FORT CHICAGO ENTERS INTO AGREEMENT TO ACQUIRE PRISTINE POWER INC.

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./

Trading Symbol: FCE.UN

Exchange: TSX

CALGARY, Sept. 22 /CNW/ - Fort Chicago Energy Partners L.P. ("Fort Chicago") announced today that it has entered into a Pre-Acquisition Agreement dated September 21, 2010 with Pristine Power Inc. ("Pristine") (TSX: PPX; PPX.WT) pursuant to which Fort Chicago has agreed to make an offer to purchase (the "Offer") (i) all of the issued and outstanding common shares of Pristine ("Pristine Shares"), including any Pristine Shares issued prior to the expiry time of the Offer upon the exercise of outstanding common share purchase warrants of Pristine ("Pristine Warrants") and upon the exercise or surrender of outstanding options to acquire Pristine Shares granted pursuant to Pristine's stock option plan ("Pristine Options"), on the basis of 0.2703 of a Class A limited partnership unit of Fort Chicago ("Class A Unit") for each Pristine Share, and (ii) all of the issued and outstanding Pristine Warrants for a cash consideration of $0.02 for each Pristine Warrant. The Offer will be made pursuant to a take-over bid.

Acquisition Highlights

Pristine is active as an electricity power developer and operator in the provinces of British Columbia and Ontario. Pristine's primary assets include:

    
    (i)    a 50% interest in the York Energy Centre, a (nominal) 400 megawatt
           ("MW") natural gas fired peaking generation facility located in
           the Township of King, north of Toronto. Construction of this
           facility has commenced, with commercial operations anticipated to
           commence in the second quarter of 2012. The gross capital cost of
           the facility is estimated at $337 million. York Energy Centre is
           party to a 20 year peaking generation contract with the Ontario
           Power Authority, the term of which will commence with commercial
           operations. The construction of York Energy Centre will be
           financed with a recently announced $270.2 million non-recourse
           debt financing and other facilities provided by a syndicate of
           financial institutions;

    (ii)   a 25% interest in the East Windsor Cogeneration Centre, a high
           efficiency 86 MW natural gas fired cogeneration facility located
           on industrial land adjacent to a Ford Motor Company of Canada
           Limited engine manufacturing site in Windsor, Ontario. Fort
           Chicago currently holds a 50% interest in East Windsor
           Cogeneration Centre. The facility is party to a 20 year combined
           heat and power contract with the Ontario Power Authority that
           commenced when the facility commenced commercial operations in
           November, 2009; and

    (iii)  a 75% interest in two 5 MW Energy Recover Generation plants
           operated by Pristine, located at the Savona and 150 Mile House
           compressor stations of the Spectra Energy pipeline system in
           British Columbia. Pristine currently holds a 25% interest in these
           facilities and recently announced that it has entered into an
           agreement with ENMAX Green Power Inc. to acquire a further 50%
           interest in these two facilities.
    

Pristine is also actively pursuing the development of a number of other power projects, including two wind power projects in Ontario under the Feed in Tariff process. Upon the successful completion of the Offer, the rights Pristine holds to purchase a 50% interest in a suite of hydroelectric assets being purchased by Fort Chicago from ENMAX Corporation, as recently announced by Fort Chicago and Pristine, will be terminated.

Mr. Stephen H. White, President and CEO of Fort Chicago, commented, "We believe the acquisition of Pristine, in conjunction with our recently completed acquisition of Swift Power Corp. and our recently announced acquisition of hydro-power assets from ENMAX Corporation, represents a third, fundamental transformative change to our power business. This transaction adds both operating and development power assets to our power business, and will also add key expertise to our operating presence in Ontario and B.C."

