Sign Up for FREE Daily Energy News
Copper Tip Energy Services
WEC - Western Engineered Containment
Hazloc Heaters
Hazloc Heaters
Copper Tip Energy
WEC - Western Engineered Containment

Chinook Energy Inc. Announces Plan of Arrangement

Calgary, Alberta – Chinook Energy Inc. (TSX: CKE) (“Chinook” or the “Company”) is pleased to announce today that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) pursuant to which Tourmaline Oil Corp. (TSX: TOU) (the “Purchaser”) has agreed to acquire all of the outstanding common shares of Chinook (“Chinook Shares”) for cash consideration of $0.0675 per share (the “Share Consideration”). The Share Consideration represents a 33% premium over the twenty day volume weighted average trading price of the Chinook Shares on the Toronto Stock Exchange (the “TSX”). The proposed transaction (the “Transaction”) is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta).


In November 2019, Chinook initiated a strategic review process led by a Special Committee of the Chinook board of directors (the “Chinook Board”), supported by management and their financial advisor, Peters & Co. Limited, to review alternatives to enhance shareholder value. This publicly announced process followed strategic reviews in 2018 and 2016. The process was, in the context of continued weakness in commodity prices, continued weakness in general Canadian E&P industry and capital market conditions and the Company’s ongoing semi-annual review of its demand credit facility, focused on maximizing shareholder value in a very challenging environment.

The extensive review process led to the evaluation of numerous strategic alternatives including a sale of all or a material portion of Chinook’s assets and corporate transaction opportunities. Following a thorough review of each alternative, Chinook’s Board and management team have determined that the Transaction represents the best alternative for Chinook shareholders with a counterparty of significant financial strength. Furthermore, all of the directors and executive officers of Chinook and a significant shareholder of Chinook have entered into support agreements and have agreed to vote an aggregate of approximately 37% of the outstanding Chinook Shares in favor of the Transaction, subject to the provisions of such support agreements.

The Transaction offers a liquidity event and cash consideration to all shareholders. Upon closing of the Transaction, the Chinook Shares will be de-listed from the TSX.


The Transaction is subject to various closing conditions, including receipt of Court approval and Chinook shareholder approval.

The Arrangement Agreement contains customary representations and warranties of each party and interim operational covenants by Chinook. The Arrangement Agreement also provides for, among other things, customary board support and non-solicitation covenants, subject to a “fiduciary out” for unsolicited “superior proposals” in favor of Chinook and a provision for the right to match any superior proposal in favor of the Purchaser.

The Arrangement Agreement provides for a non-completion fee of $1.75 million. The non-completion fee is payable in the event that the Transaction is not completed or is terminated by Chinook in certain circumstances, including if Chinook enters into an agreement with respect to a superior proposal or if the Chinook Board withdraws or modifies its recommendation with respect to the Transaction.

An annual and special meeting (the “Meeting”) of Chinook shareholders will be called to consider, among other things, the Transaction. The Transaction will require the approval of 66²/₃% of the votes cast by the Chinook shareholders and, if required, the approval of a majority of a minority after excluding the votes cast by persons whose votes may not be included in determining minority approval of a business combination pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, present in person or by proxy at the Meeting.

Further details with respect to the Transaction will be included in the information circular to be mailed to Chinook shareholders in connection with the Meeting. The Meeting is expected to be held in late-April 2020 with closing of the Transaction anticipated to occur thereafter in April 2020 upon satisfaction of all conditions precedent thereto. A copy of the Arrangement Agreement and the information circular will be filed on Chinook’s SEDAR profile and will be available for viewing at


Based on the Fairness Opinion (as defined below) and the recommendation of the Special Committee of the Chinook Board, and after consulting with its financial and legal advisors, among other considerations, the Chinook Board has unanimously: (i) determined that the Transaction is in the best interests of Chinook and the Chinook shareholders; (ii) resolved to recommend that Chinook shareholders vote in favor of the Transaction; and (iii) determined that the consideration to be received by Chinook shareholders pursuant to the Transaction is fair from a financial point of view to the Chinook shareholders.


Peters & Co. Limited acted as financial advisor to Chinook in connection with the Transaction and has provided its verbal fairness opinion (the “Fairness Opinion”) that, subject to review of the final form of documents affecting the Transaction, as at the date of the Arrangement Agreement, the consideration to be received by Chinook shareholders pursuant to the Transaction is fair, from a financial point of view to Chinook shareholders.

About Chinook Energy Inc.

Chinook is a Calgary-based public oil and natural gas exploration and development company with a large contiguous Montney liquids-rich natural gas position at Birley/Umbach, British Columbia.

Share This:

More News Articles

New SHOWCASE Directory Companies


Catch Engineering
Hy-Lok Distribution Inc
GLJ Petroleum Consultants Ltd.
Fusion Production Systems Inc
Clear Glycol Inc.
Pacbrake Company