Mr. Andrew Rees reports

WELLSTAR ENERGY ENTERS INTO LETTER OF INTENT TO ACQUIRE PRODUCING OPERATED OIL & GAS ASSETS AND ANNOUNCES PROPOSED PRIVATE PLACEMENT

Wellstar Energy Corp. has entered into a letter of intent dated as of Sept. 8, 2014, in connection with the acquisition of certain oil and gas assets located in Saskatchewan and Alberta from an arm's-length vendor.

Pursuant to the terms of the LOI, the company will acquire the assets in consideration for aggregate cash payments of $3,281,250 (including $1.5-million upon closing the acquisition) and the issuance by the company of four million warrants. Each acquisition warrant will entitle the vendor to purchase one common share at an exercise price of 18 cents for a period of 48 months following the closing of the acquisition.

The assets consist of operated working interests producing approximately 41 net barrels of oil per day from approximately 6,000 net acres in Saskatchewan and Alberta. This includes 3,500 net acres in Saskatchewan, prospective for the Bakken formation, with current production from three wells in the Red River and Winnipeg sand formations. Management feels there is significant upside potential to economically produce from the Bakken based on the results from core analysis completed in the most recently drilled well producing from the deeper Red River formation.

The acquisition includes facilities consisting of a saltwater disposal well, five 1,000-barrel oil storage tanks and a freshwater source well.

The completion of the acquisition is conditional upon, among other things, completion of due diligence, entering into a mutually acceptable definitive agreement by Sept. 22, 2014, the company securing suitable financing within the time frame agreed to by the parties and obtaining all necessary regulatory approvals to the acquisition, including the TSX Venture Exchange (TSX-V).

In connection with the acquisition, the company announces that it intends to complete a non-brokered private placement in the aggregate amount up to $1.5-million consisting of 9-per-cent convertible debenture units (CD units) of the company in the aggregate principal amount of up to $1-million and a concurrent placement of up to six million equity units at a price of 15 cents per unit, for gross proceeds of up to $500,000.

Each CD unit will consist of $1,000 in principal amount of 9.0-per-cent convertible debentures maturing in five years and that number of common share purchase warrants equal to one-half of the shares issuable upon conversion of $1,000 in principal amount of debentures. The principal, and any accrued and unpaid interest under the debentures will be secured and will be convertible at the holder's option into fully paid non-assessable common shares of the company at: (a) with respect to principal, a conversion price equal to the greater of 18 cents or the market price of the company's common shares as defined under the policies of the TSX-V; and (b) with respect to accrued and unpaid interest, the market price of the company's common shares at the time of settlement. Each CD unit warrant will be exercisable for a period of 48 months from the date of issuance at an exercise price of 25 cents per common share.

Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole unit warrant will entitle the holder thereof to purchase one common share at an exercise price of 25 cents for a period of 24 months following the closing of the unit offering.

With respect to the CD unit offering, any eligible arm's-length finder will in aggregate upon closing receive a cash placement fee of 9 per cent of the gross proceeds of the CD offering as well as common share purchase warrants equivalent to 9 per cent of the gross proceeds of the CD offering based on the conversion price of the debentures for subscriptions made by purchasers introduced by such finder. With respect to the unit offering, any eligible finder will in aggregate receive a cash placement fee of 9 per cent of the gross proceeds of the unit offering as well as common share purchase warrants equivalent to 9 per cent of the number of units sold in the unit offering to subscribers introduced by such finder.

The debentures and CD unit warrants constituting the CD units, the unit shares and unit warrants constituting the units, and any underlying common shares will be subject to a four-month hold period from the date of issue under National Instrument 45-102 and the policies of the TSX-V.

Completion of the offering is subject to receipt of all regulatory approvals, including the approval of the TSX-V. Net proceeds from the offering will be applied toward the acquisition, payment of current liabilities, exploration and development of the company's oil and gas properties, and for general working capital purposes.

We seek Safe Harbor.