Equal also responds to Montclair new releases
OKLAHOMA CITY, May 1, 2014 /CNW/ - Equal Energy Ltd. ("Equal", "the
Company", "we" or "our") (NYSE: EQU; TSX: EQU) today announced that
pursuant to the terms of an arrangement agreement amendment dated May
1, 2014 (the "Amending Agreement") Equal, Petroflow Energy Corporation
and its wholly-owned subsidiary, Petroflow Canada Acquisition Corp.
("Petroflow Sub" and together with Petroflow Energy Corporation,
"Petroflow") have agreed to amend certain terms of their arrangement
agreement dated December 6, 2013 (the "Arrangement Agreement").
Pursuant to the Arrangement Agreement, Petroflow Sub will acquire all of
the outstanding common shares of Equal for US$5.43 in cash per share
(the "Arrangement Consideration") by way of a plan of arrangement under
the Business Corporations Act (Alberta) (the "Arrangement"). The extension was granted as Petroflow
has obtained financing commitments in the amounts necessary for it to
complete the Arrangement.
Among other items, the Amending Agreement provides for payment by Equal
of two dividends of US$0.05 per common share. The Amending Agreement
also extends the outside termination date of the Arrangement Agreement
to July 31, 2014, from the original May 1, 2014 date.
"We are pleased that Petroflow has secured their financing commitment
and we continue to believe that the Arrangement with Petroflow provides
maximum value to our shareholders," said Michael Doyle, Chairman of
Equal's board of directors (the "Board"). "We have agreed to an
extension so that the Arrangement can be presented to shareholders for
a vote, and Petroflow has agreed that shareholders should receive the
dividend payments as compensation for the later closing."
Equal also commented on news releases issued by Montclair Energy, LLC
("Montclair") on April 11, 2014 and April 29, 2014 that criticized the
Arrangement and that proposed that Equal terminate the Arrangement
Details of Dividends and Extension
The Board has approved payment of the first US$0.05 dividend on May 28,
2014 to shareholders of record at the close of business on May 15,
2014. The second US$0.05 dividend will be paid to shareholders that are
entitled to receive the Arrangement Consideration on the closing of the
Arrangement. The Board expects the Arrangement will be completed no
later than the agreed extension date of July 31, 2014.
The extension granted by Equal pursuant to the Amending Agreement is
intended to provide sufficient time for the parties to meet the closing
conditions to the Arrangement Agreement before the Arrangement is
presented to a vote of all shareholders of Equal.
Details of the Arrangement are included in the preliminary information
circular and proxy statement filed by Equal on December 31, 2013. An
amended preliminary information circular and proxy statement that
describes the amendments to the Arrangement Agreement will be filed
with the applicable securities regulatory authorities. The date for the
special shareholder meeting to approve the Arrangement will be set when
the information circular and proxy statement is finalized following
mandatory regulatory review.
The Board unanimously recommended that Equal's shareholders vote FOR the
Arrangement at the upcoming meeting.
Comments on Montclair Disclosure
In response to the recent press releases by Montclair, Equal notes that
a special committee of three independent directors, assisted by expert
financial and legal advisors, undertook a review of a number of
strategic alternatives for Equal, including a return of capital to
shareholders through share buybacks similar to the alternatives
proposed by Montclair. The special committee recommended to the Board
and the Board determined that the completion of the Arrangement with
Petroflow was in the best interests of Equal.
