Blue Sky acquires Sonoro Energy Iraq B.V.

TORONTO, ONTARIO -- (Marketwired) -- 12/05/16 -- Blue Sky Energy Inc. (the "Company" or "BSI") (TSX VENTURE: BSI) has acquired from Sonoro Energy International Holdings BV (the "Vendor"), 100% of the issued and outstanding common shares of Sonoro Energy Iraq B.V. ("Sonoro Iraq"), a company incorporated in the Netherlands and the designated operator and party to several license agreements with the Al-Salah ad Din Provincial Government of Iraq for the exploration, appraisal and development of petroleum resources.

The primary contract, an Asphalt License Agreement signed in 2010, has been under Force Majeure since July 2013 due, at the time, to the deteriorating security situation. Prior to that, Sonoro Iraq had conducted various studies, geological and drilling preparatory work, and published an independent prospective resource evaluation report covering the gross license area of 24,363 square kilometers or approximately six million acres. The report was prepared by RPS Energy Canada Ltd. in accordance with NI 51-101 definitions and the COGE Handbook.

In consideration for the acquisition, BSI will make contingent payments to the Vendor, in tranches, totalling up to four million dollars based on the start of crude oil production to eighty thousand barrels per day. In the event that no production is achieved by BSI related to Sonoro Iraq's license agreements, no consideration or payments shall be owing or payable to the Vendor.

Highlights of the Prospective Resource Report:

--  Risked Prospective Resources in the Salah ad Din province are estimated
    on a gross recoverable oil basis to be approximately 5.2 billion barrels
    (P50), ranging between 1.7 billion barrels (P95) to 10.3 billion barrels
    (P5).
--  The estimated Recoverable Oil Resources for a single field discovery in
    the province is 200 million barrels (P50), ranging between 10 million
    barrels (P90) and 4.2 billion barrels (P10), with an expected (mean)
    field size of approximately 1.3 billion barrels oil recoverable.
--  The prospective heavy oil resources (less than 25 degrees API) are
    expected to be between 42% and 60% of the total prospective oil
    resources in the province.
--  Recovery factors using the Energy Intelligence data (see note 3, below)
    indicate recovery factors in the range of 15% to 35% for all discovered
    fields in the study area (16.8% to 25.6% for the heavy oil fields).

There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.

Table 1: Prospective Risked Resources (Gross Technically Recoverable) in the Mesopotamian Cretaceous and Tertiary - Salah ad Din Province

Prospective Resources - Risked Recoverable Oil (MMbbl)

------------------------------------------------------------
------------------------------------------------------------
                     P95         P50          P5        Mean
            ------------------------------------------------
Cretaceous         1,709       5,090      10,065       5,394
Tertiary              36         114         240         123
------------------------------------------------------------
Total              1,745       5,204      10,305       5,517

Table 2: Expected Field Size Distribution (Technically Recoverable) in the Mesopotamian Cretaceous and Tertiary - Salah ad Din Province

Expected Field Size2 - Technically Recoverable Oil (MMbbl)

----------------------------------------------------------------------
----------------------------------------------------------------------
Data Source3                   P90         P50         P10        Mean
----------------------------------------------------------------------
Data Set 1 (WM)                  4         150       5,081       2,346
Data Set 2 (IHS)                16         244       3,636       1,376
Data Set 3 (EIG)                11         206       3,958       1,567
----------------------------------------------------------------------
Average Field Size              10         200       4,225       1,763
Notes

(1)   Prospective Resources are those quantities of petroleum estimated, as
      of a given date, to be potentially recoverable from undiscovered
      accumulations by application of future development projects.
      Prospective Resources have both an associated chance of discovery and
      a chance of development. Prospective Resources are further subdivided
      in accordance with the level of certainty associated with recoverable
      estimates assuming their discovery and development and may be sub--
      classified based on project maturity. The chance of commerciality is
      the product of these two risk components.
(2)   Expected Field Size is the range of typical field sizes for the
      regional geologic setting. Field discoveries within the Salah ad Din
      Province are expected to be within this range and the aggregate of
      future potential field discoveries to be distributed in this manner.
(3)   Sources: Data Set 1 -- Wood Mackenzie Pathfinder E&P Database, Data
      Set 2 -- IHS EDIN E&P Database and Data Set 3 -- Iraq Ministry of Oil
      Reserves Estimates as published by the Energy Intelligence Group,
      October 2010.

Due to the recent improving security situation and liberation of areas by Iraqi forces, the Company intends to re-evaluate and re-engage the Iraq Federal Government and Provincial Authorities on the prospect of re-activating the agreements and obtaining the necessary Federal Government approvals to commence the appraisal work in this prolific area. The Company, its principals and advisors, have a significant track record and expertise in conducting petroleum operations in Middle East and Iraq.

About Blue Sky:

Blue Sky Energy Inc. is a Canadian independent oil company.

Forward-looking information

This news release contains forward-looking information relating to the Company's growth and corporate strategy, and other statements that are not historical facts. Forward-looking information relates to management's future outlook and anticipated events or results, and may include statements or information regarding the acquisition of Sonoro Iraq; the prospectivity of the fields related to the Asphalt License Agreement; the security situation in Iraq; and the future plans or prospects of the Company. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended.

Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks and uncertainties associated with oil and gas exploration, development, exploitation, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays and other risks and uncertainties discussed in the management discussion and analysis section of the Company's interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulations. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.

The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

Contacts:
Neil Said
Corporate Secretary
Blue Sky Energy Inc.
416-309-2963
[email protected]

Source: Blue Sky Energy Inc.

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