CALGARY, Dec. 3 /CNW/ - Sure Energy Inc. ("Sure Energy" or the "Company")
(SHR, TSX) is pleased to announce that it has agreed to acquire by plan of
arrangement, all of the issued and outstanding shares of a private oil and gas
company for a total consideration of $4.8 million including the assumption of
$2.7 million of debt, working capital and transaction costs (the "Proposed
Transaction"). Under the terms of the agreement Sure Energy will issue up to
2.2 million common shares to shareholders of the private company. Sure Energy
expects to finance the assumption of debt of the private company through its
existing working capital surplus. Sure Energy and the private company have
agreed to pay each other a break fee in certain circumstances. Sure Energy
also has the right to match any superior unsolicited offers that are received
by the private company prior to closing.
The Board of Directors of both Sure Energy and the private company have
unanimously approved the Proposed Transaction. The Board of Directors of the
private company has concluded that the Proposed Transaction is in the best
interest of their shareholders and has resolved to recommend that their
shareholders vote their securities in favour of the Proposed Transaction. The
private company's financial advisor has provided a verbal opinion that the
Proposed Transaction is fair, from a financial point of view, to the
shareholders of the private company.
The Board of Directors, management and certain shareholders of the
private company, holding 8% of the common shares and 100% of the outstanding
performance shares, have entered into lock up agreements to vote their
securities in favour of the Proposed Transaction. An Information Circular is
to be mailed to all private company shareholders on or prior to December 31,
2007 and closing is expected to occur in late January 2008, subject to
approval by the Court of Queen's Bench, approval of the private company
shareholders and certain other conditions.
The private company's assets are high working interest, operated oil and
gas assets located in the Peace River Arch area of Alberta and are contiguous
with Sure Energy's assets in the Peace River Arch.
Production 115 Boe/d (69% natural gas)
Undeveloped Lands 9,300 net acres
(average Working Interest 80%)
Tax Pools $18 million
Prospect Inventory 12 wells
Upon closing of the transaction the combined entity is expected to have
the following attributes:
Production 400 Boe/d
Behind Pipe Production 150 Boe/d
Undeveloped Lands 57,297 (net acres)
Advantage Trust Option Lands 390,000 (net acres)
Prospect Inventory 39 wells
Tax Pools $38 million
Basic Shares Outstanding 30,767,000
Certain information regarding Sure Energy and the private company set
forth in this press release, including management's assessment of Sure
Energy's future plans and operations, contains forward-looking statements that
involve substantial known and unknown risks and uncertainties.
These forward-looking statements are subject to numerous risks and
uncertainties, certain of which are beyond Sure Energy's control, including
the impact of general economic conditions, industry conditions, volatility of
commodity prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other industry participants, the lack of
availability of qualified personnel or management, stock market volatility,
ability to access sufficient capital from internal and external sources,
uncertainty of receiving approval from the private company's shareholders for
the transaction contemplated herein and failure to obtain required regulatory
approvals; including stock exchange listing approvals.
Readers are cautioned that the assumptions used in the preparation of
such information, although considered reasonable at the time of preparation,
may prove to be imprecise.
Sure Energy's actual results, performance or achievement could differ
materially from those expressed in, or implied by, these forward-looking
statements and, accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what benefits that Sure Energy will derive therefrom.
Sure Energy disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by applicable securities laws.
In this report the calculation of barrels of oil equivalent (BOE) is
calculated at a conversion rate of 6,000 cubic feet (Mcf) of natural gas for
one barrel (bbl) of oil based on an energy equivalency conversion method. BOEs
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
Sure Energy is a public company traded on the Toronto Stock Exchange
under the symbol SHR.
For further information:
For further information: please visit our website at
www.sureenergyinc.com or contact: Mr. Jeff Boyce, President and CEO or Mr.
Lance Wirth, Vice President Finance and CFO, Phone: (403) 410-3100, Email: