Advantage Announces Third Quarter 2009 Results, Continued Success at Glacier and A 44% Reduction in Debt Obligations

Advantage Announces Third Quarter 2009 Results, Continued Success at Glacier
and A 44% Reduction in Debt Obligations

(TSX: AAV, NYSE: AAV)

CALGARY, Nov. 12 /PRNewswire-FirstCall/ - Advantage Oil & Gas Ltd.
("Advantage" or the "Corporation") is pleased to announce its unaudited
operating and financial results for the third quarter ended September 30,
2009.

Financial and Operating Highlights

Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
-------------------------------------------------------------------------
Financial ($000, except as
otherwise indicated)
Revenue before
royalties(1) $ 93,101 $ 195,384 $ 330,710 $ 592,757
per share(2) $ 0.58 $ 1.39 $ 2.21 $ 4.27
per boe $ 42.82 $ 65.51 $ 42.66 $ 66.52
Funds from operations $ 42,104 $ 93,345 $ 149,285 $ 291,717
per share(2) $ 0.26 $ 0.67 $ 1.00 $ 2.10
per boe $ 19.38 $ 31.31 $ 19.27 $ 32.73
Expenditures on property
and equipment $ 42,658 $ 67,744 $ 111,020 $ 156,279
Working capital
deficit(3) $ 109,581 $ 72,928 $ 109,581 $ 72,928
Bank indebtedness $ 330,800 $ 540,078 $ 330,800 $ 540,078
Convertible debentures
(face value) $ 132,221 $ 219,195 $ 132,221 $ 219,195
Shares outstanding at
end of period (000) 162,476 141,333 162,476 141,333
Basic weighted average
shares (000) 161,182 140,192 149,916 138,806
Operating
Daily Production
Natural gas (mcf/d) 91,200 122,627 111,288 123,611
Crude oil and NGLs
(bbls/d) 8,431 11,980 9,853 11,920
Total boe/d @ 6:1 23,631 32,418 28,401 32,522
Average prices (including
hedging)
Natural gas ($/mcf) $ 6.10 $ 7.55 $ 6.07 $ 8.32
Crude oil and NGLs
($/bbl) $ 54.02 $ 100.02 $ 54.38 $ 95.24

(1) includes realized derivative gains and losses
(2) based on basic weighted average shares outstanding
(3) working capital deficit includes accounts receivable, prepaid
expenses and deposits, accounts payable and accrued liabilities,
distributions payable, and the current portion of capital lease
obligations and convertible debentures

MESSAGE TO SHAREHOLDERS

Advantage reduced its debt obligations by 44% and strengthened its balance
sheet through the completion of an equity financing and the closing of two
asset dispositions. Success continued at our Montney natural gas resource play
at Glacier, Alberta with strong well results, capital cost reductions and
approval of a new 50 mmcf/d gas plant that is now under construction.

Financial

Funds from Operations Strengthened through Hedging Gains, Lower Royalty
Rates and Continued Reductions in Operating Costs

- Funds from operations of $42.1 million for the third quarter of 2009
was supported by strong hedging gains, lower royalty rates and lower
operating costs. Funds from operations decreased 55% from the same
period in 2008 due to the sale of approximately 8,100 boe/d during
the third quarter and significantly lower commodity prices compared
to the high oil and natural gas prices realized during the third
quarter of 2008.

- Advantage's third quarter capital program of $42.7 million was
substantially financed from our funds from operations. In excess of
80% of the third quarter capital program was invested at Glacier to
drill and complete wells and pre-order long lead equipment for our
new gas plant.

- For the three months ended September 30, 2009, our hedging program
contributed a net gain of $24.6 million to funds from operations
which helped to partially mitigate the reduction in commodity prices.

- Average daily production for the three months ended September 30,
2009 decreased 24% to 23,631 boe/d (64% natural gas) compared to the
second quarter of 2009. Production decreased 27% when compared to the
same period of 2008 due primarily to the sale of approximately
8,100 boe/d during the quarter. Natural gas production at Lookout
Butte (1,100 boe/d) remained shut-in through the entire third quarter
with additional curtailments at smaller operated and non-operated
properties (300 boe/d) due to low commodity prices. We anticipate
Lookout Butte and the smaller properties to resume production during
the latter portion of the fourth quarter with improved natural gas
prices.

- Operating costs for the three months ended September 30, 2009 was
$11.55/boe which is a decrease of 16% when compared to the same
period in 2008 and a decrease of 7% from the second quarter of 2009.
Cost reductions are a result of optimization efforts, a lower service
and supply cost environment and the sale of higher cost properties.

- Royalties during the third quarter of 2009 decreased 7% to a royalty
rate of 12.8% as compared to the same period of 2008. The decrease is
driven by significantly lower commodity prices and the impact of
Alberta's royalty incentive programs.

Continued Success at Glacier

Glacier - Phase I Update

- Phase I of the Glacier development plan was completed during the
second quarter of 2009 with a total ten horizontal wells (8 Upper
Montney and 2 Lower Montney) placed on-production. Advantage's
Montney wells demonstrated 30 day initial production rates of
2 mmcf/d to over 5 mmcf/d which meets our expectations and is similar
to the majority of horizontal well results through the Swan, Tupper,
and Pouce Coupe South Montney fairway. Additional delineation
drilling and more production history will be required to better
define the longer term production trend on our extensive land base,
however we are pleased with the preliminary results and more recent
completion tests which support long term development plans for
Glacier. As more wells are drilled through our land base, we expect
'sweet spots' in the Montney to be further delineated and additional
resource potential in other formations to be evaluated which could
add more opportunity to the already significant drilling inventory.

- Drilling in the Montney is economic at $4.00 to $4.50 Cdn AECO per
mcf and is considered one of the top tier natural gas resource plays
in North America. The economics are further enhanced by Advantage's
strong hedging position and the Alberta royalty and drilling
incentive programs.

Glacier - Phase II Development Program

- Phase II began in July 2009 and involves the drilling of new wells
and facilities expansions to grow production capacity to a target of
50 mmcf/d during the second quarter of 2010. Production at Glacier is
anticipated to increase during the first quarter of 2010 and peak
during the second quarter of 2010.

- All necessary regulatory approvals have been received for Advantage's
new 50 mmcf/d gas plant and construction has commenced. The
completion date for the new gas plant, additional compression and
expansion of the existing gas gathering system is targeted for the
second quarter of 2010.

- From July 2009 to November 12, 2009, a total of 8 gross (8 net)
horizontal wells have been drilled by Advantage as operator and 7
gross (2.5 net) horizontal wells have been drilled on joint interest
lands through the deployment of up to four drilling rigs. Our Phase
II development plan, which continues to June 2010, includes a total
of 16 gross (16.0 net) horizontal wells, 1 gross (1 net) vertical
well and 16 gross (6.1 net) horizontal wells on joint interest lands.

- To date, a total of 6 of the 15 gross horizontal wells drilled have
been completed and tested at an average test rate of 4.6 mmcf/d. One
of the horizontal wells on an Advantage three well horizontal pad
demonstrated the highest completion test rate to date at 9 mmcf/d
with a flowing pressure of 11 mpa (1,595 psig) after a 13 stage frac
was completed. The three well horizontal pad had a combined test rate
of over 18 mmcf/d at an average flowing pressure of 6.5 mpa
(940 psig).

- Advantage employs a disciplined and continuous improvement approach
to optimize costs in order to improve project economics. Advantage's
strategy to capitalize on lower industry costs combined with improved
technical knowledge has reduced drilling costs per meter by 43% and
per frac costs by 57% since 2008. For example, we continue to improve
our understanding of the geology and variability within the Montney
fairway by employing techniques such as micro-seismic and production
logging to progress our learning curve.

- Improvements in wellsite design from knowledge gained during the
commissioning of our initial ten producing horizontal wells could
lead to cost reductions by as much as 35% per well. The design
changes will be implemented during our Phase II development program
and could lead to significant long term cost savings over the life of
the Glacier project.

- New wells drilled and placed on production between March 31, 2009 and
March 31, 2011 will qualify for the Alberta royalty incentive program
which includes a 5% royalty rate for the first year or 0.5 bcf of
production and an additional drilling credit of up to $200 per meter
of drilled depth subject to a maximum of 40% of Alberta crown
royalties paid by Advantage over a calendar year. The majority of
wells drilled during Phase II and Phase III will be directed
primarily at the Upper Montney to capture the benefits of the royalty
and drilling credit incentive program which is currently set to
expire on March 31, 2011. Increased drilling in the Lower Montney can
be deferred as the depth of the Lower Montney formation qualifies for
the previously announced Alberta deep drilling incentive program
which continues after March 31, 2011 and could result in
approximately $3.2 million in incentive credits per horizontal well.

Improved Financial Flexibility

- In July 2009, we completed our conversion to a growth oriented
corporation and significantly improved our balance sheet by closing
two asset dispositions and completing an equity financing which
generated gross proceeds of $354.6 million.

- Total outstanding debt obligations have been reduced by 44% from
$829 million at June 30, 2009 to $462 million at September 30, 2009.

- Advantage's bank debt at September 30, 2009 is $330 million versus
our current credit facility of $525 million resulting in an
unutilized capacity of $195 million. A total of $132 million of
convertible debentures remain outstanding of which $69 will mature
mid-year 2010 and $63 at the end of 2011.

- Advantage's tax pool position is estimated to be $1.5 billion net of
dispositions and provides a strong position to shield future cash
flows from corporate tax.

Strong Hedging Program to Support Future Cash Flow

- Advantage's hedging program includes 82% of our net natural gas
production hedged for the fourth quarter of 2009 at an average price
of $8.17 Cdn AECO per mcf and 58% hedged for 2010 at an average price
of $7.46 Cdn AECO per mcf. Crude oil hedges for the fourth quarter of
2009 include 53% of our net crude oil production hedged at an average
floor price of $62.40 Cdn per bbl and 31% hedged for 2010 at an
average price of $67.83 Cdn per bbl. Details on our hedging program
are available on our website.

- Our strategy will be to continue to employ a multi-year hedging
program to reduce the volatility in cash flow in support of capital
requirements.

Looking Forward

- On July 8, 2009, Advantage announced an updated corporate capital
budget for the 12 month period ending June 2010. The corporate
capital budget has been set at $207 million (approximately
$110 million during H2 2009) and will continue to focus on our
Montney natural gas resource play at Glacier, Alberta. Phase II of
the development plan at Glacier will constitute approximately 80% of
our corporate capital budget.

- Funds from operations for the 12 month period ending June 30, 2010
based on the mid-range of guidance is estimated at $196 million using
an average NYMEX natural gas price of $4.52 US/mmbtu (AECO $4.42
Cdn/mcf), WTI oil price of $77.90 US/bbl and an $0.93 Cdn/$US
exchange rate. Advantage's current hedging positions have been
included in the funds from operations estimate.

- As a result of the continued shut-in of natural gas production at
Lookout Butte through the third quarter and the shut-in of several
smaller operated and non-operated properties due to lower natural gas
prices, we anticipate that production will trend towards the lower
end of the H2 2009 production guidance that was provided
(approximately 22,700 boe/d). The natural gas production shut-ins
from these properties have a smaller impact on funds from operations
due to the lower netbacks as they are not covered by our hedge
positions. Plans are to resume production from these properties as
natural gas prices improve through the fourth quarter. We also
anticipate that royalty rates will trend lower to approximately 13%
with operating costs between $11.50 and $12.00/boe through H2 2009.

- A full year 2010 capital budget and guidance will be provided before
year-end 2009.

Advantage is well positioned to pursue future development plans at Glacier
with our strong balance sheet, solid hedging position and conversion to a
growth oriented corporation. With a stable production base and an inventory of
over 500 drilling locations at Glacier, management will continue to employ a
disciplined approach to create long term growth in shareholder value.

MANAGEMENT'S DISCUSSION & ANALYSIS

The following Management's Discussion and Analysis ("MD&A"), dated as of
November 12, 2009, provides a detailed explanation of the financial and
operating results of Advantage Oil & Gas Ltd. ("Advantage", the "Corporation",
"us", "we" or "our") for the three and nine months ended September 30, 2009
and should be read in conjunction with the consolidated financial statements
contained within this interim report and the audited financial statements and
MD&A of the predecessor legal entity, Advantage Energy Income Fund (the
"Fund") for the year ended December 31, 2008. The consolidated financial
statements have been prepared in accordance with Canadian generally accepted
accounting principles ("GAAP") and all references are to Canadian dollars
unless otherwise indicated. All per barrel of oil equivalent ("boe") amounts
are stated at a conversion rate of six thousand cubic feet of natural gas
being equal to one barrel of oil or liquids.

Forward-Looking Information

This MD&A contains certain forward-looking statements, which are based on our
current internal expectations, estimates, projections, assumptions and
beliefs. These statements relate to future events or our future performance.
All statements other than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always, identified
by the use of words such as "seek", "anticipate", "plan", "continue",
"estimate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "would" and
similar or related expressions. These statements are not guarantees of future
performance.
In particular, forward-looking statements included in this MD&A include, but
are not limited to, statements with respect to average production and
projected exit rates; areas of operations; spending and capital budgets;
availability of funds for our capital program; the size of, and future net
revenues from, reserves; the focus of capital expenditures; expectations
regarding the ability to raise capital and to continually add to reserves
through acquisitions and development; projections of market prices and costs;
the performance characteristics of our properties; our future operating and
financial results; capital expenditure programs; supply and demand for oil and
natural gas; average royalty rates; and amount of general and administrative
expenses. In addition, statements relating to "reserves" or "resources" are
deemed to be forward-looking statements, as they involve the implied
assessment, based on certain estimates and assumptions that the resources and
reserves described can be profitably produced in the future.
These forward-looking statements involve substantial known and unknown risks
and uncertainties, many of which are beyond our control, including the effect
of acquisitions; changes in general economic, market and business conditions;
changes or fluctuations in production levels; unexpected drilling results,
changes in commodity prices, currency exchange rates, capital expenditures,
reserves or reserves estimates and debt service requirements; changes to
legislation and regulations and how they are interpreted and enforced, changes
to investment eligibility or investment criteria; our ability to comply with
current and future environmental or other laws; our success at acquisition,
exploitation and development of reserves; actions by governmental or
regulatory authorities including increasing taxes, changes in investment or
other regulations; the occurrence of unexpected events involved in the
exploration for, and the operation and development of, oil and gas properties;
competition from other producers; the lack of availability of qualified
personnel or management; changes in tax laws, royalty regimes and incentive
programs relating to the oil and gas industry and income trusts; hazards such
as fire, explosion, blowouts, cratering, and spills, each of which could
result in substantial damage to wells, production facilities, other property
and the environment or in personal injury; stock market volatility; and
ability to access sufficient capital from internal and external sources. Many
of these risks and uncertainties are described in the Fund's Annual
Information Form which is available at www.sedar.com and www.advantageog.com.
Readers are also referred to risk factors described in other documents
Advantage and the Fund files with Canadian securities authorities.
With respect to forward-looking statements contained in this MD&A, Advantage
has made assumptions regarding: current commodity prices and royalty regimes;
availability of skilled labour; timing and amount of capital expenditures;
future exchange rates; the price of oil and natural gas; the impact of
increasing competition; conditions in general economic and financial markets;
availability of drilling and related equipment; effects of regulation by
governmental agencies; royalty rates and future operating costs.
Management has included the above summary of assumptions and risks related to
forward-looking information provided in this MD&A in order to provide
shareholders with a more complete perspective on Advantage's future operations
and such information may not be appropriate for other purposes. Advantage's
actual results, performance or achievement could differ materially from those
expressed in, or implied by, these forward-looking statements and,
accordingly, no assurance can be given that any of the events anticipated by
the forward-looking statements will transpire or occur, or if any of them do
so, what benefits that Advantage will derive there from. Readers are cautioned
that the foregoing lists of factors are not exhaustive. These forward-looking
statements are made as of the date of this MD&A and Advantage disclaims any
intent or obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or results or otherwise,
other than as required by applicable securities laws.

