- Custodians reporting holdings indicated under 1% of Bonterra’s shares have been tendered
- Close to 40% of Bonterra shareholders continue to advise the Company they will NOT tender their shares
- Second amendment to extend the offer demonstrates the continued failure of the Hostile Bid
- Shareholders need to take no action to REJECT the offer
CALGARY, AB – Bonterra Energy Corp. (www.bonterraenergy.com) (TSX: BNE) (“Bonterra” or the “Company”) and its Board of Directors reiterates the previous recommendation that shareholders reject Obsidian Energy Ltd.’s (“Obsidian”) highly-conditional, 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.
Second Extension to Hostile Bid Made Despite Having Little to No Shareholder Support
With the filing of the second Notice of Extension to the Hostile Bid, Obsidian has made no modifications other than to extend the tender date from January 25, 2021 to March 29, 2021. This extension is approximately three additional months from the original expiry of January 4, 2021, prolonging the process to a total of seven months, which demonstrates a lack of regard for shareholder value given the ongoing waste of considerable time and resources. This is meaningfully longer than customary for successful transactions and clearly illustrates Obsidian’s continued failure to convince Bonterra shareholders that the Hostile Bid is in their best interests.
Custodians who have reported their holdings have indicated substantially less than 1% of Bonterra’s outstanding shares have been tendered. Furthermore, Bonterra shareholders representing close to 40% of the shares outstanding have advised the Company they will not tender their shares.
Hostile Bid Lacks Lending Syndicate Support and Remains Subject to Financing
Obsidian has not secured the consents nor approvals required to complete the Hostile Bid, including from each of Obsidian’s and Bonterra’s lenders, exposing Bonterra shareholders to an uncertain financing plan and a potential capital structure that could result in future dilution to Bonterra shareholders.
Obsidian’s latest credit facility extension is until February 26, 2021, with no extension beyond that date having been announced by its lending syndicate. This reflects negatively on Obsidian given the limited runway granted by their lending syndicate, particularly since this extension does not cover Obsidian’s extension of the Hostile Bid to March 29, 2021.
Bonterra CEO is Aligned with Shareholders
Bonterra’s CEO, George Fink, remains well aligned with the Company’s shareholders and continues to hold a significant investment in Bonterra. Mr. Fink’s share purchases over many years, as reported on SEDI, demonstrate his strong belief in the future value of the Company as a stand-alone entity. Mr. Fink remains the Company’s largest shareholder, having added 238,600 common shares to his shareholdings in the past twelve months, representing an increase of approximately 5% of his total holdings of Bonterra shares.
Bonterra is Well Positioned for Stand-Alone Success
- Bonterra remains focused on generating strong, sustainable, free funds flow which can be directed to debt reduction and capital spending.
- Bonterra’s strategic plan as a stand-alone entity is expected to grow production by approximately 30 percent, returning the average annual production to pre–COVID levels of 13,000 BOE per day1 in 2021.
- Bonterra’s bank syndicate supports the Company’s current plan and has extended the maturity date of its senior credit facility to the end of 2021 at the current borrowing base.
- The strong commitment of $45 million from the Business Development Bank of Canada (“BDC”) strengthens Bonterra’s liquidity profile and provides options and funding for development drilling and abandonment programs designed to enhance value for shareholders.
- Bonterra is dedicated to responsible corporate practices and the environment, and through a combination of the Site Rehabilitation Program (“SRP”) and other provincial programs, it is expected that the Company could successfully reduce its inactive well count by approximately 60 percent over the next two years under current approvals.
- Through its longstanding history, Bonterra has the assets and the people in place to continue pursuing profitable development of its high-quality, light oil asset base to continue generating long-term net asset value growth as the economy recovers from the COVID-19 pandemic.
The Bonterra Board UNANIMOUSLY recommends that Shareholders REJECT the Hostile Bid by taking no action – DO NOT TENDER your Shares.
For more information, the Company’s recent shareholder letters, Directors’ Circular and other relevant materials are available for review on the Company’s website at www.bonterraenergy.com or on SEDAR at https://www.sedar.com/.
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”.
1 Forecast 2021 production volumes are comprised of 7,250 BBLS per day light crude oil, 1,300 BBLS per day of natural gas liquids and 26,800 MCF per day of conventional natural gas.