No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.

This short form prospectus constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities. The securities offered under this short form prospectus have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws. Accordingly, the securities offered hereby may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available. This short form prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby within the United States. See "Plan of Distribution". Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Secretary of Secure Energy Services Inc., 1900, 205 5th Avenue S.W., Calgary, Alberta, T2P 2V7 (telephone (403) 984-6100), and are also available electronically at www.sedar.com.

Short Form Prospectus New Issue May 6, 2011

SECURE ENERGY SERVICES INC. $75,000,030 11,278,200Subscription Receipts each representing the right to receive one Common Share
This short form prospectus qualifies the distribution (the "Offering") of 11,278,200 subscription receipts ("Subscription Receipts") of Secure Energy Services Inc. (the "Corporation" or "Secure") at a price of $6.65 per Subscription Receipt (the "Offering Price") for aggregate gross proceeds of $75,000,030. Each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration, one common share ("Common Share") of the Corporation upon the closing of the Acquisition (as defined herein). The gross proceeds from the sale of the Subscription Receipts (the "Escrowed Funds") will be held by Olympia Trust Company, as escrow agent (the "Escrow Agent"), and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments), pending the completion of the Acquisition or the termination of the Acquisition Agreement (as defined herein). On April 26, 2011, the Corporation, Marquis Alliance Energy Group Inc. ("Marquis Alliance") and the Vendors (as defined herein) entered into a share purchase agreement (the "Acquisition Agreement") providing for the acquisition by the Corporation of all of the issued and outstanding common shares of Marquis Alliance (the "Acquisition"). See "The Acquisition". Provided that the Acquisition closes on or before 5:00 p.m. (Calgary time) on June 15, 2011, the Escrowed Funds and the interest thereon will be released to the Corporation and the Common Shares will be issued to the holders of the Subscription Receipts. The Corporation will utilize the Escrowed Funds to pay a portion of the purchase price for the Acquisition. See "The Acquisition", "Subscription Receipts" and "Use of Proceeds". If: (i) the closing of the Acquisition does not occur by 5:00 p.m. (Calgary time) on June 15, 2011, (ii) the Acquisition is terminated in accordance with the terms and conditions of the Acquisition Agreement at any earlier time, (iii) a party to the Acquisition has disclosed to the public that it does not intend to proceed with the Acquisition, or (iv) the Corporation has advised the Underwriters (as defined herein) in writing that it does not intend to proceed with the Acquisition (in each case, a "Termination Event"), then holders of Subscription Receipts shall be entitled to receive from the Escrowed Funds an amount per Subscription Receipt equal to the Offering Price and a pro rata share of interest accrued on the Escrowed Funds. At the time of a Termination Event, a Subscription Receipt will only represent the holder's right to receive such payment from the Escrow Agent. See "Subscription Receipts".

Price: $6.65 per Subscription Receipt

Price to Public(1) Per Subscription Receipt to Public ............. $6.65 Total Offering(4) .......................................... $75,000,030
Notes: (1)

Underwriters' Fee(2) $0.3325 $3,750,001.50

Net Proceeds to Corporation(3) $6.3175 $71,250,028.50

(2)

(3) (4)

The Offering Price was determined by negotiation between the Corporation and FirstEnergy Capital Corp., on behalf of the Underwriters. See "Plan of Distribution". The Underwriters may offer the Subscription Receipts at a lower price than the price noted above. See "Plan of Distribution". The Underwriters' fee is payable as to 50% upon the closing of the Offering and as to 50% upon the release of the Escrowed Funds to the Corporation. If the closing of the Acquisition does not occur by 5:00 p.m. (Calgary time) on June 15, 2011, the Underwriters' fee will consist solely of the amount payable upon the closing of the Offering. See "Plan of Distribution". Excluding interest, if any, on the Escrowed Funds and before deducting expenses of the Offering estimated to be $200,000 which will be paid from the general funds of the Corporation. The Underwriters have been granted an option (the "Over-Allotment Option"), exercisable, in whole or in part, not later than the earlier of: (i) 30 days after closing of the Offering, and (ii) a Termination Event, to cover over-allotments, if any, to purchase up to 1,691,730 Subscription Receipts at a price of $6.65 per Subscription Receipt. If the Over-Allotment Option is exercised in whole or in part following the closing of the Acquisition, an equal number of Common Shares will be issued in lieu of Subscription Receipts. This short form prospectus qualifies both the grant of the Over-Allotment Option and the issuance of the Subscription Receipts upon exercise of the OverAllotment Option. A purchaser who acquires Subscription Receipts (or Common Shares if the Over-Allotment Option is exercised after the closing of the Acquisition) forming part of the Underwriters' over-allocation position acquires those Subscription Receipts (or Common Shares, as the case may be) under this prospectus, regardless of whether the over-allocation position is ultimately filled through exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment Option is fully exercised, the total Offering, Underwriter's Fee and Net Proceeds to the Corporation (before payment of expenses of the Offering) will be $86,250,034.50, $4,312,501.73 and $81,937,532.77, respectively.

The following table sets forth the number of Subscription Receipts that may be issued by the Corporation pursuant the OverAllotment Option:
Underwriters' Position Over-Allotment Option Maximum Size 1,691,730 Subscription Receipts Exercise Period Earlier of 30 days after closing of the Offering and a Termination Event Exercise Price $6.65 per Subscription Receipt

There is no market through which the Subscription Receipts may be sold and purchasers may not be able to resell Subscription Receipts purchased under this short form prospectus. This may affect the pricing of the Subscription Receipts in the secondary market, the transparency and availability of trading prices, the liquidity of the Subscription Receipts and the extent of issuer regulation. See "Risk Factors" and "Plan of Distribution". The Common Shares are currently listed on the Toronto Stock Exchange ("TSX") under the symbol "SES". On April 26, 2011, the last trading day before the announcement of the Offering, the closing price of the Common Shares on the TSX was $7.00 per Common Share. On May 5, 2011, the last day on which the Common Shares traded prior to the filing of this short form prospectus, the closing price of the Common Shares on the TSX was $7.06 per Common Share. The TSX has conditionally approved the listing of the Common Shares issuable pursuant to the Subscription Receipts on the TSX (including the Common Shares issuable upon exercise of the Over-Allotment Option). Listing will be subject to the Corporation fulfilling the applicable listing requirements of the TSX on or before July 28, 2011. The Subscription Receipts will not be listed on the TSX; however, on May 20, 2011 the Corporation and FirstEnergy Capital Corp., on behalf of the Underwriters, will make a good faith determination as to whether the closing of the Acquisition is reasonably likely to occur on or prior to June 1, 2011, and if not, Secure shall immediately apply to the TSX and make commercially reasonable efforts to list the Subscription Receipts on the TSX on or before June 1, 2011. The Offering Price of the Subscription Receipts was determined by negotiation between the Corporation and FirstEnergy Capital Corp. on its own behalf, and on behalf of Raymond James Ltd., CIBC World Markets Inc., Peters & Co. Limited, Macquarie Capital Markets Canada Ltd. and Paradigm Capital Inc. (collectively the "Underwriters"). Subject to applicable laws, the Underwriters may, in connection with the Offering, effect transactions which stabilize or maintain the market price of the Common Shares at levels other than those that might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. See "Plan of Distribution". The Underwriters propose to offer the Subscription Receipts initially at the Offering Price. After a reasonable effort has been made to sell all the Subscription Receipts at the Offering Price, the Underwriters may subsequently reduce the selling price to investors from time to time in order to sell any of the Subscription Receipts remaining unsold. Any such reduction will not affect the proceeds received by the Corporation, and the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by the purchasers of the Subscription Receipts is less than the proceeds paid by the Underwriters to the Corporation. See "Plan of Distribution".

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The Underwriters, as principals, conditionally offer the Subscription Receipts, subject to prior sale, if, as and when issued by the Corporation and accepted by the Underwriters in accordance with the conditions contained in the Underwriting Agreement referred to under "Plan of Distribution", subject to approval of certain legal matters on behalf of the Corporation by Bennett Jones LLP and on behalf of the Underwriters by McCarthy Ttrault LLP. Subscriptions for Subscription Receipts will be received subject to rejection or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. It is expected that closing of the Offering will occur on or about May 19, 2011 (the "Closing Date") or such other date not later than June 10, 2011 as the Corporation and the Underwriters may agree. Except in certain limited circumstances, which may include where a Subscription Receipt certificate requires the addition of a legend under applicable securities laws in the United States: (i) Subscription Receipts will be represented by a global certificate issued in registered form to the CDS Clearing and Depository Services Inc. ("CDS") or its nominee under the book-based system administered by CDS, (ii) no certificates evidencing Subscription Receipts will be issued to subscribers for Subscription Receipts, and (iii) subscribers for Subscription Receipts will receive only a customer confirmation from the Underwriters or another registered dealer who is a CDS participant and from or through whom a beneficial interest in the Subscription Receipts is purchased. See "Subscription Receipts" and "Plan of Distribution". In the opinion of Bennett Jones LLP, counsel to the Corporation, and McCarthy Ttrault LLP, counsel to the Underwriters, (collectively, "Counsel") based on the provisions of the Income Tax Act (Canada) and the regulations promulgated thereunder (collectively, the "Tax Act") in force on the date hereof, and the proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof, provided the Corporation is on the Closing Date of the Offering, and at all relevant times, a public corporation within the meaning of the Tax Act and subject to the provisions of any of the Plans (as defined herein), the Subscription Receipts will be qualified investments under the Tax Act for trusts governed by registered retirement savings plans ("RRSPs"), registered retirement income funds ("RRIFs"), deferred profit sharing plans, registered education savings plans, registered disability savings plans and tax-free savings accounts ("TFSAs") (collectively, the "Plans") provided the annuitant, beneficiary, employer, subscriber or holder under the particular Plan deals at arm's length with the Corporation, and the Common Shares issuable pursuant to the Subscription Receipts will be qualified investments under the Tax Act for the Plans at such time. In the case of a TFSA, and, if changes to the Tax Act proposed in the Federal Budget on March 22, 2011 are enacted, in the case of a RRSP and a RRIF, provided that the holder or annuitant thereunder deals at arm's length with the Corporation and does not have a "significant interest" (within the meaning of the Tax Act) in the Corporation or in a corporation, partnership or trust that does not deal at arm's length with the Corporation, the Subscription Receipts and the Common Shares issuable pursuant to the Subscription Receipts will not be a prohibited investment under the Tax Act for such TFSA, RRSP or RRIF. Investments in the Subscription Receipts and Common Shares are subject to certain risks that should be considered by prospective purchasers. It is important for prospective purchasers to consider the particular risk factors that may affect the securities and industry in which it is investing. Investors should carefully consider the risks described under the heading "Risk Factors" in the Annual Information Form (as defined herein) incorporated by reference in this short form prospectus, the risks indentified elsewhere in this short form prospectus and the documents incorporated by reference herein prior to making an investment in the Subscription Receipts. Investors should rely only on the information contained in or incorporated by reference in this short form prospectus. The Corporation has not authorized anyone to provide investors with different information. The Corporation is not offering the Subscription Receipts in any jurisdiction in which the offer is not permitted. Investors should not assume that the information contained in this short form prospectus is accurate as of any date other than the date of this short form prospectus. Subject to the Corporation's obligations under applicable securities laws, the information contained in this short form prospectus is accurate only as of the date of this short form prospectus regardless of the time of delivery of this short form prospectus or of any sale of the Subscription Receipts. The head office of the Corporation is located at 1900, 205 5th Avenue S.W., Calgary, Alberta, Canada, T2P 2V7. The registered office of the Corporation is located at 4500, 855 2nd Street S.W., Calgary, Alberta, Canada, T2P 4K7.

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TABLE OF CONTENTS
GENERAL MATTERS.................................................................... 1 DOCUMENTS INCORPORATED BY REFERENCE .............................. 2 NON-GAAP MEASURES ............................................................... 3 THE CORPORATION .................................................................... 4 BUSINESS OF THE CORPORATION ................................................ 4 THE ACQUISITION ...................................................................... 4 INFORMATION CONCERNING MARQUIS ALLIANCE........................ 5 EFFECT OF THE ACQUISITION ON SECURE .................................... 7 DESCRIPTION OF SHARE CAPITAL ................................................ 8 ESCROWED SECURITIES .............................................................. 8 CONSOLIDATED CAPITALIZATION OF THE CORPORATION ............. 9 USE OF PROCEEDS ...................................................................... 9 SUBSCRIPTION RECEIPTS .......................................................... 10 TRADING PRICE AND VOLUME .................................................. 12 PRIOR SALES ............................................................................ 12 PLAN OF DISTRIBUTION ............................................................ 13 CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS ... 14 RISK FACTORS .......................................................................... 17 LEGAL MATTERS AND INTEREST OF EXPERTS............................. 23 AUDITORS, REGISTRAR AND TRANSFER AGENT .......................... 23 STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ............ 23 AUDITORS' CONSENTS .............................................................. 24 SCHEDULE "A" CONSOLIDATED FINANCIAL STATEMENTS OF MARQUIS ALLIANCE ...............................................................A-1 SCHEDULE "B" UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS ........................................................ B-1 CERTIFICATE OF THE CORPORATION........................................ C-1 CERTIFICATE OF THE UNDERWRITERS ..................................... C-2

GENERAL MATTERS Forward-Looking Statements This short form prospectus and the documents incorporated by reference herein contain certain forward-looking statements and forward-looking information (collectively referred to as "forward-looking statements") relating to, but not limited to, the Acquisition, the Corporation's operations, anticipated financial performance, business prospects and strategies. Forward-looking statements are often (but not necessarily) identified by words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate", "will" or similar words (or the negative of such words) suggesting future outcomes and may include plans, expectations, opinions, or guidance that are not statements of fact. Information and statements contained in this prospectus and in the documents incorporated herein by reference that are not historical facts may be forward-looking statements. In particular, this short form prospectus, and the documents incorporated by reference, may contain forward-looking statements pertaining to the following: the timing of the distribution of the Subscription Receipts pursuant to the Offering and the closing of the Acquisition; use of net proceeds from the Offering and, if applicable, from the exercise of the Over-Allotment Option; completion of the Acquisition; the anticipated benefits of completing the Acquisition and the impact of the Acquisition on the Corporation's operations, infrastructure, opportunities, financial conditions, access to capital and overall strategy; impact of the Acquisition; commodity prices, foreign currency exchange rates and interest rates; capital expenditure programs and other expenditures; oilfield service activity levels; supply and demand for oil and natural gas, and oilfield services; oilfield services industry activity levels; expectations regarding the Corporation's ability to raise capital; treatment under governmental regulatory and taxation regimes; schedules and timing of certain projects and the Corporation's strategy for growth; projections of market prices and costs; amounts to be retained by the Corporation for capital expenditures and to manage seasonal fluctuations in operating cash flow; the Corporation's future operating and financial results; the Corporation's business objectives and strategies; dependence on equipment suppliers and equipment improvements; availability of required supplies; competitive conditions; currency exchange rates; the expansion of services and operations in Canada, the United States and internationally; results and impact of legal proceedings involving the Corporation;

the timing for receipt of regulatory, governmental and stock exchange approvals; operating risk and liability; the designation of dividends as "eligible dividends" under the Tax Act; and the other factors considered under "Risk Factors".

By its nature, forward-looking information or statements necessarily involve numerous assumptions regarding factors and risks that could cause the Corporation's actual results to vary materially, including, without limitation to, the following factors: general market conditions, the oil and natural gas industry, supply and demand for oilfield services and industry activity levels, commodity prices for oil, natural gas liquids and natural gas, debt service, future capital needs, exchange rates, dependence on senior management, seasonality of customers' operations, growth, acquisition strategy, anticipated completion of facilities, acquisition strategy, the integration of businesses into Secure's operations, the regulatory framework governing royalties, taxes and environmental matters in Canada, the United States and any other jurisdictions in which the Corporation may conduct its business in the future, potential liabilities from acquisitions, regulation, landfill operations, competition, risk of pending and future legal proceedings, employees, labour unions, fuel costs, access to industry and technology, possible volatility of the price for Common Shares, insurance, sales of additional Common Shares and income tax considerations. Readers are cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. Accordingly, readers are cautioned that the actual results achieved will vary from the information provided herein and the variations may be material. Readers are also cautioned that the foregoing list of factors and those incorporated by reference are not exhaustive. Consequently, there is no representation by the Corporation that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements. Furthermore, the forward-looking statements contained in this short form prospectus are made as of the date hereof, and the Corporation is under any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained herein and in the documents incorporated by reference are expressly qualified by this cautionary statement. Conventions Unless otherwise indicated, references herein to "$" or "dollars" are to Canadian dollars. Words importing the singular number include the plural, and vice versa, and words importing any gender include all genders. DOCUMENTS INCORPORATED BY REFERENCE Information has been incorporated by reference in this short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from the Secretary of the Corporation at 1900, 205 5th Avenue S.W., Calgary, Alberta, T2P 2V7 (telephone (403) 984-6100). In addition, copies of documents incorporated by reference may be obtained from the securities commissions or similar authorities in Canada through the SEDAR website at www.sedar.com. The following documents of the Corporation are specifically incorporated by reference in this short form prospectus: (a) the annual information form of the Corporation dated March 3, 2011 for the year ended December 31, 2010 (the "Annual Information Form"); the audited comparative consolidated financial statements of the Corporation (the "Financial Statements"), as at and for the fiscal years ended December 31, 2010 and 2009, and the auditors' report thereon dated March 3, 2011 addressed to the shareholders of the Corporation; management's discussion and analysis of financial condition and results of operations of the Corporation dated March 3, 2011 for the fiscal year ended December 31, 2010 (the "MD&A"); the information circular dated April 6, 2011 relating to the annual meeting of shareholders of the Corporation to be held on May 12, 2011 (the "Circular"); the information circular dated May 15, 2010 relating to the annual and special meeting of shareholders of the Corporation held on June 17, 2010; and the material change report dated April 29, 2011 relating to the Acquisition and the Offering.

(b)

(c)

(d)

(e)

(f)

Any documents of the type required by National Instrument 44-101 - Short Form Prospectus Distributions to be incorporated by reference in a short form prospectus, including any material change reports (excluding confidential reports), comparative interim financial statements, comparative annual financial statements and the auditors' report thereon, management's discussion and analysis of financial condition and results of operations, information circulars, annual information forms and business acquisition reports filed by the Corporation with the securities commissions or similar authorities in Canada after the date of this short form prospectus and before the termination of this Offering, are deemed to be incorporated by reference in this short form prospectus. Any statement contained in this short form prospectus or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this short form prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this short form prospectus. Information contained in or otherwise accessed through Secure's website (www.secure-energy.ca) or any website, other than those documents incorporated by reference herein and filed on the SEDAR website, does not form part of this Offering. NON-GAAP MEASURES Certain supplementary measures in this short form prospectus and the documents incorporated by reference herein do not have any standardized meaning as prescribed under Canadian generally accepted accounting principles ("GAAP") and, therefore, are considered non-GAAP measures. These measures are described and presented in order to provide shareholders and potential investors with additional information regarding the Corporation's financial results, liquidity and its ability to generate funds to finance its operations. These measures are identified and presented, where appropriate, together with reconciliations to the equivalent GAAP measure. However, they should not be used as an alternative to GAAP, because they may not be consistent with calculations of other companies. These measures are further explained below. EBITDA is not a recognized measure under GAAP and is therefore referred to as a non-GAAP measure. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Corporation's principal business activities prior to consideration of how those activities are financed or how the results are taxed. In addition to interest, taxes, depreciation and amortization, EBITDA also calculates earnings prior to accretion, depletion, stock-based compensation, interest, taxes and impairment of goodwill.

THE CORPORATION Secure Energy Services Inc. was amalgamated on April 24, 2007 in accordance with the Business Corporations Act (Alberta) (the "ABCA") and is a successor entity of 1232711 Alberta Ltd. and Secure Energy Services Inc. The head office of the Corporation is located at 1900, 205 5th Avenue S.W., Calgary, Alberta, Canada, T2P 2V7. The registered office of the Corporation is located at 4500, 855 2nd Street S.W., Calgary, Alberta, Canada, T2P 4K7. Secure is a "reporting issuer" or the equivalent thereof in each of the provinces of Canada, with the exception of Qubec. The Common Shares trade under the symbol "SES" on the TSX. The Corporation has no subsidiaries. BUSINESS OF THE CORPORATION General Secure is an energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the Western Canadian Sedimentary Basin ("WCSB"). The services provided by Secure assist these companies with the treatment and sale of crude oil and the handling of by-products associated with oil and natural gas development and production. The services provided by Secure include crude oil emulsion treatment, the terminalling and marketing of crude oil, oilfield waste processing, tank washing, landfill disposal, disposal of produced and waste water and the purchase and resale of crude oil at Secure facilities. Since its formation in April of 2007, Secure has successfully executed an aggressive organic growth strategy focused on constructing facilities in key under-serviced and capacity constrained markets. During the initial period from incorporation to December 2007, Secure opened its first facility and raised approximately $23.7 million through private placement financings. In 2008, Secure raised approximately $61.0 million through private placement financings, completed the construction of five facilities in Alberta and purchased one facility in British Columbia. In 2009, Secure raised approximately $4.5 million through private placement financings and completed the construction of two additional facilities in Alberta. In 2010, Secure raised approximately $66.1 million, completed one additional facility at Dawson Creek, British Columbia, completed the acquisition of the operating assets of Pembina Area Landfill Ltd., a subsidiary of Clean Harbours Inc., for cash consideration of $11.75 million and initiated construction on two additional facilities which are expected to be completed in 2011. Secure has an experienced management team. Several members of Secure's executive management team have individually 15 or more years of experience in the energy industry. Rene Amirault, Secure's Chief Executive Officer, has over 15 years of experience specifically in the oilfield treatment and disposal industry. See pages 3 to 11 of the Annual Information Form (incorporated by reference in this short form prospectus) for further information. Recent Developments and Acquisitions See pages 2 to 3 of the Annual Information Form (incorporated by reference in this short form prospectus) for a discussion of the recent developments and acquisitions of the Corporation. THE ACQUISITION Acquisition Agreement On April 26, 2011, the Corporation entered into a share purchase agreement (the "Acquisition Agreement") with Marquis Alliance and the shareholders of Marquis Alliance (the "Vendors") providing for the acquisition by the Corporation of all of the issued and outstanding shares of Marquis Alliance from the Vendors. See "Information Concerning Marquis Alliance". Pursuant to the Acquisition Agreement, the Corporation has agreed to acquire all the issued and outstanding shares of Marquis Alliance for a purchase price (the "Purchase Price") of $131.0 million, prior to giving effect to certain closing adjustments. The Purchase Price shall be paid by the Corporation to the Vendors through the issuance of 10,015,291 Common Shares at a deemed price of $6.54 per Common Share and $65.5 million in cash. Pursuant to the Acquisition Agreement, the parties have agreed to hold back $7.0 million of the cash consideration payable in respect of certain material environmental liabilities, accounts receivable and inventory obsolescence and to holdback a further $3.0 million to account for any potential working capital adjustment. The Acquisition Agreement provides that the Common Shares issued to the Vendors as partial consideration for the Acquisition will be held in escrow and, depending upon the Vendor, are to be released from escrow over periods ranging from two to five years. See "Escrowed Securities".

