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Petrobank Re-Extends Offer To Ranger Oil

Petrobank Re-Extends Offer To Ranger Oil

Canada's Petrobank Energy and Resources Ltd. has extended the deadline of its initial offer to purchase all shares of Ranger Oil Ltd.'s common stock for another two weeks. Petrobank also has entered a binding deal with Alberta Energy Co. to sell certain natural gas assets currently held by Ranger for $262 million if the hostile takeover bid succeeds.

Petrobank estimates the assets to be sold only equal about 10% of Ranger's total production on a barrel of oil equivalent basis. The hostile takeover strategy was first offered on April 6, one day after Ranger put itself on the market due to concern over share values by shareholders. The first deadline of May 12 was extended to June 5, and now the offer has been extended to June 19. Each share of Ranger stock would receive C $7.50 to a maximum of C $330 million, or three common shares of Petrobank per Ranger share.

The offer is conditioned on: (1) Petrobank being able to acquire 66 2/3% of the outstanding Ranger shares pursuant to the offer; (2) nominees of Petrobank constituting a majority of the directors of Ranger; (3) and Ranger allowing Petrobank access to all confidential operating data without restrictions. The release of the confidential data is a major sticking point because Ranger has been showing the data to other suitors who have agreed to its terms since at least April 17 , but Petrobank has only been offered access recently and not on its own terms.

Ranger's board of directors recommended its shareholders reject the offer, due largely to the per share terms. "Petrobank's offer falls far short of capturing the true value of Ranger's assets and opportunities and is not in the interests of Ranger's shareholders. We believe that Ranger shareholders will be much better served by the process of maximizing shareholder value which is currently underway and moving forward on schedule," Fred Dyment, president of Ranger Oil said in a previous statement.

Petrobank is currently reviewing and examining its alternatives for improvements of the terms and conditions of the offer that is on the table. It expects to be at a point within the near future to announce its findings.

Alex Steis

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