Prairie Provident Resources Inc. (TSX:PPR) (“PPR”) entered into an agreement to acquire Marquee Energy Ltd. (TSXV:MQX) (“Marquee”) for CAD 16.2 million on September 13, 2018. Under the terms of the Arrangement, Marquee shareholders will receive 0.0886 of a Prairie Provident common share for each Marquee share. The total consideration, including Marquee's net debt of CAD 39 million, is approximately CAD 55 million. Concurrently with the closing of the Arrangement, it is anticipated that Marquee's existing credit facilities will be repaid in full and terminated. In addition, Prairie Provident will issue CAD 1.5 million equivalent of shares to Marquee's term loan lender for early repayment of the term loan. The purchase price will be subject to normal adjustments for a transaction of this nature. In the event of termination of the agreement, PPR will pay a termination fee of CAD 2.5 million to Marquee and vice-versa.

Following completion, Prairie Provident's Board of Directors will include one additional member from Marquee and will be led by Prairie Provident's current chairman, Patrick McDonald. The Pro forma Board will consist of 7 members including Derek Petrie, Ajay Sabherwal, Rob Wonnacott, Terence (Tad) Flynn and Tim S. Granger as President and Chief Executive Officer. The management will include Mimi M. Lai as Vice President and Chief Financial Officer, Tony van Winkoop as Vice President Exploration and Gjoa Taylor as Vice President Land.

The transaction is subject to customary closing conditions including receipt of the Court of Queen's Bench of Alberta, approval of Marquee shareholders at special meetings to be held on, or about, November 26, 2018, by majorities of not less than two-thirds of the votes cast by Marquee shareholders at the Marquee meeting, third party approvals, holders of not more than 5% of the issued and outstanding Marquee Shares shall have validly exercised and not withdrawn Dissent Rights, the Net Debt of Marquee shall not exceed CAD 39 million, all outstanding Marquee Options shall have been exercised, surrendered for cancellation or otherwise dealt with to the satisfaction of PPR, and not less than two-thirds of the votes cast at the Prairie Provident meeting by the common shareholders of Prairie Provident, TSX, pre-merger notification under Part IX of the Competition Act, the Competition Act Clearance shall have been obtained, the interim order shall have been granted on or before November 2, 2018, issuance of shares shall be approved, the final order shall be granted on or before December 17, 2018, not more than 436 million shares Marquee on a valid exercise of Marquee options or Marquee warrants outstanding on the date including payment to Marquee of an exercise price of not less than $0.065 per share in case of exercise of Marquee options and not less than $0.11 per share in case of exercise of Marquee warrants shall be issued and not outstanding, none of the term loan, bank facility or any agreement of Marquee shall be supplemented, amended or modified, total transaction cost shall not exceed $2.6 million, the underwriting agreement in respect of bought out deal shall not be terminated and other regulatory approvals.

All of the directors and officers of both Marquee and Prairie Provident have entered into support agreements under which they have agreed, among other things, to vote in favor of the arrangement. In addition, shareholders of Prairie Provident related to Goldman Sachs Asset Management, holding approximately 42.67% of the outstanding Prairie Provident shares have agreed to vote in favor of the arrangement. Shareholders of Marquee holding approximately 23% of the outstanding Marque Shares have agreed to vote in favor of the arrangement. Prairie has elected to obtain requisite approval of the Prairie Provident shareholders by written consent.

The Board of Directors of Prairie Provident and Marquee have both unanimously approved the acquisition and have received verbal fairness opinions from their respective financial advisors. As on November 19, 2018, the transaction was approved by shareholders of Marquee. As on November 20, 2018, the transaction was approved by Court of Queen's Bench of Alberta. The transaction will be terminated if not completed by December 6, 2018. The transaction is expected to close on or about November 15, 2018. As on November 13, 2018, the transaction is expected to close on or about November 21, 2018. The acquisition is accretive to Prairie Provident shareholders on a fully-diluted per share basis on all pertinent fundamental metrics.

Cormark Securities Inc. acted as financial advisor and Colin Perry of Bennett Jones LLP acted as legal advisor to Prairie Provident. GMP FirstEnergy acted as financial advisor and Trevor Wong-Chor of DLA Piper (Canada) LLP acted as legal advisor to Marquee. Alliance Trust Company acted as registrar and transfer agent to Prairie Provident and AST Trust Company acted as transfer agent and registrar to Marquee in the transaction.

Prairie Provident Resources Inc. (TSX:PPR) completed the acquisition of Marquee Energy Ltd. (TSXV:MQX) on November 21, 2018. PPR expanded its existing credit arrangements with Prudential Capital Group which includes an increase in its Revolving Note Facility from $45 million (CAD 58.54 million) to $65 million (CAD 84.55 million) and the issue of an additional $12.5 million (CAD 16.26 million) principal amount of Subordinated Notes. Borrowings under the expanded credit facility have been applied, in part, to finance repayment of Marquee's indebtedness. In October 2018, PPR completed an equity financing that included a 'bought deal' prospectus offering of 6,810,200 subscription receipts and a concurrent private placement of an additional 2,780,000 subscription receipts, all at a price of CAD 0.39 per unit. The proceeds from the sale of the subscription receipts were deposited in escrow on closing of the financing, and released to Prairie Provident upon closing of the transaction.