Mr. Ian Habke reports

ARPETROL LTD. PROVIDES AN UPDATE ON THE WIND-UP OF THE COMPANY, THE DISTRIBUTION OF THE NET PROCEEDS FROM THE SALE OF SUBSTANTIALLY ALL OF ITS ASSETS AND ANNOUNCES SECOND QUARTER 2016 FINANCIAL AND OPERATING RESULTS

Arpetrol Ltd. has provided an update on the windup of the affairs of the company, including the distribution of the net proceeds from the sale of substantially all of its assets to a subsidiary of Empresa Nacional Del Petroleo, which closed on May 19, 2016. The company also announces its financial and operating results for the interim period ended June 30, 2016. The company's interim condensed consolidated financial statements and management's discussion and analysis for the reporting period have been filed on SEDAR and posted on the company's website.

Update on windup and distribution

As previously announced, Arpetrol closed the transaction on May 19, 2016. The purchase price paid to the company at closing of the transaction was $11.1-million (U.S.) including the net working capital at closing of the subsidiaries being sold of $2.1-million (U.S.). Included in the purchase price is $2.25-million (U.S.), which was placed in escrow and will be released to Arpetrol in November, 2016, following the six-month indemnity period. To date, the company has received notification of a proposed adjustment to the escrow of $55,000 (U.S.) for Argentina stamp taxes. The company remains exposed to other claims against the escrow account until mid-November, 2016.

Some of the U.S.-dollar proceeds from the transaction have been converted into Canadian dollars since the closing date. Based on current exchange rates, and the actual rates received on conversions since close, the total estimated purchase proceeds are expected to be $14.4-million (Canadian).

In line with the company's prior announced plans, the company announces that its board of directors has declared an initial distribution to the holders of common shares of the company in the aggregate amount of $8,996,187, or 40 Canadian cents per common share, in connection with the liquidation and ultimate dissolution of Arpetrol.

The distribution payment will be paid on Sept. 20, 2016, to shareholders of record at the close of business on Sept. 12, 2016, subject to the due-bill trading process described herein, and will be made as a return of capital, with the stated capital of the common shares being reduced accordingly.

Further details regarding the amount of funds available for future distribution to shareholders will be provided in due course. Currently, the company expects that the total distributions to the shareholders will be approximately 59 cents per common share. The ultimate distributions may be lower in the event of a negative change to the foreign exchange rate, reductions in the estimated net working capital subject to postclosing adjustments, any significant liabilities or costs arising during the windup and dissolution process, which are not currently foreseen by the company or its advisers, and any other claims against escrowed funds.

Also in line with the company's prior announced plans, the company announces that its board of directors has approved the application for delisting of the common shares from the TSX Venture Exchange with an effective date of Sept. 20, 2016, which is concurrent with the distribution date for the initial distribution.

The distribution payment will be made to shareholders pursuant to the TSX-V's due-bill trading policy. Pursuant to the policy:

• The record date to determine shareholders of Arpetrol entitled to the distribution payment is Sept. 12, 2016.
• The due-bill trading period will be Sept. 8, 2016 (two trading days prior to the record date), to Sept. 20, 2016.
• The payment or distribution date will be Sept. 20, 2016.
• The due-bill redemption date will be Sept. 23, 2016.

For clarification, due bills will represent the return of capital that shareholders will be entitled to receive. The due bills will be deemed to be attached to the common shares two trading days prior to the record date, and will continue to be attached to the common shares until the end of the distribution date. Accordingly, the common shares will trade on a due-bill basis from Sept. 8, 2016, until close of trading on Sept. 20, 2016. This means that persons who sell their common shares during the due-bill period shall also sell their entitlement to the distribution payment to the purchasers of such shares. The due bills will be redeemed on Sept. 23, 2016, once all trades with attached due bills entered during the due-bill period have settled. As the corporation intends for the common shares to be delisted as of the distribution date, the common shares will not trade ex distribution following the distribution date.

Summary of the second quarter 2016 and outlook

As a result of the closed transaction and the company's plan to liquidate and dissolve the company, the company has adopted the liquidation basis of accounting, effective April 1, 2016.

As at June 20, 2016, the company had net assets in liquidation of $13.3-million (Canadian). This represents the company's current estimate of the total assets to be distributed to shareholders upon completion of the liquidation and dissolution of the company. The company plans to apply for a Canadian Revenue Agency (CRA) clearance certificate in connection with the dissolution of the company and before the final distribution is made to shareholders, and the timing for receipt of the CRA clearance certificate is unknown.

To minimize the costs arising from the windup and dissolution, at the end of September, the company plans to reduce its board of directors from the current five members down to three. At that time, management will change to payment on a time-and-expense basis, with no fixed retainers being paid.

About Arpetrol

The company has completed a sale of substantially all of its assets and no longer has active business operations. The company intends to apply for delisting of the common shares from the TSX Venture Exchange, effective Sept. 20, 2016.

We seek Safe Harbor.