Junex Shareholders to Receive Premium Valuation
and Opportunity to Participate in Additional Upside

MONTREAL, July 31, 2018 /CNW/ – Utica Resources Inc. (“Utica“) today announced that it has delivered to the Special Committee of the Board of Directors of Junex Inc. (“Junex“) a revised offer (the “Offer“) to acquire Junex. Under the terms of the Offer, Utica has presented Junex with two options to maximize value for all shareholders (the “Utica Transaction“). In the first alternative, each shareholder of Junex would receive, for each common share of Junex (“Junex Shares“) held, C$0.50 in cash (the “Cash Option“). In the second alternative, each shareholder of Junex would transfer to Utica half of its Junex Shares for C$0.55 in cash per Junex Share so transferred, such that at closing of the transaction, existing shareholders of Junex would own 50% of the Junex Shares and would continue to participate in its additional upside (the “Cash and Shares Option“). As an affiliate of Utica is an existing shareholder of Junex, Utica and its affiliates would own approximately 54.9% of all issued and outstanding shares of Junex following completion of the transaction. Subject to the approval of the TSX Venture Exchange (the “TSXV“), Junex would remain a publicly-listed company in Canada at closing of the Cash and Shares Option. Utica is prepared to pursue either one of the Cash Option or the Cash and Shares Option with equal interest and speed of execution, once Junex has determined its preferred alternative. The Utica Transaction is subject to being completed by way of a plan of arrangement under the Business Corporations Act (Qu bec).

Utica believes that the Offer constitutes a “Superior Proposal” to the arrangement agreement dated June 8, 2018 (the “Arrangement Agreement“) between Junex and Cuda Energy Inc. (“Cuda“) for the announced transaction with Cuda (the “Cuda Transaction“). The Offer is subject to the termination of the Cuda Transaction as provided for in the Arrangement Agreement and the entering into of a new arrangement agreement between Utica and Junex that would be substantially similar to the Arrangement Agreement in terms of general provisions and construct, covenants, representations, warranties, conditions, and termination arrangements. Utica has delivered, together with its Offer, a substantially completed form of an arrangement agreement for the Cash Option which Utica is prepared to execute in the form submitted. Utica expects to work collaboratively with Junex and its advisors in order to finalize the Utica Transaction and obtain shareholder approval in a timely fashion. The Utica Transaction is not subject to a confirmatory due diligence condition, nor is it subject to financing.

Value

The Cash Option is a “Superior Proposal” to the Cuda Transaction. The consideration of the Cash Option represents (i) a premium of 35.1% over the deemed value of approximately C$0.37 per Junex Share for the Cuda Transaction, determined by calculating the deemed value of Junex Shares to be issued for the share portion of the proposed acquisition of Wyoming assets pursuant to the Cuda Transaction, as well as the deemed value of Junex Shares for the early conversion of convertible debentures pursuant to the Cuda Transaction; (ii) a premium range of 21.7% to 32.3% to the fair market value range of C$0.378 to C$0.411 for Junex Shares after taking into account the Cuda Transaction that was established by KPMG, as independent valuator to the Special Committee of the Board of Directors of Junex, in its fairness opinion (the “KPMG Opinion“) contained in the joint management information circular of Junex and Cuda dated July 6, 2018 (the “Circular“); and (iii) a premium of 22.0% over the closing price of C$0.41 for the Junex Shares on the TSXV on the last trading day immediately prior to the announcement by Junex of the Utica Offer on July 3, 2018.

The Cash and Shares Option is also a “Superior Proposal” to the Cuda Transaction. In the Cash and Shares Option, Junex shareholders will receive a 50% interest in the ongoing development of all of the Junex assets plus a distribution of approximately C$24.4 million in cash or C$0.275 per Junex Share. In the Cuda Transaction, Junex shareholders would receive approximately 50% interest of the Junex assets (or less assuming certain performance warrants for Cuda management are exercised) and approximately a C$13.5 million interest in Cuda based on the deemed valuation of approximately C$27 million (72.5 million Junex Shares x C$0.37 per Junex Share) placed on Cuda in the Cuda Transaction (equivalent to C$0.152 per Junex Share). Also, Utica’s financial advisor, Desjardins Capital Markets, determined on a preliminary basis that Cuda would be worth between approximately C$11-13 million, in line with Cuda’s book value of C$11.6 million (as described in the Circular). This would mean a half interest which the Junex shareholders would receive is only worth between approximately C$6-7 million; far less than the approximately C$24.4 million in cash to be received under the Cash and Shares Option. Clearly, the Cash and Shares Option is a “Superior Proposal” to the Cuda Transaction. Furthermore, while the KPMG Opinion placed no incremental value on the Wyoming project, given that this project is financed with high interest debt replete with burdensome penalty provisions under the Cuda Transaction, the Cash and Shares Option is far less risky than the Cuda Transaction as the pro forma Junex under the Cash and Shares Option will not have any added debt burden and potentially onerous debt service obligations.

The Offer is the third offer by Utica that provides cash consideration above the fair market value range of C$0.378 to C$0.411 for Junex Shares, taking into account the Cuda Transaction, that was established by the independent valuator to the Special Committee of the Board of Directors of Junex in the KPMG Opinion.

On July 27, 2018, Junex issued a press release indicating that it did not deem the offer made by Utica on July 23, 2018 to be a “Superior Proposal”, despite the upfront C$0.45 cash component and the contingent value right. In making this determination, Junex considered various “strategic factors” and listed some of the reasons underlying its decision, which were focused on the crystallization of value and the ability for shareholders to participate in “any future upside associated with future development of Junex’s Galt project and shale gas assets.”

