ACQUISITION / Dominion Energy to acquire Archer Resources
RICHMOND, Va., March 13 /CNW/ -- Dominion Energy, Inc. announced on
Wednesday of this week that it will make a cash offer of approximately $128
million (C$183 million), or $5.32 (C$7.60) per share, to acquire Archer
Resources Ltd., a publicly traded natural gas exploration and production
company headquartered in Calgary, Alberta, Canada.
The proposed acquisition of 100 percent of Archer's shares would increase
Dominion Energy's natural gas production capability by approximately 50
percent.
Under an agreement approved by the boards of both companies on Tuesday,
Dominion Energy expects to extend an offering circular to Archer shareholders
on March 18, with a 21-day offering period. Closing is expected in late
April. Dominion Energy's offer is conditioned upon 66-2/3 percent of Archer's
outstanding shares being tendered, obtaining all required regulatory approvals
and certain other conditions. Through the offer and subsequent steps,
Dominion Energy intends to acquire 100 percent of Archer's shares.
Certain directors, officers and major shareholders of Archer, holding
approximately 17 percent of shares of Archer, have irrevocably agreed to
tender their shares to Dominion Energy in its offer. Other directors and
officers of Archer, holding an additional 2 percent of Archer shares, have
indicated their intention to tender their shares to Dominion Energy's offer.
Archer has agreed to pay Dominion Energy non-completion fees and costs of
at least $4.2 million (C$6.05 million) if Archer accepts any superior offer in
certain circumstances.
G.E. Lake, Jr., senior vice president - oil and gas operations, said:
"Archer fits well with Dominion's long-term growth strategy and is a
logical addition to our family of businesses. We're acquiring significant
future drilling potential and an excellent platform for growth into our third
core area of operations in addition to Michigan and the Appalachian Basin.
We're also gaining an experienced, compatible management team and employee
group that has created consistent profitability and strong financial
performance while maintaining a low cost structure."
Archer produces approximately 72 million cubic feet of natural gas and
1,500 barrels of oil per day in Alberta. Archer's other assets include 16
processing facilities and over 500,000 undeveloped acres. Archer, which
trades on the Toronto Stock Exchange under the symbol "ARC," employs 75
people.
Dominion Energy is the competitive power and natural gas subsidiary of
Dominion Resources, Inc. (NYSE: D), a $20 billion holding company active in
regulated and independent electric power, natural gas, financial services and
real estate. Dominion Energy has more than 460 billion cubic feet of natural
gas reserves in the U.S. and an average daily production of 161 million cubic
feet. It also has ownership and operating interests in 28 competitive power
facilities throughout the U.S. and Latin America.
Lehman Brothers Canada Inc. advised Dominion Energy on the transaction.
This press release is not an extension at this time of a tender offer in
the United States for the shares of Archer Resources Ltd. Dominion Energy
intends to extend the tender offer in the United States at a future time, and
the procedural and filing requirements of the U.S. Williams Act will be
satisfied at that time.
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