Canetic to acquire Titan Exploration

Canetic Resources Trust has entered into a pre-acquisition agreement with Titan Exploration Ltd. pursuant to which Canetic will make an offer to acquire all of the issued and outstanding shares of Titan in exchange for 0.1917 of a Canetic trust unit (”Canetic Unit”) for each Titan Class A Share and 0.6609 of a Canetic Unit for each Titan Class B Share.

The total transaction value is approximately $116 million, including Titan’s net debt of approximately $17.5 million. It is expected that approximately 6.5 million Canetic Units will be issued to effect the acquisition.

The Board of Directors of Titan has unanimously agreed to support the offer and has unanimously resolved to recommend that all Titan shareholders tender their shares in acceptance of Canetic’s offer.
FirstEnergy Capital Corp. acted as exclusive financial advisor to Titan with respect to the transaction and has provided Titan’s Board of Directors with its verbal fairness opinion that the consideration to be received by Titan’s shareholders pursuant to the offer is fair, from a financial point of view, to Titan shareholders.

The Agreement provides for a non-completion fee of $3.5 million, payable by Titan to Canetic in certain circumstances and a non-completion fee of $1.7 million, payable by Canetic to Titan in certain circumstances. The Agreement also contains customary non-solicitation covenants and Titan has reserved the right, subject to certain conditions, to respond to superior proposals, which Canetic has the right to match.