GLYPH<1>GLYPH<7> GLYPH<23>GLYPH<14>GLYPH<9>GLYPH<13> GLYPH<10>GLYPH<19> GLYPH<7> GLYPH<15> GLYPH<13> GLYPH<21> GLYPH<1>GLYPH<13>GLYPH<15> GLYPH<16>GLYPH<1>GLYPH<6>GLYPH<19> GLYPH<15> GLYPH<13>GLYPH<15> GLYPH<28>GLYPH<19> GLYPH<13> GLYPH<21> GLYPH<1>GLYPH<9> GLYPH<14>GLYPH<22>GLYPH<8> GLYPH<21> GLYPH<10>GLYPH<22> GLYPH<1>GLYPH<1> Overview  2014 was a year of continued strong growth for Storm. Production for the year increased by 92% compared to 2013  as the Company expanded its liquids-rich natural gas play at Umbach in northeast British Columbia. The Company  drilled 16 horizontal wells (16.0 net) and one vertical well and tied in 10 horizontal wells (9.6 net) at Umbach. At  December 31, 2014 Storm had drilled a total of 31 horizontal wells at Umbach, comprising 23 producing wells, three  standing completed wells and five wells awaiting completion. In early 2014, Storm added to its land position at  Umbach by acquiring two horizontal wells, then producing 359 Boe net per day, and 29 sections of undeveloped land  contiguous to the Company’ s 100% working interest lands at Umbach South. The total cost of the acquisition was  approximately $88.0 million, which consisted of $30.0 million in cash plus 13.6 million common shares at a deemed  value of $4.25 per share. In mid-August a new field compression facility was commissioned at Umbach South. The  new compressor station has been operating at 27 Mmcf per day capacity since late August. No wells were drilled in  2014 on any properties owned by the Company other than Umbach.  Umbach is a high NGL content natural gas property producing from the Montney formation. Although Storm is at an  early stage in development of the play, results indicate that it is areally large and that drilling, completion and tie-in  methodologies are highly repeatable, enabling the Company to manage downwards both capital and operating costs. At year end Storm had a total of 23 producing wells at Umbach with eight wells awaiting tie-in when facility capacity  becomes available. Profitability of natural gas production at Umbach is supported by associated NGL, currently  approximating 35 barrels per Mmcf, of which 60% is high value condensate and pentanes. The Company held a total  of 141 net sections at the end of the year. A successful drilling program saw year-over-year reserve growth of 187%  for proved reserves and 117% for proved plus probable reserves. Reserves have been recognized over  approximately 18% of the Company’ s year-end land position.  In the Horn River Basin (“ HRB” ), the Company’ s one producing horizontal well continues to meet expectations and  production is consistent with type curves in the region. At December 31, 2014 Storm had a net interest in 78,000  acres in the area. The scale of the resource in the HRB is potentially immense. However, development in the area  continues to be challenged by prevailing natural gas prices and the Company has no plans for additional activity in  the area until there is evidence of a substantial and sustainable increase in natural gas prices. The Company faces  no immediate land expiries and can afford to be patient regarding future exploitation programs.  Production from the Company’ s Alberta properties, which were received as part of the Bellamont Exploration Ltd.  acquisition in early 2012, is approximately 35% crude oil and has a stable decline rate, providing reasonably  sustainable cash flow. Although the Alberta properties have development potential, it is limited in scale, certainly  when compared to Umbach, and no capital programs are planned for the area in 2015.  Average daily production in 2014 increased 92% to 6,980 Boe per day from 3,637 Boe per day in 2013 with fourth  quarter production rising by 113% from 4,773 Boe per day in 2013 to 10,173 Boe per day. These increases were a  result of the increase in natural gas and associated NGL production at Umbach. Fourth quarter production at  Umbach increased by 169% year over year; in the HRB production declined by 15%; and Alberta production  decreased by 5%.  During 2014, Storm’ s production mix was 79% natural gas, 15% NGL and 6% crude oil, compared to 73% natural  gas, 14% NGL and 13% crude oil in the prior year. Natural gas production increased by 109% relative to 2013. During the year, crude oil production dropped by 16% relative to 2013 as declines were not replaced through  reinvestment. Meanwhile, NGL production increased 108% to 1,064 barrels per day from 512 barrels per day in  2013, commensurate with increased natural gas production at Umbach. However, the financial benefit of increased  production was countered by falling prices for all of the Company’ s products. A slow erosion in prices realized by the  Company throughout the year accelerated rapidly in the fourth quarter, with the result that the average realized price  per Boe fell by nearly one-third between the first and fourth quarters of the year, with the average realized price for  natural gas, Storm’ s most important product, falling by a largely similar amount as illustrated below.  20 