Manitok Energy Inc.
TSX VENTURE : MEI

Manitok Energy Inc.
Raimount Energy Inc.
TSX VENTURE : RMT

June 29, 2016 17:40 ET

Manitok Energy Inc. and Raimount Energy Inc. Enter Into Arrangement Agreement and Manitok Energy Inc. Announces Renewed Credit Facility and Non-Brokered Subscription Receipt Private Placement

CALGARY, ALBERTA--(Marketwired - June 29, 2016) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA.

Manitok Energy Inc. ("Manitok") (TSX VENTURE:MEI) and Raimount Energy Inc. ("Raimount") (TSX VENTURE:RMT) are pleased to announce that Manitok and Raimount have entered into an arrangement agreement dated June 29, 2016 (the "Arrangement Agreement") with 1977746 Alberta Inc. ("Acquireco"), being a wholly owned subsidiary of Manitok. Under the terms of the Arrangement Agreement, Manitok will acquire, indirectly through Acquireco, all of the issued and outstanding common shares of Raimount by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Each Raimount shareholder will receive six (6) common shares and one and one-half (1.5) common share purchase warrants (the "Warrants") in the capital of Manitok in exchange for each Raimount common share held.

Raimount's assets include about $5.3 million of cash, 65 boe/d (95% gas) of production near Innisfail, Alberta and approximately 20,000 acres of land in the Woolford area of Southern Alberta, including over 12,500 freehold acres within a unit agreement entitled Woolford Unit No. 1, 6,955 freehold acres within a unit agreement entitled Woolford Unit No. 2 and 797 non-unitized Crown acres. Raimount has no debt and about 6.9 million common shares outstanding. As a result of the Arrangement Agreement, Manitok will issue approximately 41.2 million common shares and 10.3 million Warrants which will have an exercise price of $0.30 per common share, a term of two years and two forced conversion provisions. The first forced conversion provision is exercisable if Manitok common shares trade at a 140% premium to the Warrant exercise price for 20 trading days based on a volume weighted average price and the second forced conversion is exercisable if Manitok issues equity at a 130% premium to the Warrant exercise price.

The Arrangement Agreement contains customary representations and warranties of each party, and non-solicitation and interim operations covenants. The Arrangement is subject to customary conditions for a transaction of this nature, which include court and regulatory approvals (including the approval of the TSX Venture Exchange ("TSX-V")) and the approval of 66 2/3% of the votes cast by Raimount shareholders represented in person or by proxy at a meeting of Raimount shareholders to be called to consider the Arrangement. Immediately prior to the Arrangement, Raimount, a corporation incorporated under the Canada Business Corporations Act, will seek shareholder approval to continue as a corporation under the Business Corporations Act (Alberta). As part of the Arrangement, certain officers, directors and shareholders of Raimount have entered into a share lock-up agreement for a total of approximately 50.8% of the total common shares outstanding for Raimount. Both parties of the Arrangement have agreed to a mutual break fee of $700,000 subject to certain conditions. A special meeting of the shareholders of Raimount to approve the Arrangement is anticipated to be held on or about August 17, 2016.

Based on the recommendation of the Independent Committee of the Board of Directors of Raimount (the "Independent Committee"), the Board of Directors has unanimously agreed to recommend the approval of the Arrangement.

Black Spruce Merchant Capital Corp. is acting as financial advisor to the Independent Committee in connection with the Arrangement and has provided its verbal fairness opinion that, subject to review of the final form of documents affecting the Arrangement, as at the date of the Arrangement Agreement, the consideration to be received by the Raimount shareholders pursuant to the Arrangement is fair, from a financial point of view to Raimount shareholders.

A copy of the Arrangement Agreement will be available under each of Manitok's and Raimount's SEDAR profile at www.sedar.com.

Manitok has renewed its credit facility at $45 million, which is $5 million lower than its previous credit facility. Manitok is required to reduce the credit facility by $300,000 per month beginning on June 1, 2016. The facility is subject to a customary review in December 2016. After the closing of the Arrangement Agreement and the Offering discussed below, Manitok anticipates to be drawn by about $37 million on the credit facility on August 31, 2016.

Manitok also announces that it intends to conduct a non-brokered private placement offering of subscription receipts for Manitok common shares (a "Subscription Receipt") at a price of $0.18 per Subscription Receipt (one Manitok common share for each Subscription Receipt), for gross proceeds of $1.5 million (the "Offering"). Manitok anticipates closing the Offering on or before July 8, 2016. The gross proceeds from the closing of the Offering will be held in escrow by a subscription receipt agent to be appointed by Manitok in accordance with the terms and conditions of the Subscription Receipt agreement to be entered into between Manitok and the subscription receipt agent on or prior to the closing of the Offering. The gross proceeds of the Offering held by the subscription receipt agent shall not be releasable to Manitok until the Arrangement has been completed. In the event that the Arrangement is not completed by August 30, 2016, the gross proceeds held by the subscription receipt agent shall be returned to each holder of Subscription Receipts without interest. The Arrangement is not conditional on the Offering.

About Raimount

Raimount is engaged in the exploration for, development of and production of oil and natural gas properties in Western Canada and is listed on the TSX-V. Raimount was incorporated under the Canada Business Corporations Act and has its head office in Calgary, Alberta.

About Manitok

Manitok is a public oil and gas exploration and development corporation focusing on conventional oil and gas reservoirs in the Canadian foothills and southeast Alberta. Manitok will utilize its experience to develop the untapped conventional oil and liquids-rich natural gas pools in both the foothills and southeast Alberta areas of the Western Canadian Sedimentary Basin.

Caution Respecting BOE

The term barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 Bbl and an Mcfe conversion ratio of 1 Bbl:6 Mcf are based on an approximate energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Since the value ratio based on the current price of crude oil compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion based on a 6:1 ratio is misleading as an indication of value.

Forward-looking Information Cautionary Statement

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the terms of the Arrangement and the Offering.

The forward-looking statements in this press release are based on certain key expectations and assumptions made by Manitok and Raimount, including expectations and assumptions concerning the prevailing market conditions, the intentions of their lenders, commodity prices, and the availability of capital.

Although Manitok and Raimount believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Manitok and Raimount can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with adverse market conditions, the inability of Manitok or Raimount to complete the Arrangement at all or on the terms announced, not obtaining the required court, shareholder and regulatory approvals, a lender not approving the amendment to a credit facility and the risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses; and health, safety and environmental risks), uncertainty as to the availability of labour and services, commodity price and exchange rate fluctuations, unexpected adverse weather conditions, general business, economic, competitive, political and social uncertainties, capital market conditions and market prices for securities and changes to existing laws and regulations. More information about certain of these risks are set out in the documents filed from time to time with the Canadian securities regulatory authorities, available on Manitok's and Raimount's SEDAR profiles at www.sedar.com.

Forward-looking statements are based on estimates and opinions of management of Manitok and Raimount at the time the statements are presented. Manitok and Raimount may, as considered necessary in the circumstances, update or revise such forward-looking statements, whether as a result of new information, future events or otherwise, but Manitok and Raimount undertake no obligation to update or revise any forward-looking statements, except as required by applicable securities laws.

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.

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