Canada: LNG Energy to Buy Enterprise Energy Resources

 LNG Energy announced that it has entered into a definitive agreement with Enterprise Energy Resources Ltd. whereby LNG will acquire, through a court-approved plan of arrangement under the Business Corporations Act (British Columbia), all of the outstanding common shares of Enterprise for a total consideration of approximately C$4.7 million (based on LNG’s closing price on June 21, 2013) payable in shares of LNG.

Under the Arrangement, each one Enterprise Share will be exchanged for five common shares (Exchange Ratio) in the capital of LNG (each common LNG share being an “LNG Share”). The consideration to be paid by LNG represents a premium of approximately 66.7% over the closing price of the Enterprise Shares on June 21, 2013 (C$0.06) and a premium of approximately 11.1% to Enterprise’s 60-day volume-weighted average price (C$0.09).

David Nelson, President of LNG commented, “This acquisition strengthens LNG’s financial position and bolsters interest in key assets in Papua New Guinea. In addition to Enterprise’s prospective USA assets, the resulting improved balance sheet will provide the necessary capital needed to ensure that LNG can properly evaluate future results coming out of recently announced farm-out with Heritage Oil Plc.”

In January 2013, Enterprise’s 50% owned subsidiary, EERL (BVI) Holdings Ltd., acquired a 31.5% interest in Telemu No. 18 Limited (Telemu), a Papua New Guinea subsidiary of LNG. In April 2013, Telemu and other Papua New Guinea subsidiaries of LNG, entered into a farm-in agreement with subsidiaries of Heritage under which those subsidiaries acquired an 80% interest in PPL 319 and PRL 13, subject to fulfillment of work commitments under the farm-in agreement. Upon completion of the Arrangement, LNG will increase its net interest in PPL 319 from 13.7% to 16.85% and will continue to hold a 20% net interest in PRL 13.

Summary of Transaction

In connection with the Arrangement, LNG Exploration Ltd., a wholly-owned subsidiary of LNG (Subco) will amalgamate with Enterprise and LNG will issue, at the Exchange Ratio noted above, an aggregate of approximately 238,633,975 LNG Shares to the former security holders of Enterprise. The Arrangement will be subject to, among other things, the favourable vote of 66 2/3% of the holders of the Enterprise Shares obtained at a special meeting of Enterprise shareholders to be called to approve the Arrangement. Enterprise expects the meeting will be held in mid-August 2013. The transaction is expected to close during August 2013, and is subject to the satisfaction of certain of the conditions set out in the Arrangement Agreement, including receipt of court approval, the approval of the TSX Venture Exchange and the approval of Enterprise shareholders. The Agreement includes a commitment by Enterprise not to solicit alternative transactions, and Enterprise has agreed to pay a break fee of C$250,000 to LNG under certain circumstances.

Appointment to Board of Directors

The Company is pleased to announce that Mark Gustafson has been appointed to its Board of Directors. Mr. Gustafson has over 25 years of experience in financing, acquisitions, administration and operations of oil and gas and minerals exploration projects worldwide. He was previously President, CEO and Director of Euromax Resources Ltd. where he was responsible for securing funding of $18 million to advance gold and base metal projects in Serbia, Macedonia and Bulgaria. Prior to this, Mr. Gustafson was Chairman of Tuzo Energy Corporation where he managed conventional and unconventional oil and gas projects in Alberta as well as overseeing a technical and non-technical exploration team and successfully raising $50 million private equity funding to advance projects. Mr. Gustafson was previously Chairman and CEO of Triangle Energy Corporation where he led active exploration shale plays in North America raising over US$84 million in convertible instruments. Mr. Gustafson is a Chartered Accountant with a Bachelor Business Administration from Wilfrid Laurier University in Ontario.

“We are pleased to welcome Mark to the board and look forward to bringing his expertise and many years of relevant experience into the company,” commented David Cohen, Chairman of LNG.

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