Corporate Conversion and Asset Dispositions

On March 18, 2009, we announced that our Board of Directors had approved
conversion to a growth oriented corporation and a strategic asset disposition
program to increase financial flexibility.
On July 9, 2009, Unitholders of the Fund voted 91.64% in favour of the
corporate conversion at the annual general and special meeting of the Fund,
with subsequent approval by the courts. The conversion will enable Advantage
to pursue a business plan that is focused on the development and growth of the
Montney natural gas resource play at Glacier, Alberta.
The Corporation retained a financial advisor to assist with the disposition of
light oil and natural gas producing properties located in Northeast British
Columbia, West Central Alberta and Northern Alberta. Proposals were received
and evaluated by Advantage with two purchase and sale agreements signed for
net proceeds of $243.6 million, subject to further adjustments, and
representing production of approximately 8,100 boe/d. Both of these sales
successfully closed in July 2009 with the net proceeds used to reduce
outstanding debt. Advantage may utilize its credit facilities in the future to
redeem certain of the Corporation's convertible debentures as they mature and
to help finance its future capital program.
Given these business developments, historical operating and financial
performance will not be indicative of future performance.

Non-GAAP Measures

The Corporation discloses several financial measures in the MD&A that do not
have any standardized meaning prescribed under GAAP. These financial measures
include funds from operations, funds from operations per share and cash
netbacks. Management believes that these financial measures are useful
supplemental information to analyze operating performance, leverage and
provide an indication of the results generated by the Corporation's principal
business activities prior to the consideration of how those activities are
financed or how the results are taxed. Investors should be cautioned that
these measures should not be construed as an alternative to net income, cash
provided by operating activities or other measures of financial performance as
determined in accordance with GAAP. Advantage's method of calculating these
measures may differ from other companies, and accordingly, they may not be
comparable to similar measures used by other companies.
Funds from operations, as presented, is based on cash provided by operating
activities before expenditures on asset retirement and changes in non-cash
working capital. Funds from operations per share is based on the number of
shares outstanding during each applicable period. Cash netbacks are dependent
on the determination of funds from operations and include the primary cash
revenues and expenses on a per boe basis that comprise funds from operations.
Funds from operations reconciled to cash provided by operating activities is
as follows:

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Cash provided
by operating
activities $ 50,671 $115,521 (56)% $131,506 $290,996 (55)%
Expenditures
on asset
retirement 868 344 152% 4,490 6,291 (29)%
Changes in
non-cash
working
capital (9,435) (22,520) (58)% 13,289 (5,570) (339)%
-------------------------------------------------------------------------
Funds from
operations $ 42,104 $ 93,345 (55)% $149,285 $291,717 (49)%
-------------------------------------------------------------------------

Overview
Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Cash provided
by operating
activities
($000) $ 50,671 $115,521 (56)% $131,506 $290,996 (55)%
Funds from
operations
($000) $ 42,104 $ 93,345 (55)% $149,285 $291,717 (49)%
per
share(1) $ 0.26 $ 0.67 (61)% $ 1.00 $ 2.10 (52)%

(1) Based on basic weighted average shares outstanding.

Cash provided by operating activities and funds from operations have decreased
significantly for the three and nine months ended September 30, 2009 as
compared to the same periods of 2008 due to considerably lower revenue. Lower
revenue is the result of depressed commodity prices, partially offset by
substantial gains realized on strong derivative contracts, and lower
production from the successful asset dispositions that closed in July 2009.
The current global recession has resulted in drastic reductions in commodity
prices from lower demand and excess supply. This challenging environment has
continued into the fourth quarter of 2009 and we expect to see weak commodity
prices for the near-term. However, it is also important to recognize that
although commodity prices were weaker during the third quarter of 2009, our
cash netback actually increased 6% to $19.38 per boe from $18.26 per boe in
the second quarter of 2009. This improvement occurred as we realized
additional derivative gains as a higher proportion of our production was
hedged for the three months ended September 30, 2009. Additionally, we
realized decreases in both royalties and operating costs as compared to the
second quarter of 2009. We continue to experience lower operating costs per
boe as an aggressive optimization program through 2008 and into 2009 is
continuing to demonstrate positive benefits and we will seek further
opportunities to improve our operating cost structure.
The primary factor that causes significant variability of the Corporation's
cash provided by operating activities, funds from operations, and net income
is commodity prices. Refer to the section "Commodity Prices and Marketing" for
a more detailed discussion of commodity prices and our price risk management.

Revenue
Three months ended Nine months ended
September 30 September 30
($000) 2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Natural gas
excluding
hedging $ 24,266 $ 97,618 (75)% $121,608 $303,299 (60)%
Realized
hedging
gains
(losses) 26,935 (12,480) (316)% 62,837 (21,631) (390)%
-------------------------------------------------------------------------
Natural gas
including
hedging $ 51,201 $ 85,138 (40)% $184,445 $281,668 (35)%
-------------------------------------------------------------------------
Crude oil and
NGLs
excluding
hedging $ 44,204 $119,000 (63)% $138,887 $330,370 (58)%
Realized
hedging
gains
(losses) (2,304) (8,754) (74)% 7,378 (19,281) (138)%
-------------------------------------------------------------------------
Crude oil and
NGLs
including
hedging $ 41,900 $110,246 (62)% $146,265 $311,089 (53)%
-------------------------------------------------------------------------
Total
revenue(1) $ 93,101 $195,384 (52)% $330,710 $592,757 (44)%
-------------------------------------------------------------------------

(1) Total revenue excludes unrealized derivative gains and losses.

Natural gas, crude oil and NGLs revenues, excluding hedging, decreased
significantly for the three and nine months ended September 30, 2009, as
compared to 2008, due to lower commodity prices and production. Reduced
production is primarily due to our successful asset dispositions that closed
in July 2009 for net proceeds of $243.6 million, subject to further
adjustments, representing production of approximately 8,100 boe/d. Lower
commodity prices have continued from the ongoing global recession that has
reduced demand. For the three month period ended September 30, 2009, realized
natural gas prices, excluding hedging, decreased a substantial 67% while
realized crude oil and NGL prices, excluding hedging, decreased 47%. For the
nine month period ended September 30, 2009, realized natural gas prices,
excluding hedging, decreased 55% while realized crude oil and NGL prices,
excluding hedging, decreased 49%. However, as a result of our commodity price
risk management program, we recognized natural gas and crude oil hedging net
gains of $24.6 million and $70.2 million for the three and nine months ended
September 30, 2009, respectively. The Corporation enters derivative contracts
whereby realized hedging gains and losses partially offset commodity price
fluctuations, which can positively or negatively impact revenues.

Production

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Natural gas
(mcf/d) 91,200 122,627 (26)% 111,288 123,611 (10)%
Crude oil
(bbls/d) 6,289 9,566 (34)% 7,643 9,576 (20)%
NGLs (bbls/d) 2,142 2,414 (11)% 2,210 2,344 (6)%
-------------------------------------------------------------------------
Total (boe/d) 23,631 32,418 (27)% 28,401 32,522 (13)%
-------------------------------------------------------------------------
Natural gas (%) 64% 63% 65% 63%
Crude oil (%) 27% 30% 27% 29%
NGLs (%) 9% 7% 8% 8%

Average daily production for the third quarter of 2009 was 24% lower than the
second quarter of 2009 and 27% lower than the same period of the prior year
due to the successfully completed asset dispositions that closed in July 2009
for net proceeds of $243.6 million, subject to further adjustments. Net
proceeds were used to reduce outstanding bank indebtedness. The disposed
properties represented approximately 8,100 boe/d of production. Production of
1,100 boe/d at our Lookout Butte property in Southern Alberta has remained
shut-in since August 2008 due to an extended third party outage at the
Waterton gas plant where a significant modification project was underway. The
modification project is substantially completed and our production will be
brought back on production as commodity prices improve. Additionally, we
experienced curtailments during the current quarter of approximately 300 boe/d
at smaller operated and non-operated properties due to continued poor natural
gas prices. It is anticipated that these smaller properties will also resume
production as natural gas prices increase during the later portion of the
fourth quarter.

Commodity Prices and Marketing

Natural Gas

Three months ended Nine months ended
September 30 September 30
($/mcf) 2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Realized
natural gas
prices
Excluding
hedging $ 2.89 $ 8.65 (67)% $ 4.00 $ 8.95 (55)%
Including
hedging $ 6.10 $ 7.55 (19)% $ 6.07 $ 8.32 (27)%
AECO monthly
index $ 3.03 $ 9.27 (67)% $ 4.10 $ 8.58 (52)%

Realized natural gas prices, excluding hedging, were significantly lower for
the three and nine months ended September 30, 2009 than the same periods of
2008 and decreased 19% from the second quarter of 2009 resulting in some of
the lowest prices that Advantage has ever experienced. Fortunately, our
commodity hedging strategy resulted in realized natural gas prices, including
hedging, that exceed current market prices. This has significantly mitigated
the negative impact from lower natural gas prices and has protected cash flow.
The 2007/2008 winter season in North America caused inventory levels to
decline to approximately the five-year average resulting in stronger prices
during early 2008. However, since the second half of 2008 there has been
significant softening of natural gas prices from higher US domestic natural
gas production, mild weather conditions and forecasts, and the ongoing global
recession that has impacted demand. These factors have resulted in much higher
inventory levels that continue to place considerable downward pressure on
natural gas prices. Unfortunately, these conditions have continued with AECO
gas presently trading at approximately $3.30/GJ. Although we continue to
believe in the longer-term pricing fundamentals for natural gas, we are
concerned about the current pricing and economic environment that has the
potential to extend for a considerable period of time. The global recession
could delay the recovery of natural gas pricing longer than anticipated. While
the current pricing situation is quite weak, some of the factors that we
believe will support stronger future natural gas prices include: (i)
significantly less natural gas drilling projected in Canada and the US, which
will reduce productivity to offset declines, (ii) the increasing focus on
resource style natural gas wells, which have high initial declines, and which
are becoming a larger proportion of the total natural gas supply based in
Canada and the US, (iii) the potential demand for natural gas for the Canadian
oil sands projects, and (iv) fuel switching to natural gas.

Crude Oil and NGLs

Three months ended Nine months ended
September 30 September 30
($/bbl) 2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Realized
crude oil
prices
Excluding
hedging $ 65.34 $ 112.35 (42)% $ 56.24 $ 104.52 (46)%
Including
hedging $ 61.36 $ 102.40 (40)% $ 59.77 $ 97.17 (38)%
Realized
NGLs prices
Excluding
hedging $ 32.46 $ 90.60 (64)% $ 35.72 $ 87.37 (59)%
Realized
crude oil
and NGL
prices
Excluding
hedging $ 56.99 $107.96 (47)% $ 51.64 $ 101.15 (49)%
Including
hedging $ 54.02 $ 100.02 (46)% $ 54.38 $ 95.24 (43)%
WTI ($US/bbl) $ 68.29 $ 118.13 (42)% $ 57.13 $ 113.38 (50)%
$US/$Canadian
exchange
rate $ 0.91 $ 0.96 (5)% $ 0.86 $ 0.98 (12)%

Realized crude oil and NGLs prices, excluding hedging, decreased considerably
for the three and nine months ended September 30, 2009, as compared to the
same periods of 2008 and increased 2% from the second quarter of 2009.
Advantage's realized crude oil price may not change to the same extent as WTI,
due to changes in the $US/$Canadian exchange rate, and changes in Canadian
crude oil differentials relative to WTI. The price of WTI fluctuates based on
worldwide supply and demand fundamentals. There has been significant price
volatility experienced over the last several years whereby WTI reached
historic high levels in the first half of 2008, followed by a record decline
in the latter half of the year and into 2009, the result of demand destruction
brought on by the global recession. There has been a respectable improvement
during the second and third quarters of 2009, and WTI is currently trading at
approximately US$79/bbl. We continue to believe that the long-term pricing
fundamentals for crude oil remain strong with many factors affecting the
continued strength including (i) supply management and supply restrictions by
the OPEC cartel, (ii) frequent civil unrest in various crude oil producing
countries and regions, (iii) strong relative demand in developing countries,
particularly in China and India, and (iv) production declines and reduced
drilling.

Commodity Price Risk

The Corporation's operational results and financial condition will be
dependent on the prices received for oil and natural gas production. Oil and
natural gas prices have fluctuated widely during recent years and are
determined by economic and, in the case of oil prices, political factors.
Supply and demand factors, including weather and general economic conditions
as well as conditions in other oil and natural gas regions, impact prices. Any
movement in oil and natural gas prices could have an effect on the
Corporation's financial condition and performance. As current and future
practice, Advantage has established a financial hedging strategy and may
manage the risk associated with changes in commodity prices by entering into
derivatives. Although these commodity price risk management activities could
expose Advantage to losses or gains, entering derivative contracts helps us to
stabilize cash flows and ensures that our capital expenditure program is
substantially funded by such cash flows. To the extent that Advantage engages
in risk management activities related to commodity prices, it will be subject
to credit risk associated with counterparties with which it contracts. Credit
risk is mitigated by entering into contracts with only stable, creditworthy
parties and through frequent reviews of exposures to individual entities.
We have been active in entering new financial contracts to protect future cash
flows and currently the Corporation has fixed commodity prices on anticipated
production as follows:

Approximate
Production
Hedged, Net of Average Average
Commodity Royalties(1) Floor Price Ceiling Price
-------------------------------------------------------------------------
Natural gas - AECO
October to December 2009 82% Cdn$8.17/mcf Cdn$8.17/mcf
-----------------------------------------------------------------------
January to March 2010 81% Cdn$7.64/mcf Cdn$7.64/mcf
April to June 2010 59% Cdn$7.53/mcf Cdn$7.53/mcf
July to September 2010 45% Cdn$7.27/mcf Cdn$7.27/mcf
October to December 2010 46% Cdn$7.27/mcf Cdn$7.27/mcf
-----------------------------------------------------------------------
Total 2010 58% Cdn$7.46/mcf Cdn$7.46/mcf
-----------------------------------------------------------------------

January 2011 24% Cdn$7.25/mcf Cdn$7.25/mcf
-----------------------------------------------------------------------

Crude Oil - WTI
October to December 2009 53% Cdn$62.40/bbl Cdn$69.40/bbl
-----------------------------------------------------------------------
January to March 2010 28% Cdn$62.80/bbl Cdn$62.80/bbl
April to June 2010 30% Cdn$69.50/bbl Cdn$69.50/bbl
July to September 2010 32% Cdn$69.50/bbl Cdn$69.50/bbl
October to December 2010 34% Cdn$69.50/bbl Cdn$69.50/bbl
-----------------------------------------------------------------------
Total 2010 31% Cdn$67.83/bbl Cdn$67.83/bbl
-----------------------------------------------------------------------

January 2011 35% Cdn$69.50/bbl Cdn$69.50/bbl
-----------------------------------------------------------------------
(1) Approximate production hedged is based on our assumed average
production by quarter, net of royalty payments, and takes into
consideration our asset dispositions that closed in July 2009.

For the nine month period ended September 30, 2009, we recognized in income a
net realized derivative gain of $70.2 million (September 30, 2008 - $40.9
million net realized derivative loss) on settled derivative contracts. As at
September 30, 2009, the fair value of the derivatives outstanding and to be
settled was a net asset of approximately $31.7 million (December 31, 2008 -
$41.0 million net asset). For the nine months ended September 30, 2009, $9.3
million was recognized in income as an unrealized derivative loss (September
30, 2008 - $4.8 million unrealized derivative gain) due to changes in the fair
values of these contracts since December 31, 2008. The valuation of the
derivatives is the estimated fair value to settle the contracts as at
September 30, 2009 and is based on pricing models, estimates, assumptions and
market data available at that time. As such, the recognized amounts are not
cash and the actual gains or losses realized on eventual cash settlement can
vary materially due to subsequent fluctuations in commodity prices as compared
to the valuation assumptions. The Corporation does not apply hedge accounting
and current accounting standards require changes in the fair value to be
included in the consolidated statement of income and comprehensive income as
an unrealized derivative gain or loss with a corresponding derivative asset
and liability recorded on the balance sheet. These derivative contracts will
settle from October 2009 to January 2011 corresponding to when the Corporation
will receive revenues from production.

Royalties

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Royalties
($000) $ 8,749 $ 42,957 (80)% $ 37,620 $123,011 (69)%
per boe $ 4.02 $ 14.40 (72)% $ 4.85 $ 13.80 (65)%
As a
percentage
of revenue,
excluding
hedging 12.8% 19.8% (7.0)% 14.4% 19.4% (5.0)%

Advantage pays royalties to the owners of mineral rights from which we have
leases. The Corporation currently has mineral leases with provincial
governments, individuals and other companies. Royalties have decreased in
total for the three and nine months ended September 30, 2009 compared to the
same periods of 2008 due to the decrease in revenue from significantly lower
commodity prices and reduced production from our asset dispositions completed
in July 2009. Royalties as a percentage of revenue, excluding hedging, have
also decreased as compared to 2008. Effective January 1, 2009, the Alberta
Provincial Government implemented a new royalty framework for conventional
oil, natural gas and oil sands and Alberta royalties are now affected by
depths and productivity of wells and commodity prices. Given our production
profile and the current commodity price environment, our royalty rate has
decreased as compared to prior periods. Additionally, the Alberta Provincial
Government has implemented a number of drilling incentive programs whereby the
majority of our new wells brought on production since April 1, 2009 will
benefit from a reduced 5% royalty rate on the first 500 mmcf produced or
one-year, which ever comes first. We expect our corporate royalty rate to be
in the range of 12% to 16% for 2009 given the current commodity price
environment.

Operating Costs

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Operating
costs ($000) $ 25,114 $ 41,229 (39)% $ 96,175 $121,418 (21)%
per boe $ 11.55 $ 13.82 (16)% $ 12.40 $ 13.63 (9)%

Total operating costs decreased 39% and 21% for the three and nine months
ended September 30, 2009 as compared to the 2008 respective periods, which
resulted in a corresponding reduction in operating costs per boe by 16% and
9%. When compared to the second quarter of 2009, total operating costs
decreased 28% and operating costs per boe decreased by 7%. The lower total
operating costs has been primarily due to reduced production from our asset
dispositions completed in July 2009. We continue to experience lower operating
costs per boe as an aggressive optimization program through 2008 and into 2009
is continuing to demonstrate positive benefits and we will seek further
opportunities to improve our operating cost structure.

General and Administrative

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
General and
administrative
expense -
cash
($000) $ 7,097 $ 6,300 13% $ 20,636 $ 20,224 2%
per boe $ 3.26 $ 2.11 55% $ 2.66 $ 2.27 17%
General and
administrative
expense -
non-cash
($000) $ 6,127 $ - -% $ 7,816 $ (929) (941)%
per boe $ 2.82 $ - -% $ 1.01 $ (0.10) (1,108)%
Employees at
September 30 133 170 (22)%

General and administrative ("G&A") expense for the three and nine months ended
September 30, 2009 has increased compared to the same periods of 2008
primarily due to costs associated with our corporate conversion and
reorganization. Approximately $2.2 million was incurred directly for the
corporate conversion that was completed in July 2009 and $1.7 million for
severance costs. As a result of reducing staff levels, we were also able to
consolidate office space that will operationally and administratively benefit
Advantage. However, certain office space was completely vacated and we were
required to recognize $3.8 million as non-cash G&A expense with a
corresponding liability representing the full amount of all future related
lease payments. The office lease ends November 2012 and we will look for
opportunities to sublease the space to mitigate associated costs.
Upon conversion to a corporation on July 9, 2009, Advantage implemented a new
Restricted Share Performance Incentive Plan ("RSPIP" or the "Plan") as
approved by the shareholders with the purpose to retain and attract employees,
to reward and encourage performance, and to focus employees on operating and
financial performance that results in lasting shareholder return. The Plan
authorizes the Board of Directors to grant restricted shares to service
providers of the Corporation, including directors, officers, employees and
consultants. The number of restricted shares granted is based on the
Corporation's share price return for a twelve-month period and compared to a
peer group approved by the Board of Directors. The share price return is
calculated at the end of each and every quarter and is primarily based on the
12-month change in the share price. If the share price return for a 12-month
period is positive, a restricted share grant will be calculated based on the
return. If the share price return for a 12-month period is negative, but the
return is still within the top two-thirds of the approved peer group
performance, the Board of Directors may choose a discretionary restricted
share grant. The restricted share grants generally vest one-third immediately
on grant date, with the remaining two-thirds vesting evenly on the following
two yearly anniversary dates. The holders of restricted shares may elect to
receive cash upon vesting in lieu of the number of shares to be issued,
subject to consent of the Corporation. Compensation cost related to the Plan
is recognized as compensation expense within G&A expense over the service
period and incorporates the share grant price, the estimated number of
restricted shares to vest, and certain management estimates. The maximum
amount of restricted shares granted in any one quarter is limited to 50% of
the base salaries of those individuals participating in the Plan for such
period.
For the nine months ended September 30, 2009, we recognized $4.1 million of
non-cash equity-based compensation expense related to restricted shares
granted to service providers. Prior to the conversion to a corporation, the
Fund had a Restricted Trust Unit Plan and granted Restricted Trust Units
("RTUs") to service providers in January 2009. This grant was valued at $3.8
million to be issued in Trust Units at $5.49 per Trust Unit. The RTUs were
deemed to be granted in January 2009 with 171,093 Trust Units issued for the
first one-third of the grant that vested immediately and 379,009 RTUs
representing the remaining two-thirds of the grant that will vest over the
subsequent two anniversary dates. Since conversion to a corporation, the RTUs
are now considered restricted shares and will be settled by the issuance of
shares of the Corporation, with corresponding compensation expense recognized
over the service period. In conjunction with the corporate conversion, a
transitional award of restricted shares to service providers was approved by
shareholders valued at $8.4 million to be issued in shares at $5.80 per share.
The restricted shares were deemed to be granted in September 2009 with 251,867
shares issued for the first one-quarter of the grant that vested immediately
and 1,090,207 restricted shares representing the remaining three-quarters of
the grant that will vest over the subsequent three anniversary dates.
Compensation expense is recognized over the service period and included in
general and administrative expense.

Management Internalization

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Management
internalization
($000) $ - $ 1,118 (100)% $ 1,724 $ 6,048 (71)%
per boe $ - $ 0.37 (100)% $ 0.22 $ 0.68 (67)%

In 2006, the Fund and Advantage Investment Management Ltd. (the "Manager")
reached an agreement to internalize the pre-existing management contract
arrangement. As part of the agreement, the Fund agreed to purchase all of the
outstanding shares of the Manager pursuant to the terms of the arrangement,
thereby eliminating the management fee and performance incentive effective
April 1, 2006. The Trust Unit consideration issued in exchange for the
outstanding shares of the Manager was placed in escrow for a 3-year period and
was deferred and amortized into income as management internalization expense
over the specific vesting periods during which employee services were
provided. Management internalization has decreased during 2009 when compared
to 2008 as the Trust Units held in escrow continued to vest during the service
periods. As of June 23, 2009, the final Trust Units held in escrow vested and
there will be no subsequent management internalization expense recognized.

Interest on Bank Indebtedness

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Interest
expense
($000) $ 6,331 $ 6,579 (4)% $ 14,686 $ 21,463 (32)%
per boe $ 2.91 $ 2.21 32% $ 1.89 $ 2.41 (22)%
Average
effective
interest
rate 5.6% 4.8% 0.8% 4.4% 5.2% (0.8)%
Bank
indebtedness
at
September 30
($000) $330,800 $540,078 (39)%

Total interest expense decreased 4% and 32% for the three and nine months
ended September 30, 2009 as compared to 2008, respectively. The interest
expense decrease is the result of average lower interest rates during the
periods as bank lending rates declined significantly in response to rate
reductions enacted by central banks to stimulate the economy. This reduced
interest expense was partially offset by additional interest on a higher
average debt balance during early 2009. The Corporation's interest rates are
primarily based on short term bankers acceptance rates plus a stamping fee. In
June 2009 our credit facility was renewed and is subject to higher basis point
and stamping fee adjustments ranging from 1.5% to 4.0%, depending on the
Corporation's debt to cash flow ratio. Therefore, we expect that our average
effective interest rate will be higher during the following quarters than
compared to early 2009; however, this will be somewhat offset by lower
interest expense on the significantly reduced debt level that has resulted
from the July 2009 asset dispositions and equity financing. We monitor the
debt level to ensure an optimal mix of financing and cost of capital that will
provide a maximum return to our shareholders. Our current credit facilities
have been a favorable financing alternative with an effective interest rate of
only 4.4% for the nine months ended September 30, 2009.

Interest and Accretion on Convertible Debentures

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Interest on
convertible $ 3,354 $ 4,156 (19)% $ 11,332 $ 12,547 (10)%
debentures
($000)
per boe $ 1.54 $ 1.39 11% $ 1.46 $ 1.41 4%
Accretion on
convertible $ 612 $ 712 (14)% $ 1,975 $ 2,152 (8)%
debentures
($000)
per boe $ 0.28 $ 0.24 17% $ 0.25 $ 0.24 4%
Convertible
debentures
maturity
value at
September 30
($000) $132,221 $219,195 (40)%

Interest and accretion on convertible debentures for the three and nine months
ended September 30, 2009 has decreased compared to 2008 due to the maturity of
the 9.00% debentures on August 1, 2008, the 8.25% debentures on February 1,
2009, and the 8.75% debentures on June 30, 2009. Our 7.50% convertible
debentures were also settled on September 30, 2009 and will result in lower
interest and accretion in subsequent periods. Interest and accretion per boe
has increased in 2009 relative to 2008 due to the reduced production from the
asset dispositions that closed in July 2009.

Depletion, Depreciation and Accretion

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Depletion,
depreciation
and
accretion
($000) $ 62,499 $ 78,420 (20)% $204,598 $230,004 (11)%
per boe $ 28.75 $ 26.29 9% $ 26.39 $ 25.81 2%

Depletion and depreciation of fixed assets is provided on the
"unit-of-production" method based on total proved reserves. Accretion
represents the increase in the asset retirement obligation liability each
reporting period due to the passage of time. The depletion, depreciation and
accretion ("DD&A") provision has decreased for the three and nine months ended
September 30, 2009 compared to 2008 due to lower production resulting from the
asset dispositions that closed in July 2009. However, the asset dispositions
have also increased the DD&A per boe as compared to 2008 since the net
proceeds received per boe of proved reserves was generally less than the net
book value accumulated by Advantage from all past acquisitions and development
activities.

Taxes

Current taxes paid or payable for the nine months ended September 30, 2009
amounted to $1.0 million, compared to $2.4 million expensed for the same
period of 2008. Current taxes primarily represent Saskatchewan resource
surcharge, which is based on the petroleum and natural gas revenues within the
province of Saskatchewan. The reduction from 2008 is primarily due to the
corresponding decrease in commodity prices during 2009.
On July 9, 2009, the Fund was converted into the Corporation. For the nine
months ended September 30, 2009, the Corporation recognized a total future
income tax reduction of $3.9 million compared to $15.6 million for the same
period of 2008. As at September 30, 2009, the Corporation had a total future
income tax liability balance of $50.6 million, compared to $55.9 million at
December 31, 2008. Included in the future income tax expense of $17.0 million
recognized in the third quarter of 2009 was a future income tax expense impact
of $24.0 million related to the corporate conversion.

Net Income (Loss)

Three months ended Nine months ended
September 30 September 30
2009 2008 % change 2009 2008 % change
-------------------------------------------------------------------------
Net income
(loss)
($000) $(53,293) $113,391 (147)% $(72,213) $ 74,900 (196)%
per share
- Basic $ (0.33) $ 0.81 (141)% $ (0.48) $ 0.54 (189)%
- Diluted $ (0.33) $ 0.79 (142)% $ (0.48) $ 0.54 (189)%

Net loss for the three months ended September 30, 2009 was $53.3 million, as
compared to net income of $113.4 million for the same period of 2008. For the
nine months ended September 30, 2009, we experienced a net loss of $72.2
million, as opposed to the $74.9 million net income for the first nine months
of 2008. This year has presented major challenges relating to the commodity
price environment that has adversely impacted revenues, excluding hedging,
with reductions of 68% and 59% for the three and nine months ended September
30, 2009, respectively. These lower revenues were considerably mitigated by
our successful hedging program that has resulted in realized hedging gains of
$24.6 million and $70.2 million for the three and nine months ended September
30, 2009. The lower revenues have also been partially offset from a
significant reduction in royalties and lower Alberta Provincial royalty rates.
Additionally, we continue to experience lower operating costs as an aggressive
optimization program through 2008 and into 2009 is continuing to demonstrate
positive benefits and we will seek further opportunities to improve our
operating cost structure. A significant impact on our net income for this
quarter has been the corporate conversion that resulted in the recognition of
several one-time costs in G&A expense totally $7.7 million and a future income
tax expense of $24.0 million.

Cash Netbacks

Three months ended
September 30
2009 2008
$000 per boe $000 per boe
-------------------------------------------------------------------------
Revenue $ 68,470 $ 31.49 $216,618 $ 72.63
Realized gain (loss) on
derivatives 24,631 11.33 (21,234) (7.12)
Royalties (8,749) (4.02) (42,957) (14.40)
Operating costs (25,114) (11.55) (41,229) (13.82)
-------------------------------------------------------------------------
Operating $ 59,238 $ 27.25 $111,198 $ 37.29
General and administrative(1) (7,097) (3.26) (6,300) (2.11)
Interest (6,331) (2.91) (6,579) (2.21)
Interest on convertible
debentures(2) (3,354) (1.54) (4,156) (1.39)
Income and capital taxes (352) (0.16) (818) (0.27)
-------------------------------------------------------------------------
Funds from operations and
cash netbacks $ 42,104 $ 19.38 $ 93,345 $ 31.31
-------------------------------------------------------------------------

Nine months ended
September 30
2009 2008
$000 per boe $000 per boe
-------------------------------------------------------------------------
Revenue $260,495 $ 33.60 $633,669 $ 71.11
Realized gain (loss) on
derivatives 70,215 9.06 (40,912) (4.59)
Royalties (37,620) (4.85) (123,011) (13.80)
Operating costs (96,175) (12.40) (121,418) (13.63)
-------------------------------------------------------------------------
Operating $196,915 $ 25.41 $348,328 $ 39.09
General and administrative(1) (20,636) (2.66) (20,224) (2.27)
Interest (14,686) (1.89) (21,463) (2.41)
Interest on convertible
debentures(2) (11,332) (1.46) (12,547) (1.41)
Income and capital taxes (976) (0.13) (2,377) (0.27)
-------------------------------------------------------------------------
Funds from operations and
cash netbacks $149,285 $ 19.27 $291,717 $ 32.73
-------------------------------------------------------------------------

(1) General and administrative expense excludes non-cash G&A and equity-
based compensation expense.
(2) Interest on convertible debentures excludes non-cash accretion
expense.

Funds from operations and cash netbacks decreased in total and per boe for the
three and nine months ended September 30, 2009 compared to the same periods of
2008. The lower cash netback in total and per boe is primarily due to much
weaker commodity prices, particularly natural gas, which adversely impacted
revenue. However, as a result of our successful commodity price risk
management program, we were able to realize significant offsetting gains on
derivatives. Royalties also decreased during the periods as would be expected
since they are significantly influenced by commodity prices. Operating costs,
which had increased steadily over the 2008 year, have started to decrease as
we begin to realize benefits from our ongoing optimization efforts.
When compared to the second quarter of 2009, our cash netbacks per boe
actually increased 6% to $19.38 per boe from $18.26 per boe in the second
quarter of 2009. This improvement occurred as we realized additional
derivative gains as a higher proportion of our production was hedged for the
three months ended September 30, 2009. Additionally, we realized decreases in
both royalties and operating costs as compared to the second quarter of 2009.

Contractual Obligations and Commitments

The Corporation has contractual obligations in the normal course of operations
including purchases of assets and services, operating agreements,
transportation commitments, sales contracts and convertible debentures. These
obligations are of a recurring and consistent nature and impact cash flow in
an ongoing manner. The following table is a summary of the Corporation's
remaining contractual obligations and commitments. Advantage has no guarantees
or off-balance sheet arrangements other than as disclosed.

Payments due by period
($ millions) Total 2009 2010 2011 2012 2013
-------------------------------------------------------------------------
Building leases $ 7.4 $ 0.9 $ 3.9 $ 1.5 $ 1.1 $ -
Capital leases 4.9 0.8 2.2 1.9 - -
Pipeline/transportation 4.1 0.4 1.8 0.9 0.5 0.5
Convertible debentures(1) 132.2 - 69.9 62.3 - -
-------------------------------------------------------------------------
Total contractual
obligations $148.6 $ 2.1 $ 77.8 $ 66.6 $ 1.6 $ 0.5
-------------------------------------------------------------------------

(1) As at September 30, 2009, Advantage had $132.2 million convertible
debentures outstanding (excluding interest payable during the various
debenture terms). Each series of convertible debentures are
convertible to shares based on an established conversion price. All
remaining obligations related to convertible debentures can be
settled through the payment of cash or issuance of shares at
Advantage's option.

(2) Bank indebtedness of $330.8 million has been excluded from the
contractual obligations table as the credit facilities constitute a
revolving facility for a 364 day term which is extendible annually
for a further 364 day revolving period at the option of the
syndicate. If not extended, the revolving credit facility is
converted to a one year term facility with repayment due one year
after commencement of the term.

Liquidity and Capital Resources

The following table is a summary of the Corporation's capitalization
structure.

($000, except as otherwise indicated) September 30, 2009
-------------------------------------------------------------------------
Bank indebtedness (long-term) $ 330,800
Working capital deficit(1) 109,581
-------------------------------------------------------------------------
Net debt $ 440,381
-------------------------------------------------------------------------
Shares outstanding (000) 162,476
Shares closing market price ($/share) $ 7.57
-------------------------------------------------------------------------
Shares outstanding market value $1,229,946
-------------------------------------------------------------------------
Convertible debentures maturity value (long-term) $ 62,294
Capital lease obligations (long term) $ 2,041
-------------------------------------------------------------------------
Total capitalization $1,734,662
-------------------------------------------------------------------------

(1) Working capital deficit includes accounts receivable, prepaid
expenses and deposits, accounts payable and accrued liabilities,
and the current portion of capital lease obligations and convertible
debentures.

Advantage monitors its capital structure and makes adjustments according to
market conditions in an effort to meet its objectives given the current
outlook of the business and industry in general. The capital structure of the
Corporation is composed of working capital (excluding derivative assets and
liabilities), bank indebtedness, convertible debentures, capital lease
obligations and shareholders' equity. Advantage may manage its capital
structure by issuing new shares, repurchasing outstanding shares, obtaining
additional financing either through bank indebtedness or convertible debenture
issuances, refinancing current debt, issuing other financial or equity-based
instruments, declaring a dividend, implementing a dividend reinvestment plan,
adjusting capital spending, or disposing of assets. The capital structure is
reviewed by Management and the Board of Directors on an ongoing basis.
Management of the Corporation's capital structure is facilitated through its
financial and operational forecasting processes. The forecast of the
Corporation's future cash flows is based on estimates of production, commodity
prices, forecast capital and operating expenditures, and other investing and
financing activities. The forecast is regularly updated based on new commodity
prices and other changes, which the Corporation views as critical in the
current environment. Selected forecast information is frequently provided to
the Board of Directors. This continual financial assessment process further
enables the Corporation to mitigate risks. The Corporation continues to
satisfy all liabilities and commitments as they come due. We had an
established $525 million credit facility agreement with a syndicate of
financial institutions; the balance of which at September 30, 2009 was $330.8
million. This facility was renewed in June 2009 and is comprised of a $20
million revolving operating loan facility and a $505 million extendible
revolving credit facility. The Corporation additionally has convertible
debentures that will mature in 2010 and 2011, whereby we have the option to
settle such obligations by cash or though the issuance of shares. The current
economic situation has placed additional pressure on commodity prices. Natural
gas prices that had been improving early in 2008, have now declined due to the
ailing economy as well as increased inventory levels from strong injections
and mild weather. Natural gas has dropped with AECO gas presently trading at
approximately $3.30/GJ. Crude oil has dropped from a historic high in 2008 to
approximately US$79/bbl. The impact from the decrease in WTI will be somewhat
mitigated for Advantage due to the strengthening US dollar relative to the
Canadian dollar. The outlook for the Corporation from prolonged weak commodity
prices would be reductions in operating netbacks and funds from operations.
Management has partially mitigated this risk through our commodity hedging
program but the lower commodity price environment has still had a significant
negative impact. In order to strengthen our financial position and balance our
cash flows, we closed both an equity financing and two asset dispositions in
July 2009 to repay debt and focus capital spending on our Montney natural gas
resource play.
In summary, we have implemented a strategy to balance funds from operations
and capital program expenditure requirements. A successful hedging program was
also executed to help reduce the volatility of our funds from operations. As a
result, we feel that Advantage has implemented adequate strategies to protect
our business as much as possible in this environment. However, as with all
companies, we are still exposed to risks as a result of the current economic
situation and the potential duration. We continue to closely monitor the
possible impact on our business and strategy, and will make adjustments as
necessary with prudent management.

Shareholders' Equity and Convertible Debentures

Advantage has utilized a combination of equity, convertible debentures and
bank debt to finance acquisitions and development activities.
As at September 30, 2009, the Corporation had 162.5 million shares
outstanding. Prior to converting to a corporation, the Fund had issued
1,263,158 Trust Units as a result of the Premium Distribution(TM),
Distribution Reinvestment and Optional Trust Unit Purchase Plan, generating
$5.2 million reinvested in the Fund (September 30, 2008 - 2,918,047 Trust
Units were issued, generating $30.7 million reinvested in the Fund). On July
7, 2009, the Fund issued 17 million Trust Units through a bought deal
financing that raised net proceeds of $96.8 million. The proceeds were
utilized to reduce bank indebtedness.
On July 9, 2009, the Fund was dissolved and converted into the Corporation,
with each Trust Unit converted into one Common Share. As at November 12, 2009,
shares outstanding increased to 162.7 million due to shares issued in October
2009 pursuant to the Corporation's RSPIP.
At September 30, 2009, the Corporation had $132.2 million convertible
debentures outstanding that were immediately convertible to 5.8 million shares
based on the applicable conversion prices (December 31, 2008 - $219.2 million
outstanding and convertible to 9.5 million Trust Units). During the nine
months ended September 30, 2009, there were no conversions of debentures
(September 30, 2008 - $25,000 converted resulting in the issuance of 1,001
Trust Units). The principal amount of 8.25% convertible debentures matured on
February 1, 2009 and was settled by issuing 946,887 Trust Units. The 8.75%
convertible debentures matured and were settled with $29.8 million in cash on
June 30, 2009. The 7.50% convertible debentures matured and were settled with
$52.3 million in cash on September 30, 2009. As at November 12, 2009, the
convertible debentures outstanding have not changed from September 30, 2009.
We have $69.9 million of debentures that mature in June 2010 and $62.3 million
of debentures that mature in December 2011. These obligations can be settled
through the payment of cash or issuance of shares at Advantage's option.

Bank Indebtedness, Credit Facility and Other Obligations

At September 30, 2009, Advantage had bank indebtedness outstanding of $330.8
million. Bank indebtedness decreased $257.0 million since December 31, 2008,
primarily as a result of the asset dispositions and equity financing, both of
which closed in July 2009. The Corporation finalized a new credit facility of
$525 million, comprised of a $20 million revolving operating loan facility and
a $505 million extendible revolving credit facility. The credit facilities are
secured by a $1 billion floating charge demand debenture, a general security
agreement and a subordination agreement from the Corporation covering all
assets and cash flows. As well, the borrowing base for the Corporation's
credit facilities is determined through utilizing our regular reserve
estimates. The banking syndicate thoroughly evaluates the reserve estimates
based upon their own commodity price expectations to determine the amount of
the borrowing base. Revision or changes in the reserve estimates and commodity
prices can have either a positive or a negative impact on the borrowing base
of the Corporation. The next annual review is scheduled to occur in June 2010.
There can be no assurances that the $525 million credit facility will be
renewed at the current borrowing base level at that time. As at November 12,
2009, our bank indebtedness was approximately $330 million with unutilized
room of $195 million.
Advantage had a working capital deficiency of $109.6 million as at September
30, 2009. Our working capital includes items expected for normal operations
such as trade receivables, prepaids, deposits, trade payables and accruals as
well as the current portion of capital lease obligations and convertible
debentures. Working capital varies primarily due to the timing of such items,
the current level of business activity including our capital program,
commodity price volatility, and seasonal fluctuations. We do not anticipate
any problems in meeting future obligations as they become due given the level
of our funds from operations. It is also important to note that working
capital is effectively integrated with Advantage's operating credit facility,
which assists with the timing of cash flows as required. The increase in our
working capital deficiency is due to the inclusion in current liabilities of
$69.4 million of convertible debentures representing the $69.9 million 6.50%
debentures that mature in June 2010. Advantage has capital lease obligations
on various pieces of equipment used in its operations. The total amount of
principal obligation outstanding at September 30, 2009 is $4.7 million,
bearing interest at effective rates ranging from 5.5% to 6.7%, and is
collateralized by the related equipment. The leases expire at dates ranging
from December 2009 to August 2010.

Capital Expenditures

Three months ended Nine months ended
September 30 September 30
($000) 2009 2008 2009 2008
-------------------------------------------------------------------------
Land and seismic $ 559 $ 5,312 $ 2,266 $ 9,493
Drilling, completions
and workovers 29,914 44,017 72,052 90,186
Well equipping and
facilities 12,161 18,198 36,540 55,774
Other 24 217 162 826
-------------------------------------------------------------------------
$ 42,658 $ 67,744 $ 111,020 $ 156,279
Property acquisitions - 7,621 - 7,621
Property dispositions (243,565) - (245,184) (91)
-------------------------------------------------------------------------
Total capital
expenditures $ (200,907) $ 75,365 $ (134,164) $ 163,809
-------------------------------------------------------------------------

Advantage's exploitation and development program focuses on areas where past
activity has yielded long-life reserves with high cash netbacks. We are very
well positioned to selectively exploit the highest value-generating drilling
opportunities given the size, strength and diversity of our asset base as
evidenced by our success at Glacier, Nevis and several other key properties.
As a result, the Corporation has a high level of flexibility to allocate its
capital program and ensure a risk-balanced platform of projects. Our
preference is to operate a high percentage of our properties such that we can
maintain control of capital expenditures, operations and cash flows.
Advantage's acquisition strategy has been to acquire long-life properties with
strong drilling opportunities while retaining a balance of year round access
and risk.
For the nine month period ended September 30, 2009, the Corporation spent a
net $111.0 million and drilled a total of 19.8 net (33 gross) wells at a 97%
success rate. Total capital spending included $83.9 million at Glacier, $7.1
million at Martin Creek, $4.0 million at Nevis, and the remaining balance at
other miscellaneous areas. Glacier capital spending included 10.3 net (13
gross) horizontal wells and 2 net (2 gross) vertical wells. Ten horizontal
wells have been brought on-stream year-to-date with 30 day initial production
rates of 2 mmcf/d to over 5 mmcf/d. Facilities work involving the expansion of
compression facilities and our pipeline gathering system was completed at the
end of the second quarter 2009 and has taken our overall facility capacity to
25 mmcf/d after commissioning the expansion. New wells brought on-stream after
April 1, 2009 have qualified for the Alberta royalty incentive program which
results in a 5% royalty rate for one year or 500 mmcf of gas production.
Activity is now well underway at Glacier to increase production capacity to
approximately 50 mmcf/d by mid 2010. At Nevis, activity has been focused on
drilling high initial deliverability wells that should qualify for the
recently extended Alberta royalty incentive program.
On July 8, 2009, the Board of Directors approved a new capital budget for the
twelve month period beginning July 2009 and ending June 2010. Management will
review the capital program on a regular basis in the context of prevailing
economic conditions and make adjustments as deemed necessary to the program,
subject to review by the Board of Directors.
Advantage's corporate capital budget for the twelve month period ending June
2010 has been set at $207 million, with $105 to $110 million for the remainder
of 2009. The budget will focus on development of our Montney natural gas
resource play at Glacier, Alberta where Advantage will continue to employ a
phased development approach. Phase I of the development plan was achieved
during the second quarter of 2009 where production capacity was increased to
approximately 25 mmcf/d and included wells, compression facilities and
additional pipelines. Phase II of the development plan is well underway
targeting a production capacity increase to approximately 50 mmcf/d by mid
2010. Phase III of the development plan will target the attainment of 100
mmcf/d by mid 2011. Approximately 79% of the total capital expenditures for
Phase II will be allocated to Glacier.

