., Calgary, Alberta, Canada T2P 1G1, Attention: Jeff Sharpe a written objection to the AvenEx Arrangement Resolution, which written objection must be received by 5:00 p.m. (Calgary time) on February 11, 2013 or in the case of any adjournment or postponement of the AvenEx Meeting, by no later than 5:00 p.m. (Calgary time) on the second business day which is immediately preceding the date of the adjourned or postponed AvenEx Meeting; (b) the AvenEx Shareholder shall not have voted in favour of the AvenEx Arrangement Resolution; and (c) the AvenEx Shareholder must have otherwise strictly complied with the provisions of Section 191 of the ABCA, as modified by the terms of the Interim Order.

Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the terms of the Interim Order, may result in the loss of any right of dissent. Persons who are beneficial owners of AvenEx Shares registered in the name of a broker, dealer, bank, trust company or other nominee who wish to dissent should be aware that only the registered holders of such AvenEx Shares are entitled to dissent. Accordingly, a beneficial owner of AvenEx Shares desiring to exercise the right of dissent must make arrangements for the AvenEx Shares beneficially owned by such holder to be registered in the holder's name prior to the time the written objection to the AvenEx Arrangement Resolution is required to be received by AvenEx or, alternatively, make arrangements for the registered AvenEx Shareholders of such AvenEx Shares to dissent on behalf of the beneficial holder. It is strongly suggested that any AvenEx Shareholders wishing to dissent seek independent legal advice, as the failure to comply strictly with the provisions of the ABCA, as modified by the terms of the Interim Order, may prejudice such AvenEx Shareholder's right to dissent.

The attached Information Circular contains important information regarding the business to be conducted at the AvenEx Meeting. AvenEx Shareholders are strongly urged to review this information carefully.

DATED at Calgary, Alberta this 18th day of January, 2013.

BY ORDER OF THE BOARD OF DIRECTORS OF AVENEX ENERGY CORP.

(Signed) "William Gallacher" William Gallacher

President and Chief Executive Officer

PACE OIL & GAS LTD.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the special meeting (the "Pace Meeting") of the holders ("Pace Shareholders") of common shares (the "Pace Shares") of Pace Oil & Gas Ltd. ("Pace") will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 10:00 a.m. (Calgary time) on Tuesday, February 19, 2013 for the following purposes:

1. to consider, pursuant to an interim order (the "Interim Order") of the Court of Queen's Bench of Alberta dated January 14, 2013, and, if deemed advisable, to pass, with or without variation, a special resolution (the "Pace Arrangement Resolution"), the full text of which is set forth in Appendix E to the accompanying joint information circular of Charger Energy Corp. ("Charger"), AvenEx Energy Corp. ("AvenEx") and Pace, dated January 18, 2013 (the "Information Circular"), to approve a plan of arrangement (the "Arrangement") under Section 193 of the Business Corporations Act (Alberta) (the "ABCA") involving Charger, the shareholders of Charger ("Charger Shareholders"), AvenEx, the shareholders of AvenEx ("AvenEx Shareholders"), Pace and the Pace Shareholders, all as more particularly described in the Information Circular; and

2. to transact such further and other business as may properly be brought before the Pace Meeting or any adjournment thereof.

Pace Shareholders are referred to the attached Information Circular, accompanying this Notice, for more detailed information with respect to the matters to be considered at the Pace Meeting.

The record date for the determination of Pace Shareholders entitled to receive notice of and to vote at the Pace Meeting is January 14, 2013. Only Pace Shareholders whose names have been entered in the register of Pace Shareholders as at the close of business on January 14, 2013 will be entitled to receive notice of and to vote at the Pace Meeting.

Each Pace Share entitled to be voted in respect of the Pace Arrangement Resolution at the Pace Meeting will entitle the holder to one vote at the Pace Meeting. The Pace Arrangement Resolution must be approved by at least 66 ½% of the votes cast by Pace Shareholders present in person or by proxy at the Pace Meeting.

If you are a registered Pace Shareholder and are unable to attend the Pace Meeting in person, please date and sign the enclosed form of proxy and deliver it to Computershare Trust Company of Canada: (i) by mail using the enclosed return envelope or one addressed to Computershare Trust Company of Canada, Proxy Department, 135 West Beaver Creek, P.O. Box 300, Richmond Hill, Ontario, L4B 4R5; (ii) by hand delivery to Computershare Trust Company of Canada, 9th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1; (iii) by facsimile to (416) 263- 9524 or 1-866-249-7775; or (iv) through the internet at www.investorvote.com. In order to be valid and acted upon at the Pace Meeting or any adjournment thereof, proxies must be received at the aforesaid address not less than forty-eight (48) hours (excluding Saturdays, Sundays and statutory holidays in the Province of Alberta) prior to the commencement of the Pace Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Pace Meeting at his or her discretion and the Chairman of the Pace Meeting is under no obligation to accept or reject any particular late proxy. The Chairman of the Pace Meeting may waive or extend the proxy cut- off without notice. If a Pace Shareholder receives more than one form of proxy because such holder owns Pace Shares registered in different names or addresses, each form of proxy should be completed and returned.

Beneficial owners of Pace Shares that are registered in the name of a broker, custodian, nominee or other intermediary should follow the instructions provided by their broker, custodian, nominee or other intermediary in order to vote their Pace Shares.

A proxyholder has discretion under the accompanying forms of proxy in respect of amendments or variations to matters identified in this Notice and with respect to other matters which may properly come before the Pace Meeting, or any adjournment thereof. As of the date hereof, management of Pace knows of no amendments, variations or other matters to come before the Pace Meeting other than the matters set forth in this Notice. Pace Shareholders who are planning on returning the form of proxy are encouraged to review the Information Circular carefully before submitting the proxy form.

It is the intention of the persons named in the applicable enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote in favour of the Pace Arrangement Resolution.

Pursuant to the Interim Order, registered holders of Pace Shares have been granted the right to dissent with respect to the Pace Arrangement Resolution and, if the Arrangement becomes effective, to be paid the fair value of their Pace Shares in accordance with the provisions of Section 191 of the ABCA. A registered Pace Shareholder's right to dissent is more particularly described in the Information Circular, the Interim Order and the text of Section 191 of the ABCA, which are set forth in Appendices B and O, respectively, to the accompanying Information Circular. To exercise such right: (a) a dissenting Pace Shareholder must send to Pace, c/o Heenan Blaikie LLP, Suite 1900, 215 - 9th Avenue S.W., Calgary, Alberta, T2P 1K3 (Attention: Tom Cotter) a written objection to the Pace Arrangement Resolution, which written objection must be received by 5:00 p.m. (Calgary time) on February 11, 2013 or in the case of any adjournment or postponement of the Pace Meeting, by no later than 5:00 p.m. (Calgary time) on the second business day which is immediately preceding the date of the adjourned or postponed Pace Meeting; (b) the Pace Shareholder shall not have voted in favour of the Pace Arrangement Resolution; and (c) the Pace Shareholder must have otherwise strictly complied with the provisions of Section 191 of the ABCA, as modified by the terms of the Interim Order.

Failure to strictly comply with the requirements set forth in Section 191 of the ABCA, as modified by the terms of the Interim Order, may result in the loss of any right of dissent. Persons who are beneficial owners of Pace Shares registered in the name of a broker, dealer, bank, trust company or other nominee who wish to dissent should be aware that only the registered holders of such Pace Shares are entitled to dissent. Accordingly, a beneficial owner of Pace Shares desiring to exercise the right of dissent must make arrangements for the Pace Shares beneficially owned by such holder to be registered in the holder's name prior to the time the written objection to the Pace Arrangement Resolution is required to be received by Pace or, alternatively, make arrangements for the registered Pace Shareholders of such Pace Shares to dissent on behalf of the beneficial holder. It is strongly suggested that any Pace Shareholders wishing to dissent seek independent legal advice, as the failure to comply strictly with the provisions of the ABCA, as modified by the terms of the Interim Order, may prejudice such Pace Shareholder's right to dissent.

The attached Information Circular contains important information regarding the business to be conducted at the Pace Meeting. Pace Shareholders are strongly urged to review this information carefully.

DATED at Calgary, Alberta this 18th day of January, 2013.

BY ORDER OF THE BOARD OF DIRECTORS OF PACE OIL & GAS LTD.

(Signed) "Fred Woods" Fred Woods

President and Chief Executive Officer

IN THE COURT OF QUEEN'S BENCH OF ALBERTA JUDICIAL DISTRICT OF CALGARY

IN THE MATTER OF SECTION 193 OF THE BUSINESS CORPORATIONS ACT (ALBERTA), R.S.A. 2000, c. B-9, AS AMENDED AND IN THE MATTER OF A PROPOSED ARRANGEMENT INVOLVING CHARGER ENERGY CORP., THE SHAREHOLDERS OF CHARGER ENERGY CORP., AVENEX ENERGY CORP., THE SHAREHOLDERS OF AVENEX ENERGY CORP., PACE OIL & GAS LTD. AND THE SHAREHOLDERS OF PACE OIL & GAS LTD.

NOTICE OF APPLICATION

NOTICE IS HEREBY GIVEN that an originating application (the "Application") has been filed with the Court of Queen's Bench of Alberta, Judicial District of Calgary (the "Court") on behalf of Charger Energy Corp. ("Charger"), AvenEx Energy Corp. ("AvenEx") and Pace Oil & Gas Ltd. ("Pace") (Charger, AvenEx and Pace are collectively referred to herein as the "Arrangement Parties") with respect to a proposed plan of arrangement (the "Arrangement") under Section 193 of the Business Corporations Act (Alberta), R.S.A. 2000, c. B-9, as amended (the "ABCA"), involving the Arrangement Parties and the holders (the "Charger Shareholders") of class A shares of Charger ("Charger Shares"), the holders (the "AvenEx Shareholders") of common shares of AvenEx ("AvenEx Shares") and the holders (the "Pace Shareholders") of common shares of Pace ("Pace Shares") (the Charger Shareholders, the AvenEx Shareholders and the Pace Shareholders are collectively referred to herein as the "Arrangement Shareholders"), which Arrangement is described in greater detail in the Joint Information Circular and Proxy Statement of the Arrangement Parties dated January 18, 2013, accompanying this Application. At the hearing of the Application, the Arrangement Parties intend to seek:

1. a declaration that the terms and conditions of the Arrangement, and the procedures relating thereto, are fair to the persons affected, including the Arrangement Shareholders, both from a substantive and procedural point of view;

2. an order approving the Arrangement pursuant to the provisions of Section 193 of the ABCA;

3. an order declaring that the registered Charger Shareholders, AvenEx Shareholders and Pace Shareholders shall have the right to dissent in respect of the Arrangement in accordance with the provisions of Section 191 of the ABCA, as modified by the interim order (the "Interim Order") of the Court dated January 14, 2013;

4. a declaration that the Arrangement will, upon the filing of the Articles of Arrangement pursuant to the provisions of Section 193 of the ABCA, become effective in accordance with its terms and will be binding on each of the Arrangement Parties and the Arrangement Shareholders on and after the Effective Date, as defined in the Arrangement; and

5. such other and further orders, declarations and directions as the Court may deem just.

AND NOTICE IS FURTHER GIVEN that the Final Order approving the Arrangement will, if granted, serve as the basis for an exemption from the registration requirements of the United States Securities Act of 1933, as amended, pursuant to Section 3(a)(10) thereof, with respect to the issuance of Pace Shares and common shares of the entity resulting from the amalgamation of Charger, AvenEx and Pace pursuant to the Arrangement issuable to the Arrangement Shareholders pursuant to the Arrangement.

AND NOTICE IS FURTHER GIVEN that the said Application was directed to be heard before the Honourable Justice Stevens of the Court of Queen's Bench of Alberta, Calgary Courts Centre, 601 - 5th Street S.W., Calgary, Alberta, on Tuesday, February 19, 2013 at 2:00 p.m. (Calgary time), or as soon thereafter as counsel may be heard. Any Arrangement Shareholder or any other interested party desiring to support or oppose the Application may appear at the time of the hearing in person or by counsel for that purpose. Any Arrangement Shareholder or any other interested party desiring to appear at the hearing is required to file with the Court, and serve upon

each of Charger, AvenEx and Pace on or before noon (Calgary time) on February 12, 2013, a notice of intention to appear, including an address for service in the Province of Alberta, indicating whether such shareholder or other interested party intends to support or oppose the application or make submissions at the application, together with a summary of the position such shareholder or other interested party intends to advocate before the Court and any evidence or materials which are to be presented to the Court. Service on each of Charger, AvenEx and Pace is to be effected by delivery to the solicitors for Charger, AvenEx and Pace, at the address set out below. If any Arrangement Shareholder or any other such interested party does not attend, either in person or by counsel, at that time, the Court may approve the Arrangement as presented, or may approve it subject to such terms and conditions as the Court shall deem fit, or refuse to approve the Arrangement, without any further notice.

AND NOTICE IS FURTHER GIVEN that no further notice of the Application will be given by the Arrangement Parties and that in the event the hearing of the Application is adjourned, only those persons who have appeared before the Court for the application at the hearing shall be served with notice of the adjourned date.

AND NOTICE IS FURTHER GIVEN that the Court, by the Interim Order, has given directions as to the calling and holding of a meeting of Charger Shareholders, AvenEx Shareholders and Pace Shareholders, as applicable, for the purpose of such Arrangement Shareholders voting upon special resolutions to approve the Arrangement, and has directed that registered Charger Shareholders, AvenEx Shareholders and Pace Shareholders, shall have the right to dissent with respect to the Arrangement in accordance with the provisions of Section 191 of the ABCA, as modified by the Interim Order.

AND NOTICE IS FURTHER GIVEN that a copy of the said Application and other documents in the proceedings will be furnished to any Arrangement Shareholder or other interested party in respect of Charger, AvenEx and Pace requesting the same by the under mentioned solicitors for Charger, AvenEx and Pace upon written request delivered to such solicitors as follows:

Charger AvenEx Pace

Norton Rose Canada LLP Burnet, Duckworth & Palmer LLP Heenan Blaikie LLP

3700, 400 - 3rd Avenue S.W. 2400, 525 - 8th Avenue S.W. Suite 1900, 215 - 9th Avenue S.W. Calgary, Alberta T2P 4H2 Calgary, Alberta T2P 1G1 Calgary, Alberta T2P 1K3 Attention: Kirk Litvenenko Attention: Jeff Sharpe Attention: Tom Cotter

DATED at the City of Calgary, in the Province of Alberta, this 18th day of January, 2013.

BY ORDER OF THE BOARD OF BY ORDER OF THE BOARD OF DIRECTORS OF CHARGER ENERGY CORP. DIRECTORS OF PACE OIL & GAS LTD.

(Signed) "Thomas Buchanan" (Signed) "Fred Woods"

Thomas Buchanan Fred Woods

Chairman and Chief Executive Officer President and Chief Executive Officer

Charger Energy Corp. Pace Oil & Gas Ltd.

BY ORDER OF THE BOARD OF DIRECTORS OF AVENEX ENERGY CORP.

(Signed) "William Gallacher" William Gallacher

President and Chief Executive Officer AvenEx Energy Corp.

JOINT INFORMATION CIRCULAR

See "Glossary of Terms" for the meaning assigned to certain capitalized terms in this Information Circular. Information contained in this Information Circular is given as of January 18, 2013, unless otherwise specifically stated.

Introduction

This Information Circular is furnished in connection with the solicitation of proxies by and on behalf of the management of Charger, the management of AvenEx and the management of Pace for use at the Charger Meeting, the AvenEx Meeting and the Pace Meeting, respectively, and any adjournment(s) thereof. No person has been authorized to give any information or make any representation in connection with the Arrangement or any other matters to be considered at the Charger Meeting, the AvenEx Meeting or the Pace Meeting other than those contained in this Information Circular and, if given or made, any such information or representation must not be relied upon as having been authorized.

The information concerning Charger contained in this Information Circular has been provided by Charger. Although AvenEx and Pace have no knowledge that would indicate that any of such information is untrue or incomplete, AvenEx and Pace do not assume any responsibility for the accuracy or completeness of such information or the failure by Charger to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to AvenEx and Pace.

The information concerning AvenEx contained in this Information Circular has been provided by AvenEx. Although Charger and Pace have no knowledge that would indicate that any of such information is untrue or incomplete, Charger and Pace do not assume any responsibility for the accuracy or completeness of such information or the failure by AvenEx to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to Charger and Pace.

The information concerning Pace contained in this Information Circular has been provided by Pace. Although Charger and AvenEx have no knowledge that would indicate that any of such information is untrue or incomplete, Charger and AvenEx do not assume any responsibility for the accuracy or completeness of such information or the failure by Pace to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to Charger and AvenEx.

All summaries of, and references to, the Arrangement in this Information Circular are qualified in their entirety by reference to the complete text of the Plan of Arrangement, a copy of which is attached as Exhibit "A" to the Arrangement Agreement, which is attached as Appendix A to this Information Circular. Charger Shareholders, AvenEx Shareholders and Pace Shareholders are urged to read carefully the full text of the Plan of Arrangement and the Arrangement Agreement.

Cautionary Notice Regarding Forward-Looking Information

This Information Circular contains forward-looking information. The use of any of the words "expect", "anticipate", "estimate", "objective", "may", "will", "project", "should", "believe", "plans", "intends", "potential" and similar expressions are intended to identify forward-looking information. More particularly and without limitation, this Information Circular contains forward-looking information concerning: anticipated synergies; anticipated future production, operating netbacks, cash flow, capital expenditures, dividends, payout ratios, decline rates, development capital efficiencies, net debt to cash flow, reserve life index, credit facility availability and years of sustaining development available; the timing and anticipated receipt of required regulatory, Court and shareholder approvals for the Arrangement; the ability of each of Charger, Pace and AvenEx to satisfy the other conditions to, and to complete, the Arrangement including the Elbow River Transaction; the holding of each of the Charger Meeting, the AvenEx Meeting and the Pace Meeting; the anticipated dividend payments of Spyglass following the Effective Date; the anticipated benefits from the proposed Arrangement; the board of directors and executive leadership team of Spyglass; the expected completion date of the Arrangement; the stock exchange listing of the Spyglass Shares; the anticipated compensation policies and arrangements of Spyglass following completion of the Arrangement; the

terms of the proposed credit facilities to be entered into by Spyglass upon completion of the Arrangement; and certain combined operational and financial information.

Furthermore, the combined financial and operational information set forth in the Information Circular should not be interpreted as indicative of the actual reserves, financial position or results or other results of operations had Charger, AvenEx and Pace operated as a combined entity as at or for the periods presented.

The forward-looking information in this Information Circular is based on certain key expectations and assumptions made by Charger, AvenEx and Pace, as the case may be, including expectations and assumptions concerning: the accuracy of reserve and resource estimates; commodity prices and interest and foreign exchange rates; applicable royalty rates and tax laws; exploration and development results consistent with expectations; access to capital; operating costs; growth projects and future production rates; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; the ability of each of Charger, Pace and AvenEx to receive, in a timely manner, the necessary regulatory, Court, shareholder, stock exchange and other third party approvals, including but not limited to the receipt of applicable Competition Act approvals; the ability of each of Charger, Pace and AvenEx to satisfy, in a timely manner, the other conditions to the closing of the Arrangement; that each of Charger's, Pace's and AvenEx's future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements relating to existing assets and projects, including but not limited to future capital expenditures relating to expansion, upgrades and maintenance shutdowns; the success of growth projects; future operating costs; that counterparties to material agreements will continue to perform in a timely manner; that there are no unforeseen events preventing the performance of contracts; and that there are no unforeseen material construction or other costs related to current growth projects or current operations. Although Charger, AvenEx and Pace, as the case may be, believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Charger, AvenEx and Pace can give no assurance that it will prove to be correct.

Since forward-looking information addresses future events and conditions, by its very nature such information involves inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general, such as: operational risks in development, exploration and production risks, including as a result of unexpected events such as fires, blowouts, freeze-ups, equipment failures and other similar events; delays or changes in plans with respect to exploration or development projects or capital expenditures; the integrity and reliability of capital assets; the uncertainty of reserve and resource estimates and estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; marketing and transportation of petroleum and natural gas and the loss of markets and the elimination of margins or other differentials on which profits are based; environmental risks, including the cost of compliance with existing and future environmental laws; competitive actions of other companies, including increased competition from other oil and gas companies and from companies that provide alternative sources of energy; labour and material shortages; and the maintenance of satisfactory relationships with unions, employee associations and joint venture partners. There are also risks inherent in the nature of the Arrangement, including: failure to realize the anticipated benefits of the Arrangement; the ability of Spyglass to access sufficient capital from internal and external sources on favourable terms, or at all; failure to satisfy all regulatory conditions, obtain required regulatory, shareholder and Court approvals or to satisfy all other conditions in respect of the Arrangement in a timely manner and on favourable terms or at all; changes in legislation, including but not limited to tax laws, royalty rates and environmental regulations; and incorrect assessments by one Party or Parties of the value of the other Party or Parties, as applicable.

This Information Circular also contains forward-looking information concerning the anticipated timing for and completion of the Arrangement. Charger, AvenEx and Pace, as the case may be, have provided these anticipated times in reliance on certain assumptions that they believe are reasonable at this time, including assumptions as to the timing of receipt of the necessary regulatory and Court approvals and the time necessary to satisfy the conditions to the closing of the Arrangement. These dates may change for a number of reasons, including the inability to secure necessary regulatory or Court approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the Arrangement.

The information contained in this Information Circular identifies additional factors that could affect the operating results and performance of Charger, AvenEx, Pace and Spyglass. Readers are urged to carefully consider those factors.

Any financial outlook or future oriented financial information in this Information Circular, as defined by applicable securities legislation, has been approved by management of Charger, Pace and AvenEx. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management's reasonable expectations as to the anticipated results of Spyglass and its anticipated business activities for the twelve months following the closing of the Arrangement and may not be suitable for other purposes, such as making investment decisions.

Readers are cautioned that the foregoing lists are not exhaustive. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this Information Circular. Readers should carefully review and consider the risk factors described under "Risk Factors", "Appendix I - Additional Information Concerning Charger - Risk Factors", "Appendix J - Additional Information Concerning AvenEx - Risk Factors", "Appendix K - Additional Information Concerning Pace - Risk Factors", "Appendix L - Additional Information Concerning Spyglass - Risk Factors", "Certain Canadian Federal Income Tax Considerations" and "Certain Material United States Federal Income Tax Considerations" and other risks described elsewhere in this Information Circular.

The forward-looking information contained in this Information Circular is made as of the date hereof and the Parties undertake no obligation to update such forward-looking information to reflect new information, subsequent events or otherwise, except as expressly required by Canadian Securities Laws. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.

Presentation of Oil and Gas Reserves and Production Information

All oil and natural gas reserves information contained in this Information Circular has been prepared and presented in accordance with NI 51-101 (as defined in the Glossary of Terms). Certain terms used herein but not otherwise defined in the Glossary of Terms are defined in NI 51-101 and, unless the context requires otherwise, shall have the same meanings herein as in NI 51-101.

Actual oil and natural gas reserves and future production may be greater than or less than the estimates provided in this Information Circular. The estimated future net revenue from the production of the disclosed oil and natural gas reserves does not represent the fair market value of these reserves. Charger, AvenEx and Pace have adopted the standard of 6 Mcf:1 boe when converting natural gas to barrels of oil equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Information for Beneficial Shareholders

The information set forth in this section is of significant importance to many Shareholders, as a substantial number of such Shareholders do not hold Shares in their own name. Shareholders who do not hold their Shares in their own name should note that only proxies deposited by Shareholders whose names appear on the records of the applicable registrar and transfer agent for Charger, AvenEx or Pace, as applicable, as the Registered Holders of Shares can be recognized and acted upon at the applicable Meeting. If Shares are listed in an account statement provided to a Shareholder by a broker, then in almost all cases those Shares will not be registered in a holder's name on the records of Charger, AvenEx or Pace. Such Shares will more likely be registered under the name of the holder's broker or an agent of that broker. In Canada, the vast majority of such Shares are registered under the name of CDS & Co. (the registration name for CDS, which acts as nominee for many Canadian brokerage firms). Shares held by brokers or their nominees can only be voted (for or against resolutions) upon the instructions of the Beneficial Shareholder. Without specific instructions, the brokers/nominees are prohibited from voting Shares for their clients. The majority of Shares held in the United States are registered in the name of Cede & Co., the nominee for The Depository Trust Company, which is the United States equivalent of CDS. Charger, AvenEx and Pace generally do not know for whose benefit the Shares registered in the name of CDS & Co. or Cede & Co. are held.

These securityholder materials are being sent to both registered and non-registered Shareholders. If you are a non- registered Shareholder, and the materials have been sent directly to you, your name and address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf.

Applicable regulatory policy may require intermediaries/brokers to seek voting instructions from Beneficial Shareholders in advance of shareholder meetings. Every intermediary/broker has its own mailing procedures and provides its own return instructions, which should be carefully followed by Beneficial Shareholders in order to ensure that their Shares are voted at the applicable Meeting. Often, the form of proxy supplied to a Beneficial Shareholder by its broker is identical to the form of proxy provided to Registered Holders; however, its purpose is limited to instructing the Registered Holders how to vote on behalf of the Beneficial Shareholder. The majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge. Broadridge typically mails a scannable Voting Instruction Form in lieu of the applicable form of proxy. The Beneficial Shareholder is requested to complete and return the Voting Instruction Form by mail or facsimile. Alternatively, the Beneficial Shareholder can call a toll-free telephone number or access the internet to vote the Shares held by the Beneficial Shareholder. Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of Shares to be represented at the applicable Meeting. A Beneficial Shareholder receiving a Voting Instruction Form cannot use that Voting Instruction Form to vote Shares directly at the applicable Meeting, as the Voting Instruction Form must be returned as directed by Broadridge well in advance of the applicable Meeting in order to have the Shares voted.

Although a Beneficial Shareholder may not be recognized directly at the applicable Meeting for the purpose of voting Shares registered in the name of its broker or other intermediary, a Beneficial Shareholder may vote those Shares as a proxyholder for the Registered Holder. To do this, a Beneficial Shareholder should enter such Beneficial Shareholder's own name in the blank space on the applicable form of proxy provided to the Beneficial Shareholder and return the document to such Beneficial Shareholder's broker or other intermediary (or the agent of such broker or other intermediary) in accordance with the instructions provided by such broker, intermediary or agent well in advance of the applicable Meeting.

Beneficial Shareholders of Charger, AvenEx or Pace should also instruct their broker or other intermediary to complete the Letter of Transmittal regarding the Arrangement with respect to the Beneficial Shareholder's of Charger Shares, AvenEx Shares or Pace Shares, as applicable, in order to receive the Pace Shares issued pursuant to the Arrangement in exchange for such holder's Charger Shares, AvenEx Shares or Pace Shares, as applicable.

See "Charger General Proxy Matters", "AvenEx General Proxy Matters" and "Pace General Proxy Matters", as applicable.

Supplemental Disclosure - Non-GAAP Measures

This Information Circular makes reference to certain non-GAAP financial measures to assist in assessing Charger's, AvenEx' and Pace' respective financial performance. Some of these non-GAAP measures include references to cash flow from operations (before changes in non-cash working capital), funds from operations, funds from operations per share, cash and total operating costs per barrel and netback per barrel. Non-GAAP financial measures do not have standard meanings prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Such non-GAAP financial measures should not be considered as an alternative to, or more meaningful than, cash flow from operating activities and other measures of financial performance as determined in accordance with GAAP as an indicator of performance. Each of the Parties uses such terms as an indicator of financial performance because such terms are commonly utilized by investors to evaluate companies in the energy sector. The Parties believe that funds from operations is a useful supplemental measure as it provides investors with information of what cash is available in such periods. The Parties believe that operating netback is a useful supplemental measure as it provides investors with information on operating margins per barrel of oil equivalent for such periods.

For additional information regarding these non-GAAP measures, see the MD&A for Charger for the year ended December 31, 2011 and for the nine months ended September 30, 2012, the MD&A for AvenEx for the year ended December 31, 2011 and for the nine months ended September 30, 2012 and the MD&A for Pace for the year ended

December 31, 2011 and for the nine months ended September 30, 2012. Charger's MD&A is incorporated by reference in Appendix I, AvenEx' MD&A is incorporated by reference in Appendix J and Pace's MD&A is incorporated by reference in Appendix K.

Information For U.S. Shareholders

The Pace Shares and Spyglass Shares issuable under the Arrangement to Charger Shareholders, AvenEx Shareholders and Pace Shareholders, as applicable, in exchange for their Charger Shares, AvenEx Shares and Pace Shares, as applicable, have not been and are not expected to be registered under the U.S. Securities Act or the securities laws of any state of the United States, but are expected to be issued in reliance on the exemption from registration set forth in Section 3(a)(10) thereof and similar exemptions under applicable state securities laws on the basis of the approval of the Court, as further described under "Securities Law Matters - United States".

The solicitation of proxies for the Charger Meeting, the AvenEx Meeting and the Pace Meeting are not subject to the requirements of Section 14(a) of the U.S. Exchange Act. Therefore, the solicitations are not being effected in accordance with U.S. Securities Laws. Accordingly, the solicitations and transactions contemplated in this Information Circular are made in the United States for securities of Canadian issuers in accordance with Canadian corporate and securities laws, and this Information Circular has been prepared solely in accordance with the applicable disclosure requirements in Canada. Charger Shareholders, AvenEx Shareholders and Pace Shareholders residing in the United States should be aware that disclosure requirements under Canadian laws are different from those of the United States applicable to registration statements under the U.S. Securities Act and proxy statements under the U.S. Exchange Act. Charger Shareholders, AvenEx Shareholders and Pace Shareholders in the United States should also be aware that other requirements under Canadian laws may differ from those required under U.S. corporate and securities laws.

Specifically, information concerning the operations of Charger, AvenEx and Pace contained or incorporated by reference herein has been prepared in accordance with Canadian disclosure standards, which are not comparable in all respects to United States disclosure standards. The unaudited pro forma consolidated financial statements of Spyglass and audited historical financial statements of Charger, AvenEx and Pace included or incorporated by reference in this Information Circular have been presented in Canadian dollars, were prepared in accordance with GAAP and were subject to Canadian auditing and auditor independence requirements, which differ from U.S. GAAP and United States auditing and auditor independence requirements in certain material respects, and are therefore not comparable in all respects to financial statements of United States domestic issuers.

