COURT FILE NUMBER 25-2054674

COURT COURT OF QUEEN'S BENCH OF ALBERTA INBANKRUPTCY AND INSOLVENCY

JUDICIAL CENTRE CALGARY

PROCEEDING IN THE MATTER OF THE PROPOSALONE EARTH OIL & GAS INC.

DOCUMENT AFFIDAVIT OF STEPHEN AUSTIN

ADDRESS FOR SERVICE AND CONTACT Peter S. Jull, Q. C.I NFORMATION OF PARTY FILING THIS DLA Piper (Canada) LLPDOCUMENT Barristers and Solicitors

1000, 250 - 2 Street SWCalgary, Alberta T2P 0C1Phone: 403-776-8811Fax: 403-296-4474File No.: 77252-00001/tpw

AFFIDAVIT OF STEPHEN AUSTINSworn on April 21, 2016

I, STEPHEN AUSTIN, of the City of Calgary in the Province of Alberta, SWEAR AND SAY THAT:

1. I am the Chief Financial Officer of One Earth Oil & Gas Inc. (the "Applicant" or "One Earth") and

as such I have personal knowledge of the matters hereinafter deposed to except where stated to

be based upon information and belief, in which case I believe the same to be true.

2. On November 5, 2015 the Applicant filed a Notice of Intention to Make a Proposal (the "NOI")

under the Bankruptcy and Insolvency Act R.S.C. 1985 c. B-3 ("BIA"). Hardie & Kelly Inc. (the

"NOI Trustee") was appointed as the proposal trustee.

3. On November 30, 2015 the Honourable Justice B.E.C. Romaine granted an Order pursuant to

s.50.4 of the BIA granting an extension of the period in which One Earth is required to file a

proposal to its creditors with the NOI Trustee to and including January 13, 2016.

4. By Orders dated January 11, 2016, February 24, 2016, and March 9, 2016, this Court granted

further extensions of the period of time in which to file a proposal up to and including March 24,

2016.

CAN: 21594085.1

-2-

5. On March 24, 2016, One Earth filed its Proposal to creditors pursuant to the BIA with the NOI

Trustee. Attached and marked as Exhibit "A" to this my Affidavit is a copy of the Proposal (the

"Proposal").

6. The NOI Trustee scheduled a Meeting of Creditors to consider the Proposal which meeting was

held on April 14, 2016. Attached and marked as Exhibit "B" to this my Affidavit is a true copy of

the Report of the NOI Trustee to the Proposal without exhibits except for Appendix "B" (the

"Trustee's Report").

7 I attended the Meeting of Creditors held on April 14, 2016 and as stated in the Trustee's Report,

the Proposal was accepted by the required majority of creditors. The Voting Summary is shown

in Appendix "B" which is attached to the Trustee's Report (Exhibit "B").

Sale of Chipmunk Properties to Prosper Petroleum Ltd.

8. One key asset of One Earth is a 65% interest in leases, lands and wells in the area described as

the Chipmunk Properties which is located in North Western Alberta. These properties produce

heavy oil and were acquired by One Earth in January of 2015 from Murphy Oil. One Earth

acquired its interest in the Chipmunk Properties together with two other working interest owners,

Gift Lake Resource Development LP ("Gift Lake") and Prosper Petroleum Ltd. ("Prosper").

9. Because of the continued depressed commodity pricing levels, the Chipmunk Properties

substantially decreased in value since they were acquired.

10. In 2015 One Earth consulted with a well-known oil and gas marketing firm as to how best to

market the Chipmunk Properties. It followed the advice of the firm that the best manner of

marketing the properties was to inform potential buyers through word of mouth and to deal with

the other working interest owners. One Earth let it be known to potential purchasers that its

interest in the Chipmunk Properties were available for sale. No formal sales process was

undertaken because it was considered that the other working interest owners were the only

parties that would likely have a serious interest in acquiring an interest in One Earth's interest in

the Chipmunk Properties.

1 1. After extensive negotiations One Earth was able to reach an agreement with Prosper to sell 50%

of its interest in the Chipmunk Properties for a price of $875,000 payable with an initial payment

of $600,000 and a second payment of $275,000 that would only be payable if the price of West

Texas Intermediate Oil averaged US$53 per barrel for 30 consecutive days before March 31,

2017. Attached and marked as Exhibit "C" to this my Affidavit is a copy of the March 11, 2016

Offer from Prosper to One Earth to purchase the interest that One Earth owns in the Chipmunk

Properties (the "Prosper Agreement").

CAN: 21594085.1

-3-

12. One Earth engaged Sayer Energy Advisors ("Sayer"), a well-known and highly respected

marketer and valuator of oil and gas properties to review the terms of the sale of the One Earth

interest in the Chipmunk Properties to Prosper and to provide an opinion on the terms of the

Proposal and the transaction. Attached and marked as Exhibit "D" to this my Affidavit is a copy

of the March 24, 2016 opinion letter of Sayer. The Sayer's opinion letter was also attached to the

Trustee's Report to the Creditors.

13. It is noted that in reference to the Prosper Agreement, Sayer was of the opinion as stated on

page 1 of Exhibit "C" that: "Based on the current attributes of the Chipmunk property, the

Prosper offer is fair, from a financial point of view to the creditors of One Earth".

14. In my assessment, the Prosper Agreement is a fair and reasonable transaction and the purchase

price represents fair value to One Earth in the context of the current commodity price conditions.

15. I make this this Affidavit in support of an application approving the Prosper Agreement and the

transfer of one-half of the interests of One Earth in the Chipmunk Properties to Prosper free and

clear of all claims of the creditors of One Earth and in support of an application for approval of the

Proposal pursuant to section 58 of the BIA.

SWORN BEFORE ME at Calgary, Alberta, this 21stday of April, 2016.

A Commissioner for Oaths in an or the Province ofAlberta

PETER S. JULL Q.C.Barrister and Solicitor

STEPHEN AUSTIN

CAN: 21594085.1

This is Exhibit " " referred toin the Affidavit of

ti 14Sworn before me this

Day of I L ,4 D20 1.6a

A Notary Public - Commissi ner for Oathsin and for the Province of Alberta

Court & Estate No: 25-2054674

PETER S. DULL IN THE MATTER OF THE PROPOSAL OF

Banister and Solicitor ONE EARTH OIL & GAS INC.

OF THE CITY OF CALGARY

IN THE PROVINCE OF ALBERTA

PROPOSAL

One Earth Oil & Gas Inc. ("OEOG" or the "Company") being insolvent, hereby submits the

following proposal to creditors, filed March 24, 2016 pursuant to the provisions of Part HI

Division I of the Bankruptcy and Insolvency Act,

ARTICLE 1INTERPRETATION

1.1 Definitions

In this Proposal, capitalized terms have the following meanings are defined:

1.1.1 "Administrative Fees and Expenses" means the fees, costs, expenses and

disbursements of the Proposal Trustee and counsel to the Company on or

incidental to this Proposal, the negotiations in connection with the preparation

of this Proposal and any subsequent proposals, and the proceedings arising out

of this Proposal and any subsequent proposals including advice to the

Company.

1.1,2 "Affected Creditors" means Preferred Creditors, Unsecured Creditors and the

Gift Group up to the amount of the Gift Group Accepted Claim.

1.1.3 "BIA" or the "Act" means the Bankruptcy and Insolvency Act (Canada), as

amended from time to time.

1.1.4 "Business Day" means a day which is not (i) a Saturday or a Sunday or (ii)

observed as a holiday under the laws of the Province of Alberta or the federal

laws of Canada, as applicable.

1.1.5 "Chipmunk Properties" means those properties described in the Prosper

Agreement.

1.1.6 "Claim" means any indebtedness, liability, action, cause of action, suit, debt

due, account, bond, covenant, contract, counterclaim, demand, claim, trust

claim, right and obligation of any nature whatsoever of the Company or its

CAN 21421665 1

respective directors, to any Person, whether liquidated, unliquidated, fixed,

contingent, matured, legal, equitable, secured, unsecured, present, future,

known or unknown, and whether by guarantee, surety or otherwise, in any way,

and whether in whole or in part, incurred or arising or relating to the period

prior to or existing on the Filing Date, excluding any equity claims as defined

by Section 2 of the BIA.

1.1.7 "Company" or "OEOG" means One Earth Oil & Gas Inc.

1.1.8 "Contingent Claim" means first, a claim against the Company which is not a

liquidated debt (including claims of employees of the Company, in connection

with amounts which are or may become actually or contingently owing in

respect of severance, termination or notice, whether pursuant to an employment

agreement, statute or common law or otherwise) and, secondly, a claim against

the Company arising from the termination or repudiation by the Company of its

obligations under any contract or agreement, or from any action taken or

omitted to be taken by the Company where such termination, repudiation action

or failure to act occurs prior to the Creditors' Meeting Date.

1.1,9 "Court" means the Court of Queen's Bench of Alberta, Judicial District of

Calgary.

1.1,10 "Court Approval Date" means the dale on which the Court makes the Final

Order.

1.1.11 "Creditor" means any Person who holds one or more Claims,

1.1.12 "Creditors' Meeting" means the meeting of creditors called pursuant to the

BIA for the purpose of considering and voting on the Proposal.

