Common use of Representations and Warranties of the Corporation Clause in Contracts

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and any Supplementary Material pursuant to Section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material pursuant to Section 4 3 above shall constitute a representation and warranty to the Underwriters Agents by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is Agents are relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgents and furnished by them in writing expressly for inclusion in the applicable document) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference in the Preliminary Prospectus and the Prospectus, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Securities and the Warrant Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference in the Preliminary Prospectus and the Prospectus, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Placement Memorandum and the U.S. Placement Memorandum and, to the extent applicable, any related Supplementary Material, each comply as to form and content in all material respects with the U.S. Securities Act and applicable state securities laws; and (iii) except as is disclosed in the Public Disclosure Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, material contracts, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a6(a) hereof, the Corporation represents and warrants (andto, where applicableand covenants with, covenants) to the Underwriterseach of the Agents, and acknowledges that each of the Underwriters is Agents are relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation Subsidiaries, are duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was they were incorporated, continued or amalgamatedamalgamated or otherwise existing, as the case may be, has have all requisite corporate power, authority and capacity to own, lease or operate its their properties and assets as described in the Prospectus and the Disclosure Record and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding upup , and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and direct or indirect beneficial holder of (a) 100of100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. each of: ("MVIHC")i) BG Explorations EOOD; (bii) 100% of the issued and outstanding securities of Madalena Austral SA Park Place Energy Turkey Limited; (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.)iii) Park Place Energy, Corp.; and (civ) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. Park Place Energy (Bermuda) Limited (individually, each a "Subsidiary" and, collectively, and collectively the "Subsidiaries"), ) in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever other than Permitted Encumbrances and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or any of the Subsidiaries any issued or unissued securities of the Subsidiaries;Subsidiaries;‌ (iii) the Corporation and each of the Subsidiaries is Subsidiaries, are duly registered and qualified to carry on business as described in the Prospectus and are validly existing under the laws of each jurisdiction in which it carries they carry on its business; (iv) other than the Subsidiaries, the Corporation does not have any subsidiaries, the Corporation has no investment or ownership interest shareholdings in any legal entity;other corporation or business organization, is not an "affiliate" or a "holding corporation" of any other body corporate (within the meaning of the BCBCA), and is not a partner of any partnerships or limited partnerships;‌ (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of and each of the provinces of AlbertaSubsidiaries have conducted and are conducting their business in compliance in all material respects with all applicable laws, British Columbiarules and regulations and, Saskatchewanin particular, Manitobaall applicable licensing and environmental legislation, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default regulations or by-laws or other lawful requirement of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by governmental or regulatory bodies applicable to the CSA Corporation and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying ProvincesSubsidiaries of each jurisdiction in which the Corporation and each of the Subsidiaries carry on business and the Corporation and each of the Subsidiaries hold all material licences, registrations, permits and qualifications in all jurisdictions in which the Corporation and each of the Subsidiaries carry on business which are necessary or desirable to carry on the business of the Corporation and each of the Subsidiaries, as now conducted and as presently proposed to be conducted in the Prospectus, except where the failure to so conduct its business or to hold such licences, registrations, permits or qualifications, would not have a material adverse effect on the Corporation and the Subsidiaries (taken as a whole) and all such licenses, registrations, permits and qualifications are valid and existing and in good standing and none of such licenses, registrations, permits or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and the Subsidiaries (taken as a whole) as now conducted or as proposed to be conducted and the Corporation is not aware of any legislation, regulation, rule or lawful requirements presently in force or proposed to be brought into force which the Corporation anticipates that the Corporation or any of its Subsidiaries will be unable to comply with without materially adversely affecting the Corporation or its Subsidiaries (taken as a whole); (vi) each neither the Corporation nor any of the Subsidiaries is in default or breach of, and the execution and delivery of this Agreement of, and the performance by of and compliance with the Corporation terms of its obligations hereunderthis Agreement, including the allotment, reservation, issuance and delivery Warrant Indenture or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not result in any breach of, or be in conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether under, or create a state of facts which, after notice or lapse of time time, or both), would result in a breach of or constitute a default under: (ai) any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the directors (or any committee thereof) or shareholders of the Corporation or a Subsidiary which are in effect at any of the date hereofSubsidiaries; (cii) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is are a party or by which it is bound; or (diii) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary any of the Subsidiaries or the property their properties or assets thereof, assets; which default or breach would might reasonably be expected to have materially adversely affect the business, operations, capital or condition (financial or otherwise) of the Corporation and the Subsidiaries (taken as a Material Adverse Effectwhole) or would impair the ability of the Corporation or any of the Subsidiaries to consummate the transactions contemplated hereby or thereby or to duly observe and perform any of its covenants or obligations contained in this Agreement and the Warrant Indenture; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws has full corporate capacity, power and authority to enter into this Agreement and the rules Warrant Indenture and regulations to perform its obligations set out herein and therein (including, without limitation, to issue the Offered Securities and Warrant Shares), and this Agreement has been, and the Warrant Indenture will, on the Closing Date, be, duly authorized, executed and delivered by the Corporation and this Agreement is, and the Warrant Indenture will, on the Closing Date, constitute, legal, valid and binding obligations of the Exchange andCorporation enforceable against the Corporation in accordance with their terms except that the validity, without limiting binding effect and enforceability are subject to the generality qualification that such validity, binding effect and enforceability may be limited by: (A) bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting creditors' rights; (B) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the foregoingapplicable court; (C) the equitable or statutory powers of the courts in Canada to stay proceedings before them and the execution of judgments; (D) rights to indemnity, contribution and waiver hereunder may be limited or unavailable under applicable law; (E) the applicable laws regarding limitations of actions; (F) the enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (G) the enforceability of the provisions exculpating a party from liability or duty otherwise owed by it to another and certain remedial terms and waivers of equitable defences provided for in such agreement or other document may be limited under applicable law; (H) the requirement of a court that the discretionary powers expressed to be conferred on any party to such agreement, indenture or other document be exercised reasonably and in good faith notwithstanding any provisions to the contrary and the possibility that such court may decline to accept as conclusive factual or legal determinations described as conclusive therein; and (I) the fact that costs of and incidental to all proceedings authorized to be taken in court are in the discretion of the court and that the court has full power to determine by whom and to what extent such costs shall be paid; (viii) there has not occurred been any reportable event (within the meaning of Section 4.11 of NI 51-102) with the Corporation's auditor; (ix) based upon representations made by the Corporation's auditor to the Corporation, the Corporation's auditor are independent chartered accountants with respect to the Corporation, as required by Applicable Securities Laws; (x) there has not been any material change in the capital, assets, liabilities or obligations (absolute, contingent or otherwise) of the Corporation from the position set forth in the Financial Statements which has not been disclosed in the Prospectus and there has not been any adverse material change in the business, operations, capital or condition (actual, anticipated, completed, proposed or threatened), financial or otherwise) or results of the operations of the Corporation since March 31, 2022 which has not been disclosed in the Prospectus; and since that date, other than as a result of changes in commodity prices, there have been no material facts, transactions, events or occurrences which could materially adversely affect the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects material contracts or capital condition (financial or otherwise) or results of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business operations of the Corporation and the Subsidiaries (taken as currently conducted, and the Corporation does a whole) which have not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xixxi) the AIF is Financial Statements, except for the unaudited consolidated financial statements of the Corporation for the three months ended March 31, 2022, fairly present, in accordance with U.S. GAAP, consistently applied, the financial position and condition of the Corporation on a consolidated basis at the dates thereof and the results of the operations of the Corporation on a consolidated basis for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof which are required to be disclosed in accordance with generally accepted accounting principles; (xii) the unaudited consolidated financial statements of the Corporation for the three months ended March 31, 2022, fairly present, in accordance with generally accepted accounting principles in Canada, consistently applied, the financial position and condition of the Corporation on a consolidated basis at the dates thereof and the results of the operations of the Corporation on a consolidated basis for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof which are required to be disclosed in accordance with generally accepted accounting principles; (xiii) the Corporation maintains a system of "current AIFinternal control over financial reporting" (as such term is defined in National Instrument 44NI 52-101 109) that provides reasonable assurance regarding the reliability of financial reporting and the preparation of the Corporation's consolidated financial statements for external purposes in accordance with IFRS; (xiv) the Corporation maintains "disclosure controls and procedures" (as defined in NI 52-109) that provide reasonable assurance that: (A) material information relating to the Corporation is qualified made known to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; 's president and (b) there have been no transactions entered into chief executive officer and chief financial officer by others within the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca; and

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Wrap and any Supplementary Material Prospectus Amendment pursuant to Section paragraph 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreementagreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Wrap or any Supplementary MaterialProspectus Amendment, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation Trust, AOG and the Corporation, as the case may be and the Offered Shares;Securities. (ii) the Preliminary Prospectus, the Prospectus, or the U.S. Wrap and any Supplementary MaterialProspectus Amendment, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities LawsLaws of the Qualifying Provinces, including without limitation National Instrument 44- NI 44-101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Wrap and any Supplementary Material Prospectus Amendment to the time of delivery thereof, in the businessaffairs, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations ownership of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection clause 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreementagreement, that: (i) the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued or amalgamated and validly existing organized and is valid and subsisting in good standing under the laws of the jurisdiction in which it was incorporatedAlberta, continued or amalgamated, as the case may be, and has all requisite corporate power, authority and capacity power to carry on its business as described in the Prospectuses and to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus and is validly subsisting under the laws of each jurisdiction in which it carries on a material portion of its business; (iii) except for non-material inactive subsidiaries, the Corporation does not have any subsidiaries (as defined in the ABCA) nor is it "affiliated" with or a "holding corporation" of any body corporate (within the meaning of those terms in the ABCA); (iv) the authorized capital of the Corporation consists of an unlimited number of common shares, an unlimited number of non-voting common shares, an unlimited number of preferred shares, issuable in series and an unlimited number of exchangeable shares of which only 162,745,528 common shares are outstanding; (v) the Corporation has full power and authority to issue the Offered Securities and, at the Closing Date or Additional Closing Date, as the case may be, and upon receipt of the purchase price therefor the Offered Securities will be duly allotted, validly issued and outstanding; (vi) the Corporation has full power and authority to issue the Common Shares issuable upon conversion, redemption or maturity of the Offered Securities and upon issuance thereof in accordance with the Debenture Indenture such Common Shares will, at the time of issue, be duly allotted, validly issued and outstanding as fully paid and non-assessable; (vii) the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of this agreement and the Debenture Indenture by the Corporation or any of the transactions contemplated hereby and thereby does not and will not result in any breach of, or constitute a default under, and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under any term or provision of the articles, by-laws or resolutions of the Corporation or any indenture, mortgage, note, contract, agreement (written or oral), instrument, lease or other document including, without limitation, any Material Agreement to which the Corporation is a party or by which it is bound, or any judgment, decree, order, statute, rule or regulation applicable to the Corporation which default or breach might reasonably be expected to materially adversely affect the business, operations, capital, ownership or condition (financial or otherwise) of the Corporation or its properties or assets; (viii) the Corporation has full corporate power and authority to enter into this agreement and the Debenture Indenture and to perform its obligations set out herein and therein and this agreement and the Debenture Indenture has been duly authorized, executed and delivered by the Corporation and this agreement and the Debenture Indenture is a legal, valid and binding obligation of the Corporation enforceable against it in accordance with their terms subject to the general qualifications set forth in the opinion of the Corporation's counsel to be delivered pursuant to paragraph 12(a)(v) hereof; (ix) there has not been any material change in the capital, assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation from the position set forth in the Financial Statements except as contemplated by the Prospectuses and there has not been any adverse material change in the business, operations, capital or condition (financial or otherwise) or results of the operations of the Corporation since December 31, 2008, except as a result of the Arrangement and except as disclosed in the Prospectuses or the Public Record; and since that date there have been no material facts, transactions, events or occurrences which could materially adversely affect the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, operations or condition (financial or otherwise) or results of the operations of the Corporation which have not been disclosed in the Prospectuses or the Public Record; (x) the Financial Statements fairly present, in accordance with generally accepted accounting principles in Canada, consistently applied, the financial position and condition, the results of operations, cash flows and the other information purported to be shown therein of the Trust, AOG and the Corporation, as the case may be, as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Trust, AOG and the Corporation, as the case may be, as at the dates thereof required to be disclosed by generally accepted accounting principles in Canada, and include all adjustments necessary for a fair presentation; (xi) no authorization, approval or consent of any court or governmental authority or agency is required to be obtained by the Corporation in connection with the sale and delivery of the Offered Securities, except such as may be required by the Exchanges or under the Applicable Securities Laws; (xii) there are no actions, suits, proceedings or inquiries existing or (as far as the Corporation is aware) pending or threatened against or affecting the Corporation at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which in any way materially adversely affects, or may in any way materially adversely affect, the business, operations or condition (financial or otherwise) of the Corporation or its properties and assets or which affects or may affect the distribution of the Offered Securities; (xiii) the Corporation has conducted and is conducting its business in all material respects in compliance with all applicable laws, rules and regulations of each jurisdiction in which it carries on business and holds all material licences, registrations and qualifications in all jurisdictions in which it carries on business necessary to carry on its business as now conducted and as contemplated to be conducted in the Prospectuses except where such non-compliance or lack of license, registration or qualification, in aggregate, would not have a material adverse affect on the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, operations or condition (financial or otherwise) or the results of the operations of the Corporation; (xiv) the information and statements set forth in the Public Record to the extent incorporated by reference in the Prospectuses were true, correct, and complete and did not contain any misrepresentation, as of the date of such information or statements; (xv) except for the 8% Debentures, 7.75% Debentures, 6.50% Debentures and the restricted share performance incentive plan, no person holds any securities convertible or exchangeable into Common Shares or has any agreement, warrant, option, right or privilege being or capable of becoming an agreement, warrant, option or right for the purchase of any unissued Common Shares or other securities of the Corporation; (xvi) no Securities Commission, the Exchanges nor any similar regulatory authority has issued any order preventing or suspending trading in any securities of the Corporation and no proceedings, investigations or inquiries for such purpose are pending or contemplated or (as far as the Corporation is aware) threatened; (xvii) Computershare Trust Company of Canada at its principal offices in the cities of C▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, is the duly appointed registrar and transfer agent of the Corporation with respect to the Common Shares, the 8% Debentures, 7.75% Debentures, and Valiant Trust Company, at its principal offices in the cities of C▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, is the duly appointed registrar and transfer agent of the Corporation with respect to the 6.50% Debentures; (xviii) the Trustee will be appointed trustee and the registrar and transfer agent for the Offered Securities under the Debenture Indenture at its principal transfer office in the City of Calgary, Alberta; (xix) the minute books of the Corporation, AOG and the Trust and each of their subsidiaries contain true and correct copies of the constating documents of the Corporation, AOG and the Trust and at the Closing Date and Additional Closing Date will contain true and correct copies or draft copies of the minutes of all meetings and all resolutions of the trustees and of the directors, shareholders and unitholders of the Corporation, AOG and the Trust; (xx) other than the Subsidiariesas provided for in this agreement, the Corporation has no investment not incurred any obligation or ownership interest in any legal entityliability, contingent or otherwise, for brokerage fees, finder's fees, agent's commission or other similar forms of compensation with respect to the transactions contemplated herein; (vxxi) the issued and outstanding Common Shares are listed and posted for trading on the Exchanges and, absent any circumstances that the Corporation is not aware of at this time, the Offered Securities will be listed and posted for trading on the TSX and the Common Shares issuable upon conversion, redemption or maturity of the Offered Securities in accordance with the Debenture Indenture will be listed and posted for trading on the Exchanges upon the Corporation complying with the usual conditions imposed by the Exchanges with respect thereto; (xxii) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of in the provinces of Alberta, British Columbia, Alberta, Saskatchewan, Manitoba, New BrunswickOntario, Québec, Newfoundland and Labrador, New Brunswick and Nova Scotia, ▇and within the meaning of the Applicable Securities Laws in such provinces and has the equivalent status in the province of P▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Applicable Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vixxiii) each the definitive forms of certificates for the Common Shares and the Offered Securities are in due and proper form under the laws governing the Corporation and in compliance with the material requirements of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse EffectExchanges; (viixxiv) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there AOG has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves EvaluatorS▇▇▇▇▇▇, prior to the issuance of the Reserves Reports and S▇▇▇▇▇▇ Report, for the purpose of preparing such reportsthe S▇▇▇▇▇▇ Report, all information reasonably requested by each Reserves EvaluatorS▇▇▇▇▇▇, which information did not contain any material misrepresentation at the time such information was so provided. The Except with respect to changes in the prices of oil and gas and production or asset sales which have occurred since December 31, 2008, the Corporation has no knowledge of a material adverse change in any production, cost, reserves or other relevant information provided to S▇▇▇▇▇▇ since the Reserves Evaluators since date that datesuch information was so provided. The Reserves Evaluators have represented to Corporation believes that the S▇▇▇▇▇▇ Report reasonably presents the quantity and present worth values of the oil and gas reserves associated with the crude oil, natural gas liquids and natural gas properties of the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth in such report as at December 31, 20122008 based upon information available, and commodity prices in effect, at the applicable Reserves Evaluator's evaluation of time such reserves information was prepared, and the reserves in respect of the properties Corporation believes that are the subject of the applicable Reserves Report and, since at the date of preparation such report it did not overstate the aggregate quantity or present worth values of such Reserves Report, there has been no change of which reserves (based on the commodity prices in effect at such time) or the estimated monthly production volumes therefrom; (xxv) the Corporation is not aware that would render either of any defects, failures or impairments in the title of the Reserves Reports Corporation to be incorrect the crude oil, natural gas liquids and natural gas properties, whether or not an action, suit, proceeding or inquiry is pending or threatened or whether or not discovered by any third party, which in any aggregate could have a material adverse respect; effect on: (xiiiA) neither the quantity and present worth values of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable crude oil, natural gas liquids and natural gas reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; ; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (aB) the purchase current production volumes of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of businessCorporation; or (bC) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares current cash flow of the Corporation; (xviiixxvi) except where such non-compliance or lack of obtaining the Financial Statements items listed below would not have a material adverse effect on the Corporation, the Corporation and its subsidiaries have been prepared and are in accordance material compliance with GAAP or IFRSall applicable environmental legislation, as applicable, and present fully, fairly and correctly in have obtained all material respectslicences, permits, approvals, consents, certificates, registrations and other authorizations under applicable environmental legislation necessary for the consolidated financial condition operation of their projects as currently operated and none of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilitiesnor its subsidiaries (including, expenses and losses of the Corporation, as if applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xixany predecessor companies thereof) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise)have received any notice of, or in the propertiesbeen prosecuted for, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business an offence alleging material non-compliance with any environmental legislation which remains outstanding and which would have a Material Adverse Effect; material adverse effect on the Corporation; (xxvii) the Corporation has the necessary power and authority to execute and deliver the Prospectuses and all requisite action has been taken by the Corporation to authorize the execution and delivery by it of the Prospectuses; (bxxviii) there have been no transactions entered into by the Corporation is not an "Investment Company" within the meaning of that term under the United States Investment Company Act of 1940, as amended; (xxix) the attributes and characteristics of the Offered Securities conform in all material respects to the attributes and characteristics thereof described in the Prospectuses; (xxx) with such exceptions as are not material to the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation has duly and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have on a Material Adverse Effect. All timely basis filed all tax returns, declarations, remittances and filings returns required to be filed by the Corporation it, has paid all taxes due and the Subsidiaries have been filed with payable by it and has paid all appropriate Governmental Authorities assessments and re-assessments and all such returnsother taxes, declarationsgovernmental charges, remittances penalties, interest and filings other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are complete not yet required and accurate and there are no material fact agreements, waivers, or facts have been omitted therefrom which would make any other arrangements providing for an extension of them misleading, except where time with respect to the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination filing of any tax return or payment of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paidtax, or may be payable, by the Corporation or the Subsidiaries, in any cagover

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by the Underwriters to the Corporation in writing and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentationmisrepresentation and no material fact or information has been omitted from such documents which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the circumstances in which they were made; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesShares as required under Canadian Securities Laws; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities Laws, including including, without limitation National Instrument 44- limitation, NI 44-101, and the Preliminary U.S. Placement Memorandum and the U.S. Placement Memorandum and any related Supplementary Material complies in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change Material Adverse Change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated formed (as the case may be) and organized, and is validly existing and in good standing under the laws of the jurisdiction in which it was incorporatedof its incorporation, continued amalgamation or amalgamated, formation (as the case may be, ) and has all requisite corporate powercapacity, power and authority to carry on its business, as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on a material portion of its business; (iviii) other than the Subsidiaries, the Corporation has no investment conducted and is conducting and will conduct its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable licensing and environmental legislation, regulations or ownership interest by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on business and holds all licences, registrations and qualifications in all jurisdictions in which it carries on business which are necessary or desirable to carry on the business of the Corporation as now conducted and as presently proposed to be conducted, all such licences, registrations or qualifications are valid and existing and in good standing and none of such licences, registrations or qualifications contains any legal entityburdensome term, provision, condition or limitation which has or is likely to have any Material Adverse Effect on the business of the Corporation as now conducted or as proposed to be conducted, and the Corporation is not aware of any legislation, regulation, rule or lawful requirement presently in force or proposed to be brought into force which the Corporation anticipates the Corporation will be unable to comply with without materially adversely affecting the Corporation; (iv) the presently outstanding Common Shares are listed and posted for trading on the Exchange and the OTCQX and the Corporation is in material compliance with the by-laws, rules and regulations of the Exchange and the OTCQX, as applicable; (v) as at the date hereof, the Corporation does not have any Subsidiaries, the Corporation is not “affiliated” with or a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default “holding corporation” of any other body corporate (within the meaning of those terms in the ABCA), nor is it a partner of any partnerships (other than participating in industry partnerships in the ordinary course of business) or limited partnerships, and the Corporation has no material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provincesshareholdings or other equity or voting interests in any other corporation or business organization; (vi) the minute book for the Corporation contains full, true and correct copies of the constating documents of the Corporation and contains copies of all minutes of all meetings and all consent resolutions of the directors, committees of directors and shareholders of the Corporation, and all such meetings were duly called and properly held and all consent resolutions were properly adopted; (vii) the books of account and other records of the Corporation, whether of a financial or accounting nature or otherwise, have been maintained in accordance with prudent business practices; (viii) the Corporation is insured by insurers who are, to the best of the knowledge, information and belief of the Corporation, of recognized financial responsibility against such losses and risks and in such amounts that, to the best of the knowledge, information and belief of the Corporation, are customary in the business in which it is engaged; all policies of insurance and fidelity or surety bonds insuring the Corporation and its businesses, assets, employees, officers and directors are in full force and effect; the Corporation is in compliance with the terms of such policies and instruments in all material respects; and there are no material claims by the Corporation under any such policy or instruments as to which any insurance company is denying liabilities or defending under a reservation of rights clause; the Corporation has no reason to believe that it will not be able to renew such existing insurance coverage as and when the coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect on the Corporation; (ix) the Corporation has duly and on a timely basis filed all tax returns due and required to be filed by it, has paid all taxes due and payable by it and has paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation and to the best of the knowledge, information and belief of the Corporation there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority and the Corporation has withheld from each payment made to any of its officers, directors, former directors and employees the amount of all taxes (including, without limitation, income tax) and other deductions required to be withheld therefrom and has paid the same to the proper tax and other authority within the time required under any applicable tax legislation; (x) all filings made by the Corporation under which the Corporation has received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations of material fact or omit to state any material fact which could cause any amount previously paid to the Corporation or previously accrued on the accounts thereof to be recovered or disallowed; (xi) except to the extent that any violation or other matter referred to in this subparagraph does not have a Material Adverse Effect on the business, financial condition, assets, properties, liabilities or operations of the Corporation: (A) the Corporation is not in violation of any Environmental Laws; (B) the Corporation has operated its business at all times and has received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation that have not been remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation; (E) the Corporation has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign, the occurrence of any event which is required to be so reported by any Environmental Law; and (F) the Corporation holds all licences, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licences, permits and approvals are in full force and effect, and the Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; (xii) any and all operations of the Corporation and, to the best of the knowledge, information and belief of the Corporation, any and all operations by third parties, on or in respect of the assets and properties of the Corporation have been conducted in accordance with good oil and gas industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of governmental and other competent authorities; (xiii) in respect of the assets, properties and businesses of the Corporation that are operated by the Corporation, the Corporation holds all valid licences, permits and similar rights and privileges that are required and necessary under applicable law to operate the assets, properties and businesses of the Corporation as presently operated; (xiv) the Corporation has full corporate capacity, power and authority to enter into this Agreement and the Flow-Through Subscription Agreements and to perform its obligations set out herein and therein (including, without limitation, to create, issue and sell the Offered Shares, grant the Over- Allotment Option and to renounce to the Subscribers Qualifying Expenditures in an amount equal to the Commitment Amount), and this Agreement has been and each of the Flow-Through Subscription Agreements will be duly authorized, executed and delivered by the Corporation and this Agreement is and the Flow-Through Subscription Agreements will be, legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their terms subject to laws relating to creditors’ rights generally and except as rights to indemnity may be limited by applicable law; (xv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, delivery and filing of the Prospectuses; (xvi) the attributes and characteristics of the Offered Shares and the Over- Allotment Option conform in all material respects to the attributes and characteristics thereof described in the Prospectuses; (xvii) at the Closing Date and the Additional Closing Date (as applicable), the Firm Shares, Flow-Through Shares and the Option Shares, respectively, will be issued as fully paid and non-assessable Common Shares in the capital of the Corporation; (xviii) the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of this Agreement and or the performance Flow-Through Subscription Agreements by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), would result in a breach of or constitute a default under: (ai) any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchangearticles, by-laws or constating documents of the Corporation; (bii) the constating documents or resolutions of the directors (or any committee thereof) or shareholders of the Corporation or a Subsidiary which are in effect at the date hereofCorporation; (ciii) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (div) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary any of its properties or the property or assets thereofassets, which default or breach would might reasonably be expected to have a Material Adverse Effect; (vii) materially adversely affect the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange andbusiness, without limiting the generality of the foregoingoperations, there has not occurred any material adverse change (actualcapital, anticipatedproperties, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (absolute, accrued, contingent or otherwise), ownership or condition (financial or otherwise) of the Corporation or its properties or assets or would impair the ability of the Corporation to consummate the transactions contemplated hereby or thereby or to duly observe and perform any of its covenants or obligations contained in this Agreement or the Flow-Through Subscription Agreements; (xix) there has not been any material change in the capital, assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation from the position set forth in the Financial Statements and there has not been any Material Adverse Change in the capital, assets, properties, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects operations or capital of the Corporation condition (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by financial or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereofotherwise) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 20132012 and since that date there have been no material facts, except as has been disclosed in transactions, events or occurrences which, to the Prospectus; best of the knowledge, information and belief of the Corporation, could materially adversely affect the capital, properties, assets, liabilities (xixabsolute, accrued, contingent or otherwise), business, operations or condition (financial or otherwise) or results of operations of the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101Corporation; (xx) since June 30the Financial Statements fairly present, 2013in all material respects and in accordance with international financial reporting standards, (a) there has been no change in consistently applied, the condition (consolidated financial or otherwise)position and condition, or in the properties, capital, affairs, prospects, results of operations, assets or liabilities cash flows and other information purported to be shown therein of the Corporation, whether as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or not arising in the ordinary course of business which would have a Material Adverse Effect; and (botherwise) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caa