Data on Charger's, AvenEx's and Pace's and gas reserves contained or incorporated by reference in this Information Circular have been prepared in accordance with Canadian disclosure standards and, in particular, NI 51-101, which are not comparable in all respects to United States disclosure standards. The primary difference between the United States disclosure standards and the NI 51-101 requirements is that the United States disclosure standards require that the reserves and related future net cash flows be estimated using prices and costs which are assumed not to change, but rather to remain constant, throughout the life of a property, except to the extent of certain fixed or presently determinable future prices or costs to which the issuer is legally bound by a contractual or other obligation to supply a physical product (including those for an extension period of a contract that is likely to be extended) whereas NI 51-101 requires disclosure of reserves and the related future net revenue estimated using forecast prices and costs. In addition, the United States disclosure standards require reserves to be "economically producible" whereas the requirement under Canadian disclosure standards is that extractive projects be "commercial". As a consequence, Charger's, AvenEx's and Pace's production volumes and reserve estimates included or incorporated by reference in this Information Circular are not comparable to those of United States domestic issuers subject to SEC reporting and disclosure requirements.

The enforcement by investors of civil liabilities under the U.S. Securities Laws may be affected adversely by the fact that each of Charger, AvenEx, Pace and Spyglass is or will be organized or incorporated under the laws of a province of Canada, that all of the officers and directors of Charger, AvenEx, Pace and Spyglass are or will be residents of countries other than the United States, that most of the experts named in this Information Circular are residents of countries other than the United States, and that all of the assets of Charger, AvenEx, Pace and Spyglass are or will be located outside the United States. As a result, it may be difficult or impossible for U.S. Securityholders to effect service of process within the United States upon Spyglass, Charger, AvenEx or Pace, their respective officers or directors or the experts named herein, or to realize against them upon judgments of courts of

the United States predicated upon civil liabilities under U.S. Securities Laws. U.S. Securityholders may not be able to sue a Canadian company or its officers or directors in a Canadian court for violations of U.S. Securities Laws. In addition, U.S. Securityholders should not assume that the courts of Canada: (a) would enforce judgments of United States courts obtained in actions against such persons predicated upon civil liabilities under U.S. Securities Laws; or

(b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under U.S. Securities Laws.

Pace Shares and Spyglass Shares received pursuant to the Arrangement by persons who are "affiliates" of Spyglass after the completion of the Arrangement or were affiliates of Pace within 90 days prior to the completion of the Arrangement will be subject to certain restrictions on resale imposed by the U.S. Securities Act. Under certain circumstances, certain restrictions on resale under the U.S. Securities Act may also apply to persons who are "affiliates" of Charger, AvenEx or Pace immediately prior to the completion of the Arrangement. See "Securities Law Matters - United States".

Charger Shareholders, AvenEx Shareholders and Pace Shareholders that are subject to United States federal income taxation should see the section of this Information Circular entitled "Certain Material United States Federal Income Tax Considerations" for certain information concerning the United States federal income tax consequences of the Arrangement for Charger Shareholders, AvenEx Shareholders and Pace Shareholders. Charger Shareholders, AvenEx Shareholders and Pace Shareholders that are subject to United States federal taxation are advised to consult their own tax advisors to determine the particular tax consequences to them of the Arrangement and the acquisition, ownership and disposition of Spyglass Shares.

THE PACE SHARES AND SPYGLASS SHARES ISSUABLE PURSUANT TO THE ARRANGEMENT HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES, NOR HAS THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY SUCH STATE SECURITIES REGULATORY AUTHORITY PASSED ON THE FAIRNESS OR THE MERITS OF THIS TRANSACTION OR THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS INFORMATION CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

Currency Exchange Rates

Except as otherwise indicated, all dollar amounts indicated in this Information Circular are expressed in Canadian dollars. The following table sets forth: (i) the rates of exchange for Canadian dollars, expressed in United States dollars, in effect at the end of each of the periods indicated; (ii) the average of exchange rates in effect on the first day of each month during such period; and (iii) the high and low exchange rates during each such period, in each case based on the rate, published on the Bank of Canada's website as being in effect at approximately noon on each trading day.

Year Ended December 31

2012 2011 2010

Rate at end of Period	$1.0051	$0.9833	$1.0054
Average rate during Period	$1.0021	$1.0158	$0.9679
High	$1.0299	$1.0583	$1.0054
Low	$0.9599	$0.9430	$0.9278

On January 17, 2013 the Bank of Canada noon rate for $1.00 Canadian dollar was $1.0149 United States dollars.

GLOSSARY OF TERMS

The following is a glossary of certain terms used in this Information Circular, including in the section entitled "Summary Information".

"ABCA" means the Business Corporations Act, R.S.A. 2000, c. B-9 as from time to time amended or re-enacted, including the regulations promulgated thereunder;

"Acquisition Proposal" has the meaning ascribed thereto in the Arrangement Agreement; "Appendices" means, collectively, the appendices A to N attached to this Information Circular;

"Applicable Laws" means all rules of applicable stock exchanges, applicable corporate laws, applicable employment laws and applicable securities laws, including the rules, regulations, notices, instruments, blanket orders and policies of the securities regulatory authorities of Canada;

"Arrangement" means the arrangement under the provisions of Section 193 of the ABCA, on the terms and conditions set forth in the Plan of Arrangement as supplemented, modified or amended;

"Arrangement Agreement" means the arrangement agreement dated December 20, 2012, among Charger, AvenEx and Pace with respect to the Arrangement, a copy of which is attached as Appendix A to this Information Circular, as further supplemented, modified or amended;

"Articles of Arrangement" means the articles of arrangement in respect of the Arrangement required under subsection 193(10) of the ABCA to be filed with the Registrar after the Final Order has been granted giving effect to the Arrangement;

"AvenEx" means AvenEx Energy Corp.;

"AvenEx Arrangement Resolution" means the special resolution in respect of the Arrangement to be voted on by the AvenEx Shareholders at the AvenEx Meeting in substantially the form set forth in Appendix D to this Information Circular under the heading "AvenEx Arrangement Resolution";

"AvenEx Board" means the board of directors of AvenEx as it may be comprised from time to time;

"AvenEx Dissent Procedures" means the dissent procedures, as set forth in the Plan of Arrangement, the Interim Order and Section 191 of the ABCA, as the same may be modified by the Court, and as described under "Dissent Rights";

"AvenEx Fairness Opinion" means the opinion of Peters & Co. to the AvenEx Board, dated December 20, 2012, a copy of which is attached as Appendix G to this Information Circular;

"AvenEx Information" means the information included in this Information Circular describing AvenEx and its business, operations and affairs and the matters to be considered at the AvenEx Meeting;

"AvenEx Meeting" means the special meeting of AvenEx Shareholders (including any adjournment or postponement thereof permitted under the Arrangement Agreement) that is to be convened to consider and, if deemed advisable, to approve the AvenEx Arrangement Resolution;

"AvenEx Options" means the outstanding stock options, whether or not vested, to acquire AvenEx Shares; "AvenEx RSUs" means the restricted share units granted by AvenEx;

"AvenEx Shareholders" means the holders from time to time of AvenEx Shares; "AvenEx Shares" means the common shares in the capital of AvenEx;

"AvenEx Termination Agreements" means agreements pursuant to which holders of all outstanding AvenEx Options agree, subject to the condition precedent of the Arrangement becoming effective, to terminate and surrender their AvenEx Options prior to the effective time of the Arrangement, in form and substance satisfactory to the Parties, acting reasonably;

"Beneficial Shareholders" means Shareholders who do not hold their Shares in their own name; "Broadridge" means Broadridge Financial Solutions, Inc.;

"Business Day" means a day other than a Saturday, Sunday or other than a day when banks in the City of Calgary, Alberta are not generally open for business;

"Canadian Securities Laws" means the securities legislation or ordinance and regulations thereunder of each province and territory of Canada and the rules, instruments, policies and orders of each Canadian securities regulator made thereunder;

"CDS" means CDS Clearing and Depositary Services Inc.; "Charger" means Charger Energy Corp.;

"Charger AIF" means the annual information form of Charger dated April 25, 2012 for the year ended December 31, 2011;

"Charger Arrangement Resolution" means the special resolution in respect of the Arrangement to be voted on by the Charger Shareholders at the Charger Meeting in substantially the form set forth in Appendix C to this Information Circular under the heading "Charger Arrangement Resolution";

"Charger Board" means the board of directors of Charger as it may be comprised from time to time;

"Charger Dissent Procedures" means the dissent procedures, as set forth in the Plan of Arrangement, the Interim Order and Section 191 of the ABCA, as the same may be modified by the Court, and as described under "Dissent Rights";

"Charger DSUs" means the deferred share units granted by Charger;

"Charger Energy" means Charger Energy Corp., a private corporation incorporated under the ABCA which was amalgamated with 1647613 Alberta Ltd., Silverback and Sirius pursuant to the Seaview Arrangement;

"Charger Energy Annual Financial Statements" means the audited financial statements of Charger Energy which comprise the statements of financial position as at December 31, 2011 and December 31, 2010, the statements of comprehensive loss and changes in shareholders' equity and cash flows for the year ended December 31, 2011 and the period ended December 31, 2010, together with the notes thereto and the auditors' report thereon;

"Charger Energy Annual MD&A" means the management's discussion and analysis of the financial condition and operating results of Charger Energy for the year ended December 31, 2011;

"Charger Fairness Opinion" means the opinion of TD Securities to the Charger Board, dated December 17, 2012, a copy of which is attached as Appendix F to this Information Circular;

"Charger Information" means the information included in this Circular describing Charger and its business, operations and affairs and the matters to be considered at the Charger Meeting;

"Charger Interim Financial Statements" means the unaudited condensed consolidated financial statements of Charger as at and for the three and nine months ended September 30, 2012, together with the notes thereto;

"Charger Interim MD&A" means the management's discussion and analysis of the financial condition and operating results of Charger for the three and nine months ended September 30, 2012;

"Charger Meeting" means the special meeting of Charger Shareholders (including any adjournment or postponement thereof permitted under the Arrangement Agreement) that is to be convened to consider and, if deemed advisable, to approve the Charger Arrangement Resolution;

"Charger October 2012 Circular" means the notice of meeting and management information circular of Charger dated October 19, 2012 in connection with the annual and special meeting of Charger Shareholders held on November 19, 2012;

"Charger Options" means the outstanding stock options, whether or not vested, to acquire Charger Shares; "Charger Shares" means the class A shares in the capital of Charger;

"Charger Shareholders" means holders, from time to time, of issued and outstanding Charger Shares;

"Charger Termination Agreements" means agreements pursuant to which holders of all outstanding Charger Options, Charger Warrants and Charger DSUs agree, subject to the condition precedent of the Arrangement becoming effective, to terminate and surrender their Charger Options and Charger Warrants and redeem all Charger DSUs prior to the effective time of the Arrangement, in form and substance satisfactory to the Parties, acting reasonably;

"Charger Warrants" means the outstanding warrants, whether or not vested, to acquire Charger Shares; "Code" means the U.S. Internal Revenue Code of 1986, as amended;

"Commissioner" means the Commissioner of Competition appointed under subsection 7(1) of the Competition Act, or her designee;

"Competition Act" means the Competition Act, R.S.C. 1985, c. C-34, as amended;

"Confidentiality Agreements" means, collectively, the confidentiality agreements between AvenEx and Charger dated October 18, 2012 and November 1, 2012, the confidentiality agreement between Pace and Charger dated November 20, 2012 and the confidentiality agreements between Pace and AvenEx dated November 1, 2012 and November 28, 2012;

"Court" means the Court of Queen's Bench of Alberta; "CRA" means the Canada Revenue Agency;

"Depositary" means Olympia Trust Company at its offices referred to in the Letter of Transmittal and on the last page of this Information Circular;

"Dissent Rights" means the right of a Registered Charger Shareholder, Registered AvenEx Shareholder or Registered Pace Shareholder, as applicable, to dissent with respect to the Charger Arrangement Resolution, AvenEx Arrangement Resolution or Pace Arrangement Resolution, as applicable, and to be paid the fair value of the Charger Shares, AvenEx Shares or Pace Shares, as applicable, in respect of which the holder dissents, all in accordance with the Charger Dissent Procedures, AvenEx Dissent Procedures or the Pace Dissent Procedures, as applicable;

"Dissenting AvenEx Shareholders" means Registered AvenEx Shareholders who validly exercise Dissent Rights and whose Dissent Rights remain valid immediately prior to the Effective Time;

"Dissenting Charger Shareholders" means Registered Charger Shareholders who validly exercise Dissent Rights and whose Dissent Rights remain valid immediately prior to the Effective Time;

"Dissenting Pace Shareholders" means Registered Pace Shareholders who validly exercise Dissent Rights and whose Dissent Rights remain valid immediately prior to the Effective Time;

"Dissenting Shareholders" means, collectively, Dissenting Charger Shareholders, Dissenting AvenEx Shareholders and Dissenting Pace Shareholders and "Dissenting Shareholder" means any one of them;

"Dissenting Shares" means Charger Shares, AvenEx Shares or Pace Shares, as the case may be, in respect of which a Dissenting Shareholder has validly exercised Dissent Rights;

"Effective Date" means the date on which the Arrangement becomes effective under the ABCA;

"Effective Time" means the time at which the Articles of Arrangement are filed with the Registrar on the Effective Date;

"Elbow River Entities" means Elbow River Marketing Limited Partnership, Elbow River Marketing USA Inc., 1583662 Alberta Ltd., ERM US Holdings Company Inc. and Elbow River Marketing Corp.;

"Elbow River Marketing Business" means the business carried on by the Elbow River Entities of marketing, logistics and transporting natural gas liquids, ethanol, crude oil, diesel, heavy fuel oils, asphalt and similar products primarily by rail and vehicle (truck) and wholesaling, transporting and supplying propane and butane to major refineries and propane to major retailers in North America;

"Elbow River Purchase and Sale Agreement" means the asset purchase and sale agreement dated as of December 20, 2012 among AvenEx, Elbow River Marketing Limited Partnership, Elbow River Marketing USA Inc., Elbow River Marketing Corp., Elbow River Corp., Elbow River USA Corp. and Parkland Fuel Corporation in respect of the Elbow River Transaction, as may be amended in accordance with the terms thereof and the Arrangement Agreement;

"Elbow River Transaction" means the sale by AvenEx of all of its interests in the Elbow River Marketing Business in accordance with the Elbow River Purchase and Sale Agreement;

"Eligible Institution" means a Canadian schedule 1 chartered bank, a member of the Securities Transfer Agents Medallion Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP) or a member of the New York Stock Exchange Inc., Medallion Signature Program (MSP) (members of these programs are usually members of a recognized stock exchange in Canada, members of the Industry Regulation Organization of Canada, members of the Financial Industry Regulatory Authority or banks and trust companies in the United States);

"Final Order" means the order of the Court approving the Arrangement pursuant to subsection 193(9) of the ABCA, as such order may be affirmed, amended or modified by the Court;

"GAAP" means Canadian generally accepted accounting principles; "GMP" means GMP Securities L.P.;

"HSR Act" means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; "GLJ" means GLJ Petroleum Consultants Ltd.;

"Governmental Entity" means any: (a) multinational, federal, provincial, state, territory, regional, municipal, local or other government or any governmental or public department, court, tribunal, arbitral body, commission, board, bureau or agency; (b) any subdivision, agent, commission, board or authority of any of the foregoing; or (c) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

"IFRS" means International Financial Reporting Standards;

"Information Circular", "Joint Information Circular" or "Circular" means this joint information circular dated January 18, 2013, together with all Appendices attached hereto, distributed by Charger, AvenEx and Pace in connection with the Meetings;

"Interim Order" means the interim order of the Court dated January 14, 2013, providing for, among other things, the calling of the Charger Meeting, AvenEx Meeting and Pace Meeting, attached as Appendix B to this Information Circular;

"IRS" means the U.S. Internal Revenue Service;

"Letters of Transmittal" means, collectively, the letters of transmittal provided to Registered Holders of Charger Shares, AvenEx Shares and Pace Shares by Charger, AvenEx or Pace, as applicable, with the Information Circular pursuant to which such holders are required to deliver certificates representing their Charger Shares, AvenEx Shares or Pace Shares, as applicable, in order to receive certificates representing the Spyglass Shares issued to them pursuant to the Arrangement and "Letter of Transmittal" shall refer to either the Charger Letter of Transmittal, the AvenEx Letter of Transmittal or the Pace Letter of Transmittal, as the context requires;

"Macquarie" means Macquarie Capital Markets Canada Ltd.; "MD&A" means management's discussion and analysis;

"Meetings" means, collectively, the Charger Meeting, the AvenEx Meeting and the Pace Meeting, and any adjournment(s) thereof, and "Meeting" shall refer to either the Charger Meeting, the AvenEx Meeting or the Pace Meeting, as the context requires;

"misrepresentation" includes any untrue statement of a material fact, any omission to state a material fact that is required to be stated and any omission to state a material fact that is necessary to be stated in order for a statement not to be misleading;

"MI 61-101" means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities Administrators;

"NI 51-101" means National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities; "NI 51-102" means National Instrument 51-102 - Continuous Disclosure Obligations;

"National Bank" means National Bank Financial Inc.;

"Notice of Application" means the notice of originating application to the Court for the Final Order, which accompanies this Information Circular;

"Notice of Meeting" means, as applicable, the notice of special meeting of Charger Shareholders, the notice of special meeting of AvenEx Shareholders or the notice of special meeting of Pace Shareholders which accompany this Information Circular;

"Pace" means Pace Oil & Gas Ltd.;

"Pace Board" means the board of directors of Pace as it may be comprised from time to time;

"Pace Arrangement Resolution" means the special resolution in respect of the Arrangement to be voted on by the Pace Shareholders at the Pace Meeting in substantially the form set forth in Appendix E to this Information Circular under the heading "Pace Arrangement Resolution";

"Pace Dissent Procedures" means the dissent procedures, as set forth in the Plan of Arrangement, the Interim Order and Section 191 of the ABCA, as the same may be modified by the Court, and as described under "Dissent Rights";

"Pace DSAs" means the deferred share awards granted by Pace;

"Pace Fairness Opinion" means the opinion of National Bank to the Pace Board, dated January 11, 2013, a copy of which is attached as Appendix H to this Information Circular;

"Pace Information" means the information included in this Circular describing Pace and its business, operations and affairs and the matters to be considered at the Pace Meeting;

"Pace Meeting" means the special meeting of Pace Shareholders (including any adjournment or postponement thereof permitted under the Arrangement Agreement) that is to be convened to consider and, if deemed advisable, to approve the Pace Arrangement Resolution;

"Pace Options" means the outstanding stock options, whether or not vested, to acquire Pace Shares; "Pace PSAs" means the performance share awards granted by Pace;

"Pace Rights" means the rights issued to holders of Pace shares pursuant to the Pace Rights Plan;

"Pace Rights Plan" means the shareholder rights plan agreement dated July 5, 2012 between Pace and Computershare Trust Company of Canada, as the rights plan agent;

"Pace RSAs" means the restricted share awards granted by Pace;

"Pace Shareholders" means the holders from time to time of Pace Shares; "Pace Shares" means the common shares in the capital of Pace;

"Pace Termination Agreements" means agreements pursuant to which holders of all outstanding Pace Options agree, subject to the condition precedent of the Arrangement becoming effective, to terminate and surrender their Pace Options prior to the effective time of the Arrangement, in form and substance satisfactory to the Parties, acting reasonably;

"Parties" means, collectively, Charger, AvenEx and Pace, and "Party" means Charger, AvenEx or Pace, as the case may be;

"person" includes any individual, partnership, firm, trust, body corporate, government, governmental body, agency or instrumentality, unincorporated body of persons or association;

"Peters & Co." means Peters & Co. Limited;

"Plan" or "Plan of Arrangement" means the plan of arrangement attached as Exhibit "A" to the Arrangement Agreement which is attached as Appendix A to this Information Circular, as amended, varied or supplemented from time to time in accordance with the terms thereof or at the discretion of the Court in the Final Order;

"Record Date" means the close of business on January 14, 2013;

"Registered Holder" means, as applicable, the person whose name appears on the register of Charger as the owner of Charger Shares, or whose name appears on the register of AvenEx as the owner of AvenEx Shares, or whose name appears on the register of Pace as the owner of Pace Shares, as the case may be;

"Registered AvenEx Shareholder" means the person whose name appears on the register of AvenEx as the owner of AvenEx Shares;

"Registered Charger Shareholder" means the person whose name appears on the register of Charger as the owner of Charger Shares;

"Registered Pace Shareholder" means the person whose name appears on the register of Pace as the owner of Pace Shares;

"Registrar" means the Registrar of Corporations for the Province of Alberta duly appointed under the ABCA; "Regulation S" means Regulation S under the U.S. Securities Act;

"Representatives" has the meaning ascribed thereto in the Arrangement Agreement;

"Seaview" means Seaview Energy Inc., a corporation incorporated under the ABCA and the predecessor of Charger;

"Seaview Annual Financial Statements" means the audited consolidated financial statements of Seaview which comprise the consolidated statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010, the consolidated statements of earnings (loss) and comprehensive income (loss), changes in shareholders' equity and cash flows for the years ended December 31, 2011 and December 31, 2010, together with the notes thereto and the auditors' report thereon;

"Seaview Annual MD&A" means the management's discussion and analysis of the financial condition and operating results of Seaview for the year ended December 31, 2011;

"Seaview Arrangement" means the plan of arrangement under Section 193 of the ABCA completed on March 6, 2012 involving Seaview, the shareholders of Seaview, Charger Energy, the shareholders, optionholders and warrantholders of Charger Energy, Silverback, the shareholders of Silverback, Sirius and the shareholders of Sirius;

"Seaview Arrangement Joint Information Circular" means the joint information circular of Charger Energy, Seaview, Silverback and Sirius dated February 2, 2012 in connection with the Seaview Arrangement;

"SEC" means the United States Securities and Exchange Commission;

"SEDAR" means the Canadian System for Electronic Document Analysis and Retrieval;

"Shareholders" means, collectively, Charger Shareholders, AvenEx Shareholders and/or Pace Shareholders, as the context may require;

"Shares" means, collectively, Charger Shares, AvenEx Shares and/or Pace Shares, as the context may require;

"Silverback" means Silverback Energy Ltd., a private corporation incorporated under the ABCA which was amalgamated with 1647613 Alberta Ltd., Charger Energy and Sirius pursuant to the Seaview Arrangement;

"Silverback Annual Financial Statements" means the audited financial statements of Silverback which comprise the statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010, and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the years ended December 31, 2011 and 2010, together with the notes thereto and the auditor's report thereon;

"Silverback Annual MD&A" means the management's discussion and analysis of the financial condition and operating results of Silverback for the year ended December 31, 2011;

"Sirius" means Sirius Energy Inc., a private corporation incorporated under the ABCA which was amalgamated with 1647613 Alberta Ltd., Charger Energy and Silverback pursuant to the Seaview Arrangement;

"Sirius Annual Financial Statements" means the audited financial statements of Sirius which comprise the statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010, the statements of earnings (loss), changes in shareholders' equity and cash flows for the years ended December 31, 2011 and December 31, 2010, together with the notes thereto and the auditors' report thereon;

"Sirius Annual MD&A" means the management's discussion and analysis of the financial condition and operating results of Sirius for the year ended December 31, 2011;

"Spyglass" means Spyglass Resources Corp., the corporation resulting from the amalgamation of Charger, AvenEx and Pace pursuant to the Arrangement;

"Spyglass Board" means the board of directors of Spyglass following completion of the Arrangement, consisting of Randy Findlay as Chair, Dennis Balderston, Thomas Buchanan, Gary Dundas, Mike Shaikh, Jeff Smith, Fred Woods and John Wright;

"Superior Proposal" has the meaning ascribed thereto in the Arrangement Agreement;

"Support Agreements" means agreements, substantially in the form attached as Exhibit "B" to the Arrangement Agreement attached hereto as Appendix A, between Charger and certain of the Supporting Shareholders, between AvenEx and certain of the Supporting Shareholders and between Pace and certain of the Supporting Shareholders, pursuant to which the Supporting Shareholders have agreed to vote the Charger Shares, the AvenEx Shares or the Pace Shares (as well as their Charger Options, Charger Warrants, AvenEx Options and AvenEx RSUs, if required), as the case may be, beneficially owned or controlled by the Supporting Shareholders in favour of the Charger Arrangement Resolution, the AvenEx Arrangement Resolution, the Pace Arrangement Resolution, as applicable, and to otherwise support the Arrangement;

"Supporting Shareholders" means those Charger Shareholders, AvenEx Shareholders and Pace Shareholders that have entered into Support Agreements;

"Tax Act" means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended, including the regulations promulgated thereunder;

"TD Securities" means TD Securities Inc.;

"Termination Fee" has the meaning set forth in "The Arrangement Agreement - Termination and Termination Fees";

"TSX" means the Toronto Stock Exchange; "TSXV" means the TSX Venture Exchange Inc.;

"United States" or "U.S." means the United States, as defined in Rule 902(l) of Regulation S; "U.S. Exchange Act" means the United States Securities Exchange Act of 1934, as amended; "U.S. GAAP" means United States generally accepted accounting principles;

"U.S. Securities Act" means the United States Securities Act of 1933, as amended;

"U.S. Securities Laws" means the federal and state securities legislation of the United States and all rules, regulations and orders promulgated thereunder;

"U.S. Securityholder" means a holder of Charger Shares, AvenEx Shares and/or Pace Shares in the United States; and

"Voting Instruction Form" means the voting instruction form provided by Broadridge to Beneficial Shareholders.

CONVENTIONS

Certain terms used herein are defined in the "Glossary of Terms". Words importing the singular number include the plural and vice versa. Certain other terms used herein but not defined herein are defined in NI 51-101 and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101. All financial information herein has been presented in Canadian dollars in accordance with GAAP.

ABBREVIATIONS

Oil and Natural Gas Liquids Natural Gas

bbl barrel Mcf thousand cubic feet

bbls barrels MMbtu million British thermal units

boe barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for 6 Mcf of natural gas

MMcf million cubic feet

boe/d barrel of oil equivalent per day Mcf/d thousand cubic feet per day bbls/d barrels per day MMcf/d million cubic feet per day

Mboe 1,000 barrels of oil equivalent Bcf billion cubic feet

MMboe million barrels of oil equivalent GJ gigajoule NGLs natural gas liquids

boe barrel of oil equivalent of natural gas and crude oil on the basis of 1 boe for 6 Mcf of natural gas

Other

$000s thousands of dollars

Disclosure provided herein in respect of boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

CONVERSIONS

To Convert From	To	Multiply By
Mcf	Cubic metres	28.174
Cubic metres	Cubic feet	35.494
Bbls	Cubic metres	0.159
Cubic metres	Bbls oil	6.290
Feet	Metres	0.305
Metres	Feet	3.281
Miles	Kilometres	1.609
Kilometres	Miles	0.621
Acres	Hectares	0.405
Hectares	Acres	2.471

SUMMARY INFORMATION

The following is a summary of certain information relating to the Arrangement, Charger, AvenEx, Pace and Spyglass (following completion of the Arrangement) contained elsewhere in this Information Circular, including the Appendices attached hereto. This summary is not intended to be complete and is qualified in its entirety by the more detailed information and financial data and statements contained or referred to elsewhere in this Information Circular or in the Appendices attached hereto, all of which are important and should be reviewed carefully. Capitalized terms used in this summary and not otherwise defined herein are defined in the "Glossary of Terms".

The Arrangement

On December 20, 2012 Charger, AvenEx and Pace agreed to combine their respective businesses and entered into the Arrangement Agreement, a copy of which is attached as Appendix A to this Information Circular. Each of Charger, AvenEx and Pace are companies at arm's length with one another. Under the terms of the Arrangement:

• the articles of Pace shall be amended to subdivide the issued and outstanding Pace Shares on the basis of 1.3 post-subdivided Pace Shares for each 1.0 pre-subdivided Pace Share;

• Charger Shareholders (other than Dissenting Charger Shareholders) will receive 0.18 of a post- subdivided Pace Share for every Charger Share held, for aggregate deemed consideration of $32.4 million;

• AvenEx Shareholders (other than Dissenting AvenEx Shareholders) will receive 1.00 of a post- subdivided Pace Share for every AvenEx Share held, for aggregate deemed consideration of

$148.8 million; and

• Charger, AvenEx and Pace shall amalgamate to form "Spyglass Resources Corp." and each post- subdivided Pace Share (including the Pace Shares issued to holders of Charger Shares and AvenEx Shares) will be exchanged for one (1) Spyglass Share.

A maximum of 134 million Spyglass Shares are potentially issuable pursuant to the Arrangement. Assuming that all Charger Options, Charger Warrants, AvenEx Options and Pace Options which are "out-of-the-money" are terminated or cancelled as described in this Circular, it is expected that approximately 128.9 million Spyglass Shares will be issued pursuant to the Arrangement for aggregate deemed consideration of approximately $344 million, based on the closing price of the AvenEx Shares on January 16, 2013.

See "The Arrangement".

The Combined Company

Following completion of the Arrangement, Spyglass will be a dividend paying corporation with a balanced commodity profile and sustainable business model underpinned by 18,000 boe/d of stable, low decline oil and gas production.

The 2013 capital program of Spyglass is designed to sustain current production levels. A total of $80 to $90 million in capital expenditures are planned and will be focused primarily on light oil development in the following areas:

• Halkirk-Provost Viking (approximately 30%);

• Southern Alberta multiple zones (Pekisko and other) (approximately 20%);

• Randell Slave Point and Gilwood (approximately 20%);

• Pembina Cardium (approximately 10%); and

• Other (approximately 20%).

Following completion of the Arrangement, Thomas Buchanan, Chief Executive Officer and a current director of Charger, will serve as Chief Executive Officer of Spyglass, Dan O'Byrne, the current President and Chief Operating Officer of Charger, will serve as President of Spyglass, Mark Walker the current Vice President, Finance and Chief Financial Officer of Charger, will serve as Vice President, Finance and Chief Financial Officer of Spyglass, Kelly

Cowan, the current Vice President, Corporate Development and Land of Charger, will serve as Vice President, Corporate Development and Land of Spyglass, John Milford, the current Vice President, Exploration and Development, will serve as Vice President, Exploration and Development of Spyglass and Dan Fournier, the current General Counsel and Corporate Secretary of Charger, will serve as General Counsel and Corporate Secretary of Spyglass. The Spyglass Board will consist of eight members with representatives from each Party namely Randy Findlay, Dennis Balderston, Thomas Buchanan, Gary Dundas, Mike Shaikh, Jeff Smith, Fred Woods and John Wright

Immediately following completion of the Arrangement, Charger Shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx Shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace Shareholders are anticipated to own approximately 48% of the issued and outstanding Spyglass Shares.

See "Pro Forma Information Concerning Spyglass Following the Arrangement".

Dividend Policy of Spyglass

Spyglass intends to implement a monthly dividend of $0.03 per Spyglass Share following completion of the Arrangement, and, subject to prevailing and anticipated commodity prices, Spyglass will not reduce its monthly dividend rate on the Spyglass shares for a period of six (6) months following the Effective Date. Notwithstanding the foregoing, the dividend policy of Spyglass will be at the discretion of the Spyglass Board following completion of the Arrangement, with the Spyglass Board giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under Applicable Laws. See "The Arrangement – Dividend Policy of Spyglass" and "Cautionary Notice Regarding Forward-Looking Information".

