The Toronto Stock Exchange reports that Gear Energy Ltd., Cenovus Energy Inc. and Lotus Creek Exploration Inc. (Newco) have entered into an arrangement agreement, pursuant to which, through a series of transactions, holders of Gear shares will transfer each of their Gear shares to Cenovus for cash consideration or common shares of Newco, or a combination thereof. According to the TSX, Gear shareholders will receive 60.7 cents in total consideration per Gear share. Gear shareholders may elect to receive, in respect of each Gear share held, either 60.7 cents in cash, 0.3035 of a Newco share or a combination thereof, subject to the proration and consideration caps set out in the plan of arrangement. It is understood that Newco has applied to list its shares on the TSX Venture Exchange.

The TSX notes that the maximum aggregate amount of cash consideration distributable to Gear shareholders pursuant to the arrangement is $80-million and the maximum amount of share consideration distributable to Gear shareholders pursuant to the arrangement is 40 million Newco shares. Fractional Newco shares will not be issued. In lieu of any fractional Newco share, each Gear shareholder otherwise entitled to a fractional interest in a Newco share will only be entitled to receive the lowest whole number of Newco shares (with all fractions being rounded down). Any amounts of cash consideration will be rounded to the nearest whole cent.

The election deadline is 4:30 p.m. Calgary time on Jan. 30, 2025. To receive the consideration, shareholders must return the letter of transmittal and election form, together with Gear share certificates or DRS advices, to Odyssey Trust Company at its principal offices in Toronto before the election deadline. Failure by a registered Gear shareholder to complete a letter of transmittal and election form prior to the election deadline will result in a deemed election of consideration comprising 50-per-cent share consideration and 50-per-cent cash consideration, subject to the proration and consideration caps set out in the plan of arrangement. Trades from 9:30 a.m. Toronto time to 12 p.m. Toronto time on Jan. 30, 2025, will settle on the same day.