ORLEN Upstream Canada Ltd. acquired Kicking Horse Energy Inc.

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") informs that on 1 December 2015 ORLEN Upstream Canada Ltd. (“ORLEN Upstream Canada”) acquired all of the outstanding common shares of Kicking Horse Energy Inc. ("Kicking Horse").

Total amount of approximately CAD 295 million (i.e. ca. PLN 890 million) has been transferred by ORLEN Upstream Canada to the account of a transfer agent (“Transfer Agent”) designated jointly by the transaction parties. The Transfer Agent will pay to Kicking Horse shareholders CAD 4.75 (i.e. ca. PLN 14.34) in cash for each share they hold. The total transaction value representing the enterprise value, including the assumption of Kicking Horse’s net debt and working capital as of 30 September 2015 as well as after the settlement of existing options is CAD 356 million (i.e. ca. PLN 1 075 million). The transaction was financed through an increase of equity capital in ORLEN Upstream Canada (made by ORLEN Upstream Sp. z o.o.) as well as Kicking Horse available lines of credit.

ORLEN Upstream Canada has transferred the cash after receiving pertinent court approvals confirming the correctness of the transaction process as well as ORLEN Upstream Canada rights to all Kicking Horse shares. Kicking Horse shareholders represented on Kicking Horse Meeting on 30 November 2015 gave also consent to the transaction.

Kicking Horse is a Calgary, Alberta, Canada based company engaged in the exploration, development and production of oil and natural gas. More information about Kicking Horse can be found at www.kickinghorseenergy.com.

With the purchase of Kicking Horse shares by ORLEN Upstream Canada, trading of the Kicking Horse shares on the TSX Venture exchange has terminated. As a result of the planned restructuring process Kicking Horse will be merged with ORLEN Upstream Canada.

PKN ORLEN owns 100% of the registered capital of ORLEN Upstream sp. z o.o. ORLEN Upstream sp. z o.o. owns 100% of the registered capital of ORLEN Upstream International B.V. ORLEN Upstream International B.V. owns 100% of the registered capital of ORLEN Upstream Canada.

All amounts in PLN have been calculated based on the average PLN/CAD exchange rate as of 1 December 2015, as stated by the National Bank of Poland.

See also: regulatory announcement no 144/2015 dated 13 October 2015 and regulatory announcement no 163/2015 dated 30 November 2015.