def14a

CANWEST PETROLEUM CORPORATION

Date , ___

Christopher H. Hopkins, Chief Executive Officer

The holder of the Series B Preferred Stock is entitled to 58,799,926 votes, which equals the number of Exchangeable Shares of Oilsands Quest Inc., the Company’s subsidiary, outstanding as of September 11, 2006. The total voting power combined for the holders of Common Stock and the Series B Preferred Stock is 188,239,728.

The presence, in person or by proxy, of holders of one-third of the shares entitled to vote as of the Record Date constitutes a quorum for the transaction of business at the Meeting. In the event there are not sufficient votes for a quorum or to approve any proposals at the time of the Meeting, the Meeting may be adjourned in order to permit further solicitation of proxies. Abstentions will count towards quorum requirements.

As to the election of directors under Proposal Two, the proxy card being provided by the Board enables a shareholder to vote for the election of each of the nominees proposed by the Board, or to withhold authority to vote for one or more of the nominees being proposed. Directors are elected by a plurality of votes cast, without respect to either (i) broker non-votes, or (ii) proxies as to which authority to vote for one or more of the nominees being proposed is withheld.

With respect to Proposals One, Three, Four, Six, and Seven, the affirmative vote of a majority of the votes cast at the respective proposals in person or by proxy is required to approve the proposals. As to these proposals, a shareholder may: (i) vote “FOR” the proposal, (ii) vote “AGAINST” the proposal, or (iii) “ABSTAIN” with respect to the proposal. These proposals shall be determined without regard to broker non-votes or proxies marked “ABSTAIN” as to each matter.

As to Proposal Five, the affirmative vote of 66-2/3% of the votes entitled to be cast is required to approve Proposal Five. This proposal shall be determined by including broker non-votes or proxies marked “ABSTAIN” as votes not cast in favor of the proposal.

The proposed corporate actions on which the shareholders are being asked to vote are not corporate actions for which shareholders of a Colorado corporation have the right to dissent under the Colorado Business Corporation Act.

Voting and Revocability of Proxies

Shares of Common Stock and Series B Preferred Stock represented by all properly executed proxies received at the Company’s transfer agent by Wednesday, October 25, 2006 will be voted as specified in the proxy. Unless contrary instructions are indicated on the proxy, the shares of Common Stock and Series B Preferred Stock represented by such proxy will be voted “FOR” the slate of directors described herein; and “FOR” each of proposals two through seven as described herein. Management and the Board of Directors of the Company know of no other matters to be brought before the Meeting other than as described herein. If any other matters properly are presented to the shareholders for action at the Meeting and any adjournments or postponements thereof, the proxy holder named in the enclosed proxy intends to vote in his discretion on all matters on which the shares of Common Stock and Series B Preferred Stock represented by such proxy are entitled to vote.


				Percent of
Name and Address of Beneficial		Amount and Nature of		Common
Owner	Position	Beneficial Ownership⁽¹⁾		Stock⁽¹⁾
Errin Kimball
Suite 205, 707 — 7th Avenue S.W.,	Vice President,
Calgary, Alberta CANADA T2P 3H6	Exploration	3,336,900⁽⁹⁾			2.5	%

Patricia A. Beatch Suite 205, 707 — 7th Avenue S.W.,	Vice President, Corporate &
Calgary, Alberta CANADA T2P 3H6	Strategic
	Development	37,500⁽¹⁰⁾			*

Thornton Donaldson
206-475 Howe St.	Former President
Vancouver, B.C.	and Chief Executive
CANADA V6C 2B3	Officer	2,157,000⁽¹¹⁾			1.6	%

All directors, executive
officers and named executive
officers as a group
(10 persons)⁽¹²⁾	-		41,294,450		24.5	%


*		Indicates less than one percent.

(1)		The amounts and percentages in these columns may include Exchangeable Shares and options to purchase Exchangeable Shares (discussed further below) that were issued by OQI in exchange for OQI common stock and stock options pursuant to that certain Reorganization Agreement dated June 9, 2006 (the transactions contemplated in the Reorganization Agreement were consummated on August 14, 2006 and the closing under that Agreement is referred to as the “Reorganization”.). Each Exchangeable Share (or exercised option) is convertible into one share of the Company’s common stock and the expiration date of each Exchangeable Share is August 14, 2013 (unless stock options to purchase Exchangeable Shares have an earlier expiration date). The information related to stock options to purchase Exchangeable Shares owned by each director, executive officer and each named executive officer, if any, is disclosed in the respective footnotes to the Amount and Nature of CanWest Beneficial Ownership.

(2)		Includes vested options to purchase 2,075,000 shares of Common Stock. This number does not include unvested options to purchase 2,525,000 shares of the Company’s common stock.

(3)		Includes: (i) vested options to purchase 525,000 shares of Common Stock; (ii) 600,000 shares of Common Stock owned by DKR Saturn Event Holding Fund, Ltd., of which Mr. Phillips is the manager; and (iii) options to acquire 823,000 Exchangeable Shares. This number does not include unvested options to purchase 175,000 shares of Common Stock.

(4)		Includes: (i) 20,533,850 Exchangeable Shares and options to acquire Exchangeable Shares acquired under the Reorganization Agreement; (ii) 75,000 vested options to acquire the Company’s common stock; (iii) 8,400 shares of the Company’s common stock owned by Mr. Hopkins’ spouse; and (iv) 205,750 Exchangeable Shares owned by Mr. Hopkins’ spouse. The number of shares beneficially owned by Mr. Hopkins does not include (i) unvested options to acquire 823,000 Exchangeable Shares; and (ii) unvested options to purchase 525,000 shares of the Company’s common stock

(5)		Includes: (i) 5,349,500 Exchangeable Shares and vested options to acquire Exchangeable Shares; and (ii) vested options to purchase 50,000 shares of the Company’s common stock. This number does not include (i) unvested options to acquire 823,000 Exchangeable Shares; and (ii) unvested options to purchase 350,000 shares of the Company’s common stock.

(6)		Includes: (i) 16,800 shares of the Company’s common stock owned by Mr. Milne’s affiliate Precise Details, Inc.; (ii) 35,000 shares of the Company’s common stock owned by Mr. Milne’s spouse; (iii) 2,469,000 Exchangeable Shares and options to acquire Exchangeable Shares acquired pursuant to the Reorganization Agreement; (iv) 288,050 Exchangeable Shares acquired by Mr. Milne’s spouse pursuant to the Reorganization Agreement; and (v) vested options to purchase 25,000 shares of the Company’s common stock. The number of shares beneficially owned by Mr. Milne does not include unvested options to purchase 175,000 shares of the Company’s common stock.


(7)		Includes: (i) 500,000 shares of the Company’s common stock held by the WLT Reification Trust for the Benefit of William Scott Thompson; (ii) vested options to acquire 2,057,500 Exchangeable Shares; and (iii) vested options to purchase 25,000 shares of the Company’s common stock. This number does not include unvested options to purchase 175,000 shares of the Company’s common stock.

(8)		Includes vested options to purchase 25,000 shares of the Company’s common stock. This number does not include unvested options to purchase 175,000 shares of the Company’s common stock.

(9)		Includes: (i) 3,292,000 Exchangeable Shares and options to acquire Exchangeable Shares acquired pursuant to the Reorganization Agreement; and (ii) vested options to purchase 37,500 shares of the Company’s common stock. The number of shares beneficially owned by Mr. Kimball does not include (i) unvested options to acquire 823,000 Exchangeable Shares; and (ii) unvested options to purchase 262,500 shares of the Company’s common stock.

(10)		Includes vested options to purchase 37,500 shares of the Company’s common stock. This number does not include unvested options to purchase 262,500 shares of the Company’s common stock.

(11)		Includes: (i) 955,000 shares of Common Stock held by Mr. Donaldson’s affiliate, United Corporate Advisors, Ltd.; (ii) 22,000 shares of Common Stock held by Mr. Donaldson’s spouse; (iii) vested warrants to purchase 780,000 shares of Common Stock; and (iv) vested options to purchase 300,000 shares of Common Stock.

(12)		Includes securities as reflected in footnotes 2 to 11.

On August 14, 2006, the Company entered into a Voting and Exchange Trust Agreement (the “Voting Agreement”) with its subsidiary, Oilsands Quest, Inc. (“OQI”), and Computershare Trust Company of Canada (“CTC”) for the OQI Exchangeable Shares. CTC is the trustee of the Voting Agreement. According to the Voting Agreement the Exchangeable Shares are represented for voting purposes in the aggregate by one share of CanWest Series B Preferred Stock (the “Preferred Share”), which Preferred Share is held by CTC, and the Preferred Share is entitled to vote on all matters that are presented to the holders of Common Stock. CTC will vote the one Preferred Share as indicated by the individual holders of Exchangeable Shares. The one Preferred Share represents a number of votes equal to the total outstanding Exchangeable Shares on the applicable record date for the vote submitted to CanWest shareholders. The Voting Agreement will expire on August 14, 2013, seven years after the effective date.

Changes in Control

None.

MANAGEMENT

Unless otherwise indicated in their employment agreement, executive officers of the Company are elected by the Board of Directors and serve for a term of one year and until their successors have been elected and qualified or until their earlier resignation or removal by the Board of Directors. There are no family relationships among any of the directors and executive officers of the Company. None of the executive officers or directors are currently involved in any legal proceedings and none of the executive officers or directors is an adverse party in a material proceeding against the Company.

The following table sets forth the names and ages of all executive officers and directors and the positions and offices that each person holds with the Company:

meetings at which a majority of the directors were present in person or by telephone. All board members attended more than 75% of such directors meetings during the past fiscal year. The Company does not have a formal policy with regard to board members’ attendance at annual meetings, but encourages them to attend shareholder meetings.

Committees

Audit Committee: We have a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and Section 121A of the American Stock Exchange Company Guide. The following persons currently serve on our audit committee: Ronald Phillips, Thomas Milne and Gordon Tallman. Messrs. Phillips, Milne and Tallman are each “independent” as that term is defined in Section 121A of the American Stock Exchange Company Guide and SEC Rule 10A-3 under the Exchange Act of 1934.

The Board of Directors has adopted the Audit Committee’s charter which is available on our website at www.canwestpetroleum.com and is attached hereto.

The Audit Committee has held three formal meetings and has taken three actions by unanimous written consent through the Record Date.

The Audit Committee’s responsibility is to monitor and oversee management’s internal controls and financial reporting process, and the Company’s independent accountants. The following generally describes the functions performed by the Audit Committee:

	•		reviews and discusses audited annual and unaudited interim financial statements with management and the independent accountants;

	•		discusses with the independent accountants the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU section 380), as modified by SAS 89 and SAS 90; and

	•		receives the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No.1, Independence Discussions with Audit Committees), as may be modified or supplemented, and discusses with the independent accountant the accountant’s independence.

REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of CanWest Petroleum Corporation

The following constitutes the report the Audit Committee has made to the Board of Directors and, when read in connection with the Audit Committee Charter, generally describes the functions performed by the Audit Committee:

REPORT OF THE AUDIT COMMITTEE
To the Board of Directors of CanWest Petroleum Corporation

Management is responsible for our internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of our financial statements in accordance with generally accepted auditing standards and to issue a report on our financial statements. Our responsibility is to monitor and oversee those processes. We hereby report to the Board of Directors that, in connection with the financial statements for the year ended April 30, 2006, we have:

	•		reviewed and discussed the audited financial statements with management and the independent accountants;

	•		approved the appointment of the independent accountants;

	•		discussed with the independent accountants the matters required to be discussed by SAS 61 (Codification of Statements on Auditing Standards, AU section 380), as modified by SAS 89 and SAS 90; and

	•		received the written disclosures and the letter from the independent accountants required by Independence Standards Board Standard No. 1 (Independence Standards Board Standard No.1, Independence Discussions with Audit Committees), as may be modified or supplemented, and discussed with the independent accountant the accountant’s independence.

Based on the discussions and our review discussed above, we recommended to the Board of Directors that the audited financial statements for the year ended April 30, 2006 be included in the Company’s 2006 Annual Report to Shareholders on Form 10-KSB for that fiscal year.

Respectfully submitted,
The Audit Committee of CanWest Petroleum Corporation
Ronald Phillips, Member
Roderick Haverslew, Member*

* Mr. Haverslew resigned as a director and member of the Audit Committee on August 14, 2006, in connection with the Reorganization.

Governance and Nominating Committee:

The Governance and Nominating Committee oversees the process by which individuals may be nominated to our Board of Directors. As of the date of this Proxy Statement, the Governance and Nominating Committee consists of Ronald Phillips, Thomas Milne and Gordon Tallman, all of whom are considered independent as defined in Section 121A of the American Stock Exchange Company Guide and SEC Rule 10A-3 under the Exchange Act of 1934. The Governance and Nominating Committee’s charter was adopted by the Board of Directors and is available on our website at www.canwestpetroleum.com.

The functions performed by the Governance and Nominating Committee include identifying potential directors and making recommendations as to the size, functions and

composition of the Board and its committees. In making nominations, our Governance and Nominating Committee is required to submit candidates who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who shall be most effective, in conjunction with the other nominees to the Board, in collectively serving the long-term interests of the shareholders.

The Governance and Nominating Committee considers nominees proposed by our shareholders. To recommend a prospective nominee for the Governance and Nominating Committee’s consideration, you may submit the candidate’s name by delivering notice in writing to CanWest Petroleum Corporation, c/o Burns, Figa & Will, P.C., 6400 S. Fiddler’s Green Circle, Suite 1000, Greenwood Village, CO 80111, USA.

A shareholder nomination submitted to the Governance and Nominating Committee must include at least the following information (and can include such other information the person submitting the recommendation desires to include), and must be submitted to the Company by the date mentioned in this proxy statement under the heading “Proposal From Shareholders” as such date may be amended in cases where the annual meeting has been changed as contemplated in SEC Rule 14a-8(e), Question 5:

	(i)		The name, address, telephone number, fax number and e-mail address of the person submitting the recommendation;

	(ii)		The number of shares and description of the Company’s voting securities held by the person submitting the nomination and whether such person is holding the shares through a brokerage account (and if so, the name of the broker-dealer) or directly;

	(iii)		The name, address, telephone number, fax number and e-mail address of the person being recommended to the nominating committee to stand for election at the next annual meeting (the “proposed nominee”) together with information regarding such person’s education (including degrees obtained and dates), business experience during the past ten years, professional affiliations during the past ten years, and other relevant information.

