"The acquisition of Prima strengthens Petro-Canada's core North American gas business," said Petro-Canada President and Chief Executive Officer Ron Brenneman. "Prima's extensive land position in the U.S. Rockies natural gas basins and strong capability in unconventional gas production solidly positions Petro-Canada to benefit from the growing unconventional gas segment."
"We look forward to welcoming the employees of Prima and working with a strong and experienced team to further develop and expand Petro-Canada's natural gas business," said Kathy Sendall, Senior Vice-President North American Natural Gas.
The acquisition of Prima Energy will add 55 million cubic feet per day of natural gas equivalent production to Petro-Canada. Prima also has an extensive undeveloped acreage position and 1,600 drillable locations identified. In addition to acreage in the Powder River and Denver-Julesberg basins, Prima's 360,000 undeveloped acres include positions in the Green River, Uinta, and Wind River basins. Petro-Canada expects Prima's production to double by 2007.
As scheduled, the tender offer expired at 5:00 pm, New York City time, on July 22, 2004. Petro-Canada has been advised by Mellon Investor Services, the depositary for the tender offer, that 11,750,484 shares of Prima common stock were tendered into the offer and not withdrawn. In addition, 370,221 shares of Prima common stock were tendered into the offer by receipt of notices of guaranteed delivery. Together, this represents approximately 93 per cent of the total number of Prima shares outstanding. All shares of Prima common stock validly tendered and not properly withdrawn before the expiration of the tender offer period have been accepted for purchase at a price of $39.50 US per share in cash and will be purchased promptly. All shares represented by notices of guaranteed delivery, which were received by Petro-Canada before the expiration of the offering period, will be purchased promptly after the shares are delivered.
Petro-Canada intends to complete the acquisition of Prima as soon as practicable through a merger in which all shares of common stock not validly tendered into the tender offer will be converted into the right to receive $39.50 US per share in cash. Since Raven Acquisition Corp. has acquired more than 90 per cent of the outstanding Prima shares, it intends to effect a "short-form" merger under Delaware law without action by any other stockholder.
Payment of the merger consideration will be made following the merger upon proper presentation of certificates formerly representing Prima shares to Mellon Investor Services, paying agent for the merger, together with a properly completed letter of transmittal. Instructions as to how to exchange shares of Prima common stock into the merger consideration will be sent to stockholders. Following the merger, Prima will become an indirect wholly-owned subsidiary of Petro-Canada.
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