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and or any Supplementary Material pursuant to Section 4 6 above shall constitute a representation and warranty to the Underwriters by the Corporation as at the date of such delivery (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished in writing by and relating solely to any of the Underwriters) contained in the Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceDocuments Incorporated By Reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) collectively constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Prospectus Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated Documents Incorporated by referenceReference therein, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities LawsLaws of the Qualifying Jurisdictions, including without limitation National Instrument 44- NI 44-101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and its the Subsidiaries (taken as on a whole)consolidated basis) or their properties or assets. (b) In addition to the representations and warranties contained in subsection 7(a) hereof11(a), the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges Underwriters that each of the Underwriters is relying upon such following representations and warranties (and, where applicable, covenants) in entering into is true and correct on the date of this Agreement, thatAgreement or such other date specified herein: (i) the Corporation has been duly incorporated and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the its jurisdiction in which it was incorporated, continued or amalgamated, as the case may beof continuance, has all requisite corporate power, power and authority and capacity is duly qualified to own, lease or operate carry on its business as now conducted and to own its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderunder this Agreement; (ii) to the knowledge of the Corporation, except as disclosed in the Prospectus, no agreement is in force or effect which in any manner affects the voting or control of any of the securities of the Corporation; (iii) The Corporation is the registered and beneficial holder of (a) 100% beneficially owns, directly or indirectly, all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the Material Subsidiaries, all of which are pledged as security for the Corporation's credit facilities. All of such shares have been duly authorized and validly issued and are outstanding securities of Madalena Austral SA (90% directly as fully paid and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHCnon-assessable shares and, 100% except for the rights of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, Corporation's lenders under the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreementright, agreement or option, present or future, contingent or absolute, or any right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an a right, agreement or a right to option, for the purchase or receive) from the Corporation of any interest in any of such shares or for the Subsidiaries issue or allotment of any issued or unissued securities shares in the capital of the Subsidiaries; (iii) the Corporation and each any of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessor any other security convertible into or exchangeable for any such shares; (iv) other than each Material Subsidiary has been duly incorporated and is validly existing under the Subsidiarieslaws of its jurisdiction of incorporation, the Corporation has no investment or ownership interest in any legal entityall requisite corporate power and authority and is duly qualified to carry on its business as now conducted and to own its properties and assets; (v) the Corporation is a "reporting issuer" all consents, approvals, permits, authorizations or filings as may be required under the Canadian Applicable Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of necessary for the execution and delivery of this Agreement and the performance by issuance and sale of the Prospectus Shares and the consummation of the transactions contemplated hereby, have been made or obtained or will be obtained prior to the Closing Date, as applicable, other than the final approval of the TSX, or in the case of any post-closing filings required under applicable United States federal or state securities laws, which will be made or obtained; (vi) the Corporation of its obligations hereunderhas full power and authority to issue the Prospectus Shares and, including at the allotmentClosing Time, reservationthe Prospectus Shares, and at any Over-Allotment Option Closing Time, if applicable, the Over-Allotment Shares, issued thereon, will be duly and validly authorized, allotted and reserved for issuance and delivery and, upon receipt of the Offered purchase price therefor, will be duly and validly issued as fully paid, and in the case of the Over-Allotment Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effectnon-assessable; (vii) the Corporation is currently issued and outstanding Common Shares are listed and posted for trading solely on the TSX and no order ceasing or suspending trading in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital securities of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of prohibiting the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, trading of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there issued securities has been issued and no default under any proceedings for such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectuspurpose are pending or, to the knowledge of the Corporation, none threatened; (viii) the attributes and characteristics of the Corporation's Prospectus Shares and the Underlying Shares conform in all material oil respects to the attributes and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated characteristics thereof described in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are locatedProspectuses; (ix) except as disclosed at the Closing Time, the form of certificate representing the Prospectus Shares will be in proper form under the Prospectus, all leases, licenses, concessions, claims or other property rights through which laws of Canada and will comply with the Corporation requirements of the TSX and will not conflict with the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit constating documents of the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewithCorporation; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements (i) have been prepared in accordance with Canadian GAAP or IFRSconsistently applied throughout the period referred to therein, as applicable(ii) present fairly, and present fully, fairly and correctly in all material respects, the consolidated financial condition position (including the assets and liabilities, whether absolute, contingent or otherwise) of the Corporation and the Subsidiaries as at the such dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended ended, and (iii) contain and reflect to the extent required by Canadian GAAP adequate provisions provision or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013; (xi) no authorization, approval or consent of any court or governmental authority or agency is required to be obtained by the Corporation in connection with the sale and delivery of the Prospectus Shares hereunder, except such as has been may be required under the Applicable Securities Laws; (xii) except as disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) Prospectuses, since June 30, 2013, (a) there the Corporation has been no change in the condition (financial not declared or otherwise), paid any dividends or declared or made any other payments or distributions on or in the propertiesrespect of any of its shares and has not, capitaldirectly or indirectly, affairsredeemed, prospects, operations, assets purchased or liabilities otherwise acquired any of the Corporation, whether its securities or not arising in the ordinary course agreed to do so or otherwise effected any return of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectuscapital with respect to such securities; (xxixiii) all Taxes taxes (including income tax, capital tax, payroll taxes, employer health tax, workers' compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable by the Corporation have been paid or provided for in the Financial Statements and the Subsidiaries have been paid, Interim Financial Statements except for where the failure to pay such Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse EffectEffect on the Corporation. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities governmental authorities within the times required and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, misleading except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse EffectEffect on the Corporation. To the best of the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress progress, other than normal course review, and there are no issues or disputes outstanding with any Governmental Authority governmental authority respecting any Taxes taxes that have been paid, or may be payable, by the Corporation or the SubsidiariesCorporation, in any cacase, except where such examinations, issues or disputes would not have a Material Adverse Effect on the Corporation; (xiv) the auditors of the Corporation who audited the consolidated financial statements of the Corporation for the year ended June 30, 2013 and who provided their audit report thereon are independent public accountants as required under Applicable Securities Laws of the Qualifying Jurisdictions; (xv) the Corporation has established and maintains “disclosure controls and procedures” and “internal control over financial reporting” within the meaning of such terms under Multilateral Instrument 52-109 — Certification of Disclosure in Issuers' Annual and Interim Filings of the Canadian Securities Administrators and is in compliance with the certification requirements thereof with respect to the Corporation's annual and interim filings with Canadian securities regulators; (xvi) the audit committee of the Corporation is comprised and operates in accordance with the requirements of Multilateral Instrument 52-110 — Audit Committees of the Canadian Securities Administrators; (xvii) to the knowledge of the Corporation, no insider of the Corporation has the present intention to sell any securities of the Corporation during the period of distribution of the Prospectus Shares; (xviii) since June 30, 2013, there has not been a “reportable event” (within the meaning of National Instrument 51-102 — Continuous Disclosure) with the present or former auditors of the Corporation; (xix) as at each of the Closing Date and the Over-Allotment Option Closing Date, as applicable, and other than as set forth in the Prospectuses and in connection with the Offering, no holder of outstanding securities of the Corporation will be entitled to any pre-emptive or any similar rights to subscribe for any of the Common Shares or other securities of the Corporation and no rights, warrants or options to acquire, or instruments convertible into or exchangeable for, any shares in the capital of the Corporation are outstanding; (xx) except as set out in the Prospectuses, no legal or governmental proceedings are pending to which the Corporation is a party or to which its property is subject that could reasonably be expected to have individually or in the aggregate a Material Adverse Effect on the Corporation and, to the best knowledge of the Corporation, no such proceedings have been threatened against or are contemplated with respect to the Corporation or its properties; (xxi) no Securities Commission, other securities commission or similar regulatory authority or stock exchange in Canada or the United States has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation and no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened and the Corporation is not in default of any material requirement of Applicable Securities Laws of the Qualifying Jurisdictions; (xxii) Computershare Investor Services Inc. at its principal offices in the City of Toronto, is the duly appointed registrar and transfer agent of the Corporation with respect to the Common Shares; (xxiii) the Corporation has conducted and is conducting its business in compliance in all material respects with all applicable laws and regulations of each jurisdiction in which it carries on business or holds assets (including, without limitation, all applicable federal, provincial, municipal and local environmental anti-pollution and licensing laws, regulations and other lawful requirements of any governmental or regulatory body, including, but not limited to relevant exploration and exploitation permits and concessions), holds all material permits, licenses and other approvals required under all such laws and is in compliance with all terms of such licenses, permits and other approvals, and has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of non-compliance with any such laws, regulations or permits, which would have a Material Adverse Effect on the Corporation; (xxiv) the Corporation is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to as owned by it in the Prospectuses to the extent disclosed in the Prospectuses, all agreements under which the Corporation holds an interest in a property, business or asset are in good standing according to its terms except where the failure to be in such good standing does not and will not, individually or in the aggregate, have a Material Adverse Effect on the Corporation; (xxv) the Corporation is a reporting issuer under Applicable Securities Laws in each of the provinces of Canada; the Corporation is not in default in any material respect of any requirement of the Applicable Securities Laws of the Qualifying Jurisdictions and the Corporation is not included in a list of defaulting reporting issuers maintained by the Securities Commissions. In particular, without limiting the foregoing, the Corporation is in compliance at the date hereof with its obligations to make timely disclosure of all material changes relating to it and, since June 30, 2013 (other than in respect of material change reports previously filed on a confidential basis and thereafter made public or material change reports previously filed on a confidential basis and in respect of which no material change ever resulted), no such disclosure has been made on a confidential basis and there is no material change relating to the Corporation which has occurred and with respect to which the requisite material change report has not been filed; (xxvi) the minute books and records of the Corporation made available to Underwriters’ counsel in connection with their due diligence investigations of the Corporation are all of the minute books and records of the Corporation and contain copies of all material proceedings of the shareholders, the board of directors and all committees of the board of directors of the Corporation from the date of incorporation to the date of review of such corporate records and minute books, other than minutes that have not been approved by the board of directors, draft minutes of which have been made available for review by the Underwriters, and there have been no other meetings, resolutions or proceedings of the shareholders, board of directors or any committees of the board of directors of the Corporation from the date of incorporation to the date of review of such corporate records and minute books not reflected in such minute books and other records, other than meetings of the board of directors or committees thereof held on September 17, 2013, September 20, 2013, October 17 2013, October 26, 2013 and October 29, 2013, draft minutes of which have been made available for review by the Underwriters; (xxvii) the execution and delivery of this Agreement and the performance of the transactions contemplated hereunder and thereunder, the offering, sale and issuance of the Prospectus Shares do not and will not: (A) require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, securities regulatory authority or other third party, except: (i) such as have been obtained or will be obtained prior to the Closing Date; (ii) such as may be required under the applicable by-laws, policies, regulations and prescribed forms of the TSX; or (iii) such as may be required following the Closing Date in order to comply with certain notice filing requirements under United States federal and state securities laws; (B) result in a breach of or default under, nor creat

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, U.S. Memorandum and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, U.S. Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any related Supplementary Material complies in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, U.S. Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, Agreement that: (i) the Corporation has full corporate capacity, power and each authority to enter into this agreement and to perform its obligations set out herein and to issue the Offered Shares and to grant the Over-Allotment Option and at the Closing Time and the Additional Closing Time, as applicable, the Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the Subsidiaries is a corporation purchase price therefor, the Offered Shares will be duly and validly issued as fully paid and non-assessable Common Shares; (ii) the Corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedformed, as the case may be, and organized and is validly existing under the laws of the province of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate poweror partnership capacity, power and authority to carry on its business as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (iiiii) the Corporation is qualified to carry on business under the registered laws of each jurisdiction in which it carries on a material portion of its business; (iv) except as disclosed in writing to the Underwriters, Corporation has conducted and beneficial holder is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in writing to the Underwriters, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (acollectively “Licenses”) 100% in all jurisdictions in which it carries on a material portion of its business which are necessary or desirable to carry on the business of the Corporation, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have any material adverse effect on the business of the Corporation (taken as a whole) and none of such Licenses contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation, as now conducted or as proposed to be conducted; (v) the Corporation does not have any Subsidiaries other than True Energy Peru SAC (which does not have any material assets or liabilities and does not carry on any active operations) and the Corporation is not “affiliated” with or a “holding corporation” of any other body corporate (within the meaning of those terms in the ABCA), nor is it (or its Subsidiaries) a partner of any partnerships; (vi) all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly its Subsidiaries are fully paid and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non assessable and, collectivelyin the case of its Subsidiaries, are legally and beneficially owned by the "Subsidiaries"), in each case, Corporation free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the credit facilities of the Corporation) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-pre emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or right for the acquisition of any unissued or issued securities of the such Subsidiaries; (vii) the minute books of the Corporation are true and correct in all material respects and contain the minutes of all meetings and all resolutions of directors (including committees of directors) and shareholders, as the case may be, thereof, other than minutes of the meetings of the board and committees held in March, 2011, which minutes are currently being finalized; (viii) the books of account and other records of the Corporation, whether of a right financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (ix) except to purchase the extent that any violation or receiveother matter referred to in this subparagraph does not have a material adverse effect on the Corporation and except as disclosed in the Responses: (A) to the best of its knowledge, information and belief, after due inquiry, it is not in violation of any applicable federal, provincial, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, “Environmental Laws”); (B) to the best of its knowledge, information and belief, after due inquiry, the Corporation (and, if applicable, the Trust and any predecessor companies of the Corporation) has operated its businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or in respect of the Corporation’s business or assets that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation; (E) it has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign (“Government Authority”) the occurrence of any event which is required to be so reported by any Environmental Law; (F) it holds all licenses, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta), the Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) the Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) has not received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and the Corporation (including, if applicable, the Trust or any predecessor companies) has not settled any allegation of material non-compliance short of prosecution; (x) any and all operations of the Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation, have been conducted in accordance with good oil and gas industry practices except where the lack of or lesser standard of such conduct would not have a material adverse effect on the business of the Corporation; (xi) all income tax returns of the Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of the Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) has made instalments of taxes as and when required. The Corporation (including, if applicable, the Trust and any predecessor companies of the Corporation) has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xii) the Reorganization will not have a materially adverse impact on the tax pools of the Corporation or the Subsidiaries any issued or unissued securities ability of the SubsidiariesCorporation to use such tax pools and, to the best of the knowledge, information and belief of the Corporation, there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation, its Subsidiaries or its predecessors in respect of taxes, governmental charges or assessments asserted by any governmental authority; (xiii) this Agreement has been duly authorized, executed and delivered by the Corporation and this Agreement is a legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with its terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, being available only in the discretion of the applicable court; (iii) the Corporation statutory and each inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgments; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the Subsidiaries is qualified remainder of such document would be determined only in the discretion of the court; (vi) enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and (vii) that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, deliver and filing of the Prospectuses; (xv) except as provided to the Underwriters and other than this Agreement, the Debenture Indenture and agreements in respect of the Corporation’s credit facilities, there are no material contracts or agreements which have or which might have or create any material obligation to the Corporation or from which it derives or could derive any material benefit or which are required for the Corporation to carry on its business as described now conducted or as presently proposed to be conducted and the Corporation is not in the Prospectus under the laws material default or breach of each jurisdiction in which it carries on its businessany of such agreements; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (vxvi) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Lawsor breach of, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement of, and the performance by of and compliance with the Corporation of its obligations hereunderterms of, including the allotment, reservation, issuance and delivery this Agreement or any of the Offered Sharestransactions contemplated hereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the shareholders or directors or shareholders of the Corporation Corporation, or a Subsidiary which are in effect at the date hereof; (c) any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary or the property or assets thereof, which default or breach would might reasonably be expected to have materially adversely affect the business, operations, capital or condition (financial or otherwise) of the Corporation and its Subsidiaries (taken as a Material Adverse Effectwhole) or its properties or assets (on a consolidated basis); (viixvii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred been any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities or obligations (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements from the position set forth in all documents the Documents (other than as has been publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correctand generally disclosed), and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves ReportFinancial Statements, there has not been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies the business, operations, capital or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities ) of the CorporationCorporation since December 31, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; 2010, and (b) since that date there have been no transactions entered into by the Corporationmaterial facts, transactions, events or occurrences (other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation respecting commodity prices or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caaff

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary ProspectusProspectuses, the Prospectus Supplements and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters Agent by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agent is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgent) contained in the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and the Prospectuses, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are , at the respective dates of such documents, true documents and correct at the Closing Date: (A) conform in all material respectsrespects to the requirements of the applicable Securities Laws, including without limitation the Securities Act and the SEC Rules and Regulations; (B) contain no misrepresentation; (C) did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (CD) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesSecurities; (ii) the Preliminary Prospectus, the Canadian Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caSecurities

Representations and Warranties of the Corporation. ‌ (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material pursuant to Section 4 3 above shall constitute a representation and warranty to the Underwriters Agent by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agent is relying on such representations and warranties in entering into this Agreement) that:that:‌ (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgent and furnished by them in writing expressly for inclusion in the applicable document) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference in the Preliminary Prospectus and the Prospectus, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference in the Preliminary Prospectus and the Prospectus, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Placement Memorandum and the U.S. Placement Memorandum and, to the extent applicable, any related Supplementary Material, each comply as to form and content in all material respects with the U.S. Securities Act and applicable state securities laws; and (iii) except as is disclosed in the Public Disclosure Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, material contracts, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a6(a) hereof, the Corporation represents and warrants (andto, where applicableand covenants with, covenants) to the UnderwritersAgent, and acknowledges that each of the Underwriters Agent is relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation Subsidiaries, are duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was they were incorporated, continued or amalgamatedamalgamated or otherwise existing, as the case may be, has have all requisite corporate power, authority and capacity to own, lease or operate its their properties and assets as described in the Prospectus and the Disclosure Record and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and direct or indirect beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. each of: ("MVIHC")i) BG Explorations EOOD; (bii) 100% of the issued and outstanding securities of Madalena Austral SA Park Place Energy Turkey Limited; (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.)iii) Park Place Energy, Corp.; and (civ) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. Park Place Energy (Bermuda) Limited (individually, each a "“Subsidiary" and, collectively, ” and collectively the "“Subsidiaries"), ”) in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever other than Permitted Encumbrances and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or any of the Subsidiaries any issued or unissued securities of the Subsidiaries;Subsidiaries;‌ (iii) the Corporation and each of the Subsidiaries is Subsidiaries, are duly registered and qualified to carry on business as described in the Prospectus and are validly existing under the laws of each jurisdiction in which it carries they carry on its business; (iv) other than the Subsidiaries, the Corporation does not have any subsidiaries, the Corporation has no investment or ownership interest shareholdings in any legal entityother corporation or business organization, is not an “affiliate” or a “holding corporation” of any other body corporate (within the meaning of the BCBCA), and is not a partner of any partnerships or limited partnerships; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of and each of the provinces of AlbertaSubsidiaries have conducted and are conducting their business in compliance in all material respects with all applicable laws, British Columbiarules and regulations and, Saskatchewanin particular, Manitobaall applicable licensing and environmental legislation, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default regulations or by-laws or other lawful requirement of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by governmental or regulatory bodies applicable to the CSA Corporation and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying ProvincesSubsidiaries of each jurisdiction in which the Corporation and each of the Subsidiaries carry on business and the Corporation and each of the Subsidiaries hold all material licences, registrations, permits and qualifications in all jurisdictions in which the Corporation and each of the Subsidiaries carry on business which are necessary or desirable to carry on the business of the Corporation and each of the Subsidiaries, as now conducted and as presently proposed to be conducted in the Prospectus, except where the failure to so conduct its business or to hold such licences, registrations, permits or qualifications, would not have a material adverse effect on the Corporation and the Subsidiaries (taken as a whole) and all such licenses, registrations, permits and qualifications are valid and existing and in good standing and none of such licenses, registrations, permits or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and the Subsidiaries (taken as a whole) as now conducted or as proposed to be conducted and the Corporation is not aware of any legislation, regulation, rule or lawful requirements presently in force or proposed to be brought into force which the Corporation anticipates that the Corporation or any of its Subsidiaries will be unable to comply with without materially adversely affecting the Corporation or its Subsidiaries (taken as a whole); (vi) each neither the Corporation nor any of the Subsidiaries is in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not result in any breach of, or be in conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether under, or create a state of facts which, after notice or lapse of time time, or both), would result in a breach of or constitute a default under: (ai) any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the directors (or any committee thereof) or shareholders of the Corporation or a Subsidiary which are in effect at any of the date hereofSubsidiaries; (cii) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is are a party or by which it is bound; or (diii) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary any of the Subsidiaries or the property their properties or assets thereof, assets; which default or breach would might reasonably be expected to have materially adversely affect the business, operations, capital or condition (financial or otherwise) of the Corporation and the Subsidiaries (taken as a Material Adverse Effectwhole) or would impair the ability of the Corporation or any of the Subsidiaries to consummate the transactions contemplated hereby or thereby or to duly observe and perform any of its covenants or obligations contained in this Agreement; (vii) the Corporation is in compliance in all material respects with has full corporate capacity, power and authority to enter into this Agreement, the Broker Warrant Certificates and to perform its continuous disclosure obligations under Canadian Securities Laws set out herein and therein (including, without limitation, to issue the Offered Shares), and this Agreement, has been, and the rules Broker Warrant Certificates will, on the Closing Date, be, duly authorized, executed and regulations delivered by the Corporation and this Agreement is, and the Broker Warrant Certificate will, on the Closing Date, constitute, legal, valid and binding obligations of the Exchange andCorporation enforceable against the Corporation in accordance with their terms except that the validity, without limiting binding effect and enforceability are subject to the generality qualification that such validity, binding effect and enforceability may be limited by: (A) bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting creditors’ rights; (B) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the foregoingapplicable court; (C) the equitable or statutory powers of the courts in Canada to stay proceedings before them and the execution of judgments; (D) rights to indemnity, contribution and waiver hereunder may be limited or unavailable under applicable law; (E) the applicable laws regarding limitations of actions; (F) the enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (G) the enforceability of the provisions exculpating a party from liability or duty otherwise owed by it to another and certain remedial terms and waivers of equitable defences provided for in such agreement or other document may be limited under applicable law; (H) the requirement of a court that the discretionary powers expressed to be conferred on any party to such agreement, indenture or other document be exercised reasonably and in good faith notwithstanding any provisions to the contrary and the possibility that such court may decline to accept as conclusive factual or legal determinations described as conclusive therein; and (I) the fact that costs of and incidental to all proceedings authorized to be taken in court are in the discretion of the court and that the court has full power to determine by whom and to what extent such costs shall be paid; (viii) there has not occurred been any reportable event (within the meaning of Section 4.11 of NI 51-102) with the Corporation’s auditor or Former auditor; (ix) based upon representations made by the Corporation’s auditor to the Corporation, the Corporation’s auditor are independent chartered accountants with respect to the Corporation, as required by Applicable Securities Laws; (x) there has not been any material change in the capital, assets, liabilities or obligations (absolute, contingent or otherwise) of the Corporation from the position set forth in the Financial Statements which has not been disclosed in the Prospectus and there has not been any adverse material change in the business, operations, capital or condition (actual, anticipated, completed, proposed or threatened), financial or otherwise) or results of the operations of the Corporation since June 30, 2023 which has not been disclosed in the Prospectus; and since that date, other than as a result of changes in commodity prices, there have been no material facts, transactions, events or occurrences which could materially adversely affect the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects material contracts or capital condition (financial or otherwise) or results of the operations of the Corporation and the Subsidiaries (taken as a whole) which have not been disclosed in the Prospectus; (xi) the Financial Statements contain no misrepresentations, present fairly, in all material respects, the financial position of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation periods then ended and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, applied on a consistent basis throughout the consolidated financial condition of periods involved; (xii) the Corporation maintains a system of “internal control over financial reporting” (as defined in NI 52-109) that provides reasonable assurance regarding the reliability of financial reporting and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses preparation of the Corporation, as applicable, and there has been no material change ’s consolidated financial statements for external purposes in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectusaccordance with IFRS; (xixxiii) the AIF is a "current AIF" Corporation maintains “disclosure controls and procedures” (as such term is defined in National Instrument 44NI 52-101 and 109) that provide reasonable assurance that: (A) material information relating to the Corporation is qualified made known to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; ’s president and (b) there have been no transactions entered into chief executive officer and chief financial officer by others within the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca; and

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary ProspectusProspectuses, the Prospectus Supplements and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters Agent by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agent is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgent) contained in the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and the Prospectuses, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are , at the respective dates of such documents, true documents and correct at the Closing Date: (A) conform in all material respectsrespects to the requirements of the applicable Securities Laws, including without limitation the Securities Act and the SEC Rules and Regulations; (B) contain no misrepresentation; (C) did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (CD) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesSecurities; (ii) the Preliminary Prospectus, the Canadian Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101; and. The Corporation meets all eligibility requirements to offer the Offered Securities in Canada pursuant to MJDS; (iii) as of the Applicable Time, the Disclosure Package does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (iv) except as is disclosed in the Public RecordRegistration Statement, the Disclosure Package and the Prospectuses, there has been no intervening material change (adverse material change until filing of the ProspectusProspectuses) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and any Supplementary Material the Prospectuses to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries Corporation; and (taken as a whole)v) each Issuer Free Writing Prospectus will not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference that has not been superseded or modified. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersAgent, and acknowledges that each of the Underwriters Agent is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) each of the Corporation and each of the Subsidiaries is a corporation Material Subsidiary has been duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedorganized, as the case may be, and is validly existing under the laws of the jurisdiction of its incorporation, continuance or organization and has all requisite corporate power, authority and capacity power to owncarry on its businesses, lease or operate as now conducted and as presently proposed to be conducted by it, and to own its properties assets; (ii) the only Subsidiaries of the Corporation are OQI Sask, Township Petroleum Corporation ("TPC"), Western Petrochemicals Corp. ("WPC"), Stripper Energy Services Inc. ("Stripper"), Oilsands Quest Technology Inc. ("OQI Technology"), 1291329 Alberta Ltd. ("1291329") and assets as described 1259882 Alberta Ltd. and the only Material Subsidiary of the Corporation is OQI Sask and the Corporation is not "affiliated" (within the meaning of that term in the Prospectus and no steps ASA) with any other entity, nor is it a partner of any partnerships (other than participating in industry partnerships in the ordinary course of business) or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding uplimited partnerships, and the Corporation has no material shareholdings in any other corporation or business organization. Except for the exchangeable shares described in the Registration Statement, Disclosure Package and the Prospectuses, the Corporation owns, directly or indirectly, all requisite of the capital stock or comparable equity interests of each Subsidiary free and clear of any and all liens, and all the issued and outstanding shares of capital stock or comparable equity interests of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities; (iii) each of the Corporation and its Material Subsidiaries is qualified to carry on business under the laws of each jurisdiction where it carries on its business and owns properties or assets; (iv) the Corporation has full corporate capacity, power and authority to enter into this Agreement Agreement, the Flow-Through Subscription Agreements and the OQI Sask Flow-Through Subscription Agreements and to carry out perform its obligations hereunderset out herein and therein (including, without limitation, to create, issue and sell the Offered Securities), and this Agreement is, and at the Closing Time, the Flow-Through Subscription Agreements and the OQI Sask Flow-Through Subscription Agreement will have been, duly authorized, executed and delivered by the Corporation and will be valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms subject to laws relating to creditors’ rights generally and except as rights to indemnity may be limited by applicable law; (iiv) the Corporation's execution and delivery of this Agreement, the Flow-Through Subscription Agreements, the OQI Sask Subscription Agreements and the consummation of the transactions contemplated thereby (including the sale and delivery of the Offered Securities) by the Corporation: (A) have been duly authorized by all necessary action on the part of the Corporation; (B) do not require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, Securities Commission, the SEC or other regulatory authority or other similar third party (except (A) those which have been obtained or (B) those as may be required (and will be obtained prior to the Closing Time) under applicable Securities Laws); (C) do not and will not (or will not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with or result in a default under (A) any of the terms or provisions of the articles or by-laws of the Corporation, (B) any resolution of the board of directors, (or any committee thereof) or securityholders of the Corporation, or (C) any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Corporation, or any agreement, license or permit to which the Corporation is a party; (D) do not and will not result in the violation of any law; and (E) do not and will not give rise to any lien on or with respect to the properties or assets now owned or hereafter acquired by the Corporation or the acceleration of or the maturity of any indebtedness or other liabilities or obligations under any indenture, mortgage, lease, agreement or instrument binding or affecting any of them or any of its properties; (vi) neither the Corporation nor any Material Subsidiary is a party to any material mortgage, note, indenture, deed of trust, contract, agreement, instrument, lease, license or other document other than as described in the Registration Statement, the Disclosure Package and the Prospectuses; (vii) each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all respects with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all valid permits, licenses, registrations, qualifications, consents and approvals that are required and necessary to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, except in each case where the failure to be in such compliance or to hold such permits, licenses, registrations, qualifications, consents and approvals would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and all such permits, licenses, registrations, qualifications, consents and approvals are in good standing and none contains any term, provision, condition or limitation which will have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and the Corporation is not aware of any fact or matter which would reasonably be expected to result in the termination of any such permit or otherwise have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (viii) neither the Corporation nor any Material Subsidiary is in breach or violation of any of the terms, conditions or provisions of the articles, constating documents, by-laws or resolutions of the shareholders or directors (or any committee thereof) of the Corporation or the Material Subsidiary, as the case may be; (ix) except as described in the Registration Statement, the Disclosure Package and the Prospectuses, neither of the Corporation nor any Subsidiary is in breach or violation of: (A) any permits, licenses, consents and approvals issued to the Corporation or the Subsidiary, as the case may be, or any agreement, indenture, lease, document or instrument to which the Corporation or the Subsidiary is a party or by which it is contractually bound, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); or (B) any statute, regulation or rule applicable to the Corporation or any Subsidiary or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or any Subsidiary, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (x) to the knowledge of the senior management of the Corporation, after reasonable inquiry, there is no person who, as of the date hereof, directly or indirectly will beneficially own or have control or direction over greater than 10% of the voting rights attached to all outstanding voting securities of the Corporation other than as disclosed in the Registration Statement, the Disclosure Package, and the Prospectus; (xi) the Corporation is not in default or breach of, and the registered execution and beneficial holder delivery of, and the performance of and compliance with the terms of this Agreement, the Flow-Through Subscription Agreements and the OQI Sask Flow-Through Subscription Agreement or any of the transactions contemplated hereby or thereby by the Corporation, does not and will not result in any breach of or constitute a default under, and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under, any term or provision of the articles, by-laws or resolutions of shareholders or directors of the Corporation or OQI Sask, or any indenture, mortgage, note, contract, agreement (awritten or oral), instrument, lease or other document to which the Corporation or OQI Sask is a party or by which it is bound, or any law, judgment, decree, order, statute, rule or regulation applicable to the Corporation or OQI Sask, except for any breach or default which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) 100% or would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform its obligations contained in this Agreement, the Flow-Through Subscription Agreements or the OQI Sask Flow-Through Subscription Agreement; (xii) since April 30, 2010 there have been no facts, transactions, events or occurrences which, to the knowledge of the Corporation, could have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) which have not been disclosed in the Registration Statement, the Disclosure Package and the Prospectuses; (xiii) the Financial Statements fairly present, in all material respects and in accordance with generally accepted accounting principles in the United States consistently applied, the financial position and condition, the results of operations, cash flows and other information purported to be shown therein of the Corporation as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof required to be disclosed in accordance with generally accepted accounting principles in the United States, and include all adjustments necessary for a fair presentation. Such financial statements comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing; (xiv) except as disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, each of the Corporation and its Material Subsidiaries has carried on business in the ordinary course; (xv) there are no actions, suits, proceedings or inquiries pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation or any of its Material Subsidiaries at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, in any way could reasonably be expected to have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) or which affects or may affect the distribution of the Offered Securities or which would impair the ability of the Corporation or OQI Sask to consummate the transactions contemplated hereby or to duly observe and perform any of its covenants or obligations contained in this Agreement, the Flow-Through Subscription Agreement or the OQI Sask Flow-Through Subscription Agreement and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; (xvi) the authorized capital of the Corporation consists of 750 million Common Shares and 10 million preferred shares, issuable in series, and as of October 21, 2010 the issued and outstanding capital of the Corporation consists of 313,988,323 Common Shares, and one Series B Preferred Share, each of which has been validly issued as a fully paid and non-assessable share in the capital of the Corporation; (xvii) other than Common Shares to be issued pursuant to the October 28 Agency Agreement and except as disclosed in the Public Record, no person, firm or corporation holds any securities convertible or exchangeable into securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims Corporation or demands whatsoever and no person any Material Subsidiary or other entity has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the purchase, subscription or receive) from the Corporation or the Subsidiaries issuance of any issued or unissued securities of the SubsidiariesCorporation or any Material Subsidiary . There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Offered Securities; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viiixviii) except as disclosed in the Prospectus any and all of the agreements and other documents and instrumentsPublic Record, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently ownednot, directly or indirectly, by the Corporation hold any shares, other securities, options or any Subsidiary, whether by asset sale, transfer of rights to subscribe for shares or otherwise other than in the ordinary course securities of business; or (b) any change in control of the Corporation (by salecorporation, transfer partnership or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries entity except for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the ProspectusSubsidiaries; (xix) Computershare Trust Company of Canada acts as the AIF is a "current AIF" as such term is defined in National Instrument 44-101 transfer agent and registrar for the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101Common Shares; (xx) since June 30none of the SEC, 2013a Securities Commission, (a) there has been no change other securities commission or similar regulatory authority or exchange in the condition (financial Selling Jurisdictions or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business United States has issued any order which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues outstanding preventing or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any casusp

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus, Supplemented Prospectus and any Supplementary Material pursuant to Section 4 3 above shall constitute a representation and warranty to the Underwriters Underwriter by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Underwriter is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersUnderwriter and furnished by them in writing expressly for inclusion in the applicable document) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Supplemented Prospectus, the Registration Statement, or any Supplementary Material, as applicable, including, without limitation, the documents Documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesUnits; (ii) the Preliminary Prospectus, the Prospectus, the Supplemented Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents Documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Supplemented Prospectus, the Registration Statement and any Supplementary Material to the time date of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection Section 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersUnderwriter, and acknowledges that each of the Underwriters Underwriter is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) to the knowledge, information and belief of the Corporation, the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101, the Preliminary U.S. Memorandum, the U.S. Placement Memorandum and any related Supplementary Material complies in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and or its Subsidiaries (Subsidiaries, taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents represents, warrants and warrants (and, where applicable, covenants) covenants to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, Agreement that: (i) the Corporation has full corporate capacity, power and authority to issue the Offered Shares and to grant the Over-Allotment Option and at the Closing Time and the Additional Closing Time, as applicable, the Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the purchase price therefor, the Offered Shares will be duly and validly issued as fully paid and non-assessable Common Shares; (ii) each of the Corporation and its Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedformed, as the case may be, and organized and is validly existing under the laws of the jurisdiction of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus Prospectuses; (iii) each of the Corporation and no steps its Subsidiaries is qualified to carry on business under the laws of each jurisdiction in which it carries on a material portion of its business and is qualified to own its assets as described in the Public Record; (iv) except as disclosed in writing to the Underwriters, each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in writing to the Underwriters, all applicable licensing and environmental legislation, regulations or proceedings by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (collectively "Licenses") in all jurisdictions in which it carries on a material portion of its business which are necessary to carry on the business of the Corporation and its Subsidiaries, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have been any material adverse effect on the business of the Corporation and its Subsidiaries (taken by as a whole); (v) the Corporation does not have any personmaterial Subsidiaries other than TPII, voluntary or otherwiseTGHYI, requiring or authorizing its dissolution or winding upTWGI, TGGI, TGWYI and TPEI and the Corporation has all requisite is not "affiliated" with or a "holding corporation" of any other body corporate power and authority to enter into this Agreement and to carry out (within the meaning of those terms in the ABCA), nor is it (or its obligations hereunderSubsidiaries) a partner of any partnerships or limited partnerships; (iivi) the Corporation is the registered and beneficial holder of (a) 100% all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% each of the issued Subsidiaries are fully paid and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non-assessable and, collectivelyin the case of each of the Subsidiaries, legally or beneficially owned by the "Subsidiaries"), in each case, Corporation (directly or indirectly) free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the credit facilities of the Corporation or its Subsidiaries) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of any of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-pre emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries issued securities of any issued or unissued securities of the Subsidiaries; (vii) the minute books of each of the Corporation and its Subsidiaries are true and correct in all material respects and contain the minutes of all meetings and all resolutions of directors (including committees thereof), shareholders and partners, as the case may be, thereof; (viii) the books of account and other records of each of the Corporation and its Subsidiaries, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (ix) except to the extent that any violation or other matter referred to in this subparagraph does not have a material adverse effect on the Corporation and its Subsidiaries (taken as a whole) or as set forth in the Public Record: (A) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries are not in violation of any applicable federal, provincial, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, "Environmental Laws"); (B) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries have operated their businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or its Subsidiaries that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation or its Subsidiaries; (E) it and its Subsidiaries have not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign ("Government Authority") the occurrence of any event which is required to be so reported by any Environmental Law; (F) it and its Subsidiaries hold all licenses, permits and approvals required under any Environmental Laws in connection with the operation of their respective business and the ownership and use of their respective assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation and its Subsidiaries, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta) and similar legislation in the jurisdictions in which the Corporation or its Subsidiaries conduct business, neither the Corporation nor any of its Subsidiaries has received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies thereof) has received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of material non-compliance short of prosecution; (x) any and all operations of the Corporation and its Subsidiaries and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation and its Subsidiaries, have been conducted in accordance with good oil and gas industry practices except where the lack of, or lesser standard of, such conduct would not have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole); (xi) all income tax returns of each of the Corporation and its Subsidiaries required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of each of the Corporation and its Subsidiaries required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. Each of the Corporation and its Subsidiaries has made instalments of taxes as and when required. Each of the Corporation and its Subsidiaries has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein (including, without limitation, to issue the Offered Shares), and this Agreement has been duly authorized, executed and delivered by the Corporation and this Agreement is a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors' rights generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, being available only in the discretion of the applicable court; (iii) the statutory and inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgements; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vi) enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and (vii) that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiii) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, deliver and filing of the Prospectuses; (xiv) other than this Agreement and the Material Agreements, there are no material contracts or agreements which have, or which might have or create, any material obligation to the Corporation or its Subsidiaries or from which they derive or could derive any material benefit or which are required by the Corporation or its Subsidiaries to carry on their business as now conducted by them or as presently proposed to be conducted by them; (xv) the Material Agreements described in the Prospectus or documents incorporated by reference therein have been accurately described as to parties, dates, terms, conditions and amendments thereto, each of such agreements is a legal, valid and binding obligation of the Corporation and/or its Subsidiaries, as the case may be, enforceable against such party or parties in accordance with their terms, and the Corporation and each of its Subsidiaries, as applicable, are in compliance with the terms of such Material Agreements except where such non-compliance, in aggregate, would not reasonably be expected to have a material adverse effect on the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), ownership or condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries is qualified to carry on business (taken as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessa whole); (ivxvi) other than the Subsidiaries, the Corporation has no investment or ownership interest in reason to believe, after due inquiry, that any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue other party to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms Material Agreements or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document material contract to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , is in default of any term or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which obligation to be performed by such party where such default or breach would might reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (effect on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase is not aware of any material property event which has occurred which would provide any of the parties to any of the Material Agreements with a reasonable basis to terminate or assets or any interest therein or the sale, transfer or other disposition seek a termination of any material property such agreement or assets that the applicable regulatory requirements and government approvals required under the Material Agreements may be revoked, modified or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporationamended; (xviii) the Financial Statements have been prepared Corporation is not in accordance with GAAP default or IFRS, as applicablebreach of, and present fullythe execution and delivery of, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at performance of and compliance with the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilitiesterms of, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into this Agreement by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently of the transactions contemplated hereby, does not and will not result in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paidbreach of, or may be payableconstitute a default under, by and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under, any term or provision of the Corporation or the Subsidiaries, in any caarticles

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Placement Memorandum and any Supplementary Material pursuant to Section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Placement Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101, and the U.S. Placement Memorandum and, to the extent applicable, any related Supplementary Material, complies as to form in all material respects with applicable U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Placement Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian applicable Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian applicable Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian applicable Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any cano

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary ProspectusProspectuses, the Prospectus Supplements and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreementagreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and the Prospectuses or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are , at the respective dates of such documents, true documents and correct at the Closing Date: (A) conform in all material respectsrespects to the requirements of the applicable Securities Laws, including without limitation the Securities Act and the SEC Rules and Regulations; (B) contain no misrepresentation; (C) did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (CD) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesSecurities; (ii) the Preliminary Prospectus, the Canadian Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws; (iii) as of the Applicable Time, including without limitation National Instrument 44- 101the Disclosure Package does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and (iiiiv) except as is disclosed in the Public RecordRegistration Statement, the Disclosure Package and the Prospectuses, there has been no intervening material change (adverse material change until filing of the ProspectusProspectuses) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and any Supplementary Material the Prospectuses to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreementagreement, that: (i) each of the Corporation and each of the Subsidiaries is a corporation Material Subsidiary has been duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedorganized, as the case may be, and is validly existing under the laws of the jurisdiction of its incorporation, continuance or organization and has all requisite corporate power, authority and capacity power to owncarry on its businesses, lease or operate its properties as now conducted and assets as described in the Prospectus and no steps or proceedings have been taken presently proposed to be conducted by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding upit, and to own its assets; (ii) the only Subsidiaries of the Corporation are Oilsands Quest Sask Inc. (“OQI Sask”), Township Petroleum Corporation (“TPC”), Western Petrochemicals Corp. (“WPC”), Stripper Energy Service Inc. (“Stripper”) and 1291239 Alberta Ltd. (“1291235”) and the only Material Subsidiary of the Corporation is OQI Sask; (iii) each of the Corporation and its Material Subsidiaries is qualified to carry on business under the laws of each jurisdiction where it carries on its business; (iv) the Corporation has all requisite full corporate power and authority to enter into this agreement, the Flow-Through Subscription Agreements, the OQI Sask Flow-Through Subscription Agreement and the Warrant Indenture and to carry out perform its obligations hereunderset out herein and therein (including, without limitation, to issue the Offered Securities), and this agreement is and at the Closing Time, the Flow-Through Subscription Agreements, the OQI Sask Flow-Through Subscription Agreement and the Warrant Indenture will have been duly authorized, executed and delivered by the Corporation and will be valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms subject to laws relating to creditors’ rights generally and except as rights to indemnity may be limited by applicable law; (iiv) the sale and delivery of the Offered Securities by the Corporation: (A) have been duly authorized by all necessary action on the part of the Corporation; (B) do not require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, Securities Commission, the SEC or other regulatory authority or other similar third party (except (A) those which have been obtained or (B) those as may be required (and will be obtained prior to the Closing Time) under applicable Securities Laws); (C) do not and will not (or will not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with or result in a default under (A) any of the terms or provisions of the articles or by-laws of the Corporation, (B) any resolution of the board of directors, (or any committee thereof) or securityholders of the Corporation, or (C) any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Corporation, or any agreement, license or permit to which the Corporation is a party; (D) do not and will not result in the violation of any law; and (E) do not and will not give rise to any lien on or with respect to the properties or assets now owned or hereafter acquired by the Corporation or the acceleration of or the maturity of any indebtedness or other liabilities or obligations under any indenture, mortgage, lease, agreement or instrument binding or affecting any of them or any of its properties; (vi) neither the Corporation nor any Material Subsidiary is a party to any material mortgage, note, indenture, deed of trust, contract, agreement, instrument, lease, license or other document other than as described in the Registration Statement, the Disclosure Package and the Prospectuses; (vii) each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all respects with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all permits, licenses, consents and approvals to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, except in each case where the failure to be in such compliance or to hold such permits would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and all such permits, licenses, consents and approvals are in good standing and none contains any term, provision, condition or limitation which will have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and the Corporation is not aware of any fact or matter which would reasonably be expected to result in the termination of any such permit or otherwise have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) ; (viii) neither the Corporation nor any Material Subsidiary is in breach or violation of any of the terms, conditions or provisions of the articles, constating documents, by-laws or resolutions of the shareholders or directors (or any committee thereof) of the Corporation or the Material Subsidiary, as the case may be; (ix) neither of the Corporation nor any Subsidiary is in breach of violation of: (A) any permits, licenses, consents and approvals issued to the Corporation or the Subsidiary, as the case may be, or any agreement, indenture, lease, document or instrument to which the Corporation or the Subsidiary is a party or by which it is contractually bound, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); or (B) any statute, regulation or rule applicable to the Corporation or any Subsidiary or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or any Subsidiary, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (x) to the knowledge of the senior management of the Corporation, after reasonable inquiry, there is no person who as of the date hereof directly or indirectly will beneficially own or have control or direction over greater than 10% of the voting rights attached to all outstanding voting securities of the Corporation other than as disclosed in the Registration Statement, the Disclosure Package, and the Prospectus; (xi) the Corporation is not in default or breach of, and the registered execution and beneficial holder delivery of, and the performance of and compliance with the terms of this agreement, the Flow-Through Subscription Agreement, the OQI Sask Flow-Through Subscription Agreement, the Warrant Indenture or any of the transactions contemplated hereby or thereby by the Corporation, does not and will not result in any breach of or constitute a default under, and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under, any term or provision of the articles, by-laws or resolutions of shareholders or directors of the Corporation, or any indenture, mortgage, note, contract, agreement (awritten or oral), instrument, lease or other document to which the Corporation is a party or by which it is bound, or any law, judgment, decree, order, statute, rule or regulation applicable to the Corporation, except for any breach or default which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (xii) 100% since April 30, 2007 there have been no facts, transactions, events or occurrences which, to the knowledge of the Corporation, could have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) which have not been disclosed in the Registration Statement, the Disclosure Package and the Prospectuses or in writing to the Underwriters; (xiii) the Financial Statements fairly present, in all material respects and in accordance with generally accepted accounting principles in the United States consistently applied, the financial position of the Corporation as at the dates thereof for the periods then ended and reflect all liabilities (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof; (xiv) except as disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, each of the Corporation and its Material Subsidiaries has carried on business in the ordinary course; (xv) there are no actions, suits, proceedings or inquiries pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation or any of its Material Subsidiaries at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, in any way could reasonably be expected to have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) or which affects or may affect the distribution of the Offered Securities and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; (xvi) the authorized capital of the Corporation consists of 500 million Common Shares and 10 million preferred shares, issuable in series, and as of November 15, 2007 the issued and outstanding capital of the Corporation consists of 190,888,781 Common Shares, and one Series B Preferred Share, each of which has been validly issued as a fully paid and non-assessable share in the capital of the Corporation; (xvii) except as disclosed in the Public Record, no person, firm or corporation holds any securities convertible or exchangeable into securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims Corporation or demands whatsoever and no person any Material Subsidiary or other entity has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the purchase, subscription or receiveissuance of any unissued Common Shares; (xviii) from except as disclosed in the Public Record the Corporation does not, directly or the Subsidiaries indirectly, hold any issued shares, other securities, options or unissued rights to subscribe for shares or other securities of any corporation, partnership or other entity except for the Subsidiaries; (iiixix) Computershare Trust Company of Canada acts as the transfer agent and registrar for the Common Shares; (xx) none of the SEC, a Securities Commission, other securities commission or similar regulatory authority or exchange in the Qualifying Provinces or the United States has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation, no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened and the Corporation is not in default of any requirement of Securities Laws in the Qualifying Provinces or the United States; (xxi) there is not in the constating documents or by-laws of the Corporation or any Material Subsidiary, or in any agreement, mortgage, note, debenture, indenture or other instrument or document to which the Corporation or any Material Subsidiary is a party, any restriction upon or impediment to the declaration of dividends by its directors or payment of dividends by its holders of its shares; (xxii) the Corporation is a reporting issuer in good standing under the laws of Alberta; (xxiii) excepting out those things and matters which are not material to the Corporation or any of its Material Subsidiaries, the Corporation and each of its Material Subsidiaries has duly and on a timely basis filed all tax returns required to be filed by it, has paid all taxes due and payable by it and has paid all assessments and re-assessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which are claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the Subsidiaries is qualified filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation or any Material Subsidiary and there are no actions, suits, proceedings, investigations or claims or, to carry on business as described the knowledge of the Corporation, threatened or pending against the Corporation or any Material Subsidiary in the Prospectus respect of taxes, governmental charges or assessments or any matters under the laws of each jurisdiction in which it carries on its businessdiscussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority; (ivxxiv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws Each of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, P▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict KPMG LLP are independent with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable respect to the Corporation including, without limitation, as required by applicable Canadian Securities Laws and the rules and regulations of the Exchange; Exchange and there has not been any reportable disagreement (b) within the constating documents or resolutions meaning of section 4.11 of National Instrument No. 51-102 of the directors or shareholders Canadian Securities Administrators) with the auditors of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares incorporation of the Corporation; (xviiixxv) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, Corporation and present fully, fairly and correctly each Material Subsidiary maintains a system of internal accounting controls sufficient to provide reasonable assurance that in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes : (A) transactions are executed in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions accordance with management’s general or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectusspecific authorization; (xixB) the AIF transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; and (C) access to assets is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus permitted only in accordance with National Instrument 44-101;management’s general or specific authorization. (xxxxvi) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any cainfor

