10-12G

As filed with the Securities and Exchange Commission on October 28, 2014

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10

GENERAL FORM FOR REGISTRATION OF SECURITIES

Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934

LYNDEN ENERGY CORP.

(Exact name of registrant as specified in its charter)

British Columbia, Canada
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
888 Dunsmuir Street, Suite 1200 Vancouver, British Columbia	V6C 3K4
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(604) 629-2991

Securities to be registered pursuant to Section 12(b) of the Act:

None

Securities to be registered pursuant to Section 12(g) of the Act:

Title of Each Class to be so Registered

Common shares, no par value

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934, as amended. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

TABLE OF CONTENTS

REFERENCES		1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS		1
GLOSSARY OF OIL AND NATURAL GAS TERMS		2
CURRENCY		5
Item 1.	Business.	5
Item 1A.	Risk Factors.	25
Item 2.	Financial Information.	46
Item 3.	Properties.	53
Item 4.	Security Ownership of Certain Beneficial Owners and Management.	53
Item 5.	Directors and Executive Officers.	54
Item 6.	Executive Compensation.	56
Item 7.	Certain Relationships and Related Transactions, and Director Independence.	61
Item 8.	Legal Proceedings.	62
Item 9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.	62
Item 10.	Recent Sales of Unregistered Securities.	68
Item 11.	Description of Registrant’s Securities to be Registered.	72
Item 12.	Indemnification of Directors and Officers.	75
Item 13.	Financial Statements.	76
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	76
Item 15.	Financial Statements and Exhibits.	76
WHERE YOU CAN FIND MORE INFORMATION		104
EXPERTS		104
SIGNATURES

REFERENCES

As used in this registration statement on Form 10 (the “Registration Statement”): (i) the terms the “Registrant”, “we”, “us”, “our”, “Lynden” and the “Company” mean Lynden Energy Corp. and its subsidiaries, if any; (ii) “SEC” refers to the Securities and Exchange Commission; (iii) “Securities Act” refers to the United States Securities Act of 1933, as amended; (iv) “Exchange Act” refers to the United States Securities Exchange Act of 1934, as amended; and (v) all dollar amounts refer to United States dollars unless otherwise indicated.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information in this Registration Statement includes “forward-looking statements.” All statements, other than statements of historical fact included in this Registration Statement, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Registration Statement, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the section entitled “Item 1A. Risk Factors” included in this Registration Statement.

Forward-looking statements may include statements about our:

• business strategy;

• reserves;

• exploration and development drilling prospects, inventories, projects and programs;

• ability to replace the reserves we produce through drilling and property acquisitions;

• financial strategy, liquidity and capital required for our development program;

• realized oil and natural gas prices;

• timing and amount of future production of oil and natural gas;

• hedging strategy and results;

• future drilling plans;

• competition and government regulations;

• ability to obtain permits and governmental approvals;

• pending legal or environmental matters;

• marketing of oil and natural gas;

• leasehold or business acquisitions;

• costs of developing our properties;

• general economic conditions;

• credit markets;

• uncertainty regarding our future operating results; and

• plans, objectives, expectations and intentions contained in this Registration Statement that are not historical.

We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks described under the section entitled “1A. Risk Factors” in this Registration Statement.

Reserve engineering is a process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the quality of available data, the interpretation of such data and price and cost assumptions made by reserve engineers. In addition, the results of drilling, testing and production activities may justify revisions of estimates that were made previously. If significant, such revisions would change the schedule of any further production and development drilling. Accordingly, reserve estimates may differ significantly from the quantities of oil and natural gas that are ultimately recovered.

Should one or more of the risks or uncertainties described in this Registration Statement occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

All forward-looking statements, expressed or implied, included in this Registration Statement are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Registration Statement.

GLOSSARY OF OIL AND NATURAL GAS TERMS

The terms and abbreviations defined in this section are used throughout this Registration Statement:

“Basin.” A large natural depression on the earth’s surface in which sediments generally brought by water accumulate.

“Bbl.” One stock tank barrel of 42 U.S. gallons liquid volume used herein in reference to crude oil, condensate or NGL.

“Boe.” A barrel of oil equivalent and is a standard convention used to express oil, NGL and natural gas volumes on a comparable oil equivalent basis. Natural gas equivalents are determined under the relative energy content method by using the ratio of 6.0 Mcf of gas to 1.0 Bbl of oil or NGL.

“Btu or British Thermal Unit.” The quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit.

“Dry hole.” A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.

“E&P.” Exploration and production of oil, NGL and natural gas.

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“Enhanced recovery.” The recovery of oil, NGL and natural gas through the injection of liquids or gases into the reservoir, supplementing its natural energy. Enhanced recovery methods are often applied when production slows due to depletion of the natural pressure.

“Exploratory well.” A well drilled to find and produce oil, NGL or natural gas reserves not classified as proved, to find a new reservoir in a field previously found to be productive of oil, NGL or natural gas in another reservoir or to extend a known reservoir.

“Field.” An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

“Formation.” A layer of rock which has distinct characteristics that differs from nearby rock.

“Gross acres or gross wells.” The total acres or wells, as the case may be, in which a working interest is owned. All gross acre figures in this Registration Statement are approximates and estimated.

“Hydraulic fracturing.” The technique of improving a well’s production or injection rates by pumping a mixture of fluids into the formation and rupturing the rock, creating an artificial channel. As part of this technique, sand or other material may also be injected into the formation to keep the channel open, so that fluids or natural gases may more easily flow through the formation.

“LIBOR.” London Interbank Offered Rate, which is a market rate of interest.

“MBbl.” One thousand barrels of crude oil, condensate or NGL.

“MBoe.” One thousand Boes.

“Mcf.” One thousand cubic feet of natural gas.

“MGal.” One thousand gallons of NGL.

“MMBbl.” One million barrels of crude oil, condensate or NGL.

“MMBoe.” One million Boes.

“MMBtu.” One million British Thermal Units.

“MMcf.” One million cubic feet of natural gas.

“Net acres or net wells.” The percentage of total acres an owner has out of a particular number of acres, or a specified tract. An owner who has 50% interest in 100 acres owns 50 net acres. All net acre figures in this Registration Statement are approximates and estimated.

“NGL.” Natural gas liquids. Hydrocarbons found in natural gas that may be extracted as liquefied petroleum gas and natural gasoline.

“NYMEX.” The New York Mercantile Exchange.

“PDP.” Proved developed producing reserves.

“Productive well.” A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.

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“Proved developed reserves.” Reserves of any category that can be expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well, and installed extraction equipment and infrastructure operation at the time of the reserve estimate if the extraction is by means not involving a well.

“Proved reserves.” The quantities of oil, NGL and natural gas, which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible, from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

“Proved undeveloped reserves” or “PUDs.” Reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage are limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units are claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Estimates for proved undeveloped reserves will not be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir.

(i) The area of the reservoir considered as proved includes: (A) the area identified by drilling and limited by fluid contacts, if any, and (B) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil, NGL or natural gas on the basis of available geoscience and engineering data.

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (“LKH”) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (“HKO”) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering or performance data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) the project has been approved for development by all necessary parties and entities, including governmental entities.

(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based on future conditions.

“Recompletion.” The process of treating a drilled well followed by the installation of permanent equipment for the production of oil, NGL or natural gas or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.

“Reservoir.” A porous and permeable underground formation containing a natural accumulation of producible oil, NGL and/or natural gas that is confined by impermeable rock or water barriers and is separate from other reservoirs.

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“Spacing.” The distance between wells producing from the same reservoir. Spacing is often expressed in terms of acres, e.g., 40-acre spacing, and is often established by regulatory agencies.

“Standardized measure.” The year-end present value of estimated future net revenues to be generated from the production of proved reserves, determined in accordance with the rules and regulations of the SEC, without giving effect to non-property related expenses (such as, certain general and administrative expenses, debt service and future federal income tax expenses) or to depreciation, depletion and amortization and discounted using an annual discount rate of 10%.

“Undeveloped acreage.” Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil, NGL and natural gas regardless of whether such acreage contains proved reserves.

“Unit.” The joining of all or substantially all interests in a reservoir or field, rather than a single tract, to provide for development and operation without regard to separate property interests. Also, the area covered by a unitization agreement.

“Wellbore.” The hole drilled by the bit that is equipped for natural gas production on a completed well. Also called well or borehole.

“West Texas Intermediate Sweet.” A light, sweet blend of oil produced from the fields in West Texas.

“Working interest.” The right granted to the lessee of a property to explore for and to produce and own oil, NGL, natural gas or other minerals. The working interest owners bear the exploration, development, and operating costs on either a cash, penalty, or carried basis.

“Workover.” Operations on a producing well to restore or increase production.

CURRENCY

Unless otherwise indicated, all currency amounts are expressed in U.S. dollars.

Item 1. Business.

Our Company

We are a company that was formed on June 15, 2000 under the name The InfoUtility Corporation as a result of the amalgamation of InfoUtility Corporation and Black Point Resources Ltd. pursuant to the Business Corporations Act (Ontario). The Company changed its name to Lynden Ventures Ltd., and consolidated its issued and outstanding shares of common stock on a 4:1 basis on January 18, 2005. Lynden then continued into British Columbia under the Business Corporations Act (British Columbia) on February 2, 2006 under the name Lynden Ventures Ltd., which was subsequently changed to Lynden Energy Corp. effective January 16, 2008. We have two wholly owned subsidiaries, Lynden Exploration Ltd. and Lynden USA Inc. We are a reporting issuer in British Columbia, Ontario and Alberta and our common shares are listed on the TSX Venture Exchange under the symbol LVL. We are in the business of acquiring, exploring and developing petroleum and natural gas (“P&NG”) rights and properties. We have various working interests in the Midland Basin (Wolfberry) and Eastern Shelf (Mitchell Ranch), located in the Permian Basin in west Texas, U.S.A. and in the Paradox Basin Project, located in the State of Utah, U.S.A.

We are filing this Registration Statement because, at December 31, 2013, we no longer met the definition of “foreign private issuer” under the Securities Act of 1933 (and, thus, lost certain exemptions from registration for “foreign private issuers”) and as of June 30, 2014 (our fiscal year end) we met the registration requirements under Section 12(g) of the Securities Exchange Act of 1934 and are required to register with the Securities and Exchange Commission as a domestic registrant.

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JOBS Act

The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) provides for certain exemptions from various reporting requirements applicable to public companies that are reporting companies and are “emerging growth companies.” We are an “emerging growth company” as defined in section 3(a) of the Exchange Act (as amended by the JOBS Act, enacted on April 5, 2012), and we will continue to qualify as an “emerging growth company” until the earliest to occur of: (a) the last day of the fiscal year during which we have total annual gross revenues of $1 billion (as such amount is indexed for inflation every 5 years by the SEC) or more; (b) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act; (c) the date on which we have, during the previous 3-year period, issued more than $1 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer”, as defined in Exchange Act Rule 12b–2. Therefore, we expect to continue to be an emerging growth company for the foreseeable future.

We also qualify as a “smaller reporting company” and have the advantage of not being required to provide the same level of disclosure as larger companies.

Generally, a registrant that registers any class of its securities under section 12 of the Exchange Act is required to include in the second and all subsequent annual reports filed by it under the Exchange Act, a management report on internal control over financial reporting and, subject to an exemption available to registrants that meet the definition of a “smaller reporting company” in Exchange Act Rule 12b-2, an auditor attestation report on management’s assessment of internal control over financial reporting. However, for so long as we continue to qualify as an emerging growth company, we will be exempt from the requirement to include an auditor attestation report in our annual reports filed under the Exchange Act, even if we do not qualify as a “smaller reporting company”. In addition, section 103(a)(3) of the Sarbanes-Oxley Act of 2002 has been amended by the JOBS Act to provide that, among other things, auditors of an emerging growth company are exempt from the rules of the Public Company Accounting Oversight Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the registrant (auditor discussion and analysis). Furthermore, as an emerging growth company, we have availed ourselves of the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and to not present to our stockholders a nonbinding advisory vote on executive compensation, obtain approval of any golden parachute payments not previously approved, or present the relationship between executive compensation actually paid and our financial performance.

Properties

Midland Basin, West Texas

We have been involved in the Midland Basin since October 2009, and hold interests in leases in the West Texas counties of Martin, Midland, Glasscock and Howard as follows:

County	Gross Acres		Net Acres		Lynden Net Interest			Lynden Net Acres
Martin		2,043		1,757		43.75	%		769
		1,127		1,127		20.00	%		225
Midland		640		640		43.75	%		280
Glasscock		5,900		4,480		43.75	%		1,960
Howard		6,388		6,121		40.625	%		2,487
		640		640		25.39	%		162
Total		16,738		14,765					5,883

Note: All acreage and net interest percentages are approximate and subject to revision. All leases are subject to royalties to the mineral rights owners.

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The vast majority of our acreage is operated by CrownQuest Operating LLC (“CrownQuest”), a Midland, Texas based company with extensive knowledge and experience operating in the Permian Basin. Our primary working interest partner in the acreage operated by CrownQuest is CrownRock LP. We are party to a Participation Agreement (“Midland Basin Participation Agreement”) with CrownRock, L.P. (“CrownRock”) whereby we will receive 43.75% of CrownRock’s interest in the leases relating to wells drilled after the date of the Participation Agreement by paying 50% of the drilling and completion costs attributable to CrownRock’s interest. A 1,127 acre lease in Martin County, is operated by a separate Midland, Texas based company. We will receive a 20.0% working interest in new wells drilled on the lease by paying 24.375% of the drilling and completion costs.

Vertical Well Development

West Texas has experienced a resurgence in oil-focused exploration and development activity as a result of new completion methods being applied to an unconventional rock package from the Permian Basin, historically one of the most prolific oil basins in North America. The Wolfberry Project’s primary objectives target oil (and gas) production from the Spraberry and Wolfcamp formations, which are Permian in age and are informally grouped to form the “Wolfberry” interval or zone. Completions are anticipated over a 2,500 to 3,000 foot gross interval, generally located a drilling depth of between 7,000 and 11,500 feet. In addition to this main objective, other conventional and unconventional productive zones occur both above and below the Wolfberry assemblage.

We continue to carry out a rapid oil and gas vertical well development program on our Midland Basin acreage, and we now have 97 gross (39.7 net) Wolfberry wells tied-in and producing.

Our independent petroleum engineer, Cawley, Gillespie & Associates, estimates our net Proved plus Probable (P2) reserves attributable to our working interest at June 30, 2014 to be 5.48 million barrels of oil, 13.09 billion cubic feet of gas, and 2.60 million barrels of natural gas liquids. Of this amount, proved reserves were 5.19 million barrels of oil, 12.71 billion cubic feet of gas, and 2.52 million barrels of natural gas liquids. The Net Present Value (10%) of future revenue, before income tax, of the Proved plus Probable reserves as of June 30, 2014 is estimated by Cawley, Gillespie & Associates to be $112.96 million. All of the reserves reported are attributable to vertical wells in the Midland Basin.

In the normal course of business, we evaluate on an ongoing basis the sale of our assets with the objective of generating the best returns for stockholders.

Effective December 30, 2013 we disposed of 12 gross (4.7 net) Wolfberry wells and underlying leases covering approximately 1,000 gross acres (403 net acres) to BreitBurn Energy Partners L.P. of Los Angeles, California for gross proceeds of $19.3 million, subject to customary post–closing adjustments.

Effective February 1, 2014, through a sale, we reduced our working interest in a 1,127 acre lease in Martin County and the five Wolfberry wells on the lease from 30.625% to 20.0%. As a result of prior obligations on the lease, we will be funding 24.375% of the cost of new wells drilled on the lease.

The gross cost of a Wolfberry well is currently approximately $2.1 million. Our current plans call for 15 gross (6.26 net) Wolfberry wells to spud in fiscal 2015 (July 1, 2014 to June 30, 2015) at an estimated cost to us of approximately $15.0 million. Pursuant to the terms of the Midland Basin Participation Agreement, Lynden’s funding amount for the 6.26 net wells is equivalent to 7.15 wells.

Our capital budget is subject to change depending upon a number of factors, including economic and industry conditions at the time of drilling, prevailing and anticipated prices for oil and gas, the availability of sufficient capital resources for drilling prospects, our financial results and the availability of lease extensions and renewals on reasonable terms.

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The following table summarizes recent Wolfberry drilling activity.

	30-Sep-13		31-Dec-13		31-Dec-13		31-Mar-14		30-Jun-14		30-Sep-14
			(Breitburn Sale)
Producing Wolfberry well
Gross		76		-12		72		78		91		95
Net		31.68		-4.73		29.69		31.72		37.18		38.87
Well spud or drilled awaiting completion and /or tie in
Gross		4				3		7		4		5
Net		1.78				1.27		2.87		1.68		1.97

Horizontal Well Development

The Midland Basin acreage also has potential to be developed with horizontal wells. Numerous industry participants are actively testing various formations within the Wolfberry interval for their development potential. CrownQuest, the operator of the vast majority of our acreage, has begun to create an initial horizontal development plan for the acreage. Two initial CrownQuest operated horizontal wells are scheduled for the first half of calendar 2015 in Glasscock County. We anticipate a gross cost of a horizontal well to be approximately $9.0 million, for an estimated cost to Lynden pursuant to the terms of the Midland Basin Participation Agreement of approximately $4.5 million per well.

Lynden’s first horizontal well, the Wolcott 253-1H, was spud in April 2014 on a 1,127 acre lease in northern Martin County, West Texas. The 1,127 lease (the “Wolcott Lease”) is operated by a separate Midland, Texas based company. The well has a lateral length of approximately 6,200 feet and was fracture stimulated in late July. In order to continue with development of the Wolcott Lease, a second horizontal well on the lease was spud in October 2014. Lynden is funding 24.375% of the cost of the wells on the Wolcott Lease and will have a 20% working interest in the wells. Subject to proposals made by the operator, we currently anticipate three horizontal wells will be spud on the lease in fiscal 2015. The gross cost of a horizontal well is estimated to be approximately $8.5 million, for an estimated cost to Lynden of approximately $2.1 million per well.

Lynden incurred $36,741,244 of capital expenditures in the Midland Basin during the financial year ended June 30, 2014. Of this amount, approximately $25,000 was for land and lease costs; approximately $345,000 was for the accrual of decommissioning liabilities; approximately $1,122,000 was for capitalized borrowing costs; and approximately $35,250,000 was for drilling, completion, facilities and tie-in.

Mitchell Ranch Project

In 2010, we entered into a Participation Agreement (“Eastern Shelf Participation Agreement”) with CrownRock pertaining to a single P&NG lease covering approximately 104,000 acres of P&NG leases in Coke, Mitchell, and Sterling counties of West Texas, subject to a 22.5% royalty to the mineral rights owners. All acreage is contained within a historical ranch, whose lands were optioned by CrownRock. The ranch lies to the immediate west of the Jameson oil field and is approximately 10 miles south-east of the Iatan oil field. The project is focused on Permo-Pennsylvanian-aged detrital targets along the eastern shelf of the Permian Basin where there are numerous opportunities across several pay zones, all of which are shallower than 8,000 feet in drilling depth.

In July 2011, together with CrownRock, we completed a term assignment with a large, independent exploration and production company, covering approximately 35,000 acres of the 104,000 acre Mitchell Ranch Project, located generally in the southern portion of the ranch. On March 31, 2014 the term assignment acreage was returned to us and CrownRock. We currently have a 50% working interest in the approximately 104,000 acres of the Mitchell Ranch Project.

We currently have one (0.5 net) producing test well on the Mitchell Ranch Project, the Spade 17 #1, where several rounds of completions have been carried out to determine a development plan for the project. The most recent completion was carried out in mid-February 2014.

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A four new well program is currently underway, with the first three wells now drilled and the fourth well currently drilling. The wells are in general proximity to our Spade 17 #1 well. The new well program is incorporating the results of a recent 3D seismic program that has identified multiple pay opportunities.

Assuming completions and subsequent testing across several zones, the gross cost of each well is anticipated to be $1.8 million, for an estimated cost to the Company of approximately $0.9 million per well.

During the financial year ended June 30, 2014, we received $110,081 in P&NG sales, incurred royalties of $24,768, and incurred production taxes of $3,939 with respect to the Mitchell Ranch Project.

Paradox Basin Project

The Paradox Basin project is a natural gas focused project located in the Paradox Basin in southwest Utah. The project is separated into two contiguous P&NG prospect areas: the Northern Prospect Area and the Southern Prospect Area. Lynden has a 55% before payout working interest (41.25% after payout working interest) in an 80% net revenue interest in the Northern Prospect Area. Lynden has a 25% before payout working interest (23.75% after payout working interest) in an 85% to 87% net revenue interest in the Southern Prospect Area.

Lynden and its partners have drilled nine gross wells in the Paradox Basin Project as part of the evaluation of the project’s productive potential. Two of the wells have now been plugged and abandoned and several of the wells continue to produce periodically.

Our interest in the gas gathering system, including approximately 25 miles of pipeline, is held though our 47.99% interest in Abajo Gas Transmission Company, LLC (“Abajo”). Through our interest in Abajo, Lynden is entitled to an effective 55% interest in the Northern Prospect Area gathering system and a 25% effective interest in the Southern Prospect Area gathering system.

During the financial year ended June 30, 2014, we received $202,842 in P&NG sales, incurred royalties of $35,634, incurred transportation costs of $41,322, and incurred production taxes of $6,768 in the Parador Basin. The transportation and marketing costs were paid to Abajo at market rates. The majority of the P&NG sales were from the sale of natural gas.

As a result of the depressed price of natural gas, we have not undertaken any material development work on the Paradox Basin Project over the past several years and consequently Lynden’s lease holdings continue to expire. Lynden’s lease holdings not held by production will expire in the next three years.

In December 2013, the Company disposed of its interest in leases covering approximately 8,400 gross acres in the Paradox Basin Project Southern Prospect Area for proceeds of approximately $307,000. As Lynden’s interest in these leases had been previously written down, Lynden recognized a gain of approximately $288,000 on disposition.

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Summary Reserve Information

The following chart details our summary reserve information as of June 30, 2014. The information is based on a reserve report prepared by our independent consulting petroleum engineers, Cawley, Gillespie and Associates, Inc. You should refer to “Item 1A. Risk Factors,” “Item 2. Financial Statements-Management’s Discussion and Analysis of Financial Condition and Results of Operations” in evaluating the material presented in the following table.

	June 30, 2014
	12-Month Unweighted Average Pricing: Oil $100.27, Natural Gas $4.104
	Oil (Mbbl)		Natural Gas (MMcf)		Natural Gas Liquids (Mbbl)		Pre-Tax Present Value Discounted at 10% (M$)
Proved developed producing		2,108.9		5,885.1		1,167.2		67,995
Proved developed non-producing		647.2		1,007.9		200.0		15,354
Proved undeveloped		2,430.8		5,817.1		1,154.2		28,342
Total proved		5,186.9		12,710.10		2,521.4		111,691
Probable		292.5		381.1		75.6		1,271
Total		5,479.4		13,091.2		2,597.0		112,962

	June 30, 2013
	12-Month Unweighted Average Pricing: Oil $91.60, Natural Gas $3.459
	Oil (Mbbl)		Natural Gas (MMcf)		Pre-Tax Present Value Discounted at 10% (M$)
Proved developed producing		1,877.0		7,405.5		49,881.7
Proved developed non-producing		494.2		1,226.6		7,535.2
Proved undeveloped		2,433.1		9,180.1		13,877.2
Total proved		4,804.4		17,812.1		71,294.2
Probable		159.0		654.5		735.0
Total		4,963.4		18,466.6		72,029.2

Proved reserves. Estimates of proved developed and undeveloped reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price changes and other factors. See “Item 1A. Risk Factors—Risks Related to Our Business—The development of our estimated proved undeveloped reserves (“PUDs”) may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore, our estimated PUDs may not be ultimately developed or produced.”

Proved undeveloped reserves. During the year ended June 30, 2014, we converted approximately 1,352 MMBoe of proved undeveloped reserves to proved developed reserves by drilling and completing 24 gross (9.78 net) PUD vertical locations.

Probable reserves. Estimates of probable reserves are inherently imprecise. When producing an estimate of the amount of oil and natural gas that is recoverable from a particular reservoir, an estimated quantity of probable reserves is an estimate that is as likely as not to be achieved. Estimates of probable reserves are also continually subject to revision based on production history, results of additional exploration and development, price changes and other factors.

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Deterministic methods to estimate probable reserve quantities are used, and when deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir. Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.

Reserve Estimation Procedures and Audits

The information included in this offering circular about our reserves as of June 30, 2014 and 2013, is based on reports prepared by Cawley, Gillespie and Associates, Inc. (“CGA”). The estimates of 100% of our proved reserves at June 30, 2014, and 2013, were prepared by CGA. Reserves were estimated in accordance with guidelines established by the SEC and the FASB applicable to public reporting companies.

Reserve estimation procedures. We have established internal controls over reserve estimation processes and procedures to support the accurate and timely preparation and disclosure of reserve estimates in accordance with SEC and GAAP requirements. These controls include oversight of the reserves estimation reporting processes by members of our senior management team and the preparation of annual reserve reports by CGA.

As part of our reserves estimation report processes, CGA works with our financial, land and accounting personnel to gather accurate and current data in order to prepare reserves estimates. Data gathered include updated production, lease operating expenses, price differentials and ownership interest. The reports are prepared by CGA and reviewed by members of our senior management team. All reserve estimates, material assumptions and inputs used in reserve estimates and significant changes in reserve estimates are reviewed for engineering and financial appropriateness and compliance with SEC and GAAP standards by CGA.

Reserves report preparation. CGA follows the general principles set forth in the standards pertaining to estimating and preparing oil and natural gas reserve information promulgated by the Society of Petroleum Engineers (“SPE”).

In conjunction with the preparation of our reserves report, we provided our internal engineering and geosciences technical data and all applicable analyses to CGA. No data was withheld from CGA. CGA accepted without independent verification the accuracy and completeness of the historical information and data furnished by us with respect to ownership interest, oil and natural gas production, well test data, commodity prices, operating and development costs, and any agreements relating to current and future operation of the properties and sale of production. Nevertheless, if in the course of its evaluation something came to its attention that brought into question the validity or sufficiency of any such information or data, CGA did not rely on the information or data until it had satisfactorily resolved its questions relating thereto or had independently verified that information or data.

Qualifications of reserves preparers. CGA is a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies. CGA was founded in 1961 and performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F-693. Within CGA, the technical person primarily responsible for preparing the estimates set forth in the CGA letter dated September 22, 2014 was Mr. Robert D. Ravnaas. Mr. Ravnaas is President of CGA and is a Registered Professional Engineer in the State of Texas (License No. 61304). Mr. Ravnaas has been a Petroleum Consultant for CGA since 1983 and became President in 2011. We understand that he has completed numerous field studies, reserve evaluations

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and reservoir stimulation, waterflood design and monitoring, unit equity determinations and producing rate studies and that he has testified before the Railroad Commission of Texas (the “TRRC”) in unitization and field rules hearings. Mr. Ravnaas received a B.S. with special honors in Chemical Engineering from the University of Colorado at Boulder, and a M.S. in Petroleum Engineering from the University of Texas at Austin. He is a member of the SPE, the Society of Petroleum Evaluation Engineers, the American Association of Petroleum Geologists and the Society of Professional Well Log Analysts.

Technologies used in reserves estimates. PUDs include those reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for completion. Undeveloped reserves may be classified as proved reserves on undrilled acreage directly offsetting development areas that are reasonably certain of production when drilled or where reliable technology provides reasonable certainty of economic producibility. Undrilled locations may be classified as having undeveloped proved reserves only if an ability and intent has been established to drill the reserves within five years, unless specific circumstances justify a longer time period.

In the context of reserves estimations, reasonable certainty means a high degree of confidence that the quantities will be recovered, and reliable technology is a grouping of one or more technologies (including computational methods) that has been field-tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. In estimating proved reserves, we use several traditional methods, such as, performance-based methods, volumetric-based methods and analogy with similar properties. In addition, we use additional technical analyses, such as seismic interpretation, geophysical logs and core data to provide incremental support for more complex reservoirs. Information from this incremental support is combined with the traditional technologies to enhance the certainty of our reserve estimates.

Selected Oil and Natural Gas Information

The following tables set forth selected oil and natural gas information from our operations as of and for each of the years ended June 30, 2014, 2013 and 2012. Because of normal production declines, increased or decreased drilling activities, and the effects of acquisitions or divestitures, the historical information presented below should not be interpreted as being indicative of future results.

Production, Price and Cost Data. Please see “Item 2. Financial Statements—Year Ended June 30, 2014 (Fiscal 2014) Compared to Year Ended June 30, 2013 (Fiscal 2013)—Results of Operations—P&NG Revenue” for discussion and disclosure related to production, price and cost data.

Productive Wells. The following table sets forth information at June 30, 2014, relating to the productive wells in which we owned a working interest as of that date. Productive wells consist of producing wells and wells capable of production, including natural gas wells awaiting pipeline connections to commence deliveries and oil wells awaiting connection to production facilities. Gross wells are the total number of producing wells in which we own an interest, and net wells are the sum of our fractional working interests owned in gross wells.

	Gross Productive Wells						Net Productive Wells
	Oil		Natural Gas		Total		Oil		Natural Gas		Total
Total		91		0		91		37.18		0		37.18

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Leasehold Acreage. The following table sets forth information as of June 30, 2014, relating to our leasehold acreage:

	Developed Acreage (a)				Undeveloped Acreage (b)
	Gross (c)		Net (d)		Gross (c)		Net (d)
Total		7,280		2,559		133,458		65,324

(a) Developed acres are acres spaced or assigned to productive wells capable of production.

(b) Undeveloped acres are acres which are not held by commercially producing wells, regardless of whether such acreage contains proved reserves.

(c) A gross acre is an acre in which we own a working interest. The number of gross acres is the total number of acres in which we own a working interest.

(d) A net acre is deemed to exist when the sum of the fractional ownership working interest in gross acres equals one. The number of net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof.

With respect to the leases subject to expiration during Fiscal 2015, we may perpetuate these leases pursuant to their respective continuous drilling clauses, we may sell all or some of these leases, we may allow the leases to expire undrilled or we may extend the leases prior to their expiration based on Fiscal 2015 planned activities or for other business reasons. In certain leases, an extension is only subject to our election to extend and the fulfillment of certain capital expenditure commitments. In other cases, the extensions are subject to the consent of third parties, and no assurance can be given that the requested extensions will be granted.

Drilling and Other Exploration and Development Activities. The following table sets forth the number of gross and net wells drilled by us during the years ended June 30, 2014, 2013 and 2012, that were productive or dry holes. This information should not be considered indicative of future performance, nor should it be assumed that there were any correlations between the number of productive wells drilled and the oil and natural gas reserves generated thereby or the costs to us of productive wells compared to the costs of dry holes.

	Year Ended June 30,
	2014		2013		2012
Gross:
Development
Productive		24		40		23
Dry		0		0		0
Total		24		40		23
Exploratory
Productive		0		0		0
Dry		0		0		0
Total		24		40		23
Net:
Development
Productive		9.78		16.90		9.64
Dry		0		0		0
Total		9.78		16.90		9.64
Exploratory
Productive		0		0		0
Dry		0		0		0
Total		9.78		16.90		9.64

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Present Activities. The following table sets forth information about our wells that were in the process of being drilled as of June 30, 2014:

	June 30, 2014
Gross:
Development		4.0
Exploratory		2.0
Total		6.0
Net:
Development		1.68
Exploratory		0.70
Total		2.38

Title to Properties

We believe we have satisfactory title, in all material respects, to substantially all of our producing properties in accordance with standards generally accepted in the oil and natural gas industry. Our producing properties are subject to royalty interest, standard liens incident to operating agreements, liens for current taxes and other burdens, which we believe do not materially interfere with the use of or affect the value of such properties. Substantially all of our proved producing oil and natural gas properties are pledged as collateral for borrowing under our revolving credit facility. As is customary in the industry, in the case of undeveloped properties, we typically rely upon the judgment of oil and natural gas lease brokers or landmen who perform the field work in examining records in the appropriate governmental or county clerk’s office before attempting to acquire a lease or other developed rights in a specific mineral interest. Prior to drilling a well, however, we obtain a preliminary title review of the spacing unit within which the proposed well is to be drilled to ensure there are no obvious deficiencies in title to the well. During the course of this preliminary title review, we may find that individual properties are subject to burdens that we believe do not materially interfere with the use or affect the value of the properties, such as royalty interest, standard liens incident to operating agreements and liens for current taxes.

Our failure to obtain perfect title to our leaseholds may adversely affect our current production and reserves and our ability in the future to increase production and reserves.

Marketing and Major Purchasers

All revenues from the sale of oil and natural gas production are collected and disbursed on our behalf by CrownQuest. Production from our properties is marketed using methods that are consistent with industry practices. Sales prices for oil, NGL and natural gas production are negotiated based on factors normally considered in the industry, such as an index or spot price, price regulations, distance from the well to the pipeline, commodity quality and prevailing supply and demand conditions. We sell our oil and natural gas production principally to marketers and other purchasers that have access to pipeline facilities. In areas where there is no practical access to pipelines, oil is transported to storage facilities by trucks owned or otherwise arranged by the marketers or purchasers. Our marketing of oil and natural gas can be affected by factors beyond our control, the effects of which cannot be accurately predicted.

For the year ended June 30, 2014 oil and natural gas production representing approximately 50% of our total revenues was sold to High Sierra Crude Oil & Marketing, LLC, and oil and natural gas production representing approximately 30% of our total revenues was sold to LPC Crude Oil, Inc. The loss of any significant purchaser may result in a temporary decline in our revenues.

While the loss of any of these purchasers may result in a temporary interruption in sales of, or a lower price for, our production, we believe that the loss of any of these purchasers would not have a material adverse effect on our operations because there are other purchasers in our producing regions.

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Seasonality

Generally, but not always, the demand for natural gas decreases during the summer months and increases during the winter months, thereby affecting the price we receive for natural gas. Seasonal anomalies, such as mild winters or hotter than normal summers, sometimes lessen this fluctuation. Demand for natural gas and natural gas liquid (“NGL”) can be particularly weak in the fall and spring which, coupled with high inventory levels, could result in the shut-in and deferral of production. Demand for oil has generally not been seasonal.

Employees

Our operations and activities are managed by our board of directors (the “Board”) and our executive management personnel. We have no employees. However, pursuant to a management agreement with Colin Watt, the employees of Squall Capital Corp., a company wholly owned by Colin Watt, provide monthly administrative and support services. See section entitled “Item 6. Executive Compensation – Colin Watt.” As of June 30, 2014, Squall had 4 full-time employees, all of which worked at our Vancouver, BC office. We also use the services of independent contractors to perform various other services.

We are a non-operator, and as such all of the oil and gas field operations are carried out by an operator. The vast majority of our acreage is operated by CrownQuest Operating, LLC of Midland, Texas. CrownQuest is a company related to CrownRock. CrownQuest operates 90% of our wells in the Midland Basin (Wolfberry), and is the operator of both the Mitchell Ranch Project and Paradox Basin Project.

Competition

The oil and natural gas industry in the regions in which we operate is highly competitive. We encounter strong competition from numerous parties, ranging generally from small independent producers to major integrated companies. We primarily encounter significant competition in acquiring properties, contracting for drilling and workover equipment, and securing trained personnel. Many of these competitors have financial and technical resources and staffs substantially larger than ours. As a result, our competitors may be able to pay more for desirable properties, or to evaluate, bid for and purchase a greater number of properties or prospects than our financial or personnel resources will permit.

In addition to the competition for drilling and workover equipment, we are also affected by the availability of related equipment and materials. The oil and natural gas industry periodically experiences shortages of drilling and workover rigs, equipment, pipe, materials and personnel, which can delay developmental drilling, workover and exploration activities and cause significant price increases. Past shortages of personnel made it difficult to attract and retain personnel with experience in the oil and natural gas industry and caused us to increase our general and administrative budget. We are unable to predict the timing or duration of any such shortages

Competition is also strong for attractive oil and natural gas producing properties, undeveloped leases and drilling rights. Although we regularly evaluate acquisition opportunities and submit bids as part of our growth strategy, we do not have any current agreements, understandings or arrangements with respect to any material acquisition.

Regulation of the Oil and Natural Gas Industry

General

The oil and natural gas industry in the United States of America is extensively regulated by numerous federal, state and local authorities. Legislation affecting the oil and natural gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden. Also,

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numerous departments and agencies, both federal and state, are authorized by statute to issue rules and regulations binding on the oil and natural gas industry and its individual members, some of which carry substantial penalties for failure to comply. Although the regulatory burden on the oil and natural gas industry increases our cost of production and, consequently, affect our profitability, these burdens generally do not affect us any differently or to any greater or lesser extent than they affect other companies in the oil and natural gas industry with similar types, quantities and locations of production.

Activities on Federal Lands

Oil and natural gas exploration and production activities on federal lands are subject to the National Environmental Policy Act (“NEPA”). NEPA requires the federal Bureau of Land Management, a division of the U.S. Department of the Interior (the “BLM”) and/or other relevant federal agencies of the U.S. Department of the Interior to evaluate major agency actions having the potential to significantly affect the environment. In the course of such evaluations, an agency will prepare an environmental assessment that assesses the potential direct, indirect and cumulative effects of a proposed project and, if necessary, will prepare a more detailed environmental impact statement that may be made available for public review and comment. All of our current exploration and production activities, as well as proposed exploration and development plans, on federal lands require governmental permits that are subject to the requirement of NEPA. This process has the potential to delay development of some of our oil and natural gas projects. Authorizations under NEPA are also subject to protest, appeal or litigation, any or all of which may delay or halt projects.

Our lease operations on these federal leases must also comply with numerous regulatory restrictions, including various non-discrimination statues, royalty and related valuation requirements, and certain of these operations must be conducted pursuant to specified on-site security regulations and other appropriate federal permits. Our leases upon these federal lands contain relatively standardized terms and require compliance with detailed federal regulation and orders, and contain stipulations limiting activities that may be conducted on the lease. Some stipulations are unique to particular geographic areas and may limit the times during which activities on the lease may be conducted, the manner in which certain activities may be conducted or, in some case, may ban any surface activity. Under certain circumstance, the BLM or other relevant federal agency may require our operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect our financial condition and operations.

Regulation of the Development and Production of Oil and Natural Gas

Development and production operations are subject to various types of regulation at federal, state and local levels. These types of regulation include requiring permits for the drilling of wells, the posting of bonds in connection with various types of activities and filing reports concerning operations. Most states, and some counties and municipalities, in which we operate, also regulate one or more of the following:

• the location of wells;

• the method of drilling and casing wells;

• the method and ability to fracture stimulate wells;

• the surface use and restoration of properties upon which wells are drilled;

• the plugging and abandoning of wells; and

• notice to surface owners and other third parties.

State laws regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized

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properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of oil and natural gas we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, NGLs and natural gas within its jurisdiction. States do not regulate wellhead prices or engage in other similar direct regulation, but there can be no assurance that they will not do so in the future. The effect of such future regulations may be to limit the amounts of oil and natural gas that may be produced from our wells, negatively affect the economics of production from these wells, or limit the number of locations we can drill.

Regulation of Transportation and Sale of Oil and NGL

The liquids industry is also extensively regulated by numerous federal, state and local authorities. In a number of instances, the ability to transport and sell such products on interstate pipelines is dependent on pipelines whose rates, terms and conditions of service are subject to the Federal Energy Regulatory Commission (“FERC”) jurisdiction under the Interstate Commerce Act (the “ICA”). We do not believe these regulations affect us any differently than other producers.

The ICA requires that pipelines maintain a tariff on file with FERC. The tariff sets forth the established rates as well as the rules and regulations governing the service. The ICA requires, among other things, that rates and terms and conditions of service on interstate common carrier pipelines be “just and reasonable.” Such pipelines must also provide jurisdictional service in a manner that is not unduly discriminatory or unduly preferential. Shippers have the power to challenge new and existing rates and terms and conditions of service before FERC.

Rates of interstate liquids pipelines are currently regulated by FERC primarily through an annual indexing methodology, under which pipelines increase or decrease their rates in accordance with an index adjustment specified by FERC. For the five-year period beginning in 2010, FERC established an annual index adjustment equal to the change in the producer price index for finished goods plus 2.65%. This adjustment is subject to review every five years. Under FERC’s regulations, a liquids pipeline can request a rate increase that exceeds the rate obtained through application of the indexing methodology by using a cost-of-service approach, but only after the pipeline establishes that a substantial divergence exists between the actual costs experienced by the pipeline and the rates resulting from application of the indexing methodology. Increases in liquids transportation rates may result in lower revenue and cash flows for us.

In addition, due to common carrier regulatory obligations of liquids pipelines, capacity must be prorated among shippers in an equitable manner in the event there are nominations in excess of capacity by current shippers or capacity requests are received from a new shipper. Therefore, new shippers or increased volume by existing shippers may reduce the capacity available to us. Any prolonged interruption in the operation or curtailment of available capacity of the pipelines that we rely upon for liquids transportation could have a material adverse effect on our business, financial condition, results of operations and cash flows. However, we believe that access to liquids pipeline transportation services generally will be available to it to the same extent as to our similarly-situated competitors.

Intrastate liquids pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate liquids pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate liquids pipeline rates, varies from state to state. We believe that the regulation of liquids pipeline transportation rates will not affect our operations in any way that is materially different from the effects on our similarly-situated competitors.

In November 2009, the FTC issued regulations pursuant to the Energy Independence and Security Act of 2007 intended to prohibit market manipulation in the petroleum industry. Violators of the regulations face civil penalties of up to $1.0 million per violation per day. In July 2010, the U.S. Congress passed the Act, which incorporated an expansion of the authority of the Commodity Futures Trading Commission (“CFTC”) to prohibit market manipulation in the markets regulated by the

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CFTC. This authority, with respect to crude oil swaps and futures contracts, is similar to the anti-manipulation authority granted to the FERC with respect to anti-manipulation in the natural gas industry and the FTC with respect to crude oil purchases and sales. In July 2011, the CFTC issued final rules to implement their new anti-manipulation authority. The rules subject violators to a civil penalty of up to the greater of $1.0 million or triple the monetary gain to the person for each violation.

Sales prices of oil, condensate and NGL are not currently regulated and are made at market prices. Although prices of these energy commodities are currently unregulated, the U.S. Congress historically has been active in their regulation. We cannot predict whether new legislation to regulate the prices charged for these commodities, might be proposed, what proposals, if any, might actually be enacted by the U.S. Congress or the various state legislatures and what effect, if any, the proposals might have on our operations.

Regulation of Transportation and Sale of Natural Gas

Historically, the transportation and sale for resale of natural gas in interstate commerce has been regulated by FERC under NGA, the Natural Gas Policy Act of 1978 (“NGPA”) and regulations issued under those statutes. In the past, the federal government has regulated the prices at which natural gas could be sold. While sales by producers of natural gas can currently be made at market prices, Congress could reenact price controls in the future. Deregulation of wellhead natural gas sales began with the enactment of the NGPA and culminated in adoption of the Natural Gas Wellhead Decontrol Act which removed all price controls affecting wellhead sales of natural gas effective January 1, 1993.

The availability, terms and cost of transportation significantly affect sales of gas. Federal and state regulations govern the price and terms for access to gas pipeline transportation. Intrastate gas pipeline transportation activities are subject to various state laws and regulations, as well as orders of state regulatory bodies, including the TRRC. The interstate transportation and sale of gas is subject to federal regulation, including regulation of the terms, conditions and rates for interstate transportation, storage and various other matters, primarily by FERC. FERC endeavors to make gas transportation more accessible to gas buyers and sellers on an open-access and non-discriminatory basis. Natural gas transportation has historically been heavily regulated. Therefore, we cannot provide any assurance that the current less stringent regulatory approach will continue. However, we do not believe that any action taken will affect us in a way that materially differs from the way it affects other natural gas producers.

Pursuant to the Energy Policy Act of 2005 (“EPAct 2005”) it is unlawful for “any entity,” including producers such as us, that are otherwise not subject to FERC’s jurisdiction under the NGA to use any deceptive or manipulative device or contrivance in connection with the purchase or sale of gas or the purchase or sale of transportation services subject to regulation by FERC, in contravention of rules prescribed by FERC. FERC’s rules implementing this provision make it unlawful, in connection with the purchase or sale of gas subject to the jurisdiction of FERC, or the purchase or sale of transportation services subject to the jurisdiction of FERC, for any entity, directly or indirectly, to use or employ any device, scheme or artifice to defraud; to make any untrue statement of material fact or omit to make any such statement necessary to make the statements made not misleading; or to engage in any act or practice that operates as a fraud or deceit upon any person. EPAct 2005 also gives FERC authority to impose civil penalties up to $1.0 million per day per violation for violations of the NGA and the Natural Gas Policy Act of 1978. The anti-manipulation rule applies to activities of entities not otherwise subject to FERC’s jurisdiction to the extent the activities are conducted “in connection with” gas sales, purchases or transportation subject to FERC jurisdiction, which includes the annual reporting requirements under Order 704 (defined below).

In December 2007, FERC issued a final rule on the annual natural gas transaction reporting requirements, as amended by subsequent orders on rehearing (“Order 704”). Under Order 704, any market participant that engages in wholesale sales or purchases of gas that equal or exceed 2.2 million MMBtus of physical natural gas in the previous calendar year must annually report such sales and

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purchases to FERC on Form No. 552 on May 1 of each year. Form No. 552 contains aggregate volumes of natural gas purchased or sold at wholesale in the prior calendar year to the extent such transactions utilize, contribute to or may contribute to the formation of price indices. It is the responsibility of the reporting entity to determine which individual transactions should be reported based on the guidance of Order 704. Order 704 is intended to increase the transparency of the wholesale gas markets and to assist FERC in monitoring those markets and in detecting market manipulation.

Additional proposals and proceedings that might affect the natural gas industry are considered from time to time by the U.S. Congress, FERC, state regulatory bodies and the courts. We cannot predict when or if any such proposals might become effective or their effect, if any, on our operations. We do not believe that we will be affected by any action taken in a materially different way than other natural gas producers, gatherers and marketers with which we compete.

Gas Gathering

Section 1(b) of the NGA exempts gas gathering facilities from FERC’s jurisdiction. We believe that the gas gathering facilities in which we hold an interest meet the traditional tests FERC has used to establish a pipeline system’s status as a non-jurisdictional gatherer. There is, however, no bright-line test for determining the jurisdictional status of pipeline facilities. Moreover, the distinction between FERC-regulated transmission services and federally unregulated gathering services is the subject of litigation from time to time, so the classification and regulation of some of our gathering facilities may be subject to change based on future determinations by FERC and the courts.

While we hold an interest in some gas gathering facilities, we also depend on gathering facilities owned and operated by third parties to gather production from our properties, and therefore, we are affected by the rates charged by these third parties for gathering services. To the extent that changes in federal or state regulation affect the rates charged for gathering services, we also may be affected by these changes. Accordingly, we do not anticipate that we would be affected any differently than similarly situated gas producers.

Energy Commodity Prices

Sales prices of gas, oil, condensate and NGL are not currently regulated and are made at market prices. Although prices of these energy commodities are currently unregulated, the U.S. Congress historically has been active in their regulation. We cannot predict whether new legislation to regulate oil and gas, or the prices charged for these commodities, might be proposed, what proposals, if any, might actually be enacted by the U.S. Congress or the various state legislatures and what effect, if any, the proposals might have on our operations.

Transportation of Hazardous Materials

The U.S. Department of Transportation has adopted regulations requiring that certain entities transporting designated hazardous materials develop plans to address security risks related to the transportation of hazardous materials. We do not believe that these requirements will have an adverse effect on us or our operations. We cannot provide any assurance that the security plans required under these regulations would protect against all security risks and prevent an attack or other incident related to our transportation of hazardous materials.

Environmental and Occupational Health and Safety Matters

General. Our operations are subject to stringent and complex federal, state, local and tribal laws and regulations governing environmental protection, worker health and safety, and the discharge of materials into the environment. These laws and regulations may, among other things:

• require the acquisition of various permits before drilling or other regulated activity commences;

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• enjoin some or all of the operations of facilities deemed in noncompliance with permits;

• restrict the types, quantities and concentration of various substances that can be released into the environment in connection with oil and natural gas drilling and production activities;

• limit or prohibit drilling activities on certain lands lying within wilderness, wetlands and other protected areas;

• apply specific health and safety criteria addressing worker protection; and

• require remedial measures to mitigate pollution from former and ongoing operations, such as requirements to close pits and plug abandoned wells.

A failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil and criminal penalties, the imposition of investigatory and remedial obligations, and the issuance of orders enjoining performance of some or all of our operations.

These laws and regulations may also restrict the rate of oil and natural gas production below the rate that would otherwise be possible. The regulatory burden on the oil and natural gas industry increases the cost of doing business in the industry and consequently affects profitability. While we believe we are in substantial compliance with all existing environmental laws and regulations applicable to our current operations and that our continued compliance with existing requirements will not have a material adverse effect on our financial condition and results of operations, environmental laws and regulations are subject to frequent change, often resulting in more restrictions and limitations on activities that may affect the environment. Any changes that result in more stringent and costly well construction, drilling, water management or completion activities or waste handling, disposal and cleanup requirements for the oil and natural gas industry could have a significant effect on our results of operations, financial condition and business as well as the industry in general. We did not incur any material capital expenditures for remediation or pollution control activities for fiscal the year ended June 30, 2014. Additionally, we are not aware of any environmental issues or claims that will require material capital expenditures during fiscal 2015. Nevertheless, accidental spills or releases may occur in the course of our operations, and we cannot give any assurance that it will not incur substantial costs and liabilities as a result of such spills or releases, including those relating to claims for damage to property and persons.

The following is a summary of some of the more significant existing laws and regulations, as amended from time to time, to which our operations are or may be subject.

Hazardous Wastes and Substances. The Resource Conservation and Recovery Act (the “RCRA”) and comparable state statutes regulate the generation, transportation, treatment, storage, disposal and cleanup of hazardous and non-hazardous wastes. Under the auspices of the U.S. Environmental Protection Agency (the “EPA”), the individual states administer some or all of the provisions of the RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters and most of the other wastes associated with the exploration, development and production of crude oil or natural gas, if properly handled, are regulated under the RCRA’s non-hazardous waste provisions rather than the more stringent hazardous waste standards. However, owing to changes in existing laws and regulations, it is possible that certain oil and gas exploration and production wastes now classified as non-hazardous could be classified as hazardous wastes in the future. Any such change could result in an increase in our costs to manage and dispose of wastes, which could have a material adverse effect on our results of operations and financial position as well as those of the oil and natural gas industry in general.

Wastes containing naturally occurring radioactive materials (“NORM”) may also be generated in connection with our operations. NORM is subject primarily to individual state radiation control regulations. In addition, NORM handling and management activities are governed by regulations promulgated by the Occupational Safety and Health Administration (“OSHA”). These state and OSHA regulations impose certain requirements concerning worker protection; the treatment, storage and disposal of NORM waste; the management of waste piles, containers and tanks containing NORM; as

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well as restrictions on the uses of land with NORM contamination. Compliance with these NORM requirements could have a significant adverse effect on our operating costs.

Comprehensive Environmental Response, Compensation and Liability Act (the “CERCLA”), also known as the Superfund law, and analogous state laws impose joint and several liability, without regard to fault or legality of conduct, on classes of persons considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current and past owner or operator of the site where the release occurred and anyone who disposed or arranged for the disposal of a hazardous substance released at the site. Under CERCLA, such persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

We currently own, lease, or operate numerous properties that have been used for oil and natural gas development and production for many years. Although we believe that we have used operating and waste disposal practices that were standard in the industry at the time, hazardous substances, wastes or petroleum hydrocarbons may have been spilled or otherwise released on or under the properties owned or leased by us, or on or under other locations, including off-site locations, where such substances have been taken for recycling or disposal. In addition, some of our properties have been operated by previous owners or operators whose treatment and disposal of hazardous substances, wastes or petroleum hydrocarbons were not under our control. These properties and the substances disposed or released on them may be subject to CERCLA, the RCRA and analogous state laws. Under such laws, we could be required to remove previously disposed substances and wastes, remediate contaminated property or perform remedial plugging or pit closure operations to prevent future contamination.

Water Discharges and Subsurface Injections. The Clean Water Act and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, including spills and leaks of oil and hazardous substances, into waters of the United States and state waters. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. Spill prevention, control and countermeasure planning requirements of federal laws require appropriate containment berms and similar structures to help prevent the contamination of navigable waters by a petroleum hydrocarbon tank spill, rupture or leak. In addition, the Clean Water Act and analogous state laws require individual permits or coverage under general permits for discharges of stormwater runoff from certain types of facilities. The Clean Water Act also prohibits the discharge of dredge and fill material into regulated waters, including wetlands, unless authorized by an appropriately issued permit. Federal and state regulatory agencies can impose administrative, civil and criminal penalties for noncompliance with discharge permits or other requirements of the Clean Water Act and analogous state laws and regulations.

The primary federal law imposing liability for oil spills is the Oil Pollution Act (the “OPA”) amends the Clean Water Act and sets minimum standards for prevention, containment and cleanup of oil spills. OPA applies to releases from vessels, offshore facilities and onshore facilities, including exploration and production facilities that may affect waters of the United States. Under OPA, responsible parties, including owners and operators of onshore facilities, may be subject to oil spill cleanup costs and natural resource damages as well as a variety of public and private damages that may result from oil spills. OPA also requires owners and operators of certain onshore facilities to prepare Oil Spill Response Plans for responding to a worst case discharge of oil to waters of the United States.

Operations associated with our properties also produce wastewaters that are disposed via injection in underground wells. These injection wells are regulated by the federal Safe Drinking Water Act (the “SDWA”) and analogous state laws. The underground injection well program under the SDWA requires permits from the EPA or analogous state agency for our disposal wells, establishes minimum standards for injection well operations, and restricts the types and quantities of fluids that may be injected. Any leakage from the subsurface portions of the injection wells may cause degradation of freshwater,

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potentially resulting in cancellation of operations of a well, issuance of fines and penalties from governmental agencies, incurrence of expenditures for remediation of the affected resource, and imposition of liability by third parties for alternative water supplies, property damages and personal injuries. While we believe that we have obtained the necessary permits from the applicable regulatory agencies for our underground injection wells and that we are in substantial compliance with applicable permit conditions and federal and state rules, any changes in the laws or regulations or the inability to obtain permits for new injection wells in the future may affect our ability to dispose of produced waters and ultimately increase the cost of our operations. In addition, in response to recent seismic events near underground injection wells used for the disposal of oil and gas-related wastewaters, federal and some state agencies, including the Texas Railroad Commission, have begun investigating whether such wells have caused increased seismic activity, and some states have shut down or imposed moratoria on the use of such injection wells. If new regulatory initiatives are implemented that restrict or prohibit the use of underground injection wells in areas where we rely upon the use of such wells in our operations, our costs to operate may significantly increase and our ability to conduct continue production may be delayed or limited, which could have a material adverse effect on our results of operations and financial position.

We also routinely use hydraulic fracturing techniques in many of our drilling and completion programs. The process involves the injection of water, sand and chemical additives under pressure into targeted subsurface formations to stimulate oil and gas production. The process is typically regulated by state oil and gas commissions but the EPA has asserted federal regulatory authority under the SDWA over certain hydraulic fracturing involving the use of diesel fuel and published final permitting guidance in February 2014 for hydraulic fracturing activities using diesel fuels. In November 2011, the EPA announced its intent to develop and issue regulations under the federal Toxic Substances Control Act to require companies to disclose information regarding the chemicals used in hydraulic fracturing and continues to project the issuance of an Advance Notice of Proposed Rulemaking that would seek public input on the design and scope of such disclosure regulations but it does not state a deadline for such issuance. In addition, Congress has from time to time considered the adoption of legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process. At the state level, a growing number of states, including Texas where we operate, have adopted, or are considering legal requirements that could impose more stringent permitting, disclosure, or well construction requirements on hydraulic fracturing activities. In addition, local government may seek to adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular. We believe that we follow applicable standard industry practices and legal requirements for groundwater protection in our hydraulic fracturing activities. Nevertheless, if new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development, or production activities, and perhaps even be precluded from drilling wells.

In addition, several governmental reviews have been conducted or are underway that focus on environmental aspects of hydraulic fracturing activities. The White House Council on Environmental Quality is coordinating an administration-wide review of hydraulic fracturing practices. The EPA has commenced a study of the potential environmental effects of hydraulic fracturing on drinking water and groundwater, with a draft report drawing conclusions about hydraulic fracturing on drinking water resources expected to be available for public comment and peer review in 2014. Moreover, the EPA is developing effluent limitations for the treatment and discharge of wastewater resulting from hydraulic fracturing activities and plans to propose these standards for shale gas in 2014. Also, in May 2013, the BLM published a revised supplemental notice of proposed rulemaking governing hydraulic fracturing on federal and Indian oil and gas leases that would require public disclosure of chemicals used in hydraulic fracturing, confirmation that wells used in fracturing operations meet appropriate construction standards, and development of appropriate plans for managing flowback water that returns to the surface. These existing or any future studies, depending on their degree of pursuit and any meaningful results obtained, could spur initiatives to further regulate hydraulic fracturing under the SDWA or other regulatory mechanisms.

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To our knowledge, there have been no citations, suits or contamination of potable drinking water arising from our fracturing operations. We do not have insurance policies in effect that are intended to provide coverage for losses solely related to hydraulic fracturing operations; however, we believe our general liability and excess liability insurance policies would cover third-party claims related to hydraulic fracturing operations and associated legal expenses in accordance with, and subject to, the terms of such policies.

Air Emissions. The federal Clean Air Act (the “CAA”) and comparable state laws regulate emissions of various air pollutants through air emissions permitting programs and the imposition of other requirements. Such laws and regulations may require a facility to obtain pre-approval for the construction or modification of certain projects or facilities expected to produce air emissions or result in the increase of existing air emissions; obtain or strictly comply with air permits containing various emissions and operational limitations; or utilize specific emission control technologies to limit emissions of certain air pollutants. In addition, the EPA has developed, and continues to develop, stringent regulations governing emissions of toxic air pollutants at specified sources. Moreover, states can impose air emissions limitations that are more stringent than the federal standards imposed by the EPA. Federal and state regulatory agencies can also impose administrative, civil and criminal penalties for noncompliance with air permits or other requirements of the CAA and associated state laws and regulations.

Permits and related compliance obligations under the CAA, as well as changes to state implementation plans for controlling air emissions in regional non-attainment areas, may require us to incur future capital expenditures in connection with the addition or modification of existing air emission control equipment and strategies for gas and oil exploration and production operations. For example, in 2012, the EPA published final rules under the CAA that subject oil and natural gas production, processing, transmission and storage operations to regulation under the New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants programs. With regards to production activities, these final rules require, among other things, the reduction of volatile organic compound emissions from three subcategories of fractured and refractured gas wells for which well completion operations are conducted: wildcat (exploratory) and delineation gas wells; low reservoir pressure non-wildcat and non-delineation gas wells; and all “other” fractured and refractured gas wells. All three subcategories of wells must route flowback emissions to a gathering line or capture and combust flowback emissions using a combustion device, such as a flare. However, the “other” wells must use reduced emission completions, also known as “green completions,” with or without combustion devices, on or after January 1, 2015. These regulations also establish specific new requirements regarding emissions from production-related wet seal and reciprocating compressors. Compliance with these requirements could increase our costs of development and production, which costs could be significant.

Climate Change. In December 2009 the EPA published its findings that emissions of carbon dioxide, methane and other greenhouse gases (“GHGs”) present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the Earth’s atmosphere and other climatic changes. Based on these findings, the EPA adopted regulations under the existing CAA, establishing construction and operating permitting reviews for GHG emissions from certain large stationary sources that are potential major sources of certain principal, or criteria, pollutant emissions. We could become subject to these permitting requirements and be required to install “best available control technology” to limit emissions of GHGs from any new or significantly modified facilities we may seek to construct in the future if they would otherwise emit GHGs in excess of applicable threshold levels. The EPA has also adopted rules requiring the reporting of GHG emissions on an annual basis from specified GHG emission sources in the United States, including certain oil and natural gas production facilities, which includes certain of our facilities. We are monitoring GHG emissions from our operations in accordance with these GHG emissions reporting rules and believe our monitoring activities are in substantial compliance with applicable reporting obligations.

While the U.S. Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal

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level in recent years. In the absence of federal climate legislation in the United States, a number of state and regional efforts have emerged that are aimed at tracking or reducing GHG emissions by means of cap and trade programs that typically require major sources of GHG emissions, such as electric power plants, to acquire and surrender emission allowances in return for emitting those GHGs. Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would affect our business, any such future laws and regulations could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, acquire emissions allowances or comply with new regulatory or reporting requirements including the imposition of a carbon tax. Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, oil and gas, which could reduce the demand for the oil and gas we produce. Consequently, legislation and regulatory programs to reduce emissions of GHGs could have an adverse effect on our business, financial condition and results of operations.

Finally, some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, floods and other climatic events. If any such effects were to occur, they could have an adverse effect on our financial condition and results of operations.

Endangered Species. The federal Endangered Species Act (the “ESA”) and analogous state laws regulate activities that could have an adverse effect on threatened or endangered species. Some of our well drilling operations are conducted in areas where protected species or their habitats are known to exist. In these areas, we may be obligated to develop and implement plans to avoid potential adverse effects to protected species and their habitats, and we may be prohibited from conducting operations in certain locations or during certain seasons, such as breeding and nesting seasons, when our operations could have an adverse effect on the species. It is also possible that a federal or state agency could order a complete halt to drilling activities in certain locations if it is determined that such activities may have a serious adverse effect on a protected species. Similar protections are offered to migratory birds under the Migratory Bird Treaty Act. The presence of a protected species in areas where we perform activities could result in increased costs or limitations on our ability to perform operations and thus have an adverse effect on our business.

As a result of a settlement approved by the U.S. District Court for the District of Columbia in September 2011, the U.S. Fish and Wildlife Service (the “FWS”) is required to consider listing numerous species as endangered or threatened under the ESA by no later than completion of the agency’s 2017 fiscal year. For example, on March 27, 2014, the FWS announced the listing of the lesser prairie chicken, whose habitat is over a five-state region, including Texas, where we conduct our operations, as a threatened species under the ESA. However, the FWS also announced a final rule that will limit regulatory effects on landowners and businesses from the listing if those landowners and businesses have entered into certain range-wide conservation planning agreements, such as those developed by the Western Association of Fish and Wildlife Agencies, pursuant to which such parties agreed to take steps to protect the lesser prairie chicken’s habitat and to pay a mitigation fee if its actions harm the lesser prairie chicken’s habitat. The designation of previously unprotected species, including the lesser prairie chicken, as threatened or endangered in areas where we operate could cause us to incur increased costs arising from species protection measures or could result in limitations on our exploration and production activities that could have an adverse effect on our ability to develop and produce reserves.

Occupational Health and Safety. Our operations are subject to the requirements of OSHA and comparable state statutes. These laws and the related regulations strictly govern the protection of the health and safety of employees. The OSHA hazard communication standard, EPA community right-to-know regulations under Title III of CERCLA and similar state statues require that we organize or disclose information about hazardous materials used or produced in our operations. We believe that we are in substantial compliance with these applicable requirements and with other OSHA and comparable requirements.

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Legal Proceedings

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not currently a party to any material legal proceedings. In addition, we are not aware of any legal or governmental proceedings against us, or contemplated to be brought against us, under the various environmental protection statutes to which we are subject.

Item 1A. Risk Factors.

Investing in our common stock involves risks. You should carefully consider the information in this Registration Statement, including the matters addressed under “Cautionary Statement Regarding Forward-Looking Statements,” and the following risks before making an investment decision. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.

Risks Related to Our Business

Oil and natural gas prices are volatile. A substantial or extended decline in commodity prices may adversely affect our business, financial condition or results of operations and our ability to meet our capital expenditure obligations and financial commitments.

The prices we receive for our oil, NGLs and natural gas production heavily influence our revenue, profitability, access to capital and future rate of growth. Oil, NGLs and natural gas are commodities and, therefore, their prices are subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the commodities market has been volatile. This market will likely continue to be volatile in the future. The prices we receive for our production, and the levels of our production, depend on numerous factors beyond our control. These factors include the following:

• worldwide and regional economic conditions affecting the global supply and demand for oil, NGLs and natural gas;

• the price and quantity of foreign imports;

• political and economic conditions in or affecting other producing countries, including the Middle East, Africa, South America and Russia;

• the ability of members of the Organization of the Petroleum Exporting Countries to agree to and maintain oil price and production controls;

• the level of global exploration and production;

• the level of global inventories;

• prevailing prices on local price indexes in the areas in which we operate;

• the proximity, capacity, cost and availability of gathering and transportation facilities;

• localized and global supply and demand fundamentals and transportation availability;

• the cost of exploring for, developing, producing and transporting reserves;

• weather conditions and other natural disasters;

• technological advances affecting energy consumption;

• the price and availability of alternative fuels;

• expectations about future commodity prices; and

• domestic, local and foreign governmental regulation and taxes.

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Lower commodity prices may reduce our cash flows and borrowing ability. We may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a decline in our reserves as existing reserves are depleted. Lower commodity prices may also reduce the amount of oil, NGLs and natural gas that we can produce economically.

If commodity prices decrease, a significant portion of our exploitation, development and exploration projects could become uneconomic. This may result in our having to make significant downward adjustments to our estimated proved reserves. As a result, a substantial or extended decline in commodity prices may materially and adversely affect our future business, financial condition, results of operations, liquidity or ability to finance planned capital expenditures.

Our exploitation, development and exploration projects require substantial capital expenditures. We may be unable to obtain required capital or financing on satisfactory terms, which could lead to a decline in our ability to access or grow reserves.

The oil and natural gas industry is capital intensive. We make and expect to continue to make substantial capital expenditures for the exploitation, development and acquisition of oil and natural gas reserves. Our fiscal 2015 capital budget for drilling, completion, recompletion and infrastructure is approximately $34 million. Our capital budget excludes acquisitions. We expect to fund 2014 capital expenditures with cash generated by operations, borrowings under our revolving credit facility and possibly through asset sales or additional capital market transactions. The actual amount and timing of our future capital expenditures may differ materially from our estimates as a result of, among other things, oil and natural gas prices; actual drilling results; the availability of drilling rigs and other services and equipment; and regulatory, technological and competitive developments. A reduction in commodity prices from current levels may result in a decrease in our actual capital expenditures, which would negatively affect our ability to grow production. We intend to finance our near-term capital expenditures primarily through cash flow from operations and through borrowings under our revolving credit facility; however, our financing needs may require us to alter or increase our capitalization substantially through the issuance of debt or equity securities or the sale of assets. The issuance of additional indebtedness would require that a portion of our cash flow from operations be used for the payment of interest and principal on our indebtedness, thereby reducing our ability to use cash flow from operations to fund working capital, capital expenditures and acquisitions.

Our cash flow from operations and access to capital are subject to a number of variables, including:

• our proved reserves;

• the level of hydrocarbons we are able to produce from existing wells;

• the prices at which our production is sold;

• our ability to acquire, locate and produce new reserves; and

• our ability to borrow under our revolving credit facility.

If our revenues or the borrowing base under our revolving credit facility decrease as a result of lower oil and natural gas prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels. If additional capital is needed, we may not be able to obtain debt or equity financing on terms acceptable to us, if at all. If cash flow generated by our operations or available borrowings under our revolving credit facility are not sufficient to meet our capital requirements, the failure to obtain additional financing could result in a curtailment of our operations relating to development of our properties, which in turn could lead to a decline in our reserves and production, and could materially and adversely affect our business, financial condition and results of operations.

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Part of our strategy involves using some of the latest available horizontal drilling and completion techniques, which involve risks and uncertainties in their application.

Our operations involve utilizing some of the latest drilling and completion techniques as developed by us and our service providers. Risks that we face while drilling horizontal wells include, but are not limited to, the following:

• landing our wellbore in the desired drilling zone;

• staying in the desired drilling zone while drilling horizontally through the formation;

• running our casing the entire length of the wellbore; and

• being able to run tools and other equipment consistently through the horizontal wellbore.

Risks that we face while completing our wells include, but are not limited to, the following:

• the ability to fracture stimulate the planned number of stages;

• the ability to run tools the entire length of the wellbore during completion operations; and

• the ability to successfully clean out the wellbore after completion of the final fracture stimulation stage.

The results of our drilling in new or emerging formations are more uncertain initially than drilling results in areas that are more developed and have a longer history of established production. Newer or emerging formations and areas have limited or no production history and, consequently, we are more limited in assessing future drilling results in these areas. If our drilling results are less than anticipated, the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of unevaluated properties and the value of our undeveloped acreage could decline in the future.

Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations.

Our future financial condition and results of operations will depend on the success of our exploitation, development and acquisition activities, which are subject to numerous risks beyond our control, including the risk that drilling will not result in commercially viable oil and natural gas production.

Our decisions to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. For a discussion of the uncertainty involved in these processes, see “Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves”. In addition, our cost of drilling, completing and operating wells is often uncertain.

Further, many factors may curtail, delay or cancel our scheduled drilling projects, including the following:

• delays imposed by or resulting from compliance with regulatory requirements including limitations resulting from wastewater disposal, discharge of GHGs and limitations on hydraulic fracturing;

• pressure or irregularities in geological formations;

• shortages of or delays in obtaining equipment and qualified personnel or in obtaining water for hydraulic fracturing activities;

• equipment failures or accidents;

• lack of available gathering facilities or delays in construction of gathering facilities;

• lack of available capacity on interconnecting transmission pipelines;

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• adverse weather conditions;

• issues related to compliance with environmental regulations;

• environmental hazards, such as oil and natural gas leaks, oil spills, pipeline and tank ruptures and unauthorized discharges of brine, well stimulation and completion fluids, toxic gases or other pollutants into the surface and subsurface environment;

• declines in oil and natural gas prices;

• limited availability of financing at acceptable terms;

• title problems; and

• limitations in the market for oil and natural gas.

We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under applicable debt instruments, which may not be successful.

Our ability to make scheduled payments on or to refinance our indebtedness obligations, including our revolving credit facility, depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund debt service obligations, we may be forced to reduce or delay investments and capital expenditures, sell assets, seek additional capital or restructure or refinance indebtedness. Our ability to restructure or refinance indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict business operations. The terms of existing or future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. In the absence of sufficient cash flows and capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet debt service and other obligations. Our revolving credit facility currently restricts our ability to dispose of assets and our use of the proceeds from such disposition. We may not be able to consummate those dispositions, and the proceeds of any such disposition may not be adequate to meet any debt service obligations then due. These alternative measures may not be successful and may not permit us to meet scheduled debt service obligations.

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

Our revolving credit facility contains a number of significant covenants (in addition to covenants restricting the incurrence of additional indebtedness), including restrictive covenants that may limit our ability to, among other things:

• incur additional indebtedness;

• make loans to others;

• make investments;

• merge or consolidate with another entity;

• make certain payments;

• hedge future production or interest rates;

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• incur liens;

• sell assets; and

• engage in certain other transactions without the prior consent of the lenders.

In addition, our revolving credit facility requires us to maintain certain financial ratios or to reduce our indebtedness if we are unable to comply with such ratios. These restrictions may also limit our ability to obtain future financings to withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities. We may also be prevented from taking advantage of business opportunities that arise because of the limitations that the restrictive covenants under our revolving credit facilities impose on us.

A breach of any covenant in our revolving credit facility would result in a default under the applicable agreement after any applicable grace periods. A default, if not waived, could result in acceleration of the indebtedness outstanding under our revolving credit facility and in a default with respect to, and an acceleration of, the indebtedness outstanding under other debt agreements. The accelerated indebtedness would become immediately due and payable. If that occurs, we may not be able to make all of the required payments or borrow sufficient funds to refinance such indebtedness. Even if new financing were available at that time, it may not be on terms that are acceptable to us.

Any significant reduction in our borrowing base under our revolving credit facility as a result of the periodic borrowing base redeterminations or otherwise may negatively affect our ability to fund our operations.

Our revolving credit facility limits the amounts we can borrow up to a borrowing base amount, which the lenders, in their sole discretion, determine on a semi-annual basis based, among other things, upon projected revenues from, and asset values of, the oil and natural gas properties securing our loan. The lenders can unilaterally adjust the borrowing base and the borrowings permitted to be outstanding under our revolving credit facility.

In the future, we may not be able to access adequate funding under our revolving credit facility as a result of a decrease in borrowing base due to the issuance of new indebtedness, the outcome of a subsequent borrowing base redetermination or an unwillingness or inability on the part of lending counterparties to meet their funding obligations and the inability of other lenders to provide additional funding to cover the defaulting lender’s portion. Declines in commodity prices could result in a determination to lower the borrowing base in the future and, in such a case, we could be required to repay any indebtedness in excess of the redetermined borrowing base. As a result, we may be unable to implement our respective drilling and development plan, make acquisitions or otherwise carry out business plans, which would have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness.

Our derivative activities could result in financial losses or could reduce our earnings.

We irregularly enter into derivative instrument contracts for a portion of our oil production. We are not currently party to any hedging contracts. To the extent we enter into any hedging contracts in the future, our earnings may fluctuate significantly as a result of changes in fair value of our derivative instruments.

Derivative instruments also expose us to the risk of financial loss in some circumstances, including when:

• production is less than the volume covered by the derivative instruments;

• the counterparty to the derivative instrument defaults on its contractual obligations;

• there is an increase in the differential between the underlying price in the derivative instrument and actual prices received; or

• there are issues with regard to legal enforceability of such instruments.

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The use of derivatives may, in some cases, require the posting of cash collateral with counterparties. If we enter into derivative instruments that require cash collateral and commodity prices or interest rates change in a manner adverse to us, our cash otherwise available for use in our operations would be reduced which could limit our ability to make future capital expenditures and make payments on our indebtedness, and which could also limit the size of our borrowing base. Future collateral requirements will depend on arrangements with our counterparties, highly volatile oil and natural gas prices and interest rates.

In addition, derivative arrangements could limit the benefit we would receive from increases in the prices for oil and natural gas, which could also have a material adverse effect on our financial condition.

Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves.

The process of estimating oil and natural gas reserves is complex. It requires interpretations of available technical data and many assumptions, including assumptions relating to current and future economic conditions and commodity prices. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of our reserves.

In order to prepare reserve estimates, we must project production rates and timing of development expenditures. We must also analyze available geological, geophysical, production and engineering data. The extent, quality and reliability of this data can vary. The process also requires economic assumptions about matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves will vary from our estimates. Any significant variance could materially affect the estimated quantities and present value of our reserves. For instance, initial production rates reported by us or other operators may not be indicative of future or long-term production rates, our recovery efficiencies may be worse than expected, and production declines may be greater than we estimate and may be rapid and irregular when compared to initial production rates. In addition, we may adjust reserve estimates to reflect production history, results of exploration and development, existing commodity prices and other factors.

You should not assume that the present value of future net revenues from our reserves is the current market value of our estimated reserves. We generally base the estimated discounted future net cash flows from reserves on prices and costs on the date of the estimate. Actual future prices and costs may differ materially from those used in the present value estimate.

Our identified drilling locations are scheduled out over several months, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, we may not be able to raise the substantial amount of capital that would be necessary to drill such locations.

Our management team has specifically identified and scheduled certain drilling locations as an estimation of our future multi-year drilling activities on our existing acreage. These drilling locations represent a significant part of our growth strategy. Our ability to drill and develop these locations depends on a number of uncertainties, including oil and natural gas prices, the availability and cost of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, gathering system and pipeline transportation constraints, access to and availability of water sourcing and distribution systems, regulatory approvals and other factors. Because of these uncertain factors, we do not know if the numerous drilling locations we have identified will ever be drilled or if we will be able to produce natural gas or oil from these or any other drilling locations. In

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addition, unless production is established within the spacing units covering the undeveloped acres on which some of the drilling locations are obtained, the leases for such acreage will expire. As such, our actual drilling activities may materially differ from those presently identified.

As a result of the limitations described above, we may be unable to drill many of our drilling locations. In addition, we will require significant additional capital over a prolonged period in order to pursue the development of these locations, and we may not be able to raise or generate the capital required to do so. Any drilling activities we are able to conduct on these locations may not be successful or result in our ability to add additional proved reserves to our overall proved reserves or may result in a downward revision of our estimated proved reserves, which could have a material adverse effect on our future business and results of operations

Adverse weather conditions may negatively affect our operating results and our ability to conduct drilling activities.

Adverse weather conditions may cause, among other things, increases in the costs of, and delays in, drilling or completing new wells, power failures, temporary shut-in of production and difficulties in the transportation of our oil, NGLs and natural gas. Any decreases in production due to poor weather conditions will have an adverse effect on our revenues, which will in turn negatively affect our cash flow from operations.

Our operations are substantially dependent on the availability of water. Restrictions on our ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.

Water is an essential component of deep shale oil and natural gas production during both the drilling and hydraulic fracturing processes. Drought conditions have persisted in Texas over the past several years. These drought conditions have led governmental authorities to restrict the use of water subject to their jurisdiction for hydraulic fracturing to protect local water supplies. If we are unable to obtain water to use in our operations, we may be unable to economically produce oil and natural gas, which could have a material and adverse effect on our financial condition, results of operations and cash flows.

Our producing properties are located in the Permian Basin of West Texas, making us vulnerable to risks associated with operating in one major geographic area.

All of our producing properties are geographically concentrated in the Permian Basin of West Texas. At June 30, 2014, all of our total estimated proved reserves were attributable to properties located in this area. As a result of this concentration, we may be disproportionately exposed to the effect of regional supply and demand factors, delays or interruptions of production from wells in this area caused by governmental regulation, processing or transportation capacity constraints, market limitations, availability of equipment and personnel, water shortages or other drought related conditions or interruption of the processing or transportation of oil, NGLs or natural gas.

The marketability of our production is dependent upon transportation and other facilities, certain of which we do not control. If these facilities are unavailable, our operations could be interrupted and our revenues reduced.

The marketability of our oil and natural gas production depends in part upon the availability, proximity and capacity of transportation facilities owned by third parties. Our oil production is transported from the wellhead to our tank batteries by owned and third party gathering systems. Our purchasers then transport the oil by truck or pipeline for transportation. Our natural gas production is generally transported by gathering lines from the wellhead to a gas processing facility. We do not control these trucks and other third party transportation facilities and our access to them may be limited or denied. Insufficient production from our wells to support the construction of pipeline facilities by our purchasers or a significant disruption in the availability of our or third party transportation facilities or other production facilities could adversely affect our ability to deliver to market or produce our oil and natural gas and

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thereby cause a significant interruption in our operations. If, in the future, we are unable, for any sustained period, to implement acceptable delivery or transportation arrangements or encounter production related difficulties, we may be required to shut in or curtail production. Any such shut in or curtailment, or an inability to obtain favorable terms for delivery of the oil and natural gas produced from our fields, would materially and adversely affect our financial condition and results of operations.

Failure of third parties to meet contractual obligations could have a material adverse effect on Lynden and its cash flow from operations.

We are or may be exposed to third party credit risk through its contractual arrangements with its current or future joint venture partners, the operators of its joint ventures and other parties. In the event such entities fail to meet their contractual obligations to Lynden, such failures could have a material adverse effect on Lynden and its cash flow from operations.

We may incur losses as a result of title defects in the properties in which we invest.

The existence of a material title deficiency can render a lease worthless and can adversely affect our results of operations and financial condition. While we typically obtain title opinions prior to commencing drilling operations on a lease or in a unit, the failure of title may not be discovered until after a well is drilled, in which case we may lose the lease and the right to produce all or a portion of the minerals under the property.

The development of our estimated proved undeveloped reserves (“PUDs”) may take longer and may require higher levels of capital expenditures than we currently anticipate. Therefore, our estimated PUDs may not be ultimately developed or produced.

As of June 30, 2014, approximately 46% of our total estimated proved reserves were classified as proved undeveloped. Development of these undeveloped reserves may take longer and require higher levels of capital expenditures than we currently anticipate. Delays in the development of our reserves, increases in costs to drill and develop such reserves or decreases in commodity prices will reduce the value of our estimated PUDs and future net revenues estimated for such reserves and may result in some projects becoming uneconomic. In addition, delays in the development of reserves could cause us to have to reclassify our PUDs as unproved reserves. Further, we may be required to write down our PUDs if we do not drill those wells within five years after their respective dates of booking.

If commodity prices decrease to a level such that our future undiscounted cash flows from our properties are less than their carrying value for a significant period of time, we will be required to take write-downs of the carrying values of our properties.

Accounting rules require that we periodically review the carrying value of our properties for possible impairment. Based on specific market factors and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write down the carrying value of our properties. A writedown constitutes a non-cash charge to earnings. We may incur impairment charges in the future, which could have a material adverse effect on our results of operations for the periods in which such charges are taken.

Unless we replace our reserves with new reserves and develop those reserves, our reserves and production will decline, which would adversely affect our future cash flows and results of operations.

Producing oil and natural gas reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Unless we conduct successful ongoing exploitation, development and exploration activities or continually acquire properties containing proved reserves, our proved reserves will decline as those reserves are produced. Our future reserves and production, and therefore our future cash flow and results of operations, are highly dependent on our success in efficiently developing and exploiting our current reserves and economically finding or acquiring additional recoverable reserves. We may not be able to develop, exploit, find or acquire

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sufficient additional reserves to replace our current and future production. If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, financial condition and results of operations would be materially and adversely affected.

