Ironhorse Oil & Gas Advises Shareholders to Take No Action to 1927297 Alberta Ltd.'s Extension of the Expiry of its Hostile Bid and Responds to 1927297's Tactics to Conceal the Inadequacies of the Bid

CALGARY, Dec. 21, 2015 /CNW/ - Ironhorse Oil & Gas Inc. ("Ironhorse" or the "Company") (TSX-V:IOG), advises its shareholders to take no action in response to the extension of 1927297 Alberta Ltd.'s (the "Offeror") hostile bid to acquire the common shares ("Common Shares") of Ironhorse at $0.17 per share in cash (the "Offer").  The Offer, as extended, will expire on February 5, 2016.  The Offer remains the same, aside from the extension to February 5, 2016.  The Offer significantly undervalues Ironhorse's assets and growth potential.  Recent statements made by the Offeror are merely an attempt to conceal the inadequacies of its substantially undervalued, opportunistic and predatory bid for the Company.

The Offeror's Tactics to Conceal the Inadequacies of the Bid:

  1. Inaccurate and misleading statements about our financial advisor's opinion: The Offeror has made inaccurate and misleading statements about the opinion provided by our financial advisor to our board of directors (the "Board") and included in our Directors' Circular dated November 19, 2015.  As indicated in the opinion, our financial advisor relied on financial statements subsequent to December 31, 2014, including draft interim financial statements for the nine month period ended September 30, 2015 and management's discussion and analysis related thereto.  The Offeror's statement that our financial advisor relied only on outdated financial statements and management's discussion and analysis is clearly incorrect and misleading to our shareholders.  Furthermore, in assessing the adequacy of the consideration under the Offer to our shareholders our financial advisor mechanically rolled forward the reserves evaluation to September 30, 2015, utilized the strip pricing assumptions as at November 13, 2015, and made use of our actual lease operating statements for 2015.
  2. Our directors' and officers' interests are clearly aligned with shareholders: As a group, our directors and officers hold over 14% of the Common Shares.  Our directors and officers interests to maximize shareholder value are clearly well aligned with the interests of our shareholders.  The statement made by the Offeror that our Board is trying to protect management from a change of control that would reduce their compensation is misleading.  The amounts paid to our officers pursuant to our management agreement with Grizzly Resources Ltd. are not significant and the Board believes that they have no impact on our officers' interests in maximizing shareholder value.  The Board believes that it could not obtain replacement services at similar cost under other arrangements. The misleading and opportunistic actions of the Offeror are resulting in considerable cost and diversion of resources, which the Board believes is not in the interests of Shareholders.
  3. The Offer significantly undervalues Ironhorse's assets and growth potential. The Board believes that the Offer fails to adequately compensate shareholders for the value of Ironhorse's assets, and if successful, would deprive shareholders of Ironhorse's upside potential.  The Board has determined that the Offer is financially inadequate at current oil prices and is an opportunistic attempt by the Offeror to acquire Ironhorse, effectively using Ironhorse's own cash, at a low point in the energy cycle when Ironhorse has no debt and significant value appreciation with any oil price recovery.
  4. Superior proposals or other alternatives may emerge. The special committee of the Board (the "Special Committee") continues to work together with Ironhorse's management, directors and advisors to evaluate a range of strategic alternatives that may enhance shareholder value. The Board believes that Ironhorse and its assets are potentially attractive to other parties in addition to the Offeror. Alternatives may include, among other things, a sale of the Company for cash and/or shares, asset sales(s), a merger, a reorganization or partnering with a financial or strategic investor. Tendering Common Shares into the Offer before the Special Committee has had an opportunity to fully explore all available alternatives to the Offer may preclude the possibility of a financially superior alternative transaction emerging.