Conditions to closing the Acquisition under the Acquisition Agreement include, among other things, the following: (i) closing shall have occurred on or before June 1, 2011 or such other date as may be agreed to among the Corporation, Marquis Alliance and the Vendors; (ii) all necessary regulatory, governmental and third party approvals and consents shall have been obtained, including the approval of the TSX; (iii) the Corporation and Marquis Alliance shall have delivered certificates in respect of the accuracy of representations and warranties and performance of their covenants; (iv) no material adverse change respecting the Corporation or Marquis Alliance shall have occurred; (v) the only outstanding securities of Marquis Alliance will be the securities purchased by the Corporation in accordance with the terms of the Acquisition Agreement; (vi) the Acquisition shall not be prohibited under applicable law; (vii) each of the Vendors shall have delivered an escrow agreement and a non-compete agreement to the Corporation; (viii) receipt by the Corporation of resignations and releases from the directors and officers of Marquis Alliance; (ix) Marquis Alliance shall have completed a reorganization to the satisfaction of the Corporation; (x) the Marquis Alliance common shares purchased by the Corporation shall be duly issued as fully paid and non-assessable shares and shall be free and clear of all encumbrances; (xi) the Common Shares issuable to the Vendors as partial consideration for the Acquisition shall be duly issued as fully paid and non-assessable shares in the capital of the Corporation, free and clear of all encumbrances (other than encumbrances created by the Vendors) and shall be delivered to the Corporation's counsel to be held in escrow in accordance with the terms of the Acquisition Agreement, (xii) the unanimous shareholders agreement between the Vendors shall have been terminated and evidence thereof shall have been delivered to the Corporation; and (xiii) all of the Vendors shall have entered into employment agreements with the Corporation. The Acquisition Agreement contains customary indemnities by the Vendors to the Corporation, and by the Corporation to the Vendors. To secure the obligations of the Vendors under the indemnity to the Corporation, each of the Vendors has granted, to the Corporation, a security interest in the Common Shares issuable to each of them pursuant to the Acquisition Agreement, as long as such shares remain in escrow. See "Escrowed Securities". The Acquisition will represent a "significant acquisition" to the Corporation for the purposes of Part 8 of National Instrument 51102 Continuous Disclosure Obligations. Accordingly, the Corporation will be required to file a business acquisition report in respect of the Acquisition. For historical financial information in respect of Marquis Alliance, see Schedule "A" Consolidated Financial Statements of Marquis Alliance. For pro forma financial information in respect of the Corporation, including its outstanding share capital and weighted average share capital, after giving effect to the Acquisition, see Schedule "B" Unaudited Pro Forma Consolidated Financial Statements of the Corporation. All information regarding the Acquisition contained herein, including all financial information and all pro forma financial information reflecting the pro forma effects of the Acquisition, has been derived in part from information provided by Marquis Alliance and other third parties. See "Risk Factors" in this short form prospectus. INFORMATION CONCERNING MARQUIS ALLIANCE General As the Corporation does not own Marquis Alliance, the information under this heading has been summarized based on information provided by Marquis Alliance and the Vendors. Marquis Alliance Energy Group Inc. was formed by way of amalgamation under the ABCA on November 27, 2009, as a result of the amalgamation of Marquis Mergeco Alberta Ltd. and Alliance Mergeco Alberta Ltd. Marquis Alliance is an energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the WCSB, Qubec, the United States and India. Marquis Alliance provides products, processes, equipment and services that enable oil and gas exploration and production companies to develop and produce oil and natural gas more efficiently and effectively. Marquis Alliance is comprised of three service lines: (i) drilling fluids supply and engineering; (ii) solids control equipment rentals; and (iii) environmental services. The primary services provided by each of the service lines are detailed below. Marquis Alliance estimates that it will generate revenue of $132.0 million and EBITDA of $26.4 million (after being normalized for onetime costs relating to the Acquisition and costs specific to being a private company) for the fiscal year ending March 31, 2011. See "Non-GAAP Measures".

Drilling Fluids The drilling fluids service line comprises the core business of Marquis Alliance, which includes the design and implementation of drilling fluid systems for producers drilling for oil, bitumen and natural gas. Marquis Alliance focuses on providing products and systems that are designed for more complex wells, such as medium to deep wells, horizontal wells and horizontal wells drilled into the oil sands. Marquis Alliance provides drilling fluids services in the WCSB, Eastern Canada (St. Lawrence Low Lands in Qubec), the Rocky Mountain States and India. Marquis Alliance has a large focus on servicing the ongoing major resource plays such as, but not limited to, the Muskwa shales of the Horn River, the Cardium of Central Alberta, the Montney in the Deep Basin of Alberta and British Columbia, the oil sands of Alberta and Saskatchewan, the Bakken of Saskatchewan and North Dakota and the Utica shale of Qubec. The wells currently drilled in these resource plays include vertical wells and directional wells; however, the majority of the wells currently being drilled are horizontal. With the development of new horizontal completion techniques, such as horizontal fracturing technology, resources previously thought of as uneconomic or trapped are now being developed in old and new fields across North America. As these technologies require the drilling of horizontal wellbores, horizontal drilling is increasing in frequency. Horizontal drilling can be utilized in tight formations like shale gas/oil, and in carbonate formations and sand formations such as those found in the heavy oil areas of Alberta and Saskatchewan, including the oil sands. According to the Alberta Energy and Utilities Board only 18% of the total oil sands reserves can be recovered using mining techniques and the remaining 82% can only be recovered using in situ methods, such as steam-assisted gravity drainage (SAGD), which requires the drilling of horizontal wells. All wells drilled, whether gas, oil, bitumen, carbon dioxide injection and/or disposal wells require the use of drilling fluids to drill the well. Drilling fluids encompass the functions of cleaning debris out of the hole, stabilizing and sometimes strengthening the formation drilled, controlling subsurface pressures, preventing accretion, enhancing drilling rates and protecting potential production zones while conserving the environment in the surrounding surface and subsurface area. Marquis Alliance's drilling fluid systems are designed to be adaptable to a wide range of complex and varied drilling and completion scenarios, to help clients eliminate inefficiencies in the drilling and completion process and to assist clients in meeting operational objectives while maintaining environmental compliance. Marquis Alliance markets its proprietary and patented products, technical expertise and fluid engineering services to all entities that drill oil, gas or energy related wells. Marquis Alliance markets its services by emphasizing the historical success of its products and systems, as well as the experience and technical competency of its management and employees. Solids Control and Equipment Rentals Marquis Alliance's solids control and equipment rental service line provides solids control and ancillary equipment rentals for drilling operations in both western Canada and the Rocky Mountain States. The majority of the activity for the solids control and equipment rental service line is in Central Alberta and the oil sands. Marquis Alliance's current fleet of high speed centrifuges, drying shakers, bead recovery units, tanks and ancillary equipment is offered as a standalone package or part of an integrated package with the drilling fluids and environmental services. The centrifuge and hydraulic stand package is a state of the art system designed for high end drilling fluids to reduce fluid and moving costs between wells while providing a safe working platform. Environmental Services Marquis Alliance's environmental service line is comprised of two groups: drilling waste management and environmental sciences. Both groups provide services primarily to oil and gas producers active in the WCSB. Most of the activity of the environmental service line is in the heavy oil region of Alberta, including the oil sands, Central Alberta, the Grande Prairie region and the Horn River of British Columbia. The business of Marquis Alliance's environmental service line involves determining the appropriate processes for disposing of drilling waste such as drill cuttings and fluids and/or the recycling of the fluids produced by drilling operations. In addition, Marquis Alliance also provides a reclamation service to assess and determine the most appropriate and cost effective method for reclaiming the land back to its original pre-drilling state. Marquis Alliance's environmental scientists and chemists, in conjunction with its drilling fluids specialists, work to execute the reclamation and disposal process. United States Operations Marquis Alliance operates in the United States, through its wholly-owned subsidiary, Marquis Alliance Energy Group USA Inc. ("Marquis USA"), a Delaware limited liability company. The majority of Marquis USA's activity has been the supply of drilling fluids in the Rocky Mountain States, primarily in the Bakken of North Dakota and Montana, as well as plays in Colorado, Wyoming and Utah. Marquis USA has its head office in Denver, Colorado.

Personnel As at January 1, 2011, Marquis Alliance, together with its subsidiaries, employed 173 employees and retained the services of approximately 30 consultants. As components of Marquis Alliance's business are seasonal, the number of consultants may range from 5 to 45 depending on the time of year. Financial Statements Attached as Schedule "A" hereto are: (i) the audited consolidated balance sheet of Marquis Alliance as at March 31, 2010 and the consolidated statement of earnings, comprehensive earnings, and cash flows in respect of Marquis Alliance for the year ended March 31, 2010 and the unaudited comparative consolidated balance sheet of Marquis Alliance as at March 31, 2009 and the consolidated statement of earnings, comprehensive earnings and accumulated other comprehensive earnings, and cash flows in respect of Marquis Alliance for the year ended March 31, 2009; and (ii) the unaudited consolidated balance sheet of Marquis Alliance as at December 31, 2010 and the unaudited consolidated statements of earnings, comprehensive earnings and accumulated comprehensive earnings, retained earnings (deficit) and cash flows for the three and nine month periods ended December 31, 2010 and 2009. EFFECT OF THE ACQUISITION ON SECURE Benefits of the Acquisition The acquisition of Marquis is a complementary fit with the Corporation's existing business and is consistent with the Corporation's overall business plan to leverage off its existing infrastructure and expand its recycling services offering. Specifically, management of the Corporation believes that the anticipated benefits and upside potential associated with the Acquisition include the following: Providing a platform for recycling oil based drilling fluids in active resource plays in Western Canada; Leveraging the Corporation's existing facility infrastructure in order to reduce transportation costs and improve logistical movement and storage associated with delivery and return of drilling fluids to and from the customer location; Accretion to the Corporation on an earnings and cash flow per share basis; Operational synergies over the next 12 to 24 months; Integration into Secures existing network; and Providing customers with an efficient and cost effective full cycle "cradle to grave" drilling fluids and waste management program.

While management expects that the Corporation will receive the benefits noted above, the Acquisition does expose the Corporation to additional risks including the risk that the Corporation will fail to realize the anticipated benefits of the Acquisition. For a further discussion of certain of the risks associated with the Acquisition, see "Risk Factors". Selected Pro Forma Information The following table sets out certain financial information in respect of Secure and Marquis Alliance and certain unaudited pro forma consolidated financial information after giving effect to the Acquisition, the Offering and certain other adjustments. Such information should be read in conjunction with the unaudited pro forma consolidated financial statements, including the assumptions set forth in the notes thereto, attached hereto at Schedule "B". The pro forma adjustments are based upon the assumptions described in the notes to the unaudited pro forma consolidated financial statements. The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating or financial results that would have occurred had the Acquisition actually occurred at the times contemplated by the notes to the unaudited pro forma consolidated financial statements or of the results expected in future periods.

The information presented below and in the unaudited pro forma consolidated financial statements of the Corporation assumes completion of the Acquisition and issuance of the Common Shares issuable pursuant to the Subscription Receipts in connection with the Offering (prior to giving effect to the Over-Allotment Option).

Year Ended December 31, 2010 Marquis Pro Forma Alliance(7) Consolidated(8) Secure Financial Information ($000's, except per share amounts) Total Revenue................................................................................. EBITDA(1)(2)(3).................................................................................. EBITDA Margin(4)........................................................................... Net Income(3)................................................................................ Net Income Margin(5)..................................................................... Earnings per share(3)(4) (6).................................................................. Total Assets....................................................................................
Notes: (1) (2) (3) (4) (5) (6) (7) Adjusted to give effect to the Acquisition and the Offering. No adjustment has been made to reflect cost savings from operating synergies that may be realized as a result of the Acquisition. EBITDA is non-GAAP financial measure. See "Non-GAAP Measures". Excluding loss from discontinued operations. EBITDA Margin is shown as a percentage and is calculated by dividing EBITDA by Total Revenue. Net Income Margin is shown as a percentage and is calculated by dividing Net Income by Total Revenue. Calculated based on the weighted average number of Common Shares outstanding (basic and diluted) after giving effect to the Offering and the Acquisition. The financial information presented for Marquis Alliance was selected from the unaudited constructed financial statement of operations of Marquis Alliance for the 12-month period ended December 31, 2010, constructed for the purposes of the unaudited pro forma consolidated financial statements of the Corporation and does not conform with historical financial statements of Marquis Alliance included elsewhere in this short form prospectus (excluding Total Assets). See note 4 to the unaudited pro forma consolidated financial statements of the Corporation attached hereto as Schedule "B". The weighted average share capital for Marquis Alliance for the 12-month period ended December 31, 2010 was not constructed, and therefore earnings per share for Marquis Alliance cannot be calculated. Columns may not add due to pro forma adjustments. $72,759 $24,012 33% $4,474 6% $0.07 $192,976 $122,299 $18,636 15% $9,633 8% $88,631 $195,058 $42,148 22% $9,023 5% $0.11 $370,741

(8)

DESCRIPTION OF SHARE CAPITAL Authorized Capital The Corporation is authorized to issue an unlimited number of Common Shares and an unlimited number of preferred shares ("Preferred Shares"). As at the date hereof, 63,870,748 Common Shares are issued and outstanding and no Preferred Shares are issued and outstanding. The holders of Common Shares ("Shareholders") are entitled: (i) to notice of, to attend and to one vote per Common Share at, all meetings of the Shareholders (other than meetings of a class or series of shares of the Corporation other than the Common Shares); (ii) to receive dividends as and when declared by the Board of Directors on the Common Shares as a class, subject to prior satisfaction of all preferential rights to dividends attached to all shares of other classes of shares of the Corporation ranking in priority to the Common Shares in respect of dividends; and (iii) in the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, or any other distribution of the assets of the Corporation among the Shareholders for the purpose of winding-up its affairs, and subject to prior satisfaction of all preferential rights to return of capital on dissolution attached to all shares of other classes of shares of the Corporation ranking in priority to the Common Shares in respect of a return of capital on dissolution, to share rateably, together with the holders of shares of any other class of shares of the Corporation ranking equally with the Common Shares in respect of a return of capital, in such assets of the Corporation as are available for distribution. ESCROWED SECURITIES Though not required by law, in connection with the initial public offering of the Corporation (the "IPO"), several executive officers elected to enter into an escrow agreement with Bennett Jones LLP and the Corporation (the "Escrow Agreements"), pursuant to which such Shareholders agreed to deposit, in the aggregate, 6,435,804 Common Shares (the "Escrowed Shares") into escrow with Bennett Jones LLP as escrow agent. The Escrow Agreement provided that 33 1/3% of the number of securities

held thereunder were released on completion of the IPO on March 30, 2010 with an additional 33 1/3% being released on each of the 12 and 24-month anniversaries of the closing date of IPO. As at the date hereof, an aggregate of 2,145,268 Common Shares remain in escrow and are expected to be released on March 30, 2012. The Acquisition Agreement provides that the Common Shares issued to the Vendors as partial consideration for the Acquisition will be held in escrow and, depending upon the Vendor, are to be released from escrow over periods ranging from two to five years. Of the 10,015,291 Common Shares issued to the Vendors as partial consideration for the Acquisition: (i) 1,005,588 Common Shares will be subject to escrow and are to be released as to 50% per year over a 2 year period from the closing date of the Acquisition; (ii) 608,030 Common Shares will be subject to escrow and are to be released as to 25% per year over a 4 year period from the closing date of the Acquisition; and (iii) the remaining 8,401,673 Common Shares will be subject to escrow and are to be released as to 20% per year over a 5 year period from the closing date of the Acquisition. CONSOLIDATED CAPITALIZATION OF THE CORPORATION The following table sets forth the consolidated capitalization of the Corporation as at December 31, 2010 both before and after giving effect to the Offering and the Acquisition (stated in thousands of dollars except share amounts). Outstanding as at December 31, 2010 Before Giving Effect to the Offering and the Acquisition $152,983 (63,754,348 shares) nil $nil $nil Outstanding as at December 31, 2010 After Giving Effect to the Offering and the Acquisition(1) $275,921 (85,047,839 shares) nil $1,725(5) $nil(5)

Designation Common Shares(2) Preferred Shares Long Term Debt(3)(4) Bank Debt

Authorized unlimited unlimited $35,000,000 -

Notes: (1) Based on the issuance of: (i) 11,278,200 Subscription Receipts pursuant to the Offering for gross proceeds of $75 million less the Underwriters' fee of $3.75 million and other expenses of the Offering estimated to be $200 thousand; and (ii) 10,015,291 Common Shares pursuant to the Acquisition in connection with the partial payment of the Purchase Price. See "The Acquisition". The future tax benefit associated with the share issue costs is $937 thousand. If the Over-Allotment Option is fully exercised, the value and number of Common Shares outstanding as at December 31, 2010 after giving effect to the Offering and the Acquisition will be approximately $286.7 million and 86,739,569 Common Shares, respectively. The foregoing assumes that the closing of the Acquisition occurs and includes the issuance of Common Shares upon the exchange of the Subscription Receipts in connection with the closing of the Acquisition. (2) The Corporation is authorized to issue an unlimited number of Common Shares and an unlimited number of Preferred Shares, of which 63,870,748 Common Shares and no Preferred Shares are issued and outstanding as fully paid and non-assessable shares as of the date hereof. In addition, as at March 31, 2011, 5,638,132 Common Shares have been reserved for issuance on exercise of a like number of outstanding options to purchase Common Shares issued under the Corporation's stock option plan and 1,050,494 Common Shares have been reserved for issuance on exercise of a like number of outstanding performance warrants each with an exercise price of $1.50 per Common Share (subject to adjustment). See "Description of the Option Plan" and "Description of the Performance Warrants" in the Circular. (3) At December 31, 2010, the Corporation had a revolving credit facility in the amount of $35 million with a Canadian financial institution, before consideration of letters of guarantee in the amount of $8.5 million. (4) At December 31, 2010, the Corporation had an accumulated deficit of $1.1 million. (5) Pursuant to the Acquisition, Secure will assume $1.7 million of long term debt of Marquis Alliance but will not assume any bank debt as Marquis Alliance is required to deliver a net working capital surplus of $19.8 million net of any outstanding bank debt. See note 2 to the unaudited pro forma consolidated financial statements of the Corporation attached hereto as Schedule "B".