While Utica disagrees with Junex’s Board of Directors’ determination that each of Utica’s previous offers was not a “Superior Proposal”, on the basis of qualitative considerations, and after having failed to provide Junex shareholders with a full analysis of the valuation of the Cuda Transaction as compared to Utica’s previous offers, Utica has nonetheless delivered the Offer in an effort to meet Junex’s unspecified requirements for a “Superior Proposal”. The Offer delivers improved financial terms to the Junex shareholders, through the payment of a C$0.50 per Junex Share consideration under the Cash Option. Alternatively, by selecting the Cash and Shares Option, the Special Committee would allow Junex shareholders to receive a meaningful upfront cash consideration far greater in value than their share of Cuda and an ability to maintain equivalent or greater upside resulting from the further development of Junex’s Galt project and shale gas assets as compared to the Cuda Transaction.

Qu bec-Focused Strategy

Utica is a Qu bec-based private energy company. Utica sees long term potential in Junex’s Qu bec assets and intends to stay invested in Qu bec for the long run. Utica’s strategy will be to invest and grow in Qu bec, leveraging Utica’s expertise, network of partners, relationships and community involvement. This network includes a long-standing relationship with Junex’s management and employees. Utica anticipates working closely with the Junex team to create a leading position in oil and gas development in Qu bec.

Utica believes that its Offer holds additional benefits for the province of Qu bec as it plans on retaining the existing Junex team and will continue to operate as a Qu bec-based oil & gas company, rather than a subsidiary of a Calgary-based public company focused on opportunities in other jurisdictions.

Outline of Benefits

Benefits to Junex shareholders:

• A very substantial premium to the value of the Cuda Transaction, as determined by KPMG, the independent valuator of the Special Committee of the Board of Directors of Junex
• Development of Galt and other Junex assets to benefit from continuity in management and technical teams as well as the addition of Mario L vesque, CEO of Utica, a well-known industry expert in Qu bec and highly regarded across the Oil and Gas Service Industry
• Unconditional offer

For the Cash Option

• Meaningful cash consideration of C$0.50 per Junex Share which provides liquidity at a fixed price
• Certainty of valuation compared to the Cuda Transaction

For the Cash and Shares Option

• Meaningful cash payment of C$0.55 per Junex Share for every such Junex Share transferred (half of each Junex Share to be transferred)
• Equivalent or greater upside exposure to the Junex assets than the Cuda Transaction
• No financing required, including debt financing, such that the entity emerging from the Utica Transaction will not be saddled with costly debt and assorted, potentially dangerous covenants found in the Cuda Transaction

Benefits for Junex management team and employees, the Junex communities and the Province of Qu bec:

• Planned retention of the Junex management team
• Greater preservation of Qu bec jobs with Junex employees compared to the Cuda Transaction
• Economic and social alignment with the communities in which Junex will operate
• Junex would remain a Qu bec-based oil & gas company rather than a subsidiary of a Calgary-based public company

Review Process and Shareholders Meeting

In light of the Offer, its obvious merits and benefits to shareholders and other stakeholders of Junex, Utica believes that postponing the planned special meeting of shareholders of Junex currently expected to take place August 2, 2018 (the “Meeting“) would be consistent with the Board of Director’s fiduciary duty. This postponement of the Meeting is required to allow the Special Committee of the Board of Directors of Junex to carefully review the Offer and confirm that it constitutes a “Superior Proposal”.

To that end, Utica invites the Government of Qu bec, through its investment arm of Ressources Qu bec, holders of approximately 15% of Junex Shares, and other Junex shareholders, to actively insist that the Special Committee of the Board of Directors of Junex recommend that the Meeting to be held on August 2, 2018 be postponed, and come to the fair and proper determination that the Utica Transaction is not only a “Superior Proposal” for shareholders, but that it is in the best interests of Qu bec to keep Junex in the Province of Qu bec managed by an experienced local management team led by Mario Levesque, a native son of the Gasp .

Update to Early Warning Report

Lansdowne Partners Austria GmbH (“LPA“) is the investment manager of Lansdowne Investment Company Cyprus Limited (“LICC“). LICC is an affiliate of Utica. LICC directly holds 8,750,000 Junex Shares and 4,375,000 common share purchase warrants (“Warrants“). On the basis of 88,602,703 Junex Shares issued and outstanding (as disclosed in the Circular), LICC has beneficial ownership or direction over approximately 14.81% of the outstanding Junex Shares after giving effect to the exercise of the Warrants. LPA will update its early warning report dated July 23, 2018 (which updated its early warning report dated July 4, 2018, which updated its initial early warning report dated October 23, 2017) and a copy of such updated report will be available under Junex’s profile on SEDAR at www.sedar.com. The address of LPA is Wallnerstrasse 3/21, 1010 Vienna, Austria.

Cautionary Note Regarding Forward Looking Statements

This news release contains forward-looking information and forward-looking statements (collectively, “forward-looking statements“) within the meaning of Canadian securities legislation, including, without limitation: (i) statements regarding the intentions of Utica, LICC and LPA; (ii) the ability of the parties to reach an agreement regarding the proposed transaction, (iii) if an agreement is reached, the ability of the parties to complete the proposed transaction or the timing or terms thereof; and (iv) if a proposed transaction is completed, the ability of Junex to develop and operate its assets (including the Galt project). Forward-looking statements can, but may not always, be identified by the use of words such as “expects”, “intends”, “proposed” and similar references to future periods or the negatives of these words and expressions. These statements are based on the stated intentions of the parties and currently available information. They are not guarantees of future events, are based upon assumptions that may not prove to be accurate, and involve certain risks and uncertainties that are difficult to predict, including the risk that no transaction will be agreed to, that completion of the transaction will be materially delayed or that, even if a transaction is agreed to, the transaction will not be completed. Investors are cautioned not to put undue reliance on forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and the parties undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Neither TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Utica Resources Inc.