AvenEx Energy Corp AVNDF

Elbow River Funds, Severance,......etc. Avenex REP

[deisman]

My Email's to AvenexAvenex's Reply My comments from JIC

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Jan 22 (3 days ago)			Reply
to info

Prior to deciding to vote either for or against the merger I have a number of questions.

1./ Is the Elbow River sale a done deal regardless of the merger?

2./ On the assumption that the merger goes through, what will the cost be for severance type charges/costs?

3./ If the merger is not successful, what steps will management take to replace the Elbow River Income and protect growth/dividends?

Thank you in advance for your response.

[e-mail] srs.bis6.us.blackberry.com	Jan 22 (3 days ago)		Reply
to me

Thanks for the email. The Elbow River is scheduled for closing February 15th prior to the planned close of the 3 way merger.
Senior management not continuing with the new entity will get severance per the Information Circular filed on Sedar. With 3 entities combining there will be significant G&A savings spread throughout the 3 workforces. Final decisions on who stays have not been made but the Charger Management team (ex Provident team) will make up most of senior management.
If the deal was voted down we would have to move to redeploy the excess cash and some bank debt on an oil + gas acquisition of some sort to try to replace the cashflow.
Regards

	Jan 22 (3 days ago)		Reply
to gdundas

Thank you Mr. Dundas for your reply .

I understand that severance decisions have not been disclosed yet but according to clauses 4.1.mmm, 4.2.lll,and 4.3.kkk estimates were given. Are these estimates (or at least totals) available to shareholders?

Regards

As I didn't get a response I looked in the info circular and this was the only reference I could find. I assume a big chunk of the ER sale funds are going towards severence but I stand to be corrected. The following is from that circular.

The net debt of Spyglass after giving effect to the Arrangement, based on
December 20, 2012 estimates, will be approximately $280 million. The pro forma net debt calculation incorporates estimated cash proceeds from the Elbow River Transaction of $80 million and estimated transaction costs of the Arrangement of $25.2 million (which includes executive severance and termination payments - see "Interests of Certain Persons or Companies in the Matters to be Acted Upon" in this Information Circular) and excludes risk management assets and liabilities as of the Effective Date.

Link to JIC https://www.avenexenergy.com/pdf/pressRelease/2013/Joint%20InformationCircular.pdf