WESTBRIDGE ENERGY CORPORATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Expressed in Canadian dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

NOTICE TO READER Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying un-audited interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

Vancouver, Canada November 28, 2013

3

WESTBRIDGE ENERGY CORPORATION CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited, prepared by management and expressed in Canadian Dollars)

As at September 30, As at December 2013 31, 2012 ASSETS Current Cash and cash equivalents Receivables Prepaid expenses Total Current Assets

$

Non-Current Assets Exploration and evaluation assets (Note 6) Performance bond Total Non-Current Assets

570,358 $ 20,057 13,605 604,020

2,428,436 19,941 60,792 2,509,169

7,220,139 201,480 7,421,619

5,861,006 5,861,006

TOTAL ASSETS

$

8,025,639 $

8,370,175

LIABILITIES Current liabilities Accounts payable and accrued liabilities

$

98,819 $

160,111

Non-Current liabilities Decommissioning provision (Note 5) TOTAL LIABILITIES

11,493 110,312

SHAREHOLDERS' EQUITY Capital stock (Note 8) Currency translation adjustment Contributed surplus Deficit TOTAL SHAREHOLDER'S EQUITY TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY

23,700,168 23,200,168 (626) (626) 2,526,134 2,106,608 (18,310,349) (17,107,579) 7,915,327 8,198,571 $ 8,025,639 $ 8,370,175

Basis of operations and going concern (Note 2 ) Subsequent Events (Note 11) Approved on behalf of the Board: “Peter Henry”

Director

“Paul Larkin”

Director

See accompanying notes to the consolidated financial statements. 4

11,493 171,604

WESTBRIDGE ENERGY CORPORATION CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE LOSS (Unaudited, prepared by management and expressed in Canadian Dollars)

For the Three Months Ended September 30 2013 2012 REVENUE Oil and gas revenues, net of royalties

$

DIRECT COSTS Operating expenses

10,605 $

13,374 $

For the Nine Months Ended September 30 2013 2012 37,799 $

43,335

2,723

2,815

8,301

9,036

EXPENSES Conferences and seminars Consulting and administration fees Investor relations Management fees Office and miscellaneous Professional fees Project generation Stock-based compensation (Note 8) Transfer agent and regulatory fees Travel and business development Total Expenses

130,147 22,741 19,500 13,360 9,503 15,199 5,426 1,793 16,669 (234,338)

1,638 43,696 10,417 66,107 22,768 17,047 665,790 6,461 156,330 (990,254)

5,733 356,207 120,861 175,943 49,490 28,660 36,949 419,526 15,350 84,614 (1,293,333)

1,638 141,806 10,417 190,976 40,727 73,384 1,261,790 27,179 205,473 (1,953,390)

Loss from operations

(226,456)

(979,695)

(1,263,835)

(1,919,091)

(2,592) 960 (1,632)

(18,331) 4,503 (13,828)

55,642 5,423 61,065

(8,278) 16,606 8,328

Foreign exchange gain (loss) Interest income Loss for the period Currency translation adjustment Comprehensive loss for the period

$

(228,088) (228,088) $

Basic And Diluted Loss Per Share Outstanding, Continuing Operations

$

(0.00) $

Weighted Average Number Of Shares Outstanding

84,479,253

(993,523) (1,202,770) (1,910,763) (993,523) $ (1,202,770) $ (1,910,763) (0.01) $ 78,392,296

(0.01) $ 81,182,550

See accompanying notes to the consolidated financial statements.

5

(0.04) 53,576,345

WESTBRIDGE ENERGY CORPORATION CONDENSED INTERIM STATEMENT OF CASH FLOWS (Unaudited, prepared by management and expressed in Canadian Dollars) For the Nine Months Ended September 30 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES Loss for the period Items not affecting cash: Stock-based compensation

$

Changes in non-cash working capital items: (Increase) decrease in receivables (Increase) decrease in prepaids Increase (decrease) in accounts payable and accrued liabilities Cash used in operating activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of capital stock Share issue costs Cash provided by financing activities

(1,202,770) $

(1,910,763)

419,526

1,261,790

(116) 47,187

(13,606) (94,008)

(148,809) (884,982)

138,688 (617,899)

-

CASH FLOWS FROM INVESTING ACTIVITIES Asset acquisition Performance bond Cash used in investing activities Change in cash and cash equivalents during the period Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the period

$

5,186,750 (132,925) 5,053,825

(771,616) (201,480) (973,096)

(3,111,006) (3,111,006)

(1,858,078) 2,428,436 570,358 $

1,324,920 1,371,714 2,696,634

Supplementary information: Exploration and evaluation costs included in accounts payable and accrued liabilities Share issued as finder's fee on asset acquisition Shares issued for asset acquisition

$

87,517 500,000

$

250,000 2,500,000

Breakdown of cash and cash equivalents: Cash Term deposit

$

553,108 $ 17,250 570,358 $

2,662,134 34,500 2,696,634

$

See accompanying notes to the consolidated financial statements. 6

WESTBRIDGE ENERGY CORPORATION CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Unaudited, prepared by management and expressed in Canadian Dollars)

Date Balance, December 31, 2011 Private placement financing, net of issuance costs Private placement finders' fee Asset acquisition Asset acquisition finder's fee Share purchase warrants exercised Stock-based compensation Net loss and comprehensive loss for the period Balance, September 30, 2012 Balance, December 31, 2012 Share issuance obligation - asset acquisition Stock-based compensation Net loss and comprehensive loss for the period Balance, September 30, 2013

Contributed Surplus 740,004 -

No. of Shares Capital Stock 40,286,453 15,396,343 16,000,000 3,693,125 692,800 173,200 10,000,000 2,500,000 1,000,000 250,000 11,500,000 1,187,500 79,479,253 $ 23,200,168 $ 79,479,253

23,200,168 500,000 79,479,253 $ 23,700,168 $

1,261,790 2,001,794

Currency Translation Adjustment (11,087) $ (11,087) $

2,106,608

(626)

419,526 2,526,134 $

(626) $

See accompanying notes to the consolidated financial statements. 6

Deficit Total Equity (14,772,647) 1,352,613 3,693,125 173,200 2,500,000 250,000 1,187,500 1,261,790 (1,910,763) (1,910,763) (16,683,410) $ 8,507,465 (17,107,579)

8,198,571 500,000 419,526 (1,202,770) (1,202,770) (18,310,349) $ 7,915,327

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

1.

CORPORATE INFORMATION

Westbridge Energy Corporation (the “Company”) is incorporated under the laws of British Columbia and its principal business activity is the acquisition and development of oil and gas properties. The Company was incorporated on February 9, 1956. The Company is listed on the TSX Venture Exchange (“TSX-V”), under the symbol WEB, as a Tier 2 oil and gas issuer. The address of the Company’s corporate office and principal place of business is # 530 - 625 Howe Street, Vancouver, British Columbia, V6C 2T6.

2.

BASIS OF OPERATIONS AND GOING CONCERN

(a)

Statement of Compliance

These condensed interim consolidated financial statements of the Company for the nine months ended September 30, 2013 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), having previously prepared its financial statements in accordance with pre-changeover Canadian Generally Accepted Accounting Principles (“pre-changeover Canadian GAAP”). These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” (“IAS 34”). Accordingly, these condensed interim consolidated financial statements follow the same accounting principles and methods of application as the annual consolidated financial statements for the year ended December 31, 2012 but may condense or omit certain disclosures that otherwise would be present in annual financial statements prepared in accordance with IFRS. These financial statements should therefore be read in conjunction with the December 31, 2012 financial statements. Results for the period ended September 30, 2013, are not necessarily indicative of future results. These unaudited condensed consolidated financial statements were authorized for issue by the Board of Directors on November 28, 2013. (b)

Basis of Presentation and Measurement

These condensed consolidated financial statements of the Company and its wholly-owned subsidiaries are prepared in accordance with IFRS (see Note 2 (a)) and include the accounts of the Company. These condensed consolidated financial statements are presented in Canadian dollars. The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

7

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

2.

BASIS OF OPERATIONS AND GOING CONCERN (cont’d…)

(c)

Going Concern

These condensed consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its current obligations and continue its operations over the next twelve months. At September 30, 2013, the Company had not yet achieved profitable operations and expects to incur further losses in the development of its business, but had a working capital surplus of $505,201. The Company will require additional financing in order to meet its long term funding requirements. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to do so in the future. Accordingly, these financial statements do not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern. These material uncertainties may cast significant doubt about the Company’s ability to continue as a going concern.

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Principles of consolidation

These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Kayuco Universal Ltd. (“Kayuco”), a company incorporated in the British Virgin Islands, and Portrush Petroleum USA, a company incorporated in the USA, from the date control was acquired. All significant inter-company transactions and balances have been eliminated on consolidation. (b)

Exploration and evaluation assets

Exploration and evaluation expenditures include costs associated with the acquisition of a license interest, directly attributable general and administrative costs, expenditures incurred in the process of determining oil and gas exploration targets, and exploration drilling costs. All exploration expenditures are capitalized on a license-by-license basis within intangible exploration and evaluation assets. Costs are held un-depleted until such time as the exploration phases on the license area are complete or commercially viable reserves have been discovered and extraction of those reserves is determined to be technically feasible. If commercial reserves are established and technical feasibility for extraction demonstrated, then the related capitalized intangible exploration costs are transferred into a single field cost center within “oil and gas interests” subsequent to determining that the assets are not impaired (see “Impairment” below). Where results of exploration drilling indicate the presence of hydrocarbons which are ultimately not considered commercially viable, all related costs are recognized in the statement of loss and comprehensive loss.

8

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(b)

Exploration and evaluation assets (cont’d…)

Net proceeds from any disposal of an intangible exploration and evaluation asset are initially credited against the previously capitalized costs. Any surplus proceeds are recorded as a gain in the statement of loss and comprehensive loss. Costs incurred prior to obtaining the legal rights to explore an area are recognized in the statement of loss and comprehensive loss as incurred. (c)

Cash and Cash equivalents

Cash and cash equivalents include cash on hand, deposits held and other short-term highly liquid investments with original maturities of three months or less from the date of purchase. (d)

Property and equipment

All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons has been demonstrated are capitalized within “property and equipment” on a field-by-field basis. Subsequent expenditures are capitalized only where it either enhances the economic benefits of the development/producing asset or replaces part of the existing development/producing asset. Any remaining costs associated with the part replaced are expensed in the statement of loss and comprehensive loss. Net proceeds from any disposal of “property and equipment” are credited against the previously capitalized cost. A gain or loss on disposal is recognized in the statement of loss and comprehensive loss to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalized costs of the asset. The net carrying value of “property and equipment” are depleted on a field-by-field basis using the unit of production method by reference to the ratio of production in the year to the related proven and probable reserves, taking into account estimated future development costs necessary to bring those reserves into production. Proven and probable reserves are estimated using independent reserve engineer reports and represent the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible.

9

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(d)

Property and equipment (cont’d…)

Such reserves are considered commercially producible if management has the intention of developing and producing them and such intention is based upon:

(e)



a reasonable assessment of the future economics of such production;



a reasonable expectation that there is a market for all or substantially all the expected oil and natural gas production; and



evidence that the necessary production, transmission and transportation facilities are available or can be made available. Impairment of long-lived assets

At the end of each reporting period, the Company’s assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cashgenerating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss. (f)

Decommissioning Provisions

The Company recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of oil and gas interests, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future rehabilitation cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to the production assets along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.

10

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(f)

Decommissioning Provisions (cont’d…)

The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to oil and gas interests with a corresponding entry to the rehabilitation provision. The Company’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates. Changes in the net present value, excluding changes in the Company’s estimates of reclamation costs, are charged to profit and loss for the period. (g)

Income taxes

Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination or items recognized directly in equity or in other comprehensive loss/income. Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date. Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for taxable temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting not taxable profit or loss. Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. (h)

Stock-based compensation

The Company uses the fair value-based method for stock-based compensation and therefore all awards to employees will be recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock.

11

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(h)

Stock-based compensation (cont’d…)

Stock-based compensation arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity settled share based payment transactions and measured at the fair value of goods or services received. If the fair value of the goods or services received cannot be estimated reliably, the share based payment transaction is measured at the fair value of the equity instruments granted. (i)

Capital stock

Proceeds from the exercise of stock options and warrants are recorded as capital stock at the amount for which the stock option and warrant enabled the holder to purchase shares of the Company. Capital stock issued for non-monetary consideration is recorded at fair value based on the quoted market price on the date of issuance. Share issue costs, which include commissions and professional and regulatory fees are charged directly to capital stock. (j)

Basic and diluted loss per share

The Company computes the dilutive effect of options, warrants and similar instruments. The dilutive effect on loss per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average market price during the year. Basic loss per share is calculated using the weighted-average number of common shares outstanding during the year. This calculation proved to be anti-dilutive for the years presented. (k)

Foreign currency translation

The functional currency of the parent company and Kayuco is the Canadian dollar and the functional currency of Portrush Petroleum USA (“Portrush”) is the US dollar. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate in effect at the date of the statement of financial position. Non-monetary assets and liabilities, expenses and other income arising from foreign currency transactions are translated at the exchange rate in effect at the date of the transaction except for Portrush which translates nonmonetary assets at the exchange rate at period end. Exchange gains or losses in the parent company arising from the translation are included in profit and loss for the year. Exchange gains and losses in Portrush are recognized in other comprehensive loss and accumulate as a separate component of equity. (l)

Revenues

Revenue from oil and gas properties is recognized when oil and natural gas are shipped, title passes and collection of the sale is reasonably assured. 12

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(m)

Financial instruments

Financial assets The Company classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Company's accounting policy for each category is as follows: Fair value through profit or loss - This category comprises derivatives, or assets acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in the statement of loss and comprehensive loss. Loans and receivables - These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at cost less any provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. Held-to-maturity investments - These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company's management has the positive intention and ability to hold to maturity. These assets are measured at amortized cost using the effective interest method. If there is objective evidence that the investment is impaired, determined by reference to external credit ratings and other relevant indicators, the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses, are recognized in the statement of loss and comprehensive loss. All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described above. Financial liabilities The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the asset was acquired. The Company's accounting policy for each category is as follows:

13

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

(m)

Financial instruments (cont’d...)

Financial liabilities (cont’d…) Fair value through profit or loss - This category comprises derivatives, or liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in the statement of loss and comprehensive loss. Other financial liabilities: This category includes amounts due to related parties and accounts payables and accrued liabilities, all of which are recognized at amortized cost. The Company has classified its cash and cash equivalents as fair value through profit and loss. The Company’s receivables are classified as loans and receivables. The Company’s accounts payable and accrued liabilities are classified as other financial liabilities. (m)

Future accounting policies:

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective and determined that the following may have an impact on the Company: 

IFRS 9, “Financial Instruments”:

As of January 1, 2013, the Company is required to adopt IFRS 9, “Financial Instruments”, which is the result of the first phase of the IASB’s project to replace IAS 39, “Financial Instruments: Recognition and Measurement”. The new standard replaces the current multiple classification and measurement models for financial assets and liabilities with a single model that has only two classification categories: amortized cost and fair value. The adoption of this standard should not have a material impact on the Company's consolidated financial statements. 