USE OF PROCEEDS The net proceeds to the Corporation from the sale of the Subscription Receipts are estimated to be approximately $71,050,028.50 ($81,737,532.77 in the event the Over-Allotment Option is exercised in full) after deducting the fees of $3,750,001.50 payable to the Underwriters ($4,312,501.73 if the Over-Allotment Option is exercised in full) and the estimated expenses of the Offering of $200,000. The Escrowed Funds will be held by the Escrow Agent, and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments), pending the closing of the Acquisition or the termination of the Acquisition Agreement. See "Subscription Receipts". The net proceeds of the Offering will be used by the Corporation: (i) to fund a portion of the Purchase Price of the Acquisition; and (ii) for ongoing working capital and general corporate purposes, including funding of capital expenditures. See "The

Acquisition", "Effect of the Acquisition on Secure" and "Capitalization of the Corporation". The balance of the Purchase Price will be funded through the issuance of 10,015,291 Common Shares to the Vendors. The Common Shares issued to the Vendors in connection with the Acquisition shall have the rights, privileges, restrictions and conditions as described above under the heading "Description of Share Capital". For particulars of past issuances of Common Shares during the 2 year period preceding the date of this short form prospectus refer to the Financial Statements incorporated by reference herein. SUBSCRIPTION RECEIPTS The following summary of the material attributes and characteristics of the Subscription Receipts does not include a description of all of the terms of the Subscription Receipts, and reference should be made to the Subscription Receipt Agreement (as defined herein) for a complete description of the terms of the Subscription Receipts. The Subscription Receipts will be issued on the date of closing of the Offering pursuant to a subscription receipt agreement to be entered into at closing of the Offering between the Corporation, FirstEnergy Capital Corp., on behalf of the Underwriters, and the Escrow Agent (the "Subscription Receipt Agreement"). The Escrowed Funds will be delivered to and held by the Escrow Agent and invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments) pending the closing of the Acquisition. Provided that the Acquisition closes on or before 5:00 p.m. (Calgary time) on June 15, 2011, the Escrowed Funds after taking into account interest earned on the Escrowed Funds (such released amount being the "Released Amount"), will be released to the Corporation and holders of Subscription Receipts will receive, without payment of additional consideration or further action, one Common Share for each Subscription Receipt held on closing date of the Acquisition. In connection with the closing of the Acquisition, the Escrow Agent will release to the Corporation the Released Amount against: (i) an irrevocable direction of the Corporation to the Escrow Agent (in its capacity as registrar and transfer agent of the Common Shares) to issue the Common Shares to holders of record of Subscription Receipts as at the closing date of the Acquisition; and (ii) a joint notice from the Corporation and FirstEnergy Capital Corp., on behalf of the Underwriters, to the Escrow Agent, confirming that all matters relating to the closing of the Acquisition, except for the payment of the Released Amount, have been fulfilled to their satisfaction. The Subscription Receipt Agreement will contain a covenant of the Corporation to apply a portion of the Released Amount to the purchase price of the Acquisition. The transfer register with respect to the Subscription Receipts shall be closed at 5:00 p.m. (Calgary time) on the closing date of the Acquisition. See "Use of Proceeds". If: (i) the closing of the Acquisition does not occur by 5:00 p.m. (Calgary time) on June 15, 2011, (ii) the Acquisition is terminated in accordance with the terms and conditions of the Acquisition Agreement at any earlier time, (iii) a party to the Acquisition has disclosed to the public that it does not intend to proceed with the Acquisition, or (iv) the Corporation has advised the Underwriters in writing that it does not intend to proceed with the Acquisition (in each case, a "Termination Event"), then holders of Subscription Receipts shall be entitled to receive from the Escrowed Funds an amount per Subscription Receipt equal to the Offering Price and a pro rata share of interest accrued on the Escrowed Funds. At the time of the Termination Event, a Subscription Receipt will only represent the holder's right to receive such payment from the Escrow Agent. Holders of Subscription Receipts are not shareholders of the Corporation and do not have rights as shareholders of the Corporation, including voting or pre-emptive rights, the right to receive any dividends of the Corporation or the right to receive the remaining property of the Corporation upon dissolution. Holders of Subscription Receipts are entitled only to receive Common Shares on the closing of the Acquisition or to a return of the full purchase price of such holder's Subscription Receipts together with such holder's pro rata portion of any interest accrued thereon, as described above. The Corporation has covenanted with the Escrow Agent and FirstEnergy Capital Corp., on behalf of the Underwriters, that, from the closing date of the Offering to the earlier of a Termination Event and the closing date of the Acquisition, it will not do any of the following: (i) subdivide or redivide the outstanding Common Shares into a greater number of Common Shares; (ii) reduce, combine or consolidate the outstanding Common Shares into a smaller number of Common Shares; (iii) issue any assets, securities or evidences of indebtedness of the Corporation or any other entity to holders of all or substantially all of the outstanding Common Shares by way of a dividend or other distribution whatsoever (other than cash distributions declared or paid in the ordinary course); or (iv) reclassify the Common Shares or undertake a reorganization of the Corporation or a consolidation, amalgamation, arrangement or merger of the Corporation with any other person or other entity, or a sale or conveyance of the property and assets of the Corporation as an entirety or substantially as an entirety to any other person or entity or a liquidation, dissolution or winding-up of the Corporation. From time to time while the Subscription Receipts are outstanding, the Corporation, the Underwriters and the Escrow Agent, without the consent of the holders of the Subscription Receipts, may amend or supplement the Subscription Receipt Agreement for certain purposes, including making any change that, in the opinion of the Escrow Agent, does not prejudice the rights of the holders of the Subscription Receipts. The Subscription Receipt Agreement will provide for other modifications and alterations

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thereto and to the Subscription Receipts issued thereunder by way of a resolution approved by more than 66% of the votes cast in person or by proxy by Subscription Receipt holders. Under the Subscription Receipt Agreement, purchasers of Subscription Receipts under this short form prospectus will have a contractual right of rescission following the issuance of Common Shares to such purchasers, to receive the amount paid for the Subscription Receipts upon surrender of the Common Shares, if this short form prospectus and any amendment contains a misrepresentation or is not delivered to such purchaser, provided such remedy for rescission is exercised within 180 days of the closing date of the Offering. The Corporation may from time to time purchase by private contract or otherwise any of the Subscription Receipts. The Subscription Receipts will be issued in "book-entry only" form and must be purchased or transferred through a Participant (as defined below), other than, in certain circumstances, Subscription Receipts issued to U.S. holders, which may be certificated and delivered to such holders on the closing date of the Offering. In such circumstances, the provisions below under "Book-Entry Only System" will not apply to such United States holders. The Subscription Receipts will not be listed on the TSX; however, on May 20, 2011 the Corporation and FirstEnergy Capital Corp., on behalf of the Underwriters, will make a good faith determination as to whether the closing of the Acquisition is reasonably likely to occur on or prior to June 1, 2011, and if not, Secure shall immediately apply to the TSX and make commercially reasonable efforts to list the Subscription Receipts on the TSX on or before June 1, 2011. Book-Entry Only System Except in limited circumstances, which may include where a Subscription Receipt certificate requires the addition of a legend under applicable securities laws in the United States, the Subscription Receipts will be issued in "book-entry only" form and must be purchased or transferred through a participant (a "CDS Participant") in the depository service of CDS. On the closing of the Offering, the Subscription Receipts will be issued in registered form to CDS or its nominee, CDS & Co., and will be deposited directly with CDS pursuant to the book-entry only system. Unless the book-entry only system is terminated as described below, a purchaser acquiring a beneficial interest in the Subscription Receipts issued in "book-entry only" form (a "Beneficial Owner") will not be entitled to receive a certificate for Subscription Receipts, or, unless requested, for the Common Shares issuable pursuant to the Subscription Receipts. Purchasers of Subscription Receipts will not be shown on the records maintained by CDS, except through a CDS Participant. Beneficial interests in Subscription Receipts will be represented solely through the book-entry only system and such interests will be evidenced by customer confirmations of purchase from the registered dealer from which the applicable Subscription Receipts are purchased in accordance with the practices and procedures of that registered dealer. In addition, registration of interests in and transfers of the Subscription Receipts will be made only through the depository service of CDS. As indirect holders of Subscription Receipts, investors should be aware that they (subject to the situations described below): (a) may not have Subscription Receipts registered in their name; (b) may not have physical certificates representing their interest in the Subscription Receipts; (c) may not be able to sell the Subscription Receipts to institutions required by law to hold physical certificates for securities they own; and (d) may be unable to pledge Subscription Receipts as security. The Subscription Receipts will be issued to beneficial owners thereof in fully registered and certificate form (the "Subscription Receipt Certificates") only if: (a) required to do so by applicable law, which may include where a Subscription Receipt Certificate requires the addition of a legend under applicable securities laws in the United States; (b) the book-entry only system ceases to exist; (c) the Corporation or CDS advises the Escrow Agent that CDS is no longer willing or able to properly discharge its responsibilities as depository with respect to the Subscription Receipts and the Corporation is unable to locate a qualified successor; or (d) the Corporation, at its option, decides to terminate the book-entry only system through CDS. Upon the occurrence of any of the events described in the immediately preceding paragraph, the Escrow Agent must notify CDS, for and on behalf of CDS Participants and Beneficial Owners of Subscription Receipts, of the availability through CDS of Subscription Receipt Certificates. Upon surrender by CDS of the global certificates representing the Subscription Receipts and receipt of instructions from CDS for the new registrations, the Escrow Agent will deliver the Subscription Receipts in the form of Subscription Receipt Certificates and thereafter the Corporation will recognize the holders of such Subscription Receipt Certificates as holders of Subscription Receipts under the Subscription Receipt Agreement. Neither the Corporation nor the Underwriters will assume any liability for: (a) any aspect of the records relating to the beneficial ownership of the Subscription Receipts held by CDS or any payments relating thereto; (b) maintaining, supervising or reviewing any records relating to the Subscription Receipts; or (c) any advice or representation made by or with respect to CDS and contained in this short form prospectus and relating to the rules governing CDS or any action to be taken by CDS or at the direction of a CDS Participant. The rules governing CDS provide that it acts as the agent and depository for the CDS Participants.

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As a result, CDS Participants must look solely to CDS and Beneficial Owners must look solely to CDS Participants for any payments relating to the Subscription Receipts paid by or on behalf of the Corporation to CDS. TRADING PRICE AND VOLUME The Common Shares are listed and posted for trading on the TSX under the symbol "SES". The following table sets out information concerning the monthly price ranges and trading volumes of the Common Shares on the TSX for the periods indicated. 2010 May ............................................................................................. June ............................................................................................. July ............................................................................................. August......................................................................................... September ................................................................................... October ....................................................................................... November ................................................................................... December .................................................................................... 2011 January February March April May 1 to May 5 High $ 3.96 3.90 3.75 3.85 3.95 4.35 5.75 6.00 6.15 6.30 6.35 7.99 7.40 Low $ 3.30 3.31 3.35 3.57 3.60 3.90 4.43 5.13 5.50 5.69 5.72 6.17 7.02 Volume 3,699,107 3,052,351 1,431,733 929,799 5,126,682 2,686,177 4,514,842 1,903,275 1,919,949 3,025,936 2,738,521 5,322,765 446,222

On April 26, 2011, the last trading day before the announcement of the Offering, the closing price of the Common Shares on the TSX was $7.00 per Common Share. On May 5, 2011, the last day on which the Common Shares traded prior to the filing of this short form prospectus, the closing price of the Common Shares on the TSX was $7.06 per Common Share. PRIOR SALES During the 12-month period preceding the date of this short form prospectus, the Corporation issued 163,100 Common Shares at an average price of $2.55 pursuant to the exercise of options and performance warrants, the particulars of which are set forth in the following table:
Date of Issue May 14, 2010 July 12, 2010 July 14, 2010 July 30, 2010 October 8, 2010 October 8, 2010 November 5, 2010 November 26, 2010 December 9, 2010 December 9, 2010 January 10, 2011 January 10, 2011 February 1, 2011 March 15, 2011 March 23, 2011 March 23, 2011 April 1, 2011 April 15, 2011 April 15, 2011 Number of Common Shares Issued 6,000 1,000 6,000 500 3,200 6,000 20,000 10,000 6,000 6,000 9,000 20,000 53,333 6,000 500 1,200 6,800 567 1,000 Exercise Price $2.50 $2.50 $2.50 $2.50 $2.50 $2.60 $1.50 $3.40 $2.60 $2.72 $2.60 $2.72 $2.60 $2.72 $2.50 $3.00 $3.00 $3.00 $2.72

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During the same 12-month period, the Corporation granted, under the Corporation's stock option plan (the "Option Plan"), options ("Options") to acquire an aggregate of 668,490 Common Shares, the particulars of which are set forth in the following table:
Number of Common Shares Issuable on Exercise(1) 228,250 102,700 98,550 17,250 17,625 80,465 1,935 121,715 Exercise Price per share $3.77 $3.68 $4.57 $5.50 $5.48 $5.24 $5.50 $6.10

Date of Grant May 20, 2010 August 20, 2010 November 15, 2010 November 29, 2010 December 1, 2010 December 9, 2010 December 15, 2010 March 14, 2011

Notes:
(1) Each Option entitles the holder thereof to acquire one Common Share on the terms and conditions set forth in the Option Plan.

PLAN OF DISTRIBUTION Pursuant to the underwriting agreement between the Corporation and the Underwriters dated effective April 27, 2011 (the "Underwriting Agreement"), the Corporation has agreed to issue and sell, at the Offering Price, an aggregate of 11,278,200 Subscription Receipts to the Underwriters and the Underwriters have severally agreed to purchase such Subscription Receipts on May 19, 2011, or such other date not later than June 10, 2011 as may be agreed among the parties to the Underwriting Agreement. Delivery of the Subscription Receipts is conditional upon payment on closing of $6.65 per Subscription Receipt by the Underwriters to the Escrow Agent. The Underwriting Agreement provides that the Corporation will pay the Underwriters' a fee equal to the sum of 5% of the issue price, equal to $0.3325 per Subscription Receipt issued to the public, for an aggregate underwriters' fee payable by the Corporation of $3,750,001.50, in consideration for their services in connection with the Offering. The Underwriters' fee in respect of the Subscription Receipts is payable as to 50% upon the closing of the Offering and as to 50% upon closing of the Acquisition. If the closing of the Acquisition does not occur by 5:00 p.m. (Calgary time) on June 15, 2011 or a Termination Event occurs, the Underwriters' fee in respect of the Subscription Receipts will be reduced to the amount payable upon closing of the Offering. The terms of the Offering were determined by negotiation between the Corporation and FirstEnergy Capital Corp., on their own behalf and on behalf of the other Underwriters. The Corporation has granted the Underwriters the Over-Allotment Option, exercisable, in whole or in part, for a period of up to 30 days after closing of the Offering, to purchase up to an additional 1,691,730 Subscription Receipts, at the Offering Price, to cover over-allotments, if any, and for market stabilization purposes. The grant of the Over-Allotment Option and the issuance of the Common Shares upon exercise of the Over-Allotment Option are qualified for distribution under this short form prospectus. A purchaser who acquires Subscription Receipts (or Common Shares if the Over-Allotment Option is exercised after the closing of the Acquisition) forming part of the Underwriters' over-allocation position acquires those Subscription Receipts (or Common Shares, as the case may be) under this prospectus, regardless of whether the over-allocation position is ultimately filled through exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment Option is exercised in full, the total Offering, the Underwriter's fee and the net proceeds to the Corporation (before payment of the expenses of this Offering) will be $86,250,034.50, $4,312,501.73 and $81,937,532.77, respectively. The obligations of the Underwriters under the Underwriting Agreement are several and not joint, and may be terminated at their discretion on the basis of their assessment of the state of the financial markets and may also be terminated upon the occurrence of certain stated events. The obligations of the Corporation and the Underwriters under the Underwriting Agreement to complete the purchase and sale of the Subscription Receipts will terminate if a Termination Event occurs. If an Underwriter fails to purchase the Subscription Receipts that it has agreed to purchase, the other Underwriters may, but are not obligated to, purchase such Subscription Receipts. The Underwriters are, however, obligated to take up and pay for all Subscription Receipts if any are purchased under the Underwriting Agreement. The Underwriting Agreement also provides that the Corporation will indemnify the Underwriters and their directors, officers, agents, shareholders and employees against certain liabilities and expenses. Except in certain limited circumstances, the Subscription Receipts will be issued in "book-entry only" form and must be purchased or transferred through a CDS Participant. See "Subscription Receipts". The Corporation has been advised by the Underwriters that, in connection with the Offering, the Underwriters may effect transactions that stabilize or maintain the market price of the Common Shares at levels other than those that might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time.

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The Corporation has agreed that, subject to certain exceptions, it will not offer or issue, or enter into an agreement to offer or issue Common Shares (other than options granted pursuant to the Corporation's stock option plan and Common Shares issuable under options granted under such plan and existing instruments already issued, including performance warrants) for a period of 90 days subsequent to the closing date of the Offering without the prior written consent of FirstEnergy Capital Corp., on behalf of the Underwriters, which consent may not be unreasonably withheld. The Underwriters propose to offer the Subscription Receipts initially at the Offering Price. After a reasonable effort has been made to sell all the Subscription Receipts at the price specified, the Underwriters may subsequently reduce the selling price to investors from time to time in order to sell any of the Subscription Receipts remaining unsold. Any such reduction will not affect the proceeds received by the Corporation, and the compensation realized by the Underwriters will be decreased by the amount that the aggregate price paid by the purchasers of the Subscription Receipts is less than the proceeds paid by the Underwriters to the Corporation. There is no market through which the Subscription Receipts may be sold and purchasers may not be able to resell Subscription Receipts purchased under this short form prospectus. The Common Shares are currently listed on the TSX under the symbol "SES". On April 26, 2011 the last trading day before the announcement of the Offering, the closing price of the Common Shares on the TSX was $7.00 per Common Share. On May 5, 2011, the last day on which the Common Shares traded prior to the filing of this short form prospectus, the closing price of the Common Shares on the TSX was $7.06 per Common Share. The TSX has conditionally approved the listing of the Common Shares issuable pursuant to the Subscription Receipts on the TSX (including the Common Shares issuable upon exercise of the Over-Allotment Option). Listing will be subject to the Corporation fulfilling the applicable listing requirements of the TSX on or before July 28, 2011. The Subscription Receipts will not be listed on the TSX; however, on May 20, 2011 the Corporation and FirstEnergy Capital Corp., on behalf of the Underwriters, will make a good faith determination as to whether the closing of the Acquisition is reasonably likely to occur on or prior to June 1, 2011, and if not, Secure shall immediately apply to the TSX and make commercially reasonable efforts to list the Subscription Receipts on the TSX on or before June 1, 2011. The Subscription Receipts and the Common Shares issuable pursuant to the Subscription Receipts (the "Securities") have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and, accordingly, the Securities may not be offered or sold within the United States or to U.S. persons (as defined in Regulation S under the U.S. Securities Act) except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. The Underwriting Agreement permits offers and sales of the Subscription Receipts in the United States or to U.S. persons to be made only to institutions that are "accredited investors" as defined in Rule 501(a) of Regulation D under the U.S. Securities Act in transactions that comply with the requirements of the exemption from registration provided by Rule 506 of Regulation D and to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act ("Rule 144A") in transactions that comply with the requirements of the exemption from registration provided by Rule 144A. Moreover, the Underwriting Agreement provides that offers and sales of Subscription Receipts outside the United States will be made only in accordance with Regulation S under the U.S. Securities Act. In addition, until 40 days after the closing of the Offering, an offer or sale of Securities within the United States by any dealer (whether or not participating in the Offering) may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A. CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS In the opinion of Bennett Jones LLP, counsel to the Corporation and McCarthy Ttrault LLP, counsel to the Underwriters, ("Counsel") the following summary, as of the date hereof, describes the principal Canadian federal income tax considerations generally applicable under the Tax Act to a purchaser who acquires Subscription Receipts pursuant to the Offering and who at all relevant times, for purposes of the Tax Act holds the Subscription Receipts and the Common Shares issued pursuant to the Subscription Receipts (together, the "Securities") as capital property and deals at arm's length with, and is not affiliated with, the Corporation and the Underwriters (a "Holder"). Generally, the Securities will be capital property to a Holder provided the Holder does not acquire or hold the Securities in the course of carrying on a business or as part of an adventure or concern in the nature of trade. This summary is based on the current provisions of the Tax Act, and Counsel's understanding of the current administrative policies and assessing practices of the Canada Revenue Agency ("CRA") published in writing prior to the date hereof. This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the "Proposed Amendments") and assumes that all Proposed Amendments will be enacted in the form proposed. However, no assurances can be given that the Proposed Amendments will be enacted as proposed, or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative policy or practice whether by legislative, administrative or judicial action nor does it take into account tax legislation or considerations of any province, territory or foreign jurisdiction, which may differ from those discussed herein.

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This summary does not apply to a purchaser (i) that is a specified financial institution, (ii) an interest in which is a tax shelter investment, (iii) that is a financial institution for purposes of the mark-to-market rules, or (iv) that has elected to determine its tax results in a foreign currency under the functional currency rules, each as defined in the Tax Act. Such purchasers should consult their own tax advisors with respect to an investment in the Securities. This summary is of a general nature only and is not exhaustive of all Canadian federal income tax considerations applicable to an investment in Subscription Receipts or Common Shares issued pursuant to the Subscription Receipts. The tax consequences of acquiring, holding or disposing of Subscription Receipts or Common Shares issued pursuant to the Subscription Receipts will vary according to the status and circumstances of the particular purchaser. This summary is not intended to be legal or tax advice to any particular purchaser. Accordingly, prospective purchasers should consult their own tax advisors having regard to their own particular circumstances. This summary is based upon the understanding of Counsel that a Subscription Receipt evidences a right to acquire a Common Share on the satisfaction of certain conditions. However, no advance income tax ruling has been sought from the CRA in this regard and Counsel is not aware of any judicial authority with respect to this characterization. Taxation of Holders of Subscription Receipts Resident in Canada This portion of the summary is generally applicable to a Holder who at all relevant times, for the purposes of the Tax Act, is resident in Canada (a "Resident Holder"). Subscription Receipts Issuance of Common Shares No capital gain or capital loss will be realized by a Resident Holder on the issuance of a Common Share pursuant to a Subscription Receipt. The Resident Holder's cost of a Common Share issued pursuant to a Subscription Receipt will generally be equal to the amount paid by the Resident Holder to acquire the Subscription Receipt. The cost of any Common Shares acquired pursuant to the Subscription Receipts must be averaged with the adjusted cost base of any other Common Shares held by the Resident Holder as capital property at that time. Disposition of Subscription Receipts A disposition or deemed disposition by a Resident Holder of a Subscription Receipt (other than on the acquisition of a Common Share pursuant to the terms of the Subscription Receipts) including on the repayment of the issue price thereof by the Corporation in the event the Acquisition is not completed before the Termination Time, will generally result in the Resident Holder realizing a capital gain (or capital loss) equal to the amount by which the proceeds of disposition are greater (or less) than the aggregate of the Resident Holder's adjusted cost base of such Subscription Receipt and any reasonable costs of disposition. See "Taxation of Capital Gains and Capital Losses". In the event that a Resident Holder becomes entitled to repayment of the issue price of a Subscription Receipt as a consequence of the Acquisition not becoming effective prior to the Termination Time, any amount that is paid to the Resident Holder by the Corporation as or on account of interest on the Escrowed Funds will be included in the Resident Holder's income and excluded from the Resident Holder's proceeds of disposition. Interest on Escrowed Funds A Resident Holder that is a corporation, partnership, unit trust or a trust in which a corporation or a partnership is a beneficiary will be required to include in income for a taxation year any interest accrued to the Resident Holder on the Escrowed Funds to the end of the Resident Holder's taxation year, or that is receivable or received by the Resident Holder before the end of that taxation year, except to the extent that such interest was included in computing the Resident Holder's income for a preceding taxation year. Any other Resident Holder (including an individual) that is entitled to receive its share of interest earned on the Escrowed Funds will be required to include in income for a taxation year such interest as is received or receivable by the Resident Holder in that taxation year, depending on the method regularly followed by the Resident Holder in computing income.