	(iv)		Information regarding any family relationships of the proposed nominee as required by Item 401(d) of SEC Regulation S-K.

	(v)		Information whether the proposed nominee or the person submitting the recommendation has (within the ten years prior to the recommendation) been involved in legal proceedings of the type described in Item 401(f) of SEC Regulation S-K (and if so, provide the information regarding those legal proceedings required by Item 401(f) of Regulation S-K).

	(vi)		Information regarding the share ownership of the proposed nominee required by Item 403 of Regulation S-K.

	(vii)		Information regarding certain relationships and related party transactions of the proposed nominee as required by Item 404 of Regulation S-K.

	(viii)		The signed consent of the proposed nominee in which he or she

	a.		consents to being nominated as a director of the Company if selected by the nominating committee;

	b.		states his or her willingness to serve as a director if elected for compensation not greater than that described in the most recent proxy statement;

	c.		states whether the proposed nominee is “independent” as defined by Section 121A of the American Stock Exchange Company Guide; and

	d.		attests to the accuracy of the information submitted pursuant to paragraphs (i), (ii), (iii), (iv), (v), (vi), and (vii), above.

Although the information may be submitted by fax, e-mail, mail, or courier, the Governance and Nominating Committee must receive the proposed nominee’s signed consent, in original form, within ten days of making the nomination.

When the information required above has been received, the Governance and Nominating Committee will evaluate the proposed nominee based on the criteria described below, with the principal criteria being the needs of the Company and the qualifications of such proposed nominee to fulfill those needs.

The process for evaluating a director nominee is the same whether a nominee is recommended by a shareholder or by an existing officer or director. The Governance and Nominating Committee will:

	1.		Establish criteria for selection of potential directors, taking into consideration the following attributes which are desirable for a member of our board of directors: leadership; independence; interpersonal skills; financial acumen; business experience; industry knowledge; and diversity of viewpoints. The Governance and Nominating Committee will periodically assess the criteria to ensure it is consistent with best practices and the goals of the Company.

	2.		Identify individuals who satisfy the criteria for selection to the board and, after consultation with the Executive Chairman of the Board, make recommendations to the board on new candidates for board membership.

	3.		Receive and evaluate nominations for board membership which are recommended by existing directors, corporate officers, or shareholders in accordance with policies set by the Governance and Nominating Committee and applicable laws.

The Governance and Nominating Committee has held four formal meetings and taken four actions by unanimous written consent through the Record Date. OnSeptember 12, 2006 by unanimous consent the Governance and Nominating Committee nominated all directors currently serving on the board of directors to stand for reelection.

Shareholder Communication with the Board of Directors

The Company values the views of its shareholders (current and future shareholders, employees and others). Accordingly, the Board of Directors established a system through its Audit Committee to receive, track and respond to communications from shareholders addressed to the Company’s Board of Directors or to its Non-Management Directors. Any shareholder who wishes to communicate with the Board of Directors or the Non-Management Directors may write to:

Thomas Milne, Chair, Audit Committee
c/o CanWest Petroleum Corporation
205, 707 — 7^th Avenue S.W.
Calgary, Albert Canada T2P 3H6
tmilne@oilsandsquest.com

The Chair of the Audit Committee is the Board Communications Designee. He will review all communications and report on the communications to the chair of the Governance and Nominating Committee, the full Board or the Non-Management Directors as appropriate. The Board Communications Designee will take additional action or respond to letters in accordance with instructions from the relevant Board source.

Compensation Committee:

The Compensation Committee oversees the compensation paid by the Company to its employees, directors and consultants; and the Compensation Committee has the authority to establish or recommend to the Board of Directors for determination the compensation of the President & Chief Executive Officer and the other executive officers. The Compensation Committee’s charter was adopted by the Board of Directors, and is available on our website at www.canwestpetroleum.com. The Compensation Committee consists of Ronald Phillips, Thomas Milne and Gordon Tallman, all of whom are considered independent as defined in Section 121A of the American Stock Exchange Company Guide and SEC Rule 10A-3 under the Exchange Act of 1934. The Compensation Committee has held three meetings and taken four actions by unanimous written consent through the date of this Proxy Statement.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, as amended, requires the Company’s directors, officers and persons who own more than 10% of the Company’s outstanding Common Stock to file reports of ownership with the Securities and Exchange Commission (“SEC”). Directors, officers, and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

Based solely on a review of Forms 3, 4, and 5 and amendments thereto furnished to the Company during and for the Company’s year ended April 30, 2006, and as of September 12, 2006 there were no directors, officers or more than 10% stockholders of the Company who failed to timely file a Form 3, 4 or 5, other than Thornton J. Donaldson (as to two transactions on two Form 4s), William Timmins (as to thirty-three transactions on five Form 4s), and Romeo D’Angela (as to two transactions on two Form 4s).

EXECUTIVE COMPENSATION

Compensation and other Benefits of Executive Officers

The following table sets out the compensation paid for the fiscal years April 30, 2006, 2005 and 2004 in respect to each of the individuals who were the Company’s chief

executive officer at any time during the last fiscal year and the Company’s most highly compensated executive officers whose total salary and bonus exceeded $100,000 (the “Named Executive Officers”). See “Certain Relationships and Related Transactions”.

SUMMARY COMPENSATION TABLE

FISCAL YEAR COMPENSATION

LONG TERM COMPENSATION

Awards

Payouts

Securities

Restricted

Underlying

Shares or

Name and

Other

Option/

Restricted

LTIP

All other

Principal

Salary

Bonus

Annual

SARs

Share

Payouts

Compensation

Position

Year

($)

Compensation⁽⁴⁾

Granted

Units

($)

Thornton

2006

Nil

$36,000

Nil

100,000

Nil

Donaldson⁽¹⁾

2005

$1,500

$110,750⁽²⁾

Nil

425,000

Nil

Former President, Chief

2004

Nil

$22,100⁽²⁾

Nil

130,000

Nil

Financial Officer

Christopher H.

2006

$148,091⁽⁶⁾

Nil

100,000

Nil

$1,736^{(5) (6)}

Hopkins⁽⁴⁾

2005

$39,963⁽⁶⁾

Nil

President and Chief Executive Officer

Karim Hirji⁽⁴⁾

2006

$148,091⁽⁶⁾

Nil

$1,736^{(5) (6)}

Chief Financial Officer

2005

$39,963⁽⁶⁾

Nil


(1)		Mr. Donaldson served as President, Chief Executive Officer and Chief Financial Officer from April, 1998 to May 16, 2002 and from September 15, 2003 to May 1, 2006.

(2)		During 2005, Mr. Donaldson received a bonus of $110,750 (2004 — $22,100) which was paid by the issuance of 425,000 (2004 — 130,000) shares of Common Stock.

(3)		OQI was incorporated on November 20, 1998, but only commenced operations on September 24, 2004.

(4)		Messrs. Hopkins and Hirji became officers of the Company on August 14, 2006, after the end of the last fiscal year shown in this table. Messrs. Hopkins and Hirji became employees of OQI on May 1, 2005. Prior thereto, they were consultants to OQI. All consulting fees charged to OQI are included as salaries.

(5)		Premiums paid on an extended health benefits program and personal use benefits of company vehicles are included herein.

(6)		Salaries were received while employed by OQI.

Effective May 1, 2006, the OQI Board of Directors increased the compensation of Mr. Hopkins and Mr. Hirji to $268,456 ($300,000 CDN), and $223,714 ($250,000 CDN) per annum, respectively, and granted Mr. Hopkins 100,000 options to acquire OQI Common Shares at $6.00 per share vesting immediately, 100,000 options to acquire OQI Common Shares at $25.00 per share vesting immediately, 100,000 options to acquire Common Stock at $25.00 per share vesting on completion of the Reorganization with OQI (August 14, 2006), and 100,000 options to acquire OQI Common Shares at $25.00 per share vesting as to 1/3 on the first, second and third anniversary date of the grant; and Mr. Hirji as to 50,000 options to acquire OQI common shares at $6.00 per share vesting immediately, 50,000 options to acquire OQI Common Shares at

$25.00 per share vesting immediately, 50,000 options to acquire OQI Common Shares at $25.00 per share vesting on completion of the corporate reorganization (August 14, 2006), and 100,000 options to acquire OQI Common Shares at $25.00 per share vesting as to 1/3 on the first, second and third anniversary date of the grant. All the options granted have a term of five years.

Employment Contracts and Termination of Employment and Change-in-Control Arrangements

T. Murray Wilson

On May 1, 2006, the Company entered into an Executive Employment Agreement with T. Murray Wilson under which Mr. Wilson will receive an annual base salary of $300,000 (CDN) and he is eligible to receive an annual bonus up to 200% of his annual base salary (the “Base Salary”). In addition to the Base Salary, Mr. Wilson received: (i) a signing bonus of $100,000 (CDN); (ii) a further lump sum of $17,000 (CDN) within 30 days of each of the first, second and third months following the execution of the Employment Agreement; and (iii) a stock option agreement entitling Mr. Wilson to receive 4,000,000 shares of the Company’s Common Stock at an exercise price equal to the per-share fair market value on the date of grant and vesting as follows: 1,000,000 on the execution of the Employment Agreement; 1,000,000 upon the conclusion of any amalgamation or other affiliation achieved between the Company and OQI (which closed on August 14, 2006); 1,000,000 upon 12 months completed service; and (iii) 1,000,000 upon 24 months completed service.

According to the severance terms of the Employment Agreement, upon termination of employment by the Company, Mr. Wilson will receive: (i) a lump sum payment equal to the monthly Base Salary (the Base Salary divided by 12) as at the termination date, multiplied by the number of months in the notice period (which is equal to one month for each completed year of service, subject to a minimum of 12 months plus one month for each completed year of service); (ii) a further lump sum payment equal to the value of Mr. Wilson’s benefits; (iii) a further lump sum payment equal to the average annual bonus during the term of his employment, divided by 12 and multiplied by the number of months in the notice period; and (iv) accelerated vesting of all unvested stock options granted to Mr. Wilson to the extent such stock options would have vested during the notice period and a period of 90 days from the termination date in which to exercise any unexercised stock options.

Upon a change in control of the Company, Mr. Wilson will be entitled to receive the following compensation: (i) a lump sum payment equal to the monthly Base Salary as at the termination date, multiplied by the number of months in the notice period times 1.5; (ii) a further lump sum payment equal to the value of Mr. Wilson’s benefits times 1.5; (iii) a further lump sum payment equal to the average annual bonus, divided by 12 and multiplied by the number of months in the notice period times 1.5; and (iv) the accelerated vesting of all stock options and other unvested incentive compensation granted to Mr. Wilson to the extent such stock options would have vested during the notice period and a period of 90 days from the termination date in which to exercise any unexercised stock options.

Christopher H. Hopkins

On August 14, 2006, Christopher H. Hopkins entered into an Executive Employment Agreement with the Company, pursuant to which he will receive a base annual salary (referred to as the Base Fee in his agreement) of $267,528 ($300,000 Cdn). The executive is entitled to participate in the Company’s long and short term incentive plans (including stock option plans) and bonuses from time to time in amounts and on such terms and conditions as may be determined by the Board of Directors in its sole discretion.

According to the severance terms of the Executive Employment Agreement, upon termination of employment by the Company without cause or upon triggering events or a change in control (all of which are defined in the agreement along with the capitalized terms used in this paragraph), the executive will receive: (i) a lump sum payment equal to the Monthly Base Fee (the Base Fee divided by 12) as at the Termination date, multiplied by the number of months in the Notice Period (which is equal to one month for each completed year of service, subject to a minimum of 18 months plus one month for each completed year of service, including years of service with OQI from November 1, 2004); (ii) a further lump sum payment equal to the value of the executive’s benefits, multiplied by the number of months in the Notice Period; and (iii) a further lump sum payment based on the average annual bonus (for the previous three years) paid to the executive, divided by 12 and multiplied by the number of months in the Notice Period. The agreement may also be terminated at any time by the executive, with 60 days’ notice, in which case the executive is only entitled to payments of salary and benefits through the date of termination.

Karim Hirji

Karim Hirji entered into an Executive Employment Agreement with the Company pursuant to which he will receive a base annual salary (referred to as the Base Fee in his agreement) of $222,940 ($250,000 Cdn). The executive is entitled to participate in the Company’s long and short term incentive plans (including stock option plans) and bonuses from time to time in amounts and on such terms and conditions as may be determined by the Board of Directors in its sole discretion. The terms regarding severance and change of control are substantially identical to those described for Mr. Hopkins above.

Errin Kimball

Errin Kimball entered into an Executive Employment Agreement with the Company pursuant to which he will receive a base annual salary (referred to as the Base Fee in his agreement) of $222,940 ($250,000 Cdn). The executive is entitled to participate in the

To Romeo D’Angela, the Company granted (i) options to purchase 200,000 shares of Common Stock at an exercise price of $1.50 per share, expiring on October 20, 2007; and (ii) options to purchase 600,000 shares of Common Stock at an exercise price of $2.58 per share, expiring on January 11, 2008. Mr. D’Angela resigned as a director of the Company effective August 14, 2006.

To Ronald Phillips, the Company granted (i) options to purchase 250,000 shares of Common Stock at an exercise price of $4.62 per share, expiring on February 8, 2008; and (ii) options to purchase 250,000 shares of Common Stock at an exercise price of $4.57 per share, expiring on February 17, 2009.

To Roderick Haverslew, the Company granted options to purchase 250,000 shares of Common Stock at an exercise price of $4.60 per share, expiring on March 9, 2008. Mr. Haverslew resigned as a director of the Company effective August 14, 2006.

Repricing of Options.

