Stratic Energy reaches Agreement for Sale


 

TIDMSE. TIDMENQ 
 
RNS Number : 4133Q 
Stratic Energy Corporation 
03 August 2010 
 
 
 
 
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES 
 OR FOR DISSEMINATION IN THE 
UNITED STATES 
Stratic Energy Corporation reaches Agreement for Sale of the Company 
 to 
EnQuest PLC in Share Exchange Transaction 
CALGARY and LONDON - August 3, 2010 - Stratic Energy Corporation (TSX-V: SE and 
AIM: SE) ("Stratic" or the "Company") has reached agreement for the proposed 
sale of the Company to EnQuest PLC (LSE: ENQ and NASDAQ OMX Stockholm: ENQ) 
("EnQuest") in an all-share transaction pursuant to a statutory plan of 
arrangement (the "Arrangement"). The proposed transaction has been approved by 
the boards of directors of both Stratic and EnQuest. 
EnQuest and Stratic have entered into a definitive agreement (the "Arrangement 
Agreement") providing for the terms and conditions of the proposed Arrangement, 
under which each Stratic common share will be exchanged for 0.089626 EnQuest 
ordinary shares.  Based on the average closing price of the EnQuest shares on 
the five market days to August 2, 2010 of approximately GBP1.17 (approximately 
C$1.90 based on yesterday's closing exchange rate quoted by Reuters), the 
exchange ratio values each Stratic share at C$0.17, representing a 70% premium 
to the closing price of the Stratic shares on the TSX Venture Exchange of 
C$0.10. The total transaction value, including the assumption or repayment by 
EnQuest of Stratic's bank debt, 8.75% convertible debentures and 9% convertible 
notes, is approximately C$135 million. 
Completion of the Arrangement is subject to a number of conditions, including 
approval of the Stratic shareholders by special resolution at a meeting to be 
held later this year, acceptance of repayment by the holders of the Company's 
outstanding 9% convertible notes, court approval pursuant to the arrangement 
provisions of the Business Corporations Act (Yukon) and receipt of all necessary 
regulatory consents and approvals. 
EnQuest is an independent oil and gas production and development company focused 
on the UK Continental Shelf ("UKCS"). On 6 April 2010 EnQuest was formed from 
the demerged UK North Sea assets of Petrofac Limited and Lundin Petroleum AB. On 
listing EnQuest went into the FTSE250 index and OMX Nordix Index. Based on the 
closing price of the EnQuest shares on August 2, 2010 of GBP1.17 EnQuest's 
market capitalisation at close of business yesterday was approximately GBP900 
million (C$1,470 million). Its assets include interests in the Thistle, Deveron, 
Heather, Broom, Don Southwest, and West Don fields. It has interests in 16 
production licences covering 26 blocks or part blocks in the UKCS, of which 15 
licences are operated by EnQuest. In its interim management statement dated 17 
May 2010 EnQuest re-affirmed that it is on track to produce approximately 18,000 
barrels of oil per day in 2010. In its prospectus dated 18 March 2010 EnQuest 
reported total net proved and probable oil and natural gas liquids reserves of 
80.5 million barrels as at January 1, 2010 based on an independent reserves 
report prepared in accordance with applicable UK listing rules. 
The Board of Directors of Stratic has concluded that the proposed transaction 
with EnQuest is in the best interests of shareholders, debenture and note 
holders and other creditors. This conclusion has been reached after a review of 
alternative options open to the Company and in the light of the Company's high 
debt levels, disappointing production performance, the increased difficulty in 
selling Crawford resulting from the uncertainty created by the operator's failed 
London IPO announced on July 15, 2010, and the likelihood that further bank 
support may be required to enable the Company to meet its obligations over the 
next twelve months. The Board believes that the deal provides shareholders with 
the opportunity to benefit from an investment in a substantial company with the 
financial means fully to develop Stratic's assets as part of a large portfolio 
of North Sea assets, which has the potential to yield further gains in value 
over time. 
Lazard & Co., Limited ("Lazard") has acted as exclusive financial advisor to the 
Company in respect of this transaction and has provided a fairness opinion to 
the Stratic directors, a copy of which will be included in the Stratic 
information circular to be sent to the Stratic shareholders. 
It is expected that the Company's current listings on the TSX Venture Exchange 
and the Alternative Investment Market of the London Stock Exchange ("AIM") will 
terminate upon completion of the Arrangement. The ordinary shares of EnQuest are 
traded on the London Stock Exchange and NASDAQ OMX Stockholm, and it is a 
condition to completion of the Arrangement that the EnQuest shares issuable 
thereunder be listed on each such exchange. 
An information circular providing details with respect to the Arrangement is 
anticipated to be mailed to Stratic shareholders in September 2010 for a special 
