CALGARY, Dec. 12 /CNW/ - WIN Energy Corporation ("WIN") released today
the contents of a material change report dated November 15, 2007 (the
"Material Change Report"), which was previously filed on a confidential basis
with the securities commission or similar regulatory authority in each of the
Provinces of Canada in which WIN is a reporting issuer. The Material Change
Report discloses information concerning the recent operational developments of
WIN referred to in press releases dated November 21, 2007 and December 10,
2007, jointly issued by WIN and Compton Petroleum Corporation ("Compton"). The
Material Change Report is available on SEDAR at www.sedar.com.
The operational developments of WIN relate to its receipt of initial
results from a test well in which it has a 40% working interest. As with all
discoveries of this nature, the productive capacity of the well will not be
known until some time in the future. WIN expects that this well will be
tied-in to the gathering system connecting to the natural gas processing, NGL
extraction and gas compression facility that is owned 100% by WIN.
WIN initially filed the Material Change Report on a confidential basis
because WIN anticipated submitting a bid at a public land sale (the "Land
Sale") on December 12, 2007 to acquire additional sections of land in the area
of the test well. WIN acquired a 50% working interest in two additional
sections of land (the "Lands") at the Land Sale. The acquisition was financed
by way of a loan made by Compton to WIN (see "Loan Agreement" below).
Proposed Acquisition of WIN by Compton by way of an Arrangement
On September 17, 2007, WIN and Compton jointly announced that they had
entered into an Arrangement Agreement (the "Arrangement Agreement") whereby
Compton would acquire, by way of a statutory plan of arrangement under the
Business Corporations Act (Alberta) (the "Arrangement"), all of the issued and
outstanding common shares of WIN for cash consideration of $0.37 per common
share and all of the issued and outstanding warrants of WIN for cash
consideration of $0.01 per warrant.
As a result of the initial results from the test well, Compton agreed to
amend the Arrangement Agreement to increase the cash consideration for all of
the outstanding common shares of WIN to $0.45 per common share. This increase
was announced by way of a press release jointly issued by WIN and Compton on
December 10, 2007. The cash consideration for all of the outstanding warrants
of WIN will remain at $0.01 per warrant. In connection with this increased
purchase price, WIN agreed to increase the non-completion fee payable under
the circumstances set forth in (i) Section 7.3(b) of the Arrangement Agreement
from $1 million to $1.5 million and (ii) Section 7.3(a) of the Arrangement
Agreement from $400,000 to $600,000.
The Arrangement, as amended, has the support of the board of directors of
each of Compton and WIN. Jennings Capital Inc., the exclusive financial
advisor to WIN, has verbally confirmed to the board of directors of WIN that,
subject to receipt of final documentation, it will provide an opinion to the
board of directors of WIN that the consideration to be received in the
Arrangement, including the increased $0.45 per common share consideration to
be received by WIN shareholders, is fair from a financial point of view to the
holders of common shares of WIN and holders of warrants of WIN (collectively,
the "WIN Voting Securityholders"). The board of directors of WIN has
unanimously approved the amendments to the Arrangement Agreement and has
concluded that the Arrangement as amended is in the best interests of WIN and
continues to unanimously recommend that the WIN Voting Securityholders vote in
favour of the Arrangement.
Pursuant to a notice, information circular dated October 19, 2007 and
proxy statement (the "Information Circular") mailed on October 22, 2007 to the
WIN Voting Securityholders, a meeting of the WIN Voting Securityholders (the
"Meeting") was to have been held on November 22, 2007 for the purpose of
approving the Arrangement. On November 21, 2007, WIN announced the decision of
the board of directors of WIN to postpone the Meeting in order to properly
consider and assess the effect of recent operational developments. As a
result, and following the amendment by WIN and Compton of the Arrangement
Agreement to permit WIN to postpone the Meeting date, WIN obtained an order
from the Court of Queen's Bench of Alberta (the "Court") to postpone the
Meeting until 9:00 a.m. on December 20, 2007.
WIN and Compton have entered into a Loan Agreement (the "Loan Agreement")
whereby Compton agreed to loan to WIN an amount equal to the amount bid by WIN
for the Lands at the Land Sale. Under the terms of the Loan Agreement, WIN
will be required to transfer the Lands to Compton as full repayment of the
loan if the Arrangement Agreement is terminated for any reason whatsoever,
other than certain specific reasons, in which case the loan may be repaid in
cash. The reasons that WIN would be required to transfer the Lands to Compton
include (i) the WIN board of directors changing its recommendation that the
WIN Voting Securityholders vote in favour of the Arrangement due to a
"superior proposal" and (ii) the resolution authorizing the Arrangement not
being approved by the WIN Voting Securityholders. The reasons that would
require WIN to repay the loan in cash include circumstances where Compton
terminates the Arrangement Agreement on the basis that certain conditions set
forth in the Arrangement Agreement have not been satisfied, including
conditions relating to (i) the exercise by 10% or more of all WIN Voting
Securityholders of their dissent rights; (ii) a "material adverse change"
having occurred to WIN since the execution of the Arrangement Agreement; (iii)
a breach of a material representation or warranty by WIN; and (iv) a
proceeding which has the effect of imposing material limitations or conditions
on the completion of the Arrangement. WIN will also repay the amount of the
loan plus interest in the form of cash and keep the Lands if WIN terminates
the Arrangement Agreement because Compton has not complied in all material
respects with its covenants under the Arrangement Agreement.
Information Concerning the Meeting of WIN Voting Securityholders
As previously announced by WIN in its November 21, 2007 joint press
release with Compton, the Meeting of WIN Voting Securityholders will be held
at 9:00 a.m. on December 20, 2007 in the Strand/Tivoli Room of The
Metropolitan Conference Centre at 333 - 4th Avenue S.W., Calgary, Alberta. The
purpose of the Meeting will be to consider the Arrangement. The record date
for WIN Voting Securityholders entitled to vote at the Meeting remains the
close of business on October 19, 2007.
Valid proxies submitted by WIN Voting Securityholders prior to the
originally scheduled Meeting will continue to be valid for purposes of the
postponed Meeting and will not need to be recast. WIN Voting Securityholders
who have previously submitted proxies may revoke such proxies in accordance
with the instructions set forth in the Information Circular.
As previously announced by WIN in its December 10, 2007 joint press
release with Compton, WIN Voting Securityholders wishing to exercise the
rights of dissent described in the Information Circular must do so prior to
12:00 p.m. on December 19, 2007. Additionally, any WIN Voting Securityholder
or other interested party desiring to support or oppose the petition to the
Court for the final Order approving the Arrangement must file with the Court
and serve upon WIN on or before 12:00 p.m. (Calgary time) on December 17,
2007, a Notice of Intention to Appear as set out in the Information Circular.
Interested parties are encouraged to consult the Information Circular,
which is available on SEDAR at www.sedar.com, for additional information
concerning the Meeting.
Information Concerning WIN
WIN Energy Corporation is a Calgary based junior oil and natural gas
company with operations in Alberta and exploratory landholdings in Montana.
The common shares of WIN are listed on the TSX Venture Exchange and trade
under the symbol "WNR".
A copy of the opinion to be provided by Jennings Capital Inc. will be
available on SEDAR at www.sedar.com prior to the Meeting. Should you have any
questions, please contact WIN's information agent and proxy solicitation
agent, Georgeson, toll-free at (888) 605-8399.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: please contact WIN's information agent and
proxy solicitation agent, Georgeson, toll-free at (888) 605-8399