PRD Energy Announces Operational Update

CALGARY, ALBERTA--(Marketwired - Nov. 26, 2015) - PRD Energy Inc. ("PRD" or the "Company") (TSX VENTURE:PRD) announces the filing of its financial statements as at and for the three and nine months ended September 30, 2015, and provides an update on the Company's activities. The Company's interim condensed consolidated financial statements and management's discussion and analysis for the three and nine months ended September 30, 2015 have been posted on the Company's website at www.prdenergy.de and filed on SEDAR at www.sedar.com. All references to dollars or "$" in this news release are references to Canadian dollars.

Impairment

In Germany, the Company and its subsidiaries have completed the termination of its farm-in arrangements of the Boerger asset and the relinquishment of all of their licenses to the relevant state authorities in Germany. As a result of the foregoing, the Company incurred an impairment expense on its exploration and evaluation assets of $13.2 million for the nine months ended September 30, 2015 and has no remaining carrying value attributed to such assets.

The Company has appointed a formal liquidator to complete the liquidation and dissolution of the Company's German subsidiaries which the Company expects will be completed in October 2016.

Restructuring Costs

The Company expects to incur material restructuring costs during the fourth quarter of 2015 and first quarter of 2016. These costs include ongoing administrative costs, employee termination benefits, office lease termination costs, legal, financial and professional costs. The Company estimates the costs to restructure its affairs to be approximately $1.3 million from September 30, 2015 onwards. These costs are expected to be funded from its cash balance which as of September 30, 2015 was approximately $14.4 million.

Stock Exchange Listing and Strategic Alternatives

The Company's Special Committee, comprised of Daryl Gilbert, Terry McCoy and Bill Shupe, is actively working with FirstEnergy Capital Corp. to identify and evaluate strategic alternatives available to the Company. The Special Committee is seeking a transaction that has the potential to be highly accretive for PRD shareholders' and is not subject to a continuing refinancing risk. PRD cautions that there are no guarantees that the review of strategic alternatives will result in a transaction, or if a transaction is undertaken, as to its terms. If a suitable transaction cannot be identified by the end of 2015, the Special Committee may propose returning the remaining capital in the Company to the shareholders'. The Company does not expect to make further public comment regarding the review unless the Special Committee approves a specific action.