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Velvet Energy Ltd. & Iron Bridge Resources Inc. Jointly Announce Amalgamation Agreement

CALGARY, Alberta, Oct. 11, 2018 (GLOBE NEWSWIRE) -- Velvet Energy Ltd.

CALGARY, Alberta, Oct. 11, 2018 (GLOBE NEWSWIRE) — Velvet Energy Ltd. (“Velvet”) and Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”) today announced that Iron Bridge has entered into an amalgamation agreement (the “Amalgamation Agreement”) with Velvet Acquisition Company Ltd. (“AcquisitionCo”), a wholly-owned subsidiary of Velvet, under which Iron Bridge will amalgamate with AcquisitionCo, with the amalgamated entity (“Amalco”) becoming an wholly-owned subsidiary of Velvet (the “Amalgamation”). The Amalgamation, which is subject to the approval of the holders (the “Iron Bridge Shareholders”) of common shares of Iron Bridge (the “Iron Bridge Shares”), will constitute the subsequent acquisition transaction proposed by Velvet in order to acquire all of the Iron Bridge Shares that Velvet did not acquire under its offer to purchase all of the outstanding Iron Bridge Shares (the “Offer”), which expired on October 5, 2018. Velvet acquired an aggregate of 143,788,237 Iron Bridge Shares under the Offer, representing approximately 87.7% of the number of outstanding Iron Bridge Shares.

A special meeting (the “Meeting”) of the Iron Bridge Shareholders has been called for 9:00 a.m. (Calgary time) on November 6, 2018 at 2400, 525 – 8th Avenue S.W., Calgary, Alberta to consider, and if thought advisable, pass a special resolution in relation to the Amalgamation (the “Amalgamation Resolution”). The Amalgamation Resolution must be passed by 66 2/3% of the votes cast by Iron Bridge Shareholders, voting in person or by proxy at the Meeting. In addition, pursuant to applicable securities laws, the Amalgamation must also be approved by a simple majority of the votes cast by “minority” Iron Bridge Shareholders represented in person or by proxy at the Meeting. Velvet currently holds approximately 87.7% of the issued and outstanding Iron Bridge Shares, all of which are entitled to be treated as “minority” Iron Bridge Shares, and Velvet has advised that it intends to vote all of its Iron Bridge Shares in favour of the Amalgamation.  An information circular and proxy statement (the “Information Circular”) and related documents are expected to be mailed on or about October 16, 2018 to Iron Bridge Shareholders of record on October 2, 2018 and will be filed on SEDAR (under Iron Bridge’s profile) at www.sedar.com.

Subject to the terms of the Amalgamation Agreement, each Iron Bridge Shareholder (other than Velvet and any of its affiliates or any Iron Bridge Shareholder who validly exercises dissent rights in relation to the Amalgamation) will, upon completion of the Amalgamation, receive one redeemable preferred share of Amalco (each, a “Redeemable Preferred Share”) for each Iron Bridge Share. The Redeemable Preferred Shares will be automatically redeemed immediately following the completion of the Amalgamation for $0.845 in cash per Redeemable Preferred Share (the “Amalgamation Consideration”). The Amalgamation Consideration is the same as the consideration that was available to Iron Bridge Shareholders under the Offer.

As Velvet intends to vote the Iron Bridge Shares held by it in favour of the Amalgamation Resolution, and, under applicable securities laws, all such votes, are entitled to be counted in respect of the Amalgamation Resolution at the Meeting, it is anticipated that the Amalgamation will be approved and take effect on or about November 6, 2018 (the “Effective Date”). At that time, Amalco will become a wholly owned subsidiary of Velvet, the Iron Bridge Shares will thereafter cease to trade on the Toronto Stock Exchange and Iron Bridge will apply to cease to be a reporting issuer under applicable securities laws as soon as reasonably practicable following the Effective Date.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. In particular, this news release contains forward-looking information concerning the timing of the Meeting, the manner in which the Iron Bridge Shares held by Velvet will be voted at the Meeting, that Amalco will become a wholly-owned subsidiary of Velvet upon completion of the Amalgamation, the completion of the Amalgamation and the timing thereof, the Amalgamation Consideration, the redemption of the Redeemable Preferred Shares and the timing thereof, the anticipated de-listing of the Iron Bridge Shares from the Toronto Stock Exchange following the Amalgamation, Iron Bridge ceasing to be a reporting issuer under applicable securities laws following the Amalgamation and the timing thereof, the mailing and filing on SEDAR of the Information Circular and related documents.

Forward-looking statements are based upon the opinions and expectations of management of Velvet and Iron Bridge as at the effective date of such statements and, in some cases, information supplied by third parties. Although Velvet and Iron Bridge believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from third parties is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, such things as new laws and regulations, failure to obtain approval of the Amalgamation Resolution by Iron Bridge Shareholders and/or complete the Amalgamation in the manner contemplated by the parties or at all. Having regard to the various risk factors, readers should not place undue reliance upon the forward-looking statements contained in this news release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes. The forward-looking statements contained in this news release are made as of the date hereof neither Velvet or Iron Bridge undertake any obligation to update or to revise any of the included forward-looking statements, except as required by applicable securities laws in force in Canada. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Velvet Offer for Iron Bridge Resources Expires

CALGARY, Alberta, Oct. 05, 2018 (GLOBE NEWSWIRE) -- Velvet Energy Ltd.
  • 87.73% of Iron Bridge common shares tendered
  • Velvet Offer for Iron Bridge Resources expires
  • Velvet sets shareholder meeting to approve final acquisition transaction

CALGARY, Alberta, Oct. 05, 2018 (GLOBE NEWSWIRE) — Velvet Energy Ltd. (“Velvet”) and Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”) today announced that Velvet’s amended $0.845 per share all cash offer has expired, and that a total of approximately 87.73% of Iron Bridge common shares equating to approximately 143,810,584 common shares have been tendered to the offer.

Since Velvet’s initial take up of shares on September 24, 2018, approximately 10.29% of additional Iron Bridge common shares equating to approximately 16,872,875 common shares have been tendered to the offer. Velvet has taken-up and will pay for these shares in accordance with the terms of the offer.

Following this additional take-up of shares, Velvet expects to complete a subsequent acquisition transaction to acquire the remaining Iron Bridge common shares. Iron Bridge previously filed on SEDAR under Iron Bridge’s profile at www.sedar.com a Notice of Special Meeting of Iron Bridge shareholders to be held in Calgary on November 6, 2018, for the purposes of approving the acquisition and amalgamation of Iron Bridge by Velvet.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 30,000 boe per day, prior to the acquisition of Iron Bridge, and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil development and delineation at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the subsequent acquisition transaction, including the timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Velvet Energy and Iron Bridge Resources Announce Successful Tender and Take-up of 81.98% of Iron Bridge Common Shares

CALGARY, Alberta, Sept. 24, 2018 (GLOBE NEWSWIRE) -- Velvet Energy Ltd.

Resignation of Iron Bridge Board of Directors & Officers; Velvet to Appoint New Slate of Directors & Officers

  • 81.98% of Iron Bridge common shares tendered, exceeding Velvet’s minimum 2/3rds condition
  • Velvet to take-up and pay for 126.9 million of the currently outstanding common shares of Iron Bridge and extend offer ten days to October 5, 2018
  • Iron Bridge Board of Directors and Officers to resign
  • Velvet to appoint new Board of Directors and Officers
  • Iron Bridge to file notice of special meeting of Iron Bridge shareholders for November 6, 2018
  • Shareholders can tender today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com

CALGARY, Alberta, Sept. 24, 2018 (GLOBE NEWSWIRE) — Velvet Energy Ltd. (“Velvet”, “we”, “us” or “our”) and Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”), today announce that Iron Bridge shareholders, representing 126.9 million of the currently outstanding common shares or 81.98%, have tendered to Velvet’s amended $0.845 per share all cash offer.  Velvet has taken-up and will pay for these shares and is extending the offer to October 5, 2018 to allow remaining shareholders to tender to the offer.

On take-up Velvet will have a controlling interest in Iron Bridge and intends to immediately proceed with a second stage transaction to acquire the remaining shares.  Given Velvet’s controlling interest, the outcome of the second stage is assured and minority shareholders are encouraged to immediately tender in order to expedite their receipt of cash entitlement.

Ken Woolner, President & CEO of Velvet Energy, commented “we are very pleased to see the resounding support for our amended offer for Iron Bridge common shares.  We encourage shareholders that have not yet tendered to do so during this extended window to receive your cash consideration as expeditiously as possible.”

RESIGNATION OF CURRENT IRON BRIDGE BOARD OF DIRECTORS AND OFFICERS; VELVET TO APPOINT NEW DIRECTOR & OFFICER SLATE

Effective September 25, 2018, the serving members of the Board of Directors of Iron Bridge, including Joshua Young, Chairman, Dean Bernhard, Robert Colcleugh, Jay Paul McWilliams, Steve Oldham and Marshall Abbott, will resign.  Additionally, the Officers of Iron Bridge, including Robert Colcleugh, Tim Krysak, Dean Bernhard, Jeremy Smith, Gregg Nixon and Zoran Jankovic, will resign their positions with the company.