Elbow River Transaction

On December 20, 2012, AvenEx entered into the Elbow River Purchase and Sale Agreement relating to the sale of the Elbow River Marketing Business for aggregate cash proceeds of $80 million, subject to regulatory approvals, customary closing conditions and adjustments. The Elbow River Transaction is expected to close by mid-February 2013, at or prior to the Effective Time of the Arrangement. Closing of the Arrangement is conditional upon the completion of the Elbow River Transaction. See "Elbow River Transaction".

Effect on holders of Charger Options, Charger Warrants, Charger DSUs, AvenEx Options, AvenEx RSUs, Pace Options, Pace DSAs, Pace PSAs and Pace RSAs

Under the terms of the Arrangement Agreement:

1. holders of Charger Options, holders of Charger Warrants and holders of Charger DSUs have entered into or will enter into prior to the Effective Time the Charger Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Charger Options and Charger Warrants and redeem all Charger DSUs immediately prior to the Effective Time. The exercise of "in-the-money" Charger Options will be completed upon payment of the exercise price by the holder in accordance with the terms thereof, and "out-of-the-money" Charger Options and Charger Warrants will be surrendered and cancelled in consideration of payment from Charger of $0.001 per "out-of-the-money" Charger Option and Charger Warrant. Charger anticipates paying an aggregate of $64,400 in cash, as of the Effective Time, in satisfaction of all of the outstanding Charger DSUs (based on a market price per Charger Share of $0.46 as at January 16, 2013);

2. holders of AvenEx Options have entered into or will enter into prior to the Effective Time the AvenEx Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised AvenEx Options immediately prior to the Effective Time. The exercise of "in-the-money" AvenEx Options will be completed upon payment of the exercise price by the holder or on a "cashless basis" in exchange for AvenEx Shares in accordance with the terms thereof, and "out-of-the-money"

AvenEx Options will be surrendered and cancelled in consideration of payment from AvenEx of $0.001 per "out-of-the-money" AvenEx Option. Closing of the Arrangement will constitute a "change of control" under the terms and conditions of the AvenEx RSUs and, as a result, the vesting provisions of all such AvenEx RSUs shall be accelerated, all such AvenEx RSUs will vest immediately prior to the Effective Time, AvenEx shall issue AvenEx Shares to the holders thereof as soon as practicable after the vesting thereof (which will be automatically exchanged for Spyglass Shares pursuant to the Arrangement), and all such AvenEx RSUs shall terminate on the Effective Date; and

3. holders of Pace Options have entered into or will enter into prior to the Effective Time the Pace Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Pace Options immediately prior to the Effective Time. The exercise of "in-the-money" Pace Options will be completed upon payment of the exercise price by the holder or on a "cashless basis" in exchange for Pace Shares in accordance with the terms thereof, and "out-of-the-money" Pace Options will be surrendered and cancelled in consideration of payment from Pace of $0.001 per "out-of-the-money" Pace Option. The Arrangement will constitute a "change of control" under the terms and conditions of the Pace RSAs, Pace PSAs and Pace DSAs and, as a result, the vesting provisions and settlement dates in respect of all such Pace RSAs, Pace PSAs and Pace DSAs shall be accelerated and all settlement amounts in respect of the Pace RSAs, Pace PSAs and Pace DSAs shall be paid by Pace on the date which is immediately prior to the Effective Date in accordance with the terms of the plan governing the Pace RSAs, Pace PSAs and Pace DSAs. Pace anticipates paying an aggregate of $4,129,515 in cash in settlement of all Pace RSAs, Pace PSAs and Pace DSAs as of the Effective Date (based on a market price per Pace Share of

$3.38 as at January 16, 2013).

See "The Arrangement – Effect of the Arrangement"

Selected Financial and Operational Information for Spyglass

The following tables set out certain financial and operational information for each of Charger, AvenEx and Pace, as well as unaudited pro forma financial information after giving effect to the Arrangement (and certain other adjustments) and combined operational information. The selected financial and operational information in respect of AvenEx includes the results of the AvenEx oil and gas division to be acquired by Spyglass through the Arrangement and excludes the operational and financial results in respect of: (i) the Elbow River Marketing Business; (ii) AvenEx's real estate division (discontinued operations); and (iii) certain oil and gas assets sold by AvenEx on November 26, 2012. The financial information in respect of AvenEx excluding: (i) the Elbow River Marketing Business; (ii) the AvenEx real estate division (discontinued operations); and (iii) the oil and gas assets sold by AvenEx on November 26, 2012 is set forth under the column entitled "Adjusted AvenEx Energy Corp." in the unaudited pro forma consolidated financial statements of Spyglass included in Appendix M to this Information Circular. All such information set forth below should be read in conjunction with the unaudited pro forma consolidated financial statements of Spyglass after giving effect to the Arrangement included in Appendix M to this Information Circular. Adjustments have been made to prepare the unaudited pro forma consolidated financial statements of Spyglass, which adjustments are based on certain assumptions. Both the adjustments and the assumptions made in respect thereof are described in the notes to the unaudited pro forma consolidated financial statements.

The unaudited pro forma consolidated financial statements are presented in accordance with IFRS for illustrative purposes only and are not necessarily indicative of: (i) the operating or financial results that would have occurred had the Arrangement actually occurred at the times contemplated by the notes to the unaudited pro forma consolidated financial statements; or (ii) the results expected in future periods.

Selected Pro Forma Financial Information

For the nine months ended September 30, 2012 (unaudited) $000's

Charger

AvenEx(1)

Pace

Pro Forma

Revenue 19,301 39,608 125,560 184,469

Funds from (used in) Operations(2)(6) 3,927 13,056 45,218 64,702

Net Income (loss) (7,515) (12,309) (66,426) (74,920)

Net Debt and Working Capital Deficit (surplus)(3)

61,256 (17,722) 210,348 277,848

Capital Expenditures(4) 25,261 17,442 68,293 110,996

Total Assets 209,490 359,702 691,162 1,104,313

Total Liabilities 95,663 119,312 322,624 468,086

For the year ended December 31, 2011 (unaudited) $000's

Charger(8)

AvenEx(1)

Pace

Pro Forma

Revenue 45,823 70,571 194,245 310,639

Funds from (used in) Operations(2)(6) 17,716 32,316 97,852 151,219

Net Income (loss) (82,796) (24,317) 16,707 (21,226)

Net Debt and Working Capital Deficit (surplus)(3)

33,046 (26,598) 186,129 288,652

Capital Expenditures(4) 92,916 39,798 127,565 260,279

Total Assets 213,302 372,472 738,530 1,102,181

Total Liabilities 101,419 118,993 304,091 598,361

Selected Pro Forma Operational Information

For the nine months ended September 30, 2012(7)	Charger	AvenEx	Pace	Pro Forma
Daily Natural Gas Production(Mcf/d)	9,749	9,669	42,869	62,287
Crude Oil and NGLs (bbl/d)	868	1,775	6,519	9,162
Total (boe/d)	2,493	3,387	13,664	19,543
Operating Netback ($/boe)(5)	12.66	23.19	17.34	17.76
For the year ended December 31, 2011(7)	Charger(8)	AvenEx	Pace	Pro Forma
Daily Natural Gas Production(Mcf/d)	17,265	13,398	46,772	77,435
Crude Oil and NGLs (bbl/d)	994	2,092	6,245	9,331
Total (boe/d)	3,871	4,325	14,040	22,236
Operating Netback ($/boe)(5)	19.41	27.00	22.58	22.89

Notes:

(1) The selected financial and operational information in respect of AvenEx includes the results of the AvenEx oil and gas division to be acquired by Spyglass through the Arrangement and excludes the operational and financial results in respect of: (i) the Elbow River Marketing Business; (ii) AvenEx's real estate division (discontinued operations); and (iii) certain oil and gas assets sold by AvenEx on November 26, 2012. The financial information in respect of AvenEx excluding: (i) the Elbow River Marketing Business; (ii) the AvenEx real estate division (discontinued operations); and (iii) the oil and gas assets sold by AvenEx on November 26, 2012 is set forth under the column entitled "Adjusted AvenEx Energy Corp." in the unaudited pro forma consolidated financial statements of Spyglass included in Appendix M to this Information Circular.

(2) Funds from operations does not have a standardized meaning under GAAP. Therefore, funds from operations may not be comparable to similar measures presented by other issuers, and investors are cautioned that funds from operations should not be construed as alternatives to net earnings, cash flow from operating activities or other measures of financial performance calculated in accordance with GAAP. Management calculates funds from operations as net earnings (loss) plus transaction costs plus the addition of non-cash items (depletion, depreciation and accretion impairments, stock-based compensation, performance warrants, future income taxes, gains or losses on the sale of property and equipment and unrealized gains or losses on financial derivative instruments, financial contracts and foreign exchange). As a non-GAAP measure, funds from operations is an indicator of the financial performance as it demonstrates each Party's ability to generate the cash necessary to fund future capital investments and to repay debt. Each Party uses such term as an indicator of financial performance because such term is commonly utilized by investors to evaluate companies in the

energy sector. The Parties believe that funds from operations is a useful supplemental measure as it provides investors with information of what cash is available in such periods.

(3) Net debt and working capital includes bank debt and costs of the Arrangement of approximately $25.2 million, which includes executive severance and termination payments (see "Interests of Certain Persons or Companies in the Matters to be Acted Upon" in this Information Circular), offset by net working capital surplus excluding the current portion of future income taxes and financial derivative instruments (financial contracts and risk management contracts).

(4) Capital expenditures excludes acquisitions and dispositions.

(5) Operating netback does not have a standardized meaning under GAAP. Therefore, operating netback may not be comparable to similar measures presented by other issuers. Operating netback typically equals oil and natural gas sales net of royalties and realized gains and losses on financial derivative instruments and operating and transportation costs and is generally calculated on a per boe basis. As a non-GAAP measure, operating netback is an indicator of the financial performance of each Party. Each Party uses such term as an indicator of financial performance because such term is commonly utilized by investors to evaluate companies in the energy sector. The Parties believe that operating netback is a useful supplemental measure as it provides investors with information on operating margins per barrel of oil equivalent for such periods.

(6) Pro forma funds from (used in) operations for the nine months ended September 30, 2012 represents the aggregate amounts of funds from (used in) operations for each of Charger, AvenEx and Pace for the period. Pro forma funds from (used in) operations for the year ended December 31, 2011 represents the aggregate amounts of funds from (used in) operations for each of Charger, AvenEx and Pace for the period. See note (2) above for additional information on funds from (used in) operations.

(7) The selected operational information of Charger is included in the MD&A for the year ended December 31, 2011 and for the nine months ended September 30, 2012 incorporated by reference in this Circular in "Appendix I- Additional Information Concerning Charger". The selected operational information of AvenEx is included in the MD&A for the year ended December 31, 2011 and for the nine months ended September 30, 2012 incorporated by reference in this Circular in "Appendix J- Additional Information Concerning AvenEx". See note (1) above for results excluded from the AvenEx operational information. The selected operational information of Pace is included in the MD&A for the year ended December 31, 2011 and for the nine months ended September 30, 2012 incorporated by reference in this Circular in "Appendix K- Additional Information Concerning Pace". Pro forma Daily Natural Gas Production (mcf/d), Crude Oil and NGLs (bbls/d) and Total (boe/d) represent the aggregate amounts for each of Charger, AvenEx and Pace for the period. See also note (5) above for additional information on operating netbacks.

(8) The selected operational and financial information in respect of Charger for the year ended December 31, 2011 includes the operational and financial results attributable to each of Charger Energy, Seaview, Sirius and Silverback for the year ended December 31, 2011. The financial information in respect of each of Charger Energy, Seaview, Sirius and Silverback is set forth in the unaudited pro forma financial consolidated statements of Spyglass included in Appendix M to this Information Circular. Additional information regarding the Seaview Arrangement is included in the Charger AIF incorporated by reference herein.

See "Pro Forma Information Concerning Spyglass Following the Arrangement" and the unaudited pro forma consolidated financial statements of Spyglass following completion of the Arrangement and the notes thereto set forth in Appendix M to this Information Circular. Additional operational and reserves information concerning each of the Parties is included or incorporated by reference in Appendix I - Additional Information Concerning Charger", "Appendix J - Additional Information Concerning AvenEx" and "Appendix K - Additional Information Concerning Pace".

Estimated Funds Available to Spyglass

After giving effect to the Arrangement, based on December 20, 2012 estimates, it is anticipated that Spyglass will have approximately $120 million available based on borrowing capacity under Spyglass' proposed credit facility. Spyglass has received proposals for a $400 million senior revolving credit facility with a syndicate of banks, subject to the closing of the Arrangement. The net debt of Spyglass after giving effect to the Arrangement, based on December 20, 2012 estimates, will be approximately $280 million. The pro forma net debt calculation incorporates estimated cash proceeds from the Elbow River Transaction of $80 million and estimated transaction costs of the Arrangement of $25.2 million (which includes executive severance and termination payments - see "Interests of Certain Persons or Companies in the Matters to be Acted Upon" in this Information Circular) and excludes risk management assets and liabilities as of the Effective Date.

The AvenEx Meeting

The AvenEx Meeting will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 9:00 a.m. (Calgary time) on Tuesday, February 19, 2013, for the purposes set forth in the accompanying applicable Notice of Meeting. The primary purpose of the AvenEx Meeting will be to consider and vote upon the AvenEx Arrangement Resolution. See "The Arrangement".

The Pace Meeting

The Pace Meeting will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 10:00 a.m. (Calgary time) on Tuesday, February 19, 2013, for the purposes set forth in the accompanying applicable Notice of Meeting. The primary purpose of the Pace Meeting will be to consider and vote upon the Pace Arrangement Resolution. See "The Arrangement".

The Charger Meeting

The Charger Meeting will be held in the Livingston Club Conference Centre, Livingston Place, South Tower, +15 Level, 222 – 3rd Avenue S.W., Calgary, Alberta at 11:00 a.m. (Calgary time) on Tuesday, February 19, 2013, for the purposes set forth in the accompanying applicable Notice of Meeting. The primary purpose of the Charger Meeting will be to consider and vote upon the Charger Arrangement Resolution. See "The Arrangement".

Anticipated Benefits of the Arrangement

The Arrangement will create a dividend paying company with a balanced commodity profile and sustainable business model underpinned by 18,000 boe/d of stable, low decline oil and gas production. Charger, AvenEx and Pace have complementary asset bases and collectively have a portfolio of light oil growth opportunities with strong growth efficiencies. Spyglass will have a stable balance sheet, an experienced management team and board of directors with a proven track record managing a cash distributing entity. This is anticipated to position the combined entity for sustainability through 2013 and into the future. Anticipated benefits of the Arrangement include the following:

(a) Spyglass will have a diversified production base of crude oil and natural gas production. Estimated current pro forma production capability of the combined company is approximately 18,000 boe/d following the Arrangement, of which approximately 55% is weighted to natural gas and the remaining 45% to crude oil and natural gas liquids;

(b) the proposed 2013 capital program of Spyglass is designed to sustain current production levels and support the cash flow underpinning the dividend model. A total of $80 to $90 million in capital expenditures are planned and will be focused primarily on light oil development in Halkirk- Provost Viking (approximately 30%), Southern Alberta multiple zones (Pekisko and other) (approximately 20%), Randell Slave Point and Gilwood (approximately 20%), Pembina Cardium (approximately 10%) and other areas (approximately 20%);

(c) management of Spyglass will employ an active commodity price hedging strategy to protect its proposed dividend and capital program. Spyglass plans to protect up to 60% of production by volume using a rolling 12 month hedging strategy featuring a blend of fixed price and participating products designed to reduce the impact of commodity price volatility on netbacks and cash flow;

(d) Spyglass intends to implement a monthly dividend of $0.03 per Spyglass Share following completion of the Arrangement, and, subject to prevailing and anticipated commodity prices, Spyglass will not reduce its monthly dividend rate on the Spyglass Shares for a period of six (6) months following the Effective Date. Notwithstanding the foregoing, the dividend policy of Spyglass will be at the discretion of the Spyglass Board following completion of the Arrangement, with the Spyglass Board giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under Applicable Laws; and

(e) Spyglass will be managed by an experienced team of public company professionals who have demonstrated their ability to deliver on exploration, exploitation, acquisition and financial objectives.

See "The Arrangement - Background to and Reasons for the Arrangement".

The Companies

The proposed business combination involving Charger, AvenEx and Pace is an arm's length transaction.

Charger Energy Corp.

Charger is a Calgary, Alberta based crude oil and natural gas company that trades on the TSXV under the symbol "CHX". Charger is committed to the drilling of internally-generated light oil prospects and by pursuing strategic property and corporate acquisitions with light oil potential using new completion technology. To date, Charger has operated, high working interest, light oil and natural gas assets in the Halkirk-Provost and Drumheller areas of east central Alberta as well as the Peace River Arch area of north western Alberta. See "Appendix I - Additional Information Concerning Charger".

AvenEx Energy Corp.

AvenEx is a Calgary, Alberta based company that trades on the TSX under the symbol "AVF". AvenEx is focused on the exploration and development of oil and gas properties in western Canada and crude oil and liquefied petroleum gas marketing and logistics through the Elbow River Business. AvenEx is focused on providing stable, sustainable dividends to the AvenEx Shareholders while providing modest growth.

See "Appendix J - Additional Information Concerning AvenEx".

Pace Oil & Gas Ltd.

Pace is a Calgary, Alberta based intermediate sized oil-weighted company with a large portfolio of near term oil resource opportunities in the Western Canadian Sedimentary Basin. Pace has a growing oil production base in the Peace River Arch area with its large Montney pool at Dixonville, its Slave Point light oil resource play at Red Earth and in Southern Alberta, and is successfully developing and exploiting a large inventory of identified Mannville channels. The Pace Shares trade under the symbol "PCE" on the TSX and "PACEF" on the OTC. See "Appendix K

- Additional Information Concerning Pace".

Background to and Reasons for the Arrangement

The terms of the Arrangement are the result of arm's length negotiations between representatives of Charger, AvenEx and Pace, as well as their respective advisors. This Information Circular contains a summary of the events leading up to the negotiation of the Arrangement Agreement and the meetings, negotiations, discussions and actions among the Parties that preceded the signing of the Arrangement Agreement and the public announcement of the Arrangement on December 20, 2012. See "The Arrangement - Background to and Reasons for the Arrangement".

Fairness Opinions and Other Advisors

Charger Fairness Opinion

TD Securities is of the opinion that, as at December 17, 2012, the consideration to be received by the Charger Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Charger Shareholders. The Charger Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "The Arrangement - Fairness Opinions - Charger Fairness Opinion" and "Appendix F - Charger Fairness Opinion". Charger Shareholders are urged to, and should, read the Charger Fairness Opinion in its entirety.

Charger will pay fees to TD Securities in connection with its services, a portion of which are contingent upon the completion of the Arrangement. Charger has also agreed to reimburse TD Securities for certain expenses and to indemnify it against certain liabilities arising out of or in connection with its engagement, including certain liabilities under securities laws.

The Charger Fairness Opinion addresses only the consideration to be received by Charger Shareholders, is for the information of the Charger Board in connection with its consideration of the proposed Arrangement and does not constitute a recommendation as to how Charger Shareholders should vote at the Charger Meeting or how to act with respect to any matter relating to the Arrangement.

AvenEx Fairness Opinion

AvenEx retained Peters & Co. to provide the AvenEx Board with its opinion as to the fairness, from a financial point of view, to the AvenEx Shareholders, of the consideration to be received by the AvenEx Shareholders pursuant to the Arrangement. In connection with this mandate, Peters & Co. has prepared the AvenEx Fairness Opinion. The AvenEx Fairness Opinion states that, based on the assumptions, limitations and qualifications set forth therein, Peters & Co. is of the opinion that, as at December 20, 2012, the consideration to be received by the AvenEx Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the AvenEx Shareholders. The AvenEx Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "The Arrangement - Fairness Opinions - AvenEx Fairness Opinion" and "Appendix G - AvenEx Fairness Opinion". AvenEx Shareholders are urged to, and should, read the AvenEx Fairness Opinion in its entirety.

AvenEx will pay fees to Peters & Co. in connection with its services, a portion of which are contingent upon the completion of the Arrangement. AvenEx has also agreed to reimburse Peters & Co. for certain expenses and to indemnify it against certain liabilities arising out of or in connection with its engagement, including certain liabilities under securities laws.

The AvenEx Fairness Opinion addresses only the consideration to be received by AvenEx Shareholders, is for the information of the AvenEx Board in connection with its consideration of the proposed Arrangement and does not constitute a recommendation as to how AvenEx Shareholders should vote at the AvenEx Meeting or how to act with respect to any matter relating to the Arrangement.

Pace Fairness Opinion

Pace retained National Bank to provide the Pace Board with its opinion as to the fairness, from a financial point of view, to the Pace Shareholders, of the consideration to be received by the Pace Shareholders pursuant to the Arrangement. In connection with this mandate, National Bank has prepared the Pace Fairness Opinion. The Pace Fairness Opinion states that, based on the assumptions, limitations and qualifications set forth therein, National Bank is of the opinion that, as at January 11, 2013, the consideration to be received by the Pace Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Pace Shareholders. The Pace Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "The Arrangement - Fairness Opinions - Pace Fairness Opinion" and "Appendix H - Pace Fairness Opinion". Pace Shareholders are urged to, and should, read the Pace Fairness Opinion in its entirety.

Pace will pay fees to National Bank in connection with its services, a portion of which are contingent upon the completion of the Arrangement. Pace has also agreed to reimburse National Bank for certain expenses and to indemnify it against certain liabilities arising out of or in connection with its engagement, including certain liabilities under securities laws.

The Pace Fairness Opinion addresses only the consideration to be received by Pace Shareholders, is for the information of the Pace Board in connection with its consideration of the proposed Arrangement and does not constitute a recommendation as to how Pace Shareholders should vote at the Pace Meeting or how to act with respect to any matter relating to the Arrangement.

Other Advisors

Charger retained Macquarie as strategic advisor to Charger with respect to the Arrangement. Charger has agreed to reimburse Macquarie for certain expenses and to indemnify it against certain liabilities arising out of or in connection with its engagement, including certain liabilities under securities laws.

AvenEx retained GMP as strategic advisor to AvenEx with respect to the Arrangement and the Elbow River Transaction. AvenEx also retained Raymond James Ltd. as financial advisor to AvenEx with respect to the Elbow River Transaction.

Recommendations of the Charger Board

After considering, among other things, the Charger Fairness Opinion, the Charger Board (other than two directors who recused themselves from the process of considering the Arrangement due to a conflict of interest) concluded that the Arrangement is in the best interests of Charger and is fair to Charger Shareholders and authorized Charger to enter into the Arrangement Agreement and all related agreements. The Charger Board recommends that the Charger Shareholders vote in favour of the Charger Arrangement Resolution. See "The Arrangement - Recommendation of the Respective Boards' of Directors".

Recommendations of the AvenEx Board

After considering, among other things, the AvenEx Fairness Opinion, the AvenEx Board unanimously concluded that the Arrangement is in the best interests of AvenEx and is fair to AvenEx Shareholders and authorized AvenEx to enter into the Arrangement Agreement and all related agreements. The AvenEx Board recommends that the AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution. See "The Arrangement - Recommendation of the Respective Boards' of Directors".

Recommendations of the Pace Board

After considering, among other things, the Pace Fairness Opinion, the members of the Pace Board (other than two directors who recused themselves from the process of considering the Arrangement due to a conflict of interest) concluded that the Arrangement is in the best interests of Pace and is fair to Pace Shareholders and authorized Pace to enter into the Arrangement Agreement and all related agreements. The Pace Board recommends that the Pace Shareholders vote in favour of the Pace Arrangement Resolution. See "The Arrangement - Recommendation of the Respective Boards' of Directors".

Support Agreements

All of the directors and officers of each of Charger, AvenEx and Pace have each entered into Support Agreements pursuant to which they have agreed, among other things, to support the Arrangement and vote their Charger Shares, AvenEx Shares or their Pace Shares (as well as their Charger Options, Charger Warrants, AvenEx Options and AvenEx RSUs, if required), as the case may be, beneficially owned or controlled by them in favour of the Charger Arrangement Resolution, the AvenEx Arrangement Resolution and the Pace Arrangement Resolution, as applicable, and to otherwise support the Arrangement. As of December 20, 2012, these Supporting Shareholders own or exercise control or direction over an aggregate of 8,238,297 Charger Shares (representing 12% of the issued and

outstanding Charger Shares), 1,911,196 AvenEx Shares (representing 3.52% of the issued and outstanding AvenEx Shares) and 926,579 Pace Shares (representing 1.97% of the issued and outstanding Pace Shares). See "The Arrangement - Support Agreements".

Details of the Arrangement

The following is a summary only of the Plan of Arrangement and reference should be made to the full text of the Plan of Arrangement attached as Exhibit "A" to the Arrangement Agreement set forth in Appendix A to this Information Circular.

The Arrangement involves a number of steps, including each of the events set out below, which will occur or be deemed to occur in the following order commencing at the Effective Time, without any further act or formality, except as otherwise expressly provided therein:

(a) all of the issued and outstanding Pace Shares will be subdivided on the basis of 1.3 post- subdivision Pace Shares for every one (1) pre-subdivision Pace Share;

(b) the AvenEx Shares, the Charger Shares and Pace Shares held by Dissenting Shareholders who have exercised Dissent Rights which remain valid immediately prior to the Effective Time shall be deemed to have been transferred (free of any claims) to AvenEx, Charger or Pace, respectively, and such Dissenting Shareholders shall cease to have any rights as AvenEx Shareholders, Charger Shareholders or Pace Shareholders, as the case may be, other than the right to be paid the fair value of their AvenEx Shares, Charger Shares and/or Pace Shares in accordance with the Dissent Rights;

(c) the stated capital of each class of shares of AvenEx and Charger will be reduced to $1.00 without distribution or payment of any amount in respect of those shares;

(d) each Charger Share held by a Charger Shareholder shall be transferred to Pace (free of any claims) in exchange for Pace Shares on the basis of 0.18 fully paid and non-assessable subdivided Pace Shares for each Charger Share so transferred;

(e) each AvenEx Share held by an AvenEx Shareholder shall be transferred to Pace (free of any claims) in exchange for AvenEx Shares on the basis of one (1) fully paid and non-assessable subdivided Pace Share for each AvenEx Share so transferred;

(f) Pace, Charger and AvenEx shall be amalgamated and continued as one corporation under the ABCA to form Spyglass; and

(g) the stated capital of each class of shares of Spyglass shall be reduced to $1.00 without distribution or payment and the reduction shall be added to the contributed surplus account in respect of the shares of Spyglass.

On the amalgamation of Charger, AvenEx and Pace, the issued and outstanding Charger Shares and AvenEx Shares held by Pace will be cancelled and each issued and outstanding Pace Share (including for greater certainty those issued pursuant to subsections (d) and (e) above) shall survive and continue as one (1) Spyglass Share.

Completion of the Arrangement is subject to a number of conditions including, among other things, the approval of the Charger Arrangement Resolution, the AvenEx Arrangement Resolution, the Pace Arrangement Resolution, the closing of the Elbow River Transaction by AvenEx, the granting of the Final Order, the receipt of required regulatory and stock exchange approvals and satisfaction of certain other closing conditions that are customary for a transaction of this nature. See "Procedure for the Arrangement to Become Effective".

Procedure for Exchange of Charger Shares, AvenEx Shares and Pace Shares

Enclosed with this Information Circular are Letters of Transmittal which, when properly completed and returned to the Depositary (at one of the addresses specified on the last page of the Letters of Transmittal), together with the certificate or certificates representing Charger Shares, AvenEx Shares and/or Pace Shares, and all other required documents, will enable each Registered Holder of Charger Shares, AvenEx Shares and/or Pace Shares to obtain a certificate(s) representing the Spyglass Shares issued to such Registered Holder under the Arrangement. The Letters of Transmittal contain complete instructions on how to submit certificates representing Charger Shares, AvenEx Shares and/or Pace Shares.

Shareholders whose Charger Shares, AvenEx Shares and/or Pace Shares are registered in the name of a broker, dealer, bank, trust company or other nominee must contact their nominee to deposit their Charger Shares, AvenEx Shares and/or Pace Shares.

Subject to applicable legislation relating to unclaimed personal property, any certificate formerly representing Charger Shares, Pace Shares and/or AvenEx Shares that is not deposited with all other documents as required by the Plan of Arrangement before the last Business Day prior to the third anniversary of the Effective Date shall cease to represent a right or claim of any kind or nature including the right of the Registered Holder of such Charger Shares, Pace Shares and/or AvenEx Shares to receive Spyglass Shares (and any dividend or other distributions thereon). In such case, such Spyglass Shares (together with all dividends or other distributions thereon) shall be returned to Spyglass and such Spyglass Shares shall be cancelled.

For additional information, see "The Arrangement - Procedure for Exchange of Charger Shares, AvenEx Shares and/or Pace Shares".

Approval of Charger Shareholders Required for the Arrangement

Pursuant to the Interim Order, the votes required to pass the Charger Arrangement Resolution shall not be less than 66 2⁄3% of the vote s cast by Charger Shareholders, either in person or by proxy, at the Charger Meeting. See Appendix C to this Information Circular for the full text of the Charger Arrangement Resolution. See "Procedure for the Arrangement to Become Effective".

Approval of AvenEx Shareholders Required for the Arrangement

Pursuant to the Interim Order, the votes required to pass the AvenEx Arrangement Resolution shall not be less than:

(i) 66 2⁄3% of the votes cast by AvenEx Shareholders, either in person or by proxy, at the AvenEx Meeting; and (ii) a majority of the votes cast by AvenEx Shareholders, either in person or by proxy, at the AvenEx Meeting after excluding the votes required to be excluded by MI 61-101. See Appendix D to this Information Circular for the full text of the AvenEx Arrangement Resolution. See also "Procedure for the Arrangement to Become Effective" and "Securities Law Matters – Multilateral Instrument 61-101".

Approval of Pace Shareholders Required for the Arrangement

Pursuant to the Interim Order, the votes required to pass the Pace Arrangement Resolution shall not be less than 66 2⁄3% of the votes cast by Pace Shareholders, either in person or by proxy, at the Pace Meeting. See Appendix E to this Information Circular for the full text of the Pace Arrangement Resolution. See "Procedure for the Arrangement to Become Effective".

Other Conditions, Final Order and Effective Date

Implementation of the Arrangement requires the approval of the Charger Shareholders, AvenEx Shareholders and Pace Shareholders described above, the completion of the Elbow River Transaction by AvenEx, the approval of the Court, approval under the Competition Act, and the satisfaction of several other customary conditions, including the receipt of all required regulatory and stock exchange approvals. See "Procedure for the Arrangement to Become Effective".

