C.A. Bancorp Ltd.

C.A. Bancorp Ltd.

February 02, 2006 10:40 ET

C.A. Bancorp Ltd. Urges Shareholders to Reject Unfair and Undervalued Merger Between Tiverton Petroleums Ltd. 'TSX:TIV' and Arsenal Energy Inc. 'TSX:AEI' and to Remove Tiverton's Board...

TORONTO, ONTARIO--(CCNMatthews - Feb. 2, 2006) -

C.A. Bancorp Ltd. Urges Shareholders to Reject Unfair and Undervalued Merger Between Tiverton Petroleums Ltd. 'TSX:TIV' and Arsenal Energy Inc. 'TSX:AEI' and to Remove Tiverton's Board of Directors

C.A. Bancorp Ltd. (C.A. Bancorp) believes that the merger proposal between Tiverton Petroleums Ltd. ("Tiverton") and Arsenal Energy Inc. ("Arsenal") is unfair to Tiverton shareholders and undervalues Tiverton' assets and overvalues Arsenal.

C.A. Bancorp and Strategic Energy Fund (TSX:SEF.UN) have requisitioned a Meeting of Shareholders to remove Tiverton's existing board of directors with a new and highly experienced board. This new board will immediately replace Tiverton management with an experienced, Calgary-based management team ready to operate the business on behalf of all shareholders.

C.A. Bancorp and Strategic Energy Fund have mailed and filed on SEDAR a Dissident Proxy Circular responding to Tiverton's Information Circular dated January 23, 2006. The Dissident Proxy Circular outlines the reasons why C.A. Bancorp and Strategic Energy Fund have decided to vote against the merger and vote in favour of removing Tiverton's existing board of directors. Tiverton's shareholders are urged to support this initiative by signing, dating and returning the YELLOW form of proxy, which accompanies the Dissident Proxy Circular.

In November of 2005 C.A. Bancorp and Strategic Energy Fund requested a Meeting of Shareholders to replace the existing board of directors with a new slate of directors. In response, Tiverton is attempting to complete a transaction that would place shareholders in an inferior position. C.A. Bancorp opposes the proposed plan of arrangement (the "Plan of Arrangement") with Arsenal.

The proposed Plan of Arrangement with Arsenal is not in the best interests of Tiverton shareholders and undervalues Tiverton's assets for the following reasons:

- The exchange value is too low as Arsenal's actual production is overstated and its production per share is declining;

- Tiverton Management and Arsenal know that the exchange ratio is not fair and, as a result, no dissent rights are being offered to Tiverton shareholders;

- Tiverton did not thoroughly search for the best merger candidate - there were other interested parties;

- Arsenal's offer does not appear to provide any value for Tiverton's tax pools; The value of Arsenal's Egyptian assets is very questionable - the risk and time to achieve commercial production are considerable;

- In an effort to consummate the Plan of Arrangement, management has not been forthcoming in disclosing Tiverton's 2006 production potential;

- Material information has been withheld from Tiverton shareholders, complicating shareholders' ability to properly evaluate the proposed transaction;

- There are minimal or no synergies or cost savings between the two companies; and

- Arsenal is using the acquisition of Tiverton to address shortfalls in its own operations.

C.A. Bancorp believes that the break fee of $1,150,000, payable by Tiverton is excessive and it should be noted that the break fee is not payable if shareholders reject the merger.

C.A. Bancorp believes that the existing board of directors of Tiverton must be replaced for the following reasons:

- Production levels continue to decline significantly;

- Excessive capital expenditures have been incurred with no tangible financial or production results;

- Tiverton's reserves continue to decline;

- Management has excessive uncontrolled administrative costs - double the industry average;

- Shareholders are being continually diluted with new share issuances, while revenues and earnings are stagnating; and

- While the energy sector booms and stock prices soar, Tiverton's share price continues to underperform.

C.A. Bancorp and Strategic Energy Fund are proposing a new board of directors who have extensive experience in the oil and gas industry and a track record of successfully growing resource companies. Led by John F. Driscoll, the proposed board of directors will be committed to growing Tiverton and creating real value for all shareholders.

C.A. Bancorp chairman, John F. Driscoll, has a 25-year, highly successful record in the Alberta oil and gas industry, including being the Chairman and founder of Petrofund Energy Trust ($2.7 billion market cap), the Chairman of Inter Pipeline Fund ($2 billion market cap) and the Chairman of Endev Energy Inc. (which has produced a 25% annualized share return from 2002 to 2005). John Driscoll is offering his leadership to Tiverton and will be instrumental in creating a solid foundation for Tiverton's future success.

The new slate of directors will take specific action to maximize shareholder value. If elected, the new board will:

- Replace the President and CEO immediately with Larry Petropoulos, P.Eng., and hire Carlos Salas, M.Sc.Geo., as Vice-President, Exploration. Larry Petropoulos is a Calgary-based executive who has over 21 years of experience in the Western Canadian oil and gas industry. Carlos Salas is a Calgary-based executive who has over 20 years of experience in oil and gas exploration in Western Canada.

This management team will immediately step in and implement the action plan outlined below to grow shareholder value:

- Cut expenses and administrative costs;

- Raise standards to "best of class" in all aspects of the business, including corporate governance and internal financial and operational controls;

- Analyze and review present exploration/drilling programs;

- Create an encompassing new shareholder communication program and initiate a public relations/financial analyst program;

- Initiate an aggressive acquisition program; and

- Restore Tiverton's credibility in the financial community.

C.A. Bancorp and Strategic Energy Fund, who collectively own 16.9% of Tiverton, are working aggressively on behalf of all shareholders to prevent a hasty, reactionary and undervalued merger with Arsenal from proceeding and to refocus Tiverton to enhance shareholder value.

If you have any questions or need assistance completing your proxy, please contact our agent, Georgeson Shareholder Communications Canada Inc., toll free 1-866-630-2012.

The Exchange Tower
130 King Street West
Suite 2850, P.O. Box 104
Toronto, Ontario M5X 1A4

Contact Information

  • C.A. Bancorp Ltd.
    Mark Gardhouse, President
    (media inquiries)
    (416) 364-5615 (FAX)
    C.A. Bancorp Ltd.
    Katherine Pawling
    (Corporate Secretary)
    (416) 364-5615 (FAX)