meeting of shareholders to consider the Arrangement that is currently expected 
to be held in October 2010.  If the Arrangement is approved by the requisite 
majority of 66?% of votes cast by Stratic shareholders, and assuming 
satisfaction of all other conditions, closing would be expected within a short 
period following the meeting. 
The board of directors of Stratic has unanimously determined that the 
Arrangement is in the best interests of the Company and its shareholders, and 
has resolved to recommend approval of the Arrangement by the holders of the 
Stratic shares. The directors and officers of Stratic have agreed to vote in 
favour of the Arrangement in respect of their own shareholdings. 
The outstanding 8.75% convertible debentures and 9% convertible notes of the 
Company are not dealt with under the Arrangement.  If the Arrangement is 
completed the debentures and notes will continue to be unsecured debt securities 
of Stratic governed by the terms and conditions of their existing governing 
instruments.  The Company understands, however, that EnQuest intends to cause 
Stratic to repay the outstanding debentures and notes in full following 
completion of the Arrangement, which is conditional on, among other things, 
agreement by the holders of the 9% convertible notes to accept repayment. 
The Arrangement Agreement restricts the Company from soliciting or initiating 
any discussions regarding any other acquisition proposal, contains provisions 
enabling EnQuest to match competing, unsolicited proposals, and provides for 
Stratic to pay a termination fee of C$2.5 million to EnQuest in certain 
circumstances. 
Further details about "EnQuest" can be found at its website www.enquest.com. For 
the avoidance of confusion, please note that EnQuest PLC, listed on the London 
Stock Exchange and on the NASDAQ OMX Stockholm, is completely unrelated to the 
company EnQuest Energy Services Corp. which is listed on the Toronto Stock 
Exchange, also under the symbol ENQ. 
Financial Advisors 
Lazard is acting as financial advisor to Stratic and no one else in connection 
with the Arrangement and will not be responsible to anyone other than Stratic 
for providing the protections afforded to clients of Lazard or for providing 
advice in relation to the Arrangement. 
Reader Advisories 
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that 
term is defined in the policies of the TSX Venture Exchange) accepts 
responsibility for the adequacy or accuracy of this release. 
This news release does not constitute or form part of an offer to sell or the 
solicitation of an offer to buy, nor shall there be any sale of, securities to 
any person to whom or in any jurisdiction in which such offer, solicitation or 
sale would be unlawful. The securities to be offered have not been and will not 
be registered under the United States Securities Act of 1933, as amended (the 
"Securities Act"), or any state securities laws, and may not be offered or sold 
in the United States or to or for the account or benefit of a U.S. person unless 
registered under the Securities Act and applicable state securities laws or 
pursuant to an available exemption from, or in a transaction not subject to, the 
registration requirements thereof. 
Certain statements made herein constitute forward-looking statements, including 
statements concerning the anticipated timing for sending an information circular 
in respect of the Arrangement to the Stratic shareholders, holding of a special 
meeting of Stratic shareholders, and closing the Arrangement. Although the 
Company believes these statements to be reasonable, the assumptions upon which 
they are based may prove to be incorrect. 
Completion of the Arrangement is subject to a number of conditions, including 
shareholder, noteholder, court and regulatory approvals and consents. The 
Arrangement could be delayed if the Company is not able to obtain all necessary 
approvals and consents on expected timelines, or not completed at all if any 
condition to closing is not satisfied.  There can be no assurance that the 
Arrangement will be completed as proposed, or at all. 
 
For further information contact: 
 
Company: 
Sir Graham Hearne, Chairman 
         +44 20 7766 7900 
Kevin Watts, Chief Executive Officer 
        +44 20 7766 7900 
John van der Welle, Chief Financial Officer 
      +44 20 7766 7900 
Mark Bilsland, Chief Operating Officer 
        +44 20 7766 7900 
 
Public and investor relations: 
Patrick d'Ancona, M:Communications (London) 
+44 20 7920 2347 
Roger Fullerton (Canada) 
              +1   952 929 7243 
 
Financial advisor and NOMAD: 
David Kotler, Lazard 
                +44 20 7187 2000 
Nick Fowler, Lazard 
                +44 20 7187 2000 
 
Joint brokers: 
David Arch, Oriel Securities Limited 
          +44 20 7710 7616 
Hugh Sanderson, FirstEnergy Capital LLP 
    +44 20 7448 0202 
 
Website: www.straticenergy.com 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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