An application for the Final Order approving the Arrangement is scheduled to be made on February 19, 2013 at 2:00

p.m. (Calgary time). At the hearing to consider the application, the Court will, among other things, consider the procedural and substantive fairness of the Arrangement to Charger, AvenEx and Pace and the Charger Shareholders, AvenEx Shareholders and Pace Shareholders. If the Charger Shareholders, AvenEx Shareholders and Pace Shareholders approve the Arrangement, the Final Order is granted and the other conditions to the completion of the Arrangement are satisfied or waived (as applicable and permissible), the Arrangement is expected to be completed on February 19, 2013. See "Procedure for the Arrangement to Become Effective".

Timing

Assuming the Meetings are held on February 19, 2013 and the Final Order is obtained on February 19, 2013 in form and substance satisfactory to Charger, AvenEx and Pace, and all other conditions set forth in the Arrangement Agreement are satisfied or waived, the Effective Date is anticipated to be February 19, 2013. It is not possible, however, to state with certainty when the Effective Date will occur. See "Procedure for the Arrangement to Become Effective".

The Arrangement Agreement

The Arrangement will be effected pursuant to the Arrangement Agreement. The Arrangement Agreement contains covenants, representations and warranties of and from each of Charger, AvenEx and Pace and various conditions precedent, both mutual and with respect to each of Charger, AvenEx and Pace.

The Arrangement Agreement provides that, upon the occurrence of certain termination events, certain of the Parties may be required to pay to certain of the other Parties a non-completion fee.

This Information Circular contains a summary of certain provisions of the Arrangement Agreement and is qualified in its entirety by the full text of the Arrangement Agreement, a copy of which is attached as Appendix A to this Information Circular. See "The Arrangement Agreement".

Right to Dissent in Respect of the Arrangement

Pursuant to the Interim Order, Registered Holders of Charger Shares, AvenEx Shares and Pace Shares also have Dissent Rights in respect of the Charger Arrangement Resolution, AvenEx Arrangement Resolution and Pace Arrangement Resolution, as applicable, and the right to be paid an amount equal to the fair value of their Charger Shares, AvenEx Shares and Pace Shares, as applicable.

Charger Dissent Procedures

The Charger Dissent Procedures require that a Registered Holder of Charger Shares who wishes to dissent must send a written notice of objection to the Charger Arrangement Resolution to Charger (i) c/o Norton Rose Canada LLP, Suite 3700, 400 - 3rd Avenue S.W., Calgary, Alberta, T2P 4H2 (Attention: Kirk Litvenenko) or (ii) by facsimile transmission to c/o Norton Rose Canada LLP, Facsimile: (403) 264-5973 (Attention: Kirk Litvenenko), in either case, to be received by no later than 5:00 p.m. (Calgary time) on February 11, 2013 or, in the case of any adjournment or postponement of the Charger Meeting, by no later than 5:00 p.m. (Calgary time) on the second Business Day immediately preceding the day of the adjourned or postponed Charger Meeting, and must otherwise strictly comply with the Charger Dissent Procedures. Failure to strictly comply with the Charger Dissent Procedures will result in loss of the Dissent Rights. Any Registered Holder of Charger Shares who dissents from the Charger Arrangement Resolution in compliance with the Charger Dissent Procedures, will be entitled, in the event the Arrangement becomes effective, to be paid by Spyglass the fair value of the Charger Shares held by such Dissenting Charger Shareholder, determined as of the close of business on the day before the Charger Arrangement Resolution is adopted. See "Dissent Rights".

AvenEx Dissent Procedures

The AvenEx Dissent Procedures require that a Registered Holder of AvenEx Shares who wishes to dissent must send a written notice of objection to the AvenEx Arrangement Resolution to AvenEx (i) c/o Burnet, Duckworth & Palmer LLP, Suite 2400, 525-8th Avenue S.W., Calgary, Alberta, T2P 1G1 (Attention: Jeff Sharpe) or (ii) by facsimile transmission to c/o Burnet, Duckworth & Palmer LLP, Facsimile: (403) 260-0332 (Attention: Jeff Sharpe), in either case, to be received by no later than 5:00 p.m. (Calgary time) on February 11, 2013 or, in the case of any adjournment or postponement of the AvenEx Meeting, by no later than 5:00 p.m. (Calgary time) on the second Business Day immediately preceding the day of the adjourned or postponed AvenEx Meeting, and must otherwise strictly comply with the AvenEx Dissent Procedures. Failure to strictly comply with the AvenEx Dissent Procedures will result in loss of the Dissent Rights. Any Registered Holder of AvenEx Shares who dissents from the AvenEx Arrangement Resolution in compliance with the AvenEx Dissent Procedures, will be entitled, in the event the Arrangement becomes effective, to be paid by Spyglass the fair value of the AvenEx Shares held by such Dissenting AvenEx Shareholder, determined as of the close of business on the day before the AvenEx Arrangement Resolution is adopted. See "Dissent Rights".

Pace Dissent Procedures

The Pace Dissent Procedures require that a Registered Holder of Pace Shares who wishes to dissent must send a written notice of objection to the Pace Arrangement Resolution to Pace (i) c/o Heenan Blaikie LLP, Suite 1900, 215

- 9th Avenue S.W., Calgary, Alberta, T2P 1K3 (Attention: Tom Cotter) or (ii) by facsimile transmission to c/o Heenan Blaikie LLP, Facsimile: (403) 234-7987 (Attention: Tom Cotter), in either case, to be received by no later than 5:00 p.m. (Calgary time) on February 11, 2013 or, in the case of any adjournment or postponement of the Pace Meeting, by no later than 5:00 p.m. (Calgary time) on the second Business Day immediately preceding the day of the adjourned or postponed Pace Meeting, and must otherwise strictly comply with the Pace Dissent Procedures. Failure to strictly comply with the Pace Dissent Procedures will result in loss of the Dissent Rights. Any Registered Holder of Pace Shares who dissents from the Pace Arrangement Resolution in compliance with the Pace Dissent Procedures, will be entitled, in the event the Arrangement becomes effective, to be paid by Spyglass the fair value of the Pace Shares held by such Dissenting Pace Shareholder, determined as of the close of business on the day before the Pace Arrangement Resolution is adopted. See "Dissent Rights".

Additional Information Relating to Dissent Rights

Only Registered Holders of Charger Shares, AvenEx Shares and Pace Shares may dissent. Persons who are beneficial owners of Charger Shares, AvenEx Shares or Pace Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent, should be aware that they may only do so through the registered owner of such Charger Shares, AvenEx Shares or Pace Shares. A Registered Holder of Charger Shares, AvenEx Shares or Pace Shares, such as a broker, who holds of Charger Shares, AvenEx Shares or Pace Shares as nominee for beneficial holders, some of whom wish to dissent, must exercise Dissent Rights on behalf of such beneficial owners with respect to the Charger Shares, AvenEx Shares or Pace Shares held for such beneficial owners. In such case, the written objection should set forth the number of Charger Shares, AvenEx Shares and Pace Shares covered by such objection.

The Arrangement Agreement provides that, unless otherwise waived by each of Charger, AvenEx and/or Pace, as applicable, it is a condition to the completion of the Arrangement that holders of such number of Charger Shares, AvenEx Shares or Pace Shares that, in the aggregate, would not constitute greater than 5% of the outstanding Charger Shares, AvenEx Shares and/or Pace Shares, as applicable, shall have validly exercised Dissent Rights in respect of the Arrangement that have not been withdrawn as of the Effective Date. See "The Arrangement Agreement - Conditions to the Arrangement" and "Dissent Rights".

Registered Holders of Charger Shares, AvenEx Shares or Pace Shares are cautioned that fair value could be determined to be less than the value of the consideration payable pursuant to the terms of the Arrangement and that the proceeds of disposition received by a Dissenting Shareholder may be treated in a different, and potentially more adverse, manner under Canadian and United States federal income tax laws than had such shareholder exchanged his or her Charger Shares, AvenEx Shares or Pace Shares for Spyglass Shares pursuant to the Arrangement. In addition,

any judicial determination of fair value will result in delay of receipt by a Dissenting Shareholder of consideration for such Dissenting Shareholder's Dissenting Shares.

Certain Canadian Federal Income Tax Considerations

Generally, Charger Shareholders, AvenEx Shareholders and Pace Shareholders will not realize a capital gain (or a capital loss) upon the exchange of Charger Shares, AvenEx Shares or Pace Shares for Pace Shares and/or Spyglass Shares, as applicable, under the Arrangement.

This Information Circular contains a summary of the principal Canadian federal income tax considerations applicable to certain Shareholders in respect of the steps comprising the Arrangement, and the above comments are qualified in their entirety by reference to such summary. For more information, see "Certain Canadian Federal Income Tax Considerations".

Certain Material United States Federal Income Tax Considerations

The exchange of Charger Shares for Pace Shares, the exchange of AvenEx Shares for Pace Shares, and the amalgamation of Charger, AvenEx and Pace have been structured with the intent that the Arrangement will qualify as a tax-deferred "reorganization" within the meaning of Section 368(a) of the Code with respect to U.S. holders of Charger Shares, AvenEx Shares and Pace Shares. Assuming the Arrangement is treated as a tax-deferred reorganization then: (a) the U.S. holders of Charger Shares, AvenEx Shares and Pace Shares should not recognize gain or loss for U.S. federal income tax purposes on the exchange of Charger Shares for Pace Shares, AvenEx Shares for Pace Shares or Pace Shares for Spyglass Shares pursuant to the Arrangement; (b) a U.S. holder's aggregate tax basis of the Spyglass Shares will be equal to such U.S. holder's aggregate tax basis in the Charger Shares, AvenEx Shares or Pace Shares, as applicable, surrendered in exchange therefor; and (c) a U.S. holder's holding period for the Spyglass Shares acquired in exchange for Charger Shares, AvenEx Shares or Pace Shares, as applicable, pursuant to the Arrangement will include such U.S. holder's holding period for Charger Shares, AvenEx Shares or Pace Shares, as applicable.

Notwithstanding the foregoing, the "passive foreign investment company" rules may affect the tax consequences to

U.S. holders of the transactions discussed herein.

Additionally, certain information reporting and backup withholding rules may apply to certain categories of U.S. holders.

This description of U.S. federal income tax consequences of the Arrangement to U.S. holders of Charger Shares and AvenEx Shares is qualified in its entirety by the longer form discussion under "Certain Material United States Federal Income Tax Considerations" below, and neither this description nor the longer form discussion is intended to be legal or tax advice to any particular U.S. holder. None of Charger, AvenEx or Pace has sought or obtained a ruling from the IRS regarding any of the tax consequences of the Arrangement. Accordingly, there can be no assurance that the IRS will not challenge such tax treatment of the Arrangement or that the U.S. courts will uphold such tax treatment in the event of an IRS challenge. Accordingly, U.S. holders should consult their own tax advisors with respect to their particular circumstances.

Certain Other Tax Considerations

This Information Circular does not address any tax considerations of the Arrangement other than certain Canadian and United States federal income tax considerations applicable to certain Charger Shareholders, AvenEx Shareholders and Pace Shareholders. Charger Shareholders, AvenEx Shareholders and Pace Shareholders who are resident in jurisdictions other than Canada or the United States should consult their tax advisors with respect to the tax implications of the Arrangement, including any associated filing requirements, in such jurisdictions and with respect to the tax implications in such jurisdictions of owning Spyglass Shares after the completion of the Arrangement. Charger Shareholders, AvenEx Shareholders and Pace Shareholders should also consult their own tax advisors regarding provincial, state or territorial tax considerations of the Arrangement and of holding Spyglass Shares.

Stock Exchange Listing and Approval

The Charger Shares are currently listed and posted for trading on the TSXV under the symbol "CHX", the AvenEx Shares are currently listed and posted for trading on the TSX under the symbol "AVF" and the Pace Shares are currently listed and posted for trading on the TSX under the symbol "PCE" and the OTC under the symbol "PACEF".

The transactions described in this Information Circular are subject to the final approval of the TSX. The TSX has conditionally accepted the listing of the Spyglass Shares issuable pursuant to the Arrangement, subject to Spyglass fulfilling all of the requirements of the TSX. Following completion of the Arrangement, it is expected that the Charger Shares, the AvenEx Shares and the Pace Shares will be de-listed from the TSXV and the TSX, as applicable, and the Spyglass Shares will be listed and posted for trading on the TSX under the symbol "SGL".

See "Procedure for the Arrangement to Become Effective".

Market Trading Price

On December 19, 2012, being the last day on which the Charger Shares traded prior to the announcement of the Arrangement and on January 17, 2013, being the last day on which the Charger Shares traded prior to the date of this Information Circular, the closing price for the Charger Shares on the TSXV was $0.34 and $0.45, respectively.

On December 19, 2012, being the last day on which the AvenEx Shares traded prior to the announcement of the Arrangement and on January 17, 2013, being the last day on which the AvenEx Shares traded prior to the date of this Information Circular, the closing price for the AvenEx Shares on the TSX was $3.32 and $2.61, respectively.

On December 19, 2012, being the last day on which the Pace Shares traded prior to the announcement of the Arrangement and on January 17, 2013, being the last day on which the Pace Shares traded prior to the date of this Information Circular, the closing price for the Pace Shares on the TSX was $3.40 and $3.32, respectively.

Interests of Experts

Other than as specifically disclosed herein, no person or company whose profession or business gives authority to a statement made by the person or company and who is named as having prepared or certified any part of the Information Circular or any report or valuation described herein holds any direct or indirect interests in the property or securities of Charger, AvenEx or Pace or any of their respective associates or affiliates. See "Interests of Experts".

Risk Factors Relating to the Arrangement

Charger Shareholders voting in favour of the Charger Arrangement Resolution, AvenEx Shareholders voting in favour of the AvenEx Arrangement Resolution and Pace Shareholders voting in favour of the Pace Arrangement Resolution, will be choosing to combine the businesses of Charger, AvenEx and Pace and to invest in Spyglass Shares. The Arrangement and investment in Spyglass Shares involves risks.

An investment in Spyglass Shares is subject to certain risks, which are generally associated with an investment in shares of an oil and gas exploration and development company. The following is a list of certain additional risk factors associated with the Arrangement and the investment in Spyglass Shares which Charger Shareholders, AvenEx Shareholders and Pace Shareholders should carefully consider before approving the Charger Arrangement Resolution, the AvenEx Arrangement Resolution and the Pace Arrangement Resolution, as applicable:

• the Parties may not realize the anticipated benefits of the Arrangement;

• actual production and ultimate reserves could be less than the production forecasts and reserve estimates contained herein;

• risks related to the integration of the existing businesses of the Parties;

• future reserves and production depend on success in exploring the current reserves and acquiring or discovering additional reserves;

• failure to realize anticipated benefits of future acquisitions and dispositions;

• general economic conditions in Canada, the United States and globally;

• industry conditions, including commodity price volatilities and other factors that may affect the marketability of oil and natural gas;

• liabilities inherent in oil and natural gas operations;

• governmental regulation of the oil and gas industry, including environmental regulation;

• variation in foreign exchange rates and interest rates;

• geological, technical, drilling and processing problems and other difficulties in producing reserves;

• imprecision in reserve estimates;

• unanticipated operating events which can reduce production or cause production to be shut in or delayed;

• failure to obtain industry partner and other third party consents and approvals, when required;

• the payment of dividends by Spyglass following completion of the Arrangement will be subject to prevailing and anticipated commodity prices and other factors which may be beyond management's control;

• stock market volatility and market valuations;

• competition for, among other things, capital, acquisitions or reserves, undeveloped land and skilled personnel;

• competition for and inability to retain drilling equipment and other services; and

• the inability to obtain required consents, permits or approvals to the Arrangement, including shareholder, Court or regulatory approvals.

The risk factors listed above are an abbreviated list of risk factors summarized elsewhere in this Information Circular. See "Risk Factors" and "Appendix L – Additional Information Concerning Spyglass - Risk Factors".

THE ARRANGEMENT

Summary of the Arrangement

The following is a summary only and reference should be made to the full text of the Plan of Arrangement attached as Exhibit "A" to the Arrangement Agreement set forth in Appendix A to this Information Circular.

• the articles of Pace shall be amended to subdivide the issued and outstanding Pace Shares on the basis of 1.3 post-subdivided Pace Shares for each 1.0 pre-subdivided Pace Share;

• AvenEx Shareholders (other than Dissenting AvenEx Shareholders) will receive 1.00 of a post- subdivided Pace Share for every AvenEx Share held, for aggregate deemed consideration of

$148.8 million; and

Based on the number of Pace Shares currently issued and outstanding as of the date hereof, and assuming the exercise of all outstanding Pace Options (in exchange for the cash exercise price in respect thereof), approximately 15 million Pace Shares will be issued to Pace Shareholders upon the subdivision of the Pace Shares pursuant to the Arrangement. Assuming the vesting and exercise of all of the currently outstanding AvenEx Options, AvenEx RSUs, Charger Options and Charger Warrants (in exchange for the cash exercise price in respect thereof, if applicable), and based on the number of Charger Shares and AvenEx Shares currently issued and outstanding, approximately 72 million Pace Shares are potentially issuable pursuant to the exchange of Charger Shares and AvenEx Shares for Pace Shares pursuant to the Arrangement (assuming there are no Dissenting Shareholders). The maximum number of Pace Shares potentially issuable represents approximately 153% of the 46,916,300 Pace Shares currently issued and outstanding on a non-diluted basis and prior to giving effect to the subdivision of the Pace Shares (110% on a fully-diluted, post-subdivision basis) and as such, in accordance with the requirements of the TSX, the Pace Shareholders will be asked to approve the issuance of up to 72 million Pace Shares to AvenEx Shareholders and Charger Shareholders as part of the Arrangement. Upon the amalgamation of Charger, Pace and AvenEx pursuant to the Arrangement and the exchange of Pace Shares for Spyglass Shares, a maximum of approximately 134 million Spyglass Shares are potentially issuable (which amount includes additional Spyglass Shares issuable in respect of fractional Charger Shares, Pace Shares and AvenEx Shares, as the case may be).

Taking into consideration Charger Options, Charger Warrants, AvenEx Options and Pace Options which are "out- of-the-money", it is expected that approximately 128.9 million Spyglass Shares will be issued pursuant to the Arrangement for aggregate deemed consideration of approximately $344 million, based on the closing price of the AvenEx Shares on January 16, 2013. Immediately following completion of the Arrangement, Charger Shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx Shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace Shareholders are anticipated to own the remaining 48% of the issued and outstanding Spyglass Shares.

Dividend Policy of Spyglass

of the Arrangement, with the Spyglass Board giving consideration to a number of factors including current and future commodity prices, foreign exchange rates, an active commodity price hedging program, status of current operations and future investment opportunities. Spyglass' dividend policy will be reviewed monthly and will be subject to the satisfaction of all requirements under Applicable Laws. See "Cautionary Notice Regarding Forward- Looking Information".

Background to and Reasons for the Arrangement Background to and Reasons for the Arrangement - Charger Background to the Arrangement

The Charger Board and management regularly review the company’s business, strategic objectives and growth prospects and evaluate corporate and asset acquisitions. After evaluating its business and prospects during the second quarter of 2012, management and the Charger Board came to the view that a larger entity with greater cash flow and the ability to take advantage of economies of scale would be a preferable platform to maximize both the potential of its current producing assets and execute on its capital development opportunities.

In early August 2012, the Chairman and Chief Executive Officer of Charger, Mr. Buchanan, and the President and Chief Executive Officer of Pace, Mr. Woods, discussed the potential benefits a business combination of Charger and Pace could achieve for the Charger Shareholders and Pace Shareholders. At a Pace Board meeting held on August 13, 2012, the potential benefits of a transaction with Charger were discussed.

On August 29, 2012, in light of the fact that Messrs. Buchanan and Shaikh were also members of the Pace Board, the Charger Board appointed an independent committee comprised of Messrs. Findlay, Wright, O'Byrne and Gilbert to consider issues related to a potential business combination with Pace. The independent committee retained Blake, Cassels & Graydon LLP to act as its legal counsel and TD Securities provided preliminary financial advice. Thereafter, Mr. Buchanan attended Charger Board meetings that considered the business combination of Charger, AvenEx and Pace in his capacity as Charger's Chief Executive Officer, and abstained from voting as a director on any such matters. Mr. Shaikh attended Charger Board meetings where the proposed transaction was considered, but abstained from voting with respect to any such matters.

Charger and Pace entered into a confidentiality agreement on August 13, 2012 and Charger conducted initial due diligence investigations with respect to Pace and its assets throughout the remainder of August 2012. Charger made proposals to Pace to combine the businesses of Pace and Charger in late August and early September, 2012. In mid- September, Pace informed Charger that it had decided to expand its evaluation of its strategic alternatives and would not be prepared to pursue a business combination with Charger at that time.

In early November 2012, Mr. Buchanan contacted the President and Chief Executive Officer of AvenEx to discuss the possibility of making a joint bid to effect a business combination with Pace which would also include a concurrent sale of the Elbow River Marketing Business. As a result, Charger entered into reciprocal confidentiality agreements with AvenEx dated October 18, 2012 and November 1, 2012 and then entered into a confidentiality agreement with Pace on November 20, 2012.

Following a written proposal made by Charger and AvenEx on November 26, 2012, Pace informed Charger that it had evaluated the transaction proposals received and wished to pursue further discussions with Charger and AvenEx in respect of a possible transaction.

AvenEx and Charger submitted an amended business combination proposal to Pace on November 27, 2012. On November 28, 2012, a non-binding proposal was executed by the Parties that included an exclusive dealing period (the "Exclusivity Period") until December 14, 2012. The parties later extended the Exclusivity Period to December 17, 2012 and then to December 19, 2012.

During the Exclusivity Period, Pace, Charger and AvenEx, with the assistance of their respective legal and financial advisors, finalized their due diligence in respect of one another and negotiated the definitive terms of the Arrangement Agreement.

On December 17, 2012, the Charger Board met with management of Charger and its legal and financial advisors to review the terms of the proposed Arrangement and related matters. At that meeting, Charger's General Counsel reviewed the detailed terms and conditions of the Arrangement Agreement and Support Agreements. TD Securities provided the Charger Board with financial analysis and advice on the proposed Arrangement and related matters and delivered its verbal opinion that, as at December 17, 2012, based upon and subject to the various assumptions, qualifications and limitations set forth in its opinion, the consideration to be received by Charger Shareholders pursuant to the Arrangement is fair, from a financial point of view, to Charger Shareholders. The Charger Board met in the absence of management with TD Securities to discuss financial aspects of the proposed Arrangement.

After duly considering the financial aspects and various other considerations relating to the proposed transaction, including, without limitation, the terms and conditions of the proposed Arrangement Agreement and Charger Board's fiduciary duties and based, in part, on the advice and analysis provided by TD Securities including the Charger Fairness Opinion, the Charger Board (other than the two directors who recused themselves from the process of considering the Arrangement): (i) determined that the Arrangement was in the best interests of Charger and the Charger Shareholders; (ii) determined that the Arrangement was fair to Charger Shareholders; (iii) approved the Arrangement and the entering into of the Arrangement Agreement; and (iv) resolved to recommend that Charger Shareholders vote in favour of the Arrangement by voting in favour of the Charger Arrangement Resolution.

On December 20, 2012, the Arrangement Agreement and the Support Agreements were finalized and executed and a joint news release announcing the Arrangement and related matters was disseminated prior to the opening of markets.

On January 10, 2013, TD Securities delivered a draft of the written Charger Fairness Opinion and on January 11, 2013 the Charger Board approved the Information Circular and the mailing thereof to the Charger Shareholders and confirmed its prior determinations and recommendations. TD Securities delivered the final written Charger Fairness Opinion on January 17, 2013.

Reasons for and Benefits of the Arrangement

Following receipt of the advice and assistance of its financial advisor and legal counsel, the Charger Board: (i) determined that the Arrangement is fair to Charger Shareholders and the Arrangement and the entering into of the Arrangement Agreement are in the best interests of Charger; (ii) approved the entering into of the Arrangement Agreement; and (iii) determined to recommend that Charger Shareholders vote in favour of the Arrangement. In reaching these determinations and approvals, the Charger Board considered, among other things (including those matters described under "The Arrangement - Reasons For and Benefits of the Arrangement"), the following factors and potential benefits and risks of the Arrangement:

(e) Spyglass will be managed by an experienced team of public company professionals who have demonstrated their ability to deliver on exploration, exploitation, acquisition and financial objectives;

(f) the Arrangement is believed to be the most favourable strategic alternative available to Charger;

(g) the Arrangement Agreement was the result of a comprehensive negotiation process with respect to the key elements of the Plan of Arrangement and was undertaken with the oversight and participation of the Charger Board, TD Securities, Macquarie and Charger's legal counsel, and those negotiations resulted in terms and conditions that are reasonable in the judgment of the Charger Board;

(h) under the Arrangement Agreement, the Charger Board retains the ability to consider and respond to Superior Proposals on the specific terms and conditions set forth in the Arrangement Agreement and subject to, if applicable, the payment of termination fees of $0.70 million to AvenEx and

$1.40 million to Pace;

(i) the likelihood that the conditions to complete the Arrangement will be satisfied, including the nature of the approvals and consents required by the respective parties to be obtained as a condition to completing the Plan of Arrangement; and

(j) the requirement that the Arrangement must be approved by the Court, which will consider, among other things, the fairness and reasonableness of the Arrangement to the Charger Shareholders.

In reaching its conclusions and formulating its recommendations, the Charger Board considered a number of factors, including the Charger Fairness Opinion, the expected benefits of the Arrangement and the risks associated with completing the Arrangement. The information and factors described above and considered by the Charger Board in reaching its determinations and making its approvals are not intended to be exhaustive but include material factors considered by the Charger Board. In view of the wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the Charger Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, individual members of the Charger Board may have given different weight to different factors.

The anticipated benefits of the Arrangement constitute forward-looking information which is subject to certain risks and uncertainties. See "Risk Factors", "Cautionary Note Regarding Forward-Looking Information" and "Appendix L – Additional Information Concerning Spyglass - Risk Factors".

Background to and Reasons for the Arrangement - AvenEx

Background to the Arrangement

The AvenEx Board and management regularly review the company’s results, internal and external opportunities for growth, strategic objectives and opportunities for enhancing value for AvenEx Shareholders.

During the course of 2012, AvenEx management and the AvenEx Board considered and discussed a number of potential strategic initiatives with the goal of providing long-term benefit to AvenEx Shareholders and in the fall of 2012 AvenEx initiated a public process to identify potential alternatives to maximize the value of its oil and natural gas properties. Also in 2012, AvenEx received an indication of interest from Parkland Fuel Corporation with respect to the potential purchase of the Elbow River Marketing Business and AvenEx entered into preliminary discussions with Parkland Fuel Corporation.

On October 18, 2012, Charger entered into a confidentiality agreement with AvenEx on in order to review AvenEx's confidential information in connection with the oil and gas asset value maximization process being undertaken by AvenEx. Subsequently, in early November 2012, the Chairman and Chief Executive Officer of Charger, Mr. Buchanan, contacted the President and Chief Executive Officer of AvenEx, Mr. Gallacher, to discuss the possibility of Charger and AvenEx making a joint proposal to effect a business combination with Pace, which would also include a concurrent sale by AvenEx of the Elbow River Marketing Business. As a result, AvenEx entered into a confidentiality agreement with Charger dated November 1, 2012, in order to undertake an evaluation of the business and assets of Charger and subsequently entered into confidentiality agreements with Pace dated November 1, 2012, and November 28, 2012, respectively, in order that each company could undertake an evaluation of the business and assets of the other.

Following a written proposal made by Charger and AvenEx, on November 26, 2012, Pace informed AvenEx and Charger that it had evaluated the transaction proposals received and wished to pursue further discussions with Charger and AvenEx. Further discussions between AvenEx, Charger and Pace in respect of a possible transaction resulted in AvenEx and Charger presenting a revised proposal to Pace on November 26, 2012 and a further revised proposal on November 27, 2012. The non-binding proposal was executed by the Parties on November 28, 2012, providing for an exclusive dealing period (the "Exclusivity Period") until December 14, 2012. The parties later extended the Exclusivity Period to December 17, 2012 and then to December 19, 2012.

During the Exclusivity Period, AvenEx, Charger and Pace, with the assistance of their respective legal and financial advisors, finalized their due diligence in respect of one another and negotiated the definitive terms of the Arrangement Agreement.

On December 18, 2012, the AvenEx Board met with management of AvenEx and its legal and financial advisors to review the terms of the proposed Arrangement and related matters. At such meeting, AvenEx's legal counsel reviewed the detailed terms and conditions of the Arrangement Agreement and Support Agreements. Peters & Co. provided the AvenEx Board with financial analysis and advice on the proposed Arrangement and related matters and delivered its verbal opinion that, as of such date and subject to review of final documentation, Peters & Co. was of the opinion that the consideration under the proposed Arrangement is fair, from a financial point of view, to AvenEx Shareholders. At such meeting, AvenEx's legal counsel also reviewed the detailed terms and conditions of the Elbow River Purchase and Sale Agreement and AvenEx's financial advisor with respect to the Elbow River Transaction, Raymond James Ltd., provided the AvenEx Board with financial analysis and advice on the proposed Elbow River Transaction and related matters including its opinion that, subject to the various assumptions, qualifications and limitations set forth in its opinion, the Elbow River Transaction is fair, from a financial point of view, to the shareholders of AvenEx. The AvenEx Board met in the absence of management with legal counsel to discuss certain matters respecting the proposed Arrangement.

On December 19, 2012, after duly considering the financial aspects and various other considerations relating to the proposed transaction, including, without limitation, the terms and conditions of the proposed Arrangement Agreement and the AvenEx Board's fiduciary duties and responsibilities and based, in part, on the advice and analysis provided by Peters & Co. including the AvenEx Fairness Opinion, the AvenEx Board unanimously determined that the Arrangement is in the best interests of AvenEx and the AvenEx Shareholders, that the

Arrangement is fair to AvenEx Shareholders and approved the Arrangement and the entering into of the Arrangement Agreement and resolved to recommend that AvenEx Shareholders vote in favour of the Arrangement by voting in favour of the AvenEx Arrangement Resolution. On December 19, 2012, the AvenEx Board also approved the entering into of the Elbow River Purchase and Sale Agreement.

Early in the morning of December 20, 2012, the Arrangement Agreement and the Support Agreements were finalized and executed, as was the Elbow River Purchase and Sale Agreement, and a joint news release announcing the Arrangement and related matters including the Elbow River Transaction was disseminated prior to the opening of markets.

Peters & Co. delivered the written AvenEx Fairness Opinion on January 16, 2013, and on January 17, 2013 the AvenEx Board approved the Information Circular and the mailing thereof to the AvenEx Shareholders and confirmed its determinations and recommendations as made on December 19, 2012.

