Mr. Andrew Rees reports

WELLSTAR ENERGY CORP. SIGNS LOI TO ACQUIRE SUNDIAL ENERGY LTD. PLANS TO HARNESS GEOTHERMAL ENERGY FROM PRODUCING OIL WELLS -- A FIRST IN CANADA

Wellstar Energy Corp. has entered into a letter of intent dated Nov. 25, 2016, in connection with the acquisition of Sundial Energy Ltd., which represents an undivided 100-per-cent interest in its assets and intellectual property. Sundial Energy is involved in the field of geothermal heating applications, LED lighting and solar power generation.

Wellstar, at its McTaggart oil project in Saskatchewan, produces in excess of 1,200 barrels per day of oil and water that at surface are approximately 50 degrees. Currently, the produced oil and water are gravity separated, then the produced hot water is pumped into the company's on-site disposal well, leaving a significant resource of unused geothermal heat.

The excess heat in the volume of liquids produced from the company's oil wells at its McTaggart project is rare but not unique. The company believes that existing pumping oil wells that produce significant heat can be used as a source of energy for many applications. The acquisition of Sundial Energy with its renewable energy expertise will assist Wellstar in developing the process to make use of this otherwise wasted resource.

Through work spearheaded by Sundial Energy and the Living Energy Project in Leduc, Alta., Wellstar further believes that opportunities lie in using existing suspended wells as a source for a geothermal loop. This would allow for the installation of a geothermal unit that would generate energy by extracting heat from oil or natural gas wells already drilled, effectively deferring abandonment of wells that outlived their economic hydrocarbon cycle by recycling the existing wellbores for another useful mandate.

Additionally, Wellstar has signed a lease option agreement and secured four acres of highly arable land neighbouring its McTaggart project for the purpose of becoming a leader in using captured geothermal energy from its producing oil wells to heat greenhouses and produce profitable crops.

Heating is a major component of a commercial greenhouse facility's operating budget. Eliminating that cost centre would provide a significant increase in profit margins for food, medicinal crops, herbs or flowers grown in greenhouses.

Company president and chief executive officer Andrew Rees commented: "While this is not a change in focus or direction for the company, management is excited at having the opportunity to be an industry leader by profitably capturing heat from producing oil wells while providing a social benefit to surrounding communities by offering a fresh and local food source. There is an additional opportunity to scale this project by partnering with local communities in addition to communities in remote areas."

Upon signing a definitive agreement with Sundial Energy, Wellstar will issue to Sundial Energy 250,000 common shares. Wellstar will issue an additional 250,000 common shares to Sundial Energy on the one-year anniversary from closing.

The completion of the acquisition is conditional upon, among other things, completion of due diligence, entering into a mutually acceptable definitive agreement by Dec. 15, 2016, and obtaining all necessary regulatory approvals for the acquisition, including from the TSX Venture Exchange.

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