​Polski Koncern Naftowy ORLEN S.A. ('PKN ORLEN') informs that on 12 October 2015 ORLEN Upstream Canada Ltd. ('ORLEN Upstream Canada') has entered into a definitive agreement (the 'Arrangement Agreement') with Kicking Horse Energy Inc. ('Kicking Horse'). Under the Arrangement Agreement, ORLEN Upstream Canada will acquire all of the outstanding common shares of Kicking Horse, representing 100% of the registered capital of Kicking Horse as well as 100% of the total votes at the meeting of Kicking Horse shareholders. The Arrangement Agreement includes the plan of the arrangement (the 'Arrangement'), which indicates a sequence of steps to be conducted to complete the transaction.

Under the terms of the Arrangement Agreement, Kicking Horse shareholders will receive CAD 4.75 (ca. PLN 13.65) in cash for each share they hold. The total equity purchase price to be paid by ORLEN Upstream Canada in cash is approximately CAD 293 million (ca. PLN 842 million). The total transaction value representing the enterprise value, including the assumption of Kicking Horse's net debt and working capital as of 30 September 2015 as well as after the settlement of existing options is CAD 356 million (ca. PLN 1,023 million).

The Arrangement is subject to customary conditions for a transaction of this nature, which include approval by at least 66 2/3% of the votes cast at a special meeting of Kicking Horse's shareholders and option holders and pertinent court approvals. Pursuant to the Arrangement Agreement, the transaction is also subject to the approval of the Court of Queen's Bench of Alberta, applicable regulatory approvals and the satisfaction of certain closing conditions customary in transactions of this nature, under the Canadian law. The Arrangement Agreement also provides for customary board support and non-solicitation covenants (subject to a 'fiduciary out' for unsolicited 'superior proposals' in favour of the Kicking Horse Board and a 'right to match' in favor of ORLEN Upstream Canada) as well as the payment to ORLEN Upstream Canada of a break fee in the amount of CAD 10 million (ca. PLN 28.7 million) if the proposed transaction is not completed in certain specified circumstances.

An information circular regarding the Arrangement is expected to be filed and mailed to Kicking Horse shareholders in late October 2015. The Meeting of Kicking Horse Shareholders as well as closing of the transaction are expected to be held in late November or early December 2015.

The acquisition of Kicking Horse is in line with PKN ORLEN strategy for 2014-2017 announced in July 2014. Financing of the transaction will be covered from PKN ORLEN's cash at hand and available lines. The strategic assumptions of PKN ORLEN regarding dividend policy and financial basis are not changed and the main financial ratios of PKN ORLEN remains on the safe level.

Kicking Horse is a Calgary, Alberta, Canada based company engaged in the exploration, development and production of oil and natural gas. Kicking Horse shares are traded on the Canadian stock exchange TSX Venture Exchange under the symbol ' KCK'. With the purchase of Kicking Horse shares by ORLEN Upstream Canada, trading of the shares on the Canadian stock exchange will be terminated. More information about Kicking Horse can be found at

www.kickinghorseenergy.com

.


PKN ORLEN owns 100% of the registered capital of ORLEN Upstream sp z o.o. ORLEN Upstream sp. z o.o. owns 100% of the registered capital of ORLEN Upstream International B.V. ORLEN Upstream International B.V. owns 100% of the registered capital of ORLEN Upstream Canada.

All amounts in PLN have been calculated based on the average PLN/CAD exchange rate as of 12 October 2015, as stated by the National Bank of Poland.

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