12.

SUBSEQUENT EVENTS

On March 23, 2016, 900,000 stock options previously granted on March 23, 2011 to two directors, expired unexercised.

On June 20, 2016, warrants to acquire up to 520,000 common shares of the Company, expired unexercised.

On November 23, 2016, warrants to acquire up to 52,155,221 common shares of the Company, expired unexercised.

On June 19, 2017, the Company renewed its Edmonton office lease commencing effective on July 1, 2017 and expiring on June 30, 2019. As part of the lease renewal the Company received the first 3 months of basic rent free. The quarterly payments due are as follows:

	USD $		Cdn $
2017 Q4 (July - September)	$	–	$	–
2018 Q1 (October - December)	$	5,745	$	7,969
2018 Q2 (January - March)	$	5,745	$	7,969
2018 Q3 (April - June)	$	5,745	$	7,969
2018 Q4 (July - September)	$	5,745	$	7,969
2019 Q1 (October - December)	$	5,745	$	7,969
2019 Q2 (January - March)	$	5,745	$	7,969
2019 Q3 (April - June)	$	5,745	$	7,969

First production from the Company’s joint Steam Assisted Gravity Drainage Demonstration Project (the “SAGD Project”) began on September 16, 2014. As a result of the low-price environment for bitumen in 2015 and early 2016, a majority of the Company’s Joint Venture partners voted to temporarily suspend operations of the SAGD Project at the end of February 2016. In early May of 2016, an amended application was submitted to the AER for an expansion of the existing SAGD Project facility site which would potentially increase the operation for up to a total of eight SAGD well pairs. The amended application sought approval to expand the existing SAGD Project facility site to 3,200 bopd (100% basis). It is anticipated that only five SAGD well pairs need to be operating to achieve this production level. The expanded facility will be designed to handle up to 3,200 bopd. The AER approval for the expansion of the existing SAGD Project was granted on December 14, 2017. While the joint venture has not yet approved to expand the SAGD Project, currently, the SAGD Project continues to move forward with engineering and identification of long lead time items towards potential expansion to 3,200 bopd and future development at Sawn Lake.