CALGARY, ALBERTA–(Marketwired – Dec. 31, 2013) – Lone Pine Resources Inc. (“Lone Pine” or the “Company”) today announced that the Company and its subsidiaries have filed with the Court of Queen’s Bench of Alberta (the “Court”) a supplement (the “Plan Supplement”) to its previously-filed plan of compromise and arrangement under the Companies’ Creditors Arrangement Act (“CCAA”), together with an amended and restated plan of compromise and arrangement (as amended, the “Plan”) giving effect to certain amendments referred to in the Plan Supplement. The Plan Supplement supplements the Plan by providing further information regarding the rights, privileges, restrictions and conditions that will be attached to each class of equity securities to be issued by the Company and its subsidiary, Lone Pine Resources Canada Ltd. (“LPR Canada”) pursuant to the Plan; a description of certain shareholder protections and other provisions, including drag-along, tag-along, pre-emptive, registration and piggy-back rights, to be included in the constating documents of the Company and LPR Canada upon implementation of the Plan; a draft of the Court order to be sought by the Company sanctioning and approving the Plan; and a description of certain proposed amendments to the Plan providing for, among other things, a potential, conditional cash distribution to holders of the existing common stock of Lone Pine (“Existing Common Shares”). A copy of the amended and restated Plan is included as a schedule to the Plan Supplement.
The amended and restated Plan provides for a potential, conditional cash distribution to holders of Existing Common Shares if certain conditions are satisfied. Such cash distribution, if available, relates to the potential recovery by the Company, on behalf of LPR Canada, of proceeds from the previously-announced claim under the North American Free Trade Agreement (“NAFTA”) seeking monetary relief in respect of the expropriation without compensation by the Government of Quebec of certain oil and gas mining rights held by LPR Canada. If the requisite conditions are satisfied, and the net proceeds actually received by any of the Applicants from the full and final determination or settlement of that NAFTA claim (after deducting costs, expenses and taxes) are greater than $50 million, then a portion of such net proceeds will be paid to PricewaterhouseCoopers Inc. (the “Monitor”), as Court-appointed monitor of Lone Pine and its subsidiaries, or another distribution agent if the Monitor has been discharged, for pro rata distribution to holders of Existing Common Shares determined as at the earlier of January 31, 2014 and the business day prior to the Plan implementation date. The distributable portion of net proceeds of the NAFTA claim will be (i) if total net proceeds are between $50 million and $75 million, 25% of the net proceeds amount that is in excess of $50 million, and (ii) if total net proceeds are greater than $75 million, the amount determined in clause (i) plus 50% of the net proceeds amount that is in excess of $75 million. No amount will be distributable if total net proceeds of the NAFTA claim are less than $50 million, and the Company will continue to have the sole decision making power and control over the NAFTA claim.
The requisite conditions to this potential cash distribution are specified in the Plan. Interested parties are urged to carefully review the Plan Supplement and complete text of the amended and restated Plan for particulars. There can be no assurance of recovery in respect of the NAFTA claim and, accordingly, of any future distribution to holders of Existing Common Shares as of the relevant date.
As previously announced, the meetings at which affected unsecured creditors will be asked to consider and vote on the Plan have been called for Monday, January 6, 2014. Shareholders will not vote on the Plan. A hearing before the Court for the sanction order approving the Plan under the CCAA is currently scheduled to commence on Thursday, January 9, 2014, and a hearing before the United States Bankruptcy Court for the District of Delaware for recognition of the sanction order under Chapter 15 of the U.S. Bankruptcy Code is currently scheduled for Thursday, January 16, 2014. Based on the foregoing, the Company currently anticipates implementing the Plan and completing its restructuring on or before Friday, January 31, 2014.
Further information regarding the Company’s restructuring proceedings under the CCAA and Chapter 15 of the U.S. Bankruptcy Code, including copies of the Plan Supplement, the amended and restated Plan, the information circular and other materials relating to the creditors’ meetings, and all court orders and previously-filed reports of the Monitor, are available on the Monitor’s website at www.pwc.com/car-lpr.
The securities to be offered in connection with the restructuring have not been registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and, unless so registered, may not be offered or sold in the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The preferred shares will be offered only to accredited investors as such term is defined under Section 501 of Regulation D under the Securities Act. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the securities nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Canadian securities laws. All statements, other than statements of historical facts, that address activities that Lone Pine assumes, plans, expects, believes, projects, aims, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements provided in this news release are based on management’s current belief, based on currently available information, as to the outcome and timing of future events. Lone Pine