Representations and Warranties of the Corporation. The Corporation represents and warrants to the Agent and acknowledges that the Agent is relying upon such representations and warranties, that: (a) Each delivery of each of the Preliminary Prospectus, the Prospectus and or any Supplementary Material pursuant to Section 4 above paragraph 3 shall constitute a representation and warranty to the Underwriters Agent by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, Public Record or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Sharesdistribution of the Unit Securities; other than any information or statements relating solely to the Agent and furnished to the Corporation by the Agent in writing expressly for inclusion in the Preliminary Prospectus, the Prospectus or the Supplementary Material; (ii) the Preliminary Prospectus, the Prospectus, Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- 101; and; (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, thereof in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation; (iv) the Financial Statements fairly present, in all material respects and in accordance with generally accepted accounting principles in Canada consistently applied, the financial position and condition of the Corporation on a consolidated basis as at the dates thereof and its Subsidiaries the results of the operations of the Corporation on a consolidated basis for the periods then ended and reflect all liabilities (taken absolute, accrued, contingent or otherwise) of the Corporation on a consolidated basis as a whole).at the dates thereof; (v) based upon representations made by the Corporation's auditors to the Corporation, the Corporation's auditors are independent chartered professional accountants with respect to the Corporation as required by Applicable Securities Laws; and (vi) there has not been any reportable disagreement (within the meaning of Section 4.11 of National Instrument 51-102 Continuous Disclosure Obligations, as amended or replaced) with the Corporation's auditors; (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents has been duly incorporated and warrants (and, where applicable, covenants) to the Underwriters, is valid and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing subsisting under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, OBCA and the Corporation has all requisite corporate power and authority to carry on its business as now conducted by it and to own, lease and operate its properties and assets; the Corporation has no Subsidiaries other than MXM Nation Inc. and SponsorsOne Media Inc., the Corporation owns all of the issued and outstanding securities of each of MXM Nation Inc. and SponsorsOne Media Inc., and the Corporation is not a partner of any partnership or limited partnership; (c) each of MXM Nation Inc. and SponsorsOne Media Inc. have been duly incorporated and are valid and subsisting under the laws of their respective jurisdictions of incorporation, and each Subsidiary has the requisite power and authority to carry on its business as now conducted and to own and lease its respective properties and assets; (d) the Corporation has full power and authority to enter into this Agreement and to carry out perform its obligations hereunderset out herein (including, without limitation, to issue the Offered Units) and the EEI Option Certificates, the Unit Warrant Indenture and the Sponsorship Option Certificates will be on the Closing Date, duly authorized, executed and delivered by the Corporation; and the EEI Option Certificates, the Warrant Indenture and the Sponsorship Option Certificates will be on the Closing Date, legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms subject to the general qualification that: (i) the enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting creditors' rights; (ii) equitable remedies, including the Corporation is remedies of specific performance and injunctive relief, are available only in the registered and beneficial holder of (a) 100% discretion of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiariesapplicable court; (iii) the Corporation and each enforceability of the Subsidiaries is qualified to carry on business as described in the Prospectus any provision exculpating a party from liability or duty otherwise owed by it may be limited under the laws of each jurisdiction in which it carries on its businessapplicable law; (iv) other than the Subsidiaries, enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the Corporation has no investment enforceability or ownership interest validity of the remainder of such document would be determined only in any legal entitythe discretion of the court; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each equitable or statutory powers of the provinces courts in Canada having jurisdiction to stay proceedings before them and the execution of Albertajudgments; (vi) rights to indemnity and contribution hereunder may be limited under applicable law; and (vii) the enforceability may be limited by applicable laws regarding limitation of actions; (e) the Unit Common Shares, British Columbiathe Unit Warrants, Saskatchewanthe Warrant Shares, Manitobathe Agent Options, New Brunswickthe Agent Shares, Newfoundland the Agent Warrants and Labradorthe Agent Warrant Shares have been authorized and the Unit Common Shares, Nova Scotiathe Warrant Shares, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island the Agent Shares and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA Agent Warrant Shares have been reserved and will continue to be, allotted for issuance; (f) at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of EEI Options and Sponsorship Options will be duly and validly issued and created and the Qualifying ProvincesEEI Option Certificates and Sponsorship Option Certificates, respectively will be authorized; (vig) each when issued, the Unit Common Shares shall be duly and validly issued as fully paid and non- assessable shares in the capital of the Corporation; (h) upon the due exercise of the Unit Warrants, the Agent Options, the Sponsorship Options and the Agent Warrants in accordance with the respective provisions thereof, the Warrant Shares, the Agent Shares and Agent Warrant Shares, respectively, will be duly and validly issued as fully paid and non-assessable shares in the capital of the Corporation on payment of the purchase price therefor; (i) the Corporation is not in default or breach of, and the execution and delivery of this Agreement of, and the performance of and compliance with the terms of this Agreement, the Unit Warrant Indenture, the EEI Option Certificates, the Sponsorship Option Certificates and the certificates representing the Agent Warrants, by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby and thereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the articles, by-laws, other constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document document, to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary or the property or assets thereofCorporation, which default or breach would might reasonably be expected to have a Material Adverse Effectmaterially adversely affect the business, operations, capital or condition (financial or otherwise) of the Corporation or its properties and assets; (viij) the Corporation has no reason to believe that it will not be able to obtain insurance coverage against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has engaged at a cost that would not occurred any have a material adverse change effect on the condition (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), businessprospects, affairsearnings, operations, prospects business or capital properties of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereofCorporation; (viiik) except as disclosed in the Prospectus any and all of the agreements and other documents and instrumentsthere are no existing actions, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest insuits, proceedings or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectusinquiries or, to the knowledge of the Corporation, none pending or threatened against or affecting the Corporation and its Subsidiaries (taken as a whole) at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which in any way materially adversely affects, or may in any way materially adversely affect, the business, operations, capital or condition (financial or otherwise) of the Corporation's material oil , MXM Nation Inc. or SponsorsOne Media Inc. or their respective assets or which affects or may affect the distribution of the Unit Securities or the Warrant Shares, the Agent Options, the Agent Shares, the Agent Warrants and gas assets the Agent Warrant Shares and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; (including any interest, or right to earn an interest, thereinl) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit authorized capital of the Corporation or mandated by consists of an unlimited number of Common Shares of which 30,409,712 Common Shares are currently issued and outstanding prior to the applicable Governmental Authority in the jurisdictions in Closing Date, all of which such assets shares are locatedvalidly issued, fully paid and non-assessable; (ixm) as of July 12, 2018, no person holds any securities convertible or exchangeable into any unissued securities of the Corporation, MXM Nation Inc. or SponsorsOne Media Inc. or has any agreement, warrant, option, right or privilege being or capable of becoming an agreement, warrant, option or right for the purchase or other acquisition of any unissued securities of the Corporation, MXM Nation Inc. or SponsorsOne Media Inc., except as disclosed in the Prospectuscontemplated pursuant to this Agreement, all leases, licenses, concessions, claims or other property rights through which and except for (i) options to purchase 3,335,000 Common Shares at a weighted average exercise price of $0.33; (ii) 1,568,440 Special Warrants; (iii) 11,766,332 common share purchase warrants of the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit entitling the holder thereof to explore for, purchase Common Shares at an average price of $0.21; and (iv) 156,844 options to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewithpurchase Units; (xn) the Prospectus contains an accurate summary description form and terms of all property rights held definitive certificates representing the Common Shares, Unit Warrants, EEI Options, Sponsorship Options, and the Agent Warrants have been duly approved and adopted by the Corporation and comply with all legal requirements relating thereto; (o) the Subsidiaries issued and no other property or assets outstanding Common Shares are necessary listed and posted for trading on the conduct of the business of the Corporation and the Subsidiaries as currently conductedExchange, and the Corporation does not know is in compliance with the rules and regulations of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such propertiesExchange; (xip) neither the Securities Commissions, other securities commissions or similar regulatory authorities, the Exchange or any other stock exchanges in Canada has issued any order which is currently outstanding ceasing, halting, suspending or preventing trading in any securities of the Corporation, and no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened; (q) the Corporation made available to each Reserves Evaluator, prior to is a reporting issuer in the issuance province of the Reserves Reports Ontario and for the purpose is not in default of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge requirement of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained thereinApplicable Securities Laws; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvir) to the knowledge of the Corporation, no counterparty insider of the Corporation has a present intention to sell any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in securities of the performance or observance thereof which default would have a Material Adverse EffectCorporation; (xviis) neither of the Corporation nor it Subsidiaries owes any money to, or has any present loans to, or borrowed any monies from, is or otherwise indebted to any officer, director, employee, shareholder, partner or any person not dealing at "arm's length" (as such term is defined in the Tax Act) with each of the Corporation and its Subsidiaries except for usual employee reimbursements and compensation paid in the ordinary and normal course of the business of each of the Corporation and its Subsidiaries; (t) other than as disclosed in to the ProspectusAgent, neither the Corporation nor any Subsidiary has approvedis a party to any contract, agreement or entered into understanding with any agreement in respect of: officer, director, employee, shareholder or any other person not dealing at arm's length with each of the Corporation and its Subsidiaries; (au) the purchase minute books of the Corporation and its Subsidiaries are, in all material respects, true and correct and contain copies of all minutes of all meetings and all resolutions of the directors, committees of directors and shareholders of the Corporation and its Subsidiaries and all such meetings were duly called and properly held and all consent resolutions were properly adopted; (v) the books of account and other records of the Corporation and its Subsidiaries, whether of a financial or accounting nature or otherwise, have been maintained in accordance with prudent business practices; (w) other than as provided for in this Agreement, the Corporation has not incurred any material property obligation or assets liability, contingent or any interest therein or the saleotherwise, transfer for brokerage fees, finder's fees, commissions or other disposition similar forms of any compensation with respect to the transactions contemplated in this Agreement; (x) except pursuant to rights available for employees of the Corporation at common law, there is presently no material property plan in place for retirement bonus, pension benefits, unemployment benefits, deferred compensation, severance or assets termination pay, insurance, sick leave, disability, salary continuation, legal benefits, vacation or any interest therein currently owned, directly other employee incentives or indirectly, compensation that is contributed to or required to be contributed to by the Corporation or any Subsidiaryof its Subsidiaries for the benefit of any current or former director, whether officer, employee, consultant or partner of the Corporation or any of its Subsidiaries; (y) neither the Corporation nor any Subsidiary is party to or bound by asset saleany agreement of guarantee, transfer of shares or otherwise indemnification (other than an indemnification of directors and officers in accordance with the by-laws of the Corporation and its Subsidiaries and applicable laws, indemnification agreements or covenants that are entered into arising in the ordinary course of business; , including operating and similar agreements, indemnification and contribution provisions in agency and underwriting agreements, transfer agency agreements and credit borrowing agreements) or (b) any change in control other like commitment of the Corporation obligations, liabilities (by sale, transfer contingent or otherwise) of indebtedness of any other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or person; (cz) to the knowledge of the Corporation, a proposed planned disposition no officer, director, employee, partner or any other person not dealing at arm's length with the Corporation or its Subsidiaries, any associate or affiliate of shares by any shareholder who such person, owns, directly has or indirectlyis entitled to any royalty or any other encumbrances or claims of any nature whatsoever on the properties or other assets, 10% or more including, but not limited to the Intellectual Property of the Corporation and its Subsidiaries or any revenue or rights attributed thereto; (aa) to the Corporation's knowledge, neither the Corporation nor any of its holders of Common Shares is a party to any shareholders agreement, escrow agreement, pooling agreement, voting trust or other similar type of arrangements in respect of outstanding shares securities of the Corporation; (xviiibb) the Financial Statements have been prepared in accordance Corporation has not entered into any agreements or made any covenants with GAAP or IFRSany parties, as applicableincluding without limitation any rights of first refusal, and present fully, fairly and correctly in all material respects, that would restrict the consolidated financial condition Corporation from entering the Material Agreements; (cc) each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to each of them of each jurisdiction in which it carries on business and hold all licenses, registrations and qualifications in all jurisdictions in which it carries on business which are necessary or desirable to carry on the Subsidiaries business as at now conducted and as presently proposed to be conducted and all such licenses, registrations or qualifications are valid and existing and in good standing and none of such licenses, registrations or qualifications contain any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the dates thereof and the consolidated results business of the operations and the changes in the financial position each of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporationits Subsidiaries, as applicable, and there has been no material change in accounting policies now conducted or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 proposed to be conducted and the Corporation is qualified not aware of any legislation, regulation, rule or lawful requirements presently in force or proposed to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business be brought into force which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of anticipates the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required Subsidiary will be unable to be filed by the Corporation and the Subsidiaries have been filed comply with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any cawithout materially adversely a

Representations and Warranties of the Corporation. (a1) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, and any Supplementary Material pursuant to Section 4 or Section 6(3) above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (ia) all of the information and statements (except information and statements furnished in writing by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (Ai) are at the respective dates of such documents, true and correct in all material respects; (Bii) contain no misrepresentation; and (Ciii) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesUnits and the Underlying Offered Securities; (iib) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101; and (iiic) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b2) In addition to the representations and warranties contained in subsection 7(aSection 7(1) hereof, the Corporation represents and warrants (andto, where applicableand covenants with, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, that: (ia) the Corporation and each of the Subsidiaries is a corporation Subsidiary have been duly incorporated, continued or amalgamated incorporated and organized and are validly existing and in good standing subsisting under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has of their incorporation and have all requisite corporate powercapacity, authority and capacity power to carry on their business, as now conducted and as presently proposed to be conducted by them, and to own, lease or and operate its their properties and assets as described assets; (b) the Corporation and the Subsidiary are duly registered to do business and are in good standing in each jurisdiction in which the Prospectus and no steps character of its properties, owned or proceedings have been taken by leased, or the nature of its activities make such registration necessary, except where the failure to be so registered or in good standing would not result in a material adverse effect; (c) the Corporation’s sole subsidiary Subsidiary is Scythian Biosciences Inc. The Corporation is not “affiliated” with or a “holding corporation” of any person, voluntary or otherwise, requiring or authorizing its dissolution or winding upother body corporate (each within the meaning of the OBCA), and is not a partner of any partnerships or limited partnerships; (d) the Corporation has all requisite full corporate capacity, power and authority to enter into this Agreement Agreement, the Private Placement Subscription Agreement, the Warrant Indenture and the Compensation Options, to carry out perform its obligations hereunderset out herein and therein, and this Agreement has been and the Private Placement Subscription Agreement, Warrant Indenture and the Compensation Options, will, on the Closing Date and, if applicable, any Additional Closing Date, be duly authorized, executed and delivered by the Corporation and the Private Placement Subscription Agreement, the Warrant Indenture and the Compensation Options will, on the Closing Date and, if applicable, any Additional Closing Date, be legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms, subject to the general qualifications that: (i) enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the Corporation is remedies of specific performance and injunctive relief, are available only in the registered and beneficial holder of (a) 100% discretion of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiariesapplicable court; (iii) the courts in Canada having jurisdiction may have equitable or statutory powers to stay proceedings before them and the execution of judgments; (iv) rights to indemnity and contribution hereunder may be limited under applicable law; (v) the applicable laws regarding limitations of actions; (vi) the enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vii) the enforceability of the provisions exculpating a party from liability or duty otherwise owed by it to another and certain remedial terms and waivers of equitable defences provided for in such agreement or other document may be limited under applicable law; (viii) the requirement of a court that the discretionary powers expressed to be conferred on any party to such agreement, indenture or other document be exercised reasonably and in good faith notwithstanding any provisions to the contrary and the possibility that such court may decline to accept as conclusive factual or legal determinations described as conclusive therein; and (ix) the fact that costs of and incidental to all proceedings authorized to be taken in court are in the discretion of the court and that the court has full power to determine by whom and to what extent such costs shall be paid; (e) the Corporation has full corporate power and authority to issue the Offered Units, the Private Placement Units, the Underlying Securities, the Compensation Options and the Compensation Option Underlying Securities, and to grant the Underwriters’ Option and the Underwriters’ Private Placement Option and, upon receipt of full payment therefor, at the Closing Time or, if applicable, any Additional Closing Time, the Underlying Securities, the Compensation Options and the Compensation Option Underlying Securities will be duly and validly authorized, allotted and reserved for issuance and, at the time of their issuance, the Common Shares underlying the Offered Units and Private Placement Units will have been duly and validly issued as fully paid and non-assessable Common Shares, the Warrants will have been duly and validly issued and, upon due exercise of the Warrants, in accordance with the terms of the Warrant Indenture, the Warrant Shares will be duly and validly issued as fully paid and non-assessable Warrant Shares, the Compensation Options will have been duly and validly issued and, upon due exercise of the Compensation Options, in accordance with the terms of thereof, the Compensation Option Underlying Shares will be duly and validly issued as fully paid and non-assessable Compensation Option Underlying Shares, the Compensation Option Underlying Warrants will be duly and validly issued as fully paid and non-assessable Compensation Option Underlying Warrants and the Compensation Option Underlying Warrant Shares will be duly and validly issued as fully paid and non-assessable Compensation Option Underlying Warrant Shares; (f) the Corporation has the necessary power and authority to sign, deliver and file the Prospectuses and all Supplementary Materials and all necessary action has been taken, or will be taken prior to filing thereof, by the Corporation to authorize the signing, delivery and filing thereof; (g) each of the Subsidiaries Corporation and the Subsidiary has conducted and is qualified conducting and will conduct its businesses in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable controlled substance laws, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to carry on business as described in the Prospectus under the laws it of each jurisdiction in which it carries on business and holds all licences, permits, registrations and qualifications in all jurisdictions in which it carries on business which are necessary or desirable to carry on the business of the Corporation and the Subsidiary as now conducted and as contemplated to be conducted in the Prospectuses (except where the failure to so conduct its businessbusiness or to hold such licences, permits, registrations or qualifications would not, individually or in the aggregate, result in material adverse effect) of the Corporation or the Corporation’s properties or assets), all such licences, permits, registrations or qualifications are valid and existing and in good standing (except where the lack of such valid or existing license would not have any material adverse effect on the business of the Corporation) and none of such licences, permits, registrations or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation or the Subsidiary as now conducted or as proposed to be conducted; (ivh) other than to the Subsidiariesknowledge of the Corporation, there is no legislation, or proposed legislation to be published by a legislative body, which it anticipates will materially and adversely affect the business, affairs, operations, assets, liabilities (contingent or otherwise) or prospects of the Corporation has no investment or ownership interest in any legal entitythe Subsidiary; (vi) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Lawsor breach of, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement of, and the performance of and compliance with the terms of, this Agreement, the Private Placement Subscription Agreement, the Warrant Indenture or the Compensation Options and the performance of any of the transactions or issuance of any securities contemplated hereby and thereby by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered SharesCorporation, do not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and do not and will not create a state of facts which, after notice or lapse of time or both), (a) will result in a breach of or constitute a default under, any statute, rule applicable laws or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations any term or provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary or the property or assets thereofCorporation, which default or breach would might reasonably be expected to have result in a Material Adverse Effectmaterial adverse effect; (viij) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred been any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities or obligations (absolute, contingent or otherwise) of the Corporation from the position set forth in the Scythian Financial Statements and there has not been any material adverse change in the business, operations, capital or condition (financial or otherwise) or results of the operations of the Corporation since the date of the Scythian Financial Statements other than as described in the Prospectus and, since that date, there have been no material facts, transactions, events or occurrences which could materially adversely affect the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects operations or capital condition (financial or otherwise) or results of the operations of the Corporation (on a consolidated basis) since December 31other than as described in the Prospectus, 2011 which has have not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation manner required pursuant to Canadian Applicable Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereofLaws; (viiik) except as disclosed in the Prospectus any and all minute books of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property Subsidiary are, in all material respects, true and assets (including any interest incorrect and contain copies of all minutes of all meetings and all resolutions of the directors, or right to earn an interest in, any property) are valid committees of directors and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither shareholders of the Corporation nor any and the Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any all such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, meetings were duly called and such properties properly held and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are locatedresolutions were properly adopted; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (xl) the Prospectus contains an accurate summary description books of all property rights held by the Corporation account and the Subsidiaries and no other property or assets are necessary for the conduct of the business records of the Corporation and the Subsidiaries as currently conductedSubsidiary, and the Corporation does not know whether of any claim a financial or the basis for any claim that might accounting nature or could materially and adversely affect the right thereof to useotherwise, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons have been maintained in respect of such propertiesaccordance with prudent business practices; (xim) the Corporation made available to each Reserves EvaluatorScythian Financial Statements: (i) fairly present, prior to in all material respects, the issuance financial position and condition of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and reflect all assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof; (ii) have been prepared in conformity with IFRS, applied on a consistent basis throughout the periods involved; and (iii) do not contain any misrepresentations with respect to the periods involved; (n) the Corporation has filed all tax returns required to be filed by it, has paid all taxes due and reflect payable by it and have paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provisions provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or allowance other arrangements providing for all reasonably anticipated liabilitiesan extension of time with respect to the filing of any tax return or payment of any tax, expenses governmental charge or deficiency by the Corporation and, to the best of the knowledge, information and losses belief of the Corporation, there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation or the Subsidiary in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority. The Corporation has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (o) there is no material contingent tax liability of the Corporation or its predecessors or, to the best of the Corporation’s knowledge, information and belief, after due inquiry, any grounds which will prompt a reassessment; (p) the Corporation is not a party to, or bound by, any agreement or guarantee, indemnification other than an indemnification of directors and officers of the Corporation in accordance with the by-laws of the Corporation and the Subsidiary, as applicable, and there has been no material change applicable laws and other than indemnities in accounting policies favour of agents or practices underwriters in connection with an issuance of the Corporation since June 30, 2013, except as has been disclosed in the Prospectussecurities or like transactions; (xixq) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and Corporation does not have any loans or other indebtedness outstanding which have been made to or from any of their shareholders, directors, officers or employees or any other person not dealing at arm’s length with the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101that are currently outstanding; (xxr) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of except as would not be reasonably expected to have a material adverse effect on the Corporation, whether there is not (or not arising in the ordinary course of business are not) (i) any order or directive from any regulatory authority which would have a Material Adverse Effect; relates to environmental matters and (b) there have been no transactions entered into by the Corporationwhich requires any material work, other than those in the ordinary course of businessrepairs, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paidconstruction, except where the failure or capital expenditures relating to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues of its business undertakings, (ii) any demand or disputes outstanding notice from any regulatory authority with respect to the material breach of any Governmental Authority environmental, health or safety law applicable to the Corporation or any of its business undertakings, including, without limitation, any regulations respecting any Taxes that have been paidthe use, storage, treatment, transportation, or may be payabledisposition of environmental contaminants, or (iii) any spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes, which have not been rectified, on any of the properties or assets owned or leased by the Corporation or in which it has an interest or over which it has control. (s) the SubsidiariesCorporation is not subject to any contingent or other liability relating to the restoration or rehabilitation of land, in water or any caother part o

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the any documents incorporated by referencereference therein, as the case may be: (A) are , contains, at the respective dates date of such documentsdocument, true no misrepresentation and correct in all material respects; (B) contain no misrepresentation; and (C) constitute constitutes full, true and plain disclosure of all material facts relating to the Corporation and Corporation, the Offered Securities and Underlying Shares; (ii) no material fact has been omitted from the Preliminary Prospectus, the Prospectus, Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply which is required to be stated or which is necessary to make any statements or information contained therein not misleading in light of the circumstances in which they are made; (iii) the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, complies in all material respects with the applicable requirements of Canadian Securities Laws, including including, without limitation National Instrument 44- limitation, NI 44-101; and (iiiiv) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and its the Subsidiaries (taken as a whole). provided that, in each case, the Corporation makes no representation or warranty with respect to statements contained in the Preliminary Prospectus, Prospectus or Supplementary Material, as the case may be, relating solely to and provided in writing by the Underwriters expressly for inclusion in such documents. (b) In addition to the representations and warranties contained in subsection 7(a8(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation has been duly incorporated and organized and is validly existing under the laws of its jurisdiction of incorporation, and has all requisite capacity, power and authority to carry on its business, as now conducted and as presently proposed to be conducted by it, and to own its properties and assets; (ii) all continuous and timely disclosure documents, reports, forms, filings and fees required to be filed, made and paid by the Corporation pursuant to the Canadian Securities Laws have been filed, made and paid in accordance with the Canadian Securities Laws in all material respects; (iii) other than as set forth in the Public Record, none of the directors, officers or employees of the Corporation, any person who owns, directly or indirectly, more than 10% of any class of securities of the Corporation, or any associate or affiliate of any of the foregoing, had or has any material interest, direct or indirect, in any material transaction or any proposed material transaction with the Corporation which, as the case may be, materially affects, is material to or will materially affect the Corporation or its Subsidiaries; (iv) the Corporation has, or will have at the appropriate time, the necessary corporate power and authority to execute and deliver each of the Prospectuses and any Supplementary Material and all necessary corporate action has been taken or will be taken, as applicable, by the Corporation to authorize the execution and delivery by it of the Prospectuses and any Supplementary Material and the filing thereof, as the case may be, in each of the Qualifying Provinces under the Canadian Securities Laws; (v) the Corporation is qualified to carry on business and is validly subsisting under the laws of each jurisdiction in which it carries on its business; (vi) other than the entities listed in Schedule “A” hereto, the Corporation does not have any Subsidiaries and the Corporation is not “affiliated” with or a corporation “holding corporation” of any other body corporate (within the meaning of those terms in the YBCA), nor is it a partner of any partnerships or limited partnerships; (vii) each of the Material Subsidiaries of the Corporation has been duly incorporated, continued incorporated or amalgamated and validly existing is valid and subsisting in good standing under the laws of the its jurisdiction in which it was incorporated, continued of incorporation or amalgamated, amalgamation as the case may be, and has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out on its obligations hereunderbusiness; (iiviii) each of the Material Subsidiaries of the Corporation is qualified to carry on business and is validly subsisting under the registered and beneficial holder laws of each jurisdiction in which it carries on its business; (aix) 100% all of the issued and outstanding securities shares in the capital of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% each of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% Subsidiaries of the issued Corporation are fully paid and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, non-assessable and legally and beneficially owned by the "Subsidiaries"), in each case, Corporation free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person holds any securities convertible into or other entity exchangeable for issued or unissued shares of such Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries any issued or unissued securities of such Subsidiaries other than as disclosed in the SubsidiariesPublic Record; (iiix) the minute books and record books of the Corporation and each of its Subsidiaries are true and correct and contain the minutes of all meetings and all resolutions of directors (and subcommittees thereof) and shareholders thereof (except to the extent that the absence of any such document could not reasonably be expected to have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole)); (xi) the books of account and other records of the Corporation and each of its Material Subsidiaries, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (xii) there has not been any reportable event (within the meaning of section 4.11 of National Instrument 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators) with the auditors of the Corporation; (xiii) each of the Corporation and its Subsidiaries has conducted and is qualified conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to carry on business as described in the Prospectus under the laws it of each jurisdiction in which it carries on business and holds all licenses, permits, registrations and qualifications (collectively “Licenses”) in all jurisdictions in which it carries on business which are necessary to carry on the respective businesses of the Corporation and its businessSubsidiaries as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have any material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole) and none of such Licenses contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole), as now conducted or as proposed to be conducted; (ivxiv) except to the extent that any violation or other than the Subsidiaries, matter referred to in this subparagraph does not have a material adverse effect on the Corporation has no investment and its Subsidiaries (taken as a whole): (A) neither the Corporation nor any of its Subsidiaries is in violation of any applicable federal, provincial, municipal, local or ownership interest in any legal entityother laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, “Environmental Laws”); (vB) the Corporation and its Subsidiaries have operated their respective businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or its Subsidiaries on their respective properties that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation or its Subsidiaries; (E) neither the Corporation nor any of its Subsidiaries has failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign the occurrence of any event which is a "reporting issuer" required to be so reported by any Environmental Law; and (F) the Corporation and its Subsidiaries hold all licenses, permits and approvals required under any Environmental Laws in connection with the operation of their respective businesses and the ownership and use of their respective assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation or its Subsidiaries, and (B) notifications relating to reclamation obligations under the Canadian Securities Environmental Protection and Enhancement Act (Alberta) or similar Environmental Laws applicable in the jurisdictions in which the Corporation or any of its Subsidiaries carry on business, neither the Corporation nor any of its Subsidiaries has received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; (xv) each of the Corporation and its Subsidiaries has duly and on a timely basis filed all tax returns required to be filed by it, has paid all taxes due and payable by it and has paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation or any of its Subsidiaries and to the best of the knowledge, information and belief of the Corporation there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation or any of its Subsidiaries in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority (except to the extent that such actions, suits, proceedings, investigations or claims could not reasonably be expected to have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole)) ; (xvi) any and all operations of each of the provinces Corporation and its Subsidiaries conducted by it and, to the best of Albertathe Corporation’s knowledge, British Columbiaany operations conducted by third parties on or in respect of the assets and properties of the Corporation and its Subsidiaries, Saskatchewanhave been conducted in accordance with good oil and gas practices, Manitobaas applicable, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default except where the lack of any material requirement or lesser standard of such Canadian Securities Lawsconduct would not have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole); (xvii) the Corporation has full corporate capacity, is not included power and authority to enter into this Agreement and the Debenture Indenture and to perform its obligations set out herein and therein (including, without limitation, to issue the Offered Securities) and this Agreement has been, and the Debenture Indenture will, on a list of defaulting reporting issuers maintained the Closing Date be, duly authorized, executed and delivered by the CSA Corporation and this Agreement is, and the Debenture Indenture will continue on the Closing Date be, legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to laws relating to the availability of equitable remedies and creditors’ rights generally and except as rights to indemnity and contribution may be limited or unavailable by applicable law; (xviii) the Over-Allotment Option has been granted hereby, subject to compliance by the Underwriters with all Applicable Securities Laws in connection thereto, and authorized and the Offered Securities to be issued by the Corporation as described in this Agreement and in the Prospectuses will be, at the Closing Time or the Over-Allotment Option Closing Time, a reporting issuer under as applicable, duly created and authorized, and, when authenticated, issued and delivered in the Canadian Securities Laws of each manner contemplated by the Debenture Indenture, will constitute legal, valid and binding obligations of the Qualifying ProvincesCorporation, enforceable against it in accordance with their terms subject to the general qualifications that: (A) enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally; and (B) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court; (vixix) each at the Closing Date, the Underlying Shares issuable upon conversion, redemption or maturity of the Offered Securities in accordance with the Debenture Indenture will be duly and validly authorized, allotted and reserved for issuance as fully paid and non-assessable Common Shares and will be free and clear of all liens, charges and encumbrances; (xx) neither the Corporation nor any of its Subsidiaries is in default or breach of, and the execution and delivery of this Agreement of, and the performance by of and compliance with the Corporation of its obligations hereunderterms of, including this Agreement, the allotment, reservation, issuance and delivery Debenture Indenture or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by-laws or resolutions of the shareholders or directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any of its Subsidiaries, or any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the its Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary any of its Subsidiaries is bound, or any law, judgment, decree, order, statute, rule or regulation applicable to the property Corporation or assets thereof, any of its Subsidiaries which default or breach would might reasonably be expected to have materially adversely affect the business, operations, capital or condition (financial or otherwise) of the Corporation and its Subsidiaries (taken as a Material Adverse Effectwhole); (viixxi) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred been any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities or obligations (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements from the position set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation Documents (other than as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil publicly and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporationgenerally disclosed); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has not been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Offering Documents constitutes and any Supplementary Material pursuant to Section 4 above shall constitute a representation and warranty to the Underwriters Agents by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agents is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished furnished, in writing, by and relating solely to the UnderwritersAgents) contained in the Preliminary Prospectus, the Prospectus or any Supplementary MaterialOffering Documents, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; (C) no material fact or information has been omitted from such document which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the circumstances in which they were made; and (CD) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Receipts, the Acquisition and the Underlying Shares; (ii) the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Final Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceDocuments, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Offering Memorandum, the Amended and Restated Preliminary U.S. Offering Memorandum, the Final U.S. Offering Memorandum and any amendment thereto comply in all material respects with applicable U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material Offering Documents to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and its the Subsidiaries (taken as a whole)) or, to the knowledge of the Corporation, the Partnership. (b) In addition to the representations and warranties contained in subsection 7(a) hereofSection 8(a), the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersAgents, and acknowledges that each of the Underwriters Agents is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) each of the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, formed (as the case may be) and organized and is valid and subsisting under the Laws of the jurisdiction of its incorporation, amalgamation or formation and has all requisite corporate powercapacity, power and authority and capacity to carry on its business as described in the Prospectuses including, without limitation, to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) each of the Corporation and the Subsidiaries is qualified to carry on business under the Laws of the jurisdictions in which it carries on a material portion of its business; (iii) the Corporation has no material Subsidiaries other than 1647456 Alberta Ltd., Penn West PROP Holdco Ltd., Penn West Sandhill Crane Ltd., Penn West PROP Limited Partnership, Penn West Northern Harrier Partnership, Peace River Oil Partnership, PROP Energy 45 Limited Partnership, PROP Energy 45 GP Ltd. and Obsidian Energy Partnership (the “Material Subsidiaries”) and, other than the Subsidiaries, the Corporation is not, directly or indirectly, a partner of any partnerships, limited partnerships or material joint ventures; (iv) the registered total assets of the Corporation and beneficial holder the Material Subsidiaries (taken as a whole), constituted no less than 95% of the consolidated assets of the Corporation as at September 30, 2021, and the total revenues of such Subsidiaries constituted no less than 95% of the consolidated revenues of the Corporation for the nine month period ended September 30, 2021; (av) 100% all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. the Subsidiaries are validly issued as fully paid and non-assessable, the Corporation is ("MVIHC"); (b) 100% other than in respect of the Partnership of which the Corporation indirectly holds a 54.9% interest), directly or indirectly, the registered and beneficial holder of all such issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC holds such securities with valid and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of marketable title to the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgagesany liens, pledges, charges, pledgesencumbrances, security interests, encumbrances, interests or other adverse claims or demands whatsoever (other than lender security) and no person holds any securities convertible or other entity exchangeable into securities of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to (whether or not on condition(s)) for the purchase or receiveother acquisition of any unissued shares, securities (including convertible securities) from the Corporation or the Subsidiaries any issued or unissued securities warrants of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business ; and, except as described disclosed in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the SubsidiariesDocuments, the Corporation has no investment or ownership interest material shareholdings in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Albertaother corporation, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provincespartnership or business organization; (vi) each the Corporation has full corporate capacity, power and authority to enter into this Agreement, the Subscription Receipt Agreement and the Acquisition Agreement and to perform its obligations set out herein and therein (including, without limitation, to complete the Acquisition and to issue the Offered Receipts), and this Agreement and the Acquisition Agreement have been, and the Subscription Receipt Agreement will be, duly authorized, executed and delivered by the Corporation and this Agreement, the Subscription Receipt Agreement and the Acquisition Agreement will be, legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their terms subject to the general qualifications that: (A) enforceability may be limited by bankruptcy, insolvency or other Laws affecting creditors’ rights generally; and (B) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court; (vii) no action, approval, consent or vote on the part of the shareholders of the Corporation is or shall be necessary to consummate the transactions contemplated by this Agreement or the Acquisition Agreement; (viii) the Corporation has full power and authority to issue the Offered Receipts and, at the Closing Date, the Offered Receipts and the Underlying Shares will be duly and validly authorized, allotted and reserved for issuance and, in the case of the Offered Receipts, upon receipt of the purchase price therefore, and, in the case of the Underlying Shares upon issuance in accordance with the Subscription Receipt Agreement, will be issued as fully paid and non-assessable; (ix) neither the Corporation nor the Subsidiaries is in default or breach of, and the execution and delivery of this Agreement of, and the performance of and compliance with the terms of this Agreement, the Subscription Receipt Agreement, the Acquisition Agreement by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by-laws or resolutions of the shareholders or directors or shareholders of the Corporation and the Subsidiaries, or a Subsidiary which are in effect at the date hereof; (c) any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, applicable Law which default or breach would might reasonably be expected to constitute a Material Adverse Effect or would impair the ability of the Corporation to consummate the transactions contemplated hereby or thereby or to perform any of its covenants or obligations contained in this Agreement, the Subscription Receipt Agreement or the Acquisition Agreement; (x) there has not been any material change in the capital, assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation and Subsidiaries (taken as a whole) from the position set forth in the Financial Statements except as contemplated by the Prospectuses and there has not been any Material Adverse Change since December 31, 2020; and since that date there have been no material facts, transactions, events or occurrences which could constitute a Material Adverse Effect which have not been disclosed in the Prospectuses; (xi) except as mandated by a Governmental Authority, which mandates have not materially adversely affected the business or financial condition of the Corporation and Subsidiaries (taken as a whole) as at the date of this Agreement, and except as disclosed in the Prospectuses, there has been no material suspension of the operations of the Corporation as a result of the COVID-19 outbreak (“COVID-19 Outbreak”). The Corporation has been monitoring the COVID-19 Outbreak and the potential impact on its operations and has used reasonable commercial efforts to put reasonable measures in place to reduce the risk to the health of its employees; (xii) the Financial Statements (other than management’s discussion and analysis) fairly present, in accordance with IFRS, consistently applied, the financial position and condition, the results of operations, cash flows and the other information purported to be shown therein of the Corporation on a consolidated basis as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation on a consolidated basis as at the dates thereof required to be disclosed by IFRS and include all adjustments necessary for a fair presentation; (xiii) the Other Financial Information is correct, in all material respects, and has been properly compiled to give effect to, as the case may be, the assumptions and adjustments described therein and such assumptions are reasonable and such adjustments are based on good faith estimates and assumptions which are reasonable; (xiv) the Corporation is not currently considering any material write-offs or write- downs with respect of its ownership of the Partnership following completion of the Acquisition; (xv) the Corporation’s current and preceding auditors are independent with respect to the Corporation within the meaning of the Rules of Professional Conduct of the Institute of Chartered Professional Accountants of Alberta and there has not been any reportable event (within the meaning of Section 4.11 of National Instrument 51-102, Continuous Disclosure Obligations current and preceding of the Canadian Securities Administrators) with the Corporation’s auditors; (xvi) the Corporation maintains a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Corporation is not aware of any material weakness in its internal controls over financial reporting; (xvii) no authorization, approval or consent of any Governmental Authority is required to be obtained by the Corporation in connection with the sale and delivery of the Offered Receipts hereunder, except such as may be required by the TSX or pursuant to Applicable Securities Laws; (xviii) there are no outstanding judgments against the Corporation or the Subsidiaries or any consent decrees or injunctions to which the Corporation or the Subsidiaries is subject or by which its assets are bound and there are no actions, suits, proceedings or inquiries pending or (as far as the Corporation is aware) threatened against or affecting the Corporation or the Subsidiaries at Law or in equity or before or by Governmental Authority which in any way constitutes or may constitute a Material Adverse Effect or which affects or may affect the distribution of the Offered Receipts or which would impair the ability of the Corporation to consummate the transactions contemplated in this Agreement, the Subscription Receipt Agreement or the Acquisition Agreement or to duly observe and perform any of its covenants or obligations contained in this Agreement, the Subscription Receipt Agreement or the Acquisition Agreement and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; (xix) except for this Agreement and the Acquisition Agreement, neither the Corporation nor the Subsidiaries is party to or bound by any agreement of guarantee, indemnification (other than an indemnification of directors and officers in accordance with the by-laws of the Corporation and applicable Laws and other than indemnities in favour of the Corporation’s lenders or similar agreements in the ordinary course of business) or any other like commitment of the obligations, liabilities (contingent or otherwise) of indebtedness of any other person; (xx) each of the Corporation and the Subsidiaries has conducted and is conducting its business in all material respects in compliance with all applicable Laws and, in particular, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any Governmental Authorities applicable to it of each jurisdiction in which it carries on business and holds all licences, registrations and qualifications in all jurisdictions in which it carries on business necessary to carry on its business as now conducted and as contemplated to be conducted in the Prospectuses and all such licenses, registrations and qualifications are valid and existing and in good standing, except where the lack of such valid or existing license, registration or qualification would not have a Material Adverse Effect and none of such licenses, registrations or qualifications contains any burdensome term, provision, condition or limitation which has constituted, or is likely to constitute, a Material Adverse Effect; (viixxi) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws information and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, Public Record were true, correct, and complete in all material respects and did not contain any misrepresentation misrepresentation, as of the date of such information or statements and were prepared in accordance with Applicable Securities Laws and the Corporation has not filed any confidential material change reports since the date of such statements which remains report still maintained on a confidential as at the date hereofbasis; (viiixxii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated ordinary course indebtedness incurred in the normal course of business and for the benefit connection with compensation or expenses incurred on behalf of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the ProspectusSubsidiaries, neither the Corporation nor the Subsidiaries have any Subsidiary has approvedloans or other indebtedness outstanding which have been made to or from any of its shareholders, officers, directors or entered into any agreement in respect of: (a) the purchase of any material property or assets employees or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by person not dealing at arm’s length with the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or Subsidiaries that are currently outstanding; (bxxiii) any change in control the authorized capital of the Corporation (by sale, transfer or other disposition consists of an unlimited number of Common Shares and an unlimited number of preferred shares or sale, transfer, lease or other disposition of all or substantially all issuable in series. There are 74,852,877 Common Shares issued and outstanding as of the property date hereof, each of which is validly issued, fully paid and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of non-assessable and no preferred shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporationare outstanding; (xviiixxiv) as of the Financial Statements have been prepared in accordance with GAAP date hereof, no person holds any securities convertible into or IFRSexchangeable for Common Shares or has any agreement, as applicablewarrant, and present fullyoption, fairly and correctly in all material respectsright or privilege being or capable of becoming an agreement, warrant, option or right (whether or not on condition(s)) for the consolidated financial condition purchase or other acquisition of any unissued Common Shares or other securities of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by Common Shares issuable upon the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any exercise of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caoptions

