Board of Directors' Responsibilities

Board of Directors and Committees
The Board of Directors of Coastal Energy Company currently consists of 9 directors. Frank Inouye is the Board's presiding Chairman, whose responsibilities include those matters discussed in the Board's Governance Principles. The Board is responsible for approving long-term strategic plans, annual operating budgets and plans recommended by management. Consideration and approval of the Board is also required for all material contracts and business transactions and all debt and equity financing proposals. The Board is also responsible for the review of senior executive recruitment and executive compensation, subject to the recommendations of the Corporate Governance and Nominating Committee and the Compensation Committee, respectively.

Committees' Responsibilities

The Board has adopted written Terms of Reference for all of its four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Executive Committee. The Board has determined that all members of the Audit, Compensation and Corporate Governance and Nominating Committees are independent.

Audit Committee.
The members of the Audit Committee are directors Messrs. Black, Wylie and Zaozirny who is currently the chair. The Board has determined that Messrs. Black, Wylie and Zaozirny are financially literate as defined under Multilateral Instrument 52-101 – Audit Committees. In keeping with the overall responsibility for the stewardship of the Company, the Board, through the Audit Committee, examines the Company's internal controls and management information systems. A more detailed description of the Audit Committee can be found in its Terms of Reference.

Compensation Committee.
The members of the Compensation Committee are directors Messrs. Black, currently the Chair, Smith and de Montal. This committee has two primary responsibilities: (1) to determine, review and approve the compensation of the CEO and other senior executives; and to ensure that senior compensation policies and packages attract, retain and motivate quality employees whilst not exceeding market rates. This committee also oversees the Company's stock option plan. A more detailed description of the Compensation Committee may be found in its Terms of Reference. No director is permitted to participate in discussions or decisions concerning his own remuneration. Additional information on the committee's process and procedures for consideration of executive compensation are addressed in the Compensation Discussion and Analysis below.

Corporate Governance and Nominating Committee.
The members of the Corporate Governance and Nominating Committee are directors Messrs. Murphy, currently the Chair, de Combret, and Wylie. The Corporate Governance and Nominating Committee is responsible for identifying individuals qualified to become members of the Board and recommending to the Board the director nominees in advance of each annual meeting of Shareholders. In identifying candidates, the Corporate Governance and Nominating Committee follows the procedure outlined in the Corporate Governance and Nominating Committee Charter. The Corporate Governance and Nominating Committee is also responsible for developing and recommending corporate governance guidelines to be followed by the Company, and for overseeing the evaluation of the Board and management. Further information about the Corporate Governance and Nominating Committee may be found in its Terms of Reference.

Executive Committee.
The members of the Executive Committee are directors Messrs. Bartley, Black, Inouye, Wylie and de Combret who is currently the Chair. The purpose of the Executive Committee is to act in the place of the full Board on matters of the Company which require more immediate attention. Unanimous agreement of the Executive Committee is required for an action to pass.

Supporting Governance Documents

• Terms of Reference for Executive Committee
• Terms of Reference for Compensation Committee
• Terms of Reference for Audit Committee
• Terms of Reference for Nominating Committee
• Whistleblowing Procedure
• Code of Ethics
• Rule 26