Recent Pronouncements:

In May 2011, the IASB issued the following standards which have not yet been adopted by the Company: IFRS 10, Consolidated Financial Statements (IFRS 10), IFRS 11, Joint Arrangements (IFRS 11), IFRS 12, Disclosure of Interests in Other Entities (IFRS 12), IAS 27, Separate Financial Statements (IAS 27), IFRS 13, Fair Value Measurement (IFRS 13) and amended IAS 28, Investments in Associates and Joint Ventures (IAS 28). Each of the new standards is effective for annual periods beginning on or after January 1, 2013 with early adoption permitted. The Company has not yet begun the process of assessing the impact that the new and amended standards will have on its financial statements or whether to early adopt any of the new requirements.

14

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013 4.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both. Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed below: i)

Decommissioning Provisions

Rehabilitation provisions have been created based on the Company’s internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs which will reflect the market conditions at the time the rehabilitation costs are actually incurred. The final cost of the currently recognized rehabilitation provisions may be higher or lower than currently estimated. ii)

Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after an expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the statement of loss and comprehensive loss in the period the new information becomes available. iii)

Title to Oil and Gas Property Interests

Although the Company has taken steps to verify title to oil and gas properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

15

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013 4.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (cont’d…)

iv)

Income Taxes

Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized. However, utilization of tax losses also depends on the ability of the Company to satisfy certain tests at the time the losses are recouped. v)

Share-based Payment Transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of loss and comprehensive loss over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Nonvesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied. Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of loss and comprehensive loss over the remaining vesting period.

16

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013 4.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (cont’d…)

v)

Share-based Payment Transactions (cont’d…)

Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized in comprehensive loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied. Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received in the statement of loss and comprehensive loss, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of capital stock. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value of options or warrants is measured by use of the Black-Scholes option pricing model and the fair value of shares is the market price. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioral considerations. All equity-settled share-based payments are reflected in contributed surplus, until exercised. Upon exercise, shares issued from treasury and the amount reflected in contributed surplus is credited to capital stock, adjusted for any consideration paid.

5.

DECOMMISSIONING PROVISIONS

The following table presents the reconciliation of the beginning and ending aggregate carrying amount of the obligation associated with the retirement of oil and gas properties. September 30 2013

Asset retirement obligation, beginning of period $ Accretion expense Liabilities discharged through the sale of oil and gas properties Foreign exchange gain Asset retirement obligation, end of period $

11,493 $ 11,493 $

December 31 2012

10,476 1,017 11,493

The undiscounted amount of cash flows, required over the estimated reserve life of the underlying assets, to settle the obligation, adjusted for inflation, is estimated at September 30, 2013 to be $11,493 (December 31, 2012 - $11,493). The obligation was calculated using a credit-adjusted risk free discount rate of 10% and an inflation rate of 5%. It is expected that this obligation will be funded from general Company resources at the time the costs are incurred with the majority of costs expected to occur during 2013.

17

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

6.

EXPLORATION AND EVALUATION ASSETS

The Company held various interests in the following exploration and evaluation assets:

September 30 2013 Oil and gas properties Namibia USA

$ $

(a) i.

7,220,139 $ 7,220,139 $

December 31 2012 5,861,006 5,861,006

Namibia Concession 1811B In June 2012, through its acquisition of Kayuco, a private company incorporated under the laws of the British Virgin Islands, the Company acquired an 80% interest in an oil and gas petroleum exploration license granted by the Ministry of Mines and Energy of the Republic of Namibia to explore within block number 1811B off-shore Namibia. The remaining 20% interest is a carried interest with certain back in rights held by NAMCOR (the Namibian state oil company) and Lunganda Trading Enterprise (Namibian economic empowerment group). Under the terms of the transaction, the Company acquired all of the issued and outstanding common shares of Kayuco in exchange for 10,000,000 common shares of the Company valued at $2,500,000 and a cash payment of US$3,000,000 to Kayuco’s selling shareholders. The Company also paid US$30,000 ($30,468) for legal fees incurred by Kayuco’s selling shareholders and $33,738 in other transaction costs. A finder’s fee in the amount of 1,000,000 common shares valued at $250,000 was issued to Westward Energy LLC for introducing Kayuco to the Company. Westward Energy is a private Company which is 45% owned by Knute Lee, the former President & CEO of the Company.

18

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

6. (b)

EXPLORATION AND EVALUATION ASSETS (cont’d…) Namibia (cont’d…))

(i) Concession 1811B (cont’d…)) The acquisition of Kayuco was treated as an asset acquisition. The purchase consideration and price allocation are as follows: Purchase consideration: Cash Common shares Common shares – finders fees Transaction costs

$

$

3,046,800 2,500,000 250,000 64,206 5,861,006

Purchase price allocation: Exploration and evaluation assets

$

5,861,006

(ii) Concessions 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished In June 2013, the Company completed the acquisition of a 75% interest with Ropat Petroleum Investments (PTY) Ltd. ("Ropat") in the oil and gas exploration blocks 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished (the "Licenses") offshore Namibia (the "Transaction”) Westbridge is the operator of the Licenses with a 75% interest. Ropat has a 15% carried interest and the remaining 10% is a carried interest held by NAMCOR, the Namibian state oil company. Ropat is a private oil and gas company incorporated in Namibia. The Company paid Ropat a cash payment of US$500,000 on the closing date of the transaction and issued 5 million common shares in the capital of Westbridge (the “Westbridge Shares”) to the shareholders of Ropat. The Westbridge Shares are subject to a statutory four-month hold period from and such other regulatory hold period imposed by the TSX-V that expired on October 26, 2013. In addition the Westbridge Shares are subject to a contractual hold period (the “Lock-up Arrangements”) from the date of issue providing for release on the following basis: 1/3rd will be released on December 26, 2013, a further 1/3rd will be released on June 26, 2014 and the final 1/3rd will be released on December 26, 2014.

19

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013 (b)

Namibia (cont’d…)

(ii) Concessions 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished (continued) In addition, Westbridge will make a cash payment to Ropat of US$1 million upon the satisfactory completion of the following conditions to be set out in a definitive agreement in relation to the Transaction: i.

receipt by Westbridge of an independent technical report from a reputable firm indicating the Licenses contain a risked, recoverable, P50 resource estimate of 1,000MMboe or greater; and

ii.

Westbridge having a net cash balance of more than US$15million.

(c)

Michigan, U.S.A.

The Company has a 22.5% working interest in a prospect located in Michigan, U.S.A. During fiscal 2009, the interest was fully depleted. The Company continues to receive monthly revenue from this interest.

7.

RELATED PARTY TRANSACTIONS

The following amounts due to related parties are included in trade payables and accrued liabilities: September 30, 2013 December 31, 2012 Officers, Directors or companies controlled by Directors of the Company $ 2,673 $ 80,508 Amounts paid to related parties are non-interest-bearing, unsecured and have no specific terms of repayment The Company incurred the following transactions with key management personnel comprised of Officers, Directors or companies controlled by Directors: For the nine months ended September 30 2013 2012 $ 154,500 $ 49,500 237,358 190,976 92,687 890,346 9,000 9,000 $ 493,545 $ 1,139,822

Consulting and administration Management fees Management share based compensation Rent

20

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

8.

CAPITAL STOCK AND CONTRIBUTED SURPLUS

a)

Authorized: Unlimited number of common shares without par value.

