INVESTING IN CANADA'S ENERGY FUTURE

Development Financing Programs (DFP)

Outline & Procedure

DFP when implemented, will act as a development tool to finance in-house and third party capital programs. The DFP program will enable the ability and capacity to manage a series of arrangements through its parent and operating subsidiaries to safeguard the primary investment capital.

Upon the completion of a comprehensive review and approval by the board, a designated capital project is selected for development through an operating subsidiary of the company. The operating subsidiary has the capability of entering into a lienable or convertible ownership interest within the designated target project from the development approval. Then the operating subsidiary will overlap the negotiated terms of finance and development with the designated company subsidiary, under an NRI “Net Revenue Interest” or an NPI “Net Production Interest” arrangement.

Following the successful payout of the NPI/NRI agreement, the contract is closed between the company and the operating subsidiary. The operating subsidiary will then revert to the original negotiated terms and conditions of its arrangement for the original project.

The agreement structure is designed to safeguard and optimize the following key operational considerations :

  • Promote the turnover of investment capital;
  • Rapidly deploy and capitalize on “ready to go” (Board approved) projects;
  • Protect investment capital against third party insolvency;
  • Protect the company from operational litigation; and
  • Provide immediate cash flow, post project completion.

Risk Management Strategy

The company employ’s an active risk management strategy to reduce the risks associated with development operations, environmental and general operator liabilities. This strategy will ensure that the core objective of progressing the company’s asset base will not be placed at undue risk.