/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO
ANY UNITED STATES NEWS SERVICES/
CALGARY, June 27 /CNW/ - Action Energy Inc. (AEC - TSX Venture)
("Action") and Rolling Thunder Exploration Ltd. (ROL.A and ROL.B - TSX
Venture) ("Rolling Thunder"), are pleased to announce that they have executed
an agreement to effect a business combination whereby Action will acquire all
of the outstanding Class A shares ("Rolling Thunder A Shares") and Class B
shares ("Rolling Thunder B Shares") of Rolling Thunder in exchange for:
(a) at the election of the Rolling Thunder shareholder in respect of each
Rolling Thunder A Share held, 0.333 of a common share of Action
("Action Share") or $1.15 cash per Rolling Thunder A Share (up to a
cash maximum in the aggregate of $8,556,640); and
(b) at the election of the Rolling Thunder shareholder in respect of each
Rolling Thunder B Share held, 2.899 Action Shares or $10.00 cash per
Rolling Thunder B Share (up to a cash maximum in the aggregate of
The transaction represents a 24% premium to the closing price of the
Rolling Thunder A Shares on the TSX Venture Exchange on June 26, 2007.
The maximum cash consideration for the Rolling Thunder A Shares and
Rolling Thunder B Shares shall not exceed $10,000,000.
The parties intend to carry out the business combination by way of a plan
of arrangement under the provisions of the Business Corporations Act (Alberta)
Shareholders of Rolling Thunder will be asked to approve the Plan at a
special meeting of shareholders to be held in August, 2007. An information
circular detailing the Plan is anticipated to be mailed to Rolling Thunder
shareholders on or before July 31, 2007. The Plan will require the approval of
Rolling Thunder's shareholders, and the approval of the Court of Queen's Bench
of Alberta and certain regulatory authorities.
The directors of each of Action and Rolling Thunder have unanimously
approved the proposed transaction. In addition, Rolling Thunder's Board has
concluded the proposed transaction is fair, from a financial point of view, to
its shareholders, in the best interests of Rolling Thunder and its
shareholders and has agreed to recommend that Rolling Thunder shareholders
vote in favour of the Plan. All of the directors and officers of Rolling
Thunder have agreed to enter into lock-up agreements with Action whereby such
persons will agree to vote their Rolling Thunder shares in favour of the Plan.
Tristone Capital Inc. has acted as financial advisor to Rolling Thunder
and has provided the board of directors of Rolling Thunder with the opinion
that the consideration to be received by Rolling Thunder shareholders pursuant
to the Plan is fair, from a financial point of view, to Rolling Thunder
Shareholders, subject to review of final documentation. Jennings Capital Inc.
acted as financial advisor to Action.
Rolling Thunder has agreed to pay Action a non-completion fee in the
amount of $1,800,000 in certain circumstances if the Plan is not completed.
Rolling Thunder has agreed to terminate any discussions with other parties and
has agreed not to solicit or initiate discussion or negotiation with any third
party with respect to alternate transactions involving Rolling Thunder and has
granted Action a right to match any other proposals Rolling Thunder may
receive. In addition, Action has agreed to pay Rolling Thunder a
non-completion fee in the amount of $1,800,000 in certain circumstances. The
Plan will be subject to receipt of all regulatory and shareholder approvals.
The Plan will provide Rolling Thunder shareholders continued
participation in the upside of Rolling Thunder's asset base through their
significant stake in Action, an emerging oil and gas company focused on the
acquisition, exploration, exploitation and development of oil and natural gas
in western Canada. Action's areas of focus include northeast British Columbia,
the Peace River Arch area, northeast Alberta and southwest Saskatchewan.
Financial and Operational Benefits of the Acquisition
Action and Rolling Thunder expect to achieve a number of key financial
and operational benefits from the transaction, including:
- The acquisition is accretive to Action's net asset value per share,
production per share and cash flow per share.
- The combined company will emerge from the transaction as a
significantly stronger entity, with improved liquidity in the market,
a significantly larger market capitalization and a strong balance
- Significantly improved netbacks, as the majority of Rolling Thunder's
current production in excess of 1,000 boe/d is comprised of operated,
high quality, light oil and natural gas.
- Based on the independent reserves evaluation of Action and Rolling
Thunder, each effective December 31, 2006, the combined company will
have proved reserves of approximately 4,915 mboe and proved plus
probable reserves of approximately 12,140 mboe.
- Access to a significant, additional undeveloped land base of over
12,500 acres (gross) of land and production infrastructure in
Action's Peace River Arch core area. Action has identified multiple
development drilling locations on Rolling Thunder lands, further
adding to Action's already existing large inventory of drilling
prospects. Rolling Thunder's development and optimization
opportunities will complement and diversify Action's existing
exploration prospects in the area.
The strategic merits of the proposed business combination are significant
for both groups of shareholders. Rolling Thunder's current production is
complementary to Action's existing production and Action expects to realize
significant operational and administrative savings through the combination of
the two companies.
Upon the completion of the acquisition, assuming the cash component is
fully taken up, Action will have approximately 43,239,379 Action Shares
outstanding (assuming exercise of all "in-the-money" Rolling Thunder options)
and net debt of approximately $17,867,562.
The larger, more diversified cash flow base will permit the combined
company to embark upon a more aggressive exploration and development program
in its Peace River Arch focus area. This, combined with a strong development
drilling program in Action's other core areas will drive the growth of the
combined company's asset and production base.
Action is a Calgary-based junior resource company engaged in the
exploration, development and production of natural gas and oil in Alberta and
Rolling Thunder is a Calgary, Alberta based corporation engaged in the
exploration, development and production of petroleum and natural gas.
This press release may include forward-looking statements including
opinions, assumptions, estimates and expectations of future production, cash
flow and earnings. When used in this document, the words "anticipate,"
"believe," "estimate," "expect," "intend," "may," "project," "plan", "will",
"should" and similar expressions are intended to be among the statements that
identify forward-looking statements. Forward-looking statements are subject to
a wide range of risks and uncertainties, and although the Company believes
that the expectations represented by such forward-looking statements are
reasonable, there can be no assurance that such expectations will be realized.
Any number of important factors could cause actual results to differ
materially from those in the forward-looking statements including, but not
limited to, the volatility of oil and gas prices, the ability to implement
corporate strategies, the state of domestic capital markets, the ability to
obtain financing, changes in oil and gas acquisition and drilling programs,
operating risks, production rates, reserve estimates, changes in general
economic conditions and other factors more fully described from time to time
in the reports and filings made by the Company with securities regulatory
Oil equivalent amounts have been calculated using a conversion rate of
six thousand cubic feet of natural gas to one barrel of oil. 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
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
This news release is not for dissemination in the United States or to any
United States news services. The trust units of Crescent Point have not and
will not be registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any state securities laws and may not
be offered or sold in the United States or to any U.S. person except in
certain transactions exempt from the registration requirements of the U.S.
Securities Act and applicable state securities laws.
For further information:
For further information: ON ACTION OR ROLLING THUNDER PLEASE CONTACT:
Action Energy Inc., Roger Tang, Chairman and CEO, Telephone: (403) 264-1112,
Facsimile: (403) 264-1116; R.D. (Bob) Bowman, President, CFO & COO, Telephone:
(403) 264-1112, Facsimile: (403) 264-1116; Website: www.action-energy.com;
Rolling Thunder Exploration Ltd.: Peter Bolton, President & CEO, Telephone:
(403) 532-6221, Facsimile: (403) 262-0229; Website: