Mr. John MacPhail reports

PACIFIC ARC RESOURCES ANNOUNCES PROPOSED CHANGE OF BUSINESS AND ENTERS INTO TWO LETTERS OF INTENT FOR PROPOSED DEVELOPMENT OF OIL AND GAS ASSETS

Pacific Arc Resources Ltd. has entered into two letters of intent (LOIs) dated Nov. 13, 2023, which contemplate the company completing a change of business to an oil and gas issuer. One LOI with Greenflame Resources Inc. (GRI), whereby Pacific Arc will advance $2-million (U.S.) to acquire a direct 20-per-cent equity interest in the production sharing contract (PSC) held by GRI and New Horizons energy on the Parrylands Block E in Trinidad and Tobago. The PSC covers 744 acres within the Parrylands block; there have been 110 wells drilled previously on the block and it is connected to port via an existing pipeline. The PSC is subject to a 16-per-cent royalty, and the licence is held by production and is in good standing.

The second LOI is with Kinghorn Operations Inc. (KHO), whereby Pacific Arc will earn a 50-per-cent interest in an initial five-well pilot program to test the Nordegg formation in certain lands controlled by KHO (the farm-in) upon Pacific Arc paying 100 per cent of the actual costs of the pilot program. Pacific Arc will initially advance $750,000 to KHO prior to KHO commencing operations on the five-well pilot program. It is estimated that the cost of the pilot project will be approximately $750,000. Upon payment of the $750,000 to KHO and upon payment of 100 per cent of the farm-in costs for the five-well pilot program, Pacific Arc will earn a 50-per-cent ownership in the production spacing units in the land containing the five-well pilot program. Further, as part of the farm-in, the partners shall establish an area of mutual interest (AMI) covering the farm-in lands in the Clairmont area of Alberta. As such, Pacific Arc intends to complete the farm-in agreement with KHO and an updated PSC.

The transaction terms set out in the LOIs are non-binding, and the transaction is subject to the parties successfully negotiating and entering into definitive agreements in respect of the transaction.

Proposed private placement

Pacific Arc intends to complete a non-brokered equity financing or financings for aggregate gross proceeds of $5-million of units priced at a minimum price of 25 cents. Each unit shall comprise one full common share and one-half of a warrant, with each full warrant exercisable into a common share for 18 months from the closing of the financing at an exercise price of 40 cents per share. The use of proceeds will be to cover the above-mentioned transactions and provide general working capital as it seeks other opportunities within the sector.

Finder's fees may be payable in connection with the offering in accordance with applicable securities laws and the policies of the TSX Venture Exchange.

About Pacific Arc Resources Inc.

Pacific Arc is a reporting issuer in British Columbia, Alberta and Ontario, incorporated under the BCBCA. The common shares of Pacific Arc are listed for trading on the TSX-V NEX board under the symbol PAV.H.

Information concerning the proposed transaction

Trading in Pacific Arc shares will remain halted pending the completion of the transaction. Pacific Arc will provide further details in respect of the transaction in due course by way of press release.

The company does not intend to seek shareholder approval of the transaction, as the transaction is not a related-party transaction within the meaning of MI 61-101 or the policies of the TSX-V, and no other circumstances exist which may compromise the independence of the company. The company is a NEX-listed issuer without active operations: the company is not and will not be subject to a cease trade order, and will not otherwise be suspended from trading on completion of the transaction; and shareholder approval of any aspect of the transaction is not required under applicable corporate laws or securities laws.

Sponsorship

The company also intends to apply for a waiver from the requirement to obtain a sponsor for the transaction, however, there can be no assurance that a waiver will be obtained. If a waiver from the sponsorship requirement is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the transaction should not be construed as any assurance with respect to the merits of the transaction or the likelihood of its completion.

Completion of the transaction is subject to a number of conditions, including, but not limited to, TSX-V acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Pacific Arc should be considered highly speculative.

We seek Safe Harbor.