Equal also responds to Montclair new releases
OKLAHOMA CITY, May 1, 2014 /CNW/ - Equal Energy Ltd. ("Equal",
"the Company", "we" or "our") (NYSE: EQU; TSX: EQU) today announced
that pursuant to the terms of an arrangement agreement amendment
dated May 1, 2014 (the "Amending
Agreement") Equal, Petroflow Energy Corporation and its
wholly-owned subsidiary, Petroflow Canada Acquisition Corp.
("Petroflow Sub" and together with Petroflow Energy Corporation,
"Petroflow") have agreed to amend certain terms of their
arrangement agreement dated December 6,
2013 (the "Arrangement Agreement").
Pursuant to the Arrangement Agreement, Petroflow
Sub will acquire all of the outstanding common shares of Equal for
US$5.43 in cash per share (the
"Arrangement Consideration") by way of a plan of arrangement under
the Business Corporations Act (Alberta) (the "Arrangement"). The extension
was granted as Petroflow has obtained financing commitments in the
amounts necessary for it to complete the Arrangement.
Among other items, the Amending Agreement
provides for payment by Equal of two dividends of US$0.05 per common share. The Amending Agreement
also extends the outside termination date of the Arrangement
Agreement to July 31, 2014, from the
original May 1, 2014 date.
"We are pleased that Petroflow has secured their
financing commitment and we continue to believe that the
Arrangement with Petroflow provides maximum value to our
shareholders," said Michael Doyle,
Chairman of Equal's board of directors (the "Board"). "We have
agreed to an extension so that the Arrangement can be presented to
shareholders for a vote, and Petroflow has agreed that shareholders
should receive the dividend payments as compensation for the later
closing."
Equal also commented on news releases issued by
Montclair Energy, LLC ("Montclair") on April
11, 2014 and April 29, 2014
that criticized the Arrangement and that proposed that Equal
terminate the Arrangement Agreement, respectively.
Details of Dividends and Extension
The Board has approved payment of the first
US$0.05 dividend on May 28, 2014 to shareholders of record at the
close of business on May 15, 2014.
The second US$0.05 dividend will be
paid to shareholders that are entitled to receive the Arrangement
Consideration on the closing of the Arrangement. The Board expects
the Arrangement will be completed no later than the agreed
extension date of July 31, 2014.
The extension granted by Equal pursuant to the
Amending Agreement is intended to provide sufficient time for the
parties to meet the closing conditions to the Arrangement Agreement
before the Arrangement is presented to a vote of all shareholders
of Equal.
Details of the Arrangement are included in the
preliminary information circular and proxy statement filed by Equal
on December 31, 2013. An amended
preliminary information circular and proxy statement that describes
the amendments to the Arrangement Agreement will be filed with the
applicable securities regulatory authorities. The date for the
special shareholder meeting to approve the Arrangement will be set
when the information circular and proxy statement is finalized
following mandatory regulatory review.
The Board unanimously recommended that Equal's
shareholders vote FOR the Arrangement at the upcoming meeting.
Comments on Montclair Disclosure
In response to the recent press releases by
Montclair, Equal notes that a special committee of three
independent directors, assisted by expert financial and legal
advisors, undertook a review of a number of strategic alternatives
for Equal, including a return of capital to shareholders through
share buybacks similar to the alternatives proposed by Montclair.
The special committee recommended to the Board and the Board
determined that the completion of the Arrangement with Petroflow
was in the best interests of Equal.
Additional Information
In connection with the Arrangement, Equal filed
a preliminary proxy statement with the Securities and Exchange
Commission (the "SEC") on December 31,
2013. The preliminary proxy statement has also been filed on
the Canadian SEDAR filing system at www.sedar.com, and is available
on Equal's website at www.equalenergy.ca The preliminary proxy
statement contains important information about the proposed
Arrangement and related matters. INVESTORS AND SHAREHOLDERS ARE
URGED TO CAREFULLY READ THE PRELIMINARY PROXY STATEMENT, AND WHEN
AVAILABLE, THE FINAL PROXY STATEMENT. Investors and shareholders
may obtain free copies of the preliminary proxy statement and other
documents filed with the SEC by Equal through the website
maintained by the SEC at www.sec.gov. In addition, investors and
shareholders may obtain free copies of the preliminary proxy
statement from Equal by telephone at (405) 242-6000, or by mail at:
Equal Energy Ltd., 4801 Gaillardia Pkwy, Suite 325, Oklahoma City, OK, 73142 Attn: Investor
Relations. Equal will furnish the finalized proxy statement to its
shareholders when it is available.
Equal and its directors and executive officers
may be deemed to be participants in the solicitation of proxies
from the shareholders of Equal in connection with the proposed
transaction. Information regarding the interests of these directors
and executive officers in the transaction described herein is
included in the proxy statement described above. Additional
information regarding these directors and executive officers is
also included in Amendment No. 1 to Equal's Annual Report on
Form 10-K for the year ended December 31, 2013, which was filed with the
SEC on April 29, 2013 This document
is available free of charge at the SEC's web site at www.sec.gov,
and from Equal by telephone at (405) 242-6000, or by mail at: Equal
Energy Ltd., 4801 Gaillardia Pkwy, Suite 325, Oklahoma City, OK, 73142 Attn: Investor
Relations.
Any Equal shareholder that has questions or
requires more information with regard to the voting of Equal shares
should contact Kingsdale Shareholder Services Inc. by toll-free
telephone in North America at
1-866-581-1479 or collect call outside North America at 416-867-2272, or by e-mail at
contactus@kingsdaleshareholder.com.
About Equal Energy Ltd.
Equal Energy is an oil and gas exploration and
production company based in Oklahoma
City, Oklahoma. Our oil and gas assets are centered on the
Hunton liquids-rich natural gas property in Oklahoma. Our shares are listed on the New
York Stock Exchange and the Toronto Stock Exchange under the symbol
(EQU). Our convertible debentures are listed on the Toronto Stock
Exchange under the symbols EQU.DB.B.
Forward-Looking Statements
Certain information in this press release
constitutes forward-looking statements under applicable securities
laws including statements relating to the completion of the
Arrangement, payment of consideration pursuant to the Arrangement,
payment of dividends and adequate financing being obtained by
Petroflow to complete the Arrangement. Any statements that are
contained in this press release that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements are often identified by terms such as
"may," "should," "anticipate," "expects," "seeks" and similar
expressions.
Forward-looking statements necessarily
involve known and unknown risks, such as risks associated with oil
and gas production; marketing and transportation; loss of markets;
volatility of commodity prices; currency and interest rate
fluctuations; imprecision of reserve and future production
estimates; environmental risks; competition; incorrect assessment
of the value of acquisitions; failure to realize the anticipated
benefits of dispositions; inability to access sufficient capital
from internal and external sources; changes in legislation,
including but not limited to income tax, environmental laws and
regulatory matters; and failure to obtain shareholder approval or
to meet other closing conditions for the Arrangement, including the
failure of Petroflow to deliver the funds to complete the
Arrangement. Readers are cautioned that the foregoing list of
factors is not exhaustive.
Readers are cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward looking statements contained in this press release are
expressly qualified by this cautionary statement.
Additional information on these and other
factors that could affect Equal's operations or financial results
are included in Equal's reports on file with Canadian and U.S.
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com), the SEC's website
(www.sec.gov), Equal's website (www.equalenergy.ca) or by
contacting Equal. Furthermore, the forward looking statements
contained in this press release are made as of the date of this
press release, and Equal does not undertake any obligation to
update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events
or otherwise, except as expressly required by securities
law.
SOURCE Equal Energy Ltd.