Cardinal Energy : 2020 Annual Information Form

ANNUAL INFORMATION FORM

For the Year Ended December 31, 2020

Dated March 26, 2021

www.cardinalenergy.ca

TABLE OF CONTENTS
GLOSSARY......................................................................................................................................................	1
ABBREVIATIONS ............................................................................................................................................	2
CONVERSIONS...............................................................................................................................................	2
CONVENTIONS ..............................................................................................................................................	3
FORWARD-LOOKING INFORMATION AND STATEMENTS .............................................................................	3
OIL AND GAS ADVISORY................................................................................................................................	5
NON-GAAP MEASURES .................................................................................................................................	5
CARDINAL ENERGY LTD.................................................................................................................................	5
GENERAL DEVELOPMENT OF OUR BUSINESS ...............................................................................................	6
GENERAL DESCRIPTION OF OUR BUSINESS ..................................................................................................	8
STATEMENT OF RESERVES DATA AND OTHER OIL AND NATURAL GAS INFORMATION.............................	11
DESCRIPTION OF OUR CAPITAL STRUCTURE...............................................................................................	28
MARKET FOR OUR SECURITIES....................................................................................................................	31
DIRECTORS AND OFFICERS..........................................................................................................................	32
AUDIT COMMITTEE.....................................................................................................................................	35
DIVIDEND POLICY ........................................................................................................................................	36
INDUSTRY CONDITIONS ..............................................................................................................................	37
RISK FACTORS..............................................................................................................................................	52
LEGAL PROCEEDINGS AND REGULATORY ACTIONS....................................................................................	71
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ...............................................	72
AUDITORS, TRANSFER AGENT AND REGISTRAR..........................................................................................	72
MATERIAL CONTRACTS ...............................................................................................................................	72
EXPERTS ......................................................................................................................................................	72
ADDITIONAL INFORMATION .......................................................................................................................	73
APPENDICES
Appendix A - Report of Management and Directors on Oil and Gas Disclosure	A-1
Appendix B - Report on Reserves Data by Independent Qualified Reserves Evaluator	B-1
Appendix C - Mandate & Terms of Reference of the Audit Committee	C-1

GLOSSARY

Capitalized terms in this Annual Information Form have the meanings set forth below:

Entities

Board or Board of Directors means our board of directors.

Cardinal, we, us or our means Cardinal Energy Ltd.

Reserves

COGE Handbook means the Canadian Oil and Gas Evaluation Handbook maintained by the Society of Petroleum Evaluation Engineers (Calgary chapter), as amended from time to time.

CSA 51-324 means Staff Notice 51-324- Glossary to NI 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.

GLJ means GLJ Ltd., independent petroleum consultants of Calgary, Alberta.

NI 51-101 means National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Report means the report prepared by GLJ dated March 2, 2021, evaluating 100% of our crude oil, natural gas and natural gas liquids reserves as at December 31, 2020.

Securities and Other terms

5.50% Debentures means our 5.50% extendible convertible unsecured subordinated debentures which were due December 31, 2020.

8.00% Debentures means our 8.00% convertible unsecured subordinated debentures which were due December 31, 2022.

Common Shares means our common shares as presently constituted.

Credit Facility means our $225 million syndicated credit facility, as more particularly described under the heading "Description of our Capital Structure - Credit Facility".

Debentureholders means the holders of 5.50% Debentures or the 8.00% Debentures, as applicable.

Secured Notes means our second lien secured notes, as more particularly described under the heading "Description of our Capital Structure - Secured Notes".

Shareholders mean the holders of Common Shares from time to time.

Warrants means our common share purchase warrants issued on December 30, 2020, each of which entitles the holder to acquire one Common Share at an exercise price of $0.55 for the period commencing on June 30, 2021 to December 30, 2023.

