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LNG Energy to Acquire All of the Shares of Enterprise Energy Resources Ltd. in Friendly Share Exchange Transaction and Announces Board Appointment

Jun 25 2013 12:00AM

Marketwire

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VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/25/13 -- LNG Energy Ltd. ("LNG") (TSX VENTURE: LNG) is pleased to announce that it has entered into a definitive agreement (the "Agreement") with Enterprise Energy Resources Ltd. (TSX VENTURE: EER) ("Enterprise") whereby LNG will acquire, through a court-approved plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia), all of the outstanding common shares of Enterprise (the "Enterprise Shares") for total consideration of approximately C$4.7 million (based on LNG's closing price on June 21, 2013) payable in shares of LNG.

Under the Arrangement, each one Enterprise Share will be exchanged for five common shares ("Exchange Ratio") in the capital of LNG (each common LNG share being an "LNG Share"). The consideration to be paid by LNG represents a premium of approximately 66.7% over the closing price of the Enterprise Shares on June 21, 2013 (C$0.06) and a premium of approximately 11.1% to Enterprise's 60-day volume-weighted average price (C$0.09).

David Nelson, President of LNG commented, "This acquisition strengthens LNG's financial position and bolsters our interest in our key assets in Papua New Guinea. In addition to Enterprise's prospective USA assets, the resulting improved balance sheet will provide the necessary capital needed to ensure that LNG can properly evaluate future results coming out of our recently announced farm-out with Heritage Oil Plc ("Heritage"). "

In January 2013, Enterprise's 50% owned subsidiary, EERL (BVI) Holdings Ltd., acquired a 31.5% interest in Telemu No. 18 Limited ("Telemu"), a Papua New Guinea subsidiary of LNG. In April 2013, Telemu and other Papua New Guinea subsidiaries of LNG, entered into a farm-in agreement with subsidiaries of Heritage under which those subsidiaries acquired an 80% interest in PPL 319 and PRL 13, subject to fulfillment of work commitments under the farm-in agreement. Upon completion of the Arrangement, LNG will increase its net interest in PPL 319 from 13.7% to 16.85% and will continue to hold a 20% net interest in PRL 13.

Summary of Transaction

In connection with the Arrangement, LNG Exploration Ltd., a wholly-owned subsidiary of LNG ("Subco") will amalgamate with Enterprise and LNG will issue, at the Exchange Ratio noted above, an aggregate of approximately 238,633,975 LNG Shares to the former security holders of Enterprise. The Arrangement will be subject to, among other things, the favourable vote of 66 2/3% of the holders of the Enterprise Shares obtained at a special meeting of Enterprise shareholders to be called to approve the Arrangement. Enterprise expects the meeting will be held in mid-August 2013. The transaction is expected to close during August 2013, and is subject to the satisfaction of certain of the conditions set out in the Arrangement Agreement, including receipt of court approval, the approval of the TSX Venture Exchange and the approval of Enterprise shareholders. The Agreement includes a commitment by Enterprise not to solicit alternative transactions, and Enterprise has agreed to pay a break fee of C$250,000 to LNG under certain circumstances.

A full copy of the Arrangement Agreement will be filed by each of Enterprise and LNG under their respective profiles on SEDAR at www.sedar.com. In addition, a detailed description of the Arrangement Agreement will be included in the management information circular which will be mailed to Enterprise shareholders in advance of the proposed Enterprise Shareholders Meeting.

Appointment to Board of Directors

The Company is pleased to announce that Mark Gustafson has been appointed to its Board of Directors. Mr. Gustafson has over 25 years of experience in financing, acquisitions, administration and operations of oil and gas and minerals exploration projects worldwide. He was previously President, CEO and Director of Euromax Resources Ltd. where he was responsible for securing funding of $18 million to advance gold and base metal projects in Serbia, Macedonia and Bulgaria. Prior to this, Mr. Gustafson was Chairman of Tuzo Energy Corporation where he managed conventional and unconventional oil and gas projects in Alberta as well as overseeing a technical and non-technical exploration team and successfully raising $50 million private equity funding to advance projects. Mr. Gustafson was previously Chairman and CEO of Triangle Energy Corporation where he led active exploration shale plays in North America raising over US$84 million in convertible instruments. Mr. Gustafson is a Chartered Accountant with a Bachelor Business Administration from Wilfrid Laurier University in Ontario.

"We are pleased to welcome Mark to the board and look forward to bringing his expertise and many years of relevant experience into the company," commented David Cohen, Chairman of LNG.

About LNG

LNG is a Canadian exploration and development company focused on developing oil and gas properties in Papua New Guinea, Poland and Bulgaria. LNG holds in Papua New Guinea a 13.7% net interest in PPL 319 and a 68.5% interest in 3 additional PPLs in northern Papua New Guinea (which collectively cover approximately 5.5 million gross acres) and a 20% net interest in PRL 13 (which covers approximately 42,000 gross acres). Telemu has entered into a farm-in agreement with subsidiaries of Heritage Oil PLC under which those subsidiaries acquired an 80% interest in PPL 319 and PRL 13, subject to fulfillment of work commitments under the farm-in agreement. LNG has a 20.18% net interest in approximately 734,000 gross acres of prospective shales in Poland together with BNK Petroleum Inc., Sorgenia E&P S.p.A., and Rohol-Aufsuchungs Aktiengesellschaft. LNG is operator and has a 50% net interest in approximately 360,000 gross acres of prospective shales in Poland together with San Leon Energy. LNG has entered into a farm-in agreement relating to 405,080 acres of prospective argillite formation in Bulgaria with Direct Petroleum Bulgaria EOOD, a subsidiary of TransAtlantic Petroleum Ltd. LNG shares trade on the TSX Venture Exchange under the symbol "LNG".

About Enterprise

Enterprise is a Canadian exploration and development company with oil and gas properties in Montana, USA and Papua New Guinea. Enterprise holds a 15.75% interest Telemu which holds a 20% interest in PPL 319 and 100% interest in PPLs 320, 321 and 322. Enterprise also holds a 100% working interest (80% net revenue interest) in approximately 13,000 net mineral acres of oil and gas leases in Daniels and Sheridan Counties located in north east Montana as well as a 100% working interest (79% net revenue interest) in approximately 46,700 net acres of oil and gas leases in Cascade County, in western Montana. Further information is available under the Company's profile at www.sedar.com.

LNG ENERGY LTD.

David Nelson, President & CEO

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including information regarding the Arrangement. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management, including that the Arrangement will close. Forward looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risks related to unsatisfactory results of due diligence, international operations and doing business in foreign jurisdictions, risks associated with the oil and gas industry and exploratory and development activities generally (e.g., operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, risks associated with equipment procurement and equipment failure), the risk of commodity price and foreign exchange rate fluctuations, risks related to future royalty rate changes, and risks and uncertainties associated with securing and maintaining necessary regulatory approvals, and counterparty risk related to the stability and viability of the Company's joint venture participants.

Shares Outstanding: 338,719,365

Neither 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:
LNG Energy Ltd.
Investor Relations
1-778-373-0103
1-604-639-4670 (FAX)
info@lngenergyltd.com





Source: Marketwire


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