Benefits to Fort Chicago

The benefits identified by Fort Chicago of the acquisition of Pristine include:

    
    -   addition of high-quality power generation assets with stable, long-
        term contracted cash flows, which is consistent with Fort Chicago's
        overall investment strategy;

    -   incremental cash flows from East Windsor and EnPower, which will be
        significantly augmented with cash flows from York Energy Centre once
        it is in service;

    -   York Energy Centre provides Fort Chicago with meaningful, low-risk
        growth and a significant addition to its near-term growth profile,
        which includes the contracted Dasque and Culliton Creek run-of-river
        projects in development in B.C., and to the long-term, contracted
        run-of-river assets it is acquiring from ENMAX Corporation;

    -   York Energy Centre has been fully funded and has commitments for
        major equipment purchases in hand;

    -   the location of the Pristine assets is complementary to Fort
        Chicago's existing operations in Ontario and B.C., allowing Fort
        Chicago to leverage its operating presence in those areas; and

    -   extends the tax horizon of Fort Chicago's Canadian businesses.
    

Based on the closing price of the Class A Units on the Toronto Stock Exchange (the "TSX") of $11.30 on September 21, 2010, the Offer implies a share exchange value of $3.05 per Pristine Share representing a premium of approximately 17% over the closing price of the Pristine Shares on the TSX of $2.60 on September 21, 2010. Based on the volume weighted average price of the Class A Units on the TSX for the 20 trading day period ending September 21, 2010, the Offer implies a share exchange value of $3.09 per Pristine Share, representing a premium of approximately 28% over the volume weighted average price of the Pristine Shares on the TSX for the same period.

Each Pristine Warrant entitles the holder thereof to acquire one Pristine Share at an exercise price of $3.25 per Pristine Share up until January 13, 2012. The outstanding Pristine Warrants are "out of the money" since the exercise price of $3.25 exceeds both the closing price of the Pristine Shares on the TSX of $2.60 on September 21, 2010 and the share exchange value implied by the Offer of $3.05 per Pristine Share.

The aggregate enterprise value of the Pristine transaction is approximately $314 million, which includes assumed debt of approximately $195 million, which amount assumes the York Energy Centre is fully funded and Pristine holds a 75% interest in the EnPower assets.

The Board of Directors of Pristine has approved the Offer and, after consulting with its financial and legal advisors, has unanimously determined that the Offer is fair, from a financial point of view, to holders of Pristine Shares and Pristine Warrants and in the best interests of Pristine and the holders of Pristine Shares and Pristine Warrants. It has agreed to unanimously recommend that holders of Pristine Shares and Pristine Warrants accept the Offer. Pristine retained Haywood Securities Inc. as its financial advisor in connection with certain matters. Capital West Partners has provided the Board of Directors of Pristine with a verbal fairness opinion that the consideration to be received by holders of Pristine Shares and Pristine Warrants under the Offer is fair, from a financial point of view, to such holders.

As of the date hereof, there are 35,622,556 Pristine Shares, 2,895,835 Pristine Warrants and 3,537,500 Pristine Options issued and outstanding, which in the aggregate represent 42,055,891 Pristine Shares outstanding on a fully diluted basis. Fort Chicago, together with its affiliates, currently owns an aggregate of 4,342,675 Pristine Shares (representing approximately 12.2% of the issued and outstanding Pristine Shares), 276,000 Pristine Warrants (representing approximately 9.5% of the issued and outstanding Pristine Warrants) and 160,000 Pristine Options, all together representing approximately 11.4% of the issued and outstanding Pristine Shares on a fully diluted basis.

In connection with the Offer, Fort Chicago has entered into Pre-Tender Agreements pursuant to which directors and officers of Pristine and certain other holders of Pristine Shares and Pristine Warrants have agreed to tender to the Offer and not withdraw, except in certain circumstances, the Pristine Shares beneficially owned by them, including all Pristine Shares that they may acquire before the expiry time of the Offer upon the exercise of Pristine Warrants or upon the exercise or surrender of Pristine Options, and all the Pristine Warrants beneficially owned by them, representing approximately 57% of the issued and outstanding Pristine Shares on a fully diluted basis and 54% of the issued and outstanding Pristine Warrants. Fort Chicago is exempt from the requirement to provide a valuation of the Pristine Shares in connection with the Offer (which is an insider bid under applicable securities legislation) on the basis that Fort Chicago has entered into Pre-Tender Agreements with at least one Pristine shareholder holding over 10% of the outstanding Pristine Shares and a number of Pristine shareholders holding, in aggregate, over 20% of the outstanding Pristine Shares, and has satisfied a number of other conditions to the availability of such valuation exemption.