Velvet will appoint a new slate of Directors, including Harvey Doerr as Chairman and Vincent Chahley, Debbie Stein and Ken Woolner.  This Board, will in turn, appoint a new Officer slate including: Ken Woolner, President & CEO, Chris Theal, Chief Financial Officer, Peter Henry, Vice President, Finance and Jeremy Kwasnecha, Vice President, Operations.

NOTICE OF EXTENSION AND NOTICE OF IRON BRIDGE RESOURCES MEETING OF SHAREHOLDERS

With the initial uptake of Iron Bridge common shares, Velvet has extended its offer for the uptake of additional Iron Bridge common shares for ten days to October 5, 2018.  This Notice of Extension and a Notice of Special Meeting of Iron Bridge shareholders to be held in Calgary on November 6, 2018, for the purposes of approving the acquisition and amalgamation of Iron Bridge by Velvet Energy Ltd., will be filed on SEDAR under Iron Bridge’s profile at www.sedar.com.  Given Velvet’s controlling interest the approval of the acquisition is assured.

CONTACT KINGSDALE ADVISORS TO TENDER YOUR SHARES

Remaining shareholders of Iron Bridge are encouraged to contact Kingsdale Advisors for assistance in depositing their shares to the offer, by calling toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 30,000 boe per day, prior to the acquisition of Iron Bridge, and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Velvet Energy Reminds Shareholders of Offer Expiry and Encourages Iron Bridge Shareholders to Tender Their Shares to Offer

CALGARY, Alberta, Sept. 20, 2018 (GLOBE NEWSWIRE) -- Velvet Energy Ltd.

Amended Offer of $0.845 per Iron Bridge share has unanimous support of Iron Bridge’s Board of Directors and largest shareholders

  • Shareholders urged to tender their shares ahead of the deadline on September 24, 2018. at 5:00 p.m. Toronto time.  Shareholders are reminded that most financial intermediaries have earlier expiry deadlines for processing tenders.
  • Shareholders can tender today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com.

CALGARY, Alberta, Sept. 20, 2018 (GLOBE NEWSWIRE) — Velvet Energy Ltd. (“Velvet”, “we”, “us” or “our”) is reminding shareholders of Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”) that Velvet’s all-cash offer to acquire all of the issued and outstanding common shares of Iron Bridge will expire at 5:00 p.m. (Toronto time) on September 24, 2018.  Shareholders are, however, cautioned, that most brokers and financial intermediaries will have an earlier cut-off time. All Iron Bridge shareholders who have not yet tendered their common shares are urged to do so today.

THE CONSIDERATION

On September 10, 2018 we announced that Velvet and Iron Bridge agreed to terms on a friendly transaction whereby Velvet modified its May 22, 2018 offer (the “Original Offer”) to increase the cash consideration payable for each Iron Bridge common share from $0.75 to $0.845 (the “Amended Offer”). The Amended Offer was filed with the Alberta Securities Commission on September 12, 2018 under a Notice of Change and Variation.

The Amended Offer is fully-supported by the Iron Bridge Board of Directors and Officers and is receiving growing and significant support from Iron Bridge Shareholders.  Based on this support, Velvet is confident the Amended Offer will exceed the Minimum Tender Condition.

REASONS TO ACCEPT THE OFFER

  • The Revised Velvet Offer is the best alternative currently available. Iron Bridge and its financial advisor conducted an extensive process seeking alternative proposals. No alternatives emerged that are superior to the Amended Offer.  Moreover, with Iron Bridge’s financial challenges, the Amended Offer is a superior alternative to the going concern risks of continuing to operate independently.
  • Increased cash consideration for Shareholders compared to the Original Offer. The Amended Offer represents a 13% increase in cash consideration for Iron Bridge common shares over the Original Offer and a significant 78% premium to the closing price of Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to Velvet submitting its original $0.75 offer letter to the Iron Bridge Board of Directors.
  • Certainty of value and immediate liquidity for shareholders in the face of volatile and challenging conditions. The Montney geological formation, accessible from Iron Bridge landholdings, is challenging, both from a geological and a technical perspective, and requires a significant commitment of capital.  Given the current investment environment for the Canadian oil and gas sector, there is significant uncertainty as to the availability or cost of that capital for Iron Bridge and its shareholders.
  • The Amended Offer has the unqualified support and recommendation of the Iron Bridge Boards of Directors.   All Iron Bridge Directors, Officers and certain shareholders, who together own approximately 36% of the outstanding Common Shares, entered into support agreements with Velvet committing their common shares to the Amended Offer.

TENDER YOUR SHARES TODAY

Iron Bridge shareholders can tender their shares immediately by contacting Kingsdale Advisors, Velvet’s Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 within North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com.

Advisors

Velvet has retained BMO Capital Markets as its exclusive financial advisor and Bennett Jones LLP as its legal advisor.  Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 26,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Velvet Energy and Iron Bridge Resources Agree to Terms of Friendly Transaction with Unanimous Approval from Iron Bridge’s Board of Directors

CALGARY, September 10, 2018 – Velvet Energy Ltd.
  • Velvet Energy and Iron Bridge agree to friendly transaction with unanimous Iron Bridge Board support, wherein Velvet has increased its cash consideration by 13% from $0.75 to $0.845 per Iron Bridge common share
  • Including the assumption of net debt of $9.0 million and net proceeds from dilutive securities, total cash consideration from Velvet is approximately $142 million
  • Iron Bridge shareholders and all directors and officers, accounting for approximately 35% of outstanding Iron Bridge common shares, have committed to tender their shares  in support of Velvet’s all-cash offer
  • Shareholders can tender today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com

CALGARY, Alberta, Sept. 10, 2018 (GLOBE NEWSWIRE) —  Following a friendly negotiation with Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge”),  Velvet Energy Ltd. (“Velvet”, “we”, “us” or “our”) today announces that it has modified its May 22, 2018 offer to purchase all of the issued and outstanding common shares of Iron Bridge (the “Original Offer”) to increase the cash consideration payable for each Iron Bridge common share from $0.75 to $0.845 (the “Amended Offer”).  Total cash consideration payable by Velvet under the Amended Offer, including the assumption of estimated net debt of $9.0 million and net proceeds from dilutive securities, is approximately $142 million.

35% OF IRON BRIDGE SHAREHOLDERS ALREADY SUPPORT THE AMENDED OFFER

After consultation with its financial advisor, the Iron Bridge Board of Directors has determined that the Amended Offer is in the best interest of Iron Bridge and is fair from a financial point of view, to its common shareholders, and unanimously recommends that Iron Bridge shareholders accept the Amended Offer.  All of Iron Bridge’s officers and directors, as well as certain shareholders including Maple Rock Capital Partners and Bison Interests, LLC and their respective affiliates and principals, have entered into agreements with Velvet pursuant to which they have committed to tender all of their Iron Bridge common shares in favour of (and to otherwise support) the Amended Offer.  These lock-up agreements represent approximately 35% of Iron Bridge’s common shares.

Ken Woolner, Velvet Energy’s President & CEO, commented, “We are very pleased to have the engagement and unqualified support of Iron Bridge’s Special Committee, Board of Directors and its largest shareholders in defining a path that is a superior outcome for Iron Bridge shareholders. Our team looks forward to consolidating Iron Bridge’s land holdings in the Gold Creek area with the goal of optimizing our highly synergistic businesses.”

KEY HIGHLIGHTS OF THE VELVET OFFER

Pursuant to the terms of a support agreement between Velvet and Iron Bridge, Velvet has agreed to increase the cash consideration per Iron Bridge common share from $0.75 to $0.845.  The Amended Offer represents a 13% increase in cash consideration for Iron Bridge common shares, and a significant 78% premium to the closing price of Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to Velvet submitting its original $0.75 offer letter to the Iron Bridge Board of Directors.

Velvet intends to file a notice of change and variation (the “Notice of Change and Variation”), which, among other things, will: (i) amend certain terms of the Original Offer (including the increase to the cash consideration payable per Iron Bridge common share from $0.75 to $0.845 for Iron Bridge shares taken-up under the Amended Offer); (ii) update certain information set out in the Original Offer and associated take-over bid circular (the “Original Offer and Circular“); and (iii) supplement information set out in the Original Offer and Circular, including lock-up agreements from certain shareholders, officers and directors and other additional context for the Amended Offer.

Velvet expects that its Notice of Change and Variation and an amended letter of transmittal (updated to reflect the additional cash consideration offered by Velvet) and Iron Bridge’s  Notice of Change to Directors’ Circular will be filed on SEDAR under Iron Bridge’s profile at www.sedar.com prior to the close of business on September 12, 2018.  Under the Agreement, the expiry time of the Amended Offer has been extended to 5:00 p.m. (Toronto time) on September 24, 2018, or such later date as Velvet may require.

TENDER YOUR SHARES TODAY

Iron Bridge shareholders can tender their shares immediately by contacting Kingsdale Advisors, Velvet’s Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 within North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com.

Advisors

Velvet has retained BMO Capital Markets as its exclusive financial advisor and Bennett Jones LLP as its legal advisor.  Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 28,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Iron Bridge’s Dismal Second Quarter Results Show Material Underperformance and Financial Distress; Reinforce Velvet Energy’s Offer as the Superior Value Maximization Alternative for Iron Bridge Shareholders

CALGARY, August 21, 2018 – Velvet Energy Ltd.
  • Material underperformance underscores why Iron Bridge shareholders should tender to Velvet’s all-cash offer
  • Several independent analyst reports note that Iron Bridge’s common shares would trade well below $0.75 per share, absent Velvet Energy’s offer
  • Our premium, all-cash offer, provides shareholders with certainty of avoiding the dilutive impact of any financing alternative Iron Bridge might pursue absent Velvet’s Offer
  • Shareholders are reminded that Velvet Energy’s offer is the only one available
  • Shareholders are urged to tender today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com

CALGARY, Alberta, Aug. 21, 2018 (GLOBE NEWSWIRE) — Following the release of Iron Bridge Resources Inc.’s (TSX:IBR) (“Iron Bridge” or the “Company”) second quarter results on August 14, 2018, Velvet Energy Ltd. (“Velvet”, “we”, “us” or “our”) today commented on Iron Bridge’s material underperformance and deteriorating financial condition.

Ken Woolner, President & CEO of Velvet, stated, “Iron Bridge’s operational and financial results have been, across the board, significantly worse than we expected when we made our $0.75 per share all-cash offer.  Second quarter results and public information paint a disturbing picture of the deterioration in the Company’s operations and finances over what was available prior to us making the offer.  Without a viable stand-alone plan, and in a weak capital market environment, Velvet’s all-cash offer for Iron Bridge’s shares is increasingly out of line with the underlying value of Iron Bridge’s struggling business.  While such deterioration of the business could justify us not following through, we remain committed to the offer we have made to Iron Bridge shareholders.  Shareholders should be concerned about the future of their investment, and the trading price of their shares, if Velvet’s offer isn’t accepted.”

CERTAINTY OF VALUE VS. UNCERTAINTAINY OF CONTINUING AS A GOING CONCERN

As Velvet has previously stated, its all-cash offer for Iron Bridge shares, at a significant premium to market and underlying business fundamentals, provides Iron Bridge shareholders with immediate liquidity and certainty of value.

As we approach the expiration date of the offer on September 12, 2018, Velvet’s offer has become even more compelling, particularly in light of the material deterioration of the business since we made our offer, for a number of reasons:

  • Iron Bridge continues to speak in generalities about running a sale process and seeking “white knights”.  At 85 days into the bid period, if anyone other than Velvet was interested in acquiring Iron Bridge at a premium to $0.75 per share, evidence of that interest would be clearly stated;
  • Iron Bridge has not identified any credible financing alternative to compete with Velvet’s offer.  Given Iron Bridge’s material underperformance, any standalone capital raise would, if at all, only be achieved at a share price which is significantly below our offer price.  Shareholders should fully expect that such a financing  will be either highly-dilutive (if equity or equity-linked) or very expensive and covenant-heavy (if debt).  Furthermore, debt financing of any form would represent a significant transfer of economic value (and likely control) from shareholders to creditors;
  • Iron Bridge’s continued underperformance and deteriorating liquidity has limited its ability to continue, status quo, as a going concern without passing significant control to a financial partner; and
  • Iron Bridge’s board has exhausted its options.  As fiduciaries, they need to act in the best interests of the Company and its stakeholders and encourage acceptance of Velvet’s offer.

Velvet believes that its minimum tender condition will be met by the time the offer expires. However, if the condition is not met, Iron Bridge’s shareholders should not assume that Velvet will extend the offer on current bid terms.

MATERIAL UNDERPERFORMANCE YIELDS NEGATIVE RATES OF RETURN FOR SHAREHOLDERS

Iron Bridge’s well results, when normalized for periodic downtime, are materially below their own type curve and create an ominous outlook for the solvency of Iron Bridge.  At current strip commodity pricing, using actual production data, and incorporating actual capital costs to drill, complete, equip and tie-in wells, plus the additional water disposal costs to handle excessive water volumes, Iron Bridge generates a negative rate of return on its wells.  Iron Bridge’s wells are all below their own production type curve, and are now destroying borrowed capital.

IRON BRIDGE CANNOT MEET ITS BANK LOAN FINANCIAL COVENANT

With its poor financial results, Iron Bridge disclosed that, at the end of the second quarter, it breached the only financial covenant in its lending agreement.  To put the borrowing arrangements back onside, Iron Bridge’s banker increased its borrowing base from $5 million to $10 million and granted a covenant waiver.

Iron Bridge is currently spending its limited undrawn bank debt to clean out sand blockages in the Company’s two new wells.  With the prospect of diminished revenue, combined with high fixed operating, transportation and G&A costs, a further breach by Iron Bridge of its financial covenant is likely in the immediate term.

PRECARIOUS FUTURE IF VELVET BID NOT ACCPETED

In reporting on its second quarter results, Iron Bridge stated that one of its five Montney producers was converted to a water injector to facilitate handling high volumes of water.  Based on regulatory filings, the converted Montney producer appears to be the 3-22 well, which recovered 28,800 barrels of oil over its 12 month productive life (41 bbl/d in June).

We estimate that the 3-22 well generated only $2.6 million of operating income over its short productive life.  This means that Iron Bridge recovered only 75% of the $4.3 million of the disclosed cost to drill and complete the well, not including the significant additional capital investment required to equip and tie-in the well for production.  This well will see a negative reserve revision at year-end, and we remind investors that it was one of five wells that supported Iron Bridge’s borrowing base.

Going forward, the cash generation of Iron Bridge’s four remaining wells is impaired by:

  • Consistent underperformance relative to its light oil type curve – Iron Bridge’s wells are producing at 30-50% of type curve, and oil revenue is substantially below that inferred in its type curve economics, as illustrated in the Company’s April 2018 investor presentation.  The Company’s higher rate natural gas wells are further challenged by low and volatile AECO natural gas prices.  The Company has no commodities hedges in place to support pricing;
  • High costs over a limited number of wells – Capital upgrades to its 2-23 facility and additional water injection infrastructure are sunk costs, and the economies of scale management seeks to achieve are unattainable as the plant will be significantly underutilized, and costs will be spread over fewer, underperforming wells;
  • Transportation commitments growing in 2019 – Iron Bridge has alluded to transportation income in prior periods through its efforts to mitigate its unutilized pipeline take-or-pay obligations, by selling capacity to third parties.  With the over-supply of natural gas in the basin, offloading excess firm service is no longer an option.  This will be a growing problem as Iron Bridge’s firm service commitments are set to double to $2.2 million in 2019;
  • High G&A expense – Management’s overhead burn rate of $1.3 million per quarter translates into over $6.00/boe, which is excessive, even after adjusting for one-time expenses of $300,000.  This level of overhead is excessive to manage 4 wells and a very limited capital program; and
  • Borrowing costs rising as debt builds – Iron Bridge’s aggressive spending and operational underperformance are steering the Company to fully draw its $10 million bank line, with interest expense set to be a further drag on marginal field cash flows.

Based on current production volumes, we foresee minimal funds flow at strip pricing.  In effect, Iron Bridge’s precarious financial state has the Company constrained to produce out its existing four wells.

NO CREDIBLE BUSINESS OR FINANCING PLAN; VELVET ENERGY’S OFFER IS THE ONLY OPTION THAT PROTECTS YOUR INVESTMENT

Despite the lack of cash generation and liquidity, management has licenced six new Montney locations which will require at least $50 million of new funding, prior to considering facilities expansion to accommodate their high fluid handling requirements.

Given the operational and financial underperformance of the Company, no equity financing is available to Iron Bridge’s management team.  If the Company really did have financing offers “in hand” to fund this activity, why have these not been disclosed, particularly in light of the Company’s precarious financial state?

THE TIME TO ACT IS NOW: TENDER YOUR SHARES TODAY

Rejecting Velvet’s fully-funded all-cash offer exposes shareholders to real risk and we would note that since the release of their second quarter results, there is a consistent theme amongst independent analyst reports stressing the degree to which Iron Bridge shares would trade sharply lower, absent our premium offer.  To receive certainty in the form of a fully-funded, all-cash, 58% premium offer, take the simple steps needed to tender your Iron Bridge common shares now.

The offer expires at 5:00 p.m. (Toronto time) on September 12, 2018.  If you have any questions or require assistance, please contact Kingsdale Advisors, our Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 with North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com.  We hope you will accept our significant premium all-cash offer.

Advisors

Velvet has retained BMO Capital Markets as its exclusive financial advisor.  Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 25,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Iron Bridge’s Continued Operational Underperformance Underscores Rationale for Shareholders to Tender Their Shares to Velvet Energy’s Offer

CALGARY, July 30, 2018 – Velvet Energy Ltd.
  • Velvet Energy is offering Iron Bridge shareholders $0.75 in cash per common share, representing an immediate 58% premium to the $0.475 closing price of Iron Bridge common shares on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors
  • Iron Bridge’s recent results underscore ongoing destruction of shareholder value, confirming that the status quo is a risky and inferior alternative to Velvet’s all-cash premium Offer
  • The volume weighted average price (“VWAP”) since Velvet’s announcement is $0.75 per share, and has been trending lower recently, highlighting the market’s view that a superior alternative does not exist
  • Iron Bridge shareholders can tender their shares today by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com.

