TABLE OF CONTENTS 1. INTRODUCTION OPERATIONS UPDATE LIBERTY TRANSACTION POST CLOSING MATTERS CRITICAL SUPPLIERS...

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2 TABLE OF CONTENTS 1. INTRODUCTION OPERATIONS UPDATE LIBERTY TRANSACTION POST CLOSING MATTERS CRITICAL SUPPLIERS LEASE DISCLAIMERS KERP UPDATE BACKGROUND TO SECURITY REVIEWS CANADIAN SECURITY REVIEW UNITED STATES SECURITY REVIEW UNPERFECTED EQUIPMENT INTERIM LENDERS CHARGE SUPERPRIORITY CAMERON BARTON CLAIM APPLICATION FOR INTERIM DISTRIBUTION TO SYNDICATE FINANCIAL ADVISORS CHARGE ACTUAL CASH FLOWS FOR APRIL 23 TO JUNE 10, REVISED CASH FLOW FORECAST RECOMMENDATIONS...18 APPENDICES A. List of Disclaimer Notices B. Canadian Potential Priority Registrations C. Calculation of Estimated Holdback for Distribution Order D. Revised Cash Flow Forecast

3 1. INTRODUCTION SANJEL CORPORATION ET AL 1.1 On April 4, 2016, on the application of Sanjel Corporation and the applicants listed in Appendix A in the Monitor s First Report (collectively referred to as Sanjel or the Company or the Applicants ) the Court of Queen's Bench of Alberta (the "Court") issued an order (the "Initial Order") granting Sanjel protection from its creditors pursuant to the Companies' Creditors Arrangement Act ( CCAA ). Under the Initial Order, PricewaterhouseCoopers Inc. ( PwC ) was appointed monitor of the Company (the Monitor ). 1.2 The purpose of this Distribution (Ninth) Report (the Distribution (Ninth) Report ) is to provide the Court with: an update on operations; an update on the closing of the Liberty APA and associated post-closing matters; an update on the Company s designation of certain vendors as Critical Suppliers; an update on the status of certain notices to disclaim contracts issued under the Enhanced Powers of the Monitor; an update on the status of the KERP Charge and the Monitor s view on the Company s application to amend the KERP Charge; the Monitor s opinion on the validity and enforceability of the Syndicate s security; information regarding certain of the Company s U.S. equipment secured pursuant to the Interim Lenders Charge and the Monitor s views with respect to repayment of the Interim Facility; information with respect to the claim put forth by the Company s former CFO and the Monitor s views with respect to this claim; the Monitor s views with respect to payment of the Financial Advisors Charge as it relates to the STEP and Liberty transactions; the Company s actual cash flow for the period April 23, 2016 to June 10, 2016; the Monitor s view on the revised cash flow forecast for the period from June 11, 2016 to December 31, 2016 ( June 11 CFF ); and the Monitor s recommendations with respect to the Company s application to the Court for an order authorizing an interim distribution of the net proceeds of the STEP and Liberty transactions (collectively, the Net Sale Proceeds ) subject to the holdback recommended by the Monitor. 1

4 1.3 A copy of the filed Distribution (Ninth) Report will be available on the Monitor s website All non-confidential prescribed materials filed by Sanjel and the Monitor relating to this CCAA proceeding are available to creditors and other interested parties in electronic format on the Monitor s website. The Monitor will make regular updates to its website to ensure creditors and interested parties are kept current and to add prescribed materials as required. In addition, the Monitor s website contains a direct link to the website for the Company s U.S. Chapter 15 proceedings. 1.4 Unless otherwise stated, all monetary amounts noted herein are expressed in Canadian dollars. Capitalized terms not otherwise defined herein are as defined in the Company s application materials, the Initial Order and, the Proposed Monitor s Report and the Monitor s prior reports. 1.5 Certain information contained in this report is based on information obtained from the Applicants books and records and discussions with management and staff. The Monitor has not independently verified the accuracy or completeness of such information; accordingly the Monitor does not express an opinion thereon. 1.6 This Distribution (Ninth) Report should be read in conjunction with the Monitor s prior reports and the Proposed Monitor s Report. 2. OPERATIONS UPDATE 2.1 The previously approved transactions with STEP and Liberty are closed, Court approval for the sale of Suretech was received on June 15, 2016 and an application for U.S. Court approval is scheduled on June 22, The Company is working on transactions for the sale of Terracor and the Company s Saudi joint venture interest. As such, the Company s remaining operations are minimal. 2.2 The Company expects that approximately 80 employees will remain until June 30, 2016 with the headcount reducing to approximately 35 to 40 employees for all or part of July 2016 and 9 thereafter. The remaining 9 employees will be engaged for terms varying from one to six months (or as may be extended if necessary) to: finalize post-closing matters associated with the STEP and Liberty transactions; operate Suretech pending U.S. Court approval and closing of the transaction; operate and assist with the sale of the remaining divisions; complete regulatory submissions to obtain various tax refunds; analyze lien claims; 2

