DAL Dalmac Energy Inc

Dalmac Energy Inc. (“Dalmac”) (TSX-V:DAL) wishes to announce that on August 18, 2016 it entered into a financing arrangement with BDC Capital Inc. for $1.5 million (the “Loan”), as the borrower (the “Initial BDCC Financing”). The Loan shall be repayable by way of one balloon payment of $1.5 million on August 31, 2021, with interest payable monthly until maturity and excess cash sweeps throughout the term of the Loan. The Initial BDCC Financing was amended on August 29, 2016 by a second amended and restated offer letter (together, with the Initial BDCC Financing, the “BDCC Financing”).  The BDCC Financing is subject to a number of conditions and covenants, including maintenance of the required financial ratios and the payment of an additional compensation premium equal to 2.00% of the consolidated value of Dalmac and its corporate guarantors, those being Dalmac Oilfield Services Inc. (“Dalmac Oilfield”) and 1421771 Alberta Ltd.  The proceeds of the BDCC Financing will be used for working capital.  The closing of the BDCC Financing occurred on the date hereof.  On August 29, 2016, as part of the BDCC Financing, Dalmac Oilfield also entered into a fifth amending agreement with PNC Bank Canada Branch, Dalmac Oilfield’s senior lender.

As a condition to the completion of the BDCC Financing, Dalmac engaged in a sale of certain motor vehicle equipment (the “Assets”).  As part of the disposition, Dalmac Oilfield entered into a joint venture agreement (the “Agreement”) with Professional Consulting Solutions Ltd. (“PCS”), which pursuant to the terms and conditions of the Agreement, Dalmac Oilfield transferred a 50% interest in the Assets to PCS for $250,000.  Dalmac will be able to utilize the Assets in its business on an ongoing basis, pursuant to the rental terms in the Agreement. 

The Agreement is considered a “related party transaction” pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”), which is applicable as Dalmac is listed on the TSX Venture Exchange (the “TSXV”) and John Babic is a director of both Dalmac and Dalmac Oilfield and a director and the sole shareholder of PCS. The Agreement is exempt from the related party transaction requirements of MI 61-101, as neither the fair market value of the Assets nor the consideration paid under the Agreement exceeds 25% of the market capitalization of Dalmac pursuant to sections 5.5(a) and 5.7(a) of MI 61-101. The Agreement has been approved by the TSXV.  Dalmac and Dalmac Oilfield have also entered into two other similar asset agreements since November 2015, both of which have been approved by the TSXV and further details in respect of those transactions have been provided in Dalmac’s financial statements in respect of the applicable periods.

For further information: Please contact John Babic, at 4934 – 89 Street NW, Edmonton AB T6E 5K1 by phone (780) 988-8510, by fax at (780) 988-8512, or by e-mail at jbabic@dalmacenergy.com.

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

Forward-Looking Information and Statements

This document contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "feels", "may", "will", "would", "believe", "plans", "intends", "possible", "future" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this document contains forward-looking information and statements pertaining to, among other things, the following: the repayment amounts and timelines pursuant to the BDCC Financing; the use of the proceeds of the BDCC Financing; and Dalmac’s use of the Assets on an ongoing basis.  This forward-looking information and the related statements are based upon factors, expectations and assumptions reflected in the forward-looking statements that are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

The forward-looking information and statements contained in this news release are based upon several material factors, expectations and assumptions of Dalmac including, without limitation: the availability of the BDCC Financing funds; the ability of Dalmac to meet its obligations under the BDCC Financing; that Dalmac will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; availability of sources to fund Dalmac’s capital and operating requirements as needed; and certain commodity price and other cost assumptions.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information and statements including, without limitation: general economic, market and business conditions; volatility in market prices for crude oil and natural gas; the ability of Dalmac’s clients to explore for, develop and produce oil and gas; availability of financing and capital; the ability of Dalmac’s customers to pay in a timely manner; changes in commodity prices; unanticipated operating results; changes in tax or environmental laws or royalty rates; limited, unfavourable or no access to debt or equity capital markets; increased costs and expenses; the impact of competitors; reliance on industry partners; circumstances may arise, including changes in accounting policies, regulations or economic conditions, which could change the assumptions, estimates or expectations or the information provided; shareholder value may not be maximized by Dalmac or at all; there may be circumstances where, for unforeseen reasons, a reallocation of funds may be necessary as may be determined at the discretion of Dalmac and there can be no assurance as at the date of this disclosure as to how those funds may be reallocated; should any one of a number of issues arise, Dalmac may find it necessary to alter its current business strategy and/or capital expenditure program; fluctuations in interest rates; demand for Dalmac’s product and services; adverse conditions in the debt and equity markets; and government actions including changes in environment and other regulation; and certain other risks detailed from time to time in Dalmac’s public disclosure documents including, without limitation, those risks identified in this document.                                                                                                                                             The forward-looking information and statements contained in this document speak only as of the date of this document, and Dalmac does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.