Canadian Natural Resources Limited (TSX:CNQ) entered into a definitive arrangement agreement to acquire Painted Pony Energy Ltd. (TSX:PONY) for approximately CAD 110 million on August 10, 2020. Canadian Natural Resources will acquire outstanding common shares of Painted Pony, for a cash consideration of CAD 0.69 per share. Canadian Natural Resources will also assume Painted Pony's total debt of approximately CAD 350 million. As per the terms of transaction, on completion, Painted Pony Energy Ltd. will become a wholly-owned subsidiary of Canadian Natural Resources Limited. Upon closing of the transaction, the Painted Pony shares will be de-listed from the TSX. The agreement provides for customary support and non-solicitation covenants by Painted Pony. The agreement provides for a non-completion fee of $20 million, payable in the event that the transaction is not completed or is terminated in certain circumstances, including if Painted Pony enters into an agreement with respect to a superior proposal or if the Board withdraws or modifies recommendation with respect to the transaction. All of the Directors and Executive Officers of Painted Pony, together with Painted Pony's two largest shareholders, have entered into support agreements and have agreed to support the transaction and vote an aggregate of approximately 25% of the outstanding Painted Pony Shares in favor of the transaction.

The transaction is subject to approval of shareholders and holders of option of Painted Pony and be approved by by two-thirds of the votes cast, meeting expected to be held in September, 2020, receipt of court approval and certain regulatory approvals, including approval under the Competition Act (Canada). As a closing condition, Immediately prior to the effective time, excluding the executive employees, Painted Pony shall have no more than 65 employees and not more than 160,995,692 Company Shares shall be issued and outstanding and the holders of not greater than 5% of the outstanding Company Shares shall have validly exercised Dissent Rights in respect of the arrangement that have not been withdrawn as of the effective date. The transaction is not subject to any financing conditions. Based on the fairness opinion and the recommendation of the independent committee, and after consulting with financial and legal advisors, among other considerations, the Board has unanimously determined that the arrangement is fair, from a financial point of view, to Painted Pony's shareholders. A special meeting of shareholders of Painted Pony is expected to be held on October 1, 2020. As of September 14, 2020, Institutional Shareholder Services Inc. has recommended that Painted Pony shareholders vote in favor of the proposed plan of arrangement. As of September 17, 2020, Glass, Lewis & Co. has recommended that Painted Pony shareholders vote in favor of the proposed plan of arrangement. As of October 1, 2020, shareholders of Painted Pony Energy Ltd. voted in favor of transaction. The arrangement was approved by more than 88% of shareholders and option holders (voting together as a single class) who voted at a special meeting of Painted Pony held on October 1, 2020. As of October 2, 2020, the Court of Queen's Bench of Alberta has granted a final order approving the proposed transaction. The transaction is targeted to close in late third quarter or early fourth quarter of 2020. As of August 15, 2020, closing of the transaction is anticipated to occur in early October 2020. As of October 1, 2020, the transaction is expected to close on or about October 6, 2020.

TD Securities Inc., RBC Dominion Securities Inc. and Raymond James Ltd. acted as a financial advisors for Painted Pony in the transaction. TD Securities Inc. acted as fairness opinion provider for shareholders of Painted Pony. Scott W.N. Clarke and David Tupper of Blake, Cassels & Graydon LLP acted as legal advisors to Painted Pony. Brent Kraus of Bennett Jones LLP acted as legal advisor to Canadian Natural Resources. Gryphon Advisors Inc. acted as proxy solicitor for Painted Pony. TSX Trust Company acted as depository for Canadian Natural Resources.

Canadian Natural Resources Limited (TSX:CNQ) completed the acquisition of Painted Pony Energy Ltd. (TSX:PONY) on October 6, 2020. Painted Pony will make an application to cease to be a reporting issuer. Painted Pony employees will join Northeast British Columbia and Calgary head office teams of Canadian Natural Resources.