Sun Century announces proposed increase of the offer to acquire Masters Energy Inc. to $1.95 per share

    CALGARY, April 22 /CNW/ - Sun Century Petroleum Corporation ("Sun
Century") announces that it has offered to Masters Energy Inc. ("Masters") to
increase the purchase price under its previously announced offer to acquire
all of the issued and outstanding common shares (the "Common Shares") of
Masters from $1.85 cash per Common Share to $1.95 cash per Common Share,
subject to satisfactory completion by Sun Century of an accelerated due
diligence review of Masters (the "Proposed Sun Century Offer").
    Sun Century, in consultation with its financial advisor, Peters & Co.
Limited, is of the view that the consideration under the Proposed Sun Century
Offer is superior to the consideration under the proposed plan of arrangement
(the "Zargon Offer") involving Masters and Zargon Energy Trust ("Zargon") for
the reasons set out below.

    The Proposed Sun Century Offer is SUPERIOR

    The Proposed Sun Century Offer represents:

    -   a premium of approximately 62.5% over the closing trading price of
        the Common Shares on the Toronto Stock Exchange (the "TSX") on
        February 26, 2009, the last trading day prior to the announcement of
        the Zargon Offer; and

    -   an approximate 5.1% premium to the implied value of the Zargon Offer
        of $1.85 based on Zargon's 30-day volume weighted average price
        ("VWAP") of $15.51 per unit.

    The Proposed Sun Century Offer Compared to the Zargon Offer

    The Zargon Offer comprises either 0.120 Zargon trust units or $1.83 cash
for each Common Share, subject to a maximum of 1.49 million Zargon trust units
and a maximum of $5.7 million of cash.

    The implied value of the Zargon Offer is less than the $1.95 cash per
Common Share payable under the Proposed Sun Century Offer on all relevant
                                         Zargon Offer based on
                           Close on         30-day       60-day       90-day
                        April 21, 2009       VWAP         VWAP         VWAP
    Unit portion (80%)
    Zargon trust unit
     price                     $15.65       $15.51       $15.29       $15.19
    Value of trust unit
     consideration        $23,152,016  $22,944,905  $22,619,445  $22,471,509

    Cash portion (20%)
    Cash offer per
     Common Share               $1.83        $1.83        $1.83        $1.83
    Value of cash
     consideration         $5,640,068   $5,640,068   $5,640,068   $5,640,068

    Total consideration   $28,792,083  $28,584,973  $28,259,513  $28,111,577
    Value per Common
     Share                      $1.87        $1.85        $1.83        $1.82

    (1) In all cases above, the value of the Zargon Offer assumes an 80:20
        pro-ration between the Zargon trust units and cash.

    In their March 2, 2009 press release, Zargon and Masters valued the
proposed transaction at approximately $41.4 million, including the assumption
of approximately $13.2 million of net debt (this value fluctuates daily with
changes in the trading price of the Zargon trust units). The Proposed Sun
Century Offer represents a transaction value of approximately $43.3 million.

    The Proposed Sun Century Offer is ALL CASH

    The Proposed Sun Century Offer provides Masters shareholders with full
liquidity in the form of cash consideration, which enables shareholders of
Masters to make their own re-investment decisions regarding subsequent
purchases of Zargon trust units or the securities of any other issuer. The
Proposed Sun Century Offer provides the certainty of cash at a time of
heightened uncertainty in equity and financial markets.

    The Value of the Zargon Offer is Uncertain

    The value of the Zargon Offer is uncertain and will vary according to the
price of the Zargon trust units:

    -   Zargon has capped the maximum cash under the Zargon Offer at $5.7
        million. Accordingly, even if a Masters shareholder wishes to receive
        all cash, it is unlikely that this will occur, and would be at a
        significant discount to the Proposed Sun Century Offer of $1.95.

    -   The Zargon trust unit price must be $16.50 in order for the
        consideration under the Zargon Offer to match the consideration under
        the Proposed Sun Century Offer. The last time the Zargon trust units
        traded at a 30-day VWAP at or above $16.50 was in November 2008. In
        November 2008, the average closing prices for the front month
        contracts of WTI and AECO, respectively, were WTI: $57.44 USD/bbl and
        AECO: $6.51 CAD/GJ. The prices at the close of business on April 21,
        2008 were WTI: $46.51 USD/bbl and AECO: $3.25 CAD/GJ.

    The Zargon Trust Units have Limited Liquidity

    From January 1, 2009 through March 31, 2009, an aggregate of 2.3 million
Zargon trust units traded in the open market, representing only approximately
12% of the total Zargon trust units outstanding (calculated on a basic basis).
    Based on Zargon's historic trading volumes (from January 1, 2009 through
March 31, 2009), if Masters shareholders elected to sell the maximum 1.49
million Zargon trust units received by them under the Zargon Offer, it would
take approximately 40 trading days to dispose of such trust units.

    Masters Shareholders Meeting

    Sun Century acknowledges that Masters has set an annual and special
meeting of holders of Common Shares to be held on Tuesday, April 28, 2009 to
consider, among other things, passing a special resolution to approve the
Zargon Offer.

    Indicative Timing of the Proposed Sun Century Offer and How to Accept
    Subject to satisfactory completion of its due diligence review of
Masters, Sun Century expects to file a notice of variation reflecting the
terms of the Proposed Sun Century Offer on or prior to Friday, April 24, 2009.
The Proposed Sun Century Offer is expected to be open for acceptance until May
25, 2009, unless withdrawn or extended, and will be subject to, among other
conditions, the acceptance of the Proposed Sun Century Offer by Masters'
shareholders representing at least 66 2/3% of the Common Shares on a
fully-diluted basis. The offer and circular filed by Sun Century on April 17,
2009 contain information on how to accept the Proposed Sun Century Offer.


    Sun Century's financial advisor is Peters & Co. Limited and Sun Century's
legal advisor is Gowling Lafleur Henderson LLP.

    About Sun Century

    Sun Century is a private company incorporated under the laws of the
Province of Alberta. Sun Century's business strategy is to acquire, develop
and operate oil and gas properties in strategic geographic locations in

    Forward-Looking Statements
    This news release may contain forward-looking statements and information,
including opinions, assumptions, estimates and management's views and
expectations. When used in this document, the words "believe," "may," "will,"
and similar expressions are intended to be among the statements that identify
forward-looking statements. Forward-looking statements are subject to a wide
range of risks and uncertainties, and although Sun Century believes that the
expectations represented by such forward-looking statements are reasonable,
there can be no assurance that such expectations will be realized. Any number
of important factors could cause actual results to differ materially from
those in the forward-looking statements including, but not limited to the
state of domestic capital markets, delays resulting from inability to obtain
required regulatory approvals, changes in general economic conditions and
other factors more fully described from time to time in the reports and
filings made by Sun Century with securities regulatory authorities. Readers
are cautioned not to place undue reliance on forward-looking statements, as no
assurances can be given as to future results, levels of activity or
achievements. Except as required by applicable securities laws, Sun Century
does not undertake any obligation to publicly update or revise any
forward-looking statements.

    Unless otherwise indicated, all references in this press release to "$"
or "dollars" are references to Canadian dollars.

For further information:

For further information: SUN CENTURY PETROLEUM CORPORATION, 950, 550 -
6th Avenue S.W., Calgary, Alberta, T2P 0S2, Alan M. Tang, President, Phone:
(403) 269-2880

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