ARC ENERGY FUND 8 REACHES AGREEMENT FOR THE TAKE-PRIVATE ACQUISITION OF STEP ENERGY SERVICES LTD.

CALGARY, AB, Oct. 17, 2025 /CNW/ - ARC Energy Fund 8 Canadian Limited Partnership, ARC Energy Fund 8 United States Limited Partnership, ARC Energy Fund 8 International Limited Partnership and ARC Capital 8 Limited Partnership (collectively, "ARC Energy Fund 8") issue this press release pursuant to National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues in respect of their holdings in STEP Energy Services Ltd. (TSX:STEP) ("STEP").

ARC Energy Fund 8, a private equity fund advised by ARC Financial Corp., is pleased to announce that ARC Energy Fund 8 and 2659160 Alberta Ltd., a corporation wholly owned by the limited partnerships comprising ARC Energy Fund 8 (the "Purchaser" and together with ARC Energy Fund 8, the "Purchaser Parties"), have entered into a definitive arrangement agreement (the "Arrangement Agreement") with STEP, pursuant to which the Purchaser Parties will acquire all of the issued and outstanding common shares in the capital of STEP ("Shares") that are not currently owned, controlled or directed, directly or indirectly, by ARC Energy Fund 8 or ARC Energy Fund 6 Canadian Limited Partnership, ARC Energy Fund 6 United States Limited Partnership, ARC Energy Fund 6 International Limited Partnership, or ARC Capital 6 Limited Partnership (collectively, "ARC Energy Fund 6"), for cash consideration of $5.50 per Share, by way of a plan of arrangement under section 193 of the Business Corporations Act (Alberta) (the "Arrangement").

ARC Energy Fund 8 currently holds an aggregate of 26,654,454 Shares, representing approximately 36.57% of the outstanding Shares, and ARC Energy Fund 6 currently holds an aggregate of 13,588,546 Shares, representing approximately 18.65% of the outstanding Shares. Collectively, ARC Energy Fund 8 and ARC Energy Fund 6, both of which are private equity funds advised by ARC Financial Corp., own, control or direct, directly or indirectly, an aggregate of 40,243,000 Shares, representing approximately 55.22% of the total outstanding Shares.

Prior to the execution of the Arrangement Agreement, the Purchaser Parties entered into voting support agreements with: (i) MMCAP International Inc. ("MMCAP") on September 24, 2025, in respect of the 16,401,485 Shares held by MMCAP, representing approximately 22.50% of the outstanding Shares, (ii) funds advised by XIB Asset Management Inc. (collectively, "XIB") on October 7, 2025, in respect of the 4,627,774 Shares held by XIB, representing approximately 6.35% of the outstanding Shares, and (iii) Groundlayer Capital Inc. ("Groundlayer") on October 9, 2025, in respect of the 1,198,400 Shares held by Groundlayer, representing approximately 1.64% of the outstanding Shares, pursuant to which MMCAP, XIB and Groundlayer agreed to, among other things, vote or cause to be voted all of the Shares owned, controlled or directed, directly or indirectly, by them in favour of the Arrangement.

In addition, concurrently with the execution of the Arrangement Agreement, the Purchaser Parties entered into voting support agreements with each of the directors and officers of STEP (together with MMCAP, XIB and Groundlayer, the "Locked-Up Shareholders"), collectively holding 1,176,101 Shares, representing approximately 1.61% of the outstanding Shares, pursuant to which each director and officer has agreed to, among other things, vote or cause to be voted all of the Shares owned, controlled or directed, directly or indirectly, by them in favour of the Arrangement.

Concurrently with the execution of the Arrangement Agreement, ARC Energy Fund 6 also entered into a voting support agreement with STEP, pursuant to which it agreed to, among other things, vote or cause to be voted all of the Shares owned, controlled or directed, directly or indirectly, by ARC Energy Fund 6 in favour of the Arrangement. ARC Energy Fund 6 is anticipated to retain the 13,588,546 Shares currently held by it, representing approximately 18.65% of the outstanding Shares.

The Arrangement will be subject to the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), including the "majority of the minority" shareholder approval requirements, and the Business Corporations Act (Alberta). Shares held by Locked-Up Shareholders represent approximately 71.71% of the "minority" shareholders, being all outstanding Shares excluding the 40,243,000 Shares collectively held by ARC Energy Fund 8 and ARC Energy Fund 6. On a combined basis, the Shares held by ARC Energy Fund 8, ARC Energy Fund 6 and the Locked-Up Shareholders represent approximately 87.33% of the Shares.

The meeting of STEP shareholders (the "STEP Meeting") is expected to be held on December 12, 2025. Closing of the Arrangement is expected to occur on or about December 16, 2025, following the STEP Meeting and upon the satisfaction of all conditions precedent, including receipt of the final order of the Court of King's Bench of Alberta.

STEP's address is Bow Valley Square II 1200, 205 5^th Ave SW, Calgary, AB T2P 4B9. A copy of ARC Energy Fund 8's related early warning report will be filed with the applicable securities commissions and will be filed under STEP's SEDAR+ profile at www.sedarplus.ca. Further information and a copy of the early warning report of ARC Energy Fund 8 may be obtained by contacting Tanya Causgrove at [phone] (ARC Energy Fund 8, 4300 400 3^rd Ave SW, Calgary, AB T2P 4H2).

RBC Capital Markets is acting as lead financial advisor and ATB Capital Markets is acting as co-financial advisor to ARC. Norton Rose Fulbright Canada LLP is acting as legal advisor to ARC.

ARC has entered into a commitment letter for a fully underwritten commitment of secured senior credit facilities to support the Arrangement, with ATB Financial acting as sole lead arranger and bookrunner.

FORWARD LOOKING INFORMATION AND STATEMENTS

Certain statements in this press release constitute "forward-looking information" or "forward-looking statements" within the meaning of applicable securities laws (collectively, "forward-looking statements"). In some cases, forward-looking statements are identifiable by the terminology used, such as "will", "expect", "anticipate", "intends" or other similar words suggesting future outcomes or an outlook. Forward-looking statements in this news release include, but are not limited to, express and/or implied statements pertaining to: the Arrangement, including, without limitation, the timing for the STEP Meeting and the completion of the Arrangement, the method by which it will be implemented; the expectation that ARC Energy Fund 6 will retain the Shares currently held by it in connection with the Arrangement; the expectation that all conditions precedent to closing of the Arrangement will be satisfied; and the filing of an early warning report.

The forward-looking statements contained in this press release are based on a number of assumptions which may prove to be incorrect. Although ARC Energy Fund 8 believes that the expectations reflected in such forward-looking statements are reasonable based on the information available at the time of this press release, undue reliance should not be placed on any such statements as ARC Energy Fund 8 can give no assurance that such expectations will prove to be correct. Forward-looking statements are based on expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by ARC Energy Fund 8 and described in the forward-looking statements.

The forward-looking statements contained in this press release is made as of the date hereof and, except as required by applicable securities law, ARC Energy Fund 8 undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.

SOURCE ARC Financial Corp.