CALGARY, June 8, 2017 /CNW/ – Manitok Energy Inc. (“Manitok“) (TSX-V: MEI) and Craft Oil Ltd. (“Craft“) are pleased to announce that the previously announced plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement“) involving Manitok, Craft and the holders (the “Craft Shareholders“) of class “A” common shares of Craft (“Craft Shares“) was completed on June 6, 2017. The Arrangement was approved at the special meeting of Craft Shareholders held on June 5, 2017 and the final order regarding the Arrangement was granted by the Court of Queen’s Bench of Alberta on June 6, 2017.
Craft assets include approximately $3.5 million of net working capital which will be applied to Manitok’s revolving bank credit facility to provide increased liquidity. In addition to the positive working capital, Craft’s assets include approximately 420 boe/d (30% oil and liquids), a small working interest in a non-operated gas plant and 31,000 acres (approximately 26,490 net) of undeveloped land in the Peace River Arch area of Alberta. Craft also has approximately $33.0 million in total tax pools, including approximately $17.0 million in non-capital losses. When combined with Manitok’s current assets, total production in the Peace River Arch area will be approximately 675 boe/d.
Pursuant to the Arrangement, Manitok has acquired all of the issued and outstanding Craft Shares, by way of a plan of arrangement, for aggregate consideration of $6.6 million common shares of Manitok (“Manitok Shares“) being issued to the Craft Shareholders at a deemed price of $0.116 per Manitok Share (the “Manitok Share Price“), which represents an exchange ratio of 0.25175 of a Manitok Share for each Craft Share held by the former Craft Shareholders. A total $1.0 million Manitok Shares out of the $6.6 million Manitok Shares are being held in escrow by the escrow agent until September 4, 2017 in connection with any potential post-closing adjustments. Pursuant to the Arrangement, Craft was amalgamated with Manitok’s wholly owned subsidiary and the amalgamated entity will carry on under the name of Raimount Energy Corp.
The Manitok Share Price represents the volume weighted average trading price of Manitok Shares on the TSX Venture Exchange, calculated in accordance with the arrangement agreement in respect of the Arrangement (the “Arrangement Agreement“), by using five trading days preceding the date that is five calendar days preceding the meeting of Craft shareholders held on June 5, 2017.
Additional information with respect to the Arrangement is set out in the joint press release of the parties dated May 1, 2017 and the Arrangement Agreement, a copy of which is available under each of Manitok’s and Craft’s SEDAR profile at www.sedar.com.
Craft Shareholders whose Craft Shares are held by a broker, agent or other intermediary should contact their broker or agent in respect of the exchange of their Craft Shares pursuant to the Arrangement. Registered holders of Craft Shares must deposit their certificates with a duly completed letter of transmittal in order to receive the consideration to which they are entitled pursuant to the Arrangement, as set forth in the management information circular of Craft dated May 5, 2017. Certificates formerly representing Craft Shares now represent only the right to receive the consideration to which the holders thereof are entitled pursuant to the Arrangement.
Craft is engaged in the exploration for, development of and production of oil and natural gas properties in Western Canada and is a reporting issuer in all provinces and territories of Canada. Craft common shares are not listed on any recognized exchange in Canada. Craft was incorporated under the Business Corporations Act (Alberta) and has its head office in Calgary, Alberta.
Manitok is a public oil and gas exploration and development company focused on Lithic Glauconitic light oil in southeast Alberta and Cardium light oil in west central Alberta. The Corporation utilizes its expertise, combined with the latest recovery techniques, to develop the remaining oil and liquids-rich natural gas pools in its core areas of the Western Canadian Sedimentary Basin.