Iteration Energy Ltd. and Cyries Energy Inc. have reported that they have entered into an arrangement agreement that provides for the combination of Iteration and Cyries to form a new growth focused, intermediate oil and gas exploration and development company with an enterprise value of approximately $1 billion. The combination will be completed pursuant to an arrangement (the "Arrangement") under the Business Corporations Act (Alberta).
Under the terms of the Arrangement Agreement, each Cyries shareholder will receive 1.475 common shares of Iteration for each common share of Cyries held, which represents, using the 20 day weighted average trading price on the Toronto Stock Exchange for Iteration, a premium of 6% on the 20 day weighted average trading price on the Toronto Stock Exchange of Cyries. Upon completion of the Arrangement, Cyries will be a wholly-owned subsidiary of Iteration. The Arrangement will be accomplished on a tax-deferred basis in Canada. At the closing of the Arrangement, Iteration shareholders will own approximately 46% of the combined entity and Cyries shareholders will own approximately 54%.
Mr. Brian Illing, currently President and Chief Executive Officer of Iteration, will continue as President and Chief Executive Officer of the combined entity. Mr. Don Archibald, currently Chairman and Chief Executive Officer of Cyries, will be appointed to the board as Chairman. The current Chairman, Mr. Jim Grenon, will continue in the role of Lead Director. The management of the combined company will be comprised of Iteration's existing executive, augmented by members of the Cyries' management team. The technical teams at Iteration and Cyries will form a highly experienced group that will be focused on exploring and exploiting the new company's exciting asset base.
The Board of Directors of Iteration will be initially comprised of eight members including the six current directors of Iteration and two representatives from Cyries. On the closing of the combination, in addition to Mr. Archibald joining the board, Mr. Howard Crone, a current director of Cyries, has advised that he has agreed to join the board as a director. Iteration and Cyries have also agreed that Mr. Gary Peddle, current Vice President Corporate and a director of Cyries, will also be put forward for election at the next annual Iteration shareholders meeting. This will expand Iteration's Board of Directors to nine members.
The Iteration executive team brings a successful track record of executing value-added acquisitions and successful exploitation, exploration and development programs, while maintaining sound financial management and strict cost controls that the new company will rely on in the future. Prior to forming Iteration, almost all of the Iteration team worked together in lead technical roles at Canadian Natural Resources Limited. They have considerable technical experience in the Deep Basin/Peace River Arch areas where both Iteration and Cyries are currently focused.
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