1.1.13 "Crown Claims" means Claims of the Crown for amounts that were

outstanding on the Filing Date and that could be subject to an application

under:

a) subsection 224(1.2) of the Income Tax Act;

b) any provision of the Canada Pension Plan or of the Employment

Insurance Act that refers to subsection 224(1.2) of the Income Tax Act

and provides for the collection of a contribution, as defined in the

Canada Pension Plan, or an employee's premium, or employer's

premium, as defined in the Employment Insurance Act, and of any

related interest, penalties or other amounts; or

any provision of provincial legislation that has a similar purpose to

subsection 224(1.2) of the Income Tax Act, or that refers to that

subsection, to the extent that it provides for the collection of a sum, and

of any related interest, penalties or other amounts, where the sum:

2

CAN: 21421665.1

p

has been withheld or deducted by a person from a payment to

another person and is in respect of a tax similar in nature to the

income tax imposed on individuals under the Income Tax Act; or

is of the same nature as a contribution under the Canada

Pension Plan if the province is a "province providing a

comprehensive pension plan" as defined in subsection 3(1) of

the Canada Pension Plan and the provincial legislation

establishes a "provincial pension plan" as defined in that

subsection,

the whole in accordance with subsection 60(1.1) of the Act,

1.1.14 "Crown Creditor" means a Person in its capacity as the holder of a Crown

Claim.

1.1.15 "Dividend Payments" means the payments made or to be made by the

Proposal Trustee referenced in Article 6 of the Proposal,

1.1.16 "Filing Date" means the date of filing the Notice of Intention, being

November 5,. 2015.

1.1.17 "Final Order" means an order of the Court approving this Proposal to be

granted under the provisions of the BIA, the appeal period having expired and

no appeal having been filed, or any appeal therefrom having been dismissed

and that dismissal having become final.

1.1,18 "Gift Creditor Payment" means one-half of the Proposal Fund.

1,1,19 "Gift Group" means Gift Lake Resource Development L.P, or any of its

related entities or persons.

1.1,20 "Gift Group Accepted Claim" means the Secured Claims and Unsecured

Claims held by the Gift Group to an amount equal to the total of all proven

Unsecured Claims, so that the Gift Group shall share equally in the Proposal

Fund.

1.1.21 "Governmental Authority" means:

CAN: 21421665.1

a) any federal, provincial, state, local, municipal, regional, territorial,

aboriginal, or other government, governmental or public department,

branch, ministry, or court, domestic or foreign, including any district,

agency, commission, board, arbitration panel or authority and any

subdivision of any of them exercising or entitled to exercise any

administrative, executive, judicial, ministerial, prerogative, legislative,

regulatory or taxing authority or power of any nature; and

3

b) any quasi-governmental or private body exercising any regulatory,

expropriation or taxing authority under or for the account of any of

them, and any subdivision of any of them.

1.1.22 "Initial Payment Fund" means the fund which is included within the Proposal

Fund required to pay the lesser of $500 or the principal amount of all Proven

Claims of Creditors as referenced in paragraph 6.1.1.

1.1.23 "Landlord" means W.S. Partnership.

1.1.24 "Levy" means the Superintendent of Bankruptcy Levy as provided for in

Section 147 of the BIA.

1.1.25 "Notice of Intention" means the notice of intention to make a proposal

pursuant to the BIA filed by the Company with the Official Receiver on

November 5, 2015.

1.1.26 "Official Receiver" means the officer appointed under Section 12(2) of the

BIA.

1.1.27 "Person" will be broadly interpreted and includes:

a) a natural person, whether acting in his or her own capacity, or in his or

her capacity as executor, administrator, estate trustee, trustee or

personal or legal representative, and the heirs, executors, administrators,

estate trustees, trustees or other personal or legal representatives of a

natural person;

a Partnership or a company of any kind, a partnership of any kind, a

sole proprietorship, a trust, a joint venture, an association, an

unincorporated association, an unincorporated syndicate, an

unincorporated organization or any other association, organization or

entity of any kind; and

c) a Governmental Authority.

1.1.28 "Post-Filing Claim" means a claim arising from the supply of goods or

services to the Company after the Filing Date or a claim for sales or excise

taxes, source deductions or assessments and premiums arising in relation to

such claims. Post-Filing Claims do not include claims in respect of an

obligation incurred prior to the Filing Date but which is payable after the Filing

Date, or the disclaimer of any agreement after the Filing Date in accordance

with the Act.

1.1.29 "Preferred Claim" means a Claim held by a Person entitled to receive

payment thereof in priority to other Creditors as provided for in Section 136 of

the BIA.

4

CAN' 21421665.1

1.1,30 "Preferred Creditor" means a Creditor in its capacity as the holder of a

Preferred Claim.

1 ,1.31 "Proposal" means this Proposal made pursuant to the provisions of Part III

Division I of the BIA, as amended or supplemented from time to time, and

includes any schedule.

1.1.32 "Proposal Fund" means a fund consisting of the total of the following:

a) $600,000 paid by Prosper from the sale of the Chipmunk Properties

pursuant to the Prosper Agreement; and

b) the anticipated refund if collected from the Orphan Well Fund,

after payment of Administrative Fees and Expenses, Crown Claims and

Preferred Claims.

1.1.33 "Proposal Payment" means the payments to Creditors pursuant to Article 6.5.

1.1.34 "Proposal Period" means the period between the date of filing of the Proposal

and the date on which the Proposal is considered complete pursuant to

Article 6.5.

1.1.35 "Proposal Trustee" means Hardie & Kelly Inc., the trustee acting under the

Proposal.

1.1.36 "Prosper" means Prosper Petroleum Ltd.

1.1,37 "Prosper Agreement" means the Letter Agreement dated March 11, 2016

between Prosper and OEOG whereby Prosper agrees to purchase 50% of

OEOG's interests in the Chipmunk Properties.

1.1.38 "Proven Claim" means the Claims of Affected Creditors which:

after the delivery of a Proof of Claim to the Proposal Trustee, have been

admitted by the Proposal Trustee in whole or in part; or

b) after the delivery of a Proof of Claim to the Proposal Trustee, have been

disallowed by the Proposal Trustee, which disallowance has

subsequently been set aside in whole or in part by the Court,

provided that n Proven Claim shall not include the amount due to a Post-Filing

Creditor in respect of a Post-Filing Claim, Proven Claims shall not include any interest

for the period subsequent to the Filing Dale,

1.1.39 "Residual Payment Fund" means the fund consisting of one-half of the

Proposal Fund less the amount paid to Creditors from the Initial Payment Fund.

5

CAN: 21421665.1

1.1,40 "Secured Claim" means a Claim secured by a Security Interest.

1.1,41 "Secured Creditor" means a Creditor in its capacity as the holder of a SecuredClaim.

1.1.42 "Security Interest" means any mortgage, charge, security interest, lien or otherencumbrance, including a lease, title retention agreement or other similararrangement where an interest in property is held by the Creditor as security fora Claim.

1,1.43 "Unsecured Creditor" means a Creditor in its capacity as the holder of anUnsecured Claim,

1.1.44 "Unaffected Creditor" means a Secured Creditor, a holder of a Post-FilingClaim and the Gift Group to the extent of any Claim that it holds in excess ofthe amount of the Gift Group Accepted Claim.

1,1.45 "Unsecured Claims" means any Claims against the Company other than anyClaim by the Gift Group, Secured Claims or Preferred Claims. For greatercertainty but without limiting the generality of the foregoing, UnsecuredClaims include:

a) the Claims of employees for arising from the termination of theiremployment with the Company up to and including the date of thefiling of this Proposal who have been given notice of termination oftheir employment with the Company (regardless of the effective date ofsuch termination); and

b) the Claims of all landlords in relation to leases which were disclaimedpursuant to the Act, such Claims to he valued at the lesser of:

their actual losses (after mitigation) resulting from thedisclaimer; and

an amount equal to the lesser of:

1) the aggregate of:

A) the rent provided for in the lease for the first yearof the lease following the date on which thedisclaimer became effective, and

B) fifteen per cent of the rent for the remainder ofthe term of the lease after that year, and

three years' rent.

6

CAN. 214 21665 1

1.2 The division of the Proposal into parts, paragraphs and sub-paragraphs, and the

insertion of headings, is for convenience of reference only and is not to affect the

construction or interpretation of this Proposal. Unless otherwise provided in this

Proposal, references to parts, paragraphs and sub-paragraphs are references to parts,

paragraphs and sub-paragraphs of this Proposal.

1.3 In this Proposal, where the context requires, a word importing the singular includes the

plural and vice versa, and a word importing gender includes the masculine, feminine

and neuter genders.

1.4 In the event that any date on which an action is required to be taken under this

Proposal is not a Business Day, that action will be required to be taken on the next

succeeding day that is a Business Day.

1,5 This Proposal will be binding upon and will enure to the benefit of the heirs,

administrators, executors, personal representatives, successors and assigns of all

persons named or referred to in the Proposal including, without limitation, all

Creditors.

2.1

ARTICLE 2PURPOSE AND EFFECT

Purpose: The purpose of the Proposal is to compromise the indebtedness owed to the

Affected Creditors so as to restructure the financial affairs of the Company in order to

permit the Company to continue to carry on business in the expectation that all

Creditors will derive a greater benefit from the continued operation of the business of

the Company than would result from a bankruptcy. This Proposal provides for the

compromise, payment and release of the Claims of the Affected Creditors in exchange

for payments in cash made by the Proposal Trustee from the Proposal Fund. The

Proposal, if successful, will allow for the following to occur:

2,1.1 the payment of all Crown Claims and Preferred Claims, if' any, in cash; and

2.1.2 the payment of the Dividend Payments to Unsecured Creditors and the Gift

Group.

2.2 Distribution of Gift Claims: This Proposal is based on a compromise of the claims of

the Gift Group against the Company. There is an issue as to whether the Claim of the

Gift Group is secured and if so what amount of its claim is a Secured Claim and there

is further issue as to the amount of Gift's Claim. In order to resolve these issues, the

Proposal provides that the Unsecured Creditors, excluding the Gift Group, shall

receive one half of the Proposal Fund. The Gift Group shall submit a Proof of Claim

in the amount of the Gift Group Accepted Claim, which shall be accepted by the

Proposal Trustee. The amount of the Gift Group Accepted Claim shall he valued at an

amount equal to the Proven Claim of the Unsecured Creditors so that the Gift Group

shall receive one half of the Proposal Fund. The Gift Creditor Payment shall be

accepted in full payment of the Gift Group Accepted Claim. The balance of the Claim

7

CAN: 21421065 1

of the Gift Group after deducting the amount of the Gift Group Accepted Claim willnot be affected by the Proposal.

