Long Run Exploration acquires Crocotta Energy

Long Run Exploration Ltd. acquired Crocotta Energy Inc. pursuant to a plan of arrangement under the provisions of the Business Corporations Act (Alberta).

The arrangement was approved by greater than a 99 per cent majority of the Crocotta shareholders who voted on the arrangement and by greater than a 99 per cent majority of the Long Run shareholders who voted on the issuance of the Long Run common shares in connection therewith. The arrangement also received approval of the Court of Queen's Bench of Alberta.

Pursuant to the arrangement, Long Run acquired all of the issued and outstanding common shares of Crocotta. Crocotta shareholders received a combination of Long Run common shares as well as common shares and warrants of a newly established Montney-focused exploration company called Leucrotta Exploration Inc. to be led by Crocotta's previous management team.

The assets excluded from Long Run's acquisition of Crocotta consist of Crocotta's assets in northeast British Columbia and northwest Alberta, which were transferred to Leucrotta in connection with the arrangement.

Under the arrangement, Long Run issued approximately 44 million common shares of Long Run and assumed $115 million of Crocotta net debt, inclusive of transaction costs. The transaction implies a value of approximately $346 million for Crocotta (excluding the assets transferred to Leucrotta). After giving effect to the arrangement, Long Run has approximately 193 million common shares outstanding. Long Run's credit facilities have been increased to $695 million from the previous $575 million. Immediately following completion of the arrangement, Long Run and Crocotta amalgamated and continued under the name "Long Run Exploration Ltd."

Gowling Lafleur Henderson LLP advised Crocotta with respect to the plan of arrangement and the spin out of its Montney assets with a team led by Greg Peterson and Frank Sur and including Bennett Wong, Kristina Athanasopoulos and Melanie Condic (corporate/securities); Geoffrey Macleod and Patrick Rea (oil and gas); Brian Kearl and Benjamin Hudson (tax); and François Baril and Elad Gafni (Investment Canada Act).

Burnet, Duckworth & Palmer LLP advised Long Run with respect to the transaction with a team led by Steve Cohen, Jake Hoeppner, Jessica Brown and Matt Grant (securities); Jody Wivcharuk and John Ozirny (competition and energy); John Wilmot (banking) and Robert Kiddine (commercial real estate).