Sprott Resource Corp. Announces Sale of its Subsidiary Waseca Energy Inc. to Twin Butte Energy Ltd.

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[{"type":"text","content":"\n\n\n\n\n\nTORONTO, Sept. 4, 2012 /CNW/ - Sprott Resource Corp. (\"SRC\" or the \"Company\") (TSX: SCP) announced today that its subsidiary, Waseca Energy Inc. (\"Waseca\"), has entered into an arrangement agreement providing for the\n acquisition by Twin Butte Energy Ltd. (\"Twin Butte\") of all of the issued and outstanding common shares of Waseca for\n $134.5 million ($127 million on an enterprise value basis) or $1.35 per Waseca\n common share (the \"Transaction\").\n\n\nThe consideration for the Transaction will be comprised of a minimum of\n $32.2 million and a maximum of $58.9 million of cash (assuming the\n Waseca options and performance shares are arranged in accordance with\n the arrangement agreement) and a minimum of 28.9 million and a maximum\n of 39.0 million of Twin Butte common shares depending on the elections\n between cash and Twin Butte shares made by Waseca shareholders.\n\n\nSRC owns 73.6 million Waseca common shares (or 81.1% of the undiluted\n Waseca common shares outstanding), which it purchased for $44.2 million\n ($0.60 per Waseca common share).  SRC will receive total consideration\n of $99.4 million in cash and Twin Butte common shares for its Waseca\n common share holdings.  On closing of the Transaction, SRC will own\n approximately 9% of Twin Butte's common shares outstanding.\n\n\nWaseca's SAGD Assets\n\n\nWaseca's SAGD assets (the \"SAGD Assets\") are not included as part of the Transaction.  Such assets will either\n be sold prior to October 1, 2012 or conveyed by Waseca to a new\n wholly-owned subsidiary of Waseca, the shares of which would be\n distributed to Waseca common shareholders on closing of the\n Transaction.  If the SAGD Assets are sold prior to October 1, 2012, Waseca common\n shareholders will be entitled to a special cash distribution of\n approximately $10 million on closing of the Transaction ($0.09 per\n Waseca common share).  The special cash distribution, if made, would\n result in additional consideration of $6.6 million to SRC.\n\n\n\"We would like to congratulate the Waseca team for delivering an\n exceptional return on investment to Waseca shareholders over the past\n four years, especially relative to the returns experienced by most\n Canadian oil and gas companies during this period,\" said Kevin\n Bambrough, President & CEO of SRC.\n\n\n\...

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