Ryland Oil Corporation ("Ryland" or "the Company") (TSX VENTURE:
RYD) is pleased to announce that it has entered into an arrangement
agreement (the "Arrangement Agreement") with Crescent Point Energy
Corp. ("Crescent Point") pursuant to which Crescent Point will
acquire all of the issued and outstanding common shares in the
capital of Ryland (each a "Ryland Share") by way of a plan of
arrangement (the "Arrangement").
Under the terms of the Arrangement, Ryland shareholders will
receive 0.0117 of a Crescent Point common share for each Ryland
Share, or approximately $0.46 per Ryland Share based on the most
recent 5 day volume weighted average Crescent Point share price of
$39.32 per share. This represents a 31% premium to the most recent
5 day volume weighted average Ryland Share price of $0.35. Total
consideration is approximately $121.8 million, including an
estimated $26.4 million of Ryland net debt at closing time.
Ryland's directors and senior management have unanimously
approved the Arrangement and have entered into support agreements
to vote their Ryland Shares in favour of the Arrangement.
Crescent Point is Ryland's working interest partner in the Flat
Lake Bakken play in Southeast Saskatchewan. To date, Crescent Point
and companies acquired by Crescent Point have drilled six
successful wells in the Flat Lake area. Crescent Point has budgeted
to drill up to eight more wells in the area by year-end 2010 to
further delineate the play.
"This agreement is the culmination of a lengthy process launched
by our company to determine how to maximize shareholder value,"
said Ryland President Gerry Shields. "Ryland has a premier land
position in southeast Saskatchewan and North Dakota, and it will
take considerable resources to exploit it. Crescent Point is a
leading producer in the area with a strong management team, a
proven track record and access to capital. This deal with Crescent
Point provides us with economies of scale and technical experience
to accelerate the development of this significant resource play. By
doing a share exchange, our shareholders will be afforded the
opportunity to continue to realize the considerable upside
potential of Ryland's assets as well as Crescent Point's existing
operations."
"We see great potential in the Flat Lake Bakken pool, which is
an extension of the Bakken play in the U.S.," said Scott Saxberg,
President and CEO of Crescent Point. "This acquisition of our only
partner in the play allows us to fully manage the development of
the area and adds a U.S. land base of over 50 net sections in the
Bakken."
In support of the Arrangement, the $6.5 million loan facility
which was closed by Ryland on May 3, 2010, and which has been fully
drawn down, has been assigned by the original lenders to Crescent
Point. No bonus shares were issued to the original lenders in
connection with the loan, and Crescent Point has waived any right
to be issued bonus shares under the loan agreement, regardless of
whether the Arrangement is completed. As a result, Ryland has been
released from its obligation to issue 3,611,111 bonus shares at a
deemed price of $0.36 per share. The other terms of the credit
agreement and related security documents have remained
unchanged.
Completion of the Arrangement is subject to the approval of 66
2/3% of the Ryland shareholders voting in person or by proxy at a
meeting of the Ryland shareholders to be held to consider the
Arrangement. The management information circular to be mailed to
Ryland shareholders will contain detailed information in respect of
the Arrangement and Crescent Point. Completion of the Arrangement
is also subject to the approval of the Court of Queen's Bench of
Alberta and the receipt of all other necessary regulatory, stock
exchange and third party approvals, as well as other conditions
which are typical for transactions of like nature. It is also a
condition of completion of the Arrangement that the Toronto Stock
Exchange shall have approved the listing of the Crescent Point
Shares issuable to Ryland's shareholders as consideration for the
Ryland Shares.
FINANCIAL ADVISORS
GMP Securities L.P. ("GMP") acted as financial advisor to Ryland
in connection with the Arrangement. GMP has given to Ryland's board
of directors a verbal fairness opinion to the effect that that the
consideration to be received by the Ryland shareholders pursuant to
the Arrangement is fair, from a financial point of view, to the
Ryland shareholders. GMP's formal fairness opinion will be included
in the management information circular to be mailed to Ryland
shareholders.
BMO Capital Markets acted as financial advisor and FirstEnergy
Capital Corp. acted as strategic advisor to Crescent Point.
RYLAND OIL CORPORATION
Gerald J. Shields, President
Reader Advisory
Investors are cautioned that, except as disclosed in Ryland's
management information circular to be prepared in connection with
the Arrangement, any information released or received with respect
to the transaction may not be accurate or complete and should not
be relied upon. Trading in the securities of Ryland should be
considered highly speculative.
Certain statements contained in this press release constitute
forward-looking statements. All forward-looking statements are
based on Ryland's beliefs and assumptions based on information
available at the time the assumption was made. The use of any of
the words "could", "should", "can", "anticipate", "expect",
"believe", "will", "may", "projected", "sustain", "continues",
"strategy", "potential", "projects", "grow", "take advantage",
"estimate", "well positioned" and similar expressions are intended
to identify forward-looking statements. By their nature, such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements. Ryland believes that the expectations
reflected in those forward-looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
correct and such forward-looking statements included in this report
should not be unduly relied upon. These statements speak only as of
the date of this press release or, if applicable, as of the date
specified in those documents specifically referenced herein.
In particular, this press release contains forward-looking
statements pertaining to the following: the performance
characteristics of Crescent Point's and Ryland's oil and natural
gas properties; capital expenditure programs and the timing
thereof; drilling programs and drilling efficiencies; timing and
completion of the Arrangement, the proposed Ryland shareholder
meeting, receipt of all necessary court, shareholder, regulatory
and third party approvals and the approval of the Toronto Stock
Exchange.
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 (many of which are beyond the control of Ryland) that could
cause actual events or results to differ materially from those
anticipated in the forward-looking information. Some of the risks
and other factors could cause results to differ materially from
those expressed in the forward-looking information include, but are
not limited to: general economic conditions in Canada, the United
States and globally, the risks associated with the oil and gas
industry, commodity prices and exchange rate changes. Industry
related risks could include, but are not limited to: operational
risks in exploration, development and production; delays or changes
in plans; competition for and/or inability to retain drilling rigs
and other services; competition for, among other things, capital,
acquisitions of reserves, undeveloped lands, skilled personnel and
supplies; risks associated to the uncertainty of reserve estimates;
governmental regulation of the oil and gas industry, including
environmental regulation; geological, technical, drilling and
processing problems and other difficulties in producing reserves;
the uncertainty of estimates and projections of production, costs
and expenses; unanticipated operating events or performance which
can reduce production or cause production to be shut in or delayed;
incorrect assessments of the value of acquisitions; the need to
obtain required approvals from regulatory authorities; stock market
volatility; volatility in market prices for oil and natural gas;
liabilities inherent in oil and natural gas operations; access to
capital; and other factors. Readers are cautioned that this list of
risk factors should not be construed as exhaustive.
Readers are cautioned not to place undue reliance on this
forward-looking information, which is given as of the date it is
expressed herein or otherwise and Ryland undertakes no obligation
to update publicly or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
unless required to do so pursuant to applicable law.
This news release is not for dissemination in the United States
or to any United States news services. The shares of Crescent Point
have not and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or
any state securities laws and may not be offered or sold in the
United States or to any U.S. person except in certain transactions
exempt from the registration requirements of the U.S. Securities
Act and applicable state securities laws.
Issued and Outstanding: 201,673,418
The TSX Venture Exchange has in no way passed upon the merits of
the proposed transaction and has neither approved nor disapproved
the contents of this press release. Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Contacts: Ryland Oil Corporation Mr. Jim Welykochy
Vice-President Corporate Development 403.861.1242
www.rylandoil.com
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