Escuela moderna: “Inclusiva” y excluyente

The Corporation has adopted a Safety and Social Responsibility Policy (‘‘S&SR Policy’’) that articulates its commitment to health and safety, environment, stakeholder engagement, and regulatory compliance. The S&SR Policy applies to any activities undertaken by or on behalf of the Corporation in its operating areas. The Corporation’s Board of Directors and the President & Chief Executive Officer are ultimately accountable for ensuring compliance with the S&SR Policy. The Corporation’s management and its Safety & Social Responsibility department are responsible for ensuring that the S&SR Policy is implemented and communicated across the Corporation. All employees and contractors of the Corporation are responsible for complying with the S&SR Policy. The Safety & Social Responsibility Committee of the Corporation’s board of directors (the ‘‘S&SR Committee’’) is responsible for overseeing the Corporation’s S&SR performance and ensuring there are adequate systems in place to support ongoing compliance, and to plan and execute the Corporation’s activities in a safe and socially responsible manner.

The Corporation strives to develop and operate its oil and natural gas assets in a socially responsible manner and places a high priority on preserving the quality of the environment, protecting the health and safety of its employees, contractors and the public in the communities in which it operates, and encouraging active and open collaboration with its stakeholders. The Corporation has established processes and programs designed to evaluate and minimize health and safety and environmental risks. The Corporation actively participates in industry recognized programs that support its sustainability goals, and expects continuous improvement.

The S&SR Policy articulates the Corporation’s commitment to protecting the health and safety of all persons and communities involved in, or affected by, its business activities. Specifically, the S&SR Policy outlines that the Corporation will: (i) promote and support a culture in which all employees and contractors share ownership of a workplace where no one gets injured; (ii) provide the resources, equipment and training needed to ensure everyone complies with its health and safety programs; and (iii) strive to continually improve its safety culture by integrating applicable industry best practices and operational experience into its health and safety mindset and programs.

The S&SR Policy also articulates the Corporation’s commitment to the environment and states that the Corporation will: (i) proactively manage its impact on the environment and to consider innovative improvement opportunities; (ii) work to reduce its environmental impact in the areas in which it operates, including: reviewing the efficiency of its energy consumption to reduce emissions intensity; (iii) improve its water and land use practices; (iv) limit the waste it generates; (v) prevent and manage releases; (vi) provide transparent disclosure; and (vii) provide resources and training to meet its environmental commitments.

The Corporation’s commitment to building meaningful and transparent relationships with its stakeholders is articulated in its S&SR Policy. In addition, the S&SR Policy expresses the Corporation’s commitment to engaging with stakeholders to promote economic and social development for the people and communities in its operating areas.

Finally, the Corporation’s commitment to the responsible development of resources and regulatory compliance is stated in its S&SR Policy.

Health and Safety

The Corporation’s combined (employee/contractor) recordable injury frequency rate for 2015 was 1.24 injuries per 200,000 man hours, a decrease from the rate of 1.43 recorded in 2014. The Corporation’s employee recordable injury frequency rate increased from 0.40 injuries per 200,000 man hours in 2014 to 0.99 injuries per 200,000 man hours in 2015. The Corporation’s contractor total recordable injury frequency decreased from 2.17 injuries per 200,000 man hours in 2014 to 1.48 injuries per 200,000 man hours in 2015. The Corporation recorded three lost-time injuries in 2015, a decrease from nine lost-time injuries recorded in 2014. The Corporation had zero employee or contractor fatalities in 2015 and 2014.

Health and safety risks influence workplace practices, operating costs and the establishment of regulatory standards. The Corporation maintains a health and safety management system designed to:

• increase emphasis on safety awareness and to promote continuous improvement and safety excellence;

• support and participate in the Canadian Association of Petroleum Producers (‘‘CAPP’’) Responsible Canadian Energy Program to improve safety performance;

• incorporate hazard assessment and risk management as an integral part of everyday business; and

• monitor performance to ensure that its operations comply with all legal obligations and its internally-imposed standards.

The health and safety component of the S&SR system is reviewed annually for continuous improvement opportunity. Every three years, the Health and Safety Management System is subject to a third-party audit utilizing the Enform Certificate of Recognition (‘‘COR’’) Audit Protocol. Annual maintenance audits against the COR Audit Protocol are conducted each year. In 2015, the Corporation successfully renewed its COR certification.

The Corporation continues to develop and implement prevention measures and safety management program improvements to support its focus and commitment for an injury-free workplace.

Environment

The Corporation is committed to meeting its responsibilities to protect the environment through a variety of programs and actively monitors its operations for compliance with all regulations. In particular, the Corporation engages in the following activities:

• The Corporation supports and participates in the CAPP Responsible Canadian Energy program. The Corporation’s participation in this program since its inception demonstrates its commitment to responsible resource development and to continuous improvement in environment, health and safety and social performance;

• Site abandonment, remediation and reclamation capital expenditures for the Corporation’s Canadian properties in 2015 totaled $13.4 million ($9.9 million on operated properties and $3.4 million on non-operated properties). The Corporation’s U.S. abandonment capital expenditures totaled $1.5 million (operated and non-operated). The Corporation received 11 reclamation certificates in 2015 by returning sites to that of equivalent land capability;

