CALGARY, Alberta, Dec. 19, 2018 (GLOBE NEWSWIRE) — (TSX-V: BBI) Blackbird Energy Inc. (“Blackbird” or the “Company”) is pleased to announce that its shareholders (the “Blackbird Shareholders”) have approved the previously announced strategic combination of Blackbird and Pipestone Oil Corp. (the “Transaction”) at a special meeting held today, by a majority of over 99% of votes cast. The Blackbird Shareholders also approved the continuance of Blackbird from British Columbia into Alberta (the “Continuance”), which is necessary for the Transaction to proceed as proposed. The Transaction will result in the strategic combination of two adjacent and contiguous Pipestone Montney land bases under a single well-capitalized, high growth company that will operate under the name Pipestone Energy Corp. (“Pipestone Energy”).
“We are very pleased to report the significantly positive outcome from today’s special meeting. Thanks to the continued support of our shareholders we are positioned to complete a transformative transaction that is expected to deliver significant growth and value creation in a highly challenged time for our domestic energy industry. As a pro-forma company, Pipestone Energy will have significant scale, diversified access to processing and a combined potential value that we believe is far greater than the sum of the parts,” said Garth Braun, President, CEO and Chairman of Blackbird.
The Transaction is structured as a plan of arrangement (the “Arrangement”) under section 193 of the Business Corporations Act (Alberta) and as such also requires final approval of the Court of Queen’s Bench of Alberta, which will be sought at a hearing scheduled for tomorrow.
The Arrangement will result in the Blackbird Shareholders and Canadian Non-Operated Resources L.P. (“CNOR LP”), as sole shareholder of Pipestone Oil Corp. (“Pipestone Oil”), becoming shareholders of Pipestone Energy. More particularly, the common shares of Blackbird (“Blackbird Shares”) will be converted to common shares of Pipestone Energy (“New Shares”) and effectively consolidated on a 10:1 basis (the “Consolidation”), with the Blackbird Shareholders (including with respect to Blackbird Shares issuable pursuant to the related subscription receipt financing described below) to receive approximately 45.3% of the approximately 189.6 million New Shares that will be outstanding on closing, on the basis of one New Share for every ten Blackbird Shares. CNOR LP will receive 103.75 million New Shares (equivalent to 1.0375 billion pre-Consolidation Blackbird Shares) under the Arrangement.
In connection with the Transaction, Blackbird and Pipestone Oil also entered into agreements with certain of their existing shareholders who have committed to common equity financings totaling approximately $111.0 million and Pipestone Oil arranged approximately $198.5 million of debt financing (collectively, the “Financings”). The common equity financings include commitments of approximately $26 million from GMT Exploration Company LLC and certain funds and accounts managed by the Company’s principal shareholder, GMT Capital Corp., to purchase additional Blackbird Shares on a subscription receipt basis at a pre-Consolidation price of $0.34 per subscription receipt, and $85 million from CNOR LP in common shares of Pipestone Oil on or prior to closing of the Transaction. The number of New Shares issuable to CNOR LP pursuant to the Arrangement (including with respect to its $85 million equity commitment) was determined with reference to $0.34 per Blackbird Share.
Subject to requisite approvals by the Court of Queen’s Bench of Alberta and the TSX Venture Exchange, and to satisfaction or waiver of all other conditions to closing as provided in the amended and restated arrangement agreement dated effective October 29, 2018 between Blackbird and Pipestone Oil, the Transaction and Financings are expected to close on or about January 4, 2019.
At the special meeting held on December 19, 2018, Blackbird Shareholders approved the Arrangement and Continuance as follows:
|Continuance into Alberta||Passed||> 99%||< 1%|
|Plan of Arrangement||Passed||> 99%||< 1%|
|Plan of Arrangement (excluding certain insiders)(1)||Passed||> 99%||< 1%|
|(1) Shareholders of Blackbird who voted on the Arrangement after excluding the vote cast by such persons whose votes were required to be excluded in determining minority approval of a business combination under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.|
Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Pipestone/Elmworth, near Grande Prairie, Alberta.