Conservation measures and technological advances could reduce demand for oil and natural gas.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil and natural gas. The effect of the changing demand for oil and natural gas may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our operations may be exposed to significant delays, costs and liabilities as a result of environmental and occupational health and safety requirements applicable to our business activities.

Our operations are subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, health and safety aspects of our operations, or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations applicable to our operations including the acquisition of a permit before conducting regulated drilling activities; the restriction of types, quantities and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; the application of specific health and safety criteria addressing worker protection; and the imposition of substantial liabilities for pollution resulting from our operations. Numerous governmental authorities, such as the U.S. Environmental Protection Agency (“EPA”) and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve taking difficult and costly compliance measures or corrective actions. Failure to comply with these laws and regulations may result in the assessment of sanctions, including administrative, civil or criminal penalties, the imposition of investigatory or remedial obligations, and the issuance of orders limiting or prohibiting some or all of our operations. In addition, we may experience delays in obtaining, or be unable to obtain, required permits, which may delay or interrupt our operations and limit our growth and revenue.

Certain environmental laws impose strict as well as joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons, or solid wastes have been stored or released. We may be required to remediate contaminated properties currently or formerly operated by us or facilities of third parties that received waste generated by our operations regardless of whether such contamination resulted from the conduct of others or from consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken. In connection with certain acquisitions, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety effects of our operations. Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. Moreover, public interest in the protection of the environment has increased dramatically in recent years. The trend of more and stringent environmental legislation and regulations applied to the crude oil and natural gas industry could continue, resulting in increased costs of doing business and consequently affecting profitability. To the extent laws are enacted or other governmental action is taken that restricts drilling or imposes more stringent and costly operating, waste handling, disposal and cleanup requirements our business, prospects, financial condition or results of operations could be materially adversely affected.

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We may incur substantial losses and be subject to substantial liability claims as a result of our operations. Additionally, we may not be insured for, or our insurance may be inadequate to protect us against, these risks.

We are not insured against all risks. Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect our business, financial condition or results of operations.

Our exploration and production activities are subject to all of the operating risks associated with drilling for and producing oil and natural gas, including the possibility of:

• environmental hazards, such as uncontrollable releases of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater, air and shoreline contamination;

• abnormally pressured formations;

• mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse;

• fires, explosions and ruptures of pipelines;

• personal injuries and death;

• natural disasters; and

• terrorist attacks targeting oil and natural gas related facilities and infrastructure.

Any of these risks could adversely affect our ability to conduct operations or result in substantial loss to us as a result of claims for:

• injury or loss of life;

• damage to and destruction of property, natural resources and equipment;

• pollution and other environmental damage;

• regulatory investigations and penalties;

• suspension of our operations; and

• repair and remediation costs.

We may elect not to obtain insurance for any or all of these risks if we believe that the cost of available insurance is excessive relative to the risks presented. In addition, pollution and environmental risks generally are not fully insurable. The occurrence of an event that is not fully covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

Properties that we decide to drill may not yield oil or natural gas in commercially feasible quantities.

Properties that we decide to drill that do not yield oil or natural gas in commercially viable quantities will adversely affect our results of operations and financial condition. There is no way to predict in advance of drilling and testing whether any particular prospect will yield oil or natural gas in sufficient quantities to recover drilling or completion costs or to be economically feasible. The use of micro-seismic data and other technologies and the study of producing fields in the same area will not enable us to know conclusively prior to drilling whether oil or natural gas will be present or, if present, whether oil or natural gas will be present in commercial quantities. We cannot assure you that the analogies we draw from available data from other wells, more fully explored prospects or producing fields will be applicable to our drilling prospects. Further, our drilling operations may be curtailed, delayed or cancelled as a result of numerous factors, including:

• unexpected drilling conditions;

• title problems;

• pressure or lost circulation in formations;

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• equipment failure or accidents;

• adverse weather conditions;

• compliance with environmental and other governmental or contractual requirements; and

• increase in the cost of, shortages or delays in the availability of, electricity, supplies, materials, drilling or workover rigs, equipment and services.

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may disrupt our business and hinder our ability to grow.

In the future we may make acquisitions of businesses that complement or expand our current business. We may not be able to identify attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to complete the acquisition or do so on commercially acceptable terms. Competition for acquisitions may also increase the cost of, or cause us to refrain from, completing acquisitions.

The success of any completed acquisition will depend on our ability to integrate effectively the acquired business into our existing operations. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. In addition, possible future acquisitions may be larger and for purchase prices significantly higher than those paid for earlier acquisitions. No assurance can be given that we will be able to identify additional suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully acquire identified targets. Our failure to achieve consolidation savings, to integrate the acquired businesses and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our financial condition and results of operations.

In addition, our revolving credit facility imposes certain limitations on our ability to enter into mergers or combination transactions. Our revolving credit facility also limits our ability to incur certain indebtedness, which could indirectly limit our ability to engage in acquisitions of businesses.

We are subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities.

Our oil and natural gas exploration, production and transportation operations are subject to complex and stringent laws and regulations. In order to conduct our operations in compliance with these laws and regulations, we must obtain and maintain numerous permits, approvals and certificates from various federal, state and local governmental authorities. We may incur substantial costs in order to maintain compliance with these existing laws and regulations. Failure to comply with these laws and regulations may also result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties, including the assessment of natural resource damages, as well as injunctions limiting or prohibiting our activities. These regulations could change to our detriment. Our costs of compliance may increase if existing laws and regulations are revised or reinterpreted, or if new laws and regulations become applicable to our operations. Such costs could have a material adverse effect on our business, financial condition and results of operations.

Certain of our properties are subject to land use restrictions, which could limit the manner in which we conduct our business.

Certain of our properties are subject to land use restrictions, including city ordinances, which could limit the manner in which we conduct our business. These land use restrictions could affect, among other things, our access to and the permissible uses of our facilities as well as the manner in which we produce oil and natural gas and may restrict or prohibit drilling in general. The costs we incur to comply with such restrictions may be significant in nature, and we may experience delays or curtailment in the pursuit of exploration, development or production activities and perhaps even be precluded from the drilling of wells.

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Our business is subject to federal, state and local laws and regulations as interpreted and enforced by governmental authorities possessing jurisdiction over various aspects of the exploration for, and the production and transportation of, oil and natural gas. Failure to comply with such laws and regulations, including any evolving interpretation and enforcement by governmental authorities, could have a material adverse effect on our business, financial condition and results of operations.

Changes to existing or new regulations may unfavorably affect us, could result in increased operating costs and could have a material adverse effect on our financial condition and results of operations. Such potential regulations could increase our operating costs, reduce our liquidity, delay or halt our operations or otherwise alter the way we conduct our business, which could in turn have a material adverse effect on our financial condition, results of operations and cash flows. Further, the discharges of oil, NGLs, natural gas and other pollutants into the air, soil or water may give rise to significant liabilities on our part to the government and third parties. See “Business—Regulation of the Oil and Natural Gas Industry” for a further description of laws and regulations that affect us.

The unavailability or high cost of additional drilling rigs, equipment, supplies, personnel and oilfield services could adversely affect our ability to execute our exploration and development plans within our budget and on a timely basis.

The demand for qualified and experienced field personnel to drill wells and conduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas industry can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Historically, there have been shortages of drilling and workover rigs, pipe and other equipment as demand for rigs and equipment has increased along with the number of wells being drilled. We cannot predict whether these conditions will exist in the future and, if so, what their timing and duration will be. If we are unable to secure a sufficient number of drilling rigs at reasonable costs, we may not be able to drill all of our acreage before our leases expire. Equipment shortages could delay or cause us to incur significant expenditures that are not provided for in our capital budget, which could have a material adverse effect on our business, financial condition or results of operations.

Should we fail to comply with all applicable FERC administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines.

Under the EPAct 2005, FERC has civil penalty authority under the Natural Gas Act of 1938 (the “NGA”) and the Natural Gas Policy Act (“NGPA”) to impose penalties for current violations of up to $1 million per day for each violation and disgorgement of profits associated with any violation. While our operations have not been regulated by FERC as a natural gas company under the NGA, FERC has adopted regulations that may subject certain of our otherwise non-FERC jurisdictional operations to FERC annual reporting and posting requirements. We also must comply with the anti-market manipulation rules enforced by FERC. Additional rules and legislation pertaining to those and other matters may be considered or adopted by FERC from time to time. Failure to comply with those regulations in the future could subject us to civil penalty liability, as described in “Business—Regulation of the Oil and Natural Gas Industry.”

Climate change laws and regulations restricting emissions of GHGs could result in increased operating costs and reduced demand for the oil and natural gas that we produce while potential physical effects of climate change could disrupt our production and cause us to incur significant costs in preparing for or responding to those effects.

In response to findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment, the EPA has adopted regulations under existing provisions of the federal CAA that, among other things, require preconstruction and operating permits for certain large stationary sources. Facilities required to obtain preconstruction permits for their GHG emissions also will be required to meet “best available control technology” standards that will be established by the states or, in some cases, by the EPA on a case-by-case basis. These EPA

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rulemakings could adversely affect our operations and restrict or delay our ability to obtain air permits for new or modified sources. In addition, the EPA has adopted rules requiring the monitoring and reporting of GHG emissions from specified onshore and offshore oil and natural gas production sources in the United States on an annual basis, which include certain of our operations. We are monitoring GHG emissions from our operations in accordance with the GHG emissions reporting rule and believe that our monitoring activities are in substantial compliance with applicable reporting obligations.

While Congress has from time to time considered legislation to reduce emissions of GHGs, there has not been significant activity in the form of adopted legislation to reduce GHG emissions at the federal level in recent years. In the absence of such federal climate legislation, a number of state and regional efforts have emerged that are aimed at tracking and/or reducing GHG emissions by means of cap and trade programs. These programs typically require major sources of GHG emissions to acquire and surrender emission allowances in return for emitting those GHGs. In addition, in 2013 the Obama administration announced its Climate Action Plan, which, among other things, directs federal agencies to develop a strategy for the reduction of methane emissions, including emissions from the oil and natural gas industry. Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would affect our business, any such future laws and regulations imposing reporting obligations on, or limiting emissions of GHGs from, our equipment and operations could require us to incur costs to reduce emissions of GHGs associated with our operations. Substantial limitations on GHG emissions could adversely affect demand for the oil and natural gas we produce. Finally, it should be noted that some scientists have concluded that increasing concentrations of GHGs in the Earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods and other climatic events; if any such effects were to occur, they could have a material adverse effect on our exploration and production operations.

Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing as well as governmental reviews of such activities could result in increased costs and additional operating restrictions or delays in the completion of oil and natural gas wells and adversely affect our production.

Hydraulic fracturing is an important and common practice that is used to stimulate production of oil and/or natural gas from dense subsurface rock formations. The hydraulic fracturing process involves the injection of water, sand and chemicals under pressure into targeted subsurface formations to fracture the surrounding rock and stimulate production. We regularly use hydraulic fracturing as part of our operations. Hydraulic fracturing is typically regulated by state oil and natural gas commissions, but the EPA has asserted federal regulatory authority pursuant to the federal Safe Drinking Water Act (“SDWA”) over certain hydraulic fracturing activities involving the use of diesel fuels and published permitting guidance in February 2014 addressing the performance of such activities using diesel fuels. In May 2014, the EPA issued an Advanced Notice of Proposed Rulemaking, seeking comment on the development of regulations under the Toxic Substances Control Act to require companies to disclose information regarding the chemicals used in hydraulic fracturing. Also, in May 2013, the BLM published a revised proposed rule that would impose requirements for hydraulic fracturing activities on federal lands, including new requirements relating to public disclosure, as well as well bore integrity and handling of flowback water. In addition, Congress has from time to time considered legislation to provide for federal regulation of hydraulic fracturing under the SDWA and to require disclosure of the chemicals used in the hydraulic fracturing process. It is unclear how any federal disclosure requirements that add to any applicable state disclosure requirements already in effect may affect our operations.

We may be subject to regulations that restrict our ability to discharge water produced as part of our production operations, and the ability to use injection wells as a disposal option not only will depend on federal or state regulations but also on whether available injection wells have sufficient storage capacities. For example, the EPA is developing effluent limitation guidelines that may impose federal pre-treatment standards on all oil and natural gas operators transporting wastewater associated with

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hydraulic fracturing activities to publicly owned treatment works for disposal. The EPA plans to propose such standards by late 2014.

Further, in April 2012, the EPA published final rules that subject all oil and natural gas operations (production, processing, transmission, storage and distribution) to regulation under the New Source Performance Standards (“NSPS”) and the National Emission Standards for Hazardous Air Pollutants (“NESHAPS”) programs. These rules became effective in October 2012 and include NSPS standards for completions of hydraulically-fractured gas wells. The standards include the reduced emission completion techniques developed in the EPA’s Natural Gas STAR program along with pit flaring of gas not sent to the gathering line. The standards are applicable to newly drilled and fractured wells and wells that are refractured on or after January 1, 2015. Further, the rules under NESHAPS include Maximum Achievable Control Technology (“MACT”) for glycol dehydrators and storage vessels at major source of hazardous air pollutants not currently subject to MACT standards. The EPA received numerous requests for reconsideration of these rules and court challenges were also filed. The EPA intends to issue revised rules that are likely responsive to some of these requests. For example, in September 2013 the EPA published an amendment extending compliance dates for certain storage vessels. At this point, we cannot predict the final regulatory requirements or the cost to comply with such requirements with any certainty.

Certain governmental reviews have been conducted or are underway that focus on the potential environmental effects of hydraulic fracturing. The White House Council on Environmental Quality is coordinating an administration-wide review of hydraulic fracturing practices. The EPA has commenced a study of the potential environmental effects of hydraulic fracturing on water resources and expects to make the final report available for public comment and peer review by late 2014. Other governmental agencies, including the U.S. Department of Energy, have evaluated or are evaluating various other aspects of hydraulic fracturing. These ongoing or proposed studies could spur initiatives to further regulate hydraulic fracturing and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.

At the state level, several states have adopted or are considering legal requirements that could impose more stringent permitting, disclosure and well construction requirements on hydraulic fracturing activities. For example, in May 2013, the Texas Railroad Commission issued a “well integrity rule,” which updates the requirements for drilling, putting pipe down and cementing wells. The rule also includes new testing and reporting requirements, such as (i) the requirement to submit cementing reports after well completion or after cessation of drilling, whichever is later, and (ii) the imposition of additional testing on wells less than 1,000 feet below usable groundwater. The well integrity rule took effect in January 2014. Local governments also may seek to adopt ordinances within their jurisdictions regulating the time, place and manner of drilling activities in general or hydraulic fracturing activities in particular or prohibit the performance of well drilling in general or hydraulic fracturing in particular. We believe that we follow applicable standard industry practices and legal requirements for groundwater protection in our hydraulic fracturing activities. Nonetheless, if new or more stringent federal, state or local legal restrictions relating to the hydraulic fracturing process are adopted in areas where we operate, we could incur potentially significant added costs to comply with such requirements, experience delays or curtailment in the pursuit of exploration, development or production activities, and perhaps even be precluded from drilling wells.

Competition in the oil and natural gas industry is intense, making it more difficult for us to acquire properties, market oil or natural gas and secure trained personnel.

Our ability to acquire additional prospects and to find and develop reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment for acquiring properties, marketing oil and natural gas and securing trained personnel. Also, there is substantial competition for capital available for investment in the oil and natural gas industry. Many of our competitors possess and employ financial, technical and personnel resources substantially greater than ours. Those companies may be able to pay more for productive

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properties and exploratory prospects and to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit. In addition, other companies may be able to offer better compensation packages to attract and retain qualified personnel than we are able to offer. The cost to attract and retain qualified personnel has increased over the past three years due to competition and may increase substantially in the future. We may not be able to compete successfully in the future in acquiring prospective reserves, developing reserves, marketing hydrocarbons, attracting and retaining quality personnel and raising additional capital, which could have a material adverse effect on our business.

The loss of senior management or technical personnel could adversely affect operations.

We depend on the services of our senior management. We do not maintain, nor do we plan to obtain, any insurance against the loss of any of these individuals. The loss of the services of our senior management could have a material adverse effect on our business, financial condition and results of operations.

Our management may not be subject to United States legal process, making it more difficult for U.S. investors to sue them.

The enforcement by investors of civil liabilities under the United States federal securities laws may not be possible because all of our officers and most of our directors are neither citizens nor residents of the United States. U.S. shareholders may not be able to effect service of process within the United States upon such persons. U.S. shareholders may not be able to enforce, in United States courts, judgments against such persons obtained in such courts predicated upon the civil liability provisions of United States federal securities laws. Appropriate foreign courts may not be able to enforce judgments of United States courts obtained in actions against such persons predicated upon the civil liability provisions of the federal securities laws. The appropriate foreign courts may not be able to enforce, in original actions, liabilities against such persons predicated solely upon the United States federal securities laws. However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government, and are in compliance with applicable Canadian legislation regarding the limitation of actions.

We are susceptible to the potential difficulties associated with rapid growth and expansion and have a limited operating history.

We have grown rapidly over the last several years. Our management believes that our future success depends on our ability to manage the rapid growth that we have experienced and the demands from increased responsibility on management personnel. The following factors could present difficulties:

• increased responsibilities for our executive level personnel;

• increased administrative burden;

• increased capital requirements; and

• increased organizational challenges common to large, expansive operations.

Our operating results could be adversely affected if we do not successfully manage these potential difficulties. The historical financial information incorporated herein is not necessarily indicative of the results that may be realized in the future. In addition, our operating history is limited and the results from our current producing wells are not necessarily indicative of success from our future drilling operations.

Increases in interest rates could adversely affect our business.

Our business and operating results can be harmed by factors such as the availability, terms of and cost of capital, increases in interest rates or a reduction in credit rating. These changes could cause our cost of doing business to increase, limit our ability to pursue acquisition opportunities, reduce cash flow

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used for drilling and place us at a competitive disadvantage. Recent and continuing disruptions and volatility in the global financial markets may lead to a contraction in credit availability affecting our ability to finance our operations. We require continued access to capital. A significant reduction in cash flows from operations or the availability of credit could materially and adversely affect our ability to achieve our planned growth and operating results.

We may be subject to risks in connection with acquisitions of properties.

The successful acquisition of producing properties requires an assessment of several factors, including:

• recoverable reserves;

• future oil and natural gas prices and their applicable differentials;

• operating costs; and

• potential environmental and other liabilities.

The accuracy of these assessments is inherently uncertain. In connection with these assessments, we perform a review of the subject properties that we believe to be generally consistent with industry practices. Our review will not reveal all existing or potential problems nor will it permit us to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller may be unwilling or unable to provide effective contractual protection against all or part of the problems. We often are not entitled to contractual indemnification for environmental liabilities and acquire properties on an “as is” basis.

Income tax returns are subject to reassessment or audit, which may affect current and future taxes.

We will file all required income tax returns and believes that it will be in full compliance with the provisions of federal (Canada and United States) and all applicable provincial and state tax legislation. However, such returns are subject to reassessment by the applicable taxation authority. In the event of a successful reassessment or tax audit of Lynden whether by re-characterization of exploration and development expenditures or otherwise, such reassessment or audit may have an effect on current and future taxes payable.

Certain federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated, and additional state taxes on oil and natural gas extraction may be imposed, as a result of future legislation.

The Fiscal Year 2015 Budget proposed by the President recommends the elimination of certain key U.S. federal income tax incentives currently available to oil and natural gas exploration and production companies, and legislation has been introduced in Congress that would implement many of these proposals. Such changes include, but are not limited to: (i) the repeal of the percentage depletion allowance for oil and natural gas properties; (ii) the elimination of current deductions for intangible drilling and development costs; (iii) the elimination of the deduction for certain U.S. production activities for oil and natural gas production; and (iv) an extension of the amortization period for certain geological and geophysical expenditures. It is unclear, however, whether any such changes will be enacted or how soon such changes could be effective.

The passage of this legislation or any other similar change in U.S. federal income tax law could eliminate or postpone certain tax deductions that are currently available with respect to oil and natural gas exploration and development, and any such change could negatively affect our financial condition and results of operations.

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Our use of seismic data is subject to interpretation and may not accurately identify the presence of oil and natural gas, which could adversely affect the results of our drilling operations.

Even when properly used and interpreted, 2-D and 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures. In addition, the use of 3-D seismic and other advanced technologies requires greater predrilling expenditures than traditional drilling strategies, and we could incur losses as a result of such expenditures. As a result, our drilling activities may not be successful or economical.

Restrictions on drilling activities intended to protect certain species of wildlife may adversely affect our ability to conduct drilling activities in areas where we operate.

Oil and natural gas operations in our operating areas may be adversely affected by seasonal or permanent restrictions on drilling activities designed to protect various wildlife. Seasonal restrictions may limit our ability to operate in protected areas and can intensify competition for drilling rigs, oilfield equipment, services, supplies and qualified personnel, which may lead to periodic shortages when drilling is allowed. These constraints and the resulting shortages or high costs could delay our operations or materially increase our operating and capital costs. Permanent restrictions imposed to protect endangered species could prohibit drilling in certain areas or require the implementation of expensive mitigation measures. The designation of previously unprotected species in areas where we operate as threatened or endangered could cause us to incur increased costs arising from species protection measures or could result in limitations on our exploration and production activities that could have a material and adverse effect on our ability to develop and produce our reserves.

The enactment of derivatives legislation could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.

The Dodd-Frank Act, enacted on July 21, 2010, established federal oversight and regulation of the over-the-counter derivatives market and entities, such as us, that participate in that market. The Dodd-Frank Act requires the CRTC and the SEC to promulgate rules and regulations implementing the Dodd-Frank Act. In its rulemaking under the Dodd-Frank Act, the CFTC has issued final regulations to set position limits for certain futures and option contracts in the major energy markets and for swaps that are their economic equivalents. Certain bona fide derivative transactions would be exempt from these position limits. The position limits rule was vacated by the United States District Court for the District of Columbia in September of 2012 although the CFTC has stated that it will appeal the District Court’s decision. The CFTC also has finalized other regulations, including critical rulemakings on the definition of “swap,” “security-based swap,” “swap dealer” and “major swap participant.” The Dodd-Frank Act and CFTC rules also will require us in connection with certain derivatives activities to comply with clearing and trade-execution requirements (or take steps to qualify for an exemption to such requirements). In addition, new regulations may require us to comply with margin requirements although these regulations are not finalized and their application to us is uncertain at this time. Other regulations also remain to be finalized, and the CFTC recently has delayed the compliance dates for various regulations already finalized. As a result, it is not possible at this time to predict with certainty the full effects of the Dodd-Frank Act and CFTC rules on us and the timing of such effects. The Dodd-Frank Act also may require the counterparties to our derivative instruments to spin off some of their derivatives activities to a separate entity, which may not be as creditworthy as the current counterparty. The Dodd-Frank Act and any new regulations could significantly increase the cost of derivative contracts (including through requirements to post collateral, which could adversely affect our available liquidity), materially alter the terms of derivative contracts and reduce the availability of derivatives to protect against risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts and increase our exposure to less creditworthy counterparties. If we reduce our use of derivatives as a result of the Dodd-Frank Act and CFTC rules, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to

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plan for and fund capital expenditures. Finally, the Dodd-Frank Act was intended, in part, to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. Our revenues could therefore be adversely affected if a consequence of the Dodd-Frank Act and CFTC rules is to lower commodity prices. Any of these consequences could have a material and adverse effect on us, our financial condition or our results of operations.

The pre-tax net present value of our estimated reserves is not an accurate estimate of the current fair value of our estimated oil and natural gas reserves.

Pre-tax net present value is a reporting convention that provides a common basis for comparing oil and natural gas companies subject to the rules and regulations of the SEC. Pre-tax net present value requires the use of specific pricing as required by the SEC as well as operating and development costs prevailing as of the date of computation. Consequently, it may not reflect the prices ordinarily received or that will be received for oil and natural gas production because of varying market conditions, nor may it reflect the actual costs that will be required to produce or develop the oil and natural gas properties. Accordingly, estimates included herein of future net cash flow may be materially different from the future net cash flows that are ultimately received. Therefore, the pre-tax net present value of our estimated reserves included in this Registration Statement should not be construed as accurate estimates of the current fair value of our proved reserves.

We may not be able to keep pace with technological developments in our industry.

The oil and natural gas industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies. As others use or develop new technologies, we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those new technologies at substantial costs. In addition, other oil and natural gas companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and that may in the future allow them to implement new technologies before we can. We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected.

Risks Related to our Common Stock

The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs and distract management.

We will incur significant legal, accounting and other expenses that we did not incur before we were required to register under the Exchange Act. We will also incur costs associated with our U.S. public company reporting requirements and with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and the Financial Industry Regulatory Authority. These rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly, and we expect that these costs may increase further after we are no longer an “emerging growth company.” These rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board or as executive officers.

However, for as long as we remain an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not

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being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of these reporting exemptions until we are no longer an emerging growth company.

We will remain an emerging growth company for up to five years, although if we have more than $1 billion of revenues in a fiscal year, if the market value of our common stock that is held by non-affiliates exceeds $700 million, or if we issue more than $1 billion of non-convertible debt over a three-year period, we would cease to be an “emerging growth company.”

After we are no longer an “emerging growth company,” we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with those requirements applicable to companies that are not emerging growth companies.

If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock.

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the Sarbanes Oxley Act of 2002. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

The market price of our common stock may be volatile.

The market price of our common stock could vary significantly as a result of a number of factors, some of which are beyond our control. In the event of a drop in the market price of our common stock, you could lose a substantial part or all of your investment in our common stock.

The following factors could affect our stock price:

• our operating and financial performance and drilling locations, including reserve estimates;

• quarterly variations in the rate of growth of our financial indicators, such as net income per share, net income and revenues;

• the public reaction to our press releases, our other public announcements and our filings with the SEC;

• strategic actions by our competitors;

• changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts;

• speculation in the press or investment community;

• the failure of research analysts to cover our common stock;

• sales of our common stock by us, the selling stockholders or other stockholders, or the perception that such sales may occur;

• changes in accounting principles, policies, guidance, interpretations or standards;

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• additions or departures of key management personnel;

• actions by our stockholders;

• general market conditions, including fluctuations in commodity prices;

• domestic and international economic, legal and regulatory factors unrelated to our performance; and

• the realization of any risks described under this “Risk Factors” section.

The stock markets in general have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in very substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.

Certain of our executive officers, directors and principal shareholders may be able to exercise significant influence over matters subject to shareholder approval.

An affiliate of one of our directors, Derek Michaelis, beneficially owned approximately 17.06% of our outstanding common shares as of October 22, 2014. Accordingly, Mr. Michaelis, either alone or in combination with other executive officers and directors, together with their respective affiliates, if they act together, may be able to exercise influence over matters requiring shareholder approval, including the election of directors and approval of corporate transactions, such as a merger or other sale of our company or its assets, for the foreseeable future. This concentration of ownership could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on the market value of our common shares. For information regarding the ownership of our outstanding common shares by our executive officers and directors and their affiliates, please see “Item 4. Security Ownership of Certain Beneficial Owners and Management.”

We do not intend to pay cash dividends on our common stock, and our revolving credit facility places certain restrictions on our ability to do so. Consequently, your only opportunity to achieve a return on your investment is if the price of our common stock appreciates.

We do not plan to declare cash dividends on shares of our common stock in the foreseeable future. Additionally, our revolving credit facility places certain restrictions on our ability to pay cash dividends. Consequently, your only opportunity to achieve a return on your investment in us will be if you sell your common stock at a price greater than you paid for it.

Future sales of our common stock in the public market could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.

We may sell additional shares of common stock in public offerings. We may also issue additional shares of common stock or convertible securities. We have 130,198,411 shares of common stock outstanding, 5,710,000 shares of common stock reserved for issuance upon the exercise of stock options, 7,500,000 shares of common stock reserved for issuance upon the exercise of share purchase warrants, and 12,000 shares of common stock reserved for issuance upon the exercise of finder’s warrants.

We cannot predict the size of future issuances of our common stock or securities convertible into common stock or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock.

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We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

Our notice of articles authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock respecting dividends and distributions, as the Board may determine. The terms of one or more classes or series of preferred stock could adversely affect the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the common stock.

For as long as we are an emerging growth company, we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

In April 2012, President Obama signed into law the JOBS Act. We are classified as an “emerging growth company” under the JOBS Act. For as long as we are an emerging growth company, which may be up to five full fiscal years, unlike other public companies, we will not be required to, among other things: (i) provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) comply with any new requirements adopted by the PCAOB requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; (iii) provide certain disclosure regarding executive compensation required of larger public companies; or (iv) hold nonbinding advisory votes on executive compensation. We will remain an emerging growth company for up to five years, although we will lose that status sooner if we have more than $1 billion of revenues in a fiscal year, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1 billion of non-convertible debt over a three-year period.

To the extent that we rely on any of the exemptions available to emerging growth companies, you will receive less information about our executive compensation and internal control over financial reporting than issuers that are not emerging growth companies. If some investors find our common stock to be less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our common stock or if our operating results do not meet their expectations, our stock price could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover our company downgrades our common stock or if our operating results do not meet their expectations, our stock price could decline.

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Item 2. Financial Information.

Selected Historical Consolidated Financial Information

The selected historical consolidated financial information set forth below as of and for each of the years ended June 30, 2014 and 2013 has been derived from our audited consolidated financial statements. The selected historical consolidated financial information is qualified in its entirety by, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes and other financial information included in this Registration Statement. Historical results are not necessarily indicative of results that may be expected for any future period.

	Year Ended June 30,
	2014			2013
Revenue
Petroleum and natural gas sales, net of royalties	$	29,366,595		$	18,953,732
Derivative financial instruments gain (loss)		(63,633	)		15,163
Interest income		89,990			12,573
Total revenues		29,392,952			18,981,468
Expenses
Production and operating expenses		(4,949,932	)		(3,019,360	)
Depletion, depreciation and accretion		(7,917,230	)		(5,931,851	)
Exploration		(253,504	)		(278,457	)
Foreign exchange gain (loss)		(5,835	)		(52,030	)
General and administrative		(1,384,587	)		(1,689,720	)
Impairments		—			—
Interest		(283,183	)		(260,974	)
Total expenses		(14,794,271	)		(11,232,392	)
Other Income
Gain on disposition of property, plant and equipment		10,219,755			11,255,320
Income before income taxes		24,818,436			19,004,396
Income tax expense (recovery)		11,088,651			5,595,986
Net income		13,729,785			13,408,410
Other comprehensive income (loss)
Foreign currency translation reserve		(352,602	)		128,387
Total comprehensive income for the year	$	13,377,183		$	13,536,797
Weighted average number of Common shares outstanding
Basic		123,798,574			110,138,794
Diluted		126,814,887			113,483,138
Net earnings per common share
Basic	$	0.11		$	0.13
Diluted	$	0.11		$	0.13

	As of June 30,
	2014		2013
Balance Sheet Data:
Cash and cash equivalents	$	13,955,890	$	1,874,400
Property, plant and equipment		91,812,527		73,984,820
Total assets		109,111,434		78,471,594
Shareholders’ equity		72,763,993		46,670,853

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	Year Ended June 30,
	2014		2013
Statement of Cash Flows Data:
Capital expenditures	$	34,235,029	$	56,167,297
Net cash provided by (used in):
Operating activities	$	21,758,744	$	11,096,363
Investing activities		13,431,117		31,088,315
Financing activities		3,910,274		12,403,233

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with (i) our audited financial statements for the fiscal years ended June 30, 2014 and 2013, and the notes thereto and (ii) the section entitled “Item 1. Business”, included elsewhere in this Registration Statement. Our consolidated financial statements are prepared in accordance with U.S. GAAP. All references to dollar amounts in this section are in U.S. dollars unless expressly stated otherwise. The following discussion contains forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from the forward-looking statements as a result of these risks and uncertainties. See “Cautionary Statement Regarding Forward-Looking Statements” for additional cautionary information.

Overview

We are an independent oil and natural gas partnership engaged in the acquisition, development, exploitation and exploration of oil and natural gas properties. Our operations are primarily focused in Texas and Utah. We intend to grow our reserves and production through development drilling, and exploitation and exploration activities on our lease holdings.

Our core properties are in the Wolfberry play in the Midland Basin of the Permian Basin, West Texas. The Permian Basin of West Texas is characterized by an extensive production history, predominately oil-focused drilling targets, abundant infrastructure, wells with long reserve lives and multiple oil and natural gas producing stratigraphic horizons. The Wolfberry play is a modification and extension of the Spraberry play, the majority of which is designated in the Spraberry Trend Area field. According to the latest information available from the Energy Information Administration of the U.S. Department of Energy, the Spraberry Trend Area ranks as the second largest oilfield in the United States by proved reserves and the fourth for estimated oil production. Based on the results of our drilling to date and our observation of the activity and results of other operators in this area, we believe the Wolfberry play represents one of the premier oil and gas development opportunities in North America.

Our other properties are located in other parts of the Permian Basin of West Texas and the Paradox Basin of Utah.

Outlook

We have taken advantage of a robust market for proved reserves and sold portions of our held-by-production Wolfberry play acreage during Fiscal 2013 and 2014. See “Significant Divestitures” for more information on divestitures that we made during Fiscal 2013 and 2014. In the near term, we will be focused on perpetuating leases by satisfying the continuous development provisions of such leases. A major strategy for our sales of the producing acreage is to maintain adequate capital that, along with cash flows from operations and borrowing capacity under our credit facility, ensures that we have the financial resources to drill enough wells to perpetuate substantially all of the net acres scheduled in our latest reserve report. We currently own or hold more than 30% of our Midland Basin acreage by production.

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Selected Factors That Affect Our Operating Results

Our revenue, cash flow from operations and future growth depend substantially upon (i) the prices and demand for crude oil, NGL and natural gas, (ii) the quantity of our oil, NGL and natural gas production, and (iii) the level of our operating expenses. All of the Company’s production is unhedged.

(a) Commodity Prices

Our results of operations are heavily influenced by commodity prices. Factors that may affect commodity prices, including the price of oil and natural gas, include:

• the level of consumer demand, domestic and worldwide, for oil, NGL and natural gas;

• the domestic and worldwide supply of oil, NGL and natural gas;

• inventory levels at Cushing, Oklahoma, the benchmark for WTI oil prices;

• natural gas inventory levels in the United States;

• commodity processing, gathering and transportation availability, and the availability of refining capacity;

• the price and level of imports of foreign oil, NGL and natural gas;

• the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;

• domestic and foreign governmental regulations and taxation;

• the price and availability of alternative fuel sources;

• weather conditions;

• political conditions or hostilities in oil, NGL and natural gas producing regions, including the Middle East, Africa and South America;

• technological advances affecting energy consumption and energy supply;

• variations between product prices at sales points and applicable index prices; and

• worldwide economic conditions.

Although we cannot predict the occurrence of events that may affect future commodity prices or the degree to which these prices will be affected, the prices for any commodity that we produce will generally approximate current market prices in the geographic region of the production. From time to time, we expect that we may economically hedge a portion of our commodity price risk to mitigate the effect of price volatility on our business.

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Oil and natural gas prices have been subject to significant fluctuations during the past several years. The following table sets forth the average NYMEX oil and natural gas prices for the six months ended June 30, 2014, and the years ended December 31, 2013, 2012 and 2011, as well as the high and low NYMEX price for the same periods:

	Six Months Ended June 30, 2014		Year Ended December 31,
			2013		2012		2011
Average NYMEX prices:
Oil (Bbl)	$	100.84	$	98.05	$	94.15	$	95.11
Natural gas (MMBtu)	$	4.65	$	3.73	$	2.83	$	4.03
High and low NYMEX prices:
Oil (Bbl):
High	$	107.26	$	110.53	$	109.77	$	113.93
Low	$	91.66	$	86.68	$	77.69	$	75.67
Natural gas (MMBtu):
High	$	6.15	$	4.46	$	3.90	$	4.85
Low	$	4.01	$	3.11	$	1.91	$	2.99

(b) Reserves

The primary factors affecting our production levels are capital availability, the success of our drilling plan, property sales and our inventory of drilling prospects. In addition, as is typical for businesses engaged in the exploration and production of crude oil and natural gas, we face the challenge of natural production declines. As initial reservoir pressures are depleted, crude oil and natural gas production from a given well decreases. We attempt to overcome this natural decline primarily through drilling our existing undeveloped reserves. Our future growth will depend in part on our ability to continue to add reserves in excess of production. Our ability to add reserves through drilling is dependent on our capital resources and can be limited by many factors, including our ability to timely obtain drilling permits and regulatory approvals.

(c) Operating Expenses

Operating expenses are the costs incurred in the operation of producing properties. Expenses for utilities, direct labor, water injection and disposal, production taxes, repairs and materials and supplies comprise the most significant portion of our operating expenses. A majority of our operating cost components are variable and increase or decrease as the level of production increases or decreases. Certain items, however, such as direct labor and materials and supplies, generally remain relatively fixed and do not fluctuate with changes in production volumes, but can fluctuate depending on activities performed during a specific period. In evaluating our operations, we monitor and assess our operating expenses, in terms of absolute dollars and on a per Boe basis. We believe that this measure allows us to better evaluate our operating efficiency, and we use it in reviewing the economic feasibility of a potential acquisition or development project

(d) Significant Divestitures

We regularly review our asset base to assess the market value versus holding value of existing assets, with a view to optimizing deployed capital. While we generally do not dispose of assets solely for the purpose of reducing debt, such dispositions can have the result of furthering our objective of increasing financial flexibility through reduced debt levels.

Effective December 1, 2012 we disposed of 16 gross (7.0 net) Wolfberry Project wells and underlying leases covering approximately 1,440 gross acres (630 acres net) to BreitBurn Energy Partners L.P. of Los Angeles, California for gross proceeds of $25.1 million.

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Effective December 30, 2013 the Company disposed of 12 gross (4.7 net) Wolfberry wells and underlying leases covering approximately 1,000 gross acres (403 net acres) to BreitBurn Energy Partners L.P. for gross proceeds of $19.3 million.

Year Ended June 30, 2014 (Fiscal 2014) Compared to Year Ended June 30, 2013 (Fiscal 2013)

Results of Operations

The Company reported net income of $13,729,785 (Fiscal 2013 - $13,408,410) and total comprehensive income of $13,377,183 (Fiscal 2013 - $13,536,797) for Fiscal 2014. Significant components of Fiscal 2014 net earnings were revenues of $29,392,952, gain on disposition of property, plant and equipment of $10,219,755 and depletion, depreciation and accretion of $7,917,230 and income tax expense of $11,088,651. The Company’s net earnings per common share for Fiscal 2014 was $0.11 (Prior Year - $0.13).

P&NG Revenue

The Company reported petroleum and natural gas sales, net of royalties of $29,366,595 (Fiscal 2013 - $18,953,732) for Fiscal 2014, the vast majority from its Wolfberry wells. The Company paid production and operating expenses of $4,949,932 (Fiscal 2013 - $3,019,361) for Fiscal 2014. The Company also incurred $7,917,230 (Fiscal 2013 - $5,931,851) of depletion, depreciation and accretion for Fiscal 2014.

	Year ended June 30,
	2014			2013
Net Revenues
Petroleum revenues	$	30,813,306		$	20,582,952
Natural gas revenues		7,552,570			4,460,847
		38,365,876			25,043,799
Royalties		(8,999,281	)		(6,090,067	)
Production and operating		(4,949,932	)		(3,019,360	)
Net back	$	24,416,663		$	15,934,372
Production Volumes and Pricing
Total volumes
Petroleum production (bbl)		320,572			230,064
Natural gas production (mcf)		1,495,923			894,978
Daily production averages
Petroleum (bblpd)		878			630
Natural gas (mcfpd)		4,098			2,452
Barrel of oil equivalent (boepd)		1,561			1,039
Average prices
Petroleum selling price ($/bbl)	$	96		$	89
Natural gas selling price ($/mcf)1	$	5.05		$	4.98
Percentages of Total Revenue
Royalties		23	%		24	%
Production and operating		13	%		12	%
Net back		64	%		64	%

¹  The natural gas selling price is reflective of the thermal value of the gas and associated products sold.

The natural gas selling price realized has remained relatively stable over the past year. The selling price received for oil has increased in Fiscal 2014 as the price has generally tracked the changes in the price of West Texas Intermediate. Production volumes increased significantly in Fiscal 2014 as a result of the tie-in of new Wolfberry wells.

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All of the Company’s commodity contracts expired at June 30, 2014. During Fiscal 2014, the Company reported realized losses on derivative financial instruments of $63,633 (Fiscal 2013 - $15,163 gain).

As at June 30, 2014, all of the Company’s production is unhedged and will be impacted by fluctuations in the prices of oil and natural gas.

Production and operating expenses as a percentage of total revenues have generally remained relatively consistent, and within an expected range given the Company’s mix of new and older wells.

General and Administrative

The Company’s general and administrative expenditures are related to the level of financing and exploration, development, and production activities that are being conducted, which may in turn depend on the Company’s recent exploration, development, and production activities and prospects, as well as general market conditions relating to the availability of funding for early stage exploration and development natural resource companies. Thus, there may not be predictable or observable trends in the Company’s business activities, and comparisons of financial operating results with prior years may not be meaningful.

General and administrative expenses were $1,384,587 (Fiscal 2013 - $1,689,720) during Fiscal 2014. The Company’s cash general and administrative expenses were higher in Fiscal 2014 than Fiscal 2013, however overall expenses were higher in Fiscal 2013 as a result of significantly greater stock based compensation costs. The Company did not grant any stock options in Fiscal 2014 (Fiscal 2013 – 1,397,500). The Company uses the Black-Scholes method to determine fair value for all share-based awards. The Company grants share options on an irregular basis in order to provide non-cash compensation to its directors, officers, employees and consultants and to align the interests of the directors, officers, employees and consultants with the interests of shareholders.

Foreign Currency Translation

The foreign exchange loss of $5,835 (Fiscal 2013 - $52,030) included in net earnings for Fiscal 2014 primarily relates to the effect of exchanging Canadian dollars, held by Lynden Energy Corp., to United States dollars and transferring those funds to Lynden USA Inc. The Company exchanged and transferred $100,000 in Fiscal 2014 (Fiscal 2013 - $7,580,000).

The foreign currency translation loss of $352,602 (Fiscal 2013 – gain of $128,387) included in other comprehensive income for Fiscal 2014 relates primarily to translating Lynden Energy Corp.’s and Lynden Exploration Ltd.’s net assets denominated in Canadian dollars into the United States dollar. Lynden Energy Corp.’s and Lynden Exploration Ltd.’s functional currency is the Canadian dollar.

Other Items

During Fiscal 2014, the Company recognized a gain of approximately $9.6 million on the BreitBurn Sale, $288,000 on the sale of Paradox Basin leases, and $305,000 on the disposition of a 10.625% interest in certain Midland Basin wells and leases. During the Fiscal 2013, the Company recognized a gain of approximately $11.3 million on a separate sale of assets to BreitBurn.

Income taxes

The Company has estimated income tax expense of $10,606,023 (Fiscal 2013 – $4,501,705) for Fiscal 2014. A significant portion of these amounts represent deferred tax expense. The deferred tax liabilities are mainly the result of the lower tax carrying values for the Company’s property, plant and equipment compared to the accounting carrying values, due to recognizing more depreciation for tax purposes compared to depreciation for accounting purposes.

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Financial Condition, Liquidity and Capital Resources

As at June 30, 2014, the Company had working capital of $13,947,730 compared to a working capital deficiency of $22,439,226 at June 30, 2013. The significant change in working capital is primarily the result of the Credit Facility being classified as a long-term liability as at June 30, 2014 as the Credit Facility was extended to August 2016 during 2014. The major component of working capital is cash and cash equivalents of approximately $14 million, which includes $12 million of cash and cash equivalents denominated in Canadian dollars.

Major sources of cash during fiscal 2014 were 1) $21,758,744 from operating activities; 2) gross proceeds of $20,803,912 from the dispositions of property, plant and equipment; and 3) $12,660,274 from the exercise of 18,770,391 share purchase warrants.

The major uses of cash during fiscal 2014 were 1) $34,235,029 spent on exploration and evaluation assets, and development and production assets; and 2) $8,750,000 of the Credit Facility repaid.

The Company’s wholly owned subsidiary, Lynden USA Inc., has a reducing revolving line of credit (the “Credit Facility”) in an amount up to $100 million (increased from $50 million on February 5, 2014). As at June 30, 2014, the Credit Facility provided a borrowing base of $32 million of which $17.75 million had been drawn. As of the date of this report, $23.3 million has been drawn on the Credit Facility. The Company anticipates continuing to seek upward revisions of the borrowing base.

The Credit Facility contains certain mandatory covenants, including minimum current ratio and cash flow requirements, and other standard business operating covenants. The Company has complied with all of these covenants as at and during the year ended June 30, 2014. The Company has pledged its interest in its P&NG and other assets as security for liabilities pursuant to the Credit Facility. Further to amendments to the Credit Facility during the year, amounts owing on the Credit Facility are payable when the Credit Facility expires in August 2016, unless otherwise extended by the parties, or payable on demand on the event of default. The Credit Facility also includes a covenant restricting the payment of dividends and certain other payments from Lynden USA Inc. to the parent company. The restricted net assets of Lynden USA Inc. represent the majority of the Company’s total net assets.

The Company anticipates total capital expenditures in fiscal 2015 (July 1, 2014 to June 30, 2015) of approximately $34 million. Included in the capital budget is the Company’s participation in fifteen Wolfberry wells, five Midland Basin horizontal wells, and four vertical wells on the Mitchell Ranch Project.

The Company continues to carry out a rapid oil and gas vertical well development program on its Midland Basin acreage. The gross cost of a Wolfberry well is currently approximately $2.1 million. The Company’s current plans call for 15 gross (6.26 net) Wolfberry wells to spud in fiscal 2015

(July 1 to June 30, 2015) at an estimated cost to the Company of approximately $15.0 million. Pursuant to the terms of the Midland Basin Participation Agreement with CrownRock, the Company’s funding amount for the 6.26 net wells is equivalent to 7.15 wells.

Subject to proposals made by the operator, the Company currently anticipates three horizontal wells will be spud on the Wolcott Lease in fiscal 2015. The gross cost of a horizontal well is estimated to be approximately $8.5 million, for an estimated cost to the Company of approximately $2.1 million per well. The Company is funding 24.375% of the cost of the wells on the Wolcott lease and will have a 20% working interest in the wells.

Two initial CrownQuest operated horizontal wells are scheduled for the first half of calendar 2015 in Glasscock County. The Company anticipates a gross cost of a horizontal well to be approximately $9.0 million, for an estimated cost to the Company pursuant to the terms of the CrownRock Midland Basin Participation Agreement of approximately $4.5 million per well.

The Company is also participating in four new vertical wells over the next several months on the Mitchell Ranch at an estimated total cost to the Company of $3.6 million.

There are currently no major capital expenditures planned for the Paradox Basin Project.

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The Company anticipates financing the majority of its capital expenditures through operating revenues, draw downs on the line of credit, and cash on hand at June 30, 2014 of approximately $14 million.

The Company’s capital budget is subject to change depending upon a number of factors, including economic and industry conditions at the time of drilling, prevailing and anticipated prices for oil and gas, the availability of sufficient capital resources for drilling prospects and the Company’s financial results.

Off-Balance Sheet Arrangements

The Company has not engaged in any off-balance sheet arrangements such as obligations under guarantee contracts, a retained or contingent interest in assets transferred to an unconsolidated entity, any obligation under derivative instruments or any obligation under a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company or engages in leasing or hedging services with the Company.

Item 3. Properties.

For a description of our properties, please see “Item 1. Business—Properties.”

Item 4. Security Ownership of Certain Beneficial Owners and Management.

The table below presents, as of October 22, 2014, information regarding the beneficial ownership of our common stock with respect to each of our executive officers, each of our directors, each person known by us to own beneficially more than 5% of the common stock, and all of our directors and executive officers as a group. Beneficial ownership is determined under the rules of the Securities and Exchange Commission and generally includes voting or investment power over securities. Each individual or entity named has sole investment and voting power with respect to the common shares indicated as beneficially owned by them, subject to community property laws, where applicable, except where otherwise noted.

Shares of common stock subject to options or warrants that are currently exercisable within 60 days from October 22, 2014 are considered outstanding and beneficially owned by the person holding the options or warrants for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing percentage ownership of any other person.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership			Percent of Class
Richard Andrews		8,658,450	(1)		6.24	%
Colin Watt		2,917,699	(2)		2.19	%
Robert Bereskin		200,000	(3)		0.15	%
John McLennan		281,250	(4)		0.22	%
Ron Paton		681,250	(5)		0.52	%
Laurie Sadler		83,600	(6)		0.06	%
All Officers and Directors as a Group		12,822,249			8.97	%
John Lovoi		26,787,600	(7)		17.06	%

⁽¹⁾ Includes i) 1,262,950 common shares owned by Hawken Trust and ii) 2,237,500 stock options held of record by Richard Andrews which are vested and are exercisable into 2,237,500 shares of common stock. The address for Mr. Andrews is Suite 1200, 888 Dunsmuir St., Vancouver, BC V6C 3K4.

⁽²⁾  Includes 2,110,000 stock options held of record by Colin Watt which are vested and are exercisable into 2,110,000 shares of common stock. The address for Mr. Watt is Suite 1200, 888 Dunsmuir St., Vancouver, BC V6C 3K4.

⁽³⁾  Includes 175,000 stock options held of record by Robert Bereskin which are vested and are exercisable into 175,000 shares of common stock. The address for Mr. Bereskin is Suite 1200, 888 Dunsmuir St., Vancouver, BC V6C 3K4.

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⁽⁴⁾  Includes 281,250 stock options held of record by John McLennan which are vested and are exercisable into 281,250 shares of common stock. The address for Mr. McLennan is Suite 1200, 888 Dunsmuir St., Vancouver, BC V6C 3K4.

⁽⁵⁾  Includes 581,250 stock options held of record by Ron Paton which are vested and are exercisable into 581,250 shares of common stock. The address for Mr. Paton is 29th Floor, 595 Burrard Street, Vancouver, BC V7X 1J5.

⁽⁶⁾  Includes 75,000 stock options held of record by Laurie Sadler which are vested and are exercisable into 75,000 shares of common stock. The address for Ms. Sadler is Suite 1200, 888 Dunsmuir St., Vancouver, BC V6C 3K4.

⁽⁷⁾  Includes the following limited partnerships which are indirectly controlled by JVL Advisors, LLC, the membership interests of which are substantially owned by John Lovoi, (i) 1,630,627 common stock owned by Asklepios Energy Fund, LP, (ii) 4,451,392 shares of common stock owned by Hephaestus Energy Fund LP, (iii) 9,572,356 shares of common stock owned by Luxiver, LP, (iv) 4,931,449 common shares owned by Navitas Fund, LP, (v) 1,884,574 shares of common stock owned by Panakeia Energy Fund, LP, (vi) 330,729 shares of common stock owned by TJS Energy Fund, LP, (vii) 414,973 shares of common stock owned by Urla, (viii) 1,482,600 warrants which are exercisable into 1,482,600 shares of common stock owned by Luxiver, LP and (ix) 2,142,900 warrants which are exercisable into 2,142,900 shares of common stock owned by Navitas Fund, LP. The address for Mr. Lovoi is Suite 550, 10000 Memorial Dr., Houston, Texas 77024.

Item 5. Directors and Executive Officers.

The following table sets forth the names, ages and titles of our directors and executive officers.

Name	Age		Position
Richard Andrews		66	Chairman of the Board and Director
Colin Watt		43	President, Chief Executive Officer, Corporate Secretary and Director
Laurie Sadler		69	Chief Financial Officer
Robert Bereskin		72	Director
John McLennan		62	Director
Derek Michaelis		36	Director
Ron Paton		51	Director

Richard Andrews, Chairman of the Board and Director, has served as a member of our the Board and as our chairman of the board since April 2008, and as chief executive officer of our subsidiary, Lynden USA Inc., since April, 2008. Mr. Andrews has over 30 years of experience in fundraising and building resource companies, including acting as a consultant to Silver Standard Resources Inc., Conquistador Mines Ltd., Canadian Spirit Resources Inc., Western Copper and Gold Corp. and Victoria Gold Corp.

Colin Watt, President, Chief Executive Officer, Corporate Secretary and Director, has served as a member of the Board and as our president since January 2005, as our chief executive officer since February 2007 and as our corporate secretary since January 2010. Mr. Watt has been the president of Squall Capital Corp., a private Canadian based company which specializes in financing, restructuring and providing management service to early stage public companies, since 1997. Mr. Watt is currently a director of Donnybrook Energy Inc., Donnycreek Energy Inc., Emerita Resources Corp. and Oakham Capital Corp., all of which are listed on the TSX Venture Exchange.

Laurie Sadler, Chief Financial Officer, has served as our chief financial officer since July 2005. Mr. Sadler is a retired Chartered Accountant with extensive experience as a business advisor to public and private companies. Mr. Sadler was a founder and managing partner of the firm Sadler, Weismiller, Spencer, Chartered Accountants (1984-2001) and has a Masters of Business Administration from the University of Western Ontario.

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Robert Bereskin, Director, has served as a member of the Board since July 2007. Dr. Bereskin has over 30 years experience in the oil and gas industry, and is currently an Adjunct Professor at the University of Utah. His consulting work over the last dozen years has focused on unconventional gas-bearing shale reservoirs in both the United States and Canada, where he has assisted with several international and domestic exploration/exploitation efforts. Before that, Dr. Bereskin was a manager / scientist with TerraTek Inc. for approximately twelve years, where he was able to investigate reservoirs around the world. Dr. Bereskin began his work in the oil and gas industry with a large, Denver based, exploration and production company, where he was involved in both frontier work in Nevada, Utah and Wyoming, and development efforts in Utah and Wyoming.

John McLennan, Director, has served as a member of the Board since May 2005. Dr. McLennan has worked in geomechanics and petroleum technology companies since receiving his Ph.D. in 1980 (Civil Engineering, University of Toronto). Since then, while with Dowell and Schlumberger Dowell, one focus of his has been on improving stimulation effectiveness by applying rock mechanics principles and new-generation frac simulators. While at TerraTek, and later with Advantek International, he became involved with produced water and drill cuttings reinjection, fracpack design, as well as casing design issues related to compaction. Dr. McLennan has authored or co-authored technical manuals on coalbed methane exploitation, underbalanced drilling and underbalanced completions as well as numerous technical papers. He is currently Technical Director of ASRC Energy Service E&P Technology Inc. with its main office in Anchorage, Alaska. Dr. McLennan is currently an associate professor at University of Utah, Department of Chemical Engineering and senior research scientist at Energy & Geoscience Institute, University of Utah.

Derek Michaelis, Director, has served as a member of the Board since September 2013. Since 2005, Mr. Michaelis has been an equity oil & gas analyst with JVL Advisors, LLC, a private energy investment company based in Houston, Texas, and related entities. JVL Advisors, LLC and related entities are significant shareholders of Lynden. Mr. Michaelis holds a B.A. in Economics from Rice University.

Ron Paton, Director, has served as a member of the Board since January 2005. Mr. Paton practices business and securities law as a shareholder with the law firm of Owen Bird Law Corporation based in Vancouver, British Columbia. His clients include private and public companies with domestic and international business interests in a variety of industries. His experience includes advising on equity and debt financings, stock exchange listings, mergers and acquisitions, regulatory compliance, corporate governance and general corporate, commercial and securities law matters. Prior to joining Owen Bird Law Corporation in 2013, Mr. Paton carried on practice with the Vancouver law firm of Maitland & Company for 24 years. He has also served as a director or officer of several junior public and private companies in the resource and other sectors. Mr. Paton received his law degree from the University of British Columbia (LL.B. 1988) and was called to the British Columbia bar in 1989.

Director Qualifications

The board of directors seeks to ensure that the board is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow the board to satisfy its oversight responsibilities effectively. More specifically, in identifying candidates for membership on the board, takes into account (1) individual qualifications, such as strength of character, mature judgment and industry knowledge or business experience, and (2) all other factors it considers appropriate, including alignment with our shareholders.

When determining whether our current directors have the experience, qualifications, attributes and skills, taken as a whole, to enable our board to satisfy its oversight responsibilities effectively in light of our business and structure, our board focused primarily on our directors’ contributions to our success in recent years and on the information discussed in the biographies set forth above. With respect to Mr. Colin Watt, our board considered in particular his current role as our president and chief executive

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officer, his familiarity with our business operations, and his management expertise. With respect to Mr. Richard Andrews, our board considered his familiarity with our business operations, and his experience advising and raising funds for natural resource companies. With respect to Dr. Robert Bereskin, our board considered in particular his general oil gas industry experience and his geological knowledge of the Permian Basin and other oil and gas basins in North America. With respect to Dr. John McLennan, our board considered in particular his general oil and gas industry experience and his knowledge of well completion practices. With respect to Mr. Ron Paton, our board considered in particular his extensive knowledge of Canadian securities matters. With respect to Mr. Derek Michaelis, our board considered in particular his knowledge of capital markets and of oil and gas activities in the Permian Basin.

Other U.S. Directorships

None of our directors are currently, or have been within the past five years, also directors of other issuers with a class of securities registered under Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).

Involvement in Certain Legal Proceedings

On or about April 25, 2013, Functional Technologies Corp. (“FEB”), a British Columbia company, of which Ron Paton was a director, filed a notice of intention to make a proposal to its creditors under the Canada Bankruptcy and Insolvency Act. The initial 30 day creditor protection period was extended by court order on or about May 24, 2013. On June 12, 2013, Mr. Paton resigned as a director with immediate effect. It is Mr. Paton’s understanding that following his resignation, FEB was placed into bankruptcy.

Significant Employees

We have no employees and our officers and directors provide their services on a consulting basis.

Item 6. Executive Compensation.

We are currently considered an emerging growth company for purposes of the SEC’s executive compensation disclosure rules. In accordance with such rules, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year End Table, as well as limited narrative disclosures. Further, our reporting obligations extend only to the individuals serving as our chief executive officer, and our two other most highly compensated executive officers. For the fiscal year ending June 30, 2014, our named executive officers were:

Named Executive Officer	Title
Richard Andrews	Chairman
Colin Watt	Chief Executive Officer
Laurie Sadler	Chief Financial Officer

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Summary of Compensation

The following table sets forth all annual and long term compensation for services paid to or earned by the Named Executive Officers during the most recently completed financial year.

Summary Compensation Table

Name and Principal Position During the Financial Year Ended June 30, 2014	Financial Year Ended June 30		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		All other compens- ation ($)			Total compens- ation ($)
Richard Andrews		2014		0		0		0		0	$	252,115	(1)	$	252,115
Chairman
Colin Watt		2014		0		0		0		0		226,059	(2)		226,059
Chief Executive Officer
Laurie Sadler		2014		0		0		0		0		14,946	(3)		14,946
Chief Financial Officer

⁽¹⁾  Paid to Richard Andrews pursuant to the Andrews Agreement, as described in greater detail below.

⁽²⁾  Paid, pursuant to the Watt Agreement as described in greater detail below, to Squall Capital Corp., a company controlled by Colin Watt, for the services provided by Colin Watt and for administrative services provided by several employees of Squall Capital Corp. The amount paid to Squall Capital Corp. was paid in Canadian dollars and is presented in U.S. dollars. This amount was translated at CDN$1= US$0.9341 for the fiscal year ended June 30, 2014.

⁽³⁾  Paid to Timeout Holdings Inc., a private company owned by Mr. Sadler, for fees for acting as the Company’s Chief Financial Officer. The amount was paid to Timeout Holdings Inc. in Canadian dollars and is presented in U.S. dollars. This amount was translated at CDN$1=US$0.9341 for the fiscal year ended June 30, 2014.

Compensation Discussion and Analysis

Compensation paid to our Named Executive Officers is determined solely based on discussions by the Board. The Board follows a compensation philosophy that aligns the Name Executive Officers’ interests with those of our stockholders and seeks to provide incentives designed to ensure that we attract, retain and motivate key talents in this highly specialized and technical public junior natural resource industry.

The Board believes that a total compensation package including consulting fees and stock options is appropriate in achieving its objectives. We do not have any predetermined performance goals for our Named Executive Officers, but expect each Named Executive Officer to serve the Company and its stockholders to the best of his abilities, putting stockholder interests and value first in their decision making.

Each of the Named Executive Officers is compensated primarily by a consulting fee that is negotiated between the Company and the Named Executive Officer. Stock options are granted to Named Executive Officers to align the Named Executive Officers’ interests with those of the stockholders. The number of stock options granted to each Named Executive Officer is determined solely by the Board and is based on the Named Executive Officer’s performance, his consulting fee, if any, and the Company’s share price at the time these stock options are granted.

The services of Richard Andrews, the chairman of the Board, are provided pursuant to a services agreement (the “Andrews Agreement”) dated January 1, 2013 between Mr. Andrews and the Company. Pursuant to the terms of the Andrews Agreement, Mr. Andrews is paid $15,000 per month, and provided Mr. Andrews has been continuously engaged by the Company during the calendar year, an annual bonus in the amount of $70,000.

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The services of Colin Watt, the president, chief executive officer and corporate secretary of the Company, are provided pursuant to a management agreement (the “Watt Agreement”) dated January 1, 2013 between Mr. Watt and the Company. Pursuant to the terms of the Watt Agreement, Squall Capital Corp. is paid up to CDN$20,000 per month, for the services of Colin Watt and for the administrative services provided by several employees of Squall Capital Corp.

The Company pays Timeout Holdings Inc., a private company owned by Laurie Sadler, CDN$1,333.33 per month for providing the services of Laurie Sadler as the Company’s Chief Financial Officer.

Option-based Awards

The Company currently has in place a “rolling” stock option plan. The purpose of granting stock options is to assist the Company in compensating, attracting, retaining and motivating its executive officers and to closely align the personal interests of such persons to that of the stockholders. In determining the number of options to be granted to the executive officers, the Board will take into account the number of options, if any, previously granted to each executive officer and the exercise price of any outstanding options to ensure that such grants are in accordance with the policies of the TSX Venture Exchange.

See “Incentive Plan Awards” below for details of the option-based awards outstanding as at June 30, 2014.

Compensation Governance

The Company does not have a compensation committee. The Board has not adopted any specific policies or practices to determine the compensation for the Company’s directors and executive officers other than as disclosed above.

Incentive Plan Awards

During the financial year ended June 30, 2014, the Company did not grant any stock options and there were no re-pricings of stock options under the stock option plan or otherwise.

The following table discloses the particulars of the option-based awards granted to the Named Executive Officers under the Company’s stock option plan which were outstanding as at June 30, 2014.

Outstanding Equity Awards At Fiscal Year-End

Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Option Exercise Price (CDN$)		Option Expiration Date
Richard Andrews		350,000 475,000 1,150,000 612,500		0.30 0.55 0.80 0.50	Oct. 7, 2014 Mar. 16, 2015 July 21, 2016 July 2, 2017
Colin Watt		350,000 475,000 97,500 925,000 612,500		0.30 0.55 0.60 0.80 0.50	Oct. 7, 2014 Mar. 16, 2015 July 20, 2015 July 21, 2016 July 2, 2017
Laurie Sadler		50,000 25,000 50,000		0.30 0.55 0.80	Oct. 7, 2014 Mar. 16, 2015 July 21, 2016

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The Company currently has in place a 10% “rolling” stock option plan for the purpose of attracting and motivating directors, officers, employees and consultants of the Company and advancing interests of the Company by affording such person with the opportunity to acquire an equity interest in the Company through rights granted under the stock option plan to purchase common stock of the Company. The Board may, at the time an option is awarded or upon renegotiation of the same, attach restrictions relating to the exercise of the option, including but not limited to vesting provisions. Any such restrictions are indicated on the applicable option certificate. Notwithstanding the foregoing, options issued to consultants performing investor relations activities must vest in stages over at least twelve months with not more than one-quarter of the options vesting in any three month period. See the section entitled “Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters” for more details regarding the Company’s stock option plan.

Pension Plan Benefits

The Company does not maintain or sponsor any pension or retirement plans.

Potential Payments Upon Termination Or Change-In-Control

Except as disclosed below, the Company does not have any compensatory plans, contracts or arrangements that provide for payments to a Named Executive Officer at, following or in connection with any termination, resignation, retirement, a change in control of the Company or a change in a Named Executive Officer’s responsibilities.

Richard Andrews

The services of Richard Andrews, the chairman of the Board, are provided pursuant to a services agreement (the “Andrews Agreement”) dated January 1, 2013 between Mr. Andrews and the Company. Mr. Andrews may terminate the Andrews Agreement on two weeks’ written notice for Good Cause (as defined below), in which case the Company is obligated to pay Mr. Andrews $500,000 on the termination date.

Good Cause means the occurrence of one of the following events without Mr. Andrews’ express written consent:

• the assignment by the Company to Mr. Andrews, without Mr. Andrews’ consent, of any substantial new or different duties inconsistent with the his positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;

• a material reduction in Mr. Andrews’ responsibilities, without the his consent, except as a result of his death or disability;

• a reduction by the Company in Mr. Andrews’ compensation not agreed to by him;

• the requirement by the Company that Mr. Andrews be based anywhere other than within a 50 kilometer radius of his then current location; or

• the failure by the Company to continue in effect, or a material change in the terms of Mr. Andrews’ participation in benefits under any incentive program in place for the Company’s executives, including, without limiting the generality of the foregoing, share option plans, share purchase plans, stock appreciation rights, profit-sharing or bonus plans (collectively, the “Incentive Plans”), the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to him under the Incentive Plan.

The Company may terminate the Andrews Agreement without cause at any time by notice in writing stating the effective date of termination, in which case the Company is obligated to pay Mr. Andrews $500,000 on the termination date.

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If the Andrews Agreement is terminated by the Company within 12 months of a Change of Control (as defined in the Andrews Agreement) other than for cause, or the Andrews Agreement is terminated by Mr. Andrews at any time within six months after a Change of Control, Mr. Andrews will receive a termination payment of $500,000.

Colin Watt

The services of Colin Watt, the president, chief executive officer and corporate secretary of the Company, are provided pursuant to a management agreement (the “Watt Agreement”) dated January 1, 2013 between Mr. Watt and the Company. Mr. Watt may terminate the Watt Agreement on two weeks’ written notice for Good Cause (as defined below), in which case the Company is obligated to pay Mr. Watt CDN$500,000 on the termination date.

Good Cause means the occurrence of one of the following events without Mr. Watt’s express written consent:

• the assignment by the Company to Mr. Watt, without Mr. Watt’s consent, of any substantial new or different duties inconsistent with the his positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;

• a material reduction in Mr. Watt’s responsibilities, without the his consent, except as a result of his death or disability;

• a reduction by the Company in Mr. Watt’s compensation not agreed to by him;

• the requirement by the Company that Mr. Watt be based anywhere other than within a 50 kilometer radius of his then current location; or

• the failure by the Company to continue in effect, or a material change in the terms of Mr. Watt’s participation in benefits under the Incentive Plans, the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to him under the Incentive Plan.

The Company may terminate the Watt Agreement without cause at any time by notice in writing stating the effective date of termination, in which case the Company is obligated to pay Mr. Watt CDN$500,000 on the termination date.

If the Watt Agreement is terminated within 12 months of a Change of Control (as defined in the Watt Agreement) by the Company other than for cause, or the Watt Agreement is terminated by Mr. Watt at any time within six months after a change of control, Mr. Watt will receive a termination payment of CDN$500,000.

Compensation of Directors

Compensation for the Named Executive Officers has been disclosed in the “Summary Compensation Table” above. The Company pays its independent directors for acting as such and is determined solely based on discussions by the Board. Directors are also eligible to receive stock option grants.

The Company has a stock option plan for the granting of incentive stock options to certain persons including directors. The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the stockholders. See “Incentive Plan Awards” above.

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The following table discloses the particulars of the compensation provided to the directors of the Company (excluding the Named Executive Officers) for the financial year ended June 30, 2014.

Director Compensation

Director Name	Fees Earned or Paid in Cash ($)		All Other Compensation ($)		Total ($)
Robert Bereskin		48,000		Nil	$	48,000
John McLennan		24,000		Nil	$	24,000
Derek Michaelis		Nil		Nil		Nil
Ron Paton		Nil		Nil		Nil

Mr. Robert Bereskin is paid $2,000 per month for acting as a director of the Company, and is paid $2,000 per month for acting as the Chair of the Company’s Technical Committee.

Mr. John McLennan is paid $2,000 per month for acting as a director of the Company.

Item 7. Certain Relationships and Related Transactions, and Director Independence.

Certain Relationships and Related Transactions

We do not maintain a policy for approval of Related Party Transactions. A “Related Party Transaction” is a transaction, arrangement or relationship in which we or any of our subsidiaries was, is or will be a participant, the amount of which involved exceeds the lesser of (a) $120,000 or (b) one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any Related Person had, has or will have a direct or indirect material interest. A “Related Person” means:

• any person who is, or at any time during the applicable period was, one of our executive officers or one of our directors;

• any person who is known by us to be the beneficial owner of more than 5% of our common stock;

• any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of our common stock, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of our common stock; and

• any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.

The Board periodically reviews all Related Party Transactions that the rules of the SEC require be disclosed in the Company’s annual report or proxy statement, as applicable, and makes a determination regarding the initial authorization or ratification of any such transaction.

In determining whether to approve or disapprove entry into a Related Party Transaction, the Board will take into account, among other factors, the following: (1) whether the Related Party Transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and (2) the extent of the Related Person’s interest in the transaction.

Except as described in this section, there has not been any transaction or series of similar transactions (aside from compensation for services rendered) during the last three completed financial years or any proposed transaction or series of similar transactions to which the Company was or is a party in which the amount involved exceeded or exceeds the lesser of (a) $120,000 or (b) one percent of the average of our total assets at year end for the last two completed fiscal years and in which any of the Company’s directors, executive officers, holders of more than 5% of any class of its voting securities, or any

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member of the immediate family of any of the foregoing persons, had or will have a direct or indirect material interest.

See “Executive Compensation” for details regarding compensation arrangements with our directors and executive officers.

Director Independence

The Board currently consists of six members, Richard Andrews, Robert Bereskin, John McLennan, Derek Michaelis, Ron Paton and Colin Watt. Although we are not listed on any U.S. securities exchange and therefore are not subject to the listing requirements of the NYSE MKT LLC, the Board has determined that Robert Bereskin, John McLennan and Derek Michaelis are independent as defined by the rules of the NYSE MKT LLC. Colin Watt is an executive officer of the Company and Ron Paton is the Company’s legal counsel, and accordingly, they are not considered to be independent. Due to his position as chairman of the Board involving a policy making function, Richard Andrews is also considered to be non-independent.

Committees of the Board of Directors

We have an audit committee and a technical committee of the Board, and may have such other committees as the Board shall determine from time to time.

Audit Committee

Our audit committee consists of John McLennan, Ron Paton and Colin Watt (Chair). Colin Watt is an executive officer of the Company and Ron Paton is the Company’s legal counsel, and accordingly, they are not considered to be independent as defined by the rules of the NYSE MKT LLC or Rule 10A-3 of the Exchange Act. However, we are not required to meeting these independence rules because our securities are not listed on a national securities exchange in the United States.

Item 8. Legal Proceedings.

To the best of our knowledge, there are no material pending legal proceedings, to which we, or any of our subsidiaries, is a party or of which our property is subject.

Item 9. Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters.

Market Price

Our common stock trades on the TSX Venture Exchange under the symbol “LVL”. The table below sets forth, for the periods indicated, the high and low sales prices per share of our common stock in Canadian dollars.

QUARTER	HIGH		LOW
July 1, 2012 to September 30, 2012	$	0.750	$	0.450
October 1, 2012 to December 31, 2012	$	1.070	$	0.640
January 1, 2013 to March 31, 2013	$	1.030	$	0.750
April 1, 2013 to June 30, 2013	$	0.860	$	0.600
July 1, 2013 to September 30, 2013	$	0.980	$	0.660
October 1, 2013 to December 31, 2013	$	0.900	$	0.710
January 1, 2014 to March 31, 2014	$	0.900	$	0.630
April 1, 2014 to June 30, 2014	$	0.920	$	0.720
July 1, 2014 to September 30, 2014	$	1.230	$	0.850

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On October 22, 2014, the closing price of our common stock was CDN$0.79 per share. As of October 22, 2014, we had approximately 252 holders of record of our common stock. This number excludes owners for whom common stock may be held in “street” name.

As at the date of this Registration Statement, 5,710,000 shares of our common stock were subject to outstanding incentive stock options, 7,500,000 shares of our common stock were subject to shares purchase warrants, and 12,000 shares of our common stock were subject to finder’s warrants.

Dividend Policy

Lynden has never declared and paid, and it does not anticipate declaring or paying, any cash dividends to holders of its common stock in the foreseeable future. We currently intend to retain future earnings, if any, for the development and growth of our business. Our future dividend policy is within the discretion of the Board and will depend upon then-existing conditions, including our results of operations, financial condition, capital requirements, investment opportunities, statutory restrictions on our ability to pay dividends and other factors the Board may deem relevant. In addition, our revolving credit facility places restrictions on our ability to pay cash dividends.

Securities Authorized for Issuance Under Equity Compensation Plans

During the financial year ended June 30, 2014, our stock option plan was the only equity compensation plan under which securities were authorized for issuance. The following table sets forth information with respect to our stock option plan as at the fiscal year ended June 30, 2014.

Plan category	Number of securities to be issued upon exercise of outstanding options (a)		Weighted-average exercise price of outstanding options ($) (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		6,632,500	CDN$	0.61		6,295,091	(1)
Equity compensation plans not approved by security holders		Nil		N/A		Nil
Total		6,632,500	CDN$	0.61		6,295,091	(1)

⁽¹⁾  This figure is based on the total number of shares authorized for issuance under our stock option plan, less the number of stock options issued under such plan which were outstanding as at the Company’s financial year ended June 30, 2014. As at June 30, 2014, the Company was authorized to issue options for the purchase of a total of 12,927,591 shares of common stock.

Warrants

As at the date of this Registration Statement, we have a total of 7,500,000 share purchase warrants outstanding. The holders of 5,067,500 share purchase warrants are entitled to purchase one share of our common stock at a price of CDN$0.65 per share until May 4, 2015 and the holders of 2,432,500 share purchase warrants are entitled to purchase one share of our common stock at a price of CDN$0.65 per share until May 18, 2015.

If, during the term of the share purchase warrants, we: (i) subdivide the outstanding shares of common stock into a greater number of common stock, (ii) consolidate the outstanding shares of our common stock into a lesser number of common stock, or (iii) make any distribution, other than by way of a dividend paid in the ordinary course, to the holders of all or substantially all of the outstanding shares of common stock payable in shares of common stock, (any of such events being called a “Common

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Share Reorganization”), the exercise price of the share purchase warrants shall be adjusted effective immediately after the effective date or record date, as the case may be, on which the holders of common stock are determined for the purpose of the Common Share Reorganization by multiplying the exercise price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of shares of common stock outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of shares of common stock outstanding immediately after giving effect to such Common Share Reorganization occurring on the effective date or record date as the case may be.

If, during the term of the warrants, we fix a record date for the issue or distribution to all or substantially all the holders of the shares of common stock of:

(i) securities of Lynden including any rights, options or warrants to acquire shares of common stock or securities convertible into or exchangeable for shares of common stock or property or assets at a price per common stock or having a conversion or exchange price per common stock less than 75% of the current market price per common stock on such record date; or

(ii) any property or other assets,

and if such issuance or distribution is not by way of a dividend paid in the ordinary course or a Common Share Reorganization then, in each such case, the exercise price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the exercise price in effect on such record date by a fraction, of which the numerator shall be the product of the number of shares of common stock outstanding on such record date and the current market price on such record date, less the aggregate fair market value (as determined by us) of such securities, property or other assets so issued or distributed, and of which the denominator shall be the product of the number of shares of common stock outstanding on such record date and such current market price.

As at the date of this Registration Statement, we have a total of 12,000 finder’s warrants outstanding. The holders of the finder’s warrants are entitled to purchase one share of our common stock at a price of CDN$0.65 per share until May 4, 2015. The terms of the warrants finder’s warrants have the same terms regarding adjustment of the exercise price as the share purchase warrants described above.

Stock Options

As at the date of this Registration Statement, we have a total of 5,710,000 incentive stock options outstanding.

The Company currently has in place a “rolling” stock option plan (the “SOP”), whereby a maximum of 10% of the issued common stock from time to time may be reserved for issuance pursuant to the exercise of options. The purpose of the SOP is to attract and motivating directors, officers, employees and consultants and our advancing interests by affording such person with the opportunity to acquire an equity interest in Lynden through rights granted under the SOP to purchase our common stock. The Board may, at the time an option is awarded or upon renegotiation of the same, attach restrictions relating to the exercise of the option, including but not limited to vesting provisions. Any such restrictions are indicated on the applicable option certificate. Notwithstanding the foregoing, options issued to consultants performing investor relations activities must vest in stages over at least twelve months with not more than one-quarter of the options vesting in any three month period.

The material terms of the SOP are as follows:

1. Directors, officers, employees and consultants are eligible to be granted stock options under the SOP.

2. The term of any options granted under the SOP will be fixed by the board at the time such options are granted, provided that options will not be permitted to exceed a term of ten years.

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3. The exercise price of any options granted under the SOP will be determined by the Board, in its sole discretion, but shall not be less than the closing trading price of the our common stock preceding the grant of such options, less any discount permitted by the regulatory authorities.

4. Subject to any required regulatory approvals, any existing option or the SOP or the terms and conditions of any option thereafter to be granted may from time to time be amended provided that where such amendment relates to an existing option and it would:

(a) materially decrease the rights or benefits accruing to an option holder; or

(b) materially increase the obligations of an option holder;

then the written consent of the option holder in question to such amendment must be obtained. If at the time the exercise price of an option is reduced the option holder is an insider, the insider must not exercise the option at the reduced exercise price until the reduction in exercise price has been approved by disinterested shareholders, if required by the TSX Venture Exchange.

5. If there is a material alteration in the capital structure and the shares of common stock are consolidated, subdivided, converted, exchanged, reclassified or in any way substituted for, the Board or a committee of the Board shall make such adjustments to the SOP and to the options then outstanding under the SOP they determine to be appropriate and equitable under the circumstances, so that the proportionate interest of each option holder shall, to the extent practicable, be maintained as before the occurrence of such event. Such adjustments may include, without limitation:

(a) a change in the number or kind of share covered by such options; and

(b) a change in the exercise price payable per share provided, however, that the aggregate exercise price applicable to the unexercised portion of existing options shall not be altered, it being intended that any adjustments made with respect to such options shall apply only to the exercise price payable per share and the number of shares of common stock subject thereto.

6. Unless otherwise imposed by the Board or a committee of the Board, no vesting requirements will apply to options granted under the SOP. A four month hold period, commencing from the date of grant of an option, will apply to all shares issued under an option only if the exercise price of the stock options is based on less than market price.

7. All options will be non-assignable and non-transferable.

8. If the option holder ceases to be a director or ceases to be employed by us (other than by reason of death), as the case may be, then the option granted shall expire on no later than the 30th day following the date that the option holder ceases to be a director or ceases to be employed us, subject to the terms and conditions set out in the SOP.

9. The aggregate number of options which may be granted to any one option holder under the SOP within any 12 month period must not exceed 5% of the number of issued and outstanding common shares of the Company (unless the we have obtained disinterested shareholder approval as required by the TSX Venture Exchange).

10. Disinterested shareholder approval (in accordance with TSX Venture Exchange requirements) is required to the grant to insiders (as a group), within a 12 month period, of an aggregate number of options which, when added to the number of outstanding incentive stock options granted to insiders within the previous 12 months (calculated at the date an option is granted to an insider), exceed 10% of the number of issued and outstanding shares of common stock.

11. The aggregate number of options which may be granted to any one consultant within any 12 month period must not exceed 2% of the number of issued and outstanding shares of common stock, calculated at the date an option is granted to a consultant.

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12. The aggregate number of options which may be granted within any 12 month period to employees or consultants engaged in investor relations activities must not exceed 2% of the number of issued and outstanding shares of common stock, calculated at the date an option is granted to any such employee or consultant, and such options must vest in stages over a period of not less than 12 months with no more than 25% of the options vesting in any three month period.

13. The aggregate number of options which may be granted to eligible charitable organizations must not at any time exceed 1% of the number of issued and outstanding common shares, calculated immediately subsequent to the grant of an option to an eligible charitable organization.

Below is a table setting out details of the current outstanding stock options.

Grant Date	Number of Options		Exercise Price (CDN$)		Expiry Date
March 17, 2010		1,440,000	$	0.55		March 16, 2015
July 21, 2010		260,000	$	0.60		July 20, 2015
July 22, 2011		2,537,500	$	0.80		July 21, 2016
September 2, 2011		75,000	$	0.80		September 1, 2016
July 3, 2012		1,397,500	$	0.50		July 2, 2017

Exchange Controls

There are no government laws, decrees or regulations in Canada which restrict the export or import of capital or which affect the remittance of dividends, interest or other payments to non-resident holders of our common stock. Any remittances of dividends to United States residents and to other non-residents are, however, subject to withholding tax. See “Taxation” below.

