BNE Bonterra Energy Corp

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES


Bonterra Energy Corp. (TSX:BNE) ("Bonterra") and Spartan Oil Corp. (TSX:STO)
("Spartan") are pleased to announce that they have entered into an arrangement
agreement (the "Bonterra Arrangement Agreement") whereby Bonterra has agreed to
acquire all of the issued and outstanding common shares (the "Spartan Shares")
of Spartan (the "Bonterra Arrangement"). Pursuant to the terms of the Bonterra
Arrangement Agreement, holders ("Spartan Shareholders") of Spartan Shares will
receive 0.1169 (the "Exchange Ratio") of a Bonterra common share (the "Bonterra
Shares") for each Spartan Share held and will also benefit from their Bonterra
Share ownership as Bonterra has committed, subject to the completion of the
Bonterra Arrangement and the terms of the Bonterra Arrangement Agreement, to
increase its monthly dividend to $0.28 from $0.26 beginning March 2013.


Termination of Pinecrest Arrangement

In accordance with the terms of the arrangement agreement dated November 20,
2012 (the "Pinecrest Arrangement Agreement") between Spartan and Pinecrest
Energy Inc. ("Pinecrest"), the board of directors of Spartan (the "Spartan
Board") determined that the proposed Bonterra Arrangement constituted a
"superior proposal", as such term is defined in the Pinecrest Arrangement
Agreement and Spartan has provided notice of the proposed Bonterra Arrangement
to Pinecrest. 


Pursuant to the Pinecrest Arrangement Agreement, Pinecrest waived its right to
revise its existing merger transaction with Spartan (the "Pinecrest
Arrangement") to match the consideration offered under the Bonterra Arrangement.
As a result, in accordance with the terms of the Pinecrest Arrangement
Agreement, Spartan terminated the Pinecrest Arrangement Agreement and paid to
Pinecrest the non-completion fee of $12.5 million. Spartan then entered into the
Bonterra Arrangement Agreement.


Bonterra Arrangement

Completion of the Bonterra Arrangement is subject to the satisfaction of a
number of conditions, including the receipt of requisite shareholder, court and
regulatory approvals. The Bonterra Arrangement will need to be approved by not
less than 66 2/3% of the votes cast by Spartan Shareholders (and by a majority
of votes cast by Spartan Shareholders after excluding the votes cast by certain
members of Spartan management), voting in person or by proxy, at a special
meeting expected to be held on or about January 25, 2013 (the "Spartan
Meeting"). In addition, the issuance of the Bonterra Shares in connection with
the Bonterra Arrangement is subject to the majority approval of the holders of
Bonterra Shares (the "Bonterra Share Issuance Resolution") pursuant to the
policies of the Toronto Stock Exchange voting in person or by proxy, at a
special meeting expected to be held on or about January 25, 2013 (the "Bonterra
Meeting"). The Bonterra Arrangement also requires the approval of the Court of
Queen's Bench of Alberta. 


Under the terms of the Bonterra Arrangement Agreement, Spartan has agreed that
it will not solicit or initiate any inquiries or discussions regarding any other
business combination or sale of assets. Spartan has granted Bonterra the right
to match any superior proposals. The Bonterra Arrangement Agreement also
provides for a reciprocal non-completion fee of $12.5 million under certain
circumstances. For more information on the Bonterra Arrangement and the Bonterra
Arrangement Agreement refer to the full Bonterra Arrangement Agreement, a copy
of which will be filed by each of Bonterra and Spartan on SEDAR and will be
available for viewing under their respective profiles on www.sedar.com. 


TD Securities Inc. is acting as financial advisor to Spartan in connection with
the Bonterra Arrangement and has provided the Spartan Board with its verbal
opinion that, subject to review of the final documentation, the consideration to
be received by the Spartan Shareholders is fair, from a financial point of view,
to the Spartan Shareholders. GMP Securities L.P. and Clarus Securities Inc.
acted as strategic advisors to Spartan. 