The Facts About the Offer

Shareholders are reminded of the facts about the Offer:

  1. The Offer is not supported by Ironhorse's largest shareholders or its directors and officers holding approximately 45% of the outstanding Common Shares
    • The directors and officers of Ironhorse, together with a number of shareholders (including certain of Ironhorse's largest shareholders) have indicated to the Company that they intend to reject the Offer. Such persons hold approximately 45% of the outstanding Common Shares. Accordingly, management believes that the Offer is unlikely to succeed under its current conditions.
  2. The Offer is highly conditional and has substantial completion risk.
    • The Offer is highly conditional and has substantial completion risk.  Among the conditions to the Offer is the condition that, together with Common Shares held by the Offeror and its affiliates, at least 66⅔% of the outstanding Common Shares shall have been deposited pursuant to the Offer. As stated above, shareholders holding approximately 45% of the outstanding Common Shares have indicated that they intend to reject the Offer. Accordingly, the Offer is subject to substantial completion risk as it is unlikely that all of the conditions to the Offer will be satisfied.
  3. The amended Offer does not comply with the Shareholder Rights Plan
    • Since the amended Offer is only open for acceptance for 93 days, it is not a "Permitted Bid" under the Shareholder Rights Plan adopted by Ironhorse, and the Offeror has chosen not to amend its bid to become a Permitted Bid.  The Shareholder Rights Plan is consistent with the amendments to the Canadian take-over bid rules proposed by the Canadian securities regulators to increase the minimum amount of time that a take-over bid must remain open to 120 days.

If shareholders of Ironhorse have any questions or require more information, they are encouraged to contact D.F. King Canada ("D.F. King"), a division of CST Investor Services Inc., the information agent retained by Ironhorse, by telephone at 1-800-294-3174 (Toll Free in North America) or 1-201-806-7301 (Banks, Brokers and Collect Calls), or by email at inquiries@dfking.com.

How to REJECT the Offer and Withdraw Tendered Shares

To reject the Offer, you should do nothing. The Offer is open for acceptance until February 5, 2016, unless extended further. Shareholders who have already tendered their Common Shares to the Offer can withdraw them at any time before they have been taken up by the Offeror and in certain other circumstances as further described under the heading "How to Withdrawn Your Deposited Common Shares" in the Directors' Circular. Shareholders holding shares through a dealer, broker or other nominee should contact such dealer, broker or nominee to withdraw their Common Shares. Shareholders may also contact D.F. King by telephone at 1-800-294-3174 (Toll Free in North America) or 1-201-806-7301 (Banks, Brokers and Collect Calls), or by email at inquiries@dfking.com.

If you have already tendered Common Shares to the Offer and you decide to withdraw these Common Shares from the Offer, you must allow sufficient time to complete the withdrawal process prior to the expiry of the Offer.

Advisories

Forward-Looking Statements

This news release contains forward-looking information (as defined in the Securities Act (Alberta)) and statements (collectively, "forward-looking statements") that are based on expectations, estimates and projections as of the date of this news release. These forward-looking statements can often, but not always, be identified by the use of forward-looking terminology such as "plans", "predicts", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or statements that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Examples of such forward-looking statements in this news release include, but are not limited to, the growth potential of the Company; and whether or not an alternative transaction superior to the Offer may emerge. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Forward-looking statements contained in this news release are based on a number of assumptions that may prove to be incorrect, including, but not limited to assumptions as to production, operating expenses, capital expenditures and oil prices; competitive conditions in the oil and gas industry; general economic conditions; changes in laws, rules and regulations applicable to Ironhorse; estimates of reserves; and whether or not an alternative transaction superior to the Offer may emerge. In addition to being subject to a number of assumptions, forward-looking statements in this news release involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to: volatility of crude oil and natural gas prices; the impacts of legislative and regulatory changes especially those which relate to royalties, taxation and the environment; various events which could disrupt operations; operational issues and contractual issues; uncertainty of estimates with respect to reserves; the supply and demand metrics for oil and natural gas; the variances of stock market activities generally; currency and interest rate fluctuations; Ironhorse's inability to either generate sufficient cash flow from operations to meet its current and future obligations or obtain external sources of debt and equity capital; general economic, business and market conditions; and such other risks and uncertainties identified in the filings by Ironhorse with the Canadian provincial securities regulatory authorities. The Board believes that the expectations reflected in the forward-looking statements contained in this news release are reasonable as at the date hereof, but no assurance can be given that these expectations will prove to be correct. In addition, although Ironhorse and the Board have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, you should not place undue reliance on any forward-looking statements contained in this news release. Except as required by law, neither the Board nor Ironhorse undertakes any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Ironhorse Oil & Gas Inc.

For further information: Larry J. Parks, President & Chief Executive Officer, (403) 237.9600; Karen Hutson, VP Finance & Chief Financial Officer, (403) 237.9600, www.ihorse.ca

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