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Press release from CNW Group

Veresen Announces Closing of the Hythe/Steeprock Midstream Acquisition

Thursday, February 09, 2012

Veresen Announces Closing of the Hythe/Steeprock Midstream Acquisition10:01 EST Thursday, February 09, 2012/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICESOR FOR DISSEMINATION IN THE UNITED STATES/CALGARY, Feb. 9, 2012 /CNW/ - Veresen Inc. ("Veresen") (TSX: VSN) today announced it has closed the acquisition of the Hythe/Steeprock processing and gas gathering complex from Encana Corporation ("Encana"). These assets are located in the Cutbank Ridge region of Alberta and British Columbia.The Hythe/Steeprock complex includes two natural gas processing plants with combined functional capacity of 516 MMcf/d as well as approximately 40,000 hp of compression and 370 km of gas gathering lines. The Hythe plant processes both sour and sweet natural gas, while the Steeprock plant is a sour gas processing facility.In connection with the transaction, Veresen and Encana have entered into a long-term Midstream Services Agreement under which Encana will provide a competitive, long-term, take-or-pay throughput commitment averaging 370 MMcf/d, representing 72 percent of the functional capacity of the Hythe/Steeprock complex."The completionof this transaction represents a significant milestone in the history of our organization," said Stephen White, President and Chief Executive Officer. "This transaction is our single largest acquisition and establishes a leading, independent midstream business for Veresen in the high-growth, liquids-rich Montney fairway.""These midstream assets provide contracted, stable, fee-for service cash flow underpinned by a competitive, long-term gathering and processing fee agreement with Encana, and the acquisition is immediately accretive to our distributable cash per share."The aggregate $920 million purchase price for the acquisition was funded by the net proceeds of $335 million from the subscription receipt offering completed by Veresen on December 16, 2011, with the balance drawn under Veresen's senior credit facilities.A small portion of the midstream assets being acquired from Encana are subject to National Energy Board ("NEB") regulation, and closing for the transaction related to these assets will occur when NEB approval is obtained.With the closing of the acquisition, each outstanding subscription receipt of Veresen has been automatically exchanged, without payment of additional consideration, for one common share of Veresen and a dividend equivalent payment of $0.1666 per subscription receipt in respect of the dividends declared by Veresen for the months ending December 31, 2011 and January 31, 2012, net of applicable withholding taxes. Trading in the subscription receipts on the Toronto Stock Exchange (the "TSX") has been halted and will remain halted until the close of business today, at which time the subscription receipts will be de-listed from the TSX.  The common shares issued on exchange of the subscription receipts have commenced trading on the TSX.  As the subscription receipts trade in the "book-entry" system and no individual certificates are issued, holders of subscription receipts are not required to take any action in order to receive the common shares and the dividend equivalent payment to which they are entitled.About Veresen Inc.Veresen is a publicly-traded dividend paying corporation based in Calgary, Alberta, that owns and operates energy infrastructure assets across North America.  Veresen is engaged in three principal businesses: a pipeline transportation business comprised of interests in two pipeline systems, the Alliance Pipeline and the Alberta Ethane Gathering System; a midstream business which includes ownership interests in a world-class natural gas liquids extraction facility near Chicago, the Hythe/Steeprock complex, and other natural gas and NGL processing energy infrastructure; and a power business with renewable and gas-fired facilities and development projects in Canada and the United States, and district energy systems in Ontario and Prince Edward Island. Veresen and each of its pipeline, midstream and power businesses are also actively developing a number of greenfield projects.  In the normal course of its business, Veresen and each of its businesses regularly evaluate and pursue acquisition and development opportunities.Veresen's common shares and 5.75% convertible unsecured subordinated debentures, Series C due July 31, 2017 are listed on the Toronto Stock Exchange under the symbols "VSN" and VSN.DB.C", respectively. For further information, please visit www.vereseninc.com.Forward-looking InformationCertain information contained herein relating to, but not limited to, Veresen and its businesses and the offering of the notes, constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that Veresen expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", "plan", "intend", "target", "project", "forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, the average take-or-pay volumes under the Midstream Services Agreement.  Additional information on risks, uncertainties and factors that could affect Veresen's operations or financial results is included in its filings with the securities commissions or similar authorities in each of the provinces of Canada, as may be updated from time to time. Readers are also cautioned that such additional information is not exhaustive. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as these factors are independent and management's future course of action would depend on its assessment of all information at that time.  Although Veresen believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material. Veresen makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof, and Veresen does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable laws. Any forward-looking information contained herein is expressly qualified by this cautionary statement.For further information: Dorreen Miller, Director, Investor Relations Phone: (403) 213-3633 Email: investor-relations@vereseninc.com www.vereseninc.com