REG - Tenaz Energy Corp. SDX Energy PLC Tenaz Energy - TNZ - Termination of SDX Energy Plc Acquisition

Tenaz EnergyAnnouncement

29/07/2022 14:45

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RNS Number : 3118U  Tenaz Energy Corp.  29 July 2022

TENAZ ENERGY CORP.

ANNOUNCES TERMINATION OF

SDX ENERGY PLC ACQUISITION

 

/NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS
RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW./

CALGARY, AB, July 29, 2022 /CNW/ - Tenaz Energy Corp. ("Tenaz", "we", "our",
"us" or the "Company") (TSX: TNZ) would like to provide an update regarding
the proposed acquisition of SDX Energy Plc ("SDX").

Earlier today, SDX announced the results of its Meeting of Shareholders to
consider the Scheme of Arrangement (the "Scheme") to amalgamate Tenaz and SDX.
As a percentage of issued and outstanding SDX shares, 20.2% voted in favor
with 21.6% against the Scheme at the SDX meeting. SDX had earlier announced,
as reflected in a press release by Tenaz on July 18, 2022, that a shareholder
group representing 25.7% of the issued and outstanding shares of SDX intended
to vote against the Scheme. The results of the vote, as represented by SDX,
did not meet the required threshold of 75% of voted shares in favour of the
Scheme.

As of today, approximately 43% of the issued and outstanding shares of Tenaz
had been voted on our Share Issuance Resolution regarding the proposed
combination. Of the voted Tenaz shares, 99.995% were in favor of the
resolution. However, based on the results of the SDX vote, Tenaz will no
longer hold its Special Meeting of Shareholders, which had been scheduled for
this afternoon. Consequently, the Share Issuance Resolution will not come
into effect, and there will be no resulting share issuance.

As announced on July 18, 2022, Tenaz had reserved the right to elect to
implement the transaction by way of a Takeover Offer in compliance with UK and
Canadian regulatory requirements. We have completed our evaluation of this
alternative and have determined that it is not in the best interests of Tenaz
shareholders to proceed with a Takeover Offer.

Although a Takeover Offer may have resulted in the tendering of a majority of
SDX shares, this outcome would not have achieved our strategic objectives for
the combination. Among other factors, our assessment is that Tenaz's ownership
of a simple majority of shares, rather than owning SDX in its entirety, would
result in the following disadvantages as compared to our original plan:

·      It is likely that SDX would continue to exist as a separate
corporate entity with a sizable minority interest. Moreover, unless and until
75% of the voted shares of SDX would support delisting, it is highly likely
that SDX would have to retain its AIM listing and remain a publicly-traded
company.

·      SDX would continue to have significant corporate general and
administrative costs that were part of the targeted cost reductions by Tenaz
had the Scheme become effective. In addition, the Takeover Offer would have
incurred additional transaction costs that can be better employed by Tenaz in
alternative corporate uses.

·      Most fundamentally, the resulting acquisition of SDX shares,
despite majority control, would not constitute the type of clean and
meaningful acquisition that we are seeking in our business model. The
magnitude of cost, elapsed time and management focus required is not warranted
by the expected share ownership in SDX in the event of a successful Takeover
Offer.

We appreciate the support of Tenaz shareholders throughout the SDX transaction
process, as evinced by the positive vote in respect of our Share Issuance
Resolution. As a result of the termination of the acquisition, we will unlock
approximately $40 million (including approximately $16 million generated from
our recently established credit facility with ATB Financial) that was held in
escrow for the SDX transaction.

Tenaz will now proceed with an application for a Normal Course Issuer Bid
("NCIB") program as we announced at the time of our Q1 2022 report. The NCIB
will be subject to acceptance by the Toronto Stock Exchange (the "TSX") and,
if accepted, will be made in accordance with the applicable rules of the TSX
and Canadian securities laws. Details of the NCIB will be discussed along with
our second quarter results on August 8, 2022. In addition, we continue to
advance value-adding acquisition opportunities and to develop our
Leduc-Woodbend semi-conventional oil asset.

About Tenaz Energy Corp.

Tenaz is an energy company focused on the acquisition and sustainable
development of international oil and gas assets capable of returning free cash
flow to shareholders. In addition, Tenaz conducts development of a
semi-conventional oil project in the Rex member of the Upper Mannville group
at Leduc-Woodbend in central Alberta.

Forward-looking Information and Statements

This press release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "budget", "forecast", "continue", "estimate",
"objective", "ongoing", "may", "will", "project", "should", "believe",
"plans", "intends", "strategy" and similar expressions are intended to
identify forward-looking information or statements. In particular, but without
limiting the foregoing, this press release contains forward-looking
information and statements pertaining to: an NCIB program, potential
acquisition opportunities and development of our Leduc-Woodbend
semi-conventional oil asset.

The forward-looking information and statements contained in this press release
reflect several material factors and expectations and assumptions of the
Company including, without limitation: satisfaction of all conditions to the
transaction and receipt of all necessary approvals; the performance of the SDX
assets; the continued performance of the Company's oil and gas properties in a
manner consistent with its past experiences; and the continued availability of
adequate debt and equity financing and cash flow from operations to fund its
planned expenditures. The Company believes the material factors, expectations
and assumptions reflected in the forward-looking information and statements
are reasonable, but no assurance can be given that these factors,
expectations, and assumptions will prove to be correct.

The forward-looking information and statements included in this press release
are not guarantees of future performance and should not be unduly relied upon.
Such information and statements involve known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking information or statements
including, without limitation: the ability of management to execute its
business plan or realise anticipated benefits from the transaction; the risks
of not obtaining court, shareholder, regulatory and other approvals for the
transaction; the ability of management to successfully integrate the SDX's
business and assets; changes in commodity prices; changes in the demand for or
supply of the Company's products; unanticipated operating results or
production declines; changes in tax or environmental laws, royalty rates or
other regulatory matters; changes in development plans of the Company or by
third party operators of the Company's properties, increased debt levels or
debt service requirements; inaccurate estimation of the Company's oil and gas
reserve volumes; limited, unfavorable or a lack of access to capital markets;
increased costs; a lack of adequate insurance coverage; the impact of
competitors; and certain other risks detailed from time to time in the
Company's public documents.

The forward-looking information and statements contained in this press release
speak only as of the date of this press release, and the Company does not
assume any obligation to publicly update or revise them to reflect new events
or circumstances, except as may be required pursuant to applicable laws.

For further information: Tenaz Energy Corp., investors@tenazenergy.com;
Anthony Marino, President and Chief Executive Officer, Direct: 587 330 1983;
Bradley Bennett, Chief Financial Officer, Direct: 587 330 1714

 

 

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