No. of Shares Capital Stock Issued and outstanding: Balance, December 31, 2011

40,286,453 $ 15,396,343

Private placement financing Private placement finders' fee Shares issued for property acquisition Property acquisition finders' fee Exercise of share purchase warrants Share issue costs Balance, December 31, 2012

16,000,000 692,800 10,000,000 1,000,000 11,500,000

4,000,000 173,200 2,500,000 250,000 1,187,500 (387,125) 79,479,253 $ 23,119,918

Shares issued for property acquisition

5,000,000

500,000

84,479,253

23,619,918

Balance, September 30, 2013

b)

Private placements

During the nine months ended September 30, 2013, no financings were completed. (See note 11) During the year ended December 31, 2012 i)

In May 2012, the Company closed a non-brokered private placement financing for gross proceeds of $4,000,000. The Company issued 16,000,000 units at a price of $0.25 per unit. Each unit was exchangeable into one common share and one half of one common share purchase warrant. Each whole share purchase warrant entitles the holder to acquire one common share at a price of $0.45 for a period of 18 months from issuance. The Company paid fees and warrants to certain qualified arm’s length finders in connection with the Offering. A corporate finance fee of $80,000 was paid, other issuance costs of $53,675 were incurred and the Company issued 692,800 Finders’ Warrants valued at $173,200. Each Finders’ Warrant was exercisable into a Unit of the Company, such exercise being subject to certain release conditions. This resulted in the issuance of 692,800 finders’ shares and 346,400 share purchase warrants exercisable into common shares at a price of $0.45 for a period of 18 months from issuance.

21

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

8.

CAPITAL STOCK AND CONTRIBUTED SURPLUS (cont’d…)

c)

Stock options

The Company has a stock option plan whereby, from time to time, at the discretion of the Board of Directors, stock options are granted to directors, officers and certain consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. The exercise price of each option is based on the market price of the Company’s common stock at the date of the grant less an applicable discount. The options can be granted for a maximum term of 5 years and vest at the discretion of the Board of Directors. During the nine months ended September 30, 2013, the Company granted 3,552,500 (2012 – 4,475,000) stock options at $0.15 (2012 - $0.35) per share for a period of 5 years. The fair value of stock-based compensation expense totaling $419,526 (2012 - $1,261,790) or $0.12 (2012 - $0.28) per option was estimated using the Black-Scholes option pricing method assuming a weighted average risk-free rate of 1.50% (2012 – 1.31%), a weighted average expected volatility of 130% (2012 – 130%), an expected dividend and forfeiture rate of nil (2012 – nil), and an expected life of 5 years (2012 – 4.89 years). Stock option transactions are summarized as follows:

Number Outstanding, December 31, 2011 Granted Expired Outstanding, December 31, 2012 Granted Expired Outstanding, September 30, 2013

4,475,000 (50,000) 4,425,000 3,552,500 (1,300,000) 6,677,500

Number currently exercisable

Weighted Average Exercise Price $ 0.37 0.35 $ 0.37 0.15 0.35 $ 0.25

6,677,500 $

22

0.25

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

8.

CAPITAL STOCK AND CONTRIBUTED SURPLUS (cont’d…)

c)

Stock options (cont’d…)

The following stock options are outstanding at September 30, 2013:

Number Exercise Price 900,000 0.35 1,975,000 0.39 250,000 0.35 3,462,500 0.15 90,000 0.15

d)

Expiry Date February 9, 2017 August 17, 2017 September 21, 2017 April 18, 2018 July 24, 2018

Share purchase warrants

Share purchase warrant transactions are summarized as follows:

Outstanding, December 31, 2011 Granted Exercised Outstanding, December 31, 2012 and September 30, 2013 Number currently exercisable

Weighted Average Exercise Number Price 31,500,000 $ 0.10 8,346,400 0.45 (11,500,000) 0.10 28,346,400

$

0.20

28,346,400 $

0.20

The following warrants are outstanding at September 30, 2013:

Number 8,346,400 20,000,000

Exercise Price 0.45 0.10

Expiry Date November 2, 2013 November 2, 2015

28,346,400 Subsequent to September 30, 2013, 8,346,400 share purchase warrants expired unexercised.

23

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

9.

FINANCIAL INSTRUMENTS, MANAGEMENT OF CAPITAL AND FINANCIAL RISK

The Company's financial instruments consist of cash and cash equivalents, receivables and accounts payable and accrued liabilities. Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The carrying value of receivables and accounts payable and accrued liabilities approximate their fair value because of the short-term nature of these instruments. The Company discloses the inputs used in making fair value measurements, including their classification within a hierarchy that prioritizes their significance. The three levels of inputs are: Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 – inputs that are not based on observable market data. Financial instruments measured at fair value on the statement of financial position are summarized in levels of fair value hierarchy as follows:

Assets Cash and cash equivalents

Level 1 $

Level 2

570,358 $

Level 3 -

$

Total -

$

570,358

The Company has exposure to the following risks from its use of financial instruments: credit risk, market risk and liquidity risk. Management, the Board of Directors and the Audit Committee monitor risk management activities and review the adequacy of such activities. (a) Credit risk Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s cash and cash equivalents is primarily held in large Canadian financial institutions. The Company does not have any asset-backed commercial paper. The Company’s receivables consist mainly of GST receivable due from the Federal Government of Canada and balances due from the sale of its share of oil and gas relating to its oil and gas properties. Management believes that the credit risk concentration with respect to financial instruments included in receivables is minimal. (b) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. 24

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

9.

FINANCIAL INSTRUMENTS, MANAGEMENT OF CAPITAL AND FINANCIAL RISK (cont’d…) (c) Market risk

Market Risk is the risk of loss that may arise from changes in market factors such as foreign exchange rates, interest rates, and commodity and equity prices. (i) Cash held in foreign currencies other than the Canadian dollar is subject to currency risk. The Company is exposed to currency risk by incurring certain expenditures in currencies other than the Canadian dollar. The Company does not use derivative instruments or foreign exchange contracts to hedge against gains or losses arising from foreign exchange fluctuations. As at September 30, 2013 currency risk is nominal. (ii) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s interest-bearing financial instruments are comprised of cash and cash equivalents, which bear interest at variable rates. The Company considers its interest rate risk as minimal and immaterial. (c) Market risk (cont’d...) (iii) Price risk The Company is exposed to price risk with respect to commodity and equity prices. The ability of the Company to explore its oil and properties and the future profitability of the Company are directly related to the market price of oil and gas. The Company monitors oil and gas prices to determine the appropriate course of action to be taken by the Company. Capital Management The Company's objectives when managing capital are: • to safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and • to provide an adequate return to shareholders by pricing products commensurately with the level of risk.

25

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

9.

FINANCIAL INSTRUMENTS, MANAGEMENT OF CAPITAL AND FINANCIAL RISK (cont’d…)

Capital Management (cont’d…) The Company considers the items included in shareholders’ equity as capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through public and/or private placements, sell assets to reduce debt or return capital to shareholders. The Company is not subject to externally imposed capital requirements.

10.

SEGMENTED INFORMATION

The Company's operations are in the oil and gas industry and are located in the Republic of Namibia and Michigan, USA. 100% of the revenues were generated in the U.S.A. Assets attributable to Namibia total $7,220,139 made up of $5,960,621 in costs incurred on Block 1811B and $1,259,518 in costs incurred on concessions 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished. There are no assets attributable to the U.S.A because interest in the U.S.A. property was fully depleted during fiscal 2009. (See Subsequent Events - note 11(i))

11.

SUBSEQUENT EVENTS

Subsequent to September 30, 2013: i. The Company entered into a binding Letter of Intent (“LOI”) with Black Pearl Holdings, LLC (“BPH”) to acquire working interests in 3 projects in the southern United States. Upon closing of the proposed transaction, the Company will secure a cash flow stream from existing production and participate in multiple drill ready projects. The projects include the Bivens Field Project, Wharton County Field Project and Lavaca County Project. Pursuant to the terms of the LOI, the Company will participate in each of the 3 projects by contributing capital to expand production as well as acquire, develop and explore leases. The Company intends to finance any cash requirements in the form of equity, debt, joint ventures and/or farm-out of the existing Namibian portfolio. Any equity capital raised will be in the context of the market and subject to the rules and regulations of the TSX Venture Exchange. The transaction is subject to the Company raising a minimum of $2.5 million.

