Cork Exploration and Profound Energy Agree to Merge

Cork Exploration and Profound Energy have entered into a pre-acquisition agreement pursuant to which Cork will make an offer to acquire all of the issued and outstanding common shares of Profound. Pursuant to the Agreement, Cork has agreed to purchase the Profound Shares in consideration for the issuance by Cork of 1.60 common shares of Cork for each issued and outstanding Profound Share. The combined entity will continue under the name "Profound Energy Inc.". Cork shareholders will own approximately 51% of the shares of New Profound.

The transaction is subject to certain conditions including the tendering of a minimum of 67% of the Profound Shares to the Offer, receipt of the Toronto Stock Exchange and Cork shareholder approval and other transaction specific and customary conditions. It is a condition of Cork that holders of approximately 67% of the outstanding Profound Shares, including all directors and officers of Profound, enter into lock-up agreements with Cork whereby they agree to tender their Profound Shares to the Offer and it is a condition of Profound that holders of approximately 4.5% of the outstanding Cork Shares, including all directors and officers of Cork, enter into support agreements with Profound whereby they agree to support a shareholder vote in favor of the transaction and related matters.

New Profound Highlights

The combination of Cork and Profound will create a natural gas leveraged company with high working interests and an extensive suite of drillable locations on a large prospective undeveloped land base. New Profound will have a strong presence in its Carrot Creek, North and South Pembina, and Cochrane core areas in west central Alberta and will provide significant economies of scale with its existing infrastructure and compatible land base. Upon closing of the transaction, New Profound will have:

-An experienced and dedicated management team, which will be comprised of the current management of Profound (the former Find Energy Ltd. management team, which grew Find to over 5,500 boe/d at the time of its sale to Shiningbank Energy Income Fund for $443 million in September 2006);

-Estimated production at closing after giving effect for normal declines and assuming no new production additions in the interim of 2,750 boe/d comprised of 650 bbls/d of oil and natural gas liquids and 12.5 mmcf/d of natural gas (76% weighed to natural gas);

-A land base of approximately 39,419 net undeveloped acres, providing a multi-year drilling inventory; -An expanded and diversified portfolio of low risk multi-zone drilling and completion opportunities in Carrot Creek, North and South Pembina, and Cochrane;

-A strong balance sheet, low leverage and financial flexibility. At closing and after transaction costs, New Profound expects to have approximately $19.9 million of debt (less than 1.0x debt/cash flow) on available bank lines of $47 million;

-An opportunity to realize administrative and operating efficiencies through considerable overlap of the asset bases and economies of scale; and

-A production base that is more than 90% operated.

Contingent on approval of this transaction by Cork shareholders, New Profound will be led by a strong Board and an experienced and dedicated management team as follows:

    Board of Directors         Principal Occupation
    ------------------         --------------------
    William T. (Bill) Davis    President and Chief Executive Officer of
    Nicholas R. (Nick) Wemyss  Executive Vice President and Chief Operating
                               Officer of Profound
    Robert C. (Rob) Cook       Senior Vice President of ARC Financial Corp.
    George Chow                Executive Vice President Corporate of 
                               Energy Services Corp.
    Herbert (Herb) Pinder      President of The Goal Group

Two additional directors will be nominated for New Profound, one of whom will be designated by Cork and the other nominee to be mutually agreed upon by Cork and Profound.

    Management Team            Position
    ---------------            --------
    William T. (Bill) Davis    President and Chief Executive Officer
    Nicholas R. (Nick) Wemyss  Executive Vice President and Chief Operating
    Evelyn Burnett             Vice President Finance and Chief Financial
    Karl Rumpf                 Vice President Exploration
    Al Grabas                  Vice President Engineering
    Kevin Orriss               Vice President Land
    Bill Kosich                Vice President Drilling and Completions

Benefits to Shareholders of New Profound

The transaction provides a number of benefits to the shareholders of New Profound, namely:

-New Profound will have a stronger balance sheet and the necessary capital to further its drilling and exploration program and fulfill its outstanding drilling commitments;

-The properties of Cork and Profound are highly complementary and management of Profound has extensive experience in Cork's operating areas;

-Operationally, Profound has significant expertise in drilling wells in the target areas on a cost-effective and time efficient basis;

-Management and the employees of Profound have a proven track record in both the public markets and the operating areas to be developed;

-The transaction would provide Cork shareholders the opportunity to participate in an entity with better diversification and less risk; and

-As a result of the transaction, there would be additional synergies realized including complementary drilling programs and a reduction in finding costs and general and administration costs.

Profound is a private oil and gas company with operations focused in west central Alberta, predominantly in the same operating area that Cork has built its asset base. Since its formation in December 2006, Profound has built a concentrated asset base and prospect inventory through a large scale strategic farm-in agreement with an energy trust, participation at crown land sales and multi-section farm-ins on lands held by other operators.

At closing, Profound will have approximately 31.8 million fully diluted Shares outstanding, a net cash balance of $31.1 million, 140 barrels of oil equivalent per day ("boe/d") production with an additional 100/boe/d behind pipe, and 4,640 net acres of undeveloped land.


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