5 2.2.6 collect accounts receivable balances and realize on other miscellaneous assets; and complete other administrative matters related to the wind-down of the Company s estates and the finalization of the U.S. Chapter 15 Proceedings, including providing accounting and information services in connection with the actions described herein and services related to dissolution of corporate entities, assistance with pending litigation in the United States and obtaining a final decree in the U.S. Chapter 15 Proceedings. 3. LIBERTY TRANSACTION POST CLOSING MATTERS 3.1 Included in the Liberty APA were a number of assets for which the Company did not hold a certificate of title in Montana ( Untitled Equipment ). The Untitled Equipment was primarily registered in Montana, but in a few other states as well. The Monitor understands that Liberty became aware of this issue after entering into the Liberty APA. 3.2 The Company has applied for 59 titles and is anticipating the receipt of those titles shortly. In addition, there are 45 titles for which insufficient paperwork restricts the ability of the Company to apply for title in the normal course and title may only be received through a bonding process ( Bonded Equipment ). 3.3 The following table summarizes the status of the Untitled Equipment as of June 10, ($USD) Allocated Status Units APA Value In process 59 3,880,543 Bond required 45 1,665, ,545, On June 13, 2016 the Company and Liberty entered into an Escrow agreement with PwC acting as the Escrow Agent ( Liberty Escrow ). As part of the closing of the Liberty APA, PwC, the Company and Liberty agreed that USD$5.5 million would be held in escrow with the Escrow Agent ( Escrow Funds ), representing the allocated valuation of the Untitled Equipment (based on net book values) set out in the Liberty APA. The Escrow Funds will be released as certificates of title are received and provided to Liberty, up until January 2, Pursuant to the Liberty Escrow, if there is Untitled Equipment remaining as of January 2, 2017, the Company may elect to purchase the Untitled Equipment at the allocated values and release the remaining Escrow Funds to the Purchaser. If the Company makes this election, however, the Purchaser has a right of first refusal under the Liberty Escrow to keep the Untitled Equipment and if this right is exercised, the remaining Escrow Funds are released to the Company. Alternatively, if the Company does not elect to purchase the Untitled Equipment, the Escrow Agent will release to the Company from the remaining Escrow Funds 3

6 50% of the allocated value of any remaining Untitled Equipment, up to a maximum of USD$2 million. 3.6 The Monitor understands that the Liberty Escrow was heavily negotiated as between the Company and Liberty. The Monitor was supportive of the Liberty Escrow as it provided a mechanism for dealing with the Untitled Equipment in a manner that did not materially impact the Liberty purchase price or delay closing of the Liberty transaction. 3.7 In connection with the closing of the Liberty transaction, Liberty is continuing to use premises under certain of the MacBain leases and the Company has agreed with Liberty to allow it to use such premises until September 11, The Monitor intends to seek to disclaim those leases in the near future and may seek consent of MacBain and/or authority of the U.S. Bankruptcy Court in order to make such premises available until September 11, CRITICAL SUPPLIERS 4.1 There has been no change to the listing of Critical Suppliers contained in the Monitor s First Report or the criteria used by the Monitor to identify a supplier as critical. 4.2 As of the date of closing the Liberty transaction, the Company no longer had operations that required the support of its Critical Suppliers. The Monitor will work with the Critical Suppliers to ensure that all balances for post filing work are fully satisfied. 4.3 As of June 10, 2016, the estimated balance owing to Critical Suppliers was approximately CAD$1 million, significantly below the charge of CAD$20 million. Once the Monitor has confirmed with each of the Critical Suppliers that there are no post filing balances outstanding, the Monitor will recommend to the Court that the Critical Suppliers Charge be fully released. 4.4 However, for the purposes of the distribution of the Net Sale Proceeds proposed by the Company, the Monitor recommends maintaining a holdback of CAD$20 million to ensure the Critical Suppliers Charge is protected. The Monitor currently expects that it will be in a position to report on the status of this charge within 60 days of the date of this report. 5. LEASE DISCLAIMERS 5.1 The Enhanced Powers of the Monitor are set out in paragraph 38 of the Initial Order. They include the ability, where appropriate, to disclaim or resiliate agreements to which the Company is party, pursuant to Section 32 of the CCAA. 5.2 As at the date of this report, 70 disclaimer notices have been issued. The leases for which notices have been sent to date include 33 real property leases issued to its landlords, primarily MacBain Properties Ltd. or its U.S. affiliates (collectively, MacBain ), 16 equipment leases and 19 railcar leases under Section 32(5) of the CCAA. A list of the disclaimer notices are attached to this report as Appendix 4

7 A. As described below, only two of the parties to whom disclaimer notices were sent filed applications to contest the disclaimer of their leases. 5.3 The Company s rationale for disclaiming leases, and the Monitor s process to assess which leases should be disclaimed, have not changed since the Monitor s First Report. 5.4 MacBain filed an application to contest the disclaimers issued by the Monitor in respect of the MacBain leases. Counsel for MacBain subsequently advised the Monitor that it is not proceeding with the application to contest the disclaimers. However, the application has not yet been formally withdrawn. 5.5 Concentra Financial Services Corporation, the lessor under certain equipment leases that were disclaimed by the Monitor, has withdrawn its application filed to contest the lease disclaimers on the basis that the Company returned the leased equipment to the lessor. The Monitor understands that the Company no longer needed the equipment for its operations and that there was no equity available in the equipment to benefit the Company s creditors. 6. KERP UPDATE 6.1 All scheduled payments under the KERP Charge up to June 30, 2016 are included in the June 11 CFF and have been made by June 30, 2016, other than the Pro- Rata Award owed to the Tranche A KERP employees (as set out in the Confidential KERP Summary that is Exhibit 3 to the April 4, 2016 Confidential Affidavit of Paul Crilly). The maximum amount that could become owing under the Pro-Rata Award owed to the Tranche A KERP Employees is CAD$298, The Company plans to retain nine (9) key employees (the Transition Team ) for various periods of up to six months (the Transition Period ) in order to complete the tasks set out in paragraph 2.2 of this report. 6.3 The Company is proposing that the Transition Team receive a KERP for the periods ranging from one to six months (the Transition KERP ). 6.4 The Company is of the view that the members of the Transition Team have the Company specific expertise and the key knowledge critical to: manage post-closing matters associated with the various sale transactions (Court approved and pending); ensure that all lien claims are properly analyzed and addressed; assist with certain matters in the United States including pending litigation and finalization of the Chapter 15 Proceedings; and maximize collections of the Company s outstanding accounts receivable balances. 6.5 The Transition KERP is based on terms similar to those of the KERP that formed the basis for the KERP Charge. A confidential summary of the Transition KERP 5

