CEQUENCE ENERGY LTD. ANNOUNCES THE COMPLETION OF THE ACQUISITION OF THE DEEP
BASIN ASSETS AND OTHER MATTERS

CALGARY, Sept. 9 /CNW/ - Cequence Energy Ltd. ("Cequence") (TSX:CQE) is pleased to announce that it has closed the acquisition of certain assets in the Deep Basin (the "Deep Basin Assets") from a large publicly traded oil and gas company (the "Vendor") for approximately $85 million in cash.

The Deep Basin Assets have production of approximately 2,100 BOE/d and estimated proved plus probable reserves of 11,178 MBOE based on an independent engineering report effective July 1, 2010. In addition, the Deep Basin Assets contain a large inventory of resource based opportunities and provide exploration opportunities in the Gething, Wilrich and Montney formations. The Deep Basin Assets are complementary to core properties of Temple Energy Inc. ("Temple") in the Simonette area.

Satisfaction of Escrow Release Conditions

Cequence is also pleased to announce that, further to the closing of the previously announced "bought deal" short form prospectus offering of 18,545,000 subscription receipts, all escrow release conditions have been satisfied and that the escrow agent has released net proceeds of $37.9 million from the sale of the subscription receipts to the Vendor, as partial payment of the purchase price for the Deep Basin Assets.

In addition, the escrow agent has issued the underlying Cequence common shares to the receiptholders effective September 8, 2010 through the facilities of CDS Clearing and Depository Services Inc. (other than those certificates representing the underlying Cequence common shares of subscription receipts sold pursuant to Rule 506 of Regulation D under the United States Securities Act of 1933, which will be delivered to the holders thereof). The transfer register in respect of subscription receipts closed at 5:00 p.m. (Calgary time) on September 8, 2010.

Temple Arrangement Matters

Cequence is also pleased to announce that Cequence shareholders have approved the issuance of Cequence common shares in connection with the plan of arrangement (the "Arrangement") involving Temple, shareholders of Temple, Cequence and Cequence Acquisitions Ltd., a wholly-owned subsidiary of Cequence, at the special meeting (the "Meeting") of the Cequence shareholders held on September 8, 2010.

At the Meeting, Cequence shareholders also approved: (i) the election of Donald Archibald, Peter Bannister, Paul Colborne, Robert Cook, Howard Crone, Andrew Evans, Brain Felesky, James Gray, Francesco Mele and Paul Wanklyn as directors of Cequence, to hold office from and after the time the Arrangement becomes effective; and (ii) the issuance of up to 2,950,000 Cequence common shares in connection with a private placement to certain investors, including a major shareholder and certain directors and officers of Cequence.

In addition, Cequence is pleased to announce that the Temple shareholders have approved the Arrangement at the special meeting of Temple shareholders held on September 8, 2010. Also on September 8, 2010, Temple received a final order from the Alberta Court of Queen's Bench approving the Arrangement. Cequence has previously received the requisite approval under the Competition Act (Canada). The Arrangement is expected to be completed tomorrow, September 10, 2010.

Completion of Private Placement

Lastly, Cequence is pleased to announce that it has closed its previously announced private placement of 2,950,000 Cequence common shares to a major shareholder and certain directors and officers of Cequence at a price of $2.10 per share for total gross proceeds of approximately $6.2 million. The private placement was conducted through a syndicate of agents led by FirstEnergy Capital Corp. and Peters & Co. Limited and included Cormark Securities Inc., Mackie Research Capital Corporation, Macquarie Capital Markets Canada Ltd. and National Bank Financial Inc.

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 development and exploration plans and the timing thereof, timing for completion of the Arrangement and the anticipated benefits resulting from acquisition of the Deep Basin Assets. 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 Arrangement; the timely receipt of any required regulatory approvals; 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; 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: Howard Crone, President and Chief Executive Officer, [phone], [email protected]; or David Gillis, Vice President, Finance and Chief Financial Officer, [phone], [email protected]