CEQUENCE ENERGY LTD. ANNOUNCES SECOND QUARTER 2009 RESULTS

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1 PRESS RELEASE CEQUENCE ENERGY LTD. ANNOUNCES SECOND QUARTER 2009 RESULTS August 12, 2009, CALGARY, ALBERTA. Cequence Energy Ltd. ( Cequence or the Company ) (TSX: SAB; to be changed to CQE effective August 17, 2009), is pleased to announce its operating and financial results for the second quarter ended June 30, The unaudited financial statements and notes as well as management s discussion and analysis pertaining to the period are available on Cequence s website at and on SEDAR at FINANCIAL AND OPERATING HIGHLIGHTS (000s except share and per share amounts) Three months ended June 30, Six months ended June 30, Financial ($) Production revenue, net of royalties $ 3,673 $ 14,209 $ 7,443 $ 26,360 Realized gain (loss) on derivative contracts 2,489 (2,331) 4,546 (2,411) Unrealized gain (loss) on derivative contracts (1,326) (4,715) 2,407 (12,698) Net income (loss) (2,444) (2,486) 996 (13,305) Funds flow from operations (1) 1,507 6,339 3,413 14,072 Production volumes Natural gas (mcf/d) 8,077 12,422 8,031 14,098 Crude oil (bbls/d) Natural gas liquids (bbls/d) Total (boe/d) 1,548 2,357 1,559 2,695 Sales prices Natural gas, including realized hedges ($/mcf) $ 7.50 $ 8.94 $ 7.61 $ 8.19 Crude oil ($/bbl) Natural gas liquids ($/bbl) Total, before ($/boe) $ $ $ $ Netbacks ($/boe) $ $ $ $ Operating costs Net debt (2) $ 34,983 $ 61,042 $ 34,983 $ 61,042 Total capital expenditures 209 9,522 4,976 22,126 Undeveloped land (net acres) 142, , , ,700 (1) Funds flow is calculated as net income plus non controlling interest, unrealized derivate gains and losses, depletion, accretion, future income taxes, stock compensation expense, valuation allowances and asset retirement expenditures.

2 (2) Net debt is calculated cash, net working capital less derivative contract asset, bank debt and long term debt. REORGANIZATION TRANSACTION On July 29, 2009, the shareholders of Sabretooth Energy Ltd. approved reorganization transactions that resulted in a recapitalization of the company, appointment of new management and directors and a name change to Cequence Energy Ltd. Our business plan is to create cost effective per share growth in reserves, production and cash flow through an integrated strategy of acquiring, exploiting and exploring high quality, long life natural gas and oil properties in Alberta and British Columbia. We believe the current economic environment provides an excellent opportunity for acquisitions and consolidation within the junior oil and gas marketplace. The new management team of Cequence is led by Howard Crone as President & Chief Executive Officer, Richard Thompson as Executive Vice President, David Gillis as Vice President, Finance and Chief Financial Officer, Hany Beshry as Vice President, Exploration, Robin Bieraugle as Vice President, Operations, Nathan MacBey as Vice President, Land and Erin Thorson as Controller. The management team has worked together in various capacities in building three successful oil and gas companies including Cyries Energy, Cequel Energy and Cypress Energy. The new Board of Directors is comprised of Donald Archibald as Chairman, Howard Crone, Richard Thompson, Paul Colborne, Peter Bannister, Brent Perry and Hank Swartout. The Company has raised approximately $65 million from proceeds of the reorganization transactions and subsequent subscription receipt financing. As part of the reorganization the new management and employee group of Cequence contributed $10 million of cash and assets in exchange for 27,027,027 shares of Sabretooth at $0.37 per share. In addition, existing shareholders of Sabretooth were granted a right to purchase up to $10 million of shares for $0.37 per share. Finally, on July 30, 2009 the Company completed its subscription receipts financing of 53,390,000 common shares at $0.86 per share for total proceeds of approximately $46 million before deducting deal costs. On a consolidated basis, including our 71 percent owned HFG Holdings ( HFG ) whose principle asset is approximately $10 million in cash and ignoring our hedging asset, we expect to have approximately $22 million in available cash and working capital after the completion of the transaction. All of the transactions have closed as of the date of this press release except for the rights offering to existing shareholders which rights expire on August 14, The Company will continue to have $40 million available under a revolving credit facility, $18 million available under a long term facility and a $5 million acquisition facility. On August 17, 2009 our trading symbol will change to CQE on the TSX. In addition, a four for one share consolidation will be also be effected on that date. It is anticipated that the shares will commence trading on a consolidated basis sometime later that week or early the following week. Cequence intends to add to its extensive drilling inventory both through corporate / asset acquisitions and land purchases at Crown land sales. The approved 2009 capital program will validate key lands and identify multiple follow-up drilling locations. In response to low gas prices in the near term, a conservative approach will be applied to the 2009 capital budget. We currently plan to spend $20 million in the Peace River Arch