The Investment Canada Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Canada Act (a “non-Canadian”), unless after review, the minister responsible for the Investment Canada Act is satisfied or deemed to be satisfied that the investment is likely to be of net benefit to Canada.

An investment in the common stock by a non-Canadian entity other than a “WTO Investor” (as that term is defined by the Investment Canada Act, and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when we were not controlled by a WTO Investor, would be reviewable under the Investment Canada Act if it was an investment to acquire control of Lynden and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Canada Act, was $5,000,000 or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, regardless of the value of our assets. An investment in the common stock by a WTO Investor, or by a non-Canadian entity when we were controlled by a WTO Investor, would be reviewable under the Investment Canada Act if it was an investment to acquire control of Lynden and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Canada Act, was not less than a specified amount, which for the year 2014 is $354,000,000. A non-Canadian entity would be deemed to acquire control of Lynden for the purposes of the Investment Canada Act if the non-Canadian entity acquired a majority of our common stock. The acquisition of one-third or more, but less than a majority of our common stock, would be presumed to be an acquisition of control of Lynden unless it could be established that, on the acquisition, we were not controlled in fact by the acquirer through the ownership of our common stock. The acquisition of less than one-third of our common stock is deemed not to be an acquisition of control of Lynden.

Certain transactions relating to the common stock would be exempt from the Investment Canada Act, including: (a) an acquisition of the common stock by a person in the ordinary course of that person’s business as a trader or dealer in securities; (b) an acquisition of control of Lynden in connection with the

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realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Canada Act; and (c) an acquisition of control of Lynden by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of Lynden, through the ownership of the common stock, remained unchanged.

Taxation

Certain Canadian Federal Income Taxation

We consider that the following general summary fairly describes the principal Canadian federal income tax consequences applicable to a holder of our common stock who is a resident of the United States, who is not, will not be and will not be deemed to be a resident of Canada for purposes of the Income Tax Act (Canada) and any applicable tax treaty and who does not use or hold, and is not deemed to use or hold, his, her or its common stock in the capital of Lynden in connection with carrying on a business in Canada (a “non-resident holder”).

This summary is based upon the current provisions of the Income Tax Act (Canada), the regulations thereunder (the “Regulations”), the current publicly announced administrative and assessing policies of the Canada Revenue Agency and the Canada-United States Tax Convention as amended by the Protocols thereto (the “Treaty”). This summary also takes into account the amendments to the Income Tax Act (Canada) and the Regulations publicly announced by the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all such Tax Proposals will be enacted in their present form. However, no assurances can be given that the Tax Proposals will be enacted in the form proposed, or at all. This summary is not exhaustive of all possible Canadian federal income tax consequences applicable to a holder of our common stock and, except for the foregoing, this summary does not take into account or anticipate any changes in law, whether by legislative, administrative or judicial decision or action, nor does it take into account provincial, territorial or foreign income tax legislation or considerations, which may differ from the Canadian federal income tax consequences described herein.

This summary is of a general nature only and is not intended to be, and should not be construed to be, legal, business or tax advice to any particular holder or prospective holder of our common stock, and no opinion or representation with respect to the tax consequences to any holder or prospective holder of our common stock is made. Accordingly, holders and prospective holders of our common stock should consult their own tax advisors with respect to the income tax consequences of purchasing, owning and disposing of our common stock in their particular circumstances.

Dividends

Dividends paid on our common stock to a non-resident holder will be subject under the Income Tax Act (Canada) to withholding tax at a rate of 25% subject to a reduction under the provisions of an applicable tax treaty, which tax is deducted at source by Lynden. The Treaty provides that the Income Tax Act (Canada) standard 25% withholding tax rate is reduced to 15% on dividends paid on shares of a corporation resident in Canada (such as our company) to residents of the United States, and also provides for a further reduction of this rate to 5% where the beneficial owner of the dividends is a corporation resident in the United States that owns at least 10% of the voting stock of the corporation paying the dividend.

Capital Gains

A non-resident holder is not subject to tax under the Income Tax Act (Canada) in respect of a capital gain realized upon the disposition of a share of our common stock unless such share represents “taxable

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Canadian property”, as defined in the Income Tax Act (Canada), to the holder thereof. Our common stock generally will be considered taxable Canadian property to a non-resident holder if:

• the non-resident holder;

• persons with whom the non-resident holder did not deal at arm’s length; or

• the non-resident holder and persons with whom such non-resident holder did not deal at arm’s length,

owned, or had an interest in an option in respect of, not less than 25% of the issued shares of any class of our capital stock at any time during the 60 month period immediately preceding the disposition of such shares. In the case of a non-resident holder to whom shares of our common stock represent taxable Canadian property and who is resident in the United States, no Canadian taxes will generally be payable on a capital gain realized on such shares by reason of the Treaty unless the value of such shares is derived principally from real property situated in Canada.

Item 10. Recent Sales of Unregistered Securities.

Information concerning the issuance or sale of unregistered securities during the last three years is set out below.

DATE OF SALE	TYPE OF SECURITY	NUMBER	CONSIDERATION	EXEMPTION FROM REGISTRATION
September 2, 2011	Stock Options issued to non-U.S. Person exercisable into common stock until September 1, 2016(1)	75,000	Exercise price of CDN$0.80 (US$0.81;CDN$1 =US$1.0161) per common stock	Regulation S
April 24, 2012	Common Stock issued upon exercise of warrants by non-U.S. Person	100,000	Exercise price of CDN$0.50 (US$0.51; CDN$1 =US$1.0121) per common stock	Regulation S
May 1, 2012	Common Stock issued upon exercise of warrants by U.S. Person	17,000	Exercise price of CDN$0.50 (US$0.51; CDN$1 =US$1.0144) per common stock	Rule 506 of Regulation D
May 4, 2012	Units issued to U.S.	8,023,000	CDN$0.42	Rule 506 of Regulation D
	Persons(2)		(US$0.42;CDN$1 =US$1.0045) per Unit
May 4, 2012	Units issued to non-U.S. Persons(2)	2,112,000	CDN$0.42 (US$0.42;CDN$1 =US$1.0045) per Unit	Regulation S

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DATE OF SALE	TYPE OF SECURITY	NUMBER	CONSIDERATION	EXEMPTION FROM REGISTRATION
May 4, 2012	Finder’s Units(2)	30,000	Finder’s fees for the introduction of non-U.S. investors in the May 4, 2012 tranche of the private placement. A total cash payment of CDN$12,600 (US$12,657; CDN$1=US$1.0045) was also paid to finders for the introduction of non-U.S. investors in the May 4, 2012 tranche of the private placement.	Regulation S
May 7, 2012	Common Stock issued upon exercise of warrants by non-U.S. Persons	108,000	Exercise price of CDN $0.50 (US$0.50; CDN$1=US$1.0070) per common stock	Regulation S
May 18, 2012	Units issued to non-U.S. Persons(3)	4,865,000	CDN$0.42 (US$0.41; CDN$1=US$0.9796) per Unit. No finder’s fee or commissions were paid in connection with this tranche of the private placement.	Regulation S
July 3, 2012	Stock Options issued to non-U.S. persons exercisable into common stock until July 2, 2017(4)	785,000	Exercise price of CDN$0.50 (US$0.52; CDN$1=US$1.0408) per common stock	Regulation S
July 3, 2012	Stock Options issued to U.S. persons exercisable into common stock until July 2, 2017(2)	612,500	Exercise price of CDN$0.50 (US$0.52; CDN$1=US$1.0408) per common stock	Rule 506 of Regulation D
December 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	250,000	Exercise price of CDN$0.70 (US$0.71;CDN$1 =US$1.0133) per common stock	Regulation S

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DATE OF SALE	TYPE OF SECURITY	NUMBER	CONSIDERATION	EXEMPTION FROM REGISTRATION
January 17, 2013	Common Stock issued upon exercise of stock options by U.S. Person	25,000	Exercise price of CDN$0.55 (US$0.56; CDN$1=US$1.0149) per common stock	Rule 506 of Regulation D
January 25, 2013	Common Stock issued upon exercise of stock options by U.S. Person	100,000	Exercise price of CDN$0.30 (US$0.30; CDN$1=US$0.9923) per common stock	Rule 506 of Regulation D
February 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	80,000	Exercise price of CDN$0.70 (US$0.70;CDN$1 =US$0.9985) per common stock	Regulation S
March 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	130,000	Exercise price of CDN$0.70 (US$0.68;CDN$1 =US$0.9723) per common stock	Regulation S
April 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	55,000	Exercise price of CDN$0.70 (US$0.69;CDN$1 =US$0.9818) per common stock	Regulation S
July 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	602,500	Exercise price of CDN$0.70 (US$0.68;CDN$1 =US$0.9737) per common stock	Regulation S
August 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	141,498	Exercise price of CDN$0.70 (US$0.67;CDN$1 =US$0.9605) per common stock	Regulation S
September 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	2,916,000	Exercise price of CDN$0.70 (US$0.68;CDN$1 =US$0.9676) per common stock	Regulation S
September 2013	Common Stock issued upon exercise of finder’s warrants by non-U.S. Person	3,000	Exercise price of CDN$0.65 (US$0.62;CDN$1 =US$0.9497) per common stock	Regulation S

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DATE OF SALE	TYPE OF SECURITY	NUMBER	CONSIDERATION	EXEMPTION FROM REGISTRATION
October 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	10,191,393	Exercise price of CDN$0.70 (US$0.68;CDN$1 =US$0.9662) per common stock	Regulation S
October 2013	Common Stock issued upon exercise of warrants by U.S. Persons	450,000	Exercise price of CDN$0.70 (US$0.68;CDN$1 =US$0.9662) per common stock	Rule 506 of Regulation D
November 2013	Common Stock issued upon exercise of warrants by non-U.S. Persons	4,466,000	Exercise price of CDN$0.70 (US$0.67;CDN$1 =US$0.9539) per common stock	Regulation S
July 14, 2014	Common Stock issued upon exercise of stock options by U.S. Person pursuant to an employee benefit plan	50,000	Exercise price of CDN$0.30 (US$0.28; CDN$1=US$0.9333) per common stock	Rule 701 of the Securities Act
July 14, 2014	Common Stock issued upon exercise of stock options by U.S. Person pursuant to an employee benefit plan	25,000	Exercise price of CDN$0.55 (US$0.51; CDN$1=US$0.9333) per common stock	Rule 701 of the Securities Act
July 30, 2014	Common Stock issued upon exercise of stock options by U.S. Person pursuant to an employee benefit plan	350,000	Exercise price of CDN$0.30 (US$0.28; CDN$1=US$0.9173) per common stock	Rule 701 of the Securities Act
August 1, 2014	Common Stock issued upon exercise of stock options by non-U.S. Persons pursuant to an employee benefit plan	12,500	Exercise price of CDN$0.30 (US$0.27; CDN$1=US$0.9152) per common stock	Rule 701 of the Securities Act

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DATE OF SALE	TYPE OF SECURITY	NUMBER	CONSIDERATION	EXEMPTION FROM REGISTRATION
August 7, 2014	Common Stock issued upon exercise of stock options by non-U.S. Person pursuant to an employee benefit plan	35,000	Exercise price of CDN$0.30 (US$0.27; CDN$1=US$0.9157) per common stock	Rule 701 of the Securities Act
October 2, 2014	Common Stock issued upon exercise of stock options by non-U.S. Person pursuant to an employee benefit plan	225,000	Exercise price of CDN$0.30 (US$0.27; CDN$1=US$0.8958) per common stock	Rule 701 of the Securities Act
October 7, 2014	Common Stock issued upon exercise of stock options by non-U.S. Persons pursuant to an employee benefit plan	225,000	Exercise price of CDN$0.30 (US$0.27; CDN$1= US$0.8952) per common stock	Rule 701 of the Securities Act

^1.  These options vested as to 1/3 (33.33%) on March 2, 2012, as to an additional 1/3 (33.3%) on September 2, 2012, and as to an additional 1/3 (33.33%) on March 2, 2013.

^2.  Each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one share of our common stock at a price of $0.65 per share until May 4, 2015.

^3.  Each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one share of our common stock at a price of $0.65 per share until May 18, 2015.

^4.  These options vested as to 1/3 (33.33%) on January 3, 2013, as to an additional 1/3 (33.3%) on July 3, 2013, and as to an additional 1/3 (33.33%) on January 3, 2014.

Item 11. Description of Registrant’s Securities to be Registered.

The authorized capital stock of Lynden is an unlimited number of common shares, with no par value, of which 130,198,411 are issued and outstanding, and an unlimited number of preference shares, with no par value, of which no shares are issued and outstanding.

The following summary of the capital stock and articles of Lynden does not purport to be complete and is qualified in its entirety by reference to the provisions of applicable law and to our notice of articles and articles, which are filed as exhibits to the registration statement.

Common Stock

Each share of common stock entitles the holder thereof to one vote per share at all meetings of stockholders, except meetings at which only holders of a specified class of shares are entitled to vote, and do not have cumulative voting rights. Subject to prior rights and preferences that may be applicable to any outstanding shares or series of preferred stock, holders of common stock are entitled to receive ratably in proportion to the shares of common stock held by them such dividends (payable in cash, stock or otherwise), if any, as may be declared from time to time by the Board out of funds legally available for dividend payments. All outstanding shares of common stock are fully paid and non-assessable.

The holders of common stock have no preferences or rights of conversion, exchange, preemptive or other subscription rights. There are no redemption or sinking fund provisions applicable to common

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stock. There are no existing indentures or agreements affecting the rights of stockholders other than the notice of articles and articles of the Company. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, holders of common stock will be entitled to share ratably in our assets in proportion to the shares of common stock held by them that are remaining after payment or provision for payment of all of our debts and obligations and after distribution in full of preferential amounts to be distributed to holders of outstanding shares of preferred stock, if any. However, the holders of common stock are entitled to receive the remaining property of Lynden upon dissolution, subject to the rights, restrictions and conditions attached to any other class of stock.

Preferred Stock

Our articles authorizes the Board, subject to any limitations prescribed by law, without further stockholder approval, to establish and to issue from time to time one or more classes or series of preferred stock. Each class or series of preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the Board, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, redemption rights and the terms and conditions of any sinking fund. The shares of preferred stock of any series may be converted into shares of common stock. Except as provided by law or in a preferred stock designation, the holders of shares of preferred stock have such rights to attend and vote at meetings of stockholders by restrictions on attendances or voting rights thereat as may be determined by resolution of the Board. Holders of shares of a class or series of preferred stock are not entitled to vote separately as a class or series or to dissent in certain circumstances.

In the event of any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, the holders of shares of each series of preferred stock rank in parity with the preferred stock of every other series of the same class and have preference over the shares of common stock and any shares ranking junior to the shares of preferred stock. The directors may also give the shares of preferred stock additional preferences over the shares of common stock and other shares ranking junior to such preferred stock. If any cumulative dividends, whether or not earned or declared, declared non-cumulative dividends, or amounts payable on the return of capital in respect of a series of shares of preferred stock are not paid in full, all shares of preferred stock of other series of the same class are entitled to participate rateably in respect of accumulated cumulative dividends, declared non-cumulative dividends, and amounts payable on return of capital.

Anti-Takeover Effects of Provisions of our Articles

Our articles contain an advance notice provision (the “Advance Notice Provision”) which is designed to: (i) facilitate orderly and efficient stockholder meetings at which directors are to be elected; (ii) ensure that all stockholders, including those participating in a stockholders’ meeting by proxy rather than in person, receive adequate notice of all director nominations and sufficient information with respect to all nominees; and (iii) allow stockholders to register an informed vote.

Nominations of persons for election to the board may be made at an annual general meeting of stockholders, or at any other general meeting of stockholders (an “extraordinary meeting”) if one of the purposes for which the extraordinary meeting was called was the election of directors) in one of the following ways: (a) by or at the direction of the board, including pursuant to a notice of meeting; (b) by or at the direction or request of one or more stockholders pursuant to a proposal made in accordance with the provisions of the British Columbia Business Corporations Act (the “BCA”), or a requisition of the stockholders made in accordance with the provisions of the BCA; or (c) by any person (a “Nominating Stockholder”): (A) who, at the close of business on the date of the giving of the notice provided for below in the Advance Notice Provision and on the record date for notice of such meeting, is entered in the central securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in the Advance Notice Provision.

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In addition to any other applicable requirements, for a nomination to be made by a Nominating Stockholder, the Nominating Stockholder must have given timely notice thereof in proper written form to our corporate secretary at our head office.

To be timely, a Nominating Stockholder’s notice to our secretary must be made: (a) in the case of an annual general meeting of stockholders, not less than 30 nor more than 65 days prior to the date of the annual general meeting of stockholders; provided, however, that in the event that the annual general meeting of stockholders is to be held on a date that is less than 50 days after the date (the “Notice Date”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nominating Stockholder may be made not later than the close of business on the 10th day following the Notice Date; and (b) in the case of an extraordinary meeting (which is not also an annual general meeting) of stockholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the extraordinary meeting of stockholders was made. In no event shall any adjournment or postponement of a meeting of stockholder or the announcement thereof commence a new time period for the giving of a Nominating Stockholder’s notice as described above.

To be in proper written form, a Nominating Stockholder’s notice to our corporate secretary must set forth: (a) as to each person whom the Nominating Stockholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares in our capital stock which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of stockholder (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (D) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the BCA and Applicable Securities Laws (as defined below); and (b) as to the Nominating Stockholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Stockholder has a right to vote any our stock and any other information relating to such Nominating Stockholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the BCA and Applicable Securities Laws (as defined below). We may require any proposed nominee to furnish such other information as may reasonably be required by us to determine the eligibility of such proposed nominee to serve as an independent director of the Board or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such proposed nominee.

No person will be eligible for election as a director unless nominated in one of the three ways described above; provided, however, that nothing in the Advance Notice Provision shall be deemed to preclude discussion by a stockholder (as distinct from the nomination of directors) at a meeting of stockholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the BCA. The chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

For purposes of the Advance Notice Provision: (a) “public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and (b) “Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada.

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Notwithstanding any other provision of the Advance Notice Provision, notice given to our corporate secretary pursuant to the Advance Notice Provision may only be given by personal delivery or fax transmission and shall be deemed to have been given and made only at the time it is served by personal delivery or sent by fax transmission (provided that receipt of confirmation of such transmission has been received) to our corporate secretary at the address of our head office; provided that if such delivery or fax transmission is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or fax transmission shall be deemed to have been made on the next business day.

Actions Requiring a Special Majority

Under the Business Corporations Act (British Columbia), unless otherwise stated in the Articles, certain corporate actions require the approval of a special majority of shareholders, meaning holders of shares representing two-thirds of those votes cast in respect of a shareholder vote addressing such matter. Those items requiring the approval of a special majority generally relate to fundamental changes with respect to our business, and include amongst others, resolutions: (i) removing a director prior to the expiry of his or her term; (ii) altering the Articles, (iii) approving an amalgamation; (iv) approving a plan of arrangement; and (v) providing for a sale of all or substantially all of our assets.

Foreign Governmental Laws and Taxes

See the section entitled “Item 9. Market Price of and Dividend on the Registrant’s Common Equity and Related Stockholder Matters – Exchange Controls, Taxation” for a discussion regarding the rights of nonresident or foreign owners.

Item 12. Indemnification of Directors and Officers.

Subject to the Business Corporations Act (British Columbia), our articles require that we indemnify a director, former director or alternate director and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable and each director or alternate director is deemed to have contracted with us on the terms of the indemnity contained in our articles. Our articles also provide that we may indemnify any person, subject to any restrictions in the Business Corporations Act (British Columbia). The Business Corporations Act (British Columbia) prohibits indemnification if any of the following circumstances apply:

(a) if the indemnity or payment is made under an earlier agreement to indemnify or pay expenses and, at the time that the agreement to indemnify or pay expenses was made, the company was prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

(b) if the indemnity or payment is made otherwise than under an earlier agreement to indemnify or pay expenses and, at the time that the indemnity or payment is made, the company is prohibited from giving the indemnity or paying the expenses by its memorandum or articles;

(c) if, in relation to the subject matter of the eligible proceeding, the eligible party did not act honestly and in good faith with a view to the best interests of the company or the associated corporation, as the case may be;

(d) in the case of an eligible proceeding other than a civil proceeding, if the eligible party did not have reasonable grounds for believing that the eligible party’s conduct in respect of which the proceeding was brought was lawful.

The Business Corporations Act (British Columbia) also prohibits indemnification and payment of expenses of an eligible party if an eligible proceeding is brought against an eligible party by us or on our behalf or by or on behalf of an associated corporation.

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Our articles permit us to purchase insurance on behalf of any officer, director, employee or other agent for any liability arising out of that person’s actions as our officer, director, alternate director, employee or agent or person who holds or held such equivalent position. We have entered into indemnification agreements with each of our current directors and officers. These agreements require us to indemnify these individuals to the fullest extent permitted under laws of British Columbia and the laws of Canada applicable therein against liability that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. We believe that the indemnification agreements facilitate our ability to continue to attract and retain qualified individuals to serve as directors and officers.

Item 13. Financial Statements.

Please see the section entitled “Item 15. Financial Statements and Exhibits” for information on financial statements filed with this Registration Statement.

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

For the fiscal years ended June 30, 2013, and 2014, we did not have any disagreement with our accountants on any matter of accounting principles, practices or financial statement disclosure.

Item 15. Financial Statements and Exhibits.

The following Consolidated Financial Statements and Exhibits are filed or furnished as part of this Registration Statement.

(a) Consolidated Financial Statements.

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INDEX TO FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		78
Consolidated Balance Sheets as of June 30, 2014 and June 30, 2013		79
Consolidated Statements of Income and Comprehensive Income for the years ended June  30, 2014 and June 30, 2013		80
Consolidated Statement of Changes in Shareholders’ Equity for the years ended June  30, 2014 and June 30, 2013		81
Consolidated Statements of Cash Flows for the years ended June 30, 2014 and June 30, 2013		82
Notes to the Consolidated Financial Statements		83

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Lynden Energy Corp.

We have audited the accompanying consolidated financial statements of Lynden Energy Corp. (the “Company”), which comprise the consolidated balance sheets as at June 30, 2014 and June 30, 2013, and the consolidated statements of income and comprehensive income, consolidated statements of changes in shareholders’ equity, and consolidated statements of cash flows for each of the years then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Lynden Energy Corp. as at June 30, 2014 and June 30, 2013, and its financial performance and its cash flows for each of the years then ended in accordance with accounting principles generally accepted in the United States.

/s/ Deloitte LLP

Chartered Accountants

October 28, 2014

Vancouver, Canada

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LYNDEN ENERGY CORP.

Consolidated Balance Sheets

(Presented in United States dollars, except where indicated)

	Notes		June 30, 2014			June 30, 2013
ASSETS
Current assets
Cash and cash equivalents			$	13,955,890		$	1,874,400
Trade and other receivables, net of allowance for doubtful accounts		4		3,143,017			2,612,374
Income taxes receivable				200,000			—
Total current assets				17,298,907			4,486,774
Non-current assets
Property, plant and equipment		6		91,812,527			73,984,820
Total assets			$	109,111,434		$	78,471,594
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Credit facility		9	$	—		$	26,601,653
Trade and other payables		8,12		2,971,177			220,425
Income taxes payable				380,000			103,922
Total current liabilities				3,351,177			26,926,000
Non-current liabilities
Credit facility		9		17,853,245			—
Asset retirement liabilities		10		240,208			200,531
Deferred tax liabilities		16		14,902,811			4,674,210
				32,996,264			4,874,741
Total liabilities				36,347,441			31,800,741
Shareholders’ equity
Share capital—authorized unlimited common shares, no par value
Issued and outstanding: June 30, 2014—129,275,911
June 30, 2013—110,505,520		11		65,160,387			49,279,688
Paid-in capital		11		15,434,128			18,598,870
Accumulated other comprehensive income (loss)				(212,663	)		139,939
Retained earnings (Deficit)				(7,617,859	)		(21,347,644	)
Total shareholders’ equity				72,763,993			46,670,853
Total liabilities and shareholders’ equity			$	109,111,434		$	78,471,594
Subsequent events		17

Approved by the Board of Directors:

Director Director

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LYNDEN ENERGY CORP.

Consolidated Statements of Income and Comprehensive Income

(Presented in United States dollars, except where indicated)

	Notes		Year ended June 30, 2014			Year ended June 30, 2013
Revenue and other income
Petroleum and natural gas sales, net of royalties			$	29,366,595		$	18,953,732
Derivative financial instruments gain (loss)		13		(63,633	)		15,163
Interest income				89,990			12,573
Total revenue and other income				29,392,952			18,981,468
Expenses
Production and operating expenses				(4,949,932	)		(3,019,360	)
Depletion, depreciation and accretion				(7,917,230	)		(5,931,851	)
Exploration				(253,504	)		(278,457	)
Foreign exchange gain (loss)				(5,835	)		(52,030	)
General and administrative				(1,384,587	)		(1,689,720	)
Impairments				—			—
Interest				(283,183	)		(260,974	)
Total expenses				(14,794,271	)		(11,232,392	)
Other income
Gain on disposition of property, plant and equipment		6,7		10,219,755			11,255,320
Income before income taxes				24,818,436			19,004,396
Income tax expense (recovery)		16		11,088,651			5,595,986
Net income				13,729,785			13,408,410
Other comprehensive income (loss)
Foreign currency translation adjustment				(352,602	)		128,387
Total comprehensive income for the year			$	13,377,183		$	13,536,797
Weighted average number of common shares outstanding
Basic		11		123,798,574			110,138,794
Diluted		11		127,399,949			113,824,479
Net earnings per common share
Basic			$	0.11		$	0.13
Diluted			$	0.11		$	0.13

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LYNDEN ENERGY CORP.

Consolidated Statement of Changes in Shareholders’ Equity

(Presented in United States dollars, except where indicated)

	Notes	Year ended June 30, 2014			Year ended June 30, 2013
Share capital
Balance, beginning of year		$	49,279,688		$	48,755,838
Common shares issued for cash:
Private placement			—			—
Share issue costs on private placement			—			—
Exercise of stock options			—			75,808
Exercise of warrants			15,880,699			448,042
Balance, end of year		$	65,160,387		$	49,279,688
Paid-in capital
Balance, beginning of year		$	18,598,870		$	18,063,623
Private placement			—			—
Share issue costs on private placement			—			—
Exercise of stock options			—			(32,085	)
Exercise of warrants			(3,220,425	)		(88,532	)
Share-based payments			55,683			655,864
Balance, end of year		$	15,434,128		$	18,598,870
Accumulated other comprehensive income (loss)
Balance, beginning of year		$	139,939		$	11,552
Foreign currency translation			(352,602	)		128,387
Balance, end of year		$	(212,663	)	$	139,939
Deficit
Balance, beginning of year		$	(21,347,644	)	$	(34,756,054	)
Net income			13,729,785			13,408,410
Balance, end of year		$	(7,617,859	)	$	(21,347,644	)
Total shareholders’ equity		$	72,763,993		$	46,670,853
Common shares—number
Balance, beginning of year			110,505,520			109,865,520
Private placement			—			—
Share issue costs on private placement			—			—
Exercise of stock options			—			125,000
Exercise of warrants			18,770,391			515,000
Balance, end of year			129,275,911			110,505,520

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LYNDEN ENERGY CORP.

Consolidated Statements of Cash Flows

(Presented in United States dollars, except where indicated)

	Notes		Year ended June 30, 2014			Year ended June 30, 2013
Operating activities
Earnings for the year			$	13,729,785		$	13,408,410
Adjustments for:
Unrealized loss (gain) on derivative financial instruments				15,163			(15,163	)
Depletion, depreciation, accretion and impairment				7,917,230			5,931,851
Share-based payments				55,683			650,089
Gain on disposition of property, plant and equipment				(10,219,755	)		(11,255,320	)
Deferred income taxes				10,228,601			5,595,987
Unrealized foreign exchange loss (gain)				(196,191	)		149,868
Changes in non-cash working capital items:
Trade and other receivables				(545,806	)		(1,163,033	)
Current taxes receivable				(200,000	)		—
Prepaid expenses				—			—
Trade and other payables				697,956			(2,180,247	)
Income taxes payable				276,078			13,922
Cash generated by operating activities				21,758,744			11,096,363
Investing activities
Disposition of property, plant and equipment				20,803,912			25,078,982
Acquisition of property, plant and equipment				(34,235,029	)		(56,167,297	)
Cash used in investing activities				(13,431,117	)		(31,088,315	)
Financing activities
Credit facility				(8,750,000	)		12,000,000
Common shares issued for cash, net of issue costs		11		12,660,274			403,233
Cash generated by financing activities				3,910,274			12,403,233
Effect of exchange rate on cash held in foreign currency				(156,411	)		(15,706	)
Change in cash and cash equivalents during the year				12,081,490			(7,604,425	)
Cash and cash equivalents, beginning of year				1,874,400			9,478,825
Cash and cash equivalents, end of year			$	13,955,890		$	1,874,400
Cash and cash equivalents are composed of:
Cash			$	2,628,377		$	1,874,400
Guaranteed investment certificates				11,327,513			—
			$	13,955,890		$	1,874,400
Supplemental cash flow information		14

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

1. Description of Business

Lynden Energy Corp. (the “Company”) is a public company continued under the Business Corporations Act (British Columbia). The Company’s business is to acquire, explore and develop petroleum and natural gas (“P&NG”) properties. The Company’s principal business activities are located in Texas, United States of America. The Company’s common shares trade on the TSX Venture Exchange (“TSX-V”) under the symbol LVL. The head office is located in Vancouver, British Columbia, Canada.

2. Significant Accounting Policies

a) Basis of presentation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). These consolidated financial statements present the Company’s financial position as at June 30, 2014 and 2013 and results of operations for the year ended June 30, 2014, and the 2013 and 2012 comparative periods.

b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Lynden Exploration Ltd. and Lynden USA Inc.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of income and comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Investments where the Company has the ability to exercise significant influence are accounted for using the equity method. Under this method, the Company’s share of the associate’s earnings or losses is included in operations with a corresponding change in the carrying value of the investment. Dividends received from these investments are credited to the investment. The Company’s 47.99% interest in Abajo Gas Transmission Company, LLC is accounted for using the equity method (note 5).

A substantial portion of the Company’s exploration, development and production activities is conducted jointly with others. These consolidated financial statements reflect only the Company’s proportionate interest in such activities.

Inter-company balances and transactions, including income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee.

c) Foreign currency translation

The consolidated financial statements are presented in United States dollars, except where otherwise indicated, and all values are rounded to the nearest dollar, except where otherwise indicated. The individual financial statements of each entity are prepared in their functional currency, which is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and its wholly owned subsidiary, Lynden Exploration Ltd., is the Canadian dollar. The functional currency of the Company’s wholly owned subsidiary, Lynden USA Inc., is the United States dollar.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

Transactions in foreign currencies are initially recorded into the entities’ functional currencies at the exchange rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated using exchange rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Revenue and expense items are translated at the exchange rates in effect at the date of underlying transaction, except for items related to non-monetary assets and liabilities, which are translated at historical exchange rates. Exchange rate differences are recognized in the statement of income and comprehensive income in the period they arise.

The results of the Company and Lynden Exploration Ltd. are translated to the United States dollar presentation currency as follows: all assets and liabilities are translated at the exchange rate prevailing at the statement of financial position date; equity balances are translated at the rates of exchange at the transaction dates. All items included in the statements of income (loss) and comprehensive income (loss) are translated using the average monthly exchange rates unless there are significant fluctuations in the exchange rate, in which case the rate at the date of transaction is used. All differences arising upon the translation to the presentation currency are recorded in the foreign currency translation reserve.

d) Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amount and timing of recording of assets, liabilities, revenues and expenses since the determination of these amounts may be dependent on future events. Significant estimates made by management include: oil and natural gas reserves and related present value of future cash flows, depreciation, depletion, amortization and accretion (“DDA&A”), impairment, asset retirement obligations, income taxes, and share-based compensation. The Company uses the most current information available and exercises judgment in making these estimates and assumptions. In the opinion of management, these consolidated financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s accounting policies.

e) Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand, and short term deposits with an original maturity of three months or less, which are readily convertible into a known amount of cash. The Company had $11,327,513 (2013—$nil) in cash equivalents at June 30, 2014.

f) Trade and other receivables and allowance for doubtful accounts

CrownQuest Operating LLC (“CrownQuest”) markets CrownRock LP’s (“CrownRock”), and by extension, the Company’s, oil and natural gas to various customers. As discussed in note 6, the Company is party to various participation agreements with CrownRock. Oil and natural gas sales receivables are generally unsecured. CrownQuest monitors exposure to these customers primarily by reviewing credit ratings, financial statements and payment history. CrownQuest extends credit terms based on their evaluation of each customer’s creditworthiness. Receivables are considered past due if

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for doubtful accounts only after all collection attempts have been exhausted. The Company does not have any off balance sheet credit exposure related to its customers.

g) Property, plant and equipment (“PPE”)

Property, plant and equipment are recorded at cost.

The company uses the successful-efforts method to account for its exploration and development activities. Under this method, costs are accumulated on a field-by-field basis with certain exploratory expenditures and exploratory dry holes being expensed as incurred. Costs of productive wells and development dry holes are capitalized and amortized using the unit-of-production method. The company carries as an asset exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. Other exploratory expenditures, including geophysical costs and annual lease rentals are expensed as incurred.

Maintenance and repair costs, including planned major maintenance, are expensed as incurred. Improvements that increase or prolong the service life or capacity of an asset are capitalized.

Production involves lifting the oil and gas to the surface and gathering, treating, field processing and field storage of the oil and gas. The production function normally terminates at the outlet valve on the lease or field production storage tank. Production costs are those incurred to operate and maintain the company’s wells and related equipment and facilities and are expensed as incurred. They become part of the cost of oil and gas produced. These costs, sometimes referred to as lifting costs, include such items as labour cost to operate the wells and related equipment; repair and maintenance costs on the wells and equipment; materials, supplies and energy costs required to operate the wells and related equipment; and administrative expenses related to the production activity.

Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and gas reserves. Depreciation and depletion for assets associated with producing properties begin at the time when production commences on a regular basis. Depreciation for other assets begins when the asset is in place and ready for its intended use. Assets under construction are not depreciated or depleted. Unit-of-production depreciation is applied to those wells, plant and equipment assets associated with productive depletable properties, and the unit-of-production rates are based on the amount of proved developed reserves of oil and gas. Depreciation of other plant and equipment is calculated using the straight-line method, based on the estimated service life of the asset.

Proved oil and gas properties held and used by the company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets.

The company estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. Cash flows used in impairment evaluations are developed using annually updated corporate plan investment evaluation assumptions for crude oil and natural gas

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

commodity prices. Annual volumes are based on field production profiles, which are also updated annually.

Impairment analyses are generally based on reserve estimates used for internal planning and capital investment decisions. Where probable reserves exist, an appropriately risk-adjusted amount of these reserves may be included in the impairment evaluation. An asset group would be impaired if the undiscounted cash flows were less than its carrying value. Impairments are measured by the amount the carrying value exceeds fair value.

Significant unproved properties are assessed for impairment individually and valuation allowances against the capitalized costs are recorded based on the estimated economic chance of success and the length of time the company expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. The valuation allowances are reviewed at least annually.

Gains or losses on assets sold are included in the consolidated statement of income.

h) Asset retirement obligations

The Company’s P&NG operating activities give rise to dismantling, decommissioning and site remediation activities. These obligations are initially measured at fair value and discounted to present value. A corresponding amount equal to the initial obligation is added to the capitalized costs of the related asset. Amortization of capitalized decommissioning costs and increases in asset retirement obligations resulting from the passage of time are recorded as amortization and accretion, respectively, which are included in depreciation, depletion, amortization and accretion and charged against net income.

Changes in the estimated liability resulting from revisions to the estimated timing or amount of cash flows, are recognized as a change in the asset retirement obligation and related capitalized asset retirement cost and are measured at fair value and discounted to present value.

i) Revenue recognition

The Company uses the accrual method of accounting for P&NG revenues. Sales of P&NG are recognized when the delivery to the purchaser has occurred and title has been transferred. This occurs when P&NG has been delivered to a pipeline or oil hauling has occurred. Crude oil is priced on the average monthly settlement price during the calendar month of the delivery month based upon prevailing prices published by purchasers with certain adjustments related to oil quality and physical location. Virtually all of the Company’s natural gas contracts’ pricing provisions are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, quality of natural gas, and prevailing supply and demand conditions, so that the price of the natural gas fluctuates to remain competitive with other available natural gas supplies.

j) Share-based payments

Employees (including directors and senior executives) of the Company may receive a portion of their remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (“equity-settled transactions”).

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

In situations where equity instruments are issued for goods or services, the transaction is measured at the fair value of the goods or services received by the entity. When the value of the goods or services cannot be specifically identified, they are measured at fair value of the share-based payment.

The costs of equity-settled transactions with employees are measured by reference to the fair value at the date on which they are granted.

The costs of equity-settled transactions are recognized, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (“the vesting date”). The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and the corresponding amount is represented in share option reserve.

No expense is recognized for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled award are modified, the minimum expense recognized is the expense as if the terms had not been modified. An additional amount is recognized on the same basis as the amount of the original award for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

The dilutive effect of outstanding options is reflected as additional dilution in the computation of earnings per share.

k) Income tax

Income tax expense is comprised of current and deferred income tax. Current income tax is the expected tax payable or refund on taxable income or loss for the year, using rates enacted at the reporting date. Deferred income tax is recognized using the liability method of accounting for income taxes. Under this method, deferred tax is recorded on the temporary differences between the accounting and income tax basis of assets and liabilities, using the enacted income tax rates expected to apply when the temporary differences are expected to reverse. Deferred tax is recognized in net income except to the extent that it relates to items recognized directly in shareholders’ equity. Deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. The Company routinely reviews deferred tax assets and a valuation allowance is provided if, after considering available evidence, it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the financial statement effects of an uncertain tax position when it is more likely than not, based on technical merits, that the position will be sustained upon examination by a taxation authority. The amount of tax benefit recognized is the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxation authority. The Company recognizes potential penalties and interest related to uncertain tax positions in income tax expense.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

The effect of changes in enacted income tax rates or laws, for both current and deferred income tax, is recognized in net income in the period of enactment.

l) Financial assets

All financial assets are initially recorded at fair value and classified upon inception into one of the following four categories: held to maturity, available-for-sale, loans and receivables or at fair value through profit or loss (“FVTPL”).

Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through earnings.

Financial assets classified as loans and receivables and held to maturity are measured at amortized cost using the effective interest method less any allowance for impairment. The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period.

Financial assets classified as available-for-sale are measured at fair value with unrealized gains and losses recognized in other comprehensive income except for losses in value that are considered significant or prolonged decline in the fair value of that investment below its cost which are considered impairments resulting in a reclassification from other comprehensive income to earnings.

Transactions costs associated with FVTPL financial assets are expensed as incurred, while transaction costs associated with all other financial assets are included in the initial carrying amount of the asset.

m) Financial liabilities

All financial liabilities are initially recorded at fair value and classified upon inception as FVTPL or other financial liabilities.

Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable transaction costs. After initial recognition, other financial liabilities are subsequently measured at amortized cost using the effective interest method. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Transaction costs on financial liabilities classified as FVTPL are expensed as incurred. Fair value changes on financial liabilities classified as FVTPL are recognized through the statement of income and comprehensive income.

o) Net income per share

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

2. Significant Accounting Policies (cont’d)

For the diluted net income per common share calculation, the weighted average number of shares outstanding is adjusted for the potential number of shares which may have a dilutive effect on net income. The weighted average number of diluted shares is calculated in accordance with the treasury stock method which assumes that the proceeds received from the exercise of all common share equivalents would be used to repurchase common shares at the average market price.

p) Interest capitalization

The Company capitalizes interest costs which are directly attributable to the acquisition or construction of qualifying assets.

q) Recent accounting pronouncements

As of July 1, 2014, the Company will adopt the following FASB accounting standards updates, which have been issued but are not yet effective. The adoption of these standards is not expected to have any material impact on the Company’s consolidated financial statements.

• Accounting Standards Update 2013-04, Obligations resulting from Joint and Several Liability Arrangements

• Accounting Standards Update 2013-05, Parent’s Accounting for Cumulative Translation Adjustments upon Derecognition of Certain Subsidiaries

• Accounting Standards Update 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists

• Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity

• Accounting Standards Update 2014-09, Revenue From Contracts With Customers

• Accounting Standards Update 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern

4. Trade and Other Receivables

	June 30, 2014		June 30, 2013
Accounts receivable—trade	$	2,572,761	$	1,729,691
Accrued receivables		496,947		817,727
Sales taxes receivable		73,308		64,956
	$	3,143,016	$	2,612,374

The Company did not have any allowance for doubtful accounts as at June 30, 2014 and 2013. As at June 30, 2014, $2,991,585 (2013—$2,376,774) is owing from one counterparty.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

5. Investment in Associate

In October 2007, the Company participated, along with its Paradox Basin partners, in the formation of a Utah, USA based natural gas transmission company, Abajo Gas Transmission Company, LLC (“Abajo”). The Company purchased a 47.99% interest in Abajo through capital contributions totaling $5,135,000. Abajo holds ownership of the gas gathering systems in the Northern and Southern Prospect Areas of the Company’s Paradox Basin Project (note 7). Through its interest in Abajo, the Company is entitled to 55% of the revenues and expenses attributable to the construction, operation, maintenance and expansion of the gas gathering system in the Northern Prospect Area and 25% in the Southern Prospect Area.

The Company exerts significant influence over Abajo as a result of its 47.99% interest. However, as a result of the Company’s partner holding a 50.60% interest in Abajo and also acting as manager of Abajo, the Company does not control Abajo. As such, the investment in Abajo is accounted for using the equity method.

At July 1, 2010, the Company wrote down its Abajo investment to $nil. The impairment charge was made after considering, among other things, the estimated future natural gas volumes to be transmitted by Abajo from the wells currently tied into the gas gathering system and the Company’s decision to not incur capital expenditures on the Paradox Basin Project in the near term.

The following is summarized financial information for Abajo as at June 30, 2014 and June 30, 2013 and for the twelve month periods ended June 30, 2014 and 2013:

	June 30, 2014		June 30, 2013
Total assets	$	1,682,118	$	1,883,384
Total liabilities	$	861,934	$	823,393
Revenues	$	88,617	$	101,363
Loss	$	239,804	$	219,422

The Company’s cumulative share of losses attributable to Abajo from July 1, 2010 to June 30, 2013 that have not been recognized amounts to $4,579,298 and $148,959 for the year ended June 30, 2014.

6. Property, Plant and Equipment

	June 30, 2014
	Cost		Accumulated Depletion, Depreciation and Impairment			Net Book Value
Petroleum and natural gas properties
Proved	$	100,407,385	$	(12,781,939	)	$	87,625,446
Suspended exploratory well costs		30,972,613		(26,786,552	)		4,186,061
		131,379,998		(39,568,491	)		91,811,507
Computer equipment		4,820		(3,799	)		1,021
Total property, plant and equipment	$	131,384,818	$	(39,572,290	)	$	91,812,528

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

6. Property, Plant and Equipment (cont’d)

	June 30, 2013
	Cost		Accumulated Depletion, Depreciation and Impairment			Net Book Value
Petroleum and natural gas properties
Proved	$	76,891,477	$	(6,937,146	)	$	69,954,331
Suspended exploratory well costs		30,817,041		(26,786,552	)		4,030,489
		107,708,518		(33,723,698	)		73,984,820
Computer equipment		3,337		(3,337	)		-
Total property, plant and equipment	$	107,711,855	$	(33,727,035	)	$	73,984,820

The Company has capitalized $840,320 (2013—$885,779) of interest expense during 2014 to proved assets. The Company has pledged its interest in its property, plant and equipment to the issuer of its Credit Facility as security.

Development and Production Assets – Midland Basin

The Company is party to a Participation Agreement with CrownRock to acquire interests up to 43.75% in P&NG leases located in the Glasscock, Howard, Martin, Midland and Sterling counties of West Texas, USA.

The Company will receive 43.75% of the vendor’s interest in the leases relating to wells drilled after the date of the Participation Agreement by paying 50% of the drilling and completion costs attributable to the vendor’s interest.

In February 2014, the Company disposed of a 10.625% interest in 5 gross (1.53 net) vertical Midland Basin wells and underlying leases covering approximately 1,127 gross acres (345 acres net) for gross proceeds of $1.23 million, subject to customary post–closing adjustments. The Company recognized a gain of $305,000. The Company will receive a 20% working interest in new wells drilled on the lease by paying 24.375% of the drilling and completion costs.

In December 2013, the Company disposed of 12 gross (4.7 net) vertical Midland Basin wells and underlying leases covering approximately 1,000 gross acres (403 acres net) for gross proceeds of $19.3 million, subject to customary post–closing adjustments. The Company recognized a gain of $9.62 million.

In December 2012, the Company disposed of 16 gross (7.0 net) vertical Midland Basin wells and underlying leases covering approximately 1,440 gross acres (630 acres net) for gross proceeds of $25.1 million, subject to customary post–closing adjustments. The Company recognized a gain of $11.3 million.

7. Suspended Exploratory Well Costs

The Company continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

7. Suspended Exploratory Well Costs (cont’d)

Project costs suspended for longer than one year were primarily suspended pending the completion of economic evaluations including, but not limited to, results of additional appraisal drilling, well test analysis, additional geological and geophysical data, facilities and infrastructure development options, development plan approval, and permitting. If additional information becomes available that raises substantial doubt as to the economic or operational viability of any of these projects, the associated costs will be expensed at that time.

	Paradox Basin			Mitchell Ranch		Total
As at June 30, 2012	$	445,706		$	3,360,704	$	3,806,410
Additions pending the determination of proved reserves		—			224,079		224,079
As at June 30, 2013		445,706			3,584,783		4,030,489
Additions pending the determination of proved reserves		22,652			151,737		174,389
Dispositions		(18,817	)		—		(18,817	)
As at June 30, 2014	$	449,541		$	3,736,520	$	4,186,061

a) Paradox Basin

The Company has a 55% before payout working interest (41.25% after payout) in an 80% net revenue interest in the Paradox Basin Project – Northern Prospect Area consisting of P&NG leases located in the Paradox Basin, Utah.

The Company has a 25% before payout working interest (23.75% after payout working interest) in an 85% to 87% net revenue interest in the Paradox Basin Project – Southern Prospect Area consisting of P&NG leases located in the Paradox Basin, Utah.

During the year ended June 30, 2014, the Company received $119,118 (2013—$99,892) of sales of P&NG net of royalties and production costs from its Paradox Basin Project.

In December 2013, the Company disposed of its interest in leases covering approximately 8,400 acres in the Southern Prospect Area for proceeds of approximately $307,000. The Company recognized a gain of approximately $288,000.

b) Mitchell Ranch

The Company is party to a Participation Agreement with CrownRock LP (“CrownRock”) pertaining to a 50% working interest in approximately 104,000 acres of P&NG leases in Coke, Mitchell, and Sterling counties of West Texas, subject to a 22.5% royalty to the mineral rights owners. Pursuant to the Participation Agreement, the Company is required to make an additional $1,500,000 payment to CrownRock upon the achievement of a drilling milestone.

In July 2011, the Company and CrownRock completed a term assignment with a large, independent exploration and production company, covering approximately 35,000 acres (“Term Assignment Acreage”) of the 104,000 acre Mitchell Ranch Project. On March 31, 2014 the Term Assignment Acreage was returned to the Company and CrownRock.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

7. Suspended Exploratory Well Costs (cont’d)

The Company has a 50% working interest in the approximately 104,000 acres of the Mitchell Ranch Project.

During the year ended June 30, 2014, the Company received $81,374 (2013—$87,808) of sales of P&NG net of royalties and production costs from its Mitchell Ranch Project.

8. Trade and Other Payables

	June 30, 2014		June 30, 2013
Accounts payable—trade	$	2,693,097	$	163,377
Accrued liabilities		278,080		57,048
	$	2,971,177	$	220,425

As at June 30, 2014, $2,486,438 (2013—$68,261) is due to one counterparty.

9. Credit Facility

The Company has a reducing revolving line of credit (the “Credit Facility”) in an amount up to $100 million. As of June 30, 2014, the Credit Facility has a borrowing base of $32 million, of which $17.75 million has been drawn down. The Credit Facility will bear interest determined by the percent of the borrowing base utilized and by elections made by the Company. Amounts drawn down under the Credit Facility will bear interest at a rate of LIBOR plus a range of 3.00% to 3.50% or at a rate of U.S. prime plus a range of 2.00% to 2.50%. A minimum interest rate of 3.5% is required on borrowings under the Credit Facility. Payments under the Credit Facility will be required to the extent that outstanding principal and interest exceed the borrowing base. Other fees also apply. Increases in the borrowing base will be made based on the bank’s engineering valuation of the Company’s oil and gas reserves. The borrowing base will be re-determined semi-annually; however, the Company may request two additional re-determinations of the borrowing base annually.

The Credit Facility contains certain mandatory covenants, including minimum current ratio and cash flow requirements, and other standard business operating covenants. The terms of the Credit Facility also require the Company to seek written consent from the bank prior to paying any dividends. The Company has complied with all of these covenants as at and during the year ended June 30, 2014. The Company has pledged its interest in its P&NG and other assets as security for liabilities pursuant to the Credit Facility. All amounts owing on the Credit Facility are payable when the Credit Facility expires in August 2016, unless otherwise extended by the parties, or payable on demand on the event of default.

10. Asset Retirement Obligations

The total decommissioning liabilities were estimated by management based on the Company’s net ownership interest in all wells, estimated costs to reclaim and abandon the wells and the estimated timing of the costs to be incurred in future periods. The total undiscounted amount of the estimated cash flows (adjusted for inflation with weighted-average rate of 2%) to settle the decommissioning liabilities is approximately $3,565,671 as at June 30, 2014 (June 30, 2013—$2,803,000). These payments are expected to be made over the next 11 to 35 years. The Company used a weighted-average credit adjusted risk free rate of 10.2% to calculate the present value of the decommissioning liabilities.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

10. Asset Retirement Obligations (cont’d)

As at June 30, 2012	$	149,664
Liabilities incurred		52,205
Property dispositions		(16,890	)
Accretion		15,709
Revisions in estimated liabilities		(157	)
As at June 30, 2013		200,531
Liabilities incurred		34,627
Property dispositions		(13,941	)
Accretion		21,190
Revisions in estimated liabilities		(2,199	)
As at June 30, 2014	$	240,208

11. Shareholders’ Equity

a) Authorized share capital:

An unlimited number of common shares without par value.

An unlimited number of preference shares without par value.

b) The Company completed the following private placements during the years ended June 30, 2014, 2013, and 2012:

In May 2012, the Company closed a non-brokered private placement for gross proceeds of CDN$6,300,000. These funds were raised through the issuance of 15,000,000 units at a price of CDN$0.42 per unit. Each unit is comprised of one common share and one-half of one common share purchase warrant. The total proceeds were allocated to common shares in the amount of CDN$5,200,360 and to warrants in the amount of CDN$1,099,640 based on their relative fair values on the dates of closing.

The private placement closed in two stages and therefore 5,067,500 warrants expire on May 4, 2015 and 2,432,500 warrants expire on May 18, 2015. Each share purchase warrant entitles the holder to purchase one additional common share at a price of CDN$0.65 per common share.

The Company incurred total share issue costs on the private placement of CDN$50,601 which were allocated to common shares in the amount of CDN$41,769 and to warrants in the amount of CDN$8,832 based on their relative fair values. Of these costs, CDN$38,001 was incurred in cash and CDN$12,600 was incurred through the issuance of 30,000 units with the same terms as those issued in the private placement.

c) Warrants:

The changes in warrants issued during the years ended June 30, 2014, 2013, and 2012 are as follows:

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

11. Shareholders’ Equity (cont’d)

	Number of warrants			Weighted average exercise price (CDN$)
As at June 30, 2012		27,930,760		$	0.69
Exercised		(515,000	)	$	0.70
Expired		—		$	—
As at June 30, 2013		27,415,760		$	0.69
Exercised		(18,770,391	)	$	0.70
Expired		(1,133,369	)	$	0.70
As at June 30, 2014		7,512,000		$	0.65

Warrants exercisable and outstanding as at June 30, 2014 are as follows:

Expiry Date	Exercise Price (CDN$)		Number of warrants
May 4, 2015	$	0.65		5,079,500
May 18, 2015	$	0.65		2,432,500
				7,512,000

d) Earnings per share:

Diluted earnings per share computation

	June 30, 2014		June 30, 2013
Numerator:
Net earnings	$	14,212,413	$	14,502,691
Denominator:
Weighted average number of common shares (basic)		123,798,574		110,138,794
Dilutive effect of share options		1,626,501		1,221,626
Dilutive effect of warrants		1,974,874		2,464,059
Weighted average number of common shares (diluted)		127,399,949		113,824,479
Diluted earnings per common share	$	0.11	$	0.13

There are nil (2013 – nil) warrants and 2,612,500 (2013 – 2,620,000) stock options that are not dilutive as at June 30, 2014 and are not included in the calculation of diluted earnings per share.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

11. Shareholders’ Equity (cont’d)

e) Stock option plan

The Company has a stock option plan whereby a maximum of 10% of the issued and outstanding common shares of the Company may be reserved for issuance pursuant to the exercise of stock options. The term of the stock options granted are fixed by the board of directors and are not to exceed ten years. The exercise prices of the stock options are determined by the board of directors but shall not be less than the closing price of the Company’s common shares on the day preceding the day on which the directors grant the stock options, less any discount permitted by the TSX-V. Subject to any vesting schedule imposed by the Company’s board of directors in respect of any specific stock option grants, the stock options vest immediately on the date of grant except for stock options granted to investor relations consultants which vest over a twelve month period.

The Company did not grant or amend any stock options during the year ended June 30, 2014. The Company recognized $55,683 for share-based payments for stock options granted in prior years.

During the year ended June 30, 2013, the Company granted 1,397,500 stock options to officers, directors and employees. The Company recognized $650,089 for share-based payments.

The fair value of stock options granted is estimated using the Black-Scholes Option Pricing Model with the following details and assumptions:

	June 30, 2014		June 30, 2013
Weighted average fair value at grant date (CDN$)		n/a	$	0.35
Average risk-free interest rate		n/a		1.31	%
Expected life		n/a		5 years
Expected volatility		n/a		97	%
Expected dividend yield		n/a		0	%
Forfeiture rate		n/a		1	%

The expected volatility assumption is based on the historical volatility of the Company’s common share price on the TSX Venture Exchange. The risk-free interest rate is based on yield curves on the Canadian government zero-coupon bonds or Canadian government treasury bills with a remaining term equal to the stock options’ expected life.

The changes in stock options issued during the years ended June, 2014, 2013, and 2012 are as follows:

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

11. Shareholders’ Equity (cont’d)

	Number of options			Weighted average exercise price (CDN$)
As at June 30, 2012		7,600,000		$	0.81
Granted		1,397,500		$	0.50
Exercised		(125,000	)	$	0.35
Expired		(2,005,000	)	$	1.31
Forfeited		(5,000	)	$	0.80
As at June 30, 2013		6,862,500		$	0.61
Expired		(230,000	)	$	0.68
As at June 30, 2014		6,632,500		$	0.61

The following table summarizes information about stock options outstanding and exercisable at June 30, 2014:

	Options outstanding				Options exercisable
Exercise price (CDN$)	Number of options		Weighted average remaining life (years)		Number of options		Weighted average remaining life (years)
$0.30 to $0.60		4,020,000		1.43		4,020,000		1.43
$0.70 to $0.80		2,612,500		2.06		2,612,500		2.06
		6,632,500		1.68		6,632,500		1.68

12. Related Party Transactions

The Company incurred the following fees and expenses in the normal course of operations at amounts agreed upon between the parties to companies owned by key management and directors.

	June 30, 2014		June 30, 2013
Legal fees		38,972		22,201
Transportation and marketing costs with Abajo		41,322		31,239
	$	80,294	$	53,440

Trade and other payables include $47,014 (June 30, 2013—$21,058) owing to related parties. Amounts due to or from related parties are unsecured, non-interest bearing and are due on demand.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

13. Financial Instruments

As at June 30, 2014, the Company’s financial instruments are cash and cash equivalents, trade and other receivables, credit facility, trade and other payables, and a commodity derivative liability. These financial instruments are classified as follows:

Cash and cash equivalents – loans and receivables

Trade and other receivables – loans and receivables

Credit facility – other financial liabilities

Trade and other payables – other financial liabilities

Derivative liability – fair value through profit or loss

The following fair value hierarchy is used to categorize and disclose the Company’s financial assets and liabilities held at fair value for which a valuation technique is used:

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2:	All inputs which have a significant effect on the fair value are observable, either directly or indirectly, for substantially the full contractual term.
Level 3:	Inputs which have a significant effect on the fair value are not based on observable market data.

The Company’s commodity derivative liability was classified as a level 2 in accordance with the above hierarchy. The commodity derivative liability expired during the year ended June 30, 2014.

The amounts reported in the statement of financial position for the Company’s cash and cash equivalents, trade and other receivables, credit facility, and trade and other payables are carrying amounts and approximate their fair values due to their short-term nature.

The Company has exposure to credit risk, liquidity risk, and market risk from its use of financial instruments.

a) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and cash equivalents and trade and other receivables are exposed to credit risk. Management believes the credit risk on cash is low because the counterparties are highly rated financial institutions. The majority of the Company’s trade and other receivables are with customers in the petroleum and natural gas industry and are subject to normal industry credit risks. The Company generally extends unsecured credit to these customers and therefore the collection of trade and other receivables may be affected by changes in economic or other conditions. The Company believes the risk is mitigated by the size and reputation of the companies to which they extend credit. The Company has not experienced any material credit loss in the collection of trade and other receivables to date and therefore has not made any provision for bad debts. The Company did not have any allowance for doubtful accounts as at June 30, 2014 and 2013. As at June 30, 2014, $2,991,585 (2013—$2,376,774) is owing from CrownQuest.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

13. Financial Instruments  (cont’d)

b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s trade and other payables are generally payable within 90 days. The Company’s objective is to have sufficient capital to meet short term financial obligations after taking into account its exploration and development obligations, cash on hand, the unused borrowing base amount under its Credit Facility and anticipated changes in the Credit Facility borrowing base amount.

Advances under the Credit Facility can be in the form of Eurodollar loans, which have a maximum period of 90 days, or in the form of Floating Rate loans, which can remain outstanding to the Credit Facility final maturity date of August 29, 2016. Eurodollar loans can be converted at the Company’s election to Floating Rate loans, or continued as new Eurodollar loans, provided that the total amount advanced under the Credit Facility does not exceed the borrowing base amount at that time. The Company’s continued investment in developing its property, plant and equipment would generally increase the amount of the borrowing base, however adverse exploration and development results or a decrease in the price of petroleum and natural gas would negatively impact the amount of the borrowing base.

Re-payments under the Credit Facility prior to the maturity date will be required only to the extent that outstanding principal and interest exceed the borrowing base.

The following table details the Company’s expected remaining contractual maturities for its financial liabilities. The table is based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company is required to satisfy the liabilities.

	Total		Less than 1 year		One to two years		More than two years
Credit facility1	$	17,853,245	$	—	$	—	$	17,853,245
Trade and other payables		2,971,177		2,971,177		—		—
Income taxes payable		380,000		380,000		—		—
	$	21,204,422	$	3,351,177	$	—	$	17,853,245

¹includes accrued interest of $103,245.

c) Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates and commodity and equity prices.

i) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s cash and credit facility are exposed to interest rate risk as the Company invests cash at floating rates of interest in highly liquid instruments and it borrows funds at floating rates of interest. Fluctuations in interest rates impact interest income and expense. As at June 30, 2014, a 1% change in interest rates would have had a negligible impact on the Company’s earnings and comprehensive earnings for the year ended June 30, 2014.

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

13. Financial Instruments  (cont’d)

ii) Currency Risk

Currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Financial instruments that impact the Company’s earnings or loss due to currency fluctuations include Canadian dollar denominated assets and liabilities. The Company does not use derivative instruments or hedges to manage currency risks. The sensitivity of the Company’s earnings or loss due to changes in the exchange rate between the Canadian dollar and United States dollar is included in the table below:

	Cash		Trade and other receivables		Trade and other payables			Net assets exposure		Effect of +/- 10% change in currency
Canadian dollar denomination	$	11,548,317	$	5,300	$	(87,501	)	$	11,466,116	$	1,146,612

Based on the above net exposures at June 30, 2014, a 10% depreciation or appreciation of the Canadian dollar against the United States dollar would result in an increase or decrease, respectively, in the Company’s earnings by $1,146,612.

iii) Price Risk

The Company’s P&NG production is marketed and sold on the spot market to area aggregators based on daily spot prices that are adjusted for product quality and transportation costs. The Company’s cash flow from product sales will therefore be impacted by fluctuations in commodity prices.

To protect future cash flows for planned capital expenditures, the Company entered into costless collar oil commodity contracts during the years ended June 30, 2014 and 2013. There are no commodity contracts outstanding as at June 30, 2014. Under the costless collar agreements, the Company would receive a cash payment if the average monthly price of West Texas Intermediate Crude Oil was below $80 and the Company would make a cash payment if the average monthly price of West Texas Intermediate Crude Oil was above $104 or $105. During the year ended June 30, 2014, the Company recognized a loss of $63,633 (2013 – gain of $15,163).

14. Supplemental Cash Flow Information

	June 30, 2014		June 30, 2013
Non-cash financing activities:
Fair value of warrants transferred to common shares on exercise of warrants	$	3,220,425	$	88,532
Fair value of options transferred to common shares on exercise of options	$	—	$	32,085
Additional cash flow information:
Interest paid	$	874,226	$	820,353
Taxes paid	$	783,972	$	26,028

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

15. Segmented Information

At June 30, 2014 the Company has one reportable operating segment, being the acquisition, exploration and development of petroleum and natural gas properties. The Company operates in two reportable geographic areas, being Canada and the United States of America.

An operating segment is defined as a component of the Company:

• that engages in business activities from which it may earn revenues and incur expenses;

• whose operating results are reviewed regularly by the entity’s chief operating decision maker; and

• for which discrete financial information is available.

The Company’s revenues and capital assets in each of the geographic areas are as follows:

	Canada		USA		Consolidated Total
Revenue and other income
Year ended June 30, 2014	$	89,990	$	29,302,962	$	29,392,952
Year ended June 30, 2013	$	12,573	$	18,968,895	$	18,981,468
Property, plant and equipment
As at June 30, 2014	$	1,021	$	91,811,506	$	91,812,527
As at June 30, 2013	$	—	$	73,984,820	$	73,984,820

16. Income Taxes

Income tax expense differs from the amount computed by applying the combined Canadian federal and provincial income tax rates, applicable to the Company, to the net earnings (loss) before income taxes due to the following:

	June 30, 2014			June 30, 2013
Net earnings before income taxes	$	24,818,436		$	19,004,395
Combined statutory tax rate		26.00	%		25.25	%
Income tax expense computed at statutory tax rate		6,452,793			4,798,610
Increase (decrease) attributable to:
Changes in valuation allowance		2,244,580			(1,200,445	)
Non-deductible (taxable) expenditures		584,411			430,402
Effect of different statutory tax rates on earnings in subsidiaries		2,082,510			1,810,507
Equity investment taxable loss pick-up		(275,643	)		(243,088	)
Income tax expense	$	11,088,651		$	5,595,986
Current income tax expense		860,050			40,000
Deferred income tax expense		10,228,601			5,555,986
Income tax expense	$	11,088,651		$	5,595,986

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LYNDEN ENERGY CORP.

Notes to the Consolidated Financial Statements

For the Year Ended June 30, 2014 and 2013

(Presented in United States dollars, except where indicated)

16. Income Taxes  (cont’d)

Current income tax and deferred income tax for 2014 and 2013 are all US based taxes.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	June 30, 2014			June 30, 2013
Deferred tax assets:
Decommissioning liabilities	$	81,671		$	68,181
Alternative minimum tax credits		272,830			—
Capital loss carry forwards		17,669			18,347
Share issuance costs		31,315			62,477
Excess tax value of intangibles over book value		463			517
Excess tax value of property, plant and equipment over book value		1,136			1,043
Exploration and evaluation assets		673,948			699,801
Non-capital losses carry forwards		10,149,816			7,175,566
		11,228,848			8,025,932
Valuation allowance		(2,847,991	)		(2,633,478	)
		8,380,857			5,392,454
Deferred tax liabilities:
Credit facility		(264,683	)		(97,236	)
Unrealized mark-to-market gains		(1,006,795	)		(985,159	)
Property, plant and equipment		(22,012,190	)		(8,984,269	)
		(23,283,668	)		(10,066,664	)
Net deferred tax assets (liabilities)	$	(14,902,811	)	$	(4,674,210	)

The Company has income tax loss carry forwards of approximately $23,558,458 (2013—$15,659,628) for US tax purposes. These recognized tax losses will expire between 2031 and 2032.

The Company has unrecognized income tax loss carry forwards of approximately $8,167,152 (2013—$7,331,852) for Canadian tax purposes. These unrecognized tax losses will expire between 2015 and 2034.

The British Columbia provincial corporate tax rate changed effective April 1, 2013, resulting in a change in the Company’s statutory tax rate from 25.25% to 26%.

17. Subsequent Events

Subsequent to June 30, 2014, 447,500 stock options with an exercise price of CDN$0.30 were exercised for gross proceeds of CDN$134,250 and 25,000 stock options with an exercise price of CDN$0.55 were exercised for gross proceeds of CDN$13,750.

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(b) Exhibits.

Exhibit No.	Description
3.1*	Certificate of Continuation of Lynden Ventures, Ltd., dated February 2, 2006.
3.2*	Certificate of Change of Name of the Company, dated January 16, 2008.
3.3*	Notice of Articles of the Company.
3.4*	Articles of the Company, dated December 5, 2005.
4.1*+	Stock Option Plan, dated March 6, 2014.
10.1*	Credit Agreement, dated August 29, 2011, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.2*	First Amendment to Credit Agreement, dated February 2, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.3*	Second Amendment to Credit Agreement, dated March 31, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.4*	Third Amendment to Credit Agreement, dated September 25, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.5*	Fourth Amendment to Credit Agreement, dated December 19, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.6*	Fifth Amendment to Credit Agreement, dated December 26, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.7*	Sixth Amendment to Credit Agreement, dated May 10, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.8*	Seventh Amendment to Credit Agreement, dated September 27, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.9*	Eighth Amendment to Credit Agreement, dated December 27, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.10*	Ninth Amendment to Credit Agreement, dated February 5, 2014, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.11*	Tenth Amendment to Credit Agreement, dated June 5, 2014, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.12*+	Form of Share Purchase Warrant Certificate for share purchase warrants issued on May 4, 2012.
10.13*+	Form of Finder’s Warrant Certificate for finder’s warrants issued on May 4, 2012.
10.14*+	Form of Share Purchase Warrant Certificate for share purchase warrants issued on May 18, 2012.
10.15*+	Services Agreement, dated January 1, 2013, between Lynden Energy Corp and Richard Andrews.
10.16*+	Management Agreement, dated January 1, 2013, between Lynden Energy Corp and Colin Watt.
21.1*	List of Subsidiaries.
23.1*	Consent of Cawley, Gillespie & Associates, Inc.
99.1*	Report of Cawley, Gillespie & Associates, Inc.

+ Designates a compensation plan or arrangement for directors or executive officers.

* Filed herewith.

** Furnished herewith.

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WHERE YOU CAN FIND MORE INFORMATION

We will be required to file annual and quarterly reports and other information with the SEC. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C., 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our filings will also be available to the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov.

EXPERTS

The letter reports of Cawley, Gillespie and Associates, Inc., independent consulting petroleum engineers, and information with respect to our oil and natural gas reserves derived from such reports, have been referred to in this Registration Statement upon the authority of each such firm as experts with respect to such matters covered in such reports and in giving such reports.

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SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized.

		LYNDEN ENERGY CORP.
Date: October 28, 2014	By:	/s/ Colin Watt
		Colin Watt
		President, Chief Executive Officer, Corporate   Secretary and Director

LYNDEN ENERGY CORP.

Exhibit Index

Exhibit No.	Description
3.1*	Certificate of Continuation of Lynden Ventures, Ltd., dated February 2, 2006.
3.2*	Certificate of Change of Name of the Company, dated January 16, 2008.
3.3*	Notice of Articles of the Company.
3.4*	Articles of the Company, dated December 5, 2005.
4.1*+	Stock Option Plan, dated March 6, 2014.
10.1*	Credit Agreement, dated August 29, 2011, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.2*	First Amendment to Credit Agreement, dated February 2, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.3*	Second Amendment to Credit Agreement, dated March 31, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.4*	Third Amendment to Credit Agreement, dated September 25, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.5*	Fourth Amendment to Credit Agreement, dated December 19, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.6*	Fifth Amendment to Credit Agreement, dated December 26, 2012, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.7*	Sixth Amendment to Credit Agreement, dated May 10, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.8*	Seventh Amendment to Credit Agreement, dated September 27, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.9*	Eighth Amendment to Credit Agreement, dated December 27, 2013, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.10*	Ninth Amendment to Credit Agreement, dated February 5, 2014, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.11*	Tenth Amendment to Credit Agreement, dated June 5, 2014, between Lynden USA, Inc., as borrower, Texas Capital Bank, N.A., as administrative agent, and the lenders party thereto.
10.12*+	Form of Share Purchase Warrant Certificate for share purchase warrants issued on May 4, 2012.
10.13*+	Form of Finder’s Warrant Certificate for finder’s warrants issued on May 4, 2012.
10.14*+	Form of Share Purchase Warrant Certificate for share purchase warrants issued on May 18, 2012.
10.15*+	Services Agreement, dated January 1, 2013, between Lynden Energy Corp and Richard Andrews.
10.16*+	Management Agreement, dated January 1, 2013, between Lynden Energy Corp and Colin Watt.
21.1*	List of Subsidiaries.
23.1*	Consent of Cawley, Gillespie & Associates, Inc.
99.1*	Report of Cawley, Gillespie & Associates, Inc.

+ Designates a compensation plan or arrangement for directors or executive officers.

* Filed herewith.

** Furnished herewith.

EX-3.1

Exhibit 3.1

Number: C0747719

CERTIFICATE

OF

CONTINUATION

BUSINESS CORPORATIONS ACT

I Hereby Certify that LYNDEN VENTURES LTD., which was duly registered as an extraprovincial company under the laws of British Columbia with certificate number A0064793, has continued into British Columbia from the Jurisdiction of ONTARIO, under the Business Corporations Act, with the name LYNDEN VENTURES LTD. on February 2, 2006 at 12:47 PM Pacific Time.

Issued under my hand at Victoria, British Columbia

On February 2, 2006                        

  RON TOWNSHEND Registrar of Companies Province of British Columbia Canada

EX-3.2

Exhibit 3.2

Number: C0747719

     BRITISH

  COLUMBIA

The Best Place on Earth

CERTIFICATE

OF

CHANGE OF NAME

BUSINESS CORPORATIONS ACT

I Hereby Certify that LYNDEN VENTURES LTD. changed its name to LYNDEN ENERGY CORP. on January 16, 2008 at 01:33PM Pacific Time.

Issued under my hand at Victoria, British Columbia

On January 16, 2008                        

  RON TOWNSHEND Registrar of Companies Province of British Columbia Canada

EX-3.3

Exhibit 3.3

BC Registry Services Mailing Address: PO Box 9431 Stn Prov Govt Victoria BC V8W 9V3 www.corporateonline.gov.bc.ca Location: 2nd Floor – 940 Blanshard Street Victoria, BC 250-356-8626

CERTIFIED COPY

Of a Document filed with the Province of

British Columbia Registrar of Companies

Notice of Articles BUSINESS CORPORATIONS ACT
	CAROL PREST

This Notice of Articles was issued by the Registrar on: March 13, 2014 09:36AM Pacific Time

Incorporation Number: C0747719

Recognition Date and Time: Continued into British Columbia on February 2, 2006 12:47 PM Pacific Time

NOTICE OF ARTICLES

Name of Company:

LYNDEN ENERGY CORP.

REGISTERED OFFICE INFORMATION

Mailing Address: 2900-595 BURRARD STREET PO BOX 49130 VANCOUVER BC V7X 1J5 CANADA Delivery Address: 2900-595 BURRARD STREET PO BOX 49130 VANCOUVER BC V7X 1J5 CANADA

RECORDS OFFICE INFORMATION

Mailing Address: 2900-595 BURRARD STREET PO BOX 49130 VANCOUVER BC V7X 1J5 CANADA Delivery Address: 2900-595 BURRARD STREET PO BOX 49130 VANCOUVER BC V7X 1J5 CANADA

Page: 1 of 3

DIRECTOR INFORMATION

Last Name, First Name, Middle Name:

Bereskin, Robert

Mailing Address: 2129 EAST 2100 SOUTH, STE. B SALT LAKE CITY UT 84109 UNITED STATES Delivery Address: 2129 EAST 2100 SOUTH, STE. B SALT LAKE CITY UT 84109 UNITED STATES

Last Name, First Name, Middle Name:

McLennan, John

Mailing Address: 1419 MCCLELLAND ST. SALT LAKE CITY UT 84105 UNITED STATES Delivery Address: 1419 MCCLELLAND ST. SALT LAKE CITY UT 84105 UNITED STATES

Last Name, First Name, Middle Name:

Andrews, Richard

Mailing Address: 120 HIGHWAY 28 STILLWATER COVE, UNIT 47 CRYSTAL BAY NV 89402 UNITED STATES Delivery Address: 120 HIGHWAY 28 STILLWATER COVE, UNIT 47 CRYSTAL BAY NV 89402 UNITED STATES

Last Name, First Name, Middle Name:

Paton, Ron

Mailing Address: C/O OWEN BIRD LAW CORPORATION 2900-595 BURRARD STREET VANCOUVER BC V7X 1J5 CANADA Delivery Address: C/O OWEN BIRD LAW CORPORATION 2900-595 BURRARD STREET VANCOUVER BC V7X 1J5 CANADA

Last Name, First Name, Middle Name:

Watt, Colin

Mailing Address: SUITE 1200 - 888 DUNSMUIR STREET VANCOUVER BC V6C 3K4 CANADA Delivery Address: SUITE 1200 - 888 DUNSMUIR STREET VANCOUVER BC V6C 3K4 CANADA

Last Name, First Name, Middle Name:

Michaelis, Derek

Mailing Address: 10000 MEMORIAL DRIVE SUITE 550 HOUSTON TX 77024 UNITED STATES Delivery Address: 10000 MEMORIAL DRIVE SUITE 550 HOUSTON TX 77024 UNITED STATES

Page: 2 of 3

AUTHORIZED SHARE STRUCTURE

1. No Maximum	Common Shares	Without Par Value
		With Special Rights or Restrictions attached
2. No Maximum	PREFERENCE Shares	Without Par Value
		With Special Rights or Restrictions attached

Page: 3 of 3

EX-3.4

Exhibit 3.4

**Pursuant to name change January 16, 2008

INDEX TO THE ARTICLES

OF

**LYNDEN ENERGY CORP.

Continuation Number: C747719

(the “Company”)

PART 1	ARTICLE	SUBJECT
1.	INTERPRETATION
	1.1	Definitions
	1.2	Business Corporations Act and Interpretation Act Definitions Applicable
2.	SHARES AND SHARE CERTIFICATES
	2.1	Authorized Share
	2.2	Structure Form of Share Certificate
	2.3	Shareholder Entitled to Certificate or Acknowledgment
	2.4	Delivery by Mail
	2.5	Replacement of Worn Out or Defaced Certificate or Acknowledgement
	2.6	Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment
	2.7	Splitting Share Certificates
	2.8	Certificate Fee
	2.9	Recognition of Trusts
3.	ISSUE OF SHARES
	3.1	Directors Authorized
	3.2	Commissions and Discounts
	3.3	Brokerage
	3.4	Conditions of Issue
	3.5	Share Purchase Warrants and Rights
4.	SHARE REGISTERS
	4.1	Central Securities
	4.2	Register Closing Register
5.	SHARE TRANSFERS
	5.1	Registering Transfers
	5.2	Form of Instrument of Transfer
	5.3	Transferor Remains Shareholder
	5.4	Signing of Instrument of Transfer
	5.5	Enquiry as to Title Not Required
	5.6	Transfer Fee
6.	TRANSMISSION OF SHARES
	6.1	Legal Personal Representative Recognized on Death
	6.2	Rights of Legal Personal Representative

7.	PURCHASE OF SHARES
	7.1	Company Authorized to Purchase Shares
	7.2	Purchase When Insolvent
	7.3	Sale and Voting of Purchased Shares
8.	BORROWING POWERS
	8.1	Company Authorized to Borrow
9.	ALTERATIONS
	9.1	Alteration of Authorized Share Structure
	9.2	Special Rights and Restrictions
	9.3	Change of Name
	9.4	Other Alterations
10.	MEETINGS OF SHAREHOLDERS
	10.1	Annual General Meetings
	10.2	Resolution Instead of Annual General Meeting
	10.3	Calling of Meetings of Shareholders
	10.4	Notice for Meetings of Shareholders
	10.5	Record Date for Notice
	10.6	Record Date for Voting
	10.7	Failure to Give Notice and Waiver of Notice
	10.8	Notice of Special Business at Meetings of Shareholders
11.	PROCEEDINGS AT MEETINGS OF SHAREHOLDERS
	11.1	Special Business
	11.2	Special Majority
	11.3	Quorum
	11.4	One Shareholder May Constitute Quorum
	11.5	Other Persons May Attend
	11.6	Requirement of Quorum
	11.7	Lack of Quorum
	11.8	Lack of Quorum at Succeeding Meeting
	11.9	Chair
	11.10	Selection of Alternate Chair
	11.11	Adjournments
	11.12	Notice of Adjourned Meeting
	11.13	Decisions by Show of Hands or Poll
	11.14	Declaration of Result
	11.15	Motion Need Not be Seconded
	11.16	Casting Vote
	11.17	Manner of Taking Poll
	11.18	Demand for Poll on Adjournment
	11.19	Chair Must Resolve Dispute
	11.20	Casting of Votes
	11.21	Demand for Poll
	11.22	Demand for Poll Not to Prevent Continuance of Meeting
	11.23	Retention of Ballots and Proxies

- ii -

12.	VOTES OF SHAREHOLDERS
	12.1	Number of Votes by Shareholder or by Shares
	12.2	Votes of Persons in Representative
	12.3	Capacity Votes by Joint Holders
	12.4	Legal Personal Representatives as Joint Shareholders
	12.5	Representative of a Corporate Shareholder
	12.6	Proxy Provisions Do Not Apply to All Companies
	12.7	Appointment of Proxy Holders
	12.8	Alternate Proxy Holders
	12.9	Proxy Holder Need Not Be Shareholder
	12.10	Deposit of Proxy
	12.11	Validity of Proxy Vote
	12.12	Form of Proxy
	12.13	Revocation of Proxy
	12.14	Revocation of Proxy Must Be Signed
	12.15	Production of Evidence of Authority to Vote
13.	DIRECTORS
	13.1	First Directors; Number of Directors
	13.2	Change in Number of Directors
	13.3	Directors’ Acts Valid Despite Vacancy
	13.4	Qualifications of Directors
	13.5	Remuneration of Directors
	13.6	Reimbursement of Expenses of Directors
	13.7	Special Remuneration for Directors
	13.8	Gratuity, Pension or Allowance on Retirement of Director
14.	ELECTION AND REMOVAL OF DIRECTORS
	14.1	Election at Annual General Meeting
	14.2	Consent to be a Director
	14.3	Failure to Elect or Appoint Directors
	14.4	Places of Retiring Directors Not Filled
	14.5	Directors May Fill Casual Vacancies
	14.6	Remaining Directors Power to Act
	14.7	Shareholders May Fill Vacancies
	14.8	Additional Directors
	14.9	Ceasing to be a Director
	14.10	Removal of Director by Shareholders
	14.11	Removal of Director by Directors
	14.12	Nominations of Directors
15.	ALTERNATE DIRECTORS
	15.1	Appointment of Alternate Director
	15.2	Notice of Meetings
	15.3	Alternate for More Than One Director Attending Meetings
	15.4	Consent Resolutions

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	15.5	Alternate Director Not an Agent
	15.6	Revocation of Appointment of Alternate Director
	15.7	Ceasing to be an Alternate Director
	15.8	Remuneration and Expenses of Alternate Director
16.	POWERS AND DUTIES OF DIRECTORS
	16.1	Powers of Management
	16.2	Appointment of Attorney of Company
17.	DISCLOSURE OF INTEREST OF DIRECTORS
	17.1	Obligation to Account for Profits
	17.2	Restrictions on Voting by Reason of Interest
	17.3	Interested Director Counted in Quorum
	17.4	Disclosure of Conflict of Interest or Property
	17.5	Director Holding Other Office in the Company
	17.6	No Disqualification
	17.7	Professional Services by Director or Officer
	17.8	Director or Officer in Other Corporations
18.	PROCEEDINGS OF DIRECTORS
	18.1	Meetings of Directors
	18.2	Voting at Meetings
	18.3	Chair of Meetings
	18.4	Meetings by Telephone or Other Communications Medium
	18.5	Calling of Meetings
	18.6	Notice of Meetings
	18.7	When Notice Not Required
	18.8	Meeting Valid Despite Failure to Give Notice
	18.9	Waiver of Notice of Meetings
	18.10	Quorum
	18.11	Validity of Acts Where Appointment Defective
	18.12	Consent Resolutions in Writing
19.	EXECUTIVE AND OTHER COMMITTEES
	19.1	Appointment and Powers of Executive Committee
	19.2	Appointment and Powers of Other Committees
	19.3	Obligations of Committees
	19.4	Powers of Board
	19.5	Committee Meetings
20.	OFFICERS
	20.1	Directors May Appoint Officers
	20.2	Functions, Duties and Powers of Officers
	20.3	Qualifications
	20.4	Remuneration and Terms of Appointment

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21.	INDEMNIFICATION
	21.1	Definitions
	21.2	Mandatory Indemnification of Directors and Former Directors
	21.3	Indemnification of Other Persons
	21.4	Non-Compliance with Business Corporations Act
	21.5	Company May Purchase Insurance
22.	DIVIDENDS
	22.1	Payment of Dividends Subject to Special Rights
	22.2	Declaration of Dividends
	22.3	No Notice Required
	22.4	Record Date
	22.5	Manner of Paying Dividend
	22.6	Settlement of Difficulties
	22.7	When Dividend Payable
	22.8	Dividends to be Paid in Accordance with Number of Shares
	22.9	Receipt by Joint Shareholders
	22.10	Dividend Bears No Interest
	22.11	Fractional Dividends
	22.12	Payment of Dividends
	22.13	Capitalization of Surplus
23.	DOCUMENTS, RECORDS AND REPORTS
	23.1	Recording of Financial Affairs
	23.2	Inspection of Accounting Records
24.	NOTICES
	24.1	Method of Giving Notice
	24.2	Deemed Receipt of Mailing
	24.3	Certificate of Sending
	24.4	Notice to Joint Shareholders
	24.5	Notice to Trustees
25.	SEAL
	25.1	Who May Attest
	25.2	Seal Sealing Copies
	25.3	Mechanical Reproduction of Seal
26.	SPECIAL RIGHTS AND RESTRICTIONS ATTACHED TO SHARES
	26.1	Common Shares
	26.2	Preference Shares

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**Pursuant to name change January 16, 2008

ARTICLES

OF

**LYNDEN ENERGY CORP.

Continuation Number: C747719

(the “Company”)

PART 1 - INTERPRETATION

1.1 Definitions

In these Articles, unless the context otherwise requires:

(1) “board of directors”, “directors” and “board” mean the directors or sole director of the Company for the time being;

(2) “Business Corporations Act” means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(3) “legal personal representative” means the personal or other legal representative of the shareholder;

(4) “Notice of Articles” means the notice of articles for the Company contained in the Company’s Continuation application, as amended from time to time;

(5) “registered address” of a shareholder means the shareholder’s address as recorded in the central securities register;

(6) “seal” means the seal of the Company, if any.

