CEQUENCE ENERGY LTD. ANNOUNCES THE CLOSING OF THE PLAN OF ARRANGEMENT WITH
TEMPLE ENERGY INC.

CALGARY, Sept. 10 /CNW/ - Cequence Energy Ltd. ("Cequence") (TSX:CQE) is pleased to announce the completion of the plan of arrangement (the "Arrangement") involving Temple Energy Inc. ("Temple"), Temple shareholders, Cequence and Cequence Acquisitions Ltd., a wholly-owned subsidiary of Cequence, providing for the combination of the businesses of Cequence and Temple as well as their directors and management teams to form a resource play focused, oil and gas exploration and development company.

Pursuant to the Arrangement, Temple shareholders are entitled to receive 0.355 of a Cequence common share for each Temple common share held. To receive their Cequence shares, former Temple shareholders must submit their Temple shares to Valiant Trust Company, depositary under the Arrangement and transfer agent for Cequence, pursuant to the terms and instructions contained in the letters of transmittal provided to Temple shareholders. Based on the outstanding shares of both companies as of July 27, 2010 when the arrangement agreement with respect to the Arrangement was entered into by Temple and Cequence, and the exchange ratio, shareholders of each of Cequence and Temple would own 52.5% and 47.5%, respectively, of the combined entity (those figures will have varied due to the closing of Cequence's recent equity financings on August 19, 2010 and September 9, 2010).

Following completion of the Arrangement, the company's new management team consists of Paul Wanklyn, President and Chief Executive Officer (previously President and CEO of Temple), Howard Crone, Executive Vice President and Chief Operating Officer (previously President and CEO of Cequence) and David Gillis, Vice President, Finance and Chief Financial Officer. The management team also includes the following former Vice Presidents of Temple who will be assuming the following positions in Cequence: Chris Soby, Vice President, Land; Steve Stretch, Vice President, Geophysics; Dave Robinson, Vice President, Geology; Mike Stewart, Vice President, Operations; and James Jackson, Vice President, Engineering, together with Nathan MacBey the former Vice President, Land of Cequence who has now assumed the position of Vice President, Corporate Development.

Donald Archibald will continue in his capacity as Chairman of the board of directors of the combined company. The Board will also include Paul Wanklyn, Jim Gray, Brian Felesky, Andrew Evans and Robert Cook (previously Temple directors) with Paul Colborne, Howard Crone, Peter Bannister and Francesco Mele continuing on the Board.

Paul Wanklyn, President and CEO, stated, "I know I speak for all previous Temple employees when I say that we are excited with the opportunities ahead of us. Over the past number of months we have developed a high regard for Howie and his team and we look forward to collectively exploiting our combined asset base. With production in excess of 8,000 boepd, Cequence is well positioned to weather the current market weakness and evaluate resource style opportunities on our lands."

In addition, Cequence is pleased to announce that, concurrently with the closing of the Arrangement, it has entered into a credit agreement with a syndicate of banks pursuant to which the banks have agreed to provide Cequence with credit facilities for an aggregate of $110 million. The credit facilities are comprised of a $100 million extendible revolving term credit facility and a $10 million operating facility. After completion of the Arrangement, Cequence currently has approximately $71 million in estimated net debt. In calculating the estimate of net debt the Company has made assumptions relating to, among other things, commodity pricing, production levels, capital expenditures, deal and acquisition related costs, purchase price adjustments related to recent asset acquisitions and royalties.

Cequence is also pleased to announce that it has sold the long term floating rate notes which it held as a result of a previously announced restructuring of asset backed commercial paper inherited with the recapitalization of Sabretooth Energy Ltd. for approximately $13.5 million.

FirstEnergy Capital Corp. acted as financial advisor for Cequence and Peters & Co. Limited acted as financial advisor for Temple.

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 future production levels and net debt levels. 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: field production rates and decline rates; the ability of Cequence to secure adequate product transportation; the ability of Cequence to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; Cequence's ability to operate the properties in a safe, efficient and effective manner; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; deal and acquisition related costs, purchase price adjustments related to recent asset acquisitions and the ability of Cequence to successfully market its oil and natural gas products. 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

BOEs means barrels of oil equivalent and are presented on the basis of one Boe for six Mcf of natural gas. Disclosure provided herein in respect of BOEs may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

%SEDAR: 00023788E

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