Penn West and Petrofund announce unitholder approval of their merger and required modifications to their plan of arrangement
28 Junho 2006 - 9:59PM
PR Newswire (US)
CALGARY, June 28 /PRNewswire-FirstCall/ -- Penn West Energy Trust
("Penn West") (TSX: PWT.UN; NYSE: PWE) and Petrofund Energy Trust
("Petrofund") (TSX: PTF.UN; AMEX: PTF) are pleased to announce that
the Plan of Arrangement (the "Arrangement") related to the merger
of the trusts was approved today at both the Penn West Annual and
Special unitholder Meeting and the Petrofund Special unitholder
Meeting. Subject to approval from the Court of Queen's Bench of
Alberta and certain regulatory approvals, the merger of Penn West
and Petrofund will become effective on or about June 30, 2006. At
the Penn West Annual and Special meeting, a majority of unitholders
did not vote in favor of the resolution related to the private
placement of shares to certain service providers of the proposed
new junior oil and natural gas exploration and development company
("ExploreCo"). Participation in the ExploreCo private placement and
option plan had been offered to the proposed officers, certain
directors and other staff of Exploreco as a material inducement to
accept their positions with ExploreCo and to provide working
capital with which to launch ExploreCo operations. Failure to
obtain the requisite approvals for these matters would have
resulted in such individuals not accepting their proposed positions
with ExploreCo, which could have had a material adverse effect on
ExploreCo. As a result, the Arrangement was structured to provide
that if either the private placement or option plan were not
approved by the unitholders of both trusts, the planned
transactions related to ExploreCo would not be completed. In
summary, the effect on the Arrangement will be that: - The
conveyances of producing oil and natural gas properties and
undeveloped lands from the trusts to ExploreCo will not occur. The
properties and lands will remain in the merged trust. - There will
be no distribution of the ExploreCo shares to the unitholders by
the Trusts. The merger of Penn West and Petrofund will proceed as
otherwise detailed in the Arrangement, subject to the remaining
required approvals. Petrofund unitholders will receive 0.6 of a
Penn West unit for each Petrofund unit exchanged. Petrofund
unitholders will also receive a separate special distribution of
$1.10 which includes an adjustment of $0.10 per unit required to
align the distribution payment dates of the trusts. To achieve a
tax- deferred exchange of units, certain Canadian resident
Petrofund unitholders will be required to file tax elections prior
to September 30, 2006, as detailed in the Joint Information
Circular and Proxy Statement dated May 23, 2006 previously mailed
to all unitholders. All other resolutions presented were approved
by the unitholders of both trusts including the election of the
following directors to the Board of Penn West as of the effective
date of the merger: John A. Brussa (Chairman) James E. Allard
William E. Andrew George H. Brookman Jeffery E. Errico Murray R.
Nunns Thomas E. Phillips Frank Potter James C. Smith Following the
completion of the merger, Penn West will be the largest energy
trust in North America with an enterprise value of approximately
$11 billion, oil and natural gas production capacity of
approximately 135,000 barrels of oil equivalent per day weighted
52% to liquids and 48% to natural gas. Penn West will have a
diversified portfolio of conventional oil and natural gas assets
plus significant resource-play potential in the Peace River
Oilsands of Northern Alberta, CO2 enhanced oil recovery in the
Pembina, Swan Hills, Midale and Weyburn light oil pools and coalbed
methane producing assets. Subsequent to the merger, Penn West will
have approximately 234 million trust units issued and outstanding.
Penn West trust units will continue to trade on the Toronto Stock
Exchange (TSX) under the symbol PWT.UN and on the New York Stock
Exchange (NYSE) under the symbol PWE. Petrofund units will be
delisted from the TSX and the American Stock Exchange (AMEX) on or
shortly after June 30, 2006. Forward Looking Statements Certain
information regarding Penn West Energy Trust, Petrofund Energy
Trust and the merged Trust and the transactions contemplated in
this news release including but not limited to management's
assessment of future plans and operations, completion of the
merger, the benefits of the merger, the diversity of conventional
assets, the potential of resource plays, the enterprise value and
the productive capacity of the merged trust may constitute
forward-looking statements under applicable securities law and
necessarily involve risks and assumptions, including but not
limited to risks and assumptions associated with oil and gas
exploration, development, exploitation, production, marketing and
transportation, loss of markets, volatility of commodity prices,
currency fluctuations, imprecision of reserve estimates,
environmental risks, competition, incorrect assessment of the value
of acquisitions, failure to realize the anticipated benefits of the
merger; ability to access sufficient capital from internal and
external sources and failure to obtain required regulatory or other
approvals. As a consequence, actual results may differ materially
from those anticipated or implied in the forward-looking
statements. Readers are cautioned that the foregoing list of
factors is not exhaustive. Additional information on these and
other factors that could affect Penn West's and/or Petrofund's
operations or financial results are included in reports on file
with Canadian securities regulatory authorities and may be accessed
through the SEDAR website (http://www.sedar.com/), at Penn West's
website (http://www.pennwest.com/) or Petrofund's website
(http://www.petrofund.ca/). Furthermore, the forward-looking
statements contained in this news release are made as of the date
of this news release, and none of Penn West, Petrofund or the
merged Trust undertakes any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be expressly required by applicable securities law. Where
reserves or production are stated on a barrel of oil equivalent
(boe) basis, natural gas volumes have been converted to a barrel of
oil equivalent (boe) at a ratio of six thousand cubic feet of
natural gas to one barrel of oil. This conversion ratio could be
misleading as it is based on an energy equivalent conversion method
primarily applicable at the burner tip and does not represent value
equivalence at the wellhead. Penn West Energy Trust is a senior oil
and natural gas energy trust based in Calgary, Alberta that trades
on the Toronto Stock Exchange under the symbol PWT.UN and on the
New York Stock Exchange under the symbol PWE. Petrofund Energy
Trust is a Calgary based royalty trust that trades on the Toronto
Stock Exchange under the symbol PTF.UN and on the American Stock
Exchange under the symbol PTF. DATASOURCE: Penn West Energy Trust
CONTACT: Penn West: William E. Andrew, President and Chief
Executive Officer, (403) 777-2502; David W. Middleton, Executive
Vice President and COO, (403) 777-3301; Investor Relations,
Toll-free: 1-866-693-2707, Email: , http://www.pennwest.com/;
Petrofund: Jeffery E. Errico, President and Chief Executive
Officer, (403) 218-8625; Jeffrey D. Newcommon, Executive Vice
President, (403) 218-8625; Investor Relations, Toll-free:
1-866-318-1767, Email: , http://www.petrofund.ca/
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