Cork Exploration Inc. and Profound Energy Ltd. announce strategic combination


    CALGARY, Sept. 17 /CNW/ - Cork Exploration Inc. ("Cork") (TSX: CRK) and
Profound Energy Ltd. ("Profound"), a private Alberta-based oil and natural gas
exploration company with operations in west central Alberta, are pleased to
announce that Cork and Profound have entered into a pre-acquisition agreement
(the "Agreement") pursuant to which Cork will make an offer (the "Offer") to
acquire all of the issued and outstanding common shares of Profound ("Profound
Shares"). Pursuant to the Agreement, Cork has agreed to purchase the Profound
Shares in consideration for the issuance by Cork of 1.60 common shares of Cork
("Cork Shares") for each issued and outstanding Profound Share. The combined
entity ("New Profound") will continue under the name "Profound Energy Inc.".
Cork shareholders will own approximately 51% of the shares of New Profound.
    The transaction is subject to certain conditions including the tendering
of a minimum of 67% of the Profound Shares to the Offer, receipt of the
Toronto Stock Exchange ("TSX") and Cork shareholder approval and other
transaction specific and customary conditions. It is a condition of Cork that
holders of approximately 67% of the outstanding Profound Shares, including all
directors and officers of Profound, enter into lock-up agreements with Cork
whereby they agree to tender their Profound Shares to the Offer and it is a
condition of Profound that holders of approximately 4.5% of the outstanding
Cork Shares, including all directors and officers of Cork, enter into support
agreements with Profound whereby they agree to support a shareholder vote in
favour of the transaction and related matters.

    New Profound Highlights

    The combination of Cork and Profound will create a natural gas leveraged
company with high working interests and an extensive suite of drillable
locations on a large prospective undeveloped land base. New Profound will have
a strong presence in its Carrot Creek, North and South Pembina, and Cochrane
core areas in west central Alberta and will provide significant economies of
scale with its existing infrastructure and compatible land base. Upon closing
of the transaction, New Profound will have:

    -  An experienced and dedicated management team, which will be comprised
       of the current management of Profound (the former Find Energy Ltd.
       ("Find") management team, which grew Find to over 5,500 boe/d at the
       time of its sale to Shiningbank Energy Income Fund for $443 million in
       September 2006);

    -  Estimated production at closing after giving effect for normal
       declines and assuming no new production additions in the interim of
       2,750 boe/d comprised of 650 bbls/d of oil and natural gas liquids and
       12.5 mmcf/d of natural gas (76% weighed to natural gas);

    -  A land base of approximately 39,419 net undeveloped acres, providing a
       multi-year drilling inventory;

    -  An expanded and diversified portfolio of low risk multi-zone drilling
       and completion opportunities in Carrot Creek, North and South Pembina,
       and Cochrane;

    -  A strong balance sheet, low leverage and financial flexibility. At
       closing and after transaction costs, New Profound expects to have
       approximately $19.9 million of debt (less than 1.0x debt/cash flow)
       on available bank lines of $47 million;

    -  An opportunity to realize administrative and operating efficiencies
       through considerable overlap of the asset bases and economies of
       scale; and

    -  A production base that is more than 90% operated.

    Contingent on approval of this transaction by Cork shareholders, New
Profound will be led by a strong Board and an experienced and dedicated
management team as follows:

    Board of Directors         Principal Occupation
    ------------------         --------------------
    William T. (Bill) Davis    President and Chief Executive Officer of
    Nicholas R. (Nick) Wemyss  Executive Vice President and Chief Operating
                               Officer of Profound
    Robert C. (Rob) Cook       Senior Vice President of ARC Financial Corp.
    George Chow                Executive Vice President Corporate of Savanna
                               Energy Services Corp.
    Herbert (Herb) Pinder      President of The Goal Group

    Two additional directors will be nominated for New Profound, one of whom
will be designated by Cork and the other nominee to be mutually agreed upon by
Cork and Profound.

    Management Team            Position
    ---------------            --------
    William T. (Bill) Davis    President and Chief Executive Officer
    Nicholas R. (Nick) Wemyss  Executive Vice President and Chief Operating
    Evelyn Burnett             Vice President Finance and Chief Financial
    Karl Rumpf                 Vice President Exploration
    Al Grabas                  Vice President Engineering
    Kevin Orriss               Vice President Land
    Bill Kosich                Vice President Drilling and Completions

    Benefits to Shareholders of New Profound

    The transaction provides a number of benefits to the shareholders of New
Profound, namely:

    -  New Profound will have a stronger balance sheet and the necessary
       capital to further its drilling and exploration program and fulfill
       its outstanding drilling commitments;

    -  the properties of Cork and Profound are highly complementary and
       management of Profound has extensive experience in Cork's operating

    -  operationally, Profound has significant expertise in drilling wells in
       the target areas on a cost-effective and time efficient basis;

    -  management and the employees of Profound have a proven track record in
       both the public markets and the operating areas to be developed;

    -  the transaction would provide Cork shareholders the opportunity to
       participate in an entity with better diversification and less risk;

    -  as a result of the transaction, there would be additional synergies
       realized including complementary drilling programs and a reduction in
       finding costs and general and administration costs.