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary ProspectusProspectuses, the Prospectus Prospectuses and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished in writing by and relating solely to the Underwriters) contained in the Preliminary ProspectusRegistration Statement, the Prospectus Preliminary Prospectuses, the Prospectuses or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceDocuments, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary ProspectusRegistration Statement, the ProspectusPreliminary Prospectuses, the Prospectuses, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be, comply in all material respects with the applicable Canadian all Applicable Securities Laws, including without limitation National Instrument 44- 101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Registration Statement, Preliminary ProspectusProspectuses, the Prospectus Prospectuses and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, Agreement that: (i) the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedformed, as the case may be, and organized and is validly existing under the laws of the province of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Preliminary Prospectuses and capacity the Prospectuses, and to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, Preliminary Prospectuses and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is qualified to carry on business under the registered laws of each jurisdiction in which it carries on a material portion of its business; (iii) except as disclosed in the Preliminary Prospectus and beneficial holder the Prospectuses, the Corporation has conducted and is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in the Preliminary Prospectuses and Prospectuses, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (acollectively “Licenses”) 100% in all jurisdictions in which it carries on a material portion of its business which are necessary or desirable to carry on the business of the Corporation, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have any material adverse effect on the business of the Corporation (taken as a whole) and none of such Licenses contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation, as now conducted or as proposed to be conducted; (iv) the Corporation does not have any Material Subsidiaries and the Corporation is not “affiliated” with or a “holding corporation” of any other body corporate (within the meaning of those terms in the ABCA), nor is it a partner of any partnerships; (v) all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly its Subsidiaries are fully paid and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non-assessable and, collectivelyin the case of its Subsidiaries, are legally and beneficially owned by the "Subsidiaries"), in each case, Corporation free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the credit facilities of the Corporation) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the such Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each the minute books of the execution Corporation are true and correct in all material respects and contain the minutes of all meetings (except for such minutes for meetings of the board or committees thereof held in April 2014 and May 2014 which have not yet been finalized and approved) and all resolutions of directors (including committees of directors) and shareholders, as the case may be, thereof, and all such meetings were duly called and properly held and all resolutions were properly adopted; (vii) the books of account and other records of the Corporation, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (viii) all filings made by the Corporation under which the Corporation has received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations or omit to state any material fact which could cause any material amount previously paid to the Corporation or previously accrued on the accounts thereof to be recovered or disallowed; (ix) except to the extent that any violation or other matter referred to in this subparagraph does not have a material adverse effect on the Corporation (and, in respect of non-operated properties, to the knowledge, information and belief of the Corporation): (A) to the best of its knowledge, information and belief, after due inquiry, it is not in violation of any applicable federal, provincial, state, municipal, local or foreign laws, regulations, orders, government decrees or ordinances with respect to environmental, pollution, health or safety matters (collectively, “Environmental Laws”); (B) to the best of its knowledge, information and belief, after due inquiry, the Corporation (and, if applicable, any predecessor entities of the Corporation) has operated its businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or in respect of the Corporation’s business or assets that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation; (E) the Corporation has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign (“Government Authority”) the occurrence of any event which is required to be so reported by any Environmental Law; (F) the Corporation holds all licenses, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta), the Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) the Corporation (including, if applicable, any predecessor companies or entities of the Corporation) has not received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and the Corporation (including, if applicable, any predecessor entities) has not settled any allegation of material non-compliance short of prosecution; (x) any and all operations of the Corporation (including, if applicable, any predecessor entities of the Corporation) and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation, have been conducted in accordance with good oil and gas industry practices except where the lack of or lesser standard of such conduct would not have a material adverse effect on the business of the Corporation; (xi) all income tax returns of the Corporation (including, if applicable, any predecessor entities of the Corporation) required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of the Corporation (including, if applicable, any predecessor entities of the Corporation) required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The Corporation (including, if applicable, any predecessor entities of the Corporation) has made installments of taxes as and when required. The Corporation (including, if applicable, any predecessor entities of the Corporation) has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xii) no consent, approval, permit, authorization, order or filing with any court or governmental agency, the securities authorities or any other jurisdiction or agency is required by the Corporation or necessary for the execution, delivery of this Agreement and the performance by the Corporation of its obligations hereunderunder this Agreement, other than such consents, approvals, authorizations, registrations or qualifications as may be required under Applicable Securities Laws or by the TSX or the NYSE MKT, all of which will be obtained by the Corporation prior to the Closing Time; (xiii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein (including, without limitation, to issue the Offered Shares and to grant the Over-Allotment Option), and this Agreement has been duly authorized, executed and delivered by the Corporation and this Agreement forms legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with its terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the allotmentremedies of specific performance and injunctive relief, reservationbeing available only in the discretion of the applicable court; (iii) the statutory and inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgments; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiv) at the Closing Time and the Additional Closing Time, as applicable, the Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the purchase price therefor, the Offered Shares will be duly and validly issued as fully paid and non-assessable Common Shares; (xv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Preliminary Prospectuses and the Prospectuses and, prior to the filing of the Prospectuses, all requisite action had been and will have been, as applicable, taken by the Corporation to authorize the execution, delivery and filing of the Preliminary Prospectuses and the Prospectuses; (xvi) except as disclosed in the Preliminary Prospectuses and the Prospectuses and other than this Agreement, there are no material contracts or agreements outside of the ordinary course of business which have or which might have or create any material obligation to the Corporation or from which it derives or could derive any material benefit or which are required for the Corporation to carry on its business as now conducted or as presently proposed to be conducted, and the Corporation is not in material default or breach of any of such agreements. For the purposes of this representation and warranty, material contracts or agreements shall be deemed to give rise to a material obligation where such contract or agreement provides for expenditures by the Corporation for an aggregate of more than $5,000,000 during any 12 month period; (xvii) the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of, this Agreement or any of the Offered Sharestransactions contemplated hereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the shareholders or directors or shareholders of the Corporation Corporation, or a Subsidiary which are in effect at the date hereof; (c) any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary or the property or assets thereof, which default or breach would might reasonably be expected to have a Material Adverse Effect; (vii) materially adversely affect the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects capital or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caan

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Memorandum and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) to the knowledge, information and belief of the Corporation, the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101, the U.S. Placement Memorandum and any related Supplementary Material complies in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the U.S. Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and or its Subsidiaries (Subsidiaries, taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, Agreement that: (i) the Corporation has full corporate capacity, power and authority to issue the Offered Shares and to grant the Over-Allotment Option and at the Closing Time and the Additional Closing Time, as applicable, the Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the purchase price therefor, the Offered Shares will be duly and validly issued as fully paid and non-assessable Common Shares; (ii) each of the Corporation and its Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedformed, as the case may be, and organized and is validly existing under the laws of the jurisdiction of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus Prospectuses; (iii) each of the Corporation and no steps its Subsidiaries is qualified to carry on business under the laws of each jurisdiction in which it carries on a material portion of its business and is qualified to own its assets as described in the Public Record; (iv) except as disclosed in writing to the Underwriters, each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in writing to the Underwriters, all applicable licensing and environmental legislation, regulations or proceedings by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (collectively "Licenses") in all jurisdictions in which it carries on a material portion of its business which are necessary to carry on the business of the Corporation and its Subsidiaries, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have been any material adverse effect on the business of the Corporation and its Subsidiaries (taken by as a whole); (v) the Corporation does not have any personmaterial Subsidiaries other than GHP, voluntary or otherwise▇▇▇▇▇▇▇, requiring or authorizing its dissolution or winding upTPII, TGHYI, TWGI and TPEI and the Corporation has all requisite is not "affiliated" with or a "holding corporation" of any other body corporate power and authority to enter into this Agreement and to carry out (within the meaning of those terms in the ABCA), nor is it (or its obligations hereunderSubsidiaries) a partner of any partnerships or limited partnerships; (iivi) the Corporation is the registered and beneficial holder of (a) 100% all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% each of the issued Subsidiaries are fully paid and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non assessable and, collectivelyin the case of each of the Subsidiaries, legally or beneficially owned by the "Subsidiaries"), in each case, Corporation (directly or indirectly) free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the credit facilities of the Corporation or its Subsidiaries) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of any of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-pre emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries issued securities of any issued or unissued securities of the Subsidiaries; (vii) the minute books of each of the Corporation and its Subsidiaries are true and correct in all material respects and contain the minutes of all meetings and all resolutions of directors (including committees thereof), shareholders and partners, as the case may be, thereof; (viii) the books of account and other records of each of the Corporation and its Subsidiaries, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (ix) except to the extent that any violation or other matter referred to in this subparagraph does not have a material adverse effect on the Corporation and its Subsidiaries (taken as a whole) or as set forth in the Public Record: (A) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries are not in violation of any applicable federal, provincial, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, "Environmental Laws"); (B) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries have operated their businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or its Subsidiaries that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation or its Subsidiaries; (E) it and its Subsidiaries have not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign ("Government Authority") the occurrence of any event which is required to be so reported by any Environmental Law; (F) it and its Subsidiaries hold all licenses, permits and approvals required under any Environmental Laws in connection with the operation of their respective business and the ownership and use of their respective assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation and its Subsidiaries, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta) and similar legislation in the jurisdictions in which the Corporation or its Subsidiaries conduct business, neither the Corporation nor any of its Subsidiaries has received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies thereof) has received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of material non-compliance short of prosecution; (x) any and all operations of the Corporation and its Subsidiaries and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation and its Subsidiaries, have been conducted in accordance with good oil and gas industry practices except where the lack of, or lesser standard of, such conduct would not have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole); (xi) all income tax returns of each of the Corporation and its Subsidiaries required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of each of the Corporation and its Subsidiaries required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. Each of the Corporation and its Subsidiaries has made instalments of taxes as and when required. Each of the Corporation and its Subsidiaries has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein (including, without limitation, to issue the Offered Shares), and this Agreement has been duly authorized, executed and delivered by the Corporation and this Agreement is a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors' rights generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, being available only in the discretion of the applicable court; (iii) the statutory and inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgements; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vi) enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and (vii) that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiii) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, deliver and filing of the Prospectuses; (xiv) other than this Agreement, the Material Agreements as set forth in the Public Record, there are no material contracts or agreements which have, or which might have or create, any material obligation to the Corporation or its Subsidiaries or from which they derive or could derive any material benefit or which are required by the Corporation or its Subsidiaries to carry on their business as now conducted by them or as presently proposed to be conducted by them; (xv) each of the Material Agreements is accurately described in the Prospectus or documents incorporated by reference therein as to parties, dates, terms, conditions and amendments thereto, each of such agreements is a legal, valid and binding obligation of the Corporation and/or its Subsidiaries, as the case may be, enforceable against such party or parties in accordance with their terms, and the Corporation and each of its Subsidiaries, as applicable, are in compliance with the terms of such Material Agreements except where such non-compliance, in aggregate, would not reasonably be expected to have a material adverse effect on the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), ownership or condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries is qualified to carry on business (taken as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessa whole); (ivxvi) other than the Subsidiaries, the Corporation has no investment or ownership interest in reason to believe, after due inquiry, that any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue other party to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms Material Agreements or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document material contract to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , is in default of any term or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which obligation to be performed by such party where such default or breach would might reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (effect on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase is not aware of any material property event which has occurred which would provide any of the parties to any of the Material Agreements with a reasonable basis to terminate or assets or any interest therein or the sale, transfer or other disposition seek a termination of any material property such agreement or assets that the applicable regulatory requirements and government approvals required under the Material Agreements may be revoked, modified or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporationamended; (xviii) the Financial Statements have been prepared Corporation is not in accordance with GAAP default or IFRS, as applicablebreach of, and present fullythe execution and delivery of, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at performance of and compliance with the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilitiesterms of, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable this Agreement by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect or any of the Corporation transactions contemplated hereby, does not and will not result in any breach of, or have constitute a Material Adverse Effect. All tax returnsdefault under, declarationsand does not and will not create a state of facts which, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returnsafter notice or lapse of time or both, declarationswould result in a breach of or constitute a default under, remittances and filings are complete and accurate and no material fact any term or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect provision of the Corporation articles, by-laws or have a Material Adverse Effect. To the knowledge resolutions of the Corporation, no examination of any tax return shareholders or directors of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paidof its Subsidiaries, or may be payableany indenture, by the Corporation or the Subsidiariesmortgage, in any cano

Representations and Warranties of the Corporation. (a) Each Except as otherwise indicated below, the Corporation’s delivery to the Agents of each of the Preliminary Prospectus, Canadian Prospectus and the U.S. Prospectus and any Supplementary Material pursuant Canadian Prospectus Amendment or U.S. Registration Statement Amendment, as applicable, and the documents referred to in Section 4 above 6(1)(a) and 6(1)(b) hereof shall constitute a the Corporation’s representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each Agents that, as of the Underwriters is relying on such representations date hereof and warranties in entering into this Agreement) thatas of the Closing Date: (a) (i) each such document at the time of its filing complied in all material respects with the requirements of the Applicable Securities Laws pursuant to which it was filed and that all the information and statements contained therein (except information and or statements furnished by and relating solely to the Underwritersan Agent) contained in the Preliminary Prospectusare, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documentsdelivery thereof, true and correct in all material respects; (B) , contain no misrepresentation; and misrepresentation (Cas defined in the Applicable Securities Laws) and constitute full, true and plain disclosure of all material facts relating to the Corporation and its subsidiaries taken as a whole, and the Offered SharesShares as required by the Applicable Securities Laws; (ii) no material fact or information has been omitted therefrom and no other fact or information (except facts or information relating solely to the Agents) has been omitted therefrom which is necessary to make the statements contained therein not misleading in light of the circumstances in which they were made; and (iii) the Corporation has made disclosure of all material changes in the affairs of the Corporation in accordance with the Applicable Securities Laws; (iib) except as otherwise disclosed in each of the Preliminary Prospectus, Canadian Prospectus and the U.S. Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceCanadian Prospectus Amendment or U.S. Registration Statement Amendment, as the case may be, comply in all material respects with subsequent to the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101; and (iii) except respective dates as of which information is disclosed given in the Public RecordCanadian Prospectus and the U.S. Prospectus, or any Canadian Prospectus Amendment and U.S. Registration Statement Amendment, as the case may be: (i) there has been no intervening material change (adverse change, or any development that could reasonably be expected to result in a material change until filing of adverse change, in the Prospectus) (actualcondition, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, or in the earnings, business, operationsoperations or prospects, revenueswhether or not arising from transactions in the ordinary course of business, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries subsidiaries, considered as one entity (taken as any such change is called a whole“Material Adverse Change”). ; (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (iii) the Corporation and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business, nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Corporation or, except for dividends paid to the Corporation or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by the Corporation or any of its subsidiaries of any class of capital stock; (c) the Corporation has an authorized capitalization as set forth in each of the Subsidiaries Canadian Prospectus and the U.S. Prospectus, of which, as of September 4, 2009, (i) 16,666,974 Subordinate Voting Shares, (ii) 1,548,000 Multiple Voting Shares, (iii) 2,250,000 Series A Preferred Shares and (iv) 3,750,000 Series B Preferred Shares, respectively, have been duly and validly authorized and issued and are fully paid and non-assessable and no other shares are outstanding; (d) the Shares have been duly authorized for issuance, sale and delivery to the Agents pursuant to this Agreement and, when issued and delivered by the Corporation against payment of the consideration set forth herein, the Shares will be validly issued and fully paid and non-assessable and will conform to the description thereof contained in the Canadian Prospectus and the U.S. Prospectus; the issuance of the Shares is not subject to the preemptive or similar rights of any person; (e) the Corporation consents to the use by the Agents of the documents referred to in Section 6(1)(a) in connection with the Offering in the Qualifying Jurisdictions in compliance with the terms hereof; (f) this Agreement has been duly authorized, executed and delivered by, and is a corporation duly incorporated, continued or amalgamated valid and validly existing and in good standing under the laws binding agreement of the jurisdiction Corporation, enforceable in accordance with its terms, except as to rights of indemnification and contribution hereunder which it was incorporatedmay be limited by applicable law and except as the enforcement hereof may be limited by bankruptcy, continued insolvency, reorganization, moratorium or amalgamatedother similar laws relating to or affecting the rights and remedies of creditors or by general equitable principles; (g) PricewaterhouseCoopers, LLP, Chartered Accountants, who have expressed their opinions with respect to the Financial Information contained in the Canadian Prospectus and the U.S. Prospectus, and any Canadian Prospectus Amendment or U.S. Registration Statement Amendment, as the case may be, are the auditors of the Corporation, are independent within the meaning of the Canada Business Corporations Act (the “CBCA”) and the Applicable Securities Laws and are independent public or certified public accountants as required by the U.S. Securities Act and the rules and regulations promulgated by the SEC thereunder and the U.S. Exchange Act and the rules and regulations thereunder; (h) the financial statements included or incorporated by reference in the Canadian Prospectus and the U.S. Prospectus, respectively, present fairly in all material respects the consolidated financial position of the Corporation and its consolidated subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with Canadian GAAP applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. The financial data set forth in the Canadian Prospectus and the U.S. Prospectus under the captions “Summary Historical Consolidated Financial Data” and “Capitalization” fairly present in all material respects the information set forth therein on a basis consistent with that of the audited and unaudited financial statements contained or incorporated by reference in the Canadian Prospectus and the U.S. Prospectus. (i) each of the Corporation and its subsidiaries has all requisite been duly incorporated or formed and is validly existing as a corporation, partnership, limited liability company or other similar entity under the laws of the jurisdiction of its incorporation or formation and has power (corporate power, or other) and authority and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing to conduct its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Canadian Prospectus and the U.S. Prospectus, except where failure to so own and operate any property or conduct any business would not result in a Material Adverse Change, and, in the case of the Corporation, to enter into and perform its obligations under this Agreement. Each of the Corporation and each subsidiary is duly qualified as a foreign corporation to transact business and is in good standing under the laws of each jurisdiction in which it carries on its such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock of each subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and is owned, except as otherwise expressly disclosed in the Canadian Prospectus and the U.S. Prospectus, and any Canadian Prospectus Amendment or U.S. Registration Statement Amendment, by the Corporation, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim. The Corporation’s principal subsidiaries are the subsidiaries listed in the Corporation’s Annual Information Form for the year ended December 31, 2008; (ivj) other than the Subsidiaries, neither the Corporation has no investment nor any of its subsidiaries is in violation of its articles of incorporation or ownership interest in any legal entity; (v) the Corporation by-laws or is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default (or, with the giving of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time time, would be in default) (“Default”) under any indenture, mortgage, loan or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgagecredit agreement, note, indenture, contract, agreement, joint venture, partnership, instrumentfranchise, lease or other document instrument to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it subsidiaries is a party or by which it or its property any of them may be bound, except in each case as would not have a Material Adverse Effect; (xvi) or to the knowledge which any of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary of its subsidiaries is currently subject (each, an “Existing Instrument”), except for such Defaults as would not, individually or in progress the aggregate, result in a Material Adverse Change. The Corporation’s execution, delivery and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caperformance of this