 

CALGARY, July 30, 2018 – Velvet Energy Ltd. (“Velvet” or “We” or “Us”) reminds shareholders of Iron Bridge Resources Inc. (TSX: IBR) (“Iron Bridge” or the “Company”) that Velvet’s all-cash offer to acquire all of the issued and outstanding common shares of Iron Bridge for $0.75 in cash per common share (the “Offer”) will expire at 5:00 p.m. (Toronto time) on September 12, 2018.

“As we approach the expiration date of our Offer, publicly available production data confirms that Iron Bridge is continuing its lacklustree performance, failing to deliver on its production targets and markedly falling short of industry benchmarks,” said Ken Woolner, President and Chief Executive Officer of Velvet. “These recent results reinforce our view that the status quo is fraught with uncertainty and risk and that Velvet’s Offer provides Iron Bridge shareholders with superior value to any potential alternatives offered by the Company.”

RECENT RESULTS CONFIRM THE STATUS QUO IS A RISKY AND INFERIOR ALTERNATIVE

Iron Bridge’s investor communication since Velvet publicly announced the Offer has focused on asking shareholders to believe in a potential upside beyond the certainty of Velvet’s fully-financed, all-cash offer of $0.75 common share. Iron Bridge’s claims of its own asset values are more founded in assertion and rhetoric than they are in fact. It’s important that this promotional messaging is put in context based on facts now available through publicly available data.  

Iron Bridge’s press release dated May 17, 2018 referenced the initial performance of two new Montney wells at Gold Creek, identified as 102/8-21-68-3W6 and 100/8-21-68-3W6, which together were producing oil-equivalent production of 3,142 boe/d (19% oil & 12% natural gas liquids (“NGL”)).  Publicly available information from Petrinex for the month of June indicates that, despite these wells being on production for over 98% of the month, they are materially underperforming these initial results, with combined production at the significantly reduced rate of approximately 1,900 boe/d.  

More importantly, these wells are materially underperforming Iron Bridge’s disclosed type curve for light oil production by approximately 60% and 80%, respectively, equating to an oil content of only 13% of reported production.  As the chart below shows, the 102/8-21 well produced 166 bbl/d and the 100/8-21 well 81 bbl/d of light oil in June, significantly below Iron Bridge’s oil type curve of approximately 450 bbl/d in the first 60 days on production. This is important as crude oil revenues drive the rate of return on these wells.  

Source: Iron Bridge Resources Inc. April 2018 corporate presentation, slide 6.

These results are significantly below regional results and underscore that management has yet to demonstrate an understanding of the subsurface or an ability to optimize drilling and completion techniques.

Iron Bridge’s total Montney production for the 30 days in June, filed on Petrinex, was approximately 2,500 boe/d (15% oil) – half of the ~5,000 boe/d productive capability referenced in Iron Bridge’s May 17, 2018 press release.  This significant variance highlights the credibility gap Iron Bridge management has with the investment community. Since the Petrinex Alberta public data is based on crude oil and unprocessed natural gas rates, which do not reflect the conversion of a portion of natural gas production into NGLs, we encourage Iron Bridge management to provide clarity to shareholders on oil, NGL and natural gas sales volumes for its new wells and for second quarter 2018 given this material underperformance relative to results recently disclosed by the Company.  In light of this underwhelming execution, the risk to Iron Bridge shareholders of allowing management to continue to pursue a standalone plan is evident and substantial.

Moreover, as with any resource company, the true state of reserves and the ability to extract them goes to the very heart of valuation.  While type curve economics as presented by Iron Bridge management may look compelling, the underlying value of the Company’s reserves is substantially eroded by virtue of the material underperformance of all of their Montney wells.  We believe these results are likely to result in value to Iron Bridge’s shareholders considerably lower than Velvet’s Offer. Iron Bridge shareholders must now critically examine management’s claims about their assets and their ability to generate value from them.  

As the chart below shows, Iron Bridge continues to significantly underperform the TSX Capped Energy Index – even with the Velvet Offer propping up its stock.

NO ALTERNATIVE PROPOSALS HAVE EMERGED

These results explain why, despite claims of having term sheets in-hand and potential alternative transactions emerging, no viable financing or value-enhancing transaction has surfaced in the two months since Velvet announced its intention to make an offer on May 22, 2018.  

Iron Bridge has had ample time to find alternatives but has failed to do so. Velvet wishes to remind Iron Bridge shareholders that it is within the Company’s control to eliminate false hope and bring forward the bid deadline of the Offer. There is no reason to further unduly delay shareholder’s ability to accept Velvet’s compelling Offer. The volume-weighted average price of Iron Bridge’s common shares since the launch of our Offer on May 22, 2018 on all Canadian exchanges remains $0.75, demonstrating that the market agrees with the valuation of Velvet’s Offer.

TENDER YOUR SHARES TODAY

Consider the benefits, and take the simple steps needed to tender your Iron Bridge common shares to the Offer now. The Offer expires at 5:00 p.m. (Toronto time) on September 12, 2018. If you have any questions or require assistance, please contact Kingsdale Advisors, our Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 with North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com.

Visit velvetenergy.ca/IronBridgeOffer for more information and updates.

ADVISORS

Velvet has retained BMO Capital Markets as its exclusive financial advisor and Bennett Jones LLP as its legal counsel. Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

INFORMATION AGENT

For additional information, including assistance in depositing Iron Bridge shares to the Offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

ABOUT VELVET

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 24,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

IMPORTANT NOTICE

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the Offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance

(403) 781-9133

 

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Velvet Energy Comments on Iron Bridge Resources’ Directors’ Circular

CALGARY, Alberta, June 20, 2018 (GLOBE NEWSWIRE)
  • Velvet Energy’s offer of $0.75 in cash per common share represents a significant 58% premium to the $0.475 closing price of Iron Bridge common shares on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors.
  • Velvet’s all-cash offer represents full and fair value and certainty, which is financially superior to the high-risk “go it alone” alternative.
  • Velvet’s offer is not subject to due diligence and has only limited conditions that are customary for a takeover offer of this kind.
  • Iron Bridge common shares have underperformed, even in a strengthening commodity price environment, reflecting the market’s concerns with Iron Bridge’s business plan and financing ability.
  • Iron Bridge shareholders can tender their shares now by contacting Kingsdale Advisors at 1-866-879-7650 or by e-mail at contactus@kingsdaleadvisors.com.

CALGARY, Alberta, June 20, 2018 (GLOBE NEWSWIRE) — Velvet Energy Ltd. (“Velvet” or “We” or “Us”) today commented on the recently published Directors’ Circular (the “Circular”) issued by Iron Bridge Resources Inc. (TSX:IBR) (“Iron Bridge” or the “Company”) regarding Velvet’s all-cash offer (the “Offer”).

“It is clear from our conversations with supportive shareholders that they believe the Velvet Offer is in their best interests and superior to the uncertainty of a standalone plan,” said Ken Woolner, President and Chief Executive Officer of Velvet Energy. “There is nothing in the Iron Bridge Directors’ Circular that provides a realistic strategic direction for Iron Bridge or that detracts from the strength of our $0.75 per share Offer, which represents a significant 58% all-cash premium to Iron Bridge’s pre-Offer common share price of $0.475, immediate liquidity, and certainty of value against the backdrop of a very uncertain market and a risky Iron Bridge standalone plan.”

Velvet urges Iron Bridge shareholders to consider the following points as they review the Circular:

VELVET’S OFFER REPRESENTS A SIGNIFICANT 58% CASH PREMIUM TO MARKET PRICE

  • Velvet’s 58% premium is fair to Iron Bridge shareholders especially considering the current merger and acquisition environment in the oil and gas sector in Canada, where the two most recent transactions – Baytex Energy/Raging River Exploration and Vermilion Resources /Spartan Energy – saw respective premiums of only 10% and 5%. More broadly, across all takeover transactions in all sectors in Canada since 2000, the median premium was approximately 26%.
  • Iron Bridge’s attempt to discount the premium Velvet is offering and claim credit for stock appreciation fails to account for the fact that Iron Bridge had our $0.75 offer letter in hand for nearly a week prior to the Iron Bridge dissemination of a press release regarding certain well results. During that interim period the stock traded at more than three times the year-to-date average daily volume at higher prices. For this reason, the closing common share price on the TSX on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors, is the most accurate reference point when evaluating the size of the effective premium. The effective premium is significantly higher when compared to Iron Bridges’ standalone prospects and unattractive financing options – highly dilutive equity or very expensive and non-traditional debt.
  • At this time, Velvet’s Offer is the highest price and valuation available for Iron Bridge common shares. If Velvet’s Offer was not made or is not accepted, Iron Bridge common shares would be trading materially below $0.75, given the market understands that any junior oil and gas standalone plan will require some form of financing transaction, which has substantial execution risk for a company such as Iron Bridge.