    About Profound

    Profound is a private oil and gas company with operations focused in west
central Alberta, predominantly in the same operating area that Cork has built
its asset base. Since its formation in December 2006, Profound has built a
concentrated asset base and prospect inventory through a large scale strategic
farm-in agreement with an energy trust, participation at crown land sales and
multi-section farm-ins on lands held by other operators.
    At closing, Profound will have approximately 31.8 million fully diluted
Shares outstanding, a net cash balance of $31.1 million, 140 barrels of oil
equivalent per day ("boe/d") production with an additional 100/boe/d behind
pipe, and 4,640 net acres of undeveloped land.

    Transaction Details and Approvals

    The Offer will be completed by way of an exempt take-over bid to be
mailed to the holders of Profound Shares in late September with an initial
expiry date of November 16, 2007.
    Completion of the proposed transaction is subject to a number of
conditions including, among others, approval by the TSX and approval of
certain matters by a majority of Cork's shareholders. A notice of a special
meeting and management information circular will be mailed to Cork
shareholders as soon as practicable, with a shareholder meeting to be held in
mid-November to approve the following:

    -  Issuance of Cork Shares to acquire Profound pursuant to the Offer;

    -  A consolidation of the outstanding Cork Shares on the basis of 4 Cork
       Shares for each 1 new Cork Share;

    -  A name change to "Profound Energy Inc.";

    -  Appointment of the Board of Directors;

    -  Appointment of the auditors; and

    -  Implementation of a new stock option plan.

    The transaction has the unanimous support of the board of directors of
both Cork and Profound. The board of directors of Profound has concluded that
the Offer is in the best interests of its shareholders and will recommend that
shareholders tender their shares to the Offer. The board of directors of Cork
has concluded that the transaction is in the best interests of Cork and will
recommend that shareholders vote in favour of the matters to be considered at
the special shareholder meeting.
    Subject to certain limited exceptions, the Board of Directors of Cork
have agreed that they will not solicit or initiate discussions or negotiations
with any third party for any business combination involving Cork, and under
defined circumstances, Cork has agreed to a non-completion fee of $3.5
million. Subject to the satisfaction of customary closing conditions and the
receipt of applicable regulatory and other approvals, it is anticipated that
the closing of the transaction will occur shortly after the Cork shareholder
    Tristone Capital Inc. is acting as financial advisor to Cork with respect
to the transaction and has advised the Cork Board of Directors that, subject
to review of the final forms and documents effecting the transaction, the
consideration to be paid by Cork under the Offer is fair from a financial
point of view to Cork.

    Cautionary Statements

    Disclosure provided herein in respect of BOEs may be misleading,
particularly if used in isolation. A BOE conversion ratio of 6 Mcf to 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. All BOE
conversion in this document are derived by converting gas to oil according to
this 6 Mcf to 1 Bbl ratio.
    Certain information set forth in this document, including management's
assessment of Cork's and Profound's future plans and operations, contains
forward-looking statements. By their nature, forward looking statements are
subject to numerous risks and uncertainties, some of which are beyond these
parties' 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 and ability to access sufficient capital
from internal and external sources. 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 and, as such, undue
reliance should not be placed on forward-looking statements. Cork's and
Profound'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 statement will transpire or occur, or if any of them do
so, what benefits that Cork and Profound will derive therefrom. Cork and
Profound each disclaim 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.
    This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities within the United States. The
Cork Shares have not been and will not be registered under the U.S. Securities
Act of 1933, as amended, or any state securities laws, and may not be offered
or sold in the United States, or to a U.S. person absent registration or an
applicable exemption from the registration requirements of such Act or other

    %SEDAR: 00023712E

For further information:

For further information: Cork Exploration Inc.: No. 380, 435 - 4th Ave.
SW, Calgary, Alberta, T2P 3A8, Telephone: (403) 531-1695, Raymond G. Smith,
Interim President and Chief Executive Officer, and Chairman of the Board of
Directors; Profound Energy Ltd.: No. 1700, 700 6th Avenue SW, Calgary,
Alberta, T2P 3N4, Telephone: (403) 513-1379, William T. (Bill) Davis,
President and Chief Executive Officer

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