MERGERS & ACQUISITIONS / Big Horn & Ironwood
BIG HORN RESOURCES LTD. TO ACQUIRE IRONWOOD PETROLEUM LTD.
CALGARY, Oct. 1 /CNW/ - Big Horn Resources Ltd. (''Big Horn'') and
Ironwood Petroleum Ltd. (''Ironwood'') are pleased to announce that they have
entered into an agreement whereby Big Horn will offer to acquire by way of
take-over bid all of the outstanding common shares of Ironwood for a price of
$0.76 per share.
Following the review of the offer by the board of directors of Ironwood,
who were provided with financial advice by Jennings Capital Inc., the offer
has received the unanimous support of the board of directors of Ironwood. The
directors and officers of Ironwood, holding in aggregate approximately 45% of
the outstanding Ironwood common shares, have agreed to tender their common
shares to the offer.
Big Horn intends to use the proceeds from its previously announced
private placement to fund the majority of the acquisition cost of the Ironwood
shares.
Average production for the first half of 1998 for Big Horn and Ironwood
was 566 boepd and 327 boepd respectively. Current production for the combined
companies is approximately 900 boepd with approximately 50/50 gas to oil mix.
Total proved and probable reserves acquired are in excess of 2,000,000 boe (or
approximately 1,650,000 boe on proved plus half probable basis). The Ironwood
acquisition also includes over 10,000 acres (gross) of undeveloped land (4,500
acres net). The combined companies will continue to operate with only minimal
increases to its general and administrative costs.
The offer will be conditional upon, among other things, a minimum
condition of not less than 66 2/3% of the outstanding Ironwood common shares
(on a fully-diluted basis and excluding, subject to regulatory relief, common
shares tendered by the directors and officers of Ironwood pursuant to their
agreements to tender) being tendered under and not withdrawn from the offer
and upon obtaining all required regulatory and stock exchange approvals.
Without regulatory relief, in order for the minimum condition to be satisfied,
approximately 82% of the outstanding common shares of Ironwood would be
required to be tendered under the offer. Big Horn expects to mail the offer on
or before October 5, 1998, subject to extension to October 9, 1998 in certain
circumstances. If the offer is successful, Big Horn intends to take such steps
as may be advisable in order to acquire 100% of the outstanding Ironwood
common shares.
Ironwood has agreed to pay Big Horn a non-completion fee of $350,000 in
certain circumstances and has agreed not to solicit other transaction
proposals, subject to the fiduciary duty of the board of directors of
Ironwood.
Neither the Vancouver Stock Exchange or The Alberta Stock Exchange has
reviewed nor accepts any responsibility for the adequacy or accuracy of the
contents of the information contained herein.
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For further information: Big Horn Resources Ltd.: Reginald J.
Greenslade, President and Chief Executive Officer, Phone: (403) 263-0262, Fax:
(403) 294-1197; Ironwood Petroleum Inc.: Randell J. Hammond, President and
Chief Executive Officer, Phone: (403) 299-1285, Fax: (403) 299-1289
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