BelAir Energy Corp -
BelAir makes offer for CrownJoule
BelAir Energy Corp
BEC
Shares issued 5,909,657
2000-03-07 close $1.75
Wednesday Mar 8 2000
Also CrownJoule Exploration Ltd (CJE)
Mr. Victor Luhowy and Mr. George Wilson report
BelAir and CrownJoule have entered into an agreement pursuant to which BelAir
will offer to purchase all of the issued and outstanding common shares of
CrownJoule for consideration of 0.42 of a BelAir common share and 10
Canadian cents cash for each common share of CrownJoule.
The boards of directors of each of BelAir and CrownJoule have approved the
proposed transaction and the board of directors of CrownJoule has resolved
unanimously to recommend that its shareholders accept the BelAir offer. The
board of directors of CrownJoule has agreed that it will not solicit or initiate
discussions or negotiations with any third party concerning any sale of any material
position or assets of CrownJoule, or any business combination involving
CrownJoule. Griffiths McBurney & Partners acted as financial adviser to
CrownJoule and will provide a fairness opinion in connection with the transaction.
The proposed transaction will be subject to, among other things, completion of
satisfactory due diligence on behalf of both parties, execution of a definitive
agreement by March 15, 2000, tendering of a minimum of two-thirds of the
common shares of CrownJoule (on a fully diluted basis) to BelAir and obtaining
the required regulatory approvals. CrownJoule has agreed, under certain
circumstances, to pay to BelAir a non-completion fee of $400,000.
As a result of the transaction, BelAir will have approximately 12.9 million shares
issued and outstanding. The company will have production of approximately
2,000 barrels of oil equivalent (boe) per day comprising 12.0 million cubic feet of
natural gas per day and 800 barrels of oil and natural gas liquids per day. The
company will have 3.8 million boe of proven reserves, 2.2 million boe of probable
reserves as well as 162,000 net acres of undeveloped lands. Most of the
properties of BelAir and CrownJoule are located in central and northwestern
Alberta.
According to CrownJoule president, George Wilson: "The combination of our two
companies will result in a larger, stronger company going forward. We gain a
more diversified asset base, a stronger balance sheet with which to develop the
potential on our large undeveloped land base and an experienced and aggressive
BelAir management team."
"This business combination is beneficial to shareholders of both companies,"
declared Vic Luhowy, president of BelAir Energy. "CrownJoule's heavy weighting
to natural gas will be advantageous as North American demand for natural gas
continues to increase. BelAir provides higher exposure to crude oil production to
take advantage of this year's high prices. CrownJoule's focus in two main areas,
Doris and Sylvan Lake, is synergistic with BelAir's strategy of consolidating its
assets into central and northwestern Alberta."
As part of the transaction, CrownJoule will be entitled to nominate one member to
the board of directors of BelAir. In connection with this appointment, Robert J.
Engbloom, a director of BelAir, has resigned from the board of directors of
BelAir.
It is proposed that the combined company will continue to be listed on the
Toronto Stock Exchange subject to the approval of the TSE and regulatory
agencies.
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