ORLEN Upstream Canada Ltd. to Acquire Kicking Horse Energy Inc.

CALGARY, AB--(October 13, 2015) - ORLEN Upstream Canada Ltd. ("ORLEN Upstream Canada"), a wholly owned subsidiary of PKN ORLEN S.A. ("PKN ORLEN") (WSE:PKN), and Kicking Horse Energy Inc. ("Kicking Horse") (TSX VENTURE: KCK) announced today that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which ORLEN Upstream Canada will acquire all of the outstanding common shares of Kicking Horse for C$4.75 per share in cash. The transaction is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement").

The consideration payable pursuant to the Arrangement represents a 47% premium to the most recent closing price of Kicking Horse's common shares on the TSX-V and a 60% premium to the 20 day volume weighted average trading price of Kicking Horse's common shares for the period ended October 9, 2015, being a total equity purchase price of C$293 million. The total transaction value, including the assumption of Kicking Horse's current net debt and amounts to be paid under the Arrangement to retire in-the-money Kicking Horse options, is approximately C$356 million.

The acquisition of Kicking Horse aligns with PKN ORLEN's strategy of investing in attractive, low-risk jurisdictions such as Canada and expands ORLEN Upstream Canada's Canadian asset portfolio allowing it to leverage its Canadian corporate office and executive team based in Calgary, Alberta. ORLEN Upstream Canada originally established its Canadian operations in 2013 through the acquisition of TriOil Resources Ltd. and since then has continued to grow its production and reserve base via further investment. Today it holds significant land positions across the Cardium, Dunvegan and Montney formations with current production volumes of 7,000 boe/d and a 2P reserve base of approximately 50 million boe.

Kicking Horse's core assets are strategically located in the Greater Kakwa area of Alberta where the Montney has successfully been developed, delivering condensate rich natural gas. The economics of this play are some of the best in Western Canada and provide ORLEN Upstream Canada with significant growth opportunities that are synergistic with their existing portfolio. Kicking Horse's assets are expected to add approximately 4,000 boe/d of production (approximately 50% condensate) and 30 million boe of 2P reserves (as reported by Kicking Horse as at December 31, 2014), and significantly increase ORLEN Upstream Canada's position within the Montney Formation.

Matt Rees, the President of ORLEN Upstream Canada, stated, "This transaction represents a continuation of our strategy to grow our Canadian business, both through development of our existing lands and acquisitions of the right assets. It includes a large land position focused on the highly prospective Kakwa/Wapiti areas of Alberta with exposure to a very attractive part of the Montney. Supported by the significant financial capacity of PKN ORLEN, we believe we can accelerate production and development activities on these lands in order to fully realize the potential of Kicking Horse's asset base. We look forward to welcoming the employees of Kicking Horse to our team in Calgary and continuing their past success."

Steve Harding, the President and CEO of Kicking Horse, stated, "This transaction crystalizes the significant value created by Kicking Horse, in its East Kakwa property, and its other Deep Basin and Canadian assets, through more than five years of successful land acquisition, exploration and development activities. Furthermore, it provides cash liquidity for all Kicking Horse shareholders at an attractive premium, and eliminates downside risk for our shareholders in a market that continues to be capital constrained and subject to significant commodity price uncertainty."

The Arrangement

The Arrangement will be subject to approval by at least 66 2/3% of the votes cast at an annual and special meeting of Kicking Horse's shareholders and option holders that is expected to be held in late November or early December 2015. Pursuant to the Arrangement Agreement, the transaction is also subject to the approval of the Court of Queen's Bench of Alberta, applicable regulatory approvals and the satisfaction of certain closing conditions customary in transactions of this nature. The Arrangement Agreement also provides for, among other things, customary board support and non-solicitation covenants (subject to a "fiduciary out" for unsolicited "superior proposals" in favour of the Kicking Horse Board and a "right to match" in favour of ORLEN Upstream Canada) as well as the payment to ORLEN Upstream Canada of a break fee in the amount of C$10.0 million if the proposed transaction is not completed in certain specified circumstances.

Kicking Horse's Board of Directors, after consultation with its financial and legal advisors, has unanimously determined that the Arrangement is in the best interest of Kicking Horse and is fair to Kicking Horse shareholders from a financial point of view and will recommend that Kicking Horse's shareholders and option holders vote in favour of the Arrangement. AltaCorp Capital Inc. and Canaccord Genuity Corp., acting as financial advisors to the Special Committee of the Board of Directors of Kicking Horse, have each provided an opinion to the effect that the consideration to be received by Kicking Horse shareholders is fair, from a financial point of view, to Kicking Horse shareholders. All of the senior officers and directors of Kicking Horse have entered into customary lock-up and support agreements, pursuant to which, among other things, they have agreed to vote in favour of the transaction.