None

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

United Corporate Advisors (“UCA”) is related to the Company due to control by Thornton Donaldson. During the year ended April 30, 2005 UCA converted a $195,000 note into 780,000 shares of Common Stock and 780,000 warrants to purchase that same number of shares of Common Stock at $0.34 per share until September 30, 2005. During the fiscal year ended April 30, 2006 the Company agreed to extend the expiry date of these warrants to September 14, 2006. These warrants were exercised on September 13, 2006. During the fiscal year ended April 30, 2006 UCA was paid consulting fees of $136,462 and no amount remains owing.

The Company issued Thornton Donaldson 100,000 shares of Common Stock upon exercise of options, at a deemed cost of $36,000, during the year ended April 30, 2006. Also included in accounts payable as at April 30, 2006 is an accrual for a termination settlement with Mr. Donaldson pertaining to his resignation from the board as to 100,000 bonus shares of Common Stock, at a deemed cost of $517,000.

William Scott Thompson is President and a director of Harris-Forbes, Inc., which was engaged by the Company as a financial advisor from May 2005 to June 2006. Harris-Forbes, Inc. received 2,000,000 shares of the Company’s restricted common stock as compensation for its services.

On August 14, 2006, the Company closed the Reorganization Agreement with its subsidiary, OQI. The Company acquired the minority interest in OQI, going from a 64.08% ownership interest to a 100% voting interest. OQI is a private Alberta company that owns 100% of exploration permits covering 508,000 net acres in northwest Saskatchewan. The following directors and executive officers of the Company were affiliated with OQI during this transaction: (i) Christopher H. Hopkins as Chief Executive Officer,

President and a director of OQI; (ii) Karim Hirji as Chief Financial Officer of OQI; (iii) Errin Kimball as Vice President, Exploration of OQI; and (iv) William Scott Thompson, Thomas Milne, and Ronald Phillips as directors of OQI. Although these executive officers and directors received Exchangeable Shares under the Reorganization Agreement, they did not receive any special benefits that were not shared pro rata with the other OQI shareholders.

Other than the transactions stated above, none of the directors, named executive officers or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 5% of the Company’s outstanding shares of its Common Stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred since May 1, 2004, or in any proposed transaction, which has materially affected or will affect the Company.

INDEPENDENT PUBLIC ACCOUNTANTS

We have selected Pannell Kerr Forster (“PKF”) to continue to serve as our independent registered public accounting firm. A representative of PKF is expected to be present at the annual meeting.

Audit Fees.

Our principal accountant, PKF, billed us aggregate fees in the amount of approximately $39,000 for the fiscal year ended April 30, 2006 and approximately $18,000 for the fiscal year ended April 30, 2005. These amounts were billed for professional services that PKF provided for the audit of our annual financial statements and the review of the financial statements included in our report on 10-KSB.

Audit-Related Fees.

PKF billed us aggregate fees in the amount of $70,000 for the fiscal year ended April 30, 2006 and $36,000 for the fiscal year ended April 30, 2005 for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements.

Tax Fees.

PKF billed us $6,000 for tax compliance for the fiscal year ended April 30, 2006 and nothing for the fiscal year ended April 30, 2005. During the fiscal years ended April 30, 2006 and 2005 PKF did not provide any tax advice.

All Other Fees.

PKF billed us $13,000 in other fees for the fiscal year ended April 30, 2006 and nothing for the fiscal year ended April 30, 2005.

Our principal accountant (through its full time employees) performed all work regarding the audit of our financial statements for the most recent fiscal year

Audit Committee’s Pre-Approval Practice

Section 10A(i) of the Exchange Act prohibits our auditors from performing audit services for us as well as any services not considered to be “audit services” unless such services are pre-approved by the audit committee of the Board of Directors, or unless the services meet certain de minimis standards. The audit committee’s charter (adopted February 15, 2006) provides that the audit committee must:

	•		Preapprove all audit services that the auditor may provide to us or any subsidiary (including, without limitation, providing comfort letters in connection with securities underwritings or statutory audits) as required by §10A(i)(1)(A) of the Exchange Act (as amended by the Sarbanes-Oxley Act of 2002).

	•		Preapprove all non-audit services (other than certain de minimis services described in §10A(i)(1)(B) of the Exchange Act (as amended by the Sarbanes-Oxley Act of 2002)) that the auditors propose to provide to us or any of our subsidiaries.

The audit committee considers at each of its meetings whether to approve any audit services or non-audit services. In some cases, management may present the request; in other cases, the auditors may present the request. The audit committee did not pre-approve any of the audit related fees for the fiscal year ended April 30, 2006, because the Audit Committee was only in existence for the last three months of the fiscal year. The audit committee approved the audit related fees after they were incurred.

PROPOSAL ONE
AMENDMENT OF ARTICLES OF INCORPORATION TO
CHANGE THE COMPANY’S NAME TO OILSANDS QUEST INC.

The Board of Directors of the Company has approved an amendment to the Company’s Articles of Incorporation to change the Company’s name to Oilsands Quest Inc. The Board of Directors believes that the name change will better reflect the scope of the business of the Company while allowing members of the general public to continue to distinctively identify the Company. The primary business of the Company now involves the exploration for and development of Oilsands. If the proposed amendment to the Company’s Articles of Incorporation is approved by the shareholders of the Company and is not abandoned by the Board of Directors, such amendment will become effective when the Articles of Amendment to the Company’s Articles of Incorporation are filed for record with the Secretary of State of Colorado.

Vote Required and Recommendation of Board

Proposal One requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Meeting. The Board of Directors recommends that shareholders vote “For” the proposed amendment to the Articles of Incorporation.

PROPOSAL TWO
ELECTION OF DIRECTORS

The Board of Directors is nominating the six current Directors for reelection. Since the last annual shareholders meeting, the number of Directors on the Company’s Board of Directors was expanded to six directors. Each Director currently serves for a one year term or until his successor is elected and qualified, however, it has been proposed, and will be voted upon at the Meeting, that the terms of the Directors be staggered as addressed in Proposal Three below.

Nominees for Election of Directors

The Company’s Board of Directors consists of six directors. Under the Company’s current Articles of Incorporation and Bylaws, all directors of the Company are elected annually and serve until their successors are duly elected and qualified. However, if the proposal to establish a Classified Board of Directors to be voted on at the Meeting is approved, the Directors will be divided into three classes, Class A, Class B and Class C. The initial Class A Directors will be elected for three years, the initial Class B Directors for two years, and the initial Class C Directors for one year. Upon the expiration of the initial terms, Directors will be elected for terms of three years, to succeed those whose terms have expired. The merits of this proposal are discussed in detail below in Proposal Three.

At the meeting, the nominees for directors will be elected to serve either for: (i) one year if proposal three for the Classified Board of Directors is not accepted; or (ii) if the Classified Board proposal is accepted, Christopher H. Hopkins and Gordon Tallman (as the Class A directors) will serve for a three-year term; Thomas Milne and T. Murray Wilson (as the Class B directors) will serve for a two year term; and Ronald Phillips and W. Scott Thompson (as the Class C directors) will serve for a one year term. In any event, the Directors will serve until their successors are duly elected and qualified or until their earlier death, resignation or removal. Any vacancies which occur during the year may be filled by the Board of Directors to serve for the remainder of the full term of such class of Director. Cumulative voting is not allowed.

See “Management” on page 10 for biographical information, including principal occupation and business experience during the last five years, of each nominee for director.

Vote Required and Recommendation of Board

The Board of Directors recommends a vote “FOR” the election of Christopher H. Hopkins, Thomas Milne, Ronald Phillips, Gordon Tallman, W. Scott Thompson and T. Murray Wilson for the terms set forth above. Unless otherwise specified, the enclosed proxy will be

voted “FOR” the election of the Board of Directors’ slate of nominees. Discretionary authority may be exercised by the proxy holders named in the enclosed proxy to vote for a substitute nominee proposed by the Board of Directors if any nominee becomes unavailable for election. At this time, neither Management nor the Board of Directors of the Company is aware of any reason which would cause any nominee to be unavailable to serve as a Director.

The nominees for election to the Board of Directors under Proposal Two receiving the greatest number of affirmative votes cast by the holders of the Company’s Common Stock and Series B Preferred Stock, up to the number of Directors to be elected, will be elected as Directors.

PROPOSAL THREE
AMENDMENT OF THE ARTICLES OF INCORPORATION AND BYLAWS TO
REQUIRE A CLASSIFIED BOARD OF DIRECTORS

The Board has approved an amendment to the Company’s Articles of Incorporation and Bylaws to provide for a classified Board of Directors.

If this Proposal Three is approved, the initial terms of office for the Directors elected at the 2006 annual meeting will be three years for the Class A Directors, who will hold office until the 2009 annual meeting, two years for the Class B Directors, who will hold office until the 2008 annual meeting, and one year for the Class C Directors, who will hold office until the 2007 annual meeting. At each annual meeting following the 2006 annual meeting, the class of Directors whose terms expire at that meeting would be elected for a three-year term. If a vacancy occurs during the year, the Board of Directors may fill the vacancy and the appointed director will serve the remainder of the classified term. The composition of each class of Directors if this Proposal Three is adopted is set forth under Proposal Two above.

The Board of Directors believes that a classified Board of Directors is in the best interests of the Company and its Shareholders. Board classification will help avoid abrupt changes in the management of the Company and lend continuity and stability to the management of the Company, particularly in the event of an unsolicited tender offer. Following adoption of the classified Board structure, at any given time approximately two-thirds of the members of the Board of Directors will have had prior experience as Directors of the Company. The Board believes that this will facilitate long-range planning, strategy and policy and will have a positive impact on customer and employee loyalty. The Company, however, has not historically had problems with either the continuity or stability of its Board of Directors. The Board of Directors has not submitted this proposal for an anti-takeover related purpose and the Company’s management has no knowledge of any current efforts to obtain control of the Company or to effect large accumulations of its Common Stock.

Election of a classified Board of Directors will affect every election of Directors. It will take two annual meetings for shareholders to change the majority of the Directors in the event a

change of the Board is desired. Currently, all Directors are elected at each annual meeting, thus allowing a change of Directors each year.

A classified Board of Directors also establishes a legal structure that encourages any potential acquiror to negotiate with the Board, rather than unilaterally attempt to gain control of the Company. The Board believes that this approach is the one most likely to result in long-term enhancement of shareholder value.

Anti-Takeover Effect

A Classified Board of Directors, however, has certain disadvantages. Specifically, it has the effect of making it more difficult to replace incumbent Directors and management, even if the reason for the desired change is inadequate performance. It will also significantly extend the time required to effect a change in control of the Board of Directors. Currently, a change in control of the Board of Directors can be made by shareholders holding a plurality of the votes cast at a single annual meeting. If the Company implements a classified Board of Directors, it will take at least two annual meetings to make a change in control of the Board of Directors.

A classified Board of Directors may also discourage hostile takeover bids for the Company. Without the ability to obtain immediate control of the Board of Directors, a takeover bidder will not be able to take action to remove other impediments to its acquisition of the Company. Because the classified Board proposal will increase the amount of time required for a takeover bidder to obtain control of the Company without the cooperation of the Board of Directors, even if the takeover bidder were to acquire a majority of the Company’s outstanding stock, it will tend to discourage certain tender offers, perhaps including some tender offers that some shareholders may feel would be in their best interests.

Additionally, with respect to takeover bids, a classified Board of Directors may discourage accumulations of large blocks of the Company’s stock by purchasers (other than the takeover bidder) whose objective is to have such stock repurchased by the Company or the takeover bidder at a premium. Therefore, adoption of the amendment could tend to reduce any temporary fluctuations in the market price of stock that may be caused by such accumulations. Accordingly, our shareholders could be deprived of certain opportunities to sell their stock at a temporarily higher market price. Because the amendment will increase the amount of time required for a takeover bidder to obtain control of the Company without the cooperation of the Board, even if the takeover bidder were to acquire a majority of the Company’s outstanding stock, a classified board may tend to discourage certain tender offers that would otherwise allow shareholders the opportunity to realize a premium over the market price of their stock.

Vote Required and Recommendation of Board

Proposal Three requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Meeting. The Board of Directors recommends that shareholders vote “For” the proposed amendment to the Articles of Incorporation and Bylaws.

PROPOSAL FOUR
AMENDMENT TO THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF
SHARES OF AUTHORIZED COMMON STOCK

The Board of Directors of the Company has approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of authorized Common Stock from 250,000,000 shares to 500,000,000 shares.

Background and Discussion of Proposed Amendment

The proposed increase in the authorized Common Stock has been recommended by the Board of Directors to ensure that an adequate supply of authorized unissued shares is available for general corporate needs. With respect to the Company’s authorized capital: (i) 129,439,802 shares of Common Stock were issued and outstanding on September 11, 2006; (ii) 15,811,275 shares of Common Stock were authorized, unissued and not reserved for issuance on September 11, 2006; (iii) 13,400,000 shares of authorized Common Stock have been reserved for issuance upon exercise of stock options granted or to be granted under the Company’s option plans (this amount will increase if Proposal Seven is approved); (iv) 76,504,302 shares of authorized Common Stock have been reserved for issuance upon conversion of the Exchangeable Shares (The Exchangeable Shares were issued by OQI in connection with the Company’s acquisition of the remaining interest in OQI not already owned by the Company. At the option of the holder, each Exchangeable Share may be converted into one share of Common Stock in the Company.); (v) approximately 12,882,721 shares of authorized Common Stock have been reserved for issuance or may be reserved for issuance upon exercise of warrants; and (vi) approximately 1,961,900 shares have been reserved for issuance pursuant to arrangements to settle debt.

In the event Proposal Six (the Rights Agreement) is approved by the shareholders at the Meeting, the Company will have available shares, if necessary, to reserve a number of shares of authorized Common Stock equal to the outstanding shares for issuance upon the exercise of the Series A Junior Participating Preferred Stock pursuant to the Rights Agreement. Reservation of shares in this case would not occur until a Distribution Date has occurred, as defined under Proposal Six.

Further, the additional authorized shares of Common Stock may be used for issuing additional options and warrants, for raising additional capital for the operations of the Company or acquiring other businesses, and may also be used for such purposes as future stock dividends or stock splits. Except as described above, there are currently no plans or arrangements relating to the issuance of any of the additional shares of Common Stock proposed to be authorized, other than pursuant to the exercise of options or warrants or exchange of Exchangeable Shares.