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Prospectus and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters Agent by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agent is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgent and its affiliates) contained in the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesShares as required by Applicable Securities Laws in the Selling Jurisdictions, except statements, forecasts, estimates and expressions of opinion, belief, intention and expectation (provided that such statements, forecasts, estimates and expression of opinion, belief, intention and expectation were honestly held by management of the Corporation at the time they were made or given and for which the Corporation believed there was a reasonable basis for); (ii) the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101 and NI 51-101, and any related Supplementary Material complies in all material respects with U.S. securities laws, if applicable; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Amended and Restated Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersAgent, and acknowledges that each of the Underwriters Agent is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) each of the Corporation and each of the Subsidiaries is a corporation its Subsidiary has been duly incorporated, continued amalgamated, formed or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedcontinued, as the case may be, and is validly existing under the laws of the jurisdiction of its incorporation, amalgamation, formation or continuance, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Prospectuses and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is the registered and beneficial holder each of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries its Subsidiary is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on a material portion of its business; (iii) each of the Corporation and its Subsidiary has conducted and is conducting and will conduct its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all licences, registrations and qualifications in all jurisdictions in which it carries on a material portion of its business which are necessary or desirable to carry on the business of the Corporation and its Subsidiary as now conducted and as presently proposed to be conducted except where the failure to so conduct its business or hold such licenses, registrations or qualifications would not have a material adverse effect on the Corporation and its Subsidiary, taken as a whole, all such licences, registrations or qualifications are valid and existing and in good standing and none of such licences, registrations or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation and its Subsidiary as now conducted or as proposed to be conducted, and neither the Corporation nor its Subsidiary are aware of any legislation, regulation, rule or lawful requirements presently in force or proposed to be brought into force which each of the Corporation and its Subsidiary anticipate it will be unable to comply with without materially adversely affecting the Corporation and its Subsidiary, taken as a whole; (iv) the only Subsidiary of the Corporation is Legacy and the Corporation does not have any other Subsidiaries and the Corporation is not “affiliated” (within the meaning of the ASA) with or a “holding corporation” of any other body corporate (within the meaning of such terms in the ABCA), nor is it a partner of any partnerships (other than participating in industry partnerships in the Subsidiariesordinary course of business) or limited partnerships, and the Corporation has no investment or ownership interest material shareholdings in any legal entityother corporation, entity or business organization; (v) the minute books of the Corporation contain full, true and correct copies of the constating documents of the Corporation and contain copies of all minutes of all meetings and all consent resolutions of the directors, committees of directors and shareholders of the Corporation and all such meetings were duly called and properly held and all consent resolutions were properly adopted; (vi) the minute books of Legacy contain full, true and correct copies of the constating documents of Legacy and contain copies of all minutes of all meetings and all consent resolutions of the directors, committees of directors and shareholders of Legacy and all such meetings were duly called and properly held and all consent resolutions were properly adopted; (vii) the books of account and other records of the Corporation and its Subsidiary, whether of a financial or accounting nature or otherwise, have been maintained in accordance with prudent business practices; (viii) with such exceptions as are not material to the Corporation and its Subsidiary (taken as a whole), the Corporation and its Subsidiary have duly and on a timely basis filed all tax returns required to be filed by each of them respectively, have paid all taxes due and payable by each of them respectively and have paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by each of them respectively and which were claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation or its Subsidiary and to the best of the knowledge, information and belief of the Corporation and its Subsidiary respectively there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation or its Subsidiary in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority; (ix) all filings made by the Corporation or its Subsidiary under which the Corporation or its Subsidiary have received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations of material fact or omit to state any material fact which could cause any amount previously paid to the Corporation or its Subsidiary or previously accrued on the accounts thereof to be recovered or disallowed; (x) except to the extent that any violation or other matter referred to in this subsection does not have a "reporting issuer" under material adverse effect on the Canadian Securities Laws business, financial condition, assets, properties, liabilities or operations of the Corporation and its Subsidiary, taken as a whole, to the knowledge of the Corporation in respect of its non-operated properties: (A) neither the Corporation nor its Subsidiary is in violation of any applicable federal, provincial, state, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, “Environmental Laws”); (B) each of the provinces Corporation and its Subsidiary has operated its business at all times and has received, handled, used, stored, treated, shipped and disposed of Albertaall contaminants without violation of Environmental Laws; (C) there have been no spills, British Columbiareleases, Saskatchewandeposits or discharges of hazardous or toxic substances, Manitobacontaminants or wastes into the earth, New Brunswickair or into any body of water or any municipal or other sewer or drain water systems by the Corporation or its Subsidiary that have not been remedied; (D) to the knowledge of the Corporation, Newfoundland after due inquiry, no orders, directions or notices have been issued and Labradorremain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation or its Subsidiary; (E) neither the Corporation nor its Subsidiary has failed to report to the proper federal, Nova Scotiaprovincial, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontariomunicipal or other political subdivision, is not in default government, department, commission, board, bureau, agency or instrumentality, domestic or foreign the occurrence of any event which is required to be so reported by any Environmental Law; and (F) the Corporation and its Subsidiary holds all licences, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licences, permits and approvals are in full force and effect, and neither the Corporation nor its Subsidiary has received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; (xi) any and all operations of the Corporation, its Subsidiary and to the knowledge of the Corporation, any and all operations by third parties, on or in respect of the assets and properties of the Corporation and its Subsidiary have been conducted in accordance with good oil and gas industry practices and in material requirement compliance with applicable laws, rules, regulations, orders and directions of governmental and other competent authorities; (xii) in respect of the assets and properties of the Corporation or its Subsidiary that are operated by it, if any, the Corporation and its Subsidiary hold all valid licences, permits and similar rights and privileges that are required and necessary under applicable law to operate the assets and properties of the Corporation and its Subsidiary, as presently operated except where the failure to hold such licence, permit or similar right or privilege will not have a material adverse effect on the Corporation and its Subsidiary taken as a whole; (xiii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein (including, without limitation, to create, issue and sell the Offered Shares, to grant the Over-Allotment Option and to create and issue the Common Shares to be issued pursuant to the exercise of such Canadian Securities LawsOver-Allotment Option), is not included on a list of defaulting reporting issuers maintained and this Agreement has been duly authorized, executed and delivered by the CSA Corporation and is a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with its terms subject to the general qualifications that: (A) the enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization, arrangement or winding up laws or other similar laws of general application affecting creditors’ rights generally; (B) equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court; (C) the equitable or statutory powers of the courts in Canada having jurisdiction to grant relief from forfeiture, to stay proceedings before them and to stay the execution of judgments; (D) rights to indemnity and contribution hereunder may be limited under applicable law and may or may not be ordered by a court on grounds of public policy and may therefore not be available in particular instances; (E) the validity, binding nature and enforceability of provisions in any of the agreements which purport to sever therefrom any provision which is unenforceable or invalid under applicable law without affecting the enforceability or validity of the remainder of such agreements would be determined in the discretion of the court; (F) the failure to exercise a right of action within a period prescribed in the applicable legislation governing the limitation of actions may act as a bar to enforcement of such rights at any time thereafter; and (G) the costs of and incidental to proceedings authorized to be taken in court or before a judge are within the discretion of the court or judge before which such proceedings are brought and a court or judge has full power to determine by whom and to what extent the costs of such proceedings will continue be paid; (xiv) the Corporation has the necessary corporate power and authority to beexecute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, delivery and filing of the Prospectuses; (xv) the attributes and characteristics of the Offered Shares and the Over-Allotment Option conform in all material respects to the attributes and characteristics thereof described in the Prospectuses; (xvi) at the Closing Time, a reporting issuer under the Canadian Securities Laws of each Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the Qualifying Provincespurchase price therefor, will be duly and validly issued as fully paid and non-assessable; (vixvii) each other than this Agreement, the credit agreement dated December 17, 2009 with Ionic Capital Corp. relating to the acquisition of the Wyoming Assets and any agreement identified as a material agreement in the Documents, there are no material contracts or agreements which have or which might have or create any material obligation to the Corporation or from which they derive or could derive any material benefit or which are required by the Corporation or its Subsidiary to carry on its business as now conducted by it or as presently proposed to be conducted by it and neither the Corporation nor its Subsidiary is in material default or breach of any of such agreements; (xviii) no default under any material agreement or instrument pursuant to which indebtedness of the Corporation has been issued, has occurred, and no event which with the giving of notice or the passage of time or both would constitute default under any such agreement or instrument has occurred and is continuing; (xix) the Corporation is not in default or breach of, and the execution and delivery of this Agreement of, and the performance of and compliance with the terms of, this Agreement by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby or thereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any caresult

Representations and Warranties of the Corporation. (a1) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, and any Supplementary Material pursuant to Section 4 or Section 6(3) above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (ia) all of the information and statements (except information and statements furnished in writing by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (Ai) are at the respective dates of such documents, true and correct in all material respects; (Bii) contain no misrepresentation; and (Ciii) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesUnits and the Underlying Offered Securities; (iib) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Applicable Securities Laws, including without limitation National Instrument 44- NI 44-101; and (iiic) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b2) In addition to the representations and warranties contained in subsection 7(aSection 7(1) hereof, the Corporation represents and warrants (andto, where applicableand covenants with, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, that: (ia) the Corporation and each of the Subsidiaries is a corporation Subsidiary have been duly incorporated, continued or amalgamated incorporated and organized and are validly existing and in good standing subsisting under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has of their incorporation and have all requisite corporate powercapacity, authority and capacity power to carry on their business, as now conducted and as presently proposed to be conducted by them, and to own, lease or and operate its their properties and assets as described assets; (b) the Corporation and the Subsidiary are duly registered to do business and are in good standing in each jurisdiction in which the Prospectus and no steps character of its properties, owned or proceedings have been taken by leased, or the nature of its activities make such registration necessary, except where the failure to be so registered or in good standing would not result in a material adverse effect; (c) the Corporation’s sole subsidiary Subsidiary is Scythian Biosciences Inc. The Corporation is not “affiliated” with or a “holding corporation” of any person, voluntary or otherwise, requiring or authorizing its dissolution or winding upother body corporate (each within the meaning of the OBCA), and is not a partner of any partnerships or limited partnerships; (d) the Corporation has all requisite full corporate capacity, power and authority to enter into this Agreement Agreement, the Private Placement Subscription Agreement, the Warrant Indenture and the Compensation Options, to carry out perform its obligations hereunderset out herein and therein, and this Agreement has been and the Private Placement Subscription Agreement, Warrant Indenture and the Compensation Options, will, on the Closing Date and, if applicable, any Additional Closing Date, be duly authorized, executed and delivered by the Corporation and the Private Placement Subscription Agreement, the Warrant Indenture and the Compensation Options will, on the Closing Date and, if applicable, any Additional Closing Date, be legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms, subject to the general qualifications that: (i) enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the Corporation is remedies of specific performance and injunctive relief, are available only in the registered and beneficial holder of (a) 100% discretion of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiariesapplicable court; (iii) the courts in Canada having jurisdiction may have equitable or statutory powers to stay proceedings before them and the execution of judgments; (iv) rights to indemnity and contribution hereunder may be limited under applicable law; (v) the applicable laws regarding limitations of actions; (vi) the enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vii) the enforceability of the provisions exculpating a party from liability or duty otherwise owed by it to another and certain remedial terms and waivers of equitable defences provided for in such agreement or other document may be limited under applicable law; (viii) the requirement of a court that the discretionary powers expressed to be conferred on any party to such agreement, indenture or other document be exercised reasonably and in good faith notwithstanding any provisions to the contrary and the possibility that such court may decline to accept as conclusive factual or legal determinations described as conclusive therein; and (ix) the fact that costs of and incidental to all proceedings authorized to be taken in court are in the discretion of the court and that the court has full power to determine by whom and to what extent such costs shall be paid; (e) the Corporation has full corporate power and authority to issue the Offered Units, the Private Placement Units, the Underlying Securities, the Compensation Options and the Compensation Option Underlying Securities, and to grant the Underwriters’ Option and the Underwriters’ Private Placement Option and, upon receipt of full payment therefor, at the Closing Time or, if applicable, any Additional Closing Time, the Underlying Securities, the Compensation Options and the Compensation Option Underlying Securities will be duly and validly authorized, allotted and reserved for issuance and, at the time of their issuance, the Common Shares underlying the Offered Units and Private Placement Units will have been duly and validly issued as fully paid and non-assessable Common Shares, the Warrants will have been duly and validly issued and, upon due exercise of the Warrants, in accordance with the terms of the Warrant Indenture, the Warrant Shares will be duly and validly issued as fully paid and non- assessable Warrant Shares, the Compensation Options will have been duly and validly issued and, upon due exercise of the Compensation Options, in accordance with the terms of thereof, the Compensation Option Underlying Shares will be duly and validly issued as fully paid and non-assessable Compensation Option Underlying Shares, the Compensation Option Underlying Warrants will be duly and validly issued as fully paid and non- assessable Compensation Option Underlying Warrants and the Compensation Option Underlying Warrant Shares will be duly and validly issued as fully paid and non-assessable Compensation Option Underlying Warrant Shares; (f) the Corporation has the necessary power and authority to sign, deliver and file the Prospectuses and all Supplementary Materials and all necessary action has been taken, or will be taken prior to filing thereof, by the Corporation to authorize the signing, delivery and filing thereof; (g) each of the Subsidiaries Corporation and the Subsidiary has conducted and is qualified conducting and will conduct its businesses in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable controlled substance laws, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to carry on business as described in the Prospectus under the laws it of each jurisdiction in which it carries on business and holds all licences, permits, registrations and qualifications in all jurisdictions in which it carries on business which are necessary or desirable to carry on the business of the Corporation and the Subsidiary as now conducted and as contemplated to be conducted in the Prospectuses (except where the failure to so conduct its businessbusiness or to hold such licences, permits, registrations or qualifications would not, individually or in the aggregate, result in material adverse effect) of the Corporation or the Corporation’s properties or assets), all such licences, permits, registrations or qualifications are valid and existing and in good standing (except where the lack of such valid or existing license would not have any material adverse effect on the business of the Corporation) and none of such licences, permits, registrations or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation or the Subsidiary as now conducted or as proposed to be conducted; (ivh) other than to the Subsidiariesknowledge of the Corporation, there is no legislation, or proposed legislation to be published by a legislative body, which it anticipates will materially and adversely affect the business, affairs, operations, assets, liabilities (contingent or otherwise) or prospects of the Corporation has no investment or ownership interest in any legal entitythe Subsidiary; (vi) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Lawsor breach of, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement of, and the performance of and compliance with the terms of, this Agreement, the Private Placement Subscription Agreement, the Warrant Indenture or the Compensation Options and the performance of any of the transactions or issuance of any securities contemplated hereby and thereby by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered SharesCorporation, do not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and do not and will not create a state of facts which, after notice or lapse of time or both), (a) will result in a breach of or constitute a default under, any statute, rule applicable laws or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations any term or provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , or (d) any judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary or the property or assets thereofCorporation, which default or breach would might reasonably be expected to have result in a Material Adverse Effectmaterial adverse effect; (viij) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred been any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities or obligations (absolute, contingent or otherwise) of the Corporation from the position set forth in the Scythian Financial Statements and there has not been any material adverse change in the business, operations, capital or condition (financial or otherwise) or results of the operations of the Corporation since the date of the Scythian Financial Statements other than as described in the Prospectus and, since that date, there have been no material facts, transactions, events or occurrences which could materially adversely affect the capital, assets, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects operations or capital condition (financial or otherwise) or results of the operations of the Corporation (on a consolidated basis) since December 31other than as described in the Prospectus, 2011 which has have not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation manner required pursuant to Canadian Applicable Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereofLaws; (viiik) except as disclosed in the Prospectus any and all minute books of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property Subsidiary are, in all material respects, true and assets (including any interest incorrect and contain copies of all minutes of all meetings and all resolutions of the directors, or right to earn an interest in, any property) are valid committees of directors and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither shareholders of the Corporation nor any and the Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any all such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, meetings were duly called and such properties properly held and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are locatedresolutions were properly adopted; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (xl) the Prospectus contains an accurate summary description books of all property rights held by the Corporation account and the Subsidiaries and no other property or assets are necessary for the conduct of the business records of the Corporation and the Subsidiaries as currently conductedSubsidiary, and the Corporation does not know whether of any claim a financial or the basis for any claim that might accounting nature or could materially and adversely affect the right thereof to useotherwise, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons have been maintained in respect of such propertiesaccordance with prudent business practices; (xim) the Corporation made available to each Reserves EvaluatorScythian Financial Statements: (i) fairly present, prior to in all material respects, the issuance financial position and condition of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and reflect all assets, liabilities or obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof; (ii) have been prepared in conformity with IFRS, applied on a consistent basis throughout the periods involved; and (iii) do not contain any misrepresentations with respect to the periods involved; (n) the Corporation has filed all tax returns required to be filed by it, has paid all taxes due and reflect payable by it and have paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provisions provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or allowance other arrangements providing for all reasonably anticipated liabilitiesan extension of time with respect to the filing of any tax return or payment of any tax, expenses governmental charge or deficiency by the Corporation and, to the best of the knowledge, information and losses belief of the Corporation, there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation or the Subsidiary in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority. The Corporation has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non- resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (o) there is no material contingent tax liability of the Corporation or its predecessors or, to the best of the Corporation’s knowledge, information and belief, after due inquiry, any grounds which will prompt a reassessment; (p) the Corporation is not a party to, or bound by, any agreement or guarantee, indemnification other than an indemnification of directors and officers of the Corporation in accordance with the by-laws of the Corporation and the Subsidiary, as applicable, and there has been no material change applicable laws and other than indemnities in accounting policies favour of agents or practices underwriters in connection with an issuance of the Corporation since June 30, 2013, except as has been disclosed in the Prospectussecurities or like transactions; (xixq) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and Corporation does not have any loans or other indebtedness outstanding which have been made to or from any of their shareholders, directors, officers or employees or any other person not dealing at arm’s length with the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101that are currently outstanding; (xxr) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of except as would not be reasonably expected to have a material adverse effect on the Corporation, whether there is not (or not arising in the ordinary course of business are not) (i) any order or directive from any regulatory authority which would have a Material Adverse Effect; relates to environmental matters and (b) there have been no transactions entered into by the Corporationwhich requires any material work, other than those in the ordinary course of businessrepairs, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paidconstruction, except where the failure or capital expenditures relating to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues of its business undertakings, (ii) any demand or disputes outstanding notice from any regulatory authority with respect to the material breach of any Governmental Authority environmental, health or safety law applicable to the Corporation or any of its business undertakings, including, without limitation, any regulations respecting any Taxes that have been paidthe use, storage, treatment, transportation, or may be payabledisposition of environmental contaminants, or (iii) any spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes, which have not been rectified, on any of the properties or assets owned or leased by the Corporation or in which it has an interest or over which it has control. (s) the SubsidiariesCorporation is not subject to any contingent or other liability relating to the restoration or rehabilitation of land, in water or any caother par

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and or any Supplementary Material pursuant to Section 4 6 above shall constitute a representation and warranty to the Underwriters by the Corporation as at the date of such delivery (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished in writing by and relating solely to any of the Underwriters) contained in the Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceDocuments Incorporated By Reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) collectively constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, Prospectus or any Supplementary Material, as applicable, including, without limitation, the documents incorporated Documents Incorporated by referenceReference therein, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities LawsLaws of the Qualifying Jurisdictions, including without limitation National Instrument 44- NI 44-101; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and its the Subsidiaries (taken as on a whole)consolidated basis) or their respective properties or assets. (b) In addition to the representations and warranties contained in subsection 7(a) hereofSection 10(a), the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges Underwriters that each of the Underwriters is relying upon such following representations and warranties (and, where applicable, covenants) in entering into is true and correct on the date of this Agreement, thatAgreement or such other date specified herein: (i) the Corporation has been duly incorporated and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the its jurisdiction in which it was incorporated, continued or amalgamated, as the case may beof continuance, has all requisite corporate power, power and authority and capacity is duly qualified to own, lease or operate carry on its business as now conducted and to own its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderunder this Agreement; (ii) to the Corporation is the registered and beneficial holder of (a) 100% knowledge of the issued and outstanding securities Corporation, except as disclosed in the Prospectus, no agreement is in force or effect which in any manner affects the voting or control of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% any of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the SubsidiariesCorporation; (iii) the Corporation beneficially owns, directly or indirectly, all of the issued and each outstanding shares in the capital of the Material Subsidiaries, all of which are pledged as security for the Corporation’s credit facilities. All of such shares have been duly authorized and validly issued and are outstanding as fully paid and non-assessable shares and, except for the rights of the Corporation’s lenders under the pledges, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the purchase from the Corporation of any interest in any of such shares or for the issue or allotment of any unissued shares in the capital of any of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessor any other security convertible into or exchangeable for any such shares; (iv) other than each Material Subsidiary has been duly incorporated and is validly existing under the Subsidiarieslaws of its jurisdiction of incorporation, the Corporation has no investment or ownership interest in any legal entityall requisite corporate power and authority and is duly qualified to carry on its business as now conducted and to own its properties and assets; (v) the Corporation is a "reporting issuer" all consents, approvals, permits, authorizations or filings as may be required under the Canadian Applicable Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of necessary for the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including and the allotment, reservation, issuance and delivery consummation of the Offered Sharestransactions by the Corporation contemplated hereby, do not have been made or obtained or will be obtained prior to the Closing Date, as applicable, or in the case of any post-closing filings required under applicable United States federal or state securities laws, which will be made or obtained; (vi) the currently issued and will not conflict with outstanding Common Shares are listed and posted for trading solely on the Exchange and no order ceasing or result suspending trading in a breach any securities of the Corporation or violation prohibiting the trading of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there ’s issued securities has been issued and no default under any proceedings for such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectuspurpose are pending or, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are locatedthreatened; (ixvii) except as disclosed the attributes and characteristics of the Offered Shares conform in all material respects to the attributes and characteristics thereof described in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewithProspectuses; (xviii) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge Closing Time, the form of a material adverse change certificate representing the Offered Shares will be in any information provided to proper form under the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully laws of Canada and will comply with the requirements of National Instrument 51- 101 as at the dates thereof Exchange and will not conflict with the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviiiix) the Financial Statements (i) have been prepared in accordance with Canadian GAAP or IFRSconsistently applied throughout the period referred to therein, as applicable(ii) present fairly, and present fully, fairly and correctly in all material respects, the consolidated financial condition position (including the assets and liabilities, whether absolute, contingent or otherwise) of the Corporation and the Subsidiaries as at the such dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended ended, and (iii) contain and reflect to the extent required by Canadian GAAP adequate provisions provision or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June September 30, 2013, except as has been disclosed in the Prospectus; (xixx) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the ProspectusProspectuses, since September 30, 2013, the Corporation has not declared or paid any dividends or declared or made any other payments or distributions on or in respect of any of its shares, other than a dividend of $0.011 per Common Share payable on December 27, 2013 to holders of record of Common Shares as of the close of business on December 6, 2013, and has not, directly or indirectly, redeemed, purchased or otherwise acquired any of its securities or agreed to do so or otherwise effected any return of capital with respect to such securities; (xxixi) all Taxes taxes (including income tax, capital tax, payroll taxes, employer health tax, workers’ compensation payments, property taxes, custom and land transfer taxes), duties, royalties, levies, imposts, assessments, deductions, charges or withholdings and all liabilities with respect thereto including any penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable by the Corporation have been paid or provided for in the Financial Statements and the Subsidiaries have been paid, Interim Financial Statements except for where the failure to pay such Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse EffectEffect on the Corporation. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities governmental authorities within the times required and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, misleading except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse EffectEffect on the Corporation. To the best of the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress progress, other than normal course review, and there are no issues or disputes outstanding with any Governmental Authority governmental authority respecting any Taxes taxes that have been paid, or may be payable, by the Corporation, in any case, except where such examinations, issues or disputes would not have a Material Adverse Effect on the Corporation; (xii) the auditors of the Corporation who audited the consolidated financial statements of the Corporation for the year ended June 30, 2013 and who provided their audit report thereon are independent public accountants as required under Applicable Securities Laws of the Qualifying Jurisdictions; (xiii) the Corporation has established and maintains “disclosure controls and procedures” and “internal control over financial reporting” within the meaning of such terms under Multilateral Instrument 52-109 — Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities Administrators and is in compliance with the certification requirements thereof with respect to the Corporation’s annual and interim filings with Canadian securities regulators; (xiv) the audit committee of the Corporation is comprised and operates in accordance with the requirements of Multilateral Instrument 52-110 — Audit Committees of the Canadian Securities Administrators; (xv) to the knowledge of the Corporation, no insider of the Corporation has the present intention to sell any securities of the Corporation during the period of distribution of the Offered Shares; (xvi) since September 30, 2013, there has not been a “reportable event” (within the meaning of National Instrument 51-102 — Continuous Disclosure) with the present or former auditors of the Corporation; (xvii) except as set out in the Prospectuses, no legal or governmental proceedings are pending to which the Corporation is a party or to which its property is subject that could reasonably be expected to have individually or in the aggregate a Material Adverse Effect on the Corporation and, to the best knowledge of the Corporation, no such proceedings have been threatened against or are contemplated with respect to the Corporation or its properties; (xviii) no Securities Commission, other securities commission or similar regulatory authority or stock exchange in Canada or the United States has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation and no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened and the Corporation is not in default of any material requirement of Applicable Securities Laws of the Qualifying Jurisdictions; (xix) Computershare Investor Services Inc. at its principal offices in the City of Toronto, is the duly appointed registrar and transfer agent of the Corporation with respect to the Common Shares; (xx) the Corporation has conducted and is conducting its business in compliance in all material respects with all applicable laws and regulations of each jurisdiction in which it carries on business or holds assets (including, without limitation, all applicable federal, provincial, municipal and local environmental anti-pollution and licensing laws, regulations and other lawful requirements of any governmental or regulatory body, including, but not limited to relevant exploration and exploitation permits and concessions), holds all material permits, licenses and other approvals required under all such laws and is in compliance with all terms of such licenses, permits and other approvals, and has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a notice of noncompliance with any such laws, regulations or permits, which would have a Material Adverse Effect on the Corporation; (xxi) the Corporation is the beneficial owner of the properties, business and assets or the interests in the properties, business or assets referred to as owned by it in the Prospectuses to the extent disclosed in the Prospectuses, all agreements under which the Corporation holds an interest in a property, business or asset are in good standing according to its terms except where the failure to be in such good standing does not and will not, individually or in the aggregate, have a Material Adverse Effect on the Corporation; (xxii) the Corporation is a reporting issuer under Applicable Securities Laws in each of the provinces of Canada; the Corporation is not in default in any material respect of any requirement of the Applicable Securities Laws of the Qualifying Jurisdictions and the Corporation is not included in a list of defaulting reporting issuers maintained by the Securities Commissions. In particular, without limiting the foregoing, the Corporation is in compliance at the date hereof with its obligations to make timely disclosure of all material changes relating to it and, since September 30, 2013 (other than in respect of material change reports previously filed on a confidential basis and thereafter made public or material change reports previously filed on a confidential basis and in respect of which no material change ever resulted), no such disclosure has been made on a confidential basis and there is no material change relating to the Corporation which has occurred and with respect to which the requisite material change report has not been filed; (xxiii) the minute books and records of the Corporation made available to Underwriters’ counsel in connection with their due diligence investigations of the Corporation are all of the minute books and records of the Corporation and contain copies of all material proceedings of the shareholders, the board of directors and all committees of the board of directors of the Corporation from the date of incorporation to the date of review of such corporate records and minute books, other than minutes that have not been approved by the board of directors, draft minutes of which have been made available for review by the Underwriters, and there have been no other meetings, resolutions or proceedings of the shareholders, board of directors or any committees of the board of directors of the Corporation from the date of incorporation to the date of review of such corporate records and minute books not reflected in such minute books and other records, other than meetings of the board of directors or committees thereof held on November 14, 2013, November 27, 2013 and December 12, 2013, draft minutes of which have been made available for review by the Underwriters; (xxiv) the execution and delivery of this Agreement and the performance by the Corporation of the transactions contemplated hereunder and thereunder do not and will not: (A) require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, securities regulatory authority or other third party, except: (i) such as have been obtained or will be obtained prior to the Closing Date; (ii) such as may be required under the applicable by-laws, policies, regulations and prescribed forms of the Exchange; or (iii) such as may be required following the Closing Date in order to comply with certain notice filing requirements under United States federal and state securities laws; (B) result in a breach of or default under, nor create a state of facts which, after notice or lapse of time or both, would result in a breach of or default under, nor conflict with (i) any of the terms, conditions or provisions of the constating documents or resolutions of the shareholders, directors or any committee of directors of the Corporation; or (ii) any statute, rule, regulation or law applicable to the Corporation, including, without limitation, the Applicable Securities Laws of the Qualifying Jurisdictions, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation; or (iii) any material mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which the Corporation is a party or by which the Corporation or a material portion of the assets of the Corporation is bound (a “Material Agreement”); or (C) give rise to any lien, charge or claim in or with respect to the properties or assets now owned by the Corporation or the Subsidiariesacceleration of or the maturity of any debt under any indenture, in mortgage, lease, agreement or instrument binding or affecting it or any caof its properties; (xxv) this Agreement constitutes a valid and binding obligation of the Corporation, enforceable agains

