Marine Link
Thursday, October 20, 2016

Maha Energy and Palliser Oil & Gas to Amalgamate

August 2, 2014


Maha Energy Inc. and Palliser Oil & Gas Corporation  are pleased to announce that they have entered into an amalgamation agreement pursuant to which Maha and Palliser will amalgamate to form a new corporation to be called "Maha Energy Inc.". Palliser has also closed a minor asset disposition with Maha and entered into two farmout arrangements with Maha.


Pursuant to the Amalgamation, shareholders of Palliser will receive 0.1393 of a common share of New Maha for each common share of Palliser and shareholders of Maha will receive one New Maha Share for each common share of Maha.

Based on the price of US$1.25 per Maha Share, being the price at which Maha recently raised US$10 million of gross proceeds in a private placement of Maha Shares, and the July 30, 2014 Bank of Canada noon US$/C$ exchange rate of 1.0909, the value of the New Maha Shares to be received for Palliser Shares pursuant to the Amalgamation represents a 52% premium to the closing price of the Palliser Shares on the TSX Venture Exchange on July 30, 2014 of $0.125.

The combined asset base following completion of the Amalgamation will consist of heavy oil properties in the greater Lloydminster region of Alberta and Saskatchewan and a 99% interest in the LAK Ranch Field, a heavy oil property located in Wyoming. At closing of the Amalgamation, total production is expected to be approximately 1,650 boe/d (99% oil).

Completion of the Amalgamation is conditional on customary closing conditions and is subject to conditions precedent with respect to net indebtedness and transaction costs of Palliser at closing. In addition, it is a condition to the completion of the Amalgamation that Maha must complete bond and/or equity financings for combined aggregate gross proceeds of not less than US$70 million,  prior to October 31, 2014 (the "Outside Date"). The bond financing is expected to be completed in the Nordic market. The proceeds from the Financings will be used to refinance Palliser's current credit facilities and assist in the funding of New Maha's go-forward capital program. Upon completion of the Amalgamation, New Maha anticipates it will enhance shareholder liquidity by applying for a secondary listing in Sweden on the NASDAQ OMX First North Stock Exchange for New Maha Shares.

All outstanding options of Palliser and Maha at the effective time of the Amalgamation will be exchanged for options of New Maha in accordance with the Palliser and Maha option plans.


The Amalgamation is subject to receipt of customary regulatory approvals, including the approval of the TSXV and the approval of 66 2/3% of each of the Palli

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