Cordero Energy Inc.

Cordero Energy Inc.

June 11, 2008 18:44 ET

Cordero Energy Inc. Reaffirms Recommendation

CALGARY, ALBERTA--(Marketwire - June 11, 2008) - Cordero Energy Inc. ("Cordero") (TSX:COR) confirms that it received a revised written proposal from Ember Resources Inc. ("Ember") on June 6, 2008 documenting Ember's intention to acquire all of the issued and outstanding shares of Cordero. Ember's proposal was not capable of being accepted as a binding alternative to the outstanding offer by ENMAX Corporation ("ENMAX"), because it is a non-binding invitation for Cordero to enter into exclusive negotiations in connection with the acquisition of Cordero by Ember by way of a plan of arrangement based on Cordero shareholders receiving 2.61 Ember common shares, at a deemed value of $2.05 per Ember common share, for each Cordero common share (valued at $5.11 per Cordero share based on the three-day volume-weighted average trading price of Ember) or $5.35 per share in cash. According to the Ember proposal, the cash portion payable by Ember to Cordero shareholders would be limited to $55 million, $45 million of which would be raised by Ember pursuant to a private placement of subscription receipts which would require the approval of Ember's shareholders at a meeting called for that purpose and the remaining $10 million of which would require Ember taking on additional bank debt. The Ember proposal also provides that elections by Cordero shareholders for more or less cash would result in a proportionate adjustment to the number of Ember shares issued to Cordero shareholders.

The Cordero Board of Directors (the "Board") has carefully considered Ember's proposal including the advice of both Cordero's financial advisor and legal counsel and has concluded, based on the information available and uncertainties regarding the negotiation of a mutually acceptable binding arrangement agreement and the risks of not receiving Ember shareholder approval for the financing, that it is unable to determine if the Ember proposal is superior to the outstanding offer by ENMAX to acquire all of the outstanding common shares of Cordero for $4.75 cash for each share (the "ENMAX Offer"), which expires at 4:30 p.m. (Calgary time) on June 13, 2008.

ENMAX has requested the Board reaffirm its recommendations to shareholders pursuant to Section 11.1 of the Pre-Acquisition Agreement dated February 18, 2008 between Cordero and ENMAX. Accordingly, based on discussions with its financial advisor who has reaffirmed to the Board its fairness opinion respecting the ENMAX Offer, the Board does hereby reaffirm its recommendations to Cordero shareholders regarding the ENMAX Offer as set out in its Directors' Circular dated March 10, 2008 previously sent to all shareholders, including that the ENMAX Offer is in the best interests of shareholders of Cordero and that shareholders of Cordero should accept the ENMAX Offer and tender their shares thereto.

Cordero is an independent exploration and development company pursuing conventional oil and natural gas production and reserves as well as coalbed methane development in western Canada. Cordero is based in Calgary, Alberta.

Contact Information

  • Cordero Energy Inc.
    David Elgie
    President and Chief Executive Officer
    (403) 265-7006
    Cordero Energy Inc.
    Dean Setoguchi
    Vice President and Chief Financial Officer
    (403) 265-7006