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Common Shares Dividends on Common Shares Dividends received or deemed to be received on the Common Shares will be included in the Resident Holder's income. In the case of an individual Resident Holder (other than certain trusts), such dividends will be subject to the gross-up and dividend tax credit rules normally applicable in respect of taxable dividends received from taxable Canadian corporations (as defined in the Tax Act), which will include the enhanced gross-up and dividend tax credit to the extent any dividend is designated by the Corporation as an eligible dividend in accordance with the Tax Act. A dividend received or deemed to be received by a Resident Holder that is a corporation will generally be deductible in computing the corporation's taxable income, to the extent and in the circumstances provided in the Tax Act. A Resident Holder that is a private corporation (as defined in the Tax Act), or a corporation controlled by or for the benefit of an individual or related group of individuals (other than a trust or trusts) will generally be liable to pay a refundable tax of 33% on dividends received or deemed to be received on Common Shares to the extent such dividends are deductible in computing the Resident Holder's taxable income. Disposition of Common Shares A Resident Holder who disposes of or is deemed to dispose of a Common Share (other than to the Corporation) will generally realize a capital gain (or capital loss) to the extent the proceeds of disposition are greater (or less) than the aggregate of the adjusted cost base to the Resident Holder of the Common Share immediately before the disposition and any reasonable costs of disposition. See "Taxation of Capital Gains and Capital Losses". The amount of any capital loss realized by a Resident Holder that is a corporation on the disposition of a Common Share may be reduced by the amount of any dividends received or deemed to be received by the Resident Holder on such Common Share. Similar rules may apply where a Common Share is owned by a partnership or trust of which a corporation, trust or partnership is a member or beneficiary. Such Holders should consult their own tax advisors. Minimum Tax A Resident Holder who is an individual, including certain trusts, may be subject to alternative minimum tax as a consequence of receiving or being deemed to receive taxable dividends on the Common Shares or realizing a capital gain on the disposition or deemed disposition of the Common Shares or the Subscription Receipts. Resident Holders that are individuals should consult their own tax advisors. Taxation of Capital Gains and Capital Losses Generally, a Resident Holder is required to include in income for a taxation year one-half of any capital gain (a "taxable capital gain") realized in the year and may deduct one-half of any capital loss (an "allowable capital loss") realized in a taxation year from taxable capital gains realized by the Resident Holder in the year. Allowable capital losses in excess of taxable capital gains for the year may be deducted in any of the three preceding taxation years or any subsequent taxation year against net taxable capital gains realized in such years, to the extent and under the circumstances provided in the Tax Act. A Resident Holder that is throughout the year a Canadian-controlled private corporation, as defined in the Tax Act, may be liable to pay an additional refundable tax of 6% on its aggregate investment income, as defined in the Tax Act, which generally includes interest income and taxable capital gains. Taxation of Holders of Subscription Receipts Not Resident in Canada This portion of the summary is generally applicable to a Holder who at all relevant times, for the purposes of the Tax Act is not, and is not deemed to be, resident in Canada and does not use or hold any Securities in a business carried on in Canada (a "NonResident Holder"). Special rules, which are not discussed in this summary, apply to insurers who carry on business in Canada and elsewhere. Issuance of Securities No gain or loss will be realized by a Non-Resident Holder on the issuance of a Common Share pursuant to the terms of a Subscription Receipt.

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Disposition of Securities A Non-Resident Holder will be subject to tax under the Tax Act on any capital gains realized on the disposition or deemed disposition of a Subscription Receipt or a Common Share only if the Subscription Receipt or the Common Share is taxable Canadian property to the Non-Resident Holder and the Non-Resident Holder is not entitled to relief under an applicable income tax treaty between Canada and the country in which the Non-Resident Holder is resident. Generally, the Securities will not be taxable Canadian property to a Non-Resident Holder at a particular time if (1) the Common Shares are listed at that time on a designated stock exchange (which includes the TSX), and the Non-Resident Holder, persons with whom the Non-Resident Holder does not deal with at arm's length, or the Non-Resident Holder together with all such persons, owned less than 25% of the issued shares of each class or series of the capital of the Corporation at that time and during the prior 60-months, or (2) throughout such 60-month period more than 50% of the fair market value of the Common Shares was not derived directly or indirectly from one or any combination of: (i) real or immovable properties situated in Canada, (ii) Canadian resource properties (as defined in the Tax Act), (iii) timber resource properties (as defined in the Tax Act), and (iv) options in respect of, or interests in, or for civil law rights in, property in any of the foregoing whether or not the property exists, and (3) the Securities are not otherwise deemed to be taxable Canadian property. Generally, Securities may be deemed to be taxable Canadian property where they are received in certain tax deferred transactions in exchange for property which was taxable Canadian property. Non-Resident Holders whose Securities may constitute taxable Canadian property should consult their own tax advisors. Canadian Withholding Tax Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder on Common Shares will be subject to withholding tax under the Tax Act at a rate of 25%, subject to reduction under the provisions of an applicable income tax treaty. If the Acquisition is not completed before the Termination Time, the repayment of the issue price (including any amount paid as or on the account of interest on the Escrowed Funds) to a Non-Resident Holder will not generally be subject to non-resident withholding tax under the Tax Act. RISK FACTORS An investment in the Subscription Receipts and Common Shares is subject to certain risks. Prospective subscribers should carefully review and consider all other information contained and incorporated by reference in this short form prospectus and in particular, the risk factors set forth at pages 21 to 28 of the Annual Information Form and pages 14 to 18 of the MD&A. Failure to Complete the Acquisition Completion of the Acquisition is subject to numerous conditions to closing, including, but not limited to the following: (a) receipt of all government and third party approvals; and (b) the absence of a material adverse change with respect to Marquis Alliance or the Corporation. See "The Acquisition". If a Termination Event occurs, then the Subscription Receipts will only represent the holder's right to receive the full purchase price of such holder's Subscription Receipts plus a pro rata share of the interest earned on the Escrowed Funds. In that case, the total return that a purchaser of Subscription Receipts would be entitled to receive would be limited to the purchaser's pro rata share of interest earned on the purchase price for such purchaser's Subscription Receipts. The purchaser would not be entitled to participate in any growth in the trading price of the Common Shares. Further, the purchaser would be restricted from using the funds devoted to the acquisition of the Subscription Receipts for any other investment opportunities until the Escrowed Funds are returned to the purchaser. If closing of the Acquisition does not take place as contemplated, the Corporation could suffer adverse consequences, including the loss of investor confidence. Failure to Realize Anticipated Benefits of the Acquisition The Corporation is proposing to complete the Acquisition to strengthen its position in the oil and natural gas services industry and to create the opportunity to realize certain benefits including, among other things, anticipated growth opportunities and potential cost savings. Achieving the benefits of the Acquisition and future acquisitions the Corporation may complete depends in part on successfully consolidating functions and integrating operations procedures and personnel in a timely and efficient manner, as well as the Corporation's ability to realize the anticipated growth opportunities and synergies from combining the acquired businesses and operations with those of the Corporation. The integration of the business being acquired through the

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Acquisition requires the dedication of substantial management effort, time and resources which may divert management's focus and resources from other strategic opportunities and from operational matters during this process. The integration process may result in the loss of key employees and the disruption of ongoing business, customer and employee relationships that may adversely affect the Corporation's ability to achieve the anticipated benefits of the Acquisition and future acquisitions. Unexpected Costs or Liabilities Related to the Acquisition Although the Corporation conducted what it believed to be a prudent and thorough level of investigation in connection with the Acquisition, an unavoidable level of risk remains regarding any undisclosed or unknown liabilities of, or issues concerning, Marquis Alliance. Following the Acquisition, the Corporation may discover that it has acquired substantial undisclosed liabilities. The existence of undisclosed liabilities or the Corporation's inability to retain existing Marquis Alliance customers or employees could have a material adverse impact on the Corporation's business, financial condition, results of operations and cash flows. Operational Risks Relating to Marquis Alliance The risk factors set forth in the Annual Information Form relating to the energy services business and the operations of the Corporation apply equally in respect to Marquis Alliance and the business of Marquis Alliance that the Corporation intends to acquire pursuant to the Acquisition. Use of Proceeds May Differ from Those Set Out in this Short Form Prospectus The Corporation currently intends to allocate the net proceeds received from the Offering not related to the Acquisition as described under "Use of Proceeds" in this short form prospectus. However, management will have discretion in the actual application of the net proceeds, and may elect to allocate proceeds differently from that described in "Use of Proceeds" if it is believed it would be in the best interests of the Corporation to do so as circumstances change. The failure by management to apply these funds effectively could have a material adverse effect on the business of the Corporation. Volatility of Market Price of Common Shares The market price of the Common Shares may be volatile. The volatility may affect the ability of holders to sell the Common Shares at an advantageous price. Market price fluctuations in the Common Shares may be due to the Corporation's operating results failing to meet the expectations of securities analysts or investors in any quarter, downward revision in securities analysts' estimates, governmental regulatory action, adverse change in general market conditions or economic trends, acquisitions, dispositions or other material public announcements by the Corporation or its competitors, along with a variety of additional factors, including, without limitation, those set forth under "Forward-Looking Statements" herein. In addition, the market price for securities in the stock markets, including the TSX, recently experienced significant price and trading fluctuations. These fluctuations have resulted in volatility in the market prices of securities that often has been unrelated or disproportionate to changes in operating performance. These broad market fluctuations may adversely affect the market prices of the Common Shares. Volatility of Industry Conditions The oil and natural gas exploration and production industry in which the Corporation and Marquis Alliance operate is highly volatile, and there can be no assurance that demand for the services of either the Corporation or Marquis Alliance will be maintained at current levels. The demand, pricing and terms for oilfield services, including crude oil emulsion treatment, the terminalling and marketing of crude oil, oilfield waste processing, tank washing, landfill disposal, disposal of produced and waste water, the purchase and resale of crude oil, drilling fluid systems, environmental rentals and environmental waste management and reclamation, is largely dependent upon the level of industry activity for oil and natural gas exploration and development in the markets in which the Corporation and Marquis Alliance operate, including the WCSB, Qubec, the United States and India. Oil and natural gas industry conditions are influenced by numerous factors over which the Corporation has no control, including: oil and natural gas prices; expectations about future oil and natural gas prices; levels of consumer demand; the cost of exploring for, producing and delivering oil and natural gas; the expected rates of declining current production; the discovery rates of new oil and natural gas reserves; available pipeline and other oil and natural gas transportation and processing capacity; worldwide weather conditions; global political, military, regulatory and economic conditions; availability of capital for oil and gas exploration and capital budgets; and the ability of oil and natural gas entities to raise equity capital or debt financing.

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The level of activity in the oil and natural gas exploration and production industry is volatile. No assurance can be given that expected trends in oil and natural gas production activities will continue or that demand for oilfield services will reflect the level of activity in the industry. Any prolonged substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and therefore affect the demand for drilling and well services by oil and natural gas clients. A material decline in oil or natural gas prices or industry activity in any of the areas in which the Corporation and Marquis Alliance operate could have a material adverse effect on the Corporation's business, financial condition, results of operations and cash flows and therefore on the dividends, if any, that may be declared on the Common Shares. Any addition to, or elimination or curtailment of, government incentives could have a significant impact on the oilfield service industry. Lower oil and natural gas prices could also: cause the clients of the Corporation and Marquis Alliance to seek to terminate, renegotiate or fail to honour the services contracts with the Corporation or Marquis Alliance, as applicable; impair the fair market value of the tangible assets, intangible assets and or goodwill of the Corporation and Marquis Alliance which in turn would trigger a write-down for accounting purposes; affect the ability of the Corporation and Marquis Alliance to retain skilled oilfield services personnel; and affect the Corporation's ability to obtain access to capital to finance and grow the Corporation's business. Regulation and Taxation of Energy Industry Material changes to the regulation and taxation of the energy industry in the jurisdictions in which the Corporation and Marquis Alliance operate may reasonably be expected to have an impact on the energy services industry. Generally, a significant increase in the regulation or taxation of the energy industry or material uncertainty regarding such issues may be expected to result in a decrease in industry drilling and production activity in the applicable jurisdiction. Sources, Pricing and Availability of Products and Third Party Services The Corporation and Marquis Alliance source their products from a variety of suppliers, many of whom are located in Canada and the United States. Should any suppliers of the Corporation and Marquis Alliance be unable to provide the necessary products or services or otherwise fail to deliver products or services in the quantities required or at acceptable prices, any resulting delays in the provision of services or in the time required to find new suppliers could have a material adverse effect on the business, financial condition, results of operations and cash flows of the Corporation and Marquis Alliance and therefore on the dividends, if any, that may be declared on the Common Shares. In addition, the ability of either of the Corporation or Marquis Alliance to compete and grow will be dependent on the Corporation and Marquis Alliance having access, at a reasonable cost and in a timely manner, to equipment, parts and components. Failure of suppliers to deliver such equipment, parts and components at a reasonable cost and in a timely manner would be detrimental to the ability of either of the Corporation or Marquis Alliance to maintain and expand its client list. No assurance can be given that the Corporation or Marquis Alliance will be successful in maintaining the required supply of equipment, parts and components. It is also possible that the final costs of the equipment contemplated by the capital expenditure program of the Corporation or Marquis Alliance may be greater than anticipated by management, and may be greater than the amount of funds available to the Corporation, in which circumstance the Corporation may curtail or extend the timeframes for completing its capital expenditure plans. The ability of both the Corporation and Marquis Alliance to provide services to its customers is also dependent upon the availability at reasonable prices of raw materials which the Corporation and Marquis Alliance purchase from various suppliers, many of whom are located in Canada or the United States. Alternate suppliers do exist for all raw materials. In periods of high industry activity periodic industry shortages of certain materials have been experienced and costs are sometimes affected. In contrast, periods of low industry activity levels may cause financial distress on a supplier, thus limiting their ability to continue to operate and provide the Corporation and Marquis Alliance with necessary services and supplies. Management of both the Corporation and Marquis Alliance maintain relationships with a number of suppliers in an attempt to mitigate this risk. However, if the current suppliers are unable to provide the necessary raw materials, or otherwise fail to deliver products in the quantities required, any resulting delays in the provision of services to the clients of the Corporation and Marquis Alliance could have a material adverse effect on the Corporation's results of operation and cash flows and therefore on the dividends, if any, that may be declared on the Common Shares. Variations in interest rates and scheduled principal repayments, or the need to refinance all or a portion of the Credit Facilities upon expiration, could result in significant changes in the amount required to be applied to service the debt of the Corporation under the Credit Facilities before the distribution of any amounts to Shareholders. There can be no assurance that the amounts available under the Credit Facilities will be adequate for the financial obligations of the Corporation. Environmental Regulation The oil and natural gas industry is subject to extensive environmental regulation pursuant to local, provincial and federal legislation in Canada, federal and state laws and regulations in the United States and other applicable laws in the jurisdictions in

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which the Corporation and Marquis Alliance operates. Legislation regulating the oil and gas natural gas industry may be changed to impose higher standards and potentially more costly obligations on the oil and gas customers of the Corporation or Marquis Alliance. The Corporation's oil and gas customers will also be required to comply with any regulatory schemes for greenhouse gas emissions adopted by any applicable jurisdiction. The direct or indirect cost of these regulations may have a material adverse effect on the oil and gas customers of the Corporation or Marquis Alliance and consequently on the Corporation's business, financial condition, results of operations and cash flows. Given the evolving nature of the debate related to climate change and control of greenhouse gases and resulting requirements, management is unable to predict the impact of greenhouse gas emissions legislation and regulation on the Corporation and it is possible that it could have a material adverse affect on the Corporation's business, financial condition, results of operations and cash flows, and therefore on the dividends, if any, that may be declared on the Common Shares. Legal Proceedings Both the Corporation and Marquis Alliance are involved in litigation and claims, including the CCS Action as described in the Annual Information Form on pages 20 and 21 under the heading "Legal Proceedings" and page 25 under the heading "Risk Factors". In addition, future legal proceedings, arising in the normal course of operations, could be filed against the Corporation or Marquis Alliance and no assurance can be given as to the final outcome of any legal proceedings or that the ultimate resolution of any legal proceedings will not have a material adverse effect on the Corporation. Seasonality The level of activity in the oilfield services industry within the WCSB is influenced by seasonal weather patterns. The spring thaw during the second quarter leaves many secondary roads temporarily incapable of supporting the weight of heavy equipment, which results in severe restrictions in the level of oilfield services that may be provided. In addition, municipalities and transportation departments enforce road bans during such times that restrict the movement of heavy equipment. The duration of this period may have a direct impact on the level of the activities of the Corporation or Marquis Alliance. The spring thaw typically occurs earlier in the year in southern Alberta and Saskatchewan than it does in northern Alberta and British Columbia. The timing and duration of spring thaw is dependent on weather patterns but generally occurs in April and May. In addition, during excessively rainy periods, equipment moves may be delayed, thereby adversely affecting the Corporation's revenues. There is greater demand within the WCSB for oilfield services, including the drilling fluid systems provided by the Corporation or Marquis Alliance, in the winter season when the occurrence of freezing permits the movement and operation of heavy equipment. Consequently, oilfield service activities tend to increase in the fall and peak in the winter months of November through March. However, if an unseasonably warm winter prevents sufficient freezing, the Corporation or Marquis Alliance may not be able to access well sites, and its operating results and financial condition may therefore be adversely affected. The demand for oilfield services, including drilling fluid systems, may also be affected by the severity of the Canadian winters. The volatility in the weather and temperature can therefore create unpredictability in activity, which can have a material adverse effect on the Corporation's business, financial condition, results of operations and cash flows. Provincial Royalty Rate Changes The provincial governments of Alberta, British Columbia, Manitoba, and Saskatchewan collect royalties on the production from Crown lands. These fiscal royalty regimes are reviewed and adjusted from time to time by the respective governments for appropriateness and competitiveness. As an example, during 2009 and 2010, changes were announced to the royalty regimes and/or drilling incentive programs in Alberta and British Columbia. These changes, as well as the potential for future changes in these and other jurisdictions, add uncertainty to the outlook of the oilfield services sector. Credit Risk A concentration of credit risk exists in the accounts receivable of both the Corporation and Marquis Alliance since they are exclusively from companies in the oil and natural gas industry. Significant changes in the oil and natural gas industry, including fluctuations in commodity prices and economic conditions, environmental regulations, government policy, royalty rates and geopolitical factors, may adversely affect the ability of the Corporation or Marquis Alliance to realize the full value of its accounts receivable. It is not possible to predict the likelihood or magnitude of this risk. Global Financial Conditions Global financial conditions have been subject to increased volatility and numerous financial institutions have either gone into bankruptcy or have received capital bail-outs or other relief from governmental authorities. Access to public financing has been negatively impacted by both sub-prime mortgages in the United States and elsewhere and the liquidity crisis affecting the asset-backed commercial paper market. As a result of these global conditions, both the Corporation and Marquis Alliance are subject to increased counterparty risk and liquidity risk. The Corporation and Marquis Alliance are exposed to various

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counterparty risks including, but not limited to: (i) financial institutions that hold the cash of the Corporation or Marquis Alliance; and (ii) the insurance providers of the Corporation or Marquis Alliance. As a result, the cash of the Corporation or Marquis Alliance may become exposed to credit related losses in the event of non-performance by counterparties to these financial instruments. In the event that a counterparty fails to complete its obligations, the Corporation and Marquis Alliance, as applicable, would bear the risk of loss of the amount expected to be received under these financial instruments in the event of the default or bankruptcy of a counterparty. Both the Corporation and Marquis Alliance are also exposed to liquidity risk in the event its cash positions decline or become inaccessible for any reason, or additional financing is required to advance its projects or growth strategy and appropriate financing is unavailable, or demand for oil and gas falls. Any of these factors may impact the ability of the Corporation to obtain further equity based funding, loans and other credit facilities in the future and, if obtained, on terms favourable to the Corporation. If these increased levels of volatility and market turmoil were to continue, the Corporation's results of operations and planned growth could be adversely impacted. Proprietary Technology Marquis Alliance relies on various intellectual property rights to maintain proprietary control over its patents and trademarks. The success and ability of Marquis Alliance to compete depends in part on the proprietary technology of Marquis Alliance, and the ability of Marquis Alliance to prevent others from copying such proprietary technologies. Marquis Alliance currently relies on industry confidentiality practices, in some cases by a letter agreement, brand recognition by oil and natural gas exploration and production entities and in some cases patents (or patents pending) to protect its proprietary technology. There can be no assurance that Marquis Alliance's patent applications will be valid, or that patents will issue from the patent applications that Marquis Alliance has filed or will file. Accordingly, there can be no assurance that the patent application will be valid or will afford Marquis Alliance (and the Corporation is the Acquisition should close) with protection against competitors with similar technology. Following the closing of the Acquisition, the products developed by the Corporation may also incorporate technology that will not be protected by any patent and are capable of being duplicated or improved upon by competitors. Accordingly, the Corporation may be vulnerable to competitors who develop competing technology, whether independently or as a result of acquiring access to the proprietary information of the Corporation and trade secrets. In addition, effective patent protection may be unavailable or limited in certain foreign countries and may be unenforceable under the laws of certain jurisdictions. Policing unauthorized use of the Corporation's enhancements could prove to be difficult, and there can be no assurance that the steps taken by the Corporation will prevent misappropriation of its enhancements. In addition, litigation may be necessary in the future to enforce the intellectual property rights of the Corporation or Marquis Alliance, to protect their patents, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could have a material adverse effect on the Corporation's business, results of operations or financial condition, Despite the efforts of the Corporation, the intellectual property rights of the Corporation or Marquis Alliance may be invalidated, circumvented, challenged, infringed or required to be licensed to others. It cannot be assured that any steps the Corporation may take to protect its intellectual property rights and other rights to such proprietary technologies that are central to the Corporation's operations will prevent misappropriation or infringement. Risk of Third Party Claims for Infringement A third party may claim that the Corporation or Marquis Alliance has infringed such third party's intellectual property rights or may challenge the right of the Corporation or Marquis Alliance in their intellectual property. In such event, the Corporation will undertake a review to determine what, if any, actions the Corporation should take with respect to such claim. Any claim, whether or not with merit, could be time consuming to evaluate, result in costly litigation, cause delays in the operations of the Corporation or require the Corporation or Marquis Alliance to enter into licensing agreements that may require the payment of a license fee or royalties to the owner of the intellectual property. Such royalty or licensing agreements, if required, may not be available on terms acceptable to the Corporation. Potential Replacement or Reduced Use of Products and Services Certain of the Corporation's equipment or systems may become obsolete or experience a decrease in demand through the introduction of competing products that are lower in cost, exhibit enhanced performance characteristics or are determined by the market to be more preferable for environmental or other reasons. The Corporation will need to keep current with the changing

21

market for drilling fluids and solids control equipment and technological and regulatory changes. If the Corporation fails to do so, this could have a material adverse affect on its business, financial condition, results of operations and cash flows and therefore on the dividends, if any, that may be declared on the Common Shares. Performance of Obligations The Corporation's success depends in large part on whether it fulfills its obligations with clients and maintains client satisfaction. If the Corporation fails to satisfactorily perform its obligations, or makes professional errors in the services that it provides, its clients could terminate contracts, including master service agreements, exposing the Corporation to loss of its professional reputation and risk of loss or reduced profits or, in some cases, the loss of a project. Product Liability Both the Corporation and Marquis Alliance are subject to potential product liabilities connected with its operations, including liabilities and expenses associated with product defects. The operations of both the Corporation and Marquis Alliance have product liability and other insurance coverage that management of the applicable entity believe to be generally in accordance with the market practice in its industry, but there can be no assurance that the Corporation will always be adequately insured against all such potential liabilities. Equipment Risks The Corporation's ability to meet customer demands in respect of performance and cost will depend upon continuous improvements in the Corporation's operating equipment. There can be no assurance that the Corporation will be successful in its efforts in this regard or that it will have the resources available to meet this continuing demand. The Corporation's failure to do so could have a material adverse effect on it. No assurances can be given that competitors will not achieve technological advantages over the Corporation. Leverage and Restrictive Covenants The degree to which the Corporation is financially leveraged could have important consequences to the shareholders of the Corporation, including: (i) a portion of the Corporation's cash flow from operations will be dedicated to the payment of the principal of and interest on its indebtedness, thereby reducing funds available for dividends on the Common Shares; and (ii) certain of the Corporation's borrowings will be at variable rates of interest, which exposes the Corporation to the risk of increased interest rates. The Corporation's ability to make scheduled payments of principal and interest on, or to refinance, its indebtedness will depend on its future operating performance and cash flow, which are subject to prevailing economic conditions, prevailing interest rate levels, and financial, competitive, business and other factors, many of which are beyond its control. The Corporation's lender has been provided with security over all of the assets of the Corporation. A failure to comply with the obligations in the agreements in respect of the Credit Facility could result in an event of default which, if not cured or waived, could permit acceleration of the relevant indebtedness. Future Financing The Corporation may require future financing through the issuance of equity or debt to fund its future operations. There can be no assurance that additional financing will be available to the Corporation when needed or on terms acceptable to the Corporation. The Corporation's inability to raise funding to support ongoing operations and to fund capital expenditures or acquisitions may limit the Corporation's growth or may have a material adverse affect upon the Corporation. The Corporation cannot predict the size of future issuances of equity or the issuance of debt or the effect, if any, that future issuances and sales of the Corporation's securities will have on the market price of the Common Shares. Forward-Looking Statements May Prove Inaccurate Investors are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and specific nature, that could cause actual results to differ materially from those suggested by the forward-looking statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially inaccurate. Additional information on the risks, assumptions and uncertainties are found in this short form prospectus under the heading "Forward-Looking Statements".