23 Funding of the Proposal: Payments to the Creditors will be filnded by the ProposalFund, The Proposal Trustee will make the distributions from the Proposal Fund

directly to the Creditors as specified in Article 6.5.

2,4 The Proposal will be considered fully performed and complete when:

2.4.1 funds have been paid to all Crown and Preferred Creditors pursuant to theterms of this Proposal; and

2.4.2 cash has been paid to the Creditors in payment of their Claims pursuant to theterms of this Proposal.

ARTICLE 3AFFECTED CREDITORS AND UNAFFECTED CREDITORS

3.1 The Proposal applies to and will be binding upon the Preferred Creditors, the GiftGroup to the amount of the Gift Group Accepted Claim and the Unsecured Creditors,whether or not such Persons prove their respective Claims against the Company underthe Proposal.

3.2 Neither the Unaffected Creditors nor their Claims will in any way be affected by this

Proposal. Payments to the Unaffected Creditors will continue to be made in accordance

with the present arrangements or any other arrangements which may be agreed upon

by the Unaffected Creditors and the Company.

3.3 During the Proposal Period, and provided the Company is not in default under this

Proposal, each Affected Creditor will be stayed from commencing or continuing any

proceeding or remedy against the Company or its property based upon a Claim existing

on or before the Filing Dale, including, without limitation, any proceeding or remedy

to recover payment of that Claim, to realize against any Security Interest granted in

respect of that Claim, to recover or enforce a judgment against the Company in respect

of that Claim, or to initiate any proceedings against it under any applicable bankruptcy,

insolvency or other laws in respect of that Claim, other than an application or

proceeding in connection with this Proposal.

ARTICLE 4CROWN CLAIMS

• 4.1 All Crown Claims, if any, shall be paid in full in cash, without interest or penalty, and

subject to the Levy, in accordance with this Article and in priority to all Unsecured

Claims.

4.2 During the Proposal Period, the Company will pay and remit to the appropriate Crown

Creditors all amounts arising after the Filing Date on account of Crown Claims and

8

CAN: 21421665 1

goods and services taxes, as such payments become due and owing, and file when duethe required goods and services tax returns.

4.3 Any Crown Claims due and owing as at the Filing Date will be paid.

ARTICLE 5PREFERRED CLAIMS

5.1 The Claims of all Preferred Creditors, if any, shall be paid in full in cash, withoutinterest or penalty, and subject to the Levy, in priority to all claims of the Gift Groupand Unsecured Creditors, to the extent provided for in section 136 of the BIA. Forgreater certainty, all payments payable to former or current employees of the Companywhich would be payable in priority under subsection 136(1) of the BIA if the Companywere to become bankrupt, if any, will be paid.

5.2 All Administrative Fees and Expenses incurred in relation to the proceedings leadingto this Proposal and in connection with the preparation of this Proposal and in theadministration of this Proposal, including advice to the Company in connection withthis Proposal, will be paid in priority to all Claims of Preferred Creditors, the GiftGroup and Unsecured Creditors.

ARTICLE 6UNSECURED CLAIMS AND THE GIFT GROUP CLAIMS

6.1 Each Unsecured Creditor (with the exception of any member of the Gift Group) willreceive, in full and final satisfaction of its Claim, the following payments from onehalf of the Proposal Fund:

6.1.1 a cash payment equal to the lesser of $500 or the principal amount of its ProvenClaim (the total payment paid under this paragraph is referred to as the "InitialPayment Fund") and if its Proven Claim exceeds $500,

6.1.2 a cash payment of its pro rota share of the Residual Payment Fund based on theratio that its Proven Claim after deducting $500 bears to the total of all otherProven Claims.

6.2 The Gift Group will receive a cash payment of the other one-half of the Proposal Fund.

6.3 Payments to all Creditors and the Gift Group shall be without interest or penalty andsubject to deduction of the Levy payable to the Superintendent of Bankruptcy, basedon payments pursuant to this Proposal.

6.4 For the purpose of considering and voting on this Proposal, there shall be one class of

creditors consisting of the Affected Creditors.

6.5 The Proposal Trustee shall distribute the Company's funds as follows:

9

CAN: 21421665 1

6.5.1 first, in satisfaction of Proven Claims required to be paid under subsection60(1) of the Act, including the Administrative Fees and Expenses, CrownClaims contemplated by subsection 60(1.1) and all amounts, if any, required tobe paid under section 60(1.3) of the Act; and

6.5.2 second, in satisfaction of Proven Claims of the Preferred Creditors paid in

accordance with the priority set out in the Act; and

6.5.3 third, the Proposal Trustee shall divide the Proposal Fund into two equal funds:

from the first fund it shall pay the lesser of $500 or the principal amount of

Proven Claims pursuant to paragraph 6.1.1 and the balance of the first fund (the

Residual Payment Fund) shall be paid pro rata in payment of the ProvenClaims under paragraph 6.1.2;

6.5.4 from the second fund, the Proposal Trustee shall pay the Gift Group Accepted

Claim; and

the remainder, if any, shall be returned to the Company.

6.6 Binding Effect: On Court approval, this Proposal will become effective and be

binding on and inure to the benefit of the Company and all Affected Creditors and all

other persons named or referred to in, or subject to, this Proposal and their respective

heirs, executors, administrators and other legal representatives, successors and assigns.

The distributions as described herein shall operate as payment in full and final

satisfaction of all Claims which are extinguished upon the distributions to each

Affected Creditor as described in this Proposal, and each Affected Creditor will be

deemed to have forever released the Company from all Claims, including any debts,

liabilities, suits, claims or causes of action under sections 95 through 101 of the Act.

6.7 All amounts payable by the Company to any Preferred or Crown, Gift Group or

Unsecured Creditors under this Proposal will be paid to it to the Proposal Trustee. The

Proposal Trustee will distribute all those payments to Preferred Creditors and

Unsecured Creditors and the Preferred Creditors shall accept those payments in full

and complete satisfaction of their Preferred Claims and the Unsecured Creditors shall

accept those payments in full and complete satisfaction of their Claims.

6.8 For clarity, the Gift Group will be deemed to have only released the Company from the

amount of the Gift Group Accepted Claim and the balance of any Claim by the Gift,

Group shall remain unaffected by the Proposed.

6.9 Amounts payable shall be paid by the Proposal Trustee within a reasonable period of

time following receipt of funds from Prosper and any other payments. Interim

distributions may be made by the Proposal Trustee. Upon the final payment made to

the Creditors pursuant to this Proposal, the Company, its successors and assigns, and

its Directors shall be deemed to have satisfied in full the terms of the Proposal.

10

CAN: 21421665.1

ARTICLE 7PROPOSAL TRUSTEE, MONITORING AND ADMINISTRATIVE COSTS

7.1 Hardie & Kelly Inc. will be the trustee under this Proposal.

7.2 The Proposal Trustee is acting in its capacity as Proposal Trustee and not in itspersonal capacity and neither the Proposal Trustee nor any officer, director, employeeor agent of the Proposal TrUstee shall incur any obligations or liabilities in connectionwith the Proposal or in connection with the business or liabilities of the Company.

7.3 The Proposal Trustee's services will be based on time spent by the Proposal Trusteeand the various members of its staff at their respective billing rates plus any direct outof pocket expenses incurred. The Court will tax the Proposal Trustee's AdministrativeFees and Expenses.

7.4 The Proposal Trustee will call a Creditors Meeting, to be held within 21 days after thefiling of this Proposal with the Official Receiver, at those dates, times and places asmay be agreed upon by the Proposal Trustee and the Company.

7.5 All Affected Creditors will be required to submit a proof of claim to the ProposalTrustee, the face amount of which will govern for the purpose of voting at the meetingof Creditors to be held to consider this Proposal, unless otherwise disputed ordisallowed by the chair of the meeting. Thereafter, the Proposal Trustee will examineall proofs of claim and may require further evidence and support of the Claim or thesecurity for a Claim. The provisions of section 135 of the BIA will apply to all proofsof claim submitted by Unsecured Creditors.

7.6 The Proposal Trustee will apply on April 27, 2016 to the Court for the Final Orderupon approval by the Creditors of this Proposal.

7.7 Proof of Claim: Affected Creditors who wish to vote on this Proposal must have

completed a Proof of Claim in accordance with the instructions set out therein and

delivered the completed Proof of Claim with supporting documentation to the ProposalTrustee before the Creditors' Meeting. Affected Creditors who fail to file a Proof of

Claim prior to the Creditors' Meeting shall not be entitled to attend and vote at theCreditors' Meeting.

7.8 The procedure dealing with the disallowance of Proofs of Claim shall be as set out insection 135 of the Act.

7.9 Proxies and Voting Letters: Proxies as provided for in the Act indicating a person

authorized to act on behalf of an Affected Creditor may be submitted to the Proposal

Trustee at, or any time prior to, the commencement of the Creditors' Meeting.

7.10 Voting letters as provided for in the Act submitted to the Proposal Trustee prior to the

Creditors' Meeting must indicate whether the Affected Creditor wishes to cast their

CAN: 21421665 1

vote in favour of or against the Proposal. Voting letters that do not indicate eitherpreference will be deemed to indicate a vote in favour of the Proposal.

7.11 In the event the Affected Creditors elect not to appoint Inspectors, the powers of theInspectors as provided for in the Act shall devolve to the Proposal Trustee. Anydecision, direction or act of the inspectors may be referred to the Court by the ProposalTrustee, and the Court may confirm, reverse or modify the decision, direction or actand make such Order as it considers just. The authority and term of office of theInspectors shall terminate upon the discharge of the Proposal Trustee.

