Expedition Energy Inc.

Expedition Energy Inc.

August 31, 2007 14:36 ET

Expedition Energy Inc.: News Release

CALGARY, ALBERTA--(Marketwire - Aug. 31, 2007) - Expedition Energy Inc. ("Expedition") (TSX VENTURE:XPD) has entered into an Arrangement Agreement with Salvo Energy Corporation ("Salvo"), a private Calgary-based oil and gas exploration and production company, pursuant to which Salvo will pay $0.34 in cash for each outstanding common share of Expedition. The aggregate value of this transaction is approximately $12,750,000, including the assumption of approximately $2,000,000 in debt of Expedition. The offer represents a premium of 78.9% based on the closing price of the common shares on the TSX Venture Exchange on August 30, 2007, the last trading day of the common shares prior to the date of this announcement.

The terms of the Arrangement Agreement have been reviewed and approved by a special committee of the board of directors of Expedition and has been unanimously approved by the boards of directors of both Expedition and Salvo. Each director and officer of Expedition has indicated that they intend to vote all common shares of Expedition held by them (approximately 7% of the outstanding shares) in favour of the transaction, subject to certain exceptions. The board of directors of Expedition will recommend that its shareholders vote in favour of the transaction.

Sayer Energy Advisors is acting as financial advisor to the board of directors of Expedition, and has provided an opinion that the transaction is fair, from a financial point of view, to the Expedition shareholders.

The transaction is to be carried out by way of a statutory plan of arrangement. The transaction will be subject to the approval of 66 2/3% of the votes cast by Expedition shareholders at a special meeting of shareholders expected to be held in late October, 2007. Closing is subject to certain other conditions, including court and other regulatory approvals and is expected to close shortly after the special meeting. An information circular is expected to be mailed to shareholders in September, 2007.

The Arrangement Agreement contains customary provisions prohibiting Expedition from soliciting any other acquisition proposal or entering into any agreements relating to an alternative acquisition transaction, subject to certain exceptions which include allowing the board of directors of Expedition to accept and recommend a superior proposal if it is required to do so in accordance with its fiduciary duties. The Arrangement Agreement contains a mutual non-completion fee in the amount of $750,000 which is payable by Expedition or Salvo to the other, as the case may be, in certain circumstances if the transaction is not completed. Under the Arrangement Agreement, Salvo has the right to match any such superior proposal.

Expedition is an emerging Alberta based public corporation actively engaged in the exploration, development and production of crude oil and natural gas in Western Canada. Expedition continues to follow its strategy of internally developing prospects, securing land in core areas, and growing predominantly through drilling. Selective acquisitions that support core area growth are also considered. Expedition strives to maintain a high working interest and operate properties. Expedition's common shares are listed for trading on the TSX Venture Exchange under the symbol XPD.

This information contains forward-looking statements under applicable securities laws. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, and the regulatory and legal environment. Many of these factors can be difficult to predict. As a result, the forward-looking statements are subject to known or unknown risks and uncertainties that would cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Expedition Energy Inc.
    Scott St. John
    President and CEO
    (403) 264-1699
    (403) 264-1499 (FAX)
    Expedition Energy Inc.
    725, 435 - 4th Avenue S.W.
    Calgary, Alberta T2P 3A8