1927297 Alberta Ltd. extends premium Offer to purchase common shares of Ironhorse Oil & Gas Inc.

  • The Offer has been extended to February 5, 2016
  • Intends to file an application with ASC to cease trade the shareholder rights plan
  • All-Cash Offer of Cdn$0.17 provides immediate and certain value for shareholders
  • Ironhorse Board continues to fail to present shareholders with any alternate options to maximize shareholder value

CALGARY, Dec. 17, 2015 /CNW/ - 1927297 Alberta Ltd. (the "Offeror") announced today that it has extended its previously announced offer (the "Offer") to purchase all of the outstanding common shares (the "Shares") of Ironhorse Oil & Gas Inc. (TSXV:IOG) ("Ironhorse") for Cdn$0.17 in cash per Share, subject to certain terms and conditions, until 4:00 p.m. (Calgary time) on February 5, 2016. The Offeror will file a corresponding notice of variation (the "Notice of Variation") to formally extend the expiry time of its Offer until 4:00 p.m. (Calgary time) on February 5, 2016.

The Offeror also announced that it intends to file an application with the Alberta Securities Commission (the "ASC") to cease trade the tactical shareholder rights plan adopted by Ironhorse in response to the Offer.

No Plan to Maximize Shareholder Value

On April 16, 2015, over 200 days ago, the Ironhorse Board announced that a special committee of directors had been formed and would engage a financial advisor to review options to maximize shareholder value. No alternate options to maximize value, including strategic alternatives such as a merger or sale of Ironhorse, have been presented to date.

Overvaluation of Ironhorse's Reserves and Future Outlook

The Offeror believes that the financial opinion of Ironhorse's financial advisor is flawed as the opinion only relied on outdated financial statements and management's discussion and analysis for the years ended December 31, 2014 and 2013. No updated analysis on Ironhorse's reserve and estimated future net revenues was done by the advisor and the most recent analysis that the advisor relied upon was made prior to the current significant and prolonged decrease in the oil price. The impairment of approximately $3,500,000 reported in the September 30, 2015 financial statements may be just the beginning of the reserves devaluation with current prices substantially lower than that of the prior quarter.

Ironhorse Board Not Aligned with Shareholders

The Offeror believes that the board of directors of Ironhorse (the "Ironhorse Board") is attempting to protect management from a change in control that would reduce or eliminate the annual cash compensation paid to management. All officers of Ironhorse are also employees of Grizzly Resources Ltd. ("Grizzly"). Such officers' services are provided to Ironhorse pursuant to a management agreement between Ironhorse and Grizzly, under which Ironhorse pays to Grizzly a monthly management fee. Larry J. Parks, President and Chief Executive Officer and a director of Ironhorse is also the President and Chief Executive Officer of Grizzly.

The Offer Benefits Shareholders

The Offer announced by the Offeror on November 3, 2015 represents the following benefits for holders of Ironhorse Shares ("Shareholders"):

1)   Significant Premium and Immediate Value

The all-cash consideration provides Shareholders with the opportunity to realize an immediate and certain value for their Shares. The Offer price of $0.17 per Share represents a premium of approximately 55% to the last closing price of the Shares on the TSXV ($0.11) on November 2, 2015, the last trading day prior to the date of the announcement of the Offeror's intention to make the Offer, and a premium of approximately 45% to the volume-weighted average price of the Shares over the 90 day period ended on November 2, 2015. The closing price of the Shares on December 16, 2015 was $0.115.

2)   Immediate Liquidity

The Offer represents an attractive liquidity event for Shareholders in a thinly-traded stock. Shareholders currently have limited liquidity based on the trading history of the Shares, and the fully-funded Offer provides an opportunity for Shareholders to dispose of all of their Shares for cash consideration.

3)   Fully-Financed All-Cash Offer

The Offer is NOT subject to obtaining any financing and the Offeror, through its own resources and those to be provided by its affiliates, has available sufficient funds to pay the entire consideration for the Shares.

4)   Eliminate Exposure to Potential Decrease in the Price of Shares

Due to the continued decline in the price of oil, with many analysts expecting a longer price recovery period and lower long-term oil price outlook than was expected last year, the revaluation of Ironhorse's reserves to be filed by Ironhorse for the year ended December 31, 2015 is expected to be based on a further decreased estimated future net revenues, leading to a potential decrease in the stated value of Ironhorse's reserves. Such a decline in the stated value of Ironhorse's reserves could be expected to cause a decline in the price of the Shares.

The Offer

The Offer will remain open for acceptance until 4:00 p.m. (Calgary time) on February 5, 2016, unless extended or withdrawn by the Offeror. Full details of the Offer are set out in the take-over bid circular, related Offer documents and the Notice of Variation.

This News Release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Forward-Looking Information Cautionary Statement

This News Release contains certain forward-looking information (referred to herein as "forward-looking statements"). Forward-looking statements, including those respecting the Offer, various terms of the Offer as varied by the Notice of Variation, and the continuation or termination thereof and the intention of the Offeror to make an application to the ASC to cease trade the tactical shareholder rights plan adopted by Ironhorse, are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements.  These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "except", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue" or the negative thereof or similar variations.  Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.  Important factors that could cause actual results to differ materially from the Offeror's expectations include, among other things, general business and economic conditions, actions of the Ironhorse Board, as well as specific risks relating to Ironhorse, such as risks relating to the oil and gas industry, and general economic conditions and other risks identified in Ironhorse's public filings.  Such forward-looking statements should, therefore, be construed in light of such factors and the Offeror is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

THE TAKEOVER BID CIRCULAR AS VARIED BY THE NOTICE OF VARIATION CONTAINS IMPORTANT INFORMATION ABOUT THE OFFER AND SHOULD BE READ IN ITS ENTIRETY BY IRONHORSE SHAREHOLDERS AND OTHERS TO WHOM THE OFFER IS ADDRESSED. IRONHORSE SHAREHOLDERS (AND OTHERS) ARE ABLE TO OBTAIN, AT NO CHARGE, A COPY OF THE OFFER TO PURCHASE, TAKEOVER BID CIRCULAR AND VARIOUS ASSOCIATED DOCUMENTS INCLUDING THE NOTICE OF VARIATION ON THE SYSTEM FOR ELECTRONIC DOCUMENT ANALYSIS AND RETRIEVAL (SEDAR) AT WWW.SEDAR.COM. THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE, OTHERWISE ACQUIRE, SUBSCRIBE FOR, SELL, OTHERWISE DISPOSE OF OR ISSUE, OR ANY OTHER SOLICITATION OF ANY OFFER TO SELL, OTHERWISE DISPOSE OF, ISSUE, PURCHASE, OTHERWISE ACQUIRE OR SUBSCRIBE FOR ANY SECURITY. THE OFFER WILL NOT BE MADE IN, NOR WILL DEPOSITS OF SECURITIES BE ACCEPTED FROM A PERSON IN, ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, THE OFFEROR MAY, IN ITS SOLE DISCRETION, TAKE SUCH ACTION AS IT DEEMS NECESSARY TO EXTEND THE OFFER IN ANY SUCH JURISDICTION.

SOURCE 1927297 Alberta Ltd.

For further information: Shareholders Please Contact: Bayfield Strategy, Inc., 1-844-226-3222 (toll free in North America), 416-855-0238 (collect outside North America), info@bayfieldstrategy.com

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1927297 Alberta Ltd.

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