22

LEGAL MATTERS AND INTEREST OF EXPERTS Certain legal matters relating to the securities offered hereby will be passed upon on behalf of the Corporation by Bennett Jones LLP and on behalf of the Underwriters by McCarthy Ttrault LLP. As at the date hereof, the partners and associates of each of Bennett Jones LLP and McCarthy Ttrault LLP, as a group, own beneficially, directly or indirectly, less than 1% of the securities of the Corporation and its associates and affiliates. AUDITORS, REGISTRAR AND TRANSFER AGENT The independent auditors of the Corporation are Meyers Norris Penny LLP, Chartered Accountants, Calgary, Alberta and the independent auditors of Marquis Alliance are Deloitte & Touche LLP, Chartered Accountants, Calgary, Alberta. Olympia Trust Company is the registrar and transfer agent for the Common Shares at its principal offices in Calgary, Alberta and Toronto, Ontario. STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION Securities legislation in certain of the provinces of Canada provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces, securities legislation further provides a purchaser with remedies for rescission or, in some jurisdictions, revisions of the price or damages if the prospectus and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission, revisions of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province for the particulars of these rights or consult with a legal adviser. In addition, original purchasers of Subscription Receipts will have the benefit of a contractual right of rescission exercisable following the issuance of Common Shares to such purchasers. See "Subscription Receipts".

23

AUDITORS' CONSENTS

Consent of Meyers Norris Penny LLP We have read the short form prospectus of Secure Energy Services Inc. (the "Corporation") dated May 6, 2011 qualifying the distribution of the sale and issuance of up to 12,969,930 subscription receipts for common shares of the Corporation (the "Prospectus"). We have complied with Canadian generally accepted standards for an auditor's involvement with offering documents. We consent to the incorporation by reference in the above mentioned Prospectus of our report to the shareholders of the Corporation on the consolidated balance sheets of the Corporation as at December 31, 2010 and 2009 and the consolidated statements of operations, comprehensive income (loss) and deficit and cash flows for the years then ended. Our report is dated March 3, 2011. Calgary, Canada May 6, 2011 (signed) "Meyers Norris Penny LLP" Chartered Accountants

Consent of Deloitte & Touche LLP We have read the short form prospectus of Secure Energy Services Inc. (the "Corporation") dated May 6, 2011 qualifying the distribution of the sale and issuance of up to 12,969,930 subscription receipts for common shares of the Corporation (the "Prospectus"). We have complied with Canadian generally accepted standards for an auditor's involvement with offering documents. We consent to the use in the above mentioned Prospectus of our report to the shareholders of Marquis Alliance Energy Group Inc., on the consolidated balance sheet of Marquis Alliance Energy Group Inc. as at March 31, 2010 and the consolidated statements of earnings, comprehensive earnings and accumulated other comprehensive earnings, retained earnings and cash flows for the year then ended. Our report is dated October 28, 2010.

Calgary, Canada May 6, 2011

(signed) "Deloitte & Touche LLP" Chartered Accountants

24

SCHEDULE "A" CONSOLIDATED FINANCIAL STATEMENTS OF MARQUIS ALLIANCE

Consolidated Financial Statements of

MARQUIS ALLIANCE ENERGY GROUP INC.

March 31, 2010 and 2009

Deloitte & Touche LLP 3000 Scotia Centre 700 Second Street S.W. Calgary AB T2P 0S7 Canada Tel: (403) 267-1700 Fax: (403) 264-2871 www.deloitte.ca

Auditors Report
To the Shareholders of Marquis Alliance Energy Group Inc.: We have audited the consolidated balance sheet of Marquis Alliance Energy Group Inc. (the Company) as at March 31, 2010 and the consolidated statements of earnings, comprehensive earnings and accumulated other comprehensive earnings, retained earnings and cash flows for the year then ended. These financial statements have been prepared in accordance with Canadian generally accepted accounting principles. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at March 31, 2010 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

October 28, 2010

Chartered Accountants

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MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Earnings Years Ended March 31 2010 $ 2009 $ (Unaudited) (Note 1) 34,482,910 6,691,498 41,174,408 30,540,213 10,634,195 5,896,246 270,657 214,323 445,274 12,632 18,742 6,857,874 3,776,321 3,776,321 136,458 136,458 3,639,863

CONTINUING OPERATIONS Revenue Drilling fluids Solids control Environmental and reclamation Direct costs Expenses Selling, general and administrative Depreciation and amortization Interest Bad debt (recovery) Loss (gain) on sale of assets and investments Foreign exchange loss

0 54,524,628 1,880,544 5,734,388 62,139,560 45,538,399 16,601,161 7,891,045 853,695 614,123 386,435 119,568 9,864,866 6,736,295 (1,681,249) (447,723) 4,607,323 1,877,003 (115,333) 1,761,670 2,845,653

Impairment loss from investee accounted for using the equity method (Note 18) Impairments of marketable securities and loans receivable Loss from investee accounted for using the equity method (Note 18) Earnings before income taxes Provision for (recovery of) income taxes (Note 13): Current Future Net earnings from continuing operations DISCONTINUED OPERATION Loss from discontinued operation, net of income tax (Note 19) Net earnings

(598,971) 2,246,682

3,639,863

Earnings per share (Notes 17 and 20) Earnings per share from continuing operations - basic Earnings per share from continuing operations - diluted Loss per share from discontinued operation - basic Earnings per share - basic Earnings per share - diluted

0.50 0.43 (0.11) 0.39 0.34

0.81 0.81 0.81 0.81

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MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Comprehensive Earnings and Accumulated Other Comprehensive Earnings (Loss) Years Ended March 31 2010 $

2009 $ (Unaudited) (Note 1) 3,639,863

Net earnings Other comprehensive earnings (loss) Foreign currency translation differences for foreign operations Comprehensive earnings Accumulated other comprehensive (loss) earnings, beginning of the year Other comprehensive earnings (loss) Accumulated other comprehensive earnings (loss), end of year

2,246,682

23,411 2,270,093

(4,485) 3,635,378

(1,916) 23,411 21,495

2,569 (4,485) (1,916)

Consolidated Statements of Retained Earnings Years Ended March 31 2010 $ Retained earnings and partner's capital, beginning of year Net earnings Partners' draws Preferred shares issued on reorganization of Marquis Group of Companies (Note 11) Retained earnings, end of year 11,385,294 2,246,682 (1,324,500) (11,812,797) 494,679 2009 $ 15,925,931 3,639,863 (8,180,500) 11,385,294

A-4

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Balance Sheets March 31, 2010 $ 2009 $ (Unaudited) (Note 1)

ASSETS Current assets: Cash Marketable securities Accounts receivable and accruals Inventory (Note 5) Prepaid expenses and deposits Assets from discontinued operation (Note 19) Property and equipment (Note 6) Goodwill (Note 7) Intangible assets and patents (Note 7) Future income tax asset (Note 13) Due from related parties (Note 8) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank indebtedness (Note 9) Accounts payable and accrued liabilities Shareholders loan payable Liabilities from discontinued operation (Note 19) Current portion of obligations under capital lease (Note 10) Obligations under capital lease (Note 10) Future income tax liability (Note 13) Shareholders equity: Retained earnings Accumulated other comprehensive earnings (loss) Common shares, net of share issuance costs (Note 11) Preferred shares - Class B series 1 (Note 11) Preferred shares - Class B series 2 (Note 11) Nature of business (Note 1) Basis of presentation (Note 2) Subsequent events (Note 20) Commitments and contingencies (Note 15) Approved by the Board: 1,443,013 39,510 40,621,199 15,478,975 500,686 1,173,472 59,256,855 11,006,266 13,737,719 4,293,892 260,773 225,000 88,780,505 1,370,115 10,626,091 5,137,050 159,995 17,293,251 4,422,127 42,894 21,758,272

21,508,122 22,262,523 526,573 537,380 44,834,598 224,695 2,046,660 47,105,953 494,679 21,495 516,174 4,079,673 11,812,797 25,265,908 41,674,552

4,050,000 5,274,777 1,033,904 10,358,681 10,358,681 11,385,294 (1,916) 11,383,378 16,213 11,399,591

88,780,505

21,758,272

See accompanying notes to the consolidated financial statements.

A-5

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Cash Flows Years Ended March 31 2010 $ CASH FLOWS RELATED TO THE FOLLOWING ACTIVITES: Operating from continuing operations: Net earnings from continuing operations Items not involving cash: Depreciation and amortization Stock-based compensation (Note 11) Loss (gain) on sale of assets and investments Unrealized foreign exchange loss Impairment loss from investee accounted for using the equity method Impairments of marketable securities and loans receivable Share of loss from equity accounted investments Future income taxes (recovery) Changes in non-cash working capital from continued operations (Note 14) Operating from discontinued operations: Loss from discontinued operations Items not involving cash: Unrealized foreign exchange gain Depreciation and amortization Share of loss from equity investment Changes in non-cash working capital from discontinued operations (Note 14) 2,845,653 853,695 144,457 10,848 1,681,249 447,723 (115,333) 5,868,292 (15,059,777) (9,191,485) (598,971) (1,490) 2,354 598,971 864 (546,974) (546,110) (9,737,595) 14,432,667 (384,906) (1,324,500) (282,121) (1,033,904) 11,407,236 2009 $ (Unaudited) (Note 1) 3,639,863 270,657 12,632 3,923,152 1,338,339 5,261,491 5,261,491 4,050,000 725 (8,180,500) (20,593) 1,033,904 (3,116,464)

Financing from continuing operations: Bank indebtedness Issuance of Class A common shares, net of costs Partners' draws paid in cash Repayments of capital lease and finance contracts Due to shareholders (Note 8) Investing from continuing operations: Costs incurred on business combination, net of cash acquired (Note 4) Proceeds on sale of assets Proceeds on sale of marketable securities Purchase of property and equipment Additions to patents Advances to relates parties Advances to equity accounted investments in subsidiary, net of working capital Net increase (decrease) in cash Cash, beginning of year Cash, end of year Supplementary cash flow information (Note 14) See accompanying notes to the consolidated financial statements.
A-6

(152,720) (305,760) (3,637) (1,134,626) (1,596,743) 72,898 1,370,115 1,443,013

46,524 (3,469,044) (700) (3,423,220) (1,278,193) 2,648,308 1,370,115

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

1.

NATURE OF BUSINESS

Nature of business Marquis Alliance Energy Group Inc. (the Company or MAEG) is an energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the WCSB, Quebec, the United States and India. The Company provides products, processes and services that enable oil and gas exploration and production companies to develop and produce oil and natural gas more efficiently and effectively. The services provided by MAEG include drilling and completion fluids supply and engineering, solids control, equipment rentals, drilling waste management and reclamation services. Corporate structure The Company is incorporated under the Alberta Business Corporations Act. The Company was formed effective November 27, 2009 with the merger of Marquis Mergeco Ltd. (Marquis) and Alliance Mergeco Ltd. (Alliance). For accounting purposes the transaction was accounted as a business combination whereby Marquis is the acquirer and Alliance is the acquiree (Note 4). The financial statements of the Company reflect the historical financial statements of the Marquis Group of Companies (the Marquis Group), and the financial position and results of operations of Alliance from its acquisition date on November 27, 2009. The Marquis Group started its operations in 1997. In 2009, the Marquis Group was comprised of the following entities under common control: Marquis Fluids Inc., Marquis Fluids (A Partnership), Marquis Environmental Services Ltd., Marquis Fluids LLC, 1401615 Alberta Ltd., and Solvex Technologies Inc.

On November 27, 2009, the Marquis Group completed an internal reorganization, whereby Marquis was incorporated and all entities of the Marquis Group became subsidiaries of Marquis. As these entities were under common control, the internal reorganization was recorded using "continuity-of-interests" accounting. Under this method, the financial statements of the combined company for all periods combine the assets and liabilities at their carrying value in the combining companies' records, and are restated to reflect the financial position and results of operations as if the companies had been combined since their inception. Seasonality The Western Canadian drilling industry is subject to seasonality with activity usually peaking during the winter months. As temperatures rise in the spring, the ground thaws and becomes unstable resulting in government road bans which severely restrict activity in the first fiscal quarter until drilling equipment is moved when the roads are dry enough to support moving equipment. These seasonal trends typically lead to quarterly fluctuations in operating results and working capital requirements, which should be considered in any quarter over quarter analysis of performance. With expected expansion into the warmer climate environment of the US, the increase in horizontal pad drilling, the shift away from winter access only drilling, and longer days per well, reducing rig mobilization events, it is expected that the overall seasonality of the Companys operations will be less pronounced in future periods.

A-7

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

2.

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation These consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles (GAAP). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The consolidated financial statements have, in managements opinion, been properly prepared using careful judgment with reasonable limits of materiality and within the framework of the significant accounting policies summarized below. Financial instruments All of the Companys financial instruments are initially recognized at fair value on the balance sheet and classified into the following categories: held for trading financial assets and financial liabilities, loans and receivables, held to maturity investments, available for sale financial assets, and other financial liabilities. Subsequent measurements of financial instruments are based on their classification. Unrealized gains and losses on held for trading financial instruments are recognized in earnings. Gains and losses on available for sale financial assets are recognized in other comprehensive income (OCI) and are transferred to earnings when the instrument is settled or other than temporary impaired. The other categories of financial instruments as noted above are recognized at amortized cost using the effective interest rate method. Any transaction costs with respect to financial instruments are expensed in the period incurred. Effective April 1, 2009, the Company adopted Canadian Institute of Chartered Accountants (CICA) Emerging Issues Committee Abstract 173, Credit Risk and the Fair Value of Financial Assets and Financial Liabilities (EIC 173). EIC 173 clarifies how an entitys own credit risk and that of the relevant counterparty should be taken into account in determining the fair value of financial assets and liabilities, including derivative instruments. In addition, the Company adopted the CICAs accounting standard 3862, Financial Instruments - Disclosures, which includes enhanced disclosures related to the fair value of financial instruments and the liquidity risk associated with financial instruments. The new or amended guidance did not have any impact on the financial position or earnings of the Company. The Companys financial instruments are listed as follows, according to their classification: i) ii) Cash and marketable securities are classified as held for trading and are measured at fair value. Gains and losses as a result of subsequent revaluations are recorded in net earnings. Accounts receivable and accruals, due from related parties are classified as loans and receivables and are initially measured at fair value with subsequent revaluations recognized at amortized cost using the effective interest rate method.

iii) Bank indebtedness, accounts payable and accrued liabilities, and shareholders loan payable are classified as other liabilities and are initially measured at fair value with subsequent revaluations recognized at amortized cost using the effective interest rate method. Principles of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, with the exception of jointly controlled operations which are accounted for using proportionate consolidation. All inter-company accounts and transactions have been eliminated.

A-8

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Marketable securities Marketable securities are recorded at fair market value. Gains and losses are recorded through earnings. Investment accounted for using the equity method Investments are accounted for using the equity method, where the Company has significant influence but not control over the financial and operating policies of the operations. In accounting for an investment by the equity method, the Companys proportionate share of the investee's is recognized in earnings, and distributions or dividends received from the investee are recognized as a reduction of the investment carrying value. The investment is written-down when its decline in value is other than temporary. Investments in equity accounted subsidiaries include the Companys investment in Alliance Shamal Limited, its 50% owned Syrian Operation. Inventory Inventories are valued at the lower of cost and net realizable value, cost being determined on a weighted-average basis. The cost the inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. When the circumstances that previously caused inventories to be written down below cost no longer exist or when there is clear evidence of an increase in net realizable value because of changed economic circumstances, the amount of the write-down is reversed. Property and equipment Property and equipment are recorded at cost and are amortized over their estimated useful lives less their residual value. Amortization is being provided for by the following methods and annual rates: Buildings Computer, field and lab equipment Leasehold improvements Office and miscellaneous equipment Rental equipment 4% declining-balance or 3 years straight line 20 - 30% declining-balance straight-line over the term of the respective lease 20% declining-balance Centrifuges -10 years straight-line with 50% residual value; 3 years straight-line on other rental equipment 20 - 30% declining-balance

Shop equipment Intangible assets

Intangible assets are accounted for at cost. Amortization is based on their estimated useful lives using the straightline method and the following periods: Customer list Patents Non-competition agreements 6 years 20 years 6 years

A-9

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue recognition Revenues for services provided or products sold are based upon orders or contracts with customers that include fixed or determinable prices based upon daily, hourly or job rates. Revenue is recognized when services and equipment rentals are provided and when collectability is assured. Materials delivered to the customer, but not utilized, are shown as drilling fluids inventory. Materials delivered to the customer and utilized, but unbilled, are included in accounts receivable and accruals. Income taxes Income taxes are calculated using the liability method of accounting. Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax assets or liabilities. Future income tax assets or liabilities are calculated using substantively enacted tax rates that will be in effect in the period that the temporary differences are expected to reverse. Unused tax credits and tax losses are only recognized to the extent that they are more likely than not to be realized. Earnings per share Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding during the year. The computation of diluted earnings per share reflects contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings per share. The dilutive effect of contingently issuable/returnable securities is reflected in diluted earnings per share by application of the if converted method. Foreign currency Monetary assets and liabilities relating to foreign denominated transactions are initially recorded at the rate of exchange rates in effect at the transaction date. Gains and losses resulting from subsequent changes in foreign exchange rates are recorded in income for the period. With respect to foreign operations, self-sustaining foreign operations assets and liabilities are translated at exchange rates in effect as at the balance sheet date, while revenue and expenses are translated at average exchange rates prevailing during the period. Resulting translation gains or losses are accumulated in accumulated other comprehensive earnings. With respect to integrated foreign operations, assets and liabilities are translated using the temporal method whereby monetary items are recorded at the rate of exchange rates in effect at the balance sheet date. Nonmonetary items are translated at historical exchange rates. Revenue and expenses, other than depreciation, are translated at the average exchange rates prevailing during the period. Amortization is translated using the same historical rates as the assets to which they relate. Gains and losses resulting from subsequent changes in foreign exchange rates are recorded in income for the period.

A-10

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

Goodwill Goodwill represents the excess of purchase price over fair value of the net identifiable assets of acquired businesses. Goodwill is not amortized and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test is carried out in two steps. In the first step, the carrying amount of the reporting unit is compared with its fair value. When the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not to be impaired and the second step of the impairment test is unnecessary. The second step is necessary when the carrying amount of a reporting unit exceeds its fair value, in which case, the implied fair value of the reporting unit's goodwill is compared with its carrying amount to measure the amount of the impairment loss, if any. The implied fair value of goodwill is determined in the same manner as the value of goodwill is determined in a business combination, using the fair value of the reporting unit as if it were the purchase price. When the carrying amount of goodwill exceeds the implied fair value of the goodwill, an impairment loss is recognized in an amount equal to the excess. Impairment provisions are not reversed if there is a subsequent increase in the fair value of goodwill. Management has elected March 31 as the annual impairment test date. Managements determination as at March 31, 2010 was that goodwill was not impaired. Impairment of long-lived assets Long-lived assets including intangibles are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when their carrying value exceeds the total undiscounted cash flows expected from their use and eventual disposition. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its fair value and is recognized as an impairment expense in the period of impairment. Long-lived assets, which are to be disposed of, are reported at the lower of the carrying amount or fair market value less selling costs. Managements determination as at March 31, 2010 and 2009 was that long-lived assets were not impaired. Measurement uncertainty The preparation of financial statements requires management to make estimates based on currently available information. In particular, management makes estimates of profitability, cash flows and uses other relevant assumptions for the amounts recorded for the amortization and valuation of property and equipment, and its underlying assumptions, the recognition of future tax assets or liabilities and the valuation of goodwill and intangibles. By their very nature, these estimates are subject to measurement uncertainty and the effect of changes on the financial statements of future periods could be material. The effect on the financial statements resulting from a revision in estimates, if any, will be accounted for prospectively.

