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## General and Administrative Costs 

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Gross general and administrative costs for the final quarter of 2014 decreased by 9% when compared to the final quarter of 2013 and increased by 24% compared to the third quarter of 2014. The year-on-year decrease in general and administrative costs is largely attributable to lower personnel costs. The increase in the final quarter of 2014, when compared to the third quarter, is due to the inclusion in the final quarter of certain costs related to the Company’ s year end, including external services. Further, overhead recoveries in the final quarter of 2014 fell due to capital expenditures declining by 34% when compared to the third quarter. 

On a per-Boe measure, net general and administrative costs fell by 64% compared to the same quarter in 2013 due to increased production. The Company expects that increased production volumes in future periods will result in this favourable trend continuing. 

## $^{ }$Share-Based Compensation 

Share-based compensation increased by 248% in the final quarter of 2014 compared to the same quarter of 2013 and increased by 24% when compared to the third quarter of 2014. The increase in share-based compensation is attributable to the grant of 3.8 million new stock options in 2014. 

## $^{ }$Depletion and Depreciation 

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Higher production resulted in the total charge for depletion and depreciation increasing year over year by 77% in the final quarter of 2014. Compared to the immediately prior quarter, the charge for the fourth quarter of 2014 increased by 33%, with higher production being offset by a decrease in the per-unit rate resulting from the application of the 2014 year-end reserve report to reset the depletion calculation for the final quarter of the year. The increase in the year-over-year charge for depreciation is a consequence of increased investment in facilities in 2014. 

The year-over-year per-Boe charge fell by 17%, a reflection of lower cost reserve additions resulting from the Company’ s successful 2014 drilling program. 

## $^{ }$Reduction of Carrying Amount of Property and Equipment 

As more fully described on page 28, in the last quarter of 2014 the Company reduced the carrying amount of the Alberta CGU. The amount of the reduction in the carrying amount, $22.7 million (2013 - $26.0 million), was included in the consolidated statement of loss for the quarter. 

## $^{ }$Accretion 

The increased year-over-year change for accretion is due to additional liabilities assumed due to drilling, acquisitions and facility construction. The increase in accretion expense between the third and fourth quarters of 2014 was due to changes in estimates of future costs and discount rates. 

