New Star Energy Ltd.

New Star Energy Ltd.

May 26, 2015 11:44 ET

New Star Energy Ltd. Enters Into Arrangement Agreement

CALGARY, ALBERTA--(Marketwired - May 26, 2015) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

New Star Energy Ltd. ("New Star" or the "Company") is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with a Chinese buyer (the "Buyer"), pursuant to which the Buyer will, subject to certain conditions, acquire all of the issued and outstanding common shares of New Star (the "New Star Shares") for cash consideration (the "Arrangement"). Under the terms of the Arrangement, each New Star shareholder shall receive, for each New Star Share held, C$1.25 in cash resulting in total consideration of approximately C$215 million, including the assumption by the Buyer of New Star's net debt, after accounting for the exercise of dilutives and transaction costs.

The Board of Directors of New Star has unanimously approved the Arrangement, determined that the consideration to be received by the New Star shareholders is fair to New Star shareholders, that the Arrangement is in the best interests of New Star and recommend that New Star shareholders vote their New Star shares in favour of the Arrangement. The directors, officers and major shareholders of New Star representing approximately 55% of the outstanding New Star Shares, have entered into support agreements pursuant to which they have agreed to vote their New Star Shares in favour of the Arrangement. An information circular describing the Arrangement is expected to be mailed to New Star security holders on or before May 29, 2015 for a special meeting of shareholders (the "Meeting") scheduled to take place on or about June 25, 2015. Closing is subject to certain industry standard conditions, including the receipt of court and other regulatory approvals.

Macquarie Capital Markets Canada Ltd. is acting as exclusive financial advisor to New Star with respect to the Arrangement. National Bank Financial has provided the Board of Directors of New Star with an opinion that, subject to the review of final documentation, the consideration to be received under the Arrangement is fair, from a financial point of view, to New Star shareholders.

The Arrangement Agreement provides for customary non-completion fees and non-solicitation covenants, including New Star's right to respond to superior proposals.

Advisories

This press release contains forward-looking statements and forward-looking information (collectively "forward-looking information") within the meaning of applicable securities laws, including, but not limited to, statements relating to the mailing of the information circular describing the Arrangement and the timing thereof, and the timing of the Meeting. Forward-looking information typically uses words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. The forward-looking information is based on certain key expectations and assumptions made by management, including expectations and assumptions concerning obtaining the necessary shareholder, court and regulatory approvals, and satisfaction of the other conditions to closing the Arrangement.

Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because New Star can give no assurance that they will prove to be correct. Since forward-looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The Arrangement may not be completed on the anticipated time frames or at all.

These forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

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