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Press release from CNW Group

Twin Butte Energy completes acquisition of private heavy oil producer Waseca Energy and increases monthly dividend

Thursday, November 01, 2012

Twin Butte Energy completes acquisition of private heavy oil producer Waseca Energy and increases monthly dividend11:48 EDT Thursday, November 01, 2012CALGARY, Nov. 1, 2012 /CNW/ - Twin Butte Energy Ltd. (TSX: TBE) ("Twin Butte" or the "Company") is pleased to announce that today it completed its acquisition of Waseca Energy Inc. ("Waseca") pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Acquisition").  Pursuant to the Acquisition, Twin Butte paid approximately $136 million (including the assumption of approximately $10.0 million of positive working capital and after accounting for estimated transaction costs). Total cash of $57.6 million was allocated to former Waseca shareholders along with the issuance of approximately 30.2 million common shares to acquire all of the outstanding securities of Waseca.  After giving effect to the Acquisition, approximately 247.6 million common shares of Twin Butte are outstanding.  In connection with the completion of the Acquisition, Twin Butte's credit facility was increased from $240 million to $280 million and was converted from a demand to a committed facility that will be initially available on a revolving basis until April 30, 2013 (extendible annually at the request of Twin Butte for a further 364 days, subject to approval of the lenders) and will be repayable one year after the expiry of the revolving period.Further to its news release dated September 3, 2012, Twin Butte is also pleased to announce that it is increasing its monthly dividend by 6.7 percent from $0.015 to $0.016 per issued and outstanding common share. The increased dividend which is an eligible dividend for Canadian income tax purposes will be payable on December 14, 2012 to shareholders of record on November 30, 2012.  The Company believes that the Acquisition in combination with the recently completed Avalon Exploration Ltd. acquisition have created accretive growth for Twin Butte allowing the Company  to increase its return to shareholders.Waseca, which was amalgamated with Twin Butte following the completion of the Acquisition, was a private company with all of its production being heavy oil from properties located within 100 kilometres of the City of Lloydminster, Alberta.  The Acquisition was consistent with Twin Butte's historic strategy of acquiring quality assets, with large resource potential within focus areas where Twin Butte has expertise. The Acquisition like previous ones materially increases the size and scope of heavy oil lands and opportunities for Twin Butte.   Twin Butte's undeveloped land, seismic, and development and exploratory drilling inventories have increased materially since the beginning of 2012 which Twin Butte believes will lead to strong capital efficiencies in its capital plan for years.  As a larger, stronger company, Twin Butte intends to use its financial flexibility to capitalize on its expanded low risk drilling inventory.Twin Butte also announced that it will be releasing its third quarter financial and operational results on November 14, 2012.In addition, Twin Butte announced that Colin Ogilvy, Vice President, Land of the Company, retired effective October 31, 2012.  "We would like to thank Colin for his commitment and service to the company during his tenure here.  We wish him well in the future." said Jim Saunders, Twin Butte's President and Chief Executive Officer.About Twin Butte Twin Butte is a value oriented intermediate producer with a significant low risk, high rate of return drilling inventory focused on large original oil in place conventional heavy oil exploitation. With a stable low decline production base, Twin Butte is well positioned to live within cash flow while providing shareholders a sustainable dividend and moderate per share production growth potential over both the short and long term. Twin Butte is committed to continually enhance its asset quality while focusing on the sustainability of its dividend.  The common shares of Twin Butte are listed on the TSX under the symbol "TBE".Forward-Looking Statement AdvisoryIn the interest of providing Twin Butte's shareholders and potential investors with information regarding Twin Butte, including management's assessment of the future plans and operations of Twin Butte, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this news release contains, without limitation, forward-looking statements pertaining to the following: expectations of management regarding the proposed Acquisition, including synergies resulting from the Acquisition and the effect of the Acquisition on Twin Butte, and future dividends. With respect to forward-looking statements contained in this news release, Twin Butte has made assumptions regarding, among other things, the ability of Twin Butte to execute and realize on the anticipated benefits of the Acquisition and previous acquisitions. Although Twin Butte believes that the expectations reflected in the forward looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Twin Butte's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: incorrect assessment of the value of the Acquisition to Twin Butte; failure to realize the anticipated benefits and synergies of the Acquisition and/or previous acquisitions; volatility in market prices for oil and natural gas; the general economic conditions in Canada, the United States of America and globally; and the other factors described under "Risk Factors" in Twin Butte's most recently filed Annual Information Form available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.The forward-looking statements contained in this news release speak only as of the date of this news release. Except as expressly required by applicable securities laws, Twin Butte does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.SOURCE: Twin Butte Energy Ltd.For further information: Twin Butte Energy Ltd.  Jim Saunders President and Chief Executive Officer Tel: (403) 215-2040 Fax: (403) 215-2055 R. Alan Steele Vice President, Finance, Chief Financial Officer and Corporate Secretary Tel: (403) 215-2692 Fax: (403) 215-2055 Website:  www.twinbutteenergy.com