MARKET VALIDATES VELVET’S VALUATION

  • Research analysts and public markets support $0.75 per share as a fair valuation for Iron Bridge.
    — The volume-weighted average price of Iron Bridge’s common shares since the launch of our Offer on May 22, 2018 on all Canadian exchanges is $0.75, demonstrating that the market agrees with the valuation of Velvet’s Offer.
    — In addition, the median one-year forward target price of the equity research analysts that cover Iron Bridge is also $0.75, further validating the market’s support of the Offer. Notably, these target prices were established subsequent to both the Velvet Offer and the disclosure of new well results from Iron Bridge.

REFUTING IRON BRIDGE ASSERTIONS

  • The underperformance of Iron Bridge’s share price is the result of its financial constraints and poor operating results, despite the significant increase in the price of crude oil.
  • Iron Bridge makes an unsubstantiated assertion that there are 500 viable drilling locations on the Company’s lands. Even if this assertion was true, extracting this resource would require over $3.5 billion of capital, unattainable by a company with a pre-Offer market capitalization of approximately $74 million. To put potential dilution into perspective, if our Offer was withdrawn and Iron Bridge’s common shares return to the pre-Offer price of $0.475, the Company would have to issue over 14 million common shares to deliver one additional producing well at the estimated cost of $7.1 million– equivalent to 9.5% dilution per well.
  • Iron Bridge’s future prospects are weighed down by poor cash flow and negative working capital. Following the closing of its Waskahigan asset sale on October 17, 2017, Iron Bridge estimated corporate working capital of $45 million. Based on Iron Bridge’s most recent quarterly disclosure, that surplus swung to a deficit of approximately $2.2 million at March 31, 2018 with marginal corporate cash flow. The numbers don’t lie – any standalone plan for Iron Bridge will require significant financing, the availability and cost of which is highly uncertain and risky for a junior oil and gas company such as Iron Bridge.
  • The synergies Iron Bridge references in its Circular are only available to Iron Bridge in a combination with Velvet and this value is fully reflected in our 58% premium Offer. Velvet believes that a financially superior offer for Iron Bridge is highly unlikely.

CERTAINTY OF VALUE vs. UNCERTAIN FUTURE

  • Iron Bridge speaks of having financing “term sheets in-hand”, yet the Fairness Opinion by Iron Bridge’s financial advisor, which lists all documents they reviewed, mentions only “An indicative debt financing proposal received by Iron Bridge in May 2018”. If additional financing was indeed readily available, one would think that given the large capital spending requirements facing the Company, management would proactively execute a financing to avoid allowing available capital to decline to the current nominal unused capacity on its $5 million bank line.
  • Any debt financing, including debt convertible into equity, if achievable, would be costly given the risk profile of Iron Bridge and would represent a significant transfer of economic value (and potentially control) from shareholders to creditors, while debt servicing costs would seriously erode cash flow and margins.
  • Iron Bridge has yet to articulate a business plan inclusive of a tangible anti-dilutive and/or anti-debt burdening financing strategy. Moreover, its inability to even provide guidance for the second half of 2018 shows a lack of confidence in execution and a lack of transparency about the dispersion of results from its drilling program. Simply put, Iron Bridge is asking shareholders to blindly risk their investment.
  • Velvet’s all-cash Offer provides immediate returns and certainty of value; it also eliminates the risk of value transfer to other stakeholders at the expense of you – the independent shareholders.

NOTION OF SHAREHOLDER SUPPORT INCONSISTENT WITH AGM VOTING RESULTS

  • According to an Iron Bridge press release dated June 5, 2018, only 24% of the Company’s outstanding common shares were voted on the resolution to re-elect the current board of directors at the Company’s annual general meeting (“AGM”). Having only 24% of shares voted for the directors of a company at an AGM indicates that shareholders are at best not enthusiastic about the current direction of the company.
  • CEO Robert Colcleugh had the largest number of withheld votes at 27.55%. A large number of shareholders seemingly don’t agree with the current direction of the Company and are holding specific individuals accountable, namely the CEO, who is responsible for executing the strategy.
  • This year the median withheld vote for a CEO was ~1% for the Montney peer group, as defined in our circular, and less than 1% for the S&P/TSX Energy Sub Index. Iron Bridge’s CEO, at ~28% withheld, is the highest of any CEO in either group.
  • This vote apathy is inconsistent with Iron Bridge’s claims of support, and suggestions that the Offer cannot be successful are unfounded. Shareholders are reminded that the statutory minimum tender condition is 50%, after which point the board of directors and management of Iron Bridge could be replaced. We are confident in shareholders’ ability to judge the value of our Offer for themselves.

A FINANCIALLY SUPERIOR ALTERNATIVE TO THE STATUS QUO

Velvet is offering Iron Bridge shareholders a fully-valued all-cash offer that gives shareholders immediate liquidity against the backdrop of volatile markets and a very uncertain ability for Iron Bridge to execute on its business plan.

Under the terms of the Offer, Iron Bridge shareholders will receive $0.75 in cash for each common share of Iron Bridge held, representing an immediate 58% premium to the closing price of the Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors.

“Shareholders no longer need to endure poor operating results, a declining share price, and a leadership team that has no real plan to create value for shareholders. Iron Bridge’s AGM voting results suggest shareholders are keenly interested in a different choice than the status quo. We’re offering shareholders an opportunity to realize $0.75 cash for their investment in Iron Bridge common shares,” Mr. Woolner added.

LIMITED CONDITIONALITY

Velvet has the financial resources available to complete the Offer, and reminds Iron Bridge shareholders that the Offer is not subject to any due diligence condition. Velvet’s ability to complete the Offer and deliver certainty of value to Iron Bridge shareholders is reinforced by the very limited number of conditions to closing, which are customary for a transaction of this nature.

Velvet also reiterates to Iron Bridge shareholders, and has repeatedly made clear, that the Offer was made based on publicly-available information about Iron Bridge, and Velvet’s expertise in Iron Bridge’s areas of operations. Velvet categorically rejects any allegation that the Offer was informed by improperly-obtained confidential information, and views such allegations as a distraction from the significant financial merits reflected in the Offer.

TENDER YOUR SHARES TODAY

Consider the benefits, and take the simple steps needed to tender your Iron Bridge common shares to the Offer now. The Offer expires at 5:00 p.m. (Toronto time) on September 12, 2018. If you have any questions or require assistance, please contact Kingsdale Advisors, our Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 with North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com.

Visit velvetenergy.ca/ironbridgeoffer for more information and updates.

ADVISORS

Velvet has retained BMO Capital Markets as its exclusive financial advisor and Bennett Jones LLP as its legal counsel. Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

INFORMATION AGENT

For additional information, including assistance in depositing Iron Bridge shares to the Offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

ABOUT VELVET

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 24,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

IMPORTANT NOTICE

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the Offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Velvet Energy Commences Previously Announced Premium All Cash Offer To Acquire Iron Bridge Resources; Issues Letter To Shareholders

CALGARY, Alberta, May 29, 2018 (GLOBE NEWSWIRE)

Velvet Energy Ltd. (“Velvet” or “We” or “Us”) announced today that, further to its press release of May 22, 2018, it has filed its Offer to Purchase and Circular (the “Circular”) on SEDAR and has formally commenced its all-cash offer (the “Offer”) to purchase all of the issued and outstanding common shares of Iron Bridge Resources Inc. (“Iron Bridge”) (TSX:IBR) for $0.75 per common share.

The fully-funded Offer represents a 58% premium to the closing price of the Iron Bridge common shares on the TSX on May 11, 2018 (the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors) and provides shareholders with immediate liquidity and certainty.

Notice and advertisement of the Offer was placed in the May 29, 2018 edition of the National Post and Le Devoir. The Circular will be mailed to all Iron Bridge shareholders. In conjunction with the Circular, Velvet is mailing a letter to shareholders detailing the benefits of the Offer and addressing several of the operational and financial difficulties plaguing Iron Bridge. A copy of the letter to shareholders is also included below.  Iron Bridge shareholders are urged to tender their shares early and in any case prior to the deadline on September 12, 2018 at 5:00 p.m. (Toronto time).  If you have questions or need help tendering your shares, contact Kingsdale Advisors at 1-866-879-7650 or at contactus@kingsdaleadvisors.com.  More information about the Offer is available at Kingsdale Advisors’ website.

Letter to Iron Bridge Shareholders

Dear Iron Bridge shareholder:

I, on behalf of Velvet Energy Ltd. (“Velvet“), want to take this opportunity to personally invite you to consider our fully-valued all-cash offer (the “Offer“) that gives you an opportunity to realize a significant premium and immediate liquidity for your investment in Iron Bridge Resources Inc. (“Iron Bridge“).

Velvet is making the Offer directly to you – the owners of Iron Bridge – to acquire all of the issued and outstanding common shares of Iron Bridge. Under the terms of the Offer, Iron Bridge shareholders will receive $0.75 in cash for each common share of Iron Bridge held, representing an immediate 58% premium to the closing price of the Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors.

We believe that the choice before you is clear:

  1. an opportunity to realize a significant 58% premium and immediate cash for your investment in Iron Bridge; or
  2. the status quo of shareholder value destruction evidenced by the 40% decline in the price of Iron Bridge common shares in the 12 months prior to our Offer.

Your company is at an inflection point given its exhausted cash resources and poor past capital allocation decisions – you can accept our 58% premium all-cash Offer or you can take the risk of attempting to raise dilutive capital in the face of uncertain and volatile markets.

