Iteration Energy Ltd. and Cyries Energy Inc. Amend Terms of Proposed Arrangement


    CALGARY, March 3 /CNW/ - Iteration Energy Ltd. ("Iteration") (TSX: ITX)
and Cyries Energy Inc. ("Cyries") (TSX: CYS) announce that they have entered
into an amending agreement (the "Amending Agreement") to the previously
announced agreement (the "Arrangement Agreement") whereby Iteration agreed to
acquire all of the common shares and warrants of Cyries pursuant to an
arrangement (the "Arrangement") under the Business Corporations Act (Alberta).
    Pursuant to the terms of the initial Arrangement Agreement, (i) Cyries
shareholders would receive 1.475 Iteration common shares for each Cyries
common share held and (ii) Cyries warrantholders would receive that number of
Iteration common shares that is equal to the result of the amount by which the
Weighted Average Trading Price (as defined below) exceeds the exercise price
of such Cyries warrant, which amount is then divided by the Weighted Average
Trading Price multiplied by 1.475. The Weighted Average Trading Price is the
price determined by dividing the aggregate dollar trading value of all Cyries
Shares sold on the Toronto Stock Exchange over the five consecutive trading
days ending on the trading day immediately preceding the day which is one
business day prior to the effective date of the Arrangement by the total
number of Cyries common shares sold on such stock exchange during such period.
    Under the terms of the Amending Agreement, Iteration will increase the
consideration payable to holders of Cyries common shares and Cyries warrants
by increasing the share ratio of 1.475 to 1.62. Using the 20 day weighted
average trading price on the Toronto Stock Exchange for Iteration and Cyries,
this represents a premium of 10.9%. Upon completion of the amended
Arrangement, Cyries will be a wholly-owned subsidiary of Iteration and current
Iteration shareholders and current Cyries shareholders will own approximately
45% and 55%, respectively, of the combined entity.
    In addition, the Amending Agreement provides that the termination fee
payable by Cyries to Iteration in certain circumstances will be increased from
$13.25 million to $18.0 million.
    Iteration increased the consideration payable under the amended
Arrangement to recognize the substantial increase in production and cash flow
that have resulted from Cyries 2008 first quarter drilling. Further details
are provided in a separate press release being issued today by Cyries.
Iteration has issued a press release today that provides an operational update
together with information from Iteration's reserve report prepared by McDaniel
and Associates Consultants Ltd. dated effective December 31, 2007. Iteration
achieved a 75% year over year increase in proved plus probable reserves at a
FD&A cost including change in future capital of $15.45/boe.
    The Boards of Directors of both Iteration and Cyries have approved the
Amending Agreement. The Board of Directors of Cyries has also concluded that
the amended Arrangement is in the best interests of its securityholders, and
has resolved to recommend that securityholders of Cyries vote their securities
in favour of the combination. The Directors and Officers of Cyries, who
control approximately 13% of the securities to be voted in respect of the
transaction, have agreed to vote their Cyries securities in favour of the
amended Arrangement. FirstEnergy Capital Corp. is acting as exclusive
financial advisor to Cyries with respect to the combination and has advised
the Board of Directors of Cyries that it is of the opinion, as of the date
hereof, that the consideration to be received by Cyries shareholders pursuant
to the amended Arrangement is fair from a financial point of view to Cyries
shareholders. Cyries has agreed that it will not solicit or initiate any
discussions concerning the pursuit of any other business combination. In
addition, Iteration has the right to match any superior proposal, and Cyries
has the right to respond to any superior proposal, in the event such a
proposal is made.
    The amended Arrangement is subject to regulatory and court approval and
the approval by a majority of at least two thirds of the holders of common
shares and warrants of Cyries, voting as a single class, who vote on the
amended Arrangement at the Cyries securityholders meeting to be held on
March 7, 2008. Assuming all necessary approvals are obtained, it is
anticipated that the amended Arrangement will be completed on March 7, 2007
and in any event no later than March 11, 2007.
    Complete details of the terms of the amended Arrangement are set out in
the Amending Agreement (which will be filed by each of Iteration and Cyries on
SEDAR) and the Arrangement Agreement, which has been filed on SEDAR and is
available for viewing under each of Iteration's and Cyries' profile on

    About Iteration
    Iteration is an independent Canadian oil and natural gas exploration,
development and production company with its common shares trading on the
Toronto Stock Exchange under the symbol "ITX".

