TIDMSDX TIDMTNZ
RNS Number : 3118U
Tenaz Energy Corp.
29 July 2022
TENAZ ENERGY CORP.
ANNOUNCES TERMINATION OF
SDX ENERGY PLC ACQUISITION
/NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY
WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES
SECURITIES LAW./
CALGARY, AB , July 29, 2022 /CNW/ - Tenaz Energy Corp. ("Tenaz",
"we", "our", "us" or the "Company") (TSX: TNZ) would like to
provide an update regarding the proposed acquisition of SDX Energy
Plc ("SDX").
Earlier today, SDX announced the results of its Meeting of
Shareholders to consider the Scheme of Arrangement (the "Scheme")
to amalgamate Tenaz and SDX. As a percentage of issued and
outstanding SDX shares, 20.2% voted in favor with 21.6% against the
Scheme at the SDX meeting. SDX had earlier announced, as reflected
in a press release by Tenaz on July 18, 2022, that a shareholder
group representing 25.7% of the issued and outstanding shares of
SDX intended to vote against the Scheme. The results of the vote,
as represented by SDX, did not meet the required threshold of 75%
of voted shares in favour of the Scheme.
As of today, approximately 43% of the issued and outstanding
shares of Tenaz had been voted on our Share Issuance Resolution
regarding the proposed combination. Of the voted Tenaz shares,
99.995% were in favor of the resolution. However, based on the
results of the SDX vote, Tenaz will no longer hold its Special
Meeting of Shareholders, which had been scheduled for this
afternoon. Consequently, the Share Issuance Resolution will not
come into effect, and there will be no resulting share
issuance.
As announced on July 18, 2022, Tenaz had reserved the right to
elect to implement the transaction by way of a Takeover Offer in
compliance with UK and Canadian regulatory requirements. We have
completed our evaluation of this alternative and have determined
that it is not in the best interests of Tenaz shareholders to
proceed with a Takeover Offer.
Although a Takeover Offer may have resulted in the tendering of
a majority of SDX shares, this outcome would not have achieved our
strategic objectives for the combination. Among other factors, our
assessment is that Tenaz's ownership of a simple majority of
shares, rather than owning SDX in its entirety, would result in the
following disadvantages as compared to our original plan:
-- It is likely that SDX would continue to exist as a separate
corporate entity with a sizable minority interest. Moreover, unless
and until 75% of the voted shares of SDX would support delisting,
it is highly likely that SDX would have to retain its AIM listing
and remain a publicly-traded company.
-- SDX would continue to have significant corporate general and
administrative costs that were part of the targeted cost reductions
by Tenaz had the Scheme become effective. In addition, the Takeover
Offer would have incurred additional transaction costs that can be
better employed by Tenaz in alternative corporate uses.
-- Most fundamentally, the resulting acquisition of SDX shares,
despite majority control, would not constitute the type of clean
and meaningful acquisition that we are seeking in our business
model. The magnitude of cost, elapsed time and management focus
required is not warranted by the expected share ownership in SDX in
the event of a successful Takeover Offer.
We appreciate the support of Tenaz shareholders throughout the
SDX transaction process, as evinced by the positive vote in respect
of our Share Issuance Resolution. As a result of the termination of
the acquisition, we will unlock approximately $40 million
(including approximately $16 million generated from our recently
established credit facility with ATB Financial) that was held in
escrow for the SDX transaction.
Tenaz will now proceed with an application for a Normal Course
Issuer Bid ("NCIB") program as we announced at the time of our Q1
2022 report. The NCIB will be subject to acceptance by the Toronto
Stock Exchange (the "TSX") and, if accepted, will be made in
accordance with the applicable rules of the TSX and Canadian
securities laws. Details of the NCIB will be discussed along with
our second quarter results on August 8, 2022. In addition, we
continue to advance value-adding acquisition opportunities and to
develop our Leduc-Woodbend semi-conventional oil asset.
About Tenaz Energy Corp.
Tenaz is an energy company focused on the acquisition and
sustainable development of international oil and gas assets capable
of returning free cash flow to shareholders. In addition, Tenaz
conducts development of a semi-conventional oil project in the Rex
member of the Upper Mannville group at Leduc-Woodbend in central
Alberta.
Forward-looking Information and Statements
This press release contains certain forward-looking information
and statements within the meaning of applicable securities laws.
The use of any of the words "expect", "anticipate", "budget",
"forecast", "continue", "estimate", "objective", "ongoing", "may",
"will", "project", "should", "believe", "plans", "intends",
"strategy" and similar expressions are intended to identify
forward-looking information or statements. In particular, but
without limiting the foregoing, this press release contains
forward-looking information and statements pertaining to: an NCIB
program, potential acquisition opportunities and development of our
Leduc-Woodbend semi-conventional oil asset.
The forward-looking information and statements contained in this
press release reflect several material factors and expectations and
assumptions of the Company including, without limitation:
satisfaction of all conditions to the transaction and receipt of
all necessary approvals; the performance of the SDX assets; the
continued performance of the Company's oil and gas properties in a
manner consistent with its past experiences; and the continued
availability of adequate debt and equity financing and cash flow
from operations to fund its planned expenditures. The Company
believes the material factors, expectations and assumptions
reflected in the forward-looking information and statements are
reasonable, but no assurance can be given that these factors,
expectations, and assumptions will prove to be correct.
The forward-looking information and statements included in this
press release are not guarantees of future performance and should
not be unduly relied upon. Such information and statements involve
known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those
anticipated in such forward-looking information or statements
including, without limitation: the ability of management to execute
its business plan or realise anticipated benefits from the
transaction; the risks of not obtaining court, shareholder,
regulatory and other approvals for the transaction; the ability of
management to successfully integrate the SDX's business and assets;
changes in commodity prices; changes in the demand for or supply of
the Company's products; unanticipated operating results or
production declines; changes in tax or environmental laws, royalty
rates or other regulatory matters; changes in development plans of
the Company or by third party operators of the Company's
properties, increased debt levels or debt service requirements;
inaccurate estimation of the Company's oil and gas reserve volumes;
limited, unfavorable or a lack of access to capital markets;
increased costs; a lack of adequate insurance coverage; the impact
of competitors; and certain other risks detailed from time to time
in the Company's public documents.
The forward-looking information and statements contained in this
press release speak only as of the date of this press release, and
the Company does not assume any obligation to publicly update or
revise them to reflect new events or circumstances, except as may
be required pursuant to applicable laws.
For further information: Tenaz Energy Corp.,
investors@tenazenergy.com; Anthony Marino, President and Chief
Executive Officer, Direct: 587 330 1983; Bradley Bennett, Chief
Financial Officer, Direct: 587 330 1714
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END
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