Background of the offer

Velvet is a full-cycle exploration and production company focused in the liquids-rich window of the Deep Basin and light oil window of the Montney in Alberta.

An adjacent landowner to Iron Bridge’s mid-Montney land package, Velvet — as the natural acquirer of the land — approached Iron Bridge on March 9, 2018 with a view to negotiating a mutually agreeable transaction. Despite our repeated efforts over the subsequent months to discuss a shareholder value-maximizing transaction, over time it became clear that Iron Bridge would not constructively engage with us. As a result, we decided to bring our Offer directly to you, the owners of Iron Bridge.

Reasons to accept the offer

We believe that our fully-valued, premium Offer is compelling and represents a superior alternative to the risks of continuing to hold Iron Bridge common shares. As you make your decision, consider the following important facts regarding Velvet’s Offer:

Our Offer represents a significant premium to market price. The Offer represents a significant 58% premium to the closing price of the Iron Bridge common shares on the TSX on May 11, 2018, the last trading day prior to the submission of Velvet’s offer letter to the Iron Bridge board of directors.

Our Offer provides a premium valuation for Iron Bridge. The Offer represents a 2018 Enterprise Value (EV)/EBITDA multiple of 12.2x 2018 consensus EBITDA for Iron Bridge. This valuation represents a significant premium to Iron Bridge’s Montney peer group median consensus 2018 EV/EBITDA multiple of 6.6x.

Our Offer represents full value. The Offer factors the most recent results of Iron Bridge, execution shortfalls and a history of significantly underperforming market-announced production capacity. Iron Bridge’s often-referenced Net Asset Value (NAV) per share is simply not supportable, as you will read in the Offer to Purchase and Circular, which we have filed today.

Our all-cash Offer is fully-financed. Velvet has arranged fully-committed financing to complete the transaction, giving shareholders certainty of value and immediate liquidity in the face of volatile markets and significant uncertainty as to Iron Bridge’s ability to finance and execute its business plan.

The status quo is AN INFERIOR option

Shareholders should critically evaluate Iron Bridge’s ability to realize its claimed Net Asset Value (NAV) per share or any claims that remaining an Iron Bridge shareholder carries hidden or undervalued upside, or that the Offer in any way limits shareholder choice. While Velvet sees the value in Iron Bridge’s land package when combined with ours, we also see a company with poor operating results and financial performance, and great uncertainty in its ability to finance and execute its business plan.

Limited financing alternatives available. Iron Bridge’s valuations are based on potential future production that the company cannot finance. The company’s publicly disclosed NAV per share requires over $200 million of development capital (NPV10% before tax). Raising more than 2.2x the pre-Offer market capitalization will prove challenging for Iron Bridge in today’s energy sector, where access to, and the cost of, equity and debt financing is challenging, particularly for micro-cap issuers. Put another way, Iron Bridge cannot raise the capital it needs without significant dilution or increased debt servicing costs. These are costs directly borne by you, the shareholders.

An unsustainable cost structure. Iron Bridge’s general and administrative expense was $9.54/boe or more than 30% of cash costs in the first quarter of 2018 – significantly higher than the Montney peer median of $1.41/boe.

Exhausted cash resources. Based on Iron Bridge’s most recent quarterly disclosure, marginal operating cash flows and heavy capital expenditures have fully consumed net working capital, which declined from a surplus of approximately $40.7 million at September 30, 2017, to a surplus of approximately $21.7 million at December 31, 2017, to a deficit of approximately $2.2 million at March 31, 2018.

Problematic land geometry. Iron Bridge’s land geometry relative to neighboring land blocks is fragmented and in places completely surrounded. This does not allow for long-reach horizontal wells to be optimally situated, meaning future wells will be sub-optimal from a geological perspective and by extension will continue to constrain return on capital. Velvet’s offsetting land position can remedy these geometrical constraints. Importantly, the value of this synergy is fully reflected in Velvet’s significant 58% premium, all-cash Offer. If Iron Bridge were to continue to develop its acreage with suboptimal wells, Iron Bridge’s assets may become less valuable to Velvet or other acquirers in the future.

Velvet believes that, if the Offer is not successful, it is likely that the price of Iron Bridge’s common shares will decline to pre-Offer levels or lower.

Rejecting Velvet’s fully-funded Offer involves a future with real risk; accepting our Offer involves certainty of an all-cash, fully-valued premium Offer.

The time to act is now: Tender your shares today

Consider the benefits, and take the simple steps needed to tender your Iron Bridge common shares to the Offer now. The Offer expires at 5:00 p.m. (Toronto time) on September 12, 2018. If you have any questions or require assistance, please contact Kingsdale Advisors, our Depositary and Information Agent, by telephone toll-free at 1-866-879-7650 with North America and at 1-416-867-2272 outside of North America or by e-mail at contactus@kingsdaleadvisors.com. We hope you will accept our significant premium all-cash offer.

Sincerely,

(signed)

Ken Woolner
President and Chief Executive Officer

Advisors

Velvet has retained BMO Capital Markets as its exclusive financial advisor. Kingsdale Advisors is acting as strategic communications advisor and its Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the Offer, Iron Bridge shareholders should contact Kingsdale, toll-free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 22,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the Offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:              

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

Media Contact:

Kingsdale Advisors
Ian Robertson, 416-867-2333
Executive Vice President, Communication Strategy
irobertson@kingsdaleadvisors.com
Cell: 647-621-2646

Velvet Energy Announces Premium All Cash Offer to Acquire Iron Bridge Resources

CALGARY, Alberta, May 22, 2018 (GLOBE NEWSWIRE)

Velvet Energy Ltd. (“Velvet” or “We” or “Us”) announced today that it intends to commence an offer (the “Offer”) to acquire all of the issued and outstanding common shares (the “Common Shares”) of Iron Bridge Resources Inc. (TSX:IBR) (“Iron Bridge”).

Under the terms of the Offer, Velvet proposes to acquire all of the issued and outstanding Common Shares of Iron Bridge for $0.75 in cash per Common Share. This represents a 58% premium to the closing price of Iron Bridge Common Shares on the TSX on May 11, 2018, the last trading day prior to Velvet submitting an offer letter to Iron Bridge’s board of directors (the “Iron Bridge Board”) on May 13, 2018, and a 45% premium to the 20-day volume weighted average trading price of Iron Bridge Common Shares on the TSX for the period ended May 18, 2018. The Offer values Iron Bridge at an enterprise value of approximately $120 million, which implies a multiple of 12.2x Iron Bridge’s 2018 consensus EBITDA.

Since the submission of our offer letter to the Iron Bridge Board on May 13, 2018, Velvet has repeatedly attempted to engage with the Iron Bridge Board and management to explore a value maximizing transaction for Iron Bridge shareholders. Iron Bridge asked Velvet to execute a confidentiality agreement with a standstill. Given Velvet’s significant industry knowledge and expertise in Iron Bridge’s area of operations, we do not require access to confidential information. Further, maintaining the ability to take our Offer directly to Iron Bridge shareholders was important given the Iron Bridge Board has refused to constructively engage with Velvet about a fully-funded all-cash transaction which provides Iron Bridge shareholders the opportunity to realize a significant premium and liquidity at a very attractive fundamental valuation.

In the face of the Iron Bridge Board denying Iron Bridge shareholders the ability to decide for themselves as to the merits of the Offer, we have decided to make the Offer directly to Iron Bridge shareholders, the owners of the company.

REASONS TO ACCEPT THE OFFER

We believe that our Offer is compelling, and represents a clearly superior alternative to the course set by the Iron Bridge Board and management, for the following reasons:

  • Significant Premium to Market Price. The Offer represents a significant 58% premium to the closing price of the Iron Bridge Common Shares on the TSX on May 11, 2018, the last trading day prior to the submission of our offer letter to the Iron Bridge Board. The Offer also represents a premium of 45% to the 20-day volume weighted average trading price of the Iron Bridge Common Shares on the TSX for the period ended May 18, 2018.
  • Premium Valuation for Iron Bridge. The Offer represents a 2018 EV/EBITDA multiple of 12.2x 2018 consensus EBITDA for Iron Bridge. This valuation represents a significant premium to Iron Bridge’s Montney peer group median consensus 2018 EV/EBITDA multiple of 6.6x.
  • 100% Liquidity and Certainty of Value. The Offer provides 100% cash consideration for Iron Bridge Common Shares, giving Iron Bridge shareholders certainty of value and immediate liquidity in the face of volatile markets and significant uncertainty as to Iron Bridge’s ability to finance and execute its business plan.
  • Fully Financed Cash Offer. Velvet’s board has approved the Offer and has arranged fully committed financing to complete the transaction.
  • Iron Bridge has Insufficient Liquidity. Based on Iron Bridge’s most recent quarterly disclosure, marginal operating cash flows and heavy capital expenditures fully consumed net working capital, declining from a surplus of ~$21.7 million at December 31, 2017 to a deficit of ~$2.2 million at March 31, 2018. With a credit facility borrowing limit of only $5 million, this leaves Iron Bridge with only $2.0 million of liquidity to fund future development of its asset base.
  • Iron Bridge has an Unsustainable Cost Structure. Iron Bridge’s cash expenses, adjusted for one-time cost recoveries, were $29.33/boe in the first quarter of 2018 – approximately equal to revenue of $29.99/boe resulting in marginal funds flow. Iron Bridge’s G&A expense was $9.54/boe or more than 30% of cash costs – significantly higher than their Montney peer median of $1.41/boe.
  • Iron Bridge has Limited Financing Alternatives Available. With insufficient liquidity and a current cash flow outspend, Iron Bridge will need to access external sources of financing. Iron Bridge’s publicly disclosed net asset value requires over $200 million of future development capital. Raising this capital will prove challenging for Iron Bridge in today’s energy sector, where access to public equity and debt financing is limited. Velvet understands the value of Iron Bridge’s assets given its own operations in the area and the Offer represents a compelling valuation that could not be realized in the current public market environment.
  • Iron Bridge has made Misguided Capital Allocation Decisions. On November 20, 2017, Iron Bridge commenced a share repurchase program. Given the capital intensity of horizontal, multi-fracturing technology, Iron Bridge’s early stage of delineation and limited capital resources, Iron Bridge should be focused on prioritizing capital to its land base.
  • Iron Chain Technology Corp. is a Distraction. Cryptocurrency mining is an untested business and adds an additional layer of risk to an already volatile market environment. It also presents transparency challenges for stock valuation. Shareholder capital should be focused on developing Iron Bridge’s Elmworth Assets and associated infrastructure.

