An inspection of the above noted operation was conducted on January 10, 2019 by Resource Management Officers Norm McCowan and Jayda Robillard.

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1 Telephone: Fax: January 14, 2019 Strategic Oil & Gas Ltd th venue SW Calgary, B T2P 4G8 ttention: lyssa Bruce File Number Type of Operation Location MV OIL ND GS OPERTIONS Cameron Hills area, NT Dear Ms. Bruce, n inspection of the above noted operation was conducted on January 10, 2019 by Resource Management Officers Norm McCowan and Jayda Robillard. Enclosed is a copy of the Environmental Inspection Report. I am pleased to report that your operation appeared satisfactory in all aspects and no environmental concerns were identified during the inspection. Your cooperation is appreciated. If you have any questions, I can be reached at (867) Sincerely, Norm McCowan Resource Management Officer III Department of Lands South Slave Region cc: ngela Love, Regulatory Specialist, Mackenzie Valley Land and Water Board Wendy Bidwell, Water Resource Officer, ENR Derise Rehm Lepine, Regional Superintendent, South Slave Region, Lands Brian Heppelle, Chief Safety Officer, OROGO Charlene Coe, Land Use dvisor, North Slave Region, Lands Ken Petersen, Road and Lease Construction, Strategic Oil and Gas Ltd. 41 Capital Drive #203, Hay River, NT X0E 1G2

2 Permittee: Strategic Oil & Gas Ltd. Permit Expiry September 18, Date: 2020 Land Use Permit No. MV Previous Inspection: December 05, 2018 Quarrying Permit No. 17/0005; 17/0006 Inspection Date: January 10, 2019 Contractor: Rowe's Construction Subcontractor: Winter access from the lberta/nwt Border to the H 03 Battery Location(s) Inspected: Site, Lake Source 3, Main Camp, 21 well sites in the Cameron Hills area. Current Stage of Operation: Winter road construction to south side of the Cameron River Bridge has been completed. Equipment was working on the north side of the bridge to Well Site L 47 at time of inspection. Service rig and slickline truck scheduled to arrive on January 15, 2019 for suspension and abandonment work at twenty one (21) well locations. Program Modifications pproved: Condition of Operation cceptable U Unacceptable N/ Not pplicable N/I Not Inspected Operating Condition spect Inspected Cameron Hills Field Location as Permitted Time as Permitted Equipment as pproved (Type & Size) Methods & Techniques Facilities Erosion (Control or Prevention) Chemicals Wildlife and Fisheries Habitat (Protection) Wastes Historical / rchaeological Sites Fuel Storage Brush Disposal Restoration of Lands Permits Matters not Inconsistent Sections 8 to 12 / 14 to 16 M.V.L.U.R. Explanatory Remarks Cameron Hills Field: n inspection of the winter operation in the Cameron Hills was conducted by Resource Management Officers Norm McCowan and Jayda Robillard on January 10, Ken Peterson, Road and Lease Construction, Strategic Oil and Gas Ltd. was present during the inspection. The inspection was conducted to ensure compliance with the terms and conditions annexed to Land Use Permit MV The entire length of the winter road was inspected and the Inspectors are pleased to report that there appeared to be sufficient icing and/or snow pack along the access in accordance with Permit Condition #29 of the land use permit which requires a minimum of 10cm of coverage. Date: January 10, 2019 Permit #: MV Page No: 1

3 t the time of inspection, the winter road has been completed to all wells requiring work this winter with the exceptions of wells D 49, H 58, and L 47. Equipment including a grader, snow cat and water trucks were working on the section of access west of the airstrip to Well Site L 47. The work was progressing well with no environmental concerns noted. ll well sites scheduled for abandonment, suspension or slickline work this winter have been plowed. The Cameron River ice bridge crossing west of Well Site L 40 at 'N 'W has been completed and appeared satisfactory in all aspects. The Inspectors note that only clean snow and ice was used in the construction in compliance with Permit Condition #56. The following is a summary of work completed as reported by Strategic Oil and Gas Ltd. on the Weekly Progress Report dated January 07, 2019: Service Rig: Well 05: ccess completed; service rig to complete 2 zone suspension. Well C 74: ccess completed; service rig to complete 1 zone suspension. Well E 72: ccess completed; service rig to complete 1 zone abandonment. Well H 03: ccess completed; service rig to complete 1 zone suspension. Well 2H 03: ccess completed; service rig to complete 1 zone suspension. Well J 74: ccess completed; service rig to complete 1 zone suspension. Well K 74: ccess completed; service rig to complete 1 zone suspension. Well L 40: ccess not completed; service rig to complete 2 zone suspension. Well L 47: ccess not completed; service rig to complete 1 zone suspension. Well L 73: ccess completed; service rig to complete 1 zone suspension. Well M 73: ccess completed; service rig to complete 1 zone suspension. Well 2M 73: ccess completed; service rig to complete 1 zone suspension. Slickline: Well 03: ccess completed; slickline to set plug in tubing. Well B 08: ccess completed; slickline to set plug in tubing. Well C 19: ccess completed; slickline to set plug in tubing. Well C 75: ccess completed; slickline to set plug in tubing. Well D 49: ccess not completed; slickline to set plug in tubing. Well H 58: ccess not completed; slickline to set plug in tubing. Date: January 10, 2019 Permit #: MV Page No: 2

