Tourmaline Oil Corp. (TSX:TOU) entered into a definitive arrangement agreement to acquire Chinook Energy Inc. (TSX:CKE) for CAD 15.1 million on February 22, 2020. Tourmaline has agreed to acquire all of the outstanding common shares of Chinook for cash consideration of CAD 0.0675 per share. Upon closing of the transaction, the Chinook shares will be de-listed from the TSX. The arrangement agreement provides for a non-completion fee of CAD 1.75 million to be paid by Chinook. The non-completion fee is payable in the event that the transaction is not completed or is terminated by Chinook in certain circumstances, including if Chinook enters into an agreement with respect to a superior proposal or if the Chinook Board withdraws or modifies its recommendation with respect to the transaction. The transaction is subject to various closing conditions, including receipt of all necessary regulatory approvals, court approval, third party approval, and outstanding indebtedness of Chinook not exceeding CAD 9.34 million, holders of Chinook's common shares that have validly exercised, and not withdrawn, dissent rights shall represent not more than 17% of the common shares then outstanding, executed resignations and mutual releases having been received by Tourmaline from all of the directors of Chinook, approval by the Board of Tourmaline, Chinook's shareholder approval at a meeting to be held on April 20, 2020 and all domestic and foreign statutory and regulatory waiting periods having been expired or terminated and no unresolved material objection or opposition having been filed, initiated or made during any applicable statutory or regulatory period.

The transaction will require the approval of 66 2/3% of the votes cast by the Chinook shareholders. All of the Directors and Executive Officers of Chinook and a significant shareholder of Chinook have entered into support agreements and have agreed to vote an aggregate of approximately 37% of the outstanding Chinook shares in favor of the transaction, subject to the provisions of such support agreements. The transaction has been unanimously approved by special committee of the Board of Chinook. The Board of Directors of Chinook unanimously recommended that its Shareholders vote in favour of the resolution approving the arrangement. A committee of independent directors of Chinook's Board of Directors has been appointed to consider the arrangement. As of April 20, 2020, Chinook's shareholder approved the transaction and Chinook received court approval for the transaction. Closing of the transaction anticipated to occur in late April 2020. As of March 10, 2020, the transaction is expected to be completed on or about April 21, 2020. Peters & Co. Limited provided an opinion that the consideration to be received by Chinook's Shareholders pursuant to the arrangement is fair, from a financial point of view, to the Chinook's shareholders. Simmons Energy | A Division of Piper Jaffray acted as financial advisor to Tourmaline Oil Corp. Andrew Sunter and Joanne Luu of Burnet, Duckworth & Palmer LLP acted as legal advisors for Chinook. AST Trust Company (Canada) acted as depositary in the transaction.