Reasons for and Benefits of the Arrangement

Following receipt of the advice and assistance of its financial advisor and legal counsel, the AvenEx Board: (i) determined that the Arrangement is fair to AvenEx Shareholders and the Arrangement and the entering into of the Arrangement Agreement are in the best interests of AvenEx; (ii) approved the entering into of the Arrangement Agreement; and (iii) determined to recommend that AvenEx Shareholders vote in favour of the Arrangement. In reaching these determinations and approvals, the AvenEx Board considered, among other things (including those matters described under "The Arrangement - Reasons For and Benefits of the Arrangement"), the following factors and potential benefits and risks of the Arrangement:

(e) Spyglass will be managed by an experienced team of public company professionals who have demonstrated their ability to deliver on exploration, exploitation, acquisition and financial objectives;

(f) the Arrangement is believed to be the most favourable strategic alternative available to AvenEx;

(g) the Arrangement Agreement was the result of a comprehensive negotiation process with respect to the key elements of the Plan of Arrangement and was undertaken with the oversight and participation of the AvenEx Board, Peters & Co., GMP and AvenEx' legal counsel, and those negotiations resulted in terms and conditions that are reasonable in the judgment of the AvenEx Board;

(h) under the Arrangement Agreement, the AvenEx Board retains the ability to consider and respond to Superior Proposals on the specific terms and conditions set forth in the Arrangement Agreement and subject to, if applicable, the payment of termination fees of $0.85 million to Charger and

$3.65 million to Pace;

(j) the requirement that the Arrangement must be approved by the Court, which will consider, among other things, the fairness and reasonableness of the Arrangement to the AvenEx Shareholders.

In reaching its conclusions and formulating its recommendations, the AvenEx Board considered a number of factors, including the AvenEx Fairness Opinion, the expected benefits of the Arrangement and the risks associated with completing the Arrangement. In addition, the AvenEx Board considered the effect of the Elbow River Transaction on AvenEx and the Arrangement. The information and factors described above and considered by the AvenEx Board in reaching its determinations and making its approvals are not intended to be exhaustive but include material factors considered by the AvenEx Board. In view of the wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the AvenEx Board did not find it useful to, and did not attempt to, quantify, rank or otherwise assign relative weights to these factors. In addition, individual members of the AvenEx Board may have given different weight to different factors.

The anticipated benefits of the Arrangement constitute forward-looking information which is subject to certain risks and uncertainties. See "Risk Factors", "Cautionary Note Regarding Forward-Looking Information" and "Appendix L - Additional Information Concerning Spyglass - Risk Factors".

Background to and Reasons for the Arrangement - Pace

Background to the Arrangement

Pace management and the Pace Board regularly review the company's strategic objectives and opportunities in order to ensure that Pace Shareholder value is being maximized.

In early August, 2012, Pace management began to consider and discuss a number of potential strategic initiatives with the goal of providing long term benefit to Pace Shareholders. At a regularly scheduled meeting of the Pace Board held on August 13, 2012, management provided the Pace Board with a detailed review of Pace's current and planned operations for the balance of the year, and discussion took place regarding near and long term strategic initiatives. As was customary for the quarterly Pace Board meetings, a lengthy discussion ensued in respect of near and long term strategic initiatives and possible transactions that Pace may consider moving forward. In conjunction therewith, management provided a detailed overview of Pace's material trading metrics as compared to a number of industry peers. During the same meeting, Mr. Thomas Buchanan indicated to the other members of the Pace Board after discussions with Mr. Woods, that both he and Mr. Woods were of the view that it would be beneficial for Pace and Charger to consider a business combination and they outlined the potential benefits to Pace of such a transaction. Messrs. Thomas Buchanan and Mike Shaikh then recused themselves from the meeting due to their positions as directors and, in the case of Mr. Buchanan, as an officer of Charger. In the absence of Messrs. Buchanan and Shaikh, the remaining members of the Pace Board discussed a number of possible strategic alternative transactions including, without limitation, the possibility of pursuing a business combination transaction with Charger.

Messrs. Thomas Buchanan and Mike Shaikh recused themselves from the portion of the August 13, 2012 Pace Board meeting during which the Pace Board discussed a potential transaction with Charger, and also recused themselves from all future meetings of the Pace Board where the proposed transaction with Charger was discussed, or was proposed to be discussed.

At this time, the Pace Board determined that it was appropriate to appoint an independent committee of the Pace Board, and a mandate for the independent committee was approved at a special meeting of the Pace Board held on August 21, 2012. The mandate of the independent committee was, among other things, to assess and oversee an evaluation of strategic options available to Pace. Following the August 21, 2012 meeting of the Pace Board, management of Pace informally engaged National Bank to review and provide analysis and financial advisory services to the independent committee of the Pace Board with respect to its evaluation of strategic options available to Pace.

At its regularly scheduled annual strategic planning meeting held on September 19, 2012, the Pace Board engaged in a comprehensive discussion regarding objectives and opportunities for Pace, including among other things, a potential transaction with Charger.

Between August 21, 2012 and October 23, 2012, the independent committee of the Pace Board and the Pace Board met several times to discuss the merits of potential transactions and alternatives, including maintaining the status quo. During this period, the independent committee and Pace management received and considered several informal proposals. At a meeting of the Pace Board on October 23, 2012, the Pace Board considered an update from the independent committee regarding the status of its ongoing strategic evaluation process. The Pace Board reviewed the informal proposals presented to the independent committee and it was decided that in order to ensure the best value for Pace Shareholders, a more formal process should be undertaken. In furtherance of this objective, the Pace Board determined that it was in the best interests of Pace Shareholders and Pace to formally engage National Bank as financial advisors to Pace, and to conduct a non-public process to assess potential transaction parties and structures. The independent committee of the Pace Board was disbanded so the full Pace Board would be involved in the process, but the Pace Board stressed that directors would abstain from any meetings and votes where there would be a perceived conflict of interest.

On October 29, 2012, Pace formally engaged National Bank as its financial advisor with a mandate to, among other things, conduct a non-public, confidential, limited party sale process for Pace. National Bank was also engaged to review and provide analysis and financial advisory services related to any proposals received, if requested by the Pace Board, to negotiate the terms and conditions of any possible transaction and to advise on the adequacy or fairness, from a financial point of view, of the consideration to Pace Shareholders pursuant to any proposal and, in the event a transaction was agreed upon, to prepare and deliver a written fairness opinion.

Between October 29, 2012 and November 23, 2012, National Bank conducted a confidential process and contacted potential transactional partners on behalf of Pace. Confidentiality agreements were entered into with a number of interested parties, pursuant to which Pace provided certain confidential information to such parties. On November 22, 2012, Pace evaluated three non-binding proposals including a proposal from AvenEx and Charger. On November 23, 2012, the Pace Board met with representatives of National Bank to evaluate the merits of the three proposals. The proposal from AvenEx and Charger outlined, on a non-binding basis, the material terms and the manner in which AvenEx and Charger would consider implementing a transaction with Pace. The Pace Board received a presentation from National Bank which included, without limitation, an overview of their financial analysis conducted to date, the potential transaction parties contacted, feedback received, and a detailed description of the terms and conditions upon which the three proposals were based as of such date. Based in part upon the presentation from National Bank, the Pace Board determined to pursue further discussions with Charger and AvenEx in respect of a possible transaction.

Messrs. Thomas Buchanan and Mike Shaikh abstained from attending and voting at the meeting of the Pace Board on November 23, 2012, and all future meetings of the Pace Board relating to the proposed transaction with Charger and AvenEx due to their positions as directors and, in the case of Mr. Buchanan, as an officer of Charger.

Pace received a further proposal from AvenEx and Charger on November 26, 2012 and the Pace Board convened to discuss and consider the latest proposal. National Bank presented an overview of the terms and conditions of the latest proposal and their financial analysis in respect thereof. The Pace Board considered the financial aspects and other considerations relating to the latest proposal including the financial advice provided by National Bank. The Pace Board authorized management and National Bank to pursue further negotiations with Charger and AvenEx to determine if an acceptable transaction could be negotiated.

Following further negotiations, Pace received a revised and enhanced proposal from Charger and AvenEx on November 27, 2012. A meeting of the directors of the Pace Board was convened on November 28, 2012 at which meeting National Bank presented an updated overview of the terms and conditions of the latest proposal and their financial analysis in respect thereof. After once again considering the financial aspects and other considerations relating to the latest proposal, including the financial advice provided by National Bank, the Pace Board authorized management to enter into the letter of intent as provided to the Pace Board, following which the non-binding proposal was executed by the Parties on November 28, 2012, providing for an exclusive dealing period (the "Exclusivity Period") until December 14, 2012. The Exclusivity Period was later extended to December 17, 2012 and then to December 19, 2012 by agreement among the Parties.

On December 19, 2012, the Pace Board met with management of Pace and its legal and financial advisors to review the terms of the proposed Arrangement and related matters. At such meeting, Pace's legal counsel reviewed the detailed terms and conditions of the Arrangement Agreement and Support Agreements. National Bank provided the Pace Board with financial analysis and advice on the proposed Arrangement and related matters and delivered its verbal opinion that, as of such date and subject to review of final documentation, National Bank was of the opinion that the consideration under the proposed Arrangement is fair, from a financial point of view, to Pace Shareholders. The Pace Board then met with National Bank in the absence of management to discuss certain matters respecting the proposed Arrangement. After duly considering the financial aspects and various other considerations relating to the proposed transaction, including, without limitation, the terms and conditions of the proposed Arrangement Agreement and the Pace Board's fiduciary duties and responsibilities to Pace Shareholders and based, in part, on the advice and analysis provided by National Bank including the verbal fairness opinion of National Bank, the members of the Pace Board entitled to vote on the Arrangement unanimously: (i) determined that the Arrangement is in the best interests of Pace and the Pace Shareholders; (ii) determined that the Arrangement is fair to Pace Shareholders;

(iii) approved the Arrangement and the entering into of the Arrangement Agreement; and (iv) resolved to recommend that Pace Shareholders vote in favour of the Pace Arrangement Resolution.

Later that day, the Arrangement Agreement and the Support Agreements were finalized and executed and a joint news release announcing the Arrangement and related matters was disseminated prior to the opening of markets on December 20, 2012.

National Bank delivered the written Pace Fairness Opinion and on January 11, 2013 the Pace Board approved the Information Circular and the mailing thereof to the Pace Shareholders and confirmed its determinations and recommendations as made at the December 19, 2012 Pace Board meeting.

Reasons for and Benefits of the Arrangement

Following receipt of the advice and assistance of its financial advisor and legal counsel, the Pace Board: (i) determined that the Arrangement is fair to Pace Shareholders and the Arrangement and the entering into of the Arrangement Agreement are in the best interests of Pace; (ii) approved the entering into of the Arrangement Agreement; and (iii) determined to recommend that Pace Shareholders vote in favour of the Arrangement. In reaching these determinations and approvals, the Pace Board considered, among other things (including those matters described under "The Arrangement - Reasons For and Benefits of the Arrangement"), the following factors and potential benefits and risks of the Arrangement:

(e) Spyglass will be managed by an experienced team of public company professionals who have demonstrated their ability to deliver on exploration, exploitation, acquisition and financial objectives; and

(f) the Arrangement is believed to be the most favourable strategic alternative available to Pace;

(g) the Arrangement Agreement was the result of a comprehensive negotiation process with respect to the key elements of the Plan of Arrangement and was undertaken with the oversight and participation of the Pace Board, National Bank and Pace's legal counsel, and those negotiations resulted in terms and conditions that are reasonable in the judgment of the Pace Board;

(h) under the Arrangement Agreement, the Pace Board retains the ability to consider and respond to Superior Proposals on the specific terms and conditions set forth in the Arrangement Agreement and subject to, if applicable, the payment of termination fees of $2.86 million to Charger and

$6.14 million to AvenEx;

(j) the requirement that the Arrangement must be approved by the Court, which will consider, among other things, the fairness and reasonableness of the Arrangement to the Pace Shareholders.

In reaching its conclusions and formulating its recommendations, the Pace Board considered a number of factors, including the Pace Fairness Opinion, the expected benefits of the Arrangement and the risks associated with completing the Arrangement. The information and factors described above and considered by the Pace Board in reaching its determinations and making its approvals are not intended to be exhaustive but include material factors considered by the Pace Board. In view of the wide variety of factors considered in connection with its evaluation of the Arrangement and the complexity of these matters, the Pace Board did not find it useful to, and did not attempt to,

quantify, rank or otherwise assign relative weights to these factors. In addition, individual members of the Pace Board may have given different weight to different factors.

The anticipated benefits of the Arrangement constitute forward-looking information which is subject to certain risks and uncertainties. See "Risk Factors", "Cautionary Note Regarding Forward-Looking Information" and "Appendix L - Additional Information Concerning Spyglass - Risk Factors ".

Effect of the Arrangement

General

Pursuant to the Arrangement, Charger, AvenEx and Pace will amalgamate to form Spyglass. Immediately following completion of the Arrangement, Charger Shareholders are anticipated to own approximately 9% of the issued and outstanding Spyglass Shares, AvenEx Shareholders are anticipated to own approximately 43% of the issued and outstanding Spyglass Shares and Pace Shareholders are anticipated to own approximately 48% of the issued and outstanding Spyglass Shares. The Arrangement is currently anticipated to be completed on or about February 19, 2013.

Following the Arrangement, Thomas Buchanan, Chief Executive Officer and a current director of Charger, will serve as Chief Executive Officer of Spyglass, Dan O'Byrne, the current President and Chief Operating Officer of Charger, will serve as President of Spyglass, Mark Walker the current Vice President, Finance and Chief Financial Officer of Charger, will serve as Vice President, Finance and Chief Financial Officer of Spyglass, Kelly Cowan, the current Vice President, Corporate Development and Land of Charger, will serve as Vice President, Corporate Development and Land of Spyglass, John Milford, the current Vice President, Exploration and Development, will serve as Vice President, Exploration and Development of Spyglass and Dan Fournier, the current General Counsel and Corporate Secretary of Charger, will serve as General Counsel and Corporate Secretary of Spyglass. The Spyglass Board will consist of eight members with representatives from each Party namely Randy Findlay, Dennis Balderston, Thomas Buchanan, Gary Dundas, Mike Shaikh, Jeff Smith, Fred Woods and John Wright. See "Appendix L - Additional Information Concerning Spyglass - Directors and Officers of Spyglass".

PricewaterhouseCoopers LLP are anticipated to be the auditors of Spyglass following the completion of the Arrangement.

Effect of the Arrangement on Charger Shareholders, holders of Charger Options, Charger Warrants and Charger DSUs

Pursuant to the Arrangement, Charger Shareholders will receive, for each Charger Share held, 0.18 of a post- subdivided Pace Share and after giving effect to the Amalgamation pursuant to the Arrangement, all Charger Shareholders (other than Dissenting Charger Shareholders) will have exchanged their Pace Shares for Spyglass Shares. As a result of such exchanges pursuant to the Arrangement, the nature of a Charger Shareholder's investment will change. In deciding whether to vote to approve the Arrangement, Charger Shareholders should carefully review and consider the information concerning Spyglass contained in this Information Circular, including the information contained in "Appendix L – Information Concerning Spyglass", and "Appendix M – Pro Forma Consolidated Financial Statements of Spyglass". See "Risk Factors".

Holders of Charger Options, holders of Charger Warrants and holders of Charger DSUs have entered into or will enter into prior to the Effective Time the Charger Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Charger Options and Charger Warrants and redeem all Charger DSUs immediately prior to the Effective Time. The exercise of "in-the-money" Charger Options will be completed upon payment of the exercise price by the holder in accordance with the terms thereof, and "out-of-the-money" Charger Options and Charger Warrants will be surrendered and cancelled in consideration of payment from Charger of $0.001 per "out-of-the-money" Charger Option and Charger Warrant. Charger anticipates paying an aggregate of

$64,400 in cash, as of the Effective Time, in satisfaction of all of the outstanding Charger DSUs (based on a market price per Charger Share of $0.46 as at January 16, 2013). See "Interests of Certain Persons or Companies in the Matters to be Acted Upon".

It is a condition to the closing of the Arrangement that at least 90% of the outstanding Charger Options and Charger Warrants be exercised or terminated prior to the Effective Time and that the aggregate cash payment in respect of the surrender and cancellation of the "out-of-the-money" Charger Options and Charger Warrants, shall not exceed

$15,000, less applicable withholding taxes.

Effect of the Arrangement on AvenEx Shareholders, holders of AvenEx Options and holders of AvenEx Warrants

Pursuant to the Arrangement, AvenEx Shareholders will receive, for each AvenEx Share held, 1.00 of a post- subdivided Pace Share and after giving effect to the Amalgamation pursuant to the Arrangement, all AvenEx Shareholders (other than Dissenting AvenEx Shareholders) will have exchanged their Pace Shares for Spyglass Shares. As a result of such exchanges pursuant to the Arrangement, the nature of an AvenEx Shareholder's investment will change. In deciding whether to vote to approve the Arrangement, AvenEx Shareholders should carefully review and consider the information concerning Spyglass contained in this Information Circular, including the information contained in "Appendix L – Information Concerning Spyglass", and "Appendix M – Pro Forma Consolidated Financial Statements of Spyglass". See "Risk Factors".

Holders of AvenEx Options have entered into or will enter into prior to the Effective Time the AvenEx Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised AvenEx Options immediately prior to the Effective Time. The exercise of "in-the-money" AvenEx Options will be completed upon payment of the exercise price by the holder or on a "cashless basis"" in exchange for AvenEx Shares in accordance with the terms thereof, and "out-of-the-money" AvenEx Options will be surrendered and cancelled in consideration of payment from AvenEx of $0.001 per "out-of-the-money" AvenEx Option.

Closing of the Arrangement will constitute a "change of control" under the terms and conditions of the AvenEx RSUs and, as a result, the vesting provisions of all such AvenEx RSUs shall be accelerated, all such AvenEx RSUs will vest immediately prior to the Effective Time, AvenEx shall issue AvenEx Shares to the holders thereof as soon as practicable after the vesting thereof (which will be automatically exchanged for Spyglass Shares pursuant to the Arrangement), and all such AvenEx RSUs shall terminate on the Effective Date.

It is a condition to the closing of the Arrangement that at least 90% of the outstanding AvenEx Options and AvenEx RSUs be exercised or terminated prior to the Effective Time and that the aggregate cash payment in respect of the surrender and cancellation of such "out-of-the-money" AvenEx Options shall not exceed $1,500, less applicable withholding taxes.

Effect of the Arrangement on Pace Shareholders and holders of Pace Options

Pursuant to the Arrangement, Pace Shareholders will receive, for each Pace Share held, 1.30 of a post-subdivided Pace Share and after giving effect to the Amalgamation pursuant to the Arrangement, all Pace Shareholders (other than Dissenting Pace Shareholders) will have exchanged their Pace Shares for Spyglass Shares. As a result of such exchanges pursuant to the Arrangement, the nature of a Pace Shareholder's investment will change. In deciding whether to vote to approve the Arrangement, Pace Shareholders should carefully review and consider the information concerning Spyglass contained in this Information Circular, including the information contained in "Appendix L – Information Concerning Spyglass", and "Appendix M – Pro Forma Consolidated Financial Statements of Spyglass". See "Risk Factors".

Holders of Pace Options have entered into or will enter into prior to the Effective Time the Pace Termination Agreements pursuant to which they have agreed, or will agree, to exercise or cancel all unexercised Pace Options immediately prior to the Effective Time. The exercise of "in-the-money" Pace Options will be completed upon payment of the exercise price by the holder or on a "cashless basis"" in exchange for Pace Shares in accordance with the terms thereof, and "out-of-the-money" Pace Options will be surrendered and cancelled in consideration of payment from Pace of $0.001 per "out-of-the-money" Pace Option.

It is a condition to the closing of the Arrangement that at least 90% of the outstanding Pace Options be exercised or terminated prior to the Effective Time and that the aggregate cash payment in respect of the surrender and cancellation of such "out-of-the-money" Pace Options shall not exceed $3,500, less applicable withholding taxes.

The Arrangement will constitute a "change of control" under the terms and conditions of the Pace RSAs, Pace PSAs and Pace DSAs and, as a result, the vesting provisions and settlement dates in respect of all such Pace RSAs, Pace PSAs and Pace DSAs shall be accelerated and all settlement amounts in respect of the Pace RSAs, Pace PSAs and Pace DSAs shall be paid by Pace on the date which is immediately prior to the Effective Date in accordance with the terms of the plan governing the Pace RSAs, Pace PSAs and Pace DSAs. Pace anticipates paying an aggregate of

$4,129,515 in cash in settlement of all Pace RSAs, Pace PSAs and Pace DSAs as of the Effective Date (based on a market price per Pace Share of $3.38 as at January 16, 2013).

Fairness Opinions and Other Advisors

Charger Fairness Opinion

Charger retained TD Securities to provide the Charger Board with its opinion as to the fairness, from a financial point of view, to the Charger Shareholders, of the consideration to be received by the Charger Shareholders pursuant to the Arrangement. In connection with this mandate, TD Securities has prepared the Charger Fairness Opinion. The Charger Fairness Opinion states that, based on the assumptions, limitations and qualifications set forth therein, TD Securities is of the opinion that, as at December 17, 2012, the consideration to be received by the Charger Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Charger Shareholders. The Charger Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "Appendix F - Charger Fairness Opinion". Charger Shareholders are urged to, and should, read the Charger Fairness Opinion in its entirety.

The Charger Board concurs with the views of TD Securities as set forth in the Charger Fairness Opinion. The views of TD Securities were one of the important considerations in the Charger Board's decision to proceed with the Arrangement.

AvenEx Fairness Opinion

AvenEx retained Peters & Co. to provide the AvenEx Board with its opinion as to the fairness, from a financial point of view, to the AvenEx Shareholders, of the consideration to be received by the AvenEx Shareholders pursuant to the Arrangement. In connection with this mandate, Peters & Co. has prepared the AvenEx Fairness Opinion. The AvenEx Fairness Opinion states that, based on the assumptions, limitations and qualifications set forth therein, Peters & Co. is of the opinion that, as at December 20, 2012, the consideration to be received by the AvenEx Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the AvenEx Shareholders. The AvenEx Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "Appendix G - AvenEx Fairness Opinion. AvenEx Shareholders are urged to, and should, read the AvenEx Fairness Opinion in its entirety.

The AvenEx Board concurs with the views of Peters & Co. as set forth in the AvenEx Fairness Opinion. The views of Peters & Co. were one of the important considerations in the AvenEx Board's decision to proceed with the Arrangement.

Pace Fairness Opinion

Pace retained National Bank to provide the Pace Board with its opinion as to the fairness, from a financial point of view, to the Pace Shareholders, of the consideration to be received by the Pace Shareholders pursuant to the Arrangement. In connection with this mandate, National Bank has prepared the Pace Fairness Opinion. The Pace Fairness Opinion states that, based on the assumptions, limitations and qualifications set forth therein, National Bank is of the opinion that, as at January11, 2013, the consideration to be received by the Pace Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Pace Shareholders. The Pace Fairness Opinion is subject to the assumptions, limitations and qualifications contained therein and should be read in its entirety. See "Appendix H - Pace Fairness Opinion. Pace Shareholders are urged to, and should, read the Pace Fairness Opinion in its entirety.

The Pace Board concurs with the views of National Bank as set forth in the Pace Fairness Opinion. The views of National Bank were one of the important considerations in the Pace Board's decision to proceed with the Arrangement.

Other Advisors

Recommendation of the Respective Boards of Directors

Recommendations of the Charger Board

After considering, among other things, the Charger Fairness Opinion, the Charger Board (other than two directors who recused themselves from the process of considering the Arrangement due to a conflict of interest) concluded that the Arrangement is in the best interests of Charger and is fair to Charger Shareholders and authorized Charger to enter into the Arrangement Agreement and all related agreements. The Charger Board recommends that the Charger Shareholders vote in favour of the Charger Arrangement Resolution.

Recommendations of the AvenEx Board

After considering, among other things, the AvenEx Fairness Opinion, the AvenEx Board unanimously concluded that the Arrangement is in the best interests of AvenEx and is fair to AvenEx Shareholders and authorized AvenEx to enter into the Arrangement Agreement and all related agreements. The AvenEx Board recommends that the AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution.

Recommendations of the Pace Board

After considering, among other things, the Pace Fairness Opinion, the members of the Pace Board (other than two directors who recused themselves from the process of considering the Arrangement due to a conflict of interest) concluded that the Arrangement is in the best interests of Pace and is fair to Pace Shareholders and authorized Pace to enter into the Arrangement Agreement and all related agreements. The Pace Board recommends that the Pace Shareholders vote in favour of the Pace Arrangement Resolution.

Support Agreements

All of the directors and officers of each of Charger, AvenEx and Pace have each entered into Support Agreements pursuant to which they have agreed, among other things, to support the Arrangement and vote their Charger Shares, AvenEx Shares or their Pace Shares (as well as their Charger Options, Charger Warrants, AvenEx Options and AvenEx RSUs, if required), as the case may be, beneficially owned or controlled by them in favour of the Charger Arrangement Resolution, the AvenEx Arrangement Resolution, the Pace Arrangement Resolution, as applicable, and to otherwise support the Arrangement. As of December 20, 2012, these Supporting Shareholders own or exercise control or direction over an aggregate of 8,238,297 Charger Shares (representing approximately 12% of the issued and outstanding Charger Shares), 1,911,196 AvenEx Shares (representing approximately 3.52% of the issued and outstanding AvenEx Shares) and 926,579 Pace Shares (representing approximately 1.97% of the issued and outstanding Pace Shares).

The Support Agreements will terminate on the earlier of: (a) the mutual written consent of the parties to the Support Agreement; (b) the Effective Time; and (c) the date on which the Arrangement Agreement is terminated in accordance with its terms.

Procedure for Exchange of Charger Shares, AvenEx Shares and/or Pace Shares

General

Enclosed with this Information Circular are Letters of Transmittal for each of Charger, AvenEx and Pace which, when properly completed and returned to the Depositary (at one of the addresses specified on the last page of the Letters of Transmittal), together with the certificate or certificates representing Charger Shares, AvenEx Shares and/or Pace Shares and all other required documents, will enable each Registered Holder of Charger, AvenEx or Pace, as applicable, to obtain a certificate(s) representing the Spyglass Shares issued to such Registered Holder under the Arrangement. The Letters of Transmittal contain complete instructions on how to submit certificates representing Charger Shares, AvenEx Shares and/or Pace Shares.

From and after the Effective Time, certificates formerly representing Charger Shares, AvenEx Shares and/or Pace Shares that were exchanged for Spyglass Shares pursuant to the Arrangement shall represent only the right to receive the certificates representing Spyglass Shares which the Registered Holders of such Charger Shares, AvenEx Shares and/or Pace Shares are entitled to under the Arrangement. As soon as practicable following the later of the Effective Date and the date of deposit by a former holder of Charger Shares, AvenEx Shares and/or Pace Shares of a duly completed Letter of Transmittal and the certificates representing such Charger Shares, AvenEx Shares and/or Pace Shares, the Depositary shall either: (a) forward by first class mail to such former holder at the address specified in the Letter of Transmittal; or (b) if requested by such Shareholder in the Letter of Transmittal, make available or cause to be made available at the Depositary for pickup by such Shareholder, the certificates representing the number of Spyglass Shares issued to such Shareholder under the Arrangement.

The use of the mail to transmit certificates representing Charger Shares, AvenEx Shares and/or Pace Shares and the Letter of Transmittal will be at the risk of each Registered Holder of such Charger Shares, AvenEx Shares and/or Pace Shares. Charger, AvenEx and Pace recommend that such certificates and documents be delivered by hand to the Depositary and a receipt therefor be obtained or that registered mail be used.

Under certain circumstances as set out in the Letters of Transmittal, signatures on: (i) the Letter of Transmittal; and

(ii) certificates representing Charger Shares, AvenEx Shares and/or Pace Shares must be guaranteed by an Eligible Institution. In order to receive certificates representing Spyglass Shares after the Effective Date, Charger Shareholders, AvenEx Shareholders and/or Pace Shareholders must submit their share certificate(s) together with a duly completed and executed Letter of Transmittal to the Depositary.

If a Letter of Transmittal is executed by a person other than the Registered Holder of the certificate(s) deposited therewith, the certificate(s) must be endorsed or be accompanied by an appropriate securities transfer power of attorney duly and properly completed by the Registered Holder, with the signature on the endorsement panel, or securities transfer power of attorney guaranteed by the Eligible Institution.

All questions as to validity, form, eligibility (including timely receipt) and acceptance of any Charger Shares, AvenEx Shares and/or Pace Shares deposited pursuant to the Arrangement will be determined by Spyglass, in its sole discretion, following the Effective Time. Depositing Shareholders agree that such determination shall be final and binding. There shall be no duty or obligation on Charger, AvenEx, Pace, Spyglass, the Depositary, or any other person to give notice of any defect or irregularity in any deposit of Charger Shares, AvenEx Shares and/or Pace Shares and no liability shall be incurred by any of them for failure to give such notice.

Under no circumstances will interest accrue or be paid by Charger, AvenEx, Pace, Spyglass or the Depositary on the consideration for Charger Shares, AvenEx Shares and/or Pace Shares deposited pursuant to the Arrangement, regardless of any delay in making such payment.

The Depositary will act as the agent of persons who have deposited Charger Shares, AvenEx Shares and/or Pace Shares pursuant to the Arrangement for the purpose of receiving certificates representing Spyglass Shares and transmitting these certificates to such persons.

Unless otherwise directed in the respective Letter of Transmittal, the certificate representing Spyglass Shares to be issued in consideration for the Charger Shares, AvenEx Shares and/or Pace Shares will be issued in the name of the Registered Holder of Charger Shares, AvenEx Shares and/or Pace Shares so deposited.

Lost Certificates

If a certificate representing Charger Shares, AvenEx Shares and/or Pace Shares has been lost, stolen or destroyed, the holder of such Charger Shares, AvenEx Shares and/or Pace Shares should immediately contact the Depositary for instructions. The Depositary will issue and deliver, in exchange for such lost, stolen or destroyed certificate, the number of Spyglass Shares to which the holder is entitled pursuant to the Arrangement (and any dividends or

distributions with respect thereto) as determined in accordance with the Arrangement, provided the holder shall, as conditions to the receipt thereof, make an affidavit of the fact that the certificate has been lost, stolen or destroyed, as applicable, and give a bond to Spyglass and its transfer agent, or shall otherwise indemnify Spyglass and its transfer agent against any claim that may be made against any of them with respect to the certificate alleged to have been lost, stolen or destroyed.

