Last updated on April 18, 2014 at 5:30 EDT

Equal Energy Files Suit against Nawar Alsaadi and Adam Goldstein; Cites Repeated and Flagrant Violations of Securities Laws

January 24, 2013

CALGARY, Alberta, Jan. 24, 2013 /PRNewswire/ – Equal Energy Ltd. (TSX: EQU)
(NYSE: EQU) has today initiated legal proceedings against Mr. Nawar
Alsaadi and Dr. Adam Goldstein on the grounds of their repeated and
flagrant violation of disclosure requirements under US securities laws.

Equal’s filing with the United States District Court, Southern District
of New York, alleges that Mr. Alsaadi and Dr. Goldstein have ignored
since as early as February 2012 disclosure requirements under Sections
13(d) and 14(a) of the US Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder as part of their campaign
against Equal’s board of directors and senior management.

As a result of these actions, the investing public has been unable to
gain crucial information required by law relating to disclosure by
shareholders or shareholder groups holding more than 5% of a company’s
shares and by persons engaging in proxy solicitations. Investors are
thus unable to assess the degree of control that Mr. Alsaadi, Dr.
Goldstein and other members of their group exert over Equal, details of
their true plans and intentions, and whether they have any
understandings or arrangements with third parties regarding the
ownership or voting of Equal shares. This information is material to
the investing public.

“Such undisclosed agreements potentially enable certain shareholders to
take control of a company without warning and without paying a control
premium, to the distinct disadvantage of other uninformed
shareholders”, the filing says. “Moreover, shareholders fulminating for
change may have undisclosed financial incentives, including ones that
may present conflicts of interest with other shareholders.” Equal
believes that the violations of Mr. Alsaadi and Dr. Goldstein could
undermine the integrity of shareholder votes at the upcoming annual
meeting, and is therefore pursuing the matter to ensure that all
shareholders have access to full and complete information prior to the

Mr. Alsaadi and Dr. Goldstein have waged an irresponsible campaign
against Equal that serves their own ends rather than the interests of
all Equal shareholders. In particular, Mr. Alsaadi has used his blog
and Twitter accounts to create unrealistic expectations among other
shareholders. For example, he asserted on July 26, 2012, that the
conclusion of Equal’s strategic review would result in a “50%+ upside
within two weeks”. Rather than admit his unrealistic expectations, Mr.
Alsaadi has chosen to blame Equal’s board and management for failing to
meet his irresponsibly aggressive targets.

Mr. Alsaadi’s and Dr. Goldstein’s inappropriate actions are also
disruptive to the responsible governance priorities being pursued by
Equal’s board, including the recruitment of new board members and
highly qualified operational and technical management.

Don Klapko, Equal’s President and Chief Executive Officer, said: “Equal
is not seeking to prevent Mr. Alsaadi and Dr. Goldstein from expressing
their opinions or properly communicating with other shareholders.
However, we are committed to protecting the interests of all our
shareholders. We have filed this suit to ensure that Mr. Alsaadi and
Dr. Goldstein provide the level of transparency to all other
shareholders required by law.”

Advance Notice Provision:
In keeping with sound corporate governance, Equal’s board has approved
certain advance-notice provisions to the company’s by-laws. Under the
provisions, any nomination to the board of directors must be received
by the company no less than 30 days and no more than 65 days prior to
the annual meeting of shareholders. In the case of a special meeting of
shareholders, which is not also an annual meeting, nominations must be
received no later than 15 days after the announcement of the special

The advance notice policy is designed to comply with 2013 proxy
guidelines set by Institutional Shareholder Services, a leading
independent proxy advisory firm.

The quorum requirement for shareholder meetings has also been revised.
In future, the minimum quorum will comprise two shareholders holding
not less than 25% of the votes.

The amended by-laws are effective immediately and will apply in relation
to the company’s 2013 annual shareholder meeting. Shareholder approval
of the amended and restated by-laws will be sought at such shareholder
meeting.  A copy of the amended and restated by-laws will be available
on the company’s profile at www.sedar.com.

Other Developments:
Contrary to the impression created by Mr. Alsaadi and Dr. Goldstein,
Equal has taken numerous steps in recent months to address shareholder

        --  We have disposed of several assets, particularly in Canada,
            giving the company a clearer focus in addition to significantly
            strengthening the balance sheet.
        --  We are focusing our resources on the Hunton property in
            Oklahoma, which has delivered excellent returns for our
            shareholders in the past and which, we believe, will continue
            to do so in the future. The Hunton property will also benefit
            significantly from higher natural gas and natural gas liquids
        --  An annual dividend of 20 U.S. cents per share, paid quarterly,
            has been instituted.
        --  We have strengthened the balance sheet to take advantage of
            future opportunities and as a prudent safeguard against future
            swings in commodity prices.
        --  We are reviewing the composition of senior management and the
            board to reflect the shift in Equal's focus to Oklahoma.
            Several management changes have already been implemented, and
            further announcements can be expected.