The Spartan Board has unanimously approved the Bonterra Arrangement Agreement,
and, based on a fairness opinion provided by TD Securities Inc., determined that
the consideration to be received by Spartan Shareholders pursuant to the
Bonterra Arrangement is fair to Spartan Shareholders, determined that the
Bonterra Arrangement is in the best interests of Spartan, and unanimously
resolved to recommend that Spartan Shareholders vote in favour of the Bonterra
Arrangement. Management and directors of Spartan holding approximately 23.1% of
the issued and outstanding Spartan Shares have entered into support agreements
to vote their Spartan Shares in favour of the Bonterra Arrangement at the
Spartan Meeting. 


The Bonterra board of directors (the "Bonterra Board") has unanimously approved
the Bonterra Arrangement Agreement and has determined that the Bonterra
Arrangement is in the best interests of Bonterra, and unanimously resolved to
recommend that Bonterra Shareholders vote in favour of the Bonterra Share
Issuance Resolution. Management and directors of Bonterra holding approximately
21.5% of the issued and outstanding Bonterra Shares have entered into support
agreements to vote their Bonterra Shares in favour of the Bonterra Share
Issuance Resolution at the Bonterra Meeting. 


The mailing of a joint information circular to the Spartan Shareholders and
Bonterra Shareholders regarding the Spartan Meeting and Bonterra Meeting is
expected to occur in late December, 2012 or early January, 2013. The Spartan
Meeting, Bonterra Meeting and the closing of the Bonterra Arrangement are
expected to occur on or about January 25, 2013, provided that all shareholder,
court and regulatory approvals are obtained.


Transaction Summary



--  Pursuant to the Bonterra Arrangement, Spartan Shareholders will receive
    consideration of 0.1169 Bonterra Shares for each Spartan Share held. 
    
--  As a part of the Bonterra Arrangement, Bonterra has committed, subject
    to the completion of the Bonterra Arrangement and the terms of the
    Bonterra Arrangement Agreement, to increase its monthly dividend to
    $0.28 from $0.26 beginning March 2013. Subject to the Bonterra
    Arrangement closing prior to February 15, 2013, Spartan Shareholders
    will also receive a $0.26 per Bonterra Share dividend on February 28,
    2013. If Bonterra sustains its current effective yield of 7.2% following
    the dividend increase, Spartan Shareholders can potentially realize an
    incremental $0.43 of value per Spartan Share. 
    
--  Based on the Exchange Ratio, it is currently anticipated that Bonterra
    will issue approximately 10.7 million Bonterra Shares to the holders of
    Spartan Shares. 



Transaction Rationale

The merger of Bonterra's and Spartan's asset bases is of strong strategic value
for both groups of shareholders as the resulting company will have one of the
premier light-oil assets concentrated in the Pembina region, which will be
comprised of a complimentary production base and a long-term inventory of
drilling opportunities that is anticipated to drive future growth. The merger of
Spartan and Bonterra is a unique opportunity for Spartan Shareholders to
participate, through their approximately 35% ownership, in an established
dividend paying company that has a demonstrated history of per share production
and dividend growth through a variety of commodity cycles. The merger is
anticipated to be accretive for Bonterra on a financial and operating basis and
Bonterra expects to continue to demonstrate production per share growth and cash
flow per share growth while maintaining a strong balance sheet.




--  Bonterra is one of the premier dividend paying companies in the western
    Canadian sedimentary basin and has increased its monthly dividend from
    $0.12 to $0.26 cents over the past four years. The combination of
    Spartan and Bonterra is a strategic consolidation opportunity that is
    expected to benefit both sets of shareholders. Bonterra, as demonstrated
    by its past track record of year-over-year growth on a per share basis,
    has shown a strong ability to manage Pembina Cardium assets to provide
    measured production growth while providing a sustainable dividend to its
    shareholders. 
    
--  Combined, Bonterra and Spartan will become one of the dominant light oil
    producers in the Pembina area with a strong asset position of low-risk
    development drilling opportunities. It is anticipated that the resulting
    company will have the following characteristics: 
    
    --  a combined, sustainable, high-netback, production profile; 
        
    --  current production of 12,700 BOE/D (approximately 75% liquids
        weighting) with Bonterra currently producing approximately 8,200
        BOE/D and Spartan currently producing approximately 4,500 BOE/D; 
        
    --  post-flush production levels are anticipated to be approximately
        11,500 BOE/D; 
        
    --  high working interest properties with company-owned infrastructure; 
        
    --  a strong balance sheet with an expected Debt / 2013 Cash Flow of
        approximately 1.1x; and 
        
    --  a scalable, high quality, multi-year drilling inventory in excess of
        10 years (assuming 4 wells per section), in the heart of the Pembina
        area. 
        