Such additional shares will be available for future issuance without further action by the shareholders, unless required by the Company’s Articles of Incorporation or Bylaws or by applicable law.

If this Proposal is not approved, the Company may not have sufficient Common Stock to achieve any future financing or for mergers or acquisitions that it may wish to pursue.

Anti-Takeover Effects. The issuance of additional shares of Common Stock by the Company may also potentially have an anti-takeover effect by making it more difficult to obtain shareholder approval of various actions, such as a merger or removal of management. The increase in authorized shares of Common Stock has not been proposed for an anti-takeover related purpose and the Board of Directors and management have no knowledge of any current efforts to obtain control of the Company or to effect large accumulations of its Common Stock.

Dilutive Effects. The authorization and subsequent issuance of additional shares of Common Stock may, among other things, have a dilutive effect on earnings per share and on the equity and voting power of existing holders of Common Stock. The actual effect on the holders of Common Stock cannot be ascertained until the shares of Common Stock are issued in the future. However, such effects might include dilution of the voting power and reduction of amounts available on liquidation.

The Company’s Articles of Incorporation, as amended, do not provide for preemptive rights upon the issuance of additional amounts of Common Stock.

Vote Required and Recommendation of Board

Proposal Four requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Meeting. The Board of Directors recommends that shareholders vote “For” the proposed amendment to the Articles of Incorporation.

PROPOSAL FIVE
AMENDMENT OF THE ARTICLES OF INCORPORATION AND BYLAWS
TO REQUIRE AN AFFIRMATIVE SHAREHOLDER VOTE OF
66-2/3% FOR CERTAIN PROPOSALS

The Board has approved an amendment to the Company’s Articles of Incorporation and Bylaws to require an affirmative vote of 66-2/3% of votes entitled to be cast for certain merger, acquisition, sale or change in control transactions that the Board of Directors has not approved.

The Board of Directors and the Company’s management possess the most knowledge regarding the Company’s needs, goals and capabilities and are in the best position to determine what is best for the Company. The Board of Directors believes that approval by a greater percentage of shareholders is appropriate when a proposal is submitted to shareholders that the Board of Directors does not support. This proposal will facilitate long-range planning, strategy and policy and will have a positive effect on the continuity and stability of the Company. This proposal will ensure that more than a simple majority of shareholders desire to approve a proposal that the Board of Directors does not recommend. Colorado law permits a requirement that a vote be approved by a greater percentage than a simple majority (“supermajority”). Any

The Rights Agreement is designed to deter coercive or unfair takeover tactics, to prevent a person or group from gaining control of the Company without offering fair value to all shareholders and to deter other abusive takeover tactics which are not in the best interests of the shareholders.

Terms of the Rights Agreement

Each shareholder of record on March 23, 2006 is entitled to a dividend distribution of one Right for each share of Common Stock held by such shareholder on such date. Each Right, when exercisable, entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock (“Preferred Stock”) at a price of $20 per one one-thousandth share (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) dated as of March 9, 2006, between the Company and Computershare Investor Services, Inc., as Rights Agent (the “Rights Agent”).

Initially, the Rights will be attached to all certificates representing shares of Common Stock then outstanding, and no separate certificates evidencing the Rights will be distributed. The Rights will separate from the Common Stock and a distribution of Rights Certificates (as defined below) will occur upon the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 20% or more of the outstanding shares of Common Stock (the “Stock Acquisition Date”) or (ii) 10 business days (or such later date as the Board of Directors of the Company may determine) following the commencement of, or the first public announcement of the intention to commence, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person of 20% or more of the outstanding shares of Common Stock (the earlier of such dates being called the “Distribution Date”).

Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates, and will be transferred with and only with the Common Stock certificates, and (ii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificate.

The Rights are not exercisable until the Distribution Date and will expire either (i) at the close of business on March 9, 2007 if the Company’s shareholders have not approved the Rights Agreement; or (ii) at the close of business on March 9, 2016, unless such date is extended, the Rights Agreement is terminated, or the Rights are earlier redeemed or exchanged by the Company as described below. The Rights will not be exercisable by a holder in any jurisdiction where the requisite qualification to the issuance to such holder, or the exercise by such holder, of the Rights has not been obtained or is not obtainable.

As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Rights Certificates”) will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will evidence the Rights. Except as otherwise determined by the Board of Directors of the

Company, only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.

In the event that a Person becomes the beneficial owner of 20% or more of the then outstanding shares of Common Stock, except pursuant to an offer for all outstanding shares of Common Stock which the Directors determine to be fair to and otherwise in the best interests of the Company and its shareholders (a “Qualifying Offer”), each holder of a Right will, after the end of a redemption period referred to below, have the right to exercise the Right by purchasing, for an amount equal to the Purchase Price, Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a value equal to two times such amount. Notwithstanding any of the foregoing, following the occurrence of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights are not exercisable following the occurrence of the events set forth above until such time as the Rights are no longer redeemable by the Company as set forth below.

For example, at a Purchase Price of $20 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $40 worth of Common Stock (or other consideration, as noted above) for $20. Assuming that the Common Stock had a per share value of $10 at such time, the holder of each valid Right would be entitled to purchase four shares of Common Stock for $20.

In the event that at any time following the Stock Acquisition Date, (i) the Company is acquired in a merger or other business combination transaction (other than a merger that follows a Qualifying Offer), or (ii) 50% or more of the Company’s assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as set forth above) shall, after the expiration of the redemption period referred to below, have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the Purchase Price of the Right (e.g., common stock of the acquiring company having a value of $40 for the $20 Purchase Price).

At any time after a person or group of affiliated or associated persons becomes an Acquiring Person and prior to the acquisition by such person of 50% or more of the outstanding Common Stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of Common Stock (or, in certain circumstances, other equity securities of the Company that are deemed by the Board of Directors of the Company to have the same value as shares of Common Stock) per Right (subject to adjustment).

The Purchase Price payable, and the number of one one-thousandths of a share of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution under certain circumstances.

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No

fractional shares will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise.

In general, the Board of Directors of the Company, may cause the Company to redeem the Rights in whole, but not in part, at any time during the period commencing on March 9, 2006 and ending on the tenth business day following the Stock Acquisition Date (the “Redemption Period”) at a price of $0.001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors of the Company). Under certain circumstances set forth in the Rights Agreement, the decision to redeem the Rights will require the concurrence of a two-thirds vote of the Board of Directors. After the Redemption Period has expired, the Company’s right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 10% or less of the outstanding shares of Common Stock in a transaction or series of transactions not involving the Company and there are no other Acquiring Persons. Immediately upon the action of the Board of Directors of the Company ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.001 redemption price.

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be subject to federal taxation to shareholders or to the Company, shareholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) of the Company or for common stock of the acquiring company as set forth above.

Except with respect to the Redemption Price of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board of Directors of the Company in order to cure any ambiguity, defect or inconsistency or to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided however, no amendment to adjust the time period governing redemption may be made at such time as the Rights are not redeemable.

As of September 11, 2006, there were 250,000,000 authorized shares of Common Stock, of which 129,439,802 shares were issued and outstanding, and 10,000,000 authorized shares of Preferred Stock, of which one share of the Series B Preferred Stock was issued and outstanding. A total of 250,000 shares of Preferred Stock are reserved for issuance upon exercise of the Rights.

Anti-Takeover Effect

The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire the Company without conditioning the offer on a substantial number of Rights being acquired, or in a manner or on terms not approved by the

Board of Directors of the Company. The Rights, however, should not deter any prospective offeror willing to negotiate in good faith with the Board of Directors of the Company, nor should the Rights interfere with any merger or other business combination approved by the Board of Directors of the Company.

The foregoing description of the Rights and the Rights Agreement between the Company and the Rights Agent does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement.

Vote Required and Recommendation of Board

Proposal Six requires the affirmative vote of a majority of the votes cast by the holders of shares entitled to vote at the Meeting. The Board of Directors recommends that shareholders vote “For” this proposal.

PROPOSAL SEVEN
APPROVAL OF THE 2006 STOCK OPTION PLAN AND ALL AMENDMENTS

On January 3, 2006, the Company’s Board of Directors adopted the 2006 Stock Option Plan (the “Plan”) and on September 12, 2006, the Board of Directors adopted a proposal to increase the shares of the Company’s common stock authorized under the Plan to the lower of (i) 30,000,000 shares or (ii) 15% of the total shares outstanding. Shareholder approval of the Plan and the increase in authorized shares is sought to comply with Section 711 of the American Stock Exchange Company Guide, which requires shareholder approval of equity compensation plans, and any material amendment, in which officers, directors, employees, or consultants may participate. In addition, the Company is proposing to amend the plan to provide for the extension of expiry date of options to account for Company-imposed “Black-Out Periods” and to clarify the scope of authority the Board of Directors has to amend the Plan without shareholder approval. These revised provisions are set out in Sections 8(d)(6) and 12(1), respectively, of the Plan. The Board of Directors recommends that shareholders vote “FOR” the approval of the Plan and the increase in authorized shares reserved under the Plan.

Options or bonuses may be granted under the 2006 Stock Option Plan prior to approval by the shareholders. The following table sets forth summary information as to options granted under the Plan:


Name and Position	Dollar Value ($)		Number of Options
T. Murray Wilson, Executive Chairman		*		4,600,000
Christopher H. Hopkins, President & Chief Executive Officer		*		600,000
Karim Hirji, Chief Financial Officer		*		400,000
Errin Kimball, Vice President, Exploration		*		300,000


Name and Position	Dollar Value ($)		Number of Options
Patricia A. Beatch, Vice President, Corporate & Strategic Development		*		300,000
Thornton Donaldson, Former Chief Executive Officer and President		*		300,000
Executive Group		*		6,500,000
Non-Executive Director Group		*		1,300,000
Non-Executive Officer Employee Group		*		360,000


*		Not determinable.

The Plan is intended to provide incentives to officers, employees, consultants and advisers (including members of the Board of Directors), who contribute to the success of the Company by offering them the opportunity to acquire an ownership interest in it. The Board of Directors believes that this also will help to align the interests of our management and employees with the interests of shareholders. The terms of the Plan concerning the incentive options and non-qualified options are substantially the same except that only employees of the Company or its subsidiaries are eligible to receive incentive options. Non-qualified options may be granted to employees, officers and consultants of the Company.

The number of shares reserved for issuance under the Plan is a maximum aggregate so that the number of incentive options and/or non-qualified options that may be granted reduces the number of bonuses which may be granted, and vice versa.

Administration of the Plan

The Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors (the “Committee”). Currently, the Board of Directors is the Committee. In addition to determining who will be granted options or bonuses, the Committee has the authority and discretion to determine when options and bonuses will be granted and the number of options and bonuses to be granted. The Committee also may determine a vesting and/or forfeiture schedule for bonuses and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise period for options and the form or forms of the agreements, certificates or other instruments evidencing grants made under the Plan. The Committee may determine the purchase price of the shares of Common Stock covered by each option and determine the fair market value per share. The Committee also may impose additional conditions or restrictions not inconsistent with the provisions of the Plan. The Committee may adopt, amend and rescind such rules and regulations as in its opinion may be advisable for the administration of the Plan.

The Committee also has the power to interpret the Plan and the provisions in the instruments evidencing grants made under it, and is empowered to make all other determinations deemed necessary or advisable for the administration of it.

Eligibility

Participants in the Plan may be selected by the Committee from employees, officers, consultants and advisors (including Board members) of the Company and its subsidiary and affiliated companies. The Committee may take into account the duties of persons selected, their present and potential contributions to the success of the Company and such other considerations as the Committee deems relevant to the purposes of the Plan. As of September 12, 2006, there are approximately fourteen employees (including five officers) who are eligible to participate in the Plan.

The grant of options or bonuses under the Plan does not confer any rights with respect to continuation of employment, and does not interfere with the right of the recipient or the Company to terminate the recipient’s employment, although a specific grant of options or bonuses may provide that termination of employment or cessation of service as an employee, officer, or consultant may result in forfeiture or cancellation of all or a portion of the bonuses or options.

Adjustment

In the event a change, such as a stock split, is made in our capitalization which results in an exchange or other adjustment of each share of Common Stock for or into a greater or lesser number of shares, appropriate adjustments will be made to unvested bonuses and in the exercise price and in the number of shares subject to each outstanding option. The Committee also may make provisions for adjusting the number of bonuses or underlying outstanding options in the event we effect one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of shares of our outstanding Common Stock. Options and bonuses may provide that in the event of the dissolution or liquidation of the Company, a corporate separation or division or the merger or consolidation of the Company, the holder may exercise the option on such terms as it may have been exercised immediately prior to such dissolution, corporate separation or division or merger or consolidation; or in the alternative, the Committee may provide that each option granted under the Plan shall terminate as of a date fixed by the Committee.

United States Income Tax Consequences of the Plan

The incentive options issuable under the Plan are structured to qualify for favorable tax treatment to recipients provided by Section 422 of the United States Internal Revenue Code of 1986, as amended (the “Code”). Pursuant to Section 422 of the Code, optionees will not be subject to federal income tax at the time of the grant or at the time of exercise of an incentive option. In addition, provided that the stock underlying the option is not sold within two years after the grant of the option and is not sold within one year after the exercise of the option, then the difference between the exercise price and the sales price will be treated as long-term capital gain or loss. An optionee also may be subject to the alternative minimum tax upon exercise of his options. The Company will not be entitled to receive any income tax deductions with respect to the granting or exercise of incentive options or the sale of the Common Stock underlying the options. The exercise price of incentive options granted cannot be less than the fair market value of the underlying Common Stock on the date the options were granted. In addition, the aggregate fair market value (determined as of the date an option is granted) of the Common Stock underlying the options granted to a single employee which become exercisable in any single calendar year may not exceed the maximum permitted by the Code for incentive options. This amount currently is $100,000. No incentive option may be granted to an employee who, at the time the option would be granted, owns more than ten percent of the outstanding stock of the Company unless the exercise price of the options granted to the employee is at least 110 percent of the fair market value of the stock subject to the option and the option is not exercisable more than five years from the date of grant.

