Source Rock Royalties Ltd.



August 25, 2014 16:16 ET

Source Rock Royalties Closes Private Placements Including Strategic Pension Fund Investment

CALGARY, ALBERTA--(Marketwired - Aug. 25, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Source Rock Royalties Ltd. ("Source Rock") announces that it has completed a brokered private placement through Richardson GMP Limited and a concurrent non-brokered private placement (collectively, the "Offerings"). Pursuant to the Offerings, subscriptions for 7,073,330 common shares of Source Rock ("Common Shares") at an issue price of $1.30 per Common Share were received. Gross proceeds committed to via the Offerings are $9,195,329.

The Offerings were structured so that investors in the Common Shares ("Investors") provided 50% of the total subscription amount committed at the Closing Date (the "Initial Closing"). Source Rock has the right, but not the obligation, to call a maximum of two times (each a "Capital Call", and collectively the "Capital Calls") up to the remaining unfunded subscription amount committed (the "Commitment Amount") on a pro rata basis, among the Investors, with at least 15 business days advance written notice in a minimum amount of 50% of the remaining Commitment Amount. Advance notice of the Capital Calls will be permitted until December 31, 2014, and closing of the Capital Calls must be completed by January 31, 2015.

Pursuant to the Offerings a recognized Canadian pension fund with a history of investing in royalty type entities subscribed for 1.5 MM Common Shares, of which 750,000 Common Shares were issued in conjunction with the Initial Closing and 750,000 Common Shares are subject to the provisions of the Capital Calls. The pension fund investment was arranged by AltaCorp Capital Inc.

Following the Initial Closing Source Rock has 11,496,666 Common Shares issued and outstanding. If Source Rock completes the Capital Calls, then it will have 15,033,331 Common Shares issued and outstanding. Net proceeds from the Offerings will be used to fund the acquisition of oil and gas royalty and mineral title interests in the Western Canadian Sedimentary Basin and for general corporate and administrative purposes.

Common Shares issued pursuant to the Offerings will not be subject to any share transfer restrictions, but will be subject to an indefinite hold period under applicable securities laws. Any validly completed transfer of the Common Shares will include the transfer of obligations relating to any portion of the Commitment Amount that has not been subject to a Capital Call at the time of the transfer.

About Source Rock Royalties

Source Rock is a private Alberta incorporated entity that is exclusively focused on acquiring gross overriding royalties on oil and gas properties in the Western Canadian Sedimentary Basin ("WCSB") and mineral title interests in the WCSB. Source Rock owns varying gross overriding royalties on approximately 16,000 gross acres of land in the Viking light oil play in west-central Saskatchewan. As a royalty interest owner Source

Rock receives top-line revenue from oil and natural gas production that occurs on its royalty lands. In addition, Source Rock does not incur any of the costs associated with activity on its royalty lands, including drilling, completing and equipping wells, enhanced recovery initiatives, maintenance and optimization of wells, abandoning of wells or reclamation of the land. Since the first quarter of 2014 Source Rock has paid a quarterly dividend to its shareholders.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction, including, but not limited to, the United States. The common shares of Source Rock referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Forward-Looking Statements

Certain statements contained in this news release are forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements relate to future events or performance and include statements which contain words such as "anticipate", "could", "should", "expect", "estimate", "seek", "may", "intend", "plan", "likely", "will", "believe" and similar expressions (including the negatives thereof). The forward-looking statements contained herein, including the use of proceeds from the Offerings, are provided to allow readers to better understand our business and prospects. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such statements. Source Rock believes that the expectations reflected in the forward-looking statements contained herein are reasonable but no assurance can be given that these expectations will prove to be correct and, as a result, such statements should not be unduly relied upon. The forward-looking statements contained herein speak only as of the date hereof, and Source Rock assumes no obligation to revise or update these statements whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities laws.

All forward-looking statements are based on certain assumptions and analyses made by Source Rock in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The assumptions and other factors upon which the forward-looking statements contained herein are based, include, but are not limited to, the following: the general stability of the economic and political environment in which Source Rock intends to operate; the impact of increasing competition; drilling results, field production rates and decline rates; the ability of the operator of the projects in which has an interest to operate the project in a safe, efficient and effective manner and to successfully market the production therefrom; the ability of Source Rock to obtain financing on acceptable terms; the ability of Source Rock to expand oil and natural gas reserves through acquisition; future oil and natural gas prices; future currency exchange and interest rates; and the ability of Source Rock to obtain qualified staff in a timely and cost efficient manner.

Actual results, performance or achievements could differ materially from those expressed in, or implied by, the forward-looking statements contained herein as a result of known and unknown risks, including, but not limited to, the following: volatility in market prices for oil and natural gas; operating risks inherent in oil and natural gas operations; general economic conditions; competition for, among other things, capital, acquisitions of reserves, and personnel; equipment and labour shortages and inflationary costs; changes in applicable environmental, taxation and other laws and regulations as well as how such laws and regulations are interpreted and enforced; the effect of weather conditions on operations and facilities; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; and stock market volatility. As a result, no assurance can be given that any of the events anticipated by the forward-looking statements contained herein will transpire or occur, or if any of them do so, what benefits will be derived therefrom. The foregoing list of risks is not exhaustive.

The forward-looking statements contained herein are expressly qualified by this cautionary statement.

Not An Offer to Purchase Securities

This news release is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Source Rock Royalties Ltd. in any jurisdiction.

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