CALGARY, April 15 /CNW/ - Sun Century Petroleum Corporation ("Sun
Century") announces that it intends to commence a public offer (the "Sun
Century Offer") to acquire all of the issued and outstanding common shares
(the "Common Shares") of Masters Energy Inc. ("Masters"), a company listed on
the Toronto Stock Exchange, at a price of CDN$1.85 per Common Share.
Premium Cash Offer
The Sun Century Offer will be all cash and will represent a premium of
approximately 54% over the closing trading price of the Common Shares on the
Toronto Stock Exchange 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
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
- 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.
- 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
- 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 Zargon's 30 trading day
weighted average trading price of $15.26 per trust unit and assuming an 80:20
pro-ration between the Zargon trust units and cash, the Zargon Offer equates
to a value of $1.83 per Common Share.
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
Indicative Timing of Sun Century's Offer and How to Accept
Sun Century's take-over bid circular will be filed in the next 2 to 7
days. The Sun Century Offer is expected to be open for acceptance for a period
of at least 35 days, subject to, among other conditions, the acceptance of the
Sun Century Offer by Masters' shareholders representing at least 66 2/3% of
the Common Shares on a fully-diluted basis. The take-over bid circular will
contain information on how to accept the Sun Century Offer.
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
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
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: