/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR
DISSEMINATION IN UNITED
STATES/
CALGARY, Aug. 24, 2018 /CNW/ - Pieridae Energy
Limited (PEA-TSXV) ("Pieridae") and Ikkuma Resources Corp.
(IKM-TSXV) ("Ikkuma") announce they have entered into a
definitive agreement dated August 23,
2018 (the "Arrangement Agreement") providing for the
acquisition by Pieridae of all of the issued and outstanding shares
of Ikkuma to be effected by way of a plan of arrangement (the
"Arrangement") under section 193 of the Business
Corporations Act (Alberta).
The completion of the Arrangement will provide Pieridae with
ownership of an extensive area of producing and gas-prone reserve
and resource properties situated primarily in the central Alberta
Foothills area (the "Natural Gas Properties"). The
Arrangement Agreement also provides for the transfer, prior to the
effective date of the Arrangement, by Ikkuma of certain interests
in Cardium light oil-focused Alberta Foothills properties (the
"Crude Oil Properties") to a newly formed private
corporation ("ExploreCo"), contingent on customary
regulatory approvals by the Alberta Energy Regulator (the
"AER").
On completion of the Arrangement, each shareholder of Ikkuma
will receive, for each common share of Ikkuma, 0.1926 of a common
share of Pieridae and 0.1 of a share of ExploreCo (with Ikkuma
shareholders holding 100% of ExploreCo upon completion of the
Arrangement), subject to AER approval of the transfer of the Crude
Oil Properties. If such AER approval is not received by
December 31, 2018, no shares of
ExploreCo will be distributed to shareholders of Ikkuma and those
shareholders will not receive any further consideration. The
exchange ratio values the shares of Ikkuma at $0.86 per share (excluding the value of ExploreCo
shares), representing a premium of 188% to the closing price of
$0.30 per share as of August 23, 2018 of Ikkuma common shares on the
TSX Venture Exchange.
The acquisition of Ikkuma is an important step in the execution
of Pieridae's strategic plans for the acquisition of natural gas
reserves and resources in its integrated business model. Pursuant
to the Arrangement Pieridae will acquire the Natural Gas Properties
at metrics significantly below the cost of similar reserves and
resources in other parts of North
America, which is expected to provide one of its long term
competitive advantages for delivering liquefied natural gas to
European and other markets. The cost of acquisition represents less
than 0.015% of the total cost of Pieridae's proposed Goldboro LNG
project and represents a significant step towards reaching the
Final Investment Decision in 2018. Ikkuma is expected to provide a
basis for further consolidation of long-life natural gas assets in
Alberta and British Columbia that are complementary to the
feedstock needs of Pieridae.
The acquisition of Ikkuma advances Pieridae's strategic position
in North America as a fully
integrated LNG enterprise, from upstream development of natural gas
reserves and resources to the production of liquefied natural gas
for sale to its existing customers in Europe. As part of the
acquisition Pieridae will retain the experienced and well regarded
team of Ikkuma to lead the development of its natural gas
properties both in Western and Eastern
Canada. It is expected that the Natural Gas Properties which
are primarily conventional in nature will be developed without the
use of hydraulic fracturing.
Alfred Sorensen, CEO of Pieridae
stated "The purchase of Ikkuma begins the final steps to reaching
the Final Investment Decision which along with our other partners
will ensure that Canada has the
opportunity to export its resources to international markets."
Tim de Freitas, CEO of Ikkuma,
stated "The Ikkuma team is excited to see capital deployed to the
prolific conventional natural gas pools in the Alberta and BC Foothills and to supply gas
through a fully integrated Canadian LNG Company."
Both Pieridae and Ikkuma believe that the Goldboro LNG facility,
combined with the natural gas properties of Ikkuma, contributes
to the evolution and growth of Canada's only majority Canadian owned
integrated LNG enterprise.
The Boards of Directors of each of Ikkuma and Pieridae have
unanimously approved the Arrangement Agreement, and the Ikkuma
Board of Directors, on the recommendation of a committee of
independent directors, has unanimously determined that the
Arrangement is in the best interests of Ikkuma, determined that the
Arrangement is fair, from a financial point of view, to the Ikkuma
shareholders and recommends that Ikkuma shareholders vote in favour
of the Arrangement. In addition, all of the directors and officers
of Ikkuma and certain shareholders of Ikkuma, including Alberta
Investment Management Corporation, holding, in aggregate, 19% of
the issued and outstanding common shares of Ikkuma have entered
into support agreements with Pieridae pursuant to which they have
agreed, among other things, to vote all Ikkuma common shares
beneficially owned or controlled by them in favour of the
Arrangement. KES 7 Capital Inc. is acting as financial advisor to
Ikkuma and has provided the Board of Directors of Ikkuma with a
fairness opinion regarding the Arrangement. Pieridae was
represented by Laurentian Bank Securities Inc.
The Arrangement and related transactions, as described above,
constitute an arm's length transaction (within the meaning of
applicable as defined in the policies of the TSX Venture Exchange,
and none of the directors, officers or insiders of Ikkuma have any
interest in Pieridae or are insiders of Pieridae.
The Arrangement remains subject to customary conditions,
including receipt of applicable court, Ikkuma shareholder and
regulatory approvals, and is expected to close in the fourth
quarter of 2018. A copy of the Arrangement Agreement (including the
plan of arrangement) will be filed on the SEDAR profile of both
Pieridae and Ikkuma and will be available on www.sedar.com.
Ikkuma's shareholders will be asked to vote on the transaction
at a special shareholders' meeting. An information circular
regarding the Arrangement is expected to be mailed to shareholders
in September for a special meeting of the holders of Ikkuma common
shares to take place in October
2018.
About Ikkuma
Ikkuma Resources Corp. is a diversified growth-oriented public
oil and gas company listed on the TSX Venture Exchange under the
symbol "IKM", with holdings in both conventional and unconventional
projects in Western Canada. The Corporation is focused in the
Foothills Region of Western Canada with a team that has
extensive experience in the area with the unique skills at
successfully exploiting a complex and potentially prolific play
type. Ikkuma has 109,334,987 shares issued and
outstanding which trade on the TSX Venture Exchange (IKM).
About Pieridae
Founded in 2011, Pieridae, a majority Canadian owned corporation
based in Calgary, is focused on
the development of integrated energy-related activities, from the
exploration and extraction of natural gas to the development,
construction and operation of the Goldboro LNG facility and the
production of LNG for sale to Europe and other markets. Pieridae is on
the leading edge of the re-integration of the LNG value chain in
North America. Pieridae has
50,549,763 shares issued and outstanding which trade on the TSX
Venture Exchange (PEA).
Forward-Looking Statements
Certain statements contained herein may constitute
"forward-looking statements" or "forward-looking information"
within the meaning of applicable securities laws (collectively
"forward-looking statements"). Words such as "may", "will",
"should", "could", "anticipate", "believe", "expect", "intend",
"plan", "potential", "continue", "shall", "estimate", "expect",
"propose", "might", "project", "predict", "forecast" and similar
expressions may be used to identify these forward-looking
statements. Forward-looking statements may include, but are
not limited to, the anticipated benefits of the Arrangement, the
anticipated closing date of the Arrangement, future sources of
funding, reserves and resources (including the future development
thereof), future acquisition opportunities, available and future
markets for LNG, anticipated cost of the Goldboro LNG project, the
anticipated date for the Final Investment Decision, the anticipated
benefits of shareholdings of Pieridae and ExploreCo including
maintaining an interest in the Crude Oil Properties. These
statements reflect Pieridae, Ikkuma and ExploreCo (respective)
management's current beliefs and are based on information currently
available to management.
Forward-looking statements involve significant risk and
uncertainties. A number of factors could cause actual results
to differ materially from the results discussed in the
forward-looking statements including, but not limited to, risks
associated with oil and gas exploration, development, exploitation,
production, marketing and transportation, loss of markets,
volatility of commodity prices, currency fluctuations, imprecision
of reserve and resource estimates, environmental risks, competition
from other producers, incorrect assessment of the value of the
Arrangement, failure to realize the anticipated benefits of the
Arrangement, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources and other risks and uncertainties
described elsewhere herein or in Pieridae's and Ikkuma's other
filings with Canadian securities regulatory authorities. Estimates
of reserves and resources are estimates only and there is no
guarantee that the estimated reserves or resources will be
recovered. As a consequence, actual results may differ materially
from those anticipated in the forward-looking statements.
Forward-looking statements are based on a number of factors and
assumptions which have been used to develop such forward-looking
statements but which may prove to be incorrect. Although it is
believed that the expectations reflected in such forward-looking
statements are reasonable, undue reliance should not be placed on
forward-looking statements because no assurance can be given that
such expectations will prove to be correct. In addition to other
factors and assumptions which may be identified in this document,
assumptions have been made regarding, among other things: the
impact of increasing competition; the general stability of the
economic and political environment in which Pieridae, Ikkuma and
ExploreCo operates; the timely receipt of any required court,
shareholder and regulatory approvals; the ability to obtain
qualified staff, equipment and services in a timely and cost
efficient manner; the ability to operate in a safe, efficient and
effective manner; the ability to obtain financing on acceptable
terms; the ability to replace and expand oil and natural gas
reserves through acquisition, development and exploration; the
timing and costs of pipeline, storage and facility construction and
expansion and the ability to secure adequate product
transportation; future oil and natural gas prices; currency,
exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in
which Pieridae, Ikkuma and ExploreCo operate; and the ability of to
successfully market crude oil and natural gas products. Readers are
cautioned that the foregoing list of factors is not exhaustive.
Additional information on these and other factors that could affect
operations and financial results are included in reports of
Pieridae and Ikkuma on file with Canadian securities regulatory
authorities and may be accessed through the SEDAR website
(www.sedar.com), and at Pieridae's website (www.pieridaeenergy.com)
and Ikkuma's website (www.ikkumarescorp.com).
Although the forward-looking statements contained herein are
based upon what management believes to be reasonable assumptions,
management cannot assure that actual results will be consistent
with these forward-looking statements. The forward-looking
statements contained herein are made as of the date hereof and
neither Pieridae, Ikkuma or ExploreCo undertakes any obligation to
update publicly or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE Ikkuma Resources Corp.