Daylight Energy Ltd. to be Acquired by Sinopec International Petroleum Exploration and Production Corporation

Daylight Energy Ltd. ("Daylight" or the "Corporation") (TSX:DAY) is pleased to
announce that it has entered into an agreement (the "Arrangement Agreement")
with Sinopec International Petroleum Exploration and Production Corporation
("SIPC") for the purchase of all of the issued and outstanding common shares of
the Corporation (the "Common Shares") at a cash price of C$10.08 per Common
Share, for total cash consideration of approximately C$2.2 billion. The
transaction is to be completed by way of a plan of arrangement under the
Business Corporations Act (Alberta) (the "Arrangement"). The consideration
offered for the Common Shares pursuant to the Arrangement represents a 43.6%
premium over the 60-day weighted average trading price of the Common Shares on
the Toronto Stock Exchange up to and including October 7, 2011. SIPC is a wholly
owned subsidiary of China Petrochemical Corporation ("Sinopec Group") and
undertakes overseas investments and operations in the upstream oil and gas
sector. Sinopec Group is China's largest producer and supplier of oil products
and major petrochemical products.


In addition, under the Arrangement and subject to approval by holders of the 10%
series "C" convertible debentures (the "Series C Debentures"), all of the issued
and outstanding Series C Debentures would be converted into Common Shares (at
the C$9.60 conversion price applicable to the Series C Debentures, such that
104.1667 Common Shares would be issued for each $1,000 principal amount of
Series C Debentures), and the holders of the Series C Debentures would then
receive, in cash, the same C$10.08 per Common Share to be paid to the
shareholders, plus accrued and unpaid interest on their Series C Debentures to
the closing date.


SIPC would also, under the Arrangement and subject to approval by holders of the
6.25% series "D" convertible debentures (the "Series D Debentures"), acquire all
of the issued and outstanding Series D Debentures for a cash price of C$1,110
per $1,000 of principal amount of Series D Debentures, plus accrued and unpaid
interest to the closing date.


If the requisite approval of the Debentureholders is not obtained, the
applicable (or both) series of Debentures will be excluded from the Arrangement
and will remain outstanding in accordance with their terms.


"We are very pleased to announce this transaction and the considerable value it
brings to our securityholders. We believe this transaction with SIPC recognizes
the highly attractive asset portfolio and exceptional team that we have
assembled at Daylight. The efforts and accomplishments of this team will be
built upon through increased investment in the business and acceleration of our
development and exploration opportunities" said Anthony Lambert, President and
Chief Executive Officer of Daylight.


THE ARRANGEMENT

The Arrangement is subject to customary conditions for a transaction of this
nature, which include court and regulatory approvals, and the approval of 66
2/3% of Daylight shareholders represented in person or by proxy at a special
meeting of Daylight shareholders to be called to consider the Arrangement.
Debentureholder approval will also be sought at the meeting to allow the holders
of the Series C and Series D Debentures (collectively, the "Debentures") to
participate in the Arrangement in the manner described above. 


The holders of the Series C Debentures and Series D Debentures will each vote on
the Arrangement as a separate class of securities, and participation in the
Arrangement by each class will require the affirmative vote of the majority of
Debentureholders in number whose holdings collectively represent at least 66
2/3% of the aggregate principal amount of that class. However, completion of the
Arrangement is not conditional on such approvals. 


If the approval is not obtained, the applicable (or both) series of Debentures
will be excluded from the Arrangement and will remain outstanding following
closing of the Arrangement. In that case, in accordance with the terms of the
indenture governing the Debentures, SIPC will be required to make an offer to
purchase the series of Debentures which are not dealt with pursuant to the
Arrangement for cash consideration equal to 101% of the face value thereof, plus
accrued and unpaid interest, within 30 days following the effective date of the
Arrangement. 


An information circular regarding the Arrangement is expected to be mailed to
security holders in November 2011 for a special meeting of the holders of Common
Shares and Debentures scheduled to take place in December, with closing expected
to occur prior to the end of December 2011.


The Arrangement Agreement contains a reciprocal non-completion fee of C$100
million, which is payable by either party in certain circumstances if the
Arrangement is not completed.


The previously announced $0.05 per Common Share dividend payable to holders of
record on September 30, 2011 will be paid on October 17, 2011, but under the
Arrangement Agreement Daylight has agreed to suspend future dividends.


A copy of the Arrangement Agreement will be filed on Daylight's SEDAR profile
and will be available for viewing at www.sedar.com.


RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors of Daylight, after consulting with its financial and
legal advisors, has unanimously approved the Arrangement and unanimously
determined that the transaction is in the best interests of Daylight and is fair
to Daylight shareholders and Debentureholders. The financial advisors to
Daylight's Board of Directors have provided opinions that, subject to the
assumptions, limitations and qualifications set forth therein, the consideration
to be received by the holders of Common Shares and Debentures under the
Arrangement is fair, from a financial point of view, to such holders. The Board
of Directors of Daylight unanimously recommends that all Daylight
securityholders vote in favour of the Arrangement at the securityholder meetings
to be called to consider the Arrangement.


The Board of Directors and officers of Daylight intend to vote their respective
Common Shares, totaling approximately 6.7 million Common Shares, in favour of
the Arrangement, and have entered into lock-up agreements with SIPC pursuant to
which they have agreed to, among other things, vote their Common Shares in
favour of the Arrangement. 


ADVISORS

Canaccord Genuity Corp. is acting as exclusive financial advisor to Daylight in
the transaction and has provided the Board of Directors of Daylight with an
opinion regarding the proposed transaction. CIBC World Markets Inc. is also
acting as financial advisor to the Board of Directors of Daylight and provided
an opinion regarding the proposed transaction. A copy of each opinion will be
included in the information circular to be sent to Daylight securityholders for
the special meetings to be called to consider the Arrangement. Blake, Cassels &
Graydon LLP is acting as legal counsel to Daylight. Barclays Capital is acting
as financial advisor to SIPC, and Vinson & Elkins LLP and Bennett Jones LLP are
acting as legal counsel to SIPC.


ABOUT DAYLIGHT ENERGY

Daylight is a growing intermediate oil and liquids rich natural gas producing
company with a high quality suite of resource play assets in Western Canada.
Daylight has approximately 213 million Common Shares currently outstanding which
trade on the TSX under the symbol "DAY". Daylight's Series C and Series D
Debentures also trade on the TSX under the symbols DAY.DB.C and DAY.DB.D,
respectively.


All amounts stated herein are in Canadian dollars.

ADVISORY:

Forward-Looking Information and Statements 

This press 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 or
information. More particularly and without limitation, this press release
contains forward-looking statements and information concerning: the anticipated
benefits of the Arrangement to Daylight and its securityholders, the timing and
anticipated receipt of required regulatory, court, Government of China and
securityholder approvals for the Arrangement; the ability of Daylight and SIPC
to satisfy the other conditions to, and to complete, the Arrangement; and the
anticipated timing of the mailing of the information circular regarding the
Arrangement and the closing of the Arrangement.


In respect of the forward-looking statements and information concerning the
anticipated completion of the proposed Arrangement and the anticipated timing
for completion of the Arrangement, Daylight has provided such in reliance on
certain assumptions that it believes are reasonable at this time, including
assumptions as to the time required to prepare and mail Daylight securityholder
meeting materials, including the required information circular; the ability of
the parties to receive, in a timely manner, the necessary regulatory, court,
securityholder and other third party approvals, including but not limited to
approvals required to be obtained by SIPC from the Government of The People's
Republic of China and Investment Canada Act approval; and the ability of the
parties to satisfy, in a timely manner, the other conditions to the closing of
the Arrangement. These dates may change for a number of reasons, including
unforeseen delays in preparing meeting materials, inability to secure necessary
securityholder, regulatory, court or other third party approvals in the time
assumed or the need for additional time to satisfy the other conditions to the
completion of the Arrangement. Accordingly, readers should not place undue
reliance on the forward-looking statements and information contained in this
press release concerning these times.


Risks and uncertainties inherent in the nature of the Arrangement include the
failure of Daylight or SIPC to obtain necessary securityholder, regulatory,
court and other third party approvals, or to otherwise satisfy the conditions to
the Arrangement, in a timely manner, or at all. Failure to so obtain such
approvals, or the failure of Daylight or SIPC to otherwise satisfy the
conditions to the Arrangement, may result in the Arrangement not being completed
on the proposed terms, or at all. In addition, the failure of Daylight to comply
with the terms of the Arrangement Agreement may result in Daylight being
required to pay a non-completion or other fee to SIPC, the result of which could
have a material adverse effect on Daylight's financial position and results of
operations and its ability to fund growth prospects and current operations.


Readers are cautioned that the foregoing list of factors is not exhaustive.
Additional information on other factors that could affect the operations or
financial results of Daylight are included in reports on file with applicable
securities regulatory authorities, including but not limited to; Daylight's
Annual Information Form for the year ended December 31, 2010 and the Daylight's
Notice of Annual General Meeting and Information Circular and Proxy Statement
dated April 14, 2011, each of which may be accessed on Daylight' SEDAR profile
at www.sedar.com


The forward-looking statements and information contained in this press release
are made as of the date hereof and Daylight undertake no obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events or otherwise, unless so required by
applicable securities laws.
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