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Large Equal Energy shareholder, Lawndale Capital Management, LLC, reviewing proxy and vote options; prefers higher valued alternatives

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Large Equal Energy shareholder, Lawndale Capital Management, LLC, reviewing proxy and vote options; prefers higher valued alternatives

On June 11, 2014, Equal Energy Ltd. (NYSE-EQU) (“Equal”) filed with the Securities and Exchange Commission (the “SEC”) a definitive proxy statement for a July 8 Special Meeting to vote on Equal’s proposed acquisition by Petroflow Energy Corp (“Petroflow”) for US$5.43 per Equal share that also includes a US$0.05/share dividend. The Special Meeting will also have a vote on a non-binding advisory proposal to approve compensation to Equal’s named executive officers in connection with completion of the acquisition, sometimes referred to as “Golden Parachute” compensation.

Lawndale is currently reviewing Equal’s June 11, 2014 proxy filing, including Prospective Financial and Operating Information (pp. 58-60) and an updated Fairness Opinion (pp 47-58) on the proposed transaction.  In the course of its preliminary review, Lawndale has already determined it will vote “AGAINST” the proposal to approve, on a non-binding advisory basis, the “Golden Parachute” compensation that may become payable in the event the Petroflow transaction is completed.

Lawndale Capital Management, LLC and its affiliate funds (“Lawndale”), which hold close to 5% of Equal’s outstanding shares, are one of Equal’s largest shareholders. Lawndale has previously opposed lower-priced unsolicited takeover bids from Montclair Energy (“Montclair”) and also expressed concern with Equal’s agreement to be completely acquired by Petroflow for only $5.43/share vs. higher value alternatives Lawndale considers possible. Lawndale would be supportive of other credible alternative proposals that would provide higher value to Equal’s shareholders than Equal’s current $5.43/share buyout agreement.  One of the higher value alternatives Lawndale has suggested Equal’s board pursue was a $6/share dutch tender and leveraged recapitalization that allows Equal shareholder’s continued participation in what Lawndale views are favorable prospects for Equal’s vast energy resources.

June 11, 2014 Equal Energy Merger Proxy on form DEFM14A for July 8, 2014 Special Meeting
Equal Energy Information Circular And Proxy Statement
http://www.sec.gov/Archives/edgar/data/1492832/000119312514232637/d740143ddefm14a.htm

Chronology of recent events

April 3, 2013 Lawndale Capital Mgmt release and letter opposed to Montclair Energy’s early 2013 unsolicited $4/share takeover bid  
Lawndale Capital Management Sends Letter to Equal Energy Board Regarding Montclair Offer
http://seekingalpha.com/article/1316981-lawndale-capital-management-sends-letter-to-equal-energy-board-regarding-montclair-offer

December 9, 2013 Equal Energy’s release announcing definitive agreement to be acquired for $5.43/share by former operating partner, Petroflow Energy Corporation and brief summary of terms
Equal Energy Enters Definitive Agreement to be Acquired by Petroflow Energy
http://www.prnewswire.com/news-releases/equal-energy-enters-definitive-agreement-to-be-acquired-by-petroflow-energy-235026761.html

December 10, 2013 release by Lawndale Capital Management, a 4.8% EQU shareholder
Lawndale Capital Management Expresses Concerns Over Equal Energy Sale Agreement
Requests More Thorough Disclosure And Scrutiny Of Equal’s Strategic Alternatives Process
http://www.prnewswire.com/news-releases/lawndale-capital-management-expresses-concerns-over-equal-energy-sale-agreement-235225931.html

March 17, 2014 – Equal Energy 2013 10-K
Equal Energy 2013 10-K
http://www.sec.gov/Archives/edgar/data/1492832/000119312514102573/d651336d10k.htm

March 17, 2014 – Equal Energy 2013 10-K Exhibit 99.1
Equal Energy Jan 1, 2014 Energy Reserves Report
http://www.sec.gov/Archives/edgar/data/1492832/000119312514102573/d651336dex991.htm
 
April 11, 2014 Montclair Energy release proposing a levered share repurchase it feels would provide $7.01-$9.97/share of value to Equal shareholders

Montclair Energy Publishes Proposal to Maximize Shareholder Value at Equal Energy Ltd.
http://www.prnewswire.com/news-releases/montclair-energy-publishes-proposal-to-maximize-shareholder-value-at-equal-energy-ltd-254914791.html

April 11, 2014 SEC 14A proxy filing Exhibit
Montclair Energy Proposal to Maximize Shareholder Value at Equal Energy Ltd.
http://www.sec.gov/Archives/edgar/data/1492832/000118811214000985/t78956_dfan14a.htm

May 8, 2014 – Equal Energy 10-Q for Quarter ending March 31, 2014
Equal Energy First Quarter 2014 10-Q
http://www.sec.gov/Archives/edgar/data/1492832/000119312514190363/d702424d10q.htm

June 11, 2014 Equal Energy Merger Proxy on form DEFM14A for July 8, 2014 Special Meeting
Equal Energy Information Circular And Proxy Statement
http://www.sec.gov/Archives/edgar/data/1492832/000119312514232637/d740143ddefm14a.htm



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