Cequence To Acquire Alberta-Based Peloton Exploration In Takeover Bid

To acquire co. with Alberta assets, gaining 650BOE/d.

Cequence Energy Ltd., Calgary, (Toronto: CQE) plans to acquire privately held, Calgary-based Peloton Exploration Corp. in a takeover bid for approximately C$36.6 million in shares and debt.

Cequence, which will assume net debt of approximately C$7.2 million in the acquisition, will issue 0.205 shares per Peloton share, reflecting a value of C$0.50 per Peloton share.

Peloton's assets include 43,100 net acres across 58 sections of undeveloped land in west-central and northwest Alberta, including four sections at Garrington with identified resource plays in the Cardium for light oil and the Elkton for liquids-rich gas. Cequence has identified 14 (11 net) horizontal locations targeting the Cardium formation and five (4.5 net) horizontal locations targeting the Elkton formation.

Production from Peloton's assets is 650 barrels of oil equivalent per day, with an additional 200 barrels per day of tested production behind pipe (85% gas).

Cequence president and chief executive Howard Crone says, "Over the past few years, Peloton has aggressively pursued high quality, repeatable resource plays that can be exploited through the use of horizontal drilling and multi-stage completion techniques. These assets complement Cequence's existing asset base and provide us with the opportunity to apply our multi-stage horizontal completion expertise into the emerging Cardium oil and Elkton natural gas resource plays."

Cormark Securities Inc. is financial advisor to Cequence. FirstEnergy Capital Corp. is financial advisor to Peloton.