EBY ANNOUNCES INCREASE TO PRIVATE PLACEMENT AND CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT

Dec 20 2017

Emerald Bay Energy Inc. (TSX Venture: EBY) (the "Corporation" or "Emerald Bay") today reported that the Corporation has closed the first tranche of its previously announced private placement. Pursuant to this first closing, an aggregate 16,666,667 units ("Units") were issued to two (2) subscribers at a price of $0.015 per Unit, for aggregate consideration of $250,000. Each Unit consisted of one (1) Common Share of the Corporation and one (1) share purchase warrant (the "Warrant") (each full Warrant shall entitle the holder thereof to purchase one (1) additional Common Share of the Corporation for a period of 12 months from the issuance of the Units at a price of $0.05) (the "Offering"). The Warrants are subject to an acceleration clause whereby if after four months and one day following the date the Warrants are issued, the closing price of the Common Shares of the Corporation on the principal market on which such shares trade is equal to or exceeds $0.10 for 30 consecutive trading days (with the 30th such trading date hereafter referred to as the "Eligible Acceleration Date"), the Warrant expiry date shall accelerate to the date which is 30 calendar days following the date a press release is issued by the Corporation announcing the reduced warrant term, provided, no more than five business days following the Eligible Acceleration Date: (i) the press release is issued; and (ii) notices are sent to all warrant holders.

Emerald Bay further reported that it has increased the total private placement/Offering from an aggregate $300,000 (see press release dated November 21, 2017) to an aggregate $400,000. No other terms of the private placement have been altered.

The net proceeds will be used in respect existing drilling commitments on the Corporation’s assets in Texas, specifically in relation to the following:

·            at the Corporation’s Wooden Horse property, the Corporation: (i) will add lifting equipment to begin production operations on the recently drilled Kuhn 4 well, at an approximate cost of $22,500; (ii) is evaluating locations for two new wells (Kuhn 5 and Kuhn 6) to be drilled as Buda formation targets at an estimated cost of $65,000 each; and (iii) will renew leased acreage and lease acreage adjacent to the Wooden Horse property at an approximate cost of $35,000; and

·            at the Corporation’s Nash Creek property, the Corporation plans to drill short radius horizontal legs to the fault detected by the 3D seismic in the BeauMar 1 well at an approximate cost of $68,000.

All of the Common Shares and Warrants issued pursuant to the private placement are subject to a 4-month hold period. The terms of the private placement are according to the TSX Venture Exchange Discretionary Waivers of $0.05 Minimum Pricing Requirement Bulletin dated April 7, 2014 and completion of the private placement is subject to the final approval of the TSX Venture Exchange.

ABOUT EMERALD BAY

Emerald Bay Energy Inc. (EBY) is an energy company with oil producing properties in southwest Texas as well as non operated oil, natural gas, and electricity generation interests in Central Alberta, Canada. EBY is the operator of the Wooden Horse and Nash Creek Projects in Guadeloupe, Texas, where the Company currently now owns a 50.00% working interest in those projects. The Company also owns 75% of Production Resources Inc., a South Texas oil company.

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For further information, please contact: Emerald Bay President, Shelby D. Beattie, (403) 262-6000, info@ebyinc.com www.ebyinc.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.