TSX Symbol "IXL"
CALGARY, Sept. 5 /CNW/ - Innova Exploration Ltd. ("Innova" or the
"Company") is pleased to announce that it has entered into a Pre-Acquisition
Agreement with Crescent Point Energy Trust ("Crescent Point") whereby Crescent
Point will make a takeover offer to acquire all the issued and outstanding
shares of Innova for a cash purchase price of $7.55 per common share.
Including the assumption of Innova's outstanding indebtedness, this equates to
approximately a $400.0 million transaction. The Board of Directors of Innova
have unanimously agreed to support the offer which represents a 30% premium
over Innova's 20-day average trading price of $5.79. Innova's Board of
Directors has received a fairness opinion, and has unanimously resolved to
recommend that all Innova shareholders tender their common shares in
accordance with Crescent Point's offer. It is anticipated that the Takeover
Bid Circular and the Directors' Circular including discussion on terms and
conditions of the Crescent Point offer will be mailed to all Innova
shareholders by no later than September 14, 2007.
The agreement provides that Innova will pay Crescent Point a
non-completion fee of $20 million in certain circumstances. The agreement also
contains customary non-solicitation covenants and Innova has reserved the
right to respond to superior proposals, which Crescent Point has the right to
match. In connection with the offer, directors and shareholders of Innova
holding approximately 27% of the outstanding shares of Innova (on a fully
diluted basis) have entered into lock-up agreements with Crescent Point
pursuant to which they have agreed to tender their Innova shares to the offer.
GMP Securities L.P. acted as financial advisor to Innova with respect to
the transaction and has provided Innova's Board of Directors with its opinion
that the consideration to be received by Innova's shareholders pursuant to the
offer is fair, from a financial point of view.
At the time of closing the transaction, it is anticipated that Innova
will have the following attributes:
- Projected cash flow of $59 million for 2007.
- Production of 4,300 boed comprised of 72% high net back light oil
and 28% natural gas.
- December 31, 2006 proved plus probable reserves of 12.7 million
barrels of oil equivalent (based on NI 51-101 independent
- Current proved plus probable reserves of 15 million barrels of oil
equivalent (based on Innova's internal estimates).
- Undeveloped land of greater than 200,000 net acres.
- Extensive inventory of seismic information.
- Tax pools in excess of $170 million.
- Enterprise Value as a Multiple of 2007 Cash Flow 6.8 times.
- Enterprise Value of Current Estimated Proved plus $26.67 per boe.
- Enterprise Value of Current Flowing Production $93,000 per boe/day
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. These statements
are based on current expectations that involve a number of risks and
uncertainties, which could cause actual results to differ from those
anticipated. These risks include, but are not limited to: the risks associated
with the oil and gas industry (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the uncertainty
of reserve estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety and environmental risks),
commodity price, price and exchange rate fluctuation and uncertainties
resulting from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures. Additional
information on these and other factors that could affect Innova's operations
or financial results are included in Innova's reports on file with Canadian
securities regulatory authorities.
Innova Exploration Ltd. is an active junior oil and natural gas
exploration and production company with core assets in Saskatchewan, Alberta
and British Columbia. The Company has 44.8 million shares outstanding.
For further information, please refer to the Company's website:
www.innovaexploration.com or, alternatively on www.sedar.com.
THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information:
For further information: Kelly D. Kerr, Vice-President, Finance & Chief
Financial Officer, Innova Exploration Ltd., Telephone: (403) 699-8484