CALGARY, ALBERTA--(Marketwire - Oct. 23, 2012) -
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Tourmaline Oil Corp. (TSX:TOU) ("Tourmaline" or the "Company") is pleased to announce the acquisition of Huron Energy Corporation ("Huron"), a private oil and gas producer with operations in NE British Columbia, in an all share transaction.
The acquisition provides a significant expansion to Tourmaline's asset base in the prolific liquid rich Montney play area in NEBC. The Company's land base in NEBC will more than double to 186 sections from 78 sections and result in a significant increase in Tourmaline's future horizontal Montney drilling inventory.
Valued at approximately $258 million, the acquisition will also add approximately 5,500 BOE/d of current production, primarily in the Groundbirch, Sunrise and Tupper areas, and 46.2 mmboe of 2P reserves (as independently evaluated in a report by GLJ Petroleum Consultants Ltd. as at August 31, 2012). Huron's extensive infrastructure in NEBC is very complementary to Tourmaline's plant and pipeline network in the greater Sunrise-Dawson area, which Tourmaline believes to be the optimum Montney play area in the entire NEBC Montney trend.
Huron shareholders will receive 0.07644 of a common share of Tourmaline for each Huron common share pursuant to the acquisition and it is expected that Tourmaline will issue an aggregate of approximately 7.4 million common shares to acquire Huron. The acquisition will be completed through an arrangement pursuant to the Business Corporations Act (Alberta) and is expected to close in early December 2012.
The Board of Directors of Huron has unanimously determined to recommend that Huron shareholders vote their Huron shares in favour of the acquisition. All of the directors and officers and certain shareholders of Huron collectively holding approximately 65% of the Huron shares have entered into agreements with Tourmaline to vote their shares in favour of the acquisition.
An information circular is expected to be mailed to all Huron shareholders in early November 2012 and a special meeting of Huron shareholders is anticipated to be held in early December 2012. Completion of the acquisition is subject to approval by Huron shareholders, court approval and regulatory approvals. Under certain circumstances, Huron has agreed to pay a non-completion fee of $7.5 million to Tourmaline.
Peters & Co. Limited acted as financial advisor to Tourmaline in connection with the Huron acquisition.