Sun Century Petroleum Corporation announces commencement of offer to acquire Masters Energy Inc.



    CALGARY, April 17 /CNW/ - Sun Century Petroleum Corporation ("Sun
Century") announces that it has commenced its previously announced offer to
acquire all of the issued and outstanding common shares (the "Common Shares")
of Masters Energy Inc. ("Masters") at a price of CDN$1.85 per Common Share
(the "Sun Century Offer") by publishing an advertisement in the national
edition of The Globe and Mail and in La Presse. A copy of the Sun Century
Offer and related bid circular (the "Circular") has been delivered to Masters
and filed with the applicable securities regulatory authorities in Canada and
will be publicly available under Masters' profile at www.sedar.com.
    A request has been made to Masters for a list of shareholders, a list of
optionholders and its security position listings for the purposes of
disseminating the Offer and Circular. Sun Century expects to mail the Sun
Century Offer and Circular to all registered shareholders and other
securityholders of Masters as soon as practicable following receipt of the
requested lists.

    
    Premium Cash Offer
    ------------------
    

    The Sun Century Offer is all cash and represents a premium of
approximately 54% over the closing trading price of the Common Shares on the
Toronto Stock Exchange (the "TSX") on February 26, 2009, the last trading day
prior to the announcement that Zargon Energy Trust ("Zargon") had entered into
an agreement with Masters to acquire all of the outstanding Common Shares (the
"Zargon Offer").
    Sun Century, in consultation with its financial advisor, Peters & Co.
Limited, is of the view that the Sun Century Offer is superior to the Zargon
Offer for the following reasons:

    
    -   The Sun Century Offer provides an immediate liquidity option to all
        Masters shareholders.

    -   The Sun Century Offer of cash consideration removes the risk of any
        material pressure on the Zargon trust units. The majority of Zargon's
        production is natural gas-weighted (approximately 5,000 BOE/d), with
        only a portion of such production hedged. Zargon's cash flows have
        been adversely impacted by lower natural gas prices and will be
        impacted further if natural gas prices decline further. For the week
        ending Friday, April 10, 2009, total natural gas and storage in the
        United States increased 21 Bcf to 1,695 from 1,674 Bcf the prior
        week. The storage level is now 438 Bcf (34.8%) higher than this time
        last year and 311 Bcf (22.5%) above the five year average (source:
        Energy Information Administration). Accordingly, we are of the view
        that natural gas prices will remain soft through the upcoming
        quarter.

    -   The Sun Century Offer eliminates any future risk to Masters
        shareholders associated with fluctuations in commodity prices, the
        cash flows ultimately received by Zargon and any resulting impact on
        Zargon's distributions.

    -   Based on historic trading information, Masters shareholders who elect
        to receive Zargon units will be faced with limited liquidity. Under
        the Zargon Offer, Masters shareholders will receive a maximum of
        1.49 million Zargon trust units. From January 1, 2009 through
        March 31, 2009, an aggregate of 2.3 million Zargon trust units traded
        in the open market, representing only approximately 12% of the total
        Zargon trust units outstanding (calculated on a basic basis).

    -   From January 1, 2009 through March 31, 2009, Zargon's trust units
        traded at a price as low as $13.05 per unit.
    

    The Zargon Offer comprises either 0.120 Zargon trust units or $1.83 cash
for each Common Share, subject to a maximum of 1.49 million Zargon trust units
and a maximum of $5.7 million of cash.

    Based on the closing trading price of the Zargon trust units on the TSX
on April 16, 2009, and each of the 30-, 60- and 90-day volume weighted average
trading prices ("VWAP") of the Zargon trust units on the TSX, the
consideration payable under the Zargon Offer is less than the $1.85 cash per
Common Share payable under the Sun Century Offer, as illustrated in the table
below.

    
                                        Zargon Offer based on
                       ------------------------------------------------------
                             Close on
                       April 16, 2009  30-day VWAP  60-day VWAP  90-day VWAP

    Unit portion (80%)
    Zargon trust unit
     price                     $15.19       $15.38       $15.27       $15.09
    Value of trust unit
     consideration        $22,471,509  $22,752,588  $22,589,858  $22,323,573

    Cash portion (20%)
    Cash offer per
     Common Share               $1.83        $1.83        $1.83        $1.83
    Value of cash
     consideration         $5,640,068   $5,640,068   $5,640,068   $5,640,068

    Total consideration   $28,111,577  $28,392,655  $28,229,926  $27,963,641
    Value per Common Share      $1.82        $1.84        $1.83        $1.81

    Note:

    (1) In all cases above, the value of the Zargon Offer assumes an
        80:20 pro-ration between the Zargon trust units and cash.
    

    The Sun Century Offer provides Masters shareholders with full liquidity
in the form of cash consideration, which enables shareholders of Masters to
make their own re-investment decisions regarding subsequent purchases of
Zargon trust units or the securities of any other issuer. The Sun Century
Offer also provides the certainty of cash at a time of heightened uncertainty
in equity and financial markets.

    
    Masters Shareholders Meeting
    ----------------------------
    

    Sun Century acknowledges that Masters has set an annual and special
meeting of holders of Common Shares to be held on Tuesday, April 28, 2009 to
consider, among other things, passing a special resolution to approve the
Zargon Offer.

    
    Indicative Timing of Sun Century's Offer and How to Accept
    ----------------------------------------------------------
    

    The Sun Century Offer will be open for acceptance until May 25, 2009,
unless withdrawn or extended, and is subject to, among other conditions, the
acceptance of the Sun Century Offer by Masters' shareholders representing at
least 66?% of the Common Shares on a fully-diluted basis. The Sun Century
Offer and Circular contain information on how to accept the Sun Century Offer.

    
    Advisors
    --------

    Sun Century's financial advisor is Peters & Co. Limited and Sun Century's
legal advisor is Gowling Lafleur Henderson LLP.

    About Sun Century
    -----------------

    Sun Century is a private company incorporated under the laws of the
Province of Alberta. Sun Century's business strategy is to acquire, develop
and operate oil and gas properties in strategic geographic locations in
Canada.

    Forward-Looking Statements
    --------------------------
    

    This news release may contain forward-looking statements and information,
including opinions, assumptions, estimates and management's views and
expectations. When used in this document, the words "believe," "may,", "will"
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 Sun Century 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
state of domestic capital markets, delays resulting from inability to obtain
required regulatory approvals, changes in general economic conditions and
other factors more fully described from time to time in the reports and
filings made by Sun Century with securities regulatory authorities. Readers
are cautioned not to place undue reliance on forward-looking statements, as no
assurances can be given as to future results, levels of activity or
achievements. Except as required by applicable securities laws, Sun Century
does not undertake any obligation to publicly update or revise any
forward-looking statements.

    
    Barrels of Oil Equivalent
    -------------------------
    

    Barrels of oil equivalent (BOE) is calculated using the conversion factor
of six thousand cubic feet (Mcf) of natural gas being equivalent to one barrel
(bbl) of oil. BOE 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 wellhead.





For further information:

For further information: SUN CENTURY PETROLEUM CORPORATION, 950, 550 -
6th Avenue S.W., Calgary, Alberta, T2P 0S2, Alan M. Tang, President, Phone:
(403) 269-2880

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SUN CENTURY PETROLEUM CORPORATION

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