1.2 Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act (British Columbia), with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act (British Columbia) relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

PART 2- SHARES AND SHARE CERTIFICATES

2.1 Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company as the same may be amended from time to time.

2.2 Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

2.3 Shareholder Entitled to Certificate or Acknowledgment

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder’s name or (b) a non-transferable written acknowledgment of the shareholder’s right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders’ duly authorized agents will be sufficient delivery to all.

2.4 Delivery by Mail

Any share certificate or non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate may be sent to the shareholder by mail at the shareholder’s registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5 Replacement of Worn Out or Defaced Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as they think fit:

(1) order the share certificate or acknowledgment, as the case may be, to be cancelled; and

(2) issue a replacement share certificate or acknowledgment, as the case may be.

2.6 Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

If a share certificate or a non-transferable written acknowledgment of a shareholder’s right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, as the case may be, if the directors receive:

(1) proof satisfactory to them that the share certificate or acknowledgment is lost, stolen or destroyed; and

(2) any indemnity the directors consider adequate.

2.7 Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder’s name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

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2.8 Certificate Fee

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount determined by the directors, if any, which must not exceed the amount prescribed under the Business Corporations Act.

2.9 Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

PART 3 - ISSUE OF SHARES

3.1 Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share, if any.

3.2 Commissions and Discounts

The Company may at any time, pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3 Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4 Conditions of Issue

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

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(1) consideration is provided to the Company for the issue of the share by one or more of the following:

(a) past services performed for the Company;

(b) property;

(c) money; and

(2) the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5 Share Purchase Warrants and Rights

Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

PART 4 - SHARE REGISTERS

4.1 Central Securities Register

As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business C01porations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2 Closing Register

The Company must not at any time close its central securities register.

PART 5 - SHARE TRANSFERS

5.1 Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1) a duly signed instrument of transfer in respect of the share has been received by the Company;

(2) if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(3) if a non-transferable written acknowledgment of the shareholder’s right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment has been surrendered to the Company.

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5.2 Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company’s share certificates or in any other form that may be approved by the directors from time to time.

5.3 Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4 Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer:

(1) in the name of the person named as transferee in that instrument of transfer; or

(2) if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5 Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

5.6 Transfer Fee

There must be paid to the Company, m relation to the registration of any transfer, the amount, if any, determined by the directors.

PART 6 - TRANSMISSION OF SHARES

6.1 Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder’s interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

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6.2 Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

PART 7 - PURCHASE OF SHARES

7.1 Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2 Purchase When Insolvent

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1) the Company is insolvent; or

(2) making the payment or providing the consideration would render the Company insolvent.

7.3 Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

(1) is not entitled to vote the share at a meeting of its shareholders;

(2) must not pay a dividend in respect of the share; and

(3) must not make any other distribution in respect of the share.

PART 8 - BORROWING POWERS

8.1 Company Authorized to Borrow

The Company, if authorized by the directors, may:

(1) borrow money in the manner and amount, on the security, from tl1e sources and on the terms and conditions that tl1ey consider appropriate;

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(2) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3) guarantee the repayment of money by any other person or the performance of any obligation of any otl1er person; and

(4) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

PART 9 - ALTERATIONS

9.1 Alteration of Authorized Share Structure

Subject to Article 9.2, the Business Corporations Act, and any regulatory or stock exchange requirements applicable to the Company, the Company may by directors’ resolution:

(1) create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(2) increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

(3) subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(a) decrease the par value of those shares; or

(b) if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(5) change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(6) alter the identifying name of any of its shares; or

(7) otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.2 Special Rights and Restrictions

Subject to the Business Corporations Act and any regulatory or stock exchange requirements applicable to the Company, the Company may by directors’ resolution:

(1) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

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9.3 Change of Name

The Company may by directors’ resolution authorize an alteration of its Notice of Articles in order to change its name subject to any other regulatory or stock exchange requirements applicable to the Company.

9.4 Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by directors’ resolution alter these Articles subject to any other regulatory or stock exchange requirements applicable to the Company.

PART10 - MEETINGSOFSHAREHOLDERS

10.1 Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2 Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company’s annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3 Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

10.4 Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1) if and for so long as the Company is a public company, 21 days;

(2) otherwise, 10 days.

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10.5 Record Date for Notice

The directors may set a date as the record date for the purpose of detem1ining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1) if and for so long as the Company is a public company, 21 days;

(2) otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6 Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7 Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8 Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1) state the general nature of the special business; and

(2) if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(a) at the Company’s records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

(b) during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

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PART 11 - PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

11.1 Special Business

At a meeting of shareholders, the following business is special business:

(1) at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(2) at an annual general meeting, all business is special business except for the following:

(a) business relating to the conduct of or voting at the meeting;

(b) consideration of any financial statements of the Company presented to the meeting;

(c) consideration of any reports of the directors or auditor;

(d) the setting or changing of the number of directors;

(e) the election or appointment of directors;

(f) the appointment of an auditor;

(g) the setting of the remuneration of an auditor;

(h) business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(i) any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2 Special Majority

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds (2/3) of the votes cast on the resolution.

11.3 Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is one person who is, or who represents by proxy, one or more shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

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11.4 One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1) the quorum is one person who is, or who represents by proxy, that shareholder; and

(2) that shareholder, present in person or by proxy, may constitute the meeting.

11.5 Other Persons May Attend

The directors, the chief executive officer (if any), the president (if any), the chief financial officer (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.6 Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7 Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1) in the case of a general meeting requisitioned by shareholders, the meeting is dissolved; and

(2) in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the san1e time and place.

11.8 Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9 Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1) the chair of the board, if any; or

(2) if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

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11.10  Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number or the Company’s solicitor to be chair of the meeting failing which the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11  Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12  Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.13  Decisions by Show of Hands or Poll

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.14  Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15  Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16  Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

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11.17  Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1) the poll must be taken:

(a) at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

(b) in the manner, at the time and at the place that the chair of the meeting directs;

(2) the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3) the demand for the poll may be withdrawn by the person who demanded it.

11.18  Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19  Chair Must Resolve Dispute

In the case of any dispute as to tl1e admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.20  Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21  Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22  Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23  Retention of Ballots and Proxies

The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

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PART 12 - VOTES OF SHAREHOLDERS

12.1 Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1) on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2) on a poll, every shareholder entitled to vote on tl1e matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2 Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3 Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1) any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2) if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4 Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5 Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(1) for that purpose, the instrument appointing a representative must:

(a) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(b) be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

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(2) if a representative is appointed under this Article 12.5:

(a) the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(b) the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6 Proxy Provisions Do Not Apply to All Companies

Articles 12.7 to 12.15 do not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions (as defined in section 1(1) of the Business Corporations Act) as part of its Articles or to which the Statutory Reporting Company Provisions apply.

12.7 Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8 Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9 Proxy Holder Need Not Be Shareholder

A person appointed as a proxy holder need not be a shareholder.

12.10  Deposit of Proxy

A proxy for a meeting of shareholders must:

(1) be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2) unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

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A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11   Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1) at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2) by the chair of the meeting, before the vote is taken.

12.12   Form of Proxy

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of company]

(the “Company”)

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder):

    Signed [month, day, year]

    [Signature of shareholder]

    [Name of Shareholder-printed]

12.13   Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

(1) received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2) provided, at the meeting, to the chair of the meeting.

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12.14   Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1) if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2) if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15   Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

PART 13 - DIRECTORS

13.1   First Directors; Number of Directors

The first directors are the persons designated as directors of the Company in the Notice of Articles that applies to the Company when it is recognized under the Business Corporations Act. There is no requirement for the directors or shareholders to fix or set the number of directors from time to time. If the Company is a public company, the Company shall have at least three directors. If the Company is not a public company, the Company shall have at least one director.

13.2   Change in Number of Directors

If the number of directors is at any time fixed or set hereunder:

(1) the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number; or

(2) if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3   Directors’ Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4   Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

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13.5   Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.6   Reimbursement of Expenses of Directors

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.7   Special Remuneration for Directors

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company’s business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

13.8   Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

PART 14 - ELECTION AND REMOVAL OF DIRECTORS

14.1   Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1) the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(2) all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2   Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1) that individual consents to be a director in the manner provided for in the Business Corporations Act;

(2) that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(3) with respect to first directors, the designation is otherwise valid under the Business Corporations Act.

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14.3   Failure to Elect or Appoint Directors

If:

(1) the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or

(2) the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

(3) the date on which his or her successor is elected or appointed; and

(4) the date on which he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4   Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5   Directors May Fill Casual Vacancies

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6   Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

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14.7   Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8   Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed:

(1) one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

(2) in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

14.9   Ceasing to be a Director

A director ceases to be a director when:

(1) the term of office of the director expires;

(2) the director dies;

(3) the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

(4) the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10   Removal of Director by Shareholders

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11   Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if:

(1) such director is convicted of an indictable offence;

(2) such director ceases to be qualified to act as a director of a company and does not promptly resign; or

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(3) if there are at least three directors on the board, then if all other directors pass a resolution to remove such director; and the remaining directors may in any such event appoint a director to fill the resulting vacancy.

14.12   Nominations of Directors

(a) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board may be made at any annual general meeting of shareholders, or at any other general meeting of shareholders (an “extraordinary meeting”) if one of the purposes for which the extraordinary meeting was called was the election of directors:

(i) by or at the direction of the board, including pursuant to a notice of meeting;

(ii) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Business Corporations Act, or a requisition of the shareholders made in accordance with the provisions of the Business Corporations Act; or

(iii) by any person (a “Nominating Shareholder”): (A) who, at the close of business on the date of the giving of the notice provided for below in this Article 14.12 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting; and (B) who complies with the notice procedures set forth below in this Article 14.12.

(b) In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, the Nominating Shareholder must have given timely notice thereof in proper written form to the secretary of the Company at the head office of the Company.

(c) To be timely, a Nominating Shareholder’s notice to the secretary of the Company must be made:

(i) in the case of an annual general meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual general meeting of shareholders; provided, however, that in the event that the annual general meeting of shareholders is to be held on a date that is less than 50 days after the date (the “Notice Date”) on which the first public announcement of the date of the annual general meeting was made, notice by the Nominating Shareholder may be made not later than the close of business on the 10th day following the Notice Date; and

(ii) in the case of an extraordinary meeting (which is not also an annual general meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the close of business on the 15th day following the day on which the first public announcement of the date of the extraordinary meeting of shareholders was made. In no event shall any adjournment or postponement of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder’s notice as described above.

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(d) To be in proper written form, a Nominating Shareholder’s notice to the secretary of the Company must set forth:

(i) as to each person whom the Nominating Shareholder proposes to nominate for election as a director: (A) the name, age, business address and residential address of the person; (B) the principal occupation or employment of the person; (C) the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the meeting of shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice; and (D) any other information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below); and

(ii) as to the Nominating Shareholder giving the notice, any proxy, contract, arrangement, understanding or relationship pursuant to which such Nominating Shareholder has a right to vote any shares of the Company and any other information relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with solicitations of proxies for election of directors pursuant to the Business Corporations Act and Applicable Securities Laws (as defined below).

(e) The Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such proposed nominee.

(f) No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Article 14.12; provided, however, that nothing in this Article 14.12 shall be deemed to preclude discussion by a shareholder (as distinct from the nomination of directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Business Corporations Act. The chairman of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

(g) For purposes of this Article 14.12:

(i) “public announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com; and

(ii) “Applicable Securities Laws” means the applicable securities legislation of each relevant province and territory of Canada, as amended from time to time, the

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rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commission and similar regulatory authority of each province and territory of Canada.

(h) Notwithstanding any other provision of this Article 14.12, notice given to the secretary of the Company pursuant to this Article 14.12 may only be given by personal delivery or fax transmission and shall be deemed to have been given and made only at the time it is served by personal delivery or sent by fax transmission (provided that receipt of confirmation of such transmission has been received) to the secretary at the address of the head office of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the next ensuing business day.

(i) Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this Article 14.12.

PART 15 - ALTERNATE DIRECTORS

15.1 Appointment of Alternate Director

Any director (an “appointor”) may by notice in writing received by the Company appoint any person (an “appointee”) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

15.2 Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3 Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1) will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2) has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3) will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

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(4) has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

15.4 Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5 Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6 Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

15.7 Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1) his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;

(2) the alternate director dies;

(3) the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(4) the alternate director ceases to be qualified to act as a director; or

(5) his or her appointor revokes the appointment of the alternate director.

15.8 Remuneration and Expenses of Alternate Director

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

PART 16 - POWERS AND DUTIES OF DIRECTORS

16.1 Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

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16.2 Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

PART 17 - DISCLOSURE OF INTEREST OF DIRECTORS

17.1 Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

17.2 Restrictions on Voting by Reason of lnterest

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors’ resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

17.3 Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4 Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

17.5 Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

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17.6 No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

17.7 Professional Services by Director or Officer

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

17.8 Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

PART 18 - PROCEEDINGS OF DIRECTORS

18.1 Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

18.2 Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3 Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1) the chair of the board, if any;

(2) in the absence of the chair of the board, the president, if any, if the president is a director; or

(3) any other director chosen by the directors or, if the directors wish, the Company’s solicitor, if:

(a) neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

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(b) neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

(c) the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4 Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

18.5 Calling of Meetings

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

18.6 Notice of Meetings

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7 When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1) the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2) the director or alternate director, as the case may be, has waived notice of the meeting.

18.8 Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9 Waiver of Notice of Meetings

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all

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future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10   Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

18.11   Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12   Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors consented to in writing by all of the directors entitled to vote on it, whether by signed document, fax, email or any other method of transmitting legibly recorded messages, is as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors duly called and held. Such resolution may be in two or more counterparts which together are deemed to constitute one resolution in writing. A resolution passed in that manner is effective on the date stated in the resolution or on the latest date stated on any counterpart. A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

PART 19 - EXECUTIVE AND OTHER COMMITTEES

19.1 Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors’ powers, except:

(1) the power to fill vacancies in the board of directors;

(2) the power to remove a director;

(3) the power to change the membership of, or fill vacancies in, any committee of the directors; and

(4) such other powers, if any, as may be set out in the resolution or any subsequent directors’ resolution.

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19.2 Appointment and Powers of Other Committees

The directors may, by resolution:

(1) appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2) delegate to a committee appointed under paragraph (1) any of the directors’ powers, except:

(a) the power to fill vacancies in the board of directors;

(b) the power to remove a director;

(c) the power to change the membership of, or fill vacancies in, any committee of the directors; and

(d) the power to appoint or remove officers appointed by the directors; and

(3) make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors’ resolution.

19.3 Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1) conform to any rules that may from time to time be imposed on it by the directors; and

(2) report every act or thing done in exercise of those powers at such times as the directors may require.

19.4 Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1) revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(2) terminate the appointment of, or change the membership of, the committee; and

(3) fill vacancies in the committee.

19.5 Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1) the committee may meet and adjourn as it thinks proper;

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(2) the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3) a majority of the members of the committee constitutes a quorum of the committee; and

(4) questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

PART 20 - OFFICERS

20.1 Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2 Functions, Duties and Powers of Officers

The directors may, for each officer:

(1) determine the functions and duties of the officer;

(2) entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3) revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3 Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as the managing director must be a director. Any other officer need not be a director.

20.4 Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors think fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

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PART 21- INDEMNIFICATION

21.1 Definitions

In this Article 21:

(1) “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(2) “eligible proceeding” means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an “eligible party”) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

(a) is or may be joined as a party; or

(b) is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3) “expenses” has the meaning set out in the Business Corporations Act.

21.2 Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

21.3 Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

21.4 Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5 Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

(1) is or was a director, alternate director, officer, employee or agent of the Company;

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(2) is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3) at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4) at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity,

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

PART 22- DIVIDENDS

22.1 Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2 Declaration of Dividends

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3 No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4 Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5 Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of cash or of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

22.6 Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1) set the value for distribution of specific assets;

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(2) determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(3) vest any such specific assets in trustees for the persons entitled to the dividend.

22.7 When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

22.8 Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9 Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10  Dividend Bears No Interest

No dividend bears interest against the Company.

22.11  Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12  Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the an1ount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13  Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

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PART 23 -DOCUMENTS, RECORDS AND REPORTS

23.1 Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

23.2 Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

PART 24- NOTICES

24.1 Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1) mail addressed to the person at the applicable address for that person as follows:

(a) for a record mailed to a shareholder, the shareholder’s registered address;

(b) for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

(c) in any other case, the mailing address of the intended recipient;

(2) delivery at the applicable address for that person as follows, addressed to the person:

(a) for a record delivered to a shareholder, the shareholder’s registered address;

(b) for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

(c) in any other case, the delivery address of the intended recipient;

(3) sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4) sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(5) physical delivery to the intended recipient.

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24.2 Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3 Certificate of Sending

A certificate or other document signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4 Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5 Notice to Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1) mailing the record, addressed to them:

(a) by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or any similar description; and

(b) at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(2) if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

PART 25 - SEAL

25.1 Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company’s seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(l) any two directors;

(2) any officer, together with any director;

(3) if the Company only has one director, that director; or

(4) any one or more directors or officers or persons as may be determined by the directors.

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25.2   Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3   Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

PART 26 - SPECIAL RIGHTS AND

RESTRICTIONS ATTACHED TO SHARES

26.1   The Common shares without par value (the “Common shares”) shall have the following rights, privileges, restrictions and conditions:

(1) The holders of the Common shares shall be entitled to vote at all meetings of shareholder except meetings at which only holders of a specified class of shares are entitled to vote, and holders of common shares shall be entitled to one vote for each common share held; and

(2) subject to the rights, privileges, restrictions and conditions attached to any other class of shares of the Company, the holders of the Common shares shall be entitled to receive the remaining property of the Company upon the dissolution of the Company.

26.2   The Preference shares without par value (the “Preference shares”) shall have the following rights privileges, restrictions and conditions:

(1) The preference shares may from time to time be issued in one or more series and, subject to the following provisions, the directors may by resolution fix from time to time before such issue the number of shares which is to comprise each series and the designation, rights, privileges, restrictions and conditions attaching to each series of preference shares including, without limiting the generality of the foregoing, the rate or amount of dividends or the method of calculating dividends, whether cumulative or non-cumulative, the dates and places of payment thereof, the redemption, purchase for cancellation and/or conversion prices and terms and conditions of redemption, purchase and/or conversion (if any), any share purchase plan or sinking fund or other provisions and the restrictions (if any) respecting the payment of dividends on any shares ranking junior to the preference shares.

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(2) The preference shares of each series shall, with respect to the priority in payment of dividends and the distribution of assets or return of capital in the event of liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other return of capital or distribution of the assets of the Company among its shareholders for the purpose of winding-up its affairs, rank a parity with the preference shares of every other series of the same class and be entitled to preference over the common shares and over any other shares of the Company ranking junior to the preference shares. The preference shares of any series may also be given such other preferences, not inconsistent with these Articles, over the common shares and any other shares of the Company ranking junior to such preference shares as may be determined by the directors.

(3) If any cumulative dividends, whether or not earned or declared, declared non-cumulative dividends, or amounts payable on the return of capital in respect of a series of preference shares are not paid in full, all preference shares of other series of the same class shall participate rateably in respect of accumulated cumulative dividends, declared non-cumulative dividends, and amounts payable on return of capital.

(4) The preference shares of any series may be made convertible into common shares.

(5) The holders of the preference shares shall be entitled to receive copies of the annual financial statements of the Company and the auditors’ report thereon to be submitted to the shareholders of the Company at annual meetings and the holders of each series of preference shares shall have such rights to attend and vote at meetings of shareholders by restrictions on attendances or voting rights thereat as may be determined by resolution of the board of directors; and

(6) The holders of shares of a class or series shall not be entitled to vote separately as a class or series or to dissent upon a proposal to amend the Notice of Articles to:

a) Increase or decrease any maximum number of authorized shares of such class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of such class;

b) Effect an exchange, re-designation or cancellation of all or pa11 of the shares of such class; or

c) Create a new class of shares equal or superior to the shares of such class.

/s/ Ron Paton

RON PATON, Director

DATED the 5th day of December, 2005.

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EX-4.1

Exhibit 4.1

LYNDEN ENERGY CORP.

STOCK OPTION PLAN

Approved by the TSX Venture Exchange on March 6, 2014

TABLE OF CONTENTS

		Page
SECTION 1 DEFINITIONS AND INTERPRETATION			1
1.1	Definitions		1
1.2	Choice of Law		4
1.3	Headings		4
SECTION 2 GRANT OF OPTIONS			4
2.1	Grant of Options		4
2.2	Record of Option Grants		5
2.3	Effect of Plan		5
SECTION 3 PURPOSE AND PARTICIPATION			5
3.1	Purpose of Plan		5
3.2	Participation in Plan		5
3.3	Limits on Option Grants		5
3.4	Notification of Grant		6
3.5	Copy of Plan		6
3.6	Limitation on Service		6
3.7	No Obligation to Exercise		6
3.8	Agreement		6
3.9	Notice		7
3.10	Representation to TSXV		7
SECTION 4 NUMBER OF SHARES UNDER PLAN			7
4.1	Board to Approve Issuance of Shares		7
4.2	Number of Shares		7
4.3	Fractional Shares		7
SECTION 5 TERMS AND CONDITIONS OF OPTIONS			7
5.1	Exercise Period of Option		7
5.2	Number of Shares Under Option		7
5.3	Exercise Price of Option		8
5.4	Termination of Option		8
5.5	Vesting of Option and Acceleration		9
5.6	Additional Terms		9
SECTION 6 TRANSFERABILITY OF OPTIONS			9
6.1	Non-transferable		9
6.2	Death of Option Holder		10
6.3	Disability of Option Holder		10
6.4	Disability and Death of Option Holder		10
6.5	Vesting		10
6.6	Deemed Non-Interruption of Engagement		10
SECTION 7 EXERCISE OF OPTION			10
7.1	Exercise of Option		10
7.2	Issue of Share Certificates		11
7.3	No Rights as Shareholder		11
7.4	Statutory Deductions		11

SECTION 8 ADMINISTRATION		11
8.1	Board or Committee	11
8.2	Powers of Committee	11
8.3	Administration by Committee	12
8.4	Interpretation	12
SECTION 9 APPROVALS AND AMENDMENT		12
9.1	Shareholder Approval of Plan	12
9.2	Amendment of Option or Plan	13
SECTION 10 CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES		13
10.1	Compliance with Laws	13
10.2	Regulatory Approvals	13
10.3	Inability to Obtain Regulatory Approvals	13
SECTION 11 ADJUSTMENTS AND TERMINATION		14
11.1	Termination of Plan	14
11.2	No Grant During Suspension of Plan	14
11.3	Alteration in Capital Structure	14
11.4	Triggering Events	14
11.5	Notice of Termination by Triggering Event	15
11.6	Determinations to be Made By Committee	15

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STOCK OPTION PLAN

SECTION 1

DEFINITIONS AND INTERPRETATION

1.1 Definitions

As used herein, unless there is something in the subject matter or context inconsistent therewith, the following terms shall have the meanings set forth below:

(a) “Administrator” means such Executive or Employee of the Issuer as may be designated as Administrator by the Committee from time to time, or, if no such person is appointed, the Committee itself.

(b) “Affiliate” has the meaning ascribed thereto in TSXV Corporate Finance Manual Policy 1.1 – Interpretation.

(c) “Associate” means, where used to indicate a relationship with any person:

(i) any relative, including the spouse of that person or a relative of that person’s spouse, where the relative has the same home as the person;

(ii) any partner, other than a limited partner, of that person;

(iii) any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity; and

(iv) any corporation of which such person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the corporation.

(d) “Black-Out” means a restriction imposed by the Issuer on all or any of its directors, officers, employees, insiders or persons in a special relationship whereby they are to refrain from trading in the Issuer’s securities until the restriction has been lifted by the Issuer.

(e) “Board” means the board of directors of the Issuer.

(f) “Change of Control” means an occurrence when either:

(i) a Person or Entity, other than the current “control person” of the Issuer (as that term is defined in the Securities Act), becomes a “control person” of the Issuer; or

(ii) a majority of the directors elected at any annual or extraordinary general meeting of shareholders of the Issuer are not individuals nominated by the Issuer’s then-incumbent Board.

(g) “Committee” means a committee of the Board to which the responsibility of approving the grant of stock options has been delegated, or if no such committee is appointed, the Board itself.

(h) “Company” means a corporation, incorporated association or organization, body corporate, partnership, trust, association or other entity other than an individual.

(i) “Consultant” means an individual (other than an Employee or an Executive) or Company that:

(i) is engaged to provide, on an ongoing bona fide basis, consulting, technical, management or other services to the Issuer or to an Affiliate of the Issuer other than services provided in relation to a “distribution” (as that term is described in the Securities Act);

(ii) provides the services under a written contract between the Issuer or an Affiliate of the Issuer and the individual or the Company, as the case may be;

(iii) in the reasonable opinion of the Issuer, spends or will spend a significant amount of time and attention on the affairs and business of the Issuer or an Affiliate of the Issuer; and

(iv) has a relationship with the Issuer or an Affiliate of the Issuer that enables the individual to be knowledgeable about the business and affairs of the Issuer.

(j) “Corporate Consultant” means a Consultant that is a Company.

(k) “Disability” means a medically determinable physical or mental impairment expected to result in death or to last for a continuous period of not less than 12 months, and which causes an individual to be unable to engage in any substantial gainful activity, or any other condition of impairment that the Committee, acting reasonably, determines constitutes a disability.

(l) “Eligible Charitable Organization” has the meaning ascribed thereto in TSXV Corporate Finance Manual Policy 4.7 – Charitable Options in Connection With an IPO.

(m) “Employee” means:

(i) an individual who is considered an employee of the Issuer or any Subsidiary under the Income Tax Act, (Canada) and for whom income tax, employment insurance and Canada Pension Plan deductions must be made at source; or

(ii) an individual who works for the Issuer or any Subsidiary either full-time or on a continuing and regular basis for a minimum amount of time per week providing services normally provided by an employee and who is subject to the same control and direction by the Issuer or any Subsidiary over the details and methods of work as an employee of the Issuer or any Subsidiary, but for whom income tax deductions are not made at source.

(n) “Executive” means an individual who is a director, senior officer or Management Company Employee of the Issuer or a Subsidiary.

(o) “Exercise Notice” means the written notice of the exercise of an Option, in the form set out as Schedule B hereto, duly executed by the Option Holder.

(p) “Exercise Period” means the period during which a particular Option may be exercised and is the period from and including the Grant Date through to and including the Expiry Time on the Expiry Date provided, however, that no Option can be exercised unless and until all necessary Regulatory Approvals have been obtained.

(q) “Exercise Price” means the price at which an Option is exercisable as determined in accordance with section 5.3.

(r) “Expiry Date” means the date the Option expires as set out in the Option Certificate or as otherwise determined in accordance with sections 5.4, 6.2, 6.3, 6.4, 7.1 or 11.4.

(s) “Expiry Time” means the time the Option expires on the Expiry Date, which is 4:00 p.m. local time in Vancouver, British Columbia on the Expiry Date.

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(t) “Grant Date” means the date on which the Committee grants a particular Option, which is the date the Option comes into effect provided however that no Option can be exercised unless and until all necessary Regulatory Approvals have been obtained.

(u) “Insider” means an insider as that term is defined in the Securities Act.

(v) “Issuer” means Lynden Energy Corp.

(w) “Management Company Employee” means an individual employed by a Person providing management services to the Issuer, which are required for the ongoing successful operation of the business enterprise of the Issuer, but excluding a Person engaged in investor relations activities.

(x) “Market Value” means the market value of the Shares as determined in accordance with section 5.3.

(y) “Option” means an incentive share purchase option granted pursuant to this Plan entitling the Option Holder to purchase Shares of the Issuer.

(z) “Option Certificate” means the certificate, in substantially the form set out as Schedule A hereto, evidencing the Option.

(aa) “Option Holder” means a Person or Entity who holds an unexercised and unexpired Option or, where applicable, the Personal Representative of such person.

(bb) “Outstanding Issue” means the number of Shares that are outstanding (on a non-diluted basis) immediately prior to the Share issuance or grant of Option in question.

(cc) “Person or Entity” means an individual, natural person, corporation, government or political subdivision or agency of a government, and where two or more persons act as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding or disposing of securities of an issuer, such partnership, limited partnership, syndicate or group shall be deemed to be a Person or Entity.

(dd) “Personal Representative” means:

(i) in the case of a deceased Option Holder, the executor or administrator of the deceased duly appointed by a court or public authority having jurisdiction to do so; and

(ii) in the case of an Option Holder who for any reason is unable to manage his or her affairs, the person entitled by law to act on behalf of such Option Holder.

(ee) “Plan” means this stock option plan as from time to time amended.

(ff) “Regulatory Approvals” means any necessary approvals of the Regulatory Authorities as may be required from time to time for the implementation, operation or amendment of this Plan or for the Options granted from time to time hereunder.

(gg) “Regulatory Authorities” means all organized trading facilities on which the Shares are listed, and all securities commissions or similar securities regulatory bodies having jurisdiction over the Issuer, this Plan or the Options granted from time to time hereunder.

(hh) “Regulatory Rules” means all corporate and securities laws, regulations, rules, policies, notices, instruments and other orders of any kind whatsoever which may, from time to time, apply to the implementation, operation or amendment of this Plan or the Options granted from time to time hereunder including, without limitation, those of the applicable Regulatory Authorities.

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(ii) “Securities Act” means the Securities Act (British Columbia), RSBC 1996, c.418 as from time to time amended.

(jj) “Share” or “Shares” means, as the case may be, one or more common shares without par value in the capital stock of the Issuer.

(kk) “Subsidiary” means a wholly-owned or controlled subsidiary corporation of the Issuer.

(ll) “Triggering Event” means:

(i) the proposed dissolution, liquidation or wind-up of the Issuer;

(ii) a proposed merger, amalgamation, arrangement or reorganization of the Issuer with one or more corporations as a result of which, immediately following such event, the shareholders of the Issuer as a group, as they were immediately prior to such event, are expected to hold less than a majority of the outstanding capital stock of the surviving corporation;

(iii) the proposed acquisition of all or substantially all of the issued and outstanding shares of the Issuer by one or more Persons or Entities;

(iv) a proposed Change of Control of the Issuer;

(v) the proposed sale or other disposition of all or substantially all of the assets of the Issuer; or

(vi) a proposed material alteration of the capital structure of the Issuer which, in the opinion of the Committee, is of such a nature that it is not practical or feasible to make adjustments to this Plan or to the Options granted hereunder to permit the Plan and Options granted hereunder to stay in effect.

(mm) “TSXV” means the TSX Venture Exchange Inc.

(nn) “vest” or “vesting” means the time at which the applicable portion of the Option granted to the Option Holder becomes exercisable.

1.2 Choice of Law

The Plan is established under, and the provisions of the Plan shall be subject to and interpreted and construed solely in accordance with, the laws of the Province of British Columbia and the laws of Canada applicable therein without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction. The Issuer and each Option Holder hereby attorn to the jurisdiction of the Courts of British Columbia.

1.3 Headings

The headings used herein are for convenience only and are not to affect the interpretation of the Plan.

SECTION 2

GRANT OF OPTIONS

2.1 Grant of Options

The Committee shall, from time to time in its sole discretion, grant Options to such Persons or Entities and on such terms and conditions as are permitted under this Plan.

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2.2 Record of Option Grants

The Committee shall be responsible to maintain a record of all Options granted under this Plan and such record shall contain, in respect of each Option:

(a) the name and address of the Option Holder;

(b) the category (Executive, Employee or Consultant) under which the Option was granted to him, her or it;

(c) the Grant Date and Expiry Date of the Option;

(d) the number of Shares which may be acquired on the exercise of the Option and the Exercise Price of the Option;

(e) the vesting and other additional terms, if any, attached to the Option; and

(f) the particulars of each and every time the Option is exercised.

2.3 Effect of Plan

All Options granted pursuant to the Plan shall be subject to the terms and conditions of the Plan notwithstanding the fact that the Option Certificates issued in respect thereof do not expressly contain such terms and conditions but instead incorporate them by reference to the Plan. The Option Certificates will be issued for convenience only and in the case of a dispute with regard to any matter in respect thereof, the provisions of the Plan and the records of the Issuer shall prevail over the terms and conditions in the Option Certificate, save and except as noted below. Each Option will also be subject to, in addition to the provisions of the Plan, the terms and conditions contained in the schedules, if any, attached to the Option Certificate for such Option. Should the terms and conditions contained in such schedules be inconsistent with the provisions of the Plan, such terms and conditions will supersede the provisions of the Plan.

SECTION 3

PURPOSE AND PARTICIPATION

3.1 Purpose of Plan

The purpose of the Plan is to provide the Issuer with a share-related mechanism to attract, retain and motivate qualified Executives, Employees and Consultants to contribute toward the long term goals of the Issuer, and to encourage such individuals to acquire Shares of the Issuer as long term investments.

3.2 Participation in Plan

The Committee shall, from time to time and in its sole discretion, determine those Executives, Employees, Consultants and Eligible Charitable Organizations to whom Options are to be granted. Options may be granted to an individual or to a Company that is wholly owned by one or more individuals who are Executives, Employees and/or Consultants.

3.3 Limits on Option Grants

If the Issuer is listed on the TSXV, the following limitations shall apply to the Plan and all Options thereunder so long as such limitations are required by the TSXV:

(a) the aggregate number of Options which may be granted to any one Option Holder under the Plan within any 12 month period must not exceed 5% of the Outstanding Issue (unless the Issuer has obtained disinterested shareholder approval as required by the TSXV);

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(b) disinterested shareholder approval (in accordance with TSXV requirements) is required to the grant to Insiders (as a group), within a 12 month period, of an aggregate number of Options which, when added to the number of outstanding incentive stock options granted to Insiders within the previous 12 months (calculated at the date an Option is granted to an Insider), exceed 10% of the Outstanding Issue;

(c) with respect to section 5.1, the Expiry Date of an Option shall be no later than the tenth anniversary of the Grant Date of such Option;

(d) the aggregate number of Options which may be granted to any one Consultant within any 12 month period must not exceed 2% of the Outstanding Issue, calculated at the date an Option is granted to a Consultant;

(e) the aggregate number of Options which may be granted within any 12 month period to Employees or Consultants engaged in investor relations activities must not exceed 2% of the Outstanding Issue, calculated at the date an Option is granted to any such Employee or Consultant, and such options must vest in stages over a period of not less than 12 months with no more than 25% of the Options vesting in any three month period; and

(f) the aggregate number of Options which may be granted to Eligible Charitable Organizations must not at any time exceed 1% of the Outstanding Issue, calculated immediately subsequent to the grant of an Option to an Eligible Charitable Organization.

3.4 Notification of Grant

Following the granting of an Option, the Administrator shall, within a reasonable period of time, notify the Option Holder in writing of the grant and shall enclose with such notice the Option Certificate representing the Option so granted. In no case will the Issuer be required to deliver an Option Certificate to an Option Holder until such time as the Issuer has obtained all necessary Regulatory Approvals for the grant of the Option.

3.5 Copy of Plan

Each Option Holder, concurrently with the notice of the grant of the Option, shall be provided with a copy of the Plan. A copy of any amendment to the Plan shall be promptly provided by the Administrator to each Option Holder.

3.6 Limitation on Service

The Plan does not give any Option Holder that is an Executive the right to serve or continue to serve as an Executive of the Issuer or any Subsidiary, nor does it give any Option Holder that is an Employee or Consultant the right to be or to continue to be employed or engaged by the Issuer or any Subsidiary.

3.7 No Obligation to Exercise

Option Holders shall be under no obligation to exercise Options.

3.8 Agreement

The Issuer and every Option Holder granted an Option hereunder shall be bound by and subject to the terms and conditions of this Plan. By accepting an Option granted hereunder, the Option Holder has expressly agreed with the Issuer to be bound by the terms and conditions of this Plan. In the event that the Option Holder receives his, her or its Options pursuant to an oral or written agreement with the Issuer or a Subsidiary, whether such agreement is an employment agreement, consulting agreement or any other kind of agreement of any kind whatsoever, the Option Holder acknowledges that in the event of any inconsistency between the terms relating to the grant of such Options in that agreement and the terms attaching to the Options as provided for in this Plan, the terms provided for in this Plan shall prevail and the other agreement shall be deemed to have been amended accordingly.

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3.9 Notice

Any notice, delivery or other correspondence of any kind whatsoever to be provided by the Issuer to an Option Holder will be deemed to have been provided if provided to the last home address, fax number or email address of the Option Holder in the records of the Issuer and the Issuer shall be under no obligation to confirm receipt or delivery.

Any notice, delivery or other communication given by an Option Holder to the Issuer under or in connection with this Plan shall be sent to the Issuer’s mailing address as shown under the Issuer’s profile on the SEDAR website (www.SEDAR.com) at the time such notice, delivery or other communication is given.

3.10 Representation to TSXV

As a condition precedent to the issuance of an Option, the Issuer must be able to represent to the TSXV as of the Grant Date that the Option Holder is a bona fide Executive, Employee or Consultant of the Issuer or any Subsidiary.

SECTION 4

NUMBER OF SHARES UNDER PLAN

4.1 Board to Approve Issuance of Shares

The Committee shall approve by resolution the issuance of all Shares to be issued to Option Holders upon the exercise of Options, such authorization to be deemed effective as of the Grant Date of such Options regardless of when it is actually done. The Committee shall be entitled to approve the issuance of Shares in advance of the Grant Date, retroactively after the Grant Date, or by a general approval of this Plan.

4.2 Number of Shares

Subject to adjustment as provided for herein, the number of Shares which will be available for purchase pursuant to Options granted pursuant to this Plan, plus any other outstanding incentive stock options of the Issuer granted pursuant to a previous stock option plan or agreement, will not exceed 10% of the Outstanding Issue. If any Option expires or otherwise terminates for any reason without having been exercised in full, the number of Shares in respect of such expired or terminated Option shall again be available for the purposes of granting Options pursuant to this Plan.

4.3 Fractional Shares

No fractional shares shall be issued upon the exercise of any Option and, if as a result of any adjustment, an Option Holder would become entitled to a fractional share, such Option Holder shall have the right to purchase only the next lowest whole number of Shares and no payment or other adjustment will be made for the fractional interest.

SECTION 5

TERMS AND CONDITIONS OF OPTIONS

5.1 Exercise Period of Option

Subject to sections 5.4, 6.2, 6.3, 6.4, 7.1 and 11.4, the Grant Date and the Expiry Date of an Option shall be the dates fixed by the Committee at the time the Option is granted and shall be set out in the Option Certificate issued in respect of such Option.

5.2 Number of Shares Under Option

The number of Shares which may be purchased pursuant to an Option shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option.

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5.3 Exercise Price of Option

The Exercise Price at which an Option Holder may purchase a Share upon the exercise of an Option shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option. The Exercise Price shall not be less than the Market Value of the Shares as of the Grant Date. The Market Value of the Shares for a particular Grant Date shall be determined as follows:

(a) for each organized trading facility on which the Shares are listed, Market Value will be the closing trading price of the Shares on the day immediately preceding the Grant Date, and may be less than this price if it is within the discounts permitted by the applicable Regulatory Authorities;

(b) if the Issuer’s Shares are listed on more than one organized trading facility, the Market Value shall be the Market Value as determined in accordance with subparagraph (a) above for the primary organized trading facility on which the Shares are listed, as determined by the Committee, subject to any adjustments as may be required to secure all necessary Regulatory Approvals;

(c) if the Issuer’s Shares are listed on one or more organized trading facilities but have not traded during the 10 trading days immediately preceding the Grant Date, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as is determined by the Committee; and

(d) if the Issuer’s Shares are not listed on any organized trading facility, then the Market Value will be, subject to any adjustments as may be required to secure all necessary Regulatory Approvals, such value as is determined by the Committee to be the fair value of the Shares, taking into consideration all factors that the Committee deems appropriate, including, without limitation, recent sale and offer prices of the Shares in private transactions negotiated at arms’ length.

Notwithstanding anything else contained herein, in no case will the Market Value be less than the minimum prescribed by each of the organized trading facilities that would apply to the Issuer on the Grant Date in question.

5.4 Termination of Option

Subject to such other terms or conditions that may be attached to Options granted hereunder, an Option Holder may exercise an Option in whole or in part at any time and from time to time during the Exercise Period. Any Option or part thereof not exercised within the Exercise Period shall terminate and become null, void and of no effect as of the Expiry Time on the Expiry Date. The Expiry Date of an Option shall be the earlier of the date so fixed by the Committee at the time the Option is granted as set out in the Option Certificate and the date established, if applicable, in paragraphs (a) or (b) below or sections 6.2, 6.3, 6.4, 7.1 or 11.4 of this Plan:

(a) Ceasing to Hold Office—In the event that the Option Holder holds his or her Option as an Executive and such Option Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Option shall be, unless otherwise determined by the Committee and expressly provided for in the Option Certificate, the 30th day following the date the Option Holder ceases to hold such position unless the Option Holder ceases to hold such position as a result of:

(i) ceasing to meet the qualifications set forth in the corporate legislation applicable to the Issuer;

(ii) a special resolution having been passed by the shareholders of the Issuer removing the Option Holder as a director of the Issuer or any Subsidiary; or

(iii) an order made by any Regulatory Authority having jurisdiction to so order,

in which case the Expiry Date shall be the date the Option Holder ceases to hold such position; OR

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(b) Ceasing to be Employed or Engaged - In the event that the Option Holder holds his or her Option as an Employee or Consultant and such Option Holder ceases to hold such position other than by reason of death or Disability, the Expiry Date of the Option shall be, unless otherwise determined by the Committee and expressly provided for in the Option Certificate, the 30th day following the date the Option Holder ceases to hold such position, unless the Option Holder ceases to hold such position as a result of:

(i) termination for cause;

(ii) resigning his or her position; or

(iii) an order made by any Regulatory Authority having jurisdiction to so order,

in which case the Expiry Date shall be the date the Option Holder ceases to hold such position.

In the event that the Option Holder ceases to hold the position of Executive, Employee or Consultant for which the Option was originally granted, but comes to hold a different position as an Executive, Employee or Consultant prior to the expiry of the Option, the Committee may, in its sole discretion, choose to permit the Option to stay in place for that Option Holder with such Option then to be treated as being held by that Option Holder in his or her new position and such will not be considered to be an amendment to the Option in question requiring the consent of the Option Holder under section 9.2 of this Plan. Notwithstanding anything else contained herein, in no case will an Option be exercisable later than the Expiry Date of the Option.

5.5 Vesting of Option and Acceleration

The vesting schedule for an Option, if any, shall be determined by the Committee and shall be set out in the Option Certificate issued in respect of the Option. The Committee may elect, at any time, to accelerate the vesting schedule of one or more Options including, without limitation, on a Triggering Event, and such acceleration will not be considered an amendment to the Option in question requiring the consent of the Option Holder under section 9.2 of this Plan. Notwithstanding the foregoing, the Committee’s election to accelerate the vesting schedule applicable to Options held by Consultants engaged in investor relations activities shall be subject to receipt of TSXV approval.

5.6 Additional Terms

Subject to all applicable Regulatory Rules and all necessary Regulatory Approvals, the Committee may attach additional terms and conditions to the grant of a particular Option, such terms and conditions to be set out in a schedule attached to the Option Certificate. The Option Certificates will be issued for convenience only, and in the case of a dispute with regard to any matter in respect thereof, the provisions of this Plan and the records of the Issuer shall prevail over the terms and conditions in the Option Certificate, save and except as noted below. Each Option will also be subject to, in addition to the provisions of the Plan, the terms and conditions contained in the schedules, if any, attached to the Option Certificate for such Option. Should the terms and conditions contained in such schedules be inconsistent with the provisions of the Plan, such terms and conditions will supersede the provisions of the Plan.

SECTION 6

TRANSFERABILITY OF OPTIONS

6.1 Non-transferable

Except as provided otherwise in this section 6, Options are non-assignable and non-transferable.

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6.2 Death of Option Holder

In the event of the Option Holder’s death, any Options held by such Option Holder shall pass to the Personal Representative of the Option Holder and shall be exercisable by the Personal Representative on or before the date which is the earlier of one year following the date of death and the applicable Expiry Date.

6.3 Disability of Option Holder

If the employment or engagement of an Option Holder as an Employee or Consultant or the position of an Option Holder as a director or officer of the Issuer or a Subsidiary is terminated by the Issuer by reason of such Option Holder’s Disability, any Options held by such Option Holder shall be exercisable by such Option Holder or by the Personal Representative on or before the date which is the earlier of one year following the termination of employment, engagement or appointment as a director or officer and the applicable Expiry Date.

6.4 Disability and Death of Option Holder

If an Option Holder has ceased to be employed, engaged or appointed as a director or officer of the Issuer or a Subsidiary by reason of such Option Holder’s Disability and such Option Holder dies within one year after the termination of such engagement, any Options held by such Option Holder that could have been exercised immediately prior to his or her death shall pass to the Personal Representative of such Option Holder and shall be exercisable by the Personal Representative on or before the date which is the earlier of one year following the death of such Option Holder and the applicable Expiry Date.

6.5 Vesting

Unless the Committee determines otherwise, Options held by or exercisable by a Personal Representative shall, during the period prior to their termination, continue to vest in accordance with any vesting schedule to which such Options are subject, except for Options which are required to be subject to a vesting schedule pursuant to the policies of the TSXV which shall not continue to vest.

6.6 Deemed Non-Interruption of Engagement

Employment or engagement by the Issuer shall be deemed to continue intact during any military or sick leave or other bona fide leave of absence if the period of such leave does not exceed 90 days or, if longer, for so long as the Option Holder’s right to re-employment or re-engagement by the Issuer is guaranteed either by statute or by contract. If the period of such leave exceeds 90 days and the Option Holder’s re-employment or re-engagement is not so guaranteed, then his or her employment or engagement shall be deemed to have terminated on the ninety-first day of such leave.

SECTION 7

EXERCISE OF OPTION

7.1 Exercise of Option

An Option may be exercised only by the Option Holder or the Personal Representative of any Option Holder. An Option Holder or the Personal Representative of any Option Holder may exercise an Option in whole or in part at any time and from time to time during the Exercise Period up to the Expiry Time on the Expiry Date by delivering to the Administrator the required Exercise Notice, the applicable Option Certificate and a certified cheque or bank draft or wire transfer payable to the Issuer or its legal counsel in an amount equal to the aggregate Exercise Price of the Shares then being purchased pursuant to the exercise of the Option. Notwithstanding anything else contained herein, Options may not be exercised during a Black-Out unless the Committee determines otherwise.

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Notwithstanding any other provision of this Plan, the Expiry Date of an Option will be automatically extended if such Expiry Date falls within a Black-Out period, subject to the following conditions of the TSXV:

(a) the Black-Out period is formally imposed by the Issuer pursuant to its internal trading policies as a result of the bona fide existence of undisclosed material information. For greater certainty, in the absence of the Issuer formally imposing a blackout period, the Expiry Date of any Options will not be automatically extended in any circumstances;

(b) the Black-Out period expires upon the general disclosure of the undisclosed material information and the Expiry Date of the affected Options is extended to no later than 10 business days after the expiry of the Black-Out period; and

(c) the automatic extension of an Option Holder’s Options is not permitted where the Option Holder or the Issuer is subject to a cease trade order (or similar order under applicable securities laws) in respect of the Issuer’s securities.

7.2 Issue of Share Certificates

As soon as reasonably practicable following the receipt of the Exercise Notice, the Administrator shall cause to be delivered to the Option Holder a certificate for the Shares so purchased. If the number of Shares so purchased is less than the number of Shares subject to the Option Certificate surrendered, the Administrator shall also provide a new Option Certificate for the balance of Shares available under the Option to the Option Holder concurrent with delivery of the Share Certificate.

7.3 No Rights as Shareholder

Until the date of the issuance of the certificate for the Shares purchased pursuant to the exercise of an Option, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to such Shares, notwithstanding the exercise of the Option, unless the Committee determines otherwise. In the event of any dispute over the date of the issuance of the certificates, the decision of the Committee shall be final, conclusive and binding.

7.4 Statutory Deductions

At the time the Option is exercised, the Option Holder shall deliver to the Issuer or its legal counsel, by certified cheque, bank draft or wire transfer, funds equal to the amount that the Issuer determines in good faith it is required to remit to the appropriate government authority in respect of statutory deductions applicable to the exercise of the Option (the “Remittance Amount”). For greater certainty, the Issuer shall not be required to process the Exercise Notice until the Option Holder has delivered the Remittance Amount as aforesaid, and the Option Holder shall not be entitled to receive a certificate representing the Shares acquired upon exercise of the Option until such delivery has been made.

SECTION 8

ADMINISTRATION

8.1 Board or Committee

The Plan shall be administered by the Administrator with oversight by the Committee.

8.2 Powers of Committee

The Committee shall have the authority to do the following:

(a) oversee the administration of the Plan in accordance with its terms;

(b) appoint or replace the Administrator from time to time;

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(c) determine all questions arising in connection with the administration, interpretation and application of the Plan, including all questions relating to the Market Value;

(d) correct any defect, supply any information or reconcile any inconsistency in the Plan in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan;

(e) prescribe, amend, and rescind rules and regulations relating to the administration of the Plan;

(f) determine the duration and purposes of leaves of absence from employment or engagement by the Issuer which may be granted to Option Holders without constituting a termination of employment or engagement for purposes of the Plan;

(g) do the following with respect to the granting of Options:

(ii) determine the Executives, Employees or Consultants to whom Options shall be granted, based on the eligibility criteria set out in this Plan;

(iii) determine the terms of the Option to be granted to an Option Holder including, without limitation, the Grant Date, Expiry Date, Exercise Price and vesting schedule (which need not be identical with the terms of any other Option);

(iv) subject to any necessary Regulatory Approvals and section 9.2, amend the terms of any Options;

(v) determine when Options shall be granted; and

(vi) determine the number of Shares subject to each Option;

(h) accelerate the vesting schedule of any Option previously granted; and

(g) make all other determinations necessary or advisable, in its sole discretion, for the administration of the Plan.

8.3 Administration by Committee

All determinations made by the Committee in good faith shall be final, conclusive and binding upon all persons. The Committee shall have all powers necessary or appropriate to accomplish its duties under this Plan.

8.4 Interpretation

The interpretation by the Committee of any of the provisions of the Plan and any determination by it pursuant thereto shall be final, conclusive and binding and shall not be subject to dispute by any Option Holder. No member of the Committee or any person acting pursuant to authority delegated by it hereunder shall be personally liable for any action or determination in connection with the Plan made or taken in good faith and each member of the Committee and each such person shall be entitled to indemnification with respect to any such action or determination in the manner provided for by the Issuer.

SECTION 9

APPROVALS AND AMENDMENT

9.1 Shareholder Approval of Plan

If required by a Regulatory Authority or by the Committee, this Plan may be made subject to the approval of the shareholders of the Issuer as prescribed by the Regulatory Authority. If shareholder approval is required, any Options granted under this Plan prior to such time will not be exercisable or binding on the Issuer unless and until such shareholder approval is obtained.

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9.2 Amendment of Option or Plan

Subject to any required Regulatory Approvals, the Committee may from time to time amend any existing Option or the Plan or the terms and conditions of any Option thereafter to be granted provided that where such amendment relates to an existing Option and it would:

(a) materially decrease the rights or benefits accruing to an Option Holder; or

(b) materially increase the obligations of an Option Holder;

then, unless otherwise excepted out by a provision of this Plan, the Committee must also obtain the written consent of the Option Holder in question to such amendment. If at the time the Exercise Price of an Option is reduced the Option Holder is an Insider of the Issuer, the Insider must not exercise the option at the reduced Exercise Price until the reduction in Exercise Price has been approved by the disinterested shareholders of the Issuer, if required by the TSXV.

SECTION 10

CONDITIONS PRECEDENT TO ISSUANCE OF OPTIONS AND SHARES

10.1 Compliance with Laws

An Option shall not be granted or exercised, and Shares shall not be issued pursuant to the exercise of any Option, unless the grant and exercise of such Option and the issuance and delivery of such Shares comply with all applicable Regulatory Rules, and such Options and Shares will be subject to all applicable trading restrictions in effect pursuant to such Regulatory Rules and the Issuer shall be entitled to legend the Option Certificates and the certificates representing such Shares accordingly.

10.2 Regulatory Approvals

In administering this Plan, the Committee will seek any Regulatory Approvals which may be required. The Committee will not permit any Options to be granted without first obtaining the necessary Regulatory Approvals unless such Options are granted conditional upon such Regulatory Approvals being obtained. The Committee will make all filings required with the Regulatory Authorities in respect of the Plan and each grant of Options hereunder. No Option granted will be exercisable or binding on the Issuer unless and until all necessary Regulatory Approvals have been obtained. The Committee shall be entitled to amend this Plan and the Options granted hereunder in order to secure any necessary Regulatory Approvals and such amendments will not require the consent of the Option Holders under section 9.2 of this Plan.

10.3 Inability to Obtain Regulatory Approvals

The Issuer’s inability to obtain Regulatory Approval from any applicable Regulatory Authority, which Regulatory Approval is deemed by the Committee to be necessary to complete the grant of Options hereunder, the exercise of those Options or the lawful issuance and sale of any Shares pursuant to such Options, shall relieve the Issuer of any liability with respect to the failure to complete such transaction.

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SECTION 11

ADJUSTMENTS AND TERMINATION

11.1 Termination of Plan

Subject to any necessary Regulatory Approvals, the Committee may terminate or suspend the Plan. Unless earlier terminated as provided in this section 11, the Plan shall terminate on, and no more Options shall be granted under the Plan after, the tenth anniversary of the date of the Exchange’s acceptance of the Plan.

11.2 No Grant During Suspension of Plan

No Option may be granted during any suspension, or after termination, of the Plan. Suspension or termination of the Plan shall not, without the consent of the Option Holder, alter or impair any rights or obligations under any Option previously granted.

11.3 Alteration in Capital Structure

If there is a material alteration in the capital structure of the Issuer and the Shares are consolidated, subdivided, converted, exchanged, reclassified or in any way substituted for, the Committee shall make such adjustments to this Plan and to the Options then outstanding under this Plan as the Committee determines to be appropriate and equitable under the circumstances, so that the proportionate interest of each Option Holder shall, to the extent practicable, be maintained as before the occurrence of such event. Such adjustments may include, without limitation:

(a) a change in the number or kind of shares of the Issuer covered by such Options; and

(b) a change in the Exercise Price payable per Share provided, however, that the aggregate Exercise Price applicable to the unexercised portion of existing Options shall not be altered, it being intended that any adjustments made with respect to such Options shall apply only to the Exercise Price per Share and the number of Shares subject thereto.

For purposes of this section 11.3, and without limitation, neither:

(c) the issuance of additional securities of the Issuer in exchange for adequate consideration (including services); nor

(d) the conversion of outstanding securities of the Issuer into Shares

shall be deemed to be material alterations of the capital structure of the Issuer.

Any adjustment made to any Options pursuant to this section 11.3 shall not be considered an amendment requiring the Option Holder’s consent for the purposes of section 9.2 of this Plan.

11.4 Triggering Events

Subject to the Issuer complying with section 11.5 and any necessary Regulatory Approvals and notwithstanding any other provisions of this Plan or any Option Certificate, the Committee may, without the consent of the Option Holder or Holders in question:

(a) cause all or a portion of any of the Options granted under the Plan to terminate upon the occurrence of a Triggering Event; or

(b) cause all or a portion of any of the Options granted under the Plan to be exchanged for incentive stock options of another corporation upon the occurrence of a Triggering Event in such ratio and at such exercise price as the Committee deems appropriate, acting reasonably.

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Such termination or exchange shall not be considered an amendment requiring the Option Holder’s consent for the purpose of section 9.2 of the Plan.

11.5 Notice of Termination by Triggering Event

In the event that the Committee wishes to cause all or a portion of any of the Options granted under this Plan to terminate on the occurrence of a Triggering Event, it must give written notice to the Option Holders in question not less than 10 days prior to the consummation of a Triggering Event so as to permit the Option Holder the opportunity to exercise the vested portion of the Options prior to such termination. Upon the giving of such notice and subject to any necessary Regulatory Approvals, all Options or portions thereof granted under the Plan which the Issuer proposes to terminate shall become immediately exercisable notwithstanding any contingent vesting provision to which such Options may have otherwise been subject, provided that TSXV approval of the same must be received in respect of Options held by Consultants engaged in investor relations activities.

11.6 Determinations to be Made By Committee

Adjustments and determinations under this section 11 shall be made by the Committee, whose decisions as to what adjustments or determination shall be made, and the extent thereof, shall be final, binding, and conclusive.

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SCHEDULE A

[Include the following TSXV hold period only if the exercise price of the stock options is based on less than Market Price or if the Option Holder is an insider or promoter of the Issuer.

Without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until •[date four months and one day after Grant Date].]

LYNDEN ENERGY CORP.

STOCK OPTION PLAN - OPTION CERTIFICATE

This Option Certificate is issued pursuant to the provisions of the Stock Option Plan (the “Plan”) of Lynden Energy Corp. (the “Issuer”) and evidences that •[Name of Option Holder] is the holder (the “Option Holder”) of an option (the “Option”) to purchase up to • common shares (the “Shares”) in the capital stock of the Issuer at a purchase price of Cdn.$• per Share (the “Exercise Price”). This Option may be exercised at any time and from time to time from and including the following Grant Date through to and including up to 4:00 p.m. local time in Vancouver, British Columbia (the “Expiry Time”) on the following Expiry Date:

(a) the Grant Date of this Option is •, 200•; and

(b) subject to sections 5.4, 6.2, 6.3, 6.4, 7.1 and 11.4 of the Plan, the Expiry Date of this Option is •, 200•.

To exercise this Option, the Option Holder must deliver to the Administrator of the Plan, prior to the Expiry Time on the Expiry Date, an Exercise Notice, in the form provided in the Plan, which is incorporated by reference herein, together with the original of this Option Certificate and a certified cheque or bank draft payable to the Issuer or its legal counsel in an amount equal to the aggregate of the Exercise Price of the Shares in respect of which this Option is being exercised.

This Option Certificate and the Option evidenced hereby is not assignable, transferable or negotiable and is subject to the detailed terms and conditions contained in the Plan. This Option Certificate is issued for convenience only and in the case of any dispute with regard to any matter in respect hereof, the provisions of the Plan and the records of the Issuer shall prevail. This Option is also subject to the terms and conditions contained in the schedules, if any, attached hereto.

[Include the following TSXV hold period only if the exercise price of the stock options is based on less than Market Price or if the Option Holder is an insider or promoter of the Issuer.

Any share certificates issued pursuant to an exercise of the Option before •[date four months and one day after Grant Date] will contain the following legend:

“Without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation, the securities represented by this certificate may not be sold, transferred, hypothecated or otherwise traded on or through the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until •[date four months and one day after Grant Date].”]

If the Option Holder is a resident or citizen of the United States of America at the time of the exercise of the Option, the certificate(s) representing the Shares will be endorsed with the following or a similar legend:

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, of the United States of America (the “Act”) or the securities laws of any state (“State”) of the United States of America and may not be sold, transferred, pledged, hypothecated or distributed, directly or indirectly, to a U.S. person (as defined in Regulation S adopted by the U.S. Securities and Exchange Commission under the Act) or within the United States unless such securities are (i) registered under the Act and any applicable State securities act (a “State Act”), or (ii) exempt from registration under the Act and any applicable State Act and the Issuer has received an opinion of counsel to such effect reasonably satisfactory to it, or (iii) sold in accordance with Regulation S and the Issuer has received an opinion of counsel to such effect reasonably satisfactory to it.”

Dated as of                                                          .

LYNDEN ENERGY CORP.

by its authorized signatory:

The Option Holder acknowledges receipt of a copy of the Plan and represents to the Issuer that the Option Holder is familiar with the terms and conditions of the Plan, and hereby accepts this Option subject to all of the terms and conditions of the Plan. The Option Holder agrees to execute, deliver, file and otherwise assist the Issuer in filing any report, undertaking or document with respect to the awarding of the Option and exercise of the Option, as may be required by the Regulatory Authorities. The Option Holder further acknowledges that if the Plan has not been approved by the shareholders of the Issuer on the Grant Date, this Option is not exercisable until such approval has been obtained. This Option is not exercisable until the following has been completed and signed by the Option Holder and a copy received by the Issuer.

Signature of Option Holder:

	Date signed:
Signature
Print Name
Address

- 2 -

OPTION CERTIFICATE – SCHEDULE

[Complete the following additional terms and any other special terms, if applicable, or remove the inapplicable terms or this schedule entirely.]

The additional terms and conditions attached to the Option represented by this Option Certificate are as follows:

1. The Option is exercisable only to the extent that it has vested. The Option will vest in accordance with the following schedule:

(a) • Shares (•%) will vest and be exercisable as of the Grant Date;

(b) • additional Shares (•%) will vest and be exercisable as of • [date];

(c) • additional Shares (•%) will vest and be exercisable as of • [date];

(d) • additional Shares (•%) will vest and be exercisable as of • [date];

2. Upon the Option Holder ceasing to hold a position with the Issuer, other than as a result of the events set out in paragraphs 5.4(a) or 5.4(b) of the Plan, the Expiry Date of the Option shall be • [Insert date desired that is longer or shorter than the standard 30 days as set out in the Plan] following the date the Option Holder ceases to hold such position.

SCHEDULE B

LYNDEN ENERGY CORP.

STOCK OPTION PLAN

NOTICE OF EXERCISE OF OPTION

TO: The Administrator, Stock Option Plan

The undersigned hereby irrevocably gives notice, pursuant to the Stock Option Plan (the “Plan”) of Lynden Energy Corp. (the “Issuer”), of the exercise of the Option to acquire and hereby subscribes for (cross out inapplicable item):

(a) all of the Shares; or

(b)                     of the Shares;

which are the subject of the Option Certificate attached hereto (attach your original Option Certificate).

The undersigned tenders herewith a certified cheque or bank draft (circle one) payable to the Issuer in an amount equal to the aggregate Exercise Price of the aforesaid Shares and directs the Issuer to issue the certificate evidencing said Shares in the name of the undersigned to be mailed to the undersigned at the following address (provide full complete address):

The undersigned acknowledges the Option is not validly exercised unless this Notice is completed in strict compliance with this form and delivered to the Issuer at its mailing address as shown under the Issuer’s profile on the SEDAR website (www.SEDAR.com), together with the required payment prior to 4:00 p.m. local time in Vancouver, BC on the Expiry Date of the Option.

DATED the              day of                     , 20     .

Signature of Option Holder

EX-10.1

Exhibit 10.1

$50,000,000

CREDIT AGREEMENT

dated

August 29, 2011

BETWEEN

LYNDEN USA INC.,

as Borrower

AND

TEXAS CAPITAL BANK, N.A.,

as Administrative Agent

AND

The Lenders Party Hereto

Reducing Revolving Credit Facility

Standby Letter of Credit Facility

TABLE OF CONTENTS

ARTICLE I DEFINITIONS			1
	1.1.	Definitions	1
	1.2.	Accounting Terms and Determinations; Changes in Accounting	21
	1.3.	References	22
	1.4.	Amendment of Defined Instruments	23
	1.5.	Joint Preparation; Construction of Indemnities and Releases	23
	1.6.	Time References	23
	1.7.	Types of Loans and Advances	23
ARTICLE II TERMS OF FACILITIES			23
	2.1.	Reducing Revolving Line of Credit and Letter of Credit Facilities	23
	2.2.	Method of Borrowing and Obtaining Letters of Credit	26
	2.3.	Notes	28
	2.4.	Certain Payments and Prepayments of Principal	28
	2.5.	Interest Rates; Payment of Interest	29
	2.6.	Unused Available Commitment Fees; Engineering Fees; Facility Fees; Letter of Credit Fees; Authorized Payments by Lender; Processing Fee	30
	2.7.	Termination of Credit Facilities; Maturity of Notes; Right of Borrower to Terminate Credit Facilities	31
	2.8.	Determination of Borrowing Base; Automatic Reductions in Borrowing Base; Borrowing Base Deficiency; Notice of Redeterminations; Requests for Reductions in Borrowing Base	32
	2.9.	Interest Elections for Conversions and Continuations	33
	2.10.	Request for Extension of Maturity	34
ARTICLE III GENERAL PROVISIONS			35
	3.1.	General Provisions as to Payments and Loans	35
	3.2.	Telephonic Notices; Notification to the Lenders of Advances, Interest Rates and Commitment Reductions; Non-Receipt of Funds by the Administrative Agent; Lending Installations	35
	3.3.	Default Interest	36
	3.4.	Prepayments Permitted	36
	3.5.	Limitation Period	37
	3.6.	Illegality	37
	3.7.	Ratable Benefit of the Lenders; Sharing of Burdens	37
	3.8.	LATE CHARGE	38
ARTICLE IV COLLATERAL			38
	4.1.	Security	38
ARTICLE V CONDITIONS PRECEDENT TO ADVANCES AND LETTERS OF CREDIT			38
	5.1.	All Advances and Letters of Credit	39
	5.2.	Initial Advance	39
	5.3.	Conditions Precedent for the Benefit of the Lenders	41

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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER			41
	6.1.	Existence and Power	41
	6.2.	Authorization; Contravention	42
	6.3.	Binding Effect	42
	6.4.	Subsidiaries; Ownership	42
	6.5.	Disclosure	43
	6.6.	Financial Information	43
	6.7.	Litigation	43
	6.8.	ERISA Plans	43
	6.9.	Taxes and Filing of Tax Returns	43
	6.10.	Title to Properties; Liens; Environmental Liability	44
	6.11.	Business Compliance	45
	6.12.	Licenses, Permits, Etc	45
	6.13.	Compliance with Laws	45
	6.14.	Governmental Consent	46
	6.15.	Investment Company Act	46
	6.16.	State Utility	46
	6.17.	Refunds; Certain Contracts	46
	6.18.	No Default	47
	6.19.	Anti-Terrorism Laws	47
	6.20.	Existing Indebtedness	47
ARTICLE VII COVENANTS			47
	7.1.	Use of Proceeds and Letters of Credit	48
	7.2.	Financial Statements; Reserve and Other Reports; Certain Required Notices from Borrower; Additional Information	48
	7.3.	Inspection of Properties and Books	51
	7.4.	Maintenance of Security; Insurance; Authorization to File Financing Statements; Operating Accounts; Transfer Orders	51
	7.5.	Payment of Taxes and Claims	52
	7.6.	Payment of Debt; Additional Debt; Payment of Accounts	53
	7.7.	Negative Pledge	54
	7.8.	Loans and Advances to Others; Investments; Restricted Payments; Subsidiaries	54
	7.9.	Consolidation, Merger, Maintenance, Change of Control; Disposition of Property; Restrictive Agreements; Hedging Agreements; Modification of Organizational Documents; Issuance of Equity Interests	55
	7.10.	Primary Business; Continuous Operations; Location of Borrower’s Office; Ownership of Assets	58
	7.11.	Operation of Properties and Equipment; Compliance with and Maintenance of Contracts; Duties as Nonoperator	58
	7.12.	Transactions with Affiliates	60
	7.13.	Plans	60
	7.14.	Compliance with Laws and Documents	61

ii

	7.15.	Certain Financial Covenants	61
	7.16.	Tax Shelter	62
	7.17.	Additional Documents; Quantity of Documents; Title Data; Additional Information	62
	7.18.	ENVIRONMENTAL INDEMNIFICATION	63
	7.19.	Exceptions to Covenants	63
	7.20.	Anti-Terrorism Laws	63
ARTICLE VIII DEFAULTS; REMEDIES			64
	8.1.	Events of Default; Acceleration of Maturity	64
	8.2.	Suits for Enforcement	67
	8.3.	Remedies Cumulative	67
	8.4.	Remedies Not Waived	67
ARTICLE IX MISCELLANEOUS			68
	9.1.	Amendments and Waivers	68
	9.2.	Highest Lawful Interest Rate	68
	9.3.	INDEMNITY	69
	9.4.	Expenses	70
	9.5.	Taxes	71
	9.6.	Survival	71
	9.7.	Applicable Law; Venue	71
	9.8.	WAIVER OF JURY TRIAL AND EXEMPLARY DAMAGES	71
	9.9.	Waiver of Deficiency Statute; Other Waivers	72
	9.10.	Headings	72
	9.11.	Counterparts	72
	9.12.	Invalid Provisions, Severability	72
	9.13.	Communications Via Internet	73
	9.14.	USA Patriot Act Notice	73
	9.15.	EXCULPATION PROVISIONS	73
	9.16.	Advice to Seek Legal and Accounting Advice	73
	9.17.	Increased Cost and Reduced Return	73
	9.18.	Taxes	75
ARTICLE X ADMINISTRATIVE AGENT			76
	10.1.	Appointment of Administrative Agent	76
	10.2.	Powers of the Administrative Agent	77
	10.3.	General Immunity	77
	10.4.	No Responsibility for Loans, Recitals, etc	77
	10.5.	Action on Instructions of Lenders	77
	10.6.	Employment of Administrative Agents and Counsel	77
	10.7.	Reliance on Documents, Counsel	78
	10.8.	Reimbursement and Indemnification of Administrative Agent	78
	10.9.	Rights as a Lender	78
	10.10.	Lender Credit Decision	79
	10.11.	Successor Administrative Agent	79
	10.12.	Applicable Parties	79

iii

ARTICLE XI SETOFF; RATABLE TREATMENTS			80
	11.1.	Setoff	80
	11.2.	Ratable Treatments; Adjustments	80
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS			81
	12.1.	Successors and Assigns	81
	12.2.	Participations; Voting Rights; Setoffs by Participants	81
	12.3.	Assignments; Effective Date	82
	12.4.	Dissemination of Information	83
	12.5.	Tax Treatment	83
ARTICLE XIII NOTICES			83
	13.1.	Notices	83
	13.2.	Change of Address	84
ARTICLE XIV ENTIRE AGREEMENT
FORM OF PROMISSORY NOTE			1
FORM OF NOTICE OF BORROWING			1
FORM OF COMPLIANCE CERTIFICATE			1
SCHEDULE 6.4.1 SUBSIDIARIES			1
EXHIBIT 6.7 LITIGATION			1

iv

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is entered into as of August 29, 2011, by and between Lynden USA Inc., a Utah corporation; the lenders from time to time parties hereto; and Texas Capital Bank, N.A., a national banking association, as contractual representative of such lenders. Certain terms used herein are defined in Section 1.1.

RECITALS:

A. The Borrower desires to borrow funds from the Lenders; and

B. The Borrower desires to acquire Oil and Gas Properties and to provide for additional credit facilities;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1. Definitions. The following terms, as used herein, have the following meanings:

“Acceptable Commodity Hedging Transaction” means:

(a) Commodity Hedging Transactions meeting each of the following criteria unless a variation therefrom is consented to in writing by the Administrative Agent:

(i) The quantity of gaseous and liquid hydrocarbons owned by the Borrower subject to Commodity Hedging Transactions (other than floors covered by clause (b) below) at the time of entering into such Commodity Hedging Transactions, shall not, without the prior written approval of the Administrative Agent, be greater than (x) for gaseous hydrocarbons, 75% of the monthly Projected Production of gaseous hydrocarbons from the Oil and Gas Properties of the Borrower used in determining the Borrowing Base and not the subject of Commodity Hedging Transactions under clause (b) below and (y) for liquid hydrocarbons, 75% of the monthly Projected Production of liquid hydrocarbons from the Oil and Gas Properties of the Borrower used in determining the Borrowing Base and not the subject of Commodity Hedging Transactions under clause (b) below; in either case, as forecast in the most recent engineering evaluation delivered to the Borrower by the Administrative Agent;

(ii) The “strike prices” under any Commodity Hedging Transactions, at the time of entering into such Commodity Hedging Transactions, shall not be less than the lowest prices utilized in the most recent base case evaluation of the Oil and Gas Properties used by the Administrative Agent in determining the Borrowing Base, as reported to the Borrower, except that under certain downside conditions such lower strike price as the Administrative Agent may approve in writing following a written request by the Borrower may be used;

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(iii) The counterparties under the Commodity Hedging Transactions must be Approved Swap Counterparties;

(iv) The Administrative Agent shall have received for the benefit of the Lenders first and prior perfected security interests pursuant to security agreements in form and substance reasonably satisfactory to the Administrative Agent in the Borrower’s right, title and interest in and to its Commodity Hedging Transactions;

(v) The Commodity Hedging Transaction is a standard commodity hedging arrangement entered into in the ordinary course of business for the principal purpose of protecting against fluctuations in commodity prices or commodity basis risk and not for purpose of speculation;

(vi) The Commodity Hedging Transaction does not involve the sale of any calls other than calls sold in order to complete a permitted collar being executed; provided that, (x) such call shall cover only Projected Production reflected at the time such call is sold, (y) both such call and the corresponding put purchase to complete the collar shall cover the same period and the same volume of Projected Production, and (z) such call is otherwise permitted under the terms of this definition;

(vii) The Commodity Hedging Transaction does not involve the purchase of any calls except calls purchased at the time a collar is put in place to serve as a so-called “blowout preventer”, which purchased calls shall cover the same period and the same volume of Projected Production as covered by such collar;

(viii) The Commodity Hedging Transaction is unsecured except as specifically permitted by the Loan Documents;

(ix) The Commodity Hedging Transaction does not involve the sale of any puts;

(x) The Commodity Hedging Transaction does not involve “put spreads” or “call spreads” as such terms are commonly understood by swap dealers;

(xi) The Administrative Agent has not notified the Borrower prior to the Borrower’s entry into the Commodity Hedging Transaction that, in the opinion of the Administrative Agent, the particular type of Commodity Hedging Transaction is non-standard; and

(xii) The duration of the Commodity Hedging Transaction does not exceed forty-eight (48) months.

As used in this definition, the term “Projected Production” means the projected production of oil or gas (measured by volume unit or BTU equivalent, not sales price), as applicable, for the term of the contracts or a particular month, as applicable, from properties and interests owned by the Borrower which are Collateral and which have attributable to them oil or gas proven reserves which are categorized as “proved developed producing” as reflected in the engineering review prepared by the Administrative Agent in connection with the most recent determination of the Borrowing Base hereunder, after deducting projected production from any properties or interests sold or under contract for sale that had been included in such report.

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(b) Commodity Hedging Transactions in the form of minimum price guarantees or “floors”, limited to 100% of the monthly Projected Production from the Borrower’s Oil and Gas Properties not subject to Commodity Hedging Transactions under clause (a) above and otherwise satisfying the requirements of subclauses (ii) through (xi) of clause (a) of this definition.

“Acceptable Hedging Transactions” means Acceptable Commodity Hedging Transactions and Acceptable Rate Management Transactions.

“Acceptable Rate Management Transaction” means any Rate Management Transaction meeting all of the following criteria:

(i) The terms thereof are reasonably satisfactory to the Administrative Agent; and

(ii) The Person with whom such Transaction is effected is reasonably satisfactory to the Administrative Agent.

“Adjusted LIBOR Rate” means, with respect to any Eurodollar Advance for any Interest Period, an interest rate per annum equal to the greater of (a) (i) the LIBOR Rate for such Interest Period multiplied by the Statutory Reserve Rate plus (ii) the Applicable Margin in effect from time to time, or (b) four and one-half percent (4.50%); but in no event exceeding the Highest Lawful Rate.

“Administrative Agent” means Texas Capital Bank, N.A., in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Administrative Agent appointed pursuant to Article X.

“Advance” means Loans of the Lenders of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.

“Affected Loans” has the meaning assigned such term in Section 3.6.

“Affiliate” means, with respect to a Person, (a) any Person owning, Controlling or holding with power to vote 10% or more of the outstanding voting interests of the referenced Person, (b) any Person 10% or more of whose outstanding voting interests are directly or indirectly owned, Controlled or held with power to vote by the referenced Person, (c) any Person directly or indirectly Controlling, Controlled by or under common Control with the referenced Person, (d) any relative within the third degree of kindred of the referenced Person, or (e) any officer, director, limited liability company manager, trustee, beneficiary, employee or general partner of the referenced Person or of any Person referred to in clauses (a), (b), (c) or (d) of this definition. The term “Affiliate” shall include Affiliates of Affiliates (and so on).

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“Aggregate Available Commitment” means the aggregate of the Available Commitments of all the Lenders hereunder, as decreased or increased from time to time pursuant to the terms hereof.

“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders hereunder, as reduced from time to time pursuant to the terms hereof.

“Agreement” or “Credit Agreement” means this Credit Agreement, as the same may hereafter be modified or amended from time to time.

“Anti-Terrorism Laws” mean any Laws relating to terrorism or money laundering, including Executive Order No. 13224 and the USA Patriot Act.

“Applicable Margin” means, at any time, with respect to each FLR Advance and Eurodollar Advance, a percentage rate per annum determined by reference to the Usage in accordance with the table below:

Usage	Applicable Margin for FLR Advances			Applicable Margin for Eurodollar Advance
>75%		2.50	%		3.50	%
> 40% but <75%		2.25	%		3.25	%
<40%		2.00	%		3.00	%

“Approved Swap Counterparties” means swap counterparties in the business of providing Hedging Transactions that are approved by the Administrative Agent.

“Available Commitment” means, with respect to any Lender, at any time, an amount equal to such Lender’s Percentage Share of the Borrowing Base as in effect at such time.

“Benefitted Lender” has the meaning stated in Section 11.2.3 hereof.

“Board of Governors” means the Board of Governors of the Federal Reserve System.

“Borrower” means Lynden USA Inc., a Utah corporation.

“Borrower Requested Determination” has the meaning given such term in Section 2.8.1.

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent, and approved by the Lenders, as the Borrowing Base in accordance with Section 2.8.1, as such Borrowing Base is reduced in accordance with Section 2.8.2. The Borrowing Base under Section 2.8.1 is deemed to be $9,500,000 as of the Closing Date.

“Borrowing Base Deficiency” means, as of the date of determination of a new Borrowing Base under Section 2.8.1, the amount, if any, by which the sum of the outstanding principal balance of the Notes of all Lenders plus the Letter of Credit Exposure exceeds the Borrowing Base.

4

“Borrowing Date” means a date on which an Advance is made or is to be made to the Borrower hereunder.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Dallas, Texas, are authorized or required by Law to remain closed; and if such day relates to an Advance or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect to any such Advance or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which dealings in dollar deposits are carried out in the London interbank market.

“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with generally accepted accounting principles or IFRS, whichever is applicable.

“Capitalized Lease Obligations” of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with generally accepted accounting principles or IFRS, whichever is applicable.

“Change of Control Event” means (a) the failure of the Parent to own the entirety of every class of Equity Interests of the Borrower and to Control the Borrower, or (b) the failure of both Colin Watt and Richard Andrews to continue to serve as officers or directors of the Borrower and the Parent and be actively involved in the day-to-day management of the Borrower’s and the Parent’s Oil and Gas Business.

“Closing” means the consummation of the transactions contemplated herein.

“Closing Date” means the date of this Agreement.

