Mr. Alex Blyumkin reports

PETROTEQ ENERGY PROVIDES UPDATE ON PROPOSED ISSUANCE OF SECURITIES AND SUBSCRIPTIONS

Petroteq Energy Inc. has received an irrevocable subscription from an arm's-length party for 1,234,567 units of the company at 81 cents per unit consisting of 1,234,567 common shares and 925,925 common share purchase warrants, for gross proceeds of an aggregate $1-million. Each warrant shall entitle the holder to acquire one common share of the company at an exercise price of $1.01 per common share expiring 24 months from the date of issuance. Closing of the transaction is subject to approval of the TSX Venture Exchange and the directors of the company.

All currency figures are in U.S. dollars.

The company also announces, pursuant to the approval of the TSX Venture Exchange, the closing of the common share subscriptions from 35 arm's-length parties announced on Aug. 17, 2018. The company issued an aggregate of 5,922,162 common shares (Aug. 17, 2018, news release indicated 5,922,849) at prices ranging from 70 cents to 81 cents, and 1,623,676 common share purchase warrants (Aug. 17, 2018, news release indicated 1,906,110), for gross proceeds of an aggregate $4,417,916 (Aug. 17, 2018, news release indicated $4,412,030). Each warrant entitles the holder to acquire one common share of the company at exercise prices ranging from 94 cents to $1.50 per common share expiring 24 months from the date of issuance. The foregoing consists of (i) 201,855 common shares at 70 cents per share; (ii) 2,823,085 common shares at 74 cents per share; (iii) 703,330 common shares at 75 cents per share; (iv) 18,750 common shares at 80 cents per share; (v) 22,118 common shares at 81 cents per share; (vi) 35,714 units at 70 cents per unit, with each such unit consisting of one common share, and one warrant, with each warrant entitling the holder thereof to acquire an additional common share at $1.50 per share until the date that is 24 months from the date of issuance; (vii) 364,866 units at 74 cents per unit, with each such unit consisting of one common share, and one-half of one warrant, with each whole warrant entitling the holder thereof to acquire an additional common share at 94 cents per share until the date that is 24 months from the date of issuance; (viii) 782,582 units at 74 cents per unit, with each such unit consisting of one common share, and one warrant, with each warrant entitling the holder thereof to acquire an additional common share at 94 cents per share until the date that is 24 months from the date of issuance; (ix) 200,000 units at 74 cents per unit, with each such unit consisting of one common share, and one-half of one warrant, with each whole warrant entitling the holder thereof to acquire an additional common share at 95 cents per share until the date that is 24 months from the date of issuance; (x) 202,702 units at 74 cents per unit, with each such unit consisting of one common share, and one warrant, with each warrant entitling the holder thereof to acquire an additional common share at 95 cents per share until the date that is 24 months from the date of issuance; (xi) 73,333 units at 75 cents per unit, with each such unit consisting of one common share, and one warrant, with each warrant entitling the holder thereof to acquire an additional common share at $1.50 per share until the date that is 24 months from the date of issuance; and (xii) 493,827 units at 81 cents per unit, with each such unit consisting of one common share, and one-half of one warrant, with each whole warrant entitling the holder thereof to acquire an additional common share at $1 per share until the date that is 24 months from the date of issuance.

In addition, the irrevocable subscription from an arm's-length party for 250 debenture units of the company at $1,000 per debenture unit for gross proceeds of $250,000, previously announced on Aug. 17, 2018, has closed. Pursuant to a condition imposed by the TSX Venture Exchange, the debenture unit was revised so each debenture unit shall consist of (i) one $1,000 principal amount convertible unsecured debenture, and (ii) 1,149.424 transferable common share purchase warrants. Each debenture has a term of 12 months and bears interest at a rate of 10 per cent per annum and at the option of the holder the principal amount of the debenture will be convertible at 87 cents per share in accordance with the terms and conditions set out in the debenture. Each warrant shall entitle the holder thereof to acquire one additional common share of the company at a price of 87 cents per share until the date that is 12 months from the date of issuance.

The net proceeds will be used by the company for use on its extraction technology in Asphalt Ridge, Utah, for potential acquisitions of new oil sands resources, and for working capital. All securities issued pursuant to the above noted transactions are subject to a four-month hold period.

About Petroteq Energy Inc.

Petroteq is a fully integrated oil and gas company focused on the development and implementation of a new proprietary technology for oil extraction. Petroteq is currently focused on developing its oil sands resources and expanding production capacity at its Asphalt Ridge heavy oil extraction facility located near Vernal, Utah. In addition, the company, through its wholly owned subsidiary, PetroBLOQ LLC, is seeking to develop the first blockchain-based platform created exclusively for the supply chain needs of the oil and gas sector.

We seek Safe Harbor.