Return of Charger Shares, AvenEx Shares and/or Pace Shares

If the Arrangement is not completed, any certificates for Charger Shares, AvenEx Shares and/or Pace Shares delivered to the Depositary will be returned to the depositing Charger Shareholders, AvenEx Shareholders and/or Pace Shareholders at Charger's, AvenEx' or Pace's expense, as applicable, upon written notice to the Depositary from Charger, AvenEx or Pace, as applicable, by returning the certificates for the Charger Shares, AvenEx Shares and/or Pace Shares (and any other relevant documents) by first class insured mail in the name of and to the address specified by the Charger Shareholder, AvenEx Shareholder and/or Pace Shareholder in the Letter of Transmittal or, if such name and address is not so specified, in such name and to such address as shown on the register maintained by Charger's, AvenEx' or Pace's transfer agent, as applicable.

Mail Services Interruption

Notwithstanding the provisions of this Information Circular, the Letter of Transmittal, Arrangement Agreement or Plan of Arrangement, certificates representing Charger Shares, AvenEx Shares and/or Pace Shares and certificates representing Charger Shares, AvenEx Shares and/or Pace Shares to be returned if applicable, will not be mailed if Charger, AvenEx and Pace determine that delivery thereof by mail may be delayed.

Persons entitled to certificates and other relevant documents which are not mailed for the foregoing reason may take delivery thereof at the office of the Depositary at which the deposited certificates representing Charger Shares, AvenEx Shares and/or Pace Shares in respect of which certificates are being issued were originally deposited upon application to the Depositary until such time as Charger, AvenEx and Pace have determined that delivery by mail will no longer be delayed.

Notwithstanding the foregoing paragraph, certificates and other relevant documents not mailed for the foregoing reason will be conclusively deemed to have been delivered on the first day upon which they are available for delivery at the office of the Depositary at which the Charger Shares, AvenEx Shares and/or Pace Shares were deposited.

Cancellation of Rights

Subject to any applicable law relating to unclaimed property, any certificate formerly representing Charger Shares, Pace Shares or AvenEx Shares that is not deposited with all other documents as required by this Plan of Arrangement on or before the last Business Day prior to the third anniversary of the Effective Date shall cease to represent a right or claim of any kind or nature and, for greater certainty, the right of the holder of such Charger Shares, Pace Shares or AvenEx Shares to receive certificates representing Spyglass Shares shall be deemed to be surrendered to Spyglass together with all dividends, distributions or cash payments thereon held for such holder.

Treatment of Fractional Interests

No fractional Spyglass Shares will be issued. In the event that a holder of Pace Shares, Charger Shares or AvenEx Shares would otherwise be entitled to a fractional Spyglass Share hereunder, the number of Spyglass Shares issued to such holder of Pace Shares, Charger Shares or AvenEx Shares shall be rounded up to the next greater whole number of Spyglass Shares if the fractional entitlement is greater than or equal to 0.5 and shall, without any additional compensation, be rounded down to the next whole number of Spyglass Shares if the fractional entitlement is less than 0.5. In calculating such fractional interests, all Pace Shares, Charger Shares and AvenEx Shares registered in the name of or beneficially held by such holder of Charger Shares or AvenEx Shares or their nominee shall be aggregated

Stock Exchange Listing Approvals

THE ARRANGEMENT AGREEMENT

Details of the Arrangement

The Arrangement will result in the amalgamation of Charger, AvenEx and Pace under the ABCA, as a result of which former Charger Shareholders (other than Dissenting Charger Shareholders), AvenEx Shareholders (other than Dissenting AvenEx Shareholders) and Pace Shareholders (other than Dissenting Pace Shareholders) will hold Spyglass Shares following completion of the Arrangement.

The following sets forth the steps which will occur under the Plan of Arrangement at the Effective Time, in the order in which they will occur, if all conditions to the completion of the Arrangement have been satisfied or waived.

(a) all of the issued and outstanding Pace Shares will be subdivided on the basis of 1.3 post- subdivision Pace Shares for every one (1) pre-subdivision Pace Share;

(c) the stated capital of each class of shares of AvenEx and Charger will be reduced to $1.00 without distribution or payment of any amount in respect of those shares;

(f) Pace, Charger and AvenEx shall be amalgamated and continued as one corporation under the ABCA to form Spyglass; and

On the amalgamation of Charger, AvenEx and Pace, the issued and outstanding Charger Shares and AvenEx Shares held by Pace shall be cancelled and each issued and outstanding Pace Share (including for greater certainty those issued pursuant to subsections (d) and (e) above shall survive and continue as one (1) Spyglass Share.

For full particulars in respect of all of the events which will occur pursuant to the Plan of Arrangement, see the full text of the Plan of Arrangement which is attached as Exhibit "A" of the Arrangement Agreement, which is attached as Appendix A to this Information Circular.

Conditions to the Arrangement

Mutual Conditions

The respective obligations of Charger, AvenEx and Pace to consummate the transactions contemplated in the Arrangement Agreement are subject to the satisfaction, on or before the Effective Date or such other time specified, of the following conditions, any of which may be waived by the consent of each of Charger, AvenEx and Pace without prejudice to their right to rely on any other of such conditions:

(a) the Interim Order shall have been granted in form and substance satisfactory to each of Charger, AvenEx and Pace, acting reasonably, and such order shall not have been set aside or modified in a manner unacceptable to Charger, AvenEx or Pace, acting reasonably, on appeal or otherwise;

(b) the Joint Information Circular shall have been mailed to AvenEx Shareholders, Charger Shareholders and Pace Shareholders on or before January 31, 2013;

(c) the Pace Arrangement Resolution shall have been passed by the Pace Shareholders in form and substance satisfactory to each of Charger, AvenEx and Pace, acting reasonably;

(d) the AvenEx Arrangement Resolution shall have been passed by the AvenEx Shareholders in form and substance satisfactory to each of Charger, AvenEx and Pace, acting reasonably, in accordance with requirements of the Interim Order;

(e) the Charger Arrangement Resolution shall have been passed by the Charger Shareholders in form and substance satisfactory to each of Charger, AvenEx and Pace, acting reasonably, in accordance with requirements of the Interim Order;

(f) holders of not greater than 5% of the outstanding AvenEx Shares shall have exercised rights of dissent in respect of the Arrangement that have not been withdrawn as at the Effective Date;

(g) holders of not greater than 5% of the outstanding Charger Shares shall have exercised rights of dissent in respect of the Arrangement that have not been withdrawn as at the Effective Date;

(h) holders of not greater than 5% of the outstanding Pace Shares shall have exercised rights of dissent in respect of the Arrangement that have not been withdrawn as at the Effective Date;

(i) the Final Order shall have been granted in form and substance satisfactory to Charger, AvenEx and Pace, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to either of the parties, acting reasonably, on appeal or otherwise;

(j) the Articles of Arrangement to be filed with the Registrar in accordance with the Arrangement shall be in form and substance satisfactory to each of Charger, AvenEx and Pace, acting reasonably;

(k) the Effective Date of the Arrangement shall have occurred on or prior to the Outside Date;

(l) to the extent required approval of AvenEx's lenders to the Arrangement and the consummation thereof shall have been obtained on a basis acceptable to Charger, AvenEx and Pace, each acting reasonably;

(m) to the extent required approval of Pace's lenders to the Arrangement and the consummation thereof shall have been obtained on a basis acceptable to Charger, AvenEx and Pace, each acting reasonably;

(n) to the extent required approval of Charger's lenders to the Arrangement and the consummation thereof shall have been obtained on a basis acceptable to Charger, AvenEx and Pace, each acting reasonably;

(o) there shall be no action taken under any existing applicable law or regulation, nor any statute, rule, regulation or order which is enacted, enforced, promulgated or issued by any court, department, commission, board, regulatory body, government or governmental authority or similar agency, domestic or foreign, that:

(i) makes illegal or otherwise directly or indirectly restrains, enjoins or prohibits the Arrangement or any other transactions contemplated herein; or

(ii) results in a judgment or assessment of material damages directly or indirectly relating to the transactions contemplated herein.

(p) either one or more of the following shall have occurred:

(i) an advance ruling certificate (an "ARC") pursuant to Section 102 of the Competition Act shall have been issued by the Commissioner in respect of the transactions contemplated by the Arrangement Agreement; or

(ii) the Commissioner shall have waived the obligation to notify and supply information under Part IX of the Competition Act pursuant to subsection 113(c) of the Competition Act and confirmed in writing that she has no intention to file an application under Part VIII of the Competition Act (a "no-action letter") in connection with the transactions contemplated by the Arrangement Agreement, on terms satisfactory to Parties acting reasonably, and such no-action letter remains in full force and effect; or

(iii) the waiting period under section 123 of the Competition Act shall have expired or been terminated and the Commissioner shall have issued a no-action letter in connection with the transactions contemplated by the Arrangement Agreement, on terms satisfactory to the Parties acting reasonably, and such no-action letter remains in full force and effect;

(q) the applicable waiting period (and any extension thereof) under the HSR Act (if required) shall have expired or been earlier terminated;

(r) in addition to the condition set forth above in subsections (p) and (q), all other required domestic and foreign regulatory, governmental and third party approvals and consents in respect of the completion of the Arrangement shall have been obtained on terms and conditions satisfactory to Charger, AvenEx and Pace, each acting reasonably, including, without limitation, conditional approval for listing of the Pace Shares issuable pursuant to the Arrangement on the TSX, and all applicable domestic and foreign statutory and regulatory waiting periods shall have expired or have been terminated and no unresolved material objection or opposition shall have been filed, initiated or made during any applicable statutory regulatory period;

(s) the Elbow River Transaction shall have been completed in all material respects in accordance with the Elbow River Purchase and Sale Agreement, or on such other terms and conditions as are satisfactory to AvenEx, Charger and Pace, each acting reasonably; and

(t) each of the parties shall be reasonably satisfied that on the completion of the Arrangement, Spyglass shall adopt a policy to pay a monthly cash dividend of initially $0.03 per Spyglass share and that subject to prevailing and anticipated commodity prices, Spyglass will not vary its monthly dividend rate on the Spyglass shares for a period of six (6) months following the Effective Date.

Additional Charger Conditions

The obligation of Charger to consummate the transactions contemplated in the Arrangement Agreement are subject to the satisfaction of the conditions precedent set forth below, on or before the Effective Date or such other time specified, any of which may be waived, in whole or in part, by Charger at any time:

(a) each of the covenants, acts and undertakings of AvenEx and Pace to be performed on or before the Effective Date pursuant to the terms of the Arrangement Agreement shall have been duly performed by AvenEx and Pace;

(b) Pace shall have furnished Charger with:

(i) certified copies of the resolutions duly passed by its board of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the Pace Arrangement Resolution for approval at the Pace Meeting and recommending that Pace Shareholders vote in favour of the Pace Arrangement Resolution; and

(ii) certified copies of the Pace Arrangement Resolution duly passed at the Pace Meeting;

(i) certified copies of the resolutions duly passed by its boards of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the AvenEx Arrangement Resolution for approval at the AvenEx Meeting and recommending that AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution; and

(ii) certified copies of the AvenEx Arrangement Resolution, duly passed at the AvenEx Meeting, approving the Arrangement;

(d) the representations and warranties of AvenEx and Pace contained in Sections 4.1 and 4.2 of the Arrangement Agreement, respectively, shall be true as at the Effective Date with the same effect as though such representations and warranties had been made at and as of such time (except to the extent such representations and warranties speak of an earlier date or except as affected by transactions contemplated or permitted by the Arrangement Agreement, including for greater certainty, in the case of AvenEx, the Elbow River Transaction) and AvenEx and Pace shall have complied with their covenants in the Arrangement Agreement, except where the failure or failures of such representations and warranties to be so true and correct or the failure to perform such covenants would not, or would not reasonably be expected to have a material adverse effect on AvenEx or Pace, as the case may be, or to materially impede or reasonably be expected to materially impede the completion of the Arrangement, and Charger shall have received a certificate to that effect dated the Effective Date of an executive officer of each of AvenEx and Pace acting solely on behalf of AvenEx and Pace, respectively, and not in their personal capacities, to the best of their information and belief having made reasonable inquiry, and Charger will have no knowledge to the contrary;

(e) the board of directors of AvenEx shall not have withdrawn, modified or changed any of its recommendations, approvals, resolutions or determinations referred to in section 2.11 of the Arrangement Agreement in a manner materially adverse to Charger or the completion of the Arrangement;

(f) the board of directors of Pace shall not have withdrawn, modified or changed any of its recommendations, approvals, resolutions or determinations referred to in section 2.13 of the Arrangement Agreement in a manner materially adverse to Charger or the completion of the Arrangement;

(g) any director, officer, insider or other non-arm's length party that is indebted to AvenEx or Pace, as the case may be, or any of their subsidiaries shall have repaid such indebtedness on or prior to completion of the Arrangement and each of AvenEx and Pace shall have furnished evidence of such repayment to Charger;

(h) each of the directors and officers of Pace and AvenEx (subject to section 2.17 of the Arrangement Agreement) shall have provided their resignations (in the case of directors, in a manner that allows for the orderly replacement of directors) together with mutual releases, effective on the Effective Date, each in form and substance and on such terms as are satisfactory to Charger, acting reasonably;

(i) there shall not have occurred any change after the date of the Arrangement Agreement or prior to the date of the Arrangement Agreement which has not been publicly disclosed prior to the date of the Arrangement Agreement or previously disclosed prior to the date of the Arrangement Agreement to Charger in writing (or any condition, event or development involving a prospective change) in the business, affairs, operations, assets, capitalization, financial condition, prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of AvenEx or Pace or their respective subsidiaries considered in each case on a consolidated basis, and which, in the judgment of Charger, acting reasonably, is materially adverse to AvenEx or Pace or their respective subsidiaries considered on a consolidated basis, other than: (i) a change directly resulting from an action taken by AvenEx or Pace to which Charger has consented to in writing; or

(ii) a change resulting from conditions affecting the oil and gas industry in jurisdictions which AvenEx and Pace hold their assets including, without limitation, changes in commodity prices or taxes of any kind at any time;

(j) immediately prior to the Effective Time, Charger shall be satisfied there shall be (i) not more than 54,304,762 AvenEx Shares outstanding (excluding any AvenEx Shares issued upon exercise of outstanding AvenEx Options and AvenEx RSUs); (ii) not more than 46,916,300 Pace Shares outstanding (excluding any Pace Shares issued upon exercise of outstanding Pace Options); and Charger shall be satisfied that upon completion of the Arrangement no person shall have any agreement, option or any right or privilege (whether by law, pre-emptive, by contract or otherwise) capable of becoming an agreement or option for the purchase, subscription, allotment or issuance of any issued or unissued, securities of AvenEx or Pace;

(k) all of the outstanding AvenEx RSUs shall have been exercised and all AvenEx Shares issuable pursuant to the exercise of such AvenEx RSUs shall have been delivered by AvenEx to the holders thereof in accordance with the terms of the AvenEx RSUs and subsection 2.8 of the Arrangement Agreement, conditional upon the closing of the Arrangement;

(l) the settlement amounts in respect of all of the outstanding Pace RSAs, Pace PSAs and Pace DSAs shall have been paid by Pace to the holders thereof in accordance with the terms of such Pace RSAs, Pace PSAs and Pace DSAs and subsection 2.10 of the Arrangement Agreement, conditional upon the closing of the Arrangement; and

(m) at least 90.0% of the: (i) AvenEx Options, and (ii) Pace Options shall have been exercised or terminated prior to the Effective Time and each of Pace and AvenEx shall provide evidence of such satisfaction to the other parties, and the aggregate payments in respect of the surrender for cash of the out-of-the-money (i) Pace Options shall not exceed $3,500, less applicable withholding taxes; and (ii) AvenEx Options shall not exceed $1,500 less applicable withholding taxes.

Additional AvenEx Conditions

The obligation of AvenEx to consummate the transactions contemplated in the Arrangement Agreement are subject to the satisfaction of the conditions precedent set forth below, on or before the Effective Date or such other time specified, any of which may be waived, in whole or in part, by AvenEx at any time:

(a) each of the covenants, acts and undertakings of Charger and Pace to be performed on or before the Effective Date pursuant to the terms of the Arrangement Agreement shall have been duly performed by Charger and Pace;

(b) Charger shall have furnished AvenEx with:

(i) certified copies of the resolutions duly passed by its board of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the Arrangement for approval at the Charger Meeting, recommending that Charger Shareholders vote in favour of the Arrangement; and

(ii) certified copy of the Charger Arrangement Resolution duly passed at the Charger Meeting approving the Arrangement;

(i) certified copies of the resolutions duly passed by its boards of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the Pace Arrangement Resolution for approval at the Pace Meeting and recommending that Pace Shareholders vote in favour of the Pace Arrangement Resolution; and

(ii) certified copy of the Pace Arrangement Resolution duly passed at the Pace Meeting;

(d) the representations and warranties of Pace and Charger contained in sections 4.2 and 4.3 of the Arrangement Agreement respectively, shall be true as at the Effective Date with the same effect as though such representations and warranties had been made at and as of such time (except to the extent such representations and warranties speak of an earlier date or except as affected by transactions contemplated or permitted by the Arrangement Agreement) and Charger and Pace shall have complied with their respective covenants in the Arrangement Agreement, except where the failure or failures of such representations and warranties to be so true and correct or the failure to perform such covenants would not, or would not reasonably be expected to have a material adverse effect on Pace or Charger, as the case may be, or to materially impede or reasonably be expected to materially impede the completion of the Arrangement, and AvenEx shall have received a certificate to that effect dated the Effective Date from an executive officer of each of Charger and Pace acting solely on behalf of Charger and Pace, respectively, and not in their personal capacities, to the best of their information and belief having made reasonable inquiry, and AvenEx will have no knowledge to the contrary;

(e) the board of directors of Charger shall not have withdrawn, modified or changed any of its recommendations, approvals, resolutions or determinations referred to in section 2.12 of the Arrangement Agreement in a manner materially adverse to AvenEx or the completion of the Arrangement;

(g) any director, officer, insider or other non-arm's length party that is indebted to Charger or Pace, as the case may be, or any of their subsidiaries shall have repaid such indebtedness on or prior to completion of the Arrangement and each of Charger and Pace shall have furnished evidence of such repayment to AvenEx;

(h) each of the directors and officers of Pace and Charger (subject to section 2.17 of the Arrangement Agreement) shall have provided their resignations (in the case of directors, in a manner that allows for the orderly replacement of directors) together with mutual releases, effective on the Effective Date, each in form and substance and on such terms as are satisfactory to AvenEx, acting reasonably;

(i) there shall not have occurred any change after the date of the Arrangement Agreement or prior to the date of the Arrangement Agreement which has not been publicly disclosed prior to the date of the Arrangement Agreement or previously disclosed prior to the date of the Arrangement Agreement to AvenEx in writing (or any condition, event or development involving a prospective change) in the business, affairs, operations, assets, capitalization, financial condition, prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of Charger or Pace or their respective subsidiaries considered in each case on a consolidated basis and which, in the judgment of AvenEx, acting reasonably, is materially adverse to Charger or Pace other than:

(i) a change directly resulting from an action taken by Charger or Pace to which AvenEx has consented to in writing; or (ii) a change resulting from conditions affecting the oil and gas industry in jurisdictions which Charger and Pace hold their assets including, without limitation, changes in commodity prices, royalties or taxes of any kind at any time;

(j) immediately prior to the Effective Time, AvenEx shall be satisfied there shall be (i) not more than 67,321,191 Charger Shares outstanding (excluding any Charger Shares issued upon exercise of outstanding Charger Options and Charger Warrants); and (ii) not more than 46,916,300 Pace Shares outstanding (excluding any Pace Shares issued upon exercise of outstanding Pace Options) and AvenEx shall be satisfied that upon completion of the Arrangement no person shall have any agreement, option or any right or privilege (whether by law, pre-emptive, by contract or otherwise) capable of becoming an agreement or option for the purchase, subscription, allotment or issuance of any issued or unissued, securities of Charger or Pace;

(k) the settlement amounts in respect of all of the outstanding Pace RSAs, Pace PSAs and Pace DSAs shall have been paid by Pace to the holders thereof in accordance with the terms of such Pace RSAs, Pace PSAs and Pace DSAs and subsection 2.10 of the Arrangement Agreement, conditional upon the closing of the Arrangement; and

(l) at least 90.0% of the: (i) Charger Options, (ii) Charger Warrants, and (iii) Pace Options shall have been exercised or terminated prior to the Effective Time and each of Charger and Pace shall provide evidence of such satisfaction to the other parties, and the aggregate payments in respect of the surrender for cash of the out-of-the-money (i) Pace Options shall not exceed $3,500, less applicable withholding taxes; and (ii) Charger Options and Charger Warrants shall not exceed

$15,000, less applicable withholding taxes.

Additional Pace Conditions

The obligation of Pace to consummate the transactions contemplated in the Arrangement Agreement are subject to the satisfaction of the conditions precedent set forth below, on or before the Effective Date or such other time specified, any of which may be waived, in whole or in part, by Pace at any time:

(a) each of the covenants, acts and undertakings of Charger and AvenEx to be performed on or before the Effective Date pursuant to the terms of the Arrangement Agreement shall have been duly performed by Charger and AvenEx;

(b) Charger shall have furnished Pace with:

(i) certified copies of the resolutions duly passed by its board of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the Charger Arrangement Resolution for approval at the Charger Meeting, and recommending that Charger Shareholders, vote in favour of the Charger Arrangement Resolution; and

(ii) certified copy of the Charger Arrangement Resolution duly passed at the Charger Meeting approving the Arrangement;

(i) certified copies of the resolutions duly passed by its board of directors approving the Arrangement Agreement and the consummation of the transactions contemplated thereby and directing the submission of the AvenEx Arrangement Resolution for approval at the AvenEx Meeting and recommending that AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution; and

(ii) certified copies of the AvenEx Arrangement Resolution duly passed at the AvenEx Meeting;

(d) the representations and warranties of AvenEx and Charger contained in sections 4.1 and 4.3 of the Arrangement Agreement, respectively, shall be true as at the Effective Date with the same effect as though such representations and warranties had been made at and as of such time (except to the extent such representations and warranties speak of an earlier date or except as affected by transactions contemplated or permitted by the Arrangement Agreement, including for greater certainty, in the case of AvenEx, the Elbow River Transaction) and Charger and AvenEx shall have complied with their respective covenants in the Arrangement Agreement, except where the failure or failures of such representations and warranties to be so true and correct or the failure to perform such covenants would not, or would not reasonably be expected to have a material adverse effect on AvenEx or Charger, as the case may be, or to materially impede or reasonably be expected to materially impede the completion of the Arrangement, and Pace shall have received a certificate to that effect dated the Effective Date from an executive officer of each of Charger and AvenEx acting solely on behalf of Charger and AvenEx, respectively, and not in their personal capacities, to the best of their information and belief having made reasonable inquiry, and Pace will have no knowledge to the contrary;

(f) the board of directors of AvenEx shall not have withdrawn, modified or changed any of its recommendations, approvals, resolutions or determinations referred to in section 2.11 of the Arrangement Agreement in a manner materially adverse to AvenEx or the completion of the Arrangement;

(g) any director, officer, insider or other non-arm's length party that is indebted to Charger or AvenEx, as the case may be, or any of their subsidiaries shall have repaid such indebtedness on or prior to completion of the Arrangement and each of Charger and AvenEx shall have furnished evidence of such repayment to Pace;

(h) each of the directors and officers of Charger and AvenEx (subject to section 2.17 of the Arrangement Agreement) shall have provided their resignations (in the case of directors, in a manner that allows for the orderly replacement of directors) together with mutual releases, effective on the Effective Date, each in form and substance and on such terms as are satisfactory to Pace, acting reasonably;

(i) there shall not have occurred any change after the date of the Arrangement Agreement or prior to the date of the Arrangement Agreement which has not been publicly disclosed prior to the date of the Arrangement Agreement or previously disclosed prior to the date of the Arrangement Agreement to Pace in writing (or any condition, event or development involving a prospective change) in the business, affairs, operations, assets, capitalization, financial condition, prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of Charger or AvenEx or their respective subsidiaries considered in each case on a consolidated basis and which, in the judgment of Pace, acting reasonably, is materially adverse to Charger or AvenEx other than:

(i) a change directly resulting from an action taken by Charger or AvenEx to which Pace has consented to in writing; or (ii) a change resulting from conditions affecting the oil and gas industry in jurisdictions which Charger and AvenEx hold their assets including, without limitation, changes in commodity prices or taxes of any kind at any time;

(j) immediately prior to the Effective Time, Pace shall be satisfied there shall (i) not be more than 67,321,191 Charger Shares outstanding (excluding any Charger Shares issued upon exercise of outstanding Charger Options and Charger Warrants); and (ii) not more than 54,304,762 AvenEx Shares outstanding (excluding any AvenEx Shares issued upon exercise of outstanding AvenEx Options and AvenEx RSUs); and Pace shall be satisfied that upon completion of the Arrangement no person shall have any agreement, option or any right or privilege (whether by law, pre-emptive, by contract or otherwise) capable of becoming an agreement or option for the purchase, subscription, allotment or issuance of any issued or unissued, securities of Charger or AvenEx;

(l) at least 90.0% of the: (i) AvenEx Options, (ii) Charger Options, and (iii) Charger Warrants shall have been exercised or terminated prior to the Effective Time and each of AvenEx and Charger shall provide evidence of such satisfaction to the other parties, and the aggregate payments in respect of the surrender for cash of the out-of-the-money (i) AvenEx Options shall not exceed

$1,500, less applicable withholding taxes; and (ii) Charger Options and Charger Warrants shall not exceed $15,000, less applicable withholding taxes.

Covenants

Mutual Covenants

The Arrangement Agreement contains mutual covenants that each of Charger, AvenEx and Pace will use their reasonable commercial efforts:

(i) to obtain all necessary waivers, consents and approvals required to be obtained by it from other parties to loan agreements, leases and other material contracts;

(ii) to obtain all necessary consents, assignments, waivers and amendments to or terminations of any instruments and take such measures as may be appropriate to fulfill its obligations hereunder and to carry out the transactions contemplated by the Arrangement Agreement;

(iii) to effect all necessary registrations and filings and submissions of information requested by governmental authorities required to be effected by it in connection with the Arrangement, and each of Charger, AvenEx and Pace will use its reasonable commercial efforts to cooperate with the other parties to the Arrangement Agreement in connection with the performance by the others of their obligations under section 3.4 of the Arrangement Agreement including, without limitation, continuing to provide reasonable access to information and to maintain ongoing communications as among officers of Charger, AvenEx and Pace, subject in all cases to the applicable Confidentiality Agreement; and

(iv) to reasonably cooperate with the other parties and their tax advisors in structuring the Arrangement in a tax effective manner, and assist the other parties and their tax advisors in making such investigations and inquiries with respect to such parties in that regard as the other parties and its tax advisors shall consider necessary, acting reasonably, provided that such parties shall not be obligated to consent or agree to any structuring that has the effect of reducing or increasing the consideration to be received under the Arrangement.

