Pearl Exploration and Production Ltd. (“Pearl”) (TSX VENTURE:PXX) and Atlas Energy Ltd. (“Atlas”) (TSX:AED) are pleased to announce that they have entered into a definitive agreement to merge the two companies.
Release Date: October 26, 2006
00:00 EDT Tuesday, October 24, 2006
CALGARY — Pearl Exploration and Production Ltd. and Atlas Energy Ltd. have agreed to merge in a deal that will see Pearl acquire all of Atlas’s stock for about $263-million plus the assumption of about $77-million of debt.
Under the deal announced yesterday, Atlas shareholders will receive 0.82 of a Pearl share for each Atlas share.
“The Atlas development portfolio will contribute significant production per share, cash flow per share . . . to Pearl shareholders,” Pearl president Gary Guidry said in a release.
“The Atlas assets complement our own existing assets and this friendly transaction with Atlas is another step forward in our aggressively paced, growth strategy.”
Along with the deal, Pearl also said it will issue 14.4 million subscription receipts for common shares at $4.50 each, and 1.7 million subscription receipts for flow-through shares at $5.85 each, for gross proceeds of $75-million. It will also issue 5.6 million shares at $4.50 each for proceeds of $25-million. The proceeds will be used to pay down the combined debt and finance continuing capital programs.
On completion of the deal and financing, Pearl shareholders will hold 40.6 per cent of the combined company, former Atlas shareholders 42.7 per cent and subscribers to the financing 16.9 per cent. Its board will be comprised of eight directors, six from Pearl plus Lukas Lundin, Pearl’s largest shareholder and Atlas chairman Lloyd Arnason.
Atlas is a junior oil and gas company with producing and development assets in Western Canada with current production of about 5,800 barrels of oil equivalent a day.