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Information Releases

August 7, 2015

Laricina Energy Ltd. Receives Court Approval for Previously Communicated Settlement Agreement - Marketing Process Underway and Shareholder Participation Private Placement to be Initiated


Laricina Energy Ltd. (“Laricina” or the “Company”) advises stakeholders that on August 5, 2015 it received approval by the Court of Queen’s Bench of Alberta, Judicial Centre of Calgary (the “Court”) under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) for the settlement transaction (the “Settlement Transaction”) set forth in the settlement agreement dated July 20, 2015 and related documents (collectively the “Settlement Agreement”) with CPP Credit Investments Inc. (“CPP Credit”) the sole holder of the Company’s 11.5% senior secured notes and interest payment-in-kind notes (collectively the “Notes”) issued pursuant to the trust indenture dated March 20, 2014 (the “Indenture”), details of which were previously communicated to stakeholders in Laricina’s information release on July 24, 2015.

The Company also advised that it was granted a further order by the Court to extend creditor protection under the CCAA until and including December 11, 2015.

The Settlement Agreement establishes the basis for the substantial repayment of the Notes through a combination of proceeds from any potential transactions resulting from the current marketing process (the “Marketing Process”) that was approved by the Court on July 22, 2015, proceeds of a pro rata equity private placement (the “Offering”) to Laricina’s shareholders (described below) and, if required, Notes conversion to common shares by CPP Credit (the “Note Conversion”). The Offering and the Note Conversion will be conducted at the same price of $0.12 per common share. The Offering allows shareholders to participate in the restructuring of the Company and to protect their pro rata equity interests. The Note Conversion backstops the Offering.

BMO Capital Markets, Peters & Co. Limited and Morgan Stanley Canada Limited have been engaged as financial advisors to assist the Company with the Marketing Process. Laricina and its advisors have prepared an asset and corporate sales process information memorandum and a virtual data room for access to due diligence materials concerning the Company and its assets and have commenced canvassing interested parties to sign non-disclosure agreements and receive access to the data room. The goal of the Marketing Process is to raise sufficient funds to repay CPP Credit in full and may include the sale of Laricina’s assets or the Company in its entirety.

The number of common shares that will be issued to CPP Credit pursuant to the Note Conversion will depend on: (i) whether any transaction is completed under the Marketing Process and the proceeds thereto and (ii) the total proceeds received pursuant to the Offering. If no transaction is completed or the Offering proceeds are minimal the number of common shares of the Company that could be issued to CPP Credit under the Note Conversion would be highly dilutive to existing shareholders who do not participate in the Offering. Details in respect of the Offering are expected to be mailed to shareholders in August 2015.

Laricina’s estimated pro-forma cash and cash equivalents as of July 31, 2015 is approximately $72.1 million. The estimated amount owing to CPP Credit is the outstanding principal amount of the Notes of approximately $113.7 million plus the reasonable costs reimbursable to CPP Credit under the Indenture and related documents and accrued interest after July 22, 2015.

Laricina believes the Settlement Transaction provides a balanced, fair and reasonable structure and path for resolution of Laricina’s financial difficulties and settles the dispute between Laricina and CPP Credit who will withdraw its application to place Laricina in receivership. Under the CCAA proceedings the Company’s operations are continuing uninterrupted and it is expected that obligations to employees and key suppliers of goods and services will continue to be met on an ongoing basis and that the Company’s management will remain responsible for the day-to-day operations of the Company.

PricewaterhouseCoopers Inc. (“PwC”) has been appointed by the Court as monitor under the CCAA proceedings (the “Monitor”). All of the materials filed with the Court are available on the Monitor’s website (www.pwc.com/car-laricina).

About Laricina Energy Ltd.
Laricina is a non-public, Calgary based, responsible energy company that will contribute supply to the growing demand for crude oil through in situ oil sands development.

Laricina’s goal is to create value by developing Canada’s oil sands using innovative in situ technologies. The Company has a diverse portfolio of oil sands assets at varied stages of development, and experienced people with the requisite technical expertise. Our current focus is on the Company’s two core producing projects – Saleski and Germain. Laricina’s asset base, holds 0.5 billion barrels of probable reserves, 3.9 billion barrels of contingent resources (best estimate) and 0.2 billion barrels of prospective resources (best estimate) as determined by Laricina’s independent reservoir engineers as at December 31, 2014 for Germain Grand Rapids, Germain Winterburn, Saleski Grosmont, Burnt Lakes, Conn Creek, Poplar Creek and Portage properties, and as at December 31, 2013 for Thornbury, Thornbury West, House River, Germain Wabiskaw and Boiler Rapids properties. These assets include oil sands resources in the familiar McMurray Formation, and the developing Grand Rapids, and Grosmont and Winterburn carbonate plays, all of which offer significant production potential.

This information release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law including but not limited to potential results of a restructuring process and enhancement of shareholder value, disclosure intentions with respect to the strategic alternatives process, capital repayment process or Settlement Transaction, and timing of final regulatory approval from the Alberta Energy Regulator and Alberta Environment. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “estimate”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on Laricina’s experience and current beliefs as well as assumptions made by, and information currently available to, Laricina, and are subject to a variety of risks and uncertainties including, but not limited to, those associated with resource definition, unanticipated costs and expenses, regulatory approvals, fluctuating oil and gas prices, and the ability to access sufficient capital to finance future acquisitions and development. Laricina’s resources at Saleski and Burnt Lakes are contained in the Grosmont Formation, and a portion of Germain’s resources are contained in the Winterburn Formation, each a carbonate reservoir. Some of the Company’s contingent resources in the carbonates that are analogous to the Saleski pilot are based on established technologies that have been demonstrated to be commercially viable specifically for the subject reservoirs, and some are based on technology under development that require further development and piloting to confirm the commercial viability of applying these technologies to carbonate reservoirs. Resource volumes based on technology under development have a higher risk than volumes based on established technology. Although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this information release are not exhaustive and readers are not to place undue reliance on forward-looking statements. Laricina disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this message, except as required under applicable securities legislation. The forward-looking statements are expressly qualified by these cautionary statements.

For further information please visit www.laricinaenergy.com or contact:

Marla Van Gelder
Vice President Corporate Development
403.750.0810
Laricina Energy Ltd.
East Tower, 5th Ave Place
800, 425 1st Street SW
Calgary, AB. T2P 3L8

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