Samson to Gain Courage for C$171 Million

Mergers and acquisitions in the energy industry are continuing at a feverish pace as two more production companies announced that they have decided to tie the knot. Samson Canada, a privately held oil and natural gas company with operations in the United States, Canada, Russia and Venezuela, announced that it will make an offer to acquire all of the outstanding common shares of Courage Energy Inc. at a price of C$5.20/share in cash.

The total value of the transaction including Courage's net debt is approximately C$171 million ($111 million U.S.). Courage Energy is an oil and natural gas exploration and production company with assets in western Canada and the United Kingdom.

Tulsa-based Samson Canada, a subsidiary of Samson Investment Co., has operated in Canada since 1989, actively exploring for and acquiring production in western Canada. Samson Canada produces approximately 13,000 boe/d, with core areas including Rainbow, Central Alberta and N.E. British Columbia. The Courage acquisition will significantly increase Samson's interests in the Fort St. John and Peace River Arch areas.

Under the agreement with Courage, the offer is subject to the tendering of a minimum of two-thirds of the Courage common shares to Samson and obtaining the required regulatory approvals. Courage said the transaction has the unanimous support of its board of directors, which along with the senior officers of the company have advised that they intend to tender their shares under the offer.

R.G. Moffat, president of Courage, stated, "We are pleased with this offer that provides Courage shareholders an excellent opportunity to realize on the fair value of the company. The proposed transaction will provide price certainty and liquidity to all Courage shareholders."

The board of directors of Courage will recommend that shareholders accept the offer and Courage has agreed that it will not solicit or initiate discussions or negotiations with any other party concerning the sale of Courage. The company has also agreed to pay a C$6.9 million non-completion fee to Samson under certain circumstances.

UBS Warburg acted as a financial adviser to Samson in this transaction and will act as soliciting dealer manager. Dundee Securities Corp. provided an opinion to the board of directors of Courage that the consideration under the offer is fair, from a financial point of view to the shareholders of Courage.

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