The Offer will be subject to a number of conditions including, among other things, (i) there being validly deposited under the Offer and not withdrawn such number of Pristine Shares that, together with the Pristine Shares owned by Fort Chicago and its affiliates, represents at least 66 2/3% of the outstanding Pristine Shares calculated on a fully diluted basis, (ii) there being validly deposited under the Offer and not withdrawn such number of Pristine Warrants that, together with the Pristine Warrants owned by Fort Chicago and its affiliates, represents at least 66 2/3% of the outstanding Pristine Warrants, and (iii) receipt of all necessary regulatory approvals. Certain conditions may be waived by Fort Chicago at any time both before and after the time of expiry of the Offer. Pristine has agreed not to solicit further offers or initiate discussions or negotiations with any third party with respect to an alternative transaction involving Pristine including the sale of Pristine, subject to fiduciary obligations including the right to respond to superior proposals, which Fort Chicago has the right to match. Pristine has agreed to pay Fort Chicago a non-completion fee of $3 million in certain circumstances.

Holders of Pristine Shares who accept the Offer and are eligible to receive Class A Units in accordance with the terms of the Offer will receive monthly distributions on such Class A Units provided that they hold such Class A Units on the applicable record date for the monthly distribution. As previously announced, Fort Chicago intends to convert from a limited partnership to a taxable Canadian corporation pursuant to a court approved plan of arrangement under the Business Corporation Act (Alberta). If the conversion is approved by holders of Class A Units at the special meeting scheduled to take place on November 23, 2010, it is anticipated that the effective date of the conversion will be January 1, 2011. Fort Chicago currently anticipates that there will be no change in its distribution policy following the completion of the conversion and that the continuing corporation will declare cash dividends on a monthly basis in the amount of $0.0833 per share, representing an annual dividend of $1.00 per share. The dividends paid by the continuing corporation are anticipated to be designated as "eligible dividends" for tax purposes and hence qualify for the Canadian enhanced federal dividend tax credit.

Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be held by or transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership", each for purposes of the Income Tax Act (Canada) (the "Tax Act"). As a result of these ownership restrictions (which will generally cease to apply after Fort Chicago is converted to a corporation) and subject to receiving all necessary regulatory approvals from Canadian securities regulatory authorities, the terms of the Offer will provide that the Class A Units issuable pursuant to the Offer to a beneficial owner of Pristine Shares who is for purposes of the Tax Act (i) a "non-resident" of Canada or a partnership which is not a "Canadian partnership", or (ii) a person in which an interest would be a "tax shelter investment", will be sold by, or on behalf of, a depositary appointed by Fort Chicago and such beneficial owner shall receive, instead of Class A Units, a cash payment in Canadian dollars equal to such beneficial owner's proportionate share of the proceeds from the sale of all Class A Units sold by such depositary net of all applicable expenses in respect of such sales, including applicable commissions and withholding taxes.

Full details of the Offer will be included in a formal take-over bid circular and related documents, which are expected to be mailed to the holders of Pristine Shares, Pristine Warrants and Pristine Options, together with the directors' circular of Pristine, on or about September 30, 2010. Once mailed, the take-over bid circular and the directors' circular will be available under Pristine's profile on the SEDAR website at www.sedar.com.

