CEQUENCE ENERGY LTD. ANNOUNCES INCREASED PARTICIPATION BY PURCHASER UNDER
PRIVATE PLACEMENT

/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW/

CALGARY, Aug. 31 /CNW/ - Cequence Energy Ltd. ("Cequence" or the "Company") (TSX:CQE) is pleased to announce that in connection with its previously announced private placement (the "Private Placement") of up to 2,950,000 Cequence common shares at $2.10 per share, KERN Energy Partners Management Ltd. and KERN Energy Partners Management II Ltd. (collectively, "KERN") will be increasing its participation in the Private Placement by acquiring an additional 53,900 common shares. As such, KERN now intends to acquire an aggregate of 2,549,300 common shares pursuant to the Private Placement. The aggregate maximum number of common shares proposed to be issued by Cequence pursuant to the Private Placement is not affected by KERN's proposed increased participation.

The acquisition of additional shares by KERN is subject to the approval of the TSX and, as required by the Rules of the TSX, the Private Placement is subject to the approval of Cequence shareholders at the special meeting of shareholders scheduled for September 8, 2010.

Further Information

Cequence is a publicly traded Canadian energy company involved in the acquisition, exploitation, exploration, development and production of natural gas and crude oil in western Canada. Further information about Cequence may be found in its continuous disclosure documents filed with Canadian securities regulators at www.sedar.com.

Forward-Looking Information

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: the proposed participation in the Private Placement. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Cequence believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Cequence can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: the ability of Cequence to complete the Private Placement and, once completed, to realize the anticipated benefits of such transaction; and the timely receipt of any required regulatory approvals (including shareholder approvals). Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Cequence and described in the forward-looking information. The material risk factors affecting Cequence and its business are contained in Cequence's Annual Information Form which is available under Cequence's issuer profile on SEDAR at www.sedar.com.

The forward-looking information contained in this press release is made as of the date hereof and Cequence undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Additional Advisories

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The common shares to be offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended and may not be offered or sold in the United States or to a U.S. person absent registration or an applicable exemption from the registration requirements.

%SEDAR: 00023788E

For further information: Howard Crone, President and Chief Executive Officer, [phone], [email protected]; or David Gillis, Vice President, Finance and Chief Financial Officer, [phone] or [email protected]