Trimox Energy Inc.

Trimox Energy Inc.

December 06, 2006 08:30 ET

Trimox Energy Inc. Announces Sale to Titan Exploration Ltd.

CALGARY, ALBERTA--(CCNMatthews - Dec. 6, 2006) -


Trimox Energy Inc. ("Trimox" or the "Company") (TSX VENTURE:TRM.A)(TSX VENTURE:TRM.B) is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with Titan Exploration Ltd. ("Titan") (TSX:TTN.A)(TSX:TTN.B) which provides that Titan will acquire all of the issued and outstanding Class A Shares and Class B Shares of Trimox pursuant to a plan of arrangement under the provisions of the Business Corporations Act (Alberta) (the "Arrangement").

Pursuant to the Arrangement, the Trimox shareholders will receive the following:

(a) for each Trimox Class A Share, 0.55 of a Titan Class A Share (a "Titan Share"); and

(b) for each Trimox Class B Share, such number of Titan Shares as is equal to $10 divided by the 5 day weighted average trading price of the Titan Shares ending on the second last day immediately preceding the closing of the Arrangement.

The closing price of the Titan Shares on the TSX on December 5, 2006 was $4.15.

Since its initial public offering in late 2004, Trimox has achieved significant growth from successful exploration and development drilling. Over the past few months, however, Trimox determined that it was rapidly approaching the operational limits of the Company. As a result, Trimox entered into discussions with Titan regarding a possible transaction. After reviewing a number of alternatives, the Board of Directors agreed to pursue a transaction with Titan that would result in a significant increase in liquidity to Trimox shareholders and would allow Trimox shareholders to participate in a company with greater resources to exploit both companies' existing opportunities.

Management and Board Recommendations

The Arrangement has the unanimous support of the Board of Directors of both Trimox and Titan. In addition, Trimox's Board has concluded, based on the opinion of FirstEnergy Capital Corp. and other factors, that the proposed transaction is fair and in the best interests of each of the Trimox Class A shareholders and Class B shareholders and has determined to recommend that Trimox shareholders vote in favour of the Arrangement. Holders of in excess of 25% of the outstanding Trimox Class A Shares and 1% of the outstanding Trimox Class B Shares, including all directors and officers of Trimox, have entered into lock-up agreements with Titan whereby they have agreed to vote their Trimox shares in favour of the Arrangement.

The completion of the Arrangement is subject to various conditions, including receipt of all applicable regulatory, shareholder and Court approvals. Special meetings of each of the Trimox Class A shareholders and Class B shareholders will be called in mid January 2007 to consider the Arrangement. An information circular detailing the Arrangement is anticipated to be mailed to Trimox shareholders in mid December.

FirstEnergy Capital Corp. is acting as financial advisor to Trimox in respect of the Arrangement. FirstEnergy has advised the board of directors of Trimox that, subject to review of final documentation, they are of the opinion that the consideration offered pursuant to the Arrangement is fair, from a financial point of view, to the Trimox Class A shareholders and the Trimox Class B shareholders.

Proforma Overview of the Transaction

The Arrangement will have a number of corporate, financial and operational benefits for all Trimox shareholders. The larger, more diversified production and cash flow base of the resulting entity is expected to permit Titan to embark upon an aggressive 2007 capital program, with exposure to high impact prospects at Windfall and Worsley. This, combined with a strong production base in southwest Saskatchewan and southern Alberta, is expected to drive continued growth of Titan's asset and production base.

This news release contains forward-looking statements which are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied. Such forward-looking statements necessarily involve risks associated with oil and gas exploration, property development, production, marketing, and transportation, such as dry holes and non-commercial wells, facility and pipeline damage, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers and the ability to access sufficient capital from internal and external sources. Readers are cautioned not to place undue reliance on forward-looking statements, as no assurances can be given as to future results, levels of activity or achievements.

Natural gas volumes have been converted to barrels of oil equivalent ("boe") using six thousand cubic feet ("mcf") equal to one barrel ("bbl"). This conversion ratio is based on an energy equivalent conversion applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

Contact Information

  • Trimox Energy Inc.
    Steve Dabner
    President & C.E.O.
    (403) 216-1721
    Trimox Energy Inc.
    Thomas Love
    Chairman & C.F.O.
    (403) 216-1722