Mr. Alex Blyumkin reports

PETROTEQ ENERGY PROVIDES UPDATE ON TRANSACTION WITH DELORO

Deloro Energy LLC has irrevocably subscribed for and closed six million units of Petroteq Energy Inc. for gross proceeds of $3.6-million (U.S.). Concurrent with closing, the company, Deloro and Petroteq Energy CA Inc., a wholly owned subsidiary of the company, entered into a termination and release agreement, whereby the parties agreed to: (i) the termination of the memorandum of understanding between Deloro and the subsidiary, previously announced by the company on Nov. 23, 2017, and (ii) the $2.5-million (U.S.) advanced by Deloro under the MOU, previously announced by the company on Feb. 5, 2018, being attributed toward Deloro's subscription. Due to the stable rise in oil prices and the company's ability to finance the development and launch of its anticipated 1,000-barrel plant without the funds to be provided by Deloro as per the MOU, the company felt that it was in the best interest of its shareholders to rescind the MOU, which entitled Deloro to convert the funds provided by Deloro into 51 per cent of the subsidiary. Therefore, the company negotiated the termination of the MOU and a commitment for additional funds from Deloro to be provided to the company in the form of an equity investment.

Each unit consists of one common share of the company and one common share purchase warrant, with each warrant entitling Deloro to acquire one common share of the company at an exercise price of 91 U.S. cents per share until May 22, 2021. The subscription is subject to final approval from the TSX Venture Exchange. All of the securities issued are subject to a four-month hold period from the date of issuance. The net proceeds will be used by the company for use on its extraction technology in Asphalt Ridge, Utah, and for working capital.

Pursuant to Deloro's subscription, and subject to the approval of the exchange, the company has granted Deloro the right and option to subscribe for up to an additional four million units at a deemed price of 60 U.S. cents per unit until June 13, 2018.

In addition, the company has agreed to issue 100,000 common shares of the company to Frank C. Ingriselli, a member of the company's advisory board, as announced by the company on May 22, 2018. The common shares will vest in three instalments between May 28, 2018, and Sept. 30, 2018.

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. The company has an environmentally safe and sustainable technology for the extraction of heavy oils from oil sands, oil shale deposits and shallow oil deposits. Petroteq is engaged in the development and implementation of its patented environmentally friendly heavy oil processing and extraction technologies. Its proprietary process produces zero greenhouse gas and zero waste and requires no high temperatures.

We seek Safe Harbor.