26

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

11. i.

SUBSEQUENT EVENT (continued) Continued Initially, the Company will acquire a 31% working interest in the Bivens Field Project from BPH by financing 56% of the costs to work-over the Olympia Minerals No. 1 and Olympia Minerals No. 2 wells. If successful, the cash flow generated by the work-over program is forecasted to be sufficient to sustain the Company’s working capital needs. In addition to the work-overs, the Company will also fund 56% of the costs to drill one deep development well to maintain the 31% interest. It is estimated the Company’s share of the costs will be US$308 thousand for the workovers and US$3.1 million for the deep well. The Company will recover 100% of the costs incurred to drill the deep well by receiving 50% of BPH’s cash flow produced from the deep well. Subsequent to closing, the Company and BPH intend to acquire a minimum 63% working interest in the Wharton County Field Project from the current landowners. WEB will receive 50% of this interest in exchange for funding the Company’s and BPH’s share of a development well to initiate production. It is estimated this program will cost a total of US$1.3 million. WEB will recover 100% of the program costs by receiving 80% of BPH’s cash flow produced from the development well. Additional wells will be considered dependent on the flow rate from the initial well. The Company will have a right of first refusal to participate up to a 50% working interest in leases or prospects secured by BPH in the Wharton County Field Project mutual area of interest. In addition to the transactions above, the Company and BPH intend to acquire a 100% working interest in 3,000 acres of leases in Lavaca County from the current landowners. The Company has committed to complete a 3 well program to confirm multiple anomalies identified on the 3D seismic in exchange for a 50% working interest. The program is estimated to cost US$4.5 million to complete and is planned to launch in the coming year. The Company will recover 100% of the program costs by receiving 80% of BPH’s cash flow produced from the 3 wells. The Company will have a right of first refusal to participate up to a 50% working interest in leases or prospects secured by BPH in the 85 square mile Lavaca County 3D Seismic mutual area of interest. The Company will also issue 5,000,000 shares of the Company to BPH or its nominee for providing the Company the option to participate in any prospects generated from the ExxonMobil Dataset and will grant one board seat to Michael Looney, President and CEO of BPH, upon closing of the transaction. The Company and BPH have agreed to proceed diligently and in good faith to negotiate and settle the terms of the transaction and to enter into a definitive agreement on or before January 31, 2014 or such other date as may be mutually agreed to in writing between the parties hereto.

27

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

11. i.

SUBSEQUENT EVENT (continued) Continued The definitive agreement will include customary conditions to closing, plus the following specific conditions: •

• • ii.

Completion of satisfactory due diligence and all legal, financial, geological and technical documentation related to the Bivens Field Project, Wharton County Field Project and Lavaca County Project; TSX Venture Exchange approval; and Approval of the boards of Westbridge and BPH.

The Company arranged, subject to the acceptance of the TSX Venture Exchange, a non-brokered private placement financing of up to 50,000,000 subscription receipts (“Subscription Receipts”) at a price of $0.06 per Subscription Receipt for gross proceeds of up to $3 million (the “Private Placement”). The Subscription Receipts are being issued in connection with the proposed joint venture (the “Transaction”) between the Company and BPH described in note 11(i). Each Subscription Receipt will be automatically convertible, for no additional consideration, into one unit of the Company (a “Unit”) upon satisfaction of certain conditions relating to the Company’s completion of the Transaction. Each Unit will consist of one common share and one common share purchase warrant (a “Warrant”) entitling the holder thereof to purchase one additional common share of the Company at a price of $0.09 for a period of 24 months. The Warrants will also be subject to an acceleration provision whereby if at any time after four (4) months and one (1) day from the closing of the Private Placement, and the conversion of the Subscription Receipts, the closing price of the Company’s shares on the TSX Venture Exchange exceeds $0.25 (on a volume weighted basis) for 30 consecutive trading days, the Company shall have the right to accelerate the exercise period of the Warrants to a date that is not less than 30 days from the date the Company provides notice to the warrant holders of its election to accelerate the exercise period. Management anticipates the Private Placement will close by the end of December 2013. Should the Transaction not close by January 31, 2014, the Subscription Receipts shall be cancelled and the subscription funds shall be distributed to the holders of Subscription Receipts, without interest or deduction. Upon closing of the Transaction and the conversion of the Subscription Receipts, the proceeds from the Private Placement will be used to fund the farm-in commitments to Black Pearl, lease acreage from current landowners, and for general corporate purposes.

28

WESTBRIDGE ENERGY CORPORATION Notes to the Condensed Consolidated Financial Statements

(Unaudited, prepared by management and expressed in Canadian Dollars) For the nine months ended September 30, 2013

11.

SUBSEQUENT EVENT (continued)

ii. Continued Finder’s fees comprised of 7% cash and 7% non-transferable share purchase warrants may be paid in connection with the Private Placement. Any finders’ fees will be payable in accordance with the policies of the TSX Venture Exchange. iii.

The Company entered into an option agreement (the “Option Agreement”) with BPH whereby BPH granted the Company the exclusive option to acquire 100% of the assets or shares of BPH in exchange for the Company issuing 100% of its current issued and outstanding shares to BPH or its shareholders (the “Proposed Merger”). This option has been granted for a period of 180 days, commencing on and subject to the closing of the private placement (Note 11(ii)). The Option Agreement allows the Company to move forward with closing the Private Placement in order to launch its initial work programs to secure production in the near term.

iv.

On November 2, 2013, 8,346,400 share purchase warrants expired unexercised.

29

WESTBRIDGE ENERGY CORPORATION

Management’s Discussion and Analysis

Nine Months Ended September 30, 2013

1

Form 51-102F1 MANAGEMENT'S DISCUSSION & ANALYSIS WESTBRIDGE ENERGY CORPORATION

Date The effective date of this MD&A is November 28, 2013. Introduction The following management’s discussion and analysis (“MD&A”) of the financial condition and results of the operations of Westbridge Energy Corporation (the “Company” or “Westbridge”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the nine months ended September 30, 2013. This MD&A was written to comply with the requirements of National Instrument 51-102 Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2012, as well as the unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2013, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results for the interim periods presented are not necessarily indicative of the results that may be expected for any future period. Information contained herein is presented as at this date, unless otherwise indicated. As of January 1, 2010, the Company adopted International Financial Reporting Standards (“IFRS”). The condensed consolidated unaudited interim financial statements for the nine months ended September 30, 2013, have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34"), and using accounting policies consistent with IFRS. Readers of this MD&A should refer to “Change in Accounting Policies” below for a discussion of IFRS and its effect on the Company’s financial presentation. For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of the Company common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) if it would significantly alter the total mix of information available to investors. Additional information about Westbridge is available at www.westbridgeweb.com and www.Sedar.com.