The terms and conditions of the proposed transaction will be summarized in Kicking Horse's information circular, which will be filed and mailed to Kicking Horse shareholders in late October 2015. The transaction is expected to close in late November or early December 2015.

Advisors and Legal Counsel

BMO Capital Markets is acting as financial advisor and Norton Rose Fulbright Canada LLP is acting as legal counsel to ORLEN Upstream Canada. AltaCorp Capital Inc. and Canaccord Genuity Corp. are acting as financial advisors and Burnet, Duckworth & Palmer LLP is acting as legal counsel to Kicking Horse.

About ORLEN Upstream Canada

ORLEN Upstream Canada is a wholly-owned subsidiary of ORLEN Upstream International B.V., which is a wholly-owned subsidiary of ORLEN Upstream Sp. z o.o., which in turn is owned 100% by PKN ORLEN. PKN ORLEN is one of the largest petroleum and petrochemical corporations in Central and Eastern Europe and the largest in Poland. For the year ended December 31, 2014, PKN ORLEN reported consolidated revenue of approximately C$35 billion and consolidated assets of approximately C$15 billion. PKN ORLEN is one of the blue chip stocks traded on the Warsaw Stock Exchange and its market capitalization as of October 9, 2015 was close to C$10 billion.

About Kicking Horse

Kicking Horse is a public oil and gas company which is primarily focused on the development of Alberta's liquids-rich Montney Formation tight gas play. For more information, please see the Company's website: www.kickinghorseenergy.com

Advisory

Forward-looking Statements - This press release contains forward-looking statements and forward looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains forward-looking statements and information concerning: the anticipated benefits of the Arrangement to Kicking Horse and its shareholders, the timing and anticipated receipt of required regulatory, court, and shareholder approvals for the Arrangement; the ability of Kicking Horse and ORLEN Upstream Canada to satisfy the other conditions to, and to complete, the Arrangement; and the anticipated timing of the mailing of the information circular regarding the Arrangement and the closing of the Arrangement.

In respect of the forward-looking statements and information concerning the anticipated completion of the proposed Arrangement and the anticipated timing for completion of the Arrangement, Kicking Horse has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions as to the time required to prepare and mail Kicking Horse shareholder meeting materials, including the required information circular; the ability of the parties to receive, in a timely manner, the necessary regulatory, court, securityholder and other third party approvals and the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Arrangement. These dates may change for a number of reasons, including unforeseen delays in preparing meeting materials, inability to secure necessary securityholder, regulatory, court or other third party approvals in the time assumed or the need for additional time to satisfy the other conditions to the completion of the Arrangement. Accordingly, readers should not place undue reliance on the forward-looking statements and information contained in this press release concerning these times.

Risks and uncertainties inherent in the nature of the Arrangement include the failure of Kicking Horse or ORLEN Upstream Canada to obtain necessary securityholder, regulatory, court and other third party approvals, or to otherwise satisfy the conditions to the Arrangement, in a timely manner, or at all. Failure to so obtain such approvals, or the failure of Kicking Horse or ORLEN Upstream Canada to otherwise satisfy the conditions to the Arrangement, may result in the Arrangement not being completed on the proposed terms, or at all. In addition, the failure of Kicking Horse to comply with certain terms of the Arrangement Agreement may result in Kicking Horse being required to pay a non-completion fee to ORLEN Upstream Canada, the result of which could have a material adverse effect on Kicking Horse's financial position and results of operations and its ability to fund growth prospects and current operations.

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of Kicking Horse are included in reports on file with applicable securities regulatory authorities, including but not limited to; Kicking Horse's Annual Information Form for the transition year ended December 31, 2014 which may be accessed on Kicking Horse's SEDAR profile at www.sedar.com. The forward-looking statements and information contained in this press release are made as of the date hereof and Kicking Horse undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities issued pursuant to the Arrangement described herein have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from such registration.

Neither the TSX Venture Exchange not its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

For more information, please contact:

Kicking Horse Energy Inc.
Steve Harding
President and Chief Executive Officer
Phone: (403) 771-1091
Fax: (403) 695-3915
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

ORLEN Upstream Canada Ltd.
Matthew Rees
President
Phone: (403) 781-2751
Fax: (403) 232-8463
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.