3 with a focus on Montney exploration in Northwestern Alberta through our 71 percent owned subsidiary HFG Holdings Inc. This capital will preserve expiring land and fulfill existing flow through commitments. Cequence will continue to monitor natural gas prices over the second half of the year and adjust the budget to properly allocate funds appropriately. Cequence s management believes that with its excellent balance sheet, solid reserve base and a growing prospect inventory, the Company is well positioned to continue to consolidate opportunities in a depressed commodity environment. OPERATIONAL HIGHLIGHTS Operations in the second quarter were limited in response to a low commodity price environment and spring break up. Production averaged 1,548 boepd compared to production of 1,605 boepd in the first quarter of No wells were drilled in the second quarter and capital spending was minimal. The capital program for the remainder of 2009 is budgeted to be $20 million and will focus on Montney exploration in the Peace River Arch. The current estimate of average production for the third quarter is 1,300 boepd which includes our best estimate of facility downtime and the expected shut in of approximately 150 boepd of natural gas production in mid-august due to low prices. With natural gas prices at low levels the Company intends to restrict capital spending to land expiries and commitments. A more extensive drilling program is expected to resume when gas prices recover. The Company s net undeveloped acreage in the Peace River Arch at June 30, 2009 was approximately 138,000 net acres. As previously described any material expiries have been addressed or will be addressed through future budgeted drilling within our subsidiary HFG Holdings. Net undeveloped acreage at Gunnell, BC is approximately 3,700 net acres. Cequence has been working with the operator to manage the timing of any new drilling given the current pricing environment. FINANCIAL HIGHLIGHTS Low natural gas prices resulted in lower funds flow and net income in the period when compared to Overall, the Company recorded a net loss in the quarter of $2.4 million compared to a loss of $2.5 million in the second quarter of Funds flow from operations for the quarter was $1.5 million compared to $6.3 million in the second quarter of Total capital expenditures in the quarter were limited to $0.2 million in response to lower gas prices. Consolidated net debt calculated as current assets, less derivative commodity contract asset, less accounts payable and bank debt at June 30, 2009 was $35.0 million compared to $33.3 million at December 31, The financial information in the quarterly results does not reflect the reorganization transactions that occurred subsequent to quarter end. The cost structure of Sabretooth was high and our expectation is to improve these costs beginning in the third quarter.

4 The Company s financial statements and management s discussion and analysis for the three and six month periods ended June 30, 2009 will be available the SEDAR system by accessing Cequence s public filings under Search for Public Company Documents within the Search Database module at Sedar.com FOR FURTHER INFORMATION PLEASE CONTACT: Howard Crone Chief Executive Officer (403) hcrone@cequence-energy.com or David Gillis Chief Financial Officer (403) dgillis@cequence-energy.com Boes are presented on the basis of one Boe for six Mcf of natural gas. Disclosure provided herein in respect of Boes may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release. Forward looking Statements or Information Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forwardlooking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this press release may include, but are not limited to, statements or information with respect to: business strategy and objectives; development, exploration, acquisition and disposition plans and the timing thereof; reserve quantities and the discounted present value of future net cash flows from such reserves; future production levels. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, however, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding, among other things: the impact of increasing competition; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manor; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of the

5 Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward-looking statements or information. The material risk factors affecting the Company and its business are contained in the Company's Annual Information Form which is available at SEDAR at The forward-looking statements or information contained in this press release are made as of the date hereof and the Company undertakes 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 required by applicable securities laws. The forward looking statements or information contained in this press release are expressly qualified by this cautionary statement.