KLR ENERGY ACQUISITION CORP. (NASDAQ:KLRE) Files An 8-K Entry into a Material Definitive Agreement

Item1.01 Entry Into A Material Definitive Agreement.

On December 20, 2016, KLR Energy Acquisition Corp. ( KLRE)
entered into a Business Combination Agreement (theBusiness
Combination Agreement) with Tema Oil and Gas Company (Tema), to
which KLRE will acquire (theBusiness Combination), assuming no
redemptions, approximately 39% of the equity of a wholly-owned
subsidiary of Tema to be named Rosehill Operating Company, LLC
(Rosehill LLC), to which Tema will contribute certain assets and
liabilities prior to closing of the Business Combination, for
aggregate consideration of $35 million in cash, 4,000,000
Warrants exercisable for shares of KLRE ClassA Common Stock (each
entitling the holder to purchase one share of Class A Common
Stock for $11.50) (each, a Warrant), additional cash held by KLRE
in its trust account and in connection with the Private Placement
(as defined below), and the assumption of $55 million in debt,
subject to certain customary purchase price adjustments. In the
Business Combination, Tema will obtain a majority of the voting
shares of KLRE and will retain a majority of its equity in
Rosehill LLC. The Business Combination Agreement and the
transactions contemplated thereby were approved by the Board of
Directors of KLRE (the Board) on December15, 2016.

The transactions set forth in the Business Combination Agreement
will result in an Initial Business Combination involving KLRE, to
KLREs Amended and Restated Certificate of Incorporation.

The Business Combination Agreement and Side
Letter

Financing

KLRE intends to finance the consideration for the Business
Combination through a combination of cash held in its trust
account and the proceeds of the private placement of 8.0% SeriesA
Cumulative Perpetual Preferred Stock (the SeriesA Preferred
Stock) and Warrants to certain qualified institutional buyers and
accredited investors (the Private Placement). For additional
information about the Private Placement, see Subscription
Agreements below.

Stockholder Redemptions

Upon the consummation of the Business Combination, and as a
condition thereof, KLRE will provide its public stockholders the
opportunity, at their election, to redeem all or a portion of
their shares of ClassA Common Stock at a per-share price, payable
in cash, equal to the aggregate amount then on deposit in the
trust account of KLRE as of two business days prior to the
consummation of the Business Combination. Temas parent, Rosemore,
Inc. (Rosemore), and KLREs sponsor, KLR Energy Sponsor, LLC (KLR
Sponsor), have agreed to backstop redemptions by the public
stockholders of KLRE in excess of 30% of the outstanding shares
of ClassA Common Stock by purchasing shares of ClassA Common
Stock or Series A Preferred Stock in an amount up to $20 million
to a side letter entered into between Rosemore, KLR Sponsor and
KLRE (the Side Letter). The foregoing description of the Side
Letter does not purport to be complete and is qualified in its
entirety by the terms and conditions of the Side Letter, a copy
of which is filed hereto as Exhibit 10.5 and is incorporated
herein by reference.

Representations, Warranties and Covenants;
Indemnification

The Business Combination Agreement contains customary
representations and warranties, covenants and indemnification
provisions, as more particularly set forth in the Business
Combination Agreement.

Conditions to Consummation of the Business Combination

Consummation of the transactions contemplated by the Business
Combination Agreement is subject to certain closing conditions,
including, among others, (i)the requisite KLRE stockholder
approval; (ii)the absence of governmental restraints or
prohibitions preventing the consummation of the Business
Combination; (iii)the completion by KLRE of a process to which
the public stockholders are given an opportunity to redeem their
shares of ClassA Common Stock; (iv)approvals under relevant U.S.
and foreign competition and antitrust laws; (v)the accuracy of
certain representations and warranties of the parties;
(v)performance by each of the parties of their obligations under
the Business Combination Agreement; (vi)the consummation of the
transactions contemplated by the contribution agreement to which
Tema will contribute certain assets and liabilities to Rosehill
LLC; (vii)consummation of the Private Placement and any
replacement debt financing; (viii)the approval for listing on the
The NASDAQ Stock Market (NASDAQ) of newly issued KLRE common
stock to be issued in connection with the Business Combination
and (ix)that KLRE have Available Cash (as defined in the Business
Combination Agreement) in an amount not less than $92 million.

Termination

The Business Combination Agreement may be terminated at any time
prior to the consummation of the Business Combination (whether
before or after the required KLRE stockholder vote has been
obtained) by mutual written consent of KLRE and Tema and in
certain other limited circumstances, including if the Business
Combination has not been consummated by May31, 2017.

