September 19, 2013
Montclair Energy, LLC
500 – 3940 Montclair Road
Birmingham, Alabama 35213
This letter agreement supplements and amends the Agreement of Confidentiality, dated April 25, 2013 (the "Confidentiality Agreement"), pursuant to which Montclair Energy, LLC ("Montclair Energy") was granted access to Equal Energy Ltd.’s ("Equal" or the "Company") data room for the purpose of evaluating a potential acquisition of all of the common shares of Equal. Capitalized terms not otherwise defined in this letter shall have the meanings ascribed to such terms in the Confidentiality Agreement.
In consideration for their mutual undertakings and agreements herein, the parties agree to the following:
1) The Company undertakes to update the information in the data room, including by adding current information regarding the detailed reports underlying the Company’s reserve estimates engineering reports and other relevant information pertaining to the Company’s assets. The Company will also provide Montclair Energy reasonable access to the Company’s senior management and personnel responsible for managing the Company’s land positions and will make commercially reasonable efforts to provide access to the authors of the Company’s technical reports and reserve estimates.
2) Notwithstanding section 1 of the Confidentiality Agreement, Montclair Energy may disclose the Evaluation Material to any third-party considering providing financing for a transaction, including sources of possible equity or debt financing, and their Representatives. Prior to making such disclosures, Montclair Energy shall ensure confidentiality, on the same terms and conditions as contained in the Confidentiality Agreement, from such financing parties; provided, (a) that such financing parties will be permitted to retain copies of Evaluation Material in order to satisfy legal, credit, audit or regulatory requirements and (b) the period of confidentiality applicable to any such financing party that is a financial institution or fund shall be one year instead of two as provided in section 2 of the Confidentiality Agreement.
3) Montclair Energy will continue to be bound by the restrictions in section 9 of the Confidentiality Agreement for two months after the date of this letter agreement.
Please confirm your acceptance of the foregoing terms by countersigning this letter and returning it to the undersigned.
Yours very truly,
EQUAL ENERGY LTD.
Per: /s/ Don Klapko
Don Klapko, President & CEO
Agreed this 20th day of September, 2013.
MONTCLAIR ENERGY, LLC
Per: /s/ W. Cobb Hazelrig
W. Cobb Hazelrig, Partner
many are now calling for NG producers to jump massively on higher prices.... Montclair may up the bid and attain an endorsed friendly deal now that Klapco has opened the books and set the table for High Tea.
What would happen if Montclair's offer is withdrawn and no others are announced. I would not totally be surprised given Klapko's approach to negotiating a deal that this might happen. Since this process has been slow and torchuous and mostly out of the share holders' scrutiny all we can do is participate in idle speculation. I suspect if it were withdrawn then the majority of share holders would be calling for the board's resignation since they are the ones acting like a filter. I bet many would be kicking themselves for not selling at these levels since the price is being supported by this offer. If that did happen then our current market price would be negatively impacted and questions about our true future value placed in another futile debate. Meanwhile Klapko continues his gravy train. We may even sink below $4 despite improved propane prices. Any thoughts.
Montclair...can put the offer directly to shareholders....I suspect that discussion has already taken place..hence Klapco new openness to the books and management.....Montclair could certainly make a move to a seat on the board or the entire board if things get rocky.... So now the friendly side of negotiations should play out.... Montclair has done well to corner Klapco....
Nice job finding / posting this.
It seems Montclair really wants this property and is trying to do what ever it takes to get it. I haven't quite figured out why they are the only ones expressing any interest, but I will say they sure are persistent.
Yes, there were multiple parties that had access to data room earlier this year.
I think the chairman of the board even said something about "time for them to make an offer if they want'. So yes, why no other offers?
The company is only worth what somebody is willing to pay for it, not what people think.
Sounds like the typical homeowner. Thinks house is worth $500K and puts it up for sale for $500K. After 6 months best offer is $400K. What is house worth?
Same for Equal. I have heard on these boards that company is worth $5.50 and even some saying $7-$10. This company has been in play for a year with a couple investment bankers shopping the company around. Multiple parties have looked at the books in the data room. Right now the company is worth $4.85 because that is the best offer so far.
If propane goes to $2, then company may be worth a lot more, but that is not now, that may happen.
It does appear no one else is requesting access and that Montclair's continued interest indicates their $4.85 bid was still in what they consider to be a bargain area. The question is: At what level does Montclair believe they still get a good deal and how does that compare with shareholder expectations. Ultimately the shareholders have to approve the transaction and there is not enough inside ownership to affect the outcome.