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished in writing by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referenceDocuments, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any related Supplementary Material complies in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, Agreement that: (i) the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued amalgamated or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedformed, as the case may be, and organized and is validly existing under the laws of the province of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is qualified to carry on business under the registered laws of each jurisdiction in which it carries on a material portion of its business; (iii) except as disclosed in writing to the Underwriters, the Corporation has conducted and beneficial holder is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in writing to the Underwriters, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (acollectively “Licenses”) 100% in all jurisdictions in which it carries on a material portion of its business which are necessary or desirable to carry on the business of the Corporation, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have any material adverse effect on the business of the Corporation (taken as a whole) and none of such Licenses contains any burdensome term, provision, condition or limitation which has or is likely to have any material adverse effect on the business of the Corporation, as now conducted or as proposed to be conducted; (iv) the Corporation does not have any Material Subsidiaries and the Corporation is not “affiliated” with or a “holding corporation” of any other body corporate (within the meaning of those terms in the ABCA), nor is it a partner of any partnerships; (v) all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly its Subsidiaries are fully paid and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non-assessable and, collectivelyin the case of its Subsidiaries, are legally and beneficially owned by the "Subsidiaries"), in each case, Corporation free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the credit facilities of the Corporation) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-pre emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the such Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (iv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each the minute books of the execution Corporation are true and correct in all material respects and contain the minutes of all meetings and all resolutions of directors (including committees of directors) and shareholders, as the case may be, thereof, and all such meetings were duly called and properly held and all resolutions were properly adopted; (vii) the books of account and other records of the Corporation, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (viii) all filings made by the Corporation under which the Corporation has received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations or omit to state any material fact which could cause any material amount previously paid to the Corporation or previously accrued on the accounts thereof to be recovered or disallowed; (ix) except to the extent that any violation or other matter referred to in this subparagraph does not have a material adverse effect on the Corporation (and, in respect of non-operated properties, to the knowledge, information and belief of the Corporation): (A) to the best of its knowledge, information and belief, after due inquiry, it is not in violation of any applicable federal, provincial, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, pollution, health or safety matters (collectively, “Environmental Laws”); (B) to the best of its knowledge, information and belief, after due inquiry, the Corporation (and, if applicable, any predecessor entities of the Corporation) has operated its businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or in respect of the Corporation’s business or assets that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation; (E) the Corporation has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign (“Government Authority”) the occurrence of any event which is required to be so reported by any Environmental Law; (F) the Corporation holds all licenses, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta), the Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) the Corporation (including, if applicable, any predecessor companies or entities of the Corporation) has not received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and the Corporation (including, if applicable, any predecessor entities) has not settled any allegation of material non-compliance short of prosecution; (x) any and all operations of the Corporation (including, if applicable, any predecessor entities of the Corporation) and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation, have been conducted in accordance with good oil and gas industry practices except where the lack of or lesser standard of such conduct would not have a material adverse effect on the business of the Corporation; (xi) all income tax returns of the Corporation (including, if applicable, any predecessor entities of the Corporation) required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of the Corporation (including, if applicable, any predecessor entities of the Corporation) required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The Corporation (including, if applicable, any predecessor entities of the Corporation) has made installments of taxes as and when required. The Corporation (including, if applicable, any predecessor entities of the Corporation) has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xii) except for any post-closing notice filings required under applicable U.S. Securities Laws, no consent, approval, permit, authorization, order or filing with any court or governmental agency, the securities authorities or any other jurisdiction or agency is required by the Corporation or necessary for the execution, delivery of this Agreement and the performance by the Corporation of its obligations hereunderunder this Agreement, including other than such consents, approvals, authorizations, registrations or qualifications as may be required under Applicable Securities Laws or by the allotmentTSX or the NYSE MKT, reservationall of which will be obtained by the Corporation prior to the Closing Time; (xiii) the Corporation has full corporate capacity, issuance power and delivery of authority to enter into this Agreement, the Arrangement Agreement and the TCA Joint Venture Agreement and to perform its obligations set out herein and therein (including, without limitation, to issue the Offered Shares, do to grant the Over-Allotment Option and to complete the Acquisition and the TCA Joint Venture), and this Agreement, the Arrangement Agreement and the TCA Joint Venture Agreement have been duly authorized, executed and delivered by the Corporation and this Agreement, the Arrangement Agreement and the TCA Joint Venture Agreement are legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, being available only in the discretion of the applicable court; (iii) the statutory and inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgments; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vi) enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and (vii) that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiv) at the Closing Time and the Additional Closing Time, as applicable, the Offered Shares will be duly and validly authorized, allotted and reserved for issuance and, upon receipt of the purchase price therefor, the Offered Shares will be duly and validly issued as fully paid and non-assessable Common Shares; (xv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, delivery and filing of the Prospectuses; (xvi) except as provided to the Underwriters and other than this Agreement, the Debenture Indenture and agreements in respect of the Corporation’s credit facilities, there are no material contracts or agreements which have or which might have or create any material obligation to the Corporation or from which it derives or could derive any material benefit or which are required for the Corporation to carry on its business as now conducted or as presently proposed to be conducted and the Corporation is not in material default or breach of any of such agreements. For the purposes of this representation and warranty, material contracts or agreements shall be deemed to give rise to a material obligation where such contract or agreement provides for expenditures by the Corporation for an aggregate of more than $5,000,000 during any 12 month period; (xvii) the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of, this Agreement, the Arrangement Agreement, the TCA Joint Venture Agreement or any of the transactions contemplated hereby or thereby, does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), (a) would result in a breach of or constitute a default under, any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; (b) the constating documents articles, by laws or resolutions of the shareholders or directors or shareholders of the Corporation Corporation, or a Subsidiary which are in effect at the date hereof; (c) any indenture, mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease agreement (written or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatenedoral), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca,

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and any Supplementary Material Offering Documents pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by the Underwriters to the Corporation in writing and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus or any Supplementary Material, as applicable, such delivered Offering Documents including, without limitation, the documents incorporated by reference, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentationmisrepresentation and no material fact or information has been omitted from such documents which is required to be stated therein or is necessary to make the statements or information contained therein not misleading in light of the circumstances in which they were made; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesShares as required under Canadian Securities Laws; (ii) the Preliminary ProspectusProspectuses, the Prospectus, or any Supplementary Material, the marketing materials contemplated by subsection 3(c)(i) hereof or any standard term sheets, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including including, without limitation National Instrument 44- limitation, NI 44-101, and the Preliminary U.S. Placement Memorandum and the U.S. Placement Memorandum and any related Supplementary Material comply in all material respects with U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise)change, from the date of the Preliminary Prospectus, the Prospectus and any Supplementary Material Offering Documents to the time of delivery thereof, in the business, operations, revenues, capitalproperties results of operations, propertiesaffairs, assets, capitalization, condition (financial or otherwise), prospects, rights or liabilities (absolute, accrued, contingent or otherwise), condition (financial cash flow or otherwise) or results of operations income of the Corporation and its Subsidiaries (taken as a whole)Corporation. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation has been duly incorporated, continued or amalgamated and organized, and is validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, of its amalgamation and has all requisite corporate powercapacity, power and authority to carry on its business, as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus and no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunderProspectuses; (ii) the Corporation is the registered and beneficial holder of (a) 100% of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the Subsidiaries any issued or unissued securities of the Subsidiaries; (iii) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on a material portion of its business; (iii) the Corporation has conducted and is conducting and will conduct its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, all applicable licensing and environmental legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on business and holds all licences, registrations and qualifications in all jurisdictions in which it carries on business which are necessary or desirable to carry on the business of the Corporation as now conducted and as presently proposed to be conducted, all such licences, registrations or qualifications are valid and existing and in good standing and none of such licences, registrations or qualifications contains any burdensome term, provision, condition or limitation which has or is likely to constitute a Material Adverse Effect and the Corporation is not aware of any legislation, regulation, rule or lawful requirement presently in force or proposed to be brought into force which the Corporation anticipates the Corporation will be unable to comply with without materially adversely affecting the Corporation; (iv) other than as at the date hereof, the Corporation does not have any Subsidiaries, the Corporation is not "affiliated" with or a "holding corporation" of any other body corporate (within the meaning of those terms in the ABCA), nor is it a partner of any partnerships (other than participating in industry partnerships in the ordinary course of business) or limited partnerships, and the Corporation has no investment material shareholdings or ownership interest other equity or voting interests in any legal entityother corporation or business organization; (v) the minute book for the Corporation is a "reporting issuer" under the Canadian Securities Laws of each contains full, true and correct copies of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each constating documents of the Qualifying ProvincesCorporation and contains copies of all minutes of all meetings and all consent resolutions of the directors, committees of directors and shareholders of the Corporation, and all such meetings were duly called and properly held and all consent resolutions were properly adopted; (vi) the books of account and other records of the Corporation, whether of a financial or accounting nature or otherwise, have been maintained in accordance with prudent business practices; (vii) the Corporation is insured by insurers who are, to the best of its knowledge, information and belief, of recognized financial responsibility against such losses and risks and in such amounts that, to the best of the knowledge, information and belief of the Corporation, are customary in the business in which it is engaged; all policies of insurance and fidelity or surety bonds insuring the Corporation and its businesses, assets, employees, officers and directors are in full force and effect; the Corporation is in compliance with the terms of such policies and instruments in all material respects; and there are no material claims by the Corporation under any such policy or instruments as to which any insurance company is denying liabilities or defending under a reservation of rights clause; the Corporation has no reason to believe that it will not be able to renew such existing insurance coverage as and when the coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not constitute a Material Adverse Effect; (viii) the Corporation has duly and on a timely basis filed all tax returns due and required to be filed by it, has paid all taxes due and payable by it and has paid all assessments and reassessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which were claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no agreements, waivers, or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by the Corporation and to the best of the knowledge, information and belief of the Corporation there are no actions, suits, proceedings, investigations or claims threatened or pending against the Corporation in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority and the Corporation has withheld from each payment made to any of its officers, directors, former directors and employees the amount of all taxes (including, without limitation, income tax) and other deductions required to be withheld therefrom and has paid the same to the proper tax and other authority within the time required under any applicable tax legislation; (ix) all filings made by the Corporation under which the Corporation has received or is entitled to government incentives, have been made in accordance, in all material respects, with all applicable legislation and contain no misrepresentations of material fact or omit to state any material fact which could cause any amount previously paid to the Corporation or previously accrued on the accounts thereof to be recovered or disallowed; (x) except to the extent that any violation or other matter referred to in this subparagraph does not constitute a Material Adverse Effect: (A) the Corporation is not in violation of any Environmental Laws; (B) the Corporation has operated its business at all times and has received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation that have not been remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation; (E) the Corporation has not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign, the occurrence of any event which is required to be so reported by any Environmental Law; and (F) the Corporation holds all licences, permits and approvals required under any Environmental Laws in connection with the operation of its business and the ownership and use of its assets, all such licences, permits and approvals are in full force and effect, and the Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; (xi) any and all operations of the Corporation and, to the best of the knowledge, information and belief of the Corporation, any and all operations by third parties, on or in respect of the assets and properties of the Corporation have been conducted in accordance with good oil and gas industry practices and in material compliance with applicable laws, rules, regulations, orders and directions of governmental and other competent authorities; (xii) in respect of the assets, properties and businesses of the Corporation that are operated by the Corporation, the Corporation holds all valid licences, permits and similar rights and privileges that are required and necessary under applicable law to operate the assets, properties and businesses of the Corporation as presently operated; (xiii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein and therein (including, without limitation, to create, issue and sell the Offered Shares and grant the Over-Allotment Option, and this Agreement has been duly authorized, executed and delivered by the Corporation and this Agreement constitutes legal, valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their terms subject to laws relating to creditors' rights generally and except as rights to indemnity may be limited by applicable law; (xiv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, delivery and filing of the Prospectuses; (xv) the attributes and characteristics of the Offered Shares and the Over-Allotment Option conform in all material respects to the attributes and characteristics thereof described in the Prospectuses; (xvi) at the Closing Date and the Additional Closing Date (as applicable), the Firm Shares and the Option Shares, respectively, will be issued as fully paid and non- assessable Common Shares; (xvii) the Corporation is not in default or breach of, and the execution and delivery of, and the performance of and compliance with the terms of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery or any of the Offered Sharestransactions contemplated hereby, do does not and will not conflict with or result in a any breach or violation of any of the terms or provisions of, or constitute a default under (whether under, and does not and will not create a state of facts which, after notice or lapse of time or both), would result in a breach of or constitute a default under: (aA) any statute, rule term or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations provision of the Exchange; articles or by-laws of the Corporation; (bB) the constating documents or resolutions of the directors (or any committee thereof) or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; Corporation; (cC) any mortgage, note, indenture, contract, agreement, joint venture, partnershipagreement (written or oral), instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or or (dD) any law, judgment, decree decree, order, statute, rule or order binding regulation applicable to the Corporation or a Subsidiary any of its properties or the property or assets thereof, assets; which default or breach would might reasonably be expected to constitute a Material Adverse Effect or would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform any of its covenants or obligations contained in this Agreement; (xviii) there has not been any material change in the business, operations, revenues, properties results of operations, affairs, assets, capitalization, condition (financial or otherwise), prospects, rights or liabilities (absolute, accrued, contingent or otherwise), cash flow or income of the Corporation from the position set forth in the Financial Statements and there has not been any Material Adverse Change since December 31, 2015 and since that date there have been no material facts, transactions, events or occurrences which, to the best of the knowledge, information and belief of the Corporation, could cause a Material Adverse Effect; (viixix) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws Financial Statements and the rules and regulations of the Exchange andBoulder Financial Statements fairly present, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither International Financial Reporting Standards, consistently applied, the Corporation nor any Subsidiaryconsolidated financial position and condition, as applicablethe results of operations, is in default cash flows and other information purported to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge be shown therein of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain reflect all assets, liabilities and reflect adequate provisions obligations (absolute, accrued, contingent or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices otherwise) of the Corporation since June 30, 2013, except as has been at the dates thereof required to be disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101generally accepted accounting principles in Canada, and include all adjustments necessary for a fair presentation; (xx) since June 30the Corporation has not completed any "significant acquisitions" nor are there any proposed significant acquisitions that would require, 2013pursuant to NI 44-101, (a) there has been no change any financial statements or pro forma financial statements in respect thereof to be included in the condition Prospectuses; (financial xxi) the Corporation is not a party to or otherwise)bound by any agreement of guarantee, or indemnification (other than an indemnification of directors and officers in accordance with the properties, capital, affairs, prospects, operations, assets or liabilities by-laws of the CorporationCorporation and applicable laws, whether indemnification agreements or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions covenants that are entered into by the Corporation, other than those arising in the ordinary course of business, except as disclosed including operating and similar agreements, indemnification provisions in the Prospectus; (xxi) all Taxes due May 2016 Flow-Through Subscription Agreement, indemnification and payable by contribution provisions in this Agreement and in the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such credit documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination and the Corporation's transfer agency agreement) or any other like commitment of the obligations, liabilities (contingent or otherwise) or indebtedness of any tax return other person; (xxii) there has not been any "reportable event" (within the meaning of Section 4.11 of National Instrument 51-102 - Continuous Disclosure Obligations) with the auditors of the Corporation since incorporation of the Corporation; (xxiii) the Corporation does not have any loans or other indebtedness outstanding which have been made to or from any of its shareholders, officers, directors or employees or any Subsidiary is currently in progress and there are no issues or disputes outstanding other person not dealing at arm's length with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any cathat are currently outstandin

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary ProspectusProspectuses, the Prospectus Supplements and any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters Agents by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agents is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgents) contained in the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package, the Prospectuses and each electronic roadshow, if any, when taken together as a whole with the Disclosure Package, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) are , at the respective dates of such documents, true documents and correct at the Closing Date: (A) conform in all material respectsrespects to the requirements of the applicable Securities Laws, including without limitation the Securities Act and the SEC Rules and Regulations; (B) contain no misrepresentation; (C) did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (CD) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesSecurities; (ii) the Preliminary Prospectus, the Canadian Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- 101; and. The Corporation meets all eligibility requirements to offer the Offered Securities in Canada pursuant to MJDS; (iii) as of the Applicable Time, the Disclosure Package does not and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (iv) except as is disclosed in the Public RecordRegistration Statement, the Disclosure Package and the Prospectuses, there has been no intervening material change (adverse material change until filing of the ProspectusProspectuses) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary ProspectusRegistration Statement, the Prospectus Disclosure Package and any Supplementary Material the Prospectuses to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries Corporation; and (taken as a whole)v) each Issuer Free Writing Prospectus will not include any information that conflicts with the information contained in the Registration Statement, including any document incorporated therein by reference that has not been superseded or modified. (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersAgents, and acknowledges that each of the Underwriters Agents is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) each of the Corporation and each of the Subsidiaries is a corporation Material Subsidiary has been duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedorganized, as the case may be, and is validly existing under the laws of the jurisdiction of its incorporation, continuance or organization and has all requisite corporate power, authority and capacity power to owncarry on its businesses, lease or operate as now conducted and as presently proposed to be conducted by it, and to own its properties assets; (ii) the only Subsidiaries of the Corporation are Oilsands Quest Sask Inc. (“OQI Sask”), Township Petroleum Corporation (“TPC”), Western Petrochemicals Corp. (“WPC”), Stripper Energy Services Inc. (“Stripper”), Oilsands Quest Technology Inc. (“OQI Technology”) and assets as described 1291329 Alberta Ltd. (“1291329”) and the only Material Subsidiary of the Corporation is OQI Sask and the Corporation is not “affiliated” (within the meaning of that term in the Prospectus and no steps ASA) with any other entity, nor is it a partner of any partnerships (other than participating in industry partnerships in the ordinary course of business) or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding uplimited partnerships, and the Corporation has all requisite no material shareholdings in any other corporation or business organization; (iii) each of the Corporation and its Material Subsidiaries is qualified to carry on business under the laws of each jurisdiction where it carries on its business; (iv) the Corporation has full corporate capacity, power and authority to enter into this Agreement and the Warrant Indenture and to carry out perform its obligations hereunderset out herein and therein (including, without limitation, to create, issue and sell the Offered Securities), and this Agreement is, and at the Closing Time the Warrant Indenture will have been, duly authorized, executed and delivered by the Corporation and will be valid and binding obligations of the Corporation enforceable against the Corporation in accordance with their respective terms subject to laws relating to creditors’ rights generally and except as rights to indemnity may be limited by applicable law; (iiv) the sale and delivery of the Offered Securities by the Corporation: (A) have been duly authorized by all necessary action on the part of the Corporation; (B) do not require the consent, approval, authorization, registration or qualification of or with any governmental authority, stock exchange, Securities Commission, the SEC or other regulatory authority or other similar third party (except (A) those which have been obtained or (B) those as may be required (and will be obtained prior to the Closing Time) under applicable Securities Laws); (C) do not and will not (or will not with the giving of notice, the lapse of time or the happening of any other event or condition) result in a breach or a violation of, or conflict with or result in a default under (A) any of the terms or provisions of the articles or by-laws of the Corporation, (B) any resolution of the board of directors, (or any committee thereof) or securityholders of the Corporation, or (C) any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Corporation, or any agreement, license or permit to which the Corporation is a party; (D) do not and will not result in the violation of any law; and (E) do not and will not give rise to any lien on or with respect to the properties or assets now owned or hereafter acquired by the Corporation or the acceleration of or the maturity of any indebtedness or other liabilities or obligations under any indenture, mortgage, lease, agreement or instrument binding or affecting any of them or any of its properties; (vi) neither the Corporation nor any Material Subsidiary is a party to any material mortgage, note, indenture, deed of trust, contract, agreement, instrument, lease, license or other document other than as described in the Registration Statement, the Disclosure Package and the Prospectuses; (vii) each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all respects with all applicable laws, rules and regulations of each jurisdiction in which its business is carried on and holds all valid permits, licenses, registrations, qualifications, consents and approvals that are required and necessary to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, except in each case where the failure to be in such compliance or to hold such permits, licenses, registrations, qualifications, consents and approvals would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and all such permits, licenses, registrations, qualifications, consents and approvals are in good standing and none contains any term, provision, condition or limitation which will have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) and the Corporation is not aware of any fact or matter which would reasonably be expected to result in the termination of any such permit or otherwise have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (viii) neither the Corporation nor any Material Subsidiary is in breach or violation of any of the terms, conditions or provisions of the articles, constating documents, by-laws or resolutions of the shareholders or directors (or any committee thereof) of the Corporation or the Material Subsidiary, as the case may be; (ix) neither of the Corporation nor any Subsidiary is in breach or violation of: (A) any permits, licenses, consents and approvals issued to the Corporation or the Subsidiary, as the case may be, or any agreement, indenture, lease, document or instrument to which the Corporation or the Subsidiary is a party or by which it is contractually bound, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); or (B) any statute, regulation or rule applicable to the Corporation or any Subsidiary or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Corporation or any Subsidiary, except for any breach or violations which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole); (x) to the knowledge of the senior management of the Corporation, after reasonable inquiry, there is no person who as of the date hereof directly or indirectly will beneficially own or have control or direction over greater than 10% of the voting rights attached to all outstanding voting securities of the Corporation other than as disclosed in the Registration Statement, the Disclosure Package, and the Prospectus; (xi) the Corporation is not in default or breach of, and the registered execution and beneficial holder delivery of, and the performance of and compliance with the terms of this Agreement, the Warrant Indenture or any of the transactions contemplated hereby or thereby by the Corporation, does not and will not result in any breach of or constitute a default under, and does not and will not create a state of facts which, after notice or lapse of time or both, would result in a breach of or constitute a default under, any term or provision of the articles, by-laws or resolutions of shareholders or directors of the Corporation, or any indenture, mortgage, note, contract, agreement (awritten or oral), instrument, lease or other document to which the Corporation is a party or by which it is bound, or any law, judgment, decree, order, statute, rule or regulation applicable to the Corporation, except for any breach or default which would not have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) 100% or would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform its obligations contained in this Agreement or the Warrant Indenture; (xii) since April 30, 2008 there have been no facts, transactions, events or occurrences which, to the knowledge of the Corporation, could have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) which have not been disclosed in the Registration Statement, the Disclosure Package and the Prospectuses; (xiii) the Financial Statements fairly present, in all material respects and in accordance with generally accepted accounting principles in the United States consistently applied, the financial position and condition, the results of operations, cash flows and other information purported to be shown therein of the Corporation as at the dates thereof and for the periods then ended and reflect all assets, liabilities and obligations (absolute, accrued, contingent or otherwise) of the Corporation as at the dates thereof required to be disclosed in accordance with generally accepted accounting principles in the United States, and include all adjustments necessary for a fair presentation; (xiv) except as disclosed in the Registration Statement, the Disclosure Package and the Prospectuses, each of the Corporation and its Material Subsidiaries has carried on business in the ordinary course; (xv) there are no actions, suits, proceedings or inquiries pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation or any of its Material Subsidiaries at law or in equity or before or by any federal, provincial, municipal or other governmental department, commission, board, bureau, agency or instrumentality which, in any way could reasonably be expected to have a Material Adverse Effect on the Corporation and its Subsidiaries (taken as a whole) or which affects or may affect the distribution of the Offered Securities or which would impair the ability of the Corporation to consummate the transactions contemplated hereby or to duly observe and perform any of its covenants or obligations contained in this Agreement or the Warrant Indenture and the Corporation is not aware of any existing ground on which such action, suit, proceeding or inquiry might be commenced with any reasonable likelihood of success; (xvi) the authorized capital of the Corporation consists of 750 million Common Shares and 10 million preferred shares, issuable in series, and as of April 28, 2009 the issued and outstanding capital of the Corporation consists of 241,559,549 Common Shares, and one Series B Preferred Share, each of which has been validly issued as a fully paid and non-assessable share in the capital of the Corporation; (xvii) except as disclosed in the Public Record, no person, firm or corporation holds any securities convertible or exchangeable into securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% of the issued and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" and, collectively, the "Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims Corporation or demands whatsoever and no person any Material Subsidiary or other entity has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the purchase, subscription or receiveissuance of any unissued Common Shares; (xviii) from except as disclosed in the Public Record, the Corporation does not, directly or the Subsidiaries indirectly, hold any issued shares, other securities, options or unissued rights to subscribe for shares or other securities of any corporation, partnership or other entity except for the Subsidiaries; (iiixix) Computershare Trust Company of Canada acts as the Corporation transfer agent and each of registrar for the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessCommon Shares; (ivxx) none of the SEC, a Securities Commission, other than securities commission or similar regulatory authority or exchange in the SubsidiariesSelling Jurisdictions or the United States has issued any order which is currently outstanding preventing or suspending trading in any securities of the Corporation, no such proceeding is, to the knowledge of the Corporation, pending, contemplated or threatened and the Corporation has no investment or ownership interest in any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, Laws in the Selling Jurisdictions or the United States; (xxi) there is not included on in the constating documents or by-laws of the Corporation or any Material Subsidiary, or in any agreement, mortgage, note, debenture, indenture or other instrument or document to which the Corporation or any Material Subsidiary is a list party, any restriction upon or impediment to the declaration of defaulting reporting issuers maintained dividends by its directors or payment of dividends by its holders of its shares; (xxii) the CSA and will continue to be, at the Closing Time, Corporation is a reporting issuer in good standing under the Canadian Securities Laws laws of each of the Qualifying Provinces; (vixxiii) each of the execution excepting out those things and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary matters which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document not material to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgmentits Material Subsidiaries, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is Material Subsidiaries has duly and on a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of timely basis filed all or substantially all of the property and assets of the Corporation); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings returns required to be filed by the Corporation it, has paid all taxes due and the Subsidiaries have been filed with payable by it and has paid all appropriate Governmental Authorities assessments and re-assessments and all such returnsother taxes, declarationsgovernmental charges, remittances penalties, interest and filings other fines due and payable by it and which are complete claimed by any governmental authority to be due and accurate owing and adequate provision has been made for taxes payable for any completed fiscal period for which tax returns are not yet required and there are no material fact agreements, waivers, or facts have been omitted therefrom which would make any other arrangements providing for an extension of them misleading, except where time with respect to the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination filing of any tax return or payment of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paidtax, or may be payable, by the Corporation or the Subsidiaries, in any cagovernmental char

