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by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery lost 38 cents to $46.97 on the New York Merc, while Brent for October lost 47 cents to $49.24 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.55 to WTI ($32.80), unchanged. Natural gas for September was unchanged at $2.85. The TSX energy index lost a fraction to close at 198.65.

The future is up in the air for Alberta and Saskatchewan producer Twin Butte Energy Ltd. (TBE), which lost 1.5 cents to 2.5 cents on 13.4 million shares, after its controversial takeover proposal was shot down by disgruntled debentureholders. The takeover offer, which arrived two months ago from Reignwood Resources (linked to China's Reignwood Group), had promised six cents for each of Twin Butte's shares and 14 cents on the dollar for the holders of its 6.25-per-cent debentures. Many debentureholders were appalled at the skimpy payout. An informal group of them, led by Murray Bockhold of Bockhold Investment Management, spent weeks urging a "no" vote at this morning's meeting in Calgary, despite Twin Butte's warnings that this could plunge the debt-laden company into receivership. The group got its wish. Although the proposal received greater than two-thirds support from shareholders, who voted 78 per cent in favour, a mere 32 per cent of debentureholders were willing to vote yes, less than half of what was required. Now the tap-dancing begins again for Twin Butte. The company is already in default under its credit agreement because it failed to repay an $85-million facility on June 23, and although its lenders entered into a forbearance agreement, that agreement expired the moment that the takeover was rejected. The lenders are now entitled to exercise their rights, which include appointing a receiver to liquidate Twin Butte's assets. Twin Butte says it will engage in "pro-active discussions" with the lenders to see what it can do. The informal debentureholder group, meanwhile, has yet to publicly react to the vote. It has previously said that if the takeover were voted down, it would be "prepared to step forward and provide tangible support for alternative paths forward." Just what those paths might be remains unclear.

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