The Government of Quebec and Maurel & Prom Agree to Invest $100 million to Complete Exploration Work on Anticosti Island

QUÉBEC CITY, QUÉBEC--(Marketwired - Feb. 13, 2014) - Pétrolia (TSX VENTURE:PEA) is pleased to announce that, in accordance with its business plan, it has signed a letter of intent to create a strategic partnership in order to complete a significant exploration work program on Anticosti Island.

The Government of Québec, through its affiliate Ressources Québec, and Établissements Maurel et Prom (MAU-PA) ("Maurel & Prom"), the second largest French oil and gas company with a market capitalization of $1.8 billion Euros and a gross production of 29 000 bopd, have agreed to form a partnership with Pétrolia and Corridor Resources (CDH-TO) ("Corridor") in order to complete the exploration work necessary to demonstrate the commercial viability of the hydrocabon resources on Anticosti Island.

Pétrolia and Corridor will each transfer all of their respective petroleum exploration licenses to the new partnership. Ressources Québec and Maurel & Prom have, together, agreed to contribute up to $100 million to finance the proposed exploration work program on the island. The partnership will hire Pétrolia to act as operator for the project.

Details of the Transaction

Ressources Québec and Maurel & Prom have agreed to a pre-money valuation of $100 million for the exploration permits and have committed to finance up to $100 million of exploration work, in two phases, for an ownership of 50% of the partnership. Of this $100 million, Ressources Québec has committed to invest up to $56.67 million in exchange for an interest of 28.3% and Maurel & Prom has committed to invest up to $43.33 million for an interest of 21.7%. In order to ensure an equal participation by the three public oil and gas companies and to allow for an interest of 35% by Ressources Québec, Pétrolia and Ressources Québec shall pay, respectively, $1.9 million and $13.3 million to Corridor in exchange for an interest of 0.97% and 6.67% respectively in the partnership. As a result, at the completion of the series of transactions, the parties will, initially and subject to certain conditions, have the following ownership interest in the partnership: Ressources Québec - 35%, Pétrolia - 21.7%, Maurel & Prom - 21.7% and Corridor - 21.7%.

The partnership will be managed by a general partner. The board of directors of the general partner will be composed of one representative from each of the four partners as well as an independent director named by the partners. The representative of Ressources Québec will act as Chair of the board.

The board of directors will establish an operating committee to oversee the work to be completed by the partnership as well as a technical committee to provide advice. These committees will be composed of an equal number of representatives from each of the parties. A representative of Pétrolia, as operator, will act as Chair of the operating committee and the technical committee.

Details of the initial exploration program

Pétrolia, as operator, and Maurel & Prom, as assistant technical operator, will bring together the best resources from the three public oil and gas companies and will retain the assistance of the best experts, in order to complete the exploration work program.

The first phase of the program is expected to commence in the summer of 2014 and will be completed over the following two years. The program will initially involve the drilling of 15-18 stratigraphic survey wells which will provide additional geological information and assist in choosing the location for 3 petroleum wells that are expected to be drilled and completed in the second year of the program. The total budget for this initial exploration phase is expected to be $55 million, but shall not exceed $60 million.

In the event of a favorable decision of the board of directors of the general partner to proceed to a second exploration phase, an additional drilling program will be pursued and the first $40-45 million of this phase will be funded by Ressources Québec and Maurel & Prom.

Once the partnership shall have spent a minimum of $35 million of the capital contributions made by Ressources Québec and Maurel & Prom and subject to minimum work having been completed, Maurel & Prom has the right to discontinue funding the partnership and, in such case, it shall have no right nor ownership whatsoever in the partnership.In the event Maurel & Prom withdraws from the partnership, Ressources Québec shall commit to fund in the aggregate $13.3 million and Pétrolia and Corridor shall commit in the aggregate $6.7 million in order to complete the initial exploration phase. As a result, Ressources Québec's interest in the partnership shall be increased to 50%, Pétrolia's interest to 25% and Corridor to 25% of the partnership.

Next Step

The closing of the transaction, which is expected to occur on or before March 31, 2014, is subject to the completion of formal documents and the receipt of all necessary approvals, including the approval of the TSX-V. Following closing the board of directors of the general partner will meet to put in place all necessary committees and resources to allow the partnership to proceed as soon as possible with the proposed exploration work program, which is expected to commence in summer 2014.

To assist with this transaction, Pétrolia and Corridor have retained National Bank Financial as financial advisors. In addition, Pétrolia has relied on legal advice from Davies, Colby Monet and Parlee McLaws.

Myron Tetreault, President and CEO of Pétrolia stated the following: "The partnership announced today has the potential to be transformative for our company and for the Province of Quebec. This investment by the Government of Quebec and Maurel & Prom validates the work done by Pétrolia and Corridor during the last few years to demonstrate the significant hydrocarbon potential on Anticosti Island and could allow us to unlock the value of these resources for the benefit of our stakeholders, the local population and the Province of Quebec." Alexandre Gagnon, Executive VP of Pétrolia added, "The partnership, with Pétrolia as operator, will seek to complete this exploration work program in consultation with the local population and using the best industry standards for the safety and security of its workers and the protection of the environment. Pétrolia is proud of the work it has done to date and is excited by this opportunity to contribute to the development of the Province of Quebec through the establishment of a local oil industry."

About Pétrolia

Pétrolia is a junior oil and gas exploration company which owns interests in oil and gas licenses covering 16,000 km² (4 million acres), which represents about 22% of the Québec territory under lease. The leases, the majority of which are located on the Gaspé Peninsula and Anticosti Island, are considered to be very promising and represent almost 71% of the territory under lease for which there is land-based oil potential in Québec. Pétrolia has 70 667 372 shares issued and outstanding.

About Corridor

Corridor is an Eastern Canadian junior resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick and Québec and offshore in the Gulf of St. Lawrence. Corridor currently has natural gas production and reserves in the McCully Field near Sussex, New Brunswick and crude oil reserves in the Caledonia Field near Sussex, New Brunswick. In addition, Corridor has contingent resources and discovered resources in Elgin, New Brunswick and undiscovered resources on Anticosti Island, Québec where Corridor has ongoing exploration projects.

About Ressources Québec

As a subsidiary of Investissement Québec, Ressources Québec is the gateway for companies seeking to invest in the mining and oil and gas industries. Ressources Québec supports resource companies at every stage of their projects, from exploration and development through to processing. It offers a full range of financial products, including investments in equity, debentures and various types of loans.

About Maurel & Prom,

A worldwide presence, a diversified oil & gas portfolio

As a mid-size oil & gas Company listed on the Paris market (in EUR), Maurel & Prom has proven experience as an oil operator with a presence in Africa and latin America. In 10 years, the Group has designed oil systems, drilled more than 100 exploration wells will a success rate of more than 46% and discovered major fields at minimum cost. Currently working in 12 countries on 4 continents, Maurel & Prom is extremely focused on exploration and maximisation of the value of its acreage. That is why the company's management is comprised exclusively of professionals with strong track records in the oil & gas industry

Forward-looking statements

Certain statements made herein may constitute forward-looking statements. These statements relate to future events or the future economic performance of Pétrolia and carry known and unknown risks, uncertainties and other factors that may appreciably affect their results, economic performance or accomplishments when considered in light of the content or implications or statements made by Pétrolia. Actual events or results could be significantly different. Accordingly, investors should not place undue reliance on forward-looking statements. Pétrolia does not intend and undertakes no obligation to update these forward-looking statements.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.