DENVER, Sept. 10, 2012
/PRNewswire/ -- Magellan Petroleum Corporation (NASDAQ: MPET;
ASX: MGN) ("Magellan") today announced that its Board of Directors
has carefully considered the unsolicited proposal by Stratex Oil
& Gas Holdings, Inc. (OTCQB: STTX) ("Stratex") that Stratex
announced on August 28, 2012.
After consulting with its financial and legal advisors, the
Magellan Board has determined not to pursue the Stratex proposal.
The proposal, as set forth in a letter from Stratex dated
August 27, 2012, was a proposal to
acquire each outstanding share of Magellan common stock for
$0.65 in cash and one share of
Stratex common stock, the closing price for which as reported by
the OTCQB on August 27, 2012, was
$1.65 per share.
In making its determination, the Board of Directors noted that
Stratex did not respond to a written request for preliminary
information regarding, among other things, Stratex's financial
statements, organizational structure, oil and gas properties, and
the terms and conditions of the "committed financing" for the cash
component of the proposal. The Magellan Board and its
advisors reviewed the most recent public disclosures by Stratex,
from which it appears:
- Stratex is a development stage company that lacks significant
financial or other assets;
- the audit opinion dated June 27,
2012, for the most recent audited financial statements of
Stratex Oil & Gas, Inc. contains an explanatory paragraph
regarding factors which raise substantial doubt about Stratex's
ability to continue as a going concern, and the financial
statements in Stratex's Form 8-K dated July
6, 2012, contain the following statement: "the company
(Stratex) believes its current available cash along with
anticipated revenues may be insufficient to meet its cash needs for
the near future.";
- the proposed transaction presents significant corporate
governance concerns for Magellan shareholders given, among other
things, the effective 100,000,000 share super-voting rights in
Stratex held by the two principal officers of Stratex;
- the majority of the asserted value of the Stratex proposal is
based on the value of Stratex common stock, a security with
extremely limited trading volume that trades only sporadically;
and
- the manner in which Stratex has reported its oil and gas
reserve quantities, future net cash flows, and the number of its
gross and net wells raises concerns about accurately understanding
the value of these metrics.
CAUTIONARY INFORMATION ABOUT FORWARD-LOOKING
STATEMENTS
Statements in this release which are not historical in nature
are intended to be, and are hereby identified as, forward-looking
statements for purposes of the Private Securities Litigation Reform
Act of 1995. These statements about Magellan may relate to
its businesses, prospects, and other matters that involve a number
of risks and uncertainties that may cause actual results to differ
materially from the results expressed or implied in the
forward-looking statements. Among these risks and
uncertainties are: (i) whether Stratex will revise its proposal and
whether any transaction with Stratex will be agreed to by Magellan
as being in the best interests of Magellan's shareholders; (ii)
whether Stratex will pursue a tender offer directly to Magellan's
shareholders; and (iii) those set forth in the Risk Factors
sections of Magellan's most recent 10-K and subsequent 10-Qs filed
with the U.S. Securities and Exchange Commission (the "SEC").
ABOUT MAGELLAN
Magellan is an independent energy company engaged in the
exploration, development, production, and sale of crude oil and
natural gas from currently held assets in the United States, Australia, and the United Kingdom.
Traded on NASDAQ since 1972, the Company conducts its operations
through two wholly owned subsidiaries, Nautilus Poplar LLC, which
owns interests at Poplar, a highly attractive oil field in the
Williston Basin, and Magellan Petroleum Australia Limited, a
successful independent oil and gas company in Australia and the UK in existence since the
1960s. The Company's mission is to enhance shareholder value
by maximizing the full potential of existing assets. Magellan
routinely posts important information about the Company on its
website at www.magellanpetroleum.com.
For further information, please contact:
Matthew Ciardiello, Manager,
Investor Relations at 720.484.2404
IMPORTANT INFORMATION FOR INVESTORS AND STOCKHOLDERS
This communication does not constitute an offer to buy or
solicitation of an offer to sell any securities. No tender
offer for the shares of Magellan has commenced at this time.
If a tender offer is commenced, Magellan will file a
solicitation/recommendation statement on Schedule 14D-9 with the
SEC. STOCKHOLDERS OF MAGELLAN ARE URGED TO READ THESE AND
OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY (IF
AND WHEN THEY BECOME AVAILABLE) BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors and stockholders may obtain a free
copy of these documents (when they are filed and become available)
free of charge at the SEC's website at www.sec.gov. Magellan
also will provide a copy of these materials without charge on its
website at www.magellanpetroleum.com.
Under the rules of the Australian Securities Exchange, the
transaction proposed by Stratex is considered to be an off-market
transaction.
SOURCE Magellan Petroleum Corporation
