UTS Board rejects latest inadequate bid by Total
posted on
Apr 16, 2009 02:33PM
Fort Hills oil sands project - production & upgrading of bitumen
UTS ENERGY CORPORATION |
|
Attention Business Editors
<< /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/ >> TSX Trading Symbol: UTS CALGARY, April 16 /CNW/ - UTS Energy (UTS) today announced that its Board of Directors unanimously recommends that shareholders reject the revised unsolicited offer by Total E&P Canada Ltd. (Total) to acquire UTS for $1.75 per common share. The Board believes that this revised offer remains inadequate. Total has made no attempt to contact UTS since first launching its unsolicited bid in January. Each of the directors and officers of UTS has indicated their intention not to accept the revised Total offer. "We have received strong support from our shareholders since Total launched its hostile bid in January. Several of our largest shareholders have publicly stated their ongoing opposition to, and dissatisfaction with, Total's bid. The revised bid in no way reflects improving industry fundamentals, remains lower than the sum of UTS' cash and remaining earn-in and attributes no value to our excellent and expanding suite of oil sands assets," said Dennis Sharp, Chairman of the Board of Directors. "UTS has some of the highest quality contingent oil sands resources in Alberta. We believe that gives us a value today that exceeds Total's bid and that our value will increase." "We see the proposed merger of Suncor and Petro-Canada as enhancing the intrinsic value of the Fort Hills Project, which in turn directly benefits UTS shareholders. Integration of the Fort Hills Project with the existing Suncor expertise, assets and infrastructure would result in significant capital and operating cost reductions. This process will of course take time and we are at the very early stages of considering how this will all play out, but one thing is clear right now: this is good news for the UTS shareholder," said William Roach, President and Chief Executive Officer of UTS. "UTS and its financial advisors are involved in discussions with other parties with respect to alternative transactions, including restructuring," said John Watson, Chairman of the independent Special Committee of the Board of Directors. "We intend to continue those discussions in the best interests of our shareholders, despite this revised bid from Total." While discussions are ongoing and continue to advance, there can be no assurance they will ultimately lead to a transaction. In reaching its conclusions, the Board carefully reviewed and considered the revised offer, with the benefit of advice from its financial and legal advisors and the report and recommendation of an independent Special Committee of UTS directors. The Board's assessment of the revised offer and the reasons for the recommendation that shareholders reject it will be set out in a director's circular to be issued shortly. UTS shareholders are advised to review the "Notice of Change to Directors' Circular," when filed on SEDAR (
www.sedar.com
) and posted at
for more details regarding the reasons for the Board's
recommendation. UTS Energy Corporation is based in Calgary, Alberta. The Company's common shares (UTS) are traded on the Toronto Stock Exchange. UTS Energy has retained Georgeson to act as information agent. Any shareholder questions or requests for assistance may be directed to them at 1-888-605-7631. FORWARD-LOOKING INFORMATION: Except for statements of historical fact relating to UTS, this news release contains "forwarding-looking information" within the meaning of applicable securities law. The forward-looking statements in this press release relate to, but are not limited to, statements with respect to the revised Total bid and potential alternative transactions, future plans for UTS' assets, the future value of UTS, potential capital and operating cost savings and financing requirements related to the Fort Hills Project, the potential benefits to UTS and the Fort Hills Project of the proposed merger of Suncor and Petro-Canada, the potential for UTS to be fully funded for a period of time, the potential for the Lease 421 Area to become a fourth oil sands project, the Company's anticipated mine plan, drilling results, capital expenditures, drilling plans, estimated resources, prospective oil sands, rate of recovery and production estimates of bitumen resources are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. These risks and uncertainties include uncertainties around the specific scope and timing of the Fort Hills Project or the Lease 421 Area; lack of regulatory approvals for certain aspects of such projects, the uncertainty regarding marketing plans for production from certain areas, the estimation or improved estimation of project costs; commodity price fluctuations, in the case of the Fort Hills Project the acceptance within the Fort Hills partnership of the updates to the Fort Hills Project scope, timing, cost estimates and final Board of Directors approval of each of the partners, whether the proposed Suncor and Petro-Canada merger is completed and if so whether UTS will realize the anticipated benefits of such a merger, the inability of UTS to negotiate an alternative transaction that provides superior value for shareholders and those other risks and contingencies described under "Risk Factors" in UTS' annual information form available on the UTS website
or under UTS'
profile at
. There are numerous uncertainties inherent in
estimating bitumen, including many factors beyond the Company's control, and no assurance can be given that the indicated level of bitumen or the recovery thereof will be realized. In general, estimates of bitumen are based upon a number of factors and assumptions made as of the date on which the resource estimates were determined, such as geological and engineering estimates, certain TV:BIP ratios and pit boundaries, which have inherent uncertainties. There is no certainty that it will be commercially viable to produce any contingent resources from any of the Fort Hills Project, the Equinox Project or the Frontier Project. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", " potential", "should", "would", "estimate", "likely", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. UTS undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward looking information -30- /For further information: William J. F. Roach, President and Chief Executive Officer at (403) 538-7030/
UTS Board rejects latest inadequate bid by Total