“Collateral” means the Property pledged as security for the Notes and the other Obligations.

“Commitment” means, for each Lender, the lesser of (a) the amount set forth opposite its signature below (or in any amendment hereto) or as set forth in (or reduced or increased by) any Notice of Assignment relating to any assignment that has become effective pursuant to Section 12.3.2, as such amount may be modified from time to time pursuant to the terms of this Agreement or (b) the face amount of the Note held (or to be held pursuant to a Notice of Assignment) by such Lender; or if the context requires, means, for such Lender, the commitment of each Lender to make Loans and participate in the issuance by the Administrative Agent of letters of credit hereunder or extensions or renewals of Letters of Credit. The aggregate amount of the Loans outstanding under any Lender’s Note plus such Lender’s Percentage Share of the Letter of Credit Exposure shall not exceed at any time such Lender’s Available Commitment.

5

“Commodity Hedging Transactions” means any swap transaction, cap, floor, collar, exchange transaction, forward transaction, or other exchange or protection transaction relating to hydrocarbons or any option with respect to any such transaction, including derivative financial instruments.

“Compliance Certificate” means a certificate, substantially in the form attached hereto entitled “Form of Compliance Certificate”, executed by a Responsible Representative and furnished to the Administrative Agent from time to time in accordance with Section 7.2.1.

“Contingent Obligation” shall mean, as to any Person, without duplication, any obligation of such Person guaranteeing or in effect guaranteeing any Debt, leases, dividends, or other obligations of any other Person (for purposes of this definition, a “primary obligation”) in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, regardless of whether such obligation is contingent, (a) to purchase any primary obligation or any Property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any primary obligation, or (ii) to maintain working or equity capital of any other Person in respect of any primary obligation, or otherwise to maintain the net worth or solvency of any other Person, (c) to purchase Property, securities or services primarily for the purpose of assuring the owner of any primary obligation of the ability of the Person primarily liable for such primary obligation to make payment thereof, or (d) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof, with the amount of any Contingent Obligation being deemed to be equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith.

“Control,” “Controlling” and “Controlled by” mean the ability (directly or indirectly through one or more intermediaries) to direct or cause the direction of the management or affairs of a Person, whether through the ownership of voting interests, by contract or otherwise.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any of its Subsidiaries, are treated as a single employer under Section 414(b) or (c) of the Internal Revenue Code of 1986, as amended.

“CT”, with respect to any stated time of day, means such time of day generally in effect in the Central Time Zone as in effect in the State of Texas.

“Debt” of any Person means at any date, without duplication:

(i) all obligations of such Person for money borrowed, including (a) the obligations of such Person for money borrowed by a partnership of which such Person is a general partner, (b) obligations, whether or not assumed, which are secured in whole or in part by the Property of such Person or payable out of the proceeds or production from Property of such Person, and (c) any obligations of such Person in respect of letters of credit and repurchase agreements;

6

(ii) all obligations of such Person evidenced by notes, debentures, bonds or similar instruments;

(iii) all obligations of such Person to pay the deferred purchase price of Property or services (except trade accounts arising in the ordinary course of business if interest is not paid or accrued thereon);

(iv) all Capitalized Lease Obligations of such Person;

(v) all liabilities which in accordance with applicable accounting principles would be included in determining total liabilities as shown on the liability side of a balance sheet;

(vi) all obligations of such Person under Hedging Agreements and Hedging Transactions;

(vii) all reimbursement obligations with respect to letters of credit;

(viii) all Guarantees by such Person;

(ix) all Off-Balance Sheet Debt; and

(x) all Disqualified Stock.

“Default” means the occurrence of an Event of Default or any event which with notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Rate” means a per annum interest rate equal to five percent (5.00%) plus the Floating Rate from time to time in effect, but in no event exceeding the Highest Lawful Rate.

“Discretionary Determinations” has the meaning given such term in Section 2.8.1.

“Disqualified Stock” means any preferred stock or other Securities issued by the Borrower or any of its Subsidiaries that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the occurrence or happening of any event or circumstance, (a) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the Final Maturity Date, or (b) requires the declaration or payment of any dividend or other distribution on or prior to the date that is 91 days after the Final Maturity Date, in each case unless the consideration paid and payable upon such maturity or redemption (in the case of clause (a) preceding) or as a result of such dividend or other distribution (in the case of clause (b) preceding) is payable and paid solely in Securities of the issuer which is not Disqualified Stock.

“Dollars” and “$” means dollars in lawful currency of the United States of America.

“Environmental Complaint” means any written or oral complaint, order, directive, claim, citation, notice of environmental report or investigation, or other notice by any

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Governmental Authority or any other Person with respect to (a) air emissions, (b) spills, releases, or discharges to soils, any improvements located thereon, surface water, groundwater, or the sewer, septic, waste treatment, storage, or disposal systems servicing any Property of the Borrower or any Guarantor, (c) solid or liquid waste disposal, (d) the use, generation, storage, transportation, or disposal of any Hazardous Substance, or (e) other environmental, health, or safety matters affecting any Property of the Borrower or any Guarantor or the business conducted thereon.

“Environmental Law” means (a) the following federal laws as they may be cited, referenced, and amended from time to time: the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Endangered Species Act, the Resource Conservation and Recovery Act, the Hazardous Materials Transportation Act, the Superfund Amendments and Reauthorization Act, and the Toxic Substances Control Act; (b) any and all equivalent environmental statutes of any state in which Property of the Borrower or any Guarantor is situated, as they may be cited, referenced and amended from time to time; (c) any rules or regulations promulgated under or adopted pursuant to the above federal and state Laws; and (d) any other equivalent federal, state, or local statute or any requirement, rule, regulation, code, ordinance, or order adopted pursuant thereto, including those relating to the generation, transportation, treatment, storage, recycling, disposal, handling, or Release of Hazardous Substances.

“Environmental Liability” means any claim, demand, obligation, cause of action, accusation, allegation, order, violation, damage, injury, judgment, penalty or fine, cost of enforcement, cost of remedial action or any other cost or expense whatsoever, including reasonable attorneys’ fees and disbursements, resulting from the violation or alleged violation of any Environmental Law or the imposition of any Environmental Lien.

“Environmental Lien” means a Lien in favor of a Tribunal or other Person (i) for any liability under an Environmental Law or (ii) for damages arising from or costs incurred by such Tribunal or other Person in response to a release or threatened release of hazardous or toxic waste, substance or constituent into the environment.

“Equity Interest” means, with respect to any Person, an ownership and other equity interest, including Securities, in such Person and rights to convert into an ownership or other equity interest, including Securities, in such Person or to otherwise acquire an ownership or other equity interest, including Securities, in such Person.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, together with all presently effective and future regulations issued pursuant thereto.

“ERISA Affiliate” the Borrower, all of its Subsidiaries and any other member of the Controlled Group.

“Eurodollar”, when used in reference to any Loan or Advance, refers to whether such Loan, or the Loans comprising such Advance, are bearing interest at a rate determined by reference to the Adjusted LIBOR Rate.

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“Event of Default” has the meaning stated in Section 8.1 hereof.

“Executive Order No. 13224” shall mean Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Federal Funds Rate” means, for any day, an interest rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10 a.m. (CT time) on such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative Agent in its sole discretion.

“Final Maturity Date” or “Final Maturity” means August 29, 2014, or such earlier date on which the payment of the Notes is accelerated.

“Floating Rate” means for any day a per annum interest rate equal to the higher of (i) sum of the Applicable Margin plus the WSJ Rate, each from time to time in effect or (ii) four and one-half percent (4.50%); but in no event exceeding the Highest Lawful Rate.

“FLR”, when used in reference to any Loan or Advance, refers to whether such Loan, or the Loans comprising such Advance, are bearing interest at a rate determined by reference to the Floating Rate.

“Funded Debt” of any Person means at any date, Debt referred to in clauses (i) through (vii) of the definition of “Debt” and all Guarantees by such Person of Funded Debt of another Person.

“Governmental Authority” means any nation, country, commonwealth, territory, government, state, county, parish, municipality, or other political subdivision and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government.

“Guarantee” by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing or in effect guaranteeing any Debt, leases, dividends or other obligations of any other Person (for purposes of this definition, a “primary obligation”) and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) any primary obligation or any Property constituting direct or indirect security therefor (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, to make reimbursement in connection with any letter of credit or to maintain financial statement conditions, by comfort letter or other similar undertaking of support or otherwise) or (ii) entered into for the purpose of assuring in any other manner the obligee of any primary obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part) with the amount of any Guarantee being deemed to be equal to the stated or determinable amount of the primary

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obligation in respect of which such Guarantee is made or, if not stated or determinable, the maximum primary obligation which could reasonably be anticipated to arise in respect thereof. The term Guarantee includes the pledging or other encumbrance of assets by a Person to secure the obligations of another Person and restrictions or limitations on a Person or its assets agreed to in connection with the obligations of another Person, but does not include endorsements for collection or deposit in the ordinary course of business; and “Guaranteed” by a Person shall mean the act or condition of providing a Guarantee by such Person or permitting a Guarantee of such Person to exist.

“Guarantor” means at any time any Person who has executed or does execute a Guaranty, which is in effect at such time.

“Guaranty” means the guaranty of a Person guarantying all or a portion of the Obligations of the Borrower, in form and substance satisfactory to the Administrative Agent and such Person.

“Hazardous Substance” means flammables, explosives, radioactive materials, hazardous wastes, asbestos, or any material containing asbestos, polychlorinated biphenyls (PCBs), toxic substances or related materials, petroleum, petroleum products, associated oil or natural gas exploration, production, and development wastes, or any substances defined as “hazardous substances,” “hazardous materials,” “hazardous wastes,” or “toxic substances” under the Comprehensive Environmental Response, Compensation and Liability Act, as amended, the Superfund Amendments and Reauthorization Act, as amended, the Hazardous Materials Transportation Act, as amended, the Resource Conservation and Recovery Act, as amended, the Toxic Substances Control Act, as amended, or any other Environmental Laws.

“Hedge Termination Value” means, in respect of any one or more Hedging Transactions, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Transactions, (a) for any date on or after the date such Hedging Transactions have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a) preceding, the amount(s) determined as the mark-to-market value(s) for such Hedging Transactions, as determined by the counterparties to such Hedging Transactions.

“Hedging Agreement” means any International Swap Dealers Association, Inc. Master Agreement or other agreement and all schedules and exhibits attached thereto and incorporated therein that set forth the general terms upon which a Person may enter into one or more Hedging Transactions.

“Hedging Transaction” means a Commodity Hedging Transaction or a Rate Management Transaction or any other transaction with respect to any swap, forward, future or derivative transaction or option or similar transaction, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions.

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“Highest Lawful Rate” means the maximum non-usurious interest rate, if any (or, if the context so requires, an amount calculated at such rate), that at any time or from time to time may be contracted for, taken, reserved, charged, or received by the Lenders under applicable Laws of the State of Texas or the United States of America, whichever authorizes the greater rate, as such Laws are presently in effect or, to the extent allowed by applicable Law, as such Laws may hereafter be in effect and which allow a higher maximum non-usurious interest rate than such Laws now allow. To the extent the Laws of the State of Texas are applicable for the purpose of determining the “Highest Lawful Rate”, such term shall mean the “weekly ceiling” from time to time in effect as referred to and defined in Chapter 303 of the Finance Code of Texas, as amended. The determination of the Highest Lawful Rate shall, to the extent required by applicable Law, take into account as interest paid, taken, received, charged, reserved or contracted for any and all relevant payments or charges under the Loan Documents.

“IFRS” means the International Financial Reporting Standards adopted by the International Accounting Standards Board or appropriate boards or committees thereof.

“Indemnified Party” means (i) the Administrative Agent (and its assigns), each Lender (and their respective assigns) and each of their respective shareholders, officers, directors, employees, agents, attorneys-in-fact, attorneys and affiliates and (ii) each trustee or collateral agent acting for the benefit of TCB, the Administrative Agent, the Lenders or one or more Approved Swap Counterparties under any Security Document.

“Insolvency Proceeding” of any Person means any application (whether voluntary or instituted by another Person) for or the consent to the appointment of a receiver, trustee, conservator, custodian, or liquidator of such Person or of all or a substantial part of the Property of such Person, or the filing of a petition (whether voluntary or instituted by another Person) commencing a case under Title 11 of the United States Code, seeking liquidation, reorganization, or rearrangement or taking advantage of any bankruptcy, insolvency, debtor’s relief, or other similar Law of the United States, the State of Texas, or any other jurisdiction.

“Intercreditor Agreement” means each Intercreditor Agreement among the Borrower, one or more Approved Swap Counterparties and Texas Capital Bank, N.A., as Administrative Agent, and as contractual collateral representative for itself, the Lenders and the Approved Swap Counterparties, whether executed contemporaneously with this Agreement or hereafter, as the same may be amended from time to time.

“Interest Election Request” means a request by the Borrower to convert or continue an Advance in accordance with Section 2.9.

“Interest Payment Date” means (a) with respect to any FLR Loan, the first day of each month commencing with September 1, 2011, and upon maturity of the Notes (whether stated or upon acceleration) and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Advance of which such Loan is a part; provided that with respect to any Eurodollar Loan having an Interest Period of more than three months’ duration (if permitted from time to time hereunder), “Interest Payment Date” shall mean (i) each date that occurs at intervals of three months’ duration after the first day of the Interest Period applicable to the Advance of which such Loan is a part and (ii) the last day of such Interest Period.

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“Interest Period” means with respect to any Eurodollar Advance, the period commencing on the date of such Advance and ending on the numerically corresponding day in the calendar month that is one, two or three months thereafter, as the Borrower may elect; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period pertaining to a Eurodollar Advance that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of an Advance initially shall be the date on which such Advance is made and thereafter shall be the effective date of the most recent conversion or continuation of such Advance.

“Investment” means, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person, the contribution of capital to any other Person, or any agreement to make any such acquisition (including, without limitation, any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such short sale) or capital contribution; (b) the making of any deposit with, or advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of any other Debt or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding ninety (90) days representing the purchase price of inventory, goods or services sold or provided by such Person in the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions) of Property of another Person that constitutes a business unit or (d) the entering into of any Guarantee of, or other Contingent Obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person.

“Law” mean at any time with respect to any Person or its Property, any statute, law, executive order, treaty, ordinance, order, writ, injunction, judgment, ruling, decree, regulation, or determination of an arbitrator, court or other Governmental Authority, existing at such time which are applicable to or binding upon such Person or such Property or to which such Person or such Property is subject.

“Lenders” means the financial institution or institutions listed on the signature pages of this Agreement (or any amendment hereto) and their respective successors and assigns.

“Lending Installation” means, with respect to a Lender or the Administrative Agent, the office, branch, subsidiary or affiliate of such Lender or the Administrative Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender or the Administrative Agent pursuant to the provisions hereof.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

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“Letter of Credit Application” shall mean the standard letter of credit application employed by the Administrative Agent from time to time in connection with letters of credit, completed by the Borrower as the “applicant” thereunder.

“Letter of Credit Exposure” shall mean, at any time, the aggregate maximum amount available to be drawn under outstanding Letters of Credit at such time plus the amount of the Letter of Credit Payments.

“Letter of Credit Payment” means the amount advanced by the Administrative Agent to the beneficiary of a Letter of Credit which is not evidenced by the Notes and for which the Administrative Agent and the Lenders remain unreimbursed by the Borrower.

“Letter of Credit Reimbursement Obligation” means the obligation of the Borrower to pay to the Administrative Agent, or reimburse the Administrative Agent for the benefit of the Lenders for, any amounts payable, paid, or incurred by the Administrative Agent with respect to Letters of Credit.

“LIBOR Rate” means, with respect to any Eurodollar Advance for any Interest Period, the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the “LIBOR Rate” with respect to such Eurodollar Advance for such Interest Period shall be determined by Administrative Agent by reference to such other comparable publicly available service for displaying the offered rate for dollar deposits in the London interbank market as may be selected by the Administrative Agent and, in the absence of availability, such other method to determine such Eurodollar rate as may be selected by the Administrative Agent in its sole discretion.

“Lien” means, as to any Property of any Person, (a) any mortgage, deed of trust, lien, pledge, hypothecation, or security interest in, on or of such Property, or any other charge or encumbrance on any such asset to secure Debt or liabilities, but excluding any right to netting or setoff, (b) the interest of a vendor under any conditional sale agreement or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such Property, (c) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities and (d) the signing or filing of a financing statement which names the Person as debtor, or the signing of any security agreement authorizing any other Person as the secured party thereunder to file any financing statement which names such Person as debtor.

“Limitation Period” means any period while any amount remains owing on the Notes that interest on such amount, calculated at the applicable interest rate (plus any fees or other sums payable to the Administrative Agent or any Lender under any Loan Document and deemed to be interest under applicable Law) would exceed the amount of interest which would accrue at the Highest Lawful Rate.

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“Loan” means, with respect to a Lender, that portion of any Advance made by such Lender.

“Loan Documents” shall mean this Agreement, the Notes, the Intercreditor Agreement (if any), the Letter of Credit Applications, the Security Documents, and all other documents and instruments now or hereafter delivered pursuant to the terms of or in connection with this Agreement, the Notes, the Letter of Credit Applications, or the Security Documents, and all renewals and extensions of, amendments and supplements to, and restatements of, any or all of the foregoing from time to time in effect (exclusive of term sheets and commitment letters).

“Loan Party” means each of the Borrower and the Guarantors.

“Margin Regulations” means Regulations T, U and X of the Board of Governors, as in effect from time to time.

“Material Adverse Effect” shall mean (i) for any Loan Party, any adverse effect on the business, operations, properties, results of operations or condition (financial or otherwise) of such Loan Party, (ii) any adverse effect upon the Collateral or (iii) any adverse effect on the priority or enforceability of the Liens securing the Notes; if, with respect to any of the circumstances described in clauses (i) and (ii) preceding, the adverse effect could reasonably be anticipated to involve damage, loss or Debt of $200,000 or more.

“Material Agreement” means, with respect to any Person, any written or oral agreement, contract, commitment, or understanding to which such Person is a party, by which such Person is directly or indirectly bound, or to which any Property of such Person may be subject, which is not cancelable by such Person upon notice of 90 days or less without (i) liability for further payment in excess of $200,000 or (ii) forfeiture of Property having an aggregate value in excess of $200,000.

“Material Debt” means, as to any Person, Debt (other than, with respect to the Borrower, Debt arising hereunder) of such Person in the principal amount aggregating in excess of $200,000. For purposes of determining Material Debt, the “principal amount” of the obligations of such Person in respect of any Hedging Transaction at any time shall be the Hedge Termination Value.

“Mortgages” mean deeds of trust, mortgages, assignments of production, security agreements, collateral mortgages, and acts of pledge in form and substance reasonably acceptable to the Administrative Agent, executed or to be executed by the appropriate Person as security for the Obligations and other indebtedness described therein.

“Note” means a promissory note issued pursuant hereto, in substantially the form attached hereto entitled “Form of Promissory Note”, duly executed by the Borrower and payable to the order of a Lender, including any amendment, modification, renewal or replacement of such promissory note, which Notes shall be in the aggregate amount of up to $50,000,000. The Notes issued to the Lenders hereunder might not be in proportion to their respective Commitments.

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“Notice of Borrowing” means the notice referred to in Section 2.2, which shall be substantially in the form of the attachment hereto entitled “Form of Notice of Borrowing,” plus any applicable attachments.

“Obligated Parties” mean the Borrower and any other Persons, including the Guarantors, from time obligated by Guaranty or otherwise to pay all or any portion of the Obligations.

“Obligations” shall mean, without duplication, (i) all Debt evidenced by the Notes, (ii) the Letter of Credit Reimbursement Obligations, (iii) the Letter of Credit Exposure, (iv) the obligation of the Borrower for the payment of the fees payable hereunder or under the other Loan Documents, (v) all other obligations and liabilities of the Borrower to the Administrative Agent and the Lenders, now existing or hereafter incurred, under, arising out of or in connection with any Loan Document, (vi) all obligations, liabilities and indebtedness of the Borrower to TCB in respect of Hedging Transactions, whether due or to become due, actual or contingent, now existing or hereafter arising out of or incurred under or in connection with any Hedging Agreement, including all early termination or settlement amounts, other transaction payments, costs, expenses (including attorneys’ fees) and interest thereon, and (vii) all other obligations and liabilities of the Borrower to TCB, now existing or hereafter incurred; and to the extent that any of the foregoing includes or refers to the payment of amounts deemed or constituting interest, only so much thereof as shall have accrued, been earned and which remains unpaid at each relevant time of determination.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury, or any successor Governmental Authority.

“Off-Balance Sheet Debt” means, with respect to a Person, (a) any repurchase indebtedness, liability or obligation of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation of such Person under any sale and leaseback transaction which is not a Capital Lease Obligation, (c) any indebtedness, liability or obligation of such Person under any synthetic, off-balance sheet or tax retention lease, or (d) any indebtedness, liability or obligation of such Person arising with respect to any other transaction, or agreement for the use or possession of any Property, which is the functional equivalent, or takes the place, of borrowing but which does not constitute a liability on the balance sheet of such Person.

“Oil and Gas Business” means:

(i) the acquisition, exploration, exploitation, development, operation or disposition of interests in, or obtaining production from, crude oil, natural gas or other hydrocarbon properties;

(ii) the gathering, marketing, treating, processing (but not refining), storage, selling or transporting of any production from such interests or properties and the marketing of crude oil, natural gas, other hydrocarbons and minerals obtained from unrelated Persons;

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(iii) any business (except refining) relating to or arising from exploration for or exploitation, development, production, treatment, processing, storage, transportation, gathering or marketing of crude oil, natural gas, other hydrocarbons and minerals and products produced in association therewith;

(iv) any business relating to oil field sales and services; or

(v) any activity (except refining) that is ancillary, necessary or appropriate to facilitate, or that is incidental to, the activities described in clauses (i) through (iv) of this definition.

“Oil and Gas Properties” means fee, leasehold, or other interests in or under mineral estates or oil, gas, and other liquid or gaseous hydrocarbon leases with respect to Properties situated in the United States or offshore from any State of the United States, including, without limitation, overriding royalty and royalty interests, leasehold estate interests, net profits interests, production payment interests, and mineral fee interests, together with contracts executed in connection therewith and all tenements, hereditaments, appurtenances and Properties appertaining, belonging, affixed, or incidental thereto.

“Organizational Documents” means, as to any Person, the articles of incorporation, certificate of limited partnership, articles of formation or similar organizational documents, as applicable, of such Person.

“Parent” means Lynden Energy Corp., a corporation continued under the laws of the Province of British Columbia.

“Participant” has the meaning given such term in Section 12.2.1.

“Percentage Share” means, as to each Lender for any date, the ratio, expressed as a percentage, of such Lender’s Commitment as of such date divided by the Aggregate Commitment of all Lenders as of such date.

“Permitted Indebtedness” means (i) the Obligations, (ii) unsecured accounts payable incurred in the ordinary course of business, which are not unpaid in excess of 90 days beyond the invoice date therefor or are being contested in good faith and as to which such reserve as is required by IFRS has been made and on which interest charges are not paid or accrued, (iii) if the Administrative Agent has given its prior written consent thereto, Subordinated Debt, (iv) Debt arising under Acceptable Hedging Transactions and under the Hedging Agreement governing such Acceptable Hedging Transactions (but only to the extent such Debt arises in connection with Acceptable Hedging Transactions) and (v) other Debt not exceeding $200,000 at any time outstanding.

“Permitted Investments” means Investments in (i) indebtedness, evidenced by notes maturing not more than 12 months after the date of issue, issued or Guaranteed by the government of the United States of America, (ii) certificates of deposit maturing not more than 12 months after the date of issue, issued by any Lender, (iii) commercial paper, maturing not more than 270 days after the date of issue, issued by any Lender (or any parent corporation of any Lender), (iv) money market or other mutual funds substantially all of whose assets comprise

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securities of the types described in clauses (i) through (iii) above, or (v) such other instruments, evidences of indebtedness or investment securities as the Administrative Agent may approve in writing.

“Permitted Liens” means, with respect to any Property, each of the following:

(i) Liens securing the Obligations;

(ii) the following, if the validity and amount thereof are being contested in good faith and by appropriate legal proceedings and so long as (a) levy and execution thereon have been stayed and continue to be stayed, (b) they do not in the aggregate materially detract from or threaten the value of such Property, or materially impair the use thereof in the operation of the business of the owner of such Property, and (c) a reserve therefor, if appropriate, has been established: claims and Liens for Taxes due and payable; claims and Liens of landlords, repairmen, mechanics, materialmen, warehousemen, or carriers, or similar Liens; and adverse judgments on appeal;

(iii) Liens for Taxes not past due;

(iv) landlords’, carriers’, warehousemen’s, repairmen’s, mechanics’ and materialmen’s Liens for services or materials (or other like Liens that do not secure Funded Debt) for which payment is not past due;

(v) operators’ Liens incurred pursuant to oil and gas joint operating agreements entered into by the owner of such Property in the ordinary course of business which secure obligations not past due;

(vi) Liens in favor of the lessor on the Property being leased under any Capitalized Lease permitted hereunder;

(vii) minor defects in title to an Oil and Gas Property not in any case materially detracting from the value of such Property; and

(viii) Liens securing the payment obligations relating to Acceptable Commodity Hedging Transactions that are permitted by an Intercreditor Agreement;

provided, that Liens described in clauses (ii) through (vi) shall remain Permitted Liens only for so long as no action to enforce any of such Liens has been commenced and; provided, further, no intention to subordinate the first priority Liens granted to secure the Obligations is hereby implied or expressed or is to be inferred by the permitted existence of such Permitted Liens.

“Person” means a natural person, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a trust or any other entity or organization including a government or political subdivision or any governmental agency or instrumentality thereof.

“Plan” means any employee benefit plan which is covered by Title IV of ERISA.

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“Property” means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

“Purchaser” has the meaning given such term in Section 12.3.1.

“PW9 Value” means with respect to any Oil and Gas Property, the net present value of the oil and gas to be produced from such Oil and Gas Property, calculated using a discount rate of nine percent (9.00%) per annum and estimates of reserves, prices, production rates and costs acceptable to the Administrative Agent.

“Rate Management Transaction” shall mean any transaction (including an agreement with respect thereto) now existing or hereafter entered into by the Borrower which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.

“Regulation U” means Regulation U of the Board of Governors, as in effect from time to time.

“Regulatory Documents” means, as to any Person, the bylaws, limited partnership agreement, regulations, operating agreement or similar regulatory documents, as applicable, governing the internal affairs of such Person.

“Reimbursement Amounts” has the meaning given such term in Section 7.15.3.

“Release of Hazardous Substances” means any emission, spill, release, disposal, or discharge, except in accordance with a valid permit, license, certificate, or approval of the relevant Governmental Authority, of any Hazardous Substance into or upon (a) the air, (b) soils or any improvements located thereon, (c) surface water or groundwater, or (d) the sewer or septic system, or the waste treatment, storage, or disposal system servicing any Property of the Borrower or any Guarantor, with respect to which the Borrower or such Guarantor is legally obligated to respond under applicable Environmental Laws, by notifying the relevant Governmental Authority, investigating or undertaking corrective action.

“Representative’s Certificate” means a certificate signed by a Responsible Representative.

“Required Lenders” means Lenders (one of whom must be the Administrative Agent) in the aggregate having at least 66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated or reduced to zero dollars, Lenders (one of whom must be the Administrative Agent) in the aggregate holding at least 66-2/3% of the sum of (a) the aggregate outstanding unpaid principal amount of the Notes plus (b) the Letter of Credit Exposure.

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“Requirement of Law” means, as to any Person, its Organizational Documents, its Regulatory Documents, and all applicable Laws.

“Responsible Representative” means either of Colin Watt, President or Richard Andrews, Chief Executive Officer of the Borrower.

“Restricted Payment” means any of the following:

(i) any withdrawal from the Borrower or any Guarantor of cash or other Property by an owner of an Equity Interest in the Borrower or any such Guarantor or the declaration or payment of any dividend on, or the incurrence of any liability to make, or the making of, any other payment or distribution in respect of, any Securities of or other Equity Interests in the Borrower or any such Guarantor without the prior written consent of the Required Lenders;

(ii) any payment or distribution on account of the purchase, redemption or other retirement of any Securities of or other Equity Interests in the Borrower or any Guarantor, or of any warrant, option or other right to acquire such Securities or such other Equity Interests, or any other payment or distribution made in respect thereof, either directly or indirectly; or

(iii) the repayment by the Borrower or any Guarantor of any Debt owed to an Affiliate (other than repayments to the Borrower), including any Debt payments from the Borrower to the Parent.

Notwithstanding the foregoing, the Borrower’s payment of Reimbursement Amounts within the limitations set forth in Section 7.15.3 shall not be deemed to constitute “Restricted Payments” if at the proposed time of a payment no Default exists and the making of such payment would not cause a Default to exist.

“Revolving Credit Period” means the period commencing on the Closing Date and ending on the Final Maturity Date.

“Scheduled Determinations” has the meaning given such term in Section 2.8.1.

“Security” means any stock, share, voting trust certificate, limited or general partnership interest, member interest, bond debenture, note, or other evidence of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instrument commonly known as a “security” or any certificate of interest, share or participation in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire any of the foregoing.

“Security Documents” means the security instruments executed and delivered in satisfaction of the condition set forth in Section 5.2.3, and all other documents and instruments at any time executed as security for all or any portion of the Obligations, as such instruments may be amended, restated, or supplemented from time to time.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of

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the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board of Governors to which the Administrative Agent is subject with respect to the Adjusted LIBOR Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D of the Board of Governors). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Debt” means Debt of the Borrower evidenced by promissory notes which by their terms, and by separate written subordination agreements among the payee thereof, the Borrower and the Administrative Agent, have been subordinated to the Notes and other Obligations on terms satisfactory to the Administrative Agent in its sole discretion.

“Subsidiary” means for any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned, collectively, by such Person and any Subsidiaries of such Person. The term Subsidiary shall include Subsidiaries of Subsidiaries (and so on).

“Taxes” means all taxes, assessments, filing or other fees, levies, imposts, duties, deductions, withholdings, stamp taxes, interest equalization taxes, capital transaction taxes, foreign exchange taxes or charges, or other charges of any nature whatsoever from time to time or at any time imposed by any Law or Tribunal.

“TCB” means Texas Capital Bank, N.A., in its individual capacity and not as Administrative Agent.

“Transferee” means any Person to which any Lender has sold, assigned or transferred an interest in, or granted a participation in, any of the Obligations, as authorized hereunder, and including Participants and Purchasers, and any Person acquiring, by purchase, assignment, transfer (including transfers by operation of law), or participation, from any such purchaser, assignee, transferee, or participant, any part of such Obligations.

“Tribunal” means any court, tribunal, governmental body, agency, arbitration panel, or instrumentality.

“Type” when used in reference to any Loan or Advance, refers to whether the rate of interest on such Loan, or on the Loans comprising such Advance, is determined by reference to the Floating Rate or the Adjusted LIBOR Rate.

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of Texas.

“Unused Available Commitment” means, at any time, for a Lender, an amount (not less than zero) equal to the remainder, if any, of the (a) Available Commitment for such Lender in

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effect at such time minus (b) the outstanding principal amount owed to such Lender under its Note at such time minus (c) such Lender’s Percentage Share of the Letter of Credit Exposure at such time.

“USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Usage” means, at any time, (a) the sum of (i) the aggregate outstanding principal balance of the Notes at such time plus (ii) the Letter of Credit Exposure divided by (b) the Borrowing Base then in effect. For purposes of determining the Applicable Margin for any newly requested Advance, Usage shall be determined by including the amount of such Advance in the amount of the outstanding principal balance of the Notes.

“WSJ Rate” means, on any day, the U.S. prime rate as published in The Wall Street Journal’s “Money Rates” table for such day. If multiple prime rates are quoted in such table, then the highest U.S. prime rate quoted therein shall be the prime rate. In the event that a U.S. prime rate is not published in The Wall Street Journal’s “Money Rates” table for any reason or The Wall Street Journal is not published that day in the United States of America for general distribution, the Administrative Agent will choose a substitute U.S. prime rate, for purposes of calculating the interest rate applicable hereunder, which is based on comparable information, until such time as a prime rate is published in The Wall Street Journal’s “Money Rates” table. Each change in the WSJ Rate shall become effective without notice to the Borrower on the effective date of each such change.

1.2. Accounting Terms and Determinations; Changes in Accounting.

1.2.1. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with IFRS, applied on a basis consistent (except for changes concurred in by the independent public accountants and with respect to which the Borrower shall have promptly notified the Administrative Agent on becoming aware thereof, and except for inconsistencies in the accounting methods used in the financial statements delivered prior to the Closing Date compared to the initial financial statements delivered thereafter due to the Parent’s change from use of generally accepted accounting principles of Canada to IFRS) with the most recent financial statements of the Borrower delivered to the Administrative Agent. Accounting principles are applied on a “consistent basis” when the accounting principles applied in a current period are comparable in all material respects to those accounting principles applied in a preceding period. Changes in the application of accounting principles which do not have a material impact on calculating the financial covenants herein shall be deemed comparable in all material respects to accounting principles applied in a preceding period.

1.2.2. The Borrower will not change its method of accounting, other than immaterial changes in methods, changes from use of generally accepted accounting principles of Canada to use of IFRS during the 2011 calendar year, changes thereafter permitted by IFRS in

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which the Borrower’s independent public accountants concur and changes required by a change in IFRS, without the prior written consent of the Administrative Agent. To enable the ready and consistent determination of compliance by the Borrower with its obligations under this Agreement, neither the Borrower nor any of its Subsidiaries will change the manner in which either the last day of its fiscal year or the last day of the first three fiscal quarters of its fiscal years is calculated without the prior written consent of the Required Lenders.

1.3. References. References in this Agreement to Exhibits, Schedules, Annexes, Appendixes, Attachments, Articles, Sections or clauses shall be to exhibits, schedules, annexes, appendixes, attachments, articles, sections or clauses of this Agreement, unless expressly stated to the contrary. References in this Agreement to “hereby,” “herein,” “hereinafter,” “hereinabove,” “hereinbelow,” “hereof,” “hereunder” and words of similar import shall be to this Agreement in its entirety and not only to the particular Exhibit, Schedule, Annex, Appendix, Attachment, Article, or Section in which such reference appears. Exhibits and Schedules to any Loan Document shall be deemed incorporated by reference in such Loan Document. References to any document, instrument, or agreement (a) shall include all exhibits, schedules, and other attachments thereto, and (b) shall include all documents, instruments, or agreements issued or executed in replacement thereof. This Agreement, for convenience only, has been divided into Articles and Sections; and it is understood that the rights and other legal relations of the parties hereto shall be determined from this instrument as an entirety and without regard to the aforesaid division into Articles and Sections and without regard to headings prefixed to such Articles or Sections. The phrases “this Section” and “this clause” and similar phrases refer only to the sections or clauses hereof in which such phrases occur. Whenever the context requires, reference herein made to the single number shall be understood to include the plural; and likewise, the plural shall be understood to include the singular. Definitions of terms defined in the singular or plural shall be equally applicable to the plural or singular, as the case may be, unless otherwise indicated. Words denoting sex shall be construed to include the masculine, feminine and neuter, when such construction is appropriate; and specific enumeration shall not exclude the general but shall be construed as cumulative; the word “or” is not exclusive; the word “including” (in its various forms) shall mean “including, without limitation”; in the computation of periods of time, the word “from” means “from and including” and the words “to” and “until” mean “to but excluding”; and all references to money refer to the legal currency of the United States of America. The Exhibits, Schedules, Annexes, Appendixes and Attachments attached to this Agreement and items referenced as being attached to this Agreement are incorporated herein and shall be considered a part of this Agreement for all purposes. Except as otherwise indicated, references in this Agreement to statutes, sections, or regulations are to be construed as including all statutory or regulatory provisions consolidating, amending, replacing, succeeding, or supplementing the statute, section, or regulation referred to. References in this Agreement to “writing” include printing, typing, lithography, facsimile reproduction, and other means of reproducing words in a tangible visible form. References in this Agreement to agreements and other contractual instruments shall be deemed to include all exhibits and appendices attached thereto and all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Agreement. References in this Agreement to Persons include their respective successors and permitted assigns. References in this Agreement and the other Loan Documents to “reasonable”, “reasonably” and words of similar import when applied to any request or demand which the Administrative Agent or any Lender is permitted to make hereunder or under any other Loan

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Document or as applied to a determination of the reasonableness of the amount or the incurrence of any expense shall be interpreted and construed from the perspective of an administrative agent, a collateral agent or a lender, as applicable, in a senior credit facility where such administrative agent, collateral agent or lender is regulated by various governmental agencies, seeks a high level of assurance regarding the operations, collateral position, condition (financial or otherwise) and Properties of the Borrower and other Persons Guaranteeing or otherwise connected to such facility and seeks a high level of assurance and advice regarding its rights and duties under the Loan Documents, and the Borrower and any other Person Guaranteeing or otherwise connected to such facility shall comply with such request or demand or accept such determination unless the Borrower or such other Person proves that such request, demand or determination is or was unreasonable.

1.4. Amendment of Defined Instruments. Unless the context otherwise requires or unless otherwise provided herein, the terms defined in this Agreement which refer to a particular agreement, instrument or document also refer to and include all renewals, extensions, modifications, amendments and restatements of such agreement, instrument or document, provided that nothing contained in this Section shall be construed to authorize any such renewal, extension, modification, amendment or restatement.

1.5. Joint Preparation; Construction of Indemnities and Releases. This Agreement and the other Loan Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel, and no rule of construction shall apply hereto or thereto which would require or allow any Loan Document to be construed against any party because of its role in drafting such Loan Document. All indemnification and release of liability provisions of this Agreement shall be construed broadly (and not narrowly) in favor of the Persons receiving indemnification or releases of liability.

1.6. Time References. Unless otherwise indicated, all references to a time of day refer to the time of day in the Central Time Zone for such day, as generally in effect in the state of Texas.

1.7. Types of Loans and Advances. For purposes of this Agreement, Loans and Advances, respectively, may be classified and referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Advance”).

ARTICLE II

TERMS OF FACILITIES

2.1. Reducing Revolving Line of Credit and Letter of Credit Facilities.

2.1.1. (i) During the Revolving Credit Period, and if no Default exists, each Lender severally agrees, subject to the other terms and conditions of this Agreement, to make Loans to the Borrower from time to time in amounts not to exceed, in the aggregate at any one time outstanding, its Available Commitment. Each Loan shall be made as part of an Advance consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not

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relieve any other Lender of its obligations hereunder; provided that the Commitments are several and neither the Administrative Agent nor any Lender shall be responsible for any other Lender’s failure to make Loans as required.

(ii) Subject to the terms hereof, each Advance shall be comprised entirely of FLR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(iii) At the commencement of each Interest Period for any Eurodollar Advance, such Advance shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $1,000,000. At the time that each FLR Advance is made, such Advance shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000; provided that an FLR Advance may be in an aggregate amount that is equal to the aggregate Unused Available Commitment of the Lenders. Advances of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of three (3) Eurodollar Advances outstanding. Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Advances if the Interest Period requested with respect thereto would end after the Final Maturity Date.

2.1.2. No Lender shall be obligated to lend to the Borrower, and the Borrower shall not be entitled to borrow hereunder, any amount which would cause the sum of the outstanding principal amount of the Note held by such Lender plus such Lender’s Percentage Share of the Letter of Credit Exposure, to exceed its Available Commitment.

2.1.3. Upon the terms and conditions and relying on the representations and warranties contained in this Agreement,

(i) the Administrative Agent, as issuing bank for the Lenders, agrees, from the date of this Agreement until the date which is 120 days prior to the Final Maturity Date, to issue, on behalf of the Lenders ratably in proportion to in their respective Commitments, standby letters of credit hereunder for the account of the Borrower, and to renew and extend standby Letters of Credit.

(ii) letters of credit shall be issued hereunder and Letters of Credit shall be renewed or extended from time to time on any Business Day designated by the Borrower following the receipt by the Administrative Agent of the written (or oral, confirmed promptly in writing) request by a Responsible Representative of the Borrower therefor and, if for the issuance of a new letter of credit hereunder, a Letter of Credit Application; provided, however, that:

(a) the expiry date of such requested letter of credit cannot be later than the earlier of (1) 365 days from the date of issuance, unless automatically renewable by its terms, or, if issued in favor of the Texas Railroad Commission, 15 months following the date of

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issuance, (2) the last date before which the Borrowing Base is scheduled to reduce to an amount less than the sum of the maximum drawable amount of the requested letter of credit plus the undrawn amount of all outstanding Letters of Credit which, by their terms, might be outstanding on such reduction date or (3) 30 days prior to the Final Maturity Date;

(b) the aggregate outstanding principal balance of the Notes of the Lenders plus the Letter of Credit Exposure shall not exceed at any time the Borrowing Base;

(c) the Letter of Credit Exposure shall not exceed at any time $500,000;

(d) with the exception of standby letters of credit to support plugging bond obligations of the Borrower (for which there shall be no minimum dollar amount or maximum number of such letters of credit), no letter of credit shall be issued hereunder in an amount less than $25,000; and

(e) the Administrative Agent shall not be obligated to issue a letter of credit pursuant hereto or to renew or extend a Letter of Credit, and the Borrower shall not be entitled to have a letter of credit issued pursuant hereto or to have a Letter of Credit renewed or extended, if the issuance of the requested letter of credit or the renewal or extension of an existing Letter of Credit would cause, after taking into account the mandatory reductions in the Borrowing Base required during the proposed term of such requested letter of credit or existing Letters of Credit, the sum of the undrawn amount of all Letters of Credit plus the aggregate outstanding principal amount of the Notes, to exceed the Aggregate Available Commitment.

(iii) except as otherwise permitted by clause (ii)(d) above, the Administrative Agent shall have no obligation to issue a letter of credit hereunder if as a result thereof, there would be outstanding more than five (5) standby Letters of Credit under clause (i) above.

2.1.4. With respect to each Letter of Credit issued by the Administrative Agent, the Lenders shall be deemed to have acquired, ratably in proportion to their respective Commitments, participations in such Letter of Credit (and any renewals or extensions thereof) in the maximum amount which might be drawn under such Letter of Credit.

2.1.5. With respect to each Letter of Credit issued by the Administrative Agent, each Lender shall be unconditionally and irrevocably liable, without regard (i) to the occurrence of any Default or Event of Default or (ii) the failure of the Administrative Agent, the Borrower or any other Person to satisfy any condition herein or otherwise or (iii) any contrary provisions of this Agreement, ratably in the proportion that its Commitment bears to the Aggregate Commitment, to reimburse the Administrative Agent on demand for the amount of each Letter of Credit Payment under such Letter of Credit. Each Letter of Credit Payment shall be deemed to be a Loan by each Lender to the extent of funds delivered by such Lender to the Administrative Agent with respect to such Letter of Credit Payment and shall, to such extent, be deemed a Loan under and shall be evidenced by the Note of such Lender.

2.1.6. Each Lender agrees to indemnify the Administrative Agent on a current basis, as the issuer of each Letter of Credit, and the officers, directors, employees, agents, attorneys-in-fact and affiliates of the Administrative Agent (to the extent not reimbursed by the

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Borrower and without limiting the obligation of the Borrower to do so), ratably in the proportion that its Commitment bears to the Aggregate Commitment, from and against any and all liabilities, claims, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind whatsoever which may at any time (including any time following the payment and performance of all obligations and the termination of this Agreement) be imposed on, incurred by or asserted against the Administrative Agent as the issuer of such Letter of Credit or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates in any way relating to or arising out of this Agreement or such Letter of Credit or any action taken or omitted by the Administrative Agent as the issuer of such Letter of Credit or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates under or in connection with any of the foregoing, INCLUDING ANY LIABILITIES, CLAIMS, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS IMPOSED, INCURRED OR ASSERTED AS A RESULT OF THE NEGLIGENCE, WHETHER SOLE, CONTRIBUTORY OR CONCURRENT, OF THE ADMINISTRATIVE AGENT AS THE ISSUER OF SUCH LETTER OF CREDIT OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT OR AFFILIATES; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the gross negligence or willful misconduct of the Administrative Agent as the issuer of a Letter of Credit. The agreements in this Section shall survive the payment and performance of all obligations and the termination of this Agreement.

2.2. Method of Borrowing and Obtaining Letters of Credit.

2.2.1. The Borrower shall give the Administrative Agent an irrevocable notice (a “Notice of Borrowing”) not later than (a) in the case of a Eurodollar Advance, not later than 11:00 a.m. CT, three (3) Business Days before the date of such proposed Advance or (b) in the case of an FLR Advance, not later than 12:00 p.m. CT on the date of such proposed Advance. Each Notice of Borrowing shall specify each of the following:

(i) the Borrowing Date, which shall be a Business Day, of such requested Advance.

(ii) the aggregate amount of such requested Advance.

(iii) whether such Advance is to be an FLR Advance or a Eurodollar Advance.

(iv) in the case of a Eurodollar Advance, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Advance is specified, then the requested Advance shall be an FLR Advance. If no Interest Period is specified with respect to any requested Eurodollar Advance, then the Borrower shall be deemed to have selected an Interest Period of one (1) month’s duration. Each Notice of Borrowing shall constitute a representation by the Borrower

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that (a) the amount of the requested Advance shall not cause the total principal of the Notes plus the Letter of Credit Exposure to exceed the Aggregate Commitment and (b) no Default is in existence at the time of delivery to the Administrative Agent of such Notice of Borrowing.

2.2.2. Upon receipt of a Notice of Borrowing, the Administrative Agent shall promptly notify each Lender of the contents thereof and of such Lender’s share of the requested Advance, and thereafter such Notice of Borrowing shall not be revocable by the Borrower.

2.2.3. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed Borrowing Date thereof by wire transfer of immediately available funds by 2:00 p.m. CT to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained at the Administrative Agent. Nothing herein shall be deemed to obligate any Lender to obtain the funds for its Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for its Loan in any particular place or manner.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Advance (or, in the case of FLR Advances, by the proposed date of the Advance) that such Lender will not make available to the Administrative Agent such Lender’s Percentage Share of such Advance, the Administrative Agent may assume that such Lender has made such share available on such date and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Advance available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the rate applicable to the Advance. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Advance.

2.2.4. The Borrower shall give the Administrative Agent an irrevocable request for a letter of credit prior to 12:00 p.m. CT at least three (3) Business Days before each such requested letter of credit under Section 2.1, by completing and delivering an irrevocable Notice of Borrowing together with a completed and executed Letter of Credit Application. The Letter of Credit Application must be completed in a manner and shall use such wording as is acceptable to the Administrative Agent.

2.2.5. Upon receipt of the Letter of Credit Application, the Administrative Agent shall issue such letter of credit if the conditions of Section 2.1.3, Article V or elsewhere herein have been satisfied.

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2.2.6. Subject to the terms hereof, in the event that any beneficiary of a Letter of Credit shall have taken the steps necessary in the sole judgment of the Administrative Agent to obligate or permit the Administrative Agent to make a payment under such Letter of Credit, the Borrower shall be deemed to have delivered to the Administrative Agent a Notice of Borrowing under Section 2.2 for an Advance in the amount of such payment amount, regardless of any limitations or unsatisfied conditions set forth herein or if a Default exists. The Administrative Agent shall pay over the proceeds of such Advance to itself as reimbursement for amounts paid by the Administrative Agent to the beneficiary under such Letter of Credit.

2.3. Notes.

2.3.1. The Loans of each Lender shall be evidenced by a Note issued by the Borrower, payable to the order of such Lender.

2.3.2. Upon receipt of each Lender’s Note pursuant to Section 5.2.2, the Administrative Agent shall promptly forward such Note to such Lender.

2.3.3. The outstanding principal of the Note of a Lender reflected by the notations (whether handwritten, electronic or otherwise) by such Lender on its records shall be deemed rebuttably presumptive evidence of the principal amount owing on its Note.

2.3.4. Each Lender will record on its books each Loan and the particulars thereof (e.g., date and amount) and each payment of principal or interest made by the Borrower with respect thereto, and may, if such Lender so elects in connection with any transfer or enforcement of its Note, endorse on the schedule (modified as such Lender shall deem advisable) forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the failure of any Lender to make any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under its Note. Each Lender is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule (modified as such Lender shall deem advisable) as and when required.

2.4. Certain Payments and Prepayments of Principal.

2.4.1. If at any time the aggregate principal of the Notes outstanding plus the Letter of Credit Exposure exceeds the Borrowing Base then in effect, the Borrower shall on the day of such occurrence, repay the principal of the Notes in an amount equal to such excess, except that if the circumstances described in this Section are the direct result of a decrease of the Borrowing Base under Section 2.8.1, then the provisions of Section 2.8.3 shall apply.

2.4.2. In the event that a prepayment of the Notes is required under the terms hereof, and the aggregate outstanding principal of the Notes is less than the amount required to be prepaid, the Borrower shall repay the entire balance of the Notes and, in accordance with the provisions of the relevant Letter of Credit Application executed by the Borrower or otherwise to the satisfaction of the Administrative Agent, deposit with the Administrative Agent as additional collateral securing the Obligations, an amount of immediately available funds equal to the difference of the Letter of Credit Exposure less the Borrowing Base.

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2.5. Interest Rates; Payment of Interest.

2.5.1. Each Loan comprising an FLR Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such FLR Advance is made or is automatically converted from a Eurodollar Advance into an FLR Advance pursuant to Section 2.9, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to Section 2.9, at a rate per annum equal to the lesser of (a) the Floating Rate or, if applicable, such higher rate as is specified in Section 3.3 or (b) the Highest Lawful Rate.

2.5.2. Each Loan comprising a Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period equal to the lesser of (a) the Adjusted LIBOR Rate in effect for such Advance or, if applicable, such higher rate as is specified in Section 3.3 or (b) the Highest Lawful Rate.

2.5.3. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and on the Final Maturity Date; provided that interest accrued pursuant to Section 3.3 shall be payable on demand.

2.5.4. Each determination hereunder of interest on the Notes and fees hereunder based on per annum calculations shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day), subject to the limitations of the Highest Lawful Rate. All interest rates applicable hereunder shall be determined by the Administrative Agent, and such determinations shall be conclusive absent manifest error, and be binding upon the parties hereto.

2.5.5. If prior to the commencement of any Interest Period for a Eurodollar Advance:

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBOR Rate or the LIBOR Rate for such Interest Period; or

(b) the Administrative Agent is advised by any Lender that the Adjusted LIBOR Rate or LIBOR Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lender of making or maintaining its or their Loans included in such Advance for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or electronic means as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Advance to, or continuation of any Advance as, a Eurodollar Advance shall be ineffective, and (ii) if any Notice of Borrowing requests a Eurodollar Advance, such Advance shall be made as an FLR Advance.

2.5.6. Each change in the rate of interest charged hereunder shall become effective automatically and without notice to the Borrower upon the effective date of each change in the Floating Rate or the Highest Lawful Rate, as the case may be.

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2.5.7. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan into an FLR Loan other than on the last day of the Interest Period applicable thereto, or (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBOR Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the Eurodollar market.

A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

2.6. Unused Available Commitment Fees; Engineering Fees; Facility Fees; Letter of Credit Fees; Authorized Payments by Lender; Processing Fee.

2.6.1. The Borrower shall pay to the Administrative Agent for the ratable benefit of the Lenders a commitment fee of one-half of one percent (1/2 of 1.00%) per annum, calculated daily on the actual number of days the Commitments are outstanding on the amount of the Unused Available Commitments of the Lenders in effect from time to time, such commitment fee to be payable quarterly in arrears on each January 1, April 1, July 1, and October 1 occurring hereafter, and upon termination of the Commitments.

2.6.2. (i) No engineering fee shall be due from the Borrower on the Closing Date. Thereafter, if TCB is the sole Lender, the Borrower shall pay an engineering fee in the amount of $5,000 if the Administrative Agent’s internal engineers perform the engineering review of the Collateral or the actual fees and expenses of any third-party engineers retained by the Administrative Agent to prepare an engineering report, payable at the time of the Scheduled, Discretionary or Borrower Requested Determinations of the Borrowing Base referred to in Section 2.8.1 or at the time of a redetermination of the Borrowing Base required under Section 7.9.2. If TCB is not the sole Lender, the Borrower shall pay to the Administrative Agent for the ratable benefit of the Lenders an engineering fee in the amount of $5,000 multiplied by the number of Lenders then party hereto, payable at the time of each Scheduled, Discretionary or Borrower Requested Determination of the Borrowing Base referred to in Section 2.8.1 or at the time of a redetermination of the Borrowing Base required under Section 7.9.2. In this connection, the Borrower may elect to have a third-party engineering report prepared by Cawley, Gillespie & Associates, Inc. or other independent engineering firm approved by the Administrative Agent.

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2.6.3. To compensate the Lenders for the costs of the extension of credit hereunder, the Borrower shall pay to the Administrative Agent (i) on the Closing Date, a facility fee of one percent (1.00%) of the initial Borrowing Base for the ratable benefit of the Lenders minus the $4,985 work fee previously paid by the Borrower, and (ii) thereafter for the ratable benefit of the Lenders upon each determination of an increase in the Borrowing Base pursuant to Section 2.8.1, a facility fee in the amount of one percent (1.00%) of the amount by which the Borrowing Base is increased over that in effect on the date of determination.

2.6.4. The Borrower shall pay to the Administrative Agent at the time of each issuance of a letter of credit hereunder and at the time of each renewal (including extensions) of a Letter of Credit, (a) a letter of credit fee for the ratable benefit of the Lenders equal to the greater of (i) two percent (2.00%) per annum of the face amount of such letter of credit or Letter of Credit, as applicable, for the maximum number of days from such date of issuance or renewal, as applicable, to the expiry date of such letter of credit or Letter of Credit, as applicable, and (ii) $1,000, and (b) if TCB is not the sole Lender at the time of the issuance of a letter of credit or renewal of a Letter of Credit, as applicable, a letter of credit issuance fee for the sole account of the Administrative Agent equal to one-fourth of one percent (0.25%) per annum of the face amount of such letter of credit or Letter of Credit, as applicable, for the maximum number of days from such date of issuance or renewal, as applicable, to the expiry date of such letter of credit or Letter of Credit, as applicable.

2.6.5. At any time TCB is not the sole Lender hereunder, the Borrower agrees to pay to the Administrative Agent on each January 1^st occurring hereafter, exclusively for the account of the Administrative Agent, an agency fee in the amount of $5,000 multiplied by the number of Lenders at such time.

2.6.6. The Lenders are irrevocably authorized to make Loans under the Notes for the payment of the fees and expenses of the Administrative Agent and the Lenders required to be paid by the Borrower hereunder. The Administrative Agent shall pay over such Loan proceeds to itself or directly to such other Persons entitled to payment hereunder.

2.6.7. To compensate the Administrative Agent for the cost of processing requests for waivers, partial releases, amendments and consents regarding the provisions of this Agreement or the other Loan Documents, the Borrower shall pay to the Administrative Agent at the time of granting such waiver, providing such partial release, entering into such amendment or granting such consent, the amount of $2,500 for the Administrative Agent’s sole account plus such additional amounts as the Administrative Agent, the Lenders and the Borrower shall agree.

2.7. Termination of Credit Facilities; Maturity of Notes; Right of Borrower to Terminate Credit Facilities.

2.7.1. The obligations of each Lender to the Borrower under Section 2.1 shall, subject to its continuing obligation to fund Letters of Credit, terminate on the Final Maturity Date, unless terminated earlier in accordance with the terms hereof.

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2.7.2. The Notes shall finally mature no later than the Final Maturity Date, and any unpaid principal of the Notes and accrued, unpaid interest thereon shall be due and payable on such date.

2.7.3. The Borrower shall have the right upon payment in full of the Obligations and the cancellation of all outstanding Letters of Credit, to cancel in full (but not in part) the credit facilities provided for herein, with no right of reinstatement.

2.8. Determination of Borrowing Base; Automatic Reductions in Borrowing Base; Borrowing Base Deficiency; Notice of Redeterminations; Requests for Reductions in Borrowing Base.

2.8.1. On the basis of the information furnished to the Administrative Agent hereunder and such other reports, appraisals and information as the Administrative Agent may reasonably deem appropriate, the Administrative Agent shall have the right to determine a new Borrowing Base two (2) times a year prior to the Final Maturity Date, such determinations to occur approximately six (6) months apart, or at any time it may elect if a Default has occurred which is continuing (the “Scheduled Determinations”), or at such other or additional times prior to the Final Maturity Date as the Administrative Agent or the Required Lenders in their reasonable discretion may elect (the “Discretionary Determinations”), and the Administrative Agent shall determine a new Borrowing Base at the Borrower’s expense at such additional times, but no more often than two (2) times in any 12-month period without the Administrative Agent’s consent, as the Borrower may request in connection with any material change in the value of the Oil and Gas Properties included in the most recent determination of the Borrowing Base (the “Borrower Requested Determinations”). Such determinations, if made, shall be in the Administrative Agent’s discretion and in accordance with the customary practices and standards of the Administrative Agent for loans of a similar nature as in effect at the time such determinations are made (except that the Administrative Agent may make adjustments to such determinations based on the practices and standards of each other Lender) and shall be conclusive as to the Borrower, and any increases in the Borrowing Base must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever increase the Borrowing Base.

2.8.2. The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing September 1, 2011, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders may decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.

2.8.3. Upon the occurrence of a Borrowing Base Deficiency, the Borrower shall, within 30 days following written notice by the Administrative Agent of the

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existence of such Borrowing Base Deficiency, do any one or more of the following in an aggregate amount at least equal to such Borrowing Base Deficiency: (i) prepay the principal of the Notes or (ii) cause to be created first and prior perfected Liens (subject only to Permitted Liens) in favor of the Administrative Agent for the benefit of the Lenders, by instruments reasonably satisfactory to the Administrative Agent, on producing Oil and Gas Properties (or in immediately available funds if the circumstances described in Section 2.4.2 are applicable) which in the opinion of each Lender would increase the Borrowing Base by an amount sufficient, in combination with clause (i) preceding, to eliminate such Borrowing Base Deficiency.

2.8.4. Upon each redetermination of the Borrowing Base, the Administrative Agent will notify the Borrower of such determination (which notice may be orally communicated to the Borrower and confirmed promptly thereafter in writing if the Borrowing Base is being decreased or the monthly Borrowing Base reduction amount is being increased), and the Borrowing Base and the amount by which the Borrowing Base shall be reduced so communicated to the Borrower shall become effective immediately upon such notification (or such other date as is stated in such notice and regardless of any Notice of Borrowing the Administrative Agent might have received) and shall remain in effect until the next subsequent redetermination of the Borrowing Base. The Administrative Agent may condition any increase in the Borrowing Base or decrease in the monthly Borrowing Base reduction amount upon the Borrower’s execution and return of the notice given under this Section, which notice may contain and require confirmations by the Borrower of representations, warranties and covenants contained in the Loan Documents.

2.8.5. The Borrower may at any time by written notice to the Administrative Agent request that the Borrowing Base be reduced (with no right of reinstatement) by an amount specified by the Borrower in such reduction notice, and the Borrowing Base shall be deemed so reduced upon receipt by the Administrative Agent of such reduction notice. Further, in the event the Borrower is advised of any increase in the Borrowing Base, the Borrower may decline to utilize the increased borrowing availability created thereby and by written notice to the Administrative Agent irrevocably refuse to accept all or a portion of such increase, but any such refusal notice received by the Administrative Agent more than five (5) Business Days following such increase in the Borrowing Base shall be treated as a Borrowing Base reduction notice under the immediately preceding sentence.

2.9. Interest Elections for Conversions and Continuations.

2.9.1. Each Advance initially shall be of the Type specified in the applicable Notice of Borrowing and, in the case of a Eurodollar Advance, shall have an initial Interest Period as specified in such Notice of Borrowing. Thereafter, the Borrower may elect to convert such Advance to a different Type or to continue such Advance and, in the case of a Eurodollar Advance, may elect Interest Periods therefor, all as provided in this Section 2.9. The Borrower may elect different options with respect to different portions of the affected Advance, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Advance, and the Loans comprising each such portion shall be considered a separate Advance.

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2.9.2. To make an election pursuant to this Section 2.9, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Notice of Borrowing would be required under Section 2.2.1 if the Borrower were requesting an Advance of the Type resulting from such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

2.9.3. Each telephonic and written Interest Election Request shall specify the following information and be in compliance with Section 2.1:

(i) the Advance to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Advance (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Advance);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Advance is to be an FLR Advance or a Eurodollar Advance; and

(iv) if the resulting Advance is a Eurodollar Advance, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Advance but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one (1) month’s duration.

2.9.4. Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Advance.

2.9.5. If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Advance prior to the end of the Interest Period applicable thereto, then, unless such Advance is repaid as provided herein, at the end of such Interest Period such Advance shall be converted to an FLR Advance. Notwithstanding any contrary provision hereof, if an Event of Default or a Borrowing Base Deficiency has occurred and is continuing: (i) no outstanding Advance may be converted to or continued as a Eurodollar Advance (and any Interest Election Request that requests the conversion of any Advance to, or continuation of any Advance as, a Eurodollar Advance shall be ineffective) and (ii) unless repaid, each Eurodollar Advance shall be converted to an FLR Advance at the end of the Interest Period applicable thereto.

2.10. Request for Extension of Maturity. Following receipt by the Administrative Agent of a written request from the Borrower, given by the Borrower no earlier than six (6) months prior to the Final Maturity Date, each Lender agrees to consider, in accordance with the

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customs and standards of such Lender in effect at such time for loans of a similar nature to the Loan and subject to each Lender’s complete approval process, a request by the Borrower to extend the Final Maturity Date. The Administrative Agent and Lenders might charge the Borrower fees to process any such request or to grant any such extension.

ARTICLE III

GENERAL PROVISIONS

3.1. General Provisions as to Payments and Loans.

3.1.1. All payments of principal and interest on the Notes and of fees hereunder shall be made, without setoff, deduction or counterclaim, by 12:00 p.m. CT on the date such payments are due in federal or other funds immediately available at the principal office of the Administrative Agent referred to in Article XIII and, if not made by such time or in immediately available funds, then such payment shall be deemed made when such funds are available to the Administrative Agent for its full and unrestricted use. Each payment delivered to the Administrative Agent for the account of any Lender shall be delivered promptly by the Administrative Agent to such Lender in the same type of funds that the Administrative Agent received at such Lender’s address specified pursuant to Article XIII. Whenever any payment of principal of or interest on the Notes or of fees hereunder shall be due on a day which is not a Business Day, the date for payment thereof shall be extended to the next succeeding Business Day. If the date for any payment is extended by operation of law or otherwise, interest thereon shall be payable for such extended time. The Administrative Agent is hereby authorized upon notice to the Borrower to charge the account of the Borrower maintained with the Administrative Agent, for each payment of principal, interest and fees as it becomes due hereunder.

3.1.2. All payments made by the Borrower on the Notes shall be made free and clear of, and without reduction by reason of, any Taxes.

3.1.3. All requests for Advances or letters of credit hereunder and renewals (including extensions) of Letters of Credit shall be made on a Business Day.

3.1.4. All Advances shall be made available to the Borrower on a Business Day at the Administrative Agent’s address referred to in Article XIII; all letters of credit hereunder shall be issued on a Business Day; and all Letters of Credit shall be renewed (including extensions) on a Business Day.

3.1.5. All payments and fundings shall be denominated in Dollars.

3.2. Telephonic Notices; Notification to the Lenders of Advances, Interest Rates and Commitment Reductions; Non-Receipt of Funds by the Administrative Agent; Lending Installations.

3.2.1. The Borrower hereby authorizes the Administrative Agent to extend Advances, to issue letters of credit hereunder, to renew (including extensions) Letters of Credit and to transfer funds, and hereby authorizes the Lenders to make Loans, based on telephonic, e-mail or other electronic notices made by any Person the Administrative Agent or

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any Lender in good faith believes to be acting on behalf of the Borrower. The Borrower agrees to deliver promptly to the Administrative Agent a written confirmation, if such confirmation is requested by the Administrative Agent or any Lender, of each telephonic, e-mail or other electronic notices, signed by a Responsible Representative. If the written confirmation differs in any material respect from the action taken by the Administrative Agent and the Lenders, the records of the Administrative Agent and the Lenders shall be prima facie, but not conclusive, evidence of the matter notwithstanding anything to the contrary in such confirmation.

3.2.2. The Administrative Agent will promptly notify each Lender of the contents of each Notice of Borrowing and credit facility or Borrowing Base reduction notice received by it hereunder. The Administrative Agent will give each Lender and the Borrower prompt notice of each change in the interest rate applicable to the Loans.

3.2.3. Unless the Borrower notifies the Administrative Agent prior to the date on which it is scheduled to make a payment of principal, interest or fees to the Administrative Agent for the account of the Lenders, that it does not intend to make such payment, the Administrative Agent may assume that such payment has been made. The Administrative Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If the Borrower has not in fact made such payment to the Administrative Agent, the recipient of such payment and the Borrower severally agree to pay to the Administrative Agent on demand the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to (a) in the case of payment by a Lender, the Federal Funds Rate for such day or (b) in the case of payment by the Borrower, the Floating Rate.

3.2.4. Each Lender may book its Loans at any Lending Installation selected by such Lender and may change its Lending Installation from time to time. All terms of this Agreement shall apply to any such Lending Installation, and the Note payable to such Lender shall be deemed held by each Lender for the benefit of its Lending Installation. Each Lender may, by written or facsimile notice to the Administrative Agent and the Borrower, designate, or change any previous designation of, the Lending Installation through which Loans will be made by it and for whose account Note payments are to be made.

3.3. Default Interest. Unless waived by the Required Lenders, the principal of the Notes shall bear interest at the Default Rate during any time an Event of Default exists and, to the extent not prohibited by Law, overdue interest on the Notes shall bear interest at the Default Rate.

3.4. Prepayments Permitted.

3.4.1. The principal of the Notes and accrued interest thereon may be prepaid by the Borrower in whole or in part at any time and, except as otherwise specifically provided herein or with respect to Eurodollar Advances, shall be without premium or penalty. Each prepayment of Advances pursuant to this Section shall be applied, first, ratably to any FLR Advances then outstanding, and, second, to any Eurodollar Advances then outstanding, and if

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more than one Eurodollar Advance is then outstanding, to each such Eurodollar Advance in order of priority beginning with the Eurodollar Advance with the least number of days remaining in the Interest Period applicable thereto and ending with the Eurodollar Advance with the most number of days remaining in the Interest Period applicable thereto. Prepayments of Advances shall be accompanied by accrued interest to the date of prepayment. In the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

3.4.2. Except for prepayments required under Sections 2.4.1 and 2.8.3, all prepayments of principal shall be in the minimum amount of $100,000.

3.5. Limitation Period. Notwithstanding anything herein or in the Notes to the contrary, during any Limitation Period, the interest rate to be charged on amounts evidenced by the Notes shall be the Highest Lawful Rate, and the obligation, if any, of the Borrower for the payment of fees or other charges deemed to be interest under applicable law shall be suspended. During any period or periods of time following a Limitation Period, to the extent permitted by applicable laws of the State of Texas or the United States of America, the interest rate to be charged hereunder shall remain at the Highest Lawful Rate until such time as there has been paid to the Lenders (i) the amount of interest in excess of that accruing at the Highest Lawful Rate that the Lenders would have received during the Limitation Period had the interest rate remained at the otherwise applicable rate, and (ii) the amount of all interest and fees otherwise payable to the Lenders but for the effect of such Limitation Period.

3.6. Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Lender or its applicable lending office to honor its obligation to make or maintain Eurodollar Loans either generally or having a particular Interest Period hereunder, then (a) such Lender shall promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to make such Eurodollar Loans shall be suspended (the “Affected Loans”) until such time as such Lender may again make and maintain such Eurodollar Loans and (b) all Affected Loans which would otherwise be made by such Lender shall be made instead as FLR Loans (and, if such Lender so requests by notice to the Borrower and the Administrative Agent, all Affected Loans of such Lender then outstanding shall be automatically converted into FLR Loans on the date specified by such Lender in such notice) and, to the extent that Affected Loans are so made as (or converted into) FLR Loans, all payments of principal which would otherwise be applied to such Lender’s Affected Loans shall be applied instead to its FLR Loans.

3.7. Ratable Benefit of the Lenders; Sharing of Burdens. As among the Lenders, the benefits and burdens of this Agreement shall be allocated in accordance with their respective Commitments except as specifically provided otherwise herein. In this connection, if the Commitments (and, thus, the Aggregate Commitment) of the Lenders have been terminated or reduced to zero dollars, then the amount of each Lender’s Commitment for the purposes of applying and interpreting those provisions of this Agreement which relate to indemnities of the Lenders and other burdens of this Agreement shall be determined on the basis of the Commitments as they existed immediately preceding such termination or reduction.

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3.8. LATE CHARGE. If a payment remains unpaid for a period of 15 days or more from the date such payment is due, the payment shall subject to a delinquency charge equal to 5.00% of the amount of such payment, which charge shall be due upon demand, unless waived by the Required Lenders.

ARTICLE IV

COLLATERAL

4.1. Security.

4.1.1. To secure the Obligations, the Borrower will cause the appropriate Person to execute and deliver to the Administrative Agent each of the following documents and instruments:

(i) the Mortgages on no less than 80% of the PW9 Value of the Oil and Gas Properties utilized in determining the Borrowing Base.

(ii) the Guaranty of the Parent.

(iii) a general security agreement from the Borrower.

(iv) a stock pledge agreement from the Parent, together with original stock certificates representing all of the Parent’s Equity Interests in the Borrower and stock powers covering such certificates duly executed in blank.

(v) a subordination agreement from the Parent.

4.1.2. All documents delivered or to be delivered hereunder shall be in form and substance reasonably satisfactory to the Administrative Agent and its counsel and shall be supported by such legal opinions as the Administrative Agent or its counsel may reasonably request.

4.1.3. All Liens to be created by delivery of the documents referred to in this Section shall be first and prior perfected Liens in favor of the Administrative Agent for the benefit of the Persons identified therein, subject only to Permitted Liens.

ARTICLE V

CONDITIONS PRECEDENT TO ADVANCES AND LETTERS OF CREDIT

The obligation of each Lender to make Loans comprising an Advance or of the Administrative Agent to issue standby letters of credit hereunder on behalf of the Lenders or to renew or extend Letters of Credit shall be subject to the satisfaction of each of the following conditions:

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5.1. All Advances and Letters of Credit. In the case of each Advance to be made or letter of credit to be issued hereunder or renewals (including extensions) of Letters of Credit (except the initial Advance made hereunder):

5.1.1. timely receipt by the Administrative Agent of a Notice of Borrowing and, if applicable, a Letter of Credit Application and other items required to be included therewith;

5.1.2. the fact that, immediately before such requested Advance or letter of credit or requested renewal (including extensions) of a Letter of Credit, no Default shall have occurred and be continuing and that the making of any such Advance, the issuing of such letter of credit or the renewal (including extensions) of such Letter of Credit will not cause a Default;

5.1.3. the fact that the representations and warranties of the Borrower contained in this Agreement shall be true in all material respects on and as of the date of such Advance, except to the extent that any such representation specifically makes reference to an earlier date, then such representation will be as of such earlier date;

5.1.4. each request for an Advance, for a letter of credit to be issued hereunder or for the renewal (including extensions) of a Letter of Credit shall be deemed to be a representation and warranty by the Borrower on the date of such request, as to the facts specified in Sections 5.1.2 and 5.1.3; and

5.1.5. the fact that each condition specified in Section 5.2 was satisfied at the time of the initial Advance hereunder or has been satisfied subsequent thereto or has been waived in writing by the Required Lenders.

5.2. Initial Advance. In the case of the initial Advance or Letter of Credit:

5.2.1. receipt by the Administrative Agent of each of the following:

(i) copies of the Organizational Documents, and all amendments thereto, of the Borrower and each Guarantor, accompanied by certificates that such copies are correct and complete, one issued by the Secretary of State or comparable Governmental Authority of the jurisdiction of incorporation or formation of the Borrower or such Guarantor, as applicable, dated a current date, and one executed by an authorized representative acceptable to the Administrative Agent dated the Closing Date.

(ii) copies of the Regulatory Documents (or similar documents), and all amendments thereto, of the Borrower and each Guarantor, accompanied by certificates that such copies are correct and complete of an authorized representative acceptable to the Administrative Agent dated the Closing Date.

(iii) certificates of the appropriate Tribunals of each jurisdiction in which the Borrower or any Guarantor has an executive office or principal place of business, the Borrower or any Guarantor was formed or in which any Collateral is located (if the Borrower or any Guarantor is required to qualify to do business in such jurisdiction), each dated a current date, to the effect that the Borrower or such Guarantor, as applicable, is in good standing with respect to the payment of franchise and/or other Taxes and, if required by Law, are duly qualified to transact business in such jurisdictions.

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(iv) certificates of incumbencies and signatures of all officers of the Borrower and each Guarantor who will be authorized to execute or attest any of the Loan Documents on behalf of the Borrower or such Guarantor, as applicable, executed by an authorized representative acceptable to the Administrative Agent, dated the Closing Date.

(v) copies of resolutions approving the Loan Documents and authorizing the transactions contemplated therein, duly adopted by the governing authority of the Borrower and each Guarantor, as applicable, accompanied by certificates of an authorized representative acceptable to the Administrative Agent, that such copies are true and correct copies of resolutions duly adopted at the meeting of, or by the unanimous written consent of, the authorized body of the Borrower, or such Guarantor, as applicable, and that such resolutions constitute all the resolutions adopted with respect to such transactions, have not been amended, modified or revoked in any respect, and are in full force and effect as of the Closing Date.

5.2.2. receipt by the Administrative Agent of the duly executed Note for each Lender in the amount at least equal to its Commitment, dated the Closing Date.

5.2.3. receipt by the Administrative Agent of the documents described in Section 4.1.1, each duly executed and delivered by the appropriate Person and, if such is required by the Administrative Agent with respect to the Mortgages, duly recorded in the appropriate county or parish records.

5.2.4. receipt by the Administrative Agent of such title opinions or title data as the Administrative Agent may reasonably request, in form and substance and from attorneys or other Persons reasonably acceptable to the Administrative Agent, covering and confirming title in such portions of the Collateral as the Administrative Agent may specify and such other documentation and information reasonably required by the Administrative Agent to satisfy the Administrative Agent of the status of the title of the Collateral.

5.2.5. receipt by the Administrative Agent of a certificate of ownership interests in form and substance satisfactory to the Administrative Agent, certifying as to the ownership interests of the Borrower in its Oil and Gas Properties.

5.2.6. receipt by the Administrative Agent of satisfactory evidence that prior Liens, if any, on the Collateral (other than Permitted Liens) are being released or assigned to the Administrative Agent concurrently with the Closing.

5.2.7. receipt by the Administrative Agent of the opinions of counsel to the Borrower and each Guarantor in form and substance satisfactory to the Administrative Agent and its counsel. The Borrower and each Guarantor requests such counsel to deliver its opinions to the Administrative Agent and the Lenders.

5.2.8. receipt by the Administrative Agent of the results of searches of the UCC records of the applicable jurisdictions from sources acceptable to the Administrative Agent reflecting no Liens against any of the intended Collateral other than Permitted Liens or Liens being released or assigned to the Administrative Agent concurrently with the Closing.

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5.2.9. receipt by the Administrative Agent of a certificate from an authorized representative acceptable to the Administrative Agent certifying to the best of such individual’s knowledge as to the truth and correctness of each representation and warranty contained in Article VI hereof as of the Closing Date.

5.2.10. receipt by the Administrative Agent of such additional information and documentation as the Administrative Agent or any Lender may reasonably require relating to the Loan Documents (and amendments thereto) and the transactions contemplated hereby and thereby.

5.3. Conditions Precedent for the Benefit of the Lenders. All conditions precedent to the obligations of the Administrative Agent and the Lenders to make any Advance or Loan or of the Administrative Agent to issue any letter of credit hereunder are imposed hereby solely for the benefit of the Administrative Agent and the Lenders, and no other Person may require satisfaction of any such condition precedent or be entitled to assume that the Administrative Agent and the Lenders will refuse to make any Advance or Loan or that the Administrative Agent will refuse to issue any letter of credit hereunder or renew or extend any Letter of Credit in the absence of strict compliance with such conditions precedent.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower and, to the extent applicable to any Guarantor, such Guarantor hereby represents and warrants to the Administrative Agent and the Lenders as follows with the intention that the Administrative Agent and the Lenders shall rely thereon without any investigation or verification by the Administrative Agent or any Lender or their respective counsel:

6.1. Existence and Power. The Borrower:

6.1.1. is a corporation, duly organized, validly existing and in good standing under the laws of the State of Utah.

6.1.2. has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

6.1.3. is duly qualified to transact business as a foreign entity in each jurisdiction where the nature of its business requires the same, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

6.1.4. owns, both beneficially and of record, all of its assets reflected in its financial statements delivered to the Administrative Agent.

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The Parent:

6.1.5. is a corporation, duly organized, validly existing and in good standing under the laws of the Province of British Columbia.

6.1.6. has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

6.1.7. is duly qualified to transact business as a foreign entity in each jurisdiction where the nature of its business requires the same, except where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

6.1.8. owns, both beneficially and of record, all of its assets reflected in its financial statements delivered to the Administrative Agent.

6.2. Authorization; Contravention. The execution, delivery and performance by each Person (other than the Administrative Agent and the Lenders) purporting to execute this Agreement or the other Loan Documents are within such Person’s power, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official (except that the perfection of Liens created by certain of the Security Documents may require the filing of financing statements or Mortgages in the appropriate recordation offices), and do not contravene, or constitute a default under, any provision of applicable law or regulation (including the Margin Regulations) or any agreement creating or governing such Person or any agreement, judgment, injunction, order, decree or other instrument binding upon such Person or result in the creation or imposition of any Lien on any Property of the Borrower, except Permitted Liens and Liens securing the Obligations.

6.3. Binding Effect.

6.3.1. This Agreement constitutes a valid and binding agreement of the Borrower; the Notes, when executed and delivered in accordance with this Agreement, will constitute the valid and binding obligation of the Borrower; the Security Documents, when executed and delivered in accordance with this Agreement, will constitute valid and binding obligations of each Person purporting to execute the same.

6.3.2. Each Loan Document is enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability.

6.4. Subsidiaries; Ownership.

6.4.1. The Borrower has no Subsidiaries other than as listed on Schedule 6.4.1 and, if subsequent to the Closing Date, such additional Subsidiaries as have been formed in accordance with Section 7.8.4(i).

6.4.2. The entirety of each class of Equity Interest in the Borrower is owned legally and beneficially by the Parent.

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6.5. Disclosure. No document, certificate or statement delivered to the Administrative Agent by or on behalf of the Borrower in connection with the transactions contemplated hereby contains any untrue statement of a material fact. All information heretofore furnished by the Borrower to the Administrative Agent and the Lenders for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Borrower to the Administrative Agent and the Lenders will be, true and accurate in every material respect or based on reasonable estimates on the date as of which such information is stated or certified. The Borrower has disclosed to the Administrative Agent and the Lenders in writing any and all facts known to the Borrower (except facts of general public knowledge) which could reasonably be expected to materially and adversely affect the business, operations, prospects or condition, financial or otherwise, of the Borrower or the ability of the Borrower to perform its obligations under this Agreement.

6.6. Financial Information.

6.6.1. The financial information of the Borrower delivered to the Administrative Agent and the Lenders in connection with the request for this credit facility fairly presents, and for its financial statements for the fiscal year ended June 30, 2011 to be delivered after the Closing Date, will fairly present, in all material respects, in conformity with generally accepted accounting principles of Canada, the financial position of the Borrower at the respective dates thereof. For all financial statements of the Borrower delivered to the Administrative Agent and the Lenders that cover periods after June 30, 2011, such statements will fairly present in all material respects, in conformity with IFRS, the financial position of the Borrower at the respective dates thereof.

6.6.2. Except as disclosed in a writing delivered by the Borrower to the Administrative Agent and the Lenders prior to the execution and delivery of this Agreement, since the dates referenced in the financial information referred to in Section 6.6.1 above, there has been no material adverse change in the business, financial position, results of operations or prospects of the Borrower.

6.7. Litigation. Except as disclosed in Exhibit 6.7, there is no action, suit or proceeding pending against, or to the knowledge of the Borrower threatened against or affecting the Borrower or any Guarantor before any Tribunal or arbitrator in which there is a reasonable possibility of an adverse decision which could reasonably be expected to materially and adversely affect the business, operations, prospects or condition, financial or otherwise of the Borrower, or which could in any manner draw into question the validity of this Agreement or any other Loan Documents.

6.8. ERISA Plans. Neither the Borrower nor any ERISA Affiliate of the Borrower currently sponsors, maintains or contributes to or has at any time sponsored, maintained or contributed to any Plan.

6.9. Taxes and Filing of Tax Returns.

6.9.1. (i) The Borrower has filed or properly extended all returns required to have been filed or extended with respect to Taxes and has paid all Taxes shown to be due and

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payable by it on such returns, including interest and penalties, and all other Taxes which are payable by it, to the extent the same have become due and payable (unless, with respect to such other Taxes, the criteria set forth in Section 7.5 are being met). The Borrower does not know of any proposed assessment of Taxes of a material amount against it, and all liabilities for Taxes of the Borrower are adequately provided for.