Additional Covenants of Charger

The Arrangement Agreement contains customary negative and affirmative covenants specific to Charger and its subsidiaries. Among other things, Charger has agreed that, until the Effective Date or the termination of the Arrangement Agreement, except with the prior written consent of AvenEx and Pace (such consent not to be unreasonably withheld), and except as otherwise expressly permitted, disclosed in writing or specifically contemplated by the Arrangement Agreement:

(a) Charger's business and the business of each of its subsidiaries shall be conducted only in the usual and ordinary course of business consistent with past practices (for greater certainty, where it is an operator of any property, it shall operate and maintain such property in a proper and prudent manner in accordance with good industry practice and the agreements governing the ownership and operation of such property), provided that it shall be entitled and authorized to comply with all pre-emptive rights, first purchase rights or rights of first refusal that are applicable to its assets and become operative by virtue of the Arrangement Agreement or any of the transactions contemplated by the Arrangement Agreement, and Charger shall consult with AvenEx and Pace in respect of the ongoing business and affairs of Charger and its subsidiaries and keep AvenEx and Pace apprised of all material developments relating thereto;

(b) Charger shall not directly or indirectly do or permit to occur any of the following (i) amend its constating documents; (ii) declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of its outstanding shares; (iii) issue (other than on exercise of currently outstanding Charger Options or Charger Warrants), grant, sell or pledge or agree to issue, grant, sell or pledge any shares of Charger or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire,

shares of Charger or its subsidiaries; (iv) redeem, purchase or otherwise acquire any of its outstanding shares or other securities, except as permitted hereunder; (v) split, combine or reclassify any of its shares; (vi) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or reorganization of Charger; (vii) reduce the stated capital of Charger or any of its subsidiaries or (viii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;

(c) Charger shall not, except as previously disclosed in writing to AvenEx and Pace on or prior to the date of the Arrangement Agreement, directly or indirectly: (i) sell, pledge, dispose of or encumber any assets having an individual value in excess of $200,000, other than production in the ordinary course of business; (ii) expend or commit to expend more than $200,000 individually or $500,000 in the aggregate in respect of any capital expenditures; (iii) expend or commit to expend any amounts with respect to any operating expenses other than in the ordinary course of business or pursuant to the Arrangement Agreement; (iv) acquire (by merger, amalgamation, consolidation or acquisition of shares or assets or otherwise) any corporation, partnership or other business organization or division thereof, or make any investment therein either by purchase of shares or securities, contributions of capital or property transfer; (v) acquire any assets with an acquisition cost in excess of $200,000 individually or $500,000 in the aggregate; (vi) incur any indebtedness for borrowed money in excess of existing credit facilities, or any other material liability or obligation or issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other individual or entity, or make any loans or advances, other than in respect of fees payable to legal, financial and other advisors in the ordinary course of business or in respect of the Arrangement Agreement; (vii) authorize, recommend or propose any release or relinquishment of any material contract right; (viii) waive, release, grant or transfer any material rights of value or modify or change in any material respect any existing material license, lease, contract, production sharing agreement, government land concession or other material document; (ix) enter into or terminate any hedges, swaps or other financial instruments or like transactions; or (x) authorize or propose any of the foregoing, or enter into or modify any contract, agreement, commitment or arrangement to do any of the foregoing;

(d) neither Charger nor any of its subsidiaries shall adopt or amend or make any contribution to any bonus, cost plus employee benefit plan, profit sharing, option, pension, retirement, deferred compensation, insurance incentive compensation, other compensation or other similar plan, agreement, trust, fund or arrangements for the benefit of employees except as is necessary to comply with the law, with respect to existing provisions of any such plans, programs, arrangements or agreements or with respect to new employees and except for amendments to the plan governing the Charger DSUs to permit the redemption of all Charger DSUs as of the Effective Time;

(e) Charger shall not, nor permit any subsidiary to, (i) grant any officer, director or employee an increase in compensation in any form; (ii) grant any general salary increase; (iii) take any action with respect to the amendment or grant of any severance or termination pay policies or arrangements for any directors, officers or employees; (iv) amend (other than: (A) to amend the plan governing the Charger DSUs to permit the redemption of all Charger DSUs as of the Effective Time; (B) to permit accelerated vesting of currently outstanding Charger Options and Charger Warrants; and (C) to allow for surrender of any outstanding out-of-the-money Charger Options and Charger Warrants in exchange for the payment by Charger of not more than an aggregate of $15,000, less applicable withholding taxes), any stock option plan, the terms of any outstanding stock options, warrants or any deferred share unit plan; nor (v) make any loan to any officer, director or any other party not at arm's length;

(f) Charger shall use its reasonable commercial efforts to cause its current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially

similar premiums are in full force and effect, and shall pay all premiums in respect of such insurance that became due prior to the Effective Date;

(g) Charger shall not take any action or permit any of its subsidiaries to take any action, that would render, or may reasonably be expected to render, any representation or warranty made by it in the Arrangement Agreement untrue in any material respect at any time prior to completion of the Arrangement or termination of the Arrangement Agreement, whichever first occurs;

(h) Charger shall promptly notify AvenEx and Pace in writing of any material change (actual, anticipated, contemplated or, to the knowledge of Charger threatened, financial or otherwise) in its business, operations, affairs, assets, capitalization, financial condition prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of Charger or any of its subsidiaries considered on a consolidated basis, or of any change in any representation or warranty provided by Charger in the Arrangement Agreement which change is or may be of such a nature to render any representation or warranty misleading or untrue in any material respect and Charger shall in good faith discuss with AvenEx and Pace any change in circumstances (actual, anticipated, contemplated, or to the knowledge of Charger threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to AvenEx and Pace pursuant to this provision;

(i) Charger shall ensure that it has available funds to permit the payment of the fees pursuant to a Charger Damages Event, and shall take all such actions as may be necessary to ensure that it maintains such availability to ensure that it is able to pay the fees pursuant to a Charger Damages Event if and when required;

(j) Charger shall use its reasonable commercial efforts to obtain the consent of its bankers and other third parties, to the extent required to the transactions contemplated by the Arrangement Agreement and provide the same to AvenEx and Pace on or prior to the date of the Final Order;

(k) Charger shall use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in sections 5.1, 5.2 and 5.3 of the Arrangement Agreement as soon as reasonably possible to the extent that the satisfaction of the same is within the control of Charger;

(l) Charger shall provide notice to AvenEx and Pace of the Charger Meeting and allow AvenEx's and Pace's representatives to attend such meeting;

(m) subject to compliance by AvenEx with section 3.2(n) of the Arrangement Agreement and by Pace with section 3.3(n) of the Arrangement Agreement, Charger will ensure that the Joint Information Circular provides Charger Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters before them, and will set out the AvenEx Information and the Pace Information in the Joint Information Circular in the form approved by AvenEx and Pace, respectively, and shall include, without limitation, (i) any financial statements in respect of prior acquisitions made by it that are required to be included therein in accordance with Applicable Laws; (ii) the unanimous determination of the directors of Charger entitled to vote that the Arrangement is fair to Charger Shareholders, is in the best interests of Charger and the Charger Shareholders, and include the unanimous recommendation of the directors of Charger entitled to vote that the Charger Shareholders vote in favour of the Arrangement; and (iii) the fairness opinion of Charger's financial advisor that the Arrangement is fair, from a financial point of view to Charger's Shareholders; provided that, notwithstanding the covenant of Charger in this subsection, prior to the completion of the Arrangement, the board of directors of Charger may withdraw, modify or change the recommendation regarding the Arrangement if, in the opinion of such board of directors, acting reasonably, having received the advice of its outside legal counsel which is reflected in minutes of the meeting of the board of directors of Charger (a copy of which shall be provided to AvenEx and Pace), such withdrawal, modification or change is required to enable the board of directors of Charger to act in a manner consistent with its fiduciary duties under Applicable Laws and, if applicable, provided the board of directors of Charger shall have

complied with the provisions of section 3.5 of the Arrangement Agreement and Charger shall have paid the fees pursuant to section 6.3 of the Arrangement Agreement to AvenEx and Pace;

(n) Charger will assist AvenEx and Pace in the preparation of the Joint Information Circular and provide to AvenEx and Pace, in a timely and expeditious manner, all information as may be reasonably requested by AvenEx and Pace with respect to Charger for inclusion in the Joint Information Circular and any amendments or supplements thereto, in each case complying in all material respects with all applicable legal requirements on the date of issue thereof and to enable AvenEx and Pace to meet the standard referred to in sections 3.2(m) and 3.3(m) of the Arrangement Agreement respectively with respect to Charger, the Arrangement and the transactions to be considered at the AvenEx Meeting and the Pace Meeting;

(o) Charger shall indemnify and save harmless AvenEx and Pace and the directors, officers and agents of AvenEx and Pace from and against any and all liabilities, claims demands, losses, costs, damages and expenses (excluding any loss of profits or consequential damages) to which AvenEx or Pace, or any director, officer or agent thereof, may be subject or which AvenEx or Pace, or any director, officer or agent thereof, may suffer, whether under the provisions of any statute or otherwise, in any way caused by, or arising, directly or indirectly, from or in consequence of:

(i) any misrepresentation or alleged misrepresentation in the Charger Information or in any material filed by Charger in compliance or intended compliance with any Applicable Laws;

(ii) any order made or any inquiry, investigation or proceeding by any securities commission or other competent authority based upon any untrue statement or omission or alleged untrue statement or omission of a material fact or any misrepresentation or any alleged misrepresentation in the Charger Information or in any material filed by or on behalf of Charger in compliance or intended compliance with applicable securities laws, which prevents or restricts the trading in the Charger Shares; or

(iii) Charger not complying with any requirement of Applicable Laws in connection with the transactions contemplated in the Arrangement Agreement;

except that Charger shall not be liable in any such case to the extent that any such liabilities, claims, demands, losses, costs, damages and expenses arise out of or are based upon any misrepresentation or alleged misrepresentation of a material fact based solely on the AvenEx Information or the Pace Information included in the Joint Information Circular;

(p) except for proxies and other non-substantive communications with securityholders, Charger will furnish promptly to AvenEx or AvenEx's counsel and to Pace or Pace's counsel, a copy of each notice, report, schedule or other document delivered, filed or received by Charger in connection with: (i) the Arrangement; (ii) the Charger Meeting; (iii) any filings under Applicable Laws; and

(iv) any dealings with regulatory agencies in connection with the transactions contemplated by the Arrangement Agreement;

(q) Charger shall solicit proxies to be voted at the Charger Meeting in favour of matters to be considered at the Charger Meeting, including the Charger Arrangement Resolution, provided that Charger may, with the consent of the other parties, engage a proxy solicitation agent for such purpose;

(r) Charger shall conduct the Charger Meeting in accordance with the by-laws of Charger and any instrument governing the Charger Meeting, as applicable, and as otherwise required by law;

(s) Charger will make all necessary filings and applications under Applicable Laws required to be made on the part of Charger in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in compliance with such Applicable Laws;

(t) Charger shall promptly advise AvenEx and Pace of the number of Charger Shares, for which Charger receives notices of dissent or written objections to the Arrangement and provide AvenEx and Pace with copies of such notices and written objections;

(u) concurrent with the execution of the Arrangement Agreement (or, if the parties hereto consent, within five days of the date of the Arrangement Agreement), Charger shall deliver to AvenEx and Pace Support Agreements executed by Charger Shareholders who are directors and officers of Charger with respect to all Charger Shares which they own or control, and such Support Agreements shall include not less than 12% of the issued and outstanding Charger Shares;

(v) prior to the Effective Date, Charger shall cooperate with Pace in making application to the TSX to list the Pace Shares issuable under the Arrangement;

(w) Charger shall use its reasonable commercial efforts to ensure that all Charger Options and Charger Warrants are exercised or cancelled prior to the Effective Time in accordance with section 2.9 of the Arrangement Agreement;

(x) Charger shall cooperate with the other parties to ensure that the proposed monthly dividend payment by Spyglass of not less than $0.03 per Spyglass share is disclosed in any press release and material change report relating to the Arrangement, including that subject to prevailing and anticipated commodity prices, Spyglass will not vary its monthly dividend rate on the Spyglass shares for a period of six (6) months following the Effective Date, such disclosure to be to the reasonable satisfaction of all parties; and

(y) Charger shall take all necessary actions to give effect to the transactions contemplated by the Arrangement Agreement and the Arrangement.

Additional Covenants of AvenEx

The Arrangement Agreement contains customary negative and affirmative covenants specific to AvenEx and its subsidiaries. Among other things, AvenEx has agreed that, until the Effective Date or the termination of the Arrangement Agreement, except with the prior written consent of Charger and Pace (such consent not to be unreasonably withheld), and except as otherwise expressly permitted, disclosed in writing or specifically contemplated by the Arrangement Agreement:

(a) Except as permitted or required by the Elbow River Purchase and Sale Agreement, AvenEx's business and the business of each of its subsidiaries shall be conducted only in the usual and ordinary course of business consistent with past practices (for greater certainty, where it is an operator of any property, it shall operate and maintain such property in a proper and prudent manner in accordance with good-industry practice and the agreements governing the ownership and operation of such property), provided that it shall be entitled and authorized to comply with all pre-emptive rights, first purchase rights or rights of first refusal that are applicable to its assets and become operative by virtue of the Arrangement Agreement or any of the transactions contemplated by the Arrangement Agreement, and AvenEx shall consult with Charger and Pace in respect of the ongoing business and affairs of AvenEx and its subsidiaries and keep Charger and Pace apprised of all material developments relating thereto;

(b) AvenEx shall not directly or indirectly do or permit to occur any of the following: (i) amend its constating documents, other than as may be required in connection with an internal reorganization of AvenEx to wind-up certain inactive direct and indirect subsidiaries, subject to the prior written consent of the other parties, acting reasonably; (ii) declare, set aside or pay any dividend or other

distribution or payment (whether in cash, shares or property) in respect of its outstanding shares, except for the declaration and payment of monthly cash dividends on the AvenEx Shares in an amount not exceeding $0.035 per share; (iii) issue (other than on exercise or upon the vesting of currently outstanding AvenEx Options and AvenEx RSUs, respectively), grant, sell or pledge or agree to issue, grant, sell or pledge any shares of AvenEx or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, shares of AvenEx or its subsidiaries; (iv) redeem, purchase or otherwise acquire any of its outstanding shares or other securities, except as permitted hereunder; (v) split, combine or reclassify any of its shares; (vi) other than as may be required in connection with an internal reorganization of AvenEx to wind-up certain inactive direct and indirect subsidiaries, as previously disclosed in writing to the other parties, adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or reorganization of AvenEx; (vii) reduce the stated capital of AvenEx or any of its subsidiaries or (viii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;

(c) AvenEx shall not, except as provided in the Elbow River Purchase and Sale Agreement or except as previously disclosed in writing to Charger and Pace on or prior to the date of the Arrangement Agreement, directly or indirectly: (i) sell, pledge, dispose of or encumber any assets having an individual value in excess of $200,000, other than production in the ordinary course of business;

(ii) expend or commit to expend more than $200,000 individually or $500,000 in the aggregate in respect of any capital expenditures; (iii) expend or commit to expend any amounts with respect to any operating expenses other than in the ordinary course of business or pursuant to the Arrangement Agreement; (iv) acquire (by merger, amalgamation, consolidation or acquisition of shares or assets or otherwise) any corporation, partnership or other business organization or division thereof, or make any investment therein either by purchase of shares or securities, contributions of capital or property transfer; (v) acquire any assets with an acquisition cost in excess of $200,000 individually or $500,000 in the aggregate; (vi) incur any indebtedness for borrowed money in excess of existing credit facilities, or any other material liability or obligation or issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other individual or entity, or make any loans or advances, other than in respect of fees payable to legal, financial and other advisors in the ordinary course of business or in respect of the Arrangement Agreement; (vii) authorize, recommend or propose any release or relinquishment of any material contract right; (viii) waive, release, grant or transfer any material rights of value or modify or change in any material respect any existing material license, lease, contract, production sharing agreement, government land concession or other material document;

(ix) enter into or terminate any hedges, swaps or other financial instruments or like transactions; or

(x) authorize or propose any of the foregoing, or enter into or modify any contract, agreement,

commitment or arrangement to do any of the foregoing,

(d) neither AvenEx nor any of its subsidiaries shall (except as permitted or required by the Elbow River Purchase and Sale Agreement) adopt or amend or make any contribution to any bonus, cost plus employee benefit plan, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, other compensation or other similar plan, agreement, trust, fund or arrangements for the benefit of employees, except as is necessary to comply with the law or with respect to existing provisions of any such plans, programs, arrangements or agreements including the AvenEx employment agreements entered into with officers of AvenEx, copies of which have been provided to each of the other parties;

(e) other than pursuant to the employment agreements entered into with officers of AvenEx, copies of which have been provided to each of the other parties, and except as otherwise required by the Elbow River Purchase and Sale Agreement, AvenEx shall not, nor permit any subsidiary to,

(i) grant any officer, director or employee an increase in compensation in any form; (ii) grant any general salary increase; (iii) take any action with respect to the amendment or grant of any severance or termination pay policies or arrangements for any directors, officers or employees;

(iv) amend (other than to permit accelerated vesting of currently outstanding stock options and, other than to allow for surrender of any outstanding out-of-the-money AvenEx Options in

exchange for the payment by AvenEx of not more than an aggregate of $1,500 less applicable withholding taxes) any stock option plan, the terms of any outstanding stock options or any restricted share unit plan; nor (v) make any loan to any officer, director or any other party not at arm's length;

(f) AvenEx shall use its reasonable commercial efforts to cause its current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse (except as may be necessary to give effect to the sale of the Elbow River Marketing Business), unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect and shall pay all premiums in respect of such insurance that become due prior to the Effective Date,

(g) AvenEx shall not take any action or permit any of its subsidiaries to take any action that would render, or may reasonably be expected to render, any representation or warranty made by it in the Arrangement Agreement untrue in any material respect at any time prior to completion of the Arrangement or termination of the Arrangement Agreement, whichever first occurs;

(h) AvenEx shall promptly notify Charger and Pace in writing of any material change (actual, anticipated, contemplated or, to the knowledge of AvenEx threatened, financial or otherwise) in its business, operations, affairs, assets, capitalization, financial condition, prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of AvenEx or any of its subsidiaries considered on a consolidated basis, or of any change in any representation or warranty provided by AvenEx in the Arrangement Agreement which change is or may be of such a nature to render any representation or warranty misleading or untrue in any material respect and AvenEx shall in good faith discuss with Charger and Pace any change in circumstances (actual, anticipated, contemplated, or to the knowledge of AvenEx, threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to Charger and Pace pursuant to this provision;

(i) AvenEx shall ensure that it has available funds to permit the payment of the fees pursuant to an AvenEx Damages Event, and shall take all such actions as may be necessary to ensure that it maintains such availability to ensure that it is able to pay the fees pursuant to an AvenEx Damages Event if and when required;

(j) AvenEx shall use its reasonable commercial efforts to obtain the consent of its bankers and other third parties to the transactions contemplated by the Arrangement Agreement and provide the same to Charger and Pace on or prior to the date of the Final Order;

(k) AvenEx shall use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in sections 5.1, 5.3 and 5.4 of the Arrangement Agreement as soon as reasonably possible to the extent that the satisfaction of the same is within the control of AvenEx;

(l) AvenEx shall provide notice to Charger and Pace of the AvenEx Meeting and allow Charger's and Pace's representatives to attend such meeting;

(m) subject to compliance by Charger with section 3.1(n) of the Arrangement Agreement and by Pace with section 3.3(n) of the Arrangement Agreement, AvenEx will ensure that the Joint Information Circular provides AvenEx Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters before them, and will set out the Charger Information and the Pace Information in the Joint Information Circular in the form approved by Charger and Pace, respectively, and shall include, without limitation, (i) any financial statements in respect of prior acquisitions made by it that are required to be included therein in accordance with Applicable Laws; (ii) the unanimous determination of the directors of AvenEx entitled to vote that the Arrangement is fair to AvenEx Shareholders, is in the best interests of AvenEx and

AvenEx Shareholders, and include the unanimous recommendation of the directors of AvenEx entitled to vote that the AvenEx Shareholders vote in favour of the AvenEx Arrangement Resolution; and (iii) the fairness opinion of AvenEx's financial advisor that the Arrangement is fair, from a financial point of view, to AvenEx Shareholders; provided that, notwithstanding the covenant of AvenEx in this subsection, prior to the completion of the Arrangement, the board of directors of AvenEx may withdraw, modify or change the recommendation regarding the Arrangement if, in the opinion of such board of directors, acting reasonably, having received the advice of its outside legal counsel which is reflected in minutes of the meeting of the board of directors of AvenEx (a copy of which shall be provided to Charger and Pace), such withdrawal, modification or change is required to enable the board of directors of AvenEx to act in a manner consistent with its fiduciary duties under Applicable Laws and, if applicable, provided the board of directors shall have complied with the provisions of section 3.5 of the Arrangement Agreement and AvenEx shall have paid the fees pursuant to section 6.1 of the Arrangement Agreement to Charger and Pace;

(n) AvenEx will assist Charger and Pace in the preparation of the Joint Information Circular and provide to Charger and Pace, in a timely and expeditious manner, all information as may be reasonably requested by Charger and Pace with respect to AvenEx for inclusion in the Joint Information Circular and any amendments or supplements thereto, in each case complying in all material respects with all applicable legal requirements on the date of issue thereof and to enable Charger and Pace to meet the standard referred to in sections 3.1(m) and 3.3(m) of the Arrangement Agreement, respectively, with respect to AvenEx, the Arrangement and the transactions to be considered at the Charger Meeting and the Pace Meeting;

(o) AvenEx shall indemnify and save harmless Charger and Pace and the directors, officers and agents of Charger and Pace from and against any and all liabilities, claims, demands, losses, costs, damages and expenses (excluding any loss of profits or consequential damages) to which Charger or Pace, or any director, officer or agent thereof, may be subject or which Charger or Pace, or any director, officer or agent thereof, may suffer, whether under the provisions of any statute or otherwise, in any way caused by, or arising, directly or indirectly, from or in consequence of:

(i) any misrepresentation or alleged misrepresentation in the AvenEx Information or in any material filed by AvenEx in compliance or intended compliance with any Applicable Laws;

(ii) any order made or any inquiry, investigation or proceeding by any securities commission or other competent authority based upon any untrue statement or omission or alleged untrue statement or omission of a material fact or any misrepresentation or any alleged misrepresentation in the AvenEx Information or in any material filed by or on behalf of AvenEx in compliance or intended compliance with applicable securities laws, which prevents or restricts the trading in the AvenEx Shares; or

(iii) AvenEx not complying with any requirement of Applicable Laws in connection with the transactions contemplated in the Arrangement Agreement;

except that AvenEx shall not be liable in any such case to the extent that any such liabilities, claims, demands, losses, costs, damages and expenses arise out of or are based upon any misrepresentation or alleged misrepresentation of a material fact based solely on the Charger Information or the Pace Information included in the Joint Information Circular;

(p) except for proxies and other non-substantive communications with securityholders, AvenEx will furnish promptly to Charger or Charger's counsel and to Pace or Pace's counsel, a copy of each notice, report, schedule or other document delivered, filed or received by AvenEx in connection with: (i) the Arrangement; (ii) the AvenEx Meeting; (iii) any filings under Applicable Laws; and

(vi) any dealings with regulatory agencies in connection with the transactions contemplated by the Arrangement Agreement;

(q) AvenEx shall solicit proxies to be voted at the AvenEx Meeting in favour of matters to be considered at the AvenEx Meeting, including the AvenEx Arrangement Resolution, provided that AvenEx may, with the consent of the other parties, engage a proxy solicitation agent for such purpose;

(r) AvenEx shall conduct the AvenEx Meeting in accordance with the by-laws of AvenEx and any instrument governing the AvenEx Meeting, as applicable, and as otherwise required by law;

(s) AvenEx will make all necessary filings and applications under Applicable Laws required to be made on the part of AvenEx in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in compliance with such Applicable Laws;

(t) AvenEx shall promptly advise Charger and Pace of the number of AvenEx Shares, for which AvenEx receives notices of dissent or written objections to the Arrangement and provide Charger and Pace with copies of such notices and written objections;

(u) concurrent with the execution of the Arrangement Agreement (or, if the parties hereto consent, within five days of the date of the Arrangement Agreement), AvenEx shall deliver to Charger and Pace Support Agreements executed by AvenEx Shareholders who are directors and officers of AvenEx with respect to all AvenEx Shares which they own or control, and such Support Agreements shall include not less than 3.5% of the issued and outstanding AvenEx Shares;

(v) prior to the Effective Date, AvenEx shall cooperate with Pace in making application to the TSX to list the Pace Shares issuable under the Arrangement;

(w) AvenEx shall use its reasonable commercial efforts to ensure that all AvenEx Options are exercised or cancelled prior to the Effective Time and that all AvenEx RSUs are settled and terminated prior to the Effective Time in accordance with section 2.8 of the Arrangement Agreement;

(x) AvenEx shall cooperate with the other parties to ensure that the proposed monthly dividend payment by Spyglass of not less than $0.03 per Spyglass share is disclosed in any press release and material change report relating to the Arrangement, including that subject to prevailing and anticipated commodity prices, Spyglass will not vary its monthly dividend rate on the Spyglass shares for a period of six (6) months following the Effective Date, such disclosure to be to the reasonable satisfaction of all parties; and

(y) AvenEx shall take all necessary actions to give effect to the transactions contemplated by the Arrangement Agreement and the Arrangement.

Additional Covenants of Pace

The Arrangement Agreement contains customary negative and affirmative covenants specific to Pace and its subsidiaries. Among other things, Pace has agreed that, until the Effective Date or the termination of the Arrangement Agreement, except with the prior written consent of Charger and AvenEx (such consent not to be unreasonably withheld), and except as otherwise expressly permitted, disclosed in writing or specifically contemplated by the Arrangement Agreement:

(a) Pace's business and the business of each of its subsidiaries shall be conducted only in the usual and ordinary course of business consistent with past practices (for greater certainty, where it is an operator of any property, it shall operate and maintain such property in a proper and prudent manner in accordance with good-industry practice and the agreements governing the ownership and operation of such property), provided that it shall be entitled and authorized to comply with all pre-emptive rights, first purchase rights or rights of first refusal that are applicable to its assets and become operative by virtue of the Arrangement Agreement or any of the transactions

contemplated by the Arrangement Agreement, and Pace shall consult with Charger and AvenEx in respect of the ongoing business and affairs of Pace and its subsidiaries and keep Charger and AvenEx apprised of all material developments relating thereto;

(b) Pace shall not directly or indirectly do or permit to occur any of the following: (i) amend its constating documents; (ii) declare, set aside or pay any dividend or other distribution or payment (whether in cash, shares or property) in respect of its outstanding shares; (iii) issue (other than on exercise of currently outstanding Pace Options), grant, sell or pledge or agree to issue, grant, sell or pledge any shares of Pace or its subsidiaries, or securities convertible into or exchangeable or exercisable for, or otherwise evidencing a right to acquire, shares of Pace or its subsidiaries;

(iv) redeem, purchase or otherwise acquire any of its outstanding shares or other securities, except as permitted hereunder or except as required by the terms and conditions of the Pace ESSP;

(v) split (except as provided in the Plan of Arrangement), combine or reclassify any of its shares;

(vi) adopt a plan of liquidation or resolutions providing for the liquidation, dissolution, merger, consolidation or reorganization of Pace; (vii) reduce the stated capital of Pace or its subsidiaries; or (viii) enter into or modify any contract, agreement, commitment or arrangement with respect to any of the foregoing;

(c) Pace shall not, except as previously disclosed in writing to AvenEx and Charger on or prior to the date of the Arrangement Agreement, directly or indirectly: (i) sell, pledge, dispose of or encumber any assets having an individual value in excess of $200,000, other than production in the ordinary course of business; (ii) expend or commit to expend more than $200,000 individually or $500,000 in the aggregate in respect of any capital expenditures; (iii) expend or commit to expend any amounts with respect to any operating expenses other than in the ordinary course of business or pursuant to the Arrangement Agreement; (iv) acquire (by merger, amalgamation, consolidation or acquisition of shares or assets or otherwise) any corporation, partnership or other business organization or division thereof, or make any investment therein either by purchase of shares or securities, contributions of capital or property transfer; (v) acquire any assets with an acquisition cost in excess of $200,000 individually or $500,000 in the aggregate; (vi) incur any indebtedness for borrowed money in excess of existing credit facilities, or any other material liability or obligation or issue any debt securities or assume, guarantee, endorse or otherwise become responsible for, the obligations of any other individual or entity, or make any loans or advances, other than in respect of fees payable to legal, financial and other advisors in the ordinary course of business or in respect of the Arrangement Agreement; (vii) authorize, recommend or propose any release or relinquishment of any material contract right; (viii) waive, release, grant or transfer any material rights of value or modify or change in any material respect any existing material license, lease, contract, production sharing agreement, government land concession or other material document; (ix) enter into or terminate any hedges, swaps or other financial instruments or like transactions; or (x) authorize or propose any of the foregoing, or enter into or modify any contract, agreement; commitment or arrangement to do any of the foregoing;

(d) neither Pace nor any of its subsidiaries shall adopt or amend or make any contribution to any bonus, cost plus employee benefit plan, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive compensation, other compensation or other similar plan, agreement, trust, fund or arrangements for the benefit of employees, except as is necessary to comply with the law or with respect to existing provisions of any such plans, programs, arrangements or agreements, including the Pace employment agreements entered into with officers of Pace, copies of which have been provided to each of the other parties;

(e) other than pursuant to the employment agreements entered into with officers of Pace, copies of which have been provided to each of the other parties, Pace shall not, nor permit any of its subsidiaries to, (i) grant any officer, director or employee an increase in compensation in any form; (ii) grant any general salary increase; (iii) take any action with respect to the amendment or grant of any severance or termination pay policies or arrangements for any directors, officers or employees; (iv) amend (other than to permit accelerated vesting of currently outstanding stock options and other than to allow for the surrender of any outstanding out-of-the-money Pace

Options in exchange for the payment by Pace of not more than an aggregate of $3,500 less applicable withholding taxes) any stock option plan, the terms of any outstanding stock options, restricted share awards or performance share awards; nor (v) make any loan to any officer, director or any other party not at arm's length;

(f) Pace shall use its reasonable commercial efforts to cause its current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance or re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect, and shall pay all premiums in respect of such insurance that become due prior to the Effective Date;

(g) Pace shall not take any action or permit any of its subsidiaries to take any action, that would render, or may reasonably be expected to render, any representation or warranty made by it in the Arrangement Agreement untrue in any material respect at any time prior to completion of the Arrangement or termination of the Arrangement Agreement, whichever first occurs;

(h) Pace shall promptly notify AvenEx and Charger in writing of any material change (actual, anticipated, contemplated or, to the knowledge of Pace threatened, financial or otherwise) in its business, operations, affairs, assets, capitalization, financial condition prospects, licenses, permits, rights, privileges or liabilities, whether contractual or otherwise, of Pace or any of its subsidiaries considered on a consolidated basis, or of any change in any representation or warranty provided by Pace in the Arrangement Agreement which change is or may be of such a nature to render any representation or warranty misleading or untrue in any material respect and Pace shall in good faith discuss with AvenEx and Charger any change in circumstances (actual, anticipated, contemplated, or to the knowledge of Pace threatened) which is of such a nature that there may be a reasonable question as to whether notice need to be given to AvenEx and Charger pursuant to this provision;

(i) Pace shall ensure that it has available funds to permit the payment of the fees pursuant to a Pace Damages Event, and shall take all such actions as may be necessary to ensure that it maintains such availability to ensure that it is able to pay the fees pursuant to a Pace Damages Event if and when required;

(j) Pace shall use its reasonable commercial efforts to obtain the consent of its bankers and other third parties to the transactions contemplated by the Arrangement Agreement and provide the same to AvenEx and Charger on or prior to the date of the Final Order;

(k) Pace shall use its reasonable commercial efforts to satisfy or cause satisfaction of the conditions set forth in sections 5.1, 5.3 and 5.4 of the Arrangement Agreement as soon as reasonably possible to the extent that the satisfaction of the same is within the control of Pace;

(l) Pace shall provide notice to AvenEx and Charger of the Pace Meeting and allow AvenEx's and Charger's representatives to attend such meeting;

(m) subject to compliance by AvenEx with section 3.2(n) of the Arrangement Agreement and by Charger with section 3.1(n) of the Arrangement Agreement, Pace will ensure that the Joint Information Circular provides Pace Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters before them, and will set out the AvenEx Information and the Charger Information in the Joint Information Circular in the form approved by AvenEx and Charger, respectively, and shall include, without limitation, (i) any financial statements in respect of prior acquisitions made by it that are required to be included therein in accordance with Applicable Laws; and (ii) the unanimous determination of the directors of Pace entitled to vote that the Arrangement is fair to Pace Shareholders, is in the best interests of Pace and the Pace Shareholders, and include the recommendation of the board of directors of Pace

that the Pace Shareholders vote in favour of the Pace Arrangement Resolution; and (iii) the fairness opinion of Pace's financial advisor that the Arrangement is fair from a financial point of view, to Pace Shareholders; provided that, notwithstanding the covenant of Pace in this subsection, prior to the completion of the Arrangement, the board of directors of Pace may withdraw, modify or change the recommendation regarding the Arrangement if, in the opinion of such board of directors acting reasonably, having received the advice of its outside legal counsel which is reflected in minutes of the meeting of the board of directors of Pace (a copy of which shall be provided to AvenEx and Charger), such withdrawal, modification or change is required to enable the board of directors of Pace to act in a manner consistent with its fiduciary duties under Applicable Laws and, if applicable, provided the board of directors shall have complied with the provisions of section 3.5 of the Arrangement Agreement and Pace shall have paid the fees pursuant to section 6.2 of the Arrangement Agreement to Charger and AvenEx;

(n) Pace will assist Charger and AvenEx in the preparation of the Joint Information Circular and provide to Charger and AvenEx, in a timely and expeditious manner, all information as may be reasonably requested by Charger and AvenEx with respect to Pace for inclusion in the Joint Information Circular and any amendments or supplements thereto, in each case complying in all material respects with all applicable legal requirements on the date of issue thereof and to enable Charger and AvenEx to meet the standard referred to in sections 3.1(m) and 3.2(m) of the Arrangement Agreement, respectively, with respect to Pace, the Arrangement and the transactions to be considered at the Charger Meeting and the AvenEx Meeting;

(o) Pace shall indemnify and save harmless Charger and AvenEx and the directors, officers and agents of Charger and AvenEx from and against any and all liabilities, claims, demands, losses, costs, damages and expenses (excluding any loss of profits or consequential damages) to which Charger or AvenEx, or any director, officer or agent thereof, may be subject or which Charger or AvenEx, or any director, officer or agent thereof may suffer, whether under the provisions of any statute or otherwise, in any way caused by, or arising, directly or indirectly, from or in consequence of:

(i) any misrepresentation or alleged misrepresentation in the Pace Information or in any material filed by Pace in compliance or intended compliance with any Applicable Laws;

(ii) any order made or any inquiry, investigation or proceeding by any securities commission or other competent authority based upon any untrue statement or omission or alleged untrue statement or omission of a material fact or any misrepresentation or any alleged misrepresentation in the Pace Information or in any material filed by or on behalf of Pace in compliance or intended compliance with applicable securities laws, which prevents or restricts the trading in the Pace Shares; or

(iii) Pace not complying with any requirement of Applicable Laws in connection with the transactions contemplated in the Arrangement Agreement;

except that Pace shall not be liable in any such case to the extent that any such liabilities, claims, demands, losses, costs, damages and expenses arise out of or are based upon any misrepresentation or alleged misrepresentation of a material fact based solely on the Charger Information or the AvenEx Information included in the Joint Information Circular;

(p) except for proxies and other non-substantive communications with securityholders, Pace will furnish promptly to Charger or Charger's counsel and to AvenEx or AvenEx's counsel, a copy of each notice, report, schedule or other document delivered, filed or received by Pace in connection with: (i) the Arrangement; (ii) the Pace Meeting; (iii) any filings under Applicable Laws; and

(iv) any dealings with regulatory agencies in connection with the transactions contemplated by the Arrangement Agreement;

(q) Pace shall solicit proxies to be voted at the Pace Meeting in favour of matters to be considered at the Pace Meeting, including the Pace Arrangement Resolution, provided that Pace may, with the consent of the other parties, engage a proxy solicitation agent for such purpose;

(r) Pace shall conduct the Pace Meeting in accordance with the by-laws of Pace and any instrument governing the Pace Meeting, as applicable, and as otherwise required by law;

(s) Pace will make all necessary filings and applications under Applicable Laws required to be made on the part of Pace in connection with the transactions contemplated herein and shall take all reasonable action necessary to be in compliance with such Applicable Laws;

(t) Pace shall promptly advise Charger and AvenEx of the number of Pace Shares for which Pace receives notices of dissent or written objections to the Arrangement and provide Charger and AvenEx with copies of such notices and written objections;

(u) concurrent with the execution of the Arrangement Agreement (or, if the parties hereto consent, within five days of the date of the Arrangement Agreement), Pace shall deliver to Charger and AvenEx, Support Agreements from all directors and officers of Pace with respect to all Pace Shares which they own or control and such Support Agreements shall include not less than 1.97% of the issued and outstanding Pace Shares;

(v) prior to the Effective Date, Pace shall make application to the TSX to list the Pace Shares issuable under the Arrangement;

(w) at the Effective Time, subject to the satisfaction or waiver of the conditions as set forth herein, Pace shall provide Computershare Trust Company of Canada with an irrevocable direction authorizing and directing Computershare Trust Company of Canada to deliver the Pace Shares issuable pursuant to the Plan of Arrangement;

(x) Pace shall use its reasonable commercial efforts to ensure that all Pace Options are exercised or cancelled at or prior to the Effective Time and that all Pace RSAs, Pace PSAs and Pace DSAs are paid out and terminated at or prior to the Effective Time in accordance with section 2.10 of the Arrangement Agreement;

(y) Pace shall cooperate with the other parties to ensure that the proposed monthly dividend payment by Spyglass of not less than $0.03 per Spyglass share is disclosed in any press release and material change report relating to the Arrangement, including that subject to prevailing and anticipated commodity prices, Spyglass will not vary its monthly dividend rate on the Spyglass shares for a period of six (6) months following the Effective Date, such disclosure to be to the reasonable satisfaction of all parties; and

(z) Pace shall take all necessary actions to give effect to the transactions contemplated by the Arrangement Agreement and the Arrangement.

