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Abstract
Pursuant to the Arrangement, [Rider] shareholders will receive 0.4659 of a Trust Unit of Shiningbank, pro-rata ownership in the common shares of Exploreco, and arrangement warrants for participation in a private placement to Exploreco. "The acquisition of properties from Rider is a continuation of Shiningbank's strategy of acquiring high quality, long-life, natural gas weighted assets", said David Fitzpatrick, President and CEO of Shiningbank. "As a result of the transaction, Shiningbank will add approximately 8,800 barrels of oil equivalent per day (boe/d) of production with an attractive portfolio of drilling opportunities adjacent to our Ferrier/O'Chiese core area. The transaction is expected to be accretive to Shiningbank on cash flow per unit and production per unit measures."
Pursuant to the Arrangement, Rider shareholders will receive common shares and arrangement warrants in Exploreco for each Rider share held. The arrangement warrant will allow Rider shareholders to acquire $10 million of Exploreco shares at the same issue price as the private placement to management, employees and directors of Rider. Assuming a full subscription to the private placement and exercise of arrangement warrants, Exploreco will be well capitalized with a cash position of up to $20 million and no debt, and positioned to aggressively pursue and expand its asset base and certain exploratory initiatives, which are currently underway.
An information circular detailing the Arrangement is anticipated to be mailed to Rider shareholders by late October 2006. A special meeting of Rider shareholders to consider the Arrangement will occur in early December 2006. The Arrangement will require the approval of 66 2/3 percent of the votes cast by the shareholders and optionholders of Rider, voting as a single class, the approval of the majority of shareholders, excluding directors and officers of Rider and the approval of the Court of Queen's Bench of Alberta, the Toronto Stock Exchange and certain regulatory agencies. In addition, Rider has agreed that it will not solicit or initiate discussions or negotiations with any third party for any business combination involving Rider. Under certain circumstances, Shiningbank and Rider have agreed to pay non-completion fees in the event that the transaction is not completed.