A-11

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

3.

FUTURE ACCOUNTING CHANGES

Business combinations Effective for fiscal years beginning on or after January 1, 2011, Section 1582, Business Combinations will provide the Canadian equivalent to International Financial Reporting Standard IFRS 3, Business Combinations, and replace the existing Section 1581, Business Combinations. The new Section 1582 will apply prospectively to business combinations for which the acquisition date is made on or after the date of adoption. Earlier adoption is permitted as of the beginning of a fiscal year, in which case an entity would also early adopt Section 1601, Consolidated Financial Statements, and Section 1602, Non-controlling Interests. Consolidated financial statements Effective for fiscal years beginning on or after January 1, 2011, Section 1601, Consolidated Financial Statements, establishes standards for the preparation of consolidated financial statements and will replace the existing Section 1600, Consolidated Financial Statements. Earlier adoption is permitted as of the beginning of a fiscal year, in which case an entity would also early adopt Section 1582, Business Combinations, and Section 1602, Non-controlling Interests. Non-controlling interests Effective for fiscal years beginning on or after January 1, 2011, Section 1602, Non-controlling Interests, establishes standards for accounting for a non controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. It is equivalent to the corresponding provisions of International Financial Reporting Standard IAS 27, Consolidated and Separate Financial Statements. Earlier adoption is permitted as of the beginning of a fiscal year, in which case an entity would also early adopt Section 1582, Business Combinations, and Section 1601, Consolidated Financial Statements. Management is currently assessing the impact of the above new accounting standards on its consolidated financial statements. New accounting framework The CICA has issued a new accounting framework applicable to Canadian private enterprises. Effective for fiscal years beginning on January 1, 2011, private enterprises will have to choose between International Financial Reporting Standards (IFRS) and GAAP for private enterprises, whichever suits them best. Early adoption of these standards is permitted. The Company currently plans to adopt IFRS for its fiscal year beginning on April 1, 2011. 4. BUSINESS COMBINATION

Effective November 27, 2009, the Company was formed with a merger, through the amalgamation of Marquis and Alliance. For accounting purposes, Marquis has been identified as the acquirer in this business combination and the operations of Alliance have been included in the consolidation effective November 27, 2009. The Marquis merger with Alliance was accounted for under the purchase method of accounting, the application of which requires the use of judgment and estimates as to the determination of the fair market values of the business acquired. The fair value of Alliance was determined to be $30,402,712, which includes business combination costs of $256,612. The goodwill is not deductible for tax purposes. The details of the net assets acquired are as follows:

A-12

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

4.

BUSINESS COMBINATION (Continued) $

Working capital inclusive of cash of $103,892 Property and equipment Share purchase loans receivable (Note 11) Promissory note receivable Investments in and receivables from joint ventures Goodwill Other intangible assets

5,292,894 6,890,298 1,002,837 225,000 1,699,383 13,737,719 4,500,000 33,348,131 (1,901,222) (1,044,197) (2,945,419) 30,402,712 $ 25,264,400 4,881,700 256,612 30,402,712

Future income tax liability Capital lease obligations Net assets acquired Consideration (Note 11): Class B Series 2 preferred shares (Note 11) Common shares Business combination costs Total consideration 5. INVENTORY 2010 $ Drilling fluids Shop parts and other materials 15,374,550 104,425 15,478,975

2009 $ 5,005,830 131,220 5,137,050

For the year ended March 31, 2010, there were inventory write-downs of $383,815 (2009 - $31,617) to estimated net realizable value, included in direct costs on the consolidated statements of earnings, comprehensive earnings and retained earnings, and there have been $Nil reversals of previously recorded inventory write-downs (2009 $Nil) included in the allowance for obsolete inventory. The inventories recognized as an expense during the year amount to $35,854,555 (2009 - $23,441,991). No inventories were specifically pledged as security; however, inventories are included in the general security agreement held by the bank as security for the Companys credit facility with its bank.

A-13

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

6.

PROPERTY AND EQUIPMENT 2010 Accumulated Amortization $ 119,654 160,954 18,107 92,664 3,699 492,086 391,636 183,287 1,462,087 2009 Accumulated Amortization $ 35,999 112,520 1,508 57,861 376,185 298,628 882,701 Net Book Value $ 1,198,790 2,139,988 356,533 425,806 107,961 68,834 536,478 403,005 5,768,871 11,006,266

Cost $ Land Buildings Computer equipment Field equipment Leasehold improvements Lab equipment Office and miscellaneous equipment Shop equipment Rental equipment 1,198,790 2,259,642 517,487 443,913 200,625 72,533 1,028,564 794,641 5,952,158 12,468,353

Cost $ Land Building Computer equipment Field equipment Leasehold improvements Office and miscellaneous equipment Shop equipment 1,198,790 2,107,621 223,451 7,540 173,897 914,593 678,936 5,304,828

Net Book Value $ 1,198,790 2,071,622 110,931 6,032 116,036 538,408 380,308 4,422,127

Included in property and equipment are assets under capital lease with a cost of $922,209 (2009 - $Nil) and accumulated amortization of $27,439 (2009 - $Nil). 7. GOODWILL AND INTANGIBLE ASSETS

Goodwill was established through the business combination that occurred effective November 27, 2009. It is managements estimation that there is no impairment to goodwill at March 31, 2010. Intangible assets include a customer list and non-competition agreements acquired through the business combination (Note 4). The customer list is valued at $2,600,000 and is being amortized on a straight-line basis for six years. Non-competition agreements with key personnel retained from the acquiree are valued at $1,900,000.

A-14

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

7.

GOODWILL AND INTANGIBLE ASSETS (Continued)

During the year, $252,639 (2009 - $1,768) relating the amortization of the intangible assets was included as an expense in the consolidated statement of earnings. The following is a summary of the goodwill and intangibles: 2010 Accumulated Amortization $ 150,000 100,000 9,450 259,450 2009 Accumulated Amortization $ 6,811

Net Book Value $ 13,737,719 2,450,000 1,800,000 43,892 18,031,611

Cost $ Goodwill Customer list Non-competition agreements Patents 13,737,719 2,600,000 1,900,000 53,342 18,291,061

Net Book Value $ 42,894

Cost $ Patents 8. 49,705

DUE FROM RELATED PARTIES AND RELATED PARTY TRANSACTIONS

In 2010, through the business combination (Note 4), the Company acquired a promissory note issued to an employee for home relocation purposes for $225,000 (2009 - $Nil). The note is non-interest bearing and has a fixed term of repayment being the earlier of January 1, 2012, or through twelve consecutive monthly payments following the first month after cessation of employment by the employee, or immediately in the event of default under the agreement. The note is secured by an assignment of shares held by the employee in the Company or its affiliate, and an assignment of all future payments from the Company or any of its affiliates. During the year, the Company advanced funds to two minority shareholders in the amount of $40,162 (2009 $Nil). As at March 31, 2010, $31,500 (2009 - $Nil) remains outstanding and is included in accounts receivable. These amounts are non-interest bearing, unsecured, and have no fixed terms of repayment. During the year, $1,033,904 was repaid to companies owned by certain shareholders of the Company, of which (2009 - $33,904) represented accrued interest. The amounts were advanced to the Company during the prior year. All transactions not in the normal course of operations have been accounted for at their carrying amounts.

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MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

10

9.

BANK INDEBTEDNESS

At March 31, 2010, the Company had drawn $21,508,122 (2009 - $4,050,000) on a margin credit facility available in the form of an overdraft. Interest is payable monthly in arrears at the banks floating prime lending rate plus 1.25% per annum. Prime lending rate at March 31, 2010 was 2.25% (2009 - 2.50%). The margin credit facility is a revolving facility, due on demand with no repayment terms. The overdraft is secured by a general security agreement over accounts receivable and an assignment of fire and liability insurance and guarantees of certain companies controlled by the Company. This credit facility has financial covenants as disclosed in Note 16. The maximum amount available under the facility at March 31, 2010 was $23,000,000 (2009 - $7,500,000). Subsequent to year-end, the maximum amount available under the credit facility was reduced to $17,000,000. At March 31, 2010, the Company had issued a letter of credit for US$525,000 to support an inventory purchase. At March 31, 2010, the vendor had not met the conditions of the letter of credit and therefore no draws have been made against the letter of credit. 10. OBLIGATIONS UNDER CAPITAL LEASE The Company has an existing capital lease, repayable in monthly payments of $499 including interest at an implicit rate of 7.84%, due March 2012, secured by a forklift. As part of the business combination (Note 4), the Company acquired capital lease facilities. The capital lease facilities are secured by a general security agreement with a first ranking interest on all personal property, a first ranking charge on real property of both Alliance Energy Capital Ltd. and Alliance Energy Services Ltd. guarantees and postponements of claim in the amount of $1,600,000. The total monthly payments for these leases are $80,887 bearing interest ranging from 5.5% to 8.0% per annum, adjusted for floating rate changes quarterly in arrears and maturing between July 1, 2010 and March 6, 2012. Total capital lease payments due are as follows: $ Year ending March 31, 2011 2012 Total lease payments Less: interest included in total payments Present value of net capital lease payments Current portion of obligations under capital leases Long-term capital lease obligations 562,881 228,648 791,529 29,454 762,075 537,380 224,695

Interest of $32,619 (2009 - $525) relating to capital lease obligations has been included in interest expense.

A-16

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

11

11. SHARE CAPITAL Authorized Unlimited number of Class A common voting shares Unlimited number of Class B preferred non-voting shares, issuable in series Unlimited number of Class B, Series 1 preferred non-voting shares, redeemable at $1 per share at the Companys option Unlimited number of Class B, Series 2 preferred non-voting shares, redeemable at $1 per share at the Companys option Unlimited number of Class C, D, E preferred shares, issuable in series Issued During the year, a reorganization of the Marquis Group occurred through a series of transactions resulting in the creation of Marquis for the purpose of entering into a merger with the Alliance Group of Companies described in Note 4 - Business Combination. As at the reorganization date, the Marquis Group of Companies had outstanding share capital of $441,258 and partners equity of $11,812,797. Upon reorganization, the share capital was exchanged for 485,199 Class A Common Shares of Marquis for a value of $441,258 and the partners equity was exchanged for 26,295,600 Class B Series 1 Preferred Shares of Marquis for $11,812,797. This exchange of the partners equity for preferred shares of Marquis is reflected as a debit to retained earnings (previously partners capital) of $11,812,797 in the Companys consolidated statement of retained earnings. Upon amalgamation, the Class A Common Shares and Class B Series 1 Preferred Shares of Marquis were exchanged for Class A Common Shares and Class B Series 1 Preferred Shares of the Company.
MARQUIS MARQUIS ALLIANCE ENERGY GROUP INC.

CLASS A COMMON SHARES # $ Balance, issued and oustanding at incorporation of Marquis Issued on internal reorganization of the Marquis

CLASS B SERIES 1 PREFERRED SHARES # $

CLASS A COMMON #

CLASS B SERIES 1 PREFERRED SHARES # $

CLASS B SERIES 2 PREFERRED SHARES # $

485,199

441,258

26,295,600

11,812,797

Issued as stock-based compensation Balance, issued and oustanding at November 27, 2009 Exchange of shares upon amalgamation

14,800

144,473

500,000

585,732

26,295,600

11,812,797

(500,000) (585,732)

(26,295,600) (11,812,797)

4,500,000

585,732

26,295,600

11,812,797

1,508

Issued on share exchange on business combination (Note 4)

4,500,000

4,881,700

25,264,400

25,264,400

Balance, issued and outstanding at March 31, 2010 Share issue costs Share purchase loans

9,000,000 -

5,467,432 (384,922) (1,002,837)

26,295,600 -

11,812,797 -

25,264,400 -

25,265,908 -

9,000,000

4,079,673

26,295,600

11,812,797

25,264,400

25,265,908

A-17

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

12

11. SHARE CAPITAL (Continued) Stock-based compensation As part of the reorganization of the Marquis Group of Companies, an employee was issued 14,800 Class A shares of Marquis at below fair market value. The difference between the cash received on the share issuance and the fair value of the shares at March 31, 2010 has been charged to selling, general and administrative expenses. Share purchase loans Share purchase loans in the amount of $1,002,837 were assumed in the merger with the Alliance Group of Companies (Note 4). The share purchase loans were issued to key employees of the Company. The loans are noninterest bearing, and have repayment terms of the earlier of: the closing time of any sale of the shares, 60 days following termination of the employees employment, or five years from the date the loans were entered into. The loans are secured by the shares issued, and as such are classified as a charge against share capital. 12. FINANCIAL INSTRUMENTS As disclosed in Note 2, the Company holds various forms of financial instruments. The nature of these instruments and the Companys operations expose the Company to interest rate risk, credit risk and foreign exchange risk. The financial assets and liabilities of the Company consist primarily of cash, marketable securities, accounts receivable and accruals, due from related parties, accounts payable and accrued liabilities, and bank indebtedness. All of the Companys financial instruments are classified as either held for trading, loans and receivables or other financial liabilities. Due to the short-term nature of the current assets and current liabilities, the carrying amounts are considered to approximate fair value. The Company categorizes its financial instruments carried at fair value into one of three different levels depending on the significance of inputs employed in their measurement. Level 1 includes assets and liabilities measured at fair value based on unadjusted quoted prices for identical assets and liabilities in active markets that are accessible at the measurement date. An active market for an asset or liability is considered to be a market where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Instruments valued using Level 1 inputs include cash and marketable securities. Level 2 includes valuations determined using directly or indirectly observable inputs other than quoted prices included within Level 1. Financial instruments in this category are valued using models or other industry standard valuation techniques derived from observable market data. Such valuation techniques include inputs such as quoted forward prices, time value, volatility factors and broker quotes that can be observed or corroborated in the market. The Company does not have any level 2 assets or liabilities. Level 3 includes valuations based on inputs, which are less observable, unavailable or where the observable data does not support a significant portion of the instruments fair value. Generally, Level 3 valuations are longer dated transactions, occur in less active markets, occur at locations where pricing information is not available, or have no binding broker quote to support Level 2 classification. The Company does not have any Level 3 assets or liabilities.

A-18

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

13

12. FINANCIAL INSTRUMENTS (Continued) Interest rate risk At March 31, 2010, the Company is exposed to interest rate cash flow risk to the extent that the demand loan bears interest at a floating interest rate. For each 1% change in interest rates, this would impact earnings by approximately $215,081 (2009 - $40,500) annually. Liquidity risk The Company is exposed to liquidity risk. Liquidity risk is the exposure of the Company to the risk of not being able to meet its financial obligations as they become due. The Company manages liquidity risk through management of its capital structure, monitoring and reviewing actual and forecasted cash flows and the effect on bank covenants (Note 16), and maintaining unused credit facilities where possible to ensure there are available cash resources to meet the Companys liquidity needs. At March 31, 2010, the Company had net working capital (current assets less current liabilities) of $14,422,257 and had available approximately $1,491,878 on its margin credit facility (Note 9). At March 31, 2010, the Company was committed to various financial obligations (Notes 15 and 10) which require the Company to have available various sources of capital and will require the Company to generate future operating cash flow to meet the commitments associated with these financial obligations. The expected maturities of the Companys contractual and constructive obligations are as follows: 2011 $ Bank indebtedness Accounts payable and accrued liabilities Obligations under capital lease Total Concentrations of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of accounts receivable. The maximum exposure to credit risk is equal to the carrying value of financial assets. During 2010, only one customer accounted for 10% (2009 - three customers accounted for 40%) of the Companys revenue. At March 31, 2010, 15% (2009 - 59%) of the Companys accounts receivable were receivable from one company (2009 - four companies); as such, the Company is exposed to concentrations of risk. In managements assessment, the future viability of the Company is not dependent upon any one of these major customers. 21,508,122 22,262,523 537,380 44,308,025 2012 $ 224,695 224,695

A-19

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

14

12. FINANCIAL INSTRUMENTS (Continued) Concentrations of credit risk (continued) The following details the age of outstanding accounts receivable, net of allowance for doubtful accounts: 2010 $ Trade accounts receivable: Not overdue (outstanding for less than 30 days) Past due for more than one month but not more than three months Past due for more than three months but not more than six months Past due for more than six months Accrued and other accounts receivable 2009 $

15,117,246 12,256,017 2,097,160 341,503 10,809,273 40,621,199

5,835,809 2,545,520 255,729 1,989,033 10,626,091

The change in the allowance for doubtful accounts is as follows: 2010 $ Balance, beginning of year Additional allowance Amounts used Balance, end of year Foreign exchange risk The Company is exposed to foreign currency fluctuations in relation to its operations in the United States. Management believes this exposure is not material given the United States operations are self-sustaining since the cash flow from operations has been used to fund working capital requirements from operations or the expansion of the United States operations. At March 31, 2010, the Company had $2,774,401 Canadian dollar equivalent (2009 - $840,677) of working capital denominated in foreign currencies. The Companys sensitivities to foreign currency fluctuations for the year ended March 31, 2010 are as follows: all else being equal, a hypothetical strengthening/weakening of 5% of the U.S. dollar against the Canadian dollar would have increased/decreased net earnings before income taxes by $60,728 (2009 - $34,687) and increased/decreased other comprehensive earnings (loss) by $132,758 (2009 - $7,347). 65,310 840,850 (65,310) 840,850 2009 $ 65,310 65,310

A-20

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

15

13. INCOME TAXES The Company's future tax liability relates primarily to the excess of the carrying values of the property and equipment over the available tax pools for these balances. At the end of the year, subject to confirmation by income tax authorities, the Company has the following tax pools available: 2010 $ Undepreciated capital cost Cumulative eligible capital Non-capital losses carried forward for tax purposes Financing fees 4,216,912 229,575 1,469,757 447,881 6,364,125 2009 $ 3,234,046 286,726 3,520,772

These pools are deductible from future income at rates prescribed by the Canadian Income Tax Act. The components of the Companys future income tax liability are a result of the origination and reversal of temporary differences and include the following: 2010 $ Nature of temporary differences Property, plant and equipment Intangible assets Loss carry-forwards Investments Capital leases Marketable securities Loan write-off Financing fees Other Valuation allowance Future income taxes Represented by: Future income tax asset Future income tax liability 1,446,231 1,006,000 (369,425) (266,122) (190,519) (28,288) (47,496) (111,475) (9,073) 1,429,833 356,054 1,785,887 20,546 (71,682) (47,496) (98,632) 98,632 2009 $

(260,773) 2,046,660 1,785,887

A-21

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

16

13. INCOME TAXES (Continued) The provision for income taxes differs from the expected amount calculated by applying the combined Federal and Provincial statutory income tax rates to income before taxes. This difference results from the following items: 2010 $ Earnings before income taxes Current statutory income tax rate Expected tax expense Adjustments for: Effect of expenses that are not deductible for income tax purposes and other Change in valuation allowance Effect of foreign tax credits Other rate changes Income taxable in partnership 4,607,323 28.75% 1,324,605 2009 $ 3,776,321 29.87% 1,127,987

423,997 242,887 (36,060) 187,035 (380,794) 1,761,670

160,240 100,609 (1,252,378) 136,458

At March 31, 2010, the Company had estimated non-capital loss carry-forwards of $1,469,757 (2009 - $286,726) available to reduce future taxable income. These losses will begin to expire in 2027. In fiscal 2010, $1,324,500 (2009 - $4,443,978) of the income before taxes was earned in Marquis Fluids, a Partnership. As this entity was a flow-through entity for tax purposes, the income was taxed in the hands of the partners and not the Company.

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MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

17

14. SUPPLEMENTARY CASH FLOW INFORMATION The changes in non-cash working capital from continuing operations are as follows: 2010 $ Accounts receivable Inventory Prepaid expenses and deposits Accounts payable and accrued liabilities (20,222,058) (6,928,179) 1,412,332 10,678,128 (15,059,777) 2009 $ 2,469,983 (1,991,477) 136,198 723,635 1,338,339

The changes in non-cash working capital from discontinued operations are as follows: 2010 $ Accounts receivable Assets classified as held for sale Accounts payable and accrued liabilities (538,514) (535,033) 526,573 (546,974) 614,123 1,218,301 2009 $ 221,114 -

Interest paid Taxes paid

A-23

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

18

15. COMMITMENTS AND CONTINGENCIES Commitments As at March 31, 2010, the Company had long-term commitments under various operating leases. The required aggregate payments on an annual basis are as follows: $ 2011 2012 2013 2014 961,722 548,256 393,715 11,038 1,914,731

The Company has entered into a new office lease subsequent to March 31, 2010, the commitments of which are disclosed in Note 17. Contingencies The Company currently has a legal claim outstanding with a former employee. The claim relates to the termination of the employees employment and for damages for wrongful dismissal. Management is of the view that the damages claimed are excessive and that it has a good defence to the claims. However the potential exposure to the company is not determinable at this time. A dispute has arisen regarding a contract entered into between a subsidiary of the Company and another party with respect to providing certain goods and services to Syria. It is expected that the other party wishes to proceed with arbitration. The Company has made an allowance for all disputed assets and while any potential award of damages may be less than or in excess of the allowance, the ability of the other party to enforce any judgement (if in fact one is obtained) against the assets of the Company is remote.

