Waterous Energy Fund to take Cona Resources private for $90M

Waterous Energy Fund (WEF) has proposed to take Cona Resources Ltd. (TSX: CONA) private at $2.55 per Cona common share.

The transaction would value Cona Resources at approximately $591.17 million, including $#SUBSCRIBERS ONLY CONTENT – where and how did you get your news? Subscribe today to see our research on this and all other subscriber ONLY news. Be informed!#, or $89.9 million to minority shareholders.

Waterous Energy Fund, through Waterous Energy Fund (International) L.P. and Waterous Energy Fund (Canadian) L.P., acquired 67% of the issued and outstanding common shares of Cona Resources Ltd., then known as Northern Blizzard Resources Inc., from affiliates of Riverstone Holdings, LLC, and NGP Energy Capital Management, LLC at $3.60 per share for $243.9 million in May 2017.

Upon completion of the proposed transaction, Waterous Energy Fund would become the sole shareholder of Cona Resources.

photo credit: Cona Resources

News Release

Cona Resources Ltd. Announces Agreement to a Take Private Proposal from Waterous Energy Fund

CALGARY, ALBERTA (March 7, 2018) – Cona Resources Ltd. (“Cona” or the “Company”) (TSX: CONA) announces receipt of a proposal (the “Proposal”) from Waterous Energy Fund and its affiliates (“WEF”) to take the Company private at $2.55 per Cona common share (the “Transaction”). The offered price represents a 31% premium over Cona’s 20-day volume weighted average price of $1.94 as of March 6, 2018. WEF acquired approximately 67% ownership of Cona in May of 2017 and, upon completion of the Transaction, would become the sole shareholder of the Company.

A committee of the independent members of the Cona Board of Directors (the “Board”) comprising of Ian Bruce and Hal Kvisle (the “Independent Committee”) considered the Proposal and received advice from Norton Rose Fulbright Canada LLP, as independent legal counsel, and financial advice from CIBC World Markets Inc. (“CIBC”).

CIBC has verbally delivered to the Independent Committee the results of its formal valuation of the Company and its opinion stating that, as of the date thereof and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by shareholders of Cona (other than WEF) under the Proposal is fair from a financial point of view. The Independent Committee, upon receipt of CIBC’s formal valuation and opinion, and after considering the current outlook for the Company, has recommended to the Board the approval of the Proposal as set out in the letter agreement negotiated between the Independent Committee and WEF and presented to the Board.

The Board (with Adam Waterous abstaining) has unanimously approved the letter agreement relating to the Proposal, which requires negotiation of a definitive agreement and satisfaction of a number of conditions. The Transaction would have Cona shareholders (excluding WEF) receive cash consideration of $2.55 per Cona common share by way of a plan of arrangement, amalgamation or another corporate transaction under the Business Corporations Act (Alberta) requiring shareholder approval. The Transaction will also be subject to the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, which requires that: (i) a formal independent valuation of Cona be prepared under the supervision of the Independent Committee; (ii) the valuation be disclosed to the shareholders of Cona; and (iii) the transaction be approved by a “majority of the minority” shareholders of Cona represented at a shareholder meeting to consider the Transaction.

A definitive Transaction agreement will be negotiated between the Independent Committee and WEF over the coming weeks and more information regarding the Transaction will be provided by Cona at that time. Shareholders are cautioned that the Transaction is subject to a definitive agreement, shareholder approvals and other regulatory approvals. There can be no assurance that the Transaction contemplated by the Proposal, or any other transaction, will be completed.

Cona Resources Ltd.

Cona is a Canadian crude oil production and development company focused on maximizing recovery from its large-scale oil resource base. The Company’s operations, infrastructure and concentrated land position are focused in southwest Saskatchewan. Cona’s common shares trade on the Toronto Stock Exchange
under the symbol CONA.

For further information about Cona Resources Ltd., please visit our website at www.conaresources.com or contact:

Cona Resources Ltd.
Telephone: 403-930-3000

Rob Morgan
President & Chief Executive Officer

Michael Makinson
Vice President, Finance & Chief Financial Officer

Ted Liu
Ted Liu, M.Sc. (Mining Enginering), MBA (Finance), is the Editor of Private Capital Journal, TechnologyMetals.ca, GoldSilverMetals.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, most recently served as Research Director for Canadian Venture Capital and Private Equity Association (CVCA).