Non-qualified options will not qualify for the special tax benefits given to incentive options under Section 422 of the Code. An optionee does not recognize any taxable income at the time he or she is granted a non-qualified option. However, upon exercise of the option, the optionee recognizes ordinary income for federal income tax purposes measured by the excess, if any, of the then fair market value of the shares over the exercise price. The ordinary income recognized by the optionee will be treated as compensation and will be subject to income tax withholding by the Company (if an employee) or self-employment tax (if a non-employee). Upon an optionee’s sale of shares acquired pursuant to the exercise of a non-qualified option, any difference between the sale price and the fair market value of the shares on the date when the option was exercised will be treated as long-term or short-term capital gain or loss. Upon an optionee’s exercise of a non-qualified option, the Company will be entitled to a tax deduction in the amount recognized as ordinary income to the optionee (provided that the Company effects withholding with respect to the deemed compensation if the optionee is an employee).

With respect to bonuses, generally, a grantee will recognize as ordinary income the fair market value of the bonuses as of the date of receipt. If the grantee is an employee, then the grant is compensation and will be subject to income tax withholding by the Company (if an employee) or self-employment tax (if a non-employee).

Canadian Federal Income Tax Consequences

The tax consequences of stock options granted under the plan are complex and depend, in large part, on the surrounding facts and circumstances. This section provides a brief summary of certain significant Canadian federal income tax consequences relating to stock options under existing Canadian law. This summary is not a complete statement of applicable law and is based upon the Income Tax Act (Canada) (“ITA”) and the regulations promulgated thereunder, as well as administrative and judicial interpretations of the ITA, as in effect on the date of this description. This summary is generally applicable to employees who are resident in Canada and who will hold the common shares as capital property for purposes of the ITA. This section does not discuss provincial, local, or non-Canadian tax consequences.

The optionee is not taxed on the stock options when they are granted. However, the optionee will generally be taxed in the calendar year in which the optionee exercises a stock option to purchase common shares. In certain circumstances, the taxable income arising from the exercise can be deferred until the common shares acquired on the exercise are disposed of.

Upon exercise of a stock option, the optionee will recognize ordinary employment income in an amount equal to the excess of the fair market value of the common shares underlying the stock option on the date the optionee exercises the stock option over the grant price of the stock option. If the optionee is not eligible for the election described further below, or if the optionee does not properly file such election, then the employment income attributable to the exercise of the stock option will be included in calculating the optionee’s taxable income in the taxation year that includes the exercise of the stock option.

When the optionee includes the employment income from the stock option exercise in his or her income, the optionee will generally be permitted to deduct one-half of such employment benefit in computing the optionee’s taxable income for the year, provided that the grant price is not less than the fair market value of the common shares at the date of grant of the stock option that is being exercised. Such deduction is not, however, available for alternative minimum tax purposes.

CanWest will be required by the ITA to report all employment benefits realized by the optionee in respect of the stock options. CanWest may also be required to withhold income taxes from remuneration paid to the optionee based on the amount of any employment benefit which the optionee receives in a year and does not defer as a result of the exercise of a stock option.

The optionee may be entitled to claim a deferral of the employment income attributable to the exercise of a stock option if the following conditions are satisfied: (i) the grant price of the stock option is not less than the fair market value of the common shares on the date of grant of the stock option that is being exercised, (ii) the value of the common shares in respect of which the optionee intends to defer the income recognition does not exceed the limitations provided in the ITA (generally, the optionee is entitled to defer the income recognition to the extent that the value of all stock options which vest in a particular year, calculated based on the total number of common shares the optionee is entitled to acquire in respect of stock options which vest in the year and using the fair market value of the common shares on the date or dates such stock options were granted to the optionee, does not exceed $100,000 Cnd.), (iii) the optionee was not a specified shareholder as defined in the ITA (generally, an optionee is a specified shareholder of a company if the optionee, alone or together with other non-arm’s length persons, own 10% or more of issued shares of any class of stock issued by the company) of CanWest or any other company which did not deal at arm’s length with CanWest and which employed the optionee, and (iv) the optionee properly completes and files the elections required to be prepared and filed under the ITA in this regard. In these circumstances, the employment income amount is not brought into the optionee’s taxable income until the taxation year in which the optionee disposes of those common shares, and the cost averaging rules otherwise applicable in determining the optionee’s capital gain or loss would not apply.

When the optionee sells common shares acquired upon the exercise of stock options, the optionee may have a capital gain (or loss). For purposes of calculating the capital gain or loss, the cost of a common share acquired upon the exercise of a stock option will equal the grant price paid plus the full amount of the taxable employment benefit, if any. Generally, the adjusted cost base of each common share will be determined by reference to the average cost of all common shares the optionee holds at a particular time. The capital gain (or capital loss) will generally be the amount by which the proceeds of disposition, net of any costs of disposition, exceed (or are exceeded by) the adjusted cost base to the optionee of such common shares. Any capital loss the optionee realizes may be offset against capital gains realized in the year. Any excess capital loss may generally be carried back three taxation years and to future years to offset capital gains realized in those years, until the capital loss is fully utilized.

Other Provisions

The exercise price of any option granted under the Plan must be no less than 100% of the “fair market value” of our Common Stock on the date of grant. Any incentive stock option granted under the Plan to a person owning more than 10% of the total combined voting power of the Common Stock shall be at a price of no less than 110% of the fair market value per share on the date of grant.

The exercise price of an option may be paid in cash, in shares of our Common Stock or other property having a fair market value equal to the exercise price of the option, or in a combination of cash, shares and property. The Committee shall determine whether or not property other than cash or Common Stock may be used to purchase the shares underlying an option and shall determine the value of the property received.

The following table gives information about the Company’s Common Stock that may be issued upon the exercise of options, warrants and rights under the Company’s compensation plans as of April 30, 2006.

(c) Number of

Securities

Remaining Available

for Future Issuance

(a) Number of

(b) Weighted

Under Equity

Securities to be

Average Exercise

Compensation Plans

Issued Upon Exercise

Price of

(Excluding

of Outstanding

Outstanding

Securities

Options, Warrants and

Options, Warrants

Reflected in Column

Plan Category

Rights

and Rights

(a))

Equity Compensation Plans Approved by Shareholders

-0-

N/A

-0-

Equity Compensation Plans Not Approved by Shareholders

2,650,000

⁽¹⁾

2.95

2,000,000

TOTAL

2,650,000

⁽¹⁾

2.95

2,000,000


(1)		Includes: (i) options to acquire 400,000 shares of Common Stock under the Company’s 2005 Stock Option Plan; (ii) options to acquire 2,050,000 shares of common stock under the Company’s 2006 Stock Option Plan; and (iii) warrants to acquire 200,000 shares of Common Stock pursuant to a consultant agreement with Murdock Capital.

Subsequent to April 30, 2006, the Board of Directors increased the shares of common stock reserved under the Plan to 13,000,000 shares, and granted an additional 7,965,334 bonus shares and options to purchase shares of Common Stock with a weighted average exercise price of approximately $5.30 per share. As of September 12, 2006, there are approximately 3,190,000 shares available under the Plan for future issuance.

The Board of Directors believes that the Plan will allow the Company to attract and retain the services of, and obtain maximum efforts by, directors, officers, and other key individuals by offering those persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company.

Anti-Takeover Effects. The issuance of additional shares of Common Stock upon the exercise of the options may also potentially have an anti-takeover effect by making it more difficult to obtain shareholder approval of various actions, such as a merger or removal of management. The 2006 Stock Option Plan has not been proposed for an anti-takeover related purpose and the Board of Directors and management have no knowledge of any current efforts to obtain control of the Company or to effect large accumulations of its Common Stock.

voting rights plans, the issuance of super voting stock, or the issuance of stock with voting rights less than the per share voting rights of the existing common stock through an exchange offer.

ANNUAL REPORT TO SHAREHOLDERS

Included with this Proxy Statement is the Company’s 2006 Annual Report on Form 10-KSB for the year ended April 30, 2006, and the Company’s Form 10-QSB for the quarter ended July 31, 2006.

OTHER MATTERS

Management and the Board of Directors of the Company know of no matters to be brought before the Meeting other than as set forth herein. However, if any such other matters properly are presented to the shareholders for action at the Meeting and any adjournments or postponements thereof, it is the intention of the proxy holder named in the enclosed proxy to vote in his discretion on all matters on which the shares represented by such proxy are entitled to vote.

DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS

Only one proxy statement and annual report is being delivered to shareholders sharing an address unless we have received contrary instructions from one or more of the shareholders. Upon the written or oral request of a shareholder, we will deliver promptly a separate copy of the proxy statement and annual report to shareholder at a shared address to which a single copy was delivered. Shareholders desiring to receive a separate copy in the future may contact us by mail at 205, 707 – 7^th Avenue S.W., Calgary, Alberta, Canada T2P 3H6 or by telephone (403) 263-1623.

Shareholders who share an address but are receiving multiple copies of the proxy statement and/or annual report may contact us by mail at 205, 707 – 7^th Avenue S.W., Calgary, Alberta, Canada T2P 3H6 or by telephone (403) 263-1623 to request that a single copy be delivered.

SHAREHOLDER PROPOSALS

Proposals from shareholders intended to be present at the next Annual Meeting of shareholders should be addressed to CanWest Petroleum Corporation., Attention: Corporate Secretary, 205, 707-7^th Avenue S.W., Calgary, Alberta, Canada T2P 3H6 and we must receive the proposals by May 17, 2007. Upon receipt of any such proposal, we shall determine whether or not to include any such proposal in the Proxy Statement and proxy in accordance with applicable law. It is suggested that shareholders forward such proposals by Certified Mail-Return Receipt Requested. After May 17, 2007, any shareholder proposal submitted outside the process of Rule 14a-8 will be considered to be untimely.

Purpose

The Audit Committee shall provide assistance to the corporate directors in fulfilling their responsibility to the shareholders, potential shareholders, and investment community relating to corporate accounting, reporting practices of CanWest, and the quality and integrity of the financial reports of CanWest. The Audit Committee will oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements.

In doing so, it is the responsibility of the Audit Committee to maintain free and open means of communication between the directors, the independent auditors, and the financial management of CanWest.

The independent auditors shall be accountable to the Audit Committee and to the Board of Directors as a representative of the shareholders. The Audit Committee shall also prepare the report required by Item 306 of Regulation S-B as required by the SEC’s rules.

Responsibilities

In carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible in order to best react to changing conditions; and to ensure to the directors and shareholders the corporate accounting and reporting practices of CanWest are in accordance with all requirements and are of the highest quality.

The following sets forth the actions that the Audit Committee determines to be appropriate in meeting its responsibilities:

	•		Appoint, approve the compensation for, and oversee the work of the independent auditors selected for the purpose of preparing or issuing an audit report or related work for CanWest and its divisions and subsidiaries and to cause CanWest to pay the independent auditors selected by the Audit Committee in accordance with the engagement letter with the independent auditors in the form approved by the Audit Committee.

	•		Resolve any disagreements between management and the auditors regarding financial reporting.

	•		Determine the independence of the auditor and receive from the outside auditors a formal written statement delineating all relationships between the auditor and the company (consistent with Independence Standards Board Standard 1), and thereafter actively engaging in a dialogue with the auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor and for taking, or recommending that the full board take, appropriate action to oversee the independence of the outside auditor.

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•

Preapprove

	o		all audit services that the auditor may provide to CanWest or any subsidiary (including, without limitation, providing comfort letters in connection with securities underwritings or statutory audits); and

	o		(or the chair of the Audit Committee may pre-approve) all non-audit services (other than certain de minimis services) that the auditors propose to provide to CanWest or any of its subsidiaries with the understanding that such pre-approval must be detailed as to the particular services to be provided and cannot simply set forth broad, categorical services for pre-approval. Notwithstanding anything to the contrary herein, neither the Audit Committee nor any person with authority delegated from the Audit Committee may approve an auditor providing the services that are described in §10A(g) as “prohibited activities.” Where the chair preapproves any non-audit services, his or her decisions will be presented to the full Audit Committee at its next meeting.

In all cases, the Audit Committee understands that its pre-approval of any audit or non-audit services cannot result in a delegation of the audit committee’s responsibility to management, and its pre-approval policies must be designed to ensure that the audit committee knows precisely what services it is being asked to pre-approve so that it can make a well-reasoned assessment of the impact of the service on the auditor’s independence.

	•		Meet with the independent auditors and financial management of CanWest at a minimum of once a year 1) to review any comments or recommendations of the independent auditors including, without limitation, the reports required by §10A(k) of the 1934 Act; 2) to review the adequacy and effectiveness of the accounting and financial controls of CanWest and to review management’s reports with respect to such controls and procedures prior to their disclosure in CanWest annual and quarterly reports; 3) to assess the quality of earnings; and 4) to review the annual report to shareholders to ensure the independent auditors are satisfied with the disclosure and content of the financial statements and other financial information presented to the shareholders.

	•		Meet quarterly in person or via telephone with management and the independent auditor to review current financial results and interim financial statements.

	•		Review and approve any financial earnings releases and public release of other financial information prior to the release of such information to the public;

	•		Review any use by CanWest of financial disclosure that is not strictly in accordance with generally accepted accounting principles, and review such disclosures for compliance with the requirements of SEC Regulation G;

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	•		Inquire of management and the independent auditor about significant risks or exposures and assess the steps management has taken to minimize such risk to CanWest.

	•		Conduct an appropriate review of and approve all related party transactions on an ongoing basis and the Audit Committee shall review potential conflict of interest situations where appropriate.

	•		Investigate any matter brought to its attention within the scope of its duties, and the audit committee specifically has the power to retain counsel and other advisors for this purpose if, in its judgment, that is appropriate and to ensure (without further action of the board of directors) payment of the expenses that may be incurred in retaining counsel and other advisors. Such counsel and other advisors may be the counsel or advisors regularly retained by CanWest.

	•		Review, reassess, and update the Audit Committee’s charter at least annually.