The foregoing description of the Business Combination Agreement
and the transactions contemplated thereby does not purport to be
complete and is qualified in its entirety by the terms and
conditions of the Business Combination Agreement, a copy of which
is attached hereto as Exhibit 2.1 and is incorporated herein by
reference. The Business Combination Agreement contains
representations, warranties and covenants that the respective
parties made to each other as of the date of such agreement or
other specific dates. The assertions embodied in those
representations, warranties and covenants were made for purposes
of the contract among the respective parties and are subject to
important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement. The Business
Combination Agreement has been attached to provide investors and
shareholders with information regarding its terms. It is not
intended to provide any other factual information about KLRE or
any other party to the Business Combination Agreement. In
particular, the representations, warranties, covenants and
agreements contained in the Business Combination Agreement, which
were made only for purposes of that agreement and as of specific
dates, were solely for the benefit of the parties to the Business
Combination Agreement, may be subject to limitations agreed upon
by the contracting parties (including being qualified by
confidential disclosures made for the purposes of allocating
contractual risk between the parties to the Business Combination
Agreement instead of establishing these matters as facts) and may
be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to
investors and security holders. Investors and security holders
are not third-party beneficiaries under the Business Combination
Agreement and should not rely on the representations, warranties,
covenants and agreements or any descriptions thereof as
characterizations of the actual state of facts or condition of
any party to the Business Combination Agreement. Moreover,
information concerning the subject matter of the representations
and warranties may change after the date of the Business
Combination Agreement, which subsequent information may or may
not be fully reflected in KLREs public disclosures.

Waiver Agreement

In connection with the Business Combination, on December 20,
2016, KLRE entered into the Waiver Agreement (the Waiver
Agreement) with KLR Sponsor to which KLR Sponsor agreed to cap
(a)the number of shares of ClassA Common Stock to be received by
KLR Sponsor to KLREs Amended and Restated Certificate of
Incorporation upon conversion of the shares of Class F Common
Stock held by KLR Sponsor in connection with the Business
Combination at 4,250,000 shares of ClassA Common Stock and (b)the
number of Warrants that KLR Sponsor will hold prior to the
consummation of the Business Combination at 7,863,150 Warrants.

The foregoing description of the Waiver Agreement does not
purport to be complete and is qualified in its entirety by the
terms and conditions of the Waiver Agreement, a copy of which is
filed hereto as Exhibit 10.6 and is incorporated herein by
reference.

Shareholders and Registration Rights
Agreement

Concurrently with the execution of the Business Combination
Agreement, KLRE entered into the Shareholders and Registration
Rights Agreement (the SHRRA) with KLR Energy Sponsor LLC (KLR
Sponsor), Tema (each a Sponsor and together, the Sponsors) and
Anchorage Illiquid Opportunities V, L.P. and AIO AIV 3 Holdings,
L.P. (collectively, Anchorage), the primary investor in the
Private Placement, which will govern the rights and obligations
of the Sponsors and Anchorage with respect to KLRE following the
closing of the Business Combination. to the terms of the SHRRA,
and subject to certain exceptions, the Sponsors will be bound by
restrictions on the transfer of (i)33% of their Common Stock (as
defined in the SHRRA) through the first anniversary of the
Closing Date and (ii)67% of their Common Stock through the second
anniversary of the closing of the Business Combination,
provided that sales of Common Stock above certain
specified prices will be permitted between the first and second
anniversaries of the closing of the Business Combination.

Upon the consummation of the Business Combination, the Sponsors
and Anchorage will be entitled to certain registration rights,
including the right to initiate two underwritten offerings in any
twelve-month period and unlimited piggyback registration rights,
subject to customary black-out periods, cutback provisions and
other limitations as set forth in the SHRRA. to the SHRRA, as
promptly as practicable and in no event later than seven days
following the completion of the Business Combination, KLRE has
agreed to file with the Securities and Exchange Commission (the
SEC) a shelf registration statement relating to the offer and
sale of the Registrable Securities (as defined in the SHRRA)
owned by the Sponsors and Anchorage (and any permitted
transferees) and to keep such shelf registration statement
effective on a continuous basis until the date as of which all
such Registrable Securities have been sold or another
registration statement is filed under the Securities Act of 1933,
as amended (the Securities Act).

Subject to specified ownership thresholds, KLR Sponsor will be
entitled to designate two directors for appointment to the Board,
Tema will be entitled to designate four directors and Anchorage
will be entitled to designate one director. Each Sponsor and
Anchorage will be entitled to appoint a representative or
observer on each committee of the Board. KLR Sponsor will
initially designate Gary C. Hanna (who will serve as the Chairman
of the Board) and Edward Kovalik, Tema will initially designate
J.A. (Alan) Townsend, Frank Rosenberg, Paul Ebner and an
individual to be named and Anchorage will designate an individual
to be named. The Sponsors and Anchorage intend to designate the
full slate of the Board to the SHRRA prior to the closing of the
Business Combination and such proposed directors will be
identified in the definitive proxy materials distributed to KLREs
stockholders. to the terms of the SHRRA, each Sponsor must vote
for the designees of the other Sponsors and is entitled to
replace any of its designees that are removed from the Board.