SHAREHOLDERS, THE TIME FOR ACTION IS NOW

As fiduciaries of the company, the Iron Bridge Board and management should have engaged with Velvet to pursue an attractive opportunity to unlock shareholder value.

The Iron Bridge Board’s failure to engage with Velvet has forced us to bring the Offer directly to you, the shareholders and owners of the company. However, unless the Iron Bridge Board agrees to shorten the bid period, the Offer must remain open for at least 105 days. It is within the Iron Bridge Board’s power to shorten the minimum bid period to 35 days.

There is no reason to delay shareholders’ ability to accept the Offer. In today’s capital-constrained environment, there is limited upside to holding Iron Bridge shares given the short runway the company has to pursue its growth plans. Shareholders are encouraged to contact members of the Iron Bridge Board and management team to make their views known.

Shareholders who have additional questions about the Offer or who need assistance in tendering their shares are encouraged to contact the information agent for the Offer, Kingsdale Advisors at the numbers below.

The Offer

The Offer will be made for all of the issued and outstanding Common Shares of Iron Bridge. Full details of the Offer will be included in the formal offer and take-over bid circular to be mailed to Iron Bridge shareholders. Velvet expects to formally commence the Offer and mail the offer and circular to Iron Bridge shareholders in the following days. The take-over bid circular will be filed on SEDAR at www.sedar.com.

The Offer will be subject to customary conditions including, without limitation, the deposit under the Offer of Common Shares representing at least 66 2/3% of outstanding Common Shares, receipt of all necessary regulatory approvals, and no material adverse change in Iron Bridge. The Offer will not be subject to the approval of Velvet’s shareholders and is not subject to any financing or due diligence conditions.

Under applicable Canadian securities laws, the Offer will initially be open for acceptance for a minimum of 105 days from the date of commencement, subject to the ability of Velvet to shorten the deposit period in certain circumstances, provided that the minimum deposit period can never be less than 35 days from the date of the Offer. The Offer is subject to a non-waivable condition that more than 50% of the outstanding Common Shares, excluding those Common Shares beneficially owned, or over which control or direction is exercised, by Velvet or by any person acting jointly or in concert with Velvet, shall have been validly deposited and not withdrawn. The Offer will be extended for a period of not less than 10 days after Velvet first takes up shares under the Offer, assuming the minimum bid conditions are met.

Advisors

Velvet has retained BMO Capital Markets as its exclusive financial advisor. Kingsdale Advisors is acting as strategic communications advisor and Information Agent and Depositary.

Information Agent

For additional information, including assistance in depositing Iron Bridge shares to the Offer, Iron Bridge shareholders should contact Kingsdale, toll free in North America at 1-866-879-7650 or call collect outside North America at 1-416-867-2272 or by email at contactus@kingsdaleadvisors.com.

About Velvet

Velvet Energy Ltd. is a privately-held, full-cycle exploration and production company. Focused in the liquids-rich gas and light oil window of the Deep Basin of Alberta, the Company executes an organic growth business plan, including early land capture, technical evaluation, exploration and development of internally generated prospects. Headquartered in Calgary, Velvet has current production of approximately 22,000 boe per day and a focused land position consisting of over one million net undeveloped acres spanning from its core liquids-rich Ellerslie development in the greater Edson area to early phase Montney light oil exploration at Gold Creek.

Important Notice

Certain statements contained in this news release constitute forward-looking information within the meaning of applicable securities laws. Forward-looking information can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking information in this news release includes statements respecting the Offer, including the benefits, results, effects and timing of any such transaction and the completion thereof, if at all. Forward-looking statements in this news release describe the expectations of Velvet as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation, the ability to obtain regulatory approvals and meet the other conditions to any possible transaction. Although Velvet believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon.

For further information:

Ken Woolner
President and Chief Executive Officer
(403) 781-9134

Chris Theal
Chief Financial Officer
(403) 781-9162

Peter Henry
Vice President, Finance
(403) 781-9133

www.velvetenergy.ca
@VelvetEnergyLtd.
investors@velvetenergy.ca

Media Contact:

Kingsdale Advisors
Ian Robertson
Executive Vice President, Communication Strategy
W: (416) 867-2333
C: (647) 621-2646
irobertson@kingsdaleadvisors.com

Velvet Energy Ltd. Announces US$125 Million Senior Secured Second Lien Note Financing and an Accelerated 2017 Ellerslie Development Program

Calgary, AB (Marketwired - October 05, 2016)

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Velvet Energy Ltd. (the “Company” or “Velvet”), a private oil and liquids-rich natural gas producer in the Deep Basin of Alberta, is pleased to announce that it has completed a private placement (the “Financing”) of US$125 million of Senior Secured Second Lien Notes due 2023 (the “Notes”). The Company is also pleased to provide an update on its core Edson Ellerslie program and plans for advancing key exploration initiatives.

On October 5, 2016, Velvet placed US$125 million of Notes with funds advised by FS Investments and sub-advised by GSO Capital Partners LP, and certain investment funds managed by CI Investments Inc. Proceeds of the Financing will be used to temporarily pay down existing bank indebtedness and to fund an expanded Edson Ellerslie development program. Following with the Financing, the Company plans to draw C$30 million on its equity line led by its private equity investors (the “Private Equity Line”) to continue to advance early stage exploration initiatives. The terms of Velvet’s C$165 million syndicated credit facility remain unchanged after giving effect to this Financing.

Accelerating Activity in Our High Return Base Business

Ken Woolner, President & CEO, stated, “We are very pleased to have partnered with two world-class institutional investors. The Financing, combined with continued access to the Private Equity Line and syndicated bank debt, is a testament to the value of our core Edson Ellerslie assets and provides Velvet with excellent liquidity to advance our business plan in what remains a very challenging capital markets environment. This Financing, along with funds from operations, will allow us to accelerate the pace of our Edson Ellerslie development program in 2017. Thanks in large part to our team’s diligence in reducing both capital and operating expenses in the play, we generate half cycle rates of return in excess of 50 percent at current strip prices.”

Velvet controls over 425 net sections of land in the Edson fairway, and has identified over 600 net drilling locations in the Ellerslie and Deep Basin stack, providing over 10 years of low risk, low cost, high rate of return growth.

RBC Capital Markets acted as an agent in connection with the placement of Senior Secured Second Lien Notes.

Advancing Our Exploration Initiatives

Velvet continues to advance several early stage exploration projects and will allocate proceeds from the Private Equity Line to continue to capture opportunities and derisk play concepts. The Company plans to allocate a portion of the equity proceeds from the drawdown on its Private Equity Line to ongoing exploration activity in the Montney oil window at Gold Creek.

About Velvet Energy Ltd.

Velvet Energy Ltd. is a full cycle, exploration and development company. Since inception, 80% of corporate production has been achieved via the drill bit in the Edson Ellerslie fairway. The company is acutely focused on controlling costs through the entire value chain to achieve top decile rates of return on its capital employed. Velvet is headquartered in Calgary and is backed by three institutional private equity firms in New York, namely Warburg Pincus, Trilantic Capital Partners and 1901 Partners Management LP.

About Warburg Pincus L.L.C.

Warburg Pincus L.L.C. is a leading global private equity firm focused on growth investing. The firm has more than $40 billion in assets under management. The firm’s active portfolio of more than 120 companies is highly diversified by stage, sector and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 15 private equity funds, including a $4 billion energy fund that closed in October 2014, which have invested more than $58 billion in over 760 companies in more than 40 countries.

For more than two decades, Warburg Pincus has invested or committed over $9.5 billion across more than 50 energy investments around the world involved in oil and gas exploration and production, midstream, power generation, oilfield technology and related-services, mining and alternative energy development. Notable investments include Antero Resources, Bill Barrett Corporation, Broad Oak Energy, Encore Acquisition Company, Kosmos Energy, Laredo Petroleum, MEG Energy, Newfield Exploration, Spinnaker Exploration and Targa Resources.

