ACQUISITIONS - MERGERS / Abraxas Petroleum Corporation Announces Acquisition of New Cache Petroleums Ltd.
SAN ANTONIO, Jan. 6 /PRNewswire/ -- Abraxas Petroleum Corporation (Nasdaq: AXAS) through its wholly-owned subsidiary, Canadian Abraxas Petroleum Limited, (''Canaxas'') announced today that approximately 14,026,467 common shares and associated rights, being approximately 98.8 per cent of the issued and outstanding common shares and associated rights of New Cache Petroleums Ltd. (Toronto: NWA - news; ''New Cache''), on a fully diluted basis (excluding the 1,222,353 options to acquire common shares of New Cache held by optionholders who have agreed to cancel their options pursuant to agreements between such optionholders and New Cache), were deposited prior to the expiration of its outstanding offer to purchase all such common shares and associated rights as set forth in the Offer to Purchase and Circular dated November 24, 1998 (the ''Offer''), as extended by Notice of Variation and Extension dated December 18, 1998. All of the conditions of the Offer have been satisfied.
Canaxas will take up and pay for all of the common shares and associated rights of New Cache deposited in acceptance of the Offer.
Canaxas will not be extending the Offer in respect of the remaining common shares and associated rights of New Cache not deposited in acceptance of the Offer. As Canaxas has acquired in excess of 90% of the issued and outstanding common shares and associated rights of New Cache pursuant to the Offer, Canaxas intends to implement the compulsory acquisition provisions of the Business Corporations Act (Alberta) to acquire the remaining 1.2% of the issued and outstanding common shares and associated rights of New Cache not deposited in acceptance of the Offer, whereupon, New Cache will become a wholly-owned subsidiary of Canaxas.
The previously announced transaction calls for the payment of approximately $60MM ($92MM CDN) in cash or $6.50/share CDN and the assumption of approximately $24MM ($37MM CDN) of debt.
Abraxas intends to integrate the New Cache operations into the existing operations of Canaxas and Grey Wolf Exploration, Inc., (Toronto, Alberta: GWX, approximately 48% owned by Abraxas) with Grey Wolf eventually acquiring as much as 50% of the New Cache assets.
Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas exploration and production company that also processes natural gas. It operates primarily along the Texas Gulf Coast, in the Permian Basin of western Texas, western Canada and southwestern Wyoming.
Safe Harbor for forward-looking statement: Statements in this release looking forward in time involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to be materially different from any future performance suggested in this release. Such factors may include, but may not be necessarily limited to, changes in the prices received by the Company for crude oil and natural gas. In addition, the Company's future crude oil and natural gas production is highly dependent upon the Company's level of success in acquiring or finding additional reserves. Further, the Company operates in an industry sector where securities values are highly volatile and may be influenced by economic and other factors beyond the Company's control. In the context of forward-looking information provided for in this release, reference is made to the discussion of risk factors detailed in the Company's filing with the Securities and Exchange Commission during the past 12 months.
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