Culane Enters Into Arrangement and Asset Sale Agreements

Culane Energy Corp. ("Culane" or the "Company")(TSX VENTURE:CLN) is pleased to
announce that it has entered into an agreement (the "Arrangement Agreement")
with Killam Acquisition Company Ltd. ("AcquisitionCo"), a subsidiary of a TSX
200-listed company, whereby AcquisitionCo will acquire all of the issued and
outstanding common shares of Culane (the "Culane Shares") for cash consideration
of $2.32 per Culane Share for aggregate consideration of $78.7 million,
including the assumption of $13.8 million of net debt, pursuant to a plan of
arrangement ("the Arrangement"). In conjunction with entering into the
Arrangement Agreement, Culane has also divested certain assets located in
Saskatchewan for additional cash proceeds to Culane of approximately $7.3
million, with such proceeds having been applied to reduce Culane's current
indebtedness. The transaction represents a 35% premium to the closing price of
the Culane Shares on June 17, 2011 and a 35% premium over the 20-day weighted
average trading price of the Culane Shares on the TSX Venture Exchange up to and
including June 17, 2011.


The Board of Directors has unanimously approved the Arrangement, determined that
it is fair to Culane shareholders and that the Arrangement is in the best
interests of Culane. The directors and officers of Culane and certain
significant shareholders, representing approximately 40% of the outstanding
Culane Shares, have entered into support agreements pursuant to which they have
agreed to vote their Culane Shares in favour of the Arrangement. An information
circular describing the Arrangement is expected to be mailed to security holders
in late June 2011 for an annual and special meeting of shareholders (the
"Meeting") scheduled to take place on or about July 28, 2011. The Arrangement
will be subject to the approval of at least 66 2/3% of the votes cast by Culane
shareholders at the Meeting. Closing is subject to certain conditions, including
the receipt of court and other regulatory approvals.


FirstEnergy Capital Corp. is acting as exclusive financial advisor to Culane
with respect to the Arrangement and has provided the Board of Directors of
Culane with an opinion that, subject to the review of final documentation, the
consideration to be received under the Arrangement is fair, from a financial
point of view, to Culane shareholders.


Culane has agreed not to solicit or initiate any discussion or negotiation
concerning the sale of significant assets or other business combinations. In the
event the Arrangement does not proceed, under certain circumstances, Culane has
agreed to pay a non-completion fee of $2.5 million to AcquisitionCo. In
addition, AcquisitionCo has the right to match any competing proposal, in the
event such proposal is made.


About Culane Energy Corp.

Culane Energy is a junior oil and gas company engaged in the exploration,
development and production of oil and natural gas in Alberta and Saskatchewan.


Culane website: www.culaneenergycorp.com

Reader Advisories 

Forward-Looking Statements: This news release contains forward-looking
statements and forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect", "anticipate", "continue",
"estimate", "objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends" and similar expressions are intended to identify
forward-looking statements and information. More particularly and without
limitation, this news release contains forward-looking statement and information
concerning the anticipated completion of the plan of arrangement and the
anticipated timing thereof. Culane has provided these anticipated times in
reliance on certain assumptions that it believes are reasonable, including
assumptions as to the time required to prepare meeting materials for mailing,
the timing of receipt of the necessary regulatory and court approvals and the
satisfaction of and time necessary to satisfy the conditions to the closing of
the plan of arrangement. These dates may change for a number of reasons,
including unforeseen delays in preparing meeting materials, inability to secure
necessary regulatory or court approvals in the time assumed or the need for
additional time to satisfy the conditions to the completion of the plan of
arrangement. In addition, there are no assurances the plan of arrangement will
be completed. Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this news release
concerning these times. Readers are cautioned that the foregoing list of factors
is not exhaustive. Additional information on these and other factors that could
affect Culane are included in reports on file with Canadian securities
regulatory authorities and may be accessed through the SEDAR website
(www.sedar.com). All subsequent forward-looking statements and information,
whether written or oral, attributable to Culane or persons acting on its behalf
are expressly qualified in their entirety by these cautionary statements.
Furthermore, the forward-looking statements and information contained in this
news release are made as at the date of this news release and Culane does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements and information, whether as a result of new
information, future events or otherwise, except as may be required by applicable
securities laws.