	•		Consider, as appropriate establish, and thereafter from time-to-time amend a Code of Conduct for as or before required by the Commission’s and the Marketplace rules.

	•		Establish and from time-to-time amend procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls or auditing matters; and for the confidential, anonymous submission by employees of CanWest and its subsidiaries of concerns regarding questionable accounting or auditing matters. These procedures shall be set forth in CanWest’s employee manual or other appropriate document.

	•		In addition to the above-mentioned meetings and as part of the Audit Committee’s job to foster open communication, the committee should meet at least annually with management and the independent auditors in separate executive sessions to discuss any matters the committee or each of these groups believe should be discussed privately.

Without limiting the foregoing, the independent auditor will report directly to the Audit Committee, and the Audit Committee shall be directly responsible for oversight of the work of the auditor, including resolution of disagreements between management and the auditors.

Procedures and Administration

The Audit Committee will meet on at least a quarterly basis, but as often as it deems necessary to perform its responsibilities. The Audit Committee shall periodically meet separately with: (i) the independent auditor; (ii) Company management and (iii) CanWest’s internal auditors, if any. The Audit Committee

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Appendix B

CANWEST PETROLEUM CORPORATION
2006 STOCK OPTION PLAN
(as amended through September 12, 2006)

A. 1. Purposes of and Benefits Under the Plan. This 2006 Stock Option Plan (the “Plan”) is intended to encourage stock ownership by employees, consultants, officers and directors of CanWest Petroleum Corporation and its controlled, affiliated and subsidiary entities (collectively, the “Corporation”), so that they may acquire or increase their proprietary interest in the Corporation, and is intended to facilitate the Corporation’s efforts to: (i) induce qualified persons to become employees, officers and directors (whether or not they are employees) and consultants to the Corporation; (ii) compensate employees, officers, directors and consultants for services to the Corporation; and (iii) encourage such persons to remain in the employ of or associated with the Corporation and to put forth maximum efforts for the success of the Corporation. It is further intended that options granted by the Committee pursuant to Section 6 of this Plan shall constitute “incentive stock options” (“Incentive Stock Options”) within the meaning of Section 422 of the Internal Revenue Code, and the regulations issued thereunder, and options granted by the Committee pursuant to Section 7 of this Plan shall constitute “non-qualified stock options” (“Non-qualified Stock Options”). “Options” means options granted pursuant to the provisions of this Plan, whether Incentive Stock Options or Non-qualified Stock Options.

2. Definitions. As used in this Plan, the following words and phrases shall have the meanings indicated:

(a) “Board” shall mean the Board of Directors of the Corporation.

(b) “Bonus” means any Common Stock bonus issued pursuant to the provisions of this Plan.

(c) “Committee” shall mean any Committee appointed by the Board to administer this Plan, if one has been appointed. If no Committee has been appointed, the term “Committee” shall mean the Board.

(d) “Common Stock” shall mean the Corporation’s $.001 par value common stock.

(e) “Disability” shall mean a Recipient’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. If the Recipient has a disability insurance policy, the term “Disability” shall be as defined therein.

(f) “Fair Market Value” per share as of a particular date shall mean the last sale price of the Corporation’s Common Stock as reported on a national securities exchange or by NASDAQ, or if the quotation for the last sale reported is not available for the Corporation’s Common Stock, the average of the closing bid and asked prices of the Corporation’s Common

B-1

Stock as so reported or, if such quotations are unavailable, the value determined by the Committee in accordance with its discretion in making a bona fide, good faith determination of fair market value. Fair Market Value shall be determined without regard to any restriction other than a restriction which, by its terms, never will lapse. In the case of Options and Bonuses granted at a time when the Corporation does not have a registration statement in effect relating to the shares issuable hereunder, the value at which the Bonus shares are issued may be determined by the Committee at a reasonable discount from Fair Market Value to reflect the restricted nature of the shares to be issued and the inability of the Recipient to sell those shares promptly.

(g) “Recipient” means any person granted an Option or awarded a Bonus hereunder.

(h) “Internal Revenue Code” shall mean the United States Internal Revenue Code of 1986, as amended from time to time (codified as Title 26 of the United States Code) and any successor legislation.

3. Administration.

(a) The Plan shall be administered by the Committee. The Committee shall have the authority in its discretion, subject to and not inconsistent with the express provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically conferred under the Plan or necessary or advisable in the administration of the Plan, including the authority: to grant Options and Bonuses; to determine the vesting schedule and other restrictions, if any, relating to Options and Bonuses; to determine the purchase price of the shares of Common Stock covered by each Option (the “Option Price”); to determine the persons to whom, and the time or times at which, Options and Bonuses shall be granted; to determine the number of shares to be covered by each Option or Bonus; to determine Fair Market Value per share; to interpret the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the Option agreements (which need not be identical) entered into in connection with Options granted under the Plan; and to make all other determinations deemed necessary or advisable for the administration of the Plan. The Committee may delegate to one or more of its members or to one or more agents such administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan.

(b) Options and Bonuses granted under the Plan shall be evidenced by duly adopted resolutions of the Committee included in the minutes of the meeting at which they are adopted or in a unanimous written consent.

(c) The Committee shall endeavor to administer the Plan and grant Options and Bonuses hereunder in a manner that is compatible with the obligations of persons subject to Section 16 of the U.S. Securities Exchange Act of 1934 (the “1934 Act”), although compliance with Section 16 is the obligation of the Recipient, not the Corporation. Neither the Committee, the Board nor the Corporation can assume any legal responsibility for a Recipient’s compliance with his obligations under Section 16 of the 1934 Act.

B-2

(d) No member of the Committee or the Board shall be liable for any action taken or determination made in good faith with respect to the Plan or any Option or Bonus granted hereunder.

4. Eligibility.

(a) Subject to certain limitations hereinafter set forth, Options and Bonuses may be granted to employees (including officers) and consultants to and directors (whether or not they are employees) of the Corporation or its present or future divisions, affiliates and subsidiaries. In determining the persons to whom Options or Bonuses shall be granted and the number of shares to be covered by each Option or Bonus, the Committee shall take into account the duties of the respective persons, their present and potential contributions to the success of the Corporation, and such other factors as the Committee shall deem relevant to accomplish the purposes of the Plan.

(b) A Recipient shall be eligible to receive more than one grant of an Option or Bonus during the term of the Plan, on the terms and subject to the restrictions herein set forth.

5. Stock Reserved.

(a) The stock subject to Options or Bonuses hereunder shall be shares of Common Stock. Such shares, in whole or in part, may be authorized but unissued shares or shares that shall have been or that may be reacquired by the Corporation. The aggregate number of shares of Common Stock as to which Options and Bonuses may be granted from time to time under the Plan shall not exceed the lower of (i) 30,000,000 shares or (ii) 15% of the total shares outstanding, subject to adjustment as provided in Section 8(i) hereof.

(b) If any Option outstanding under the Plan for any reason expires or is terminated without having been exercised in full, or if any Bonus granted is forfeited because of vesting or other restrictions imposed at the time of grant, the shares of Common Stock allocable to the unexercised portion of such Option or the forfeited portion of the Bonus shall become available for subsequent grants of Options and Bonuses under the Plan.

6. Incentive Stock Options.

(a) Options granted pursuant to this Section 6 are intended to constitute Incentive Stock Options and shall be subject to the following special terms and conditions, in addition to the general terms and conditions specified in Section 8 hereof. Only employees of the Corporation shall be entitled to receive Incentive Stock Options.

(b) The aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of the shares of Common Stock with respect to which Incentive Stock Options granted under this and any other plan of the Corporation or any parent or subsidiary of the Corporation are exercisable for the first time by a Recipient during any calendar year may not exceed the amount set forth in Section 422(d) of the Internal Revenue Code.

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(c) Incentive Stock Options granted under this Plan are intended to satisfy all requirements for incentive stock options under Section 422 of the Internal Revenue Code and the Treasury Regulations promulgated thereunder and, notwithstanding any other provision of this Plan, the Plan and all Incentive Stock Options granted under it shall be so construed, and all contrary provisions shall be so limited in scope and effect and, to the extent they cannot be so limited, they shall be void.

7. Non-qualified Stock Options. Options granted pursuant to this Section 7 are intended to constitute Non-qualified Stock Options and shall be subject only to the general terms and conditions specified in Section 8 hereof.

8. Terms and Conditions of Options. Each Option granted pursuant to the Plan shall be evidenced by a written Option agreement between the Corporation and the Recipient, which agreement shall be substantially in the form of Exhibit A hereto as modified from time to time by the Committee in its discretion, and which shall comply with and be subject to the following terms and conditions:

(a) Number of Shares. Each Option agreement shall state the number of shares of Common Stock covered by the Option.

(b) Type of Option. Each Option Agreement shall specifically identify the portion, if any, of the Option which constitutes an Incentive Stock Option and the portion, if any, which constitutes a Non-qualified Stock Option.

(c) Option Price. Subject to adjustment as provided in Section 8 (i) hereof, each Option agreement shall state the Option Price, which shall be determined by the Committee subject only to the following restrictions:

(1) Each Option Agreement shall state the Option Price, which (except as otherwise set forth in paragraphs 8(c)(2) and (3) hereof) shall not be less than 100% of the Fair Market Value per share on the date of grant of the Option.

(2) Any Incentive Stock Option granted under the Plan to a person owning more than ten percent of the total combined voting power of the Common Stock shall be at a price of no less than 110% of the Fair Market Value per share on the date of grant of the Incentive Stock Option.

(3) Any Non-qualified Stock Option granted under the Plan shall be at a price determined and specified by the Board, which price may be an amount less than the Fair Market Value per share on the date of grant of the Non-qualified Stock Option.

(4) The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such option is granted, unless a future date is specified in the resolution.

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(d) Term of Option. Each Option agreement shall state the period during and times at which the Option shall be exercisable, in accordance with the following limitations:

(1) The date on which the Committee adopts a resolution expressly granting an Option shall be considered the day on which such Option is granted, unless a future date is specified in the resolution, although any such grant shall not be effective until the Recipient has executed an Option agreement with respect to such Option.

(2) The exercise period of any Option shall not exceed ten years from the date of grant of the Option.

(3) Incentive Stock Options granted to a person owning more than ten percent of the total combined voting power of the Common Stock of the Corporation shall be for no more than five years.

(4) The Committee shall have the authority to accelerate or extend the exercisability of any outstanding Option at such time and under such circumstances as it, in its sole discretion, deems appropriate. In any event, no exercise period may be so extended to increase the term of the Option beyond ten years from the date of the grant.

(5) The exercise period shall be subject to earlier termination as provided in Sections 8(f) and 8(g) hereof, and, furthermore, shall be terminated upon surrender of the Option by the holder thereof if such surrender has been authorized in advance by the Committee.

(6) Subject to the rules and regulations of any exchange with which the shares of the Corporation are listed for trading, notwithstanding any other provisions of this Plan, if any Options may not be exercised due to any Black-Out Period (as defined below) at any time within the three business day period prior to the normal expiry date of such Options (the “Restricted Options”), the expiry date of such Restricted Options shall be extended for a period of 10 business days following the end of the Black-Out Period (or such longer period as permitted by the exchange and approved by the Board of Directors). “Black-Out Period” means the period of time when, pursuant to any policies of the Corporation, any securities of the Corporation may not be traded by certain persons as designated by the Corporation, including any holder of an Option.

(e) Method of Exercise and Medium and Time of Payment.

(1) An Option may be exercised as to any or all whole shares of Common Stock as to which it then is exercisable, provided, however, that no Option may be exercised as to less than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100).

(2) Each exercise of an Option granted hereunder, whether in whole or in part, shall be effected by written notice to the Secretary of the Corporation designating the number of shares as to which the Option is being exercised, and shall be accompanied by

B-5

payment in full of the Option Price for the number of shares so designated, together with any written statements required by, or deemed by the Corporation’s counsel to be advisable pursuant to, any applicable securities laws.

(3) The Option Price shall be paid in cash, or in shares of Common Stock having a Fair Market Value equal to such Option Price, or in property or in a combination of cash, shares and property and, subject to approval of the Committee, may be effected in whole or in part with funds received from the Corporation at the time of exercise as a compensatory cash payment.

(4) The Committee shall have the sole and absolute discretion to determine whether or not property other than cash or Common Stock may be used to purchase the shares of Common Stock hereunder and, if so, to determine the value of the property received.

(5) The Recipient shall make provision for the withholding of taxes as required by Section 10 hereof.

(f) Termination.

(1) Unless otherwise provided in the Option Agreement by and between the Corporation and the Recipient, if the Recipient ceases to be an employee, officer, director or consultant of the Corporation (other than by reason of death, Disability or retirement), all Options theretofore granted to such Recipient but not theretofore exercised shall terminate three months following the date the Recipient ceased to be an employee, officer, director or consultant of the Corporation, and shall terminate upon the date of termination of employment or other relationship if discharged for cause.

(2) Nothing in the Plan or in any Option or Bonus granted hereunder shall confer upon an individual any right to continue in the employ of or other relationship with the Corporation or interfere in any way with the right of the Corporation to terminate such employment or other relationship between the individual and the Corporation.

(g) Death, Disability or Retirement of Recipient. Unless otherwise provided in the Option Agreement by and between the Corporation and the Recipient, if a Recipient shall die while an employee, officer, director or consultant of the Corporation, or within ninety days after the termination of such Recipient as an employee, officer, director or consultant, other than termination for cause, or if the Recipient’s relationship with the Corporation shall terminate by reason of Disability or retirement, all Options theretofore granted to such Recipient (whether or not otherwise exercisable) unless earlier terminated in accordance with their terms, may be exercised by the Recipient or by the Recipient’s estate or by a person who acquired the right to exercise such Options by bequest or inheritance or otherwise by reason of the death or Disability of the Recipient, at any time within one year after the date of death, Disability or retirement of the Recipient; provided, however, that in the case of Incentive Stock Options such one-year period shall be limited to three months in the case of retirement.

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(h) Transferability Restriction.

(1) Options granted under the Plan shall not be transferable other than by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code or Title I of the Employee Retirement Income Security Act of 1974, or the rules thereunder. Options may be exercised during the lifetime of the Recipient only by the Recipient and thereafter only by his legal representative.

