Welton Energy Corporation

Welton Energy Corporation

December 19, 2008 13:13 ET

Welton Energy Corporation Announces Debentureholder Meeting

CALGARY, ALBERTA--(Marketwire - Dec. 19, 2008) -


Welton Energy Corporation ("Welton") (TSX:WLT)(TSX:WLT.DB) announces that a meeting of holders ("Debentureholders") of Welton 8% Convertible Secured Subordinated Debentures due January 15, 2009 (the "Debentures") will be held on Wednesday, January 14, 2009 at 10:00 a.m. Calgary time. At the meeting, Debentureholders will consider an extraordinary resolution to waive the obligation of Welton to pay interest on the Debentures on December 31, 2008 and amend the indenture governing the Debentures to extend the maturity date of the Debentures from January 15, 2009 to a date that is the earlier of March 31, 2009 and such date as specified by an instrument in writing signed by Debentureholders of 25% of the principal amount of Debentures, all as more fully described in the Notice to Debentureholders dated December 16, 2008 expected to be mailed to Debentureholders on or before December 22, 2008. The proposed amendment to the indenture governing the Debentures is subject to Toronto Stock Exchange ("TSX") approval.

On December 16, 2008, Welton and Churchill Energy Inc. ("Churchill") announced that they had entered into an arrangement agreement whereby Churchill will acquire Welton by way of plan of arrangement (the "Arrangement"), subject to satisfaction or waiver of certain conditions. The Arrangement is the culmination of the process that began in March 2008 to explore strategic alternatives to address Welton's inability to repay the principal amount of the Debentures from budgeted cash flows. To facilitate the completion of the Arrangement, which is expected to be completed in February 2009, and to provide further flexibility in dealing with the Debentures, Welton is proposing the Debentureholders approve the proposed waiver and amendment to the Debentures. Accordingly, Welton does not intend to pay interest on the Debentures on December 31, 2008.

Upon completion of the Arrangement, it is expected that both the Debentures and Welton common shares will be de-listed from the TSX.

Welton Debentures will begin trading on an interest flat basis on December 22, 2008, on the basis that Welton does not intend to pay interest on the Debentures on December 31, 2008 and the TSX will not report accrued interest in regard to any trade in the Debentures made through the facilities of the TSX.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the common shares in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933, as amended or the securities laws of any state, and may not be offered or sold in the United States, or to a U.S. person, unless an exemption from the registration requirement is available.

Cautionary Statements

Certain information set forth in this document contains forward-looking statements, including in particular information concerning the Arrangement, timing of the Arrangement and mailing of the Notice to Debentureholders and de-listing of the Debentures from the TSX. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control. The forward-looking statements and information are based on certain key expectations and assumptions made by Welton. Although Welton believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Welton can give no assurance that they will prove to be correct. Since forward-looking statements and information 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, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations, marketing and transportation, loss of markets, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, ability to access sufficient capital from internal and external sources, failure to obtain required regulatory and other approvals, and changes in legislation, including but not limited to tax laws, royalties and environmental regulations.

There are risks also inherent in the nature of the proposed Arrangement, including failure to realize anticipated synergies or cost savings; risks regarding the integration of the two entities; incorrect assessments of the values of the other entity; and failure to obtain the required securityholder, court, regulatory and other third party approvals. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other risk factors that could affect Welton's operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Welton's website (www.weltonenergy.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Welton 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.

Contact Information

  • Welton Energy Corporation
    Donald A. Engle
    President and Chief Executive Officer
    (403) 215-4747
    Website: www.weltonenergy.com