Nations Energy Company Ltd.

Tartan Energy Inc.

Tartan Energy Inc.

October 07, 2005 18:41 ET

Nations Energy's Subsidiary Acquires Additional Shares Under Offer for Tartan Energy; Final Extension of the Offer Until October 19, 2005

CALGARY, ALBERTA--(CCNMatthews - Oct. 7, 2005) - Nations Energy Company Ltd. announces that Nations and its subsidiary, 1153298 Alberta Ltd. (the "Offeror"), now own approximately 98.5 million common shares of Tartan Energy Inc. (TSX VENTURE:TEW), representing approximately 86% of the 114,727,870 Tartan shares outstanding at the commencement of the Offeror's offer to acquire all of the Tartan shares not already owned by Nations and its affiliates, and approximately 80% of the total number of Tartan shares that would be outstanding upon the exercise of all outstanding stock options. To date, an aggregate of approximately 78.4 million Tartan shares have been acquired under the offer.

The Offeror has extended the offer to 4:30 p.m. (Calgary time) on Wednesday, October 19, 2005 for the purpose of maximizing the number of Tartan shares acquired pursuant to the offer and providing those shareholders who have not yet tendered to the offer the opportunity to do so.

The Offeror currently intends that this extension will be the final extension of the offer.

If a sufficient number of Tartan shares are tendered under the offer to enable the Offeror to exercise the rights of compulsory acquisition under the Business Corporations Act (Alberta), the Offeror currently intends to exercise such rights. If the Offeror does not acquire a sufficient number of Tartan shares pursuant to the offer to enable it to exercise such rights, although there is no assurance that any second stage transaction (such as an arrangement or amalgamation transaction) to acquire the remaining Tartan shares will be completed, the Offeror currently intends to pursue a second stage transaction to effectively acquire all remaining Tartan shares.

If the Offeror proposes a second stage transaction, the price proposed under such transaction will be $0.63 per Tartan share. The Offeror currently has no intention to increase the price to be paid for any Tartan shares under any second stage transaction or otherwise. Since any such transaction will require the approval of the directors of Tartan who are independent of Nations, there is no assurance that the second stage transaction will be submitted to the Tartan shareholders for approval. If any such transaction is submitted to the Tartan shareholders for approval, the transaction may be conditional on the number of shares for which dissent rights are exercised not exceeding a specified maximum, as is common for arrangement or amalgamation transactions. As a result, if dissent rights in relation to more than the specified maximum number of shares were to be exercised, the Offeror may not proceed with the transaction due to the uncertainty as to the potential costs associated with the dissent rights. If a second stage transaction is not completed, Tartan shareholders who do not tender their shares to the offer will hold Tartan shares whose liquidity has been reduced significantly, which may adversely affect the value of the Tartan shares held by them.

The TSX Venture Exchange has issued a letter to Tartan requesting independent confirmation of the ability of Tartan to satisfy the listing requirements of the Exchange. Nations also understands that if a satisfactory response is not received by the Exchange, a trading halt may be imposed upon the Tartan shares. Although the Tartan shares may ultimately be delisted from the Exchange, Nations expects that such delisting will not occur prior to the expiry of the offer.

Non-resident Tartan shareholders are cautioned that in the event that the Tartan shares are not listed at the time of the disposition of their Tartan shares, then such shares would be deemed to be "taxable Canadian property". A disposition of Tartan shares at a time when the Tartan shares are not listed will trigger certain tax reporting requirements, including tax filings which must be made contemporaneously with any disposition. In addition, a purchaser of unlisted shares will be required to withhold 25% of the purchase price otherwise payable to a non-resident shareholder and remit same to the Canada Revenue Agency, subject to receipt of an acceptable tax clearance certificate prior to such remittance being made.

Nations is a privately owned Alberta oil and gas company engaged in the exploration for, and the acquisition, development and production of, oil and natural gas reserves internationally. Nations' oil production exceeds 45,000 barrels per day.

Contact Information

  • Nations Energy Company Ltd. and 1153298 Alberta Ltd.
    Executive Vice President
    (403) 206-1420
    (403) 206-1520 (FAX)
    Nations Energy Company Ltd. and 1153298 Alberta Ltd.
    Suite 750, 255 - 5th Avenue S.W.
    Calgary, Alberta T2P 3G6