7.12 The Proposal Trustee and the Inspectors, if appointed, shall be exempt from allpersonal liability in fulfilling any duties or exercising any powers conferred upon themby this PrOposal and shall be liable only for any wilful or wrongful act and default.

7.13 Voting: Persons in attendance at the Creditors' Meeting shall east their vote in themanner prescribed by the Proposal Trustee and the Act. All votes will be recorded andtabulated by the Proposal Trustee, who may seek the assistance of the Court withrespect to any dispute arising from or out of the tabulation of the votes.

7.14 Each Affected Creditor will be entitled to vote to the extent of the amount which isequal to the Affected Creditor's proven Claim against the Company. If the amount ofthe Claim of a Disputed Claim is not finally determined prior to the date of theCreditors' Meeting, the holder of the Disputed Claim shall be entitled to vote at theCreditors' Meeting on the portion of its Claim, if any, that has been accepted by the

Proposal Trustee for voting purposes without prejudice to the rights of the Proposal

Trustee and the holder of the Disputed Claim to have the quantum of the DisputedClaim finally determined.

7.15 Approval: In order to be approved, the Proposal must receive the affirmative vote of

the required majority specified in the Act of Affected Creditors entitled to vote.

7.16 Modification of the Proposal: Subject to the consent of the Proposal Trustee, at any

time prior to the Creditors' Meeting, the Company reserves the right at any time to file

any modification, amendment or supplement of and to this Proposal, including by way

of a supplementary proposal, and tile such amended or supplementary proposal with

the official receiver as soon as practical, in which case any such supplementary

proposal or proposals shall, for all purposes, be and be deemed to be a part of and

incorporated into this Proposal. At the Creditors' Meeting, the Proposal Trustee shall

provide all Affected Creditors in attendance with details of any modifications or

amendments of and to the Proposal prior to the vote being taken to approve the

Proposal. After the Creditors' Meeting (and both prior to and subsequent to the

Approval Order) and subject to the consent of the Proposal Trustee, the Company may

at any time and from time to time vary, amend, modify or supplement this Proposal if

the Proposal Trustee determines that such variation, amendment, modification or

supplement is of a minor, immaterial or technical nature or would not be materially

prejudicial to the interest of any of the Affected Creditors under the Proposal and is

12

CAN: 21421605.1

necessary in order to give effect to the substance of the Proposal or the ApprovalOrder.

ARTICLE 8OPERATIONS AND POST-PROPOSAL GOODS AND SERVICES

8.1 Affected Creditors under the Proposal who have dealings with the Company after theFiling Date shall not have the right to set-ofT (either legally or equitably) any amountsowing to them in respect of post-Proposal goods and services, as against Claims.

ARTICLE 9INSPECTORS

9.1 At the Creditors' Meeting, the Affected Creditors will be entitled to appoint one ormore, but not exceeding five Inspectors, whose powers shall be as follows:

9.1.1 advising the Proposal Trustee in respect of such matters as may be referred tothe Inspectors by the Proposal Trustee;

9.1.2 advising the Proposal Trustee concerning any dispute that may arise as to thevalidity of the Claims of Affected Creditors under this Proposal;

9.1.3 exercising all powers given to the Inspectors of a bankrupt estate appointedpursuant to the provisions of the BIA; and

9.1.4 altering or extending the time for payments to be made pursuant to thisProposal, but not the total amount paid.

ARTICLE 10CONDITIONS PRECEDENT

10,1 As provided for in the Act, the arrangements set out in this Proposal will not takeeffect unless the conditions set forth below are substantially satisfied:

1 0,1.1 all approvals and consents to the Proposal that may be required have beenobtained;

1 0.1.2 the Prosper Agreement has been finalized and all conditions have been met andthe Court has approved the sale contemplated by the Prosper Agreement;

10.1.3 Terms of a transaction have been finalized between a member of the GiftGroup and Sprott Resource Partnership, whereby a member of the Gift Groupwill acquire all of the shares of the Company for the purchase price of $1.00 orother nominal consideration, or, if such a transaction cannot be structured toallow for a member of the Gift Group to acquire all the shares of the Company,such alternative transaction, including Court cancellation and re-issuance of

13

CAN: 21421665.1

equity in the Company to a member of the Gift Group, satisfactory to the Gift

Group and Sprott Resource Partnership;

10.1.4 the Final Order has been issued and the time for bringing any appeal therefrom

has expired; and

10,1.5 no order or decree restraining or enjoining the consummation of the

transactions contemplated by this Proposal will have been issued.

ARTICLE 11MISCELLANEOUS

Once Court approval has been obtained, all Affected Creditors shall be deemed to have

consented and agreed to all of the provisions of the Proposal in its entirety. Each

Affected Creditor will he deemed to have waived any default by the Company in any

provision, expressed or implied, or in any agreement existing between the Affected

Creditor and the Company that occurred on or prior to the date of Court approval.

Affected Creditor will be deemed to have agreed that, to the extent that there is any

conflict between the provisions of any such agreement and the provisions of the

Proposal, the provisions of the Proposal take precedence and priority and the

provisions of any such agreement are amended accordingly.

1 1.2 The Company and the Creditors will execute and deliver all such documents and

instruments and do all such acts and things as may be necessary or desirable to carry

out the lull intent and meaning of this Proposal and to give effect to the transactions

contemplated by this Proposal, Consideration will be given to the timing and

sequencing of the transactions contemplated by the Proposal to ensure that maximum

value is realized for the benefit of Creditors, and to ensure the financial efficiency of

the transactions for all interested parties.

1 1,3 The provisions of the Proposal will be binding on the Affected Creditors, the

Company, and their respective heirs, executors, administrators, personal and legal

representatives, successors, and assigns.

1 1.4 All obligations of the Company under this Proposal will commence once Court

approval has been obtained. All terms of this Proposal will take effect as of the date of

Court approval. All obligations of the Company under this Proposal will be fully

performed for the purposes only of section 65.3 of the BIA upon the Company having

made the payments to Preferred Creditors, Unsecured Creditors and Affected Secured

Creditor provided for in this Proposal.

1 1.5 The provisions of this Proposal will be binding on the Affected Creditors and the

Company, and their respective heirs, executors, administrators, successors and assigns,

upon issuance of the Final Order after all appeal periods have expired.

1 1.6 The payment, compromise or other satisfaction of any Claim under this Proposal will

be binding upon the Creditor holding such Claim, its heirs, executors, administrators,

14

CAN: 21421665.1

successors and assigns, for all purposes and to such extent will also be effective to

relieve any third party directly or indirectly liable for that indebtedness, whether as

guarantor, indemnitor, tenant, director, joint covenantor, principal or otherwise.

ARTICLE 12ANNULMENT OF PROPOSAL

12.1 If the Proposal is annulled by an Order of the Court, all payments on account of Claims

made' pursuant to the terms of the Proposal will reduce the Claims of the Affected

Creditors. In addition, the provisions of section 63 of the BIA will apply to any

annulment of this Proposal.

kii,Dated at Calgary this day of March, 2016.

15

CAN: 21421665.1

ONE EA I OIL & GAS INC,

Per:

This is Exhibit " " referred to

District of: Alberta in the Affidavit ofDivision No. 02 - CalgaryCourt No,Estate No.

25-205467425-2054674

-tTO k-(ENSworn before e this

FORM 40Report of Trustee on Proposal Day of A.D.20

(Section 59(1) and paragraph 58(d) of the Act)

In the matter of the Proposal ofA Notary Publi - C sioner for Oaths

in and for the Province of Alberta

One Earth Oil & Gas Inc.of the City of Calgary, in the Province of Alberta

PETER S. JULL Q.C.and Solicitor

We, Hardie & Kelly Inc, the trustee acting in the proposal of One Earth Oil & Gas Inc., hereby report to the Court as follows:

1. That a proposal was filed with us on the 24th day of March 2016 a copy of which is attached and marked as Exhibit "A", and

that we filed a copy of the proposal with the official receiver on the 24th day of March 2016.

2. That on !he 28th day of March 2016, we gave notice to the debtor, to the division office and to every known creditor affected

by the proposal, whose names and addresses are shown in Exhibit "B" to this report, of the calling of a meeting of creditors to

be held on the 14th day of April 2016 to consider the proposal.

3. That with the notice was included a condensed statement of the assets and liabilities of the debtor, a list of the creditors

affected by the proposal who have claims of $250 or more and showing the amounts of their claims, a copy of the proposal, a

form of proof of claim and proxy in blank and a voting letter. Copies of the notice, the condensed statement and the list of

creditors are attached and marked as Exhibits "Cl", "C2' and "C3", respectively.

4. That prior to the meeting of creditors we made a detailed and careful inquiry into the liabilities of the debtor, the debtor's

assets and their value, the debtor's conduct and the causes of the debtor's insolvency.