(ii) For each Guarantor, such Guarantor has filed or properly extended all returns required to have been filed or extended with respect to Taxes and has paid all Taxes shown to be due and payable by it on such returns, including interest and penalties, and all other Taxes which are payable by it, to the extent the same have become due and payable (unless, with respect to such other Taxes, the criteria set forth in Section 7.5 are being met). Such Guarantor does not know of any proposed assessment of Taxes of a material amount against it, and all liabilities for Taxes of such Guarantor are adequately provided for.

6.9.2. The Borrower does not intend to treat the Loans or Letters of Credit as being a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4).

6.10. Title to Properties; Liens; Environmental Liability.

6.10.1. (i) The Borrower has good and indefeasible record title to all Property purported to be owned by it (except for Permitted Liens). All of such Property is free and clear of all Liens other than Permitted Liens. Upon the recordation of the Security Documents in the appropriate recordation offices, the Liens covering the Collateral will be valid, enforceable, first and prior, perfected Liens in favor of the Administrative Agent, subject only to Permitted Liens.

(ii) Each Guarantor has good and indefeasible record title to all Collateral purported to be owned by it (except for Permitted Liens). All of such Collateral is free and clear of all Liens other than Permitted Liens. Upon the recordation of the Security Documents in the appropriate recordation offices, the Liens covering the Collateral will be valid, enforceable, first and prior, perfected Liens in favor of the Administrative Agent, subject only to Permitted Liens.

6.10.2. (i) The Borrower has not (a) received notice or otherwise learned of any Environmental Liability arising in connection with (1) any non-compliance with or violation of the requirements of any Environmental Law or (2) the release or threatened release of any Hazardous Substance into the environment, or (b) received notice or otherwise learned of any federal or state investigation evaluating whether any remedial action is needed to respond to a release or threatened release of any Hazardous Substance into the environment for which the Borrower is or may be liable.

(ii) For each Guarantor, such Guarantor has not (a) received notice or otherwise learned of any Environmental Liability arising in connection with (1) any non-compliance with or violation of the requirements of any Environmental Law or (2) the release or threatened release of any Hazardous Substance into the environment or (b) received notice or otherwise learned of any federal or state investigation evaluating whether any remedial action is needed to respond to a release or threatened release of any Hazardous Substance into the environment for which such Guarantor is or may be liable.

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6.10.3. (i) Except in accordance with applicable Requirements of Law or the terms of a valid permit, license, certificate, or approval of the relevant Governmental Authority, no Release of Hazardous Substances by the Borrower from, affecting, or related to any Property of the Borrower has occurred.

(ii) For each Guarantor, except in accordance with applicable Requirements of Law or the terms of a valid permit, license, certificate, or approval of the relevant Governmental Authority, no Release of Hazardous Substances by such Guarantor from, affecting, or related to any Property of such Guarantor has occurred.

6.10.4. (i) No Environmental Complaint has been received by the Borrower.

(ii) For each Guarantor, no Environmental Complaints have been received by such Guarantor.

6.11. Business Compliance.

6.11.1. The Borrower has performed and abided by all obligations required to be performed by it to the extent required under each license, permit, order, authorization, grant, contract, agreement, or regulation to which it is a party or by which it or any of its Property is bound.

6.11.2. For each Guarantor, such Guarantor has performed and abided by all obligations required to be performed by it to the extent required under each license, permit, order, authorization, grant, contract, agreement, or regulation to which it is a party or by which it or any of its Property is bound.

6.12. Licenses, Permits, Etc.

6.12.1. The Borrower possesses such valid franchises, certificates of convenience and necessity, operating rights, licenses, permits, consents, authorizations, exemptions and orders of Tribunals as are necessary to carry on its business as now being conducted and to own its Properties.

6.12.2. For each Guarantor, such Guarantor possesses such valid franchises, certificates of convenience and necessity, operating rights, licenses, permits, consents, authorizations, exemptions and orders of Tribunals as are necessary to carry on its business as now being conducted and to own its Properties.

6.13. Compliance with Laws.

6.13.1. The business and operations of the Borrower have been and are being conducted in accordance with all applicable Laws.

6.13.2. For each Guarantor, the business and operations of such Guarantor have been and are being conducted in accordance with all applicable Laws.

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6.14. Governmental Consent.

6.14.1. No consent, approval or authorization of, or declaration or filing with, any Governmental Authority is required for the valid execution, delivery and the performance of this Agreement or any other Loan Documents by the Borrower.

6.14.2. For each Guarantor, no consent, approval or authorization of, or declaration or filing with, any Governmental Authority is required for the valid execution, delivery and the performance of any Loan Document by such Guarantor.

6.15. Investment Company Act. (i) The Borrower is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

(ii) For each Guarantor, such Guarantor is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

6.16. State Utility.

6.16.1. (i) The Borrower is not defined as a “utility” under the laws of the State of Texas or any other jurisdiction wherein the Borrower is required to qualify to do business.

(ii) For each Guarantor, such Guarantor is not defined as a “utility” under the Laws of the State of Texas or any other jurisdiction wherein such Guarantor is required to qualify to do business.

6.16.2. (i) The Borrower is not subject to any state or federal Law that would limit its ability to have Liens placed on any of its Property.

(ii) For each Guarantor, such Guarantor is not subject to any state or federal Law that would limit its ability to have Liens placed on any of its Property.

6.17. Refunds; Certain Contracts.

6.17.1. (i) No orders of, proceedings pending before, or other requirements of, the Federal Energy Regulatory Commission, the Texas Railroad Commission, or any Governmental Authority exist which could result in the Borrower or any Guarantor being required to refund any material portion of the proceeds received or to be received from the sale of hydrocarbons constituting part of the Collateral.

(ii) For each Guarantor, no orders of, proceedings pending before, or other requirements of, the Federal Energy Regulatory Commission, the Texas Railroad Commission, or any Governmental Authority exist which could result in such Guarantor being required to refund any material portion of the proceeds received or to be received from the sale of hydrocarbons constituting part of the Collateral.

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6.17.2. (i) The Borrower is not obligated in any material respect by virtue of any prepayment made under any contract containing a “take-or-pay” or “prepayment” provision or under any similar agreement to deliver hydrocarbons produced from or allocated to any of the Collateral at some future date without receiving full payment therefor within 90 days of delivery.

(ii) For each Guarantor, such Guarantor is not obligated in any material respect by virtue of any prepayment made under any contract containing a “take-or-pay” or “prepayment” provision or under any similar agreement to deliver hydrocarbons produced from or allocated to any of the Collateral at some future date without receiving full payment therefor within 90 days of delivery.

6.17.3. (i) The Borrower has not produced gas, in any material amount, subject to, and neither the Borrower nor any of the Collateral is subject to, balancing rights of third parties or subject to balancing duties under governmental requirements.

(ii) For each Guarantor, such Guarantor has not produced gas, in any material amount, subject to, and neither the Guarantor nor any of the Collateral is subject to, balancing rights of third parties or subject to balancing duties under governmental requirements.

6.18. No Default. No Default has occurred which is continuing as of the Closing Date, and the receipt by the Borrower of the initial Advance will not cause a Default to exist.

6.19. Anti-Terrorism Laws.

6.19.1. Anti-Terrorism Laws. None of the Obligated Parties nor any Affiliate of any Obligated Party is in violation of any Anti-Terrorism Law or knowingly engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

6.19.2. OFAC. None of the Obligated Parties nor any Affiliate of any Obligated Party is in violation of any rules or regulations promulgated by OFAC or of any economic or trade sanctions or engages in any transaction administered and enforced by OFAC or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any rules or regulations promulgated by OFAC.

6.20. Existing Indebtedness. The outstanding principal of the existing Debt owed by the Borrower to the Parent will be approximately $46,000,000 as of the Closing Date.

ARTICLE VII

COVENANTS

So long as the Lenders are required to make Loans hereunder or the Administrative Agent is required to issue letters of credit hereunder, any principal of or interest on the Notes shall remain unpaid or any Letter of Credit remains outstanding, the Borrower will duly perform and observe each and all of the covenants and agreements hereinafter set forth:

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7.1. Use of Proceeds and Letters of Credit.

7.1.1. The Borrower will use the proceeds of the Loans solely to finance the acquisition of Oil and Gas Properties, to develop its Oil and Gas Properties and for working capital purposes.

7.1.2. Letters of Credit shall be used for the support of the Borrower’s Oil and Gas Business; provided, however, no Letter of Credit may be used in lieu or in support of stay or appeal bonds, without the prior written consent of the Administrative Agent.

7.1.3. The Borrower will not, directly or indirectly, use any of the proceeds of the Loans for the purpose of purchasing or carrying any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 C. F. R. 221, as amended), or any “security that is publicly-held” within the meaning of Regulation T of such Board of Governors (12 C.F.R. 220, as amended), or otherwise take or permit any action which would involve a violation of such Regulation U, Regulation T or Regulation X (12 C.F.R. 224, as amended) or any other regulation of such Board of Governors. The Loans are not secured, directly or indirectly, in whole or in part, by collateral that includes any “margin stock” within the meaning of Regulation U. The Borrower will not engage principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any “margin stock” within the meaning of such Regulation U.

7.2. Financial Statements; Reserve and Other Reports; Certain Required Notices from Borrower; Additional Information. The Borrower will furnish to the Administrative Agent:

7.2.1. (i) as soon as available and in any event within 120 days after the end of each fiscal year of the Parent, copies of the consolidated and consolidating statement of assets and liabilities of the Parent and its consolidated subsidiaries (including the Borrower) as of the end of such fiscal year, and copies of the related statements of revenues and expenses, operations, changes in owners’ equity and cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, denominated in Dollars and prepared in accordance with generally accepted accounting principles of Canada for the fiscal year ended June 30, 2011, and in conformity with IFRS thereafter; such financial statements to be audited by a firm of independent certified public accountants, or the Canadian equivalent thereof, selected by the Parent and reasonably acceptable to the Administrative Agent.

(ii) on or before 60 days after the last day of each fiscal quarter other than the last fiscal quarter of each fiscal year (except the fiscal quarter ending on September 30, 2011, for which the reports required under this clause (ii) shall be due 75 days thereafter), (a) a copy of the unaudited consolidated and consolidating statement of assets and liabilities of the Parent and its consolidated subsidiaries (including the Borrower) as at the close of such quarter and from the beginning of such fiscal year to the end of such quarter, (b) a copy of the related statements of revenues and expenses, operations, changes in owners’ equity and cash flows for the quarter just ended and for that portion of the year ending on such last day, all in reasonable detail, denominated in Dollars and prepared on a basis consistent with the financial statements previously delivered by the Parent under this Section (except that the initial such financial

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statements due under this clause (ii) may not be consistent with the financial statements delivered to the Administrative Agent prior to the Closing Date due to the Parent’s change in accounting method from generally accepted accounting principles of Canada to IFRS) and (c) an identification of all Contingent Obligations and Guarantees by the Borrower or the Parent.

(iii) simultaneously with the delivery of each set of financial statements pursuant to the preceding clauses of this Section, a Compliance Certificate of the Borrower stating that such financial statements fairly and accurately reflect in all material respects the financial condition and results of operation of the Borrower for the periods and as of the dates set forth therein, subject, with respect to quarterly financial statements, to changes resulting from normal year-end adjustments and that the signers have reviewed the terms of this Agreement and the other Loan Documents, and have made, or caused to be made under their supervision, a review of the transactions and financial condition of the Borrower during the fiscal period covered by such financial statements, and that such review has not disclosed the existence during such period, and that the signers do not have knowledge of the existence as of the date of such certificate, of any condition or event which constitutes a Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken or is taking or proposes to take with respect thereto. For any financial statements delivered electronically by a Responsible Representative in satisfaction of the reporting requirements set forth in clause (i) or (ii) preceding that are not accompanied by the required Compliance Certificate, that Responsible Representative shall nevertheless be deemed to have certified the factual matters described in this clause (iii) with respect to such financial statements; however, such deemed certification shall not excuse or be construed as a waiver of the Borrower’s obligation to deliver the required Compliance Certificate.

(iv) within 30 days after each filing thereof by the Borrower and each Guarantor with any Governmental Authority, complete copies of the federal and state income tax returns so filed.

7.2.2. (i) within 60 days following each January 1, production and engineering reports in form and substance satisfactory to the Administrative Agent in its reasonable judgment, prepared by the Borrower containing data concerning pricing, quantities of oil, gas and liquid hydrocarbon production from the Oil and Gas Properties utilized in determining the Borrowing Base by major field and in total, purchasers of production, gross revenues, expenses, production taxes, engineering and geological data, and such other information with respect thereto as the Administrative Agent may reasonably request.

(ii) within 60 days following each request of the Administrative Agent, a report setting forth oil, gas and liquid hydrocarbon production volumes by major field and in total from the Oil and Gas Properties utilized in determining the Borrowing Base for the month ended as specified in the request, and the total oil, gas and liquids production of all fields of the Borrower and the prices received therefor, the lease operating expenses on a property-by-property basis and such other information as the Administrative Agent shall request.

(iii) within 15 days following each request by the Administrative Agent, a report setting forth all accounts receivable and accounts payable of the Borrower as of the date specified in such request, such report to show the age of such accounts and such other information as the Administrative Agent shall reasonably request.

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(iv) as soon as available, and in any event on or before October 15 of each year during the term of this Agreement, engineering reports in form and substance satisfactory to the Administrative Agent in its reasonable judgment, certified by any nationally or regionally recognized independent consulting petroleum engineers selected by the Borrower and acceptable to the Administrative Agent as fairly and accurately setting forth (a) the proven and producing, shut-in, behind-pipe, and undeveloped oil and gas reserves (separately classified as such) attributable to the Oil and Gas Properties of the Borrower as of July 1 of such year, (b) the aggregate present value of the future net income with respect to such Properties, discounted at a stated per annum discount rate of proven and producing reserves, (c) projections of the annual rate of production, gross income, and net income with respect to such proven and producing reserves, and (d) information with respect to the “take-or-pay,” “prepayment,” and gas-balancing liabilities of the Borrower and other Persons with respect to such Properties.

(v) simultaneously with the delivery of such engineering and other reports under clauses (i) through (iv) above, a Representative’s Certificate certifying that, to the best of such signatory’s knowledge, such engineering and other reports are true, accurate and complete in all material respects for the periods covered in such reports; provided that to the extent such reports include projections of future volumes of production and future costs, it is understood that such estimates are necessarily based upon professional opinions, and the Borrower does not warrant that such opinions will ultimately prove to have been accurate.

(vi) within 10 days after the Borrower’s incurring any Guarantee, a report describing such Guarantee in reasonable detail; provided, however, that such reporting requirement shall not be construed as waiving or eliminating the restrictions set forth in Section 7.6.2 hereof.

7.2.3. (i) within 10 days after any Responsible Representative becomes aware of the occurrence of any condition or event which constitutes a Default, a Representative’s Certificate specifying the nature of such condition or event, the period of existence thereof, what action the Borrower has taken or is taking and proposes to take with respect thereto and the date, if any, on which it is estimated the same will be remedied.

(ii) within 10 days after the Borrower’s or any Guarantor’s learning of any claim, demand, action, event, condition, report or investigation indicating any potential or actual liability of the Borrower or any Guarantor arising in connection with (a) the non-compliance with or violation of the requirements of any Environmental Law, (b) the release or threatened release of any toxic or hazardous waste, substance or constituent into the environment, or (c) the existence of any Environmental Lien on any Properties of the Borrower or any Guarantor, notice thereof.

(iii) within 10 days of the Borrower’s learning of any litigation or other event or circumstance which could reasonably be expected to have a Material Adverse Effect, notice thereof.

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(iv) with reasonable promptness after any Responsible Representative becomes aware of the occurrence thereof, notice of the change in identity or address of any Person remitting to the Borrower proceeds from the sale of hydrocarbon production from or attributable to any Collateral.

(v) within 10 days after the occurrence thereof, notice of any Change of Control Event.

7.2.4. with reasonable promptness, such other information relating directly or indirectly to the financial condition, business, results of operations or Properties of the Borrower or any Guarantor as from time to time may reasonably be requested by the Administrative Agent or any Lender.

7.3. Inspection of Properties and Books.

7.3.1. The Borrower will permit any officer, employee or representative of the Administrative Agent and each Lender to visit and inspect any of its Properties, to examine its books of account (and to make copies thereof and take extracts therefrom) and to discuss its affairs, finances and accounts (including transactions, agreements and other relations with any shareholders) with, and to be advised as to the same by, its officers and independent public accountants, all upon at least two (2) Business Days notice and at such reasonable times during normal business hours and intervals as the requesting Person may desire and, if a Default has occurred and is continuing, at the expense of the Borrower.

7.3.2. Each Guarantor will permit any officer, employee or representative of the Administrative Agent and each Lender to visit and inspect any of its Properties, to examine its books of account (and to make copies thereof and take extracts therefrom) and to discuss its affairs, finances and accounts (including transactions, agreements and other relations with any shareholders) with, and to be advised as to the same by, its officers and independent public accountants, all upon at least two (2) Business Days notice and at such reasonable times during normal business hours and intervals as the requesting Person may desire and, if a Default has occurred and is continuing, at the expense of the Borrower.

7.4. Maintenance of Security; Insurance; Authorization to File Financing Statements; Operating Accounts; Transfer Orders.

7.4.1. (i) The Borrower shall execute and deliver, or cause the appropriate Person to execute and deliver, to the Administrative Agent all mortgages, deeds of trust, security agreements, financing statements, assignments and such other documents and instruments (including division and transfer orders), and supplements and amendments thereto, and take such other actions as the Administrative Agent deems necessary or desirable in order to (a) maintain as valid, enforceable, first-priority, perfected Liens (subject only to the Permitted Liens), all Liens granted to secure the Obligations or (b) monitor or control the proceeds from the Collateral.

(ii) The Borrower and each Guarantor which has granted a security interest in connection herewith authorizes the Administrative Agent to complete and file, from time to time, financing statements naming the Borrower and such Guarantor, as applicable, as debtor to perfect Liens granted to secure the Obligations.

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(iii) The Borrower shall take such action as may be requested from time to time by the Administrative Agent to maintain, or cause to be in effect at all times, first and prior Liens (subject to Permitted Liens) in favor of the Administrative Agent by instruments executed by the appropriate Person and properly recorded in the applicable jurisdictions on at least 80% by PW9 Value of the Oil and Gas Properties included in the most recent determination of the Borrowing Base.

(iv) The Borrower and each Guarantor will at all times maintain or cause to be maintained hazard and liability insurance and additional insurance covering such risks as are customarily carried by businesses similarly situated, all such insurance to be in amounts and from insurers reasonably acceptable to the Administrative Agent, maintained by Borrower, naming the Administrative Agent for the benefit of the Lenders as loss payee, and, upon any renewal of any such insurance and at other times upon request by the Administrative Agent, promptly furnish to the Administrative Agent evidence, reasonably satisfactory to the Administrative Agent, of the maintenance of such insurance.

7.4.2. The Borrower will maintain its primary operating accounts with the Texas Capital Bank, N.A., and will deposit the substantial majority of its revenues in such accounts, although such requirement shall not be construed as requiring the maintenance of deposit balances.

7.4.3. The Borrower and each Guarantor which has granted a Lien on Oil and Gas Properties in connection herewith shall upon request of the Administrative Agent, execute such transfer orders, letters-in-lieu of transfer orders or division orders as the Administrative Agent may from time to time request in respect of the Collateral to effect a transfer and delivery to the Administrative Agent for the benefit of the Lenders of the proceeds of production attributable to the Collateral; provided, however, that so long as no Default exists, the Borrower shall be entitled to receive such proceeds.

7.5. Payment of Taxes and Claims.

7.5.1. The Borrower will pay (i) all Taxes imposed upon it or any of its assets or with respect to any of its franchises, business, income or profits before any material penalty or interest accrues thereon and (ii) all material claims (including claims for labor, services, materials and supplies) for sums which have become due and payable and which have or might become a Lien (other than a Permitted Lien) on any of its assets; provided, however, that no payment of such Taxes or claims shall be required if (a) the amount, applicability or validity thereof is currently being contested in good faith by appropriate proceedings promptly initiated and diligently conducted, (b) the Borrower shall have set aside on its books reserves (segregated to the extent required by applicable accounting principles) reasonably deemed by it to be adequate with respect thereto, and (c) if material, the Borrower has notified the Administrative Agent of such circumstances, in detail reasonably satisfactory to the Administrative Agent.

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7.5.2. Each Guarantor will pay (i) all Taxes imposed upon it or any of its assets or with respect to any of its franchises, business, income or profits before any material penalty or interest accrues thereon and (ii) all material claims (including claims for labor, services, materials and supplies) for sums which have become due and payable and which have or might become a Lien (other than a Permitted Lien) on any of its assets; provided, however, that no payment of such Taxes or claims shall be required if (a) the amount, applicability or validity thereof is currently being contested in good faith by appropriate proceedings promptly initiated and diligently conducted, (b) such Guarantor shall have set aside on its books reserves (segregated to the extent required by applicable accounting principles) reasonably deemed by it to be adequate with respect thereto, and (c) if material, such Guarantor has notified the Administrative Agent of such circumstances, in detail reasonably satisfactory to the Administrative Agent.

7.6. Payment of Debt; Additional Debt; Payment of Accounts.

7.6.1. (i) The Borrower will (a) pay, renew or extend or cause to be paid, renewed or extended the principal of, and the prepayment charge, if any, and interest on all Debt heretofore or hereafter incurred or assumed by it when and as the same shall become due and payable unless such payment is prohibited by the Loan Documents or would cause a Default hereunder; (b) faithfully perform, observe and discharge all unwaived covenants, conditions and obligations within any applicable periods of grace imposed on it by any instrument evidencing such Debt or by any indenture or other agreement securing such Debt or pursuant to which such Debt is issued unless such performance, observance or discharge would cause a Default hereunder; and (c) not permit the occurrence of any act or omission which would constitute a default under any such instrument, indenture or agreement.

(ii) Each Guarantor will (a) pay, renew or extend or cause to be paid, renewed or extended the principal of, and the prepayment charge, if any, and interest on all Debt heretofore or hereafter incurred or assumed by it when and as the same shall become due and payable unless such payment is prohibited by the Loan Documents or would cause a Default hereunder; (b) faithfully perform, observe and discharge all unwaived covenants, conditions and obligations within any applicable periods of grace imposed on it by any instrument evidencing such Debt or by any indenture or other agreement securing such Debt or pursuant to which such Debt is issued unless such performance, observance or discharge would cause a Default hereunder; and (c) not permit the occurrence of any act or omission which would constitute a default under any such instrument, indenture or agreement.

7.6.2. (i) The Borrower will not create, incur or suffer to exist any Funded Debt, except without duplication (a) Funded Debt to the Lenders and (b) Permitted Indebtedness.

(ii) No Guarantor will create, incur or suffer to exist any Funded Debt, except without duplication (a) Funded Debt to the Lenders and (b) Permitted Indebtedness.

7.6.3. (i) The Borrower shall pay all of its trade and other accounts payable within 90 days after the invoice date therefor, unless such payables are being contested in good faith by appropriate proceedings or other written protest thereof.

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(ii) Each Guarantor shall pay all of its trade and other accounts payable within 90 days after the invoice date therefor, unless such payables are being contested in good faith by appropriate proceedings or other written protest thereof.

7.6.4. (i) At any time an Event of Default exists or if any such payments will cause an Event of Default to exist, the Borrower shall not voluntarily make any payments on any of its Debts, other than the Obligations.

(ii) At any time an Event of Default exists or if any such payments will cause an Event of Default to exist, no Guarantor shall voluntarily make any payments on any of its Debts, other than the Obligations or payments made by such Guarantor to the Borrower.

7.7. Negative Pledge. (i) The Borrower will not create, suffer to exist or otherwise allow any Liens to be on or otherwise to affect any of its Property whether now owned or hereafter acquired, except (a) Permitted Liens and (b) Liens on Property of the Borrower that has not been engineered in connection with any Borrowing Base determination that would not otherwise be permitted by clause (a) preceding; provided that the aggregate principal or face amount of all Debt (other than the Obligations) secured under clause (b) preceding shall not exceed $200,000 at any time.

(ii) No Guarantor will create, suffer to exist or otherwise allow any Liens to be on or otherwise to affect any of its Property whether now owned or hereafter acquired, except (a) Permitted Liens and (b) Liens on Property of the Guarantor that has not been engineered in connection with any Borrowing Base determination that would not otherwise be permitted by clause (a) preceding; provided that the aggregate principal or face amount of all Debt (other than the Obligations) secured under clause (b) preceding shall not exceed $200,000 at any time.

7.8. Loans and Advances to Others; Investments; Restricted Payments; Subsidiaries.

7.8.1. (i) The Borrower will not make or suffer to exist any loan, advance or extension of credit to any Person except (a) trade and customer accounts receivable which are for goods furnished or services rendered in the ordinary course of business and which are payable in accordance with customary trade terms, (b) Permitted Investments, and (c) advances to employees of the Borrower for payment of expenses in the ordinary course of business.

(ii) No Guarantor will make or suffer to exist any loan, advance or extension of credit to any Person except (a) trade and customer accounts receivable which are for goods furnished or services rendered in the ordinary course of business and which are payable in accordance with customary trade terms, (b) Permitted Investments, and (c) advances to employees of such Guarantor for payment of expenses in the ordinary course of business.

7.8.2. (i) The Borrower will not make any capital contribution to or make any Investment in, or to purchase or make a commitment to purchase any interest in, any Person except as permitted in clauses (a), (b) and (c) of Section 7.8.1(i).

(ii) No Guarantor will make any capital contribution to or make any Investment in, or to purchase or make a commitment to purchase any interest in, any Person except as permitted in clauses (a), (b) and (c) of Section 7.8.1(ii).

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For avoidance of doubt, the foregoing shall not be construed as limiting the ability of the Borrower or any Guarantor to acquire Oil and Gas Properties, to operate in the Oil and Gas Business and to enter into standard and customary contracts and agreements for the acquisition and operation of Oil and Gas Properties in the ordinary course of business in connection therewith, in each case to the extent not expressly limited by another provision of this Agreement or another Loan Document.

7.8.3. (i) The Borrower will not, directly or indirectly, make any Restricted Payment without the prior written consent of the Required Lenders except as specifically permitted in the definition of such defined term.

(ii) No Guarantor will, directly or indirectly, make any Restricted Payment without the prior written consent of the Required Lenders except as specifically permitted in the definition of such defined term.

7.8.4. (i) The Borrower shall not form or acquire any Subsidiaries, either directly or indirectly through other Subsidiaries, without the prior written consent of the Required Lenders, which consent, if given, may be conditioned on such Subsidiary’s execution of a Guaranty and security instruments covering all of the Property of such Subsidiary, each in form and substance reasonably satisfactory to the Administrative Agent.

(ii) No Guarantor shall form or acquire any Subsidiaries, either directly or indirectly through other Subsidiaries, without the prior written consent of the Required Lenders, which consent, if given, may be conditioned on such Subsidiary’s execution of a Guaranty and security instruments covering all of the Property of such Subsidiary, each in form and substance reasonably satisfactory to the Administrative Agent.

7.9. Consolidation, Merger, Maintenance, Change of Control; Disposition of Property; Restrictive Agreements; Hedging Agreements; Modification of Organizational Documents; Issuance of Equity Interests.

7.9.1. (i) The Borrower will not (a) consolidate or merge with or into any other Person without the prior written consent of the Required Lenders, except that the Borrower may merge with any wholly-owned Subsidiary so long as (i) the Borrower gives prior written notice to the Administrative Agent, (ii) the Borrower is the surviving entity of the merger and does not change its name or jurisdiction of incorporation in connection therewith, and (iii) immediately prior to the merger, the Subsidiary is a Guarantor, has no Funded Debt and is not party to any active litigation, (b) sell, lease or otherwise transfer all or substantially all of its Property to any other Person, (c) terminate, or fail to maintain, its existence as the type of entity represented in Section 6.1 and in its state of formation represented in Section 6.1. or (d) terminate, or fail to maintain, its good standing and qualification to transact business in all jurisdictions where the nature of its business requires the same (except where the failure to maintain its good standing or qualification could not reasonably be expected to have a Material Adverse Effect) or (e) permit a Change of Control Event to occur.

(ii) No Guarantor will (a) consolidate or merge with or into any other Person without the prior written consent of the Required Lenders, (b) sell, lease or otherwise transfer all

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or substantially all of its Property to any other Person, (c) terminate, or fail to maintain, its existence as the type of entity represented in Section 6.1 and in its state of formation represented in Section 6.1. or (d) terminate, or fail to maintain, its good standing and qualification to transact business in all jurisdictions where the nature of its business requires the same (except where the failure to maintain its good standing or qualification could not reasonably be expected to have a Material Adverse Effect) or (e) permit a Change of Control Event to occur.

7.9.2. Neither the Borrower nor any Guarantor will sell, encumber, or otherwise transfer all or any portion of the Collateral, any Property having PW9 Value, or any of its other Property except for (a) sales of oil and gas after severance in the ordinary course of business, provided that no contract for the sale of hydrocarbons shall obligate the Borrower or any Guarantor to deliver hydrocarbons produced from any of the Collateral at some future date without receiving full payment therefor within 90 days of delivery, (b) the sale or other disposition of equipment destroyed, worn out, damaged, or having only salvage value or no longer used or useful in the business of the Borrower or such Guarantor, or (c) sales of Oil and Gas Properties during any rolling 12-month period that, in the aggregate, have PW9 Value of not greater than 10% of all Property utilized in determining the Borrowing Base as of the beginning of such 12-month period or then-effective Borrowing Base, whichever is less, subject in the case of sales permitted by clause (c) to the conditions that (w) the Borrower gives prior notice of the sale to the Administrative Agent, (x) no Default exists at the time of such disposition or will exist after such disposition, (y) the consideration received in respect of such disposition is not, in the opinion of the Administrative Agent, less than the fair market value of the Oil and Gas Properties subject to such disposition, and (z) if the principal of the Notes plus the Letter of Credit Exposure exceeds the Borrowing Base (or will exceed the Borrowing Base as a consequence of such disposition), the Borrower shall repay the principal of the Notes in the amount of such excess prior to or contemporaneously with the closing of such sale. In the furtherance of the foregoing, the Administrative Agent shall be entitled to redetermine the Borrowing Base under Section 2.8.1 if the Administrative Agent deems such advisable. For any sale occurring under clause (c) preceding, the Administrative Agent shall promptly following a request therefor execute a release on such Oil and Gas Properties. Notwithstanding the foregoing, any sale, encumbrance or other transfer that would not otherwise be permitted under the foregoing clauses (a), (b) or (c) may be made with the consent of all Lenders. Any consent by the Lenders to the sale, encumbrance or other transfer of any Property covered by this Section may include a requirement (to be treated as a Borrower Requested Determination) that a new Borrowing Base be determined under Section 2.8.1 and that the proceeds of such sale plus such additional amounts as are necessary (or, if such determination of the Borrowing Base has not been completed, are estimated by each Lender) to avoid the occurrence of a Borrowing Base Deficiency be applied to the Obligations. In connection with any request for consent to the sale of Collateral, the Administrative Agent and the Lenders shall be entitled to seek and receive from the Borrower such information and data as shall be advisable in the sole judgment of the requesting parties and sufficient time to review and analyze such information and data in the ordinary course of each such party’s business (including obtaining such committee approvals as may be deemed appropriate by each such party).

7.9.3. (i) The Borrower will not be or become party to or bound by any agreement (including any undertaking in connection with the incurrence of Debt or issuance of Securities) which imposes any limitation on the disposition of the Collateral more restrictive than

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those set forth above or which in any way would be contravened by the Borrower’s performance of its obligations hereunder or under the other Loan Documents or which contains any negative pledge on all or any portion of the Borrower’s Property, except in favor of the Administrative Agent.

(ii) No Guarantor will be or become party to or bound by any agreement (including any undertaking in connection with the incurrence of Debt or issuance of securities) which imposes any limitation on the disposition of the Collateral more restrictive than those set forth above or which in any way would be contravened by such Guarantor’s or the Borrower’s performance of its obligations hereunder or under the other Loan Documents or which contains any negative pledge on all or any portion of such Guarantor’s or the Borrower’s Property, except in favor of the Administrative Agent.

7.9.4. (i) The Borrower will not enter into any Hedging Transaction unless (a) such Hedging Transaction is an Acceptable Hedging Transaction and (b) the Hedging Agreement governing such Hedging Transaction does not contain any anti-assignment provisions restricting the Borrower or, if such agreement contains anti-assignment provisions which cannot be removed, such provisions shall be modified to read substantially as follows: “The interest and obligations arising from this agreement are non-transferable and non-assignable, except that Lynden USA Inc. may assign and grant a security interest in its rights and interests hereunder to Texas Capital Bank, N.A., for itself or in its capacity as contractual representative of itself and other creditors, and their respective assigns (collectively, the “Lender”), as security for Lynden USA Inc.’s present and future obligations to the Lender. Until [hedge provider] is notified in writing by Texas Capital Bank, N.A. to pay to the Lender amounts due Lynden USA Inc. hereunder, [hedge provider] may continue to make such payments to Lynden USA Inc.”

(ii) The Borrower will not cause or permit any Hedging Transaction now existing or hereafter entered into by the Borrower to be amended, modified, terminated, negated through the Borrower’s entry into one or more new Hedging Transactions with the opposing effect, or liquidated without the prior written consent of the Administrative Agent.

(iii) The Borrower will not cause or permit any Hedging Agreement now existing or hereafter entered into by the Borrower to be amended, modified or terminated without the prior written consent of the Administrative Agent except for entering into usual and customary confirmations under such Hedging Agreements setting forth volume, pricing, duration and other such standard terms.

7.9.5. (i) The Borrower will not amend its Organizational Documents or its Regulatory Documents in any material respect or in any respect which could be adverse to the interests of the Lenders.

(ii) No Guarantor will amend its Organizational Documents or its Regulatory Documents in any material respect or in any respect which could reasonably be deemed to be adverse to the interests of the Lenders.

7.9.6. (i) The Borrower will not issue any Equity Interests or rights, options or warrants to purchase any of the Borrower’s Equity Interests.

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(ii) No Guarantor (other than Parent) will issue any Equity Interests or rights, options or warrants to purchase any of such Guarantor’s Equity Interests.

7.10. Primary Business; Continuous Operations; Location of Borrower’s Office; Ownership of Assets.

7.10.1. (i) The primary business of the Borrower shall at all times be and remain the Oil and Gas Business. The Borrower shall continuously remain in operation in a manner reasonably necessary to manage its Properties and business affairs.

(ii) The primary business of each Guarantor shall at all times be and remain the Oil and Gas Business.

7.10.2. The location of the Borrower’s principal place of business and executive office shall remain at the address for the Borrower set forth on the signature page hereof, unless at least 10 days prior to any change in such address the Borrower provides the Administrative Agent with written notice of such pending change.

7.10.3. (i) The Borrower will at all times own, both beneficially and of record, all assets reflected in its financial statements delivered to the Administrative Agent from time to time, subject only to Permitted Liens and dispositions of Property permitted by this Agreement (provided that any disposed Property shall cease to be reflected in financial statements of the Borrower that are furnished after such disposition).

(ii) Each Guarantor will at all times own, both beneficially and of record, all assets reflected in its financial statements delivered to the Administrative Agent from time to time, subject only to Permitted Liens and dispositions of Property permitted by this Agreement (provided that any disposed Property shall cease to be reflected in financial statements of the Guarantor that are furnished after such disposition).

7.11. Operation of Properties and Equipment; Compliance with and Maintenance of Contracts; Duties as Nonoperator.

7.11.1. (i) The Borrower shall at all times maintain, develop and operate its Oil and Gas Properties in a good and workmanlike manner, or use commercially reasonable efforts to cause such Oil and Gas Properties to be operated in a good and workmanlike manner if it is not the operator, and will observe and comply in all material respects with all of the terms and provisions, express or implied, of all oil and gas leases relating to such Oil and Gas Properties so long as such oil and gas leases are capable of producing hydrocarbons in commercial quantities, to the extent that the failure to so observe and comply could reasonably be expected to have a Material Adverse Effect.

(ii) Each Guarantor shall at all times maintain, develop and operate its Oil and Gas Properties in a good and workmanlike manner, or use commercially reasonable efforts to cause such Oil and Gas Properties to be operated in a good and workmanlike manner if it is not the operator, and will observe and comply in all material respects with all of the terms and provisions, express or implied, of all oil and gas leases relating to such Oil and Gas Properties so long as such oil and gas leases are capable of producing hydrocarbons in commercial quantities, to the extent that the failure to so observe and comply could reasonably be expected to have a Material Adverse Effect.

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(iii) The Borrower and each Guarantor shall remain as the named operator for each oil or gas well in which it now or hereafter owns an interest if (a) it or such Guarantor is the operator thereof on the date hereof or becomes the operator thereof subsequent hereto and (b) such well is now or hereafter becomes Collateral.

(iv) The Borrower shall at all times, maintain, preserve and keep all operating equipment used or useful with respect to the Oil and Gas Properties of the Borrower in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto so that the efficiency of such operating equipment shall at all times be properly preserved and maintained, provided that no item of operating equipment need be so repaired, renewed, replaced, added to or improved, if the Borrower shall in good faith determine that such action is not necessary or desirable for the continued efficient and profitable operation of the business of the Borrower.

(v) Each Guarantor shall at all times, maintain, preserve and keep all operating equipment used or useful with respect to the Oil and Gas Properties of such Guarantor in proper repair, working order and condition, and make all necessary or appropriate repairs, renewals, replacements, additions and improvements thereto so that the efficiency of such operating equipment shall at all times be properly preserved and maintained, provided that no item of operating equipment need be so repaired, renewed, replaced, added to or improved, if such Guarantor shall in good faith determine that such action is not necessary or desirable for the continued efficient and profitable operation of the business of such Guarantor.

(vi) The Borrower will cause each of its Affiliates that becomes an operator of Oil and Gas Properties of the Borrower pledged as Collateral to execute and deliver a Guaranty to the Administrative Agent within ten (10) Business Days after any such Person becomes such an operator.

7.11.2. (i) The Borrower shall comply in all material respects with all Laws and agreements applicable to or relating to its Oil and Gas Properties or the production and sale of hydrocarbons therefrom and all applicable proration and conservation laws of the jurisdictions in which such Properties are located, to the extent that the failure to so comply with such Laws or agreements could reasonably be expected to expose the Borrower to any material loss, penalty or forfeiture.

(ii) Each Guarantor shall comply in all material respects with all Laws and agreements applicable to or relating to its Oil and Gas Properties or the production and sale of hydrocarbons therefrom and all applicable proration and conservation laws of the jurisdictions in which such Properties are located, to the extent that the failure to so comply with such Laws or agreements could reasonably be expected to expose such Guarantor to any material loss, penalty or forfeiture.

7.11.3. With respect to the Oil and Gas Properties referred to in this Section which are operated by operators other than the Borrower or any Affiliate of the

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Borrower, the Borrower shall not be obligated itself to perform any undertakings contemplated by the covenants and agreements contained in this Section which are performable only by such operators and are beyond the control of the Borrower, but the Borrower shall use commercially reasonable efforts to cause such operators to perform such undertakings.

7.11.4. (i) The Borrower will not amend, alter or change in any respect which could reasonably be expected to be adverse to the interests of the Borrower or the Lenders any agreements relating to the operations or business arrangements of the Borrower or the compression, gathering, sale or transportation of oil and gas from the Oil and Gas Properties included in the most recent determination of the Borrowing Base without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, conditioned or delayed.

(ii) No Guarantor will amend, alter or change in any respect which could reasonably be expected to be adverse to the interests of such Guarantor or the Lenders any agreements relating to the operations or business arrangements of such Guarantor or the compression, gathering, sale or transportation of oil and gas from the Oil and Gas Properties included in the most recent determination of the Borrowing Base without the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, conditioned or delayed.

7.12. Transactions with Affiliates.

7.12.1. The Borrower will not engage in any transaction with an Affiliate, except (a) the Borrower may pay or distribute to the Parent Reimbursement Amounts subject to the limitation set forth in Section 7.15.3 and the condition that no Default exists at the time of any such payment and the making of the payment will not cause a Default to exist, and (b) transactions that are (i) at least as favorable to the Borrower as could be obtained in an arm’s length transaction with an unaffiliated third party and (ii) not disadvantageous to any Lender as a holder of a Note.

7.12.2. No Guarantor will engage in any transaction with an Affiliate unless (i) such transaction is at least as favorable to such Guarantor as could be obtained in an arm’s length transaction with an unaffiliated third party and (ii) such transaction is not disadvantageous to any Lender as holder of a Note.

7.13. Plans.

7.13.1. The Borrower will not assume or otherwise become subject to an obligation to contribute to or maintain any Plan or acquire any Person which has at any time had an obligation to contribute to or maintain any Plan.

7.13.2. No Guarantor will assume or otherwise become subject to an obligation to contribute to or maintain any Plan or acquire any Person which has at any time had an obligation to contribute to or maintain any Plan.

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7.14. Compliance with Laws and Documents.

7.14.1. The Borrower will not, directly or indirectly, violate the provisions of any Laws, its Organizational Documents or its Regulatory Documents or any Material Agreement, if such violation, alone or when combined with all other such violations, could reasonably be expected to have or does have a Material Adverse Effect.

7.14.2. No Guarantor will, directly or indirectly, violate the provisions of any Laws, its Organizational Documents or its Regulatory Documents or any Material Agreement, if such violation, alone or when combined with all other such violations, could reasonably be expected to have or does have a Material Adverse Effect.

7.15. Certain Financial Covenants.

7.15.1. Interest Coverage Ratio. The Parent will not permit the ratio of Cash Flow to Fixed Charges to be less than 3.00 to 1.00, determined as of the end of each fiscal quarter of the Parent ending on or after September 30, 2011.

“Cash Flow” for any fiscal quarter of the Parent, means EBITDA of the Parent and its consolidated subsidiaries for such quarter minus Cash Taxes and Distributions of the Parent and its consolidated subsidiaries for such quarter. Cash Flow is a quarter-by-quarter calculation.

“Cash Taxes” for any fiscal quarter of the Parent, means federal income taxes and state taxes actually paid by the Parent and its consolidated subsidiaries during such quarter.

“Distributions” means dividends, distributions or other payments to Persons on account of their being the holders of Equity Interests in the Parent or the Borrower.

“EBITDA” means, for any fiscal quarter of the Parent, the pre-tax net income of the Parent and its consolidated subsidiaries for such quarter plus (without duplication and only to the extent deducted in determining such net income), interest expense of the Parent and its consolidated subsidiaries for such quarter, intangible drilling and completion expenses, depreciation, non-cash amortization, depletion, write-down of Oil and Gas Properties and other non-cash expenses of the Parent and its consolidated subsidiaries for such quarter less gains on sales of assets and other non-cash income for such quarter included in the determination of net income of the Parent and its consolidated subsidiaries. EBITDA is a quarter-by-quarter calculation.

“Fixed Charges” means with respect to any fiscal quarter of the Parent, the actual interest payments on the Funded Debt of the Parent and its consolidated subsidiaries during such quarter other than for the Notes plus required interest payments on the Notes during such quarter.

7.15.2. Current Ratio. The Borrower will not permit the ratio of its Current Assets to its Current Liabilities to be less than 1.00 to 1.00, determined as of the end of each fiscal quarter of the Borrower ending on or after September 30, 2011.

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“Current Assets” means the current assets of the Borrower (calculated using book value) plus the Unused Available Commitment.

“Current Liabilities” means the current liabilities of the Borrower (calculated using book value), exclusive of the current portion of the Notes and the current portion, if any, of Subordinated Debt.

7.15.3. General and Administrative Expenses. The Borrower’s payments and distributions to the Parent for reimbursement of the Parent’s general and administrative expenses (the “Reimbursement Amounts”) shall not exceed $1,000,000 during the period from the Closing Date through the one-year anniversary thereof or for any twelve-month period that concludes after such anniversary.

7.16. Tax Shelter. In the event the Borrower determines to take any action inconsistent with the representation in Section 6.9.2, it will promptly notify the Administrative Agent thereof. Accordingly, if the Borrower so notifies the Administrative Agent, the Borrower acknowledges that the Administrative Agent and the Lenders may treat the Loans and Letters of Credit as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and the Administrative Agent and the Lenders will maintain the lists and other records required by such Treasury Regulation.

7.17. Additional Documents; Quantity of Documents; Title Data; Additional Information.

7.17.1. The Borrower shall execute and deliver or cause to be executed and delivered such other and further instruments or documents as in the reasonable judgment of the Administrative Agent may be required to better effectuate the transactions contemplated herein and in the other Loan Documents.

7.17.2. The Borrower will deliver all certificates, opinions, reports and documents hereunder in such number of counterparts as the Administrative Agent may reasonably request.

7.17.3. Within 60 days following a written request therefor from the Administrative Agent, the Borrower shall cause to be delivered to the Administrative Agent title opinions, in form and substance and from attorneys reasonably acceptable to the Administrative Agent, or other confirmation of title acceptable to the Administrative Agent, covering Oil and Gas Properties that (a) constitute not less than 80% of the PW9 Value of the Oil and Gas Properties utilized in the most recent determination of the Borrowing Base and (b) are subject to the Mortgages; and promptly, but in any event within 60 days following notice from the Administrative Agent of any defect, material in the opinion of the Administrative Agent, in the title of the mortgagor under any Mortgage to any Oil and Gas Property covered thereby, clear such title defect or pledge additional Oil and Gas Properties in favor of the Administrative Agent that are of value and quality satisfactory to the Administrative Agent in substitution for the Oil and Gas Properties for which such title cure was requested. In the event any such title defects are not cured or substitute Oil and Gas Properties are not pledged in substitution therefor in a timely manner, the Borrower will pay all related costs and fees incurred by the Administrative Agent and the Lenders in attempting to cure the title defect.

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7.17.4. The Borrower shall furnish to the Administrative Agent, promptly upon the request of the Administrative Agent, such additional financial or other information concerning the assets, liabilities, operations, and transactions of the Borrower as the Administrative Agent may from time to time reasonably request; and notify the Administrative Agent not less than 10 days prior to the occurrence of any condition or event that may change the proper location for the filing of any financing statement or other public notice or recording for the purpose of perfecting a Lien in any Collateral, including any change in its name or the location of its principal place of business or chief executive office; and upon the request of the Administrative Agent, execute such additional Security Documents as may be necessary or appropriate in connection therewith.

7.18. ENVIRONMENTAL INDEMNIFICATION. The Borrower shall, on a current basis, indemnify, defend and hold each Indemnified Party harmless on a current basis from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial actions, requirements and enforcement actions of any kind, and all costs and expenses incurred in connection therewith (including, without limitation, reasonable attorneys’ fees and expenses), arising directly or indirectly, in whole or in part, from (a) the presence of any hazardous substances on, under, or from any Property of the Borrower, whether prior to or during the term hereof, (b) any activity carried on or undertaken on or off any Property of the Borrower, whether prior to or during the term hereof, and whether by the Borrower or any predecessor in title, employee, agent, contractor, or subcontractor of the Borrower or any other Person at any time occupying or present on such Property, in connection with the handling, treatment, removal, storage, decontamination, cleanup, transportation, or disposal of any hazardous substances at any time located or present on or under such Property, (c) any residual contamination on or under any Property of the Borrower, or (d) any contamination of any Property or natural resources arising in connection with the generation, use, handling, storage, transportation or disposal of any hazardous substances by the Borrower or any employee, agent, contractor, or subcontractor of the Borrower while such Persons are acting within the scope of their relationship with the Borrower, irrespective of whether any of such activities were or will be undertaken in accordance with applicable requirements of Law, INCLUDING ANY OF THE FOREGOING IN THIS SECTION ARISING FROM THE SOLE NEGLIGENCE, COMPARATIVE NEGLIGENCE OR CONCURRENT NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED ON ANY OF THE INDEMNIFIED PARTIES, but not any of the foregoing in this section arising from the gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification under this section; with the foregoing indemnity surviving satisfaction of all obligations and the termination of this Agreement.

7.19. Exceptions to Covenants. The Borrower shall not be permitted to take any action which is permitted by any of the covenants contained in this Agreement if such action is in breach of any other covenant contained in this Agreement.

7.20. Anti-Terrorism Laws. Neither the Borrower nor any of the other Obligated Parties shall (a) deal in, or otherwise engage in any transaction relating to, any Property or interests in Property blocked pursuant to Executive Order No. 13224; or (b) engage in or

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conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, (i) any of the prohibitions set forth in Executive Order No. 13224 or the USA Patriot Act, or (ii) any prohibitions set forth in the rules or regulations issued by OFAC or any sanctions against targeted foreign countries, terrorism sponsoring organizations, and international narcotics traffickers based on U.S. foreign policy. The Borrower shall deliver to the Administrative Agent and the Lenders any certification or other evidence requested from time to time by the Administrative Agent or any Lender, in their reasonable discretion, confirming the Obligated Parties’ compliance with this Section.

ARTICLE VIII

DEFAULTS; REMEDIES

8.1. Events of Default; Acceleration of Maturity. If any one or more of the following events (each an “Event of Default”) has occurred and has not been waived in accordance with the provisions hereof (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body or otherwise):

8.1.1. (i) the Borrower shall fail to pay, when due, any principal of, or interest on, (a) the Notes or (b) any other Debt of the Borrower to any Lender.

(ii) the Borrower shall fail to pay when due, any fees or other amounts payable hereunder and not covered by clause (i) above, if such failure shall continue unremedied for a period of 10 days after notice thereof is given to the Borrower.

8.1.2. (i) the Borrower shall fail to observe or perform any covenant or agreement contained in Sections 7.1, 7.2.3, 7.6.2, 7.7, 7.8, 7.9 or 7.15.

(ii) any Guarantor shall (a) fail to comply with the provisions of its Guaranty or (b) revoke or attempt to revoke such Guarantor’s Guaranty or deny the validity or enforceability of such Guarantor’s Guaranty.

8.1.3. the Borrower or any other Person (other than the Administrative Agent or any Lender) shall fail to observe or perform any covenant or agreement contained in this Agreement or the other Loan Documents (other than those covered by Sections 8.1.1 or 8.1.2), for a period of 30 days after the earlier of (i) any Responsible Representative shall have become aware or reasonably should have become aware (regardless of the source of such awareness) of such default or (ii) written notice specifying such default has been given to such Person by the Administrative Agent.

8.1.4. (i) the Borrower shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its Property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate or other action to authorize any of the foregoing.

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(ii) Any Guarantor shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its Property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate or other action to authorize any of the foregoing.

8.1.5. (i) an involuntary case or other proceeding shall be commenced against the Borrower seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its Property, and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of 30 days; or an order for relief shall be entered against the Borrower under the federal bankruptcy laws as now or hereafter in effect which remains undismissed or unstayed for a period of 30 days.

(ii) an involuntary case or other proceeding shall be commenced against any Guarantor seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its Property, and such involuntary case or other proceeding shall remain undismissed or unstayed for a period of 30 days; or an order for relief shall be entered against any Guarantor under the federal bankruptcy laws as now or hereafter in effect which remains undismissed or unstayed for a period of 30 days.

8.1.6. (i) the Borrower (a) shall default in the payment of any of its Material Debts (other than the Notes) and such default shall continue beyond any applicable cure period, (b) shall default in the performance or observance of any other provision contained in any agreements or instruments evidencing or governing such Material Debt and such default is not waived and continues beyond any applicable cure period, or (c) any other event or condition occurs which results in the acceleration of such Material Debt.

(ii) Any Guarantor (a) shall default in the payment of any of its Material Debts (other than its Guaranty) and such default shall continue beyond any applicable cure period, (b) shall default in the performance or observance of any other provision contained in any agreements or instruments evidencing or governing such Material Debt and such default is not waived and continues beyond any applicable cure period, or (c) any other event or condition occurs which results in the acceleration of such Material Debt.

8.1.7. (i) the Borrower shall default in the payment of any of its Debts to any Lender or shall default in the performance or observance of any provision contained in any agreements or instruments evidencing or governing any such Debt (in each case other than defaults covered by Section 8.1.1, Section 8.1.2 or Section 8.1.3) and such default is not waived and continues beyond any applicable cure period.

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(ii) any Guarantor shall default in the payment of any of its Debts to any Lender or shall default in the performance or observance of any provision contained in any agreements or instruments evidencing or governing any such Debt (in each case other than defaults covered by Section 8.1.2 or Section 8.1.3) and such default is not waived and continues beyond any applicable cure period.

8.1.8. (i) one or more judgments or orders for the payment of money aggregating in excess of $200,000 shall be rendered against the Borrower which in the opinion of the Administrative Agent is not adequately covered by insurance and such judgment or order (a) shall continue unsatisfied or unstayed (unless bonded with a supersedeas bond at least equal to such judgment or order) for a period of 30 days, or (b) is not fully paid and satisfied at least 10 days prior to the date on which any of its Property may be lawfully sold to satisfy such judgment or order.

(ii) one or more judgments or orders for the payment of money aggregating in excess of $200,000 shall be rendered against any Guarantor which in the opinion of the Administrative Agent is not adequately covered by insurance and such judgment or order (a) shall continue unsatisfied or unstayed (unless bonded with a supersedeas bond at least equal to such judgment or order) for a period of 30 days, or (b) is not fully paid and satisfied at least 10 days prior to the date on which any of its Property may be lawfully sold to satisfy such judgment or order.

8.1.9. any representation, warranty, certification or statement made or deemed to have been made by or on behalf of the Borrower in this Agreement or by the Borrower or any other Person in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made. Without limiting the generality of the foregoing sentence, such incorrect representation, warranty, certification or statement shall be deemed to be incorrect in a material respect if such incorrect representation, warranty, certification or statement (i) could reasonably be expected to have any adverse effect whatsoever upon the validity, performance or enforceability of any Loan Document, (ii) is or might reasonably be expected to be material and adverse to the financial condition or business operations of any Person or to the prospects of any Person, (iii) could reasonably be expected to impair the Borrower’s ability to fulfill its obligations under the terms and conditions of the Loan Documents, or (iv) could reasonably be expected to impair any Lender’s ability to receive full and timely payment of its Note.

8.1.10. (i) any material license, franchise, permit, or authorization issued to the Borrower by any Tribunal is forfeited, revoked, or not renewed; or any proceeding with respect to seeking forfeiture or revocation thereof is instituted and is not resolved or dismissed within one year of the date of the publication of the order instituting such proceeding.

(ii) any material license, franchise, permit, or authorization issued to any Guarantor by any Tribunal is forfeited, revoked, or not renewed; or any proceeding with respect to seeking forfeiture or revocation thereof is instituted and is not resolved or dismissed within one year of the date of the publication of the order instituting such proceeding.

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8.1.11. (i) a default shall occur under any Material Agreement, other than this Agreement, to which the Borrower is a party or by which any of its Property is bound and such default continues beyond any applicable period of grace provided therefor.

(ii) a default shall occur under any Material Agreement to which any Guarantor is a party or by which any of its Property is bound and such default continues beyond any applicable period of grace provided therefor.

8.1.12. a Change of Control Event shall occur.

8.1.13. any Person (other than the Administrative Agent) fails to comply with the terms of any agreement governing Subordinated Debt.

then, and in every such event, the Administrative Agent may at its option (and shall if requested by the Required Lenders, but subject to Article X) (i) declare the outstanding principal balance of and accrued interest on the Notes to be, and the same shall thereupon forthwith become, due and payable without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrower, (ii) proceed to foreclose the Liens securing the Notes, and (iii) take such other actions as are permitted by Law; provided that in the case of any of the Events of Default specified in Sections 8.1.4 and 8.1.5 with respect to the Borrower, without any notice to the Borrower or any other act by the Administrative Agent or the Lenders, (1) the commitment of each Lender to make Loans hereunder shall terminate except for funding obligations for Letters of Credit, (2) the commitment of the Administrative Agent to issue letters of credit hereunder or to renew (including extensions) Letters of Credit shall terminate and (3) the Notes (together with accrued interest thereon) shall become immediately due and payable without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby waived by the Borrower.

8.2. Suits for Enforcement. In case any one or more of the Events of Default specified in Section 8.1 shall have occurred and be continuing, the Administrative Agent may, at its option, proceed to protect and enforce its rights and the rights of the Lenders either by suit in equity or by action at law, or both, whether for the specific performance of any covenant or agreement contained in this Agreement or in aid of the exercise of any power granted in this Agreement.

8.3. Remedies Cumulative. No remedy herein conferred upon the Administrative Agent and the Lenders is intended to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

8.4. Remedies Not Waived. No course of dealing and no delay in exercising any rights under this Agreement or under the other Loan Documents shall operate as a waiver of any rights hereunder or thereunder of the Administrative Agent and the Lenders.

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ARTICLE IX

MISCELLANEOUS

9.1. Amendments and Waivers.

9.1.1. Any provision of this Agreement, the Notes or the other Loan Documents may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) by a written instrument signed by the Borrower and the Required Lenders (and, if the rights or duties of the Administrative Agent are affected thereby, by the Administrative Agent); provided that no such amendment or waiver shall, unless signed by each Lender directly affected thereby (i) increase or decrease the Commitments of such Lender (except for a ratable decrease in the Commitments of all Lenders) or subject such Lender to any additional obligation; (ii) reduce the principal of or rate of interest on the Note of such Lender or any fees hereunder payable to or for the benefit of such Lender; (iii) postpone the date fixed for any payment of principal of or interest on the Note of such Lender or any fees hereunder payable to or for the benefit of such Lender; (iv) increase the Borrowing Base or decrease the amount by which the Borrowing Base is scheduled to decrease each month; (v) postpone the scheduled termination of such Lender’s Commitment; (vi) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes, or the number of Lenders, which shall be required for the Lenders or any of them to take any action under this Section or any other provision of this Agreement; (vii) amend this Section 9.1 or Section 7.9.2; or (viii) effect a release of any Guaranty. Delivery of an executed counterpart of such written instrument or of the signature page of such written instrument by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective delivery of a manually executed counterpart of such written instrument.

9.1.2. Certain Guarantors might join in the execution of this Agreement or amendments hereto, but the signature or consent of such Guarantors shall not be required with respect to any future amendments to this Agreement.

9.2. Highest Lawful Interest Rate. The Administrative Agent, the Lenders, the Borrower and any other parties to the Loan Documents intend to contract in strict compliance with applicable usury law from time to time in effect. In furtherance thereof such Persons stipulate and agree that none of the terms and provisions contained in the Loan Documents shall ever be construed to create a contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum amount of interest permitted to be charged by applicable law from time to time in effect, and the provisions of this Section 9.2 shall control over all other provisions of the Loan Documents which may be in conflict or apparent conflict herewith. Regardless of any provision contained in any of the Loan Documents, the Lenders shall never be entitled to receive, collect, or apply as interest on all or any part of the Loans, any amount in excess of the Highest Lawful Rate in effect from day to day, and, in the event any Lender ever receives, collects, or applies as interest any such excess, such amount which would be deemed excessive interest shall be deemed a partial prepayment of the principal of the Loans and treated hereunder as such; and, if the entire principal amount of the Loans owed to the Lenders is paid in full, any remaining excess shall be repaid to the Borrower. In determining whether the interest paid or payable, under any specific contingency, exceeds the Highest Lawful Rate in effect from

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day to day, the Borrower and the Lenders shall, to the maximum extent permitted under applicable law, (i) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Loans so that the interest rate is uniform throughout the entire term of the Loans; provided that, if the interest received by the Lenders for the actual period of existence thereof exceeds the Highest Lawful Rate in effect from day to day, the Lenders shall apply or refund to the Borrower the amount of such excess as provided in this Section, and, in such event, the Lenders shall not be subject to any penalties provided by any laws for contracting for, charging, taking, reserving, or receiving interest in excess of the Highest Lawful Rate in effect from day to day.

9.3. INDEMNITY.

9.3.1. Whether or not any Loans are ever funded or any letter of credit is ever issued hereunder, and in addition to any other indemnifications herein or in any other Loan Documents, the Borrower agrees to indemnify and defend and hold harmless on a current basis each Indemnified Party, from and against any and all liabilities, losses, damages, costs, interest, charges, counsel fees and other expenses and penalties of any kind which any of the Indemnified Parties may sustain or incur in connection with any investigative, administrative or judicial proceeding (whether or not any Indemnified Party shall be designated a party thereto) or otherwise by reason of or arising out of the execution and delivery of this Agreement or any of the other Loan Documents and/or the consummation of the transactions contemplated hereby or thereby. The indemnification provisions in this Section shall be enforceable regardless of whether the liability is based on past, present or future acts, claims or legal requirements (including any past, present or future bulk sales law, environmental law, fraudulent transfer act, occupational safety and health law, or products liability, securities or other legal requirement), AND REGARDLESS OF WHETHER ANY PERSON (INCLUDING THE PERSON FROM WHOM INDEMNIFICATION IS SOUGHT) ALLEGES OR PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING INDEMNIFICATION OR OF ANY OTHER INDEMNIFIED PARTY, OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED ON THE PERSON SEEKING INDEMNIFICATION OR ON ANY OTHER INDEMNIFIED PARTY, but not any of the foregoing in this Section arising from the gross negligence or willful misconduct on the part of the Indemnified Party seeking indemnification under this Section; with the foregoing indemnity surviving satisfaction of all obligations and the termination of this Agreement.

9.3.2. Any amount to be paid under Section 9.3 to the Administrative Agent or the Lenders shall be a demand obligation owing by the Borrower and if not paid within three Business Days of demand shall bear interest from the date of expenditure by the Administrative Agent or the Lenders until paid at a per annum rate equal to the Default Rate. The obligations of the Borrower under Section 9.3 shall survive payment of the Notes and the assignment of any right hereunder.

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9.4. Expenses.

9.4.1. Whether or not any one or more of the Loans are ever funded, the Borrower shall pay or reimburse Administrative Agent, at Administrative Agent’s discretion, for (i) all reasonable out-of-pocket expenses of the Administrative Agent, including, without limitation, fees and disbursements of counsel for the Administrative Agent, incurred in connection with the preparation of this Agreement and the other Loan Documents (including the furnishing of any written or oral opinions or advice incident to this transaction) and, if appropriate, the recordation of the Loan Documents, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder, (ii) all title review expenses, appraisal expenses, environmental assessment expenses, and any other due diligence expenses incurred, and (iii) if an Event of Default occurs, all reasonable out-of-pocket expenses incurred by the Administrative Agent, including fees and disbursements of counsel in connection with such Event of Default and collection and other enforcement proceedings resulting therefrom, fees of auditors, consultants, engineers and other Persons incurred in connection therewith (including the supervision, maintenance or disposition of the Collateral) and investigative expenses incurred by the Administrative Agent in connection therewith, which amounts shall be deemed compensatory in nature and liquidated as to amount upon notice to the Borrower by the Administrative Agent and which amounts shall include, but not be limited to (a) all court costs, (b) reasonable attorneys’ fees, (c) reasonable fees and expenses of auditors and accountants incurred to protect the interests of the Lenders, (d) fees and expenses incurred in connection with the participation by the Administrative Agent as a member of the creditors’ committee in a case commenced under any Insolvency Proceeding, (e) fees and expenses incurred in connection with lifting the automatic stay prescribed in Title 11 §362 of the United States Code, and (f) fees and expenses incurred in connection with any action pursuant to Title 11 §1129 of the United States Code all reasonably incurred by the Administrative Agent in connection with the collection of any sums due under the Loan Documents, together with interest at the per annum interest rate equal to the Default Rate, calculated on a basis of a calendar year of 365 or 366 days, as the case may be, counting the actual number of days elapsed, on each such amount from the date of notification that the same was expended, advanced, or incurred by the Administrative Agent until the date it is repaid to the Administrative Agent, with the obligations under Section 9.4 surviving the non-assumption of this Agreement in a case commenced under any Insolvency Proceeding and being binding upon the Borrower or a trustee, receiver, custodian, or liquidator of the Borrower appointed in any such case.

9.4.2. THE BORROWER SHALL INDEMNIFY EACH LENDER AGAINST ANY TRANSFER TAXES, DOCUMENTARY TAXES, ASSESSMENTS OR CHARGES MADE BY ANY GOVERNMENTAL AUTHORITY BY REASON OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

9.4.3. Any amount to be paid under Section 9.4 shall be a demand obligation owing by the Borrower and if not paid within three (3) Business Days of demand shall bear interest from the date of expenditure until paid at a per annum rate equal to the Default Rate. The obligations of the Borrower under Section 9.4 shall survive payment of the Notes, the assignment of any right hereunder and the termination of this Agreement.

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9.5. Taxes. The Borrower will, to the extent it may lawfully do so, pay all Taxes (including interest and penalties but expressly excluding federal or state income taxes) which may be payable in respect of the execution and delivery of this Agreement or the other Loan Documents, or in respect of any amendment of or waiver under or with respect to the foregoing, and will hold each Lender harmless on a current basis against any loss or liability resulting from nonpayment or delay in payment of any such Taxes (as limited above). The obligations of the Borrower under this Section shall survive the payment of the Notes and the assignment of any right hereunder.

9.6. Survival. All representations and warranties made by or on behalf of the Borrower in this Agreement or the other Loan Documents or in any certificate or other instrument delivered by the Borrower or on the Borrower’s behalf under the Loan Documents shall be considered to have been relied upon by the Administrative Agent and the Lenders and shall survive the delivery to the Administrative Agent and the Lenders of such Loan Documents or the extension of the Loans (or any part thereof), regardless of any investigation made by or on behalf of the Administrative Agent and the Lenders.

9.7. Applicable Law; Venue.

9.7.1. This Agreement has been negotiated, is being executed and delivered, and will be performed in whole or in part, in the State of Texas. This Agreement, the other Loan Documents, the entire relationship of the parties hereto, and any litigation between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted and enforced pursuant to the Laws of the State of Texas (and the applicable federal Laws of the United States of America) without giving effect to its choice of law principles, except to the extent the Laws of any jurisdiction where Collateral is located require application of such Laws with respect to such Collateral.

9.7.2. The Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any United States federal or Texas state court sitting in Dallas, Dallas County, Texas in any action or proceeding arising out of or relating to any Loan Documents and the Borrower hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in any such court, and the Borrower hereby specifically consents to the jurisdiction of the State District Courts of Dallas County, Texas and the United States District Court for the Northern District of Texas, Dallas Division. Nothing herein shall limit the right of the Administrative Agent and the Lenders to bring proceedings against the Borrower in the courts of any other jurisdiction. Any judicial proceeding by the Borrower against the Administrative Agent, any Lender or any Affiliate of the Administrative Agent or any Lender involving, directly or indirectly, any matter in any way arising out of, related to, or connected with any Loan Document shall be brought only in the State District Courts of Dallas County, Texas, or in the United States District Court for the Northern District of Texas, Dallas Division.

9.8. WAIVER OF JURY TRIAL AND EXEMPLARY DAMAGES. THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVES (A) ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT RELATES TO OR ARISES OUT OF ANY OF THIS

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AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR THE LENDERS IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE WITH RESPECT THERETO AND (B) TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL DAMAGES (AS DEFINED BELOW). THE PROVISIONS OF THIS SECTION ARE A MATERIAL INDUCEMENT FOR THE LENDERS’ ENTERING INTO THIS AGREEMENT. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED).

9.9. Waiver of Deficiency Statute; Other Waivers.

9.9.1. The Borrower waives any rights the Borrower has under, or any requirements imposed by, Sections 51.003, 51.004 and 51.005 of the Texas Property Code, as amended.

9.9.2. Each Guarantor waives any rights such Guarantor has under, or any requirements imposed by, (i) Section 17.001 of the Texas Civil Practice and Remedies Code, as amended, (ii) Rule 31 of the Texas Rules of Civil Procedure, as amended, and (iii) Sections 51.003, 51.004 and 51.005 of the Texas Property Code, as amended.

9.10. Headings. The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning hereof and words such as “hereunder” or “ herein” shall refer to the entirety of this Agreement unless specifically indicated otherwise.

9.11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

9.12. Invalid Provisions, Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof or thereof, such provision shall be fully severable, this Agreement and the other Loan Documents shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part thereof, and the remaining provisions hereof and thereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Agreement or the other Loan Documents a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid and enforceable.

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9.13. Communications Via Internet. The Borrower and each Guarantor (by its or his/her execution of a Guaranty), hereby authorizes the Administrative Agent, each Lender and their respective counsel and agents to communicate and transfer documents and other information (including confidential information) concerning this transaction or the Borrower and such Guarantor and the business affairs of the Borrower and such Guarantor via the Internet or other electronic communication without regard to the lack of security of such communications.

9.14. USA Patriot Act Notice. The Administrative Agent and the Lenders hereby notify the Borrower and the other Obligated Parties that pursuant to the requirements of the USA Patriot Act, they are required to obtain, verify and record information that identifies the Borrower and the other Obligated Parties, which information includes the name and address of the Borrower and the other Obligated Parties and other information that will allow them to identify the Borrower and the other Obligated Parties in accordance with such Act.

9.15. EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

9.16. Advice to Seek Legal and Accounting Advice. The Lenders have advised the Borrower to seek the advice of an attorney and an accountant in connection with the Loans, and the Borrower represents that it has had an opportunity to seek the advice of an attorney and accountant of the Borrower’s choice in connection with the Loans.

9.17. Increased Cost and Reduced Return.

9.17.1. If on or after the date hereof, in the case of any Loan or any obligation to make Loans, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Lending

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Installation) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (or its Lending Installation) and the result of any of the foregoing is to reduce the amount of any sum received or receivable by such Lender (or its Lending Installation) under this Agreement or under its Notes with respect thereto, by an amount reasonably deemed by such Lender to be material, then, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction.

9.17.2. If any Lender shall have reasonably determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such rule or regulation, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Lender as a consequence of such Lender’s obligations hereunder to a level below that which such Lender could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.

9.17.3. Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section and will designate a different Lending Installation if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate of any Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods.

9.17.4. Notwithstanding anything in this Agreement to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “change in law,” regardless of the date enacted, adopted or issued.

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9.18. Taxes.

9.18.1. For the purpose of this Section 9.18, the following terms have the following meanings:

“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings with respect to any payment by the Borrower pursuant to this Agreement or under any Note, and all penalties and interest with respect thereto, excluding (i) in the case of each Lender and the Administrative Agent, taxes imposed on its income, and franchise or similar taxes imposed on it, by a jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or in which its principal executive office is located, in which its Lending Installation is located or in which it would be subject to tax due to some connection other than that created by this Agreement and (ii) in the case of each Lender, any United States withholding tax at the time such Lender first becomes a party to this Agreement.

“Other Taxes” means any present or future stamp or documentary taxes and any other excise or property taxes, or similar charges or levies and all penalties and interest with respect thereto, which arise from the making of any payment pursuant to this Agreement or under any Note or from the execution or delivery of this Agreement or any Note.

9.18.2. Any and all payments by the Borrower to or for the account of any Lender or the Administrative Agent hereunder or under any Note shall be made without deduction for any Taxes or Other Taxes; provided that, if the Borrower shall be required by law to deduct any Taxes or Other Taxes from any such payments, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under Section 9.17) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower shall furnish to the Administrative Agent, at its address referred to in Article XIII, the original or a certified copy of a receipt evidencing payment thereof.

9.18.3. The Borrower agrees to indemnify each Lender and the Administrative Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes on amounts payable under this Section) paid by such Lender or the Administrative Agent (as the case may be). This indemnification shall be paid within 15 days after such Lender or the Administrative Agent (as the case may be) makes appropriate demand therefor.

9.18.4. At least five Business Days prior to the first date on which interest or fees are payable hereunder for the account of any Lender, each Lender that is not incorporated under the laws of the United States of America, or a state thereof, agrees that it will deliver to each of the Borrower and the Administrative Agent two duly completed copies of United States Internal Revenue Service Form W-8 BEN or W-8 ECI or W-8 IMY or W-8 EXP or such other form as may be applicable and allowable under the Internal Revenue Code and the regulations

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thereunder (collectively, a “Withholding Form”), certifying in either case that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes. Each Lender which so delivers a Withholding Form further undertakes to deliver to each of the Borrower and the Administrative Agent two additional copies of such form (or a successor form) on or before the date that such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent Withholding Form so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Borrower or the Administrative Agent, in each case certifying that such Lender is entitled to receive payments under this Agreement and the Notes without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such Withholding Forms inapplicable or which would prevent such Lender from duly completing and delivering any such Withholding Form with respect to it and such Lender advises the Borrower and the Administrative Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax.

9.18.5. For any period with respect to which a Lender has failed to provide the Borrower or the Administrative Agent with the appropriate form pursuant to Section 9.18.4 (unless such failure is due to a change in treaty, law or regulation occurring subsequent to the date on which such form originally was required to be provided), such Lender shall not be entitled to indemnification under Section 9.18.2 or 9.18.3 with respect to Taxes imposed by the United States; provided that if a Lender, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps (at the expense of such Lender) as such Lender shall reasonably request to assist such Lender to recover such Taxes.

9.18.6. If the Borrower is required to pay additional amounts to or for the account of any Lender pursuant to this Section, then such Lender will change the jurisdiction of its Lending Installation if, in the judgment of such Lender, such change (i) will eliminate or reduce any such additional payment which may thereafter accrue and (ii) is not otherwise disadvantageous to such Lender in its sole judgment.

9.18.7. The obligations of the Borrower under this Section 9.18 shall survive payment of the Notes, the satisfaction of all other Obligations and the termination of this Agreement.

ARTICLE X

ADMINISTRATIVE AGENT

10.1. Appointment of Administrative Agent. TCB is hereby appointed Administrative Agent hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Administrative Agent to act as the Administrative Agent of such Lender. The Administrative Agent agrees to act as such upon the express conditions contained in this Article X. The Administrative Agent shall not have a fiduciary relationship in respect of any Lender by reason of this Agreement.

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10.2. Powers of the Administrative Agent. (i) The Administrative Agent shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Administrative Agent by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Administrative Agent shall have no implied duties to the Lenders, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Administrative Agent.

(ii) The Administrative Agent is authorized to enter into one or more Intercreditor Agreements and amendments thereto.

10.3. General Immunity. Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable to the Lenders or any Lender for any action taken or omitted to be taken by it or them hereunder or under any other Loan Document or in connection herewith or therewith (INCLUDING ANY OF THE FOREGOING ARISING FROM THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR SUCH DIRECTORS, OFFICERS, ADMINISTRATIVE AGENTS OR EMPLOYEES), unless such action or omission arises from the gross negligence or willful misconduct of the Administrative Agent or such directors, officers, agents or employees.

10.4. No Responsibility for Loans, Recitals, etc. Neither the Administrative Agent nor any of its respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document, including any agreement by the Borrower to furnish information directly to each Lender; (iii) the satisfaction of any condition specified in Article V, except receipt of the Notes required to be delivered to the Administrative Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith. The Administrative Agent shall have no duty to disclose to the Lenders information that is not required to be furnished by the Borrower to the Administrative Agent at such time, but is voluntarily furnished by the Borrower to TCB either in its capacity as Administrative Agent or in its individual capacity.

10.5. Action on Instructions of Lenders. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders and on all holders of Notes. The Administrative Agent shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action.

10.6. Employment of Administrative Agents and Counsel. The Administrative Agent may execute any of its duties as Administrative Agent hereunder and under any other Loan Document by or through agents and attorneys-in-fact and shall not be answerable to the Lenders, except as to money or securities received by it or its authorized agents, for the default or

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misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Administrative Agent shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document.

10.7. Reliance on Documents, Counsel. The Administrative Agent shall be entitled to rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, electronic transmission, facsimile, e-mail, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper Person, and, in respect to legal matters, upon the opinion of counsel selected by the Administrative Agent, which counsel may be employees of the Administrative Agent.

10.8. Reimbursement and Indemnification of Administrative Agent. The Lenders agree to REIMBURSE and INDEMNIFY the Administrative Agent on a current basis (i) for any amounts not reimbursed by the Borrower for which the Administrative Agent is entitled to reimbursement by the Borrower under the Loan Documents, and (ii) for any other expenses incurred by the Administrative Agent on behalf of the Lenders in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents, in each case ratably in proportion to the amounts of the Lenders’ respective Commitments as of the time the request for reimbursement or indemnification is made (or, if at such time all Commitments have terminated, then ratably in proportion to the amounts of the Lenders’ respective Commitments as they existed immediately prior to their termination). The Lenders also agree to REIMBURSE and INDEMNIFY the Administrative Agent on a current basis for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Loan Documents or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents (INCLUDING, WITHOUT LIMITATION, ANY OF THE FOREGOING ARISING OUT OF THE NEGLIGENCE, WHETHER SOLE, CONCURRENT OR COMPARATIVE, OF THE ADMINISTRATIVE AGENT OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED ON THE ADMINISTRATIVE AGENT), in each case ratably in proportion to the amounts of the Lenders’ respective Commitments as of the time the liability, obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement is incurred (or, if at such time all Commitments have terminated, then ratably in proportion to the amounts of the Lenders’ respective Commitments as they existed immediately prior to their termination), provided that no Lender shall be liable to the Administrative Agent for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the Administrative Agent. The obligations of the Lenders under this Section 10.8 shall survive payment of the Obligations and termination of this Credit Agreement.

10.9. Rights as a Lender. The Administrative Agent shall have the same rights and powers hereunder and under any other Loan Document as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent and each other Lender may accept deposits from, lend money or otherwise extend credit to, and generally engage in any kind of trust, debt, equity or

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other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Borrower or any of its Affiliates unless the Borrower or such Affiliate is specifically restricted hereunder. The Administrative Agent, in its individual capacity, is not obligated to remain a Lender hereunder.

10.10. Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on the financial statements prepared by the Borrower and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents.

10.11. Successor Administrative Agent. The Administrative Agent may resign at any time by giving written notice thereof to the Lenders and the Borrower, such resignation to be effective upon the appointment of a successor Administrative Agent or, if no successor Administrative Agent has been appointed, 45 days after the retiring Administrative Agent gives notice of its intention to resign. Upon any such resignation, the Required Lenders shall have the right to appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders within thirty days after the resigning Administrative Agent’s giving notice of its intention to resign, then the resigning Administrative Agent may appoint, on behalf of the Borrower and the Lenders, a successor Administrative Agent. If the Administrative Agent has resigned and no successor Administrative Agent has been appointed, the Lenders may perform all the duties of the Administrative Agent hereunder and the Borrower shall make all payments in respect of the Obligations to the applicable Lender and for all other purposes shall deal directly with the Lenders. No successor Administrative Agent shall be deemed to be appointed hereunder until such successor Administrative Agent has accepted the appointment. Any such successor Administrative Agent shall be a commercial bank having capital and retained earnings of at least $100,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the resigning Administrative Agent. Upon the effectiveness of the resignation of the Administrative Agent, the resigning Administrative Agent shall be discharged from its duties and obligations hereunder and under the Loan Documents. After the effectiveness of the resignation of an Administrative Agent, the provisions of this Article X shall continue in effect for the benefit of such Administrative Agent in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent hereunder and under the other Loan Documents.

10.12. Applicable Parties. The provisions of this Article are solely for the benefit of the Administrative Agent and the Lenders, and the Borrower shall not have any rights as a third party beneficiary or otherwise under any of the provisions of this Article. In performing functions and duties hereunder and under the other Loan Documents, the Administrative Agent shall act solely as the contractual representative of the Lenders and does not assume, nor shall it be deemed to have assumed, any obligation or relationship of trust or agency with or for the Borrower or any legal representative, successor, and assign of the Borrower.

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ARTICLE XI

SETOFF; RATABLE TREATMENTS

11.1. Setoff. In addition to, and without limitation of, any rights of the Lenders under applicable law, if any Event of Default occurs, any and all deposits (including all account balances, whether provisional or final and whether or not collected or available) and any other indebtedness at any time held or owing by any Lender or any Affiliate thereof to or for the credit or account of the Borrower may be offset and applied toward the payment of the Obligations, whether or not the Obligations, or any part hereof, shall then be due. Each Lender or Affiliate thereof making such an offset and application shall give the Borrower and the other Lenders written notice of such offset and application promptly after effecting it. To the extent that the Borrower has accounts, which in the style thereof as reflected in the Administrative Agent’s records are designated as royalty, joint interest owner or operator accounts, the foregoing right of set off shall not extend to funds in such accounts which belong to, or otherwise arise from payments to the Borrower for the account of, third-party royalty, joint interest owners, or operators.

11.2. Ratable Treatments; Adjustments.

11.2.1. Except to the extent otherwise expressly provided herein, (i) each borrowing pursuant to this Agreement shall be made from the Lenders pro rata in accordance with their respective Commitments, (ii) each payment by the Borrower of fees shall be made for the account of the Lenders pro rata in accordance with their respective Commitments, (iii) each payment of principal of Loans shall be made for the account of the Lenders pro rata in accordance with the principal balances of their respective Notes, and (iv) each payment of interest on the Notes shall be made for the account of the Lenders pro rata in accordance with their respective shares of the aggregate amount of interest due and payable to the Lenders under the Notes.

11.2.2. The Administrative Agent shall distribute all payments received by it with respect to the Obligations promptly upon receipt in like funds as received. In the event that any payments made hereunder on the Obligations at any particular time are insufficient to satisfy in full the Obligations due and payable at such time, such payments shall be applied (i) first, to that portion of the Obligations consisting of fees and expenses then due and payable, (ii) second, to that portion of the Obligations consisting of accrued, unpaid interest then due and payable, (iii) third, to that portion of the Obligations consisting of principal then due and payable, and (iv) last, to any other Obligations.

