Shareholders Group Statement On The Conclusion Of Equal Energy Strategic Review

VANCOUVER, Nov. 29, 2012 /PRNewswire/ - In response to Equal Energy's November 27 ^th 2012 press release highlighting the conclusion of the strategic review, Mr. Nawar Alsaadi and Dr. Adam Goldstein, "Shareholders Group", jointly owning 4.93% of the company's outstanding shares, would like to make the following statement:

The Shareholders Group believes that the management and the special committee of the board of directors has failed in its primary review objective of closing the significant gap between the value of the shares and that of the company's underlying assets. As a matter of fact, as a result of the asset dispositions undertaken during the review process this valuation gap has further widened.

Thus in light of the company failure to achieve its stated review objective, the Shareholders Group recommends the following:

• The immediate halt of the company's pursuit of accretive acquisitions and focusing instead on returning value to shareholders.
• The initiation of a substantial Dutch auction tender offer at a price range of $3.5 to $4.5; such a tender would significantly enhance the net asset value per share for current shareholders, while providing a liquidity event for selling shareholders.
• Materially increasing the amount of the announced annual dividend.
• The introduction of shareholder representatives on the board of directors.
• The resumption of the strategic review process to further explore alternatives to enhance shareholder value.

Equal Energy continues to be significantly undervalued. A simple inspection of the company's approved credit lines of $125m reflects a minimum enterprise value of $250m solely for the company's PDP reserves through applying the banks customary 50% discount to the value of such assets, which corresponds to a stock price of $6.49/share vs. the current stock price of $3.24

We believe the above steps will be instrumental in re-establishing shareholder confidence in Equal Energy and closing the substantial valuation gap between the company's underlying assets and its market price. Failure to undertake the above recommendations would entail further action on our part to safeguard and protect shareholder value.

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