Blacksteel Energy Inc. Announces Formal Agreement to Acquire Oilfield Service Companies and Extension of Existing Warrants

CALGARY, ALBERTA--(Marketwired - Sept. 30, 2014) -

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Blacksteel Energy Inc. (TSX VENTURE:BEY) ("Blacksteel" or the "Corporation") is pleased to announce that it has entered into a definitive share purchase agreement (the "Purchase Agreement") dated September 25, 2014 to acquire Alcan Fluid Disposal Ltd. ("Alcan"), Peace Drilling and Research Ltd. ("Peace Drilling") and Integrated Resource Technologies Ltd. ("Integrated") (the "Proposed Transaction"). The Transaction is considered to be a reverse take-over under the policies of the TSX Venture Exchange Inc. ("TSXV"). Completion of the Proposed Transaction will be subject to customary closing conditions, including regulatory approval and approval by Blacksteel's shareholders.

The Proposed Transaction

Under the terms of the Purchase Agreement, Blacksteel will acquire all of the issued and outstanding shares of Alcan, Peace Drilling and Integrated (collectively referred to herein as the "TargetCos") for an aggregate purchase price of $8,480,645, subject to working capital adjustments at closing. The consideration for the Proposed Transaction consists of the issuance of 31,658,851 common shares of Blacksteel (the "Acquisition Shares") at a deemed price of $0.15 per share, cash payment of $1,470,645 and the assumption of $2,261,172.31 in debt. The purchase price is allocated among the TargetCos as follows:

Alcan: Purchase price of $3,850,000 satisfied through the issuance of 19,000,000 Acquisition Shares and a cash payment of $1,000,000.

Peace Drilling: Purchase price of $1,170,645 satisfied through the issuance of 4,666,667 Acquisition Shares and a cash payment of $470,645; and

Integrated: Purchase price of $3,460,000 satisfied through the issuance of 7,992,184 Acquisition Shares and the assumption of secured debt of $2,261,172.31.

The acquisitions of the TargetCos are arm's length transactions. Alcan and Peace Drilling are both British Columbia incorporated companies and Integrated is an Alberta incorporated company. The principal shareholders of Alcan are Altec Inspection Holdings Ltd. ("AIH"), Karen Baker and Ron Baker, the sole shareholder of Peace Drilling is AIH and the sole shareholder of Integrated is Ken Watson. AIH is a British Columbia company owned by Baker Springing Trust, Karen Baker and Ron Baker. Karen Baker and Ron Baker are trustees of the Baker Springing Trust.