“We have been and continue to be guided by a prudent and balanced
approach that, we are confident, will bring significant benefits for
all shareholders over time”, Mr. Klapko said. “We are determined to
ensure that we do not take Equal back to the dark days of five years
ago when its predecessor over-extended itself by taking on too much
debt. An unsustainable distribution — as demanded by Mr. Alsaadi and
Dr. Goldstein – was a key factor in landing the company in financial
trouble at that time.”

Dan Botterill, Equal’s Chairman, added: “We appreciate the support we
have received from many shareholders. Equal’s board and management will
not allow the distraction caused by Mr. Alsaadi and Dr. Goldstein to
slow down the execution of our strategic plan to preserve and add value
for shareholders.

“We are firmly focused on delivering results under our 2013 business
plan and on positioning Equal to take advantage of the anticipated
recovery in commodity prices.”

Further details of Equal’s strategic review and its benefits can be
found at www.sedar.com, and at www.equalenergy.ca.

About Equal Energy:
Equal Energy is an oil and gas exploration and production company based
in Calgary, Alberta, with its United States operations office located
in Oklahoma City, Oklahoma. Our common shares and convertible
debentures are listed on the Toronto Stock Exchange under the symbols
(EQU, EQU.DB.B), and our common shares are listed on the New York Stock
Exchange under the symbol (EQU). Our oil and gas assets are centered on
the Hunton liquids-rich natural gas property in Oklahoma.

Forward-looking Statements:
Certain information in this press release constitutes forward-looking
statements under applicable securities law including payment of future
dividends, the recovery of commodity prices to more historical norms
and the reassertion of the previously outlined go-forward strategy. Any
statements that are contained in this press release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by terms
such as “may,” “should,” “anticipate,” “expects,” “seeks” and similar

Forward-looking statements necessarily involve known and unknown risks,
oil and gas production; marketing and transportation; loss of markets;
volatility of commodity prices; currency and interest rate
fluctuations; imprecision of reserve and future production estimates;
environmental risks; competition; incorrect assessment of the value of
acquisitions; failure to realize the anticipated benefits of
dispositions; inability to access sufficient capital from internal and
external sources; changes in legislation, including but not limited to
income tax, environmental laws and regulatory matters. Readers are
cautioned that the foregoing list of factors is not exhaustive.

Readers are cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions or
expectations upon which they are placed will occur. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may differ
materially from those anticipated forward-looking statements contained
in this press release are expressly qualified by this cautionary

Additional information on these and other factors that could affect
Equal’s operations or financial results are included in Equal’s reports
on file with Canadian and U.S. securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com), the SEC’s website (www.sec.gov), Equal’s website (www.equalenergy.ca) or by contacting Equal. Furthermore, the forward looking statements
contained in this news release are made as of the date of this news
release, and Equal does not undertake any obligation to update publicly
or to revise any of the included forward-looking statements, whether as
a result of new information, future events or otherwise, except as
expressly required by securities law.


Equal Energy Ltd. (“Equal Energy”) will be filing a proxy statement with
the Securities and Exchange Commission (the “SEC”) in connection with
the solicitation of proxies for its 2013 annual meeting of
shareholders. Shareholders are strongly advised to read Equal Energy’s
2013 proxy statement (including any amendments or supplements thereto)
when it becomes available because it will contain important
information. Shareholders will be able to obtain copies of Equal
Energy’s 2013 proxy statement, any amendments or supplements to the
proxy statement, and other documents filed by Equal Energy with the SEC
in connection with its 2013 annual meeting of Shareholders for no
charge at the SEC’s website at www.sec.gov.

Equal Energy, its directors, executive officers and certain employees
may be deemed participants in the solicitation of proxies from
shareholders in connection with Equal Energy’s 2013 annual meeting of
Shareholders. Information concerning the ownership of Equal Energy
securities by Equal Energy’s directors and executive officers is
included in their SEC filings on Forms 3, 4 and 5, and additional
information is available in Equal Energy’s Notice of Annual General
Meeting of Shareholders held on May 11, 2012 and the Management
Information Circular and Proxy Statement for its 2012 annual meeting of
shareholders filed with the Canadian Securities Administrators on
www.sedar.com on April 4, 2012. Information regarding Equal Energy’s
directors, executive officers and other persons who may, under rules of
the SEC, be considered participants in the solicitation of proxies for
the 2013 annual meeting of shareholders, including their respective
interests by security holdings or otherwise, will also be set forth in
the definitive proxy statement for Equal Energy’s 2013 annual meeting
of shareholders when it is filed with the SEC.

SOURCE Equal Energy Ltd.

Source: PR Newswire