Wexford Capital LP Responds to Excelsior Energy Limited's Rejection of Its
Expression of Interest In Favor of Inferior Proposal


    


    
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<p>GREENWICH, Conn., <span class="xn-chron">April 23</span> /CNW/ -- Wexford Capital LP ("Wexford") announced today that it has written the Board of Directors of Excelsior Energy Limited (ELE CN) ("Excelsior") responding to Excelsior's <span class="xn-chron">April 22</span> letter which rejected Wexford's expression of interest in investing C$30 million in Excelsior.  Excelsior's letter to Wexford asserted that Excelsior was committed to proceeding with an inferior bid and could not pursue or discuss Wexford's superior proposal.</p>
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<p>On <span class="xn-chron">April 19</span> Wexford expressed interest in acquiring 100 million shares of newly issued common stock of Excelsior at a price of C$0.30 per share.  As part of the contemplated transaction, Wexford would also acquire three year warrants to acquire 50 million shares at a price of C$0.40 per share and would have the right to appoint three directors to Excelsior's Board of Directors.  The Wexford proposal involves the issuance of fewer shares, at a substantially greater per share price, with significantly greater proceeds to Excelsior than the transaction being pursued by Excelsior.</p>
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<p>Private investment funds managed by Wexford currently own 14,928,500 shares of Excelsior stock, representing a 10.33% ownership interest.</p>
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    Wexford's letter is as follows:

    WEXFORD
    
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         Wexford Capital LP
              Wexford Plaza
     411 West Putnam Avenue
        Greenwich, CT 06830
            www.wexford.com
             (203) 862-7000
      Direct Dial: 862-7012
       Direct Fax: 862-7312
         aamron@wexford.com


    
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<p><span class="xn-chron">April 23, 2010</span></p>
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    Board of Directors
    Excelsior Energy Limited
    Life Plaza
    1510, 734 7th Avenue SW
    Calgary, Alberta
    T2P 3P8
    Canada


    Gentlemen:

