PIPESTONE ANNOUNCES THAT ISS REAFFIRMS RECOMMENDATION THAT SHAREHOLDERS
VOTE "FOR" PROPOSED COMBINATION WITH STRATHCONA TO CREATE A LEADING CANADIAN
ENERGY PRODUCER; ISS SAYS DISSIDENT'S ARGUMENTS "DO NOT APPEAR WELL
SUPPORTED"
• Pipestone encourages all shareholders to vote FOR the Arrangement today to ensure their votes
are counted; the proxy voting deadline is 10:00 a.m. (Calgary time) on Monday, September 25,
2023
• Have questions or need help voting? Call Kingsdale Advisors on 1-888-659-1824 (toll free in North
America), email contactus@kingsdaleadvisors.com, or visit www.pipestonestrathcona.com
Calgary, Alberta, September 20, 2023 (PIPE - TSX) Pipestone Energy Corp. ("Pipestone" or the
"Company") today announced that leading proxy advisory firm Institutional Shareholder Services ("ISS")
has reviewed the arguments of GMT Capital Corp. ("GMT") in its dissident proxy circular dated September
15, 2023 and reaffirmed its recommendation that shareholders vote FOR the proposed arrangement (the
"Arrangement") with Strathcona Resources Ltd. ("Strathcona") that would see Pipestone and Strathcona
combine to become one of Canada's largest energy producers.
"Upon review, the dissident arguments do not appear well supported and there is no clear indication as to
whether a rejection of the deal would enhance shareholder value or lead to an enduring improvement in
PIPE's share price. As such, ISS continues to recommend shareholders vote FOR the transaction," ISS
said.
Shareholders of Pipestone ("Shareholders") should not be distracted by GMT's flawed and misleading
arguments.
As Pipestone has outlined in detail, the dissident circular of US-based GMT is rife with flawed assumptions
and misleading arguments against this value-creating transaction. Click here to read Pipestone's news
release dated September 17, 2023 and click here to access the accompanying investor presentation, each
of which provide in-depth rebuttals to GMT's arguments.
There is nothing new in GMT's speculative arguments in its dissident proxy circular, which focuses on short-
term, cherry-picked data, nor does GMT have a value-enhancing plan for the standalone Company.
GMT's argument can be summarized as nothing more than "kill the deal and hope for the best." But hope
is not a strategy the board of directors of Pipestone (the "Board") and Pipestone can support. Neither
should Shareholders.
By contrast, Pipestone believes that the Arrangement offers numerous advantages for Shareholders. The
all-share consideration will enable Shareholders to fully participate in the upside of a much larger and more
diversified producer that is expected to benefit from scale at 185,000 boe/d; a well-positioned reserves base
and much longer life at over 38 years; better access and lower cost to capital; extending our tax shelter by
over two years; and a potential positive re-rating by markets.
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The independent committee (the "Special Committee") of the Board and the Board have determined that
the Arrangement is in the best interests of Pipestone and the Shareholders and it has the full, signed
backing of management of Pipestone.
"We are pleased to see the continued support for the Arrangement from independent parties such as ISS.
Management fully supports the Arrangement which we believe is superior to the status quo, significantly
reducing the go-forward technical risk of the business while allowing Pipestone shareholders to participate
in future upside," said Dustin Hoffman, Chief Operating Officer and Interim President and Chief Executive
Officer of Pipestone.
The determinations of the Special Committee and the Board came after an extensive and robust strategic
review process that considered all alternatives available to Pipestone, including the arguments and options
put forward by GMT, and was supported by the advice of Pipestone's financial and legal advisors.
The 18-month strategic review process that began in early 2022 evaluated over 75 potential counterparties.
In February 2023 Pipestone received an initial proposal from Strathcona. The terms of the Strathcona
proposal were improved through several revised proposals. The definitive arrangement agreement with
Strathcona was signed on July 31, 2023 and includes support agreements from management and
Riverstone Holdings LLC, a significant and highly sophisticated shareholder in Pipestone.
Throughout Pipestone's thorough strategic review process, the Special Committee and the Board
consistently compared the Strathcona transaction to the status quo as a standalone single-asset producer,
and against other potential alternatives for the Company. Those included alternatives identified during the
long and robust strategic review process and included those put forward by GMT.
The recommendations that Shareholders vote "FOR" the Arrangement by the independent proxy
advisory firms ISS and Glass Lewis underscore the Board's recommendation. The job of ISS and
Glass Lewis is to review transaction terms and process in detail and offer proxy voting guidance to
investment managers, mutual funds, pension funds, and other institutional investors.
Pipestone once again thanks Shareholders for the strong support they have shown so far by voting
FOR the Arrangement and encourages all Shareholders to vote FOR the Arrangement before 10:00
a.m. (Calgary time) on Monday, September 25, 2023. Details on how to do so can be found below.
PIPESTONE SPECIAL SHAREHOLDER MEETING
Shareholders must take action to vote by proxy before 10:00 a.m. (Calgary time) on Monday, September
25, 2023
On August 28, 2023, Pipestone filed a management information circular (the "Circular") and related meeting
materials (the "Meeting Materials") in connection with the special meeting of Shareholders (the "Meeting").
The Meeting is scheduled to be held 10:00 a.m. (Calgary time) on September 27, 2023 and will be held in
a virtual-only format that will be conducted via live audio webcast accessible at
https://web.lumiagm.com/218234565.
The sole purpose of the Meeting is for the Shareholders to consider and, if deemed advisable, approve the
Arrangement. Further details regarding the Meeting are set forth in the Circular.
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The Board of Pipestone has approved the Arrangement and recommends that Shareholders vote FOR the
Arrangement at the Meeting.
Copies of the Meeting Materials are available on www.pipestonestrathcona.com and under Pipestone's
SEDAR+ profile at www.sedarplus.ca.
HOW TO VOTE
Pipestone has retained Kingsdale Advisors as its proxy solicitation agent and strategic shareholder and
communications advisor in connection with the Meeting. Shareholders with questions are encouraged to
contact Kingsdale Advisors by email or at one of the numbers below:
North America (Toll-Free): 1-877-659-1824
Outside of North America (Collect Calls): 416-623-2514
Email: contactus@kingsdaleadvisors.com
Visit: www.pipestonestrathcona.com
VOTE "FOR" NOW
Details on how to vote can also be found in the Circular under "Voting Information". All Shareholders are
encouraged to vote in advance of the Meeting by proxy, whether or not a Shareholder is intending to attend
the Meeting in person (virtually).
Media Contact
Martin Cej, Partner
Longview Communications and Public Affairs
(403) 512-5730
mcej@longviewcomms.ca
Pipestone Company Contact
Dustin Hoffman, Chief Operating Officer and Interim President and Chief Executive Officer
(587) 392-8423
dustin.hoffman@pipestonecorp.com
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Forward-Looking Information
This news release contains certain forward-looking statements and forward-looking information (collectively
"forward-looking information") within the meaning of applicable securities laws, which are based on
Pipestone's current internal expectations, estimates, projections, assumptions and beliefs. The use of any
of the words "believe", "estimate", "anticipate", "expect", "plan", "predict", "outlook", "target", "project",
"plan", "may", "could", "will", "shall", "should", "intend", "potential" and similar expressions are intended to
identify forward-looking information. These statements are not guarantees of future performance, and
involve known and unknown risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking information.
Forward-looking information in this news release includes, but is not limited to: statements regarding the
anticipated benefit of the Arrangement, particularly that the Arrangement will offer advantages to the
Shareholders; the expectation that the consideration payable to the Shareholders on completion of the
Arrangement will enable the Shareholders to participate in the update of a much larger and more diversified
producer that will benefit from scale; the expectation that the combined entity will have longer-lasting and
better positioned reserves and better access to capital; the expectation that the combined entity will benefit
from tax shelters and a potential positive re-rating by markets and the expectation that following completion
of the Arrangement, Shareholders will continue to participate in the upside of the combined company.
Pipestone believes the expectations reflected in the forward-looking information in this news release are
reasonable, but no assurance can be given that these expectations will prove to be correct, and readers
should not place undue reliance on such forward-looking information. The forward-looking information is
not a guarantee of future performance and is subject to a number of known and unknown risks and
uncertainties that could cause actual events or results to differ materially, including, but not limited to: the
Arrangement may not be completed and may not obtain the required shareholder approval; Strathcona,
Pipestone and the combined entity may fail to realize, or may fail to realize in the expected timeframes, the
anticipated benefits resulting from the Arrangement; risks related to the integration of Strathcona's and
Pipestone's existing businesses, including that the Shareholders may be exposed to additional business
risks not previously applicable to their investment, as the business mix and operations of the combined
entity will be different than that of Pipestone; if the Arrangement is not completed, Shareholders will not
realize the anticipated benefits of the Arrangement and Pipestone's future business and operations could
be adversely affected; the combined entity's ability to realize the anticipated growth opportunities and
synergies from integrating the respective businesses of Strathcona and Pipestone following completion of
the Arrangement; the ability of the combined business to utilize and apply, or carry forward, tax losses and
other tax attributes in the future; discrepancies between actual and estimated production of the combined
entity. Such forward-looking information is made as of the date of this news release and Pipestone does
not undertake any obligation to publicly update or revise any forward-looking information, whether as a
result of new information, future events or otherwise, except as required by applicable securities laws. The
forward-looking information contained herein is expressly qualified in its entirety by this cautionary
statement.
Production and Reserves Information
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The reserves estimate in this press release is based on Pipestone's internal evaluation and were prepared
by a member of Pipestone's management who is a qualified reserves evaluator in accordance with National
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The growth potential of the pro forma
entity is based on: (i) in respect of Strathcona, (a) the report prepared by Sproule Associates Limited dated
February 23, 2023 evaluating the petroleum and natural gas reserves and contingent resources attributable
to certain of the assets of Strathcona as at December 31, 2022, (b) the report prepared by McDaniel &
Associated Consultants Ltd. ("McDaniel") dated February 1, 2023 evaluating the bitumen reserves and
contingent resources attributable to certain of the assets of Strathcona as at December 31, 2022, and (c)
the report prepared by McDaniel dated February 14, 2023 evaluating the heavy oil reserves and contingent
resources attributable to certain of the assets of Strathcona as at December 31, 2022, and (ii) in respect of
Pipestone, report prepared by McDaniel dated February 13, 2023 evaluating the crude oil, natural gas and
natural gas liquids reserves attributable to Pipestone's properties as at December 31, 2022. Such estimates
constitute forward-looking statements, which are based on values that Pipestone's management believes
to be reasonable. For further information regarding the reserves of Strathcona and Pipestone, see the
Meeting Materials and the annual information form of Pipestone dated March 8, 2023 for the year ended
December 31, 2022, a copy of which is available on Pipestone's SEDAR+ profile at www.sedarplus.ca,
respectively.
Barrels of Oil Equivalent
This press release contains references to "boe" (barrels of oil equivalent). Pipestone has adopted the
standard of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl) when converting natural gas to
boes. Boe may be misleading, particularly if used in isolation. The foregoing conversion ratio is based on
an energy equivalency conversion method primarily applicable at the burner tip and do not represent a
value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared
to natural gas is significantly different from the energy equivalent of 6:1, utilizing a conversion on a 6:1 basis
may be misleading.
About Pipestone Energy Corp.
Pipestone is an oil and gas exploration and production company focused on developing its large contiguous
and condensate rich Montney asset base in the Pipestone area near Grande Prairie. Pipestone is
committed to building long term value for our shareholders while maintaining the highest possible
environmental and operating standards, as well as being an active and contributing member to the
communities in which it operates. Pipestone has achieved certification of all its production from its Montney
asset under the Equitable Origin EO100TM Standard for Responsible Energy Development. Pipestone
shares trade under the symbol PIPE on the Toronto Stock Exchange. For more information, visit
www.pipestonecorp.com..
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Pipestone Energy Corp. published this content on 20 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 September 2023 04:26:04 UTC.