CALGARY, AB – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) today confirms that the Company has carefully reviewed the Notice of Extension, Variation and Change filed by Obsidian Energy Ltd. (“Obsidian”) for the unsolicited bid to acquire all of the issued and outstanding common shares of Bonterra in exchange for shares of Obsidian (the “Hostile Bid”) and continues to strongly recommend that Bonterra shareholders take no action and REJECT the Hostile Bid by NOT TENDERING their shares.
Since its launch, Obsidian’s Hostile Bid has proven to be unsuccessful, with Bonterra shareholders overwhelmingly advising they will not tender their shares. Rather than acknowledge the views of Bonterra shareholders and withdraw the Hostile Bid, Obsidian has instead chosen to extend the tender date of the Hostile Bid from January 4th to January 25th, 2021. In addition, Obsidian has reduced the minimum number of outstanding Bonterra shares that must be tendered to complete the Hostile Bid from the customary 66 2/3 percent down to over 50 percent. This change indicates that Obsidian does not expect the higher tender condition can be achieved due to the lack of Bonterra shareholder support of the Hostile Bid.
Consistent with the rationale outlined within its Directors’ Circular dated October 5, 2020, Bonterra’s Board has continued to recommend Shareholders REJECT the Hostile Bid.
- Obsidian has not addressed its ability to obtain the third-party consents and approvals required to complete the Hostile Bid, including the consent of each of Obsidian’s and Bonterra’s lenders, exposing Bonterra shareholders to an uncertain financing plan
- Obsidian’s lending syndicate only granted an extension of its credit facility to January 29, 2021, a negative signal given the short period of the extension
- Obsidian’s significantly higher asset retirement obligations will leave Bonterra shareholders a disproportionately higher allocation of future abandonment liabilities
- Obsidian has limited liquidity to grow operations, and has been posting negative free cash flow for every quarter since December 31, 2017
- The rationale of the Hostile Bid is highly dependent on the achievement of significant synergies and cost savings which remain uncertain
As stated in Bonterra’s Shareholder Letter dated November 23, 2020, the majority of research analysts and proxy advisors believe that the Hostile Bid is highly unlikely to proceed. These documents and additional background are available for review on the Company’s website at www.bonterraenergy.com.
The Bonterra Board UNANIMOUSLY recommends that Shareholders REJECT the Hostile Bid by taking no action – DO NOT TENDER your Shares.
Shareholders with questions are encouraged to call Bonterra’s information agent, Laurel Hill Advisory Group at 1-877-452-7184 (+1-416-304-0211 outside North America) or email firstname.lastname@example.org
Bonterra Energy Corp. is a conventional oil and gas corporation with operations in Alberta, Saskatchewan and British Columbia, focused on its strategy of long-term, sustainable growth and value creation for shareholders. The Company’s shares are listed on The Toronto Stock Exchange under the symbol “BNE”.