In connection with the Arrangement, Equal filed a preliminary proxy
statement with the Securities and Exchange Commission (the "SEC") on
December 31, 2013. The preliminary proxy statement has also been filed
on the Canadian SEDAR filing system at www.sedar.com, and is available
on Equal's website at www.equalenergy.ca The preliminary proxy statement contains important information about
the proposed Arrangement and related matters. INVESTORS AND
SHAREHOLDERS ARE URGED TO CAREFULLY READ THE PRELIMINARY PROXY
STATEMENT, AND WHEN AVAILABLE, THE FINAL PROXY STATEMENT. Investors and
shareholders may obtain free copies of the preliminary proxy statement
and other documents filed with the SEC by Equal through the website
maintained by the SEC at www.sec.gov. In addition, investors and shareholders may obtain free copies of the
preliminary proxy statement from Equal by telephone at (405) 242-6000,
or by mail at: Equal Energy Ltd., 4801 Gaillardia Pkwy, Suite 325,
Oklahoma City, OK, 73142 Attn: Investor Relations. Equal will furnish
the finalized proxy statement to its shareholders when it is available.
Equal and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the shareholders of
Equal in connection with the proposed transaction. Information
regarding the interests of these directors and executive officers in
the transaction described herein is included in the proxy statement
described above. Additional information regarding these directors and
executive officers is also included in Amendment No. 1 to Equal's
Annual Report on Form 10-K for the year ended December 31, 2013, which
was filed with the SEC on April 29, 2013 This document is available
free of charge at the SEC's web site at www.sec.gov, and from Equal by telephone at (405) 242-6000, or by mail at: Equal
Energy Ltd., 4801 Gaillardia Pkwy, Suite 325, Oklahoma City, OK, 73142
Attn: Investor Relations.
Any Equal shareholder that has questions or requires more information
with regard to the voting of Equal shares should contact Kingsdale
Shareholder Services Inc. by toll-free telephone in North America at
1-866-581-1479 or collect call outside North America at 416-867-2272,
or by e-mail at firstname.lastname@example.org.
About Equal Energy Ltd.
Equal Energy is an oil and gas exploration and production company based
in Oklahoma City, Oklahoma. Our oil and gas assets are centered on the
Hunton liquids-rich natural gas property in Oklahoma. Our shares are
listed on the New York Stock Exchange and the Toronto Stock Exchange
under the symbol (EQU). Our convertible debentures are listed on the
Toronto Stock Exchange under the symbols EQU.DB.B.
Certain information in this press release constitutes forward-looking
statements under applicable securities laws including statements
relating to the completion of the Arrangement, payment of consideration
pursuant to the Arrangement, payment of dividends and adequate
financing being obtained by Petroflow to complete the Arrangement. Any
statements that are contained in this press release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by terms
such as "may," "should," "anticipate," "expects," "seeks" and similar
Forward-looking statements necessarily involve known and unknown risks,
such as risks associated with oil and gas production; marketing and
transportation; loss of markets; volatility of commodity prices;
currency and interest rate fluctuations; imprecision of reserve and
future production estimates; environmental risks; competition;
incorrect assessment of the value of acquisitions; failure to realize
the anticipated benefits of dispositions; inability to access
sufficient capital from internal and external sources; changes in
legislation, including but not limited to income tax, environmental
laws and regulatory matters; and failure to obtain shareholder approval
or to meet other closing conditions for the Arrangement, including the
failure of Petroflow to deliver the funds to complete the Arrangement.
Readers are cautioned that the foregoing list of factors is not
Readers are cautioned not to place undue reliance on forward-looking
statements as there can be no assurance that the plans, intentions or
expectations upon which they are placed will occur. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may differ
materially from those anticipated. Forward looking statements contained
in this press release are expressly qualified by this cautionary
Additional information on these and other factors that could affect
Equal's operations or financial results are included in Equal's reports
on file with Canadian and U.S. securities regulatory authorities and
may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Equal's website (www.equalenergy.ca) or by contacting Equal. Furthermore, the forward looking statements
contained in this press release are made as of the date of this press
release, and Equal does not undertake any obligation to update publicly
or to revise any of the included forward-looking statements, whether as
a result of new information, future events or otherwise, except as
expressly required by securities law.
SOURCE: Equal Energy Ltd.
For further information:
President and Chief Executive Officer
Senior Vice President, Finance and Chief Financial Officer