• The Corporation completes third-party environmental compliance inspections designed to ensure compliance with environmental legislation and regulations, and in 2015 three audits were completed. The Corporation completes third-party audits to identify and evaluate the risk exposures associated with production equipment, process operations, utility supply systems and natural hazards. In 2015, 2 facilities were audited. The purpose of these audits is to generate detailed loss prevention reports with risk-based recommendations for improving the overall safety and performance of our facilities, mitigating the potential exposure to financial loss associated with property damage and production loss, and ensuring the adequacy of our relevant insurance coverage;

• Government regulators conducted 148 inspections of the Corporation’s field operations in the United States and Canada in 2015, an increase from the 137 government regulator inspections conducted in 2014. The percentage of noncompliant field inspections received by the Corporation in 2015 was 15%, an improvement from the 24% noncompliant field inspections received in 2014;

• The Corporation’s regulatory team completed six internal environmental and regulatory audits at selected facilities. The average score of compliance resulting from the internal audit program in 2015 was 80%;

• The Corporation continued its internal facility inspections program and completed 57 inspections at major Canadian facilities in 2015. The average score of compliance resulting from the internal inspection program in 2015 was 85%. In addition, there were 2,435 well site inspections completed in Canada;

• In the United States, the Corporation continued its internal environmental and regulatory inspections. Of the inspections conducted, 3,349 inspections were at the Corporation’s West Virginia, Pennsylvania, Montana and North Dakota sites along with routine drilling rig inspections;

• The Corporation conducts annual property reviews in Canada with specific risk reduction objectives. The Corporation also continues to manage risk through the implementation of a Pipeline Risk Assessment Process and various other activities, such as inspections of pipelines at water crossings. The Corporation reviews each pipeline system annually. The Corporation continues to incorporate improvements to these programs which are designed to identify and mitigate significant risks, and to decrease the number and severity of pipeline failure incidents;

• The Corporation has estimated its direct emissions in 2015 to be approximately 815,200 carbon dioxide equivalent tonnes per year, which is 5% less than the Corporation’s direct emissions in 2014 of 858,929 carbon dioxide equivalent tonnes per year. The estimated numbers will be adjusted as additional data becomes available. In 2015, the Corporation completed 48 fugitive emissions infrared surveys at its Canadian

Greenhouse gas regulations have been enacted in British Columbia, Alberta and at the federal level in Canada and the U.S. In British Columbia, the Corporation is subject to the carbon tax introduced in mid-2008. The total carbon tax paid was approximately $0.83 million in 2015. In addition, the Corporation is required to report third party verified greenhouse gas emissions annually to the government of British Columbia under the Greenhouse Gas Reduction (Cap and Trade) Act (British Columbia) (the ‘‘BCCTA’’). The Corporation is not subject to the Canadian greenhouse gas emissions reporting requirement as it does not currently operate facilities above the 50,000 tonnes of carbon dioxide equivalent per year per facility threshold. However, the Corporation is subject to the reporting requirement in the U.S. under the Clean Air Act and the Mandatory Reporting of Greenhouse Gases Rule. The latest of these reports was submitted to the U.S. Environmental Protection Agency on March 31, 2015 for the 2014 operational year. The report for the 2015 operational year will be submitted on March 31, 2016. For more information on the environmental regulation applicable to the Corporation, see ‘‘Industry Conditions – Environmental Regulation’’.

The Corporation endeavours to carry out its activities and operations in compliance with all relevant and applicable environmental regulations and good industry practice. In particular, with respect to hydraulic fracturing, the Corporation complies with all current Canadian and U.S. regulations and adheres to all CAPP Hydraulic Fracturing Operating Practices, which is considered the regulatory best practice standard used. The Corporation proactively employs alternative fracturing technology such as foams, gelled water and reclaimed water to reduce the amount of fresh water required during the fracturing process. The Corporation actively seeks opportunities to collaborate with other area operators to share flowback fluid where feasible through inter-company transfers. Although the Corporation proactively mitigates perceived risks involved in the hydraulic fracturing process, increased capital and operating costs may be incurred if regulations in Canada or the United States impose more stringent compliance requirements surrounding hydraulic fracturing.

Health, safety, environmental and regulatory updates and risks are reviewed regularly by the S&SR Committee. At present, the Corporation believes that it is, and expects to continue to be, in compliance with all material applicable environmental laws and regulations and has included appropriate amounts in its capital expenditure budget to continue to meet its ongoing environmental obligations.

Overall, the Corporation strives to operate in a socially responsible manner and believes its health, safety and environmental initiatives and performance confirm its ongoing commitment to environmental stewardship and the health and safety of its employees, contractors and the general public in the communities in which it operates. Annually, the Corporation identifies key focus areas to support this commitment and sets forth strategic reduction targets. The Corporation believes that by monitoring metrics, identifying areas for improvement and implementing strategies, processes and procedures in those key focus areas, the Corporation can reduce its environmental impact.

INSURANCE

The Corporation carries insurance coverage to protect its assets at or above the standards typical within the oil and natural gas industry. Insurance levels are determined and acquired by the Corporation after considering the perceived risk of loss and appropriate coverage, together with the overall cost. The Corporation currently purchases insurance to protect against third party liability, property damage, business interruption, terrorism cyber-attacks, pollution and well control. In addition, liability coverage is also carried for the directors and officers of the Corporation.

PERSONNEL

As at December 31, 2015, the Corporation employed a total of 588 persons, including full-time benefit and payroll consultants, 455 of whom were in Canada and 133 of whom were in the United States.