8 (the "Transition KERP Summary") has been provided to the Court as Confidential Exhibit 1 to the affidavit of Paul Crilly dated June 20, 2016 (the June 20 Crilly Affidavit ). As detailed in the June 20 Crilly Affidavit, the Transition KERP Summary contains sensitive commercial information, the disclosure of which would harm to the Company s commercial interests, as well as the privacy interests of Sanjel s employees. Accordingly, the Monitor supports the Company s request that the Transition KERP Summary be sealed on the Court file. 6.6 The Monitor has reviewed the Company s reasons for identifying each member of the Transition Team and is satisfied that without providing an incentive to those employees to remain in their jobs during the Transition Period, the Company will be at significant risk of losing their services, specific experience and expertise with the Company s business, which will be difficult to replace. The Monitor notes that at the commencement of the CCAA there were approximately 250 employees involved in head office administration the vast majority of which have been terminated, resulting in a dissipation of knowledge and expertise at the Company. The Monitor therefore views the Transition KERP as even more necessary to ensure that the remaining administrative matters set out above in paragraph 6.4 are dealt with as efficiently as possible. 6.7 Since almost all of the KERP payments scheduled to June 30, 2016 will have been paid by June 30, 2016, the Monitor is of the view that the KERP Charge should be reduced from CAD$2.85 million to CAD$0.565 million (to secure only the Pro- Rata Award owed to the Tranche A KERP Employees and the Transition KERP). 7. BACKGROUND TO SECURITY REVIEWS 7.1 The Monitor obtained copies of the Credit Agreement, Guarantees and Security (each as defined below) from both the Company and counsel for the Lending Syndicate. The Monitor understands that as at June 10, 2016 there was approximately CAD$397.5 million owing to the Syndicate under the Credit Agreement. 7.2 Upon its appointment under the Initial Order, the Monitor engaged Borden Ladner Gervais LLP ( BLG ), its legal counsel in Canada, and Dykema Cox Smith ( DCS ), its legal counsel in the United States, to conduct independent security reviews to confirm the validity and enforceability of the Security. 7.3 The Monitor understands from its legal counsel that: Sanjel Corporation and Sanjel (USA) Inc. (together sometimes referred to as the Borrowers ) entered into the Amended and Restated Credit Agreement dated April 21, 2015 (the Credit Agreement ) with Alberta Treasury Branches as agent and lead arranger for and on behalf of other financial institutions as lenders (collectively, the Syndicate ) Guarantees were pledged in support of the Credit Agreement (the Guarantees ) by Sanjel Corporation, Sanjel Canada Ltd., Sanjel 6

9 Investment Corp., Suretech Completions Canada Ltd., Suretech Group Ltd., Terracor Group Ltd., Terracor Canada Ltd., Terracor Resources Canada Ltd. and Terracor Logistics Canada Ltd. (together, the Guarantors ) In addition to the Guarantees, various security including general security agreements dated March 21, 2014 were pledged by the Borrowers and the Guarantors in Canada and the United States (the Security ), in support of the Borrowers and the Guarantors respective obligations to the Syndicate. 8. CANADIAN SECURITY REVIEW 8.1 On April 11, 2016, the Monitor obtained an opinion and memorandum from BLG (the BLG Opinion ) stating that the Security governed by the laws of the Province of Alberta, is valid and enforceable as against the Borrowers and the Guarantors for the assets located in Canada. 8.2 On April 26, 2016, the Monitor was provided with a further opinion from BLG addressing the Syndicate s security registrations in Alberta and British Columbia (the Second BLG Opinion ). The Second BLG Opinion confirms that the Syndicate holds a security interest in Alberta and British Columbia against all present and after-acquired personal property registered in first position at the respective provincial personal property registries. 8.3 In addition to the BLG Opinion and the Second BLG Opinion, the Monitor obtained an opinion from McDougall Gauley LLP dated April 20, 2016 regarding the status of the Syndicate s Security in Saskatchewan (the Saskatchewan Opinion ). The Saskatchewan Opinion states that the Security constitutes valid and binding obligations of the Borrowers or the Guarantors, as the case may be, and is enforceable against those parties. The Saskatchewan Opinion also states that the Security has been registered to create a perfected interest in the present and after acquired personal property of certain of the grantors in Saskatchewan. Specific note is made of the fact that no registrations were made at the personal property registry in Saskatchewan with respect to Sanjel Investment Corp., Terracor Canada Ltd., Terracor Resources Canada Ltd. or Terracor Logistics Canada Ltd. The Monitor understands that these four entities have no assets situate in Saskatchewan. 8.4 The BLG Opinion lists a number of parties who appear to have registered security interests in, or lien claims in respect of various equipment and other assets in Alberta and British Columbia which could rank in priority to the Syndicate s Security. Likewise, the Saskatchewan Opinion contains search results demonstrating registrations in specific serial numbered and other equipment that could rank in priority to the Syndicate s Security. A listing of the equipment registered in Alberta, British Columbia and Saskatchewan that could rank in priority to the Syndicate s Security (the Canadian Potential Priority Registrations ) is attached hereto as Appendix B. 7