    
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<p>As you are aware from our letter of <span class="xn-chron">April 19</span>, Wexford Capital LP and its affiliated investment funds ("Wexford") own 14,928,500 shares of stock of Excelsior Energy Limited ("Excelsior" or the "Company"), representing a 10.33% ownership interest.  We believe that we are one of the Company's largest shareholders.  As a substantial shareholder, we are shocked and disappointed by the Board of Directors' summary rejection of our expression of interest.  Asserting that it is prohibited under the terms of a letter agreement from pursuing or discussing our proposal, the Board of Directors has rejected our expression of interest to invest C$30 million in Excelsior in favor of a demonstrably and materially inferior offer.</p>
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<p>Excelsior's public announcement regarding the inferior "non-brokered private placements" that it is pursuing describes those transactions as involving the issuance of (a) 41,666,667 "units", each consisting of the equivalent of two shares of stock (one common share and one "flow through" share), or 83,333,334 shares in total, and (b) an additional 27,777,778 shares of stock.  In total, Excelsior would issue 111,111,112 shares of stock, which would be sold at a price of C$0.18 per share, or C$20 million in total.  In addition, Excelsior would issue 83,333,334 three year warrants with a strike price of C$0.30 per share.  And finally, these transactions would grant the investor group the right to appoint three directors to Excelsior's seven member board.</p>
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<p>Given the recent trading price of Excelsior shares, it is incomprehensible that the Company proposes to sell such a huge block of shares at such a large discount to market.  And, it is even more unbelievable that Excelsior is pursuing this transaction while at the same time rejecting Wexford's proposal, which involves the sale of fewer shares at a far greater per share price for a total consideration that is 150% greater.  We do not understand how the Board could view its conduct as consistent with its fiduciary duties to the Company and its shareholders.</p>
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<p>As you are aware from our prior letter, Wexford proposes to purchase 100 million shares at a price of C$0.30 per share (i.e. 167% of the per share price in the offer the Company supports).  This would result in a lower level of dilution to current shareholders than the over 111 million shares to be sold in the "non-brokered private placements."  The Wexford transaction would generate proceeds to Excelsior of C$30 million, rather than only C$25 million under the "non-brokered" alternative.  In addition, Wexford's proposal calls for the issuance of 50 million common stock warrants with a strike price of C$0.40/share.  The "non-brokered" alternative requires the issuance of a far greater number of warrants - again with a far greater dilutive impact on the Company's shareholders - at a strike price that is 25% less than the strike price of the warrants in the Wexford proposal.</p>
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<p>The Company's letter rejecting Wexford's proposal indicates that the "non-brokered" proposal has now been reflected in a "binding letter agreement."  Excelsior, however, has neither made a copy of this agreement publicly available nor provided any information regarding the agreement to its shareholders.  As a result, shareholders cannot determine whether the agreement is, in fact, legally binding, and cannot assess the conditions to which the arrangement may be subject.  At the very least, the Company should make a copy of its agreement with the investment group publicly available.</p>
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<p>The Company's letter also characterizes Wexford's proposal as "non-binding and conditional."  However, although our letter invited the Company to discuss with us the terms and conditions of our proposal, the Company made no effort to do so or to obtain any information regarding our bid.  I can advise you that we would require only minimal due diligence which could be completed in one week, assuming full cooperation from the Company.</p>
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<p>The Company has told us that the letter agreement regarding the "non-brokered" sales does not include standard provisions regarding topping bids or a requirement that the Company obtain shareholder approval.  Assuming that this is true, we view the absence of such customary protections in an agreement that calls for the transfer of a controlling interest in the Company at a below market and grossly inadequate price as an astonishing lapse.  In our view, the Board's approval of such an agreement is a clear breach of its fiduciary obligations.</p>
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<p>The Company, which should strive to maximize shareholder value, has the opportunity to present shareholders with a choice between the inadequate transaction that the Board currently endorses and a firm Wexford bid that would provide materially superior value.  If the Board continues on its stated path of proceeding with a clearly inferior proposal, it should expect to be held to account for its decision to do so.</p>
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<p>We urge the Company to engage in good faith discussions with us concerning our proposal and we look forward to your prompt response to this letter.</p>
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    Sincerely,

    Arthur Amron
    Partner & General Counsel

    About Wexford Capital

    
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<p>Wexford Capital LP is an US SEC registered investment advisor with over <span class="xn-money">$5 billion</span> of assets under management.  Wexford, which was founded in 1994, manages a series of hedge funds and private equity funds from its Greenwich, CT headquarters.  For more information about Wexford, visit the firm's website at <a href="http://www.wexford.com">www.wexford.com</a>.</p>
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    Forward Looking Statements

    
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<p>This document may contain forward-looking statements.  Forward looking statements are statements regarding expectations and projections.  All statements that do not concern historical facts are forward-looking statements.  Any statement that expresses or involves a prediction, expectation, belief, plan, projection, objective, goal, assumption or future events or performance is a forward looking statement.</p>
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<p>Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. No reliance should be placed on any forward-looking statements because no assurance can be provided that they will prove to be correct.  Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.</p>
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<p>Wexford makes no guarantee as to the accuracy or reliability of any information included herein and has no liability based upon the use of such information.  Wexford makes no representation that the information contained herein includes all material facts or does not omit a material fact necessary to make the statements therein not misleading.</p>
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<p>Any forward-looking statements contained in this press release are made as of the date hereof and Wexford undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.</p>
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<p>The document is not a solicitation to purchase, hold, dispose of, or vote shares, warrants, options, notes or other securities of Excelsior Energy Limited.</p>
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For further information: For further information: Arthur H. Amron, Wexford Capital LP, Partner & General Counsel, +1-203-862-7012, aamron@wexford.com Web Site: http://www.wexford.com

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