President's Message Though it has not yet come into force as of the date of this report, the National Assembly in Quebec passed Bill 21 banning oil and gas development in the province last month. We are still keen to work with the people of Quebec who have shown support for our Clean Gas project. The Government's decision left us no choice but to take legal action to protect the rights of our shareholders. We have filed a statement of claim and we anticipate a pre-trial hearing could be held within the next few months. As we follow the legal process in Quebec, we have three priorities - continue development of Kakwa and Antler to capitalize on higher prices, assist Red Leaf in commercializing their EcoShale technology, ultimately for our project in Jordan, and evaluate opportunities to employ new carbon technologies. Highlights o Government of Quebec passes Bill 21 to ban oil and gas development in Quebec o Three (0.75 net) wells completed at Kakwa Central and brought on stream in second quarter o Current production over 2,000 boe/d with average daily production of 1,288 boe/d and adjusted funds flow from operations of $4.3 million for the quarter We have heard from many of our Norwegian shareholders who are bewildered by the Government's decision which came after the Russian invasion of Ukraine. As energy security has become a priority again and Canada has the ability to be a reliable supplier, they are questioning why Quebec is ignoring how it can help on the global stage. This sentiment is shared by most Canadians too. A recent poll by the Montreal Economic Institute shows that 72% of Canadians support the export of energy to Europe, including 65% of Quebecers, with 17% opposed. In our view, the decision by the Government is clearly not based on social license or public opinion. We too, were perplexed by their decision to introduce the law ostensibly on the basis of reducing emissions. According to the regulatory impact assessment on Bill 21 prepared by the Ministry of Energy and Natural Resources, the purpose of the bill is to 'promote the energy transition and the achievement of objectives in the fight against climate change by reducing GHG emissions and fossil fuel consumption.' The math is clear that, this legislation, when enacted, will have the opposite effect. Quebec emissions will be dramatically higher from this 'business as usual' approach when compared to zero emissions consumption based on our circular economy approach. Quebec's natural gas consumption has remained remarkably stable over the last few decades at approximately 0.5 Bcf/d. It remains entirely dependent on imported natural gas from the United States and Western Canada. As a result, Quebec is locking in global emissions likely to be up to four times higher just from the production compared to those from consuming Clean Gas locally combined with new carbon technology. The rollout of new carbon technology is a big opportunity that Quebec is missing by banning our project. The Government's impact assessment notes 'the ban would showcase Quebec as a serious and bold leader in the fight against climate change.' This is the opposite of the truth. We believe that it is by implementing a true net-zero hub using Clean Gas that Quebec could become a real leader in energy transition. Zero emissions hubs and carbon tech are becoming the future of energy with growing support from the private and public sectors. In its most recent budget, the Federal Government of Canada announced a refundable investment tax credit of 50% of the costs of these technologies, specifically carbon capture and sequestration. Despite the geopolitical and environmental impacts, enquiries from our shareholders are focused on the nature and quantum of our claim given the absence of fair and just compensation under the legislation. These details will be finalized this summer as part of an expert witness report to validate our claim. As natural gas prices continue to rise to their highest levels in over 13 years, the strategic value of our discovery can only appreciate. The rise in oil prices is revitalizing interest in Red Leaf and their proprietary technology to produce net-zero oil in Utah. This technology will be essential to the development of our project in Jordan. They recently engaged Hatch, a global engineering firm, to validate their redesigned process before they finalize engineering for a small-scale commercial plant. We are also working closely with them to capitalize on a recently acquired land parcel in the oil-producing Uinta Basin in Utah that is the terminus for a proposed railway line. Operating & Financial The three new wells at Kakwa Central were completed and tied in last month. Including flush production, our current volumes are just over 2,000 boe/d. With no new wells for the last year, our production in the quarter averaged close to 1,300 boe/d, down marginally from the fourth quarter volumes over 1,400 boe/d and more materially from the same period last year of over 1,600 boe/d. Consistent with the industry at large, higher natural gas and oil prices materially improved our revenue and adjusted funds flow from operations. We generated $4.3 million compared to $3.8 million last quarter and $2.9 million in the first quarter of last year. These funds flow from operations largely funded our capital expenditures of $4.9 million to finish the drilling and partially complete the wells. Outlook Based on the strength in medium-term prices, we plan to participate in additional wells as proposed by the operators at Kakwa. Subject to any mid-year budget revisions by the operators, we expect drilling to resume next year. Even though the outlook is bleak, we hope the Quebec Government carefully considers the enactment of Bill 21 given the situation in Europe. The Federal Government of Canada has recently started discussions with two companies that have LNG projects on the east coast of Canada to increase gas supplies to Europe. Our project has sufficient scale that, in full development, we could supply nearly 40% of German natural gas imports from Russia. Michael Binnion President and Chief Executive Officer