Non-Solicitation

Pursuant to the Arrangement Agreement, each of Charger, AvenEx and Pace has agreed that it:

(a) shall immediately cease and cause to be terminated any existing discussions or negotiations or other proceedings initiated prior to the date of the Arrangement Agreement by it, or its officers, directors, employees, financial advisors, representatives and agents ("Representatives") or others with respect to all Acquisition Proposals, and shall immediately request the return or destruction of all information provided to any third parties who have entered into a confidentiality agreement with a party relating to an Acquisition Proposal and shall use its reasonable commercial efforts to ensure that such requests are honoured;

(b) shall not solicit, facilitate, initiate, encourage or take any action to solicit, facilitate, initiate, entertain or encourage any inquiries or communication regarding or the making of any proposal or offer that constitutes, may constitute, or may reasonably be expected to lead to, an Acquisition Proposal, including, without limitation, by way of furnishing information;

(c) shall not enter into or participate in any negotiations or initiate any discussion regarding Acquisition Proposal, or furnish to any other person any information with respect to its securities, business, properties, operations or conditions (financial or otherwise) in connection with, or furtherance of, Acquisition Proposal or otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt of any other person to do or seek to do any of the foregoing;

(d) shall not waive, or otherwise forebear in the enforcement of, or release any person from any confidentiality or standstill agreement to which it and such person are parties or amend any such agreement and shall exercise all rights to require the return of information previously provided to such persons and shall exercise all rights to require the destruction of all materials including or incorporating any information regarding it;

(e) shall not accept, recommend, approve, agree to, endorse or propose publicly to accept, recommend, approve, agree to, or endorse or enter into an agreement to implement an Acquisition Proposal; and

(f) shall not, and shall not authorize or permit any of its Representatives to, directly or indirectly, solicit, initiate or encourage (including by way of furnishing information) any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to an Acquisition Proposal from any person, or engage in any discussion, negotiations or inquiries relating thereto or accept any Acquisition Proposal.

Notwithstanding the above, each of Pace, Charger and AvenEx (and their respective Representatives) may, prior to the approval of the Pace Arrangement Resolution at the Pace Meeting, the Charger Arrangement Resolution at the Charger Meeting or the AvenEx Arrangement Resolution at the AvenEx Meeting, as the case may be:

(a) engage in discussions or negotiations with any outside person or entity who (without any solicitation, initiation or encouragement, directly or indirectly, by the relevant party to the Arrangement Agreement or its Representatives) seeks to initiate such discussions or negotiations and, subject to the execution of a confidentiality agreement in a form substantially similar to the Confidentiality Agreement, may furnish such outside person or entity information concerning it and its business, properties and assets that has previously been provided to the other parties to the Arrangement Agreement if, and only to the extent that:

(i) the third party has first made a written bona fide Acquisition Proposal which the board of directors of the party subject to the Acquisition Proposal determines in good faith: (1) did not result from a breach of the Arrangement Agreement or any other agreement between the third party making such Acquisition Proposal and the party subject to the Acquisition Proposal; (2) complies with all applicable Laws; (3) in respect of which any financing, funds or other consideration necessary to complete the Acquisition Proposal have been demonstrated to the satisfaction of the board of directors of the party subject to the Acquisition Proposal (after receiving advice from its financial advisor(s) and outside legal counsel), to have been obtained or are reasonably likely to be obtained (as evidenced by a written financing commitment from one or more financially sound financial institutions of national reputation) to fund completion of the Acquisition Proposal at the time and on the basis set out therein; (4) after consultation with its financial advisor(s), would or would be reasonably likely to, if consummated in accordance with its terms, result in a transaction financially superior for the party's shareholders compared to the transaction contemplated by the Arrangement Agreement;

(5) after consultation with its financial advisor(s) and outside legal counsel, is reasonably

likely to be consummated without undue delay within the time and on the terms proposed, taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal; (6) is not subject to any due diligence or access condition, other than to permit access to the books, records or personnel of the Party which is not more extensive than that which would be customarily provided for confirmatory due diligence purposes and which access shall not extend beyond the fifth calendar day after which such access is first afforded to the person making the Acquisition Proposal; and (7) after receiving the advice of outside legal counsel, as reflected in minutes of a meeting of the board of directors of the party subject to the Acquisition Proposal, that the taking of such action is necessary for the board of directors of the party to act in a manner consistent with its fiduciary duties under applicable Laws (a "Superior Proposal");

(ii) prior to furnishing such information to or entering into or participating in any such discussions or negotiations with such third party, the party shall: (1) provide prompt notice to the other parties to the effect that it is furnishing information to or entering into or participating in discussions or negotiations with such third party, together with a copy of the confidentiality and standstill agreement referenced above and, if not previously provided to such other parties, copies of all information provided to such third party concurrently with the provision of such information to such third party; (2) notify the other parties orally and in writing of any inquiries, offers or proposals with respect to an actual or contemplated Superior Proposal (which written notice shall include a copy of any such proposal (and any amendments or supplements thereto), together with all financing documents, the identity of the person making it, if not previously provided to the other parties and copies of all information provided to the third party), within 24 hours of the receipt thereof; and (3) keep the other parties informed of the status and details of any such inquiry, offer or proposal and answer the other parties reasonable questions with respect thereto;

(iii) it provides immediate notice to the other parties to the Arrangement Agreement at such time as it or such outside person or entity terminates any such discussions or negotiations; and

(iv) it immediately provides or makes available to the other parties to the Arrangement Agreement any information provided to any such outside person or entity whether or not previously made available to the other parties to the Arrangement Agreement;

(b) comply with Multilateral Instrument 62-104 and Part 14 of the Securities Act (Alberta) with regard to a takeover bid or a tender or exchange offer, if applicable, and other rules under Applicable Laws and U.S. Securities Laws relating to the provision of directors' circulars and the taking of a position with respect to a takeover bid or a tender or exchange offer, and make appropriate disclosure with respect thereto to its shareholders; and

(c) accept, recommend, approve or implement a Superior Proposal from an outside person or entity, but only if, prior to such acceptance, recommendation, approval or implementation: (i) its board of directors shall have concluded in good faith, after considering all proposals to adjust the terms and conditions of the Arrangement Agreement which may be offered by the other parties to the Arrangement Agreement during the three Business Day notice period set forth in subsection (c) below and after receiving the advice of outside counsel as reflected in minutes of the directors of the party that the taking of such action is necessary for the board of directors to discharge of its fiduciary duties under Applicable Laws; (ii) such party complies with its obligations set forth below; and (iii) such party terminates the Arrangement Agreement in accordance with section 10.1 of the Arrangement Agreement and concurrently pays the amounts required by Article 6 of the Arrangement Agreement.

Following receipt of a Superior Proposal, the party subject to such Superior Proposal shall give the other parties, orally and in writing, at least three Business Days advance notice of any decision by the board of directors of the party subject to such Superior Proposal to accept, recommend, approve or enter into an agreement to implement a Superior Proposal, which notice shall (i) confirm that such board of directors has determined that such Acquisition Proposal constitutes a Superior Proposal, (ii) identify the third party making the Superior Proposal, (iii) provide a true and complete copy thereof, including all financing documents, and any amendments thereto, and (iv) confirm that the board of directors of the party subject to such Superior Proposal will accept, recommend, approve or enter into an agreement to implement the Superior Proposal following the expiry of such three Business Day period if the other parties and their financial and legal advisors have not made such adjustments in the terms and conditions of the Arrangement Agreement and the Arrangement as would enable the party subject to such Superior Proposal to proceed with the Arrangement as amended rather than the Superior Proposal.

During such three Business Day period, the party subject to such Superior Proposal agrees not to accept, recommend, approve or enter into any agreement to implement such Superior Proposal and not to release the party making the Superior Proposal from any standstill provisions and shall not withdraw, redefine, modify or change its recommendation in respect of the Arrangement. In addition, during such three Business Day period the party subject to such Superior Proposal shall, and shall cause its financial and legal advisors to, negotiate in good faith with the other parties and their financial and legal advisors to make such adjustments in the terms and conditions of the Arrangement Agreement and the Arrangement as would enable the party subject to such Superior Proposal to proceed with the Arrangement as amended rather than the Superior Proposal. In the event the other parties propose to amend the Arrangement Agreement and the Arrangement on a basis such that the board of directors of the party subject to the Superior Proposal determines that the proposed transaction is no longer a Superior Proposal and so advises the board of directors of the other parties prior to the expiry of such period, the board of directors of the party subject to such Acquisition Proposal shall not accept, recommend, approve or enter into any agreement to implement such Acquisition Proposal and shall not release the party making the Acquisition Proposal from any standstill provisions and shall not withdraw, redefine, modify or change its recommendation in respect of the Arrangement and the parties will enter into an agreement to reflect such proposed amendments.

In the event that a party provides the notice contemplated above on a date which is less than three Business Days prior to the AvenEx Meeting, Pace Meeting or Charger Meeting, as the case may be, the other parties shall be entitled to: (a) adjourn or postpone its shareholders' meeting; and (b) require the party subject to the Superior Proposal to adjourn or postpone its shareholders' meeting, in each case to a date that is not more than ten Business Days after the date of such notice.

Each of the parties to the Arrangement Agreement has agreed that all information that may be provided to it by a party hereto with respect to any Superior Proposal pursuant to the Arrangement Agreement shall be treated as if it were "Evaluation Material" as that term is defined in the applicable Confidentiality Agreement and shall not be disclosed or used except in accordance with the provisions of the applicable Confidentiality Agreement or in order to enforce its rights under the Arrangement Agreement in legal proceedings.

Notwithstanding any other provision of the Arrangement Agreement, promptly, and in any event within one Business Day after the receipt by any party or by its Representatives of any Acquisition Proposal, or any material amendments to such Acquisition Proposal, or any request for non-public information relating to such party, the party receiving such Acquisition Proposal, material amendments to such Acquisition Proposal or request for non-public information shall notify the other parties at first orally and then in writing, and such written notification shall include a copy of any Acquisition Proposal or material amendments to such Acquisition Proposal.

Nothing contained in the Arrangement Agreement shall prohibit the board of directors of any party from withdrawing, modifying, qualifying or changing its recommendation to its shareholders in respect of the transactions contemplated by the Arrangement Agreement prior to the receipt of the requisite approval by such shareholders, if the board of directors of such party determines, in good faith (after consultation with its financial advisor(s) and after receiving written advice of outside counsel), that such withdrawal, modification, qualification or change is necessary for the board of directors to act in a manner consistent with its fiduciary duties under Applicable Laws; provided that: (a) not less than 5 days before the board of directors considers any Acquisition Proposal in respect of any such withdrawal, modification, qualification or change, such party shall give the other parties written notice of such proposal and promptly advise the other parties of the proposed consideration of such proposal; and (b) the

foregoing shall not relieve a party from its obligation to proceed to call and hold the applicable shareholders' meeting and to hold the vote on the Pace Arrangement Resolution, the Charger Arrangement Resolution or the AvenEx Arrangement Resolution, as the case may be (provided that, except as required under Applicable Laws, such party shall be relieved from its obligations to actively solicit proxies in favour of the Arrangement in such circumstances), except in circumstances where the Arrangement Agreement is terminated in accordance with the terms of the Arrangement Agreement.

Each party to the Arrangement Agreement has agreed to ensure that its Representatives are aware of the provisions of Section 3.5 of the Arrangement Agreement and to be responsible for any breach of Section 3.5 of the Arrangement Agreement by its Representatives.

Representations and Warranties

The Arrangement Agreement contains certain customary representations and warranties in favour of each of Charger, AvenEx and Pace, summaries of certain of which are included below.

Representations and Warranties of Charger

In the Arrangement Agreement, Charger has made representations and warranties relating to various matters including the following: organization and qualification; authority relative to the Arrangement Agreement; no violations and absence of defaults and conflicts; no legal impediments and no authorizations or approvals needed; capitalization; no material adverse changes; information being true and complete; no orders by any regulatory authorities; litigation; presentation of financial statements; environmental matters and no violation thereof; no trading suspensions or default of applicable securities laws; severance and change of control agreements; employee benefit plans; financial advisors; recommendation of the Charger Board; confidentiality and standstill agreements; no shareholder rights plan; escrow; no voting trust agreements; flow-through obligations; total debt; tax pools; production; environmental matters and orders; subsidiaries; books and records; reporting issuer and listing status; registrar and transfer agent; taxes, tax reports and returns; no insider entitlement to royalties or interest; no insider indebtedness; guarantees and indemnities; insurance; auditors and recommendation letters; title; encumbrances; no default with respect to title; production sales contracts; production penalties; financial commitments; no withholding of material information; conduct of business; obligations for salary, wages, bonuses, commissions, vacation and other employee benefits; long term disability; good oilfield practices; reserve reports; title defects; unpaid taxes or assessments; "foreign private issuer" status; "investment company" status; HSR Act status; areas of mutual interest and areas of exclusion; and hedges and swaps.

Representations and Warranties of AvenEx

In the Arrangement Agreement, AvenEx has made representations and warranties relating to various matters including the following: organization and qualification; authority relative to the Arrangement Agreement; no violations and absence of defaults and conflicts; no legal impediments and no authorizations or approvals needed; capitalization; no material adverse changes; information being true and complete; no orders by any regulatory authorities; litigation; presentation of financial statements; environmental matters and no violation thereof; no trading suspensions or default of applicable securities laws; severance and change of control agreements; employee benefit plans; financial advisors; recommendation of the AvenEx Board; confidentiality and standstill agreements; no shareholder rights plan; no escrow or voting trust agreements; flow-through obligations; total debt; tax pools; production; environmental matters and orders; subsidiaries; books and records; reporting issuer and listing status; registrar and transfer agent; taxes, tax reports and returns; no insider entitlement to royalties or interest; no insider indebtedness; guarantees and indemnities; insurance; auditors and recommendation letters; title; encumbrances; no default with respect to title; production sales contracts; production penalties; financial commitments; no withholding of material information; accuracy of representations of warranties in the Elbow River Purchase and Sale Agreement; conduct of business; obligations for salary, wages, bonuses, commissions, vacation and other employee benefits; long term disability; good oilfield practices; reserve reports; title defects; unpaid taxes or assessments; "foreign private issuer" status; "investment company" status; HSR Act status; areas of mutual interest and areas of exclusion; and hedges and swaps.

Representations and Warranties of Pace

In the Arrangement Agreement, Pace has made representations and warranties relating to various matters including the following: organization and qualification; authority relative to the Arrangement Agreement; no violations and absence of defaults and conflicts; no legal impediments and no authorizations or approvals needed; capitalization; no material adverse changes; information being true and complete; no orders by any regulatory authorities; litigation; presentation of financial statements; environmental matters and no violation thereof; no trading suspensions or default of applicable securities laws; severance and change of control agreements; employee benefit plans; financial advisors; recommendation of the Pace Board; confidentiality and standstill agreements; shareholder rights plan; no escrow or voting trust agreements; flow-through obligations; total debt; tax pools; production; environmental matters and orders; subsidiaries; books and records; reporting issuer and listing status; registrar and transfer agent; taxes, tax reports and returns; no insider entitlement to royalties or interest; no insider indebtedness; guarantees and indemnities; insurance; auditors and recommendation letters; title; encumbrances; no default with respect to title; production sales contracts; production penalties; financial commitments; no withholding of material information; conduct of business; obligations for salary, wages, bonuses, commissions, vacation and other employee benefits; long term disability; good oilfield practices; reserve reports; title defects; unpaid taxes or assessments; "foreign private issuer" status; "investment company" status; HSR Act status; areas of mutual interest and areas of exclusion; and hedges and swaps.

Amendment

The Arrangement Agreement and the Plan of Arrangement may, at any time and from time to time before or after the holding of the Charger Meeting, AvenEx Meeting and the Pace Meeting but not later than the Effective Time, be amended by mutual written agreement of the parties, subject to the Interim Order, the Final Order and Applicable Laws.

Further, any party may:

(a) change the time for performance of any of the obligations or acts of the Parties;

(b) waive any inaccuracies or modify any representation or warranty contained in the Arrangement Agreement or in any document delivered pursuant to the Arrangement Agreement;

(c) waive compliance with or modify any of the covenants contained in the Arrangement Agreement and waive or modify performance of any of the obligations of the Parties; and

(d) waive compliance with or modify any conditions precedent contained in the Arrangement Agreement,

provided however that any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party and such waiver shall apply only to the specific matters identified in such instrument.

Termination and Termination Fees

Termination

The Arrangement Agreement may be terminated, prior to the filing of the Articles of Arrangement, by mutual written consent of Charger, AvenEx and Pace without further action on the part of the securityholders of AvenEx, Pace or Charger.

Furthermore, Charger may terminate the Arrangement Agreement upon written notice to AvenEx and Pace if:

(a) the Interim Order has been set aside or modified in a manner unacceptable to Charger, acting reasonably, on appeal or otherwise;

(b) the Pace Arrangement Resolution shall have failed to receive the requisite vote of the Pace Shareholders for approval at the Pace Meeting (including any adjournment or postponement thereof);

(c) the AvenEx Arrangement Resolution shall have failed to receive the requisite vote of the AvenEx Shareholders for approval at the AvenEx Meeting (including any adjournment or postponement thereof) in accordance with the terms of the Interim Order;

(d) the Charger Arrangement Resolution shall have failed to receive the requisite vote of the Charger Shareholders for approval at the Charger Meeting (including any adjournment or postponement thereof) in accordance with the terms of the Interim Order;

(e) the Final Order has not been granted in form and substance satisfactory to Charger, acting reasonably or, if issued, has been set aside or modified in a manner unacceptable to Charger, acting reasonably, on appeal or otherwise;

(f) the Effective Time of the Arrangement shall not have occurred on or before the Outside Date, except that the right to terminate the Arrangement Agreement under this section (f) shall not be available to Charger if Charger's failure to fulfil any of its obligations has been the cause of, or resulted in, the failure of the Effective Time to occur by such date;

(g) the Court, or any other court or governmental authority shall have issued an order or taken any other action, in each case which has become final and non-appealable and which restrains, enjoins or otherwise prohibits the Arrangement;

(h) either an AvenEx Damages Event or Pace Damages Event has occurred;

(i) as provided in section 5.5 of the Arrangement Agreement, provided that Charger is not then in breach of the Arrangement Agreement so as to cause any of the conditions set forth in sections 5.1, 5.2, 5.3 or 5.4 of the Arrangement Agreement not to be satisfied; or

(j) upon a decision by the Charger board of directors to accept, recommend, approve or enter into an agreement to implement a Superior Proposal in accordance with section 3.5(b)(iii) of the Arrangement Agreement, provided that Charger: (i) has complied with its obligations set forth in section 3.5 of the Arrangement Agreement; and (ii) concurrently pays the amounts required pursuant to section 6.3 of the Arrangement Agreement to each of AvenEx and Pace.

Furthermore, AvenEx may terminate the Arrangement Agreement upon written notice to Charger and Pace if:

(a) the Interim Order has been set aside or modified in a manner unacceptable to AvenEx, acting reasonably, on appeal or otherwise;

(b) the Pace Arrangement Resolution shall have failed to receive the requisite vote of the Pace Shareholders for approval at the Pace Meeting (including any adjournment or postponement thereof);

(e) the Final Order has not been granted in form and substance satisfactory to AvenEx, acting reasonably or, if issued, has been set aside or modified in a manner unacceptable to AvenEx, acting reasonably, on appeal or otherwise;

(f) the Effective Time of the Arrangement shall not have occurred on or before the Outside Date, except that the right to terminate the Arrangement Agreement under this section (f) shall not be available to AvenEx if AvenEx's failure to fulfil any of its obligations has been the cause of, or resulted in, the failure of the Effective Time to occur by such date;

(h) either a Charger Damages Event or Pace Damages Event has occurred;

(i) as provided in section 5.5 of the Arrangement Agreement, provided that AvenEx is not then in breach of the Arrangement Agreement so as to cause any of the conditions set forth in sections 5.1, 5.2, 5.3 or 5.4 of the Arrangement Agreement not to be satisfied; or

(j) upon a decision by the AvenEx board of directors to accept, recommend, approve or enter into an agreement to implement a Superior Proposal in accordance with section 3.5(b)(iii) of the Arrangement Agreement, provided that Charger: (i) has complied with its obligations set forth in section 3.5 of the Arrangement Agreement; and (ii) concurrently pays the amounts required pursuant to section 6.1 of the Arrangement Agreement to each of Charger and Pace.

Furthermore, Pace may terminate the Arrangement Agreement upon written notice to Charger and AvenEx if:

(a) the Interim Order has been set aside or modified in a manner unacceptable to Pace, acting reasonably, on appeal or otherwise;

(b) the Pace Arrangement Resolution shall have failed to receive the requisite vote of the Pace Shareholders for approval at the Pace Meeting (including any adjournment or postponement thereof);

(e) the Final Order has not been granted in form and substance satisfactory to Pace, acting reasonably or, if issued, has been set aside or modified in a manner unacceptable to Pace, acting reasonably, on appeal or otherwise;

(f) the Effective Time of the Arrangement shall not have occurred on or before the Outside Date, except that the right to terminate the Arrangement Agreement under this section (f) shall not be available to Pace if Pace's failure to fulfil any of its obligations has been the cause of, or resulted in, the failure of the Effective Time to occur by such date;

(h) either an AvenEx Damages Event or Charger Damages Event has occurred;

(i) as provided in section 5.5 of the Arrangement Agreement, provided that Pace is not then in breach of the Arrangement Agreement so as to cause any of the conditions set forth in sections 5.1, 5.2,

5.3 or 5.4 of the Arrangement Agreement not to be satisfied; or

(j) upon a decision by the Pace board of directors to accept, recommend, approve or enter into an agreement to implement a Superior Proposal in accordance with section 3.5(b)(iii) of the Arrangement Agreement, provided that Charger: (i) has complied with its obligations set forth in section 3.5 of the Arrangement Agreement; and (ii) concurrently pays the amounts required pursuant to section 6.2 of the Arrangement Agreement to each of Charger and AvenEx.

Termination Fees

Charger Damages Event

If at any time after the execution of the Arrangement Agreement:

(a) the board of directors of Charger has withdrawn, modified, qualified or changed any of its recommendations or determinations referred to in section 2.12 of the Arrangement Agreement, (including, for greater certainty, in the circumstances contemplated by subsection 3.5(f) of the Arrangement Agreement) in a manner adverse to either Pace or AvenEx, or shall have resolved to do so prior to the Effective Date, or has failed to publicly reconfirm any such recommendation upon the request of either Pace or AvenEx prior to the earlier of five days following such request or 72 hours prior to the Charger Meeting (unless the party requesting such reconfirmation is then in material breach of its obligations hereunder and such withdrawal, change or failure relates to such breach);

(b) a bona fide Acquisition Proposal is publicly announced, proposed, offered or made to the Charger Shareholders or any person shall have publicly announced an intention to make a bona fide Acquisition Proposal in respect of Charger and, after such Acquisition Proposal shall have been made known, made or announced, Charger Shareholders do not approve the Arrangement or vote upon the Charger Arrangement Resolution, and such Acquisition Proposal or an amended version thereof relating to Charger is consummated or effected as applicable within twelve months of the date the first Acquisition Proposal is publicly announced, proposed, offered or made;

(c) the board of directors of Charger accepts, recommends, approves or enters into an agreement to implement a Superior Proposal; or

(d) Charger is in breach of or non-compliance with any of its covenants made in the Arrangement Agreement, which breach or non-compliance individually or in the aggregate causes or would reasonably be expected to cause a material adverse change with respect to Charger or materially impedes or would reasonably be expected to materially impede the completion of the Arrangement, and Charger fails to cure such breach within 10 Business Days after receipt of written notice thereof from either Pace or AvenEx,

then in the event of the termination of the Arrangement Agreement as a result thereof: (i) Charger shall pay to Pace, within two Business Days of the first to occur of the foregoing, a fee in the amount of $1.40 million as liquidated damages in immediately available funds to an account designated by Pace; and (ii) Charger shall pay to AvenEx, within two Business Days of the first to occur of the foregoing, a fee in the amount of $0.70 million as liquidated damages in immediately available funds to an account designated by AvenEx.

AvenEx Damages Event

If at any time after the execution of the Arrangement Agreement:

(a) the board of directors of AvenEx has withdrawn, modified, qualified or changed any of its recommendations or determinations referred to in section 2.11 of the Arrangement Agreement, (including, for greater certainty, in the circumstances contemplated by subsection 3.5(f) of the Arrangement Agreement) in a manner adverse to either Charger or Pace, or shall have resolved to do so prior to the Effective Date, or has failed to publicly reconfirm any such recommendation upon the request of either Charger or Pace prior to the earlier of five days following such request or 72 hours prior to the AvenEx Meeting (unless the party requesting such reconfirmation is then in material breach of its obligations hereunder and such withdrawal, change or failure relates to such breach);

(b) a bona fide Acquisition Proposal is publicly announced, proposed, offered or made to the AvenEx Shareholders or any person shall have publicly announced an intention to make a bona fide Acquisition Proposal in respect of AvenEx and, after such Acquisition Proposal shall have been made known, made or announced, AvenEx Shareholders do not approve the AvenEx Arrangement Resolution or vote upon the AvenEx Arrangement Resolution, and such Acquisition Proposal or an amended version thereof relating to AvenEx is consummated or effected as applicable within twelve months of the date the first Acquisition Proposal is publicly announced, proposed, offered or made;

(c) the board of directors of AvenEx accepts, recommends, approves or enters into an agreement to implement a Superior Proposal;

(d) AvenEx is in breach of or non-compliance with any of its covenants made in the Arrangement Agreement, which breach or non-compliance individually or in the aggregate causes or would reasonably be expected to cause a material adverse change with respect to AvenEx or materially impedes or would reasonably be expected to materially impede the completion of the Arrangement, and AvenEx fails to cure such breach within 10 Business Days after receipt of written notice thereof from either Charger or Pace; or

(e) the Effective Time has not occurred on or prior to the Outside Date as a result of the failure to satisfy or waive, by mutual consent of the parties in accordance with the terms thereof, the condition set forth in section 5.1(s) of the Arrangement Agreement,

then in the event of the termination of the Arrangement Agreement as a result thereof: (i) AvenEx shall pay to Charger, within two Business Days of the first to occur of the foregoing, a fee in the amount of $0.85 million as liquidated damages in immediately available funds to an account designated by Charger; and (ii) AvenEx shall pay to Pace, within two Business Days of the first to occur of the foregoing, a fee in the amount of $3.65 million as liquidated damages in immediately available funds to an account designated by Pace.

Pace Damages Event

If at any time after the execution of the Arrangement Agreement:

(a) the board of directors of Pace has withdrawn, modified, qualified or changed any of its recommendations or determinations referred to in section 2.13 of the Arrangement Agreement, (including, for greater certainty, in the circumstances contemplated by subsection 3.5(f) of the Arrangement Agreement) in a manner adverse to either Charger or AvenEx, or shall have resolved to do so prior to the Effective Date, or has failed to publicly reconfirm any such recommendation upon the request of either Charger or AvenEx prior to the earlier of five days following such request or 72 hours prior to the Pace Meeting (unless the party requesting such reconfirmation is