5. That the meeting of creditors was held on the 14th day of April 2016, and was presided over by Trustee.

6. That the proposal was accepted by the required majority of creditors.

7. That a copy of the minutes of the meeting is attached and marked as Exhibit "D".

8. That we are of the opinion that:

(a) the assets of the debtor and their fair realizable value are as follows:

Property Name Estimated $ Realizable $

Cash on hand - Cash in bank 0.00 0.00

Debts Due - Business - Orphan Well Association 285,000.00 285,000.00

Other - Oil and gas interests 600,000.00 600,000.00

Total Property Value: 885,000.00 885,000,00

(b) the liabilities of the debtor are as follows:

Creditor Name

Secured $ Prete red $ Unsecured $

SOA Discrepancies SOA Discrepancies SOA Discrepancies

1545965 Alberta Ltd. ota Tech Mechanical 0.00 0.00 0.00 0.00 2,498.06 0.00

709125 Alberta Ltd. ole Sword Transport 0.00 0.00 0.00 0.00 9,345.00 9,345.00

Page 1

FORM 40 --- Continued

Creditor Name

Sect' ed $ Prefe red $ Unsecured $

SOA Discrepancies SOA Discrepancies SOA Discrepancies

803702 Alberta Ltd. 0.00 0.00 0.00 0.00 1,237.35 1,237.35

87b919 Alberta Ltd. ola West CountryServices

0.00 0.00 0.00 0.00 1,492.05 0.00

901640 Alberta Ltd. ola FMU SouthernExploration Services

0.00 0 00 0.00 0.00 123,454.80 123,454.80

AB Dept of Energy - Corp.Bankruptcies/Crown Royal

0.00 0.00 0.00 0.00 0.00 0.00

Alberta Finance and Enterprise 0.00 0.00 0.00 0.00 0.00 0.00

Alberta One Call Corporation 0.00 0.00 0 00 0.00 18.90 18.90

Alltrek Drilling 0.00 0.00 0.00 0.00 182,725.73 0.00

Apex Monarch, Inc. 0.00 0.00 0.00 0.00 60,193.88 60,193.88

Apex Well Servicing (2010) Inc. 0.00 0.00 0.00 0.00 27,995.11 27,995.11

Atco Energy Solutions Ltd. 0.00 0.00 0.00 0.00 10,896.80 10,896.80

Alikameg eonstructron and UMWMaintenance Inc.

0.00 0.00 0.00 0.00 21,105.00 21,105.00

Baker Hughes Incorpo►ated 0.00 0.00 0.00 0.00 16,389.40 -1,228.70

Baron Oilfield Supply, A Partnership ofCorporations

0.00 0.00 0.00 0.00 12,805.62 12,805.62

Battle Lake Oilfield Service Ltd. 0.00 0.00 0.00 0.00 567.00 0.00

Baylex Energy LId. 0.00 0.00 0.00 0.00 63,185.63 -17.60

Borys, Sandra - Royalty 0.00 0.00 0.00 0 00 0.00 0.00

Burcat Welding 0.00 0.00 0.00 0.00 992.16 0.00

Cal Gas Inc 0.00 0.00 0.00 0.00 19,429.42 19,429.42

Canadian Natural Resources 0.00 0.00 0.00 0.00 0.00 -5,625.43

Canadian Natural Resources Partnership 0.00 0.00 000 0.00 0.00 0.00

Canadian Oil & Gas International Inc. 0.00 0.00 0.00 0.00 0.00 -2,055.02

Canwest Propane Partnership 0.00 0.00 0.00 0.00 20,683.78 -30,244.59

Ceiba Energy Services Inc. 0.00 0.00 0 00 0.00 3,977.40 -67.20

Central Oilfield Service 0 00 0.00 0.00 0.00 7,451.85 7,451.85

Cequence Energy Ltd. 0 00 0.00 0.00 0 00 10,054.55 -46,145.95

CG Engineering Ltd. 0.00 0.00 o 00 0 00 0.00 0.00

CJ-CSM Inspection Ltd. 0 00 0.00 0.00 0.00 6,416.56 0.00

Clear Environmental Solutions Uivis:on ofCES L.P.

0.00 0.00 0.00 0.00 2,709.00 0.00

CLHB Exploration Svc Ltd, 0.00 0.00 0.00 0.00 5,985.00 5,985.00

Code Red Oillied Services 0.00 0.00 0.00 0.00 1,278.90 1,278.90

Page 2

FORM 40 --- Continued

Creditor Name

Secu ed $ Prefe red $ Unsecured $

SOA Discrepancies SOA Discrepancies SOA Discrepancies

COGI Limited Partnership 0 00 0.00 0.00 0.00 472.50 472.50

Core Laboratories Canada Ltd. 0.00 0.00 0.00 0.00 3,383.28 0.00

CRA - Canaria RevenueAgency - Tax - Prairie

0.00 0.00 0.00 0.00 0.00 0.00

CX Energy Services Ltd 0.00 0.00 0.00 0.00 43,233.77 43,233.77

belorme Enterprises Ltd. 0.00 0.00 0.00 0.00 8,150.63 -0.06

Foster, Diane 0.00 0.00 0.00 0.00 0.00 0.00

Gagnon's Oilfield Services Ltd. 0.00 0.00 0.00 0.00 1,198.58 1,198.58

Geotir Inc. 0.00 0.00 0.00 0.00 171,014.53 0.00

Gift Lake Development Corp. 0.00 0.00 0.00 0.00 40,039.05 -12,040.95

Gift Lake Melts Settlement 0.00 0.00 0.00 0.00 20,000.00 0.00

Gift Lake Resource Development LP 0.00 0.00 0.00 0.00 11,519,681.42 11,519,687.42

Global Steel Ltd. 0.00 0.00 0.00 0.00 18,065.36 0.00

Global Well Servicing Ltd. 0.00 0.00 0.00 0.00 74,310.61 0.00

Government of Alberta Energy 0.00 0.00 0.00 0.00 36.00 36.00

HallIburton Group Canada 0.00 0.00 0.00 0.00 17,010.50 17,010.50

Hesse, Dale 0.00 0.00 0.00 0.00 0.00 0.00

Hesse, Gerald - Royally 0.00 0.00 0.00 7 0.00 000 0.00

Hesse, Wayne - Royalty 0.00 0.00 0.00 0.00 0.00 0.00

Hill, Nicole do Phyllas Wagar - Royally 0.00 0.00 0.00 0.00 0.00 0.00

HMA Land Services Ltd. 0.00 0.00 0.00 0.00 1,066.26 1,066.26

Hymarc Contracting 0.00 0.00 0.00 0.00 20,438.78 0.00

Indian Oil & Gas Canada 0.00 0.00 0.00 0.00 256,813.44 256,813.44

Initial Industries Ltd. 0.00 0.00 0.00 0.00 7,847.74 7,847.74

Intricate Group Inc. 0.00 0.00 0.00 0.00 7,089.97 -0.01

Jacobi, Donald Henry 0.00 0.00 0 00 0.00 0.00 0.00

Jacobi, Myles Grant 0.00 0.00 0.00 0.00 0.00 0.00

Jacobi, Richard Allen - Royalty 0.00 0.00 0.00 0.00 0.00 0.00

JB Trucking 0.00 0.00 0.00 0.00 6,783.00 6,783.00

Kanngiesser Consulting service - 111b4b7Alberta Ltd.

0.00 0.00 0.00 0.00 1,668.45 1,668.45

Key Seismic Solutions Ltd. 0.00 0.00 0.00 0.00 24,045.79 0.00

Page 3

FORM 40 --- Continued

Creditor Name

Secu ed $ Prefe red $ Unsecured $

SOA Discrepancies SOA Discrepancies SOA Discrepancies

Kozak, Kevin - Royalty 0.00 0.00 0.00 0.00 0.00 0.00

Lincoln County Oilfield Services Ltd. 0.00 000 0.00 0.00 370,415 05 0.00

Maxam Seismic Explosives, Inc. 0.00 0.00 0.00 0.00 47,917.53 0.00

Mountain West Services Ltd. 0.00 0.00 0.00 0.00 3,077.35 3,077.35

Municipal District of Acadia #34 0.00 0.00 0.00 0.00 0.00 0.00

Nalco Canada ULC #T5/04'/C - 15030610 0.00 0.00 0.00 0.00 7,232.39 7,232.39

Nauroth, Jennie 0.00 0.00 0.00 0.00 0.00 0.00

North Alla Industrial Medical Services Inc. 0.00 0.00 0.00 0.00 9,851.63 9,851.63

Penn West Petroleum Ltd. 0.00 0.00 0.00 0.00 137 329.03 137,329.03

Pyramid Corporation 0.00 0.00 0.00 0.00 1,060.11 0.00

Quicksilver Resources Canada Inc. 0.00 0.00 0.00 0.00 137,929.78 137,929.78

Reality Engine 0.00 0.00 0.00 0.00 441.00 0.00

Receiver General for Canada cio Indian airand Gas Canada

0.00 0.00 0.00 0.00 1,121.27 1,121.27

Santos Inc. 0.00 0.00 0.00 0.00 3,815.95 0.00

Secure Energy Services 0.00 0.00 0.00 0.00 304.92 304.92

Select Communications Inc. DBA Select CallCentre

0.00 0.00 0.00 0 00 180.11 180.11

Shaw Cablesystems 0.00 0 00 0.00 0.00 166.93 166.93

Shock Trauma Air Rescue Society 0 00 0.00 0.00 0.00 300.00 300.00

Silvertip Exploration Services Ltd. 0.00 0.00 0.00 0.00 9,660.00 9,660.00

Silvertip Rentals Inc. 0.00 0.00 0.00 0.00 4,101.30 0.00

Special Areas Board 0.00 0.00 0.00 0.00 1,100.45 1,100.45

Spilak Tank Truck Service Ltd. 0.00 0.00 0.00 0.00 40,979.47 40,979.47

Springburn Oilfield Services Ltd. 0.00 0.00 0.00 0.00 2,093.70 2,093.70

Sprott Resource Corp. - Promissory Note 0.00 0.00 0.00 0.00 500.000 00 0.00

Tarpon Energy Services Ltd. 0.00 0.00 0.00 0.00 702.58 702.58

Throttle Oilfield Services Ltd. 0.00 0.00 0.00 0 00 2,892.75 -204.75

Tourmaline Oil Corp. 0.00 0.00 0.00 0.00 3,616.42 -764.57

Twin Butte Energy Ltd. 0.00 0.00 0.00 0.00 26,162 49 0.00

W.S. Partnership 0.00 0.00 0.00 0.00 272,697.30 56,450.83

Wager, Phyllis - Royalty 0.00 0.00 0.00 0.00 0.00 0.00

Page 4

13

FORM 40 --- Continued

Creditor Name

Secu ed $ Preferred $ Unsecured $

SOA Discrepancies SOA Discrepancies SOA Discrepancies

Wetaskiwin Bulk Sales 0.00 0.00 0.00 0 00 277 20 277.20

Wilco Wireline & Swabbing Services Inc. 0.00 0.00 0.00 0.00 10,039.31 10,039.31

X-Cell Energy Services Ltd. 0.00 0.00 0.00 0.00 7,591.50 7,591.50

Zedi Canada 0 00 0.00 0.00 0.00 30.32 30.32

Total: 0.00 0.00 0.00 0.00 14,458,327.45 12,485,039.23

9. That we are also of the opinion that:

(a) the causes of the insolvency of the debtor are as follows:

As a result of the continued depressed slate of commodity pricing levels, the Company had been unable to satisfy all of

its obligations as they became due Including Its obligations under the Joint Venture Agreement. Consequently, several

of the Company's creditors commenced legal actions against One Earth. As a result, Management was forced to file

the NOI in order to be allowed the opportunity to pursue potential restructuring alternatives for the benefit of all of its

creditors

(b) the conduct of the debtor is subject to censure in the following respects:

N/A

(c) the following facts, mentioned in section 173 of the Act, may be proved against the debtor:

The assets of the bankrupt are not of a value equal to fifty cents on the dollar on the amount of the bankrupt's

unsecured liabilities.

10. That we are further of the opinion that the debtor's proposal is an advantageous one for the creditors, for the following

reasons:

As set out in the Report of Trustee on Proposal to creditors dated March 24, 2016, a copy of which is attached as

Exhibit "E", the proposal provides:

a. Creditors are anticipated to receive a minimum average dividend that Is equal to the best case scenario in

the event of the alternative scenario of a bankruptcy proceeding;b. In the Proposal scenario, Gift Lake Resource is making a significant concession which allows for a greater

distribution to the remaining unsecured creditors and any dispute with respect to the validity and

enforceability of Gift Lake Resources' purported security interest is avoided; and

c. The Proposal will provide for much more expeditious distributions to creditors than would he the case in a

bankruptcy proceeding

11. That we forwarded a copy of this report to the official receiver on this day.

Dated at the City of Calgary in the Province of Alberta, this 14th day of April 2016.

Hardie & Kelly Inc

1 1kfili00 ?rid-Street SWailgary.AB f2110H2Phone: (403) 777-999V Fax: (403) 640-0591

Page 5

Appendix "B"

District of Alberta

Division No. 02 - Calgary

Court No. 25-2054674

Estate No. 25-2054674

Insolvency Date: 24-Mat-2016

Estate Number: 25-2054674

Voting Summary

In the matter of the Proposal of

One Earth Oil & Gas Inc.

of the City of Calgary, in the Province of Alberta

Result of Voting

Total II Dollar Value of Claims Percentage by Votes Percentage by Value Result

Class Votes Yes No Yes No Yes No Yes No By Votes ByValue

28 27 1 1,105,860.47 182,725.73 96.43 3.57 85.82 14,18 App. App.

List of creditors

Class Creditor Name Type Account # $ Admitted fir Voting Voted By Vote

1545965 Alberta Ltd. 0/a Ii 2,498.06 Letter For

Tech Mechanical

876919 Alberta Ltd. o/a West U 1,492.05 Letter For

Country Services

Alltrek Drilling U 182,725,73 Letter Against

Baker Hughes Incorporated U 17,618.10 Letter For

Battle Lake Oilfield Service U 567.00 Letter For

Ltd.Baytex Energy Ltd. U 63,203.23 Letter For

Burcat Welding U 992.16 Letter For

Canadian Oil & Gas U 2,055.02 Letter For

International Inc.

Ceiba Energy Services Inc. U 4,044.60 Proxy For

Cequence Energy Ltd. U 56,200.50 Letter For

CJ-CSM Inspection Ltd. U 6,416.56 Letter For

Clear Environmental U 2,709.00 Letter For

Solutions Division of CES

L.P.

Core Laboratories Canada U 3,383.28 Letter For

Ltd.

Geotir Inc. U 171,014.53 Letter For

Global Steel Ltd. U 18,065.36 Letter For

Global Well Servicing Ltd. U 74,310.61 Letter For

Hymarc Contracting U 20,438.78 Letter For

Intricate Group Inc. U 7,089.98 Letter For

Key Seismic Solutions Ltd. U 24,045.79 Letter For

Lincoln County Oilfield U 370,415.05 Letter For

Services Ltd,

Pyramid Corporation U 1,060.1 1 Letter For

Reality Engine Li 441.00 Letter For

Santos Inc. U 3,815.95 Letter For

14-Apr-20I6Page I / 2

Insolvency Date: 24-Mar-2016

Estate Number: 25-2054674

List of creditors

Class Creditor Name Type Account II S Admitted for Voting Voted By Vote

Silvcrtip Rentals Inc. U 4,101.30 Letter For

Throttle Oilfield Services Ltd. U 3,097.50 Letter For

Tourmaline Oil Corp. U 4380.99 Letter For

Twin Butte Energy Ltd. U 26,162.49 Letter For

W.S. Partnership U 216,241.47 Letter For

I4-Apr-2016Page 2 / 2

ProsperPETROLEUM LTD

MARCH 11, 2016

ONE EARTH OIL AND GAS INC.300, 600 6th Avenue SWCalgary, ABT2P 0S5

This is Exhibit "---" referred to

in the Affidavit of

Sworn befor e this

Day of A.D.20 IC0

A Notary Public - Colrrrrtissioner for Oathsin and for the Province of Alberta

ATTENTION: PETE SAMETZ PETER S. JULL Q.G.Barrister and Solicitor

Dear Mr. SAMETZ

RE: OFFER TO PURCHASE 50% OF ONE EARTH'S INTERESTS IN THESETTLEMENT JV LANDS AND NON-SETTLEMENT JV LANDSAS OUTLINED IN ATTACHED SCHEDULES A AND B HERETOAND IN THE ONE EARTH - MURPHY PSAGIFT LAKE AREA ALBERTA

Prosper Petroleum Ltd. (the "Purchaser") hereby offers to purchase from One Earth Oil and GasInc. ("Vendor"), subject to the terms and conditions herein contained, 50% of the Vendor'sinterests in the leases, lands and wells in the area described on Schedule "A" and "B" hereto(hereinafter referred to as the "Interests", "Leases", "Lands" and "Well(s)" respectively, andcollectively as the "Assets") including all related equipment, facilities, contracts, permits, surfacerights and pipelines as of the Effective Date.

1. Purchase Price

The full purchase price shall be eight hundred seven-five thousand Dollars ($875, 000.00) inCanadian funds (the "Purchase Price"). There may be two payments comprised of thefollowing:

i) Initial payment of $600,000,00 at time of closing; andii) a second payment of $275,000.00 on the 31' day of WTI (NYMEX)

prices averaging $53 USD for 30 consecutive days providing that thispricing occurs before March 31,2017, If the WTI price threshold of $53USD for 30 consecutive days does not occur, this second paymentbecomes null and void; and

iii) if the price marker (ii above) is achieved before March 31, 2017 thenProsper may elect to pay the $275, 000 amount any time prior to March31, 2018. Any payment due after March 31, 2017 will accrue interest onall unpaid balances at Royal Bank of Canada prime rate plus 2%.

2. Interest on Purchase Price

There shall be no interest on the Purchase Price between the Effective Date and the ClosingDate.

1810, 500 - 4th Avenue SW, Calgary, AB T2P 2V6 • Phone: (403) 532-7655 • Fax: (403) 532-7644

3. Allocation of Purchase Price

The Purchase Price for the Assets shall be allocated as follows or adjusted proportionately ifthe second payment is not made:

Tangibles 160,000.00Miscellaneous Interests 1.00Petroleum & Natural Gas Rights $ 714,999.00Total $13.25—Q,0114

4. Encumbrances

The Vendor's interests in the Assets shall be unencumbered except for the applicable Crownroyalty, Metis Royalties and any other encumbrances set out in Schedule "A" and Schedule"B" attached hereto.

5. Operatorship and Working Interests

On the Effective Date of this Purchase, Prosper will be the Operator of all the Assets.Prosper's Working Interest will be 57.5% outside the Settlement Lands and 31.25% inside theSettlement Lands.

6. Effective Date

The transaction contemplated by this offer shall be effective after court approval of theproposal to be presented to the One Earth Creditors which approval is expected to be

received by May 1, 2016.(the "Effective Date"). The Vendor and the Purchaser shall adjust

and apportion costs, obligations, expenses, revenues, income and benefits of every kind andnature incurred, payable, paid, receivable or received with respect to the Assets, as of the

Effective Date, in accordance with generally accepted accounting principles.

7. Closing

The closing of the transaction contemplated by this offer shall be held within30 days of theEffective Date or as mutually agreeable to the Purchaser and the Vendor.

8. Closing Conditions

Upon acceptance of this offer by the Vendor, the obligation of the Purchaser to close and

complete the purchase of the Assets is subject to the following conditions which are inserted

for the sole benefit of the Purchaser and which may be waived in whole or in part by the

Purchaser prior to the Closing Date:

a) the Purchaser shall have consulted favourably with the Gift Lake Metis Settlement;

b) the Purchaser shall have received a satisfactory title opinion from its legal counsel;

c) any consents, rights of first refusal or other restrictions on the transfer, sale or assignment of

the Assets shall have been waived or complied with;

2

d) the Purchaser shall have had the opportunity to review, and shall be satisfied with, allagreements relating to the Assets;

e) the Purchaser shall have had the opportunity to conduct an environmental audit orenvironmental inspection of the Assets and upon completion of same shall be satisfied that itwishes to proceed with the purchase;

f) the Purchaser shall have received releases and registrable discharges from all parties holdingsecurity interests in the Assets;

g) there shall he no claims or proceedings threatened or pending involving the Vendor inconnection with the Assets which claims or proceedings in the aggregate would, in theopinion of the Purchaser, have a material adverse effect on the Assets:

h) the Assets shall not be subject to any contracts for the sale of petroleum substances otherthan as set forth in Schedule "A" and Schedule "B" ; and

i) the Purchaser having obtained approval from its Board of Directors to proceed with thistransaction.

