ANNUAL REPORT 2011 - Connacher Oil and Gas

AR 2011
PG 74
The following provide the details of unrecognized deductible temporary differences, unused losses and unused tax credits for which no deferred tax
asset has been recognized:
As at December 31
2011 2010
(Canadian dollar in thousands)
Non-capital losses $ 1,138 $ 1,138
Capital losses 155,700 82,202
Successor Canadian resource tax pools 4,151 4,151
Unused tax credits $ 3,388 $ 3,388
The unrecognized non-capital losses expire in 2026, capital losses and successor Canadian resource tax pool do not have a set expiration and the
unused tax credits expire in 2029 and 2030.
The company has specific tax matters under discussion with tax authorities, the outcome of which is uncertain. Where the outcome of these matters is
different from the amounts currently recorded, such differences will be recorded in net earnings (loss) in the period in which such determination is made.
17. SHARE CAPITAL
Authorized: unlimited number of common voting shares with no par value
Authorized: unlimited number of first preferred shares with no par value of which none are outstanding
Authorized: unlimited number of second preferred shares with no par value of which none are outstanding
17.1 Issued and outstanding common share capital
For the year ended December 31 2011 2010
Number Canadian dollar in
thousands
Number Canadian dollar in
thousands
Balance, beginning of year 447,167,694 $ 618,628 427,031,362 $ 593,119
Issued for cash on flow–through basis
net of premium of $2,272 – – 17,480,000 23,074
Shares issued upon exercise of stock options 810,088 752 2,017,836 1,936
Transfer from contributed surplus – share awards 282,209 534 638,496 480
Transfer from contributed surplus – stock options 423 1,082
Share issue cost, net of tax – (71) – (1,063)
Balance, end of year 448,259,991 $ 620,266 447,167,694 $ 618,628
Weighted average common shares outstanding
basic and diluted 448,024,574 432,257,947
In October 2010, the company issued 17,480,000 common shares on a flow–through basis at a price of $1.45 per common share for gross proceeds
of $25.3 million and renounced the qualifying expenditures to investors effective December 31, 2010. A premium of $2.3 million representing
the difference between the gross proceeds and the share price of the company on the date of issue was initially recognized in trade and accrued
payables and was subsequently recorded as a deferred tax provision on the renouncement of the qualifying expenditures on December 31, 2010.
18. Stock Option Plan, SHARE AWARD INCENTIVE Plan and SHARE UNIT Plan
18.1 Stock Option Plan
The company has a Stock Option Plan for all officers, employees and consultants permitting the issue from time to time of options entitling the
holders to acquire common shares. Options are granted at the discretion of the Board of Directors. The options have a term of five years to maturity
and vest annually over a two to three year period. The maximum number of common shares reserved for issuance pursuant to the Stock Option Plan
is ten percent of the issued common shares of the company from time to time, less four million common shares reserved for issuance under Share
Award Incentive Plan and less the number of common shares reserved for issuance for outstanding grants pursuant to the Share Unit Plan.