PE-backed Shoreline Energy sells royalty interests to PrairieSky

Shoreline Energy Corp (TSX: SEQ) has agreed to sell royalty interests in its Canadian land base to PrairieSky Royalty Ltd (TSX: PSK) for $9 million. The transaction, which is expected to close in August, will improve Shoreline’s balance sheet and allow it to reduce debt. Based in Calgary, the company engages in the exploration, development and production of petroleum and natural gas. Last October, Shoreline entered into a joint venture with U.S. private equity firm Acceleration Resources that includes plans for a long-term investment in the company’s Niobrara assets in Colorado. Shoreline recently announced it is undertaking a strategic alternatives process.

PRESS RELEASE

Shoreline Energy Corp. Announces Sale of Certain Royalty Interests For Total Proceeds of Nine Million Dollars

Jul 25, 2014

CALGARY, ALBERTA – Shoreline Energy Corp. (TSX: SEQ) (“Shoreline” or the “Corporation”) is pleased to announce that it has entered into a purchase and sale agreement (the “Agreement”) to sell its royalty interests in its Canadian land base to PrairieSky Royalty Ltd. (TSX: PSK ) (“PrairieSky”) for total gross proceeds of $9 million (the “Transaction”). The Agreement contains customary closing conditions and the Transaction is expected to close in early August, 2014.

The Transaction crystallizes value for the Corporation’s stakeholders and provides an immediate improvement to Shoreline’s balance sheet, as the proceeds from the sale of the royalty interests will be used to reduce total corporate indebtedness.

The purchase price under the Transaction represents a multiple of approximately 6.0x the estimated 2014 annual cash flow from Shoreline’s Canadian royalty interests. The Transaction represents approximately 100 barrels or equivalent per day reduction to Shorelines production.

RBC Capital Markets is acting as financial advisor to Shoreline in connection with Transaction and the ongoing strategic alternatives review process, which will continue to provide interested parties the opportunity to pursue transactions across Shoreline’s complete suite of remaining assets.

Shoreline believes that, given its asset valuation as disclosed in its year end financial statements, current strong commodity prices, and the positive responses to date on its strategic alternatives process, the strategic alternatives process will provide satisfactory results to stakeholders.

The Corporation cautions that there are no assurances or guarantees that (i) the ongoing strategic alternatives process will result in additional transactions; (ii) if additional transactions are undertaken, the terms or timing of such transactions will be satisfactory to all stakeholders; or (iii) the ongoing conditions of the Corporation’s forbearance arrangements with its lenders will be met to the satisfaction of the lenders.

Investor Information

Shoreline is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. Shoreline offers investors a combination of value growth via lower risk development of additional oil reserves and production on its current lands. The corporation’s common shares and convertible unsecured subordinated debentures are currently listed on the TSX under the trading symbols “SEQ” and “SEQ.DB”, respectively. Additional information regarding Shoreline is available under the Corporation’s profile at www.sedar.com or at the Corporation’s website, www.shorelineenergy.ca.

For further information contact:

Mr. Trevor Folk
Chief Executive Officer
tfolk@shorelineenergy.ca

Mr. Kevin Stromquist
President & Chief Operating Officer
kstromquist@shorelineenergy.ca

Calgary Office
Suite 500, 500 – 4th Ave. SW
Calgary, Alberta T2P 2V6

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