Verenex enters into acquisition agreement with CNPCI



    CALGARY, Feb. 26 /CNW/ - Verenex Energy Inc. ("Verenex" or the "Company")
(VNX - TSX) announced that it entered into a definitive agreement (the
"Agreement") on February 24, 2009 whereby a wholly-owned subsidiary of CNPC
International Ltd. ("CNPCI") has agreed, subject to the terms of the
Agreement, to make an offer to acquire all the outstanding common shares of
Verenex by way of a take-over bid (the "Offer") for C$10.00 per share in cash.
The aggregate value of this transaction will be approximately C$499 million.
Mailing of the Offer to Verenex shareholders is subject to the fulfillment of
certain conditions for the benefit of CNPCI which, if not satisfied, will
result in the Offer not proceeding. The primary condition precedent to the
mailing of the Offer is the receipt from the Libyan National Oil Corporation
(the "NOC") of written consent to the acquisition of Verenex by CNPCI (and
certain other related matters) in the form contemplated by the Acquisition
Agreement (the "NOC Consent"). In order for the transaction to proceed,
consent from the NOC is required under the terms of an exploration and
production sharing agreement to which NOC and Verenex are parties. Such
written consent has been requested but not yet received and no assurance can
be given that the consent will be given, or, if given, will be in the form
required by the Agreement. The Offer, if made, will be conditional upon, among
other things, valid acceptance of the Offer by Verenex shareholders owning not
less than 66 2/3% of the outstanding Verenex shares (calculated on a
fully-diluted basis). In addition, the Offer will be subject to certain
customary conditions, regulatory approvals (including all required approvals
from the Libyan Government) and the absence of any material adverse change
with respect to Verenex. The Agreement will be filed on SEDAR at
www.sedar.com. This announcement coincides with the release on SEDAR, in
response to unusual trading activity, of a material change report which was
previously filed on a confidential basis with securities regulators.
    The Agreement reached is the result of the strategic review previously
announced by Verenex. The Agreement has been recommended by the Independent
Committee of the Board of Directors of Verenex (the "Independent Committee")
and has been approved by the Boards of Directors of both Verenex and CNPCI. In
addition to support from the Verenex Board of Directors, the Agreement
contains customary provisions prohibiting Verenex from soliciting any other
acquisition proposal but allows the Verenex Board of Directors to accept and
recommend a superior proposal upon payment of a break fee of C$15 million
(subject to a right to match provision in favour of CNPCI).
    The Verenex Board of Directors, after consulting with its financial and
legal advisors, has unanimously determined that the Offer is fair to the
Verenex shareholders and is in the best interests of Verenex and the Verenex
shareholders and has recommended acceptance of the Offer by the Verenex
shareholders. FirstEnergy Capital Corp., a financial advisor to Verenex, has
provided the Independent Committee with its verbal opinion that, subject to
review of final documentation, the consideration to be received by the
shareholders of Verenex pursuant to the proposed Agreement is fair, from a
financial point of view, to the Verenex shareholders. All of the members of
the Verenex Board, its executive officers and its major shareholder, Vermilion
Resources Ltd. (representing in aggregate approximately 45% of the outstanding
common shares on a fully diluted basis), have entered into lock-up agreements
pursuant to which they have agreed to tender their common shares to the Offer
in accordance with the terms of the Agreement.
    Standard Chartered Bank and FirstEnergy Capital Corp. are acting as
financial advisors, and Macleod Dixon LLP is acting as legal counsel, to
Verenex.
    Scotia Waterous Inc. is acting as exclusive financial advisor, Dewey &
LeBoeuf LLP is acting as lead legal counsel, Stikeman Elliot LLP is acting as
Canadian legal counsel and Ernst & Young is acting as tax and accounting
advisor, to CNPCI.

    About Verenex

    Verenex is a Canada-based, international oil and gas exploration and
production company with a world-class discovered resource base and exploration
portfolio in the Ghadames Basin in Libya. Under the EPSA terms for Area 47,
Verenex is the operator and holds a 50% working interest in the initial 5-year
Exploration Period which reduces to 25% for any commercial developments
retained in a subsequent 25-year Exploitation Period. These working interest
levels reflect the Company's required share of capital funding during the
periods. In any commercial development scheme, Verenex would fund 25% of
capital expenditures and 6.85% of operating costs and receive an initial
production allocation (free of all taxes and royalties) of 6.85%. A more
complete description of the Area 47 contract terms is included in the
Company's various filings on www.sedar.com.

    About CNPCI

    CNPC International Ltd. ("CNPCI") is wholly owned by China National
Petroleum Corporation ("CNPC").
    CNPC is a global leading integrated energy corporation, involved in both
upstream and downstream operations, oil and gas field engineering and
technical services, and petroleum materials and equipment manufacturing and
supply. CNPC's website can be accessed at www.cnpc.com.cn.
    CNPC, through CNPCI, invests in the overseas petroleum sector and its oil
and gas exploration, development and production operations spread over 27
countries in Asia, Africa, North America and South America. CNPC advises that
it has crude oil production of 2.75 million barrels per day and natural gas
production of 5.6 billion cubic feet per day, and has oil reserves of 22.4
billion barrels and natural gas reserves of 81.9 trillion cubic feet. In
addition to its production activities, CNPC has activities in oil pipelines,
refining, petrochemical, oil trading and refined product sales.

    Forward-Looking Information and Statements

    This press release contains forward-looking statements. These statements
are based on current expectations and are subject to a number of risks and
uncertainties that could materially affect the results. These risks include,
but are not limited to: risks associated with obtaining regulatory approvals;
the uncertainty associated with negotiating with governments; and the risk
associated with international activity. Due to the risks, uncertainties and
assumptions inherent in forward-looking statements, prospective investors in
the company's securities should not place undue reliance on these
forward-looking statements.

    %SEDAR: 00020996E




For further information:

For further information: Jim McFarland, President & CEO, Verenex Energy
Inc., Telephone: (403) 536-8009; or Ken Hillier, Chief Financial Officer,
Verenex Energy Inc., Telephone: (403) 536-8005, www.verenexenergy.com

Organization Profile

VERENEX ENERGY INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890