Sources and Uses of Funds

The following table summarizes the various funding requirements during the
nine months ended September 30, 2009 and 2008 and the sources of funding to
meet those requirements:

Nine months ended
September 30
($000) 2009 2008
-------------------------------------------------------------------------
Sources of funds
Property dispositions $245,184 $ 91
Funds from operations 149,285 291,717
Units issued, less costs 96,779 1,248
Decrease in working capital - 11,203
-------------------------------------------------------------------------
$491,248 $304,259
-------------------------------------------------------------------------
Uses of funds
Decrease in bank indebtedness $256,968 $ 7,348
Expenditures on property and equipment 111,020 156,279
Convertible debenture maturities 82,107 5,392
Distributions to Unitholders 23,481 120,108
Increase in working capital 12,208 -
Expenditures on asset retirement 4,490 6,291
Reduction of capital lease obligations 974 1,220
Property acquisitions - 7,621
-------------------------------------------------------------------------
$491,248 $304,259
-------------------------------------------------------------------------

The Corporation generated lower funds from operations during the nine months
ended September 30, 2009 compared to the same period of 2008, due to a sharp
decrease in commodity prices and lower production from the asset dispositions
that closed in July 2009. During the period we completed two assets
dispositions and a financing that enabled us to repay a significant portion of
our outstanding bank indebtedness. Other major uses of funds during this
period included expenditures on property and equipment and convertible
debenture maturities. We had three convertible debenture maturities this year,
two of which were settled for total cash proceeds of $82.1 million. As a
result of our efforts to maintain a meaningful capital program, repay bank
indebtedness and convert to a growth oriented corporation, distributions were
suspended indefinitely in the first quarter of 2009 and the corporation does
not currently pay a dividend.

Quarterly Performance

2009 2008
($000, except as
otherwise indicated) Q3 Q2 Q1 Q4
-------------------------------------------------------------------------
Daily production
Natural gas (mcf/d) 91,200 124,990 117,968 120,694
Crude oil and NGLs
(bbls/d) 8,431 10,212 10,942 11,413
Total (boe/d) 23,631 31,044 30,603 31,529
Average prices
Natural gas ($/mcf)
Excluding hedging $ 2.89 $ 3.56 $ 5.36 $ 7.15
Including hedging $ 6.10 $ 5.63 $ 6.52 $ 7.61
AECO monthly index $ 3.03 $ 3.66 $ 5.64 $ 6.79
Crude oil and NGLs
($/bbl)
Excluding hedging $ 56.99 $ 55.89 $ 43.41 $ 53.65
Including hedging $ 54.02 $ 54.51 $ 54.54 $ 61.67
WTI ($US/bbl) $ 68.29 $ 59.62 $ 43.21 $ 58.75
Total revenues (before
royalties) $ 93,101 $ 114,659 $ 122,950 $ 149,205
Net income (loss) $ (53,293) $ (37,810) $ 18,890 $ (95,477)
per share
- basic $ (0.33) $ (0.26) $ 0.13 $ (0.67)
- diluted $ (0.33) $ (0.26) $ 0.13 $ (0.67)
Funds from operations $ 42,104 $ 51,590 $ 55,591 $ 69,370
Distributions declared $ - $ - $ 17,266 $ 45,514

2008 2007
($000, except as
otherwise indicated) Q3 Q2 Q1 Q4
-------------------------------------------------------------------------
Daily production
Natural gas (mcf/d) 122,627 123,104 125,113 128,556
Crude oil and NGLs
(bbls/d) 11,980 11,498 12,281 12,895
Total (boe/d) 32,418 32,015 33,133 34,321
Average prices
Natural gas ($/mcf)
Excluding hedging $ 8.65 $ 10.33 $ 7.90 $ 6.23
Including hedging $ 7.55 $ 9.18 $ 8.23 $ 6.97
AECO monthly index $ 9.27 $ 9.35 $ 7.13 $ 6.00
Crude oil and NGLs
($/bbl)
Excluding hedging $ 107.96 $ 110.15 $ 85.99 $ 73.40
Including hedging $ 100.02 $ 101.34 $ 84.83 $ 70.40
WTI ($US/bbl) $ 118.13 $ 124.00 $ 97.96 $ 90.63
Total revenues (before
royalties) $ 195,384 $ 208,868 $ 188,505 $ 165,951
Net income (loss) $ 113,391 $ (14,369) $ (24,122) $ 13,795
per share
- basic $ 0.81 $ (0.10) $ (0.18) $ 0.10
- diluted $ 0.79 $ (0.10) $ (0.18) $ 0.10
Funds from operations $ 93,345 $ 103,754 $ 94,618 $ 80,519
Distributions declared $ 50,743 $ 50,364 $ 50,021 $ 57,875

The table above highlights the Corporation's and Fund's performance for the
third quarter of 2009 and also for the preceding seven quarters. Production
has gradually decreased from the fourth quarter of 2007 through the first half
of 2008 due to natural declines, wet and cold weather delays, and facility
turnarounds. Production increased modestly in the third quarter of 2008 as new
wells were brought on production and most facility turnarounds were completed.
During the fourth quarter of 2008 and the first quarter of 2009, production
again decreased as we experienced freezing conditions from early cold weather
in December and a slow recovery from such cold weather conditions. An extended
third party facility outage also began in August 2008 and has continued
through 2009 but is now substantially completed. Our production will be
brought back on-stream as commodity prices improve. Production increased in
the second quarter of 2009 due to recovery from cold weather conditions that
caused brief production outages and additional production from a number of
wells drilled during the first quarter of 2009 but delayed until after March
31, 2009 such that we could benefit from the new 5% Alberta Provincial royalty
rate available on such wells for the next twelve month period. We experienced
a significant decrease in production during the third quarter of 2009 as we
successfully completed asset dispositions that closed in July 2009 for net
proceeds of $243.6 million, subject to further adjustments. The disposed
properties represented approximately 8,100 boe/d of production. Our financial
results, particularly revenues and funds from operations, increased through to
the second quarter of 2008, as both commodity prices and production steadily
increased over that timeframe. However, revenues and funds from operations
slightly declined in the third quarter of 2008, as commodity prices began to
decline in response to the financial crisis that materialized in the fall of
2008. This trend worsened in the fourth quarter, as a full global recession
set in, and commodity prices continued on a downward trend through to the
third quarter of 2009. We realized net income during the fourth quarter of
2007 as we completed the full integration of the Sound acquisition and
commodity prices began to improve. However, net losses were realized in the
first and second quarters of 2008, primarily as a result of significant
unrealized losses on commodity derivative contracts for future periods.
Commodity price declines in the third quarter of 2008 gave rise to significant
unrealized gains on these same derivative contracts, and in turn the
Corporation reported record high net income. We recognized a considerable net
loss in the fourth quarter of 2008, a combined result of falling commodity
prices and an impairment of our entire balance of goodwill. In the first
quarter of 2009, the global economy showed no clear sign of recovery and
commodity prices, particularly natural gas, were weak in comparison to prior
quarters. However, Advantage was still able to report net income as we
recognized both realized and unrealized gains on our derivative contracts and
moderately lower expenses, including operating costs. Natural gas prices
continued to worsen during the second and third quarters of 2009 resulting in
the recognition of net losses for the periods. The third quarter net loss was
also impacted by additional costs incurred related to the corporate conversion
and increased depletion and depreciation expense that resulted from the asset
dispositions. Partially offsetting these net losses is continuing reduction in
costs including royalties and operating costs.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires
Management to make certain judgments and estimates. Changes in these judgments
and estimates could have a material impact on the Corporation's financial
results and financial condition.
Management relies on the estimate of reserves as prepared by the Corporation's
independent qualified reserves evaluator. The process of estimating reserves
is critical to several accounting estimates. The process of estimating
reserves is complex and requires significant judgments and decisions based on
available geological, geophysical, engineering and economic data. These
estimates may change substantially as additional data from ongoing development
and production activities becomes available and as economic conditions impact
crude oil and natural gas prices, operating costs, royalty burden changes, and
future development costs. Reserve estimates impact net income through
depletion and depreciation of fixed assets, the provision for asset retirement
costs and related accretion expense, and impairment calculations for fixed
assets and goodwill. The reserve estimates are also used to assess the
borrowing base for the Corporation's credit facilities. Revision or changes in
the reserve estimates can have either a positive or a negative impact on net
income and the borrowing base of the Corporation.
Management's process of determining the provision for future income taxes, the
provision for asset retirement obligation costs and related accretion expense,
and the fair values assigned to any acquired company's assets and liabilities
in a business combination is based on estimates. These estimates are
significant and can include reserves, future production rates, future crude
oil and natural gas prices, future costs, future interest rates, future tax
rates and other relevant assumptions. Revisions or changes in any of these
estimates can have either a positive or a negative impact on asset and
liability values and net income.
In accordance with GAAP, derivative assets and liabilities are recorded at
their fair values at the reporting date, with unrealized gains and losses
recognized directly into net income and comprehensive income in the same
period. The fair value of derivatives outstanding is an estimate based on
pricing models, estimates, assumptions and market data available at that time.
As such, the recognized amounts are not cash and the actual gains or losses
realized on eventual cash settlement can vary materially due to subsequent
fluctuations in commodity prices as compared to the valuation assumptions.

International Financial Reporting Standards ("IFRS")

In February 2008, the Accounting Standards Board of the Canadian Institute of
Chartered Accountants confirmed that publicly accountable entities will be
required to adopt IFRS effective January 1, 2011, including preparation of
comparative financial information. Management has engaged its key personnel
responsible for financial reporting and developed an overall plan to address
IFRS implementation. The initial stage of the plan involved staff training and
ongoing education. Key personnel received professional education on IFRS
accounting principles and standards, both in general and for the oil and gas
industry in particular. Review of changes to IFRS has been incorporated into
existing processes of internal control over financial reporting. A project
plan for IFRS implementation has been prepared and will be subject to ongoing
revision as there are developments. As well, appropriate operating personnel
have been engaged, as necessary, to determine how to implement the
requirements of IFRS into the Corporation's manual and information systems
that collect and process financial data. We expect to have continual
discussion with our external and internal auditors throughout the process
regarding IFRS and implementation.
The most significant change identified will be accounting for fixed assets.
The Corporation, like many Canadian oil and gas reporting issuers, applies the
"full cost" concept in accounting for its oil and gas assets. Under full cost,
capital expenditures are maintained in a single cost centre for each country,
and the cost centre is subject to a single depletion calculation and
impairment test. IFRS will require the Corporation to make a much more
detailed assessment of its oil and gas assets. For depletion and depreciation,
the Corporation must identify asset components, and determine an appropriate
depreciation or depletion method for each component. With regard to impairment
test calculations, we must identify "Cash Generating Units", which are defined
as the smallest group of assets that produce independent cash flows. An
impairment test must be performed individually for all cash generating units
when indicators suggest there maybe impairment. The recognition of impairments
in a prior year can be reversed subsequently depending on such calculations.
It is also important to note that the International Accounting Standards Board
("IASB") is currently undertaking an extractive activities project, to develop
accounting standards specifically for businesses like that of the Corporation.
However, the project will not be complete prior to IFRS adoption in Canada. We
have also identified a number of other areas whereby differences between
Canadian GAAP and IFRS are likely to exist for Advantage. However, currently
we are concentrating on the accounting for fixed assets and will evaluate
these other areas in due course and develop more detailed plans to address the
identified issues.

Disclosure Controls and Internal Controls over Financial Reporting

Disclosure controls and procedures have been designed to provide reasonable
assurance that information required to be disclosed by the Corporation is
recorded, processed, summarized and reported within the time periods specified
under the Canadian securities law. Advantage's Chief Executive Officer and
Chief Financial Officer have concluded, based on their evaluation, that the
disclosure controls and procedures as of the end of September 30, 2009, are
effective and provide reasonable assurance that material information related
to the Corporation is made known to them by others within Advantage.
Advantage's Chief Executive Officer and Chief Financial Officer are
responsible for establishing and maintaining internal controls over financial
reporting ("ICFR"). They have, as at the quarter ended September 30, 2009,
designed ICFR or caused it to be designed under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
Canadian GAAP. The control framework Advantage's officers used to design the
ICFR is the Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations.
Advantage's Chief Executive Officer and Chief Financial Officer are required
to disclose any change in the internal controls over financial reporting that
occurred during our most recent interim period that has materially affected,
or is reasonably likely to affect, the Corporation's internal controls over
financial reporting. No material changes in the internal controls were
identified during the period ended September 30, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal controls
over financial reporting.
It should be noted that a control system, including Advantage's disclosure and
internal controls and procedures, no matter how well conceived or operated,
can provide only reasonable, not absolute, assurance that the objectives of
the control system will be met and it should be not be expected that the
disclosure and internal controls and procedures will prevent all errors or
fraud.

Outlook

We are pleased that during the third quarter of 2009, our conversion to a
growth oriented corporation was completed as well as several transactions
aimed at reducing debt, increasing financial flexibility, and improving our
overall balance sheet. In July 2009, we successfully closed two asset
dispositions for net proceeds of $243.6 million, subject to further
adjustments, and representing production of approximately 8,100 boe/d. On July
7, 2009, we closed the issuance of 17 million shares on a bought deal basis,
at a price of $6.00 per share for net proceeds of $96.8 million. We also
settled our outstanding 7.50% convertible debenture for $52.3 million of cash.
Our total bank indebtedness and convertible debentures obligations have
decreased 44% from June 30, 2009. As at November 12, 2009, our bank
indebtedness was approximately $330 million with unutilized room available of
$195 million.
These transactions have enabled Advantage to repay a significant portion of
outstanding debt while increasing the balance of unutilized credit facility.
This improves our financial flexibility moving forward as a growth oriented
corporation pursuing the significant potential of our Montney natural gas
resource play. Our credit facility may be subsequently redrawn to fund capital
expenditures and for general corporate purposes but it is our long-term
intention to balance funds from operations and our capital expenditure
program. Although our funds from operations will continue to be impacted by
the volatility of crude oil and natural gas prices, we have a substantial
hedging portfolio that improves cash flow stability for our capital program.
Approximately 82% of our natural gas production, net of royalties, is now
hedged for the remainder of 2009 at an average fixed price of $8.17/mcf. We
have also hedged approximately 53% of our remaining 2009 crude oil production,
net of royalties, at an average floor price of $62.40/bbl. For 2010, we have
hedged 58% of our natural gas production, net of royalties, at an average
fixed price of $7.46/mcf and 31% of our crude oil production, net of
royalties, at an average fixed price of $67.83/bbl. Our strategy will be to
continue to employ a multi-year hedging program to reduce the volatility in
cash flow in support of capital requirements.
In conjunction with our corporate conversion, we announced on July 8, 2009
that the Board of Directors had approved a new capital budget for the twelve
month period beginning July 2009 and ending June 2010. Management will review
the capital program on a regular basis in the context of prevailing economic
conditions and make adjustments as deemed necessary to the program, subject to
review by the Board of Directors. Advantage's corporate capital budget for
this period has been set at $207 million, with approximately $105 to $110
million for the remainder of 2009, and will continue to focus on our Montney
natural gas resource play at Glacier, Alberta.
Advantage will continue to employ a phased development approach for our
Glacier property. Phase II of the development plan will be completed by
mid-2010 and will result in production capacity increasing to 50 mmcf/d. A
continued focus on optimizing well completions at Glacier will involve
production logging of several wells in order to further evaluate the
effectiveness of frac designs and new technology applications. Phase II of the
Glacier development plan includes the drilling and completion of 16 gross
(16.0 net) horizontal operated wells, up to 16 gross (6.1 net) joint interest
horizontal wells, and 1 gross (1.0 net) vertical well. Drilling plans will
continue to balance production and reserve growth and delineation of our
extensive 89 section gross (average 90% working interest) Montney land block.
Drilling resumed in early July at Glacier with the deployment of four drilling
rigs on operated and joint interest lands. Phase II also includes the
expansion of the existing gas gathering system, additional compression and a
new Advantage operated gas plant to complement the existing infrastructure and
provide total processing and production capacity of 50 mmcf/d. All necessary
regulatory approvals have been received for Advantage's new gas plant and
construction will commence shortly. The majority of the wells drilled during
the last half of 2009 will be tied-in during the second quarter of 2010 when
the facilities expansions and gas plant are expected to be completed. Glacier
capital expenditures are estimated to be approximately $84 million net for the
last half of 2009 and $81 million net for the first half of 2010.
Approximately $116 million will be allocated to drilling and completions with
$29 million for well equipping and tie-ins and $20 million for facilities and
plant expansion. Phase III of the development plan will result in the
attainment of 100 mmcf/d by mid-2011.
The Alberta Government's recently announced extension of the energy incentive
programs to March 31, 2011 will provide substantial benefits to all three
phases of our Glacier development plan. The energy incentive programs will
allow Advantage to capitalize on lower drilling costs (through a drilling
royalty credit of up to $200 per meter of drilled depth subject to a corporate
ceiling) and an initial 5% royalty rate on the first 500 mmcf of production
for new wells based on our go-forward drilling plans for each of the three
phases of development at Glacier.
As a result of the continued shut-in of natural gas production at Lookout
Butte and several smaller operated and non-operated properties due to lower
natural gas prices through the third quarter, we anticipate that production
will trend towards the lower end of the production range that was provided
(approximately 22,700 boe/d). The natural gas production shut-ins from these
properties have a smaller impact on funds from operations due to the lower
netbacks as they are not covered by our hedge positions. Plans are to resume
production from these properties as natural gas prices improve through the
fourth quarter. We also anticipate that royalty rates will trend lower to
approximately 13% and operating costs between $11.50 and $12.50/boe through
the remainder of 2009. With regards to field operating costs, we will continue
with our optimization programs which has already delivered cost reductions. We
expect to see some further easing of operating costs as the lower commodity
price environment is expected to remain for a sustained period.
A full year 2010 capital budget and guidance will be provided before year-end
2009.
Looking forward, Advantage is well positioned to pursue future development
plans at Glacier with our strong balance sheet, solid hedging position and
conversion to a growth oriented corporation. With a stable production base and
an inventory of over 500 drilling locations at Glacier, Management will
continue to employ a disciplined approach to create long term growth in
shareholder value.

Additional Information

Additional information relating to Advantage can be found on SEDAR at
www.sedar.com and the Corporation's website at www.advantageog.com. Such other
information includes the annual information form, the annual information
circular - proxy statement, press releases, material contracts and agreements,
and other financial reports. The annual information form will be of particular
interest for current and potential shareholders as it discusses a variety of
subject matter including the nature of the business, description of our
operations, general and recent business developments, risk factors, reserves
data and other oil and gas information.

November 12, 2009

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets
September 30, December 31,
(thousands of dollars) 2009 2008
-------------------------------------------------------------------------
(unaudited)
Assets
Current assets
Accounts receivable $ 40,691 $ 84,689
Prepaid expenses and deposits 9,446 11,571
Derivative asset (note 10) 40,880 41,472
-------------------------------------------------------------------------
91,017 137,732
Derivative asset (note 10) 2,357 1,148
Fixed assets (note 3) 1,823,408 2,163,866
-------------------------------------------------------------------------
$1,916,782 $2,302,746
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 87,715 $ 146,046
Distributions payable to Unitholders - 11,426
Current portion of capital lease obligations
(note 4) 2,638 1,747
Current portion of convertible debentures
(note 5) 69,365 86,125
Derivative liability (note 10) 8,796 611
Future income taxes 9,200 11,939
-------------------------------------------------------------------------
177,714 257,894
Derivative liability (note 10) 2,785 1,039
Capital lease obligations (note 4) 2,041 3,906
Bank indebtedness (note 6) 327,749 584,717
Convertible debentures (note 5) 60,610 128,849
Asset retirement obligations (note 7) 67,666 73,852
Future income taxes 41,404 43,976
Other liability (note 8) 3,694 -
-------------------------------------------------------------------------
683,663 1,094,233
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Shareholders' Equity
Share capital (note 9) 2,188,384 -
Unit capital (note 9) - 2,075,877
Convertible debentures equity component (note 5) 6,055 9,403
Contributed surplus (note 9) 5,213 287
Deficit (966,533) (877,054)
-------------------------------------------------------------------------
1,233,119 1,208,513
-------------------------------------------------------------------------
$1,916,782 $2,302,746
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Commitments (note 12)

see accompanying Notes to Consolidated Financial Statements

Consolidated Statements of Income (Loss),
Comprehensive Income (Loss) and Deficit

(thousands of dollars, Three months ended Nine months ended
except for per share Sept. 30, Sept. 30, Sept. 30, Sept. 30,
amounts) (unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Revenue
Petroleum and natural
gas $ 68,470 $ 216,618 $ 260,495 $ 633,669
Realized gain (loss) on
derivatives (note 10) 24,631 (21,234) 70,215 (40,912)
Unrealized gain (loss)
on derivatives (note 10) (9,136) 128,718 (9,314) 4,836
Royalties (8,749) (42,957) (37,620) (123,011)
-------------------------------------------------------------------------
75,216 281,145 283,776 474,582
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Expenses
Operating 25,114 41,229 96,175 121,418
General and
administrative 13,224 6,300 28,452 19,295
Management internalization
(note 9) - 1,118 1,724 6,048
Interest 6,331 6,579 14,686 21,463
Interest and accretion on
convertible debentures 3,966 4,868 13,307 14,699
Depletion, depreciation
and accretion 62,499 78,420 204,598 230,004
-------------------------------------------------------------------------
111,134 138,514 358,942 412,927
-------------------------------------------------------------------------
Income (loss) before taxes (35,918) 142,631 (75,166) 61,655
Future income tax expense
(reduction) 17,023 28,422 (3,929) (15,622)
Income and capital taxes 352 818 976 2,377
-------------------------------------------------------------------------
17,375 29,240 (2,953) (13,245)
-------------------------------------------------------------------------
Net income (loss) and
comprehensive income
(loss) (53,293) 113,391 (72,213) 74,900
Deficit, beginning of
period (913,240) (798,711) (877,054) (659,835)
Distributions declared - (50,743) (17,266) (151,128)
-------------------------------------------------------------------------
Deficit, end of period $ (966,533) $ (736,063) $ (966,533) $ (736,063)
-------------------------------------------------------------------------
Net income (loss) per
share (note 9)
Basic $ (0.33) $ 0.81 $ (0.48) $ 0.54
Diluted $ (0.33) $ 0.79 $ (0.48) $ 0.54
-------------------------------------------------------------------------

see accompanying Notes to Consolidated Financial Statements

Consolidated Statements of Cash Flows

Three months ended Nine months ended
(thousands of dollars) Sept. 30, Sept. 30, Sept. 30, Sept. 30,
(unaudited) 2009 2008 2009 2008
-------------------------------------------------------------------------
Operating Activities
Net income (loss) $ (53,293) $ 113,391 $ (72,213) $ 74,900
Add (deduct) items not
requiring cash:
Unrealized loss (gain)
on derivatives 9,136 (128,718) 9,314 (4,836)
Equity-based compensation 2,433 - 4,122 (929)
Non-cash general and
administrative (note 8) 3,694 - 3,694 -
Management internalization - 1,118 1,724 6,048
Accretion on convertible
debentures 612 712 1,975 2,152
Depletion, depreciation
and accretion 62,499 78,420 204,598 230,004
Future income tax expense
(reduction) 17,023 28,422 (3,929) (15,622)
Expenditures on asset
retirement (868) (344) (4,490) (6,291)
Changes in non-cash working
capital 9,435 22,520 (13,289) 5,570
-------------------------------------------------------------------------
Cash provided by operating
activities 50,671 115,521 131,506 290,996
-------------------------------------------------------------------------

Financing Activities
Units issued, less costs
(note 9) 96,900 323 96,779 1,248
Decrease in bank
indebtedness (315,361) (7,868) (256,968) (7,348)
Convertible debenture
maturities (note 5) (52,268) (5,392) (82,107) (5,392)
Reduction of capital lease
obligations (329) (308) (974) (1,220)
Distributions to
Unitholders - (39,476) (23,481) (120,108)
-------------------------------------------------------------------------
Cash used in financing
activities (271,058) (52,721) (266,751) (132,820)
-------------------------------------------------------------------------
Investing Activities
Expenditures on property
and equipment (42,658) (67,744) (111,020) (156,279)
Property acquisitions - (7,621) - (7,621)
Property dispositions
(note 3) 243,565 - 245,184 91
Changes in non-cash working
capital 19,480 12,565 1,081 5,633
-------------------------------------------------------------------------
Cash provided by (used in)
investing activities 220,387 (62,800) 135,245 (158,176)
-------------------------------------------------------------------------
Net change in cash - - - -
Cash, beginning of period - - - -
-------------------------------------------------------------------------
Cash, end of period $ - $ - $ - $ -
-------------------------------------------------------------------------
Supplementary Cash Flow
Information
Interest paid $ 7,095 $ 12,497 $ 22,135 $ 31,076
Taxes paid $ 450 $ 621 $ 1,060 $ 1,413

see accompanying Notes to Consolidated Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2009 (unaudited)

All tabular amounts in thousands except as otherwise indicated.

The interim consolidated financial statements of Advantage Oil & Gas Ltd.
("Advantage" or the "Corporation") have been prepared by management in
accordance with Canadian generally accepted accounting principles
("GAAP") using the same accounting policies as those set out in note 2 to
the consolidated financial statements of the predecessor legal entity,
Advantage Energy Income Fund (the "Fund"), for the year ended December
31, 2008, except as described below. These interim financial statement
note disclosures do not include all of those required by Canadian GAAP
applicable for annual financial statements. The interim consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements of the Fund for the year ended December
31, 2008 as set out in the Fund's Annual Report.

1. Business and Structure of Advantage

Advantage is a growth oriented intermediate oil and natural gas
exploration and production corporation with properties located in
Western Canada. Advantage was created on July 9, 2009, through the
successful completion of a plan of arrangement pursuant to an
information circular dated June 5, 2009. Advantage Energy Income Fund
was dissolved and converted into the corporation, Advantage Oil and
Gas Ltd., with each Trust Unit converted into one Common Share.
Advantage does not currently pay a dividend.

2. Changes in Accounting Policies

(a) Goodwill and intangible assets

In February 2008, the Canadian Institute of Chartered Accountants
("CICA") issued Section 3064, Goodwill and Intangible Assets,
replacing Section 3062, Goodwill and Other Intangible Assets and
Section 3450, Research and Development Costs. The new Section
became effective January 1, 2009. Management has implemented the
new Section and there was no impact for the financial statements
of the Corporation.

(b) Recent accounting pronouncements issued but not implemented

(i) International Financial Reporting Standards ("IFRS")

In February 2008, the CICA Accounting Standards Board
confirmed that IFRS will replace Canadian GAAP effective
January 1, 2011 for publicly accountable enterprises.
Management is currently evaluating the effects of all
current and pending pronouncements of the International
Accounting Standards Board on the financial statements of
the Corporation, and has developed a plan for
implementation.

(c) Comparative figures

Certain comparative figures have been reclassified to conform to
the current period presentation.

3. Fixed Assets

Accumulated
Depletion and Net Book
September 30, 2009 Cost Depreciation Value
---------------------------------------------------------------------
Petroleum and natural gas
properties $ 3,159,534 $ 1,340,075 $ 1,819,459
Furniture and equipment 11,733 7,784 3,949
---------------------------------------------------------------------
$ 3,171,267 $ 1,347,859 $ 1,823,408
---------------------------------------------------------------------

Accumulated
Depletion and Net Book
December 31, 2008 Cost Depreciation Value
---------------------------------------------------------------------
Petroleum and natural gas
properties $ 3,299,657 $ 1,140,710 $ 2,158,947
Furniture and equipment 11,572 6,653 4,919
---------------------------------------------------------------------
$ 3,311,229 $ 1,147,363 $ 2,163,866
---------------------------------------------------------------------

In July 2009, Advantage closed two asset dispositions for net
proceeds of $243.6 million, subject to further adjustments.

4. Capital Lease Obligations

The Corporation has capital leases on a variety of fixed assets.
Future minimum lease payments at September 30, 2009 consist of the
following:

2009 $ 838
2010 2,200
2011 1,925
-----------------------------------------
4,963
Less amounts representing
interest (284)
-----------------------------------------
4,679
Current portion (2,638)
-----------------------------------------
$ 2,041
-----------------------------------------

5. Convertible debentures

The balance of debentures outstanding at September 30, 2009 and
changes in the liability and equity components during the nine months
ended September 30, 2009 are as follows:

8.25% 8.75% 7.50%
---------------------------------------------------------
Trading symbol AAV.DBB AAV.DBF AAV.DBC
Debentures
outstanding $ - $ - $ -
---------------------------------------------------------
Liability component:
Balance at December
31, 2008 $ 4,859 $ 29,687 $ 51,579
Accretion of discount 8 152 689
Matured (4,867) (29,839) (52,268)
---------------------------------------------------------
Balance at September
30, 2009 $ - $ - $ -
---------------------------------------------------------
Equity component:
Balance at December
31, 2008 $ 248 $ 852 $ 2,248
Expired (248) (852) (2,248)
---------------------------------------------------------
Balance at September
30, 2009 $ - $ - $ -

6.50% 7.75% 8.00% Total
---------------------------------------------------------------------
Trading symbol AAV.DBE AAV.DBD AAV.DBG
Debentures
outstanding $ 69,927 $ 46,766 $ 15,528 $ 132,221
---------------------------------------------------------------------
Liability component:
Balance at December
31, 2008 $ 68,807 $ 44,964 $ 15,078 $ 214,974
Accretion of
discount 558 456 112 1,975
Matured - - - (86,974)
---------------------------------------------------------------------
Balance at September
30, 2009 $ 69,365 $ 45,420 $ 15,190 $ 129,975
---------------------------------------------------------------------
Equity component:
Balance at December
31, 2008 $ 2,971 $ 2,286 $ 798 $ 9,403
Expired - - - (3,348)
---------------------------------------------------------------------
Balance at September
30, 2009 $ 2,971 $ 2,286 $ 798 $ 6,055
---------------------------------------------------------------------

During the nine months ended September 30, 2009, there were no
convertible debenture conversions (September 30, 2008 - $25,000
converted resulting in the issuance of 1,001 Trust Units).

The principal amount of 8.25% convertible debentures matured on
February 1, 2009 and was settled by issuing 946,887 Trust Units. The
8.75% convertible debentures matured and were settled with $29.8
million in cash on June 30, 2009. The 7.50% convertible debentures
matured and were settled with $52.3 million in cash on September 30,
2009.

6. Bank Indebtedness
September 30, December 31,
2009 2008
---------------------------------------------------------------------
Revolving credit facility $ 330,800 $ 587,404
Discount on Bankers Acceptances and other fees (3,051) (2,687)
---------------------------------------------------------------------
Balance, end of period $ 327,749 $ 584,717
---------------------------------------------------------------------

Advantage has a $525 million credit facility agreement with a
syndicate of financial institutions which consists of a $505 million
extendible revolving loan facility and a $20 million revolving
operating loan facility. The loan's interest rate is based on either
prime, US base rate, LIBOR or bankers' acceptance rates, at the
Corporation's option, subject to certain basis point or stamping fee
adjustments ranging from 1.5% to 4.0% depending on the Corporation's
debt to cash flow ratio. The credit facilities are collateralized by
a $1 billion floating charge demand debenture, a general security
agreement and a subordination agreement from the Corporation covering
all assets and cash flows. The amounts available to Advantage from
time to time under the credit facilities are based upon the borrowing
base determined by the lenders and which is re-determined on a semi-
annual basis by those lenders. The credit facilities are subject to
review on an annual basis with the next renewal due in June 2010.
Various borrowing options are available under the credit facilities,
including prime rate-based advances, US base rate advances, US dollar
LIBOR advances and bankers' acceptances loans. The credit facilities
constitute a revolving facility for a 364 day term which is
extendible annually for a further 364 day revolving period at the
option of the syndicate. If not extended, the revolving credit
facility is converted to a one year term facility with the principal
payable at the end of such one year term. The credit facilities
contain standard commercial covenants for facilities of this nature.
The only financial covenant is a requirement for Advantage to
maintain a minimum cash flow to interest expense ratio of 3.5:1,
determined on a rolling four quarter basis. The credit facilities
also prohibit the Corporation from entering into any derivative
contract where the term of such contract exceeds three years.
Further, the aggregate of such contracts cannot hedge greater than
60% of total estimated oil and gas production over two years and 50%
over the third year, except for the initial period ended December
31, 2009 whereby the Corporation shall not hedge greater than 80% of
total estimated oil and gas production. Breach of any covenant will
result in an event of default in which case Advantage has 20 days to
remedy such default. If the default is not remedied or waived, and if
required by the lenders, the administrative agent of the lenders has
the option to declare all obligations under the credit facilities to
be immediately due and payable without further demand, presentation,
protest, days of grace, or notice of any kind. Dividends to
shareholders are subordinated to the repayment of any amounts owing
under the credit facilities. Dividends to shareholders are not
permitted if the Corporation is in default of such credit facilities
or if the amount of outstanding indebtedness under such facilities
exceeds the then existing current borrowing base. Interest payments
under the debentures are also subordinated to indebtedness under the
credit facilities and payments under the debentures are similarly
restricted. For the nine months ended September 30, 2009, the average
effective interest rate on the outstanding amounts under the facility
was approximately 4.4% (September 30, 2008 - 5.2%).

7. Asset Retirement Obligations

A reconciliation of the asset retirement obligations is provided
below:

Nine months ended Year ended
September 30, December 31,
2009 2008
---------------------------------------------------------------------
Balance, beginning of period $ 73,852 $ 60,835
Accretion expense 4,102 4,186
Liabilities incurred 559 1,526
Change in estimates 15,918 16,564
Property dispositions (22,275) -
Liabilities settled (4,490) (9,259)
---------------------------------------------------------------------
Balance, end of period $ 67,666 $ 73,852
---------------------------------------------------------------------

8. Other Liability

In August 2009, Advantage vacated an office location as the space was
no longer required. Advantage has not currently subleased the office
space and is obligated to make lease payments for the remainder of
the life of the lease, which terminates in November 2012. As a
result, the full fair value of future scheduled lease payments has
been recognized as general and administrative expense with a
corresponding liability. Fair value was determined on a present value
basis, using a credit-adjusted risk free rate of 7%.

A reconciliation of the other liability is as follows:

Nine months ended
September 30, 2009
---------------------------------------------------------------------
Office lease liability incurred $ 3,781
Accretion expense 22
Liability settled (109)
---------------------------------------------------------------------
Balance, end of period $ 3,694
---------------------------------------------------------------------

9. Shareholders' Equity

(a) Share capital

(i) Authorized

The Corporation is authorized to issue an unlimited number
of shares without nominal or par value.

(ii) Issued

Number of Shares Amount
---------------------------------------------------------------------
Issued on conversion to a corporation 162,197,790 $2,186,778
Issued pursuant to Restricted Share
Performance Incentive Plan 278,627 1,606
---------------------------------------------------------------------
Balance at September 30, 2009 162,476,417 $2,188,384
---------------------------------------------------------------------

On July 9, 2009, the Fund successfully completed the plan of
arrangement pursuant to an information circular dated June 5, 2009.
Advantage Energy Income Fund was dissolved and converted into the
corporation, Advantage Oil and Gas Ltd., with each Trust Unit
converted into one Common Share.

(b) Unit capital

Number of Units Amount
---------------------------------------------------------------------
Balance at December 31, 2008 142,824,854 $ 2,077,760
Distribution reinvestment plan 1,263,158 5,211
Issued on maturity of debentures 946,887 4,867
Issued pursuant to Restricted Trust
Unit Plan 171,093 939
Management internalization forfeitures (7,862) (159)
Units issued, less costs net of future
taxes 17,000,000 98,161
Units purchased from dissenting
Unitholders (340) (1)
Cancelled on conversion to a corporation (162,197,790) (2,186,778)
---------------------------------------------------------------------
Balance at July 9, 2009 - $ -
---------------------------------------------------------------------

On June 23, 2006, the Fund internalized the external management
contract structure and eliminated all related fees for total original
consideration of 1,933,208 Trust Units initially valued at
$39.1 million and subject to escrow provisions over a 3-year period,
vesting one-third each year beginning June 23, 2007. For the nine
months ended September 30, 2009, a total of 7,862 Trust Units issued
for the management internalization were forfeited (September 30, 2008
- 5,111 Trust Units) and $1.7 million has been recognized as
management internalization expense (September 30, 2008 - $6.0
million). All Trust Units in respect of management internalization
were issued and none remained held in escrow (December 31, 2008 -
564,612 Trust Units remained in escrow).

Prior to converting to a corporation on July 9, 2009, 1,263,158 Trust
Units (September 30, 2008 - 2,918,047 Trust Units) were issued under
the Premium Distribution(TM), Distribution Reinvestment and Optional
Trust Unit Purchase Plan, generating $5.2 million (September 30, 2008
- $30.7 million) reinvested in the Fund. The Premium
Distribution (TM), Distribution Reinvestment and Optional Trust Unit
Purchase Plan was discontinued on March 18, 2009, concurrent with the
discontinuation of cash distributions.

The principal amount of 8.25% convertible debentures matured on
February 1, 2009 and was settled by issuing 946,887 Trust Units.

On July 7, 2009, the Fund successfully closed a bought deal financing
with 17 million Trust Units issued at $6.00 each, for gross proceeds
of $102 million, less $3.8 million related to $5.2 million of
issuance costs net $1.4 million of future taxes.

(c) Contributed surplus

Nine months ended Year ended
September 30, December 31,
2009 2008
---------------------------------------------------------------------
Balance, beginning of period $ 287 $ 2,005
Equity-based compensation 1,578 (1,256)
Exercise of Trust Unit Rights - (691)
Expiration of convertible debentures equity
component 3,348 229
---------------------------------------------------------------------
Balance, end of period $ 5,213 $ 287
---------------------------------------------------------------------

(d) Equity-based compensation

Prior to the conversion to a corporation, the Fund had a Restricted
Trust Unit Plan and granted Restricted Trust Units ("RTUs") to
service providers in January 2009. This grant was related to 2008 and
valued at $3.8 million to be issued in Trust Units at $5.49 per Trust
Unit. The Fund's 2008 annual return was within the top two-thirds of
the approved peer group and the Board of Directors granted RTUs at
their discretion. The RTUs were deemed to be granted in January 2009
with 171,093 Trust Units issued for the first one-third of the grant
that vested immediately and 379,009 RTUs representing the remaining
two-thirds of the grant that will vest over the subsequent two
anniversary dates. Since conversion to a corporation, the RTUs are
now considered restricted shares and will be settled by the issuance
of shares of the Corporation, with corresponding compensation expense
recognized over the service period. There were no other RTU grants
made by the Fund during prior years and no related compensation
expense has been recognized.

Upon conversion to a corporation on July 9, 2009, Advantage
implemented a new Restricted Share Performance Incentive Plan
("RSPIP" or the "Plan") as approved by the shareholders with the
purpose to retain and attract employees, to reward and encourage
performance, and to focus employees on operating and financial
performance that results in lasting shareholder return. The Plan
authorizes the Board of Directors to grant restricted shares to
service providers of the Corporation, including directors, officers,
employees and consultants. The number of restricted shares granted is
based on the Corporation's share price return for a twelve-month
period and compared to a peer group approved by the Board of
Directors. The share price return is calculated at the end of each
and every quarter and is primarily based on the 12-month change in
the share price. If the share price return for a 12-month period is
positive, a restricted share grant will be calculated based on the
return. If the share price return for a 12-month period is negative,
but the return is still within the top two-thirds of the approved
peer group performance, the Board of Directors may choose a
discretionary restricted share grant. The restricted share grants
generally vest one-third immediately on grant date, with the
remaining two-thirds vesting evenly on the following two yearly
anniversary dates. The holders of restricted shares may elect to
receive cash upon vesting in lieu of the number of shares to be
issued, subject to consent of the Corporation. Compensation cost
related to the Plan is recognized as compensation expense within
general and administrative expense over the service period and
incorporates the share grant price, the estimated number of
restricted shares to vest, and certain management estimates. The
maximum amount of restricted shares granted in any one quarter is
limited to 50% of the base salaries of those individuals
participating in the Plan for such period.

In conjunction with the corporate conversion, a transitional award of
restricted shares to service providers was approved by shareholders
valued at $8.4 million to be issued in shares at $5.80 per share. The
restricted shares were deemed to be granted in September 2009 with
251,867 shares issued for the first one-quarter of the grant that
vested immediately and 1,090,207 restricted shares representing the
remaining three-quarters of the grant that will vest over the
subsequent three anniversary dates. Compensation expense is
recognized over the service period and included in general and
administrative expense.

In July 2009, the Corporation issued 26,760 shares related to
restricted shares that vested upon employee terminations.

In October 2009, the first RSPIP grant was made to service providers
and valued at $8.3 million to be issued in shares at $7.23 per share.
A total of 259,573 shares were issued for the first one-third of the
grant that vested immediately and 768,851 restricted shares
representing the remaining two-thirds of the grant that will vest
over the subsequent two anniversary dates. No compensation expense
was included in general and administrative expense for the three and
nine month periods ended September 30, 2009 as this grant was deemed
to occur after September 30, 2009.

(e) Net income (loss) per share

The calculations of basic and diluted net income (loss) per share are
derived from both net income (loss) available to shareholders and
weighted average shares outstanding, calculated as follows:

Three months ended Nine months ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008
---------------------------------------------------------------------
Income (loss) available
to Shareholders
Basic $ (53,293) $ 113,391 $ (72,213) $ 74,900
Interest and
accretion on
convertible
debentures - 4,133 - -
---------------------------------------------------------------------
Diluted $ (53,293) $ 117,524 $ (72,213) $ 74,900
---------------------------------------------------------------------

Weighted average shares outstanding
Basic 161,182,480 140,192,094 149,915,761 138,806,106
Trust Units Rights - - - 22,339
Management
internalization - 318,490 - 539,752
Convertible
debentures - 8,775,293 - -
---------------------------------------------------------------------
Diluted 161,182,480 149,285,877 149,915,761 139,368,197
---------------------------------------------------------------------
The calculation of diluted net income (loss) per share excludes all
series of convertible debentures for both the three and nine months
ended September 30, 2009, and the nine months ended September 30,
2008 as the impact on these periods would be anti-dilutive. Total
weighted average shares issuable in exchange for the convertible
debentures and excluded from the diluted net loss per share
calculation for the three and nine months ended September 30, 2009
were 8,345,392 and 8,964,955 shares, respectively. Total weighted
average shares issuable in exchange for the convertible debentures
and excluded from the diluted net income per share calculation for
the nine months ended September 30, 2008 was 9,775,877.

Unvested restricted shares granted have been excluded from the
calculation of diluted net loss per share for the three and nine
months ended September 30, 2009, as the impact would have been anti-
dilutive. Total weighted average shares issuable in exchange for the
restricted shares and excluded from the diluted net loss per share
calculation for the three and nine months ended September 30, 2009
were 196,831 and 180,076, respectively.

Management internalization escrowed Trust Units have been excluded
from the calculation of diluted net loss per share for the nine
months ended September 30, 2009, as the impact would have been anti-
dilutive. Total weighted average shares issuable in exchange for the
Management internalization escrowed Trust Units and excluded from the
diluted net loss per share calculation for the nine months ended
September 30, 2009 was 254,161.

10. Financial Instruments

Financial instruments of the Corporation include accounts receivable,
deposits, accounts payable and accrued liabilities, bank
indebtedness, convertible debentures, other liabilities and
derivative assets and liabilities.

Accounts receivable and deposits are classified as loans and
receivables and measured at amortized cost. Accounts payable and
accrued liabilities, bank indebtedness and other liabilities are all
classified as other liabilities and similarly measured at amortized
cost. As at September 30, 2009, there were no significant
differences between the carrying amounts reported on the balance
sheet and the estimated fair values of these financial instruments
due to the short terms to maturity and the floating interest rate on
the bank indebtedness.

The Corporation has convertible debenture obligations outstanding, of
which the liability component has been classified as other
liabilities and measured at amortized cost. The convertible
debentures have different fixed terms and interest rates (note 5)
resulting in fair values that will vary over time as market
conditions change. As at September 30, 2009, the estimated fair value
of the total outstanding convertible debenture obligation was $133.2
million (December 31, 2008 - $191.2 million). The fair value of
convertible debentures was determined based on the public trading
activity of such debentures.

Advantage has an established strategy to manage the risk associated
with changes in commodity prices by entering into derivatives, which
are recorded at fair value as derivative assets and liabilities with
gains and losses recognized through earnings. As the fair value of
the contracts varies with commodity prices, they give rise to
financial assets and liabilities. The fair values of the derivatives
are determined through valuation models completed internally and by
third parties. Various assumptions based on current market
information were used in these valuations, including settled forward
commodity prices, interest rates, foreign exchange rates, volatility
and other relevant factors. The actual gains and losses realized on
eventual cash settlement can vary materially due to subsequent
fluctuations in commodity prices as compared to the valuation
assumptions.

Credit Risk

Accounts receivable, deposits, and derivative assets are subject to
credit risk exposure and the carrying values reflect Management's
assessment of the associated maximum exposure to such credit risk.
Advantage mitigates such credit risk by closely monitoring
significant counterparties and dealing with a broad selection of
partners that diversify risk within the sector. The Corporation's
deposits are primarily due from the Alberta Provincial government and
are viewed by Management as having minimal associated credit risk. To
the extent that Advantage enters derivatives to manage commodity
price risk, it may be subject to credit risk associated with
counterparties with which it contracts. Credit risk is mitigated by
entering into contracts with only stable, creditworthy parties and
through frequent reviews of exposures to individual entities. In
addition, the Corporation only enters into derivative contracts with
major national banks and international energy firms to further
mitigate associated credit risk.