9. Formal Agreement

This offer is subject to the Vendor and the Purchaser entering into a mutually acceptablepurchase and sale agreement embodying the terms of this offer. If this offer is accepted, theVendor will prepare a more comprehensive agreement containing such representations andwarranties by the Vendor and the Purchaser as are normally provided for agreements relatingto purchases and sales of this nature.

This Agreement is the only Agreement between the Parties regarding these Matters and itreplaces the earlier Agreement dated September 25, 2015, which Agreement is now null andvoid.

10. Purchaser's Review

During the period prior to closing and completion of the purchase, the Vendor shall providethe Purchaser with access to all books, records and files of the Vendor relating to the Assetsin order for the Purchaser and its representatives to review all mattes which it may considerrelevant in relation to the purchase of the Assets.

1 1 . Commitments by Vendor

During the period from the date of acceptance of this offer until the Closing Date, theVendor shall not enter into any agreements, or amend any existing agreements relating to theAssets, and shall not commit to make any expenditure in relation thereto, nor shall it enterinto any agreements relating to the sale of production therefrom, save and except for suchagreements and expenditures as are in the normal course of business. The Vendor shall befree to dispose of any petroleum substances produced prior to the Closing Date and suchproduction shall be adjusted in accordance with Clause 5 hereof. An agreement for the saleof all of the shares of the Vendor is contemplated.

12. Confidentiality

There shall be no public release of information of any kind by the Vendor or the Purchaserwith respect to this transaction unless mutually approved.

This offer is open for acceptance by the Vendor until 2 P.M. MST March 21, 2016.

If you are prepared to accept this offer, please so indicate by signing in the space providedbelow and returning one copy to the writer's attention.

/Brad GamerPresident and Chief Executive Officer

Accepted and agreed to this CIA- day of 2016.

ONE EA IL AND GAS INC

per:

Title:

This the execution page to an Offer To Purchase Letter Dated March 11, 2016Between Prosper Petroleum Ltd. And One Earth Oil and Gas Inc.

4

This space intentionally left blank

SCHEDULE 'A'

THIS IS SCHEDULE 'A' ATTACHED TO AND FORMING A PART OF ANOFFER TO PURCHASE DATED THE 11TH DAY OF MARCH 2016 BETWEENPROSPER PETROLEUM LTD. AND ONE EARTH OIL AND GAS INC.

Assets contained within the blue shaded sections and portions of sections on the attached Plat.

5

Li

SCHEDULE 'B'

THIS IS SCHEDULE 'B' ATTACHED TO AND FORMING A PART OF ANOFFER TO PURCHASE DATED THE 11" DAY OF MARCH 2016 BETWEEN

PROSPER PETROLEUM LTD. AND ONE EARTH OIL AND GAS INC.

Assets contained within the green and red shaded sections and portions of sections on the attached Plat.

6

RU M3

. . -

/-*---

-- -' - -- *---f----- - -----'- ~' ---- —' '

.

1~

Tm

Tm

Ril

Vro

[~|

•

March 24. 201 6

One Earth OH & Gas Inc.320, 600 - 6th Ave SWCalgary Alberta T2P 0S5

Dear Sirs:

This is Exhibit " " referred toin the Affidavit of

ffiet 0,1 Sworn befo e this a(Day of __ILL-- 6371.0 0 1

A Notary Public - Commiss r Oathsin and for the Province of Alberta

PETER S. JULL Q.C.Barrister and Solicitor

Sayer Energy Advisors ("Sayer", "we", "us" and "our") understands that One Earth Oil & Gas Inc.

("One Earth" or the "Company") intends to make a proposal to its creditors as per a Notice of

Intention to Make a Proposal under subsection 50.4 (1) of the Bankruptcy and Insolvency Act

dated'November 5, 2015 (the "Proposal"). As part of the Proposal, One Earth intends to carry

out a transaction with Prosper Petroleum Ltd. ("Prosper") whereby Prosper shall purchase a

50% working interest in One Earth's Chipmunk property (the "Transaction") and the proceeds

from the Transaction will be paid to the creditors of One Earth. The above description is

summary in nature. The Transaction and the disbursement of proceeds will be more clearly

defined in the Proposal to be sent out by One Earth and Hardie & Kelly Inc. (the ''Trustee"). The

remaining 50% working interest of the Chipmunk property and the other assets of One Earth

shall remain in the Company. The Prosper offer for a 50% working interest would value 100% of

the Chipmunk Property at a range of $1.2 million to $1.75 million. Based on the current

attributes of the Chipmunk property, the Prosper offer is fair, from a financial point of view, to the

creditors of One Earth. The remaining oil and natural gas properties and other assets held by

One Earth have only a nominal value at the current time.

To assist One Earth in considering the terms of the Proposal and Transaction, One Earth

engaged Sayer to provide an opinion on the fairness of the Proposal and the Transaction (the

"Opinion") to the creditors of One Earth.

Engagement of Sayer

Sayer was engaged pursuant to an agreement dated March 7, 2016 (the "Engagement

Contract") to review and consider the terms of the Proposal and Transaction and if appropriate,

to deliver an opinion as to the fairness, from a financial point of view, of the Proposal and

Transaction to the creditors of One Earth.

Pursuant to the terms of the Engagement Contract, we have not been engaged to prepare (and

have not prepared) a formal valuation or appraisal of One Earth or of any of the assets, liabilities

or securities of One Earth, and this Opinion should not be construed as such. Sayer was

similarly not engaged to review any legal, tax or accounting aspects of the Proposal and

Transaction and has assumed for the purposes of this Opinion that the Proposal and

Transaction complies with applicable laws and accounting rules and does not result in any

adverse lax consequences to the creditors of One Earth. However, Sayer has performed

research, linancial analyses and testing of assumptions that it considered to be appropriate and

necessary in the circumstances to support the conclusions reached in this Opinion.

The Engagement Contract provides that One Earth will pay Sayer a fee upon the delivery of the

Opinion, regardless of whether the Proposal and Transaction are completed. In addition, the

C,20, 140 ;tit twProit• ..0

I ;

One Earth Oil & Gas Inc. March 24'2O16Page

Engagement Contract provides for the reimbursement o<oot-of-pouket expenses incurred by

Sayer in respect to the ,;uwicea performed as part of dv*enQaQamOnt. Tha too received by

Sayer |n connection with the Engagement Contract is. not material to Sayer, One Eod|/ has

agreed to indemnify Sayer from and against certain liabilities arising out o[the performance of

professional services rendered by Sayer and its personnel Linder the Engagement Contract.

Our Opinion may be relied upon by One Earth for the purposes of considering the Proposal and

Troouuc1ion, and, except ao described below, may not boPublished, reproduced, disseminated,

quoted from or referred to in whole or in part, or be used or relied upon by any other person, or

for any other pu/pone, without our express prior written consent. Sayer consents to the

reproduction of the Opinion, and 10 the inclusion of references thereto and description thereof, in

the Proposal,

Qualifications of Sayer

Sayer |nu specialized corporate advisory firm that provides capital market and advisory services

for oil and nekuud gas companies, oilfield service oompan|eo, governments and financial

institutions aomoo Canada and for foreign entities, These services include corporate advisory

services in the areas of mer0ene, acquisitions and d(voo1itu/on, independent raaeexch,

valuations and fairness opinions for clients. Sayer arid its principals have prepared numerous

(oirnaoo opinions and have participated in o significant number of transactions involving private

and publicly traded oil arid natural gas companies.

The opinion expressed herein is the opinion of Sayer and the form and content hereof has been

approved for release by u group of professionals of Sayer, each of whom is experienced in

maqJer, acquisition, divnathure, valuation and fairness opinion matters. However, this Opinion

is that of Sayer arid not of any of the individuals involved in the preparation of the Opinion.

Independence ofSayer

Sayer is not an inuide,, associate or affiliate (am those |ennx ansdeUned in the Securities Act

(Alberta)) of One Eorth, or any of its respective ue000iu\es or affiliates ("Interested Party").

Sayer is not acting as an advisor to One EorU`, or any of its associates or a({iUoAox, in

connection with any mo0ter, other than purnuant10 the Engagement Contract as outlined above,

Sayer, in the 24 months prior to this engagement, Sayer has not been engaged by the

Interested Party to provide advisory services or to act as agent or underwriter other than as set

forth herein, Sayer does not have interests in any of the securities o(the Interested Party orany

of its affiliated entities as such term is defined Linder Multilateral Instrument 61-101 ''Pu8eoUon

o| Minority Ganurityho|&aruin Special Tusnaachons."

01he/ than the Engagement Conknac1, then* are no undemtamdinQa, agreements or

commitments between Sayer and the hn<anauted Party, with respect to any future business

deaUngo. Sayer may. in the normal oounao of buoineoo, provide advisory services to the

Interested Party or its successors in the future.

