Whitecap Resources and Midway Energy have entered into an arrangement agreement providing for the acquisition by Whitecap of all the issued and outstanding common shares of Midway. Midway is a light oil weighted public company with its primary operations located in the Garrington area of Alberta where the majority of its production and reserves are focused in the Cardium formation. Under the terms of the Transaction, Midway shareholders shall receive, for each Midway common share held, at the election of the holder: i) $4.85 cash; or ii) 0.4802 of a Whitecap common share; or iii) a combination of cash and Whitecap Shares, subject in each case to a maximum. The maximum aggregate cash amount payable to Midway shareholders shall be approximately $111.2 million and the maximum number of Whitecap Shares to be issued to Midway shareholders shall be approximately 33.5 million Whitecap Shares. Holders of Midway warrants that are exercisable at an exercise price of $4.00 per Midway common share ("Midway warrants") will receive $0.85 in cash for each Midway warrant held. Whitecap will also assume the debt of Midway, estimated at $100.8 million, after taking into account anticipated option proceeds and Transaction and severance costs, as at February 28, 2012.

The $4.85 per share Transaction value represents a 12.8% premium to the closing market price of the Midway common shares on February 27, 2012 and a 22.3% premium to the volume weighted average trading price of the Midway common shares for the 10 trading days ending February 27, 2012. The total Transaction value is approximately $550.3 million, including the assumption of net debt.

The Transaction will be funded in part through a $120.0 million bought deal financing.

Tags: Midway Energy, Whitecap Resources