(2) Any attempted sale, pledge, assignment, hypothecation or other transfer of an Option contrary to the provisions hereof and/or the levy of any execution, attachment or similar process upon an Option, shall be null and void and without force or effect and shall result in a termination of the Option.

(3) (A) As a condition to the transfer of any shares of Common Stock issued upon exercise of an Option granted under this Plan, the Corporation may require an opinion of counsel, satisfactory to the Corporation, to the effect that such transfer will not be in violation of the U.S. Securities Act of 1933, as amended (the “1933 Act”) or any other applicable securities laws or that such transfer has been registered under federal and all applicable state securities laws. (B) Further, the Corporation shall be authorized to refrain from delivering or transferring shares of Common Stock issued under this Plan until the Committee determines that such delivery or transfer will not violate applicable securities laws and the Recipient has tendered to the Corporation any federal, state or local tax owed by the Recipient as a result of exercising the Option or disposing of any Common Stock when the Corporation has a legal liability to satisfy such tax. (C) The Corporation shall not be liable for damages due to delay in the delivery or issuance of any stock certificate for any reason whatsoever, including, but not limited to, a delay caused by listing requirements of any securities exchange or any registration requirements under the 1933 Act, the 1934 Act, or under any other state, federal or provincial law, rule or regulation. (D) The Corporation is under no obligation to take any action or incur any expense in order to register or qualify the delivery or transfer of shares of Common Stock under applicable securities laws or to perfect any exemption from such registration or qualification. (E) Furthermore, the Corporation will not be liable to any Recipient for failure to deliver or transfer shares of Common Stock if such failure is based upon the provisions of this paragraph.

(i) Effect of Certain Changes.

(1) If there is any change in the number of shares of outstanding Common Stock through the declaration of stock dividends, or through a recapitalization resulting in stock splits or combinations or exchanges of such shares, the number of shares of Common Stock available for Options and the number of such shares covered by outstanding Options, and the exercise price per share of the outstanding Options, shall be proportionately adjusted by the Committee to reflect any increase or decrease in the number of issued shares of Common Stock; provided, however, that any fractional shares resulting from such adjustment shall be eliminated.

(2) In the event of the proposed dissolution or liquidation of the Corporation, or any corporate separation or division, including, but not limited to, split-up,

B-7

split-off or spin-off, or a merger or consolidation of the Corporation with another corporation, the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option (at its then current Option Price) solely for the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such dissolution, liquidation, corporate separation or division, or merger or consolidation by a holder of the number of shares of Common Stock for which such Option might have been exercised immediately prior to such dissolution, liquidation, corporate separation or division, or merger or consolidation; or, in the alternative the Committee may provide that each Option granted under the Plan shall terminate as of a date fixed by the Committee; provided, however, that not less than 30 days’ written notice of the date so fixed shall be given to each Recipient, who shall have the right, during the period of 30 days preceding such termination, to exercise the Option as to all or any part of the shares of Common Stock covered thereby, including shares as to which such Option would not otherwise be exercisable.

(3) Paragraph 2 of this Section 8 (i) shall not apply to a merger or consolidation in which the Corporation is the surviving corporation and shares of Common Stock are not converted into or exchanged for stock, securities of any other corporation, cash or any other thing of value. Notwithstanding the preceding sentence, in case of any consolidation or merger of another corporation into the Corporation in which the Corporation is the surviving corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock (excluding a change in par value, or from no par value to par value, or any change as a result of a subdivision or combination, but including any change in such shares into two or more classes or series of shares), the Committee may provide that the holder of each Option then exercisable shall have the right to exercise such Option solely for the kind and amount of shares of stock and other securities (including those of any new direct or indirect parent of the Corporation), property, cash or any combination thereof receivable upon such reclassification, change, consolidation or merger by the holder of the number of shares of Common Stock for which such Option might have been exercised.

(4) In the event of a change in the Common Stock of the Corporation as presently constituted into the same number of shares with a different par value, the shares resulting from any such change shall be deemed to be the Common Stock of the Corporation within the meaning of the Plan.

(5) To the extent that the foregoing adjustments relate to stock or securities of the Corporation, such adjustments shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive, provided that each Incentive Stock Option granted pursuant to this Plan shall not be adjusted in a manner that causes such option to fail to continue to qualify as an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code.

(6) Except as expressly provided in this Section 8(i), the Recipient shall have no rights by reason of any subdivision or consolidation of shares of stock of any class, or the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class, or by reason of any dissolution, liquidation, merger, or consolidation or spin-off of assets or stock of another corporation; and any issue by the Corporation of shares of stock

B-8

of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. The grant of an Option pursuant to the Plan shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations or changes of its capital or business structures, or to merge or consolidate, or to dissolve, liquidate, or sell or transfer all or any part of its business or assets.

(j) No Rights as Shareholder — Non-Distributive Intent.

(1) Neither a Recipient of an Option nor such Recipient’s legal representative, heir, legatee or distributee, shall be deemed to be the holder of, or to have any rights of a holder with respect to, any shares subject to such Option until after the Option is exercised and the shares are issued.

(2) No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 8(i) hereof.

(3) Upon exercise of an Option at a time when there is no registration statement in effect under the 1933 Act relating to the shares issuable upon exercise, shares may be issued to the Recipient only if the Recipient represents and warrants in writing to the Corporation that the shares purchased are being acquired for investment and not with a view to the distribution thereof and provides the Corporation with sufficient information to establish an exemption from the registration requirements of the 1933 Act. A form of subscription agreement containing representations and warranties deemed sufficient as of the date of adoption of this Plan is attached hereto as Exhibit B.

(4) No shares shall be issued upon the exercise of an Option unless and until there shall have been compliance with any then applicable requirements of the U.S. Securities and Exchange Commission or any other regulatory agencies having jurisdiction over the Corporation.

(k) Other Provisions. Option Agreements authorized under the Plan may contain such other provisions, including, without limitation, (i) the imposition of restrictions upon the exercise, and (ii) in the case of an Incentive Stock Option, the inclusion of any condition not inconsistent with such Option qualifying as an Incentive Stock Option, as the Committee shall deem advisable.

9. Grant of Stock Bonuses. In addition to, or in lieu of, the grant of an Option, the Committee may grant Bonuses.

(a) At the time of grant of a Bonus, the Committee may impose a vesting period of up to ten years, and such other restrictions which it deems appropriate. Unless otherwise directed by the Committee at the time of grant of a Bonus, the Recipient shall be

B-9

considered a shareholder of the Corporation as to the Bonus shares which have vested in the grantee at any time regardless of any forfeiture provisions which have not yet arisen.

(b) The grant of a Bonus and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the 1934 Act, other applicable securities laws, rules and regulations, and the requirements of any stock exchanges upon which the Common Stock then may be listed. Any certificates prepared to evidence Common Stock issued pursuant to a Bonus grant shall bear legends as the Corporation’s counsel may seem necessary or advisable. Included among the foregoing requirements, but without limitation, any Recipient of a Bonus at a time when a registration statement relating thereto is not effective under the 1933 Act shall execute a Subscription Agreement substantially in the form of Exhibit B.

10. Agreement by Recipient Regarding Withholding Taxes. Each Recipient agrees that the Corporation, to the extent permitted or required by law, shall deduct a sufficient number of shares due to the Recipient upon exercise of the Option or the grant of a Bonus to allow the Corporation to pay federal, provincial, state and local taxes of any kind required by law to be withheld upon the exercise of such Option or payment of such Bonus from any payment of any kind otherwise due to the Recipient. The Corporation shall not be obligated to advise any Recipient of the existence of any tax or the amount which the Corporation will be so required to withhold.

11. Term of Plan. Options and Bonuses may be granted under this Plan from time to time within a period of ten years from the date the Plan is adopted by the Board.

12. Amendment and Termination of the Plan.

(a) (1) Subject to the policies, rules and regulations of any lawful authority having jurisdiction (including any exchange with which the shares of the Corporation are listed for trading), the Board of Directors may at any time, without further action by the shareholders, terminate the Plan (or any one or more provision of the Plan) or amend the Plan or any Option granted hereunder in such respects as it may consider advisable and, without limiting the generality of the foregoing, it may do so to ensure: (A) that Options granted hereunder will comply with any provisions respecting stock options in the income tax and other laws in force in any country or jurisdiction of which any Option holders may from time to time be a resident or citizen; (B) alter the terms and conditions of vesting applicable to any Options; (C) extend the term of Options held by a person other than a person who, at the time of the extension, is an insider of the Corporation, provided that the term does not extend beyond ten years form the date of grant (subject to the “Blackout” extension provisions of the Plan); (D) accelerate the expiry date in respect of Options; (E) determine the adjustment provisions pursuant to Section (i) hereof; (F) amend the definitions contained within the Plan; (G) amend or modify the mechanics of exercise, and consideration payable in connection with the exercise, of the Options; or
(H) amendments of a “housekeeping” nature.

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(2) provided, however, that any amendment that would: (A) materially increase the number of securities issuable under the Plan to persons who are subject to Section 16(a) of the 1934 Act; or (B) grant eligibility to a class of persons who are subject to Section 16(a) of the 1934 Act and are not included within the terms of the Plan prior to the amendment; or (C) materially increase the benefits accruing to persons who are subject to Section 16(a) of the 1934 Act under the Plan; or (D) require shareholder approval under applicable state law, the rules and regulations of any national securities exchange on which the Corporation’s securities then may be listed, the Internal Revenue Code or any other applicable law, shall be subject to the approval of the shareholders of the Corporation as provided in Section 13 hereof.

(3) provided further that any such increase or modification that may result from adjustments authorized by Section 8(i) hereof or which are required for compliance with the 1934 Act, the Internal Revenue Code, the Employee Retirement Income Security Act of 1974, their rules or other laws or judicial order, shall not require such approval of the shareholders.

(b) Except as provided in Section 8 hereof, no suspension, termination, modification or amendment of the Plan may adversely affect any Option previously granted, unless the written consent of the Recipient is obtained.

13. Approval of Shareholders. The Plan shall take effect upon its adoption by the Board but shall be subject to approval at a duly called and held meeting of stockholders in conformance with the vote required by the Corporation’s governing documents, resolution of the Board, any other applicable law and the rules and regulations thereunder, or the rules and regulations of any national securities exchange upon which the Corporation’s Common Stock is listed and traded, each to the extent applicable.

14. Termination of Right of Action. Every right of action arising out of or in connection with the Plan by or on behalf of the Corporation or any of its subsidiaries, or by any shareholder of the Corporation or any of its subsidiaries against any past, present or future member of the Board, or against any employee, or by an employee (past, present or future) against the Corporation or any of its subsidiaries, will, irrespective of the place where an action may be brought and irrespective of the place of residence of any such shareholder, director or employee, cease and be barred by the expiration of three years from the date of the act or omission in respect of which such right of action is alleged to have risen.

15. Tax Litigation. The Corporation shall have the right, but not the obligation, to contest, at its expense, any tax ruling or decision, administrative or judicial, on any issue which is related to the Plan and which the Board believes to be important to holders of Options issued under the Plan and to conduct any such contest or any litigation arising therefrom to a final decision.

B-11

Exhibit A

FORM OF STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT made as of this ___ day of , ___, by and between CanWest Petroleum Corporation, a Colorado corporation (the “Corporation”), and (the “Recipient”).

In accordance with the Corporation’s 2006 Stock Option Plan (the “Plan”), the provisions of which are incorporated herein by reference, the Corporation desires, in connection with the services of the Recipient, to provide the Recipient with an opportunity to acquire shares of the Corporation’s $.001 par value common stock (“Common Stock”) on favorable terms and thereby increase the Recipient’s proprietary interest in the Corporation and incentive to put forth maximum efforts for the success of the business of the Corporation. Capitalized terms used but not defined herein are used as defined in the Plan.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein set forth and other good and valuable consideration, the Corporation and the Recipient agree as follows:

1. Confirmation of Grant of Option. Pursuant to a determination of the Committee or, in the absence of a Committee, by the Board of Directors of the Corporation made on , ___ (the “Date of Grant”), the Corporation, subject to the terms of the Plan and of this Agreement, confirms that the Recipient has been irrevocably granted on the Date of Grant, as a matter of separate inducement and agreement, and in addition to and not in lieu of salary or other compensation for services, a Stock Option (the “Option”) exercisable to purchase an aggregate of ___ shares of Common Stock on the terms and conditions herein set forth, subject to adjustment as provided in Paragraph 8 hereof.

2. Option Price. The Option Price of shares of Common Stock covered by the Option will be $___ per share (the “Option Price”) subject to adjustment as provided in Paragraph 8 hereof.

3. Vesting and Exercise of Option. (a) Except as otherwise provided herein or in Section 8 of the Plan, the Option [shall vest and become exercisable as follows: (insert vesting schedule), provided, however, that no option shall vest or become exercisable unless the Recipient is an employee of the Corporation on such vesting date/or may be exercised in whole or in part at any time during the term of the Option.] (b) The Option may not be exercised at any one time as to fewer than 100 shares (or such number of shares as to which the Option is then exercisable if such number of shares is less than 100). (c) The Option may be exercised by written notice to the Secretary of the Corporation accompanied by payment in full of the Option Price as provided in Section 8 of the Plan.

4. Term of Option. The term of the Option will be through , ___, subject to earlier termination or cancellation as provided in this Agreement. The holder of the Option will not have any rights to dividends or any other rights of a shareholder with respect to any shares of Common Stock subject to the Option until such shares shall have been issued (as evidenced by the appropriate transfer agent of the Corporation) upon purchase of such shares through exercise of the Option.

5. Transferability Restriction. The Option may not be assigned, transferred or otherwise disposed of, or pledged or hypothecated in any way (whether by operation of law or otherwise) except in strict compliance with Section 8 of the Plan. Any assignment, transfer, pledge, hypothecation or other disposition of the Option or any attempt to make any levy of execution, attachment or other process will cause the Option to terminate immediately upon the happening of any such event; provided, however, that any such termination of the Option under the provisions of this Paragraph 5 will not prejudice any rights or remedies which the Corporation may have under this Agreement or otherwise.