Scope of Review Conducted by Sayer

Gayer has only acted as the hnaDosd advisor to One Earth with respect to the

Transaction. In this context, and for the purpose of preparing this Opinion, we have analyzed

publicly available and confidential financial, operational and other information relating to One

~ o2^ w.` 5x*=ou~~mc c,I'd^,xxu i./a, |~pow~'~~o^ ^xp~o~,wo/

One Earth Oil & Gas Inc. March 24,2U1GPage

Earth, including information derived from meetings and discussions with the management of

One Earth. Except as expressly described heroin. Sayer has not conducted any independent

investigations tn verity the accuracy and completeness of such information.

|n carrying out this engagement and arriving at our Opinion, mmhave reviewed and relied upon,

among other things:

A) As pertaining to One Earth:

1) the report of the Trustee dated March 24, 2016;

0 the comparative unaudited financial statements of One Earth for the year

ended December 31 2015~

' '

iii) the tax pools of One Earth aaad December 3i.2D15;

iv) the Proposal;

v) the Prosper offer to purchase dated March 11.2O1G;

vi) the One Earth presentation dated February 2O18;

vii) the Notice cd Intention to Make e Proposal dated November 16.2O1S;

vi|i) the Application re: Extension of Time and Administration Charge dated

November 25,20|O;

jx) the affidavits of P. 8ametz dated November 25, 2U15. January 7. 2016'February 22, 2016 and March 7, 2016;

the Order re: Extension ofThnodated November 3O.2O15i January 11,

2016. February 24 2UiG and March Q.2O1G;

A) the First, Second, Third and Fourth Report of Trustee dated November

25, 2015. January 7, 2016, February 23' 2016 and March 7. 2018

xiO iho Licensee Liability Rating o/ One Earth's operated assets )n Alberta aa

of March 5, 2016;

All) the report of McDaniel & Associates Consultants Ltd., independent

engineering consultants of Ca|Oary. Alberta, regarding One Earth's oil,

natural gas liquids and natural gas reoanea and the estimated future

cash flows from such reserves effective October 1.2O14;

xiv) representations contained in certificates addressed to us, dated as of the

date heneoi, from a senior officer aa10 the completeness and accuracy o[

the information upon which our Opinion iobased;

I uzo wn *II ovnwrm« ca| pry, ap Caouu' ̀ /numo

One Earth Oil & Gas Inc. March 24, 2016Page 4

xv) certain non-public information regarding One Earth, its business and

projects, including financial and operational projections of Ono Earth as

provided by One Earth management:

xvi) other Information relating to the operations of One Earth including, but not

limited to, lease operating statements and production information, such

information having been provided by One Earth; and

xvii) discussions with a senior ()Ulcer of One Earth with regard to, among other

things, the past and future operations of One Earth, One Earth's

competitive position in the market, its prospects, the information referred

to above and other issues deemed relevant.

B) In addition to the information detailed above, Sayer has further reviewed,

considered and relied upon, among other things, publicly available information

from sources such as the System for Electronic Document Analysis and Retrieval

(SEDAR) of the Canadian Securities Administrators and the TMX Group arid

certain confidential information possessed by Sayer with respect to recent

transactions involving the sale of oil and natural gas companies and properties of

a comparable nature and considered to be relevant by Sayer in the

circumstances.

We also conducted such other analyses, investigations, research and testing of assumptions as

were deemed by us to be appropriate or necessary In the circumstances. One Earth granted us

access to their management groups and consultants and, to our knowledge, we were not denied

any information we requested. In addition, no information of a material nature has been brought

to our attention that has not been considered in the preparation of this Opinion.

Sayer did not meet with the accountants of One Earth or anyone on the audit committee of One

Earth and has assumed the accuracy and fair presentation of the financial statements of One

Earth that comprise part of the Proposal. In addition, Sayer did not meet with the independent

reserve engineers of One Earth and has assumed the accuracy of fair presentation of the

reserve reports of One Earth.

One Earth Properties

The descriptions of the properties of One Earth described below have been provided to Sayer

by representatives of One Earth and Sayer has relied upon such descriptions without

independent verification or investigation and has assumed the accuracy of such information.

Chipmunk

One Earth holds a 65% working interest in a total of 76.75 sections of land and a 37.5% working

interest in 16 sections of land in Townships 80.82, Ranges 1 I -14W5 In the Chipmunk area of

Alberta. Some of the lands are on the Gift Lake Melis Settlement (the "Settlement') but currently

all of the production is off of the Settlement. During the three months ended December 31, 2015

the net operating income from the Chipmunk property averaged $9,511 on production of

approximately 80 barrels of oil per day. Production from the Chipmunk area in December 2015

averaged approximately 64 bblid but had a negative net operating income of $9,982. It is our

understanding that production associated with the property was recently shut-in as 11 had

become uneconomical to produce.

• k P. • Y. v. : • 1:! • • ; fl

• 1. • !*: ; t••I :: •1•'• • : -nr .‘

One Earth Oil & Gas Inc. March 24. 2016

Page 5

Gift Lake

One Earth has a 50% working interest in a total of 44.5 sections of land (which include the

Bluesky mineral rights) in the Gift Lake area of Alberta with proriuclion of approximately 17

barrels of oil per clay in December 2015. The net operating income from the properly during

December 2015 was $1,440. It is our understanding that production associated with the

property was recently shut-in as it had become uneconomical to produce.

Other Minor• Progenies

One Earth has non-producing properties located in the Carruthers area of Saskatchewan and in

the Chigwell, Taber, Parkland and Pembina areas of Alberta. There are a total of five non-

producing wells, of which one well in the Taber area Is operated. The only outstanding liability

that remains on the well at Taber is a surlace reclamation.

Assumptions and Limitations

We have assumed and relied upon but, with One Earth's acknowledgement and in accordance

with the terms of our engagement, have not independently verified the accuracy, completeness

and fair representation of any of the data, advice, opinions, materials, information,

representations, reports and discussion (collectively, the "Information") referred to above and

this Opinion is conditional upon such accuracy, completeness and lair representation. Our

assumptions, the procedures we adopted and tho conclusions and opinions reached by us are

dependent, in part, upon all such lads and Information. With respect to operating and financial

forecasts and budgets provided to us and relied upon in our analysis, we have assumed that

they have been reasonably prepared on bases reflecting the most reasonable assumptions,

estimates and judgments of One Earth, as appropriate, having regard to the plans, financial

condition and prospects of One Earth, as the case may be. In addition, a senior officer of One

Earth has made representations to us in certificates dated as of the date hereof that, among

other things, the Information provided to us on behalf of One Earth, Is complete and correct as

at the date the Information was provided to us acrd that, since the date of the Information, there

has been no material change, financial or otherwise, In the position of One Earth, and there has

been no change in any material fact which is of a nature as lo render the Information untrue or

misleading in any material respect. In addition, Sayer has also assumed the accuracy and

completeness of all documents and inlormation referred to herein relating to Prosper.

We believe that the analyses and factors considered in arriving at our Opinion must be

considered as a whole and are not necessarily amenable to partial analysis or summary

description. Selecting podiums of the analyses and the factors we considered, without

considering all factors and analyses together, could create a misleading view of the process

underlying the Opinion that we employed and the conclusions we reached in the Opinion.

Accordingly, this Opinion should be read in its entirety. In arriving at our opinion, in addition to

the facts and conclusions COalilled in the Inlormatioe, we have assumed, among other things,

the legality, validity and efficacy of the procedures being lollowed to implement the Proposal

and Transaction and we express no opinion on such procedures.

We have, with respect to all accounting, legal and lax matters relating to the Proposal and the

Transaction and the implementation thereof, relied on advice of accounting advisors and legal

and tax counsel to One Earth, including with respect to information disclosed in the Proposal,

and express no opinion thereon. The Proposal and Transaction are subject to a number of

conditions outside the control of One Earth and we have assumed all conditions precedent to

! 5:;:ri, '3111 .5tli ikv.11113,- y. !)1' OM)

f :) F .!,)67

1

One Earth Oil & Gas Inc. March 24, 2016Page 6

the completion of the Proposal and Transaction can be satisfied in due course and all consents,

permissions, exemptions or orders of relevant regulatory authorities will be obtained, without

adverse conditions or qualifications. In rendering this Opinion, we express no view as to the

likelihood that the conditions respecting the Proposal and Transaction will be satisfied or waived

or that the Transaction will be implemented within the time frame indicated in the Proposal.

I n our analysis in connection with the preparation of the Opinion, we made numerous

assumptions which we believe to be reasonable with respect to the industry performance,

general business and economic conditions and other matters, many of which are beyond the

control of Sayer or One Earth. Sayer's conclusion as to the fairness, from a financial point of

view, of the consideration to be received by the creditors of One Earth in connection with the

Proposal and Transaction is based on its review of the Proposal taken as a whole, rather than

on any particular element of the Proposal. Further, Sayer considered the Proposal from the

perspective of all creditors generally and did not consider the specific circumstances of any

particular creditor.

The Opinion is rendered as of March 24, 2016 on the basis of securities markets, economic and

general business and financial conditions prevailing on that date and the condition and

prospects, financial and otherwise, of One Earth as they were reflected in the Information

provided to Sayer and as they were represented to Sayer in its discussions with a senior officer

of One Earth. Any changes therein may affect the Opinion and, although Sayer reserves the

right to change or withdraw the Opinion in such event, it disclaims any undertaking or obligation

to advise any person of any such change that may come to its attention, or to update the

Opinion after the date hereof.

While in the opinion of Sayer the assumptions used in preparing this Opinion are appropriate in

the circumstances, some or all of these assumptions may prove to be incorrect, which could

cause the Opinion given hereunder to change. This Opinion is given in accordance with and

subject to the terms and conditions of the Engagement Contract.

Conclusion

Based upon our analysis and subject to all of the foregoing assumptions and limitations and

such other matters as we have considered relevant, we are of the opinion that the Proposal and

Transaction are fair, from a financial point of view, to the creditors of One Earth.

Yours truly,

Sayer Energy Advisors

l!,111 AN 1 .2PC/1'412

r”...4Cri f +l0.3 4y4c.,st..!;;,v4:44)0,,ficmr...: 71