A-24

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

19

16. CAPITAL DISCLOSURES The Companys capital structure consists of the following: 2010 $ Bank indebtedness Shareholders equity 21,508,122 41,674,552 63,182,674 2009 $ 4,050,000 11,399,591 15,449,591

The Companys capital management objective is to maintain the Companys ability to pursue opportunities that will maximize the returns for its shareholders. The Company achieves this objective through managing the capital generated through internal growth and a conservative approach to safeguarding the Companys assets. Pursuant to its bank indebtedness, the Company must comply with certain financial covenants including a current assets to current liabilities ratio of no less than 1.25 to 1.00; a total debt to tangible net worth ratio of less than 2.25 to 1.00 as measured at the end of each fiscal quarter, tangible net worth is defined as equity, less intangible assets including promissory notes receivable, goodwill, and patents, plus amounts postponed to the bank, and a debt service coverage ratio greater than 1.25 as at each fiscal year-end. The debt service ratio is calculated as earnings before interest, taxes, depreciation and amortization (EBITDA) divided by the sum of all interest paid by the Company on all bank and third-party indebtedness and scheduled principal payments for the 12 months ended March 31. At March 31, 2010, the Company was in compliance with these financial covenant requirements related to this indebtedness. 17. EARNINGS PER SHARE In calculating the basic and diluted amounts per share, the weighted average number of shares used in the per share calculations is shown in the table below, on the basis that the Companys share capital structure as at th November 27 , 2010 (Note 11), being the date of completion of the internal reorganization of the Marquis Group of Companies, existed since inception. Shares that are contingently returnable which are held as collateral under various loans with employees (Note 8) and shareholders (Note 11) are excluded from the basic number of shares outstanding and considered dilutive securities. 2010 2009 $ $ Weighted average number of shares outstanding Basic shares outstanding Dilutive securities Contingently issuable/returnable securities Weighted average shares outstanding - diluted

5,704,128 955,593 6,659,721

4,500,000 4,500,000

A-25

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

20

18. LOSS FROM INVESTEE ACCOUNTED FOR USING THE EQUITY METHOD AND IMPAIRMENT LOSS In August 2009, the Company entered into an agreement with a Syrian company, pursuant to which the Company subscribed to 50% of the shares of an entity doing business in Syria (the Syrian Operation). The Company has determined that indications of other than temporary impairment exist on its investment in Syria. As a result, an impairment loss of $1,681,249 has been recorded in the consolidated statement of income. The impairment losses were based on managements best estimate of fair value of the investment based on revenues, expenses and cash flows and anticipated recoverability of the assets of the Syrian Operation. These estimates are subject to measurement uncertainty as they are dependent on factors that may be outside of managements control. The carrying value of investment was $1,681,249 prior to the impairment loss being recorded, which included: $ Cash advances Share of equity loss 2,128,972 (447,723) 1,681,249

Subsequent to year-end, the Company advanced further funds to the Syrian Operations of approximately $849,000 to cover additional expenditures. 19. DISCONTINUED OPERATION During 2010, the Company incorporated a 50% owned joint venture in Mexico, Alianza de Mexico, S.A. de C.V. (Alianza), which commenced operations in September 2009. In March 2010, the Company adopted a formal plan of disposal for the remaining assets of Alianza the Companys Mexico joint venture operation. The carrying value of the assets and liabilities held for sale at March 31, 2010 are: $ CURRENT Cash Accounts receivable and accruals Long-lived and other assets held for sale Total assets CURRENT Accounts payable and accrued liabilities Total liabilities

3,837 634,602 638,439 535,033 1,173,472

526,573 526,573

The long-lived assets, inventory and prepaid expenses pertaining to the disposal plan were reclassified in the year as held for sale, and recorded at the lower of their carrying value and fair market value less costs of disposal as at the date the formal plan of disposal was adopted. Subsequent to year-end, in May 2010, Alianza sold the long-lived and other assets held for sale for US$1,635,000 and ceased active operations in Mexico. Furthermore, Alianza collected US$1,516,132 in outstanding receivables from the purchaser, the Companys proportionate shares of these amounts are US$817,500 and US$758,066, respectively.

A-26

MARQUIS ALLIANCE ENERGY GROUP INC. Notes to the Consolidated Financial Statements Years Ended March 31, 2010 (Audited) and 2009 (Unaudited)

21

20. SUBSEQUENT EVENTS

a)

In April 2010, the Company entered into a lease for its head office location for eight years commencing on June 1, 2010. Lease payments exclusive of operating costs on an annual basis are as follows: $ 2011 2012 2013 2014 Thereafter 79,492 105,989 105,989 113,560 1,076,927 1,481,957

b) In April 2010, the Company sublet office premises under a head lease, which expires in June 2013. The sub-lease coterminates with the head lease. Rental income, exclusive of operating cost recoveries on an annual basis, is as follows: $ 2011 2012 2013 2014 13,353 53,414 53,414 26,707 146,888

c)

Subsequent to year-end, the Company completed a stock split thereby issuing 9 new shares for each common share outstanding. Per share amounts included in these consolidated financial statements have been retrospectively restated to reflect this split.

A-27

Consolidated Financial Statements of

MARQUIS

ALLIANCE

ENERGY

GROUP

INC.

For the Three and Nine Months Ended December 31, 2010 and 2009 (Unaudited)

A-28

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Earnings Periods Ended December 31 (Unaudited) Three months 2010 2009 $ $ (Note 1) 26,451,474 2,172,495 4,025,228 32,649,197 23,395,294 9,253,903 Expenses Selling, general and administrative Depreciation and amortization Interest Bad debt (recovery) Gain on sale of assets Foreign exchange loss 4,543,334 511,216 171,173 (97,449) (1,050) 198,584 5,325,808 (118,803) 3,809,292 1,455,287 12,272,349 15,220,276 291,105 1,152,188 16,663,569 11,701,582 4,961,987 3,031,250 245,141 67,738 83,272 79,299 3,506,700 Nine months 2010 2009 $ $ (Note 1) 72,395,135 4,245,159 9,380,804 86,021,098 59,570,574 26,450,524 11,361,685 1,437,970 535,782 (98,268) (5,050) 97,167 13,329,286 (848,889) 876,947 23,630,107 291,105 1,940,632 25,861,844 19,179,296 6,682,548 4,838,615 387,645 422,204 83,272 73,865 5,805,601

CONTINUING OPERATIONS Revenue Drilling fluids Solids control Environmental and reclamation

Direct costs

Impairment loss from investee accounted for using the equity method (Note 10) Earnings before income taxes Provision for (recovery of) income taxes Current Future

1,197,218 359,840 1,557,058 2,252,234

(21,556) 20,484 (1,072) 1,456,359

4,269,683 544,940 4,814,623 7,457,726

185,943 20,484 206,427 670,520

Net earnings from continuing operations DISCONTINUED OPERATION Earnings from discontinued operation, net of income tax (Note 11) Net earnings

148,145 2,400,379 1,456,359

411,060 7,868,786 670,520

Earnings per share (Note 5) Earnings per share from continuing operations - basic Earnings per share from continuing operations - diluted Earnings per share from discontinued operations - basic Earnings per share - basic Earnings per share - diluted

0.30 0.25 0.02 0.32 0.27

0.25 0.22 0.25 0.22

0.95 0.83 0.05 1.00 0.87

0.14 0.11 0.14 0.11

See accompanying notes to the consolidated financial statements

A-29

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Comprehensive Earnings and Accumulated Comprehensive Earnings (Loss) Periods Ended December 31 (Unaudited) Three months 2010 2009 $ $ (Note 1) Net earnings Other comprehensive (loss) earnings Foreign currency translation differences for foreign operations Comprehensive earnings 2,400,379 1,456,359

Nine months 2010 2009 $ $ (Note 1) 7,868,786 670,520

(24,640) 2,375,739

(14,368) 1,441,991

160,009 8,028,795

(9,340) 661,880

Accumulated other beginning of period

comprehensive

earnings

(loss), 206,144 (24,640) 181,504 (25,624) 14,368 (11,256) 21,495 160,009 181,504 (1,916) (9,340) (11,256)

Other comprehensive (loss) earnings Accumulated other comprehensive earnings (loss), end of period

Consolidated Statement of Retained Earnings (Deficit) Three months 2010 2009 $ $ Nine months 2010 $ 2009 $

Retained earnings and partners capital, beginning of period Net earnings for the period Partners draws Preferred shares issued on reorganization of Marquis Group of Companies Retained earnings (deficit), end of period

5,963,086 2,400,379 8,363,465

9,459,141 1,456,359 (184,186) (11,812,797) (1,081,483)

494,679 7,868,786 8,363,465

11,385,294 670,520 (1,324,500) (11,812,797) (1,081,483)

See accompanying notes to the consolidated financial statements

A-30

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Balance Sheets December 31 and March 31 (Unaudited) December 31, 2010 $ ASSETS Current assets Cash Marketable securities Accounts receivable and accruals (Note 6) Inventory Prepaid expenses and deposits Assets of discontinued operation (Note 11) March 31, 2010 $

2,198,597 40,290 39,167,640 15,929,212 451,621 132,015 57,919,375 12,761,673 13,737,719 3,729,392 482,658 88,630,817

1,443,013 39,510 40,621,199 15,478,975 500,686 1,173,472 59,256,855 11,006,266 13,737,719 4,293,892 260,773 225,000 88,780,505

Property and equipment Goodwill Intangible assets and patents Future income tax asset Due from related parties (Note 3)

LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities Bank indebtedness (Note 4) Accounts payable and accrued liabilities Liabilities of discontinued operation (Note 11) Current portion of obligations under capital lease

12,090,724 24,135,009 61,772 308,108 36,595,613 1,766 2,330,091 2,331,857

21,508,122 22,262,523 526,573 537,380 44,834,598 224,695 2,046,660 2,271,355

Obligations under capital lease Future income tax liability

Shareholders equity Retained earnings Accumulated other comprehensive earnings Common shares, net of share issuance costs Preferred shares - Class B series 1 Preferred shares - Class B series 2

8,363,465 181,504 8,544,969 4,079,673 11,812,797 25,265,908 49,703,347 88,630,817

494,679 21,495 516,174 4,079,673 11,812,797 25,265,908 41,674,552 88,780,505

Nature of business (Note 1) Basis of presentation (Note 2) Subsequent events (Note 12) Commitments and contingencies (Notes 7 & 8)

See accompanying notes to the consolidated financial statements

A-31

MARQUIS ALLIANCE ENERGY GROUP INC. Consolidated Statements of Cash Flows Periods Ended December 31 (Unaudited) CASH FLOWS RELATED TO THE FOLLOWING ACTIVITIES: Operating from continuing operations Net earnings from continuing operations Items not involving cash: Depreciation and amortization Stock-based compensation Gain on sale of assets and investments Unrealized foreign exchange loss Impairment loss from investee accounted for using the equity method Future income taxes Changes in non-cash working capital from continuing operations Financing from continuing operations Bank indebtedness Issuance of Class A common shares, net of costs Partners draws paid in cash Repayment of capital lease and finance contracts Due to shareholders Investing from continuing operations Costs incurred on business acquisition, net of cash acquired Purchase of property and equipment Additions to patents Repayment of loans and advances from discontinued operation Advances to shareholders (Note 3) Advances to equity accounted investments in subsidiary, net of working capital Net increase (decrease) in cash of continuing operations Effect of currency translation on cash and equivalents for continuing operations Cash, beginning of period from continuing operations Cash, end of period from continuing operations Operating from discontinued operation Net earnings from discontinued operations Items not involving cash: Gain on sale of assets classified as held-for-sale Changes in non-cash working capital from discontinued operation Financing from discontinued operation Repayment of loans and advancements Investing from discontinued operation Proceeds on sale of assets held-for-sale Net (decrease) increase in cash from discontinued operation Effect of currency translation on cash and equivalents for discontinued operation Cash, beginning of period discontinued operation Cash, end of period from discontinued operation Three months 2010 2009 $ $ 2,252,234 511,216 (1,050) 19,620 118,803 359,840 3,260,663 (3,223,967) 36,696 1,355,216 (84,000) 1,271,216 (895,819) (118,803) (1,014,622) 293,290 (10,167) 1,915,474 2,198,597 148,145 148,145 (460,015) (311,870) (311,870) (23,580) 440,338 104,888 1,456,359 245,141 144,457 23,733 20,484 1,890,174 (5,163,840) (3,273,666) 5,363,253 (384,906) (184,186) (75,977) (1,071,404) 3,646,780 (152,720) (81,282) (418) (234,420) 138,694 (2,429) 198,602 334,867 Nine months 2010 2009 $ $ 7,457,726 1,437,970 (5,050) 110,181 848,889 544,940 10,394,656 2,924,873 13,319,529 (9,417,398) (452,200) (9,869,598) (2,699,447) 967,420 (257,658) (848,889) (2,838,574) 611,357 144,227 1,443,013 2,198,597 411,060 (288,925) 122,135 142,624 264,759 (967,420) 823,958 121,297 (20,246) 3,837 104,888 670,520 387,645 144,457 32,349 20,484 1,255,455 (2,043,671) (788,216) 2,988,198 (384,906) (1,324,500) (75,977) (1,033,904) 168,911 (152,720) (257,157) (3,637) (413,514) (1,032,819) (2,429) 1,370,115 334,867 -

See accompanying notes to the consolidated financial statements

A-32

1.

NATURE OF BUSINESS

Nature of business Marquis Alliance Energy Group Inc. (the Company or MAEG) is an energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the WCSB, Quebec, the United States and India. The Company provides products, processes and services that enable oil and gas exploration and production companies to develop and produce oil and natural gas more efficiently and effectively. The services provided by MAEG include drilling and completion fluids supply and engineering, solids control, equipment rentals, drilling waste management and reclamation services. Corporate structure The Company is incorporated under the Alberta Business Corporations Act. The Company was formed effective November 27, 2009 with the merger of Marquis Mergeco Ltd. (Marquis) and Alliance Mergeco Ltd. (Alliance). For accounting purposes the transaction was accounted for as a business combination whereby Marquis is the acquirer and Alliance is the acquiree. The financial statements of the Company reflect the historical financial statements of the Marquis Group of Companies (the Marquis Group), and the financial position and results of operations of Alliance from its acquisition date on November 27, 2009. The Marquis Group started its operations in 1997. In 2009 the Marquis Group was comprised of the following entities under common control: Marquis Fluids Inc.; Marquis Fluids (A Partnership); Marquis Environmental Services Ltd.; Marquis Fluids LLC; 1401615 Alberta Ltd.; and Solvex Technologies Inc.

On November 27, 2009, the Marquis Group completed an internal reorganization, whereby Marquis was incorporated and all entities of the Marquis Group became subsidiaries of Marquis. As these entities were under common control, the internal reorganization was recorded using "continuity-of-interests" accounting. Under this method, the financial statements of the combined company for all periods combine the assets and liabilities at their carrying value in the combining companies' records, and are restated to reflect the financial position and results of operations as if the companies had been combined since their inception.

A-33

1.

NATURE OF BUSINESS (Continued)

Seasonality The Western Canadian drilling industry is subject to seasonality with activity usually peaking during the winter months. As temperatures rise in the spring, the ground thaws and becomes unstable resulting in government road bans which severely restrict activity in the first fiscal quarter until drilling equipment is moved when the roads are dry enough to support moving equipment. These seasonal trends typically lead to quarterly fluctuations in operating results and working capital requirements, which should be considered in any quarter over quarter analysis of performance. With expected expansion into the warmer climate environment of the United States, the increase in horizontal pad drilling, the shift away from winter access only drilling, and longer days per well, reducing rig mobilization events, it is expected that the overall seasonality of the Companys operations will be less pronounced in future periods. 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

These unaudited interim consolidated financial statements of the Company have been prepared by management in accordance with Canadian generally accepted accounting principles (GAAP) following the same accounting principles and methods of computations as those set out in the most recent annual financial statements for the year ended March 31, 2010. Certain information and disclosures normally required to be included in notes to annual financial statements have been condensed or omitted and, as such, these interim consolidated financial statements should be read in conjunction with the most recent annual financial statements.

3.

DUE FROM RELATED PARTIES AND RELATED PARTY TRANSACTIONS

During the three and nine month periods ended December 31, 2009, the Company advanced funds in the aggregate amount of $11,500 and $5,338 respectively to two minority shareholders. The amounts were subsequently repaid during the period. At December 31, 2010, $Nil (March 31, 2010 - $31,500) remained outstanding and was included in accounts receivable. These amounts were non-interest bearing, unsecured, and had no fixed terms of repayment. During the interim three and nine month periods ended December 31, 2010, the Company advanced an aggregate of $Nil and $257,658 respectively to certain shareholders. The loans are non-interest bearing, and are secured by an assignment of the shares held by the employees in the Company or its affiliates, and an assignment of certain rights and payments in respect of the shares. The repayment terms of the loans are the earlier of: the closing time of any sale of the shares, 60 days following the date the shareholder becomes a withdrawing shareholder, as defined in the Companys Shareholders Agreement, or five years from the date the loans were entered into. During the fiscal year 2010, the Company, through the business combination, acquired a promissory note to an employee for home relocation purposes for $225,000 (2009 - $Nil). The note is non-interest bearing and has a fixed term of repayment being the earlier of January 1, 2012, or through twelve consecutive monthly payments following the first month after cessation of employment by the employee, or immediately in the event of default under the agreement. Due to the short-term nature of this loan, the fair value of the loan is not materially different from its carrying value. The note is secured by an assignment of shares held by the employee in the Company or its affiliate, and an assignment of all future payments from the Company or any of its affiliates. As at December 31, 2010 the full amount remains outstanding.

See accompanying notes to the consolidated financial statements

A-34

3.

DUE FROM RELATED PARTIES AND RELATED PARTY TRANSACTIONS (Continued)

Share purchase loans in the amount of $1,147,285 were outstanding as of December 31, 2010 (March 31, 2010 - $1,002,837). The share purchase loans were issued to key employees of the Company. The loans are non-interest bearing, and have repayment terms of the earlier of: the closing time of any sale of the shares, 60 days following termination of the employees employment, or five years from the date the loans were entered into. The loans are secured by the shares issued, and as such are classified as a charge against share capital. All transactions not in the normal course of operations have been accounted for at their carrying amounts. 4. BANK INDEBTEDNESS

At December 31, 2010, the Company had drawn $12,090,724 (March 31, 2010 - $21,508,122) on a margin credit facility available in the form of an overdraft. Interest is payable monthly in arrears at the banks floating prime lending rate plus 1.25% per annum. Prime lending rate at December 31, 2010 was 3.00% (March 31, 2010 - 2.25%). The margin credit facility is a revolving facility, due on demand with no repayment terms. The overdraft is secured by a general security agreement over accounts receivable and an assignment of fire and liability insurance and guarantees of certain companies controlled by the Company. The availability of the credit facility is dependent upon the Company maintaining certain financial ratios. The maximum amount available under the facility at December 31, 2010 was $17,000,000 (March 31, 2010 - $23,000,000). In January 2011 the Company entered into an agreement to amend its existing margin credit facility, whereby the maximum amount available under the credit facility was increased to $23,000,000 for the operating months of November through April on an annual basis, otherwise the maximum amount available under the credit facility is $17,000,000. The allowable draw on the facility is based on the value of eligible accounts receivable and inventory balances. All other terms of the margin credit facility remain consistent to those disclosed in the most recent annual financial statements of the Company including compliance with certain debt covenants. The Company was in compliance with it debt covenants as of December 31, 2010.

See accompanying notes to the consolidated financial statements

A-35

5.

EARNINGS PER SHARE

In calculating the basic and diluted amounts per share for the three and nine-months ended December 31, 2010 and 2009, the weighted average number of shares used in the per share calculations is shown in the table below. Shares that are contingently returnable which are held as collateral under various loans with employees are excluded from the basic number of shares outstanding and considered dilutive securities. Three Months 2009 $
1,456,359

2010 $

2010 $

Nine Months 2009 $

670,520

Net earnings Weighted average number of shares outstanding: Basic shares outstanding Effective of dilutive securities Diluted shares outstanding

2,400,379

7,868,786

7,470,207 1,529,793 9,000,000

5,809,887 955,593 6,765,480

7,852,311 1,147,689 9,000,000

4,938,219 955,593 5,893,812

6.

FINANCIAL INSTRUMENTS

The Company holds various forms of financial instruments, the nature and classification of which are set out in the most recent annual financial statements. The Company does not manage these risks through the use of derivative instruments. An update to the Companys exposure to interest rate risk, credit risk and foreign exchange risk for the interim period is as follows: Interest rate risk At December 31, 2010, the Company is exposed to interest rate cash flow risk to the extent that the demand loan bears interest at a floating interest rate. For each 1% change in interest rates, all else being equal this would impact earnings for the three and nine months ended December 31, 2010 by approximately $26,786 and $87,289 respectively (2009 - $12,291 and $13,645). Liquidity risk The Company is exposed to liquidity risk. Liquidity risk is the exposure of the Company to the risk of not being able to meet its financial obligations as they become due. The Company manages liquidity risk through management of its capital structure, monitoring and reviewing actual and forecasted cash flows and the effect on bank covenants and maintaining unused credit facilities where possible to ensure there are available cash resources to meet the Companys liquidity needs. At December 31, 2010, the Company had net working capital (current assets less current liabilities) of $21,323,762 and had available $4,909,276 on its margin credit facility (Note 4). At December 31, 2010, the Company was committed to various financial obligations (Note 7) which require the Company to have available various sources of capital and will require the Company to generate future operating cash flow to meet the commitments associated with these financial obligations.

See accompanying notes to the consolidated financial statements

A-36

6. FINANCIAL INSTRUMENTS (Continued) The expected maturities of the Companys contractual and constructive obligations are as follows: 2011 $ Bank indebtedness Accounts payable and accrued liabilities Obligations under capital lease Total Concentrations of credit risk The carrying amount of accounts receivable reflects managements assessment of the credit risk associated with its customers. For the nine months ended December 31, 2010, one customer (2009 - three customers accounted for 12%, 11% and 11% respectively) accounted for more than 10% of the Companys revenue. The customer(s) accounted for 13% (2009 - 35.4%) in aggregate of the Companys revenue. No customer accounted for more than 10% of the Companys revenue for the three months ended December 31, 2010 (2009 - Nil%) At December 31, 2010, 12.3% (March 31, 2010 - 15%) of the Companys accounts receivable were receivable from one company (March 31, 2010 - one company); as such, the Company is exposed to concentrations of credit risk. In managements assessment, the future viability of the Company is not dependent upon any major customer. The following details the age of outstanding accounts receivable, net of allowance for doubtful accounts: December 31, 2010 $ Trade accounts receivable: Not overdue (outstanding for less than 30 days) Past due for more than one month but not more than three months Past due for more than three months but not more than six months Past due for more than six months Accrued and other accounts receivable March 31, 2010 $
12,090,724 24,135,009 308,108 36,533,841

2012 $
1,766 1,766

10,226,059 14,114,913 2,804,417 823,773 11,198,478 39,167,640

15,117,246 12,256,017 2,097,160 341,503 10,809,273 40,621,199

The change in the allowance for doubtful accounts is as follows: December 31, 2010 $ Balance, beginning of period Additional allowance Amounts used Balance, end of period 840,850 (96,531) 744,319 March 31, 2010 $ 65,310 840,850 (65,310) 840,850

See accompanying notes to the consolidated financial statements

A-37

6.

