/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE
TSX Trading Symbol: UTS
CALGARY, Feb. 9 /CNW/ - UTS Energy Corporation (TSX:UTS) today announced
that its Board of Directors unanimously recommends that shareholders reject
Total E&P Canada Ltd.'s unsolicited offer to acquire UTS. The Board, after a
thorough review and evaluation of the January 29, 2009 unsolicited take-over
bid and after consultation with its financial and legal advisors, determined
that the Total offer is inadequate and is contrary to the best interests of
UTS shareholders. The Board therefore recommends that UTS shareholders reject
the Total offer and not tender their shares to the Total offer.
"This is an inadequate and opportunistic offer that fails to recognize
the full value of UTS," said Dennis Sharp, Chairman of the Board of Directors.
"We can do better for our shareholders than what this offer represents."
UTS has created a Special Committee of the Board to pursue various
initiatives with the objective of maximizing value for all shareholders.
Among the reasons the UTS Board believes shareholders should reject the
Total offer are:
- The sum of UTS' cash, net effective investment to date in all of its
projects, including Frontier and Equinox, and remaining Fort Hills
Project earn-in is $3.57 per Common Share which significantly exceeds
the value of the Total offer before attributing any value to UTS'
other resources and lands;
- The Total offer does not reflect the value of UTS' world class oil
sands assets and growth prospects;
- The Total offer does not include any value for the significant
synergies available to Total in acquiring UTS;
- The Total offer does not reflect the scarcity value of UTS' oil sands
- The timing of the Total offer is opportunistic given the recent
dramatic decline in the price of oil and in the price of the UTS
- The UTS common shares are trading substantially above the $1.30 price
offered in the Total offer;
- Major institutional shareholders have stated that the Total offer is
- Precedent transactions suggest greater value should be obtained for
- Superior alternatives delivering greater value for shareholders may
- The disclosure in the Total take-over bid circular is deficient as it
fails to disclose prior discussions between Total and the other Fort
Hills partners in respect of the Fort Hills Partnership;
- The Total offer is highly conditional and not a firm offer; and
- UTS' financial advisors have each delivered a written opinion
indicating the Total offer is inadequate.
"UTS has built considerable shareholder value through the prudent
development of our oil sands assets, while at the same time, establishing the
platform for significant future growth. Over the past five years, UTS has
grown from a single project company with a $50 million market capitalization
to become a well-financed exploration and development company with three
projects, major partners and a significant exploration portfolio," said Dr.
William J.F. Roach, President and Chief Executive Officer.
"We have a diversified asset base within the oil sands which holds
enormous value for our shareholders but is mostly ignored by Total's offer
which focuses only on Fort Hills. It is therefore not surprising that the
offer has been rejected unanimously by UTS' directors and officers."
A copy of the Directors' Circular, which sets forth in greater detail the
Board's recommendation and the reasons it has recommended shareholders reject
the Total offer, will be mailed to all UTS shareholders. Shareholders are
advised to read the UTS Directors' Circular as it contains important
information about the Total offer. Shareholders will be able to obtain a copy
of the Directors' Circular from the Company's website at www.uts.ca as soon as
it is available and copies will also be available under the Company's profile
at the SEDAR website at www.sedar.com.
UTS Energy has retained Georgeson Shareholder Communications Canada Inc.
to act as information agent. Any questions or requests for assistance may be
directed to them at 1-888-605-7631.
RBC Capital Markets and TD Securities Inc. are acting as financial
advisors to UTS.
UTS is focused on the creation of shareholder value through exploration,
development and production of hydrocarbon resources, mainly mineable oil sands
deposits from the Athabasca Oil Sands Area in northeastern Alberta.
UTS was instrumental in re-establishing the Fort Hills Oil Sands Project
and is the principal founder of the Fort Hills Energy Limited Partnership. UTS
holds a 20 percent working interest in the Fort Hills Project, a mature mining
project, located north of Fort McMurray. Beyond the Fort Hills Project, UTS
has expanded the scope of its opportunities through a successful and
continuing lease acquisition and exploration program, specifically, a 50
percent working interest in each of the Frontier and Equinox Projects. These
other leases are expected to provide organic growth opportunities and future
funding flexibility for UTS.
Further, in addition to its working interest in both the Equinox and
Frontier Projects, UTS holds a 50 percent working interest in an additional
97,024 hectares (242,560 acres) of prospective oil sands leases, which
includes the Lease 421 Area with 13,312 hectares (33,280 acres) and located
northeast of Total's E&P Canada's Northern Lights Project and directly north
of lands owned by Imperial Oil Limited. By the end of this year's winter
drilling program, we expect to have drilled 55 wells in the Firebag Area,
enough to confirm the potential for a major new discovery.
UTS is committed to responsible resource development by conducting its
business in a manner that reduces environmental effects, protects workers' and
communities' health and safety and recognizes stakeholder interests.
UTS Energy Corporation is based in Calgary, Alberta. The Company's common
shares (UTS) are traded on the Toronto Stock Exchange.
FORWARD-LOOKING INFORMATION: Except for statements of historical fact
relating to UTS, this news release contains "forwarding-looking information"
within the meaning of applicable securities law. The forward-looking
statements in this press release relate to, but are not limited to, statements
with respect to the Total offer, the Company's anticipated mine plan, drilling
results, capital expenditures, drilling plans, estimated resources, rate of
recovery and production estimates of bitumen resources are based on the
opinions and estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from those
anticipated in the forward-looking statements. There are numerous
uncertainties inherent in estimating bitumen, including many factors beyond
the Company's control, and no assurance can be given that the indicated level
of bitumen or the recovery thereof will be realized. In general, estimates of
bitumen are based upon a number of factors and assumptions made as of the date
on which the resource estimates were determined, such as geological and
engineering estimates, certain TV:BIP ratios and pit boundaries, which have
inherent uncertainties. Forward-looking information is frequently
characterized by words such as "plan", "expect", "project", "intend",
"believe", "anticipate", "estimate" and other similar words, or statements
that certain events or conditions "may" or "will" occur. Forward-looking
information is based on the opinions and estimates of management at the date
the statements are made, and are subject to a variety of risks and
uncertainties and other factors that could cause actual events or results to
differ materially from those anticipated in the forward-looking statements.
UTS undertakes no obligation to update forward-looking information if
circumstances or management's estimates or opinions should change except as
required by law. The reader is cautioned not to place undue reliance on
forward looking information.
For further information:
For further information: Dr. William J.F. Roach, President and Chief
Executive Officer at (403) 538-7030; Media: Please call (403) 988-2888