Bonterra/Spartan -- summary under Share-for-Share

Overview

TSX-listed Bonterra is to acquire each outstanding share of TSX-listed Spartan in exchange for 0.1169 common shares of Bonterra under an Alberta Plan of Arrangement, resulting in the former Spartan shareholders holding approximately 35% of Bonterra. This was considered by the Spartan board to be a superior proposal to that under an arrangement agreement with Pinecrest Energy Inc., resulting in a break fee of $12.5M being paid to Pinecrest.

Options

All holders of options granted pursuant to the Spartan options plan (which will vest) have agreed to exercise.

Plan of Arrangement

Under the Plan of Arrangement:

• Spartan shares held by dissenters are transferred to Bonterra, with such dissenters being entitled to be paid the fair value of their shares by Bonterra
• all Spartan shareholders (other than Bonterra) transfer each of their Spartan shares to Bonterra for 0.1169 Bonterra common shares

Break fees

$12.5M by either Bonterra or Spartan.

Canadian tax consequences

S. 85.1 generally will apply to the share-for-share exchange. Dissenters will realize capital gains treatment. Standard disclosure of taxable Canadian property rules for non-residents.