Rooster Energy Ltd.

TSX VENTURE : COQ


Rooster Energy Ltd.

May 20, 2014 18:16 ET

Rooster Energy Ltd. Shareholders Approve the Acquisition of Cochon Properties, LLC, and Morrison Well Services, LLC

CALGARY, ALBERTA--(Marketwired - May 20, 2014) - ROOSTER ENERGY LTD. (the "Company" or "Rooster") (www.roosterenergyltd.com) (TSX VENTURE:COQ) is pleased to announce that its shareholders have approved the acquisition by the Company of 100% of the membership interests in Cochon Properties, LLC (the "Cochon Acquisition") and 100% of the membership interest in Morrison Well Services, LLC (the "Well Services Acquisition"). The Well Services Acquisition together with the Cochon Acquisition, are hereinafter referred to as the "Transaction".

The Company has issued and outstanding 65,071 proportionate voting shares (each entitled to 1,000 votes) and 40,397,323 common shares or 105,468,323 common shares on a fully diluted basis. As required by Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), all of the votes attached to the proportionate voting shares and 250,000 common shares were excluded from the voting approval threshold on the basis that such shares are owned or controlled by Chester F. Morrison, Jr., who is an "Interested Party" (as such term is defined in MI 61-101) with respect to the Transaction. Accordingly, 40,147,323 common shares were entitled to vote and minority approval was required from shareholders for the Transaction. There were 32,984,744 votes for and 5,016 votes against the proposed resolution approving the Transaction.

The Transaction contemplates the purchase of Well Services for US$95 million and Cochon for US$30 million, for aggregate consideration of US$125 million (the "Purchase Price"), subject to adjustments for working capital. The Purchase Price will be comprised of US$115 million in common shares of Rooster (the "Rooster Common Shares"), of which US$85 million will be in respect of Well Services and the remaining US$30 million will be in respect of Cochon, and US$10 million in cash, all in respect of Well Services.

Upon closing of the Transaction, a total of 218,631,179 Rooster Common Shares will be issued to satisfy the Rooster Common Shares portion of the Purchase Price. Cochon members will receive a total of 57,034,221 Rooster Common Shares and MEG will receive 161,596,958 Rooster Common Shares. It is anticipated that closing will occur in the late second or early third quarter of 2014.

Conditions to Completion of the Transaction

The Transaction constitutes a reviewable transaction under Policy 5.3 of the TSXV and, accordingly, is subject to final acceptance by the TSXV. The Transaction is also subject to certain other conditions set out in the Agreements, including: (i) that all of the requirements to closing each of the Well Services Acquisition and Cochon Acquisition shall have been satisfied including but not limited to the payment of US$10 million to Morrison Energy Group, LLC; and (ii); certain other customary closing conditions for a transaction of this nature.

ABOUT ROOSTER ENERGY LTD.

The Company is a Houston, Texas, based independent oil and natural gas exploration & production company focused on the development of resources in the shallow waters of the Gulf of Mexico adjacent to the states of Louisiana and Texas. At December 31, 2013, the primary assets of the Company consist of interests in 19 producing oil and/or natural gas wells and 14 oil and gas leases. The Company is the operator of the majority of its properties and daily oil and gas production.

Investors are welcome to visit our website at www.roosterenergyltd.com or contact the following for all corporate updates and investor inquiries:

Gary Nuschler, Jr.
Rooster Petroleum, LLC
Vice President - Finance
16285 Park Ten Place
Houston, Texas, USA 77084
Telephone: (832) 463-0625

Caution

Completion of the Transaction is subject to a number of conditions, including final TSXV approval and satisfaction of certain other conditions. The Transaction cannot close until all conditions are satisfied. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the circular of Rooster prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Rooster should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

Forward-Looking Information and Statements

Certain statements and information in this press release are forward-looking statements, including statements made with respect to: the Transaction; the completion of the Transaction; and other matters.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Rooster that are subject to inherent risks and uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Such factors include expectations and assumptions concerning timing of receipt of the required regulatory approvals, the satisfaction of other conditions to the completion of the Transaction, the parties' ability to close the Transaction and within the currently anticipated timeline; risks associated with the oil and gas industry (e.g. operational risks in exploration, development and production, delays or changes in plans, risks associated with the uncertainty of reserve estimates or reservoir performance, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses), commodity prices and exchange rates.

Although Rooster believes 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 Rooster can give no assurance that they will prove to be correct. The Transaction may not be completed on the terms described or at all.

Rooster's forward-looking statements are qualified in their entirely by these cautionary statements. The forward-looking statements contained in this document are made as of the date hereof and Rooster undertakes no obligation to update publically or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities law.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.

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