4 Well I 16: ccess completed; slickline to set plug in tubing. Well I 73: ccess completed; slickline to set plug in tubing. Well J 62: ccess completed; slickline to set plug in tubing. The service rig and slickline truck are scheduled to arrive in the Cameron Hills on January 15, K Camp: Snow has been plowed from the campsite. The removal of old rig matting, piping, fuel drums and other items noted on the September 2018 inspection report is planned for this winter. Main Camp: The camp is in operation. t time of inspection, sixteen people were staying at the camp which has a capacity of 29 beds. Three camp trailers have been setup beside the main camp for the service rig and slickline crews. The camp trailers are tied into the main camps sewage system and no pump out tanks are required. Water for camp use in being hauled in from Hay River. Lake Source 3: The access to the lake has been completed and water is being used for the winter road construction. total of 6,665 m3 of water has been hauled from the lake this winter. Strategic Oil and Gas Ltd. are working on a plan to address many of the deficiencies noted in the September 2018 inspection report. Work that may occur this winter includes the removal of all chemicals, fuel drums and waste items from the well sites, remediation of the sumps and sections of pipeline and backfilling of rat holes which had been left open. The Inspectors appreciate the efforts of Strategic Oil and Gas Ltd. in addressing these concerns. The Inspectors are pleased to report that this operation appeared satisfactory in all aspects and no environmental concerns were noted. Representative Signature Inspector s Signature Date: January 10, 2019 Permit #: MV Page No: 3

5 Inspection Images: Figure 1 Figure 2 Main access facing north near the Battery Site. Winter access to Lake Source 3. Figure 3 Figure 4 Water is being pumped from Lake Source 3 for Fish screen on water intake in compliance with winter road construction. Permit Condition #86. Figure 5 Figure 6 ccess and Well Site K 74 has been plowed. Winter access to Well Site J 74. Date: January 10, 2019 Permit #: MV Page No: 4

6 Figure 7 Figure 8 Well Site J 74. Equipment parked at the K Camp. Figure 9 Figure 10 Drip tray has been placed under the back hoe in Fuel drums located on the west side of the garage compliance with Permit Condition #125. building. Figure 11 Figure 12 No bung on the 45 gallon drum full of oil. Drums Well Site 05. are slated for removal this winter. Date: January 10, 2019 Permit #: MV Page No: 5

7 Figure 13 Figure 14 Winter access north of Well Site 05. Winter access at Km 45 south of the Cameron River Bridge. Figure 15 Figure 16 Winter access east of Well Site B 08. Well Site B 08. Figure 17 Figure 18 Winter access to Well Site C 19. Well Site C 19. Date: January 10, 2019 Permit #: MV Page No: 6

8 Figure 19 Figure 20 Well Site N 28. Winter access north of Well Site N 28. Figure 21 Figure 22 Winter access to Well Site L 40. Well Site L 40. Figure 23 Figure 24 Winter access facing west near the Cameron River. Snow & ice bridge constructed across the Cameron River west of Well Site L 40. Date: January 10, 2019 Permit #: MV Page No: 7

9 Figure 25 Figure 26 Winter access north of D 49. Well Site D 49. Figure 27 Figure 28 Winter access to Well Site H 58. Winter access near Well Site L 47. Figure 29 Figure 30 Well site L 47. Winter access north of Well Site L 47. Date: January 10, 2019 Permit #: MV Page No: 8

10 Figure 31 Figure 32 Main camp in operation located at the Battery Site. Crew trailers have been tied into the main camps Three new crew trailers have been hauled in. sewage system. ll sewage is pumped into the sewage lagoon. Figure 33 Figure 34 Battery site has been cleared of snow for this 50,000 L double walled fuel tank with spill kit. winters operation. Date: January 10, 2019 Permit #: MV Page No: 9