Fairmount Energy Inc.
TSX VENTURE : FMT

Fairmount Energy Inc.

November 26, 2009 17:19 ET

Fairmount Shareholders Approve Subsequent Acquisition Transaction

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2009) - Fairmount Energy Inc. ("Fairmount" or the "Company") (TSX VENTURE:FMT) is pleased to announce that at a special meeting of Fairmount shareholders held today, the shareholders of Fairmount approved the amalgamation of Fairmount and 4513398 Canada Inc. ("Delphi Subco"), a direct wholly-owned subsidiary of Delphi Energy Corp. ("Delphi"). It is expected that the amalgamation will be effected on or before November 30, 2009.

The amalgamated corporation, which will also be called Fairmount Energy Inc. ("Amalco"), will become a direct wholly-owned subsidiary of Delphi. As a result of the amalgamation, and in accordance with the amalgamation agreement dated October 28, 2009 between Fairmount and Delphi Subco, each of the common shares of Fairmount previously held by Fairmount shareholders (other than dissenting shareholders and Delphi) will be converted into one Amalco redeemable preferred share.

Immediately following the amalgamation, each Amalco redeemable preferred share held by former Fairmount shareholders will be redeemed in exchange for 0.3571 of a common share of Delphi. As a result of such redemption, a holder of Amalco redeemable preferred shares will be deemed for Canadian income tax purposes to have received a deemed dividend equal to the amount, if any, by which the fair market value of the common shares of Delphi received on the redemption exceeds the paid-up capital for Canadian income tax purposes of the Amalco redeemable preferred shares. For this purpose, Amalco estimates the paid-up capital of each Amalco redeemable preferred share to be approximately $1.07 per share. Full particulars of the amalgamation and subsequent redemption of the Amalco redeemable preferred shares were described in the information circular mailed to shareholders of Fairmount dated October 28, 2009 (the "Circular"). Holders should consult their own tax advisors with respect to the income tax consequences to them of the above noted transactions.

In addition, the meeting materials are available on the SEDAR website at www.sedar.com and contain instructions for such shareholders to receive the consideration payable to them in connection with the amalgamation and redemption.

The common shares of Fairmount are expected to be delisted from and no longer traded on the TSX Venture Exchange as soon as possible, in accordance with the respective rules and policies of the TSX Venture Exchange.

Fairmount will also apply to cease to be a reporting issuer under applicable Canadian securities laws, subject to the satisfaction of applicable regulatory requirements.

Forward-Looking Statements. This release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", may", "will", "should", believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Fairmount as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The forward-looking statements and information contained in this press release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in Delphi's take-over bid circular prepared and filed in accordance with applicable securities laws as well as the ability of Fairmount to de-list the Fairmount common shares from the TSX-V.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. These risks, factors, estimates and assumptions are not exhaustive. The forward-looking statements and information contained in this press release are made as of the date hereof for the purpose of providing the readers with the Company's expectations in respect of the acquisition of Fairmount by Delphi. The forward-looking statements and information may not be appropriate for other purposes. Fairmount 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 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

  • Fairmount Energy Inc.
    David Reid
    (403) 265-6171
    (403) 265-6207
    or
    Fairmount Energy Inc.
    Brian Kohlhammer
    (403) 265-6171
    (403) 265-6207
    or
    Fairmount Energy Inc.
    300, 500 - 4 Avenue S.W.
    Calgary, Alberta T2P 2V6