Mr. Dennis Mills reports

PACIFIC ANNOUNCES RESTRUCTURING UPDATE, APPROVAL OF CONSENSUAL RESOLUTION WITH IFC AND CCAA COURT APPROVAL OF STAY OF PROCEEDINGS EXTENSION

Pacific Exploration & Production Corp. has provided an update with respect to its comprehensive restructuring transaction with: (i) certain holders of the company's senior unsecured notes (including certain members of an ad hoc committee of holders of the company's senior unsecured notes), (ii) certain of the company's lenders under its credit facilities and (iii) the Catalyst Capital Group Inc. The restructuring transaction will significantly reduce debt, improve liquidity and best position the company to navigate the current oil price environment. Importantly, with the benefit of the $500-million (U.S.) of debtor-in-possession financing to be provided as part of the restructuring transaction, the company will be able to continue to pay all of the suppliers, trade partners and contractors of the company's subsidiaries across the jurisdictions in which they operate in accordance with local regulations. Additionally, employees will continue to be paid throughout this process, without disruption.

"We are pleased with the progress of the restructuring transaction as it significantly strengthens the company and ensures the long-term viability of the business, all without impacting our ability to serve our customers, suppliers, employees and other stakeholders," said Dennis Mills, chair of the independent committee of the board of directors. "We are thankful to the supporting creditors and Catalyst for their ongoing support during this restructuring process and as the company continues to struggle with the significant challenges presented by the low oil price environment."

Today, the Ontario Superior Court approved an extension of the stay of proceedings until Aug. 26, 2016. During this period, the company intends to complete its $500-million (U.S.) debtor-in-possession financing, put in place a new $134-million (U.S.) letter-of-credit facility, and complete creditor meetings and court hearings required to approve the restructuring transaction (which it expects to be completed in the third quarter of 2016).

In addition, the court approved a consensual resolution of the issues previously raised by the International Finance Corp. in respect of the company's interests in Pacific Infrastructure Ventures Inc. and Pacific Midstream Ltd.

The company also today received notice from the Colombian Superintendence of Corporations in respect of a creditor hearing to be held on June 7, 2016, at 11 a.m. (Bogota time), in Bogota, Colombia, to consider the company's request for recognition of the initial order obtained from the court under the Companies' Creditors Arrangement Act (Canada) on April 27, 2016. At the request of the superintendence, the notice will be published in the local Colombian newspapers and will be made available on the monitor's website.

Further to the Toronto Stock Exchange bulletin 2016-0395 dated April 19, 2016, the Toronto Stock Exchange has delisted the common shares for failure to meet the continued listing requirements of the TSX. The company is in the process of determining the delisting of the shares on La Bolsa de Valores de Colombia.

Shareholder contact information

Shareholders are reminded that any questions or concerns can be directed to the company at ir@pacificcorp.energy.

Noteholder contact information

Noteholders with questions concerning the creditor/Catalyst restructuring transaction are encouraged to contact Kingsdale Shareholder Services at 1-877-659-1821 toll-free in North America or call collect at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleshareholder.com.

We seek Safe Harbor.