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Gold/Mining/Energy : Orbit Oil and Gas (t.orb) -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (124)	11/27/1997 9:52:00 AM
From: John Fairchild	Read Replies (1) \| Respond to of 171

SUNOMA ENERGY CORP. ANNOUNCES OFFER TO ACQUIRE ORBIT OIL & GAS LTD. All-cash offer of $1.70 per share represents significant premium CALGARY, Nov. 27 /CNW/ - Calgary-based Sunoma Energy Corp. (''Sunoma'') today announced that it intends to make an all-cash offer to purchase all of the outstanding common shares of Orbit Oil & Gas Ltd. (''Orbit'') (TSE: ORB), a Calgary-based junior oil and gas exploration and production company, at a price of $1.70 per share. The offer of $1.70 per share represents a 47 percent premium to Orbit's closing price of $1.16 on Monday, November 24, 1997, a 23 percent premium to its highest price during the past 52 weeks, and a 13 percent premium to its highest price during the past three years. Mr. Rick MacDermott, President and Chief Executive Officer of Sunoma, said, ''This initiative is part of our strategic evolution as an exploration and production company with a growing financial and operating presence in the marketplace. We are approximately the same size on a production basis and, like Orbit, are focused primarily on natural gas. Our respective projects are operationally similar in many respects, so we have a good sense of how the companies will function when their operations are combined. This transaction will also bring greater financial resources to bear on the combined asset base while reducing our overhead costs. ''Orbit shareholders have an unprecedented opportunity to realize the value of their investment now, at a significant premium and in cash. We believe this price is more than fair and reasonable, and we are willing to let Orbit's shareholders evaluate our offer on its merits. We expect Orbit to do the same by waiving its shareholders' rights plan. ''This offer should be evaluated in the context of Orbit's performance during the last three years. During the three years ended November 24, 1997, Orbit shareholders experienced a 7 percent decline in the value of their shares, while the Oil and Gas Producers Index grew by some 41 percent. During the three years ended December 31, 1996, the compound annual growth rate in Orbit's cash flow per share measured negative 4.1 percent. Based on Orbit's own estimate of its 1997 cash flow per share, as contained in Orbit's press release dated November 26, 1997, cash flow growth since 1993 has been nil.'' Sunoma intends to immediately request a shareholder list from Orbit. Sunoma anticipates making the offer by mid-December and that the offer would expire mid-January, 1998 (35 days later). The offer is fully financed and is conditional on the deposit of not less than 50.1 percent of Orbit's shares (on a diluted basis) other than the 6.9 percent of shares (on a diluted basis) currently held by Sunoma. The offer is also subject to other conditions customary in these types of transactions. In addition, Orbit must waive the application of its shareholders' rights plan in order to enable the holders of Orbit shares to accept Sunoma's offer. After the acquisition of all of the common shares (on a diluted basis) of Orbit, Sunoma intends to cause Orbit to redeem its outstanding Series 2 and Series 3 Class A Preferred Shares at a redemption price of $10.00 per share. Sunoma is a private energy company engaged in the exploration and production of natural gas, primarily in the Peace River arch area of the province of Alberta. The company is known for its prudent growth through acquisitions of Sunalta Energy Inc. and Paloma Petroleum Ltd. in 1996, its ability to identify and to realize value in its asset base, and for the calibre of its management team. Goepel Shields & Partners Inc. and The Chase Manhattan Bank have been retained as financial advisors to Sunoma for purposes of this transaction. Due to the current mail disruption in Canada, shareholders will be able to obtain copies of bid documents by requesting same at the offices of Goepel Shields and Partners Inc. at Calgary (403-297-0434). -30-