Enterra Energy (NASDAQ:EENC)
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Enterra Energy Trust, U. S. Energy Corp. and Rocky Mountain Gas,
Inc. Announce Acquisition Merger
Merger Valued at Approximately $33.5 Million
CALGARY, Alberta and RIVERTON, Wyo., Feb. 25 /PRNewswire-FirstCall/ -- Enterra
Energy Trust ("Enterra") (Nasdaq: EENC; TSX: ENT.UN), U.S. Energy Corp. ("USE")
(NASDAQ:USEG) and Rocky Mountain Gas, Inc. ("RMG") today announced that they,
together with USE affiliate Crested Corp. ("Crested") (OTC:CBAG) (BULLETIN
BOARD: CBAG) have entered into a letter of intent for the acquisition of RMG
by Enterra pursuant to a merger under Wyoming law. USE and Crested jointly own
approximately 92.7% of RMG, and, as signatories to the letter of intent, have
agreed to vote their RMG shares in support of the merger. Completion of the
merger, which is expected to close by May 1, 2005, is subject to approval of
RMG's shareholders and regulatory and stock exchange approvals, as well as the
satisfaction of a number of certain conditions, precedent, including Enterra's
completion of due diligence with respect to RMG with satisfactory results and
the parties entering into a mutually agreeable definitive pre-acquisition
agreement. All dollar amounts in this release are in U.S. dollars.
RMG holds natural gas assets in Montana and Wyoming. A portion of the Wyoming
assets currently generates net/net production of approximately 2.2 million
BTU's per day. RMG has approximately 130,000 net acres of production rights to
coalbed methane. RMG also owns approximately 17% of Pinnacle Gas Resources,
Inc, a private coalbed methane exploration and production company. Under the
terms of the letter of intent, for a transition period of up to 12 months
following the merger, USE will continue to provide personnel and advice to RMG
under a consulting contract.
The value of the merger is approximately $33.5 million. If the merger is
approved, Enterra will pay the shareholders of RMG $30 million, by the issuance
of approximately $20 million in exchangeable shares of Enterra Energy Corp. and
approximately $10 million cash, plus will acquire RMG with outstanding
long-term debt of approximately $3.5 million. The newly issued shares issued
to RMG holders will be exchangeable on a one-for-one basis for Enterra trust
units 12 months after the completion of the merger. The cash portion of the
consideration may be paid by nominees of Enterra.
"We believe that RMG's assets will be a good fit and beneficial to Enterra's
assets and business plan," stated Reg J. Greenslade, President and CEO of
Enterra.
Mark J. Larsen, President of Rocky Mountain Gas, Inc. said, "The merger of
Rocky Mountain Gas into Enterra makes good business sense for the RMG
shareholders. U.S. Energy Corp., our largest shareholder, will remain in the
gas business through its equity ownership in a larger, well-managed,
well-financed oil and gas company that has substantial producing assets. Upon
completion of the merger, RMG management looks forward to devoting their
efforts towards the marketing and development of USE's significant interests in
other natural resources, all of which are trading at "multi-year highs."
"Safe Harbor" statement under the Private Securities Litigation Reform Act of
1995: This news release contains forward-looking statements that are subject
to risk and uncertainties, including, but not limited to, the impact of
competitive services, demand for services like those provided by the company
and market acceptance risks, fluctuations in operating results, cyclical market
pressures on the oil and natural gas industry and other risks detailed from
time to time in the company's filings with Securities and Exchange Commission.
Neither Enterra Energy Trust, U.S. Energy Corp. nor Rocky Mountain Gas, Inc.
undertakes any obligation to update or revise any forward-looking statements
whether as a result of new developments or otherwise.
DATASOURCE: U.S. Energy Corp.
CONTACT: Reg Greenslade, President & CEO of Enterra Energy Trust,
+1-403-213-2507; or EENC's Investor Relations Counsel, Linda Latman,
+1-212-836-9609, or Rob Greenberg, +1-212-836-9611, both of The Equity Group
Inc.; or Keith G. Larsen, President of U.S. Energy Corp., and CEO of Rocky
Mountain Gas, Inc., +1-307-856-9271; or USE's Investor Relations Counsel, Rick
Lutz of LC Group, +1-404-261-1196
Web site: http://www.theequitygroup.com/
Web site: http://www.enterraenergy.com/