The Offer, unless extended, will expire 35 days after the mailing. Completion of the Offer is expected to occur by the end of November 2010.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction outside of Canada, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Class A Units have not been and will not be registered under the United States Securities Act of 1933 or any state securities laws and may not be offered, sold or delivered in the United States to or for the account of a "U.S. person" as defined in the regulations thereunder.

Webcast

Fort Chicago Energy Partners L.P. will hold a conference call and webcast at 9:00 a.m. Mountain time (11:00 a.m. Eastern time) on Wednesday, September 22, 2010 to discuss the transaction. The call can be accessed at 1-888-231-8191 or 1-647-427-7450 (conference ID 12322405 followed by the pound sign) and will be broadcast live on the Internet. This can be accessed at either through a link contained in the "Webcasts and Presentations" section on Fort Chicago's website or through the following URL:

http://w.on24.com/r.htm?e=244710&s=1&k=1E513ADF5A45B2CB3AEC67EBF3730ECD

A replay will be available shortly thereafter at 1-800-642-1687 and 1- 416-849-0833. The access code is 12322405 (followed by the pound sign).

Fort Chicago

Fort Chicago is a publicly traded limited partnership based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America. Its Class A Units are listed on the TSX under the symbol FCE.UN and its convertible unsecured subordinated debentures, Series B and Series C are listed on the TSX under the symbols FCE.DB.B. and FCE.DB.C, respectively. Fort Chicago is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; an NGL extraction business which includes an interest in a world-class extraction facility near Chicago; and a power business with power facilities in Ontario, New York, Colorado and California, district energy systems in Ontario and Prince Edward Island, waste heat power facilities along the Alliance Pipeline and renewable power projects in British Columbia. Fort Chicago and each of its pipeline, NGL extraction and power businesses are also actively developing a number of greenfield investment opportunities that will be a key source of future growth. In the normal course of its business, Fort Chicago and each of its businesses regularly evaluate and pursue acquisition and development opportunities.

    
                     Class A Unit Ownership Restrictions
    

Fort Chicago is organized in accordance with the terms and conditions of a limited partnership agreement which provides that no Class A Units may be held by or transferred to, among other things, a person who is a "non-resident" of Canada, a person in which an interest would be a "tax shelter investment" or a partnership which is not a "Canadian partnership" each for purposes of the Tax Act.

Certain information contained herein relating to, but not limited to, Fort Chicago and its businesses constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Fort Chicago expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to Offer, the making and completion of the Offer, the outcome of the Offer, the timing and cost of the construction of York Energy Centre, the benefits of York Energy Centre, the benefits to Fort Chicago of the acquisition of Pristine and the development of greenfield investment opportunities. The risks and uncertainties that may affect the operations, performance, development and results of Fort Chicago's businesses include, but are not limited to, the following factors: failure to complete the Offer; the ability of Fort Chicago to successfully implement its strategic initiatives and achieve expected benefits; levels of oil and gas exploration and development activity; the status, credit risk and continued existence of contracted customers; the availability and price of capital; the availability and price of energy commodities; the availability of construction services and materials; fluctuations in foreign exchange and interest rates; Fort Chicago's ability to successfully obtain regulatory approvals; changes in tax, regulatory, environmental, and other laws and regulations; competitive factors in the pipeline, NGL and power industries; operational breakdowns, failures, or other disruptions; and the prevailing economic conditions in North America. Additional information on these and other risks, uncertainties and factors that could affect Fort Chicago's operations or financial results are included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that the forgoing list of factors and risks is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time.

Although Fort Chicago believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual result achieved will vary from the information provided herein and the variations may be material. Fort Chicago makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Fort Chicago does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

For further information: Stephen H. White, President and C.E.O., David I. Holm, Executive Vice President, Corporate and Business Development, Richard Weech, Vice President, Finance and C.F.O., Fort Chicago Energy Partners L.P., Livingston Place, Suite 440, 222 - 3rd Avenue S.W., Calgary, AB, T2P 0B4, Phone: [phone], Fax: [phone], www.fortchicago.com