Tanager Energy Inc. (TSXV:TAN) entered into an asset purchase agreement to acquire 50% interest in lease holdings And participation right in Polk And Tyler County from Roger S. Braugh for $8 million on April 27, 2016. As part of consideration, Tanager Energy will pay $2 million in cash and intends to issue $6 million in convertible notes. The notes are subject to a hold period of four months from the date of closing. The cash portion of the deal is expected to be financed from a debt or equity financing. Tanager has also announced a convertible debenture offering of which, CAD 0.7 million ($0.55 million) will be used for deposit and anticipated transaction costs. Paleo Oil Company LLC will hold the remaining 50% interest and will continue to operate the wells. In the event of termination, Tanager will have an option to acquire a 3.125% interest in the subject assets in consideration for the deposit payment. Upon the closing of the transaction, the Chris Pettit & Associates PC as trustee and Roger S. Braugh shall nominate three individuals to the Board of Directors of Tanager and three of the current directors of Tanager will resign. Hugh Loney, Patrick Acham and David W. Pryce, will resign upon the closing of the proposed transaction to create vacancies to allow for the appointment of the three nominees of the sellers, as required under the applicable purchase agreement. Upon closing of the proposed transaction, the Board of Directors of Tanager will be comprised of John Squarek, a current director of Tanager, and the three nominees of the sellers, namely Roland Oberlin, Craig Davis, and Thomas M. Crain Jr.

The transaction is subject to an number of conditions, including completion of satisfactory land review by Tanager, completion by Tanager of a financing for gross proceeds of not less than $1.5 million part of which will be used to satisfy the cash portion of the purchase price, the requisite approval of the shareholders of Tanager and receipt of all regulatory approvals, including approval of the TSX Venture Exchange. The transaction is expected to close on or before June 30, 2016. As of May 6, 2016, Tanager has applied to the TSX Venture Exchange for approval of the transaction. Tanager Energy intends to close the transaction following the annual general and special shareholders meeting on June 27, 2016. Chris Pettit & Associates PC acted on behalf of Roger S. Braugh Jr. in the deal. Currency conversion is made through www.oanda.com on April 27, 2016 (CAD 1= $0.79038).