2009-08-10-2008-07-01

To acquire co. with assets in Sturgeon Lake South Leduc, gaining 18.2 MMBOE 2P, 3,600 BO/d.

Calgary-based Daylight Resources Trust (Toronto: DAY.UN) plans to acquire Cadence Energy Inc. (fka Kereco Energy Ltd.) (Toronto: CDS) for approximately C$301 million, including C$70 million of debt and C$64 million in positive net working capital. Daylight will pay 0.47 unit per Cadence unit or C$5.32 in cash per Cadence share, representing a 15.5% premium to the 20-day weighted average of Cadence shares on the Toronto exchange. Some 95% of Cadence assets are in the Sturgeon Lake South Leduc oil pool in the Western Canadian Sedimentary Basin in Alberta and complement Daylight's assets in the area. Other assets include 300 barrels of oil per day in the Peace River Arch region adjacent to Daylight's Cecil/Mulligan area of operations. Cadence proved plus probable reserves are 18.2 million barrels of oil. Production is 3,600 barrels of oil per day. Pro forma, Daylight proved plus probable reserves will be 82.4 million barrels of oil, a 28% increase. Production will increase 17%. The deal is valued at $83,500 per flowing barrel and $16.54 per barrel proved, according to Daylight. Daylight president and chief executive Anthony Lambert says, "The asset overlap is tremendous and the ability to control all of the Sturgeon Lake South Leduc pool will drive significant operational efficiencies." Cadence president and chief executive Grant Fagerheim says, "The combination with Daylight provides Cadence shareholders with immediate value for our high-quality, long-life assets, continued exposure to the significant potential value to be unlocked from Sturgeon through a future CO2 miscible flood and exposure to Daylight's impressive conventional and resource play assets." Scotia Waterous Inc. is advisor to Daylight. Tristone Capital Inc. is advisor to Cadence. Closing is expected in late July.