Toro Oil & Gas Ltd. Announces a Non-Dilutive Financing of $12 Million Upon Sale of Production Volume Royalty on Viking Rights and Establishes $4 Million Acquisition Fund - Seite 2

In addition to the funding provided by the Total PVR, Source Rock has committed to set aside a $4 million Acquisition Fund, accessible at Toro's option. The proceeds of the Acquisition Fund can be used to fund strategic acquisitions within the Viking light oil fairway. Other key terms of this component include:

• The Acquisition Fund extends for a period of 12 months from the Closing Date; and
• Source Rock will be granted a gross over-riding royalty to be determined on the production and lands acquired by the Acquisition Fund.

Strategic Rationale for the Non-Dilutive Financing

Together with its existing sources of liquidity, Toro intends to use the proceeds from the Total PVR to increase and accelerate its 2015 drilling program within the Viking light-oil fairway.

"The transaction is in every sense of the word a win-win for both parties", commented Barry Olson, President and Chief Executive Officer of Toro. "Toro's business plan significantly accelerates as a result of the Source Rock partnership and non-dilutive form of financing. With signs of a modest recovery in commodity prices, a successful well-funded drilling program which Toro is about to embark upon has the potential to propel Toro into a higher production and valuation range."

The Acquisition Fund will provide Toro with the ability to continue to grow and consolidate the Viking light oil fairway. Toro has been an active acquirer within the Alberta Viking fairway and will continue to identify strategic acquisitions to increase its land base. Toro currently controls 122 net sections of land within this fairway.

With its inventory of high quality, large oil-in-place pools, Toro is well positioned to generate strong operating and financial results in the second half of 2015 and beyond.

2015 Outlook

The Total PVR proceeds in combination with other forms of liquidity, supports a $10 million initial phase drilling program which the Company intends to execute over the course of the summer. Key objectives of the drilling program include, but are not limited to, establishing or at a minimum confirming horizontal production type curves experienced previously on the Hamilton Lake property, bolster corporate cash flows in order to more fully sustain operations, begin to incur qualifying expenditures for Toro's recent flow- through equity offering and provide a basis to conduct further drilling programs prior to year-end.