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material pursuant to Section 4 above shall constitute a representation and warranty to the Underwriters Agents by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters Agents is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished by and relating solely to the UnderwritersAgents and furnished by them in writing expressly for inclusion in the applicable document) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be: (A) A. are at the respective dates of such documents, true and correct in all material respects; (B) B. contain no misrepresentation; and (C) C. constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered Shares; (ii) the Preliminary Prospectus, the Prospectus, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply in all material respects with the applicable Canadian Securities Laws, including without limitation National Instrument 44- NI 44-101, and the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and, to the extent applicable, any related Supplementary Material, complies as to form in all material respects with applicable U.S. Securities Laws; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed or prospective, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Placement Memorandum, the U.S. Placement Memorandum and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection 7(a) hereof, the Corporation represents and warrants (and, where applicable, covenants) to the UnderwritersAgents, and acknowledges that each of the Underwriters Agents is relying upon such representations and warranties (and, where applicable, covenants) in entering into this Agreement, that: (i) the Corporation and each of the Subsidiaries is a corporation duly incorporated, continued or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamated, as the case may be, has all requisite corporate power, authority and capacity to own, lease or operate its properties and assets as described in the Prospectus and and, except as disclosed to the Agents in the Due Diligence Session, no steps or proceedings have been taken by any person, voluntary or otherwise, requiring or authorizing its dissolution or winding up, and the Corporation has all requisite corporate power and authority to enter into this Agreement and to carry out its obligations hereunder; (ii) the Corporation is the registered and beneficial holder of (a) of: A. 100% of the issued and outstanding securities of Madalena Ventures International each of BNK Canada Holdings Inc. and BNK Petroleum Holding Company Inc. ("MVIHC")Inc.; (b) and B. 100% of the issued and outstanding securities of Madalena Austral SA BNK Petroleum (90% directly and 10% US) Inc. (indirectly through MVIHC and Madalena Ventures International BNK Petroleum Holding Inc.); and (c) indirectly through MVIHC, 100% of the issued and outstanding securities of Madalena Ventures International Inc. (individually, each entity referred to in A. and B., inclusive, is a "North American Subsidiary" and, collectively, the "North American Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the North American Subsidiaries any issued or unissued securities of the North American Subsidiaries; (iii) the Corporation is the registered and beneficial holder of: A. 100% of the issued and outstanding securities of BNK Petroleum (Europe) Cooperatief U.A. (98% directly and 2% indirectly through BNK Canada Holdings Inc.); B. 100% of the issued and outstanding securities of BNK Petroleum Investments B.V. (indirectly through BNK Canada Holdings Inc. and BNK Petroleum (Europe) Cooperatief U.A.); C. 100% of the issued and outstanding securities of each of BNK Poland Holdings B.V., BNK Spain Holdings B.V., BNK France Holdings B.V. and BNK ▇▇▇▇▇▇ Holdings B.V. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A. and BNK Petroleum Investments B.V.); D. 100% of the issued and outstanding securities of Saponis Investments Sp. z o.o. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A., BNK Petroleum Investments B.V. and BNK Poland Holdings B.V.); E. 100% of the issued and outstanding securities of each of BNK Polska Sp. z o.o. and BNK Indiana Holdings B.V. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A., BNK Petroleum Investments B.V. and BNK Poland Holdings B.V.); F. 100% of the issued and outstanding securities of BNK Hidrocarburos S.L.U. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A., BNK Petroleum Investments B.V. and BNK Spain Holdings B.V.); G. 100% of the issued and outstanding securities of BNK ▇▇▇▇▇▇ Hidrocarburos S.L.U. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A., BNK Petroleum Investments B.V. and BNK ▇▇▇▇▇▇ Holdings B.V.); and H. 100% of the issued and outstanding securities of Indiana Investments Sp. z o.o. (indirectly through BNK Canada Holdings Inc., BNK Petroleum (Europe) Cooperatief U.A., BNK Petroleum Investments B.V., BNK Poland Holdings B.V. and BNK Indiana Holdings B.V.), (individually, each entity referred to in A. through H., inclusive, is a "European Subsidiary" and, collectively, the "European Subsidiaries"), in each case, free and clear of all mortgages, charges, pledges, security interests, encumbrances, claims or demands whatsoever and no person or other entity has any agreement, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (or capable of becoming an agreement or a right to purchase or receive) from the Corporation or the European Subsidiaries any issued or unissued securities of the European Subsidiaries; (iv) the Corporation and each of the Subsidiaries is qualified to carry on business as described in the Prospectus under the laws of each jurisdiction in which it carries on its business; (ivv) other than the Subsidiaries, the Corporation has no investment or ownership interest in any legal entity; (vvi) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, SaskatchewanAlberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island Manitoba and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vivii) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document to which the Corporation or any of the Subsidiaries is a party or by which it is bound; or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which default or breach would reasonably be expected to have a Material Adverse Effect; (viiviii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian applicable Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actual, anticipated, completed, proposed or threatened), financial or otherwise, in the assets, liabilities (contingent or otherwise), business, affairs, operations, prospects or capital of the Corporation (on a consolidated basis) since December 31, 2011 2012 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian applicable Securities Laws since December 31, 20112012, including the Documents, were were, or will be on the filing thereof, true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viiiix) except as disclosed in the Prospectus Prospectus, any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold oil and gas property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their termsterms except where any failure to be same will not have a Material Adverse Effect; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license license, concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none None of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ixx) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other oil and gas property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsistingsubsisting except where any failure to be same will not have a Material Adverse Effect; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payment payable to Governmental Authorities in accordance with applicable lawslaws and royalties payable in the ordinary course to landowners or similar rights holders, is payable to any person in connection therewith; (xxi) the Prospectus contains an accurate summary description of all material oil and gas property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business of the Corporation and the Subsidiaries as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xixii) the Corporation made available to each Reserves EvaluatorNSAI, prior to the issuance of the Reserves Reports NSAI Report and for the purpose of preparing such reportsreport, all information reasonably requested by each Reserves EvaluatorNSAI, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators NSAI since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports NSAI Report fully comply complies with the requirements of National Instrument 51- NI 51-101 as at the dates date thereof and the Reserves Reports NSAI Report reasonably present presents the Corporation's proved proved, probable and probable possible reserves attributable to the properties evaluated therein, as applicable, as at the dates date stated therein, based upon information available at the time the Reserves Reports were NSAI Report was prepared and the assumptions as to the commodity prices and costs contained therein; (xiixiii) each Reserves the NSAI Report accurately and completely sets forth as at December 31, 20122015, the applicable Reserves EvaluatorNSAI's evaluation of the reserves in respect of the properties that are the subject all of the applicable Reserves Report Corporation's U.S. properties and the net present value thereof and, since the date of preparation of such Reserves Reportreport, there has been no change of which the Corporation is aware that would render either of the Reserves Reports such report to be incorrect in any material adverse respect; (xiiixiv) neither of the Reserves Evaluators NSAI nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves the NSAI Report or independently evaluated the proved proved, probable or probable possible reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest); (xivxv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator NSAI is an independent qualified reserves evaluator pursuant to National Instrument NI 51-101; (xvxvi) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvixvii) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xviixviii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation or any Subsidiary (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the CorporationCorporation or any Subsidiary); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination of any tax return of the Corporation or any Subsidiary is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries, in any ca

Representations and Warranties of the Corporation. (a) Each delivery of the Preliminary Prospectus, the Prospectus and Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum, or any Supplementary Material pursuant to Section section 4 above shall constitute a representation and warranty to the Underwriters by the Corporation (and the Corporation hereby acknowledges that each of the Underwriters is relying on such representations and warranties in entering into this Agreement) that: (i) all of the information and statements (except information and statements furnished in writing by and relating solely to the Underwriters) contained in the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum, or any Supplementary Material, as applicable, including, without limitation, the documents incorporated by referencereference therein, as the case may be: (A) are at the respective dates of such documents, true and correct in all material respects; (B) contain no misrepresentation; and (C) constitute full, true and plain disclosure of all material facts relating to the Corporation and the Offered SharesDebentures; (ii) the Preliminary Prospectus, the Prospectus, or and any Supplementary Material, as applicable, including, without limitation, the documents incorporated by reference, as the case may be, comply complies in all material respects with the applicable Canadian Applicable Securities Laws, including including, without limitation National Instrument 44- limitation, NI 44-101, and the Preliminary U.S. Memorandum and the U.S. Memorandum comply with the U.S. Securities Laws, as applicable; and (iii) except as is disclosed in the Public Record, there has been no intervening material change (adverse material change until filing of the Prospectus) (actual, proposed anticipated or prospectivethreatened, whether financial or otherwise), from the date of the Preliminary Prospectus, the Prospectus Prospectus, the Preliminary U.S. Memorandum, the U.S. Memorandum, and any Supplementary Material to the time of delivery thereof, in the business, operations, revenues, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), condition (financial or otherwise) or results of operations operations, or ownership of the Corporation and its the Subsidiaries (taken as a whole). (b) In addition to the representations and warranties contained in subsection clause 7(a) hereof, the Corporation represents represents, warrants and warrants (and, where applicable, covenants) covenants to the Underwriters, and acknowledges that each of the Underwriters is relying upon such representations representations, warranties and warranties (and, where applicable, covenants) covenants in entering into this Agreement, that: (i) the Corporation has full corporate capacity, power and each of authority to issue the Subsidiaries is a corporation duly incorporatedOffered Debentures and, continued at the Closing Date or amalgamated and validly existing and in good standing under the laws of the jurisdiction in which it was incorporated, continued or amalgamatedAdditional Closing Date, as the case may be, and upon receipt of the purchase price therefor, the Offered Debentures will be duly allotted, validly issued and outstanding; (ii) the Corporation has full corporate capacity, power and authority to issue the Common Shares issuable upon conversion, redemption or maturity of the Offered Debentures and upon issuance thereof in accordance with the Debenture Indenture, such Common Shares will, at the time of issue, be duly allotted, validly issued and outstanding as fully paid and non- assessable Common Shares; (iii) each of the Corporation and its Subsidiaries has been duly incorporated, amalgamated or formed, as the case may be, and organized and is validly existing under the laws of the jurisdiction of its incorporation, amalgamation or formation, as the case may be, and has all requisite corporate powercapacity, power and authority to carry on its business as described in the Prospectuses, and capacity to own, lease or and operate its properties and assets as described in the Prospectus Prospectuses; (iv) each of the Corporation and no steps its Subsidiaries is qualified to carry on business under the laws of each jurisdiction in which it carries on a material portion of its business and is qualified to own its assets as described in the Public Record; (v) each of the Corporation and its Subsidiaries has conducted and is conducting its business in compliance in all material respects with all applicable laws, rules and regulations and, in particular, except as disclosed in writing to the Underwriters, all applicable licensing and environmental legislation, regulations or proceedings by-laws or other lawful requirements of any governmental or regulatory bodies applicable to it of each jurisdiction in which it carries on a material portion of its business and holds all material licenses, registrations and qualifications (collectively “Licenses”) in all jurisdictions in which it carries on a material portion of its business which are necessary to carry on the business of the Corporation and its Subsidiaries, as now conducted and as presently proposed to be conducted, and all such Licenses are valid and existing and in good standing, except where the lack of such valid or existing License would not have been any material adverse effect on the business of the Corporation and its Subsidiaries (taken by as a whole); (vi) the Corporation does not have any personmaterial Subsidiaries other than TPII, voluntary or otherwiseTGHYI, requiring or authorizing its dissolution or winding upTWGI, TGGI, TGWYI, TPEI, TGSA and TGWB, and the Corporation has all requisite is not “affiliated” with or a “holding corporation” of any other body corporate power and authority to enter into this Agreement and to carry out (within the meaning of those terms in the ABCA), nor is it (or its obligations hereunderSubsidiaries) a partner of any partnerships or limited partnerships; (iivii) the Corporation is the registered and beneficial holder of (a) 100% all of the issued and outstanding securities of Madalena Ventures International Holding Company Inc. ("MVIHC"); (b) 100% shares in the capital of the issued Corporation and outstanding securities of Madalena Austral SA (90% directly and 10% indirectly through MVIHC and Madalena Ventures International Inc.); and (c) indirectly through MVIHC, 100% each of the issued Subsidiaries are fully paid and outstanding securities of Madalena Ventures International Inc. (individually, each a "Subsidiary" non-assessable and, collectivelyin the case of each of the Subsidiaries, legally or beneficially owned by the "Subsidiaries"), in each case, Corporation (directly or indirectly) free and clear of all mortgages, liens, charges, pledges, security interests, encumbrances, claims or demands whatsoever (other than as provided in the Credit Agreement) and no person holds any securities convertible into or other entity exchangeable for issued or unissued securities of any of the Subsidiaries or has any agreement, warrant, option, right or privilege (whether pre-emptive or contractual) to purchase or receive (being or capable of becoming an agreement agreement, warrant, option or a right to purchase for the acquisition of any unissued or receive) from the Corporation or the Subsidiaries issued securities of any issued or unissued securities of the Subsidiaries; (viii) the minute books of each of the Corporation and its Subsidiaries are true and correct in all material respects and contain the minutes of all meetings and all resolutions of directors (including committees thereof), shareholders and partners, as the case may be, thereof; (ix) the books of account and other records of each of the Corporation and its Subsidiaries, whether of a financial or accounting nature or otherwise, have been maintained in all material respects in accordance with prudent business practices; (x) except to the extent that any violation or other matter referred to in this subparagraph does not have a material adverse effect on the Corporation and its Subsidiaries (taken as a whole) or as set forth in the Public Record: (A) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries are not in violation of any applicable federal, provincial, municipal or local laws, regulations, orders, government decrees or ordinances with respect to environmental, health or safety matters (collectively, “Environmental Laws”); (B) to the best of its knowledge, information and belief, after due inquiry, it and its Subsidiaries have operated their businesses at all times and have received, handled, used, stored, treated, shipped and disposed of all contaminants without violation of Environmental Laws; (C) to the best of its knowledge, information and belief, after due inquiry, there have been no spills, releases, deposits or discharges of hazardous or toxic substances, contaminants or wastes into the earth, air or into any body of water or any municipal or other sewer or drain water systems by the Corporation or its Subsidiaries that have not been remedied or that are not presently being remedied; (D) no orders, directions or notices have been issued and remain outstanding pursuant to any Environmental Laws relating to the business or assets of the Corporation or its Subsidiaries; (E) it and its Subsidiaries have not failed to report to the proper federal, provincial, municipal or other political subdivision, government, department, commission, board, bureau, agency or instrumentality, domestic or foreign (“Government Authority”) the occurrence of any event which is required to be so reported by any Environmental Law; (F) it and its Subsidiaries hold all licenses, permits and approvals required under any Environmental Laws in connection with the operation of their respective business and the ownership and use of their respective assets, all such licenses, permits and approvals are in full force and effect, and except for (A) notifications and conditions of general application to assets of the type owned by the Corporation and its Subsidiaries, and (B) notifications relating to reclamation obligations under the Environmental Protection and Enhancement Act (Alberta) and similar legislation in the jurisdictions in which the Corporation or its Subsidiaries conduct business, neither the Corporation nor any of its Subsidiaries has received any notification pursuant to any Environmental Laws that any work, repairs, constructions or capital expenditures are required to be made by it as a condition of continued compliance with any Environmental Laws, or any licence, permit or approval issued pursuant thereto, or that any licence, permit or approval referred to above is about to be reviewed, made subject to limitation or conditions, revoked, withdrawn or terminated; and (G) neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies thereof) has received any notice of, or been prosecuted for an offence alleging, material non- compliance with any Environmental Laws, and neither the Corporation nor any of its Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of material non-compliance short of prosecution; (xi) any and all operations of the Corporation and its Subsidiaries and, to the best of the knowledge, information and belief of the Corporation, after due inquiry, any and all operations by third parties on or in respect of the assets and properties of the Corporation and its Subsidiaries, have been conducted in accordance with good oil and gas industry practices except where the lack of, or lesser standard of, such conduct would not have a material adverse effect on the business of the Corporation and its Subsidiaries (taken as a whole); (xii) all income tax returns of each of the Corporation and its Subsidiaries required by law to be filed in any jurisdiction have been filed and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except tax assessments against which appeals have been or will be promptly taken and as to which adequate reserves have been provided. All other tax returns of each of the Corporation and its Subsidiaries required to be filed pursuant to any applicable law have been filed, and all taxes shown on such returns or otherwise assessed which are due and payable have been paid, except for such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. Each of the Corporation and its Subsidiaries has made installments of taxes as and when required. Each of the Corporation and its Subsidiaries has duly and timely withheld from any amount paid or credited by it to or for the account or benefit of any person, including any employee, officer, director, or non-resident person, the amount of all taxes and other deductions required by applicable law to be withheld and has duly and timely remitted the withheld amount to the appropriate taxing or other authority and has duly and timely issued tax reporting slips or returns in respect of any amount so paid or credited by it as required by applicable law; (xiii) the Corporation has full corporate capacity, power and authority to enter into this Agreement and to perform its obligations set out herein (including, without limitation, to issue and sell the Offered Debentures and to issue the Common Shares issuable pursuant to the conversion, redemption or maturity of the Offered Debentures), and this Agreement has been and at the Closing Time, the Debenture Indenture will be, duly authorized, executed and delivered by the Corporation, and this Agreement is, and, after Closing Time, the Debenture Indenture will be a legal, valid and binding obligation of the Corporation enforceable against the Corporation in accordance with their terms except that the validity, binding effect and enforceability of the terms of agreements and documents are subject to the qualification that such validity, binding effect and enforceability may be limited by: (i) applicable bankruptcy, insolvency, moratorium, reorganization or other laws affecting creditors’ rights generally; (ii) equitable remedies, including the remedies of specific performance and injunctive relief, being available only in the discretion of the applicable court; (iii) the statutory and inherent powers of a court to grant relief from forfeiture, to stay execution of proceedings before it and to stay executions on judgments; (iv) the applicable laws regarding limitations of actions; (v) enforceability of provisions which purport to sever any provision which is prohibited or unenforceable under applicable law without affecting the enforceability or validity of the remainder of such document would be determined only in the discretion of the court; (vi) enforceability of the provisions exculpating a party from liability or duty otherwise owned by it may be limited under applicable law; and (vii) that rights to indemnity, contribution and waiver under the documents may be limited or unavailable under applicable law; (xiv) the Corporation has the necessary corporate power and authority to execute, deliver and file the Prospectuses and, prior to the filing of the Prospectuses, all requisite action will have been taken by the Corporation to authorize the execution, deliver and filing of the Prospectuses; (xv) other than the Material Agreements, there are no material contracts or agreements which have, or which might have or create, any material obligation to the Corporation or its Subsidiaries or from which they derive or could derive any material benefit or which are required by the Corporation or its Subsidiaries to carry on their business as now conducted by them or as presently proposed to be conducted by them; (xvi) the Material Agreements described in the Prospectus or documents incorporated by reference therein have been accurately described as to parties, dates, terms, conditions and amendments thereto, each of such agreements is a legal, valid and binding obligation of the Corporation and/or its Subsidiaries, as the case may be, enforceable against such party or parties in accordance with their terms, and the Corporation and each of its Subsidiaries, as applicable, are in compliance with the terms of such Material Agreements except where such non-compliance, in aggregate, would not reasonably be expected to have a material adverse effect on the business, operations, capital, properties, assets, liabilities (absolute, accrued, contingent or otherwise), ownership or condition (financial or otherwise) or results of operations of the Corporation and its Subsidiaries is qualified to carry on business (taken as described in the Prospectus under the laws of each jurisdiction in which it carries on its businessa whole); (ivxvii) other than the Subsidiaries, the Corporation has no investment or ownership interest in reason to believe, after due inquiry, that any legal entity; (v) the Corporation is a "reporting issuer" under the Canadian Securities Laws of each of the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Island and Ontario, is not in default of any material requirement of such Canadian Securities Laws, is not included on a list of defaulting reporting issuers maintained by the CSA and will continue other party to be, at the Closing Time, a reporting issuer under the Canadian Securities Laws of each of the Qualifying Provinces; (vi) each of the execution and delivery of this Agreement and the performance by the Corporation of its obligations hereunder, including the allotment, reservation, issuance and delivery of the Offered Shares, do not and will not conflict with or result in a breach or violation of any of the terms Material Agreements or provisions of, or constitute a default under (whether after notice or lapse of time or both), (a) any statute, rule or regulation applicable to the Corporation including, without limitation, Canadian Securities Laws and the rules and regulations of the Exchange; (b) the constating documents or resolutions of the directors or shareholders of the Corporation or a Subsidiary which are in effect at the date hereof; (c) any mortgage, note, indenture, contract, agreement, joint venture, partnership, instrument, lease or other document material contract to which the Corporation or any of the Subsidiaries is a party or by which it is bound; , is in default of any term or (d) any judgment, decree or order binding the Corporation or a Subsidiary or the property or assets thereof, which obligation to be performed by such party where such default or breach would might reasonably be expected to have a Material Adverse Effect; (vii) the Corporation is in compliance in all material respects with its continuous disclosure obligations under Canadian Securities Laws and the rules and regulations of the Exchange and, without limiting the generality of the foregoing, there has not occurred any material adverse change (actualeffect on the business, anticipatedoperations, completedcapital, proposed or threatened)properties, financial or otherwise, in the assets, liabilities (absolute, accrued, contingent or otherwise), business, affairs, operations, prospects ownership or capital condition (financial or otherwise) or results of the Corporation (on a consolidated basis) since December 31, 2011 which has not been publicly disclosed on SEDAR, all statements set forth in all documents publicly filed by or on behalf of the Corporation pursuant to Canadian Securities Laws since December 31, 2011, including the Documents, were true, correct, and complete in all material respects and did not contain any misrepresentation as of the date of such statements and the Corporation has not filed any confidential material change reports since the date of such statements which remains confidential as at the date hereof; (viii) except as disclosed in the Prospectus any and all of the agreements and other documents and instruments, pursuant to which the Corporation and the Subsidiaries hold property and assets (including any interest in, or right to earn an interest in, any property) are valid and subsisting agreements, documents or instruments in full force and effect, enforceable in accordance with their terms; neither the Corporation nor any Subsidiary, as applicable, is in default and to the Corporation's knowledge none of the other parties thereto are in default, of any of the provisions of any such agreements, documents or instruments, except where any such default would not have a Material Adverse Effect, nor to the Corporation's knowledge has any such default been alleged, and such properties and assets are in good standing under the applicable statutes and regulations of the jurisdictions in which they are situated; all material leases, licenses, concessions, claims or other property rights pursuant to which the Corporation derives the interests thereof in such property and assets are in good standing and there has been no default under any such lease, license concession, claim or property right, except where such default would not have a Material Adverse Effect. Except as disclosed in the Prospectus, to the knowledge of the Corporation, none of the Corporation's material oil and gas assets (including any interest, or right to earn an interest, therein) are subject to any right of first refusal or purchase or acquisition right other than those negotiated in the normal course of business and for the benefit of the Corporation or mandated by the applicable Governmental Authority in the jurisdictions in which such assets are located; (ix) except as disclosed in the Prospectus, all leases, licenses, concessions, claims or other property rights through which the Corporation and the Subsidiaries hold an interest (including any interest in, or right to earn an interest in, any property) have been validly recorded in accordance with all applicable laws and are valid and subsisting; and such leases, concessions, claims or other property rights are sufficient to permit the holder thereof to explore for, to produce and sell the petroleum, natural gas and related hydrocarbons relating thereto, free and clear of any liens, charges or encumbrances and no material commission, royalty, license fee or similar payment, other than those previously disclosed in writing to the Underwriters and payable to Governmental Authorities in accordance with applicable laws, is payable to any person in connection therewith; (x) the Prospectus contains an accurate summary description of all property rights held by the Corporation and the Subsidiaries and no other property or assets are necessary for the conduct of the business operations of the Corporation and the its Subsidiaries (taken as currently conducted, and the Corporation does not know of any claim or the basis for any claim that might or could materially and adversely affect the right thereof to use, transfer or otherwise explore for and produce and sell the petroleum, natural gas and related hydrocarbons in respect of such properties; (xi) the Corporation made available to each Reserves Evaluator, prior to the issuance of the Reserves Reports and for the purpose of preparing such reports, all information reasonably requested by each Reserves Evaluator, which information did not contain any material misrepresentation at the time such information was so provided. The Corporation has no knowledge of a material adverse change in any information provided to the Reserves Evaluators since that date. The Reserves Evaluators have represented to the Corporation that their respective Reserves Reports fully comply with the requirements of National Instrument 51- 101 as at the dates thereof and the Reserves Reports reasonably present the Corporation's proved and probable reserves attributable to the properties evaluated therein, as applicable, as at the dates stated therein, based upon information available at the time the Reserves Reports were prepared and the assumptions as to the commodity prices and costs contained therein; (xii) each Reserves Report accurately and completely sets forth as at December 31, 2012, the applicable Reserves Evaluator's evaluation of the reserves in respect of the properties that are the subject of the applicable Reserves Report and, since the date of preparation of such Reserves Report, there has been no change of which the Corporation is aware that would render either of the Reserves Reports to be incorrect in any material adverse respect; (xiii) neither of the Reserves Evaluators nor any other independent evaluator or consultant engaged by the Corporation has updated either Reserves Report or independently evaluated the proved or probable reserves or other resources attributable to the properties evaluated therein (or any part thereof) or the resources attributable to any other properties in which the Corporation has an interest; (xiv) based upon representations made to the Corporation by each Reserves Evaluator, each Reserves Evaluator is an independent qualified reserves evaluator pursuant to National Instrument 51-101; (xv) neither the Corporation nor any Subsidiary is in violation of its constating documents or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound, except in each case as would not have a Material Adverse Effect; (xvi) to the knowledge of the Corporation, no counterparty to any obligation, agreement, covenant or condition contained in any contract, indenture, trust deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party is in material default in the performance or observance thereof which default would have a Material Adverse Effect; (xvii) except as disclosed in the Prospectus, neither the Corporation nor any Subsidiary has approved, or entered into any agreement in respect of: (a) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary, whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or (b) any change in control of the Corporation (by sale, transfer or other disposition of shares or sale, transfer, lease or other disposition of all or substantially all of the property and assets of the Corporationwhole); or (c) to the knowledge of the Corporation, a proposed planned disposition of shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding shares of the Corporation; (xviii) the Financial Statements have been prepared in accordance with GAAP or IFRS, as applicable, and present fully, fairly and correctly in all material respects, the consolidated financial condition Corporation is not aware of any event which has occurred which would provide any of the Corporation and the Subsidiaries as at the dates thereof and the consolidated results parties to any of the operations and the changes in the financial position of the Corporation and the Subsidiaries for the periods then ended and contain and reflect adequate provisions Material Agreements with a reasonable basis to terminate or allowance for all reasonably anticipated liabilities, expenses and losses of the Corporation, as applicable, and there has been no material change in accounting policies or practices of the Corporation since June 30, 2013, except as has been disclosed in the Prospectus; (xix) the AIF is seek a "current AIF" as such term is defined in National Instrument 44-101 and the Corporation is qualified to file a short form prospectus in accordance with National Instrument 44-101; (xx) since June 30, 2013, (a) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Corporation, whether or not arising in the ordinary course of business which would have a Material Adverse Effect; and (b) there have been no transactions entered into by the Corporation, other than those in the ordinary course of business, except as disclosed in the Prospectus; (xxi) all Taxes due and payable by the Corporation and the Subsidiaries have been paid, except where the failure to pay Taxes would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. All tax returns, declarations, remittances and filings required to be filed by the Corporation and the Subsidiaries have been filed with all appropriate Governmental Authorities and all such returns, declarations, remittances and filings are complete and accurate and no material fact or facts have been omitted therefrom which would make any of them misleading, except where the failure to file such documents would not constitute an adverse material fact in respect of the Corporation or have a Material Adverse Effect. To the knowledge of the Corporation, no examination termination of any tax return of such agreement or that the Corporation or any Subsidiary is currently in progress applicable regulatory requirements and there are no issues or disputes outstanding with any Governmental Authority respecting any Taxes that have been paid, or government approvals required under the Material Agreements may be payable, by the Corporation or the Subsidiaries, in any carevo