The firm is headquartered in New York with offices in Amsterdam, Beijing, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo, Shanghai and Singapore. For more information please visit www.warburgpincus.com.

About Trilantic Capital Partners

Trilantic North America is a private equity firm focused on control and significant minority investments in North America. Trilantic North America’s primary investment focus is in the business services, consumer, energy and financial services sectors. To date, Trilantic North America’s energy team has committed approximately $3.2 billion in capital across 24 energy investments. As of June 30, 2016, Trilantic North America currently manages four private equity funds with aggregate capital commitments of $5.9 billion. For more information, visit www.trilantic.com.

About 1901 Partners Management, LP

1901 Partners Management, LP, is a privately held investment adviser formed in 2014 to provide management and advisory services to its clients with respect to oil and gas and other energy-related investments.

*This press release is not an offer of securities for sale in the United States. The securities of Velvet may not be offered or sold in the United States absent registration or an exemption from registration. The securities of Velvet will not be publicly offered in the United States. The securities of Velvet have not been or will not be registered under the U.S. Securities Act or any state security laws.

ADVISORY REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

This press release contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable securities laws. The use of any of the words “will”, “expects”, “believe”, “plans”, “potential” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements relating to: use of proceeds from the Financing; the proposed draw on the Private Equity Line; rates of return on the Company’s assets; prospective drilling locations; future amounts drawn on our credit facility; our plans with respect to reinvestment and drilling plans; management’s assessment of Velvet’s future strategy; plans, opportunities and operations; future funds from operations; rates of return; and other financial results, the timing, allocation and efficiency of Velvet’s capital program and the results therefrom, anticipated potential and growth opportunities associated with Velvet’s asset base and industry conditions. By their nature, forward-looking statements are based upon certain assumptions and are subject to numerous risks and uncertainties, some of which are beyond Velvet’s control, including the satisfaction of the closing conditions to the proposed drawdown on the Company’s private equity line, the impact of general economic conditions, industry conditions, current and future commodity prices, currency and interest rates, future royalties, future operating costs, the imprecision of reserve estimates, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, competition from other industry participants, availability of qualified personnel or services and drilling and related equipment, stock market volatility, effects of regulation by governmental agencies including changes in environmental regulations, tax laws and royalties; the ability to access sufficient capital from internal sources and bank and equity markets. This press release also contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about our prospective results of operations, debt levels and funds from operations, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI and forward-looking statements. Velvet’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and FOFI, or if any of them do so, what benefits Velvet will derive therefrom. Velvet has included the forward-looking statements and FOFI in this press release in order to provide readers with a more complete perspective on Velvet’s future operations and such information may not be appropriate for other purposes. Velvet disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. DRILLING LOCATIONS ADVISORY: This press release discloses drilling locations in two categories: (i) booked locations; and (ii) unbooked locations. Booked locations are proved locations and probable locations derived from the Company’s most recent independent reserves evaluation as prepared by GLJ Petroleum Consultants Ltd. as of September 30, 2015 and account for drilling locations that have associated proved and/or probable reserves, as applicable. Of the 600 net drilling locations identified herein, 36 are proved locations, 43.5 are probable locations and 520.5 are unbooked locations. Unbooked locations are internal estimates based on prospective acreage and an assumption as to the number of wells that can be drilled per section based on industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Unbooked locations have been identified by management as an estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which we actually drill wells will ultimately depend upon the availability of capital, regulatory approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results, additional reservoir information that is obtained and other factors. While certain of the unbooked drilling locations have been derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.

Velvet Energy Ltd. Announces Incremental $100 Million Investment

Calgary, Alberta January 29, 2015

Equity Commitment to Fund Acquisitions and Growth

Calgary, Alberta January 29, 2015 — Velvet Energy Ltd. (“Velvet Energy” or the “Company”), an oil and gas exploration and production company focused on the Western Canadian Sedimentary Basin (“WCSB”), today announced that it has obtained an incremental $100 million equity line led by its private equity investors Warburg Pincus L.L.C., Trilantic Capital Partners and ZAM Ventures, L.P.

Velvet Energy utilizes advanced drilling and completion technologies to explore for and develop oil and gas assets within established plays in West-Central Alberta, Canada. Velvet is currently producing approximately 14,000 barrels per day equivalent (“boe/d”) from its footprint in the Edson area of West-Central Alberta where it is achieving superior field-level economics. This incremental equity line will enable the Company to build on its success to date, through the pursuit of acquisitions and additional growth and corporate development opportunities.

“Velvet Energy is operationally and financially well positioned with a high-quality asset base, strong balance sheet, and three sophisticated and supportive investors, led by Warburg Pincus”, commented Ken Woolner, President and Chief Executive Officer, Velvet Energy. “The access to significant capital resources allows Velvet Energy to take advantage of the current market conditions to continue to efficiently grow its production base and its opportunity set”.

This commitment follows an initial equity line totalling $336 million that has been fully deployed by Velvet Energy.

About Velvet Energy

Velvet Energy is a privately-held oil and gas exploration and production company with corporate headquarters in Calgary, Alberta and operations headquartered in Edson, Alberta. From start-up in 2011, Velvet Energy has successfully pursued a counter-cyclical business plan with a primary emphasis towards sweet liquids-rich natural gas. The Company has constructed a focused land position consisting of 412,000 net acres in the Edson area of Alberta, in order to achieve long term sustainable growth through the drill bit, and is currently targeting medium term (18 month) production of 20,000 boe/d.

For more information, visit www.velvetenergy.net or contact Velvet Energy at info@velvetenergy.net or at (403) 781-9125.

About Warburg Pincus L.L.C.

Warburg Pincus L.L.C. is a leading global private equity firm focused on growth investing. The firm has more than $37 billion in assets under management. The firm’s active portfolio of more than 120 companies is highly diversified by stage, sector and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 14 private equity funds, including a $4 billion energy fund that closed in October 2014, which have invested more than $50 billion in over 720 companies in more than 35 countries.

For more than two decades, Warburg Pincus has invested or committed over $9.5 billion across more than 50 energy investments around the world involved in oil and gas exploration and production, midstream, power generation, oilfield technology and related-services, mining and alternative energy development. Notable investments include Antero Resources (NYSE: AR), Bill Barrett Corporation (NYSE: BBG), Broad Oak Energy, Encore Acquisition Company, Kosmos Energy (NYSE: KOS), Laredo Petroleum (NYSE: LPI), MEG Energy (TSX: MEG), Newfield Exploration (NYSE: NFX), Spinnaker Exploration and Targa Resources (NYSE: TRGP, NGLS).

The firm is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mumbai, Mauritius, San Francisco, São Paulo and Shanghai. For more information please visit www.warburgpincus.com.

About Trilantic Capital Partners

Trilantic Capital Partners is a private equity firm focused on control and significant minority investments in North America and Europe, with a primary investment focus in North America in the business services, consumer, energy and financial services sectors. Trilantic manages six institutional private equity funds with aggregate capital commitments of more than $7.0 billion. To date, Trilantic has committed more than $2.5 billion to the energy sector across twenty platform investments. For more information visit www.trilantic.com.

About ZAM Ventures, L.P.

ZAM Ventures, L.P. is one of the main investment vehicles for Ziff Brothers Investments, L.L.C., a multi-billion dollar family investment firm, headquartered in Manhattan, New York that invests in a variety of global asset classes. ZAM Ventures, L.P. focuses on energy-related private equity projects.

Velvet Energy Ltd. Announces Investors

CALGARY, Alberta, June 1, 2011

CALGARY, Alberta, June 1, 2011 /PRNewswire/ — Velvet Energy Ltd. (“Velvet Energy” or the “Company”), a newly formed oil and gas exploration and production company focused on the Western Canadian Sedimentary Basin (“WCSB”), today announced that Warburg Pincus, Trilantic Capital Partners (“Trilantic”), ZAM Ventures, L.P. (“ZAMV”), members of management and select Board members, have agreed to make an investment in the Company.

Velvet Energy Ltd. is led by Ken Woolner, a geological engineer by training, and an entrepreneur with a successful track record in the oil and gas industry spanning over 20 years. The Company plans to utilize advanced drilling and completion technologies to enhance production and returns in established areas of western Alberta.

Commenting on the announcement, Ken Woolner, CEO, Velvet Energy said, “We are delighted to be joined in this venture by Warburg Pincus, Trilantic Capital Partners and ZAM Ventures, L.P., and look forward to benefiting from the deep oil and gas experience these investing partners bring to the table. We are excited by the opportunity to leverage new technologies to enhance returns in mature conventional plays, and revitalize formerly marginal plays, in western and central Alberta.”

On behalf of the investors, David Krieger, Managing Director, Warburg Pincus said, “We are pleased to be partnering with this proven management team, and look forward to working with the company as it explores and develops oil and gas resources in the Western Canadian Sedimentary Basin.”

CIBC World Markets Inc. acted as financial advisor to Velvet Energy Ltd. with respect to this financing.

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