- Bonterra shareholders continue to advise the Company they will
not tender their shares
- Amended offer displays lack of success with Hostile Bid
- Shareholders need to take no action to REJECT the offer
CALGARY, AB, Jan. 11, 2021 /CNW/ - Bonterra Energy Corp.
(www.bonterraenergy.com) (TSX: BNE) ("Bonterra" or the "Company")
today confirms that the Company has carefully reviewed the Notice
of Extension, Variation and Change filed by Obsidian Energy Ltd.
("Obsidian") for the unsolicited bid to acquire all of the
issued and outstanding common shares of Bonterra in exchange for
shares of Obsidian (the "Hostile Bid") and continues to strongly
recommend that Bonterra shareholders take no action and
REJECT the Hostile Bid by NOT TENDERING their shares.
Since its launch, Obsidian's Hostile Bid has proven to be
unsuccessful, with Bonterra shareholders overwhelmingly advising
they will not tender their shares. Rather than acknowledge the
views of Bonterra shareholders and withdraw the Hostile Bid,
Obsidian has instead chosen to extend the tender date of the
Hostile Bid from January
4th to January
25th, 2021. In addition, Obsidian has reduced the
minimum number of outstanding Bonterra shares that must be tendered
to complete the Hostile Bid from the customary 66 2/3 percent down
to over 50 percent. This change indicates that Obsidian does not
expect the higher tender condition can be achieved due to the lack
of Bonterra shareholder support of the Hostile Bid.
Consistent with the rationale outlined within its
Directors' Circular dated October 5,
2020, Bonterra's Board has continued to recommend
Shareholders REJECT the Hostile Bid.
- Obsidian has not addressed its ability to obtain the
third-party consents and approvals required to complete the Hostile
Bid, including the consent of each of Obsidian's and Bonterra's
lenders, exposing Bonterra shareholders to an uncertain financing
plan
- Obsidian's lending syndicate only granted an extension of its
credit facility to January 29, 2021,
a negative signal given the short period of the extension
- Obsidian's significantly higher asset retirement obligations
will leave Bonterra shareholders a disproportionately higher
allocation of future abandonment liabilities
- Obsidian has limited liquidity to grow operations, and has been
posting negative free cash flow for every quarter since
December 31, 2017
- The rationale of the Hostile Bid is highly dependent on the
achievement of significant synergies and cost savings which remain
uncertain
As stated in Bonterra's Shareholder Letter dated November 23, 2020, the majority of research
analysts and proxy advisors believe that the Hostile Bid is highly
unlikely to proceed. These documents and additional
background are available for review on the Company's website at
www.bonterraenergy.com.
The Bonterra Board UNANIMOUSLY recommends that
Shareholders REJECT the Hostile Bid by taking no action – DO NOT
TENDER your Shares.
Shareholder Questions
Shareholders with questions are encouraged to call Bonterra's
information agent, Laurel Hill Advisory Group at 1-877-452-7184
(+1-416-304-0211 outside North
America) or email assistance@laurelhill.com
About Bonterra
Bonterra Energy Corp. is a conventional oil and gas corporation
with operations in Alberta,
Saskatchewan and British Columbia, focused on its strategy of
long-term, sustainable growth and value creation for shareholders.
The Company's shares are listed on The Toronto Stock Exchange under
the symbol "BNE".
Forward Looking Information
Certain statements contained in this release include statements
which contain words such as "anticipate", "could", "should",
"expect", "seek", "may", "intend", "likely", "will", "believe" and
similar expressions, relating to matters that are not historical
facts, and such statements of our beliefs, intentions and
expectations about development, results and events which will or
may occur in the future, constitute "forward-looking information"
within the meaning of applicable Canadian securities legislation
and are based on certain assumptions and analysis made by us
derived from our experience and perceptions. Forward-looking
information in this release includes, but is not limited to:
expectations regarding the effect of the Hostile Bid, the lack of
Bonterra shareholder support for the Hostile Bid and the Hostile
Bid being unlikely to proceed; business strategy and outlook;
expansion and growth of our business and operations; and other such
matters.
All such forward-looking information is based on certain
assumptions and analyses made by us in light of our experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors we believe are
appropriate in the circumstances. The risks, uncertainties and
assumptions are difficult to predict and may affect operations, and
may include, without limitation: risks and uncertainties relating
to the satisfaction of all conditions relating to the availability
of funding pursuant to government programs; foreign exchange
fluctuations; equipment and labour shortages and inflationary
costs; general economic conditions; industry conditions; changes in
applicable environmental, taxation and other laws and regulations
as well as how such laws and regulations are interpreted and
enforced; the ability of oil and natural gas companies to raise
capital; the effect of weather conditions on operations and
facilities; the existence of operating risks; volatility of oil and
natural gas prices; oil and gas product supply and demand; risks
inherent in the ability to generate sufficient cash flow from
operations to meet current and future obligations; increased
competition; stock market volatility; opportunities available to or
pursued by us; and other factors, many of which are beyond our
control.
Actual results, performance or achievements could differ
materially from those expressed in, or implied by, this
forward-looking information and, accordingly, no assurance can be
given that any of the events anticipated by the forward-looking
information will transpire or occur, or if any of them do, what
benefits will be derived therefrom. Except as required by law,
Bonterra disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise. The forward-looking
information contained herein is expressly qualified by this
cautionary statement.
Numerical Amounts
The reporting and the functional currency of the Company is
the Canadian dollar.
The TSX does not accept responsibility for the
accuracy of this release.
SOURCE Bonterra Energy Corp.
