New Star Energy Ltd. Enters Into Arrangement Agreement

CALGARY, ALBERTA–(Marketwired – May 26, 2015) – 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.