The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Calvalley Petroleum Inc. - Update on strategic alternatives review process

Thursday, August 23, 2012

Calvalley Petroleum Inc. - Update on strategic alternatives review process12:24 EDT Thursday, August 23, 2012/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/CALGARY, Aug. 23, 2012 /CNW/ - Calvalley Petroleum Inc. (TSX: CVI.A) provides update on strategic alternatives review process.As previously announced on July 11, 2012, Calvalley Petroleum Inc. (the "Corporation" or "Calvalley")  initiated a process to identify, examine and consider a range of strategic alternatives available to the Corporation with a view to enhancing shareholder value.  The process of reviewing strategic alternatives is being overseen by an independent Special Committee of the Board of Directors (the "Board") comprised of four independent directors.  As previously announced, the Special Committee has retained TD Securities Inc. to act as its financial advisor.As part of this process, the Corporation continues to explore and evaluate strategic alternatives.  The Corporation and its financial advisor have been in contact with a number of interested third parties.   One of the third parties that Calvalley has been in contact with is DNO International ASA ("DNO") which on July 5, 2012 had indicated an intention to make an unsolicited take-over bid for Calvalley.  Calvalley met with representatives of DNO multiple times in an effort to negotiate a mutually acceptable transaction.  Taking into consideration, among other factors, the strategic alternatives that are currently available to Calvalley, the Board was not prepared to enter into an agreement with DNO on the basis of the terms and conditions that were proposed by DNO.  On August 23, 2012, DNO issued a press release indicating that it is no longer interested in pursuing an offer to acquire Calvalley because it has been unable to determine the exact nature of a claim against Calvalley by Al-Zarqa Electricity in relation to an agency agreement dated December 19, 1996 between Al-Zarqa Electricity and Calvalley.  In addition to the information disclosed in the Corporation's public documents including its annual information form, Calvalley offered to provide DNO with access to its confidential information relating to the Al-Zarqa claim if DNO entered into a confidentiality agreement that contained customary terms and conditions. However, DNO would not agree to execute a confidentiality agreement and therefore no information in connection with this matter was provided by Calvalley to DNO.The Corporation continues to be in discussions with a number of third parties and confidentiality agreements have been executed with a number of these third parties who are currently conducting due diligence on Calvalley.  The Corporation has not set a definitive schedule to complete its evaluation and no decision on any particular alternative has been reached at this time.  The Corporation does not intend to disclose developments with respect to the process unless and until the Board has approved a specific transaction or otherwise determines that disclosure is required or appropriate. No assurances can be given that any proposal will result in a transaction.About Calvalley Petroleum Inc.Calvalley Petroleum Inc. is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen and its 100% working interest in the Metema Block of the Blue Nile Basin, in The Republic of Ethiopia.Certain information contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Investors are encouraged to review the principal risks associated with the Corporations operations set out in the Corporation's Annual Information Form for the year-ended December 31, 2011 a copy of which is filed on SEDAR at www.sedar.com. Forward-looking statements are based upon management's assumptions, expectations and estimates at the time that such statements are made. The Corporation does not update forward-looking statements should circumstances change or management's assumptions, expectations or estimates change, except as required by law. THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.SOURCE: Calvalley Petroleum Inc.For further information: investorrelations@calvalleypetroleum.com or +1 (403) 297-0490 Edmund Shimoon, Chairman and CEO Gerry Elms, CFO