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WHITECAP RESOURCES INC. AND COMPASS PETROLEUM LTD. ANNOUNCE STRATEGIC ARRANGEMENT AND WHITECAP ANNOUNCES INCREASED 2012 GUIDANCE

CALGARY, ALBERTA – Whitecap Resources Inc. (“Whitecap” or the “Company”) (TSX: WCP) and Compass Petroleum Ltd. (“Compass”) (TSXV: CPO) are pleased to announce that they have entered into an arrangement agreement (the “Arrangement Agreement”) providing for the acquisition by Whitecap of all the issued and outstanding common shares of Compass (the “Transaction”). Compass is a light oil-weighted public energy company with its primary operations located in the Dodsland/Kindersley area of West Central Saskatchewan and the majority of its production and reserves focused in the Viking formation. Under the terms of the Transaction, Compass shareholders will receive, at their election, for each Compass share held, either: (i) 0.205 of a Whitecap common share; or (ii) $1.60 in cash, subject to an aggregate cash maximum of $20 million and a maximum distribution of approximately 10.9 million Whitecap common shares. Whitecap will also assume the positive working capital of Compass, estimated at $1.3 million, after accounting for costs and severance associated with the Transaction, as at November 30, 2011.  Compass does not currently have any bank debt.

Based on the closing market price of the Whitecap common shares on the Toronto Stock Exchange (the “TSX”) on December 14, 2011, the exchange ratio represents a 33% premium to the closing market price of the Compass common shares on the TSX Venture Exchange (the “TSXV”) on December 14, 2011 and a 23% premium to the volume weighted average trading price of the Compass common shares for the 20 trading days ending December 14, 2011. The total value of the Transaction is approximately $97.8 million, including the assumption of positive working capital, option and warrant exercises and estimated transaction costs.

 

To read the full press release, click here to download the PDF file.

Profitable Per Share Growth Within Funds Flow

Whitecap Resources Inc. is an oil-weighted growth company that pays a monthly cash dividend to its shareholders.

We are focused on providing sustainable dividends and profitable per share growth enhanced by value added acquisitions.

Whitecap's common shares are traded on the Toronto Stock Exchange under the symbol WCP.

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