CapitalEnergy Corporation - Calgary

We believe that good governance stems from a commitment to conduct all affairs with trust and integrity. Developing and maintaining trusting relationships relies on our ability to consistently maintain high ethical standards and governance practices. Our Company strives to operate our business as efficiently and safely as possible. We have a strong commitment to health, safety and environment and to responsible business practices.

Code of Conduct

At CEC we expect our directors, officers, employees, consultants, and contractors will comply with our core principles which are an integral part of our Company’s philosophy:

• Act honestly and with integrity in all situations and at all times
• Respect people’s opinions and cultural differences;
• Conduct honest and open communications;
• Be professional in everything we do;
• Accept individual responsibility;
• Operate safe and healthy working environments.

We value honesty, high ethical standards and compliance with laws, rules and regulations. Our Code promotes honest and ethical behaviour and fair dealing by our directors, officers, employees, consultants, and contractors of CEC and seeks to promote these values in respect of CEC’s dealings with its shareholders, customers, and industry partners.

Governance

CEC’s board of directors is responsible for making and enforcing all significant management decisions of the Company. There are currently six members on the board. The board, in consultation with the Chief Executive Officer, sets objectives for the corporation and monitors management of its business and affairs with the goal of achieving the corporation’s principal objectives.

The board holds meetings quarterly to review any decisions relating to:

• Compliance with applicable laws
• Terms and amendments of the material contracts of the corporation
• All matters relating to the powers and authorities of the corporation, including supervision of management and compensation structure for the executive body
• Reserves review and audit
• Environmental health and safety audit
• Financial statements (reviewed quarterly and audited annually)

Corporate

Reserve Evaluators – Sproule Associates
Legal Counsel – Bennett Jones LLP
Bankers – National Bank