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ABBREVIATIONS

	Oil and Natural Gas Liquids		Natural Gas
Bbl	barrel	Mcf	thousand cubic feet
Bbls	barrels	MMcf	million cubic feet
Bbls/d	barrels per day	Mcf/d	thousand cubic feet per day
Mbbls	thousand barrels	MMbtu	million British Thermal Units
NGLs	natural gas liquids

	Other
AECO	the natural gas storage facility located at Suffield, Alberta, connected to TransCanada's Alberta
	System
API	American Petroleum Institute
°API	an indication of the specific gravity of crude oil measured on the API gravity scale
ARO	abandonment and reclamation obligations
BOE or Boe	barrel or barrels of oil equivalent, using the conversion factor of 6 Mcf of natural gas being
	equivalent to one barrel of oil
Boe/d	barrels of oil equivalent per day
CO2	carbon dioxide
ESG	environmental, social and governance
EOR	enhanced oil recovery
m3	cubic metres
MBoe	thousand barrels of oil equivalent
MMBoe	million barrels of oil equivalent
WTI	West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma for the
	crude oil standard grade
$000s	thousands of dollars
$MM	millions of dollars

CONVERSIONS

The following table sets forth certain conversions between Standard Imperial Units and the International System of Units (or metric units).

To Convert From	To	Multiply By
Mcf	cubic metres	28.317
cubic metres	cubic feet	35.315
Bbls	cubic metres	0.159
cubic metres	Bbls	6.289
feet	metres	0.305
metres	feet	3.281
miles	kilometres	1.609
kilometres	miles	0.621
acres	hectares	0.405
hectares	acres	2.471
gigajoules	MMbtu	0.950
MMbtu	gigajoules	1.0526

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CONVENTIONS

Certain terms used herein but not defined herein are defined in NI 51-101 and CSA 51-324 and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101 and CSA 51-324. Unless otherwise indicated, references herein to "$" or "dollars" are to Canadian dollars. All financial information herein has been presented in Canadian dollars in accordance with generally accepted accounting principles in Canada.

FORWARD-LOOKING INFORMATION AND STATEMENTS

This Annual Information Form contains forward-looking information and statements (collectively, "forward-lookingstatements"). These forward-looking statements relate to future events or our future performance. All information and statements, other than statements of historical fact, contained in this Annual Information Form are forward- looking statements. Such forward-looking statements may be identified by looking for words such as "about", "approximately", "may", "believe", "expects", "will", "intends", "should", "could", "plan", "budget", "predict", "potential", "projects", "anticipates", "forecasts", "estimates", "continues" or similar words or the negative thereof or other comparable terminology.

In addition, there are forward looking statements in this Annual Information Form under the headings: "General Development of Our Business" as to our business plans, focus, strategies and objectives, our 2021 capital budget and plans and our dividend program and plans; "General Description of Our Business" as to our business plans, focus, strategies and objectives, production decline rates, drilling inventories, and our ESG plans and initiatives; "Statement of Reserves Data and Other Oil and Natural Gas Information - Disclosure of Reserves Data" as to our reserves and future net revenue from our reserves, royalties, operating costs, development costs, abandonment and reclamation costs, income taxes and pricing, exchange and inflation rates; "Statement of Reserves Data and Other Oil and Natural Gas Information - Additional Information Relating to Reserves Data" as to the development of our undeveloped reserves, future developments costs, our plans to fund future developments costs through a combination of internally generated cash flow from operating activities, debt and equity issuances, our future abandonment and reclamation obligations; our 2021 capital program; "Statement of Reserves Data and Other Oil and Natural Gas Information - Other Oil and Natural Gas Information" as to our drilling and development plans, optimization and operating cost reduction plans, decline rates, anticipated land expiries, hedging and marketing policies, abandonment and reclamation obligations, tax horizon and future production; and "Dividend Policy" as to our dividend policy and the future payment of dividends.

In addition to the forward-looking statements identified above, this Annual Information Form contains forward- looking statements pertaining to the following:

• waterflood optimization opportunities and the results therefrom;
• the performance characteristics of our oil and natural gas properties;
• expectations regarding the renewal of our Credit Facility;
• expectation of future production rates, volumes and product mixes;
• projections of market prices and costs, and exchange and inflation rates;
• supply and demand for oil and natural gas;
• treatment under governmental regulatory regimes and tax laws; and
• the anticipated impact of the factors discussed under the heading "Industry Conditions" on us.

Statements relating to "reserves" are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.

Forward-looking statements are subject to risks, uncertainties and assumptions, including those discussed below and elsewhere in this Annual Information Form. Although we believe that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be