2

Description of the Business Westbridge Energy Corporation is a junior oil and natural gas exploration and production company. The Company holds an 80% interest in an oil and gas petroleum exploration license granted by the Ministry of Mines and Energy of the Republic of Namibia to explore within block number 1811B off-shore Namibia through its 100% owned subsidiary, Kayuco Universal Ltd. (“Kayuco”). The Company also owns a 75% interest in Blocks 1911A relinquished, 1912B, 1910A relinquished and 2011A relinquished. (See below for full details of this acquisition that closed in June 2013) The Company, through its 100% owned subsidiary Portrush Petroleum USA, also holds a 22.5% working interest in the Lenox project in Macomb County, SE Michigan which was acquired in June 2000. The project consists of two oil wells which are no longer producing significant revenue and during fiscal year 2009, the interest in the project was fully depleted. Overall Performance Namibia: Acquisition of Blocks 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished In June 2013, the Company completed the acquisition of a 75% interest with Ropat Petroleum Investments (PTY) Ltd. ("Ropat") in the oil and gas exploration blocks 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished (the "Licenses") offshore Namibia (the "Transaction”) Westbridge is the operator of the Licenses with a 75% interest. Ropat has a 15% carried interest and the remaining 10% is a carried interest held by NAMCOR, the Namibian state oil company. Ropat is a private oil and gas company incorporated in Namibia. The Company paid Ropat a cash payment of US$500,000 on the closing date of the transaction and issued 5 million common shares in the capital of Westbridge (the “Westbridge Shares”) to the shareholders of Ropat. The Westbridge Shares are subject to a statutory four-month hold period that expire on October 26, 2013 and such other regulatory hold period imposed by the TSX-V. In addition the Westbridge Shares are subject to a contractual hold period from the date of issue providing for release on the following basis: 1/3rd will be released on December 26, 2013, a further 1/3rd will be released on June 26, 2014 and the final 1/3rd will be released on December 26, 2014. Nigeria In May 2013, the Company entered into a strategic alliance agreement (the “Agreement”) with United Oil and Gas Nigeria Limited (“UOG”) to jointly acquire and develop near term production and exploration assets (the “Assets”) in Nigeria. After reviewing several projects, the Company and UOG were unable to complete any acquisitions and have decided to end the Agreement, although the opportunity to work together in the future remains. Louisiana and Texas, USA Please see subsequent events below

3

Exploration and Evaluation Assets Namibia Block 1811B Through its ownership of Kayuco, a private company incorporated under the laws of the British Virgin Islands, the Company owns an 80% interest in an oil and gas petroleum exploration licence granted by the Ministry of Mines and Energy of the Republic of Namibia to explore within block number 1811B (the “Licence”) off-shore Namibia. The remaining 20% interest is a carried interest with certain back in rights held by NAMCOR (the Namibian state oil company) and Lunganda Trading Enterprise (Namibian economic empowerment group). Block 1811B is situated in the Walvis basin off the northern coast of Namibia along the international boundary with Angola. Kayuco`s interest in Block 1811B covers an area of approximately 1.4 Million acres (5,854 square kilometres). A technical report compliant with NI 51-101 has been completed and filed with the Exchange for review and is filed on SEDAR. The Company is actively executing on the requirements of the 1811B License requirements and has begun the process of acquiring all available seismic data on the License. Regional geologic analysis and lead delineation has begun with an updated and a certified NI 51-101 and United States Petroleum Resource Management Systems (“PRMS”) compliant Report is planned for the first quarter of 2014. Westbridge is continuously looking to expand its portfolio and is actively engaged in evaluating other assets in Namibia, Nigeria and other prolific oil and gas regions in Sub-Saharan Africa. Blocks 1910A Relinquished, 1911A Relinquished, 1912B and 2011A Relinquished The Licenses are situated in the Walvis Basin in northern Namibia, close to the Namibia - Angola border. A map of the new acreage position can be viewed at www.westbridgeweb.com. The Licenses are contiguous to Block 1811B in which Westbridge currently has an 80% working interest and is Operator. The acquisition of the Licenses increases Westbridge’s existing area coverage in offshore Namibia from 1.4 million acres (5,854 square kilometers) to a total of approximately 5.3 million acres (21,448 square Kilometers). The Licenses are in the highly prospective Walvis Basin. The Licenses cover water depths ranging from the shoreline to 1,800m and are covered by over 10,000 line kilometers of good quality 2D seismic data. Westbridge’s initial technical analysis indicates the Licenses show similar geologic play concepts and trends to those observed in other prolific petroleum basins in Brazil and the deepwaters of Ghana, Angola, Liberia and Sierra Leone.

4

Financing Activity During the Nine Months Ended September 30, 2013 There was no financing activity during the period. See Subsequent Events below. Results of Operations Summary of Quarterly results

Oil & Gas Revenue, net of royalties Operating Expenses Revenue after Operating Expenses General and Admin Expenses Loss before other items Other Items* Currency translation adjustment Comprehensive loss for the period Basic loss per share

Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 2013 2013 2013 2012 2012 2012 2012 2011 $ 10,605 $ 15,265 $ 11,929 $ 7,896 $ 13,374 $ 13,915 $ 16,046 $ 14,077 2,723 2,707 2,871 2,588 2,815 3,507 2,714 3,782 7,882 12,558 9,058 5,308 10,559 10,408 13,332 10,295 229,338 762,479 296,515 439,076 990,254 665,389 297,747 53,826 (221,456) (749,921) (287,457) (433,768) (979,695) (654,981) (284,415) (43,531) (1,632) 29,110 33,587 9,599 (13,828) 18,386 3,770 7,017 10,461 9,671 (223,088) (720,811) (253,870) (413,708) (993,523) (636,595) (280,645) (26,843) 0.00 0.00 0.00 (0.02) (0.02) (0.06) (0.03) 0.00

* See the financial statements regarding these items.

Since January 1, 2010, all reporting is under IFRS. Results of Operations for the Three Months Ended September 30, 2013 Net Income (Loss): The current period yielded a net loss of $228,088 (2012 - $). This was comprised of revenue of $10,605 (2012 – 13,374), operating expenses of $2,723 (2012 - $2,815), General and Administrative (“G&A”) of $234,338 (2012 - $990,254), and a loss from other items of $1,632 (2012 $13,828). Revenue: Revenue from the Lenox project from the sale of oil and natural gas (net of royalties) was $10,605 compared to $13,374 in 2012. Expenses: Well operating expenses for the Lenox project were $2,723 compared with $2,815 in 2012. General & Administration Expenses: G&A expense was $234,338 (2012 - $990,254). Most of the decrease was due to a decrease in stock-based compensation expense to $5,426 in the current period from $665,790 in the previous year and travel and business development expenses decreasing to $16,669 compared to $156,330 in the previous year. There was a decrease in professional fees to $9,503 from $17,047 due to lower legal fees. Management fees also decreased due to $16,500 (2012 - $Nil) being allocated to project generation and $16,500 (2012 - $Nil) being allocated to exploration asset costs. Project generation costs are costs incurred on oil and gas projects which the Company has not yet acquired. Consulting and administration fees increased to $130,147 compared to $43,696 in 2012 and investor relations increased to $22,741 from $10,417 in 2012., were $15,199 compared to $Nil in 2012.

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Other Items: Other items consisted of a foreign exchange loss of $2,592 (2012 – loss of $13,828) and interest income of $960 (2012 - $4,503). Interest income was lower in the current period due to lower balances held in term deposits and savings accounts compared to the 2012. Commodity Prices The price received by the Company for its share of oil revenues fluctuates relative to the changes in the benchmark prices for oil. The following are average benchmark prices for oil during 2010 and 2011:

2011 WTI Oil US$/bbl 2012 WTI Oil US$/bbl 2013 WTI Oil US$/bbl

Q1

Q2

Q3

Q4

94.45

102.34

86.62

93.99

103.01

93.49

92.22

88.17

95.11

96.24

105.82

Production volume for each of the quarters was as follows:

2011 Oil bbl 2012 Oil bbl 2013 Oil bbl

Q1

Q2

Q3

Q4

Total

204

257

204

339

1,004

215

205

205

138

763

175

218

123

Liquidity and Capital Resources At September 30, 2013, the Company had cash on hand of $570,358 (December 31, 2012 - $2,428,436) and a working capital surplus of $505,201 (December 31, 2012 – $2,349,058). There are also 20,000,000 share purchase warrants outstanding with an exercise price of $0.10 and 8,346,400 share purchase warrants outstanding with an exercise price of $0.45 which could provide financing in the future although they are all “out of the money” at this time. See subsequent events below. Commitments Other than the commitments discussed in the exploration and evaluation section and the related party section, the Company has no commitments. Off-Balance Sheet Transactions The Company does not have any off-balance sheet transactions.

