Mitra to Acquire 100% Interest in Stag Oilfield

VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 26, 2016) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO US NEWSWIRES

Mitra Energy Inc. (TSX VENTURE:MTE) ("Mitra") is pleased to announce that Mitra Energy (Australia) Pty Ltd ("Mitra Australia"), a wholly owned subsidiary of Mitra, as buyer, and Mitra, as guarantor, have signed a definitive Sale & Purchase Agreement ("SPA") with Quadrant Northwest Pty Ltd and Santos Offshore Pty Ltd, as sellers, for the acquisition (the "Acquisition") of a 100% interest in the Stag Oilfield for total cash consideration of US$10 million plus adjustments to reflect an economic effective date of July 1, 2016 and potential contingent payments as further described below. Highlights of the transaction are as follows:

• The Acquisition will provide Mitra with a 1P reserve base of 10.1MMstb
• Mitra will operate the Stag Oilfield as 100% owner of the asset
• The Stag Oilfield is currently producing circa 3,750bopd
• The Field includes a number of identified low-risk in-field development opportunities

The Stag Oilfield, which is located 60km offshore Western Australia in the Carnarvon Basin and in a water depth of approximately 47 metres, has been in production since 1998 and is currently producing circa 3,750 barrels per day from 10 active wells. Mitra has commissioned a reserve report from Gaffney Cline & Associates, a qualified independent reserves evaluator, prepared in accordance with the COGE Handbook, which estimates that the Stag Oilfield has the following reserves as at July 1st, 2016:

ASSET ACQUISITION HIGHLIGHTS
Production (1)	3,750 bopd
Total Proved Reserves(2)	10.1 MMstb
Proved plus Probable Reserves(2)	14.6 MMstb
Proved plus Probable plus possible Reserves(3)	18.6 MMstb

Notes:

(1) Based on current field estimates.

(2) Based on the Gaffney Cline & Associates Report as at July 1st, 2016.

(3) Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will be equal or exceed the sum of proved plus probable plus possible reserves.

ACQUISITION METRICS

1P reserves: US$1.0/bbl, 2P reserves: US$0.7/bbl and 3P reserves: US$0.5/bbl

US$2,667 per producing bopd in 2016

2P NAV is US$59 million at US$61/bbl in 2018

A. Paul Blakeley, Executive Chairman of Mitra said, "We are delighted with this very important acquisition of the producing Stag Oilfield, which puts Mitra on a path of transformation to becoming a leading upstream production operator in the Asia Pacific region. This acquisition is cash generative from day one and provides a solid base for future growth. It creates the opportunity to demonstrate efficient and safe operating capability, consistent with what the new management team at Mitra have done in the past in Asia Pacific with Talisman Energy, and will leverage these skills to add value through further infill drilling activity, cost reduction and reservoir management. This is exactly the type of asset we are looking to invest in with deep value multiples, and we are very excited to be taking this first step towards building a business which takes advantage of the current market in a low oil price environment, with an increasing set of opportunities where we can best leverage our experience."

The proposed Acquisition will see Mitra acquire 100% operatorship and full ownership of the assets in production and development, with the potential to further expand the drilling and production activities at the Stag Oilfield. Mitra has identified various cost reduction measures to continue to lower operating costs for the field. Future activities planned for Stag Oilfield include 1 appraisal pilot and 3 infill producers in the West area in 2017 and up to three further wells in the East area in 2018. Mitra will also consider appraisal activities in the undrilled low risk exploration area of Hart and Stag South. The proposed Acquisition will be effective from 1 July 2016, resulting in an immediately cash-generating asset for Mitra.

In connection with the proposed Acquisition, Mitra will be conducting a private placement (the "Private Placement") to raise a total of up to C$65 million (approximately US$50 million). A significant portion of the Private Placement will be subscribed for by certain of Mitra's major shareholders who have signed letters of support for the acquisition and financing, and have indicated their intent to participate in the financing. Mitra will accommodate subscription orders from all existing shareholders on a pro-rata basis, along with such major shareholders; however, the Offering has been structured with the intent of providing enhanced liquidity to new and existing shareholders to position Mitra for future growth opportunities via acquisition and follow-on equity offerings. The proceeds of the Private Placement will be used to fund: (i) the purchase price for Stag; (ii) a bank guarantee or letter of credit (the "Guarantee") in the amount of US$10million to be provided to a key contractor to the Stag Oilfield to support Mitra Australia's obligations under a long term contract; (iii) US$20 million for further appraisal and infill drilling as described above and; (iv) working capital.

Pursuant to the terms of the SPA, Mitra Australia will acquire all assets relating to the Stag Oilfield including the petroleum titles (comprising of production licence WA-15-L and pipeline licence WA-6-PL). Mitra Australia will be required to pay US$10 million on closing of the Acquisition and provide the Guarantee as discussed above. Mitra may also be responsible for certain contingent payments after 2017 of up to US$15 million which are linked to future expansion of the oilfield and oil price appreciation above agreed price levels.

Completion of the proposed Acquisition is conditional on obtaining all required regulatory approvals (including TSX Venture Exchange approval, Australian Foreign Investment Review Board approval and National Offshore Petroleum Titles Administrator approval and registration of the SPA), the parties entering into a transitional services agreement and novation agreements being entered into in respect of key agreements relating to the Stag Oil Field. It is anticipated that closing will occur in early to mid-September 2016.

About Mitra Energy Inc.

Mitra Energy Inc. is TSX-V listed oil and gas company headquartered in Kuala Lumpur, Malaysia. The company is currently engaged in exploration, appraisal and pre-development activities in the Philippines, Vietnam and Indonesia. Following a recent strategic review, the company is focusing on acquiring production in the near term and further enhancing value through follow-on development activity.

Cautionary Statements

This press release may contain forward-looking information and statements ("forward-looking information") within the meaning of applicable securities laws. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements. The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, its securities, or financial or operating results or (as applicable). Although the Company believes that the expectations reflected in our forward-looking information is reasonable, our forward-looking information has been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control. We caution that the forgoing list of risks and uncertainties is not exhaustive.

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