10 8.5 Further work by the Monitor s counsel is required to determine whether the Canadian Potential Priority Registrations do in fact rank in priority to the Syndicate s interests. This work may include but is not limited to determining the following: The validity and enforceability of the competing claims, including liens; The existence of any priority agreements or no interest letters entered into by the Syndicate and a competing claimant; The existence of any purchase money security interests; and Whether or not the asset description or serial number registered is accurate. 8.6 The Monitor has already commenced gathering the information from the claimants necessary to make the above noted priority determinations. However, pending completion of the analysis of the Canadian Potential Priority Registrations, the Monitor recommends that prior to any distribution of the Net Sale Proceeds to the Syndicate, the Company retains a holdback in the aggregate amount of CAD$1 million (the CPPR Holdback ). 8.7 In addition, the Monitor continues to work with its Canadian legal counsel to determine the existence of any statutory or other claims which may rank in priority or hold super priority status over the Syndicate s Security. 9. UNITED STATES SECURITY REVIEW 9.1 On June 20, 2016, the Monitor obtained from DCS a draft opinion (the DCS Opinion ) with respect to the Syndicate s collateral in the United States providing that each security agreement reviewed constitutes a valid and binding obligation of the grantor to the Syndicate and is enforceable against such grantor in accordance with its terms. 9.2 The DCS Opinion reviews various Uniform Commercial Code (the UCC ) registrations in Delaware, Montana and New York and states that the Syndicate has a perfected security interest in the assets of Sanjel (USA) Inc., Sanjel Capital (USA) Inc., Suretech Completions (USA) Inc. and Sanjel Energy Services (USA) Inc. (the Opinion Parties ), as applicable, to the extent such an interest can be created and perfected under the UCC by the filing of a financing statement in the appropriate office. 9.3 In addition, the DCS Opinion appends a schedule of the motor vehicles owned by the Borrowers or Guarantors, as the case may be (the Motor Vehicles ). The Monitor understands this schedule was provided by Sanjel Corporation. The Monitor further understands that upon searches completed by DCS of each vehicle identification number associated with each Motor Vehicle at the Montana Department of Justice Motor Vehicle Division Vehicle Search Service online database, DCS was able to determine the existence of liens and security interests registered against the motor vehicles. 8

11 9.4 The DCS Opinion indicates that, as of April 4, 2016, of the approximately 1,851 Motor Vehicles searched, there appear to be approximately 649 vehicles against which the Syndicate had not registered an interest by April 4, The DCS Opinion does not verify the validity or enforceability of the third party registrations against the Motor Vehicles, nor does it provide an outline of the nature of any other claims, either statutory or otherwise, that may rank in priority to the Syndicate s Security. Further work is required to determine the nature and existence of any such claims, which the Monitor understands may include tax or possessory or other lien claims. 9.6 The Monitor has commenced gathering information from the third parties maintaining registrations against the Motor Vehicles to determine the validity and enforceability of their claims. 9.7 Pending completion of the analysis of the potential priority registrations and claims noted above, the Monitor recommends that prior to any distribution of the Net Sale Proceeds to the Syndicate, the Company retains a holdback in the aggregate amount of CAD$1 million (the USPPR Holdback ). 10. UNPERFECTED EQUIPMENT 10.1 Of the 1,851 Motor Vehicles searched by DCS, 1,670 were Motor Vehicles with respect to which a Montana motor vehicle title could be obtained and were included in the Liberty APA. As at the date of the Initial Order, the Syndicate had perfected liens on 1,202 of these Motor Vehicles, leaving 468 of them unperfected ( Unperfected Equipment ) Conducting appraisals to obtain valuations of the Unperfected Equipment is not practical given the large number of units and their geographic locations. The process would also be expensive and time consuming Under the terms of the Court approved Liberty APA, Liberty has the authority to determine the allocation of the purchase price amongst the various categories of assets. The allocation by Liberty, as summarized in the table below, was based on the adjusted purchase price of USD$ million. The Monitor understands that Liberty performed extensive pre-closing due diligence on all of the assets under the Liberty APA. For this reason the Monitor has no cause to believe that the allocated values are unreasonable. Liberty APA Allocation $USD Tangible Capital Property 75,746,588 Capital Spares 15,846,638 Inventory 12,656,774 Adjusted Purchase Price 104,250, In order to understand the approximate market value of the Unperfected Equipment, the Monitor calculated, based on the allocated value of the Motor Vehicles in the Liberty APA, the proportionate aggregate net book values of the Unperfected Equipment relative to the proportionate aggregate net book values 9

12 of all Motor Vehicles included in the Liberty APA. The calculation is summarized in the table below: Calculation of Unperfected Equipment APA Value NBV of Motor Vehicles perfected before April 4, ,513,000 NBV of Unperfected Equipment on April 4, ,405,000 Total (USD) 280,918,000 Percentage of NBV of Unperfected Equipment 32% Tangible Capital Property Allocation per Liberty APA (USD) 75,746,588 Liberty APA value of Unperfected Equipment (USD) (32%) 24,376,759 Conversion rate for USD to CAD 1.30 Liberty APA value of Unperfected Equipment (CAD) 31,689, Based on this this calculation, the Monitor estimates the proportionate Liberty APA value of the Unperfected Equipment at approximately CAD$31.69 million The 104 units of Untitled Equipment described in the Liberty Transaction Post Closing Matters section above forms a subset of the Unperfected Equipment. As such, under the Liberty Escrow, the allocated Liberty APA value of the Untitled Equipment accounts for approximately CAD$7.21 million (Escrow Funds of USD$5.45 million converted at a rate of 1.3) of the total proportionate Liberty APA value of the Unperfected Equipment. 11. INTERIM LENDERS CHARGE SUPERPRIORITY 11.1 The Monitor understands that the Unperfected Equipment is not subject to a perfected security interest in the collateral held by the Syndicate pursuant to the Credit Agreement However, under the terms of the Interim Financing Agreement, a copy of which is attached as Appendix E to the Monitor s First Report, the Unperfected Equipment is secured by the Court approved Interim Lenders Charge which secures all of the existing and after acquired real and personal property of the Company As at the date of this report, the Interim Facility was drawn in the amounts of CAD$11.44 million and USD$28.8 million, for an approximate total of CAD$ million As the balance drawn on the Interim Facility is greater than the estimated value of the Unperfected Equipment, the Syndicate has valid and enforceable security over all of the Unperfected Equipment pursuant to the Interim Lenders Charge. The Monitor has obtained legal advice that payment of the Interim Facility from the proceeds of the Unperfected Equipment can be made in the circumstances given the provisions of the Interim Financing Agreement, the provisions of the U.S. Bankruptcy Code governing the Interim Facility and general common law principles regarding priorities. 10

