Profound Energy Inc.
TSX : PFX

Profound Energy Inc.

April 01, 2009 08:00 ET

Profound Energy Inc. Provides Further Details With Respect to the Offer to Acquire by Paramount Energy Trust

CALGARY, ALBERTA--(Marketwire - April 1, 2009) - Profound Energy Inc. (TSX:PFX) ("Profound") provides further details with respect to the offer by Paramount Energy Trust (TSX:PMT.UN) ("PET" or the "Trust") to acquire all of the issued and outstanding common shares of Profound (the "Offer") by way of a take-over bid pursuant to the terms and conditions of a support agreement (the "Support Agreement") between Profound and PET. Holders of Profound common shares that accept the Offer and acquire PET trust units will be eligible to receive distributions on such PET trust units, provided they hold such trust units on the applicable record date for the monthly distribution. If the Offer is completed on or before May 29, 2009 shareholders of Profound who receive trust units would be eligible to receive the May 2009 distribution payable on June 15, 2009. If the Offer is completed after May 29, 2009 but on or before June 30, 2009 shareholders of Profound who receive trust units would be eligible to receive the distribution payable on July 15, 2009. Pursuant to PET's current distribution policy the monthly distribution payable on trust units is $0.05 per trust unit.

Profound also announces that ARC Energy Venture Fund 4 and ARC Energy Fund 5 (collectively, the "ARC Funds") have not entered into lock-up agreements with PET. According to publicly available information, collectively the ARC Funds hold 11,522,149 common shares of Profound which represents 30.3% of the total issued and outstanding common shares (including common shares issuable on exercise of outstanding options).

The Board of Directors of Profound has approved the Offer and has agreed to recommend that its shareholders tender their shares in acceptance of the Offer. The Board of Directors believes that the Offer provides the Profound shareholders with the following benefits:

- a significant premium for the shares of approximately 100%;

- the option of cash and/or shares as consideration with significantly increased liquidity for shareholders;

- PET trust units allow Profound shareholders to continue to participate in a significantly larger, natural gas weighted issuer with an attractive hedge position and large inventory of undeveloped land and development opportunities;

- a current distribution of $0.05 per unit per month for those shareholders who elect to receive PET units; and

- the combined entity will be less levered on a debt to cash flow basis than Profound is currently. Profound's existing bank facility is currently being reviewed by its lender and it is anticipated to be reduced to an amount at or below its current total net debt.

FirstEnergy Capital Corp. has provided a verbal fairness opinion to the Board of Directors of Profound indicating that the consideration to be received by Profound shareholders under the Offer is fair from a financial point of view.

As announced in a separate press release issued yesterday, Profound has adopted a shareholders rights plan ("Rights Plan") in order to help ensure equal treatment of all of Profound's shareholders. The Rights Plan is not intended to deter the PET Offer. The PET Offer is a "permitted bid" under the Rights Plan and the Board of Directors of Profound recommends that holders of Profound common shares tender their common shares to the PET Offer.

The Rights Plan provides that a "permitted bid" is a take-over bid which provides for a minimum deposit period of at least 35 days and which is made to all shareholders. A "permitted bid" must also satisfy certain other conditions, including that a minimum of 50% of the outstanding shares (exclusive of shares held by the offeror unless acquired pursuant to subsection 2.2(3) of Multilateral Instrument 62-104) must be tendered into the bid before the offeror may take them up, after which time the bid must then be extended for a further period of 10 days.

FORWARD LOOKING INFORMATION

This press release contains statements that constitute "forward-looking information" or "forward-looking statements" (collectively "forward-looking information") within the meaning of applicable securities legislation. This forward-looking information includes, among others, statements regarding: the Offer, the completion of the Offer, the outcome of the Offer, timing and amount of monthly distributions on the PET trust units, and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance.

Various assumptions were used in drawing the conclusions or making the forecasts and projections contained in the forward-looking information contained in this press release. Forward-looking information is based on current expectations, estimates and projections, including the current distribution policy of PET that involve a number of risks, which could cause actual results to vary and in some instances to differ materially from those anticipated and described in the forward-looking information contained in this press release. Undue reliance should not be placed on forward-looking information. The material risk factors include, but are not limited to: failure to complete the Offer, a change in the distribution policy of PET, and the Trust's ability to implement its business strategy. Readers are cautioned that the foregoing list of risk factors is not exhaustive.

Forward-looking information is based on the estimates and opinions of Profound's management at the time the information is released.

Paramount Energy Trust is a natural gas-focused Canadian energy trust. PET's Trust Units and Convertible Debentures are listed on the Toronto Stock Exchange under the symbols "PMT.UN", "PMT.DB", "PMT.DB.A", "PMT.DB.B" and "PMT.DB.C", respectively. Further information with respect to PET can be found at its website at www.paramountenergy.com.

Profound Energy Inc. is a junior oil and natural gas company based in Calgary, Alberta. Profound's common shares are listed on the Toronto Stock Exchange under the symbol "PFX". Further information with respect to Profound can be found at its website at www.profoundenergy.ca.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

Contact Information

  • Profound Energy Inc.
    William T. Davis
    President & Chief Executive Officer
    (403) 237-6102
    or
    Profound Energy Inc.
    Evelyn Burnett
    Chief Financial Officer
    (403) 237-6102
    or
    Profound Energy Inc.
    Suite 380, 435 - 4th Avenue SW
    Calgary, Alberta, Canada T2P 3A8
    (403) 237-6102
    (403) 237-6103 (FAX)
    Website: www.profoundenergy.ca