Painted Pony Enters into Agreement to be Acquired by Canadian Natural Resources Limited

CALGARY, Alberta, Aug. 10, 2020 (GLOBE NEWSWIRE) -- Painted Pony Energy Ltd. ("Painted Pony" or the "Corporation") (TSX: PONY) announces that it has entered into a definitive arrangement agreement (the “Arrangement Agreement”) with Canadian Natural Resources Limited (the “Purchaser”) (TSX, NYSE: CNQ) pursuant to which the Purchaser has agreed to acquire all of the issued and outstanding common shares of Painted Pony (“Painted Pony Shares”) for cash consideration of $0.69 per Painted Pony Share (the “Purchase Price”). The Purchase Price represents approximately a 30% premium over the twenty-day volume weighted average trading price of the Painted Pony Shares on the Toronto Stock Exchange (the “TSX”). The proposed transaction (the “Transaction”) is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta).

STRATEGIC RATIONALE
Weak prices for natural gas over the past three years and a recent decline in natural gas liquids (“NGL”) prices have resulted in lower than expected adjusted funds flow. This sustained period of low adjusted funds flow, as well as Painted Pony’s limited ability to access external markets on an accretive basis, has deprived Painted Pony’s asset base of the capital necessary to fund meaningful development. Given the challenges facing Painted Pony, including potential near-term liquidity considerations, the Corporation’s Board of Directors (the “Board”) initiated a confidential process, supervised by a special committee of independent members of the Board (the “Independent Committee”) to explore opportunities to enhance shareholder value (the “Process”).

After reviewing Painted Pony’s current circumstances and the proposals received in connection with the Process, the Board determined that the Transaction represented the best alternative for Painted Pony’s shareholders given current industry, economic and capital markets conditions. The Purchase Price is all cash and not subject to any financing conditions, which provides Painted Pony shareholders with an immediate opportunity to realize full liquidity and certainty of value in cash for their investment in the Corporation.

THE ARRANGEMENT AGREEMENT AND APPROVALS
Under the Transaction, the Purchaser will acquire all of the issued and outstanding Painted Pony Shares in exchange for the payment to shareholders of the Purchase Price for each Painted Pony Share held.

Painted Pony will seek approval of the Transaction by its shareholders and holders of options (together, the "Securityholders") at a special meeting expected to be held in September 2020 (the "Meeting"). The Transaction is subject to approval by Securityholders at the Meeting, including the approval of at least: (a) two-thirds of the votes cast by the shareholders in person or represented by proxy at the Meeting; (b) two-thirds of the votes cast by the Securityholders in person or represented by proxy at the Meeting, voting together as a single class; and (c) if required, a majority of the votes cast by shareholders in person or represented by proxy at the Meeting, after excluding the votes cast by those shareholders whose votes are required to be excluded in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.