13 11.5 Other than as described in this report in Section 3 (in connection with the Untitled Equipment) and Section 10 (as to the Unperfected Equipment), the Net Sale Proceeds are the cash collateral of the Syndicate pursuant to the Credit Agreement. The Syndicate has consented to the use of such proceeds conditional upon receiving a charge against the Escrow Funds, if any, remaining after payment of the operating and wind-down expenses and other charges Based on the above, the Monitor is of the view that the Interim Facility should be repaid: first from the proceeds of the sale of the Unperfected Equipment; and then from the Net Sale Proceeds. 12. CAMERON BARTON CLAIM 12.1 Cameron Barton, the former chief financial officer of the Company from June 1, 2010 to January 8, 2015, filed an application in these proceedings on May claiming entitlement to $484,134 from the proceeds of the STEP transaction (the Barton Claim ) Based on the Affidavit filed by Mr. Barton in support of his application, Mr. Barton alleges that as a result of a settlement agreement he entered into with the Company effective December 9, 2015 (the Barton Settlement Agreement ), and given the language of section 6.7(a) of the STEP APA, he is entitled to payment of $484,134 from the STEP proceeds Section 6.7(a) of the STEP APA states: Immediately prior to the Effective Time, the Vendors will terminate all employees and contractors of the Vendors who perform their employment duties primarily in respect of the Purchased Business, and shall pay all workers compensation premiums that are due and owing as of the Closing Date and accrued or earned and outstanding compensation and fees owing to all such employees and contractors as of the Closing Date including salary, wages, overtime, benefits, fees, commissions, bonuses, incentive payments, sick leave pay, vacation and holiday pay, and the Vendors shall provide the Purchaser with evidence of the discharge of such obligations. In addition to the foregoing, the Vendors shall be responsible for paying all claims for pay in lieu of notice and severance to such terminated employees The Monitor s understanding of section 6.7(a) of the STEP APA is that this provision is intended to protect STEP against liability for the identified claims, and it addresses the claims of any employees who were employed with the Company immediately prior to the Effective Time of the STEP APA, and not those employees who were previously terminated by the Company, including Mr. Barton who was terminated effective January 8, As such, based on the evidence currently reviewed, the Monitor understands the remaining payments owing to Mr. Barton under the Barton Settlement 11

14 Agreement totalling $484,134 represent an unsecured claim by Mr. Barton against the Company However, as of the date of writing this Distribution (Ninth) Report, the Barton Claim has not been heard or determined by the Court. As such, the Monitor seeks the advice and direction of this Court as to whether the Barton Claim should be included in the overall Holdback (as defined below). 13. APPLICATION FOR INTERIM DISTRIBUTION TO SYNDICATE 13.1 On June 27, 2016, the Company will be making application to the Court for an Order authorizing an interim distribution from Net Sale Proceeds to the Syndicate On July 6, 2016, the Company will be making a similar application to the U.S. Bankruptcy Court under the Chapter 15 Proceedings The Monitor is of the view that an interim distribution of Net Sale Proceeds to the Syndicate is appropriate in the circumstances, but should be subject to a holdback ( Holdback ) as the Company needs to retain sufficient funds to: protect priority charges granted pursuant to the Initial Order; provide sufficient liquidity to allow the Company to: continue operations as it sells the remaining assets; continue the administration of the Company including the continued administration of the U.S. Chapter 15 Proceedings, finalizing and obtaining a final decree in the U.S. Chapter 15 Proceedings and effecting the dissolution of corporate entities; address payment of liens in Canada and the U.S. which are eventually determined to be valid, enforceable and payable in the circumstances; collect accounts receivable and address third party claims associated with these receivables; and wind down its business (as projected in the June 11 CFF) and dissolve various Company entities. The supplemental funding ( Supplemental Funding ) required to ensure operational liquidity through to December 31, 2016 is discussed in more detail below protect the potential tax liens that may be outstanding in Canada and the U.S; and provide for the disputed portion of the fees of PJT, CS and Wells Fargo Securities which they are claiming but which were not fully secured by the Financial Advisors Charge in the Initial Order (as described below). 12

15 13.4 The Supplemental Funding has been determined using the following assumptions: the timing for the collection of accounts receivable for the period July to December 2016 is uncertain due to the vendor and third party liens currently outstanding on customers properties the potential for additional liens to be filed and assertions by customers of rights related to vendor and third party claims. As a result, the projected collection of accounts receivables and the associated payment of pre-filing expenditures have been excluded from the Supplemental Funding calculation; payment of the Interim Facility is assumed to occur in July 2016 from proceeds of the sale of Unperfected Equipment and Net Sale Proceeds; for simplicity, the projected cash balance as at June 30, 2016 has been used as the starting point for the calculation; and the aggregate operating costs, restructuring fees and interest payments for the period July to December 2016 are deducted from the opening cash. The calculation of the Supplemental Funding is summarized in the table below: (CAD $000's) Opening Cash at June 30, ,673 Less July to December, 2016: Operating expenses (1,159) Salaries (2,158) Lease payments (138) Restructuring (5,083) Interest Payments (9,565) (18,104) Supplemental Funding (10,431) 13.5 The Monitor s calculation of its recommended Holdback and distribution to the Syndicate (the Interim Distribution ) is set out in Appendix C to this report and summarized in the table below: 13

