HispanicBusiness

As there are no outstanding derivative commodity contracts at December 31, 2012, no assets or liabilities have been recognized on the Consolidated Balance Sheet for the current year. As at December 31, 2012, no production is hedged in future periods.

GENERAL AND ADMINISTRATIVE EXPENSES ("G&A")                                                   2012                2011----------------------------------------------------------------------------(000s, except Bbl amounts)                  $     $/Bbl         $     $/Bbl--------------------------------------------------------------------------------------------------------------------------------------------------------G&A (gross)                            27,545      4.30    17,946      4.05Stock-based compensation                4,502      0.70     3,062      0.69Capitalized G&A and overhead recoveries                            (3,841)    (0.60)   (2,115)    (0.48)----------------------------------------------------------------------------G&A (net)                              28,206      4.40    18,893      4.26--------------------------------------------------------------------------------------------------------------------------------------------------------

G&A expenses (net) increased 49% (3% on a per Bbl basis) in 2012 compared with 2011. The increase is principally due to increased staffing, administration and insurance costs associated with West Bakr, along with increased costs associated with acquisitions completed in 2012 (South Alamein and South Mariut).

The increase in stock-based compensation is due partly to an increase in the total value of new options granted during 2012 as compared to those granted during 2011, combined with an increase in the number of options granted and the expense recorded on share appreciation rights in 2012 compared with 2011.

FINANCE COSTS

Finance costs for the year ended December 31, 2012 increased to $13.9 million compared with $5.0 million in 2011. Finance costs include interest on long-term debt and convertible debentures, issue costs on convertible debentures and amortization of transaction costs associated with long-term debt. The overall increase in finance costs is due to higher debt levels associated with the convertible debentures combined with the costs of issuing the convertible debentures.

----------------------------------------------------------------------------(000s)                                                        2012      2011--------------------------------------------------------------------------------------------------------------------------------------------------------Interest expense                                            $8,006    $3,794Issue costs for convertible debentures                       4,630         -Amortization of deferred financing costs                     1,265     1,189----------------------------------------------------------------------------Finance costs                                              $13,901    $4,983--------------------------------------------------------------------------------------------------------------------------------------------------------

The Company had $18.5 million ($16.9 million net of unamortized deferred financing costs) of long-term debt outstanding at December 31, 2012 (December 31, 2011 - $60.0 million). The long-term debt that was outstanding at December 31, 2012 bore interest at LIBOR plus an applicable margin that varies from 3.75% to 4.75% depending on the amount drawn under the facility.