CALGARY, May 8 /CNW/ - Shell Canada Limited (TSX:SHC) and BlackRock
Ventures Inc. (TSX-BVI) announced today that they have entered into an
agreement whereby Shell Canada will make an all-cash offer to acquire all of
the issued and outstanding shares of BlackRock by way of a take-over bid. The
cash price will be $24.00 per share, valuing the transaction at approximately
Cdn $2.4 billion on a fully-diluted basis. The offer represents a 27 per cent
premium over Friday's closing price of $18.88 per share.
"This acquisition is consistent with our growth plan, and BlackRock's
assets are an excellent fit with our Peace River in situ assets," said Clive
Mather, Shell Canada's President and CEO. "This acquisition will augment our
overall oil sands portfolio. It will add 12,000 to 14,000 barrels per day of
heavy oil production and provide Shell Canada with access to significant
additional resources."
"In addition, BlackRock has built a strong and talented team to execute
its various projects, so we will work to retain as many BlackRock employees
and contractors as possible," said Mather.
John Festival, President, BlackRock Ventures said, "We recognized that
the tremendous potential identified on our properties outstripped our
financial and operational ability to develop them in a timely manner. Shell is
a logical operator of our assets due to the strategic fit with their own
operations. In addition, Shell has a long history of innovations and technical
excellence in Canada and will capitalize on the true potential of our
properties. I would like to thank the directors, employees and contractors who
all helped build BlackRock into a multi-billion dollar company from our humble
beginnings seven years ago. We should all be proud of this accomplishment."
The agreement provides that BlackRock will pay Shell Canada a non-
completion fee of $65 million in certain circumstances. The agreement includes
customary non-solicitation covenants and BlackRock has reserved the right to
respond to superior proposals. Shell Canada also has the right to match
superior proposals under terms of the agreement. The Board of Directors of
BlackRock has unanimously approved the transaction and concluded that the
transaction is in the best interests of the BlackRock shareholders. In
addition, the Board of Directors has unanimously resolved to recommend that
all BlackRock shareholders tender their common shares to Shell Canada's offer.
In connection with Shell Canada's offer, certain shareholders, all of the
directors and officers of BlackRock have entered into lock-up agreements with
Shell Canada pursuant to which they have agreed to tender all of their common
shares to the offer, subject to certain exceptions, representing in the
aggregate 23 million common shares or 21 per cent of the issued and
outstanding common shares of BlackRock calculated on a fully-diluted basis.
Full details of the Shell Canada offer will be included in a take-over
bid circular and related documents which will be filed with securities
regulators and mailed to BlackRock shareholders.
The offer is subject to regulatory approvals and other customary
conditions contained in the formal offer documents, including the tendering of
at least two-thirds of BlackRock's outstanding common shares on a fully-
diluted basis.
Shell Canada will fund its all-cash take-over bid by using cash and
short-term debt facilities.
CIBC World Markets Inc. acted as financial advisor to Shell Canada on
this transaction.
BlackRock's financial advisor, RBC Capital Markets and GMP Securities
L.P., have each provided an opinion indicating that the consideration under
Shell Canada's offer is fair from a financial point of view to the
shareholders of BlackRock.
Shell Canada Limited
Shell Canada is a large Canadian integrated petroleum company with three
major businesses. Exploration & Production explores for, produces and markets
natural gas and natural gas liquids. Oil Sands is responsible for an
integrated bitumen mining and upgrading operation in the Athabasca area of
Alberta and the company's Peace River in situ bitumen business. Oil Products
manufactures, distributes and markets refined petroleum products across
Canada.
BlackRock Ventures Inc.
BlackRock Ventures is an oil sands producer with operations located
exclusively in Canada. The Company's strategy is to build shareholder value by
pursuing full-cycle exploration and development opportunities in heavy oil in
western Canada. Current operations are located in three heavy-oil regions: the
Peace River oil sands, the Cold Lake oil sands and the Lloydminster area. Over
the next five years, BlackRock's growth is anticipated to come from continued
development of the Seal area in northern Alberta and construction of the Orion
SAGD project at Hilda Lake, Alberta.
Legal Notices
This release does not constitute an offer to purchase or a solicitation
of an offer to sell securities.
BlackRock shareholders are advised to review the circular and any other
relevant documents to be filed with the Canadian securities regulatory
authorities because they will contain important information. Those materials
will be mailed to BlackRock shareholders at no expense to them. In addition,
investors will be able to obtain the documents free of charge through the
System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com
or by contacting Shell Canada Secretary at corporatesecretary(at)shell.com or
facsimile 403-691-3914.
Cautionary Note for Shell Canada Limited
This document contains "forward-looking statements" based upon
management's assessment of the Company's future plans and operations. These
forward-looking statements include references to the Company's plans for
growth and expected production levels. Readers are cautioned not to place
undue reliance on forward-looking statements. Although the Company believes
that the expectations represented by such forward-looking statements are
reasonable based on the information available to it on the date of this
document, there can be no assurance that such expectations will prove to be
correct. Forward-looking statements involve numerous known and unknown risks
and uncertainties that could cause actual results to differ materially from
those anticipated by the Company. These risks and uncertainties include, but
are not limited to, the risks of the oil and gas industry (including operating
conditions and costs), market competition, demand for oil, gas and related
products, disruptions in supply, project schedules and execution, labour
availability, material and equipment shortages, the uncertainties involving
geology of oil and gas deposits, the uncertainty of reserves estimates,
fluctuations in oil and gas prices and foreign currency exchange rates,
general economic conditions, commercial negotiations, changes in law or
government policy, and other factors, many of which are beyond the control of
the Company. The forward-looking statements contained in this document are
made as of the date of this document and the Company does not undertake any
obligation to update publicly or revise any of the forward-looking statements
contained in this document, whether as a result of new information, future
events or otherwise, except as required by law. The forward-looking statements
contained in this document are expressly qualified by this cautionary note.
Fact Sheet Provided by BlackRock Ventures Inc.
(TSX:BVI Web site: blackrock-ven.com)
A Calgary-based company formed in 1996, primarily focused on heavy oil
production with assets concentrated in the Peace River and Cold Lake
regions of Alberta.
2005 Cash Flow from Operations Cdn $51.4 million
2005 Cash Flow per share Cdn $0.55
2005 Earnings per share Cdn $0.19
Shares outstanding 95 million shares (basic); approx.
109 million shares (fully
diluted)(x)
Landholdings 268,000 net acres
Reserves (proved) 142 million barrels
(probable) 67 million barrels
Estimated oil initially in place greater than 1 billion barrels
2006 Capital Investment Plan Cdn $280 million
Q1 2006 production 12,653 bbls/d
Production target for year-end 2006 18,000 - 20,000 bbls/d
Production target for year end 2009 40,000 bbls/d
Employees 22
Contractors 55
Primary Assets
Seal Property (Peace River region of Alberta)
- Cold production with EOR (thermal) potential
- Q1 2006 production 10,367 bbls/d
- Development potential 20,000 bbls/d
Chipmunk Property (Peace River region of Alberta)
- 43,000 net acres (55% partner with Talisman Energy)
- Nine wells drilled (100% success rate)
- Mississippian reef play
Orion In situ Project (Cold Lake region of Alberta)
- Two-well pilot project with eight years of production
- SAGD commercial project under construction
- Phase No. 1 10,000 bbls/d by Q4, 2007. Growth potential to
20,000-30,000 bbls/d
Lloydminster Property
- Q1 2006 production greater than 2,000 bbls/day
Additional landholdings in other oil sands regions of Alberta.
(x)Includes shares issued through exercise of stock option and conversion
of debentures.
