Gordon Creek Energy Inc.
TSX VENTURE : GDN

Gordon Creek Energy Inc.

March 11, 2015 09:00 ET

Interim Financing - Termination of Sandstorm Streaming Agreement

CALGARY, ALBERTA--(Marketwired - March 11, 2015) - Gordon Creek Energy Inc. (TSX VENTURE:GDN) (the "Company") today announced that it has entered into an agreement with Excalibur Partners XX, LP ("Excalibur") whereby Excalibur will provide a bridge loan of up to US$2.6 million that will be focused on re-working and re-activating up to 14 previously drilled development wells ("PDNP Wells") in order to increase cash flows and reserves. The Company is pleased to announce that it has closed on the first tranche of US$1.0 million with the second tranche to close no later than July 31, 2015.

The Excalibur financing was sourced through Houston Merchant Advisory Partners ("HMEP") and the Company is continuing to work with HMEP to source a new senior facility that would re-capitalize the Company, repay the Excalibur bridge financing and fund the continued development of the Gordon Creek field.

The Excalibur financing consists of a one year term subordinated debt carrying an interest rate of 15% (18% if the Company chooses to accrue interest payments). Excalibur will also receive a 6% gross over-riding royalty on production from the PDNP Wells, which will be expanded to cover all Gordon Creek production if the facility is not repaid within six months. The royalty can be repurchased by the Company at any time for US$1.68 million. Excalibur will also receive, subject to TSX-V approval and subject to anti-dilution adjustments, three year warrants to purchase up to 4,776,175 shares of the Company at a price of $0.06 per share. If the loan is not repaid within six months, Excalibur will receive, until the loan is repaid, an additional 60% gross over-riding royalty on the PDNP wells, the proceeds of which will be applied to the outstanding principal and interest.

The Company also wishes to announce that it has negotiated a termination of the commodity streaming agreement with Sandstorm Gold Inc., ("Sandstorm") (TSX: SSL) which currently provides Sandstorm with a streaming interest in 35% of all Gordon Creek production. In consideration for the termination of the interest, Sandstorm will receive a subordinated two year note for US$4.0 million and a 10% gross over-riding royalty on all Gordon Creek production. The Company will have the right, at any time, to purchase one half (5%) of the Sandstorm royalty for US$6.0 million. The closing of the Sandstorm termination agreement is subject to the completion of formal documentation. As a result of the termination of the Sandstorm streaming interest, the Company will effectively now own, subject to royalties, a 100% interest in the Gordon Creek field and the Company's Gordon Creek reserves and cash flows will be calculated accordingly.

Gordon Creek Energy Inc. is an oil and gas exploration and production Company with interests in the US Rockies.

Website: www.gordoncreekenergy.com

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

Caution Regarding Forward- looking information

Information in this news release, including information respecting the Company's financing and capitalization plans, potential reserves and cash flows, constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, expectations, or beliefs as to future events or results are believed to be reasonable based on the information currently available to the Company. The Company does not undertake to update any such forward-looking statements unless required by applicable securities legislation. Statements including forward-looking information involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.

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