11.2.3. If any Lender (for purposes of this Section, a “Benefitted Lender”) shall at any time receive any payment of all or part of its portion of the Obligations, or receive any Collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.1.4 or Section 8.1.5, or otherwise) in an amount greater than such Lender was entitled to receive pursuant to the terms hereof, such

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Benefitted Lender shall purchase for cash from the other Lenders such portion of the Obligations of such other Lenders, or shall provide such other Lenders with the benefits of any such Collateral or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such Collateral or proceeds with each of the Lenders according to the terms hereof. If all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded and the purchase price and benefits returned by each of the other Lenders, to the extent of such recovery, but without interest. The Borrower agrees that each such Lender so purchasing a portion of the Obligations of another Lender may exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion. If any Lender ever receives, by voluntary payment, exercise of rights of set-off or banker’s lien, counterclaim, cross-action or otherwise, any funds of the Borrower to be applied to the Obligations, or receives any proceeds by realization on or with respect to any Collateral, all such funds and proceeds shall be forwarded immediately to the Administrative Agent for distribution in accordance with the terms of this Agreement.

ARTICLE XII

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

12.1. Successors and Assigns. The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Borrower, the Administrative Agent and the Lenders and their respective successors and assigns, except that (i) the Borrower shall not have any right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with Section 12.3. Notwithstanding clause (ii) of this Section 12.1, any Lender may at any time, without the consent of the Borrower or the Administrative Agent, assign all or any portion of its rights under this Agreement and its Note to a Federal Reserve Bank; provided, however, that no such assignment shall release the transferor Lender from its obligations hereunder. The Administrative Agent may treat the payee of any Note as the owner thereof for all purposes hereof unless and until such payee complies with Section 12.3 in the case of an assignment thereof or, in the case of any other transfer, a written notice of the transfer is filed with the Administrative Agent. Any Transferee of a Note agrees by acceptance thereof to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the holder of any Note, shall be conclusive and binding on any subsequent Transferee of such Note or of any Note or Notes issued in exchange therefor.

12.2. Participations; Voting Rights; Setoffs by Participants.

12.2.1. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time sell to one or more banks or other entities (each a “Participant”) participating interests in any Loan owing to such Lender, any Note held by such Lender, any Commitment of such Lender or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the holder of any such Note for all purposes under the Loan

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Documents, all amounts payable by the Borrower under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Loan Documents.

12.2.2. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan, Letter of Credit or Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan, Letter of Credit or Commitment, postpones any date fixed for any regularly-scheduled payment of principal of, or interest or fees on, any such Loan, Letter of Credit or Commitment, releases any guarantor of any such Loan or Letter of Credit or releases any substantial portion of Collateral, if any, securing any such Loan or Letter of Credit.

12.2.3. The Borrower agrees that each Participant shall be deemed to have the right of setoff provided in Section 11.1 in respect of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, and each Lender shall retain the right of setoff provided in Section 11.1 with respect to the amount of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 11.1, agrees to share with each Lender, any amount received pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 11.2 as if each Participant were a Lender.

12.3. Assignments; Effective Date.

12.3.1. Any Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more banks or other entities (each a “Purchaser”) all or any part of its rights and obligations under the Loan Documents. Such assignment shall be in such form as may be agreed by the parties thereto and reasonably acceptable to the Administrative Agent (the “Assignment Agreement”) or in such other form as may be agreed to by the parties thereto. The consent of the Administrative Agent, which consent shall not be unreasonably withheld, shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Lender or an Affiliate thereof. Each such assignment shall (unless it is to a Lender or an Affiliate thereof or each of the Borrower and the Administrative Agent otherwise consents) be in an amount not less than the lesser of (i) $2,500,000 or (ii) the remaining amount of the assigning Lender’s Commitment (calculated as at the date of such assignment).

12.3.2. Upon (i) delivery to the Administrative Agent of a notice of assignment in form and substance reasonably satisfactory to the Administrative Agent (a “Notice of Assignment”), together with any consents required by Section 12.3.1, and (ii) payment of a $3,500 processing fee to the Administrative Agent for processing such assignment, such assignment shall become effective on the effective date specified in such Notice of Assignment. The Notice of Assignment shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Loans

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under the applicable Assignment Agreement are “plan assets” as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be “plan assets” under ERISA. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Credit Agreement and any other Loan Document executed by the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the Borrower, the Lenders or the Administrative Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Commitment and Loans assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3.2, the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their Commitment, as adjusted pursuant to such assignment.

12.4. Dissemination of Information. The Borrower authorizes the Administrative Agent and each Lender to disclose to any Transferee and any prospective Transferee any and all information in the Administrative Agent’s or such Lender’s possession concerning the Borrower and its Affiliates.

12.5. Tax Treatment. If any interest in any Loan Document is transferred to any Transferee which is organized under the laws of any jurisdiction other than the United States or any State thereof, the transferor Lender shall cause such Transferee, concurrently with the effectiveness of such transfer, to comply with the provisions of Section 9.19.4.

ARTICLE XIII

NOTICES

13.1. Notices. Except as otherwise specifically permitted herein, all notices, requests and other communications to any party hereunder shall be in writing (including electronic transmission, facsimile transmission or similar writing) and shall be given to such party: (x) in the case of the Borrower or the Administrative Agent, at its address or facsimile number set forth on the signature pages hereof, (y) in the case of any Lender, at its address or facsimile number set forth on the signature pages hereof or in any Assignment Agreement which has become effective pursuant to Article XII or (z) in the case of any party, at such other address or facsimile number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrower in accordance with the provisions of this Section 13.1. Each such notice, request or other communication shall be effective (i) if given by facsimile transmission, when transmitted to the facsimile number specified in this Section and confirmation of receipt is received (the receipt thereof shall be deemed to have been acknowledged upon the sending Person’s receipt of its facsimile machine’s confirmation of successful transmission; provided that if the day on which such facsimile is received is not a Business Day or is after 4:00 p.m. CT on a Business Day, then the receipt of such facsimile shall be deemed to have been acknowledged on the next following Business Day), (ii) if given by mail, three (3) Business Days after such communication is deposited in the mail with first class postage prepaid, addressed as aforesaid, or (iii) if given by any other means, when delivered (or, in the case of electronic transmission, received) at the address specified in this Section; except that notices to the Administrative Agent

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under Article II shall not be effective until received by the Administrative Agent, and except that oral notices to the Borrower of decreases in the Borrowing Base or increases in the amount of the monthly Borrowing Base reductions shall be effective when so communicated to the Borrower.

13.2. Change of Address. The Borrower, the Administrative Agent and any Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto.

[Signature Page follows]

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ARTICLE XIV

ENTIRE AGREEMENT

THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF AND SHALL SUPERSEDE ANY PRIOR AGREEMENT BETWEEN THE PARTIES HERETO, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

In witness whereof, the undersigned have executed this Agreement as of the day and year first above written.

	BORROWER:
	LYNDEN USA INC.
885 West Georgia St., Suite 2150	By:	/s/ Colin Watt
Vancouver, British Columbia	Name:	Colin Watt
V6C 3E8	Title:	President
Canada
Attn: Colin Watt
Facsimile: 604/602-9311
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
2000 McKinney Avenue, Suite 700
Dallas, Texas 75201	By:	/s/ Frank K. Stowers
Attention: Energy Banking Group	Name:	Frank K. Stowers
Facsimile: 214/932-6704	Title:	Senior Vice President
COMMITMENT	LENDERS:
$9,500,000	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
	2000 McKinney Avenue, Suite 700
	Dallas, Texas 75201
	Attention: Energy Banking Group
	Facsimile: 214/932-6704

Signature Page

to Credit Agreement

FORM OF PROMISSORY NOTE

$    ,000,000 Dallas, Texas August 29, 2011

FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned (“Borrower”) promises to pay to the order of                      (“Lender”), at the banking quarters of Texas Capital Bank, N.A., in Dallas, Dallas County, Texas, the amount of $    ,000,000, or so much thereof as may be advanced and be outstanding under this Note pursuant to the Credit Agreement dated of even date herewith by and between Borrower, the Administrative Agent, the Lender and certain other lenders (as amended, restated, or supplemented from time to time, the “Credit Agreement”), together with interest at the rates and calculated as provided in the Credit Agreement.

Reference is hereby made to the Credit Agreement for matters governed thereby, including, without limitation, certain events which will entitle the holder hereof to accelerate the maturity of all amounts due hereunder. Capitalized terms used but not defined in this Note shall have the meanings assigned to such terms in the Credit Agreement.

The date and amount, Type, interest rate, Interest Period and maturity of each Loan made by the Lender to the Borrower, and each payment made on account of the principal thereof, shall be recorded by the Lender on its books and, prior to any transfer of this Note, may be endorsed by the Lender on the schedules attached hereto or any continuation thereof or on any separate record maintained by the Lender. Failure to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s rights or obligations in respect of such Loans or affect the validity of such transfer by any Lender of this Note.

This Note is issued pursuant to and shall be governed by the Credit Agreement and the holder of the Note shall be entitled to the benefits of the Credit Agreement. This Note shall finally mature on the Final Maturity Date.

Without being limited thereto or thereby, this Note is secured by the Security Documents.

The Borrower, and each surety, endorser, guarantor, and other party ever liable for payment of any sums of money payable on this Note, jointly and severally waive presentment and demand for payment, protest, notice of protest and nonpayment, and notice of the intention to accelerate, and agree that their liability on this Note shall not be affected by any renewal or extension in the time of payment hereof, by any indulgences, or by any release or change in any security for the payment of this Note, and hereby consent to any and all renewals, extensions, indulgences, releases, or changes, regardless of the number of such renewals, extensions, indulgences, releases, or changes.

THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.

LYNDEN USA INC.
By:
	Colin Watt
	President

1

LOANS AND PAYMENT OF

PRINCIPAL AND INTEREST

Date Amount of
Loan Principal
Paid or
Prepaid Amount of
Interest
Paid Unpaid
Principal
Balance Interest
Paid to

2

FORM OF NOTICE OF BORROWING

Texas Capital Bank, N.A., as Administrative Agent

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention: Energy Group

Re: Credit Agreement dated August 29, 2011, by and between Texas Capital Bank, N.A., as Administrative Agent, the lenders signatory thereto (the “Lenders”) and Lynden USA Inc. (the “Borrower”) (as amended, restated, or supplemented from time to time, the “Credit Agreement”)

Ladies and Gentlemen:

Pursuant to the Credit Agreement, the Borrower hereby makes the requests indicated below:

¨	1.	Advance
	(a)	Amount of Advance requested: $
	(b)	Requested funding date:             , 20[    ]
	(c)	Type of Advance requested:
	(d)	In the case of a Eurodollar Advance, the initial Interest Period:
	(e)	Request funding into Texas Capital Bank Account Number:
¨	2.	Included herewith is a completed Letter of Credit Application.
¨	3.	Included herewith is a request for a renewal or extension of an existing Letter of Credit as described therein.

The undersigned natural person certifies that [s]he is a Responsible Representative, has obtained all consents necessary, and as such [s]he is authorized to execute and deliver this request. The undersigned natural person further certifies, represents, and warrants to the Administrative Agent and the Lenders that to the best of his/her knowledge the Borrower is entitled to receive the requested Advance or letter of credit under the terms and conditions of the Credit Agreement.

1

Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Credit Agreement.

Very truly yours,

LYNDEN USA INC.

By:

Print:

Title:

2

FORM OF COMPLIANCE CERTIFICATE

            , 20    

Texas Capital Bank, N.A.

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention: Energy Group

Re: Credit Agreement dated August 29, 2011, by and between Texas Capital Bank, N.A., as Administrative Agent, the lenders signatory thereto, and Lynden USA Inc. (the “Borrower”) (as amended, restated, or supplemented from time to time, the “Credit Agreement”). Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined herein.

Ladies and Gentlemen:

Pursuant to applicable requirements of the Credit Agreement, the undersigned, as a Responsible Representative of the Borrower, hereby certifies to you the following information as true and correct as of the date hereof or for the period indicated, as the case may be:

[1. To the best of the knowledge of the undersigned, no Default exists as of the date hereof or has occurred since the date of our previous certification to you, if any.]

[1. To the best of the knowledge of the undersigned, the following Defaults exist as of the date hereof or have occurred since the date of our previous certification to you, if any, and the actions set forth below have been or are being taken to remedy such circumstances:]

2. The compliance of the Borrower with certain financial covenants of the Credit Agreement, as of the close of business on                      (the “Determination Date”), is evidenced by the following:

(a) Section 7.6.3: Accounts Payable more than 90 days past due.

Required	Actual
Not more than $0.00 unless being contested in good faith by appropriate proceedings.	$	*

* If greater than $0.00, attach additional sheets containing explanations.

(b) Section 7.9.4: Hedging Agreements.

The Hedging Agreements of the Borrower and its positions thereunder as of the Determination Date are summarized on Schedule One attached hereto.

1

(c) Section 7.15.1: Interest Coverage Ratio.

Required	Actual
Not less than 3.00 to 1.00		to 1.00

(d) Section 7.15.2: Current Ratio.

Required	Actual
Not less than 1.00 to 1.00		to 1.00

(e) Section 7.15.3: G&A Expenses / Reimbursement Obligations.

Required	Actual
Not greater than $1,000,000 for rolling 12-month period (or shorter period if prior to thefirst anniversary of the Closing Date)	$

List each of the most recently ended 12 months and the G&A expenses for each month. If prior to the first anniversary of the Closing Date, only months and amounts since the Closing Date need be listed:

Month	G&A Expenses / Reimbursement Obligations
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$

2

3. To the best knowledge of the undersigned, the financial statements being delivered to the Lender concurrently herewith pursuant to the Credit Agreement fairly and accurately reflect the financial condition and results of operation of the Persons identified therein for the periods and as of the dates set forth therein, and the undersigned has reviewed the terms of the Credit Agreement and the other Loan Documents, and has made, or caused to be made under my supervision, a review of the transactions and financial condition of such Persons during the fiscal period covered by such financial statements.

4. The circled answers to the following statements are each true and correct as of the Determination Date:

(a) The annual statement of assets and liabilities of the Parent and its consolidated subsidiaries as of its most recent fiscal year-end and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1 (i). YES NO

(b) The quarterly statement of assets and liabilities of the Parent and its consolidated subsidiaries as of the last day of its most recently ended fiscal quarter and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1(ii). YES NO

(c) The federal income tax return for the year most recently ended for each Person indicated below has been properly filed with the appropriate Tribunal and a copy thereof has been delivered to the Administrative Agent pursuant to
Section 7.2.1(iv),

(i) of the Borrower. YES NO

(ii) of the Parent. YES NO

5. The most recent oil and gas production report delivered by the Borrower to the Lender under Section 7.2.2 of the Credit Agreement is, to the best knowledge of the undersigned, in compliance with the provisions of such Section and to the best knowledge of the undersigned is true and correct in all material respects as of the date thereof and for the time periods covered thereby.

The undersigned has reviewed the terms of the Credit Agreement and the other Loan Documents, and has made, or caused to be made under my supervision, a review of the transactions and financial condition of the Borrower during the period covered by the financial statements included herewith, and such review has not disclosed the existence during such period, and the undersigned does not have knowledge of the existence as of the date of this certificate, of any condition or event which constitutes a Default, except as set forth in paragraph 1 above.

Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Credit Agreement.

3

Very truly yours,

                     of Lynden USA Inc.

4

Schedule One to Compliance Certificate

Hedging Agreements

1

SCHEDULE 6.4.1

SUBSIDIARIES

None.

1

EXHIBIT 6.7

LITIGATION

None.

1

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

This First Amendment to Credit Agreement (“Amendment”) is entered into between TEXAS CAPITAL BANK, N.A., a national banking association, as Administrative Agent, and the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated February 2, 2012. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“First Amendment to Credit Agreement” means the First Amendment to Credit Agreement dated February 2, 2012, between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definitions located in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2. The Borrowing Base under Section 2.8.1 is deemed to be $11,100,000 as of the date of the First Amendment to Credit Agreement.

“Compliance Certificate” means a certificate, substantially in the form attached to the First Amendment to Credit Agreement entitled “Form of Compliance Certificate,” executed by a Responsible Representative and furnished to the Administrative Agent from time to time in accordance with Section 7.2.1.

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing February 1, 2012, and continuing on the first day of each month

1

thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders may decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. Section 7.2.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“7.2.1. (i) as soon as available and in any event within 60 days after the end of each fiscal year of the Borrower, copies of the unaudited statement of assets and liabilities of the Borrower as of the end of such fiscal year, and copies of the related statements of revenues and expenses, operations, and, if requested by the Administrative Agent, changes in owners’ equity and cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, denominated in Dollars and prepared in conformity with IFRS (except for the absence of footnotes, which shall not be required).

(ii) on or before 60 days after the last day of each fiscal quarter of the Borrower other than the last fiscal quarter of each fiscal year, (a) a copy of the unaudited consolidated statement of assets and liabilities of the Borrower as at the close of such quarter and from the beginning of such fiscal year to the end of such quarter, (b) a copy of the related statements of revenues and expenses, operations, and, if requested by the Administrative Agent, changes in owners’ equity and cash flows for the quarter just ended and for that portion of the year ending on such last day, all in reasonable detail, denominated in Dollars and prepared in conformity with IFRS (except for the absence of footnotes, which shall not be required) and on a basis consistent with the financial statements previously delivered by the Borrower under this Section and (c) an identification of all Contingent Obligations and Guarantees by the Borrower.

(iii) as soon as available and in any event within 120 days after the end of each fiscal year of the Parent, copies of the consolidated (and, if requested by the Administrative Agent, consolidating) statement of assets and liabilities of the Parent and its consolidated subsidiaries (including the Borrower) as of the end of such fiscal year, and copies of the related statements of revenues and expenses, operations, changes in owners’ equity and cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, denominated in Dollars and prepared in accordance with IFRS; such financial statements to be audited by a firm of independent certified public accountants, or the Canadian equivalent thereof, selected by the Parent and reasonably acceptable to the Administrative Agent.

(iv) on or before 60 days after the last day of each fiscal quarter of the Parent other than the last fiscal quarter of each fiscal year, (a) a copy of the unaudited

2

consolidated (and, if requested by the Administrative Agent, consolidating) statement of assets and liabilities of the Parent and its consolidated subsidiaries (including the Borrower) as at the close of such quarter and from the beginning of such fiscal year to the end of such quarter, (b) a copy of the related statements of revenues and expenses, operations, changes in owners’ equity and cash flows for the quarter just ended and for that portion of the year ending on such last day, all in reasonable detail, denominated in Dollars and prepared in conformity with IFRS and on a basis consistent with the financial statements previously delivered by the Parent under this Section and (c) an identification of all Contingent Obligations and Guarantees by the Parent.

(v) simultaneously with the delivery of each set of financial statements pursuant to the preceding clauses of this Section, a Compliance Certificate of the Borrower stating that such financial statements fairly and accurately reflect in all material respects the financial condition and results of operation of the Borrower or the Parent, as applicable, for the periods and as of the dates set forth therein, subject, with respect to quarterly financial statements, to changes resulting from normal year-end adjustments and that the signers have reviewed the terms of this Agreement and the other Loan Documents, and have made, or caused to be made under their supervision, a review of the transactions and financial condition of the Borrower during the fiscal period covered by such financial statements, and that such review has not disclosed the existence during such period, and that the signers do not have knowledge of the existence as of the date of such certificate, of any condition or event which constitutes a Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken or is taking or proposes to take with respect thereto. For any financial statements delivered electronically by a Responsible Representative in satisfaction of the reporting requirements set forth in clause (i), (ii), (iii) or (iv) preceding that are not accompanied by the required Compliance Certificate, that Responsible Representative shall nevertheless be deemed to have certified the factual matters described in this clause (v) with respect to such financial statements; however, such deemed certification shall not excuse or be construed as a waiver of the Borrower’s obligation to deliver the required Compliance Certificate.

(vi) within 30 days after each filing thereof by the Borrower and each Guarantor with any Governmental Authority, complete copies of the federal and state income tax returns so filed.”

5. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $16,000.

(b) a processing fee in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

6. The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

3

7. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

8. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

9. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

10. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent.

11. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

4

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

13. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

5

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is deemed executed effective as of the date first above written.

BORROWER: LYNDEN USA INC.
By:	/s/ Colin Watt
Name:	Colin Watt
Title:	President
ADMINISTRATIVE AGENT: TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President
LENDERS:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President

[Guarantor signature page follows]

6

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 11 of the foregoing Amendment.

GUARANTOR: LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

7

FORM OF COMPLIANCE CERTIFICATE

            , 20    

Texas Capital Bank, N.A.

2000 McKinney Avenue, Suite 700

Dallas, Texas 75201

Attention: Energy Group

Re: Credit Agreement dated August 29, 2011, by and between Texas Capital Bank, N.A., as Administrative Agent, the lenders signatory thereto, and Lynden USA Inc. (the “Borrower”) (as amended, restated, or supplemented from time to time, the “Credit Agreement”). Terms defined in the Credit Agreement are used herein as therein defined unless otherwise defined herein.

Ladies and Gentlemen:

Pursuant to applicable requirements of the Credit Agreement, the undersigned, as a Responsible Representative of the Borrower, hereby certifies to you the following information as true and correct as of the date hereof or for the period indicated, as the case may be:

[1. To the best of the knowledge of the undersigned, no Default exists as of the date hereof or has occurred since the date of our previous certification to you, if any.]

[1. To the best of the knowledge of the undersigned, the following Defaults exist as of the date hereof or have occurred since the date of our previous certification to you, if any, and the actions set forth below have been or are being taken to remedy such circumstances:]

2. The compliance of the Borrower with certain financial covenants of the Credit Agreement, as of the close of business on                      (the “Determination Date”), is evidenced by the following:

(a) Section 7.6.3: Accounts Payable more than 90 days past due.

Required	Actual
Notmore than $0.00 unless being contested in good faith by appropriate proceedings.	$	*

* If greater than $0.00, attach additional sheets containing explanations.

(b) Section 7.9.4: Hedging Agreements.

The Hedging Agreements of the Borrower and its positions thereunder as of the Determination Date are summarized on Schedule One attached hereto.

(c) Section 7.15.1: Interest Coverage Ratio.

Required	Actual
Notless than 3.00 to 1.00		to 1.00

1

(d) Section 7.15.2: Current Ratio.

Required	Actual
Not  less than 1.00 to 1.00		to 1.00

(e) Section 7.15.3: G&A Expenses / Reimbursement Obligations.

Required	Actual
Not greater than $1,000,000 for rolling 12-month period (or shorter period if prior to thefirst anniversary of the Closing Date)	$

List each of the most recently ended 12 months and the G&A expenses for each month. If prior to the first anniversary of the Closing Date, only months and amounts since the Closing Date need be listed:

Month	G&A Expenses /Reimbursement Obligations
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$

3. To the best knowledge of the undersigned, the financial statements being delivered to the Lender concurrently herewith pursuant to the Credit Agreement fairly and accurately reflect the financial condition and results of operation of the Persons identified therein for the periods and as of the dates set forth therein, and the

2

undersigned has reviewed the terms of the Credit Agreement and the other Loan Documents, and has made, or caused to be made under my supervision, a review of the transactions and financial condition of such Persons during the fiscal period covered by such financial statements.

4. The circled answers to the following statements are each true and correct as of the Determination Date:

(a) The annual statement of assets and liabilities of the Borrower as of its most recent fiscal year-end and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1(i). YES NO

(b) The quarterly statement of assets and liabilities of the Borrower as of the last day of its most recently ended fiscal quarter and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1(ii). YES NO

(c) The annual statement of assets and liabilities of the Parent and its consolidated subsidiaries as of its most recent fiscal year-end and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1(iii). YES NO

(d) The quarterly statement of assets and liabilities of the Parent and its consolidated subsidiaries as of the last day of its most recently ended fiscal quarter and the related financial statements have been delivered to the Administrative Agent pursuant to Section 7.2.1(iv). YES NO

(e) The federal income tax return for the year most recently ended for each Person indicated below has been properly filed with the appropriate Tribunal and a copy thereof has been delivered to the Administrative Agent pursuant to 
Section 7.2.1(vi),

(i) of the Borrower. YES NO

(ii) of the Parent. YES NO

5. The most recent oil and gas production report delivered by the Borrower to the Lender under Section 7.2.2 of the Credit Agreement is, to the best knowledge of the undersigned, in compliance with the provisions of such Section and to the best knowledge of the undersigned is true and correct in all material respects as of the date thereof and for the time periods covered thereby.

The undersigned has reviewed the terms of the Credit Agreement and the other Loan Documents, and has made, or caused to be made under my supervision, a review of the transactions and financial condition of the Borrower during the period covered by the financial statements included herewith, and such review has not disclosed the existence during such period, and the undersigned does not have knowledge of the existence as of the date of this certificate, of any condition or event which constitutes a Default, except as set forth in paragraph 1 above.

Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Credit Agreement.

3

Very truly yours,

                     of Lynden USA Inc.

4

Schedule One to Compliance Certificate

Hedging Agreements

5

EX-10.3

Exhibit 10.3

SECOND AMENDMENT TO CREDIT AGREEMENT

This Second Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is effective as of March 31, 2012. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Second Amendment to Credit Agreement” means the Second Amendment to Credit Agreement dated effective as of March 31, 2012 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2. The Borrowing Base under Section 2.8.1 is deemed to be $16,000,000 as of the date of the Second Amendment to Credit Agreement.

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing June 1, 2012, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders may decrease the amount of such monthly reductions. Any decreases in the monthly reductions

1

must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $49,000 pursuant to Section 2.6.3 of the Credit Agreement.

(b) a processing fee in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

5. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the percentages indicated on such Table II.

(b) The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

6. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

7. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

8. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

2

9. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent.

10. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

12. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

3

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment has been executed on May 10, 2012 but is deemed effective as of the date first above written.

BORROWER:
LYNDEN USA INC.
By:	/s/ Colin Watt
Name:	Colin Watt
Title:	President
ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President
LENDERS:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President

[Guarantor signature page follows]

4

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 10 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

5

TABLE II

				Number		Reserve
Property	Field	County	State	of Wells		Category	WI			NRI
y-Tubb A #1	Spraberry Trend (Wolfberry)	Howard	TX		1	PNP		0.4063			0.2846
FAEE 47-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375			0.3299
Wolcott 253-1	Spraberry Trend (Wolfberry)	Martin	TX		1	PDP		0.3063			0.2297
z-FAEE 47 #2	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000	*		0.3299

* Pursuant to the participation agreement between the Borrower and CrownRock, the Borrower’s cost share through completion is 0.5000; however, that cost share drops to 0.4375 after completion.

6

EX-10.4

Exhibit 10.4

THIRD AMENDMENT TO CREDIT AGREEMENT

This Third Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated September 25, 2012. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Third Amendment to Credit Agreement” means the Third Amendment to Credit Agreement dated effective as of September 25, 2012 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $26,900,000 as of the date of the Third Amendment to Credit Agreement.

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing October 1, 2012, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders

1

may decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $109,000 pursuant to Section 2.6.3 of the Credit Agreement.

(b) a processing fee in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

5. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the decimal interests indicated on such Table II.

(b) The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

6. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

7. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

8. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

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9. Conditions to Effectiveness. This Amendment shall be effective upon (i) the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent, (ii) the execution by the Borrower of a substitute Note in the principal amount of $30,000,000 in favor of Texas Capital Bank, N.A. and the receipt thereof by the Administrative Agent and (iii) the execution and delivery by the Borrower of such mortgages and amendments to mortgage as may be reasonably required by the Administrative Agent to further document the terms of this Amendment.

10. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

12. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

3

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

BORROWER:
LYNDEN USA INC.
By:	/s/ Colin Watt
Name:	Colin Watt
Title:	President
ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President
LENDERS:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President

[Guarantor signature page follows]

4

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 10 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

5

TABLE II

Property	Field	County	State	# of Wells		Reserve Category	WI		NRI
Niehues 14-3	SPRABERRY TREND (WOLFBERRY)	GLASSCOCK	TX		1	PDP		0.4375		0.3393
Niehues 14-4	SPRABERRY TREND (WOLFBERRY)	GLASSCOCK	TX		1	PDP		0.4375		0.3393
Tubb A 1	Spraberry Trend (Wolfberry)	Howard	TX		1	PDP		0.3555		0.2773
Fairy Pfluger 24-3	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3459
Mallard 23-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3391
Snider 13-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3281
y-Walters 11-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PNP		0.3750		0.2721
Bath 1-1	Spraberry Trend (Wolfberry)	Howard	TX		1	PDP		0.3555		0.2773
FM Hall 2R	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3281
Landry 23-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3319
McDaniel 13-1	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PDP		0.4375		0.3281
Miller Trust 103	SPRABERRY TREND (WOLFBERRY)	MIDLAND	TX		1	PDP		0.4375		0.3281
Wearner 38-1	SPRABERRY (TREND AREA) (TREND AREA)	Martin	TX		1	PDP		0.4375		0.3281
Wolcott 253-2		Martin	TX		1	PDP		0.3063		0.2297
y-Herzog 23-1	SPRABERRY TREND (WOLFBERRY)	Midland	TX		1	PNP		0.5000		0.3281
y-Miller Trust 104		Midland	TX		1	PNP		0.5000		0.3281
z-Landry 23-3	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3319
z-Landry 23-4	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3319
z-Landry 23-5	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3319
z-Landry 23-8	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3319
z-McDaniel 13-2	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-McDaniel 13-3	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-McDaniel 13-5	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-McDaniel 13-6	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-Niehues 14-5	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3393
z-Niehues 14-6	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3393
z-Niehues 14-7	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3393
z-Niehues 14-8	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3393
z-Roy 1-3	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3498
z-Roy 1-4	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3498
z-Snider 13-5	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-Snider 13-6	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-Snider 13-7	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-Snider 13-8	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.5000		0.3281
z-Walters 11-4	SPRABERRY TREND (WOLFBERRY)	MARTIN	TX		1	PUD		0.3750		0.2721

6

EX-10.5

Exhibit 10.5

FOURTH AMENDMENT TO CREDIT AGREEMENT

This Fourth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated December 19, 2012. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Fourth Amendment to Credit Agreement” means the Fourth Amendment to Credit Agreement dated effective as of December 19, 2012 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $32,500,000 as of the date of the Fourth Amendment to Credit Agreement.

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing January 1, 2013, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders

1

may decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. Section 7.2.1(i) of the Credit Agreement is hereby amended and restated in its entirety as follows:

“(i) as soon as available and in any event within 60 days after the end of each fiscal year of the Parent, copies of the unaudited consolidated (and, if requested by the Administrative Agent, consolidating) statement of assets and liabilities of the Parent and its consolidated subsidiaries (including the Borrower) as of the end of such fiscal year, and copies of the related statements of revenues and expenses, operations, and, if requested by the Administrative Agent, changes in owners’ equity and cash flow for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, denominated in Dollars and prepared in conformity with IFRS (except for the absence of footnotes, which shall not be required).”

5. Section 7.15.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“7.15.2. Current Ratio. The Parent will not permit the ratio of its Current Assets to its Current Liabilities to be less than 1.00 to 1.00, determined as of the end of each fiscal quarter of the Parent ending on or after December 31, 2012.

“Current Assets” means the current assets of the Parent and its consolidated subsidiaries (calculated using book value) plus the Unused Available Commitment.

“Current Liabilities” means the current liabilities of the Parent and its consolidated subsidiaries (calculated using book value), exclusive of the current portion of the Notes and the current portion, if any, of Subordinated Debt.”

6. Fees. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $56,000 pursuant to Section 2.6.3 of the Credit Agreement.

(b) an agency fee in the amount of $10,000 pursuant to Section 2.6.5 of the Credit Agrement

(c) a processing fee for the Administrative Agent’s sole account in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

2

7. Partial Assignment of Commitment; Certain Payments; Notes.

(a) TCB hereby irrevocably sells and assigns to Happy State Bank (“HSB”), and HSB hereby irrevocably purchases and assumes from TCB, subject to the Standard Terms and Conditions attached hereto as Exhibit A and the Credit Agreement, so much of TCB’s Commitment, outstanding Loans and participation in Letters of Credit, and other rights and obligations in its capacity as a Lender under the Credit Agreement and the other Loan Documents (including without limitation any Guaranties and, to the extent permitted to be assigned under applicable law, all claims (including without limitation contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity), suits, causes of action and any other right of TCB against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other Loan Documents or the loan transactions governed thereby), such that each Lender’s rights and obligations as a Lender shall be equal to its new Commitment set forth on the signature pages hereto, and the Lenders’ resulting Percentage Shares shall be as follows (such assigned rights and obligations for each Assignor being its “Assigned Interest”):

Texas Capital Bank, N.A.	70.00	%
Happy State Bank	30.00	%

(b) HSB acknowledges and agrees that the sale and assignment, and purchase and assumption hereunder is without recourse to TCB and without any warranties whatsoever by TCB or the Administrative Agent, except as expressly set forth in Exhibit A.

(c) The assignment contemplated by this paragraph 7 shall be effective upon TCB’s receipt from HSB of $8,070,000.00, which amount equals 30.00% multiplied by the outstanding principal balance owed by the Borrower as of the date of this Amendment.

(d) The Borrower shall execute and deliver to the Administrative Agent a new Note in favor of HSB in the principal amount of $20,000,000 dated of even date with this Amendment. After giving effect to the assignment contemplated by this paragraph 7, the outstanding principal balance under each Lender’s Note shall be as set forth on Exhibit B.

8. Further Assurances. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the decimal interests indicated on such Table II.

(b) The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

3

9. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

10. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

11. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

12. Conditions to Effectiveness. This Amendment shall be effective upon (i) the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent, (ii) the execution by the Borrower of a substitute Note in the principal amount of $20,000,000 in favor of Happy State Bank and the receipt thereof by the Administrative Agent and (iii) the execution and delivery by the Borrower of such mortgages and amendments to mortgage as may be reasonably required by the Administrative Agent to further document the terms of this Amendment.

13. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED

4

CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

15. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

5

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	BORROWER:
	LYNDEN USA INC.
	By:	/s/ Colin Watt
	Name:	Colin Watt
	Title:	President
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$22,750,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$ 9,750,000.00	HAPPY STATE BANK
	By:
	Name:
	Title:

[Guarantor signature page follows]

6

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 13 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

7

TABLE II

Property Name	County	State	WI		NRI
TAS 37-1	MARTIN	TX		0.4156		0.3117
y-TAS 37-2	MARTIN	TX		0.4750		0.3117
z-Heidelberg 32-3	MARTIN, MIDLAND	TX		0.5000		0.3281
y-Sefcik 24-1	GLASSCOCK	TX		0.4438		0.2999
z-Sefcik 24-5	GLASSCOCK	TX		0.5000		0.3281

8

EXHIBIT A

TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. TCB (a) represents and warrants that (i) it is the legal and beneficial owner of the relevant Assigned Interest, (ii) such Assigned Interest is free and clear of any Lien or other adverse claim, and (iii) it has full power and authority, and has taken all action necessary, to effect the assignment of the relevant Assigned Interest; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2. Assignee. HSB (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to consummate the assignment of the Assigned Interest, (ii) it meets all the requirements to be an assignee under Section 12.3 of the Credit Agreement, (iii) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (iv) it has received such documents and information as it deems appropriate to make its own credit analysis and decision to purchase the Assigned Interest, (v) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to purchase the Assigned Interest and (vi) none of the consideration used to purchase the Assigned Interest are “plan assets” as defined under ERISA and the rights and interests of TCB in and under the Loan Documents will not be “plan assets” under ERISA; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, TCB or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the effective date of the assignment contemplated by paragraph 7 of the Amendment, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to TCB for amounts which have accrued to but excluding such effective date and to HSB for amounts which have accrued from and after such effective date.

9

EXHIBIT B

NEW LENDER NOTE BALANCES

Texas Capital Bank, N.A.	$	18,830,000.00
Happy State Bank	$	8,070,000.00
TOTAL	$	26,900,000.00

10

EX-10.6

Exhibit 10.6

FIFTH AMENDMENT TO CREDIT AGREEMENT

This Fifth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated December 26, 2012. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and that the Administrative Agent release its Lien on certain Oil and Gas Properties owned by the Borrower in connection with a proposed sale thereof to a third party; and

WHEREAS, a portion of the proceeds from such sale shall be applied to a reduction of the principal under the Notes; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definitions are hereby added to Section 1.1 of the Credit Agreement as follows:

“Breitburn Sale Agreement” means that certain Purchase and Sale Agreement dated December 11, 2012 between the Borrower and BreitBurn Operating L.P. as presented to the Administrative Agent by the Borrower prior to the execution of the Fifth Amendment to Credit Agreement.

“Breitburn Sale Paydown” means a portion of the cash proceeds from the Borrower’s sale of certain of its Oil and Gas Properties pursuant to the Breitburn Sale Agreement in at least the amount that would be necessary to reduce the sum of the outstanding principal balance of the Notes plus the Letter of Credit Exposure to an amount not greater than $18,900,000.

“Fifth Amendment to Credit Agreement” means the Fifth Amendment to Credit Agreement dated effective as of December 26, 2012 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definitions located in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties as follows:

1

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $32,500,000 as of the date of the Fifth Amendment to Credit Agreement; provided, however, that upon the Administrative Agent’s receipt of the Breitburn Sale Paydown for application to the Obligations, the Borrowing Base shall be automatically and without further act or deed reduced to $24,000,000.

“Commitment” means, for each Lender, the lesser of (a) the amount set forth opposite its signature below (or in any amendment hereto, but subject to the prior satisfaction of any conditions to the adjustment of Commitment amounts that may be contained in any such amendment) or as set forth in (or reduced or increased by) any Notice of Assignment relating to any assignment that has become effective pursuant to Section 12.3.2, as such amount may be modified from time to time pursuant to the terms of this Agreement or (b) the face amount of the Note held (or to be held pursuant to a Notice of Assignment) by such Lender; or if the context requires, means, for such Lender, the commitment of each Lender to make Loans and participate in the issuance by the Administrative Agent of letters of credit hereunder or extensions or renewals of Letters of Credit. The aggregate amount of the Loans outstanding under any Lender’s Note plus such Lender’s Percentage Share of the Letter of Credit Exposure shall not exceed at any time such Lender’s Available Commitment.

3. Consent to Sale; Release of Liens. The Lenders consent to the Borrower’s sale of its Oil and Gas Properties described in the Breitburn Sale Agreement, subject to the simultaneous payment to the Administrative Agent of the Breitburn Sale Paydown. Upon the Administrative Agent’s receipt of the Breitburn Sale Paydown for application to the Obligations, (i) each Lender’s Commitment shall be automatically adjusted to the Commitment amount set forth opposite such Lender’s signature to this Amendment, and (ii) the Administrative Agent will execute and deliver to the Borrower or its designee partial releases of liens and security interests on the Oil and Gas Properties sold pursuant to the Breitburn Sale Agreement.

4. Fees. The Administrative Agent waives the processing fee payable pursuant to Section 2.6.7 of the Credit Agreement as applied to this Amendment.

5. Further Assurances. The Borrower agrees to execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

6. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

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7. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

8. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

9. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent.

10. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

11. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent.

3

Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

12. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

4

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	BORROWER:
	LYNDEN USA INC.
	By:	/s/ Colin Watt
	Name:	Colin Watt
	Title:	President
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$16,800,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$ 7,200,000.00	HAPPY STATE BANK
	By:	/s/ Ryan Monroe
	Name:	Ryan Monroe
	Title:	President - Pampa

[Guarantor signature page follows]

Signature Page – Fifth Amendment to Lynden Credit Agreement

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 10 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

Signature Page – Fifth Amendment to Lynden Credit Agreement

Executed for the limited purpose of consenting

to the sale of properties and related release of liens

contemplated by paragraph 3 of this Amendment:

CARGILL, INCORPORATED

By:

Print:

Title:

Signature Page – Fifth Amendment to Lynden Credit Agreement

EX-10.7

Exhibit 10.7

SIXTH AMENDMENT TO CREDIT AGREEMENT

This Sixth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated May 10, 2013. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Sixth Amendment to Credit Agreement” means the Sixth Amendment to Credit Agreement dated effective as of May 10, 2013 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $29,000,000 as of the date of the Sixth Amendment to Credit Agreement.

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing June 1, 2013, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders may

1

decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. Commitments. The Lenders’ respective Commitments are hereby adjusted to the amounts set forth opposite their names on the signature pages to this Amendment.

5. Fees. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $50,000 pursuant to Section 2.6.3 of the Credit Agreement.

(b) a processing fee for the Administrative Agent’s sole account in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

6. Further Assurances. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the decimal interests indicated on such Table II.

(b) The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

7. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

8. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

9. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid

2

and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

10. Conditions to Effectiveness. This Amendment shall be effective upon (i) the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent and (ii) the execution and delivery by the Borrower of such mortgages and amendments to mortgage as may be reasonably required by the Administrative Agent to further document the terms of this Amendment.

11. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

13. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

3

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	BORROWER:
	LYNDEN USA INC.
	By:	/s/ Colin Watt
	Name:	Colin Watt
	Title:	President
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$20,300,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$8,700,000.00	HAPPY STATE BANK
	By:	/s/ Ryan Monroe
	Name:	Ryan Monroe
	Title:	President - Pampa

[Guarantor signature page follows]

Signature Page – Sixth Amendment to Lynden Credit Agreement

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 11 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

Signature Page – Sixth Amendment to Lynden Credit Agreement

TABLE II

Property	Field	County	State	Wells	RsvCat	WI	NRI
M. Hillger 16-1	SPRABERRY TREND (WOLFBERRY)	Midland	TX	1	PDP	0.43750	0.33906
Annalee 18-1	SPRABERRY TREND (WOLFBERRY)	Midland	TX	1	PDP	0.43750	0.32813
Duane 18-1	SPRABERRY TREND (WOLFBERRY)	Midland	TX	1	PDP	0.43750	0.32813
J-OB 11-1		Martin	TX	1	PDP	0.43750	0.32813

EX-10.8

Exhibit 10.8

SEVENTH AMENDMENT TO CREDIT AGREEMENT

This Seventh Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated September 27, 2013. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Seventh Amendment to Credit Agreement” means the Seventh Amendment to Credit Agreement dated effective as of September 27, 2013 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definitions located in Section 1.1 of the Credit Agreement are hereby amended and restated in their respective entireties as follows:

“Adjusted LIBOR Rate” means, with respect to any Eurodollar Advance for any Interest Period, an interest rate per annum equal to the greater of (a) (i) the LIBOR Rate for such Interest Period multiplied by the Statutory Reserve Rate plus (ii) the Applicable Margin in effect from time to time, or (b) three and one-half percent (3.50%); but in no event exceeding the Highest Lawful Rate.

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $32,000,000 as of the date of the Seventh Amendment to Credit Agreement.

“Floating Rate” means for any day a per annum interest rate equal to the higher of (i) sum of the Applicable Margin plus the WSJ Rate, each from time to time in effect or (ii) three and one-half percent (3.50%); but in no event exceeding the Highest Lawful Rate.

1

3. Section 2.8.2 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“2.8.2 The Borrowing Base shall be automatically reduced as of the 1st day of each month, commencing October 1, 2013, and continuing on the first day of each month thereafter until the Final Maturity Date. Such reductions in the Borrowing Base each month shall be in the amount of $0 per month unless redetermined as herein permitted. At the time of each new Borrowing Base determination under Section 2.8.1, the Required Lenders in their sole discretion may increase the amount of such monthly reductions, and the Lenders may decrease the amount of such monthly reductions. Any decreases in the monthly reductions must be approved by all of the Lenders and shall be subject to each Lender’s complete credit approval process. There is no duty, implied or explicit, on the Administrative Agent or the Lenders to ever decrease the amount of the monthly Borrowing Base reduction amounts.”

4. Commitments. The Lenders’ respective Commitments are hereby adjusted to the amounts set forth opposite their names on the signature pages to this Amendment.

5. Fees. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $30,000 pursuant to Section 2.6.3 of the Credit Agreement.

(b) a processing fee for the Administrative Agent’s sole account in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

6. Further Assurances. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the decimal interests indicated on such Table II.

(b) The Borrower shall execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

7. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

8. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and

2

acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

9. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

10. Conditions to Effectiveness. This Amendment shall be effective upon (i) the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent and (ii) the execution and delivery by the Borrower of such mortgages and amendments to mortgage as may be reasonably required by the Administrative Agent to further document the terms of this Amendment.

11. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

12. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Agreement shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent.

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Delivery of an executed counterpart of a signature page of this Agreement by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Agreement.

13. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Signature page follows]

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ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	BORROWER:
	LYNDEN USA INC.
	By:	/s/ Colin Watt
	Name:	Colin Watt
	Title:	President
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$22,400,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$ 9,600,000.00	HAPPY STATE BANK
	By:	/s/ Ryan Monroe
	Name:	Ryan Monroe
	Title:	President - Pampa

[Guarantor signature page follows]

Signature Page – Seventh Amendment to Lynden Credit Agreement

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 11 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

Signature Page – Seventh Amendment to Lynden Credit Agreement

TABLE II

WELL	FIELD	COUNTY	STATE	WI		NRI
Annalee 18-2	SPRABERRY TREND	GLASSCOCK	TX		43.75		32.81
Bath 1-2R	SPRABERRY TREND	HOWARD	TX		35.55		27.73
CORA 18-1	SPRABERRY TREND	MARTIN	TX		43.75		32.81
DUANE 18T-2	SPRABERRY TREND	GLASSCOCK	TX		43.75		32.81
Heidelberg 32-1	SPRABERRY TREND	MARTIN	TX		43.75		32.81
HILGER HIGH-5	SPRABERRY TREND	MIDLAND	TX		43.75		35.00
MILLER TRUST 1-06	SPRABERRY TREND	MIDLAND	TX		43.75		32.81
Miller Trust-103	SPRABERRY TREND	MIDLAND	TX		43.75		32.81
Thelma 7-1	SPRABERRY TREND	GLASSCOCK	TX		43.75		32.81
TOPEAK 12-1	SPRABERRY TREND	MARTIN	TX		43.75		32.81
Tubb A-422	SPRABERRY TREND	HOWARD	TX		40.35		31.48
WALSH 7-1	SPRABERRY TREND	MIDLAND	TX		43.75		32.81
Wearner 38-2	SPRABERRY TREND	MARTIN	TX		43.75		32.81
Wolcott 253-4	SPRABERRY TREND	MARTIN	TX		30.63		22.97
y1-Walters 11-2	SPRABERRY TREND	MARTIN	TX		32.81		25.34
y-Bath 1-3	SPRABERRY TREND	HOWARD	TX		35.55		27.73
z-Sefcik 24-2	SPRABERRY TREND	MARTIN	TX		38.87		30.32
z-Valeria 34-1	SPRABERRY TREND	MARTIN	TX		43.75		32.81

EX-10.9

Exhibit 10.9

EIGHTH AMENDMENT TO CREDIT AGREEMENT

This Eighth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated December 27, 2013. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and that the Administrative Agent release its Lien on certain Oil and Gas Properties owned by the Borrower in connection with a proposed sale thereof to a third party; and

WHEREAS, a portion of the proceeds from such sale shall be applied to a reduction of the principal under the Notes; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definitions are hereby added to Section 1.1 of the Credit Agreement as follows:

“BreitBurn 2013 Sale Paydown” means a portion of the cash proceeds from the Borrower’s sale of certain of its Oil and Gas Properties pursuant to the BreitBurn Assignment in at least the amount that would be necessary to reduce the sum of the outstanding principal balance of the Notes plus the Letter of Credit Exposure to an amount not greater than $25,000,000.

“BreitBurn Assignment” means that certain Assignment and Bill of Sale dated to be effective as of December 30, 2013 between the Borrower and BreitBurn Operating L.P., as presented to the Administrative Agent by the Borrower prior to the execution of the Eighth Amendment to Credit Agreement.

“Eighth Amendment to Credit Agreement” means the Eighth Amendment to Credit Agreement dated effective as of December 27, 2013 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

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“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $32,000,000 as of the date of the Eighth Amendment to Credit Agreement; provided, however, that upon the Administrative Agent’s receipt of the BreitBurn 2013 Sale Paydown for application to the Obligations, the Borrowing Base shall be automatically and without further act or deed reduced to $25,000,000.

3. Consent to Sale; Release of Liens. The Lenders consent to the Borrower’s sale of its Oil and Gas Properties described in the BreitBurn Assignment, subject to the simultaneous payment to the Administrative Agent of the BreitBurn 2013 Sale Paydown. Upon the Administrative Agent’s receipt of the BreitBurn 2013 Sale Paydown for application to the Obligations, (i) each Lender’s Commitment shall be automatically adjusted to the Commitment amount set forth opposite such Lender’s signature to this Amendment, and (ii) the Administrative Agent will execute and deliver to the Borrower or its designee partial releases of liens and security interests on the Oil and Gas Properties sold pursuant to the BreitBurn Assignment.

4. Fees. The Borrower shall pay to the Administrative Agent upon execution of this Amendment a processing fee for the Administrative Agent’s sole account in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

5. Further Assurances. The Borrower agrees to execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

6. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

7. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

8. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

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9. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent.

10. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

11. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Amendment shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Amendment.

12. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

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ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

	BORROWER:
	LYNDEN USA INC.
	By:	/s/ Colin Watt
	Name:	Colin Watt
	Title:	President
	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$17,500,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$ 7,500,000.00	HAPPY STATE BANK
	By:	/s/ Ryan Monroe
	Name:	Ryan Monroe
	Title:	President - Pampa

[Guarantor signature page follows]

Signature Page – Eighth Amendment to Lynden Credit Agreement

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 10 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

Signature Page – Eighth Amendment to Lynden Credit Agreement

Executed for the limited purpose of consenting

to the sale of properties and related release of liens

contemplated by paragraph 3 of this Amendment:

CARGILL, INCORPORATED

By:

Print:

Title:

Signature Page – Eighth Amendment to Lynden Credit Agreement

EX-10.10

Exhibit 10.10

NINTH AMENDMENT TO CREDIT AGREEMENT

This Ninth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated February 5, 2014. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definitions are hereby added to Section 1.1 of the Credit Agreement as follows:

“Ninth Amendment to Credit Agreement” means the Ninth Amendment to Credit Agreement dated effective as of February 5, 2014 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Final Maturity Date” or “Final Maturity” means August 29, 2016, or such earlier date on which the payment of the Notes is accelerated.

“Note” means a promissory note issued pursuant hereto, in substantially the form attached hereto entitled “Form of Promissory Note,” duly executed by the Borrower and payable to the order of a Lender, including any amendment, modification, renewal or replacement of such promissory note, which Notes shall be in the aggregate amount of up to $100,000,000. The Notes issued to the Lenders hereunder might not be in proportion to their respective Commitments.

3. Fees. The Administrative Agent waives the processing fee otherwise payable pursuant to Section 2.6.7 of the Credit Agreement as applied to this Amendment.

4. Further Assurances. The Borrower agrees to execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

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5. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

6. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

7. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

8. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and substitute Notes in favor of the Lenders in the aggregate principal amount of $100,000,000, and the receipt thereof by the Administrative Agent.

9. Change of Address. The Borrower and the Parent have furnished notice that their updated address for notices purposes shall be as set forth on their signature page to this Amendment unless and until further updated in accordance with the Credit Agreement.

10. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its

2

funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

11. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. This Amendment shall become effective at such time as the counterparts hereof which, when taken together, bear the signature of the Borrower, the Administrative Agent and each Lender, shall be delivered to the Administrative Agent. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Amendment.

12. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

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ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

BORROWER:
LYNDEN USA INC.
By:	/s/ Colin Watt
Name:	Colin Watt
Title:	President
New address:
Suite 1200
888 Dunsmuir Street
Vancouver, BC
V6C 3K4

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 10 of the foregoing Amendment.

GUARANTOR:
LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer
New address:
Suite 1200
888 Dunsmuir Street
Vancouver, BC
V6C 3K4

[Signature pages continue]

Signature Page – Ninth Amendment to Lynden Credit Agreement

ADMINISTRATIVE AGENT:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President
LENDERS:
TEXAS CAPITAL BANK, N.A.
By:	/s/ Frank K. Stowers
Name:	Frank K. Stowers
Title:	Senior Vice President
HAPPY STATE BANK
By:	/s/ Ryan Monroe
Name:	Ryan Monroe
Title:	Senior Vice President

Signature Page – Ninth Amendment to Lynden Credit Agreement

Executed for the limited purpose of consenting

to amendments to the Mortgages to reflect the increase

in the aggregate Note amount to $100,000,000:

CARGILL, INCORPORATED

By:

Print:

Title:

Signature Page – Ninth Amendment to Lynden Credit Agreement

EX-10.11

Exhibit 10.11

TENTH AMENDMENT TO CREDIT AGREEMENT

This Tenth Amendment to Credit Agreement (“Amendment”) is entered into between Texas Capital Bank, N.A., a national banking association, as Administrative Agent, the lenders party to the Credit Agreement; and Lynden USA Inc., a Utah corporation, as borrower, and is dated June 5, 2014. Terms defined in the Credit Agreement between the Administrative Agent, such lenders and such borrower dated August 29, 2011 (as amended, the “Credit Agreement”), are used herein as therein defined, unless otherwise defined herein or the context otherwise requires.

R E C I T A L S:

WHEREAS, the Borrower has requested that the Lenders amend the Credit Agreement and increase the Borrowing Base; and

WHEREAS, the Lenders are willing to amend the Credit Agreement under the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Administrative Agent and the Lenders hereby agree as follows:

1. The following definition is hereby added to Section 1.1 of the Credit Agreement as follows:

“Tenth Amendment to Credit Agreement” means the Tenth Amendment to Credit Agreement dated June 5, 2014 between Administrative Agent, the Lenders and the Borrower, amending the Credit Agreement.

2. The following definition located in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

“Borrowing Base” means the amount most recently determined and designated by the Administrative Agent as the Borrowing Base in accordance with Section 2.8.1, but in no event in excess of the Aggregate Commitment, as such Borrowing Base is reduced in accordance with Section 2.8.2 or other provisions hereof. The Borrowing Base under Section 2.8.1 is deemed to be $32,000,000 as of the date of the Tenth Amendment to Credit Agreement.

3. Commitments. The Lenders’ respective Commitments are hereby amended to the amounts set forth opposite their respective signature blocks on their signature page to this Amendment.

4. Fees. The Borrower shall pay to the Administrative Agent upon execution of this Amendment,

(a) a facility fee in the amount of $70,000 pursuant to Section 2.6.3 of the Credit Agreement.

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(b) a processing fee for the Administrative Agent’s sole account in the amount of $2,500 pursuant to Section 2.6.7 of the Credit Agreement.

5. Further Assurances. The Borrower agrees to do each of the following:

(a) create in favor of the Administrative Agent by instruments satisfactory to the Administrative Agent and its counsel first and prior Liens on each of the Properties described in Table II attached to this Amendment and, in connection therewith, provide to the Administrative Agent title opinions or other title data satisfactory to the Administrative Agent and its counsel to confirm Borrower’s ownership of such Properties in the decimal interests indicated on such Table II.

(b) execute and deliver or cause the appropriate Person to execute and deliver such certificates, mortgages, amendments to mortgages and other security instruments as the Administrative Agent may from time to time reasonably request to reflect the terms of this Amendment.

6. Address Update. The notice addresses for each of Administrative Agent and Texas Capital Bank, N.A. are hereby amended to the addresses set forth on Exhibit A attached hereto.

7. Benefit of Conditions. All of the conditions in this Amendment and the Credit Agreement are solely for the benefit of the Administrative Agent and the Lenders, and no Person other than the Administrative Agent and the Lenders may rely thereon or insist on compliance therewith.

8. Ratification. The Borrower hereby ratifies all of its Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agrees and acknowledges that the Credit Agreement and each of the Loan Documents to which it is a party shall continue in full force and effect after giving effect to this Amendment. Nothing in this Amendment extinguishes, novates or releases any right, claim, Lien, security interest or entitlement of the Lenders created by or contained in any of such documents nor is the Borrower released from any covenant, warranty or obligation created by or contained therein.

9. Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that (a) this Amendment has been duly executed and delivered on behalf of the Borrower, (b) this Amendment constitutes a valid and legally binding agreement enforceable against the Borrower in accordance with its terms and (c) the execution, delivery and performance of this Amendment has been duly authorized by the Borrower.

10. Conditions to Effectiveness. This Amendment shall be effective upon the execution by all parties of this Amendment and the receipt thereof by the Administrative Agent; provided, however, that the increases in the Borrowing Base and the Lenders’ Commitments contemplated by paragraphs 2 and 3 shall not become effective until the Administrative Agent has additionally received such mortgages and amendments to mortgage as may be reasonably requested by the Administrative Agent to satisfy the requirements of paragraph 5.

2

11. RELEASE OF CLAIMS. The Borrower for itself, its successors and assigns and all those at interest therewith, including, without limitation, each Guarantor, (collectively, the “Releasing Parties”), jointly and severally, hereby voluntarily and forever, RELEASE, DISCHARGE AND ACQUIT the Administrative Agent, the Lenders and their respective officers, directors, shareholders, employees, agents, successors, assigns, representatives, affiliates and insurers (sometimes referred to below collectively as the “Released Parties”) and all those at interest therewith of and from any and all claims, causes of action, liabilities, damages, costs (including, without limitation, attorneys’ fees and all costs of court or other proceedings), and losses of every kind or nature at this time known or unknown, direct or indirect, fixed or contingent, which the Releasing Parties, have or hereafter may have arising out of any act, occurrence, transaction, or omission occurring from the beginning of time to the date of execution of this Amendment if related to the Note or the other Loan Documents (the “Released Claims”), except that (i) the future duties and obligations of the Lenders under the Loan Documents and the rights of the Borrower to its funds on deposit with the Lenders shall not be included in the term Released Claims and (ii) the right of the Borrower to require the correction of manifest accounting errors and similar administrative errors shall not be included in the term Released Claims. IT IS THE EXPRESS INTENT OF THE RELEASING PARTIES THAT THE RELEASED CLAIMS SHALL INCLUDE ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR ATTRIBUTABLE TO THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE RELEASED PARTIES.

12. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, e-mail, facsimile transmission, electronic mail in “portable document format” (“.pdf”) form or other electronic means intended to preserve the original graphic and pictorial appearance of the item being sent shall be effective as a delivery of a manually executed counterpart of this Amendment.

13. Effect. This Amendment is one of the Loan Documents. Except as amended hereby, the Credit Agreement shall remain unchanged and in full force and effect, and the Borrower hereby ratifies the terms of the Credit Agreement (as amended hereby), including, without limitation, the provisions of Section 9.7 and Section 9.8 thereof.

[Remainder of page intentionally left blank]

3

ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN THIS REGARD, THIS AMENDMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.

IN WITNESS WHEREOF, this Amendment is executed as of the date first above written.

BORROWER: LYNDEN USA INC.
By:	/s/ Colin Watt
Name:	Colin Watt
Title:	President

The Guarantor acknowledges and approves the foregoing Amendment, confirms that its Guaranty is in full force and effect and agrees to the release of claims in paragraph 11 of the foregoing Amendment.

GUARANTOR: LYNDEN ENERGY CORP.
By:	/s/ Colin Watt
Name:	Colin Watt
Print:	President and Chief Executive Officer

[Signature pages continue]

Signature Page – Tenth Amendment to Lynden Credit Agreement

	ADMINISTRATIVE AGENT:
	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
COMMITMENT
	LENDERS:
$22,400,000.00	TEXAS CAPITAL BANK, N.A.
	By:	/s/ Frank K. Stowers
	Name:	Frank K. Stowers
	Title:	Senior Vice President
$ 9,600,000.00	HAPPY STATE BANK
	By:	/s/ Ryan Monroe
	Name:	Ryan Monroe
	Title:	Senior Vice President

Signature Page – Tenth Amendment to Lynden Credit Agreement

TABLE II

Property	County	State	Reserve Category	Working Interest		Net Revenue Interest
Annalee 18T #3	Glasscock	TX	PDP		0.43750	0.32813
Deavenport 7-1	Glasscock	TX	PDP		0.43750	0.32813
Percy 39-1R	Martin	TX	PDP		0.43340	0.32851
Sefcik 24-3R	Glasscock	TX	PDP		0.38828	0.30322

EXHIBIT A

NEW NOTICE ADDRESSES OF CERTAIN PARTIES

New address for the Administrative Agent:

2000 McKinney Avenue, Suite 1800

Dallas, Texas 75201

Attention: Energy Banking Group

Facsimile: (214) 932-6704

New address for Texas Capital Bank, N.A.:

2000 McKinney Avenue, Suite 1800

Dallas, Texas 75201

Attention: Energy Banking Group

Facsimile: (214) 932-6704

EX-10.12

Exhibit 10.12

[THESE WARRANTS AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON OR A PERSON IN THE UNITED STATES UNLESS AN EXEMPTION IS AVAILABLE FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT.]

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 5, 2012.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO VALUE UNLESS EXERCISED BY 4:00 P.M. (VANCOUVER TIME) ON MAY 4, 2015.

WARRANTS

for the purchase of Common Shares of

LYNDEN ENERGY CORP.

(a British Columbia company)

Warrant Certificate Number W-12-05-• Number of Common Shares:                     

1. Grant of Warrants

1.1 For valuable consideration, Lynden Energy Corp. (the “Company”), hereby grants to                      (the “Holder”), of                     , the right to acquire that number of Common Shares set out above subject to adjustment as herein provided and subject to the terms and conditions set out herein.

2. Interpretation

2.1 As used in this certificate:

(a) “Capital Reorganization” has the meaning given in section 4.1(a);

(b) “Common Shares” means the common shares in the capital of the Company as such shares exist at the close of business on the date of issuance of this certificate; provided that, in the event of any adjustment of subscription rights pursuant to Article 4, “Common Shares” shall thereafter mean the shares or other securities or property purchasable upon the exercise of the Warrants as a result of any such adjustment;

(c) “Common Share Reorganization” has the meaning given in section 4.2(a);

(d) “Current Market Price” of the Common Shares at any date means the simple average of the closing price per share for the Common Shares for any 10 consecutive trading days selected by the Company commencing not more than 45 trading days before such date on such stock exchange or over-the-counter market on which the Common Shares trade as selected by the Company (provided that if on any day in such period no closing price per share for the Common Shares is reported on by such exchange for such day, the average of the reported closing bid and asked prices on such exchange on such day shall be deemed to be the closing price per share for the Common Shares for such day);

(e) “Dividend Paid in the Ordinary Course” means a dividend paid on the Common Shares in any four consecutive quarters of the Company, whether in (1) cash, (2) securities of the Company, including rights, options or warrants to purchase any securities of the Company or property or other assets of the Company or (3) property or other assets of the Company, to the extent that the amount or value of such dividend together with the amount or value of all other dividends theretofore paid during such financial year (any such securities, property or other assets so distributed to be valued at the fair market value of such securities, property or other assets, as the case may be, as determined by the Company, which determination shall be conclusive, provided that, for the purposes of this definition, the fair market value of any Common Shares distributed by way of dividend shall be conclusively determined by reference to the Current Market Price per Common Share on the date prior to the declaration of such dividend) does not exceed the greater of:

(i) 150% of the aggregate amount of dividends paid by the Company on the Common Shares in the period of four consecutive financial quarters ended immediately prior to the first day of such financial year; and

(ii) 100% of the consolidated net income of the Company before extraordinary items (but after dividends payable on all shares ranking prior to or on a parity with respect to the payment of dividends with the Common Shares) in respect of the period of four consecutive financial quarters ended immediately prior to the first day of the current financial quarter (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of four consecutive financial quarters or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company);

(f) “Equity Shares” means the Common Shares and any shares of any other class or series of the Company which may from time to time be authorized for issue if by their terms such shares confer upon the holders thereof the right to participate in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company beyond a fixed sum or a fixed sum plus accrued dividends;

(g) “Exercise Date” means the date on which this certificate is delivered for exercise, together with full payment of the Exercise Price, in accordance with the provisions of Article 3;

(h) “Exercise Price” means $0.65 per Common Share until the Time of Expiry, subject to adjustment in accordance with the provisions of Article 4;

(i) “Term” means the period of time commencing from the date of issuance of this certificate and expiring at the Time of Expiry;

(j) “Time of Expiry” means 4:00 p.m. (Vancouver time) on May 4, 2015;

(k) “Transfer Agent” means the Company; and

(l) “Warrants” means the share purchase warrants evidenced by this certificate.

2.2 As used in this certificate, the masculine gender includes the feminine and neuter genders, and vice versa, and the singular includes the plural, and vice versa, where the context so requires, and the terms “herein”, “hereby”, “hereunder”, “hereof”, “these Warrants” and similar provisions refer to this certificate as a whole and not to any particular section or other portion hereof unless the context otherwise requires.

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2.3 The division of this certificate into sections and the insertion of headings are for convenience of reference and shall not affect the interpretation hereof.

2.4 Where reference is made in this certificate to an amount of money, such reference shall, unless otherwise specifically provided, be deemed to be a reference to Canadian funds.

2.5 Time shall be of the essence hereof.

2.6 This certificate constitutes the entire agreement between the parties with respect to the subject matter hereof and there are no representations or warranties of any kind not contained herein. This certificate may not be amended or modified in any respect except by written instrument signed by the parties.

2.7 The invalidity of any provision of this certificate or any covenant herein contained shall not affect the validity of any other provision or covenant herein contained.

2.8 The Warrants and this certificate will be governed exclusively by the laws of British Columbia and the federal laws of Canada applicable therein, without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction. The courts of British Columbia shall have exclusive jurisdiction over any dispute arising in connection with the Warrants and this certificate.

3. Exercise of Warrants

3.1 The Holder (subject to the provisions of section 3.2) shall have the right to exercise the Warrants at any time or from time to time during the Term, in whole or in part, by the surrender of this certificate, to the Transfer Agent, together with the duly completed and executed exercise form attached hereto as Schedule A and payment, by certified cheque, bank draft, money order or wire transfer payable to the Company, of the applicable Exercise Price for the number of Common Shares then being purchased. Upon any such exercise, the Company shall cause a certificate registered in the name of the Holder, representing in the aggregate such number of the Common Shares as the Holder shall have then paid for, to be delivered to the Holder (provided that the Holder has surrendered to the Transfer Agent this certificate), within a reasonable time, not exceeding three business days after the Warrants shall have been so exercised. Unless the Warrants have expired, if less than the full number of Warrants is exercised, this certificate will be endorsed to show the number of Common Shares acquired upon exercise and the number of Common Shares remaining hereunder, and this certificate will be returned to the Holder.

3.2 The Warrants shall expire and terminate at the Time of Expiry.

3.3 Nothing herein contained or done pursuant hereto shall obligate the Holder to purchase or pay for or the Company to issue any securities except for those securities in respect of which the Holder shall have exercised its right to purchase hereunder in the manner herein provided.

3.4 Nothing in this certificate or in the holding of the Warrants will be construed as conferring on any Holder any right or interest whatsoever as a shareholder of the Company, including but not limited to any right to vote at, to receive notice of, or to attend any meeting of shareholders or any other proceeding of the Company or any right to receive any dividend or other distributions.

3.5 If the Warrants are exercised before September 5, 2012, the certificate representing the Common Shares will bear the following legend: UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 5, 2012.

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4. Adjustments

4.1 If at any time after the date hereof and prior to the Time of Expiry:

(a) there shall be a reclassification of the Common Shares outstanding at any time or change of the Common Shares into other shares or securities, or any other capital reorganization affecting the Common Shares except as described in section 4.2, or a consolidation, amalgamation or merger of the Company with or into any other corporation (other than a consolidation, amalgamation or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares or securities), or a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “Capital Reorganization”), the Holder shall be entitled to receive upon the exercise of the Warrants, and shall accept for the same aggregate consideration, in lieu of the number of Common Shares to which it was theretofore entitled upon the exercise of the Warrants, the kind and amount of shares or other securities or property which it would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, it had been the registered holder of the number of Common Shares to which it was theretofore entitled upon such exercise. If determined appropriate by the Company, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Article 4 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 4 shall thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Warrants.

(b) any adjustment in the Exercise Price shall occur as a result of an event referred to in section 4.2(a) or 4.2(b), then the number of Common Shares purchasable upon the subsequent exercise of the Warrants shall be simultaneously adjusted by multiplying the number of Common Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction which shall be the reciprocal of the fraction employed in the adjustment of the Exercise Price. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of a distribution of exchangeable or convertible securities other than Equity Shares referred to in section 4.2(a), the number of Common Shares purchasable upon the exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number of Common Shares which would be purchasable based upon the number of Common Shares actually issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of the fixing by the Company of a record date for the distribution of exchangeable or convertible securities other than Equity Shares or rights, options or warrants referred to in section 4.2(b), the number of Common Shares purchasable upon exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number which would be purchasable pursuant to this section 4.1(b) if the fair market value of such securities or such rights, options or warrants had been determined for purposes of the adjustment pursuant to this section 4.1(b) on the basis of the number of Equity Shares issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right.

4.2 The Exercise Price in effect at any date shall be subject to adjustment from time to time as follows:

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(a) If and whenever at any time after the date hereof and prior to the Time of Expiry, the Company shall (i) subdivide the outstanding Common Shares into a greater number of Common Shares, (ii) consolidate the outstanding Common Shares into a lesser number of Common Shares, or (iii) make any distribution, other than by way of a Dividend Paid in the Ordinary Course, to the holders of all or substantially all of the outstanding Common Shares payable in Common Shares, (any of such events being called a “Common Share Reorganization”), the Exercise Price shall be adjusted effective immediately after the effective date or record date, as the case may be, on which the holders of Common Shares are determined for the purpose of the Common Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization occurring on the effective date or record date as the case may be.

(b) If and whenever at any time after the date hereof, the Company shall fix a record date which is prior to the Time of Expiry for the issue or distribution to all or substantially all the holders of the Common Shares of:

(i) securities of the Company including any rights, options or warrants to acquire Equity Shares or securities convertible into or exchangeable for Equity Shares or property or assets at a price per Common Share or having a conversion or exchange price per Common Share less than 75% of the Current Market Price per Common Share on such record date; or

(ii) any property or other assets,

and if such issuance or distribution is not by way of a Dividend Paid in the Ordinary Course or a Common Share Reorganization then, in each such case, the Exercise Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the product of the number of Common Shares outstanding on such record date and the Current Market Price on such record date, less the aggregate fair market value (as determined by the Company, which determination shall be conclusive) of such securities, property or other assets so issued or distributed, and of which the denominator shall be the product of the number of Common Shares outstanding on such record date and such Current Market Price; any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation.

4.3 The following provisions shall also apply to this Article 4:

(a) In any case in which this Article 4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event:

(i) issuing to the Holder the additional Common Shares issuable upon such exercise by reason of the adjustment required by such event; and

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(ii) delivering to the Holder any distributions declared with respect to such additional Common Shares, provided, however, that the Company shall deliver to the Holder an appropriate instrument evidencing its right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of the Warrants and to such distributions declared with respect to any such additional Common Shares issuable on the exercise of the Warrants.

(b) The adjustments provided for in this Article 4 are cumulative; shall, in the case of adjustments to the Exercise Price, be computed to the nearest one-tenth of one cent; and shall apply (without duplication) to successive subdivisions, consolidations, distributions, issuances or other events resulting in any adjustment under the provisions of this Article; provided that, notwithstanding any other provision of this Article 4, no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price then in effect and no adjustment shall be required in the number of Common Shares purchasable on the exercise of the Warrants unless it would result in a change of at least one one-hundredth of a share (provided, however, that any adjustments which by reason of this section 4.3(b) are not required to be made shall be carried forward and taken into account in any subsequent adjustment).

(c) In the event of any dispute between the Company and the Holder with respect to the adjustments provided for in this Article 4, such dispute shall be conclusively determined by a firm of chartered accountants appointed by the Company (who may be the Company’s auditors); such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company and the Holder. In the event that any such determination is made, the Company shall deliver a certificate to the Holder describing such determination.

(d) No adjustment in the Exercise Price or in the number of Common Shares purchasable upon exercise of the Warrants shall be made in respect of any event described in this Article 4, other than the events referred to in clauses (i) and (ii) of section 4.2(a), if the Holder is entitled to participate in such event on the same terms mutatis mutandis as if it had exercised the Warrants prior to or on the effective date or record date of such event.

(e) If the Company shall set a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any issue or distribution or for the issue of any rights, options or warrants and shall thereafter and before such distribution or issue to such shareholders legally abandon its plan to make such distribution or issue, then no adjustment in the Exercise Price shall be required by reason of the setting of such record date.

(f) In the absence of a resolution of the directors fixing a record date for any of the events referred to in section 4.2(b), the Company shall be deemed to have fixed as the record date therefor the date on which any of such events is effected.

4.4 As a condition precedent to the taking of any action which would require an adjustment pursuant to sections 4.1 or 4.2, the Company shall take any action which may, in the opinion of counsel to the Company, be necessary in order that the Company may validly and legally issue as fully paid and non-assessable all of the Common Shares which the Holder is entitled to receive on the full exercise of the Warrants in accordance with the provisions hereof.

5. Reserve for Issuance

5.1 The Company covenants to keep alloted sufficient Common Shares to be issued, as fully paid and non-assessable, on exercise of the Warrants. Nothing contained in this certificate shall affect or restrict the right of the Company to issue Common Shares or other securities from time to time.

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6. Notices

6.1 Any notice or other communication given hereunder shall be in writing and may be given by sending the same by personal delivery or by mailing the same by registered mail within Canada to such party at the following address:

(a) if to the Company:

Lynden Energy Corp.

885 West Georgia Street, Suite 2150

Vancouver, BC

V6C 3E8

Attention: Chief Executive Officer

(b) if to the Holder:

to the address set forth on the face page hereof.

6.2 Any notice or other communication shall:

(a) if personally delivered, be deemed to have been given or made at the time of delivery; and

(b) if mailed by registered mail and properly addressed be deemed to have been given or made on the fourth business day following the day on which it was so mailed; provided that if mailed, should there be, at the time of mailing or between the time of mailing and the actual receipt of the notice, a mail strike, slowdown or other labour dispute which might affect the delivery of such notice by the mails, then such notice shall only be effective upon actual delivery.

A party may give written notice of change of address in the same manner, in which event such notice shall thereafter to be given to it as above provided at such changed address.

7. Transfer of Warrants

7.1 Subject to applicable securities laws, the Holder may, by completing the form of transfer in Schedule B to this certificate, transfer the Warrants either in whole or in part. Every transfer of Warrants must be signed by the registered Holder or the Holder’s legal personal representative(s) or the attorney authorized in writing of the registered Holder. Any such transfer, accompanied by this certificate, must be delivered to the Company’s Transfer Agent, together with such evidence of identity or title as the Company may reasonably require, whereupon the transfer will be registered and duly noted by endorsement signed by the Company’s Transfer Agent. If part only of the Warrants is transferred, the Company’s Transfer Agent will deliver to the Holder and the transferee certificates for the same aggregate number of Warrants as represented herein substantially in the form of this certificate.

7.2 The Holder shall be allowed one full or partial re-registration of this certificate. Thereafter, the Holder may be charged a fee of $25.00 plus HST for each re-registration.

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8. General

8.1 If this certificate is mutilated, lost, destroyed or stolen, the Company, subject to applicable law, will issue and deliver a new certificate representing the Warrants of like date and tenor as the one mutilated, lost, destroyed or stolen upon surrender of and in place of and upon cancellation of the mutilated certificate or in lieu of and in substitution for the lost, destroyed or stolen certificate. The applicant for the issue of a new certificate representing the Warrants pursuant to this section shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish the Company such evidence of ownership and of the loss, destruction or theft of the certificate so lost, destroyed or stolen as shall be satisfactory to the Company in its discretion and the applicant may also be required to furnish an indemnity in amount and form satisfactory to it in its discretion, and shall pay the reasonable charges of the Company in connection therewith.

8.2 The Warrants shall rank pari passu with all other share purchase warrants of the Company notwithstanding the actual date of issue of the certificates that evidence them.

IN WITNESS WHEREOF the Company has caused this certificate to be executed by a duly authorized officer as of the 4^th day of May, 2012.

LYNDEN ENERGY CORP. by its authorized signatory:
NAME:	COLIN WATT
TITLE:	PRESIDENT AND CHIEF EXECUTIVE OFFICER

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Schedule A

Subscription Form

To: Lynden Energy Corp.

885 West Georgia, Suite 2150

Vancouver, BC, V6C 3E8

(a) The Undersigned being the registered holder of the enclosed Warrant Certificate (the “Holder”) hereby subscribes for                     Common Shares of Lynden Energy Corp. (the “Company”) (or such number of Common Shares or other securities or property to which such subscription entitles the Holder in lieu thereof or in addition thereto under the provisions of the Warrant Certificate) pursuant to the within Warrants at the Exercise Price (or the adjusted dollar amount per share at which the Holder is entitled to purchase such shares under the provisions of the Warrants) until 4:00 p.m. (Vancouver time) on May 4, 2015 on the terms specified in the said Warrant Certificate, which certificate is surrendered to the Company and which will, upon the issuance of the Common Shares referred to above and a new share purchase warrant certificate for any outstanding rights of the surrendered Warrant Certificate, be null and void. The Holder also encloses herewith a certified cheque, bank draft or money order or has transmitted good same day funds by wire or other similar transfer, in lawful money of Canada, payable to or to the order of the Company in payment of the subscription price.

(b) The Holder hereby directs that the said Common Shares subscribed for be issued and delivered as follows:

Name(s) in Full	Address(es) (include postal code)	Number(s) of Common Shares
	Total:

DATED:                             

Signature Guaranteed	(Signature of Holder)
	Print full name
	Print full address

Instructions:

1. The registered holder of Warrants may exercise its right to exercise the Warrants into Common Shares by completing and surrendering this Subscription Form and the ORIGINAL certificate representing the Warrants being converted to the Company, as provided for in the Warrant Certificate. Certificates representing the Common Shares to be acquired on exercise will be sent by prepaid ordinary mail to the address(es) above within three business days after the receipt of all required documentation.

2. If this Subscription Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any other person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Company.

3. If this Subscription Form indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrants to be exercised: (i) the signature of the registered holder on this Subscription Form must be medallion guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange, and (ii) the registered holder must pay to the Company all applicable taxes and other duties.

Schedule B

Transfer Form

To: Lynden Energy Corp.

885 West Georgia, Suite 2150

Vancouver, BC, V6C 3E8

FOR VALUE RECEIVED, the undersigned transfers the Warrants represented by the attached certificate to:

(Print name and address of transferee)

DATED:                                         

Signature(s) of Transferor(s) is hereby guaranteed by:	Signature of Registered Holder (or its representative if the Holder is not an individual)
	Name of Registered Holder
	Name and Title of Person signing on behalf of the Holder (if the Holder is not an individual)

The signature on the foregoing assignment must correspond with the name of the Holder as set forth on the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatever and must be guaranteed by a Major Canadian Schedule 1 chartered bank or by a member of a recognized Medallion Signature Guarantee Program.

EX-10.13

Exhibit 10.13

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 5, 2012.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO VALUE UNLESS EXERCISED BY 4:00 P.M. (VANCOUVER TIME) ON MAY 4, 2015.

NON-TRANSFERABLE FINDER’S WARRANTS

for the purchase of Common Shares of

LYNDEN ENERGY CORP.

(a British Columbia company)

Warrant Certificate Number FW-12-05-• Number of Common Shares:             

1. Grant of Warrants

1.1 For valuable consideration, Lynden Energy Corp. (the “Company”), hereby grants to             (the “Holder”), of             , the right to acquire that number of Common Shares set out above subject to adjustment as herein provided and subject to the terms and conditions set out herein.

2. Interpretation

2.1 As used in this certificate:

(a) “Capital Reorganization” has the meaning given in section 4.1(a);

(b) “Common Shares” means the common shares in the capital of the Company as such shares exist at the close of business on the date of issuance of this certificate; provided that, in the event of any adjustment of subscription rights pursuant to Article 4, “Common Shares” shall thereafter mean the shares or other securities or property purchasable upon the exercise of the Warrants as a result of any such adjustment;

(c) “Common Share Reorganization” has the meaning given in section 4.2(a);

(d) “Current Market Price” of the Common Shares at any date means the simple average of the closing price per share for the Common Shares for any 10 consecutive trading days selected by the Company commencing not more than 45 trading days before such date on such stock exchange or over-the-counter market on which the Common Shares trade as selected by the Company (provided that if on any day in such period no closing price per share for the Common Shares is reported on by such exchange for such day, the average of the reported closing bid and asked prices on such exchange on such day shall be deemed to be the closing price per share for the Common Shares for such day);

(e) “Dividend Paid in the Ordinary Course” means a dividend paid on the Common Shares in any four consecutive quarters of the Company, whether in (1) cash, (2) securities of the Company, including rights, options or warrants to purchase any securities of the Company or property or other assets of the Company or (3) property or other assets of the Company, to the extent that the amount or value of such dividend together with the amount or value of all other dividends theretofore paid during such financial year (any such securities, property or other assets so distributed to be valued at the fair market value of such securities, property or other assets, as the case may be, as determined by the Company, which determination shall be conclusive, provided that, for the purposes of this definition, the fair market value of any Common Shares distributed by way of dividend shall be conclusively determined by reference to the Current Market Price per Common Share on the date prior to the declaration of such dividend) does not exceed the greater of:

(i) 150% of the aggregate amount of dividends paid by the Company on the Common Shares in the period of four consecutive financial quarters ended immediately prior to the first day of such financial year; and

(ii) 100% of the consolidated net income of the Company before extraordinary items (but after dividends payable on all shares ranking prior to or on a parity with respect to the payment of dividends with the Common Shares) in respect of the period of four consecutive financial quarters ended immediately prior to the first day of the current financial quarter (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of four consecutive financial quarters or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company);

(f) “Equity Shares” means the Common Shares and any shares of any other class or series of the Company which may from time to time be authorized for issue if by their terms such shares confer upon the holders thereof the right to participate in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company beyond a fixed sum or a fixed sum plus accrued dividends;

(g) “Exercise Date” means the date on which this certificate is delivered for exercise, together with full payment of the Exercise Price, in accordance with the provisions of Article 3;

(h) “Exercise Price” means $0.65 per Common Share until the Time of Expiry, subject to adjustment in accordance with the provisions of Article 4;

(i) “Term” means the period of time commencing from the date of issuance of this certificate and expiring at the Time of Expiry;

(j) “Time of Expiry” means 4:00 p.m. (Vancouver time) on May 4, 2015;

(k) “Transfer Agent” means the Company; and

(l) “Warrants” means the share purchase warrants evidenced by this certificate.

