Third Agreement to Purchase Oil and Gas AssetsMaple Leaf Royalties Corp. Enters Agreement to Purchase Oil and Gas Assets V.MPL | March 24, 2015 CALGARY, ALBERTA--(Marketwired - March 23, 2015) - Maple Leaf Royalties Corp. (TSX VENTURE:MPL) ("Maple Leaf" or the "Company") is pleased to announce that it has entered into a definitive purchase agreement with Maple Leaf 2012-II Energy Income Limited Partnership ("Vendor") pursuant to which it has agreed to acquire various royalty interests and non-operated working interests in a total of 17 oil and natural gas wells in Alberta and Saskatchewan (the "Acquired Assets") in consideration of the issuance and delivery to Vendor of 23,500,000 common shares (the "Purchase Price Shares") of Maple Leaf. Based on a price of $0.45 per share, total deemed consideration is $10.575 million. The transaction is expected to close on or about April 1, 2015 with an effective date of March 1, 2015. Closing is subject to the satisfaction of conditions customary for transactions of this nature and the receipt of all required regulatory approvals, including the acceptance of the TSX Venture Exchange. At closing, it is anticipated that Maple Leaf's outstanding share capital will consist of 75,415,131 million common shares, 9,994,444 warrants to purchase common shares at a price of $0.3675, and 73,334 stock options to purchase common shares at a price of $0.40. The Company also has about $2.7 million of positive working capital and no debt. Maple Leaf's pro forma production is estimated to be approximately 750 boe per day based on current production levels, weighted 54% to royalty production (with the balance being non-operated working interest production), and a production split that is about 70% natural gas and 30% oil and natural gas liquids. Acquired Assets Details The following tables summarize the evaluation by Sproule Associates Limited of the petroleum and natural gas reserves of the Acquired Assets. The net present values of the reserves are presented on a before income tax basis and are based on annual projections of net revenue, which were discounted at various rates. Calculated net present values are not necessarily representative of fair market value. The pricing assumptions that formed the basis for the revenue projections were based on Sproule's December 31, 2014 commodity price forecast. The reserve estimates were made in accordance with NI 51-101 and COGE Handbook reserve definitions. SUMMARY OF RESERVES AS OF DECEMBER 31, 2014 (Forecast Prices) Oil Solution Gas Non-Assoc, Assoc Gas Natural Gas Liquids Total RESERVES CATEGORY Gross (1) (Mbbl) Net(2) (Mbbl) Gross(1) (MMcf) Net (2) (MMcf) Gross (1) (MMcf) Net (2) (MMcf) Gross (1) (Mbbl) Net (2) (Mbbl) Gross(1) (Mboe) Net(2) (Mboe) PROVED Developed Producing 65.0 50.5 141 124 1,689 2,471 95.4 153.6 465.6 636.6 Undeveloped 15.0 12.2 14 13 0 0 1.3 1.0 18.7 15.3 Total Proved 80.1 62.6 155 137 1,689 2,471 96.7 154.6 484.2 651.9 Probable 23.5 17.4 44 39 486 647 27.8 37.4 139.6 169.0 TOTAL PROVED + PROBABLE 103.6 80.1 199 176 2,175 3,118 124.5 192.0 623.8 821.0 Notes: (1) "Gross Reserves" are Vendor's working interest share of remaining reserves before the deduction of royalties owned by others. (2) "Net Reserves" are Vendor's royalty interest reserves plus the Gross Reserves less all crown, freehold, and overriding royalties and interests owned by others. (3) Columns may not add due to rounding. SUMMARY OF NET PRESENT VALUE OF FUTURE REVENUE BEFORE INCOME TAXES AS OF DECEMBER 31, 2014 (Forecast Prices) Before Income Taxes - Discounted at (%/yr) RESERVES CATEGORY 0% (M$) 5% (M$) 10% (M$) 15% (M$) 20% (M$) PROVED Developed Producing 23,297 17,188 13,727 11,512 9,974 Undeveloped 426 360 305 259 221 Total Proved 23,723 17,548 14,032 11,771 10,195 Probable 7,488 3,565 2,062 1,346 951 TOTAL PROVED + PROBABLE 31,211 21,113 16,094 13,117 11,146 The Acquired Assets consist of a total of five royalty interest wells and 12 non-operated working interest wells. The royalty interest wells are all located in the greater Bigstone area of Alberta, produce from the Montney formation, and have royalty interests ranging from approximately 0.3% to 10%. The non-operated working interest wells are located in a number of areas, with four in the Kakwa area of Alberta, two in the Sylvan Lake area of Alberta, three in the Rimbey area of Alberta, one in the Oldman area of Alberta, and two in the Java area of Saskatchewan. Producing zones in the non-operated working interest wells include the Falher, Bluesky, Ellerslie, and Elkton, and working interests vary from 25% to 50%. Estimated company interest production from the assets for the month of March 2015 is estimated to be approximately 510 boe per day, comprised of about 74% natural gas and 26% oil and natural gas liquids. About 29% of the current production rate is from royalty interests, with the remaining 71% from non-operated working interests. Field cash flow from the Acquired Assets for the month of March 2015 is anticipated to be approximately $200,000. The Transaction The transaction is a Non Arm's Length Transaction under Policy 5.3 of the TSX Venture Exchange as Hugh Cartwright and Shane Doyle, directors of Maple Leaf, are also directors and officers of the General Partner of the Vendor, and John Dickson, the Chief Financial Officer of Maple Leaf, is also the Chief Financial Officer and Secretary of the General Partner of the Vendor. As partial consideration for services provided to the Vendor, 5% of the Purchase Price Shares will be paid to the General Partner of the Vendor. The General Partner is wholly owned by CADO Bancorp Ltd., a corporation owned and controlled by Hugh Cartwright and Shane Doyle. Daniel Gundersen, Chief Executive Officer and a director of Maple Leaf, and Adam Thomas, President and a director of Maple Leaf, currently provide consulting services to Vendor. These arrangements will terminate upon closing of this transaction. The Board of Directors of Maple Leaf formed an independent committee to review and approve the transaction on its behalf. The Purchase Price Shares will be subject to a four month restricted period under National Instrument 45-102. The Purchase Price Shares will also be subject to a contractual restricted resale period, with one-third being released from such restriction on each of the four, eight and 12 month anniversaries of the closing date of the transaction. No insiders of Maple Leaf are expected to be created as a result of the transaction. "We continue to execute our business plan with this third acquisition in the past four months," commented Maple Leaf CEO Dan Gundersen. "This latest transaction further expands our royalty portfolio in west central Alberta, and also adds some non-operated working interests for additional cash flow." 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