Canadian Superior Finds Canada Southern's Assessment Surprising
In response to Canada Southern Petroleum Ltd.'s press release of August 11, 2006, Canadian Superior Energy Inc. said Monday that it is surprised by Canada Southern's pessimistic view of its own Arctic natural gas interests.
Canada Southern has in its past filings expressed a very bullish outlook for its Arctic natural gas interest. In its director's circular recommending the rejection of the offer by a wholly owned subsidiary of Petro-Canada (the "Circular"), Canada Southern attributes approximately 927 bcfe net to its Arctic interest, and states that this figure is based on what Canada Southern management believes are reasonable assumptions. In the Circular, Canada Southern also states that it "believes that Arctic natural gas development will be economically viable" and describes an Arctic Pilot Project proposed by Petro-Canada and others for the shipment of Arctic natural gas by LNG tanker to southern markets, the viability of which Canada Southern claims was confirmed by a January 2005 Canadian Energy Research Institute report. These claims clearly contradict the August 11, 2006 press release disseminated by Canada Southern, in which Canada Southern notes that the ongoing interest in the Arctic resource proposed under Canadian Superior's amended offer is based on unsupported claims and arcane financial engineering and that such an interest is unlikely to provide any income for at least another 10 or 15 years, if ever.
In the Circular, Canada Southern refers to ten third-party resource studies that were completed between 1975 and 2001 with respect to the Arctic resource. It should be noted that the ultimate recoverable raw natural gas attributable to the Arctic Islands under these reports ranged from 7.1 tcf to 19.8 tcf. Canada Southern previously stated that the Petro-Canada offer failed to adequately compensate Canada Southern shareholders for the economic and strategic value of Canada Southern's Arctic assets. More generally, Canadian Superior is of the view that Canada Southern shareholders should ask themselves how the strategic value of Canada Southern's Arctic resource interest is realized by a mere cash payment to shareholders. To this end, Canadian Superior considers that its amended offer provides Canada Southern shareholders with the unique opportunity to participate in the exploitation of Canada Southern's Arctic assets through ownership of ARTs and Canadian Superior shares.
Canada Southern has noted that it does not believe that an offer superior to the offer by Canadian Oil Sands Trust ("COS") will be forthcoming. Canadian Superior is of the view that its amended offer is already superior to the COS offer and is confident that long-time shareholders of Canada Southern will agree. Canada Southern has attempted to validate its request that Canada Southern shareholders should tender their shares to the COS offer by advising that the officers and directors of Canada Southern have each committed to tender their shares and options to the COS offer. Canada Southern shareholders are urged to review the Circular to determine the holdings of the directors and officers of Canada Southern.
Canadian Superior respectfully requests that Canada Southern shareholders carefully consider the flexibility, short-term and long-term benefits and the true value of Canadian Superior's offer. Shareholders of Canada Southern are urged to tender to Canadian Superior's amended offer. If shares have already been tendered to the COS offer, shareholders are urged to withdraw these shares and tender them to the amended Canadian Superior offer. If assistance is required in this regard, shareholders are urged to promptly contact Georgeson Shareholder at their toll free number (1-866-779-3373).
Canadian Superior is a Calgary, Alberta, Canada based oil and gas exploration and production company with operations in Western Canada, offshore Trinidad and Tobago and offshore Nova Scotia.
- Canadian Superior Energy Notes Operational Updates (Jun 03)
- Canadian Superior Energy Posts 1Q10 Results (May 13)
- Canadian Superior Energy Waves Goodbye to COO (May 05)
Company: Petro-Canada more info
- C-NLOPB Approves Hebron Application (May 31)
- Petro-Canada to Fire Up Syrian Gas Production Soon (Apr 06)
- Faroe: Possible Hydrocarbons Found in North Sea Well (Mar 23)
Company: Canada Southern Petroleum Ltd. more info
- Canadian Oil Sands Takes Up 78% of Canada Southern Petroleum Shares (Sep 08)
- Canada Southern Pleased with Strong Support for Canadian Oil Sands Offer (Aug 21)
- Canadian Oil Sands Takes Up Shares Tendered to Canada Southern Offer (Aug 21)
Company: Canadian Oil Sands Trust more info
- Suncor Cuts Spending After Surprise Loss on Asset Writedowns (Feb 04)
- Suncor Reaches Deal To Buy Canadian Oil Sands With Sweetened Offer (Jan 18)
- Suncor Says Canadian Oil Bid Extension Highly Improbable (Jan 04)