Concerned Shareholders of Eagle Energy Inc. Challenge Meeting Results

Calgary, Alberta--(Newsfile Corp. - July 4, 2017) - Daniel Gundersen and Kingsway Financial Services Inc. (together, the "Concerned Shareholders") have issued the following letter to Eagle Energy Inc. (TSX: EGL) ("Eagle" or the "Company") shareholders regarding the annual general meeting held on Tuesday, June 27, 2017 (the "Meeting).

Dear Fellow Shareholders,

We worked hard to gain your support and we greatly appreciate the more than 11 million votes we received. For those shareholders who did not support us, we would like to hear from you. We would like you to tell us your objectives for your Eagle investment. Visit www.SaveEagle.ca and please contact us.

As you may have read, Eagle management claimed victory in the election of directors. Not surprisingly, the press release they issued did not include voting information for all eight nominees. These were the results upon which they claimed victory:

As you can see, the differences between the eight nominees are very small. For example, the difference between Bruce Gibson and Bradley Porter is only 342,968 votes, or 0.8% of outstanding shares.

The Meeting

If you were at the Meeting, you witnessed a chaotic situation. There was no need for this. Well before the Meeting, the Concerned Shareholders had provided Eagle and its legal counsel with a request that standard protocols regarding the Meeting should be observed. Inexplicably, especially given the extremely close nature of the vote, Eagle refused this request. Because of this, legal counsel for the Concerned Shareholders was forced to take a very aggressive position at the Meeting to protect the rights of all shareholders in demanding fairness and transparency.

At the outset of the Meeting, the Chairman provided first inadequate and then inaccurate information concerning the required quorum of shareholders represented at the Meeting. This lead to the first delay. It was then extremely challenging for us to get answers to questions about standard voting protocols and information regarding votes that may have been rejected. Our legal counsel was forced to ask the same questions repeatedly due to the Chairman's unwillingness or inability to answer these questions.

When asked by our legal counsel, the Chairman confirmed that he had made discretionary determinations about the acceptability of certain votes on the advice of his counsel. However, he would not permit us to make any representations or submissions regarding same, or to rectify any deficiencies in such votes, which is widely accepted as being good practice to ensure that shareholders are not disenfranchised. After that, the tabulation of results took well over an hour. The Meeting dragged on, lasting about three hours. The evasiveness and lack of transparency displayed by Eagle at the meeting was cause for concern. We felt it was necessary for our proxy solicitor and legal counsel to review the proxies and ballots that related to voting at the Meeting.

Initial Proxy Review

Our initial review of proxies and ballots was conducted on the afternoon of June 28, 2017. Our representatives were only permitted to inspect records selected by Eagle and they were limited to a review window of only two hours (which we extended to two and a half hours). We quickly confirmed that management had inexplicably rejected 337,000 votes in favour of our four nominees. These shares were voted by an institutional shareholder who voted in accordance with protocols under Alberta corporate law. We also discovered there were over 214,000 shares voted for management for which our advisors were not provided proper supporting documentation. Despite our legal counsel asking Eagle for an explanation on these two points, we have yet to receive a satisfactory response.

Our initial proxy review makes us concerned that the outcome of the Meeting could have been quite different if the Chairman had made different determinations. We remind you that the difference between Bruce Gibson and Bradley Porter is only 342,968 votes (or 0.8% of Eagle's issued shares). A difference of 342,969 votes would have meant that one of the Concerned Shareholders' nominees would have been elected to the board. A difference of 587,424 (or 1.4% of Eagle's issued shares) would have seen all four of our nominees elected and none of the management nominees elected.

Next Steps

The Concerned Shareholders have already spent considerable time and money in developing a plan that would benefit all shareholders. Given last week's events, Eagle has now placed the onus on us to spend more time and money to challenge the results of the Meeting after the fact in the courts. This is highly disappointing as the entirety of this process could have been avoided if Eagle had simply acted reasonably and been transparent with us in advance of and during the Meeting. The motivations of Eagle in making these decisions are not clear. We want answers to the irregularities that we saw in our proxy review. Should the two issues highlighted above be corrected, three of our four nominees would have been elected to the board.

On Friday, June 30, 2017, the Concerned Shareholders filed an originating application (the "Application") with the Court of Queen's Bench of Alberta. The Application seeks a number of remedies including "the appointment of an independent scrutineer to conduct the audit and re-tabulation of the votes related to the AGM" and an order "that Eagle Energy pay the Concerned Shareholders' costs and expenses." The Application will be heard on Wednesday, July 26, 2017.

We will continue to pursue these issues to the fullest extent possible and will update shareholders accordingly. We will continue to be open to solutions that benefit all shareholders.

Thank you for your continued support.

Sincerely,

Kingsway Financial Services Inc.
Larry G. Swets Jr., CFA

Daniel Gundersen, P.Eng., CFA                                                                            

Contacts

Daniel Gundersen
403-852-4423
dan@SaveEagle.ca

Larry G. Swets Jr.
630-290-2432

Jack Muir
604-836-8782
jackmuir@cogencygroup.ca

DF King
1-800-398-2816 (toll free within North America)
Email: inquiries@dfking.com