Pearl Exploration and Production Ltd.



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  May 15, 2006 - 17:26 ET
Pearl Exploration and Production Ltd.: Offer to Acquire SignalEnergy Inc.

  CALGARY, ALBERTA--(CCNMatthews - May 15, 2006) - Pearl Exploration and Production Ltd. ("Pearl" or "the Company") (TSX VENTURE:PXX) announces that it is in the process of mailing a takeover bid circular (the "Circular") to shareholders of SignalEnergy Inc. ("Signal") in connection with the Company's previously announced offer to purchase all of the outstanding shares of Signal (the "Offer").

The Offer is on the basis of 0.25 common shares of Pearl for each common share of Signal ("Signal Share") or $1.45 in cash for each Signal Share, or a combination thereof, subject to a maximum aggregate cash amount of $35 million. In the event that Signal shareholders collectively elect for more than this maximum aggregate cash amount, the amount of cash they receive will be prorated. Based on publicly available information, Pearl estimates that Signal has approximately 74.6 million shares outstanding (on a fully diluted basis).

On March 27, 2006, Pearl announced its intention to make an offer to Signal shareholders on the basis of 0.32 common shares of Pearl for each Signal Share or $1.45 in cash for each Signal Share, or a combination thereof, subject to a maximum aggregate cash amount of $35 million. Subsequent to the announcement, Pearl completed further due diligence of publicly available information including a review of Signal's December 31, 2005 audited annual financial statements released on March 31, 2005. Pearl has determined a fair share exchange ratio of 0.25 common shares of Pearl for each common share of Signal or $1.45 in cash for each Signal Share, or a combination thereof, subject to a maximum aggregate cash amount of $35 million.

Pearl believes that the acquisition of Signal complements Pearl's existing portfolio of North American opportunities. The shareholders of Signal will have an opportunity to participate in a company with a strategy for creating sustained shareholder value in the oil and gas industry with a portfolio of significant exploration and development opportunities. As well, Signal shareholders will have the opportunity to participate in a company within an operating group that has a proven track record of success in the oil and gas industry.

Gary Guidry, President and CEO of Pearl said, "Based on publicly available information, we have determined that Pearl's offer represents fair value to Signal shareholders. We believe the combination of Pearl and Signal assets will benefit shareholders by enabling disciplined growth through the investment of acquired cash in Pearl's portfolio of existing exploration and development projects and future strategic acquisitions."

The Offer is open for acceptance until 5:00 PM (Calgary time) on June 21, 2006 unless withdrawn or extended. The Offer is conditional upon, among other things, that there has been no actions that would have a material adverse effect on the business of Signal or the value of Signal Shares, and there being validly deposited under the Offer and not withdrawn at the expiry time, at least 66 2/3% of the outstanding Signal Shares under the Offer. If Pearl acquires at least 66 2/3% Signal Shares pursuant to the Offer, it intends to acquire the remaining Signal Shares in accordance with applicable law.

In connection with the Offer, Pearl will be filing the Circular with Canadian securities regulatory authorities (via SEDAR). The Circular contains important information and Signal shareholders should read it and any other related materials filed on SEDAR relating to the Offer, copies of which will be available on the SEDAR website at www.sedar.com or on Pearl's website at www.pearleandp.com. Georgeson Shareholder Services Inc. ("Georgeson") has been engaged to act as information agent under the Offer. Questions and requests for assistance concerning the Offer can be made by contacting Georgeson toll free in North America at 1- 866-675-4358.

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities. Additional information on Pearl is available on our website at www.pearleandp.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Pearl within the United States. The securities of Pearl have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the securities of Pearl may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under 1933 Act and applicable state securities laws or an exemption from such registration is available.

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management.

This press release also contains forward-looking statements concerning the anticipated Offer for all of the shares of Signal. Although Pearl believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Pearl can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The Offer could be delayed for various reasons including market factors or if Pearl is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The acquisition will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied or if unforeseen market factors arise. Accordingly, there is a risk that the acquisition will not be completed within the anticipated time or at all. In addition, certain information in this press release concerning Signal may change materially from the time of this press release to the date of acceptance of the Offer. Accordingly, there is the risk that the assets acquired pursuant to the Offer may differ materially from that disclosed in this press release.

The forward-looking statements contained in this press release are made as of the date hereof and Pearl undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION PLEASE CONTACT:


Pearl Exploration and Production Ltd.
Gary Guidry
President and Chief Executive Officer
(403) 716-4051
(403) 261-1007 (FAX)
gary.guidry@tykoil.com

or

Pearl Exploration and Production Ltd.
Gary Hyde
Chief Operating Officer
(403) 716-4063
(403) 261-1007 (FAX)
gary.hyde@tykoil.com
www.pearleandp.com
 
 

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