Canadian Phoenix Resources Corp.

Canadian Phoenix Resources Corp.

April 15, 2010 10:02 ET

Corporate Update- Serrano Energy Ltd Enters Into Arrangement Agreement

CALGARY, ALBERTA--(Marketwire - April 15, 2010) - CANADIAN PHOENIX RESOURCES CORP. (TSX VENTURE:CXP) ("Canadian Phoenix" or the "Corporation") is pleased to provide the following update:

The Corporation's controlled subsidiary Serrano Energy Ltd ("Serrano") is pleased to announce that it has entered into an arrangement agreement (the "Arrangement") with an intermediate oil and gas producer (the "Purchaser") pursuant to which the Purchaser will, subject to certain conditions, acquire all of the issued and outstanding shares of Serrano by way of plan of arrangement under the Business Corporations Act (Alberta). Under the Arrangement, Serrano shareholders will receive $2.256 per share in cash providing for a total proposed transaction value of approximately $41 million net of the assumption of positive working capital and including transaction costs.

The Arrangement will be subject to certain customary conditions, including acceptance of the Arrangement by holders of at least 66 2/3 percent of the outstanding shares of Serrano calculated on a fully-diluted basis, the receipt of all required regulatory and court approvals, and the receipt of any required third-party approvals relating to Canadian Phoenix. It is a condition to completion of the Arrangement that the shareholders of Canadian Phoenix and the TSX Venture Exchange approve the sale of the Serrano shares held by Canadian Phoenix. Serrano has agreed to pay the Purchaser a non-completion fee in the amount of up to $2.0 million in certain circumstances if the proposed transaction is not completed, including a non-completion fee of up to $200,000 in the event that the shareholders of Canadian Phoenix do not approve the sale of the Serrano shares held by Canadian Phoenix. The Arrangement Agreement includes customary non-solicitation covenants and right-to-match provisions. Full details of the Arrangement will be included in the information circular and related documents, which are expected to be mailed to all shareholders of Serrano by April 30, 2010.

The Board of Directors of Serrano have unanimously approved the proposed transaction and has concluded that the transaction is in the best interests of Serrano and the Serrano shareholders and will recommend that its shareholders vote in favour of the Arrangement. Directors and officers of Serrano and certain other shareholders (holding approximately 61.5 percent of the issued and outstanding shares) have agreed to vote their shares in favour of the Arrangement, subject to certain exceptions, and have entered into support agreements with the Purchaser.

Cormark Securities Inc. acted as exclusive financial advisor to Serrano and has provided the Board of Directors of Serrano with its verbal opinion that, as of the date hereof and subject to review of final documentation, the consideration to be received under the Arrangement is fair from a financial point of view to the shareholders of Serrano.

About Canadian Phoenix

Canadian Phoenix Resources Corp. is a publicly-traded junior oil and gas exploration, development and production company with operations in Western Canada. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CXP".

FORWARD-LOOKING STATEMENTS: This news release may contain forward-looking information. All statements and information other than statements of historical fact are forward-looking information. In some cases, forward-looking information can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the control of Canadian Phoenix, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Other risks and uncertainties include those associated with the Serrano's ability to complete the Arrangement on the terms proposed or at all, and the receipt by the Serrano of all required regulatory and third party approvals including the approval of the shareholders of Canadian Phoenix. Readers are cautioned that actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Canadian Phoenix will derive therefrom. The forward-looking statements and information contained in this news release are made as of the date hereof and Canadian Phoenix undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canadian Phoenix Resources Corp.
    Michael Atkinson
    President & CEO
    (604) 689-1428
    Canadian Phoenix Resources Corp.
    Tim Moran
    Chief Financial Officer
    (403) 920-0040