--  The Bonterra Arrangement is anticipated to be accretive to Bonterra
    Shareholders on key financial and operational metrics. 
    
--  It is anticipated that the Spartan Shareholders, through their
    approximately 35% ownership in Bonterra following the Bonterra
    Arrangement, will continue to realize further value creation through a
    measured production growth profile and a growth-oriented dividend
    policy. 



Financial Advisory

AltaCorp Capital Inc. is acting as financial advisor to Bonterra in connection
with the Bonterra Arrangement. TD Securities Inc. is acting as financial advisor
to Spartan in connection with the Bonterra Arrangement. GMP Securities L.P. and
Clarus Securities Inc. acted as strategic advisors to Spartan.


Further Information 

Bonterra is a conventional oil and gas corporation with operations in Alberta,
Saskatchewan and British Columbia. 


Spartan is engaged in the business of acquiring crude oil and natural gas
properties and exploring for, developing and producing oil and natural gas in
western Canada. Spartan is uniquely positioned with a significant position in
two of the leading oil resource plays in western Canada, being the Cardium light
oil play in central Alberta and the Bakken light oil resource play in southeast
Saskatchewan. 


Further information about Bonterra or Spartan may be found in their continuous
disclosure documents filed with Canadian securities regulators at www.sedar.com.



Cautionary Statements

The term barrels of oil equivalent ("BOE") may be misleading, particularly if
used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel
(6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead. All BOE conversions in the
report are derived from converting gas to oil in the ratio mix of six thousand
cubic feet of gas to one barrel of oil. 


Certain information included in this press release constitutes forward-looking
information under applicable securities legislation. Forward-looking information
typically contains statements with words such as "anticipate", "believe",
"expect", "plan", "intend", "estimate", "propose", "project" or similar words
suggesting future outcomes or statements regarding an outlook. Forward-looking
information in this press release may include, but is not limited to, timing for
completion of the transaction with Bonterra and the timing and amount of future
dividend payments by Bonterra. Forward-looking information is based on a number
of factors and assumptions which have been used to develop such information but
which may prove to be incorrect. Although Bonterra and Spartan believe that the
expectations reflected in its forward-looking information are reasonable, undue
reliance should not be placed on forward-looking information because Bonterra
and Spartan can give no assurance that such expectations will prove to be
correct. In addition to other factors and assumptions which may be identified in
this press release, assumptions have been made regarding and are implicit in,
among other things, the timely receipt of any required regulatory approvals
(including Court and shareholder approvals). Readers are cautioned that the
foregoing list is not exhaustive of all factors and assumptions which have been
used. 


Forward-looking information is based on current expectations, estimates and
projections that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by Spartan and
described in the forward-looking information. The forward-looking information
contained in this press release is made as of the date hereof and Bonterra and
Spartan undertake no obligation to update publicly or revise any forward-looking
information, whether as a result of new information, future events or otherwise,
unless required by applicable securities laws. The forward looking information
contained in this press release is expressly qualified by this cautionary
statement. 


This press release shall not constitute an offer to sell or the solicitation of
an offer to buy securities in the United States, nor shall there be any sale of
the securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful. The Bonterra Shares to be offered have not been, and will not
be, registered under the U.S. Securities Act of 1933, as amended and may not be
offered or sold in the United States or to a U.S. person absent registration or
an applicable exemption from the registration requirements.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Bonterra Energy Corp.
George F. Fink
CEO
(403) 262-5307


Bonterra Energy Corp.
Robb D. Thompson
CFO
(403) 262-5307
(403) 265-7488 (FAX)
info@bonterraenergy.com
www.bonterraenergy.com


Spartan Oil Corp.
Richard F. McHardy
President & CEO
(403) 457-4006


Spartan Oil Corp.
Michelle A. Wiggins
Vice President Finance & CFO
(403) 457-4006
(403) 457-4028 (FAX)
info@spartanoil.ca
www.spartanoil.ca

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