16 Net Sale Proceeds (CAD$000's) Liberty APA 118,021 STEP APA 122,098 Total 240,118 Holdback CCAA Charges (assuming KERP Charge reduced) (86,395) Supplemental Funding to December 31, 2016 (10,431) Other holdbacks (4,373) (101,198) Net amount 138,920 Estimated Interim Distribution (rounded) 139, FINANCIAL ADVISORS CHARGE 14.1 The Initial Order provides for a Financial Advisors Charge with an aggregate amount of USD$6.1 million for the benefit of CS and PJT As both the STEP and Liberty transactions have now closed, the Company is of the view that the aggregate amount of USD$6.1 million has been earned and is now due and payable to CS and PJT Under the terms of their engagement letters with the Company (attached as Exhibits 14 and 15 to the Crilly Affidavit sworn on April 4, 2016), CS and PJT are owed USD$3.1 million and USD$4.325 million respectively Prorating the USD$6.1 million available under this charge would result in payments of USD$2,529,766 to CS and USD$3,570,234 to PJT The Monitor is of the view and recommends that CS and PJT should be paid their pro-rata share of the amount available under the Financial Advisors Charge from the Net Sale Proceeds The Monitor understands that CS and PJT are asserting a claim for priority payment of the portion of their fees not covered by the Financial Advisors Charge. This shortfall amounts to USD$1.375 million or CAD$1.788 million (converted at a rate of 1.3) The Initial Order also provides for a Financial Advisors Charge in the amount of USD$0.5 million (or CAD$0.65 million converted at a rate of 1.3) for the benefit of Wells Fargo Securities. The Monitor s recommendations with respect to the payment of this amount will be provided at such time as the Company makes an application for distribution of proceeds from the sales of Suretech and Terracor Under the terms of their engagement letter with the Company (attached as Exhibit 13 to the Crilly Affidavit sworn on April 4, 2016), the maximum fee payable to Wells Fargo Securities upon the successful sale of both Suretech and Terracor is CAD$2.5 million. The portion of this fee not covered by the Financial Advisors Charge is CAD$1.85 million. The Monitor understands that Wells 14

17 Fargo Securities is asserting a claim for priority payment of the portion of its fees not covered by the Financial Advisors Charge Pending determination of the status of the shortfall amounts to CS, PJT and Wells Fargo Securities, the Monitor has included the full amounts of the fee shortfalls being claimed by the Financial Advisors in the Holdback. 15. ACTUAL CASH FLOWS FOR APRIL 23 to JUNE 10, The Company s actual cash flow for the period of April 23, 2016 to June 10, 2016 compared to the Apr 29 CFF filed in the Monitor s Fifth Report (along with cumulative actual cash flows from April 4, 2016 to June 10, 2016) is summarized below: Sanjel Corporation - CCAA April 23 to June 10, 2016 (CAD $000's) Cumulative Actual Forecast Actual Variance April 4-June 10 Operating receipts Accounts receivable collections 39,759 29,328 (10,431) 52,119 Total operating receipts 39,759 29,328 (10,431) 52,119 Operating disbursements Pre-filing amounts paid 26, ,647 2,353 Operating expenses 18,597 18, ,040 Salaries and benefits 30,080 29, ,473 Leases 6,705 6, ,341 Other outflows 6,053 5, ,844 Total operating disbursements 87,928 59,553 28,375 82,052 Net change in cash from operations (48,169) (30,225) 17,944 (29,933) Capital Expenditures 2,917-2,917 1,275 Restructuring Fees 7,930 7, ,667 Total net change in Cash (59,016) (37,353) 21,663 (40,875) Cumulative Interim Financing 45,355 49,012 3,657 49,012 Opening available cash 34,933 34,933-31,914 Total net change in cash flow (59,016) (37,353) 21,663 (40,875) Interim financing fees and interest (272) (40) 232 (40) RCF fees and interest - (4,904) (4,904) (4,904) Interim financing draws (repayments) 38,355 42,012 3,657 49,012 F/X on Cash Balances - (358) (358) (817) Ending available cash 14,000 34,291 20,291 34,291 15

18 15.2 Variances between forecasted and actual cash flows for the period of April 23, 2016 to June 10, 2016 are primarily timing in nature, including the reversal of timing differences realized from the Monitors Fifth Report. The Monitor s comments are as follows: accounts receivables collections had an unfavorable variance of CAD$ million. This timing difference is primarily due to an increase in lien activity on the Company s customers wells, who in turn have slowed their payments to the Company. This is forecasted to reverse as the Company settles lien claims, prompting the receivables collection to pick up accordingly as liens are removed from customers wells; pre-filing amounts paid had a favorable variance of CAD$ million, a timing difference expected to reverse in coming months as lien claims are reviewed and settled by the Company; operating expenses had a favorable variance of CAD$0.348 million, a timing difference expected to reverse in the coming months; salaries and benefits had a favorable variance of CAD$0.934 million as a result of realizing timing differences noted in the Monitor s Fifth Report; lease payments had a permanent favorable variance of CAD$0.501 million as actual payments were slightly less than forecast due to reduced operations; other cash outflows had a permanent favorable variance of CAD$0.946 million primarily due to lower than anticipated credit card usage from reduced operations; capital expenditures had a favorable variance of CAD$2.917 million, primarily a permanent difference as a result of capital requirements being less than anticipated prior to the execution of APA s; restructuring fees had a favorable variance of CAD$0.802 million, a timing difference expected to reverse in the coming months; interim financing fees and interest had a favorable variance of CAD$0.232 which is expected to reverse in the coming months; RCF fees and interest had a negative variance of CAD$4.904 million as these expenditures were not included in the April 29 CFF; and the outstanding interim financing balance as of June 10, 2016 was CAD$49 million as compared to the forecasted balance of CAD$45.4 million and is a result of the variances discussed above. 16