Also to the SHRRA, during the period beginning on the date of
closing of the Business Combination and ending on the two year
anniversary thereof, the Board may not approve, or cause Rosehill
Operating to approve, certain Major Transactions (as such defined
in the SHRRA) without the affirmative vote of at least 70% of the
directors then serving on the Board. In addition, Anchorage will
have preemptive rights under the SHRRA to participate in future
equity issuances by KLRE, subject to certain exceptions, so as to
maintain its then-current percentage ownership of our capital
stock.

The SHRRA will terminate upon the valid termination of the
Business Combination Agreement in accordance with its terms. In
addition, certain rights and obligations of the Sponsors and
Anchorage under the SHRRA will automatically cease if such
Sponsors and Anchorage (i)no longer hold any equity securities of
KLRE or (ii)no longer have the right to designate an individual
for nomination to the Board.

The foregoing description of the SHRRA does not purport to be
complete and is qualified in its entirety by the terms and
conditions of the Stockholders Agreement, a copy of which is
filed hereto as Exhibit 4.1 and is incorporated herein by
reference.

Subscription Agreements

In connection with its entry into the Business Combination
Agreement, KLRE entered into Subscription Agreements, each dated
as of December20, 2016, with KLR Sponsor and each of The K2
Principal Fund, L.P., Anchorage Illiquid Opportunities V, L.P.,
AIO V AIV 3 Holdings, L.P. and Geode Diversified Fund, a
segregated account of Geode Capital Master Fund Ltd., to which,
among other things, KLRE will issue and sell in a private
placement an aggregate of 75,000 shares of Series A Preferred
Stock,

which will be convertible into shares of ClassA Common Stock at a
conversion price of $11.50 per share (subject to certain
adjustments) and (b)5,000,000 Warrants for aggregate gross
proceeds of $75 million. Additionally, KLR Sponsor agreed to
contribute an aggregate of up to 734,704 shares of ClassA Common
Stock to the purchasers in the Private Placement. The proceeds
from the Private Placement will be used to fund the cash portion
of the consideration required to effect the Business Combination
and for general corporate purposes, including to finance
development and acquisition activities following the consummation
of the Business Combination. The Private Placement is conditioned
upon, and is expected to close concurrently with, the Business
Combination.

to the Subscription Agreements, purchasers of SeriesA Preferred
Stock and Warrants in the Private Placement will be entitled to
certain registration rights, subject to customary black-out
periods, cutback provisions and other limitations as set forth
therein.

The foregoing description of the Subscription Agreements does not
purport to be complete and is qualified in its entirety by the
terms and conditions of the Subscription Agreements, copies of
which are filed hereto as Exhibits 10.1, 10.2, 10.3 and 10.4 and
are incorporated herein by reference.

Item3.02 Unregistered Sales of Equity
Securities.

The disclosure set forth in Item1.01 above under The Business
Combination Agreement is incorporated herein by reference. The
shares of Class B Common Stock and Warrants to be issued to Tema
to the Business Combination Agreement and the transactions
contemplated thereby, as well as any shares of Class A Common
Stock or Series A Preferred Stock purchased by KLR Sponsor or
Tema to the Side Letter, will not be registered under the
Securities Act, in reliance on the exemption from registration
provided by Section4(a)(2) of the Securities Act and/or
Regulation D promulgated thereunder.

The disclosure set forth in Item1.01 above under Subscription
Agreements is incorporated herein by reference. The shares of
SeriesA Preferred Stock and Warrants to be issued, and the ClassA
Common Stock to be transferred, to the Subscription Agreements
will not be registered under the Securities Act in reliance upon
the exemption provided in Section4(a)(2) of the Securities Act
and/or Regulation D promulgated thereunder.

Item7.01 Regulation FD Disclosure.

On December 20, 2016, KLRE and Tema announced that they had
entered into the Business Combination Agreement. A copy of the
joint press release is attached hereto as Exhibit 99.1.

On December 20, 2016, KLRE made available an investor
presentation regarding the Business Combination. A copy of the
investor presentation is attached hereto as Exhibit 99.2.

The information referenced under Item 7.01 (including Exhibits
99.1 and 99.2 referenced under Item 9.01 below) of this Current
Report on Form 8-K is being furnished and shall not be deemed to
be filed for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated
by reference into any registration statement, report or other
document filed by KLRE to the Securities Act except as shall be
expressly set forth by specific reference in such filing.