FINANCIAL INSTRUMENTS (Continued)

Foreign currency exchange risk The Company is exposed to foreign currency fluctuations in relation to its operations in the United States. Management believes this exposure is not material given the United States operations are self-sustaining since the cash flow from operations has been used to fund working capital requirements from operations or the expansion of the United States operations. At December 31, 2010, the Company had $3,223,902 (2009 $2,740,275) Canadian dollar equivalent of working capital denominated in foreign currencies. The Companys sensitivities to foreign currency fluctuations for the three and nine month periods ended December 31, 2010 are as follows: all else being equal, a hypothetical strengthening/weakening of 5% of the U.S. dollar against the Canadian dollar would have increased /decreased earnings before taxes by $48,988 for the three month period and $22,215 for the nine month period (2009 - $63,761 and $77,995, respectively) and increased / decreased other comprehensive earnings by $9,668 for the three month period and $138,980 for the nine month period (2009 - $59,019 and $59,019, respectively). 7. COMMITMENTS

As at December 31, 2010, the Company had long-term commitments under various operating leases. The required aggregate payments on an annual basis are as follows: $ Year ending December 31, 2011 2012 2013 2014 2015

831,671 629,795 192,814 150,789 245,422 2,050,491

At December 31, 2010, the Company had issued a letter of credit for US$57,334 (March 31, 2010 US$525,000) to support an inventory purchase. At December 31, 2010, the vendor had not met the conditions of the letter of credit and therefore no draws have been made against the letter of credit.

See accompanying notes to the consolidated financial statements

A-38

8.

CONTINGENCIES

The Company currently has a legal claim outstanding with a former employee. The claim relates to the termination of the employees employment and for damages for wrongful dismissal. Management is of the view that the damages claimed are excessive and that it has a good defence to the claims. However the potential exposure to the company is not determinable at this time. A dispute has arisen regarding a contract to provide goods and services in Syria. Management understands that Al Furat Petroleum Company (AFPC) intends to proceed with arbitration proceedings against Alliance Energy Services Ltd. (AES), a wholly owned subsidiary of Alliance Energy Capital Ltd. as at the date of the agreement, seeking damages for breach of the Syria contract. In addition, AFPC has obtained a provisional seizure order over AES assets in Syria. It is not currently clear whether the seizure is intended as an interim step to prevent dissipation of assets pending completion of the arbitration proceedings, or whether the seizure is intended to result in a sale of assets and the payment of the proceeds to AFPC prior to the completion of the arbitration proceedings. The amount being claimed by AFPC is 4,892,836 Euros, which amount will likely exceed the value of assets located in Syria. The damages claimed by AFPC include the amount that AFPC was contractually obligated to pay AES (being 3,658,377 Euros) when AFPC arbitrarily terminated the Syria contract. The entire amount of the original contract payable to AES remains outstanding. The Company has been advised that the Syrian Customs authorities have a claim against AES, its assets located in Syria, and against AFPC, due to the improper importation of such assets, although the Company has not been provided with any documentation in this regard. If the disputing party is successful, AES assets located in Syria would be at risk. Although the Company does not believe that it is likely, it is possible that the disputing party may obtain a judgment in Canada, in which case additional assets of the Company may be at risk.

9.

CAPITAL DISCLOSURES

The Companys capital management objectives are the same as those set out in the most recent annual financial statements. The Companys capital structure consists of the following: December 31, 2010 $ Bank indebtedness Shareholders equity 12,090,724 49,703,347 61,794,071 March 31, 2010 $ 21,508,122 41,674,552 63,182,674

See accompanying notes to the consolidated financial statements

A-39

10. LOSS FROM INVESTEE ACCOUNTED FOR USING THE EQUITY METHOD AND IMPAIRMENT LOSS In August 2009, the Company entered into an agreement with a Syrian company, pursuant to which the Company subscribed to 50% of the shares of an entity doing business in Syria (the Syrian Operation). The Company had determined that indications of impairment existed on its investment in Syria as at March 31, 2010. During the three and nine month periods ended December 31, 2010 the Company advanced further funds to the Syrian Operation of approximately $118,803 and $848,889 respectively to cover additional expenditures. As a result, a further impairment loss of $118,803 and $848,889 has been recorded in the consolidated statement of income for the three and nine-month periods ended December 31, 2010 respectively. The impairment losses are based on managements best estimate of fair value of the investment based on revenues, expenses and cash flows and anticipated recoverability of the assets of the Syrian Operation. These estimates are subject to measurement uncertainty as they are dependent on factors that may be outside of managements control. The carrying value of investment at December 31, 2010 would have been $848,889 (March 31, 2010 - $1,681,249) prior to the impairment loss being recorded, which included: December 31, 2010 $ Cash advances Share of equity loss 848,889 848,889 March 31, 2010 $ 2,128,972 (447,723) 1,681,249

11. DISCONTINUED OPERATION During 2010, the Company incorporated a 50% owned joint venture in Mexico, Alianza de Mexico, S.A. de C.V. (Alianza), which commenced operations in September 2009. In March 2010, the Company adopted a formal plan of disposal for the remaining assets of Alianza the Companys Mexico joint venture operation. At March 31, 2010 the long-lived assets, inventory and prepaid expenses pertaining to the disposal plan were reclassified as held for sale, and recorded at the lower of their carrying value and fair market value less costs of disposal as at the date the formal plan of disposal was adopted. In May 2010, Alianza sold the long-lived and other assets held for sale for US$1,635,000 and ceased active operations in Mexico. Furthermore, Alianza collected US$1,516,132 in outstanding receivables from the purchaser, the Companys proportionate shares of these amounts are US$817,500 and US$758,066, respectively.

See accompanying notes to the consolidated financial statements

A-40

11. DISCONTINUED OPERATION (Continued) The carrying value of the remaining assets and liabilities held for sale are: December 31, 2010 $ CURRENT Cash Accounts receivable and accruals Long-lived and other assets held for sale Total assets CURRENT Accounts payable and accrued liabilities Total liabilities 12. SUBSEQUENT EVENTS a) Subsequent to the end of the period, the Company purchased land and building in Nisku, Alberta for a total purchase price of $2.3 million. The purchase price was paid by cash in the amount of $575,000 and the remainder financed by a $1,725,000 HSBC mortgage. March 31, 2010 $

104,888 27,127 132,015 132,015

3,837 634,602 638,439 535,033 1,173,472

61,772 61,772

526,573 526,573

b) Subsequent to the end of the period, the Company completed a stock split thereby issuing 9 new shares for each common share outstanding. Per share amounts included in these consolidated financial statements have been retrospectively restated to reflect this split. c) On April 26, 2011, the Company and its shareholders signed a share purchase agreement with Secure Energy Services Inc. (Secure) pursuant to which Secure will acquire all of the issued and outstanding securities of the Company.

d) On March 3, 2011 the Company amended its articles to designate a Class B Series 3 preferred share, having identical characteristics to the Class B, Series 1 and 2 preferred shares as set out in the most recent annual financial statements. On April 11, 2011 certain shareholders entered into a share exchange agreement, pursuant to which 22,644,637 Class B Series 1 preferred shares were exchanged for 22,644,637 Class B Series 3 preferred shares.

See accompanying notes to the consolidated financial statements

A-41

SCHEDULE "B" UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma consolidated statement of operations present herein is based upon a constructed statement of operations of Marquis Alliance for the period of January 1, 2010 to December 31, 2010. See note 4 to the unaudited pro forma consolidated financial statements

SECURE ENERGY SERVICES INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As at: December 31, 2010 December 31, 2010 Marquis Alliance Energy Group Inc. Pro Forma Secure Energy Services Inc.

(Stated in thousands of Canadian dollars)

Secure Energy Services Inc.

Adjustments

ASSETS Current assets: Cash and cash equivalents Accounts receivable and accruals Prepaid expenses and deposits Inventories

22,518 25,394 600 3,184 51,696 482 404 30,818 104,439 3,231 1,906

2,239 39,168 583 15,929 57,919 483 12,762 3,729 13,738

5,551 2(a) 5,551 (483) 500 54,711 28,855

2(b)

30,308 64,562 1,183 19,113 115,166 482 404 30,818 117,701 61,671 44,499

Notes receivable Future income tax asset Assets under construction Property, plant and equipment Intangible assets Goodwill $

2(b) 2(b) 2(b)

192,976

88,631

$ 89,134

$ 370,741

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Bank debt $ Accounts payable and accrued liabilities Current portion of capital leases

29,801 807 30,608 1,035 7,559 39,202 152,983 1,847 (1,056) 153,774

12,091 24,197 308 36,596 2 2,330 38,928 41,158 182 8,363 49,703

1,573 2(b) 1,573 1,725 2(b) 12,601 2(a),(b),(c) 15,899 81,780 2(a),(b),(c) (182) 2(b) (8,363) 2(b) 73,235

13,664 53,998 1,115 68,777 1,037 1,725 7,559 14,931 94,029 275,921 1,847 (1,056) 276,712

Capital leases Long term debt Asset retirement obligations Future income tax Shareholders' equity Share capital Contributed surplus Accumulated other comprehensive earnings Retained earnings (deficit)

192,976

88,631

$ 89,134

$ 370,741

See accompanying notes to these unaudited pro forma consolidated financial statements

B-2

SECURE ENERGY SERVICES INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the year ended December 31, 2010 Secure Energy Services Inc. December 31, 2010 Marquis Alliance Energy Group Inc. Pro Forma Secure Energy Services Inc.

(Stated in thousands of Canadian dollars - except per share data)

Adjustments

Revenue Expenses: Operating General and administrative Depreciation and amortization Stock based compensation Interest expense (income) Business development Foreign exchange loss Impairment loss from investee accounted for using equity method Income (loss) before income taxes and discontinued operation Income tax expense: Current Future

72,759

122,299

195,058

40,617 5,833 15,567 1,170 257 2,297 65,741 7,018

85,930 14,612 1,904 728 143 2,978 106,295 16,004

6,187 3(a) (56) 3(b) 500 3(c) 6,631 (6,631)

126,547 20,445 23,658 1,170 929 2,797 143 2,978 178,667 16,391

2,544 2,544

5,961 410 6,371

(1,547) 3(a) (1,547)

5,961 1,407 7,368

Net and comprehensive income before discontinued operation Loss from discontinued operation, net of income tax Net and comprehensive income Net income per share, basic and diluted $

4,474 4,474 $

9,633 (188) 9,445

(5,084) $ (5,084) $

9,023 (188) 8,835

3(d) $

0.11

See accompanying notes to these unaudited pro forma consolidated financial statements

B-3

SECURE ENERGY SERVICES INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of Canadian dollars, except for per share amounts)

1.

BASIS OF PRESENTATION The unaudited pro forma consolidated balance sheet as at December 31, 2010 and the unaudited pro forma consolidated statement of operations and comprehensive income for the year ended December 31, 2010 (the "Pro Forma Statements") are of Secure Energy Services Inc. ("Secure" or the "Corporation"). The Pro Forma Statements give effect to the acquisition (the "Acquisition") by the Corporation of Marquis Alliance Energy Group Inc. ("Marquis Alliance") and other adjustments necessary to appropriately reflect the Corporation's balance sheet and statement of operations and comprehensive income on a pro forma basis. Such adjustments are described more fully in the following notes to the Pro Forma Statements. The Pro Forma Statements should be read in conjunction with the audited financial statements of the Corporation as at and for the year ended December 31, 2010, the audited financial statements of Marquis Alliance as at March 31, 2010 and the unaudited financial statements of Marquis Alliance as at March 31, 2009, and for the years then ended, and the unaudited interim consolidated financial statements of Marquis Alliance for the three and nine month periods ended December 31, 2010. The Pro Forma Statements have been prepared by the management of the Corporation, in accordance with Canadian generally accepted accounting principles. The underlying assumptions for the pro forma adjustments provide a reasonable basis for presenting the significant financial results and financial position attributable to the applicable transactions expected to be undertaken by the Corporation as described in the notes to the Pro Forma Statements; however, the Pro Forma Statements are not necessarily indicative of the financial position or results that actually would have been achieved if the transactions reflected therein had been completed on the dates indicated or the results which may be obtained in the future. In the opinion of management, these unaudited Pro Forma Statements include all material adjustments necessary for fair presentation. The accounting policies used in these Pro Forma Statements are consistent with those used in the financial statements of the Corporation. For the purposes of the pro forma consolidated balance sheet at December 31, 2010, the transactions have been assumed to occur on December 31, 2010. For the purposes of the pro forma statement of operations and comprehensive income for the year ended December 31, 2010, the transactions have been assumed to occur on January 1, 2010. In addition, the pro forma consolidated statement of operations and comprehensive income of the Corporation for the year ended December 31, 2010 should be read in conjunction with the financial information in Note 4, which reconstructs the period earnings information of Marquis Alliance for the pro forma statement of operations and comprehensive income.

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SECURE ENERGY SERVICES INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of Canadian dollars, except for per share amounts) 2. PRO FORMA CONSOLIDATED BALANCE SHEET Specific adjustments include: a) Secure has entered into an agreement on a bought deal basis, with a syndicate of underwriters co-led by FirstEnergy Capital Corp. and Raymond James Ltd., and including CIBC World Markets Inc., Peters & Co. Limited, Macquarie Capital Markets Canada Ltd. and Paradigm Capital Inc. (collectively, the "Underwriters") pursuant to which the Underwriters have agreed to purchase for resale to the public 11,278,200 subscription receipts of Secure ("Subscription Receipts") at a price of $6.65 per Subscription Receipt for gross proceeds of $75 million. In addition, the Underwriters have been granted an over-allotment option, exercisable for a period of 30 days following closing of the offering, to purchase a further 15% of the amount of issue, at a price of $6.65 per Subscription Receipt. After considering transaction costs and commissions to the Underwriters, Secure estimates the amount of proceeds of $71 million, excluding the amount of the over-allotment, if any. Upon closing of the Acquisition, Secure will issue one common share of Secure for each Subscription Receipt.

b) Under the terms of a share purchase agreement (the "Acquisition Agreement") among Secure, Marquis Alliance and the holders of all of the outstanding shares of Marquis Alliance (the "Marquis Alliance Shareholders"), Secure agreed to purchase, and the Marquis Alliance Shareholders agreed to sell, all of the outstanding common and preferred shares of Marquis Alliance ("Marquis Alliance Shares"). Closing of the Acquisition is expected to occur on June 1, 2011. Pursuant to the Acquisition Agreement, the Marquis Alliance Shareholders will receive consideration consisting of the following: (i) (ii) $65.5 million in cash, funded through the bought deal financing as described in 2(a); and 10,015,291 common shares of Secure, at an ascribed value per share of $6.54, for consideration of $65.5 million.

These Pro Forma Statements reflect the fair value of consideration for accounting purposes and are accounted for under the purchase method. The shares issued as part of the consideration are discounted for accounting purposes to reflect the calculated fair value of the shares considering such factors as the escrow period (ranging between two to five years) and liquidity of Secure common shares in the marketplace. This has resulted in a difference between the $65.5 million ascribed purchase consideration and the fair value consideration of $50.8 million used in the preliminary purchase price equation. The final consideration for accounting purposes will be determined on the closing date of the Acquisition, which is expected to be on June 1, 2011. As a result, the consideration paid will change for accounting purposes to reflect any differences in the share price between the time of announcement and the acquisition date, and the corresponding differences in the fair value consideration.

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SECURE ENERGY SERVICES INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of Canadian dollars, except for per share amounts) 2. PRO FORMA CONSOLIDATED BALANCE SHEET (continued) The preliminary purchase price equation summarizes the estimated fair value of the consideration and the estimated fair value of the assets acquired and liabilities assumed at the date of these Pro Forma Statements. Accordingly, the actual amounts, upon final completion of the fair value of consideration and valuation assessments for each of the assets and liabilities will vary from the pro forma amounts and the variations may be material. When the fair value analysis supporting the final purchase price allocation associated with the amount currently recorded in the pro forma balance sheet as excess of purchase price over fair value are finalized, the calculation and allocation of the consideration paid could result in allocations to assets subject to amortization and future income tax balances and thus impact net comprehensive income by a material amount. The preliminary purchase price equation can be summarized as follows:

Cash Shares issued Total fair value of consideration for accounting purposes Preliminary Purchase Price Allocation: Net working capital surplus, before bank debt Property, Plant and equipment Intangible assets Goodwill Bank debt Capital leases Long term debt Future tax liability

65,500 50,810 $ 116,310

33,414 13,262 58,440 42,593 (13,664) (2) (1,725) (16,008) $ 116,310

On closing of the Acquisition, Marquis Alliance is required to deliver a net working capital surplus of $19.8 million net of any outstanding bank debt. As at December 31, 2010, current assets less current liabilities ($57.9 million less $36.6 million) resulted in net working capital of $21.3 million, therefore the bank debt was adjusted by $1.5 million accordingly. In addition, upon closing of the Acquisition the notes receivable will be collected and any differences in net working capital would be an increase or decrease to bank debt. Secure will also assume long term debt of $1.7 million and any remaining long term capital leases. Secure adopted CICA Handbook Section 1582, Business Combinations, on January 1, 2010 and accordingly acquisition-related costs, such as advisory, legal, accounting, valuation and other professional or consulting fees related to the Acquisition, are required to be expensed as incurred rather than being recognized as part of the purchase equation. These costs estimated to be $0.5 million have been expensed. c) The Acquisition will result in an estimated decrease to the future income tax liability as a result of the taxable benefit of the share issue costs.

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SECURE ENERGY SERVICES INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of Canadian dollars, except for per share amounts) 3. PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME The unaudited pro forma consolidated statements of operations give effect to the following assumptions and adjustments based on management's best estimate as if they had occurred at January 1, 2010: a) The provision for depreciation and amortization was adjusted based on the fair values assigned to property, plant and equipment and intangibles in the preliminary purchase price allocation, and the effect on future taxes;

b) Any excess cash is invested in term deposits at a rate of 1%; c) Estimated transaction costs of $0.5 million are included as business development expenses; and

d) The net earnings per share has been based on the following historical weighted average of Secure's shares adjusted for the acquisition of Marquis Alliance and the shares issued through the bought deal financing. Weighted average common shares and share capital for the year ended December 31, 2010:

Weighted average Secure shares outstanding, December 31, 2010 Shares issued on the bought deal financing Shares issued on the Marquis Alliance Acquistion

Number of shares 58,560,338 11,278,200 10,015,291 79,853,829 603,507 80,457,336

Share capital $ 152,983 72,128 50,810 $ 275,921 nm nm

Dilutive effect of Secure stock options and warrants Weighted averaged diluted shares
nm amount is not meaningful

As at December 31, 2010, assuming successful completion of the Acquisition and the Offering, the Corporation will have a total of 85,047,839 common shares issued and outstanding (excluding overallotment).

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SECURE ENERGY SERVICES INC. NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Stated in thousands of Canadian dollars, except for per share amounts) 4. MARQUIS ALLIANCE ENERGY GROUP INC. FINANCIAL INFORMATION The unaudited constructed financial statement of operations of Marquis Alliance for the twelve month period ended December 31, 2010 has been constructed by adding the unaudited interim financial statement of operations of Marquis Alliance for the nine months ended December 31, 2010 to the audited statement of operations of Marquis Alliance for the year ended March 31, 2010 and deducting the unaudited interim statement of operations of Marquis Alliance for the nine months ended December 31, 2009. The unaudited interim statement of operations of Marquis Alliance for the twelve months ended December 31, 2010 used to prepare the Corporation's unaudited pro forma statement of operations for the 12 month period ended December 31, 2010 was prepared solely for the purpose of the Pro Forma Statements and do not conform with the historical financial statements of Marquis included elsewhere in the Prospectus. Certain figures have been reclassified from the audited financial statements of operations to conform to the presentation of the Pro Forma Statements.
Nine months ended December 31, 2009 (Nine Months) Constructed year ended December 31, 2010

(Stated in thousands of Canadian dollars Year ended - except per share data) March 31, 2010

Nine months ended December 31, 2010 (Nine Months)

Revenue

62,140

86,021

25,862

$ 122,299

Expenses: Operating General and administrative Depreciation Interest expense (income) Foreign exchange loss Impairment loss from investee accounted for using equity method Income before income taxes and discontinued operation Income tax expense: Current Future (Loss) earnings from discontinued operation, net of income tax Net and comprehensive income $

45,538 8,277 854 614 120 2,129 57,532 4,608

59,571 11,257 1,438 536 97 849 73,748 12,273

19,179 4,922 388 422 74 24,985 877

85,930 14,612 1,904 728 143 2,978 106,295 16,004

1,877 (115) 1,762 (599) 2,247 $

4,270 545 4,815 411 7,869 $

186 20 206 671 $

5,961 410 6,371 (188) 9,445

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CERTIFICATE OF THE CORPORATION Dated: May 6, 2011

This short form prospectus, together with the documents incorporated herein by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador. (signed) "Rene Amirault" Chief Executive Officer (signed) "Nick Wieler" Chief Financial Officer

On behalf of the Board of Directors

(signed) "Murray Cobbe" Director

(signed) "Brad Munro" Director

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CERTIFICATE OF THE UNDERWRITERS Dated: May 6, 2011

To the best of our knowledge, information and belief, this short form prospectus, together with the documents incorporated herein by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this prospectus as required by the securities legislation of each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador FIRSTENERGY CAPITAL CORP.

(signed) "Nicholas J. Johnson"

RAYMOND JAMES LTD.

(signed) "Jason Holtby"

CIBC WORLD MARKETS INC.

PETERS & CO. LIMITED

(signed) "Michael W. de Carle"

(signed) "J.G. (Jeff) Lawson"

MACQUARIE CAPITAL MARKETS CANADA LTD.

PARADIGM CAPITAL INC.

(signed) "L. Trevor Anderson"

(signed) "Warren G. Holmes"

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