19 16. REVISED CASH FLOW FORECAST 16.1 The June 11 CFF represents a revised cash flow forecast prepared covering the period for the weeks ending June 11, 2016 to December 31, The Company is forecasting no operations, collection of accounts receivables and payment of liens. The Company s detailed June 11 CFF is attached as Appendix D to this report and is summarized below: Sanjel Corporation- CCAA Six Month Consolidated Cash Flow Forecast June 11, 2016 to December 31, 2016 (CAD $000's) June July - Dec Total Operating receipts ,451 95,207 Operating disbursements 20,194 40,586 60,779 Net change in cash from operations (19,438) 53,865 34,427 Capital Expenditures 1,248-1,248 Restructuring Fees 3,335 5,083 8,419 Total net change in cash (24,021) 48,782 24,761 Opening cash 34,291 7,673 34,291 Total net change in cash flow (24,021) 48,782 24,761 Interim financing fees and interest (247) (247) (494) RCF fees and interest (2,350) (9,318) (11,668) Net Interim financing draws (repayments) - - Ending cash 7,673 46,890 46, Based on the foregoing, the Monitor considers the Company s liquidity sufficient for the forecast period The Monitor's conclusions from its review of the June 11 CFF pursuant to section 23(1)(b) of the CCAA are as follows: The June 11 CFF has been prepared by the Company for the purpose described in the General Note, using the Probable and Hypothetical Assumptions set out in Notes 1 to 11 in the June 11 CFF The Monitor's review of the June 11 CFF consisted of inquiries, analytical procedures and discussion related to information supplied to the Monitor by management and employees of the Companies. Since Hypothetical Assumptions need not be supported, the procedures with respect to them were limited to evaluating whether they were consistent with the purpose of the June 11 CFF. The Monitor has also reviewed the support provided by management of the Companies for the Probable Assumptions, and the preparation and presentation of the June 11 CFF Based on the Monitor's review of the information provided by the Company, the data indicates that, in all material respects: The Hypothetical Assumptions appear to be consistent with the purpose of the June 11 CFF; 17

20 As at the date of this report, the Probable Assumptions developed by management appear suitably supported and consistent with the plans of the Companies and provide a reasonable basis for the June 11 CFF, given the Hypothetical Assumptions; and The June 11 CFF appears to reflect the Probable and Hypothetical Assumptions Since the June 11 CFF is based on Assumptions regarding future events, actual results will vary from the information presented even if the Hypothetical Assumptions occur, and the variations may be material. Accordingly, the Monitor expresses no assurance as to whether the results shown in the June 11 CFF will be achieved. The Monitor also expresses no opinion or other form of assurance with respect to the accuracy of any financial information presented in this report, or relied upon by it in preparing this report The June 11 CFF has been prepared solely for the purpose described in the General Note and readers are cautioned that it may not be appropriate for other purposes. 17. RECOMMENDATIONS 17.1 The Monitor respectfully recommends that this Honourable Court approve: the Transition KERP and an Order reducing the KERP Charge to CAD$0.565 million; repayment of the Interim Facility first from the proceeds of sale of the Unperfected Equipment and then from the Net Sale Proceeds; an Interim Distribution to the Syndicate from the Net Sale Proceeds in the amount of CAD$139 million on the basis that: the drawdowns under the Interim Facility are repaid first from the proceeds of the Unperfected Equipment and then from the Net Sale Proceeds; payments to CS and PJT in the respective amounts of USD$2,529,766 and USD$3,570,234 from the Net Sale Proceeds; and the Monitor retain a Holdback from the Net Sale Proceeds in the amount of CAD$96.83 million to: protect the CCAA Charges (including the Administration Charge, Interim Lenders Charge, Credit Card Charge, Directors Charge, KERP Charge (as reduced), Financial Advisors Charge and Critical Suppliers Charge) totalling CAD$ million; 18

21 provide Supplemental Funding to support the Company for its ongoing operations and the wind down of its business through to December 31, 2016, estimated to be in the amount of CAD$ million; continue the administration of the U.S. Chapter 15 Proceedings; satisfy amounts which may be owing in respect of Canadian Potential Priority Registrations and other liens senior to the claims of the Syndicate, to the extent they are found to be valid, enforceable and payable in the circumstances, in the aggregate amount of CAD$2 million; protect the potential claims of the Financial Advisors with respect to shortfalls of up to CAD$3,637,500 on their collective contractual fees; and the remaining balance of the Net Sale Proceeds and the balance, if any, of the Escrow Funds be applied against the outstanding amounts owing under the Syndicate s Credit Agreement subject to the Company s future request for a subsequent interim distribution. This report is respectfully submitted this 20 th day of June, PricewaterhouseCoopers Inc. Court Appointed Monitor of Sanjel Corporation et al Paul Darby Senior Vice President Rick Osuna Vice President 19

