/NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES WIRE
TSX Symbol: "SVW"
CALGARY, Aug. 15 /CNW/ - Silverwing Energy Inc. (TSX:SVW) ("Silverwing"
or the "Company") is pleased to announce that it has entered into a binding
agreement with Bonterra Energy Income Trust ("Bonterra") and Bonterra Energy
Corp. whereby Bonterra, or a subsidiary of Bonterra, will acquire all of the
outstanding shares of Silverwing for a gross purchase price of $30,450,000,
which amount shall be reduced by the amount of debt and negative working
capital of Silverwing and penalties related to the Tomahawk Farmin Agreement
and Trinidad drilling contract (described below), all currently estimated to
be $16,500,000, at the closing of the acquisition. The net purchase price
shall be paid to the holders of common shares of Silverwing ("Silverwing
Shares") either, at the election of the securityholder of Silverwing on the
basis of: (i) 0.002226 (subject to minor adjustments at closing) of a trust
unit of Bonterra (a "Bonterra Unit") at a deemed price equal to $33.70 per
Bonterra Unit (the 30-day weighted average trading price of Bonterra Units on
the TSX on the day prior to signing of the binding agreement) for each
Silverwing Share; or (ii) cash, in an amount equal to such securityholder's
pro rata share of the net purchase price estimated to be approximately $0.075
per Silverwing Share (subject to adjustments at closing related to
Silverwing's actual cash flow from operations). All dollar amounts in this
press release are in Canadian dollars unless otherwise stated.
The cash portion of the acquisition will be funded by Bonterra from its
existing bank line of credit. After closing the Acquisition, Silverwing will
be a wholly-owned subsidiary of Bonterra and subsequently amalgamated with
Bonterra Energy Corp. (another wholly-owned subsidiary of Bonterra), and
holders of Silverwing Shares will hold approximately 2% of the outstanding
Bonterra Units, assuming that 100% of the holders of currently outstanding
Silverwing Shares elect to receive Bonterra Units in exchange for their
Silverwing Shares. This press release does not constitute an offer of any
The Board of Directors of Silverwing and the Board of Directors of
Bonterra Energy Corp., as administrator of Bonterra, have unanimously approved
the acquisition and the entering into of the letter agreement.
Silverwing has agreed that it will not solicit or initiate any
discussions concerning the pursuit of any other business combination.
Silverwing has agreed to pay to Bonterra a non-completion fee of $1,000,000 in
cash, in certain circumstances. Bonterra has agreed to pay to Silverwing a
$1,000,000 non-completion fee in certain circumstances. In addition, Bonterra
has the right to match any superior proposal, and Silverwing has the right to
respond to any superior proposal, in the event such a proposal is made.
The acquisition is subject to, among other things, regulatory and court
approval and the acquisition resulting in Bonterra acquiring 100% of the
outstanding Silverwing Shares. In addition the Acquisition is subject to a due
diligence review being completed by both Bonterra and Silverwing to their sole
satisfaction. The Acquisition is expected to close in November 2008.
It is also a condition of the acquisition that all of the directors and
officers, and certain shareholders of Silverwing, holding an aggregate of not
less than 51,550,000 of the outstanding shares of Silverwing enter into
support agreements whereby they agree to deliver into an offer made by
Bonterra all Silverwing securities held by them or to otherwise support the
acquisition by agreeing to vote all of their securities of Silverwing in
favour of the acquisition, as the case may be.
Complete details of the terms of the proposed Acquisition are set out in
the letter agreement that will be filed by Silverwing on SEDAR (www.sedar.com)
under its profile.
Silverwing is also pleased to announce that it has successfully
renegotiated revised terms to the farmin agreement dated May 1, 2006, as
amended, among Canadian Natural Resources Limited ("CNRL") and Imperial Oil
Resources ("IOR"), as farmors, and Silverwing, as farmee (the "Tomahawk Farmin
Agreement"). Pursuant to renegotiated terms, the farmors have agreed to reduce
the penalty payment required to cancel Silverwing's commitment to drill
7 Nisku wells under the Tomahawk Farmout Agreement, to a total of
$2.625 million. The effect of the renegotiated agreement is conditional upon
the closing of the Bonterra acquisition.
Silverwing is also pleased to announce that it has entered into a
settlement agreement with Trinidad Drilling Inc. with respect to the drilling
contract between Silverwing and Trinidad dated June 14, 2006, as amended
February 8, 2008, respecting the provision of drilling services by Trinidad to
Silverwing. Pursuant to the terms of the settlement, Silverwing will pay to
Trinidad the sum of $900,000 on or before the closing of the Bonterra
acquisition as a release from the contract.
Silverwing is a Calgary, Alberta based junior natural gas and oil
exploration and production company with operations concentrated in northeast
British Columbia and central Alberta.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this news release
For further information:
For further information: Susan J. McArthur, Investment Banking, Jacob &
Company Securities, firstname.lastname@example.org, tel: (416) 866-8307, fax: