/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
CALGARY, July 11, 2012 /CNW/ - Calvalley Petroleum Inc. (the
"Corporation" or "Calvalley") announced today that its Board of
Directors (the "Board") has established a Special Committee to explore
and consider strategic alternatives with the objective of maximizing
value for all shareholders. The Special Committee members, all of
which are members of the Board and are independent of management, are
Nikolas Perrault (Chairman), Thomas H. Skupa, Kenneth M. Stephenson and
Thomas E. Valentine. The Special Committee was established in response
to the DNO International ASA ("DNO") press release dated July 5, 2012
whereby DNO expressed its intention to make an unsolicited take-over
bid of the Corporation (the "DNO Offer"). The Board has retained TD
Securities Inc. as its independent financial advisor, and Kingsdale
Shareholder Services Inc. as its shareholder communications agent to
assist in this process.
In addition, the Corporation has adopted a Shareholder Rights Plan (the
"Plan") that is similar to existing shareholder rights plans adopted by
other Canadian public companies. The objectives of the Plan are, to
the extent possible, to prevent a creeping take-over of the Corporation
by requiring that any offer to acquire Class "A" common voting shares
of the Corporation ("Common Shares") is made to all shareholders of the
Corporation ("Shareholders") for all of their Common Shares and cannot
be completed unless at least 50% of the outstanding Common Shares are
tendered in favour of the offer, and to encourage the fair treatment of
all Shareholders in connection with any take-over bid for the
Corporation. The Plan discourages discriminatory, coercive or unfair
take-overs of the Corporation, gives the Board and Shareholders time to
evaluate and consider any take-over bid for the Corporation and gives
the Board time if, in the circumstances, the Board determines it is
appropriate to take such time, to pursue alternatives to maximize
Shareholder value in the event an unsolicited take-over bid (such as
the DNO Offer) is made for all or a portion of the outstanding Common
Shares. The Plan was not adopted to prevent a take-over of the
Corporation, to secure the continuance of management or the directors
in their respective offices, or to deter fair offers for the Common
Shares. Collectively, the directors and officers of Calvalley, together
with their associates, exercise control or direction over approximately
21% of the issued and outstanding Common Shares.
In order to implement the adoption of the Plan, the issuance of one
right ("Right") in respect of each Common Share outstanding at the
close of business on July 11, 2012 (the "Record Time") has been
authorized. The Plan also authorizes the issuance of one Right in
respect of any Common Share issued after the Record Time. The Rights
initially trade with and are represented by the Corporation's Common
Share certificates, including certificates issued prior to the Record
Time. Accordingly, until such time as the Rights separate from the
Common Shares and become exercisable, Rights certificates will not be
distributed to Shareholders. With respect to the DNO Offer, the
separation time of the Rights has been deferred until a later date to
be determined by the Board or the Special Committee on behalf of the
If a person, or a group acting in concert, acquires (other than pursuant
to an exemption available under the Plan) beneficial ownership of 20%
or more of the outstanding Common Shares, the Rights (other than those
held by such acquiring person which will become void) will permit the
holder thereof to purchase Common Shares at a substantial discount to
their then prevailing market price. At any time prior to the Rights
becoming exercisable, the Board may waive the operation of the Plan
with respect to certain events before they occur.
The issuance of the Rights is not dilutive and will not affect reported
earnings or funds from operations per share until the Rights separate
from the underlying Common Shares and become exercisable or until the
exercise of the Rights. The issuance of the Rights will not change the
manner in which Shareholders currently trade their Common Shares. The
Plan is subject to approval of the Toronto Stock Exchange.
About Calvalley Petroleum Inc.
Calvalley Petroleum Inc. is an international oil and gas company, with
offices in Calgary, Alberta, Canada, that operates its 50% working
interest in Block 9 of the Masila Basin, in The Republic of Yemen and
its 100% working interest in the Gimbi and Metema Blocks of the Blue
Nile Basin, in The Republic of Ethiopia.
Certain information contained herein may constitute forward-looking
statements under applicable securities laws. Such statements are
subject to known or unknown risks and uncertainties that may cause
actual results to differ materially from those anticipated or implied
in the forward-looking statements. Investors are encouraged to review
the principal risks associated with the Corporations operations set out
in the Corporation's Annual Information Form for the year-ended
December 31, 2011 a copy of which is filed on SEDAR at www.sedar.com. Forward-looking statements are based upon management's assumptions,
expectations and estimates at the time that such statements are made.
The Corporation does not update forward-looking statements should
circumstances change or management's assumptions, expectations or
estimates change, except as required by law.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
SOURCE Calvalley Petroleum Inc.
For further information:
Shareholders of Calvalley who have questions should call the information agent, Kingsdale Shareholders Services Inc., at toll-free 1-866-581-1489.