David Tuer, the former CEO of PanCanadian Energy Corp., who helped lead the company toward its profitable spinoff as North America’s largest independent producer, is taking the reins of a small investor group to transform a bankrupt Calgary-based pharmaceutical research company into an oil and gas enterprise — with a particular focus on natural gas.

Synsorb Biotech Inc., which has been looking for a buyer and a new direction since reorganizing last year, entered into an agreement with Tuer’s group on Monday. If approved by shareholders, Synsorb would issue about C$3.5 million of secured debentures with 5.5 million common share purchase warrants and 5.5 million common preferred shares. If the conversion rights are exercised, the Tuer-led group would have a 45% stake in the company. Tuer also was named chairman and CEO.

Tuer said the new company would have a “dual focus on exploration and development, combined with an aggressive acquisition strategy,” and that natural gas opportunities would be the company’s primary focus.

Under Tuer’s leadership, the former PanCanadian Energy grew from a market worth of about C$5.5 billion to C$10 billion in six years as a subsidiary of the railway firm Canadian Pacific Ltd. Tuer, who joined the company in 1988 and became CEO in 1994, resigned abruptly for personal reasons in October 2001, on the eve of the PanCanadian spinoff (see NGI, Oct. 22, 2001). Before coming to PanCanadian, he had been an assistant deputy minister of energy for Alberta.

“I am very excited about the opportunity to build a full-cycle oil and gas company from the ground floor,” said Tuer in a statement. “The attributes of Synsorb and the timing in the Canadian oil and gas industry will allow me to bring together a strong management team and aggressively pursue new investment opportunities.”

Tuer said the company would undergo a name change, which would be proposed to the shareholders in a management information circular. Synsorb’s outgoing chairman Gerry Quinn called the move an “excellent opportunity for the Synsorb shareholders,” and said Tuer’s experience would lead Synsorb “along a promising new path.”

The transaction is subject to shareholder approval, with all of the directors and major shareholders voting in favor of the transaction. All option holders, holding in the aggregate options to acquire 275,000 common shares at C$0.70 per share, have agreed to exercise their options prior to completion of the transaction.

Synsorb has agreed to pay a non-completion fee if the transaction is not completed under certain conditions. It has agreed to terminate discussion with other parties and will not solicit any other proposals.

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