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2.2 As used in this certificate, the masculine gender includes the feminine and neuter genders, and vice versa, and the singular includes the plural, and vice versa, where the context so requires, and the terms “herein”, “hereby”, “hereunder”, “hereof”, “these Warrants” and similar provisions refer to this certificate as a whole and not to any particular section or other portion hereof unless the context otherwise requires.

2.3 The division of this certificate into sections and the insertion of headings are for convenience of reference and shall not affect the interpretation hereof.

2.4 Where reference is made in this certificate to an amount of money, such reference shall, unless otherwise specifically provided, be deemed to be a reference to Canadian funds.

2.5 Time shall be of the essence hereof.

2.6 This certificate constitutes the entire agreement between the parties with respect to the subject matter hereof and there are no representations or warranties of any kind not contained herein. This certificate may not be amended or modified in any respect except by written instrument signed by the parties.

2.7 The invalidity of any provision of this certificate or any covenant herein contained shall not affect the validity of any other provision or covenant herein contained.

2.8 The Warrants and this certificate will be governed exclusively by the laws of British Columbia and the federal laws of Canada applicable therein, without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction. The courts of British Columbia shall have exclusive jurisdiction over any dispute arising in connection with the Warrants and this certificate.

3. Exercise of Warrants

3.1 The Holder (subject to the provisions of section 3.2) shall have the right to exercise the Warrants at any time or from time to time during the Term, in whole or in part, by the surrender of this certificate, to the Transfer Agent, together with the duly completed and executed exercise form attached hereto as Schedule A and payment, by certified cheque, bank draft, money order or wire transfer payable to the Company, of the applicable Exercise Price for the number of Common Shares then being purchased. Upon any such exercise, the Company shall cause a certificate registered in the name of the Holder, representing in the aggregate such number of the Common Shares as the Holder shall have then paid for, to be delivered to the Holder (provided that the Holder has surrendered to the Transfer Agent this certificate), within a reasonable time, not exceeding three business days after the Warrants shall have been so exercised. Unless the Warrants have expired, if less than the full number of Warrants is exercised, this certificate will be endorsed to show the number of Common Shares acquired upon exercise and the number of Common Shares remaining hereunder, and this certificate will be returned to the Holder.

3.2 The Warrants shall expire and terminate at the Time of Expiry.

3.3 Nothing herein contained or done pursuant hereto shall obligate the Holder to purchase or pay for or the Company to issue any securities except for those securities in respect of which the Holder shall have exercised its right to purchase hereunder in the manner herein provided.

3.4 Nothing in this certificate or in the holding of the Warrants will be construed as conferring on any Holder any right or interest whatsoever as a shareholder of the Company, including but not limited to any right to vote at, to receive notice of, or to attend any meeting of shareholders or any other proceeding of the Company or any right to receive any dividend or other distributions.

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3.5 If the Warrants are exercised before September 5, 2012, the certificate representing the Common Shares will bear the following legend: UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 5, 2012.

4. Adjustments

4.1 If at any time after the date hereof and prior to the Time of Expiry:

(a) there shall be a reclassification of the Common Shares outstanding at any time or change of the Common Shares into other shares or securities, or any other capital reorganization affecting the Common Shares except as described in section 4.2, or a consolidation, amalgamation or merger of the Company with or into any other corporation (other than a consolidation, amalgamation or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares or securities), or a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “Capital Reorganization”), the Holder shall be entitled to receive upon the exercise of the Warrants, and shall accept for the same aggregate consideration, in lieu of the number of Common Shares to which it was theretofore entitled upon the exercise of the Warrants, the kind and amount of shares or other securities or property which it would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, it had been the registered holder of the number of Common Shares to which it was theretofore entitled upon such exercise. If determined appropriate by the Company, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Article 4 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 4 shall thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Warrants.

(b) any adjustment in the Exercise Price shall occur as a result of an event referred to in section 4.2(a) or 4.2(b), then the number of Common Shares purchasable upon the subsequent exercise of the Warrants shall be simultaneously adjusted by multiplying the number of Common Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction which shall be the reciprocal of the fraction employed in the adjustment of the Exercise Price. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of a distribution of exchangeable or convertible securities other than Equity Shares referred to in section 4.2(a), the number of Common Shares purchasable upon the exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number of Common Shares which would be purchasable based upon the number of Common Shares actually issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of the fixing by the Company of a record date for the distribution of exchangeable or convertible securities other than Equity Shares or rights, options or warrants referred to in section 4.2(b), the number of Common Shares purchasable upon exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number which would be purchasable pursuant to this section 4.1(b) if the fair market value of such securities or such rights, options or warrants had been determined for purposes of the adjustment pursuant to this section 4.1(b) on the basis of the number of Equity Shares issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right.

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4.2 The Exercise Price in effect at any date shall be subject to adjustment from time to time as follows:

(a) If and whenever at any time after the date hereof and prior to the Time of Expiry, the Company shall (i) subdivide the outstanding Common Shares into a greater number of Common Shares, (ii) consolidate the outstanding Common Shares into a lesser number of Common Shares, or (iii) make any distribution, other than by way of a Dividend Paid in the Ordinary Course, to the holders of all or substantially all of the outstanding Common Shares payable in Common Shares, (any of such events being called a “Common Share Reorganization”), the Exercise Price shall be adjusted effective immediately after the effective date or record date, as the case may be, on which the holders of Common Shares are determined for the purpose of the Common Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization occurring on the effective date or record date as the case may be.

(b) If and whenever at any time after the date hereof, the Company shall fix a record date which is prior to the Time of Expiry for the issue or distribution to all or substantially all the holders of the Common Shares of:

(i) securities of the Company including any rights, options or warrants to acquire Equity Shares or securities convertible into or exchangeable for Equity Shares or property or assets at a price per Common Share or having a conversion or exchange price per Common Share less than 75% of the Current Market Price per Common Share on such record date; or

(ii) any property or other assets,

and if such issuance or distribution is not by way of a Dividend Paid in the Ordinary Course or a Common Share Reorganization then, in each such case, the Exercise Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the product of the number of Common Shares outstanding on such record date and the Current Market Price on such record date, less the aggregate fair market value (as determined by the Company, which determination shall be conclusive) of such securities, property or other assets so issued or distributed, and of which the denominator shall be the product of the number of Common Shares outstanding on such record date and such Current Market Price; any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation.

4.3 The following provisions shall also apply to this Article 4:

(a) In any case in which this Article 4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event:

(i) issuing to the Holder the additional Common Shares issuable upon such exercise by reason of the adjustment required by such event; and

(ii) delivering to the Holder any distributions declared with respect to such additional Common Shares,

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provided, however, that the Company shall deliver to the Holder an appropriate instrument evidencing its right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of the Warrants and to such distributions declared with respect to any such additional Common Shares issuable on the exercise of the Warrants.

(b) The adjustments provided for in this Article 4 are cumulative; shall, in the case of adjustments to the Exercise Price, be computed to the nearest one-tenth of one cent; and shall apply (without duplication) to successive subdivisions, consolidations, distributions, issuances or other events resulting in any adjustment under the provisions of this Article; provided that, notwithstanding any other provision of this Article 4, no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price then in effect and no adjustment shall be required in the number of Common Shares purchasable on the exercise of the Warrants unless it would result in a change of at least one one-hundredth of a share (provided, however, that any adjustments which by reason of this section 4.3(b) are not required to be made shall be carried forward and taken into account in any subsequent adjustment).

(c) In the event of any dispute between the Company and the Holder with respect to the adjustments provided for in this Article 4, such dispute shall be conclusively determined by a firm of chartered accountants appointed by the Company (who may be the Company’s auditors); such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company and the Holder. In the event that any such determination is made, the Company shall deliver a certificate to the Holder describing such determination.

(d) No adjustment in the Exercise Price or in the number of Common Shares purchasable upon exercise of the Warrants shall be made in respect of any event described in this Article 4, other than the events referred to in clauses (i) and (ii) of section 4.2(a), if the Holder is entitled to participate in such event on the same terms mutatis mutandis as if it had exercised the Warrants prior to or on the effective date or record date of such event.

(e) If the Company shall set a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any issue or distribution or for the issue of any rights, options or warrants and shall thereafter and before such distribution or issue to such shareholders legally abandon its plan to make such distribution or issue, then no adjustment in the Exercise Price shall be required by reason of the setting of such record date.

(f) In the absence of a resolution of the directors fixing a record date for any of the events referred to in section 4.2(b), the Company shall be deemed to have fixed as the record date therefor the date on which any of such events is effected.

4.4 As a condition precedent to the taking of any action which would require an adjustment pursuant to sections 4.1 or 4.2, the Company shall take any action which may, in the opinion of counsel to the Company, be necessary in order that the Company may validly and legally issue as fully paid and non-assessable all of the Common Shares which the Holder is entitled to receive on the full exercise of the Warrants in accordance with the provisions hereof.

5. Reserve for Issuance

5.1 The Company covenants to keep alloted sufficient Common Shares to be issued, as fully paid and non-assessable, on exercise of the Warrants. Nothing contained in this certificate shall affect or restrict the right of the Company to issue Common Shares or other securities from time to time.

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6. Notices

6.1 Any notice or other communication given hereunder shall be in writing and may be given by sending the same by personal delivery or by mailing the same by registered mail within Canada to such party at the following address:

(a) if to the Company:

Lynden Energy Corp.

885 West Georgia Street, Suite 2150

Vancouver, BC

V6C 3E8

Attention: Chief Executive Officer

(b) if to the Holder:

to the address set forth on the face page hereof.

6.2 Any notice or other communication shall:

(a) if personally delivered, be deemed to have been given or made at the time of delivery; and

(b) if mailed by registered mail and properly addressed be deemed to have been given or made on the fourth business day following the day on which it was so mailed; provided that if mailed, should there be, at the time of mailing or between the time of mailing and the actual receipt of the notice, a mail strike, slowdown or other labour dispute which might affect the delivery of such notice by the mails, then such notice shall only be effective upon actual delivery.

A party may give written notice of change of address in the same manner, in which event such notice shall thereafter to be given to it as above provided at such changed address.

7. Transfer of Warrants

7.1 These Warrants are not transferrable.

8. General

8.1 If this certificate is mutilated, lost, destroyed or stolen, the Company, subject to applicable law, will issue and deliver a new certificate representing the Warrants of like date and tenor as the one mutilated, lost, destroyed or stolen upon surrender of and in place of and upon cancellation of the mutilated certificate or in lieu of and in substitution for the lost, destroyed or stolen certificate. The applicant for the issue of a new certificate representing the Warrants pursuant to this section shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish the Company such evidence of ownership and of the loss, destruction or theft of the certificate so lost, destroyed or stolen as shall be satisfactory to the Company in its discretion and the applicant may also be required to furnish an indemnity in amount and form satisfactory to it in its discretion, and shall pay the reasonable charges of the Company in connection therewith.

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8.2 The Warrants shall rank pari passu with all other share purchase warrants of the Company notwithstanding the actual date of issue of the certificates that evidence them.

IN WITNESS WHEREOF the Company has caused this certificate to be executed by a duly authorized officer as of the 4^th day of May, 2012.

LYNDEN ENERGY CORP. by its authorized signatory:
NAME:	COLIN WATT
TITLE:	PRESIDENT AND CHIEF EXECUTIVE OFFICER

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Schedule A

Subscription Form

To: Lynden Energy Corp.

885 West Georgia, Suite 2150

Vancouver, BC, V6C 3E8

(a) The Undersigned being the registered holder of the enclosed Warrant Certificate (the “Holder”) hereby subscribes for                     Common Shares of Lynden Energy Corp. (the “Company”) (or such number of Common Shares or other securities or property to which such subscription entitles the Holder in lieu thereof or in addition thereto under the provisions of the Warrant Certificate) pursuant to the within Warrants at the Exercise Price (or the adjusted dollar amount per share at which the Holder is entitled to purchase such shares under the provisions of the Warrants) until 4:00 p.m. (Vancouver time) on May 4, 2015 on the terms specified in the said Warrant Certificate, which certificate is surrendered to the Company and which will, upon the issuance of the Common Shares referred to above and a new share purchase warrant certificate for any outstanding rights of the surrendered Warrant Certificate, be null and void. The Holder also encloses herewith a certified cheque, bank draft or money order or has transmitted good same day funds by wire or other similar transfer, in lawful money of Canada, payable to or to the order of the Company in payment of the subscription price.

(b) The Holder hereby directs that the said Common Shares subscribed for be issued and delivered as follows:

Name(s) in Full	Address(es) (include postal code)	Number(s) of Common Shares
	Total:

DATED:                             

Signature Guaranteed	(Signature of Holder)
	Print full name
	Print full address

Instructions:

1. The registered holder of Warrants may exercise its right to exercise the Warrants into Common Shares by completing and surrendering this Subscription Form and the ORIGINAL certificate representing the Warrants being converted to the Company, as provided for in the Warrant Certificate. Certificates representing the Common Shares to be acquired on exercise will be sent by prepaid ordinary mail to the address(es) above within three business days after the receipt of all required documentation.

2. If this Subscription Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any other person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Company.

3. If this Subscription Form indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrants to be exercised: (i) the signature of the registered holder on this Subscription Form must be medallion guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange, and (ii) the registered holder must pay to the Company all applicable taxes and other duties.

EX-10.14

Exhibit 10.14

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 19, 2012.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO VALUE UNLESS EXERCISED BY 4:00 P.M. (VANCOUVER TIME) ON MAY 18, 2015.

WARRANTS

for the purchase of Common Shares of

LYNDEN ENERGY CORP.

(a British Columbia company)

Warrant Certificate Number W-12-05-• Number of Common Shares:             

1. Grant of Warrants

1.1 For valuable consideration, Lynden Energy Corp. (the “Company”), hereby grants to             (the “Holder”), of             , the right to acquire that number of Common Shares set out above subject to adjustment as herein provided and subject to the terms and conditions set out herein.

2. Interpretation

2.1 As used in this certificate:

(a) “Capital Reorganization” has the meaning given in section 4.1(a);

(b) “Common Shares” means the common shares in the capital of the Company as such shares exist at the close of business on the date of issuance of this certificate; provided that, in the event of any adjustment of subscription rights pursuant to Article 4, “Common Shares” shall thereafter mean the shares or other securities or property purchasable upon the exercise of the Warrants as a result of any such adjustment;

(c) “Common Share Reorganization” has the meaning given in section 4.2(a);

(d) “Current Market Price” of the Common Shares at any date means the simple average of the closing price per share for the Common Shares for any 10 consecutive trading days selected by the Company commencing not more than 45 trading days before such date on such stock exchange or over-the-counter market on which the Common Shares trade as selected by the Company (provided that if on any day in such period no closing price per share for the Common Shares is reported on by such exchange for such day, the average of the reported closing bid and asked prices on such exchange on such day shall be deemed to be the closing price per share for the Common Shares for such day);

(e) “Dividend Paid in the Ordinary Course” means a dividend paid on the Common Shares in any four consecutive quarters of the Company, whether in (1) cash, (2) securities of the Company, including rights, options or warrants to purchase any securities of the Company or property or other assets of the Company or (3) property or other assets of the Company, to the extent that the amount or value of such dividend together with the amount or value of all other dividends theretofore paid during such financial year (any such securities, property or other assets so distributed to be valued at

the fair market value of such securities, property or other assets, as the case may be, as determined by the Company, which determination shall be conclusive, provided that, for the purposes of this definition, the fair market value of any Common Shares distributed by way of dividend shall be conclusively determined by reference to the Current Market Price per Common Share on the date prior to the declaration of such dividend) does not exceed the greater of:

(i) 150% of the aggregate amount of dividends paid by the Company on the Common Shares in the period of four consecutive financial quarters ended immediately prior to the first day of such financial year; and

(ii) 100% of the consolidated net income of the Company before extraordinary items (but after dividends payable on all shares ranking prior to or on a parity with respect to the payment of dividends with the Common Shares) in respect of the period of four consecutive financial quarters ended immediately prior to the first day of the current financial quarter (such consolidated net income, extraordinary items and dividends to be shown in the audited consolidated financial statements of the Company for such period of four consecutive financial quarters or if there are no audited consolidated financial statements for such period, computed in accordance with generally accepted accounting principles, consistent with those applied in the preparation of the most recent audited consolidated financial statements of the Company);

(f) “Equity Shares” means the Common Shares and any shares of any other class or series of the Company which may from time to time be authorized for issue if by their terms such shares confer upon the holders thereof the right to participate in the distribution of assets upon the voluntary or involuntary liquidation, dissolution or winding-up of the Company beyond a fixed sum or a fixed sum plus accrued dividends;

(g) “Exercise Date” means the date on which this certificate is delivered for exercise, together with full payment of the Exercise Price, in accordance with the provisions of Article 3;

(h) “Exercise Price” means $0.65 per Common Share until the Time of Expiry, subject to adjustment in accordance with the provisions of Article 4;

(i) “Term” means the period of time commencing from the date of issuance of this certificate and expiring at the Time of Expiry;

(j) “Time of Expiry” means 4:00 p.m. (Vancouver time) on May 18, 2015;

(k) “Transfer Agent” means the Company; and

(l) “Warrants” means the share purchase warrants evidenced by this certificate.

2.2 As used in this certificate, the masculine gender includes the feminine and neuter genders, and vice versa, and the singular includes the plural, and vice versa, where the context so requires, and the terms “herein”, “hereby”, “hereunder”, “hereof”, “these Warrants” and similar provisions refer to this certificate as a whole and not to any particular section or other portion hereof unless the context otherwise requires.

2.3 The division of this certificate into sections and the insertion of headings are for convenience of reference and shall not affect the interpretation hereof.

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2.4 Where reference is made in this certificate to an amount of money, such reference shall, unless otherwise specifically provided, be deemed to be a reference to Canadian funds.

2.5 Time shall be of the essence hereof.

2.6 This certificate constitutes the entire agreement between the parties with respect to the subject matter hereof and there are no representations or warranties of any kind not contained herein. This certificate may not be amended or modified in any respect except by written instrument signed by the parties.

2.7 The invalidity of any provision of this certificate or any covenant herein contained shall not affect the validity of any other provision or covenant herein contained.

2.8 The Warrants and this certificate will be governed exclusively by the laws of British Columbia and the federal laws of Canada applicable therein, without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction. The courts of British Columbia shall have exclusive jurisdiction over any dispute arising in connection with the Warrants and this certificate.

3. Exercise of Warrants

3.1 The Holder (subject to the provisions of section 3.2) shall have the right to exercise the Warrants at any time or from time to time during the Term, in whole or in part, by the surrender of this certificate, to the Transfer Agent, together with the duly completed and executed exercise form attached hereto as Schedule A and payment, by certified cheque, bank draft, money order or wire transfer payable to the Company, of the applicable Exercise Price for the number of Common Shares then being purchased. Upon any such exercise, the Company shall cause a certificate registered in the name of the Holder, representing in the aggregate such number of the Common Shares as the Holder shall have then paid for, to be delivered to the Holder (provided that the Holder has surrendered to the Transfer Agent this certificate), within a reasonable time, not exceeding three business days after the Warrants shall have been so exercised. Unless the Warrants have expired, if less than the full number of Warrants is exercised, this certificate will be endorsed to show the number of Common Shares acquired upon exercise and the number of Common Shares remaining hereunder, and this certificate will be returned to the Holder.

3.2 The Warrants shall expire and terminate at the Time of Expiry.

3.3 Nothing herein contained or done pursuant hereto shall obligate the Holder to purchase or pay for or the Company to issue any securities except for those securities in respect of which the Holder shall have exercised its right to purchase hereunder in the manner herein provided.

3.4 Nothing in this certificate or in the holding of the Warrants will be construed as conferring on any Holder any right or interest whatsoever as a shareholder of the Company, including but not limited to any right to vote at, to receive notice of, or to attend any meeting of shareholders or any other proceeding of the Company or any right to receive any dividend or other distributions.

3.5 If the Warrants are exercised before September 19, 2012, the certificate representing the Common Shares will bear the following legend: UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE SEPTEMBER 19, 2012.

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4. Adjustments

4.1 If at any time after the date hereof and prior to the Time of Expiry:

(a) there shall be a reclassification of the Common Shares outstanding at any time or change of the Common Shares into other shares or securities, or any other capital reorganization affecting the Common Shares except as described in section 4.2, or a consolidation, amalgamation or merger of the Company with or into any other corporation (other than a consolidation, amalgamation or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares or securities), or a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being called a “Capital Reorganization”), the Holder shall be entitled to receive upon the exercise of the Warrants, and shall accept for the same aggregate consideration, in lieu of the number of Common Shares to which it was theretofore entitled upon the exercise of the Warrants, the kind and amount of shares or other securities or property which it would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, it had been the registered holder of the number of Common Shares to which it was theretofore entitled upon such exercise. If determined appropriate by the Company, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Article 4 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this Article 4 shall thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares, other securities or other property thereafter deliverable upon the exercise of the Warrants.

(b) any adjustment in the Exercise Price shall occur as a result of an event referred to in section 4.2(a) or 4.2(b), then the number of Common Shares purchasable upon the subsequent exercise of the Warrants shall be simultaneously adjusted by multiplying the number of Common Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction which shall be the reciprocal of the fraction employed in the adjustment of the Exercise Price. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of a distribution of exchangeable or convertible securities other than Equity Shares referred to in section 4.2(a), the number of Common Shares purchasable upon the exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number of Common Shares which would be purchasable based upon the number of Common Shares actually issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right. To the extent that any adjustment in subscription rights occurs pursuant to this section 4.1(b) as a result of the fixing by the Company of a record date for the distribution of exchangeable or convertible securities other than Equity Shares or rights, options or warrants referred to in section 4.2(b), the number of Common Shares purchasable upon exercise of the Warrants shall be readjusted immediately after the expiration of any relevant exchange, conversion or exercise right to the number which would be purchasable pursuant to this section 4.1(b) if the fair market value of such securities or such rights, options or warrants had been determined for purposes of the adjustment pursuant to this section 4.1(b) on the basis of the number of Equity Shares issued and remaining issuable immediately after such expiration, and shall be further readjusted in such manner upon expiration of any further such right.

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4.2 The Exercise Price in effect at any date shall be subject to adjustment from time to time as follows:

(a) If and whenever at any time after the date hereof and prior to the Time of Expiry, the Company shall (i) subdivide the outstanding Common Shares into a greater number of Common Shares, (ii) consolidate the outstanding Common Shares into a lesser number of Common Shares, or (iii) make any distribution, other than by way of a Dividend Paid in the Ordinary Course, to the holders of all or substantially all of the outstanding Common Shares payable in Common Shares, (any of such events being called a “Common Share Reorganization”), the Exercise Price shall be adjusted effective immediately after the effective date or record date, as the case may be, on which the holders of Common Shares are determined for the purpose of the Common Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding immediately after giving effect to such Common Share Reorganization occurring on the effective date or record date as the case may be.

(b) If and whenever at any time after the date hereof, the Company shall fix a record date which is prior to the Time of Expiry for the issue or distribution to all or substantially all the holders of the Common Shares of:

(i) securities of the Company including any rights, options or warrants to acquire Equity Shares or securities convertible into or exchangeable for Equity Shares or property or assets at a price per Common Share or having a conversion or exchange price per Common Share less than 75% of the Current Market Price per Common Share on such record date; or

(ii) any property or other assets,

and if such issuance or distribution is not by way of a Dividend Paid in the Ordinary Course or a Common Share Reorganization then, in each such case, the Exercise Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the product of the number of Common Shares outstanding on such record date and the Current Market Price on such record date, less the aggregate fair market value (as determined by the Company, which determination shall be conclusive) of such securities, property or other assets so issued or distributed, and of which the denominator shall be the product of the number of Common Shares outstanding on such record date and such Current Market Price; any Common Shares owned by or held for the account of the Company or any subsidiary of the Company shall be deemed not to be outstanding for the purpose of any such computation.

4.3 The following provisions shall also apply to this Article 4:

(a) In any case in which this Article 4 shall require that an adjustment shall become effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such event:

(i) issuing to the Holder the additional Common Shares issuable upon such exercise by reason of the adjustment required by such event; and

(ii) delivering to the Holder any distributions declared with respect to such additional Common Shares,

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provided, however, that the Company shall deliver to the Holder an appropriate instrument evidencing its right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of the Warrants and to such distributions declared with respect to any such additional Common Shares issuable on the exercise of the Warrants.

(b) The adjustments provided for in this Article 4 are cumulative; shall, in the case of adjustments to the Exercise Price, be computed to the nearest one-tenth of one cent; and shall apply (without duplication) to successive subdivisions, consolidations, distributions, issuances or other events resulting in any adjustment under the provisions of this Article; provided that, notwithstanding any other provision of this Article 4, no adjustment of the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price then in effect and no adjustment shall be required in the number of Common Shares purchasable on the exercise of the Warrants unless it would result in a change of at least one one-hundredth of a share (provided, however, that any adjustments which by reason of this section 4.3(b) are not required to be made shall be carried forward and taken into account in any subsequent adjustment).

(c) In the event of any dispute between the Company and the Holder with respect to the adjustments provided for in this Article 4, such dispute shall be conclusively determined by a firm of chartered accountants appointed by the Company (who may be the Company’s auditors); such accountants shall have access to all necessary records of the Company and such determination shall be binding upon the Company and the Holder. In the event that any such determination is made, the Company shall deliver a certificate to the Holder describing such determination.

(d) No adjustment in the Exercise Price or in the number of Common Shares purchasable upon exercise of the Warrants shall be made in respect of any event described in this Article 4, other than the events referred to in clauses (i) and (ii) of section 4.2(a), if the Holder is entitled to participate in such event on the same terms mutatis mutandis as if it had exercised the Warrants prior to or on the effective date or record date of such event.

(e) If the Company shall set a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any issue or distribution or for the issue of any rights, options or warrants and shall thereafter and before such distribution or issue to such shareholders legally abandon its plan to make such distribution or issue, then no adjustment in the Exercise Price shall be required by reason of the setting of such record date.

(f) In the absence of a resolution of the directors fixing a record date for any of the events referred to in section 4.2(b), the Company shall be deemed to have fixed as the record date therefor the date on which any of such events is effected.

4.4 As a condition precedent to the taking of any action which would require an adjustment pursuant to sections 4.1 or 4.2, the Company shall take any action which may, in the opinion of counsel to the Company, be necessary in order that the Company may validly and legally issue as fully paid and non-assessable all of the Common Shares which the Holder is entitled to receive on the full exercise of the Warrants in accordance with the provisions hereof.

5. Reserve for Issuance

5.1 The Company covenants to keep alloted sufficient Common Shares to be issued, as fully paid and non-assessable, on exercise of the Warrants. Nothing contained in this certificate shall affect or restrict the right of the Company to issue Common Shares or other securities from time to time.

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6. Notices

6.1 Any notice or other communication given hereunder shall be in writing and may be given by sending the same by personal delivery or by mailing the same by registered mail within Canada to such party at the following address:

(a) if to the Company:

Lynden Energy Corp.

885 West Georgia Street, Suite 2150

Vancouver, BC

V6C 3E8

Attention: Chief Executive Officer

(b) if to the Holder:

to the address set forth on the face page hereof.

6.2 Any notice or other communication shall:

(a) if personally delivered, be deemed to have been given or made at the time of delivery; and

(b) if mailed by registered mail and properly addressed be deemed to have been given or made on the fourth business day following the day on which it was so mailed; provided that if mailed, should there be, at the time of mailing or between the time of mailing and the actual receipt of the notice, a mail strike, slowdown or other labour dispute which might affect the delivery of such notice by the mails, then such notice shall only be effective upon actual delivery.

A party may give written notice of change of address in the same manner, in which event such notice shall thereafter to be given to it as above provided at such changed address.

7. Transfer of Warrants

7.1 Subject to applicable securities laws, the Holder may, by completing the form of transfer in Schedule B to this certificate, transfer the Warrants either in whole or in part. Every transfer of Warrants must be signed by the registered Holder or the Holder’s legal personal representative(s) or the attorney authorized in writing of the registered Holder. Any such transfer, accompanied by this certificate, must be delivered to the Company’s Transfer Agent, together with such evidence of identity or title as the Company may reasonably require, whereupon the transfer will be registered and duly noted by endorsement signed by the Company’s Transfer Agent. If part only of the Warrants is transferred, the Company’s Transfer Agent will deliver to the Holder and the transferee certificates for the same aggregate number of Warrants as represented herein substantially in the form of this certificate.

7.2 The Holder shall be allowed one full or partial re-registration of this certificate. Thereafter, the Holder may be charged a fee of $25.00 plus HST for each re-registration.

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8. General

8.1 If this certificate is mutilated, lost, destroyed or stolen, the Company, subject to applicable law, will issue and deliver a new certificate representing the Warrants of like date and tenor as the one mutilated, lost, destroyed or stolen upon surrender of and in place of and upon cancellation of the mutilated certificate or in lieu of and in substitution for the lost, destroyed or stolen certificate. The applicant for the issue of a new certificate representing the Warrants pursuant to this section shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish the Company such evidence of ownership and of the loss, destruction or theft of the certificate so lost, destroyed or stolen as shall be satisfactory to the Company in its discretion and the applicant may also be required to furnish an indemnity in amount and form satisfactory to it in its discretion, and shall pay the reasonable charges of the Company in connection therewith.

8.2 The Warrants shall rank pari passu with all other share purchase warrants of the Company notwithstanding the actual date of issue of the certificates that evidence them.

IN WITNESS WHEREOF the Company has caused this certificate to be executed by a duly authorized officer as of the 18^th day of May, 2012.

LYNDEN ENERGY CORP.

by its authorized signatory:

NAME:	COLIN WATT
TITLE:	PRESIDENT AND CHIEF EXECUTIVE OFFICER

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Schedule A

Subscription Form

To: Lynden Energy Corp.

885 West Georgia, Suite 2150

Vancouver, BC, V6C 3E8

(a) The Undersigned being the registered holder of the enclosed Warrant Certificate (the “Holder”) hereby subscribes for             Common Shares of Lynden Energy Corp. (the “Company”) (or such number of Common Shares or other securities or property to which such subscription entitles the Holder in lieu thereof or in addition thereto under the provisions of the Warrant Certificate) pursuant to the within Warrants at the Exercise Price (or the adjusted dollar amount per share at which the Holder is entitled to purchase such shares under the provisions of the Warrants) until 4:00 p.m. (Vancouver time) on May 18, 2015 on the terms specified in the said Warrant Certificate, which certificate is surrendered to the Company and which will, upon the issuance of the Common Shares referred to above and a new share purchase warrant certificate for any outstanding rights of the surrendered Warrant Certificate, be null and void. The Holder also encloses herewith a certified cheque, bank draft or money order or has transmitted good same day funds by wire or other similar transfer, in lawful money of Canada, payable to or to the order of the Company in payment of the subscription price.

(b) The Holder hereby directs that the said Common Shares subscribed for be issued and delivered as follows:

Name(s) in Full	Address(es) (include postal code)	Number(s) of Common Shares
	Total:

DATED:                                         

Signature Guaranteed	(Signature of Holder)
	Print full name
	Print full address

Instructions:

1. The registered holder of Warrants may exercise its right to exercise the Warrants into Common Shares by completing and surrendering this Subscription Form and the ORIGINAL certificate representing the Warrants being converted to the Company, as provided for in the Warrant Certificate. Certificates representing the Common Shares to be acquired on exercise will be sent by prepaid ordinary mail to the address(es) above within three business days after the receipt of all required documentation.

2. If this Subscription Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any other person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Company.

3. If this Subscription Form indicates that Common Shares are to be issued to a person or persons other than the registered holder of the Warrants to be exercised: (i) the signature of the registered holder on this Subscription Form must be medallion guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange, and (ii) the registered holder must pay to the Company all applicable taxes and other duties.

Schedule B

Transfer Form

To: Lynden Energy Corp.

885 West Georgia, Suite 2150

Vancouver, BC, V6C 3E8

FOR VALUE RECEIVED, the undersigned transfers the Warrants represented by the attached certificate to:

(Print name and address of transferee)

DATED:                                         

Signature(s) of Transferor(s) is hereby guaranteed by:	Signature of Registered Holder (or its representative if the Holder is not an individual)
	Name of Registered Holder
	Name and Title of Person signing on behalf of the Holder (if the Holder is not an individual)

The signature on the foregoing assignment must correspond with the name of the Holder as set forth on the face of this Warrant Certificate in every particular, without alteration or enlargement or any change whatever and must be guaranteed by a Major Canadian Schedule 1 chartered bank or by a member of a recognized Medallion Signature Guarantee Program.

EX-10.15

Exhibit 10.15

SERVICES AGREEMENT

THIS AGREEMENT is dated effective January 1, 2013.

BETWEEN:	LYNDEN ENERGY CORP. a company duly continued under the laws of British Columbia having an office at 2150 – 885 West Georgia Street, Vancouver, British Columbia V6C 3E8, Canada
	(the “Company”)
AND:	RICHARD ANDREWS, of Unit 47, Stillwater Cove, 120 Hwy 28, Crystal Bay, Nevada 89402, U.S.A.
	(the “Executive”)

WITNESSES THAT WHEREAS:

A. The Company is a public company currently listed on the TSX Venture Exchange (the “Exchange”), carrying on the business of acquiring, exploring and developing petroleum and natural gas properties;

B. The Executive presently provides services to the Company as Chairman of the Board of Directors;

C. The parties wish to update the terms of the Executive’s engagement with the Company;

NOW THEREFORE in consideration of the premises and mutual covenants herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, the parties hereby covenant and agree with each other as follows:

1. ENGAGEMENT OF EXECUTIVE

1.1 Effective Date. This Agreement shall become effective as of January 1, 2013 (the “Effective Date”) and supercedes all previous agreements entered into between the parties concerning the Executive’s provision of services to the Company.

1.2 Position. The Company agrees to continue to retain the Executive, and the Executive agrees to continue to serve, as the Chairman of the Board of Directors (the “Board”).

1.3 Term. The term of this Agreement and engagement of the Executive shall be for an initial term of 36 months following the Effective Date, provided that this Agreement may be terminated by either party as provided herein. The term of this Agreement may be extended from time to time by mutual agreement of the parties in writing.

1.4 Duties and Reporting. The Executive shall report to and be directly responsible to the Board . The Executive will have the duties and authorities commonly associated with the Executive’s office and such other duties reasonably related thereto as may be assigned by the Company from time to time, but in particular the Executive will be primarily responsible for strategic direction, corporate development, financing and public relations.

2. COMPENSATION

2.1 Monthly Billing. The Company will pay the Executive the sum of $15,000 (USD) per month, in arrears, on the final business day of each month. The Company will pay the Executive a bonus of $70,000 (USD) each calendar year provided the Executive has been continuously engaged by the Company during the calendar year. The bonus will be paid in January following the completion of the said calendar year.

2.2 Compensation Review. The Board (or its Compensation Committee) will review the Executive’s compensation following the completion of each calendar year and will make any adjustments it determines are reasonable in its opinion, taking into account, but shall not be limited to considering, the Executive’s performance, the financial and operating success of the Company in the preceding 12 months and salaries for comparable positions in the marketplace. The compensation shall not be reduced, except by written agreement signed by the Executive.

2.3 Incentive Plans. The Executive shall be entitled to participate in any incentive programs for the Company’s executives, including, without limiting the generality of the foregoing, share option plans, share purchase plans, stock appreciation rights, profit-sharing or bonus plans (collectively, the “Incentive Plans”). Participation shall be on the terms and conditions of such Incentive Plans as at the date hereof or as may from time to time be amended or implemented by the Board in its sole discretion. Except as hereafter specifically set out, the Executive acknowledges that his participation in these Incentive Plans will be to such extent, on such terms and in such amounts as the Board in its sole discretion may decide from time to time, and the Executive shall have no absolute entitlement to such participation. Any bonuses paid will generally be tied to performance of the Company, measured by increased value of the Company or its assets, attributable to the efforts of the Executive (either alone or in conjunction with others).

The Executive agrees that except in respect to share options or other incentive mechanisms which have been granted to the Executive, the Company may substitute, reduce, modify the terms of or eliminate its Incentive Plans from year to year in the sole discretion of the Board or to meet regulatory or relevant stock exchange requirements.

2.4 Expenses. The Executive shall be reimbursed by the Company for all out-of-pocket expenses actually, necessarily and properly incurred by the Executive in the discharge of his duties for the Company. The Executive agrees that such reimbursements shall be due only after the Executive has rendered an itemized expense account showing all monies actually expended on behalf of the Company and such other information as may be required and requested by the Company.

2.6 Accelerated Vesting. Notwithstanding the provision of any plan or agreement but subject to any required approval of the Exchange, which the Company will take all reasonable steps to promptly obtain, upon the announcement of any form of transaction which, if completed, would constitute a Change of Control (as defined herein), all granted share options of the Executive which have not vested shall be deemed to be fully vested and exercisable so as to permit the Executive to exercise such options and participate in the Change of Control transaction in respect of the shares thereby acquired.

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3. ADDITIONAL OBLIGATIONS OF THE EXECUTIVE

3.1 Time. The Executive shall devote as much of his working time to the business and affairs of the Company and its subsidiaries as is reasonably necessary to perform his duties hereunder. The Company and the Board acknowledge that the Executive is, or may be, engaged by other public companies in similar executive capacities, and consent to the same to the extent such activities do not interfere with any of the Executive’s fiduciary or contractual duties to the Company.

3.2 Confidential. The Executive will not, at any time, or in any manner, during the continuance of this Agreement or thereafter, divulge any of the confidential information or secrets of the Company, including but not limited to information about prospective oil and gas properties in which the Company or its affiliates has or is proposing to acquire an interest (collectively, the “Confidential Information”), to any person or persons, except as required to carry out the Executive’s duties. During the continuation of this Agreement or thereafter for a period of three years, the Executive shall not use or attempt to use any Confidential Information which the Executive may acquire in the course of providing services to the Company for his own benefit or that of any other person, directly or indirectly. The provisions of this section will survive the termination of this Agreement.

3.3 Business Opportunities. The Executive agrees to promptly communicate to the Company all material business opportunities which come to the Executive in his capacity with the Company during the continuance of this Agreement and to deliver to and assign ownership of the same to the Company to become the exclusive property of the Company without any obligation on the part of the Company to make any payment for the same. The provisions of this section will survive the termination of this Agreement.

4. TERMINATION

4.1 Termination by Executive without Good Cause. The Executive may terminate this Agreement without Good Cause by giving the Company at least three months advance written notice, in which event, subject to section 4.5, the Executive shall not be entitled to any termination payment but shall be entitled to receive compensation earned to the date of termination and payment of any reimbursable expenses.

4.2 Termination by Company Without Cause and by Executive for Good Cause. The Company may terminate this Agreement and the engagement of the Executive without cause at any time by notice in writing stating the effective date of termination (the “Termination Date”), and the Executive may terminate this Agreement on two weeks’ written notice (the end of such notice also being the “Termination Date”) for “Good Cause” (as defined below). In either event, the Company shall be obligated to pay the Executive, on the Termination Date, an amount equal to $500,000.

4.3 Good Cause Defined: As used herein, “Good Cause” means the occurrence of one of the following events without the Executive’s express written consent:

(a) the assignment by the Company to the Executive, without the Executive’s consent, of any substantial new or different duties inconsistent with the Executive’s positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;

(b) a material reduction in the Executive’s responsibilities, without the Executive’s consent, except as a result of the Executive’s death or disability;

(c) a reduction by the Company in the Executive’s compensation not agreed to by the Executive;

(d) the requirement by the Company that the Executive be based anywhere other than within a 50 kilometer radius of the Executive’s then current location; or

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(e) the failure by the Company to continue in effect, or a material change in the terms of the Executive’s participation in benefits under any Incentive Plan, the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to the Executive under the Incentive Plan.

4.4 Termination for Cause. The Company may at any time terminate this Agreement for cause. Without limiting the generality of the foregoing, cause shall include:

(a) an act of fraud or material dishonesty by or involving the Executive;

(b) willful neglect of the Executive’s duties; and

(c) if the conduct of the Executive is determined by the Board, which determination shall be made in a bona fide and reasonable manner, to be detrimental to the business of the Company and if the Executive persists in such conduct after being informed of the Board’s determination.

In any such event, the Executive shall not be entitled to any compensation or notice, but shall be entitled to receive the compensation earned to the date of termination and payment of any reimbursable expenses.

4.5 Termination After a Change of Control. Notwithstanding any other provision in this Agreement, if within 12 months following a Change of Control of the Company (as defined below), this Agreement is terminated by the Company other than pursuant to section 4.4, or this Agreement is terminated by the Executive with or without Good Cause at any time within 6 months after a Change of Control, in either case, the Executive will receive a termination payment of $500,000. The provisions of this section will survive the termination of this Agreement.

4.6 Change of Control Defined: In this Agreement, “Change of Control” means:

(a) the acquisition, directly or indirectly, by any person or group of persons acting jointly or in concert, as such terms are defined in the Securities Act (British Columbia), of common shares of the Company which, when added to all other common shares of the Company at the time held directly or indirectly by such person or persons acting jointly or in concert, constitutes for the first time in the aggregate 20% or more of the outstanding common shares of the Company and such shareholding exceeds the collective shareholding of the current directors of the Company, excluding any directors acting in concert with the acquiring party; or

(b) the removal, by extraordinary resolution of the shareholders of the Company, of more than 51% of the then incumbent Board or the election of a majority of directors to the Board who were not nominees of the Company’s incumbent Board at the time immediately preceding such election; or

(c) consummation of a sale of all or substantially all of the assets of the Company; or

(d) the consummation of a reorganization, plan of arrangement, merger or other transaction which has substantially the same effect as (a) (b) or (c) above.

4.7 Bonus on Sale. Notwithstanding the above, in the event the Company sells all or substantially all of the assets of the Company, and the Executive’s engagement is not terminated by the Company, the Executive shall be entitled to a bonus pursuant to section 2.3 commensurate with the value received by the Company, as determined by the Board. The Executive shall be entitled to payment of the amount determined under this section or section 4.5, whichever is greater, but not both.

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4.8 No Mitigation. The Executive shall not be required to mitigate the amount of any payments provided for in this Part 4 by seeking other work or otherwise, nor shall the amount of any payment provided for in this section be reduced by any compensation earned by the Executive as the result of working for or with any other party after the date of termination, or otherwise.

4.9 Return of Property. On the termination of this Agreement for any reason, the Executive agrees to deliver to the Company all documents, financial statements, records, plans, drawings and papers of every nature, in any way relating to the affairs of the Company and its subsidiaries or affiliated companies, if any, which are in the Executive’s possession or control.

4.10 Right to Deduct. The Company shall have the right to offset any money properly due by the Executive to the Company against any amounts payable by the Company to the Executive under this Agreement.

4.11 Options on Termination. If permitted by applicable laws and regulatory authorities (which consent the Company will attempt to obtain but without warranty that such consent is obtainable) all stock option grants to the Executive will provide that share options vested at the effective date of termination under section 4.1, 4.2 or 4.5 may be exercised at any time and from time to time within 30 days after such date.

4.12 Incapacity. If the Executive becomes:

(a) temporarily disabled before termination of his engagement hereunder, the Company and its subsidiaries will pay the Executive his monthly compensation to which he is otherwise entitled pursuant to section 2.1 above provided the Executive exercises reasonable efforts to return to his duties as soon as practicable until such time as the Executive is eligible for long term disability benefits (if any), or

(b) permanently disabled (which shall refer to any disability resulting in the Executive being unable to perform substantially all of his obligations under this Agreement for more than 120 consecutive days or more than 120 days in any calendar year), the Company may forthwith terminate this Agreement, and the Executive will thereafter be paid (by the Company or by a corporation entitled to issue annuity contracts engaged by the Company), for the one-year period commencing on such termination, on the last business day of each month following the date of termination of this Agreement, an amount equal to the amount of the monthly fee under section 2.1 at the time of such termination. Such payments shall be in lieu of all amounts otherwise payable to the Executive, including under section 4.2, 4.5 or any other section of this Agreement.

4.13 Death. During the term of this Agreement, the Company will maintain a life insurance policy with an initial term of not less than 10 years from the date of this Agreement that will pay, upon the death of the Executive, a lump sum payment of $500,000 to such person or persons as the Executive may have designated by notice to the Company, or failing any such designation to the estate or legal representatives of the Executive.

4.14 Release. In exchange for the payments made by the Company to the Executive under any section in this Part 4, the Executive or, if applicable, the executors of the estate of the Executive or other legal representatives of the Executive, will deliver to the Company a full and final release of all claims arising on such termination. The provisions of this section will survive the termination of this Agreement.

4.15 Taxes. The Executive shall be responsible for and keep the Company indemnified and held harmless from and against all payroll tax, income tax, national insurance contributions and any other associated government charges/taxes for which the Company may become liable to account in connection with this Agreement. The provisions of this section will survive the termination of this Agreement. Notwithstanding

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the foregoing, the Company shall be authorized to withhold from payments due to the Executive under this Agreement and remit to the applicable taxing or other government authority such amounts as management of the Company believes in good faith that the Company is obligated to remit.

5. SUCCESSORS OR ASSIGNS

5.1 Successors. This Agreement shall ensure to the benefit of and be binding upon and shall be enforceable by the Company and the successors and assigns of the Company. The Company will require any successor (whether direct or indirect, by purchase, amalgamation, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume liability, jointly and severally with the Company, for the performance by the Company of its obligations under this Agreement. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and in addition to all other remedies available to the Executive, the Executive shall be entitled to deliver a notice of termination under section 4.2 at any time within the four month period following such succession and to receive the payments and to exercise the rights in such section accordingly.

5.2 Assignment. The Company shall be entitled to assign this agreement without the Executive’s consent to any affiliates of the Company (as defined in the B.C. Business Corporations Act) on written notice to the Executive, provided there is no material change to the other terms of this Agreement. The Company shall remain jointly and severally liable to the Executive with such assignee. The Executive shall not be entitled to assign, pledge or grant a security interest in any obligation of the Company to make payment hereunder.

5.3 Benefit Binding. This Agreement shall enure to the benefit of, shall be binding upon, and shall be enforceable by the Executive’s legal representatives, executors, administrator, successors, and heirs. If the Executive dies while any amounts are still payable to the Executive under this Agreement, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such legal representatives, executors, administrator, successors, and heirs or to the Executive’s estate, as applicable.

6. MISCELLANOUS

6.1 Applicable Laws. This Agreement shall be governed, interpreted, construed and enforced according to the laws of the Province of British Columbia and the laws of Canada applicable therein without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction.

6.2 Time. Time shall be of the essence of this Agreement.

6.3 Entire Agreement. This Agreement represents the entire Agreement between the Executive and the Company concerning the subject matter hereof and supersedes any previous oral or written communications, representations, understandings or agreements with the Company or any officer or agent thereof. This Agreement may only be amended or modified in writing signed by the parties.

6.4 Notices. Any notice, acceptance or other document required or permitted hereunder shall be considered and deemed to have been duly given if delivered by hand or mailed by postage prepaid and addressed to the party for whom it is intended at the party’s address above or to such other address as the party may specify in writing to the other and shall be deemed to have been received if delivered, on the date of delivery, and if mailed as aforesaid, then on the fifth business day following the date of mailing thereof, provided that if that shall be at the time of mailing or within five business days thereof a strike, slowdown or other labour dispute which might affect delivery of notice by mail, then the notice shall only be effective if actually delivered.

6.5 Waiver. The waiver by the Executive or by the Company of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the Company or by the Executive.

6

6.6 Execution and Delivery. This Agreement may be executed in counterparts and delivered by e-mail or by fax, each of which shall be deemed to be an original and both of which shall constitute one instrument.

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written notwithstanding its actual date of execution.

LYNDEN ENERGY CORP.

/s/ Colin Watt
Authorized Signatory
Executed by the above named Executive	)
in the presence of:	)
	)
T. L. Andrews	)
(name)	)	/s/ Richard Andrews
	)	RICHARD ANDREWS
/s/ T. L. Andrews	)
(signature)	)

7

EX-10.16

Exhibit 10.16

MANAGEMENT AGREEMENT

THIS AGREEMENT is dated effective January 1, 2013.

BETWEEN: LYNDEN ENERGY CORP. a company duly continued under the laws of British Columbia having an office at 2150 – 885 West Georgia Street, Vancouver, British Columbia V6C 3E8, Canada

(the “Company”)

AND: COLIN WATT, of

(the “Executive”)

WITNESSES THAT WHEREAS:

A. The Company is a public company currently listed on the TSX Venture Exchange (the “Exchange”), carrying on the business of acquiring, exploring and developing petroleum and natural gas properties;

B. The Executive presently provides services to the Company as Chief Executive Officer, President and Corporate Secretary;

C. The parties wish to update the terms of the Executive’s engagement with the Company;

NOW THEREFORE in consideration of the premises and mutual covenants herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, the parties hereby covenant and agree with each other as follows:

1. ENGAGEMENT OF EXECUTIVE

1.1 Effective Date. This Agreement shall become effective as of January 1, 2013 (the “Effective Date”) and supercedes all previous agreements entered into between the parties concerning the Executive’s provision of services to the Company.

1.2 Position. The Company agrees to continue to retain the Executive, and the Executive agrees to continue to serve, as the Chief Executive Officer, President and Corporate Secretary.

1.3 Term. The term of this Agreement and engagement of the Executive shall be for an initial term of 36 months following the Effective Date, provided that this Agreement may be terminated by either party as provided herein. The term of this Agreement may be extended from time to time by mutual agreement of the parties in writing.

1.4 Duties and Reporting. The Executive shall report to and be directly responsible to the Board of Directors (the “Board”) of the Company. The Executive will have the duties and authorities commonly associated with the Executive’s offices and such other duties reasonably related thereto as may be assigned by the Company from time to time.

2. COMPENSATION

2.1 Monthly Billing. The Company will pay the Executive a salary, before statutory deductions, of $5,000 (CDN) per month, in arrears, on the final business day of each month. In addition, the Company acknowledges that Squall Capital Corp., a company wholly owned by the Executive, and the employees thereof, will continue to provide monthly administrative and support services to the Company on a cost recovery basis. The monthly billings of Squall Capital Corp. will not exceed $20,000 (CDN) per month without approval of the Board.

2.2 Compensation Review. The Board (or its Compensation Committee) will review the Executive’s compensation following the completion of each calendar year and will make any adjustments it determines are reasonable in its opinion, taking into account, but shall not be limited to considering, the Executive’s performance, the financial and operating success of the Company in the preceding 12 months and salaries for comparable positions in the marketplace. The compensation shall not be reduced, except by written agreement signed by the Executive.

2.3 Incentive Plans. The Executive shall be entitled to participate in any incentive programs for the Company’s executives, including, without limiting the generality of the foregoing, share option plans, share purchase plans, stock appreciation rights, profit-sharing or bonus plans (collectively, the “Incentive Plans”). Participation shall be on the terms and conditions of such Incentive Plans as at the date hereof or as may from time to time be amended or implemented by the Board in its sole discretion. Except as hereafter specifically set out, the Executive acknowledges that his participation in these Incentive Plans will be to such extent, on such terms and in such amounts as the Board in its sole discretion may decide from time to time, and the Executive shall have no absolute entitlement to such participation. Any bonuses paid will generally be tied to performance of the Company, measured by increased value of the Company or its assets, attributable to the efforts of the Executive (either alone or in conjunction with others).

The Executive agrees that except in respect to share options or other incentive mechanisms which have been granted to the Executive, the Company may substitute, reduce, modify the terms of or eliminate its Incentive Plans from year to year in the sole discretion of the Board or to meet regulatory or relevant stock exchange requirements.

2.4 Expenses. The Executive shall be reimbursed by the Company for all out-of-pocket expenses actually, necessarily and properly incurred by the Executive in the discharge of his duties for the Company. The Executive agrees that such reimbursements shall be due only after the Executive has rendered an itemized expense account showing all monies actually expended on behalf of the Company and such other information as may be required and requested by the Company.

2.5 Accelerated Vesting. Notwithstanding the provision of any plan or agreement but subject to any required approval of the Exchange, which the Company will take all reasonable steps to promptly obtain, upon the announcement of any form of transaction which, if completed, would constitute a Change of Control (as defined herein), all granted share options of the Executive which have not vested shall be deemed to be fully vested and exercisable so as to permit the Executive to exercise such options and participate in the Change of Control transaction in respect of the shares thereby acquired.

2.6 Statutory Deductions. All compensation payable to the Executive pursuant to this Agreement will be payable in accordance with the Company’s normal payroll practices and will be subject to all statutory deductions that the Company is required to make and remit. Notwithstanding the foregoing, the Executive shall be responsible for the payment of, and shall indemnify and save harmless the Company from and against, all federal, provincial and other applicable taxes assessed (and any penalties related thereto) on any income received or deemed to have been received by the Executive under this Agreement in excess of those amounts withheld by the Company.

2

3. ADDITIONAL OBLIGATIONS OF THE EXECUTIVE

3.1 Time. The Executive shall devote as much of his working time to the business and affairs of the Company and its subsidiaries as is reasonably necessary to perform his duties hereunder. The Company and the Board acknowledge that the Executive is, or may be, engaged by other public companies in similar executive capacities, and consent to the same to the extent such activities do not interfere with any of the Executive’s fiduciary or contractual duties to the Company.

3.2 Confidential. The Executive will not, at any time, or in any manner, during the continuance of the Executive’s employment hereunder or thereafter, divulge any of the confidential information or secrets of the Company, including but not limited to information about prospective oil and gas properties in which the Company or its affiliates has or is proposing to acquire an interest (collectively, the “Confidential Information”), to any person or persons, except as required to carry out the Executive’s duties. During the continuation of the Exectuive’s employment or thereafter for a period of three years, the Executive shall not use or attempt to use any Confidential Information which the Executive may acquire in the course of this employment for his own benefit or that of any other person, directly or indirectly. The provisions of this section will survive the termination of this Agreement.

3.3 Business Opportunities. The Executive agrees to promptly communicate to the Company all material business opportunities which come to the Executive in his capacity with the Company during the continuance of this Agreement and to deliver to and assign ownership of the same to the Company to become the exclusive property of the Company without any obligation on the part of the Company to make any payment for the same. The provisions of this section will survive the termination of this Agreement.

4. TERMINATION

4.1 Termination by Executive without Good Cause. The Executive may terminate this Agreement without Good Cause by giving the Company at least three months advance written notice, in which event, subject to section 4.5, the Executive shall not be entitled to any termination payment but shall be entitled to receive compensation earned to the date of termination and payment of any reimbursable expenses.

4.2 Termination by Company Without Cause and by Executive for Good Cause. The Company may terminate this Agreement and the engagement of the Executive without cause at any time by notice in writing stating the last day of employment (the “Termination Date”), and the Executive may resign on two weeks’ written notice (the end of such notice also being the “Termination Date”) for “Good Cause” (as defined below). In either event, the Company shall be obligated to pay the Executive, on the Termination Date, an amount equal to $500,000.

4.3 Good Cause Defined: As used herein, “Good Cause” means the occurrence of one of the following events without the Executive’s express written consent:

(a) the assignment by the Company to the Executive, without the Executive’s consent, of any substantial new or different duties inconsistent with the Executive’s positions, duties, responsibilities and status with the Company immediately prior to such change in assigned duties;

(b) a material reduction in the Executive’s responsibilities, without the Executive’s consent, except as a result of the Executive’s death or disability;

(c) a reduction by the Company in the Executive’s compensation not agreed to by the Executive;

3

(d) the requirement by the Company that the Executive be based anywhere other than within a 50 kilometer radius of the Executive’s then current location; or

(e) the failure by the Company to continue in effect, or a material change in the terms of the Executive’s participation in benefits under any Incentive Plan, the effect of which would be to materially reduce the total value, in the aggregate, of the benefit to the Executive under the Incentive Plan.

4.4 Termination for Cause. The Company may at any time terminate the employment of the Executive and this Agreement for cause. Without limiting the generality of the foregoing, cause shall include:

(a) an act of fraud or material dishonesty by or involving the Executive;

(b) willful neglect of the Executive’s duties; and

(c) if the conduct of the Executive is determined by the Board, which determination shall be made in a bona fide and reasonable manner, to be detrimental to the business of the Company and if the Executive persists in such conduct after being informed of the Board’s determination.

In any such event, the Executive shall not be entitled to any compensation or notice, but shall be entitled to receive the compensation earned to the date of termination and payment of any reimbursable expenses.

4.5 Termination After a Change of Control. Notwithstanding any other provision in this Agreement, if within 12 months following a Change of Control of the Company (as defined below), the Executive’s employment is terminated by the Company other than pursuant to section 4.4, or the Executive resigns with or without Good Cause at any time within 6 months after a Change of Control, in either case, the Executive will receive a termination payment of $500,000. The provisions of this section will survive the termination of this Agreement.

4.6 Change of Control Defined: In this Agreement, “Change of Control” means:

(a) the acquisition, directly or indirectly, by any person or group of persons acting jointly or in concert, as such terms are defined in the Securities Act (British Columbia), of common shares of the Company which, when added to all other common shares of the Company at the time held directly or indirectly by such person or persons acting jointly or in concert, constitutes for the first time in the aggregate 20% or more of the outstanding common shares of the Company and such shareholding exceeds the collective shareholding of the current directors of the Company, excluding any directors acting in concert with the acquiring party; or

(b) the removal, by extraordinary resolution of the shareholders of the Company, of more than 51% of the then incumbent Board or the election of a majority of directors to the Board who were not nominees of the Company’s incumbent Board at the time immediately preceding such election; or

(c) consummation of a sale of all or substantially all of the assets of the Company; or

(d) the consummation of a reorganization, plan of arrangement, merger or other transaction which has substantially the same effect as (a) (b) or (c) above.

4.7 Bonus on Sale. Notwithstanding the above, in the event the Company sells all or substantially all of the assets of the Company, and the Executive’s engagement is not terminated by the Company, the Executive shall be entitled to a bonus pursuant to section 2.3 commensurate with the value received by the Company, as determined by the Board. The Executive shall be entitled to payment of the amount determined under this section or section 4.5, whichever is greater, but not both.

4

4.8 No Mitigation. The Executive shall not be required to mitigate the amount of any payments provided for in this Part 4 by seeking other work or otherwise, nor shall the amount of any payment provided for in this section be reduced by any compensation earned by the Executive as the result of working for or with any other party after the date of termination, or otherwise.

4.9 Return of Property. On the cessation of employment for any reason, the Executive agrees to deliver to the Company all documents, financial statements, records, plans, drawings and papers of every nature, in any way relating to the affairs of the Company and its subsidiaries or affiliated companies, if any, which are in the Executive’s possession or control.

4.10 Right to Deduct. The Company shall have the right to offset any money properly due by the Executive to the Company against any amounts payable by the Company to the Executive under this Agreement.

4.11 Options on Termination. If permitted by applicable laws and regulatory authorities (which consent the Company will attempt to obtain but without warranty that such consent is obtainable) all stock option grants to the Executive will provide that share options vested at the effective date of termination under section 4.1, 4.2 or 4.5 may be exercised at any time and from time to time within 30 days after such date.

4.12 Incapacity. If the Executive becomes:

(a) temporarily disabled before termination of his engagement hereunder, the Company and its subsidiaries will pay the Executive his monthly compensation to which he is otherwise entitled pursuant to section 2.1 above provided the Executive exercises reasonable efforts to return to his duties as soon as practicable until such time as the Executive is eligible for long term disability benefits (if any); or

(b) permanently disabled (which shall refer to any disability resulting in the Executive being unable to perform substantially all of his employment duties for more than 120 consecutive days or more than 120 days in any calendar year), the Company may forthwith terminate this Agreement, and the Executive will thereafter be paid (by the Company or by a corporation entitled to issue annuity contracts engaged by the Company), for the one-year period commencing on such termination, on the last business day of each month following the date of termination of the employment, an amount equal to the amount of the monthly salary under section 2.1 at the time of such termination. Such payments shall be in lieu of all amounts otherwise payable to the Executive, including under section 4.2, 4.5 or any other section of this Agreement.

4.13 Death. During the term of this Agreement, the Company will maintain a life insurance policy with an initial term of not less than 10 years from the date of this Agreement that will pay, upon the death of the Executive, a lump sum payment of $500,000 to such person or persons as the Executive may have designated by notice to the Company, or failing any such designation to the estate or legal representatives of the Executive.

4.14 Release. In exchange for the payments made by the Company to the Executive under any section in this Part 4, the Executive or, if applicable, the executors of the estate of the Executive or other legal representatives of the Executive, will deliver to the Company a full and final release of all claims arising on such termination. The provisions of this section will survive the termination of this Agreement.

5

5. SUCCESSORS OR ASSIGNS

5.1 Successors. This Agreement shall ensure to the benefit of and be binding upon and shall be enforceable by the Company and the successors and assigns of the Company. The Company will require any successor (whether direct or indirect, by purchase, amalgamation, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume liability, jointly and severally with the Company, for the performance by the Company of its obligations under this Agreement. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and in addition to all other remedies available to the Executive, the Executive shall be entitled to deliver a notice of termination under section 4.2 at any time within the four month period following such succession and to receive the payments and to exercise the rights in such section accordingly.

5.2 Assignment. The Company shall be entitled to assign this agreement without the Executive’s consent to any affiliates of the Company (as defined in the B.C. Business Corporations Act) on written notice to the Executive, provided there is no material change to the Executive’s terms of employment. The Company shall remain jointly and severally liable to the Executive with such assignee. The Executive shall not be entitled to assign, pledge or grant a security interest in any obligation of the Company to make payment hereunder.

5.3 Benefit Binding. This Agreement shall enure to the benefit of, shall be binding upon, and shall be enforceable by the Executive’s legal representatives, executors, administrator, successors, and heirs. If the Executive dies while any amounts are still payable to the Executive under this Agreement, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to such legal representatives, executors, administrator, successors, and heirs or to the Executive’s estate, as applicable.

6. MISCELLANOUS

6.1 Applicable Laws. This Agreement and the employment of the Executive shall be governed, interpreted, construed and enforced according to the laws of the Province of British Columbia and the laws of Canada applicable therein without giving effect to the conflicts of laws principles thereof and without reference to the laws of any other jurisdiction.

6.2 Time. Time shall be of the essence of this Agreement.

6.3 Entire Agreement. Except as specifically provided in section 2.1, this Agreement represents the entire Agreement between the Executive and the Company concerning the subject matter hereof and supersedes any previous oral or written communications, representations, understandings or agreements with the Company or any officer or agent thereof. This Agreement may only be amended or modified in writing signed by the parties.

6.4 Notices. Any notice, acceptance or other document required or permitted hereunder shall be considered and deemed to have been duly given if delivered by hand or mailed by postage prepaid and addressed to the party for whom it is intended at the party’s address above or to such other address as the party may specify in writing to the other and shall be deemed to have been received if delivered, on the date of delivery, and if mailed as aforesaid, then on the fifth business day following the date of mailing thereof, provided that if that shall be at the time of mailing or within five business days thereof a strike, slowdown or other labour dispute which might affect delivery of notice by mail, then the notice shall only be effective if actually delivered.

6.5 Waiver. The waiver by the Executive or by the Company of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by the Company or by the Executive.

6.6 Execution and Delivery. This Agreement may be executed in counterparts and delivered by e-mail or by fax, each of which shall be deemed to be an original and both of which shall constitute one instrument.

6

IN WITNESS WHEREOF the parties have executed this Agreement as of the date first above written notwithstanding its actual date of execution.

LYNDEN ENERGY CORP.

/s/ Richard Andrews
Authorized Signatory
Executed by the above named Executive	)
in the presence of:	)
	)
Harvey Keats	)
(name)	)	/s/ Colin Watt
	)	COLIN WATT
/s/ Harvey Keats	)
(signature)	)

7

EX-21.1

EXHIBIT 21.1

To

FORM 10

DATED OCTOBER 28, 2014

LIST OF SUBSIDIARIES

1. Lynden Exploration Ltd. (Province of Alberta) – 100% owned

2. Lynden USA Inc. (State of Utah) – 100% owned

EX-23.1

Exhibit 23.1

CAWLEY, GILLESPIE & ASSOCIATES, INC.

PETROLEUM CONSULTANTS

13640 BRIARWICK DRIVE, SUITE 100	306 WEST SEVENTH STREET, SUITE 302	1000 LOUISIANA STREET, SUITE 625
AUSTIN, TEXAS 78729-1707	FORT WORTH, TEXAS 76102-4987	HOUSTON, TEXAS 77002-5008
512-249-7000	817- 336-2461	713-651-9944
	www.cgaus.com

CONSENT OF INDEPENDENT PETROLEUM ENGINEERS

We hereby consent to the references to our firm in the form and context in which they appear in this Registration Statement on Form 10 of Lynden Energy Corp., including under the heading “Experts.” We hereby further consent to the use in such Registration Statement of information contained in our report, dated September 22, 2014, relating to the estimates of the oil and gas reserves, future production and income attributable to certain leasehold and royalty interests of Lynden Energy Corp. We hereby further consent to the inclusion of the aforementioned report as an exhibit to such Registration Statement.

/s/ CAWLEY, GILLESPIE & ASSOCIATES, INC.

CAWLEY, GILLESPIE & ASSOCIATES, INC.

Texas Registered Engineering Firm F-693

Fort Worth, Texas

October 27, 2014

EX-99.1

Exhibit 99.1

EVALUATION SUMMARY

LYNDEN ENERGY CORP. INTERESTS

SPRABERRY & SUGG RANCH FIELDS,

VARIOUS COUNTIES, TEXAS

PROVED AND PROBABLE RESERVES

AS OF JUNE 30, 2014

CAWLEY, GILLESPIE & ASSOCIATES, INC.

PETROLEUM CONSULTANTS

TEXAS REGISTERED ENGINEERING FIRM F-693

/S/ ROBERT D. RAVNAAS, P.E.
ROBERT D. RAVNAAS, P.E. PRESIDENT

CAWLEY, GILLESPIE & ASSOCIATES, INC.

	PETROLEUM CONSULTANTS
13640 BRIARWICK DRIVE, SUITE 100 AUSTIN, TEXAS 78729-1707 512-249-7000	306 WEST SEVENTH STREET, SUITE 302 FORT WORTH, TEXAS 76102-4987 817- 336-2461 www.cgaus.com	1000 LOUISIANA STREET, SUITE 625 HOUSTON, TEXAS 77002-5008 713-651-9944

September 22, 2014

Mr. Colin Watt

President and CEO

Lynden Energy Corp.

885 West Georgia Street

Suite 2150

Vancouver, BC V6C 3E8

Re:	Evaluation Summary
	Lynden Energy Corp. Interests
	Proved and Probable Reserves
	Spraberry & Sugg Ranch Fields,
	Various Counties, Texas
	As of June 30, 2014

Dear Mr. Watt:

As requested, we are submitting our estimates of proved and probable reserves and forecasts of economics attributable to the Lynden Energy Corp. interests located in Spraberry and Sugg Ranch Fields in various counties in Texas. The results of this evaluation are presented in the accompanying tabulations and are summarized below:

		Proved Developed Producing		Proved Developed Non-Producing		Proved Undeveloped		Total Proved		Probable		Total
Net Reserves
Oil	-Mbbl		1,606.9		496.0		1,847.2		3,950.1		210.8		4,160.9
Gas	-MMcf		4,506.8		773.5		4,438.8		9,719.1		275.1		9,994.2
NGL	-Mbbl		893.9		153.5		880.7		1,928.1		54.6		1,982.7
Net Revenue
Oil	-M$		156,914.6		48,434.8		180,375.8		385,725.3		20,588.4		406,313.6
Gas	-M$		18,183.3		3,120.3		17,906.0		39,209.6		1,109.6		40,319.2
NGL	-M$		29,644.0		5,074.1		29,117.5		63,835.5		1,804.3		65,639.8
Severance Taxes	-M$		9,895.5		2,693.4		10,979.6		23,568.5		1,113.3		24,681.8
Ad Valorem Taxes	-M$		5,451.3		1,495.0		6,003.3		12,949.6		620.5		13,570.1
Operating Expenses	-M$		39,988.8		879.6		36,641.1		77,509.4		4,670.3		82,179.8
Workover Expenses	-M$		0.0		0.0		0.0		0.0		0.0		0.0
3rd Party COPAS	-M$		0.0		0.0		0.0		0.0		0.0		0.0
Other Deductions	-M$		8,925.7		2,492.2		8,383.4		19,801.3		1,252.2		21,053.5
Investments	-M$		532.8		4,301.4		59,827.2		64,661.4		7,401.3		72,062.7
Net Operating Income (BFIT)	-M$		139,947.9		44,767.6		105,564.6		290,280.1		8,444.7		298,724.8
Discounted @ 10%	-M$		67,994.9		15,353.8		28,342.5		111,691.2		1,270.5		112,961.7

Lynden Energy Corp. Interests

September 22, 2014

Page 2

The discounted cash flow values shown above should not be construed to represent an estimate of the fair market value by Cawley, Gillespie & Associates, Inc.

Presentation

This report is divided into six reserve category sections: Total (“Total”), Total Proved (“TP”), Proved Developed Producing (“PDP”), Proved Developed Non-Producing (“PDNP”), Proved Undeveloped (“PUD”) and Probable (“PROB”). Within each category there are Table I and Table II (except for the Totals). The Table I presents composite reserve estimates and economic forecasts for the particular area and reserve category. Following Table I is a Table II “oneline” summary that presents estimates of ultimate recovery, gross and net reserves, ownership, revenue, expenses, investments, net income and discounted cash flow for the leases that make up the corresponding Table I. Table II is followed by sequentially numbered individual figures and tables that represent the detailed reserves and economics for each property listed in the Table II. For a more detailed explanation of the report layout, please refer to the Table of Contents following this letter. The data presented in the individual tables is explained in page 1 of the Appendix. The methods employed in estimating reserves are described in page 2 of the Appendix.

Hydrocarbon Pricing

As requested for the SEC scenario, the base oil and gas prices calculated for June 30, 2014 were $100.27 per BBL and $4.104 per MMBTU, respectively. As specified by the SEC, a company must use a 12-month average price, calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period. The base oil price is based upon WTI-Cushing spot prices during 2013 and 2014 and the base gas price is based upon Henry Hub spot prices during 2013 and 2014. Adjustments to oil and gas prices were made based upon data provided by your office. These adjustments include treating cost, transportation charges and/or crude quality and gravity corrections.

Expenses and Taxes

Lease operating expenses and investments were forecast as furnished by your office and were held constant. Oil and gas severance tax values were determined by applying normal state severance tax rates. Ad valorem and income tax values were forecasted as provided by your office.

Miscellaneous

An on-site field inspection of the properties has not been performed nor has the mechanical operation or condition of the wells and their related facilities been examined, nor have the wells been tested by Cawley, Gillespie & Associates, Inc. Possible environmental liability related to the properties has not been investigated nor considered. The cost of plugging and the salvage value of equipment at abandonment have been included.

The proved reserve classifications used herein conform to the criteria of the Securities and Exchange Commission (“SEC”) as defined in pages 3 and 4 of the Appendix. The reserves and economics are predicated on regulatory agency classifications, rules, policies, laws, taxes and royalties in effect on the effective date, except as noted herein. The possible effects of changes in legislation or other Federal or State restrictive actions have not been considered. All reserve estimates represent our best judgment based on data available at the time of preparation, and assumptions as to future economic and regulatory conditions. It should be realized that the reserves actually recovered, the revenue derived therefrom and the actual cost incurred could be more or less than the estimated amounts.

The reserve estimates and forecasts were based upon interpretations of data furnished by your office and available from our files. Ownership information and economic factors such as liquid and gas prices, price differentials, expenses, investments and tax rates were derived from LOS data as furnished by your office and were accepted as furnished. To some extent, information from public records was used to check and/or supplement these data. The basic engineering and geological data were utilized subject to third party reservations and qualifications. Nothing has come to our attention, however, that would cause us to believe that we are not justified in relying on such data.

Lynden Energy Corp. Interests

September 22, 2014

Page 3

Cawley, Gillespie & Associates, Inc. is a Texas Registered Engineering Firm (F-693), made up of independent registered professional engineers and geologists that have provided petroleum consulting services to the oil and gas industry for over 50 years. We do not own an interest in the properties or Lynden Energy Corp. and are not employed on a contingent basis. We have used all methods and procedures that we consider necessary under the circumstances to prepare this report. Our work-papers and related data utilized in the preparation of these estimates are available in our office.

Yours very truly,
CAWLEY, GILLESPIE & ASSOCIATES, INC.
TEXAS REGISTERED ENGINEERING FIRM F-693
/s/ ROBERT D. RAVNAAS, P.E. ROBERT D. RAVNAAS, P.E.
PRESIDENT

APPENDIX

Methods Employed in the Estimation of Reserves

The four methods customarily employed in the estimation of reserves are (1) production performance, (2) material balance, (3) volumetric and (4) analogy. Most estimates, although based primarily on one method, utilize other methods depending on the nature and extent of the data available and the characteristics of the reservoirs.

Basic information includes production, pressure, geological and laboratory data. However, a large variation exists in the quality, quantity and types of information available on individual properties. Operators are generally required by regulatory authorities to file monthly production reports and may be required to measure and report periodically such data as well pressures, gas-oil ratios, well tests, etc. As a general rule, an operator has complete discretion in obtaining and/or making available geological and engineering data. The resulting lack of uniformity in data renders impossible the application of identical methods to all properties, and may result in significant differences in the accuracy and reliability of estimates.

A brief discussion of each method, its basis, data requirements, applicability and generalization as to its relative degree of accuracy follows:

Production performance. This method employs graphical analyses of production data on the premise that all factors which have controlled the performance to date will continue to control and that historical trends can be extrapolated to predict future performance. The only information required is production history. Capacity production can usually be analyzed from graphs of rates versus time or cumulative production. This procedure is referred to as “decline curve” analysis. Both capacity and restricted production can, in some cases, be analyzed from graphs of producing rate relationships of the various production components. Reserve estimates obtained by this method are generally considered to have a relatively high degree of accuracy with the degree of accuracy increasing as production history accumulates.

Material balance. This method employs the analysis of the relationship of production and pressure performance on the premise that the reservoir volume and its initial hydrocarbon content are fixed and that this initial hydrocarbon volume and recoveries therefrom can be estimated by analyzing changes in pressure with respect to production relationships. This method requires reliable pressure and temperature data, production data, fluid analyses and knowledge of the nature of the reservoir. The material balance method is applicable to all reservoirs, but the time and expense required for its use is dependent on the nature of the reservoir and its fluids. Reserves for depletion type reservoirs can be estimated from graphs of pressures corrected for compressibility versus cumulative production, requiring only data that are usually available. Estimates for other reservoir types require extensive data and involve complex calculations most suited to computer models which makes this method generally applicable only to reservoirs where there is economic justification for its use. Reserve estimates obtained by this method are generally considered to have a degree of accuracy that is directly related to the complexity of the reservoir and the quality and quantity of data available.

Volumetric. This method employs analyses of physical measurements of rock and fluid properties to calculate the volume of hydrocarbons in-place. The data required are well information sufficient to determine reservoir subsurface datum, thickness, storage volume, fluid content and location. The volumetric method is most applicable to reservoirs which are not susceptible to analysis by production performance or material balance methods. These are most commonly newly developed and/or no-pressure depleting reservoirs. The amount of hydrocarbons in-place that can be recovered is not an integral part of the volumetric calculations but is an estimate inferred by other methods and a knowledge of the nature of the reservoir. Reserve estimates obtained by this method are generally considered to have a low degree of accuracy; but the degree of accuracy can be relatively high where rock quality and subsurface control is good and the nature of the reservoir is uncomplicated.

Analogy. This method which employs experience and judgment to estimate reserves, is based on observations of similar situations and includes consideration of theoretical performance. The analogy method is applicable where the data are insufficient or so inconclusive that reliable reserve estimates cannot be made by other methods. Reserve estimates obtained by this method are generally considered to have a relatively low degree of accuracy.

Much of the information used in the estimation of reserves is itself arrived at by the use of estimates. These estimates are subject to continuing change as additional information becomes available. Reserve estimates which presently appear to be correct may be found to contain substantial errors as time passes and new information is obtained about well and reservoir performance.

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APPENDIX

Reserve Definitions and Classifications

The Securities and Exchange Commission, in SX Reg. 210.4-10 dated November 18, 1981, as amended on September 19, 1989 and January 1, 2010, requires adherence to the following definitions of oil and gas reserves:

“(22) Proved oil and gas reserves. Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations— prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

“(i) The area of a reservoir considered as proved includes: (A) The area identified by drilling and limited by fluid contacts, if any, and (B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

“(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

“(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

“(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when: (A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and (B) The project has been approved for development by all necessary parties and entities, including governmental entities.

“(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

“(6) Developed oil and gas reserves. Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

“(i) Through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

“(ii) Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

“(31) Undeveloped oil and gas reserves. Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

“(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

“(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.

“(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph (a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.

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“(18) Probable reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.

“(i) When deterministic methods are used, it is as likely as not that actual remaining quantities recovered will exceed the sum of estimated proved plus probable reserves. When probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the proved plus probable reserves estimates.

“(ii) Probable reserves may be assigned to areas of a reservoir adjacent to proved reserves where data control or interpretations of available data are less certain, even if the interpreted reservoir continuity of structure or productivity does not meet the reasonable certainty criterion. Probable reserves may be assigned to areas that are structurally higher than the proved area if these areas are in communication with the proved reservoir.

“(iii) Probable reserves estimates also include potential incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than assumed for proved reserves.

“(iv) See also guidelines in paragraphs (17)(iv) and (17)(vi) of this section (below).

“(17) Possible reserves. Possible reserves are those additional reserves that are less certain to be recovered than probable reserves.

“(i) When deterministic methods are used, the total quantities ultimately recovered from a project have a low probability of exceeding proved plus probable plus possible reserves. When probabilistic methods are used, there should be at least a 10% probability that the total quantities ultimately recovered will equal or exceed the proved plus probable plus possible reserves estimates.

“(ii) Possible reserves may be assigned to areas of a reservoir adjacent to probable reserves where data control and interpretations of available data are progressively less certain. Frequently, this will be in areas where geoscience and engineering data are unable to define clearly the area and vertical limits of commercial production from the reservoir by a defined project.

“(iii) Possible reserves also include incremental quantities associated with a greater percentage recovery of the hydrocarbons in place than the recovery quantities assumed for probable reserves.

“(iv) The proved plus probable and proved plus probable plus possible reserves estimates must be based on reasonable alternative technical and commercial interpretations within the reservoir or subject project that are clearly documented, including comparisons to results in successful similar projects.

“(v) Possible reserves may be assigned where geoscience and engineering data identify directly adjacent portions of a reservoir within the same accumulation that may be separated from proved areas by faults with displacement less than formation thickness or other geological discontinuities and that have not been penetrated by a wellbore, and the registrant believes that such adjacent portions are in communication with the known (proved) reservoir. Possible reserves may be assigned to areas that are structurally higher or lower than the proved area if these areas are in communication with the proved reservoir.

“(vi) Pursuant to paragraph (22)(iii) of this section (above), where direct observation has defined a highest known oil (HKO) elevation and the potential exists for an associated gas cap, proved oil reserves should be assigned in the structurally higher portions of the reservoir above the HKO only if the higher contact can be established with reasonable certainty through reliable technology. Portions of the reservoir that do not meet this reasonable certainty criterion may be assigned as probable and possible oil or gas based on reservoir fluid properties and pressure gradient interpretations.”

Instruction 4 of Item 2(b) of Securities and Exchange Commission Regulation S-K was revised January 1, 2010 to state that “a registrant engaged in oil and gas producing activities shall provide the information required by Subpart 1200 of Regulation S–K.” This is relevant in that Instruction 2 to paragraph (a)(2) states: “The registrant is permitted, but not required, to disclose probable or possible reserves pursuant to paragraphs (a)(2)(iv) through (a)(2)(vii) of this Item.”

“(26) Reserves. Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

“Note to paragraph (26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir, or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).”

Cawley, Gillespie & Associates, Inc.

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