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Related Party Transactions for the nine months ended September 30, 2013 1. The Company paid or accrued management fees of $185,000 (2012 - $Nil) including a signing bonus of $50,000 to Kaptepia Capital Corporation, a company controlled by the President and CEO of the Company, Botosan Omatsola. 2. The Company paid or accrued management fees of $22,500 (2012 - $Nil) to Robert Boisjoli, CFO of the Company. 3. The Company paid or accrued consulting fees of $45,000 (2012 - $Nil) to Sprout Advisors, a company controlled by Kevin Everingham, a Director of the Company; 4. The Company paid or accrued consulting fees of $45,000 (2012 - $Nil) to Caledonian Consultancy, a company controlled by Mark Frewin, the Chairman of the Company;, 5. The Company paid or accrued administration fees of $49,500 (2012 - $49,500) and rent of $9,000 (2012 - $9,000) to New Dawn Holdings Ltd., a company controlled by Paul Larkin, a Director of the Company. The fees are for the day to day financial administration and office rent for the Company. New Dawn employs three people to perform these functions. 6. The Company paid or accrued fees of $7,500 (2012 - $3,750) to Paul Larkin, a Director of the Company; 7. The Company paid or accrued fees of $7,500 (2012 - $74,588) to Peter Henry, a Director of the Company; Amounts due to related parties are non-interest bearing, unsecured and have no specific terms of repayment. Related party transactions are in the normal course of operations, occurring on terms and conditions that are similar to those of transactions with unrelated parties and, therefore, are measured at the exchange amount. Proposed Transaction There are currently no proposed transactions, except as otherwise disclosed in this MD&A. Confidentiality agreements may be entered into from time to time with independent entities to allow for discussions of the potential acquisition and or development of certain properties. Financial Instruments The Company’s financial assets consist of cash and cash equivalents, which is designated as held for trading and measured at fair value; and amounts receivable which are designated as loans and receivables and measured at amortized cost. The Company’s financial liabilities consist of accounts payable and accrued liabilities which are designated as other financial liabilities and measured at amortized cost. The fair values of these financial instruments approximate their carrying values due to their short-term nature.

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Subsequent Event Subsequent to September 30, 2013: i.

The Company entered into a binding Letter of Intent (“LOI”) with Black Pearl Holdings, LLC (“BPH”) to acquire working interests in 3 projects in the southern United States. Upon closing of the proposed transaction, the Company will secure a cash flow stream from existing production and participate in multiple drill ready projects. The projects include the Bivens Field Project, Wharton County Field Project and Lavaca County Project. Pursuant to the terms of the LOI, the Company will participate in each of the 3 projects by contributing capital to expand production as well as acquire, develop and explore leases. The Company intends to finance any cash requirements in the form of equity, debt, joint ventures and/or farm-out of the existing Namibian portfolio. Any equity capital raised will be in the context of the market and subject to the rules and regulations of the TSX Venture Exchange. The transaction is subject to the Company raising a minimum of $2.5 million. Initially, the Company will acquire a 31% working interest in the Bivens Field Project from BPH by financing 56% of the costs to work-over the Olympia Minerals No. 1 and Olympia Minerals No. 2 wells. If successful, the cash flow generated by the work-over program is forecasted to be sufficient to sustain the Company’s working capital needs. In addition to the work-overs, the Company will also fund 56% of the costs to drill one deep development well to maintain the 31% interest. It is estimated the Company’s share of the costs will be US$308 thousand for the work-overs and US$3.1 million for the deep well. The Company will recover 100% of the costs incurred to drill the deep well by receiving 50% of BPH’s cash flow produced from the deep well. Subsequent to closing, the Company and BPH intend to acquire a minimum 63% working interest in the Wharton County Field Project from the current landowners. WEB will receive 50% of this interest in exchange for funding the Company’s and BPH’s share of a development well to initiate production. It is estimated this program will cost a total of US$1.3 million. WEB will recover 100% of the program costs by receiving 80% of BPH’s cash flow produced from the development well. Additional wells will be considered dependent on the flow rate from the initial well. The Company will have a right of first refusal to participate up to a 50% working interest in leases or prospects secured by BPH in the Wharton County Field Project mutual area of interest. In addition to the transactions above, the Company and BPH intend to acquire a 100% working interest in 3,000 acres of leases in Lavaca County from the current landowners. The Company has committed to complete a 3 well program to confirm multiple anomalies identified on the 3D seismic in exchange for a 50% working interest. The program is estimated to cost US$4.5 million to complete and is planned to launch in the coming year. The Company will recover 100% of the program costs by receiving 80% of BPH’s cash flow produced from the 3 wells. The Company will have a right of first refusal to participate up to a 50% working interest in leases or prospects secured by BPH in the 85 square mile Lavaca County 3D Seismic mutual area of interest. The Company will also issue 5,000,000 shares of the Company to BPH or its nominee for providing the Company the option to participate in any prospects generated from the ExxonMobil Dataset and will grant one board seat to Michael Looney, President and CEO of BPH, upon closing of the transaction. The Company and BPH have agreed to proceed diligently and in good faith to negotiate and settle the

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terms of the transaction and to enter into a definitive agreement on or before January 31, 2014 or such other date as may be mutually agreed to in writing between the parties hereto. The definitive agreement will include customary conditions to closing, plus the following specific conditions: • Completion of satisfactory due diligence and all legal, financial, geological and technical documentation related to the Bivens Field Project, Wharton County Field Project and Lavaca County Project; • TSX Venture Exchange approval; and • Approval of the boards of Westbridge and BPH. ii.

The Company arranged, subject to the acceptance of the TSX Venture Exchange, a non-brokered private placement financing of up to 50,000,000 subscription receipts (“Subscription Receipts”) at a price of $0.06 per Subscription Receipt for gross proceeds of up to $3 million (the “Private Placement”). The Subscription Receipts are being issued in connection with the proposed joint venture (the “Transaction”) between the Company and BPH described in (i) above. Each Subscription Receipt will be automatically convertible, for no additional consideration, into one unit of the Company (a “Unit”) upon satisfaction of certain conditions relating to the Company’s completion of the Transaction. Each Unit will consist of one common share and one common share purchase warrant (a “Warrant”) entitling the holder thereof to purchase one additional common share of the Company at a price of $0.09 for a period of 24 months. The Warrants will also be subject to an acceleration provision whereby if at any time after four (4) months and one (1) day from the closing of the Private Placement, and the conversion of the Subscription Receipts, the closing price of the Company’s shares on the TSX Venture Exchange exceeds $0.25 (on a volume weighted basis) for 30 consecutive trading days, the Company shall have the right to accelerate the exercise period of the Warrants to a date that is not less than 30 days from the date the Company provides notice to the warrant holders of its election to accelerate the exercise period. Management anticipates the Private Placement will close by the end of December 2013. Should the Transaction not close by January 31, 2014, the Subscription Receipts shall be cancelled and the subscription funds shall be distributed to the holders of Subscription Receipts, without interest or deduction. Upon closing of the Transaction and the conversion of the Subscription Receipts, the proceeds from the Private Placement will be used to fund the farm-in commitments to Black Pearl, lease acreage from current landowners, and for general corporate purposes. Finder’s fees comprised of 7% cash and 7% non-transferable share purchase warrants may be paid in connection with the Private Placement. Any finders’ fees will be payable in accordance with the policies of the TSX Venture Exchange.

iii.

The Company entered into an option agreement (the “Option Agreement”) with BPH whereby BPH granted the Company the exclusive option to acquire 100% of the assets or shares of BPH in exchange for the Company issuing 100% of its current issued and outstanding shares to BPH or its shareholders (the “Proposed Merger”). This option has been granted for a period of 180 days, commencing on and subject to the closing of the private placement described above (ii). The Option Agreement allows the Company to move forward with closing the Private Placement in order to launch its initial work programs to secure production in the near term.

iv.

