The boards of Rosco S.A. and Arawak Energy Limited have reached agreement on the terms of a recommended and increased pre-conditional cash offer to be made by Rosco S.A. (or a wholly owned subsidiary of Rosco S.A. designated by Rosco S.A. to make the offer) to acquire the entire issued and to be issued share capital of Arawak (the “Increased Recommended Offer”).

The Increased Recommended Offer is being made at a price of CAD 1.00 for each Arawak Share, equivalent to 54.7 pence per Arawak Share (based on a currency exchange rate of CAD 1.8288 to £1.00 (being the Bloomberg Rate as at 5.00 pm (London time) on 15 January 2009)).

The Increased Recommended Offer values the entire issued share capital of Arawak at approximately CAD 182.6 million (£99.9 million).

The price to be paid under the Increased Recommended Offer represents a premium of approximately: - 176 per cent. to the London Stock Exchange closing middle market price of 19.8 pence per Arawak Share; and - 186 per cent. to the Toronto Stock Exchange closing price of CAD 0.35 per Arawak Share, in each case on 27 October 2008, the last business day prior to the date of the Original Announcement; and - 11.1 per cent. to the Original Offer Price of CAD 0.90 per Arawak Share made in the Original Announcement.

The Arawak Directors, who have been so advised by RBC Capital Markets, consider the terms of the Increased Recommended Offer to be fair and reasonable. In determining whether to recommend the transaction, the Arawak Directors considered a number of factors and have relied in part on advice from RBC Capital Markets to the effect that the consideration to be received by the Arawak Shareholders pursuant to the Increased Recommended Offer is fair and reasonable to such holders. In providing advice to the Arawak Directors, RBC Capital Markets has taken into account the commercial assessments of the Arawak Directors.

Accordingly, the Arawak Directors unanimously recommend that Arawak Shareholders accept the Increased Recommended Offer. The Arawak Directors have irrevocably undertaken to accept (or, where applicable, procure the acceptance of) the Increased Recommended Offer in respect of their entire shareholdings in Arawak (including any Arawak Shares they are “interested” in, as defined in the Code), such shareholdings comprising in aggregate 4,801,767 Arawak Shares representing approximately 2.63 per cent. of the issued share capital of Arawak, on the terms of the Directors’ Irrevocable Undertakings. Mancal Corporation (a company associated with one of the Arawak Directors) has also irrevocably undertaken to accept the Increased Recommended Offer in respect of the 4,484,009 Arawak Shares held by it (representing approximately 2.46 per cent. of the issued share capital of Arawak), on terms substantially the same as the Directors’ Irrevocable Undertakings.

A currency exchange facility will be made available to Arawak Shareholders under which they will be able to elect to receive their consideration in pounds sterling at the Bloomberg Rate on the date three business days prior to the relevant payment date. No commission will be charged for using this facility.

The posting of the Offer Document is pre-conditional on certain regulatory clearances being obtained.

Mr. James H Coleman, Chairman of the board of Arawak, said,“We are pleased to have negotiated an acceptable path forward with Rosco. The enhanced terms of the offer will permit Arawak shareholders to take advantage of this cash offer on a timely basis.”

Tags: Arawak Energy Corporation, Rosco