Questerre Completes Magnus Acquisition
Questerre has completed the acquisition of Magnus Energy pursuant to a Plan of Arrangement.
Magnus is now a wholly-owned subsidiary of Questerre. The total consideration for the Magnus acquisition was net cash of $6.7 million, the assumption of a $1.6 million working capital deficit and 10.09 million Questerre shares.
Michael Binnion, President and CEO of Questerre, commented, "This acquisition positions Questerre in the high profile Bakken/Torquay oil play in southeast Saskatchewan. It gives us a large land base with significant upsides and drill-ready development locations. I am confident that the six months of work and delays in our production development related to this acquisition will be well rewarded once our drilling results come in."
At the Annual and Special Meeting of the Magnus shareholders held on October 31, 2007, the Arrangement was approved by over 93% of the votes cast by shareholders. Final approval from the Court of Queen's Bench of Alberta was subsequently received. Magnus shareholders will receive 0.015316 of a Questerre Share for each Magnus Class A share. Each Magnus Class B share was exchanged for 10 Magnus Class A shares prior to the exchange of Magnus Class A shares for Questerre Shares.
Included in the net cash consideration is $9.3 million in proceeds from a Magnus equity placement completed concurrent with the closing of the acquisition. In addition, subject to regulatory approval, Questerre intends to issue a further 2.5 million Questerre Shares, on a flow-through basis, for gross proceeds of $2 million. The proceeds from these placements will fund Magnus' flow-through commitments, including its 50% share of drilling costs for the A-8 well at the Beaver River Field and Questerre's other exploration activities in Western Canada.
The cash consideration also includes the acquisition of the remaining Magnus senior secured debt at its face value of $10.08 million. The debt was acquired through a cash payment of $8 million and, subject to regulatory approval, the issuance of 2.25 million Questerre Shares. In addition to the acquisition of the secured debt of $7.4 million announced on October 24, 2007, this brings the total Magnus secured debt satisfied by Questerre to approximately $17.5 million. On a consolidated basis, Questerre will have no debt.
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Company: Magnus Energy more info
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