Forward Looking Statements

This communication includes certain statements that may
constitute forward-looking statements for purposes of the federal
securities laws. Forward-looking statements include, but are not
limited to, statements that refer to projections, forecasts or
other characterizations of future events or circumstances,
including any underlying assumptions. The words anticipate,
believe, continue, could, estimate, expect, intends, may, might,
plan, possible, potential, predict, project, should, would and
similar expressions may identify forward-looking statements, but
the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements may include, for
example, statements about: KLREs ability to consummate the
Business Combination and related private placement; the benefits
of the Business Combination; the future financial performance of
KLRE following the Business Combination; changes in Temas
reserves and future operating results; and expansion plans and
opportunities. These forward-looking statements are based on
information available as of the date of this communication, and
current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing KLREs views as of any subsequent date, and KLRE does
not undertake any obligation to update forward-looking statements
to reflect events or circumstances after the date they were made,
whether as a

result of new information, future events or otherwise, except as
may be required under applicable securities laws.You should not
place undue reliance on these forward-looking statements. As a
result of a number of known and unknown risks and uncertainties,
KLREs actual results or performance may be materially different
from those expressed or implied by these forward-looking
statements. Some factors that could cause actual results to
differ include: (i)the occurrence of any event, change or other
circumstances that could delay the Business Combination or the
Private Placement or give rise to the termination of the
contribution agreement; (ii)the outcome of any legal proceedings
that may be instituted against KLRE following announcement of the
Business Combination and transactions contemplated thereby;
(iii)the inability to complete the Business Combination due to
the failure to obtain approval of the stockholders ofKLRE, or
other conditions to closing in the contribution agreement;
(iv)the risk that the Business Combination disrupts current plans
and operations of KLRE or Tema as a result of the announcement
and consummation of the transactions described herein; (v)KLREs
ability to recognize the anticipated benefits of the Business
Combination, which may be affected by, among other things,
competition and the ability of KLRE to grow and manage growth
profitably following the Business Combination; (vi)costs related
to the Business Combination; (vii)changes in applicable laws or
regulations; (viii)the possibility that KLRE or Tema may be
adversely affected by other economic, business, and/or
competitive factors, including, but not limited to, future trends
in energy markets and commodity prices; and (ix)other risks and
uncertainties described herein, as well as those risks and
uncertainties discussed from time to time in other reports and
other public filings with the SEC by KLRE.

Additional information concerning these and other factors that
may impact our expectations and projections can be found in our
periodic filings with the SEC, including our Registration
Statement on Form S-1, as amended, which was initially filed with
the SEC on January19, 2016, and in the proxy statement to be
filed by KLRE with the SEC when available. Our SEC filings are
available publicly on the SECs website at www.sec.gov. KLRE and
Tema disclaim any obligation to update the forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required under applicable
securities laws.

Additional Information about the Transaction and
Where to Find It

In connection with the Business Combination, KLRE will file a
preliminary proxy statement with the SEC and will mail a
definitive proxy statement and other relevant documents to its
stockholders. Investors and security holders of KLRE are advised
to read, when available, the preliminary proxy statement, and
amendments thereto, and the definitive proxy statement in
connection with KLREs solicitation of proxies for its
stockholders meeting to be held to approve the Business
Combination and related transactions because the proxy statement
will contain important information about the transactions, the
parties thereto and risk factors that may affect investors. The
definitive proxy statement will be mailed to stockholders of KLRE
as of a record date to be established for voting on the Business
Combination. Stockholders will also be able to obtain copies of
the proxy statement, without charge, once available, at the SECs
website at www.sec.gov or by directing a request to: KLR Energy
Acquisition Corp., 811 Main Street, 18^th Floor, Houston, Texas 77002,
Attn: Gary C. Hanna.

Participants in Solicitation

KLRE, Tema, and their respective directors, executive officers
and other members of their management and employees, under SEC
rules, may be deemed to be participants in the solicitation of
proxies of KLRE stockholders in connection with the Business
Combination. Investors and security holders may obtain more
detailed information regarding the names, affiliations and
interests in KLRE of directors and officers of KLRE in KLREs
Registration Statement on Form S-1, as amended, which was
initially filed with the SEC on January19, 2016. Information
regarding the persons who may, under SEC rules, be deemed
participants in the solicitation of proxies to KLREs stockholders
in connection with the Business Combination will be set forth in
the proxy statement for the Business Combination when available.
Information concerning the interests of KLREs and Temas
participants in the solicitation, which may, in some cases, be
different than those of KLREs and Temas stockholders generally,
will be set forth in the proxy statement relating to the Business
Combination when it becomes available.

Disclaimer

This communication shall neither constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which the
offer, solicitation or sale would be unlawful prior to the
registration or qualification under the securities laws of any
such jurisdiction.

Item9.01. Financial Statements and Exhibits.

(d) Exhibits.

to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.

About KLR ENERGY ACQUISITION CORP. (NASDAQ:KLRE)