    About Cyries
    Cyries is an independent Canadian oil and natural gas exploration,
development and production company with its common shares trading on the
Toronto Stock Exchange under the symbol "CYS".

    Advisory Regarding Forward-Looking Statements
    This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should", "believe",
"plans", "intends" and similar expressions are intended to identify
forward-looking information or statements. More particularly and without
limitation, this press release contains forward looking statements and
information concerning completion of the combination and the assessment of the
combined company's petroleum and natural gas production reserves, undeveloped
land holdings, reserve life index, business strategy, future development and
growth opportunities, prospects, asset base and anticipated benefits from the
combination including improved operating efficiencies, field optimizations and
cost reductions, future cash flows, value and debt levels, capital programs,
and future plans. The forward-looking statements and information are based on
certain key expectations and assumptions made by Iteration and Cyries,
including expectations and assumptions concerning prevailing commodity prices
and exchange rates, applicable royalty rates and tax laws, future well
production rates and reserve volumes, the timing of receipt of regulatory and
security holder approvals, the performance of existing wells, the success
obtained in drilling new wells, the sufficiency of budgeted capital
expenditures in carrying out planned activities, the availability and cost of
labour and services and the impact of the Province of Alberta's new royalty
regime. Although Iteration and Cyries believe that the expectations and
assumptions on which such forward-looking statements and information are based
are reasonable, undue reliance should not be placed on the forward looking
statements and information because Iteration and Cyries can give no assurance
that they will prove to be correct. Since forward-looking statements and
information 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. These include, but are not limited to, the risks associated with the
oil and gas industry in general such as operational risks in development,
exploration and production delays or changes in plans with respect to
exploration or development projects or capital expenditures, the uncertainty
of reserve estimates, the uncertainty of estimates and projections relating to
reserves, production, costs and expenses, health, safety and environmental
risks, commodity price and exchange rate fluctuations, marketing and
transportation, loss of markets, environmental risks, competition, incorrect
assessment of the value of acquisitions, failure to realize the anticipated
benefits of acquisitions, ability to access sufficient capital from internal
and external sources, failure to obtain required regulatory and other
approvals, and changes in legislation, including but not limited to tax laws,
royalties and environmental regulations. There are risks also inherent in the
nature of the proposed amended Arrangement, including failure to realize
anticipated synergies or cost savings, risks regarding the integration of the
two entities, incorrect assessments of the values of the other entity, and
failure to obtain the required security holder, court, regulatory and other
third party approvals. This press release also contains forward-looking
statements and information concerning the anticipated completion of the
proposed amended Arrangement and the anticipated timing for completion of the
amended Arrangement. Iteration and Cyries have provided these anticipated
times in reliance on certain assumptions that they believe are reasonable at
this time, including assumptions as to the time required to prepare meeting
materials for mailing, the timing of receipt of the necessary regulatory and
court approvals and the time necessary to satisfy the conditions to the
closing of the amended Arrangement. These dates may change for a number of
reasons, including unforeseen delays in preparing meeting materials, inability
to secure necessary regulatory or court approvals in the time assumed or the
need for additional time to satisfy the conditions to the completion of the
amended Arrangement. Accordingly, readers should not place undue reliance on
the forward-looking statements and information contained in this press release
concerning these times. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and other factors
that could affect Iteration's, Cyries' or the combined company's operations or
financial results are included in reports on file with applicable securities
regulatory authorities and may be accessed through the SEDAR website
(, in the case of Iteration, at Iteration's website
(, and in the case of Cyries, at Cyries' website
( The forward-looking statements and information contained in
this press release are made as of the date hereof and Iteration and Cyries
undertake 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.

    Barrels of Oil Equivalent
    "Boe" means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic
feet of natural gas. Boe's may be misleading, particularly if used in
isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.

    %SEDAR: 00002576E

For further information:

For further information: Iteration Energy Ltd., Brian L. Illing,
President and Chief Executive Officer, Tel: (403) 290-4867; Website:; Cyries Energy Inc., Don Archibald, Chairman and Chief
Executive Officer, Tel: (403) 232-4157; Website:

Organization Profile


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