Torquay Oil Corp.

Torquay Oil Corp.

November 20, 2012 08:30 ET

Torquay Oil Corp. Enters Into Arrangement Agreement for Sale of the Company for Cash Consideration of $21 Million

CALGARY, ALBERTA--(Marketwire - Nov. 20, 2012) -


TORQUAY OIL CORP. (TSX VENTURE:TOC.A)(TSX VENTURE:TOC.B) ("Torquay" or the "Company") is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with a private oil and gas company ("the Purchaser"). Under the terms of the Arrangement Agreement, the Purchaser will acquire all of the issued and outstanding Class A Shares and Class B Shares of Torquay for cash consideration of $0.16 per Class A Share and $1.60 per Class B Share, respectively, pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement").

The aggregate value of the transaction is approximately $21 million which includes the assumption by the Purchaser of Torquay's anticipated net debt of approximately $11.0 million made up of bank debt, working capital obligations and transaction costs.

Based upon, among other things, the verbal fairness opinion of its financial advisor, the Board of Directors of Torquay (the "Torquay Board") has unanimously determined that the Arrangement is fair to the Torquay shareholders and in the best interests of the Company. The Torquay Board has unanimously approved the Arrangement, the transactions contemplated thereby and the entering into of the Arrangement Agreement and resolved to recommend that the shareholders vote in favour of the Arrangement. All of the members of the Torquay Board and Torquay's executive officers, who collectively own approximately 14.3% of the outstanding Class A Shares and 2.2% of the Class B Shares, have entered into lock-up agreements with the Purchaser in respect of the Arrangement and have confirmed their intention to vote their Class A Shares and Class B Shares in favour of the Arrangement.

GMP Securities LP, acted as financial advisor to Torquay and has provided the Torquay Board with its verbal opinion that, as of the date hereof, and subject to review of final documentation, the consideration to be received by Torquay's shareholders pursuant to the proposed Arrangement is fair, from a financial point of view.

The Arrangement is subject to a number of conditions including, but not limited to, the approval of at least 66 2/3% of the votes cast in person or by proxy at a special meeting of Torquay's shareholders and a majority of the votes cast by disinterested shareholders pursuant to the requirements of applicable securities laws, as well as customary court and regulatory approvals and other customary conditions. An information circular regarding the Arrangement is expected to be mailed to Torquay shareholders in late November for a meeting expected to be held on December 21, 2012, with completion of the Arrangement scheduled to occur shortly thereafter.

Under the Arrangement Agreement, Torquay has agreed that it will not solicit or initiate any discussions in respect of any other acquisition proposals. Torquay has also agreed to pay a termination fee in an amount equal to approximately $0.6 million to the Purchaser in certain circumstances. In addition, the Purchaser has the right to match any competing proposal for Torquay in the event such a proposal is made. The Purchaser has agreed to pay Torquay's out-of-pocket expenses incurred in connection with the Arrangement Agreement and the transactions contemplated thereby, if the Arrangement Agreement is terminated by the Company under certain circumstances.

About Torquay

Torquay is an oil focused, junior exploration company. The Company's Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Company currently has 48,659,448 Class A Shares and 1,260,000 Class B Shares outstanding.


This news release contains forward-looking statements. More particularly, this news release contains statements concerning the timing and completion of the Arrangement, as well as certain other matters related to the transactions referenced herein. The forward-looking statements are based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning completion of the Arrangement, timing of receipt of required approvals and third party consents and the satisfaction of other conditions to the completion of the Arrangement. Although Torquay believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Torquay can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required approvals and consents are not obtained on terms and within the timelines acceptable to Torquay and the Purchaser, that the Arrangement may not be completed on the terms contemplated or at all, and risks that other conditions to the completion of the Arrangement are not satisfied in a timely manner or at all. Additional information on the foregoing risks and other factors that could affect Torquay' operations and financial results are included in the Company's annual information form for the financial year ended December 31, 2011 and in other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website ( The forward-looking statements contained in this press release are made as of the date hereof and Torquay undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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