July 4, 2018 - 6:30 AM EDT
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Utica Resources Announces Offer to Acquire Junex Inc.

Canada NewsWire

MONTREAL, July 4, 2018 /CNW/ - Utica Resources Inc. ("Utica") today announced that it has delivered to the Special Committee of the Board of Directors of Junex Inc. ("Junex") an offer (the "Offer") to acquire all of the outstanding common shares of Junex (the "Junex Common Shares"). Pursuant to the Offer, each shareholder of Junex would have the option to receive, for each Junex Common Share held, either (a) $0.42 in cash (the "Cash Option") or (b) $0.40 in cash plus a contingent value right (the "CVR") entitling the holder thereof to receive a pro rata share, paid yearly in cash, of a royalty of 1.0% of revenue attributable to Junex's current working interest share (a 0.5287% overriding royalty) of the gross monthly production of all petroleum substances, after certain deductions, from Junex's Galt project (the "Cash Plus CVR Option"); the CVR would be redeemable by Utica at any time for an additional cash payment of $0.10 per Junex Common Share (the "Utica Transaction"). The Utica Transaction is subject to being completed by way of a plan of arrangement under the Business Corporations Act (Québec).

Utica believes that the Offer constitutes a "Superior Proposal" to the arrangement agreement dated June 8, 2018 (the "Arrangement Agreement") between Junex and Cuda Energy Inc. ("Cuda") for the announced transaction with Cuda (the "Cuda Transaction"). The Offer is subject to the termination of the Cuda Transaction as provided for in the Arrangement Agreement and the entering into of a new arrangement agreement between Utica and Junex that would be substantially similar to the Arrangement Agreement in terms of general provisions and construct, covenants, representations and warranties, conditions, and termination arrangements. The Utica Transaction is not subject to a confirmatory due diligence condition, nor is it subject to financing.


The Cash Option of $0.42 per Junex Common Share represents a premium of 16.2% over the 20-day volume-weighted average price of the Junex Common Shares on the TSX Venture Exchange ("TSXV") immediately prior to the announcement date of the Cuda Transaction, and an improvement of 13.5% over the deemed value of approximately $0.37 per Junex Common Share for the Cuda Transaction (the "Cuda Transaction Value"). The Cuda Transaction Value was determined through calculation of the deemed value of Junex Common Shares to be issued for the share portion of the proposed acquisition of Wyoming assets pursuant to the Cuda Transaction, as well as the deemed value of Junex Common Shares for the early conversion of convertible debentures pursuant to the Cuda Transaction.

Assuming the redemption or full realization of the value of the CVR up to its redemption price on an undiscounted basis, the total Cash Plus CVR Option value of $0.50 per Junex Common Share represents a premium of 38.3% over the 20-day volume-weighted average price of the Junex Common Shares on the TSXV immediately prior to the announcement date of the Cuda Transaction, and an improvement of 35.1% over the Cuda Transaction Value.

For the shareholders of Junex, the Offer provides an option to receive either 100% cash consideration, or cash consideration plus an option to receive potential incremental cash consideration as a result of the CVR; an immediate liquidity event at a fixed price; certainty of valuation compared to the Cuda Transaction; and an unconditional offer.

Québec-Focused Strategy

Utica is a Québec-based private energy company. Utica sees long term potential in Junex's Québec assets and intends to stay invested in Québec for the long run. Utica's strategy will be to invest and grow in Québec, leveraging Utica's expertise, network of partners, relationships and community involvement. This network includes a long-standing relationship with Junex's management and employees. Utica anticipates working closely with the Junex team to create a leading position in oil and gas development in Québec.

Utica believes that its Offer holds additional benefits for the province of Québec as it plans on retaining the existing Junex team and will continue to operate as a private Québec-based oil & gas company, rather than a subsidiary of a Calgary-based public company focused on opportunities in other jurisdictions.

Utica expects to work collaboratively with Junex and its advisors in order to finalize the Utica Transaction and obtain shareholder approval in a timely fashion.

Update to Early Warning Report

Lansdowne Partners Austria GmbH ("LPA") is the investment manager of Lansdowne Investment Company Cyprus Limited ("LICC"). LICC is an affiliate of Utica. LICC directly holds 8,750,000 Junex Common Shares and 4,375,000 common share purchase warrants. On the basis of 88,602,703 Junex Common Shares issued and outstanding (as disclosed in the Arrangement Agreement), LICC has beneficial ownership or direction over approximately 14.81% of the outstanding Junex Common Shares after giving effect to the exercise of the Warrants. LPA will update its early warning report dated October 23, 2017, a copy of which will be available under Junex's profile on SEDAR at www.sedar.com. The address of LPA is Wallnerstrasse 3/21, 1010 Vienna, Austria.

Cautionary Note Regarding Forward Looking Statements

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking statements") within the meaning of Canadian securities legislation, including, without limitation, statements regarding the intentions of Utica, LICC and LPA, the ability of the parties to reach an agreement regarding the proposed transaction and, if an agreement is reached, the ability of the parties to complete the proposed transaction or the timing or terms thereof. Forward-looking statements can, but may not always, be identified by the use of words such as "expects", "intends", "proposed" and similar references to future periods or the negatives of these words and expressions. These statements are based on the stated intentions of the parties and currently available information. They are not guarantees of future events, are based upon assumptions that may not prove to be accurate, and involve certain risks and uncertainties that are difficult to predict, including the risk that no transaction will be agreed to, that completion of the transaction will be materially delayed or that, even if a transaction is agreed to, the transaction will not be completed. Investors are cautioned not to put undue reliance on forward-looking statements. Any forward-looking statement speaks only as of the date hereof, and the parties undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Utica Resources Inc.

View original content: http://www.newswire.ca/en/releases/archive/July2018/04/c4355.html

Utica Resources Inc., 1020 Rue Bouvier #475, Québec, Québec, G2K 0K9; Cabinet de relations publiques NATIONAL: Information: Stéphanie Arsenault Soucy, Tel: (418) 648-1233 ex. 1223, Email: [email protected] CNW Group 2018

Source: Canada Newswire (July 4, 2018 - 6:30 AM EDT)

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