Substantially all of the Corporation's accounts receivable are due
from customers and joint operation partners concentrated in the
Canadian oil and gas industry. As such, accounts receivable are
subject to normal industry credit risks. As at September 30, 2009,
$8.6 million or 21% of accounts receivable are outstanding for 90
days or more (December 31, 2008 - $14.2 million or 17% of accounts
receivable). The Corporation believes that the entire balance is
collectible, and in some instances we have the ability to mitigate
risk through withholding production or offsetting payables with the
same parties. Management has provided for an allowance for doubtful
accounts of $1.0 million at September 30, 2009.

Liquidity Risk

The Corporation is subject to liquidity risk attributed from accounts
payable and accrued liabilities, bank indebtedness, convertible
debentures, other liabilities, and derivative liabilities. Accounts
payable and accrued liabilities, and derivative liabilities are
primarily due within one year of the balance sheet date and Advantage
does not anticipate any problems in satisfying the obligations from
cash provided by operating activities and the existing credit
facility. The Corporation's bank indebtedness is subject to a $525
million credit facility agreement. Although the credit facility is a
source of liquidity risk, the facility also mitigates liquidity risk
by enabling Advantage to manage interim cash flow fluctuations. The
credit facility constitutes a revolving facility for a 364 day term
which is extendible annually for a further 364 day revolving period
at the option of the syndicate. If not extended, the revolving credit
facility is converted to a one year term facility with the principal
payable at the end of such one year term. The terms of the credit
facility are such that it provides Advantage adequate flexibility to
evaluate and assess liquidity issues if and when they arise.
Additionally, the Corporation regularly monitors liquidity related to
obligations by evaluating forecasted cash flows, optimal debt levels,
capital spending activity, working capital requirements, and other
potential cash expenditures. This continual financial assessment
process further enables the Corporation to mitigate liquidity risk.

Advantage has several series of convertible debentures outstanding
that mature from 2010 to 2011 (note 5). Interest payments are made
semi-annually with excess cash provided by operating activities. As
the debentures become due, the Corporation can satisfy the
obligations in cash or issue shares at a price determined in the
applicable debenture agreements. This settlement alternative allows
the Corporation to adequately manage liquidity, plan available cash
resources and implement an optimal capital structure.

To the extent that Advantage enters derivatives to manage commodity
price risk, it may be subject to liquidity risk as derivative
liabilities become due. While the Corporation has elected not to
follow hedge accounting, derivative instruments are not entered for
speculative purposes and Management closely monitors existing
commodity risk exposures. As such, liquidity risk is mitigated since
any losses actually realized are subsidized by increased cash flows
realized from the higher commodity price environment.

The timing of cash outflows relating to financial liabilities are as
follows:

Less than One to Four to
one year three years five years Thereafter
---------------------------------------------------------------------
Accounts payable and
accrued liabilities $ 87,715 $ - $ - $ -
Derivative liabilities 8,796 2,785 - -
Other liabilities 1,304 2,825 -
Bank indebtedness
- principal - 330,800 - -
- interest 18,189 13,642 - -
Convertible debentures
- principal 69,927 62,294 - -
- interest 9,412 7,299 - -
---------------------------------------------------------------------
$ 195,343 $ 419,645 $ - $ -
---------------------------------------------------------------------

The Corporation's bank indebtedness does not have specific maturity
dates. It is governed by a credit facility agreement with a syndicate
of financial institutions (note 6). Under the terms of the
agreement, the facility is reviewed annually, with the next review
scheduled in June 2010. The facility is revolving, and is extendible
at each annual review for a further 364 day period at the option of
the syndicate. If not extended, the credit facility is converted at
that time into a one year term facility, with the principal payable
at the end of such one year term. Management fully expects that the
facility will be extended at each annual review.

Interest Rate Risk

The Corporation is exposed to interest rate risk to the extent that
bank indebtedness is at a floating rate of interest and the
Corporation's maximum exposure to interest rate risk is based on the
effective interest rate and the current carrying value of the bank
indebtedness. The Corporation monitors the interest rate markets to
ensure that appropriate steps can be taken if interest rate
volatility compromises the Corporation's cash flows. A 1% increase in
interest rates for the nine months ended September 30, 2009 could
have decreased net income by approximately $2.8 million for that
period.

Price and Currency Risk

Advantage's derivative assets and liabilities are subject to both
price and currency risks as their fair values are based on
assumptions including forward commodity prices and foreign exchange
rates. The Corporation enters derivative financial instruments to
manage commodity price risk exposure relative to actual commodity
production and does not utilize derivative instruments for
speculative purposes. Changes in the price assumptions can have a
significant effect on the fair value of the derivative assets and
liabilities and thereby impact net loss. It is estimated that a 10%
increase in the forward natural gas prices used to calculate the fair
value of the natural gas derivatives at September 30, 2009 could
increase net loss by approximately $9.2 million for the nine months
ended September 30, 2009. As well, an increase of 10% in the forward
crude oil prices used to calculate the fair value of the crude oil
derivatives at September 30, 2009 could increase net loss by $6.0
million for the nine months ended September 30, 2009. An increase of
10% in the forward power prices used to calculate the fair value of
the power derivatives at September 30, 2009 would not materially
increase net loss for the nine months ended September 30, 2009. A
similar increase in the currency rate assumption underlying the
derivatives fair value does not materially increase net loss.

As at September 30, 2009 the Corporation had the following
derivatives in place:

Description
of Derivative Term Volume Average Price
---------------------------------------------------------------------
Natural gas - AECO
Fixed price April 2009 to 9,478 mcf/d Cdn $8.66/mcf
December 2009
Fixed price April 2009 to 9,478 mcf/d Cdn $8.67/mcf
December 2009
Fixed price April 2009 to 9,478 mcf/d Cdn $8.94/mcf
December 2009
Fixed price April 2009 to 14,217 mcf/d Cdn $7.59/mcf
March 2010
Fixed price April 2009 to 14,217 mcf/d Cdn $7.56/mcf
March 2010
Fixed price January 2010 to 14,217 mcf/d Cdn $8.23/mcf
June 2010
Fixed price January 2010 to 18,956 mcf/d Cdn$7.29/mcf
December 2010
Fixed price April 2010 to 18,956 mcf/d Cdn$7.25/mcf
January 2011

Crude oil - WTI
Collar April 2009 to 2,000 bbls/d Bought put
December 2009 Cdn $62.00/bbl
Sold call
Cdn $76.00/bbl
Fixed price April 2009 to 2,000 bbls/d Cdn$62.80/bbl
March 2010
Fixed price April 2010 to 2,000 bbls/d Cdn$69.50/bbl
January 2011

Electricity -
Alberta Pool Price
Fixed price March 2009 to 2.0 MW Cdn$75.43/MWh
December 2009

As at September 30, 2009, the fair value of the derivatives
outstanding resulted in an asset of approximately $43.2 million
(December 31, 2008 - $42.6 million) and a liability of approximately
$11.6 million (December 31, 2008 - $1.7 million). For the nine months
ended September 30, 2009, $9.3 million was recognized in income as an
unrealized derivative loss (September 30, 2008 - $4.8 million
unrealized derivative gain) and $70.2 million was recognized in
income as a realized derivative gain (September 30, 2008 - $40.9
million realized derivative loss).

11. Capital Management

The Corporation manages its capital with the following objectives:

- To ensure sufficient financial flexibility to achieve the ongoing
business objectives including replacement of production, funding
of future growth opportunities, and pursuit of accretive
acquisitions; and
- To maximize shareholder return through enhancing the share value.

Advantage monitors its capital structure and makes adjustments
according to market conditions in an effort to meet its objectives
given the current outlook of the business and industry in general.
The capital structure of the Corporation is composed of working
capital (excluding derivative assets and liabilities), bank
indebtedness, convertible debentures, capital lease obligations and
shareholders' equity. Advantage may manage its capital structure by
issuing new shares, repurchasing outstanding shares, obtaining
additional financing either through bank indebtedness or convertible
debenture issuances, refinancing current debt, issuing other
financial or equity-based instruments, declaring a dividend,
implementing a dividend reinvestment plan, adjusting capital
spending, or disposing of assets. The capital structure is reviewed
by Management and the Board of Directors on an ongoing basis.

Advantage's capital structure as at September 30, 2009 is as follows:

September 30, 2009
---------------------------------------------------------------------
Bank indebtedness (long-term) $ 330,800
Working capital deficit(1) 109,581
---------------------------------------------------------------------
Net debt 440,381
Shares outstanding market value 1,229,946
Convertible debentures maturity value (long-term) 62,294
Capital lease obligations (long-term) 2,041
---------------------------------------------------------------------
Total capitalization $1,734,662
---------------------------------------------------------------------

(1) Working capital deficit includes accounts receivable, prepaid
expenses and deposits, accounts payable and accrued liabilities,and
the current portion of capital lease obligations and convertible
debentures.

The Corporation's bank indebtedness is governed by a $525 million
credit facility agreement (note 6) that contains standard commercial
covenants for facilities of this nature. The only financial covenant
is a requirement for Advantage to maintain a minimum cash flow to
interest expense ratio of 3.5:1, determined on a rolling four quarter
basis. The Corporation is in compliance with all credit facility
covenants. As well, the borrowing base for the Corporation's credit
facilities is determined through utilizing Advantage's regular
reserve estimates. The banking syndicate thoroughly evaluates the
reserve estimates based upon their own commodity price expectations
to determine the amount of the borrowing base. Revision or changes in
the reserve estimates and commodity prices can have either a positive
or a negative impact on the borrowing base of the Corporation.

Management of the Corporation's capital structure is facilitated
through its financial and operational forecasting processes. The
forecast of the Corporation's future cash flows is based on estimates
of production, commodity prices, forecast capital and operating
expenditures, and other investing and financing activities. The
forecast is regularly updated based on new commodity prices and other
changes, which the Corporation views as critical in the current
environment. Selected forecast information is frequently provided to
the Board of Directors.

The Corporation's capital management objectives, policies and
processes have remained unchanged during the nine month period ended
September 30, 2009.

12. Commitments

Advantage has several lease commitments relating to office buildings.
The estimated remaining annual minimum operating lease rental
payments for the buildings are as follows, of which $3.8 million is
recognized in other liabilities (note 8):

2009 $ 966
2010 3,878
2011 1,471
2012 1,072
---------------------------------
$ 7,387
---------------------------------

Advisory

The information in this press release contains certain forward-looking
statements, including within the meaning of the United States Private
Securities Litigation Reform Act of 1995. These statements relate to future
events or our future intentions or performance. All statements other than
statements of historical fact may be forward-looking statements.
Forward-looking statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"demonstrate", "expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "would" and
similar expressions and include statements relating to, among other things,
individual wells, regions, properties or projects. These statements involve
substantial known and unknown risks and uncertainties, certain of which are
beyond Advantage's control, including: the impact of general economic
conditions; industry conditions; changes in laws and regulations including the
adoption of new environmental laws and regulations and changes in how they are
interpreted and enforced; fluctuations in commodity prices and foreign
exchange and interest rates; stock market volatility and market valuations;
volatility in market prices for oil and natural gas; liabilities inherent in
oil and natural gas operations; uncertainties associated with estimating oil
and natural gas reserves; competition for, among other things, capital,
acquisitions of reserves, undeveloped lands and skilled personnel; incorrect
assessments of the value of acquisitions; changes in income tax laws or
changes in tax laws and incentive programs relating to the oil and gas
industry and income trusts; geological, technical, drilling and processing
problems and other difficulties in producing petroleum reserves; and obtaining
required approvals of regulatory authorities. Advantage's actual decisions,
activities, results, performance or achievement could differ materially from
those expressed in, or implied by, such forward-looking statements and,
accordingly, no assurances can be given that any of the events anticipated by
the forward-looking statements will transpire or occur or, if any of them do,
what benefits that Advantage will derive from them. Except as required by law,
Advantage undertakes no obligation to publicly update or revise any
forward-looking statements. For additional risk factors in respect of
Advantage and its business, please refer to its Annual Information Form dated
March 19, 2009 which is available on SEDAR at www.sedar.com and
www.advantageog.com.
References in this press release to initial test production rates, initial
"productivity", initial "flow" rates, "flush" production rates and "behind
pipe production" are useful in confirming the presence of hydrocarbons,
however such rates are not determinative of the rates at which such wells will
commence production and decline thereafter. While encouraging, readers are
cautioned not to place reliance on such rates in calculating the aggregate
production for Advantage.
Barrels of oil equivalent (boe) may be misleading, particularly if used in
isolation. A boe conversion ratio has been calculated using a conversion rate
of six thousand cubic feet of natural gas to one barrel. "TCF" stands for
trillion cubic feet of natural gas. Such conversion rates are based on an
energy equivalency conversion method application at the burner tip and do not
represent an economic value equivalency at the wellhead.
This press release contains references to estimates of natural gas classified
as discovered petroleum initially in place and contingent resources which are
not, and should not be confused with, estimates of oil and gas reserves.
"Discovered petroleum initially in place" is defined in the Canadian Oil and
Gas Evaluation Handbook (the "COGE Handbook") as the quantity of hydrocarbons
that are estimated to be in place within a known accumulation. Discovered
petroleum initially in place is divided into recoverable and unrecoverable
portions, with the estimated future recoverable portion classified as reserves
and contingent resources. "Contingent resources" is defined in the COGE
Handbook as the quantity of petroleum that is estimated to be potentially
recoverable from known accumulations using established technology or
technology under development which are not currently considered to be
commercially recoverable due to one or more contingencies. There is no
certainty that it will be commercially viable to produce any portion of the
discovered petroleum initially in place or contingent resources. There are a
number of contingencies associated with the development of the Montney
resources relating to performance from new and existing wells, future drilling
programs, the lack of infrastructure, well density per section, recovery
factors and development necessarily involves known and unknown risks and
uncertainties, including those risks identified in this press release. The
estimates of discovered petroleum initially in place and contingent resources
represents the best estimate, as defined in the COGE Handbook, of such
resources. The contingent resources estimated by Sproule have not been
adjusted for risk based on the chance of development. There is no certainty
that the resources will be developed and, if developed, there is no certainty
that it will be commercially viable to produce any portion of the reported
contingent resources for the Montney zones.
Finding and development costs have been calculated in accordance with section
5.15 of National Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities which requires changes in FDC to be included in the calculation of
finding and development costs. Advantage has also provided the calculation of
finding and development costs excluding changes in FDC as indicated above. The
aggregate of the exploration and development costs incurred in the most recent
financial year and the change during that year in estimated FDC generally will
not reflect total finding and development costs related to reserve additions
for that year. The disclosure of finding and development costs for Glacier
does not include comparative information of finding and development costs for
the years ended 2007 and 2006 as finding and development costs were not
calculated for the Glacier properties for the years ended 2007 and 2006.

SOURCE Advantage Oil & Gas Ltd.

Investor Relations, Toll free: 1-866-393-0393, ADVANTAGE OIL & GAS LTD., 700,
400 -3rd Avenue SW, Calgary, Alberta, T2P 4H2, Phone: (403) 718-8000, Fax:
(403) 718-8300, Web Site: www.advantageog.com, E-mail: ir@advantageog.com