On November 2, 2013, 8,346,400 share purchase warrants expired unexercised.

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Outstanding Share Data The following table summarizes the outstanding share capital as at November 28, 2013, the effective date of this MD&A: Common shares – issued and outstanding Stock options outstanding Warrants outstanding Total – fully diluted

84,479,253 6,677,500 20,000,000 111,156,753

Recent Accounting Pronouncements and Judgements The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both. Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the condensed interim financial statements within the next financial year are discussed below: i)

Decommissioning Provisions

Asset retirement obligation provisions have been created based on the Company’s internal estimates. Assumptions, based on the current economic environment, have been made which management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from period to period. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs which will reflect the market conditions at the time of the rehabilitation costs are actually incurred. The final cost of the currently recognized rehabilitation provisions may be higher or lower than currently estimated. ii)

Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the profit or loss in the period the new information becomes available.

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iii)

Title to Oil and Gas Property Interests

Although the Company has taken steps to verify title to oil and gas properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects. iv)

Income Taxes

Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities. In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same table entity against which the unused tax losses can be utilized. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped. v)

Share-based Payment Transactions

The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for sharebased payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. Where equity-settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive loss/income over the vesting period. Performance vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognized over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as other vesting conditions are satisfied, a charge is made irrespective of whether these vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied. Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the statement of comprehensive loss/income over the remaining vesting period. Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized in comprehensive loss/income over the vesting period, described as the period during which all the vesting conditions are to be satisfied. Where equity instruments are granted to non-employees, they are recorded at the fair value

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of the goods or services received in the statement of comprehensive loss/income, unless they are related to the issuance of shares. Amounts related to the issuance of shares are recorded as a reduction of share capital. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioral considerations. All equity-settled share-based payments are reflected in contributed surplus, until exercised. Upon exercise, shares issued from treasury and the amount reflected in contributed surplus is credited to share capital, adjusted for any consideration paid. Where a grant of options is cancelled or settled during the vesting period, excluding forfeitures when vesting conditions are not satisfied, the Company immediately accounts for the cancellation as an acceleration of vesting and recognizes the amount that otherwise would have been recognized for services received over the remainder of the vesting period. Any payment made to the employee on the cancellation is accounted for as the repurchase of an equity interest except to the extent the payment exceeds the fair value of the equity instrumented granted, measured at the repurchase date. Any such excess is recognized as an expense.

Risks Exploration Risks Oil and gas exploration and development involves significant risks. Few wells which are drilled are developed into commercially producing fields. Substantial expenditures may be required to establish reserves and no assurance can be given that commercial quantities or further reserves will be discovered or, if found, will be present in sufficient quantities to enable the Company to recover the costs incurred. The Company’s estimates of exploration and production costs can be affected by such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, and unusual or unexpected formations, pressures and work interruptions. There can be no assurance that actual exploration cost will not exceed projected cost. Volatility of Oil and Gas Prices The Company’s revenues, profitability and future growth and the carrying value of its oil and gas properties are substantially dependent on prevailing prices of oil and gas. The Company’s ability to borrow and to obtain additional capital on attractive terms is also substantially dependent upon oil and gas prices. Prices for oil and gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors beyond the control of the Company. These factors include economic conditions in the United States and Canada, the actions of the Organization of Petroleum Exporting Countries, governmental regulation, political stability in the Middle East and elsewhere, the foreign supply of oil and gas, the price of foreign imports and the availability of alternative fuel sources. Any substantial and extended decline in the price of oil and gas would have an adverse effect on the Company’s carrying value of its proved reserves, borrowing capacity, revenues, profitability and cash flows from operations.

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Volatile oil and gas prices make it difficult to estimate the value of producing properties for acquisition and often cause disruption in the market for oil and gas producing properties, as buyers and sellers have difficulty agreeing on such value. Price volatility also makes it difficult to budget for and project the return on acquisitions and development and exploitation projects. Risks Relating to Financial Condition Going concern assumption used by management highlights doubts on the Company’s ability to successfully continue The Company’s financial statements include a statement that the financial statements of the Company are prepared on a going concern basis, and therefore that certain reported carrying values are subject to the Company receiving the future continued support of its stockholders, obtaining additional financing and generating revenues to cover its operating costs. The going concern assumption is only appropriate provided that additional financing continues to become available. The Company’s History of Operating Losses is likely to continue leading to need for additional potentially unavailable financings and related problems The Company has a history of losses. Despite recent capital infusions, the Company will require significant additional funding to meet its business objectives. Capital may need to be available to help maintain and to expand work on the Company’s principal exploration/development property. The Company may not be able to obtain additional financing on reasonable terms, or at all. If equity financing is required, then such financings could result in significant dilution to existing shareholders. If the Company is unable to obtain sufficient financing, the Company might have to dramatically slow exploration/development efforts and/or lose control of its projects. The Company has historically obtained the preponderance of its financing through the issuance of equity. The Company has no current plans to obtain financing through means other than equity financing and/or loans. Such losses and the resulting need for external financings could result in losses of investment value. The Company’s Need for Additional Financing to Explore and Develop new oil and gas properties The Company is engaged in the business of exploiting oil/gas properties. The Company currently has sufficient funds to meet its working capital obligations. However, additional financing will be required to search for and develop any new oil/gas properties identified and to place new wells into commercial production. The exploitation of oil/gas properties is, therefore, dependent upon the Company’s ability to obtain financing through the sale of assets, debt financing, equity financing or other means. Failure to obtain such financing may result in delay in the Company’s ability to search for and develop other oil/gas properties. The Company competes with other oil/gas companies which have similar operations, and many such competitor companies have operations and financial resources and industry experience far greater than those of the Company. Nevertheless, the market for the Company’s potential future production of oil/gas tends to be commodityoriented rather than company-oriented. If a well successfully reaches commercial production, the Company will still be subject to competition from much larger and financially stronger competitors and such competition may materially adversely affect the Company’s financial performance.

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Credit risk Credit risk is the risk of a financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations. The Company’s cash and cash equivalents are primarily held in large Canadian financial institutions. The Company does not have any asset-backed commercial paper. The Company’s receivables consist mainly of HST receivable due from the Federal Government of Canada and balances due from the sale of its share of oil and gas relating to its oil and gas properties. Management believes that the credit risk concentration with respect to financial instruments included in receivables is minimal. Currency risk Cash held in foreign currencies other than the Canadian dollar is subject to currency risk. The Company is exposed to currency risk by incurring revenues and expenditures in US dollars. The Company does not use derivative instruments or foreign exchange contracts to hedge against gains or losses arising from foreign exchange fluctuations. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. There is a very limited interest rate risk as the Company holds no interest bearing financial obligations or assets. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. Price risk The Company is exposed to price risk with respect to commodity and equity prices. The ability of the Company to explore its oil and properties and the future profitability of the Company are directly related to the market price of oil and gas. The Company monitors oil and gas prices to determine the appropriate course of action to be taken by the Company.

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Forward Looking Statements Forward looking statements or information included in this Management Discussion & Analysis (“MD&A”) include statements with respect to:  

the Company’s current internal expectations, estimates, projections, assumptions and beliefs regarding the future market price of oil and gas and Canadian US exchange rates; and expectations regarding the Company’s ability to raise capital and add to reserves through the acquisition and development of current and additional oil and gas properties.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to be correct, and actual results may differ significantly from the results discussed in these forward-looking statements. Factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected include, among others:   

adverse changes in prices for oil and gas and in general economic conditions and risks associated with the oil and gas industry in general such as the uncertainty of reserve estimates, the uncertainty of estimates and projections relating to production, costs and expenses; and the operational risks in development, exploration and production.

In evaluating forward-looking statements, readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements.

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