6. Exercise Upon Termination. The Recipient’s rights to exercise this Option upon termination of employment or cessation of service as an officer, director or consultant shall be as set forth in Section 8(f) of the Plan.

7. Death, Disability or Retirement of Recipient. The exercisability of this Option upon the death, Disability or retirement of the Recipient shall be as set forth in Section 8(g) of the Plan.

8. Adjustments. The Option shall be subject to adjustment upon the occurrence of certain events as set forth in Section 8(i) of the Plan.

9. No Registration Obligation. The Recipient understands that the Option is not registered under the 1933 Act and, unless by separate written agreement, the Corporation has no obligation to so register the Option or any of the shares of Common Stock subject to and issuable upon the exercise of the Option, although it may from time to time register under the 1933 Act the shares issuable upon exercise of Options granted pursuant to the Plan. The Recipient represents that the Option is being acquired for the Recipient’s own account and that unless registered by the Corporation, the shares of Common Stock issued on exercise of the Option will be acquired by the Recipient for investment. The Recipient understands that the Option is, and the underlying securities may be, issued to the Recipient in reliance upon exemptions from the 1933 Act, and acknowledges and agrees that all certificates for the shares issued upon exercise of the Option may bear the following legend unless such shares are registered under the 1933 Act prior to their issuance:

The shares represented by this Certificate have not been registered under the Securities Act of 1933 (the “1933 Act”), and are “restricted securities” as that term is defined in Rule 144 under the 1933 Act. The shares may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the 1933 Act or pursuant to an exemption from

registration under the 1933 Act, the availability of which is to be established to the satisfaction of the Company.

The Recipient further understands and agrees that the Option may be exercised only if at the time of such exercise the underlying shares are registered and/or the Recipient and the Corporation are able to establish the existence of an exemption from registration under the 1933 Act and applicable state or other laws.

10. Notices. Each notice relating to this Agreement will be in writing and delivered in person or by certified mail to the proper address. Notices to the Corporation shall be addressed to the Corporation, attention: Karim Hirji, Chief Financial Officer, at such address as may constitute the Corporation’s principal place of business at the time, with a copy to: Theresa M. Mehringer, Esq., Burns, Figa & Will, P.C., 6400 S. Fiddlers Green Circle, Suite 1000, Greenwood Village, Colorado 80111. Notices to the Recipient or other person or persons then entitled to exercise the Option shall be addressed to the Recipient or such other person or persons at the Recipient’s address below specified. Anyone to whom a notice may be given under this Agreement may designate a new address by notice to that effect given pursuant to this Paragraph 10.

11. Approval of Counsel. The exercise of the Option and the issuance and delivery of shares of Common Stock pursuant thereto shall be subject to approval by the Corporation’s counsel of all legal matters in connection therewith, including compliance with the requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended, applicable state and other securities laws, the rules and regulations thereunder, and the requirements of any national securities exchange(s) upon which the Common Stock then may be listed.

12. Benefits of Agreement. This Agreement will inure to the benefit of and be binding upon each successor and assignee of the Corporation. All obligations imposed upon the Recipient and all rights granted to the Corporation under this Agreement will be binding upon the Recipient’s heirs, legal representatives and successors.

13. Effect of Governmental and Other Regulations. The exercise of the Option and the Corporation’s obligation to sell and deliver shares upon the exercise of the Option are subject to all applicable federal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency which may, in the opinion of counsel for the Corporation, be required.

14. Plan Governs. In the event that any provision in this Agreement conflicts with a provision in the Plan, the provision of the Plan shall govern.

Exhibit B

SUBSCRIPTION AGREEMENT

THE SECURITIES BEING ACQUIRED BY THE UNDERSIGNED HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 OR ANY OTHER LAWS AND ARE OFFERED UNDER EXEMPTIONS FROM THE REGISTRATION PROVISIONS OF SUCH LAWS. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS STOCK SUBSCRIPTION AGREEMENT AND APPLICABLE SECURITIES LAWS.

This Subscription Agreement is entered for the purpose of the undersigned acquiring shares of the $.001 par value common stock (the “Securities”) of CanWest Petroleum Corporation, a Colorado corporation (the “Corporation”) from the Corporation as a Bonus or pursuant to exercise of an Option granted pursuant to the Corporation’s 2006 Stock Option Plan (the “Plan”). All capitalized terms not otherwise defined herein shall be as defined in the Plan.

It is understood that no grant of any Bonus or exercise of any Option at a time when no registration statement relating thereto is effective under the U.S. Securities Act of 1933, as amended (the “1933 Act”) can be completed until the undersigned executes this Subscription Agreement and delivers it to the Corporation, and that such grant or exercise is effective only in accordance with the terms of the Plan and this Subscription Agreement.

In connection with the undersigned’s acquisition of the Securities, the undersigned represents and warrants to the Corporation as follows:

1. The undersigned has been provided with, and has reviewed the Plan, and such other information as the undersigned may have requested of the Corporation regarding its business, operations, management, and financial condition (all of which is referred to herein as the “Available Information”).

2. The Corporation has given the undersigned the opportunity to ask questions of and to receive answers from persons acting on the Corporation’s behalf concerning the terms and conditions of this transaction and the opportunity to obtain any additional information regarding the Corporation, its business and financial condition or to verify the accuracy of the Available Information which the Corporation possesses or can acquire without unreasonable effort or expense.

3. The Securities are being acquired by the undersigned for the undersigned’s own account and not on behalf of any other person or entity.


Check the appropriate box:
[ ]		Preliminary Proxy Statement
[ ]		Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))
[√]		Definitive Proxy Statement
[ ]		Definitive Additional Materials
[ ]		Soliciting Material Pursuant to §240.14a-12


[√]	No fee required.
[ ]	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
		(1	)	Title of each class of securities to which transaction applies:
		(2	)	Aggregate number of securities to which transaction applies:
		(3	)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule O-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4	)	Proposed maximum aggregate value of transaction:
		(5	)	Total fee paid:

[ ]	Fee paid previously with preliminary materials.

[ ]	Check box if any part of the fee is offset as provided by Exchange
	Act Rule O-11(a)(2) and identify the filing for which the offsetting
	fee was paid previously. Identify the previous filing by
	registration statement number, or the Form or Schedule and the date
	of its filing.
		(1	)	Amount Previously Paid:
		(2	)	Form, Schedule or Registration Statement No.:
		(3	)	Filing Party:
		(4	)	Date Filed:


Name of Director or	Officer or
Officer and Position in	Director			Office(s) Held and Other Business
the Company	Since	Age		Experience

T. Murray Wilson Executive Chairman and Chairman of the Board of Directors	May 2006		54	Former President, Chief Executive Officer, Chief Financial Officer from May 1, 2006 until August 14, 2006. Chairman of the Board since May 1, 2006 and Executive Chairman from August 14, 2006 to present. Served as Chairman and Managing Partner of Stanway Capital Partners from 2001 to present; and from 1997 to 2000, worked for TD Securities, Inc. as Managing Director and Global Head of Oil & Gas, Head of Investment Banking and Corporate Banking, and Vice Chairman of TD Securities International.


Name of Director or	Officer or
Officer and Position in	Director			Office(s) Held and Other Business
the Company	Since	Age		Experience

Christopher H. Hopkins President and Chief Executive Officer and Director	August 2006		52	President, Chief Executive Officer and director of the Company since August 14, 2006. President, Chief Executive Officer and a director of Oilsands Quest Inc., a subsidiary of the Company since November 10, 2004. Executive Vice President of Synenco Energy Inc. (“Synenco”), an oil sands exploration company, from October 1999 to September 2004 and a director of Synenco from October 1999 until August 2003. Founder, director and Vice President, Finance of Thunder Road Resources Ltd., a private oil and gas production company, from June 1996 to June 2000. Mr. Hopkins has also held executive positions in corporate planning and business development with Suncor Inc.’s Oil Sands Group, Pembina Corporation and Amoco Canada and has additional management experience in environmental control and regulatory affairs in the resource industry. Mr. Hopkins holds a B.Sc. (Chemistry and Biology) from Carleton University and a MBA from Queen’s University.


Name of Director or	Officer or
Officer and Position in	Director			Office(s) Held and Other Business
the Company	Since	Age		Experience

Karim Hirji Chief Financial Officer	August 2006		43	Chief Financial Officer of the Company since August 14, 2006. Chief Financial Officer of Oilsands Quest Inc., a subsidiary of the Company, since November 10, 2004. Vice President, Finance and Chief Financial Officer of Synenco from November 2001 to June 2004. Vice President, Finance and Chief Financial Officer of Anadime Corporation, a public oilfield services company, from September 2000 to October 2001. Manager of Financial Reporting at Enbridge Inc. from January 2000 to April 2000. Corporate Controller from 1999 to January 2000 and Assistant Corporate Controller from 1994 to 1999 of AGRA Inc., a public engineering company. Mr. Hirji received his B.Comm from the University of Calgary and CA while articling with Deloitte & Touche LLP. Mr. Hirji also serves as director of Added Capital Corp., a capital pool company.

Errin Kimball Vice President, Exploration	August 2006		37	Vice President, Exploration of the Company since August 14, 2006. Vice President, Exploration of Oilsands Quest Inc., a subsidiary of the Company, since July 2005. From January 2002 until June 2005, Mr. Kimball was Chief Geologist at Synenco. He was also a geological consultant for Synenco from 2000 until he assumed his staff position in 2002.


NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
MANAGEMENT
REPORT OF THE AUDIT COMMITTEE
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
OPTION/SAR GRANTS IN PREVIOUS YEAR — 2006 INDIVIDUAL GRANTS
AGGREGATED OPTION/SAR EXERCISED IN LAST FINANCIAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
INDEPENDENT PUBLIC ACCOUNTANTS
PROPOSAL ONE
PROPOSAL TWO
PROPOSAL THREE
PROPOSAL FOUR
PROPOSAL FIVE
PROPOSAL SIX
PROPOSAL SEVEN
GENERAL MATTERS
PROVISIONS OF THE ARTICLES OF INCORPORATION WITH POTENTIAL ANTI-TAKEOVER EFFECTS
ANNUAL REPORT TO SHAREHOLDERS
OTHER MATTERS
DELIVERY OF DOCUMENTS TO SHAREHOLDERS SHARING AN ADDRESS
SHAREHOLDER PROPOSALS
BY ORDER OF THE BOARD OF DIRECTORS:
PROXY


				Sincerely,

		T. Murray Wilson, Executive Chairman and Chairman of the Board

		Christopher H. Hopkins, President & Chief Executive Officer

	1.		Adopt an amendment to the Company’s Articles of Incorporation changing the name of the Company to “Oilsands Quest Inc.”

	2.		Elect six directors to serve until the next annual meeting of shareholders or until their successors are elected and qualified.

	3.		Adopt an amendment to the Company’s Articles of Incorporation and Bylaws providing for staggered terms for the Company’s Board of Directors.

	4.		Adopt an amendment to the Company’s Articles of Incorporation increasing the number of authorized shares of Common Stock from 250,000,000 shares to 500,000,000.

	5.		Adopt an amendment to the Company’s Articles of Incorporation and Bylaws requiring an affirmative vote of 66-2/3% of votes entitled to be cast for certain merger, acquisition, sale or change in control transactions that the Board of Directors has not approved.

	6.		Approve the Shareholders’ Rights Agreement previously adopted by the Board on March 9, 2006.

	7.		Approve the Company’s 2006 Stock Option Plan (the “Plan”) and all amendments.

	8.		Transact such other business as may lawfully come before the Meeting or any adjournment(s) thereof.


		BY ORDER OF THE BOARD OF DIRECTORS,

		T. Murray Wilson, Executive Chairman and Chairman of the Board

		Christopher H. Hopkins, President & Chief Executive Officer


	Number of	% of Total
	Securities	Options/SARs
	Underlying	Granted to
	Options/SARs	Employees in	Exercise or
Name	Granted (#)	Fiscal Year	Base Price ($)	Expiration Date

Thornton Donaldson ⁽¹⁾	100,000⁽²⁾	2.05%	$0.36	Nov 1/06

Christopher H. Hopkins	Nil	N/A	N/A	N/A

Karim Hirji	Nil	N/A	N/A	N/A


(1)		Mr. Donaldson served as President from April, 1998 to May 16, 2002 and from September 15, 2003 to May 1, 2006. On May 18, 2005 Donaldson was issued 100,000 options at $0.36 per share until November 1, 2006 which were exercised pursuant to a bonus of $36,000 on January 3, 2006. See “Certain Relationships and Related Transactions”.

	•		independent of the management of CanWest and are free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member;

	•		otherwise be considered “independent” as defined in Nasdaq Marketplace Rule 4200(a)(15), as such rule may be amended from time-to-time unless an exemption from the requirement is available;

	•		satisfy the independence standards specified in Section 121A of the American Stock Exchange (AMEX) Rules, as such rule may be amended from time-to-time unless an exemption from the requirement is available;

	•		satisfy the independence standards defined in Rule 10A-3 under the Securities Exchange Act of 1934; and

	•		who shall be able to read and understand fundamental financial statements, including a company’s balance sheet, income statement, and cash flow statement.

			shall keep such records of its meetings as it shall deem appropriate. The Audit Committees meetings may be in person or by telephone.

	2.		The Audit Committee may form and delegate authority to one or more subcommittees (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances. Any decision of a subcommittee to preapprove audit or non-audit services shall be presented to the full Audit Committee at its next scheduled meeting.

	3.		The Audit Committee shall report regularly to the Board of Directors.

	4.		At least annually, the Audit Committee shall evaluate its own performance and the performance of the auditors and the Company’s internal financial accounting staff.


T. Murray Wilson	For o	Withhold Authority to vote o
Christopher H. Hopkins	For o	Withhold Authority to vote o
Ronald Phillips	For o	Withhold Authority to vote o
Thomas Milne	For o	Withhold Authority to vote o
Gordon Tallman	For o	Withhold Authority to vote o
W. Scott Thompson	For o	Withhold Authority to vote o



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