22 APPENDIX A List of Disclaimer Notices

23 MONITOR'S DISTRIBUTION (Ninth) REPORT TO COURT 20-Jun-16 APPENDIX A Real Property Leases- Canada Number Lessor Type Location Date of Monitor's Notice 1 MacBain Properties Ltd Housing 602, th Ave SW, Calgary 4-Apr MacBain Properties Ltd Housing 2512, 618-5th Ave SW, Calgary 4-Apr MacBain Properties Ltd Parking 622-5th Ave, Calgary 4-Apr MacBain Properties Ltd Storage 622-5th Ave, Calgary 4-Apr MacBain Properties Ltd. Office 622-5th Ave, Calgary 4-Apr MacBain Properties Ltd Shop/Office Brooks, AB 4-Apr MacBain Properties Ltd Land 4750 & Ave Ft. Nelson BC 4-Apr MacBain Properties Ltd Shop/Office St High Level AB 4-Apr MacBain Properties Ltd Mancamp Lac La Biche Mancamp, AB 4-Apr MacBain Properties Ltd Mancamp Lac La Biche Mancamp, AB 4-Apr MacBain Properties Ltd Shop/Office 1901 Dickson Drive Redcliff AB 4-Apr MacBain Properties Ltd Shop/Office th Ave SE, Calgary 6-Apr MacBain Properties Ltd Shop/Office th Ave SE, Calgary 6-Apr Sanjel Canada Ltd Shop/Office th Ave SE, Calgary 6-Apr MacBain Properties Ltd Shop/Office Ave, Clairmont, AB (Bay 1) 4-Apr MacBain Properties Ltd Shop/Office Ave, Clairmont, AB (Bay 2) 4-Apr MacBain Properties Ltd Shop/Office N1, Ave W, Kindersley, SK 13-Jun MacBain Properties Ltd Shop/Office Ave SE, Calgary, AB 13-Jun MacBain Properties Ltd Shop/Office A Street Close, Red Deer AB 29-Apr MacBain Properties Ltd Shop/Office Ave, Peace River AB 29-Apr-2016 Real Property Leases- USA Number Lessor Type Location Effective Rejection Date 17 MacBain Properties Ltd Shop/Office Buffalo, WY 30-Apr MacBain Properties Ltd Bulk Plant Catarina, TX 30-Apr MacBain Properties Ltd Office Houston, TX 30-Apr MacBain Properties Ltd House Williston, ND 30-Apr Sanjel (USA) Inc. House Williston, ND 30-Apr MacBain Properties Ltd Mancamp Bainville, MT 30-Apr MacBain Properties Ltd Mancamp Catarina, TX 30-Apr MacBain Properties Ltd Trailers Williston, ND (Cimarron) 30-Apr MacBain Properties Ltd Trailers Williston, ND (Sandcreek) 30-Apr MacBain Properties Ltd Shop/Storage Unit A, th Street, Greeley, CO 30-Apr MacBain Properties Ltd Shop & Office 3350 Kermit Hwy, Odessa, TX 30-Apr MacBain Properties Ltd Shop & Office 5817 Baldwin Lane, Williston, ND 30-Apr Suretech Completions (USA) Inc. Shop & Office 5817 Baldwin Lane, Williston, ND 30-Apr MacBain Properties Ltd Mancamp Bainville, MT 30-Apr Sullivan Construction Inc. Apartments 2317, 2319 & Ave W, Williston, ND 30-Apr-2016

24 MONITOR'S DISTRIBUTION (Ninth) REPORT TO COURT 20-Jun-16 APPENDIX A Equipment Leases- Canada Number Original Lessor Lease Assigned To Lease Reference VIN Location Date of Monitor's Notice 1 GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEDR9CPBM9645 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 53UC04432CPG15424 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEDR7DPBZ7291 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 2PLC04939DBH16470 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 2ATC12127CU Red Deer 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 2ATD02201DU Red Deer 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 2ATD02203DU Red Deer 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 2PLC0442XDBM16688 Other 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEDRXCPBK8996 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 53UC04539CPG15421 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEDR7CPBM9644 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 53UC04530CPG15422 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEDR7CPBM9658 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 53UC04430CPG15423 Medicine Hat 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 5KJJAEBG1CPBM9642 Red Deer 4-Apr GE Canada Leasing Services Company Key Equipment Finance Canada Ltd A 4J8B05139CT Red Deer 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJJAEDR1CPBK9308 Edmonton 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 1PMB13120D Edmonton 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 1PMB13637D Edmonton 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJJAEDR1DPBZ7285 Red Deer 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 4J8B03926DT Red Deer 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJJAEDR3DPBZ7286 Peace River 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 4J8B03928DT Peace River 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJJAEDR7DPBZ7288 Swift Current 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 4J8B03839DT Swift Current 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJRALBG0CPBK9003 Red Deer 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 2PLC04431CBJ15427 Red Deer 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A Other 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 5KJJAEDR8CPBK8995 Medicine Hat 4-Apr GE Canada Leasing Services Company Concentra Financial Services Association A 53UC04430CLF15412 Medicine Hat 4-Apr-2016 Equipment Leases- USA Number Original Lessor Lease Assigned To Lease Reference VIN Location Effective Rejection Date 4 Banc of America Leasing & Capital, LLC N/A Schedule 1 1B9U6FA29CT Other 31-May Banc of America Leasing & Capital, LLC N/A Schedule 1 1B9U6FA20CT Other 31-May Banc of America Leasing & Capital, LLC N/A Schedule 1 1M91S4420CA Other 31-May Banc of America Leasing & Capital, LLC N/A Schedule 1 1S9DF4036DH Williston 31-May Banc of America Leasing & Capital, LLC N/A Schedule 1 1S9DF4031DH Williston 31-May Banc of America Leasing & Capital, LLC N/A Schedule 1 1S9DF4035DH Williston 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC3FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC0FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC1FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC0FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC4FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC6FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 2T9SASVC1FD Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1M91S4929CA Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1TTF482S6D Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1M91S3925CA Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1M91P4019EA Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1M91P4010EA Odessa 31-May Banc of America Leasing & Capital, LLC N/A Schedule 2 1B9U6FA23CT Odessa 31-May-2016