Enterra Energy Trust

Enterra Energy Trust

April 04, 2007 07:58 ET

Enterra Energy Trust Announces Agreement to Make a Takeover Bid

CALGARY, ALBERTA--(CCNMatthews - April 4, 2007) -


Enterra Energy Trust ("Enterra" or the "Trust") (TSX:ENT.UN)(NYSE:ENT) is pleased to announce that it has entered into a definitive agreement with a private company ("PrivateCo.") active in oil and gas exploration and development in western Saskatchewan, pursuant to which Enterra has agreed to make an offer to acquire all of the common shares of PrivateCo. PrivateCo.'s current production is approximately 2,400 boe/day consisting of 1,400 bbls/day of oil and 6,000 mcf/day of natural gas.

Pursuant to the proposed transaction, the holders of common shares of PrivateCo. will be offered Cdn$2.09 in cash for each common share held, for aggregate cash consideration to be paid by Enterra of approximately Cdn$63 million. Enterra expects to mail an offer to purchase to PrivateCo.'s shareholders on or about April 10, 2007. It is a condition to Enterra making the offer that pre-tender agreements in support of the offer be entered into with all of the directors, officers and certain other shareholders of PrivateCo. representing not less than 50% of the outstanding common shares of PrivateCo. (on a fully-diluted basis).


- Current production of approximately 2,400 boe/day;

- Proved reserves totaling 2.94 mmboe and proved plus probable reserves totaling 4.66 mmboe (as per Sproule Reserve evaluation dated September 30, 2006 and mechanically updated to December 31, 2006);

- New core area with 100% working interest in principal assets with year round access;

- All producing fields are operated including related gathering systems and facilities;

- Approximately 62,000 net undeveloped acres;

- Significant drilling and development potential, with over 30 currently defined oil and gas prospects that meet the Trust's risk profile;

- Low operating costs of approximately $5.65 per boe;

- Attractive transaction metrics of approximately $26,250 per flowing boe, and $13.50 per boe for proven plus probable reserves; and

- Accretive to production, cash flow and reserves per unit.

Certain key members of PrivateCo.'s management and technical teams have agreed to continue to work with Enterra personnel directing the exploitation of PrivateCo.'s asset base to ensure an orderly transition of the assets to Enterra.

Enterra's president Keith Conrad commented, "This acquisition brings a tremendous range of opportunities to Enterra. It offers an excellent suite of concentrated 100% working interest producing assets. Equally important, PrivateCo. has established a firm inventory of development and exploration drill targets with year round access. This combination of solid production and organic growth potential truly builds momentum for Enterra as it steps out from a foundation carefully laid over the last 18 months."

References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ration of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based upon an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

About Enterra Energy Trust

Enterra Energy Trust is a conventional oil and gas trust based in Calgary, Alberta. The Trust acquires, operates and exploits petroleum and natural gas assets principally in Alberta and British Columbia, Canada, and in Oklahoma, U.S.A.

Forward-Looking Statements

This news release contains statements about anticipated completion of acquisitions, the benefits of such acquisitions, the ability of management to facilitate growth, anticipated oil and gas production and other oil and gas operating activities, including the costs and timing of those activities, cash flow per unit or other expectations, beliefs, plans, goals, objectives, assumptions and statements about future events or performance that constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995.

Statements concerning oil and gas reserves contained in this report may be deemed to be forward-looking statements as they involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions.

Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Enterra and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, completion by Enterra of its acquisition of the remaining Oklahoma assets, the anticipated benefits of the acquisitions, the ability to integrate the operations of the acquired entities, the ability of management to achieve the anticipated benefits, the ability to refinance the bridge facilities through the issuance of debt or equity on terms favorable to Enterra or at all, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the exploration and development of oil and gas properties.

Enterra cautions that the foregoing list of risks and uncertainties is not exhaustive. Additional information on these and other factors, which could affect Enterra's operations or financial results, are included in Enterra's reports on file with Canadian securities regulatory authorities and the United States Securities and Exchange Commission.

Enterra assumes no obligation except as required by securities laws, to update forward-looking statements should circumstances or management's estimates or opinions change.

Enterra calculates its proven and probable reserves in accordance with Canadian National Instrument 51-101. Canadian disclosure standards concerning oil and gas reserves and options differ from those of the SEC. Enterra is subject to the reporting requirements of the US Securities Exchange Act of 1934, as amended and consequently, files reports with and furnishes other information to the SEC. The SEC normally permits oil and gas companies to disclose in their filings with the SEC only proved reserves that have been demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. Accordingly, any probable reserves and the calculations with respect thereto included in this release do not meet the SEC's standards for inclusion in documents filed with the SEC. (In addition, throughout this news release, Enterra makes reference to production volumes. Where not otherwise indicated, such production volumes are stated on a gross basis, which means they are stated prior to the deduction of royalties and similar payments. In the United States, net production volumes are reported after the deduction of these amounts.)

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities of Enterra in any jurisdiction.

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