Anybody have an idea about what might be going on with JEC - Jet Energy today? Cabre announced a takeover deal for $1.55 or stock, yet JEC's hardly budged from it's previous close and volume isn't that great. JEC's board is behind the deal so one would think it has a good chance of going through. Still, no action.
What gives????
Here's the press release.....
Friday October 8, 7:36 am Eastern Time
Cabre in bid for Jet
(Full text of press release from Canadian Corporate News)
OCTOBER 8, 1999
Cabre Exploration Enters Into An Agreement To Make An Offer To Acquire Jet Energy
CALGARY, ALBERTA--Cabre Exploration Ltd. (``Cabre'), and Jet Energy Corp.(``Jet'), jointly announce that they have entered into an
agreement whereby Cabre has agreed to make an offer to acquire all of the issued and outstanding common shares of Jet for either $1.55 cash per common share or 0.10 of a
common share of Cabre and $.01 cash per common share, or a combination thereof, subject to a maximum of $8.7 million in cash and a maximum of 2.5 million Cabre
shares (the ``Offer'). The Offer, expected to be mailed to all of the holders of common shares of Jet on or before October 18, is expected to expire 21 days after mailing and
is conditional upon, among other things, not less than 66 2/3% of the outstanding Jet shares being tendered. The Board of Directors of Jet has unanimously approved the
Offer and has agreed to vote their 1.65 million shares in favour of the offer and recommend that shareholders accept the Offer.
Jet currently has 28.1 million shares outstanding, net debt of approximately $20 million, which includes a convertible debenture with a face value of $5 million, resulting in a
total purchase price of $62 million. According to an independent engineering report dated June 1, 1999, Jet's current total proved and probable reserves are 10.3 million
barrels of oil equivalent (gas to oil at 10:1), weighted 65% towards natural gas. The reserves are described in more detail as follows:
/T/
Oil & NGL's Natural Gas Equivalents PW @ 15%
----------- ----------- ----------- --------
Mbbls MMCF BOE $M
Total Proven 2,555 43,986 6,954 53,494
Probable 1,087 22,961 3,383 15,291
Proven and Probable 3,642 66,947 10,337 68,785
Proven and 1/2 Probable 3,099 55,467 8,646 61,140
/T/
In addition, Cabre has valued Jet's high quality and predominantly W5 49,000 net undeveloped acres and extensive seismic database including 418 km(2) of 3-D, at $7 million.
Cabre views the addition of Jet as an ideal compliment to its ongoing strategy to increase exposure to prolific, long life, liquids rich natural gas reserves and accelerate its
exploration program in the W5 area of Alberta, where, over the past 18 months Cabre has dedicated significant internal resources towards establishing a greater presence.
Jet's operations include several areas proximal to Cabre's recent discoveries in the Willesden Green, Whitecourt and Ferrier areas. The acquisition also significantly increases
Cabre's exposure to natural gas production. The President of Jet, Mr. Bill MacDonald and Vice-President of Exploration, Mr. Doug Wine, have agreed to work with Cabre to
assist technically with maximization of development and further exploration of the Jet assets. It is intended that Mr. MacDonald will join the Board of Cabre following closing
of the transaction.
Upon completion of the transaction Cabre will have production of approximately 18,000 barrels of oil equivalent per day, weighted 45% towards natural gas, 19.2 million
shares outstanding, and net debt of approximately $175-180 million including estimated closing costs. In 2000, Cabre's risked forecast based on Jet's existing reserve base has
the potential of adding an additional 1,100 boepd over current volumes of 1,300. The transaction increases Cabre's proven reserves as a percentage of total reserves, its
reserve life index, natural gas weighting BOE per share production in 2000 and is modestly accretive to 2000 cash flow per share.
The Offer provides Jet shareholders with a 42% premium to the 20 day weighted market price and the opportunity to participate in the upside of Cabre's share price and
current inventory of high-impact exploration prospects. Griffiths McBurney & Partners acted as financial advisor to Jet and has provided to Jet's Board of Directors an
opinion that the Offer is fair to Jet's shareholders from a financial point of view.
The agreement between Cabre and Jet also provides that Jet shall not, directly or indirectly, solicit or initiate any inquiries, discussions or negotiations with a third party with
respect to any take-over proposal. Jet has agreed to pay a break fee to Cabre in the amount of $1.2 million under certain circumstances. National Bank Financial has been
retained to act as financial advisor to Cabre.
Cabre is a publicly traded Canadian energy company involved in exploration, development and production of natural gas and crude oil in western Canada and internationally
through its effective 57.5% interest in Kappa Energy, pending final closing scheduled for November. Cabre's shares are listed on The Toronto Stock Exchange under the
symbol CBE.
This news release shall not constitute an offer to sell Cabre common shares, or the solicitation of an offer to buy Jet common shares nor shall there be any sale of such
securities in any State of the United States in which such offer, solicitation or sale would be unlawful.
FOR FURTHER INFORMATION PLEASE CONTACT:
Cabre Exploration Ltd.
J. Douglas Kay
President and Chief Executive Officer
(403)231-8800
or
Roger A. Balestra
Vice-President and Corporate Secretary
(403)231-8800
or
Jet Energy Corp.
William B. MacDonald
President and Chief Executive Officer
(403)244-0440
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein. |
