HAMMERHEAD ENERGY INC. ANNOUNCES SHAREHOLDER AND COURT APPROVAL FOR THE PLAN OF ARRANGEMENT

Rhea-AI Summary

Hammerhead Energy Inc. (HHRS) to be Acquired by Crescent Point Energy Corp. in a $15.50 Cash and 0.5340 Crescent Point Common Share Deal

Insights

Financial Analyst

The acquisition of Hammerhead Energy Inc. by Crescent Point Energy Corp. represents a significant consolidation within the energy sector. The transaction, structured as a plan of arrangement, offers a mix of cash and stock to Hammerhead shareholders, which is a common approach to provide immediate liquidity and future growth potential. The unanimous shareholder approval indicates strong confidence in the deal's valuation and terms.

From a financial perspective, the offered price of $15.50 in cash plus 0.5340 of a Crescent Point common share per Hammerhead share will have immediate balance sheet implications for both entities. For Crescent Point, the acquisition cost must be justified by the projected synergies and the value of Hammerhead's assets. Shareholders of Hammerhead will need to assess the future performance of Crescent Point's shares to determine the long-term benefit of the transaction.

The energy sector is often evaluated based on reserve quantities, production efficiency and commodity prices. This acquisition suggests a strategic move by Crescent Point to increase its market share and resource base, which could lead to operational synergies and cost savings. However, the long-term success will hinge on the integration of assets and the management of the combined entity's capital structure.

Industry Analyst

The approval of the acquisition under Section 193 of the Business Corporations Act (Alberta) and the subsequent final court approval signify a pivotal regulatory milestone. The overwhelming shareholder support, with a 100% vote in favor, reflects a consensus that the arrangement is in their best interest. This level of support is notable, given that minority shareholder protection mechanisms, such as Multilateral Instrument 61-101, were in place to ensure a fair process.

Industry-wise, such mergers and acquisitions are indicative of a consolidation trend within the energy sector, often driven by the need to optimize operations and achieve economies of scale. The strategic rationale usually involves accessing new reserves, improving operational efficiencies and enhancing competitive positioning. For stakeholders, the immediate impact is the change in ownership and potential shifts in corporate strategy, while the long-term implications include the integration of operations and potential market revaluation of the merged entity.

Legal Expert

The legal process surrounding this transaction, including the adherence to Multilateral Instrument 61-101, is designed to protect minority shareholders in significant corporate reorganizations. The unanimous approval by shareholders, excluding those votes which may not be included for minority approval, underscores the legal robustness of the arrangement. It is crucial to note that such transactions are subject to rigorous legal scrutiny to ensure compliance with corporate laws and fair treatment of all shareholders.

The role of the Court of King's Bench of Alberta in granting final approval is a testament to the legal due diligence performed in this acquisition. For the broader industry, this transaction serves as a case study in navigating complex legal frameworks governing corporate mergers and acquisitions. The successful legal execution of this arrangement will likely serve as a precedent for future transactions within the sector.

CALGARY, AB, Dec. 20, 2023 /PRNewswire/ - Hammerhead Energy Inc. ("Hammerhead" or the "Corporation") (TSX: HHRS) (NASDAQ: HHRS) is pleased to announce that today at its special meeting (the "Meeting") of the holders (the "Shareholders") of Class A common shares of Hammerhead (the "Common Shares"), the Shareholders passed a special resolution (the "Arrangement Resolution") approving a plan of arrangement under Section 193 of the Business Corporations Act (Alberta), pursuant to which Crescent Point Energy Corp. ("Crescent Point") will acquire all of the issued and outstanding Common Shares and the Corporation will become a direct wholly owned subsidiary of Crescent Point. Shareholders (other than dissenting Shareholders) will receive, for each full Common Share held, $15.50 in cash and 0.5340 of a Crescent Point common share (the "Arrangement").

The Arrangement Resolution was required to be approved by: (a) at least 66⅔% of the votes cast by Shareholders present in person or represented by proxy at the Meeting; and (b) a simple majority of the votes cast by Shareholders present in person or represented by proxy at the Meeting after excluding the votes cast by persons whose votes may not be included in determining minority approval of a "business combination" pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), as further described in the management information circular and proxy statement of the Corporation dated November 17, 2023 (the "Information Circular").

A total of 84,442,061 Common Shares (approximately 88.02% of the issued and outstanding Common Shares) were represented at the Meeting in person or by proxy. The Arrangement Resolution was approved by 100.00% of the votes cast by Shareholders, either in person or by proxy at the Meeting, and by 100.00% of the votes cast by Shareholders, either in person or by proxy at the Meeting, after excluding the votes cast by persons whose votes may not be included in determining minority approval of a "business combination" pursuant to MI 61-101.

Hammerhead is also pleased to announce that today it received final approval from the Court of King's Bench of Alberta for the Arrangement. Closing of the Arrangement is expected to occur on or about December 21, 2023. It is expected that the Common Shares will be delisted from the Nasdaq Capital Market (the "NASDAQ") and the Toronto Stock Exchange (the "TSX") following closing of the Arrangement, and Hammerhead will submit an application to cease to be a reporting issuer in each of the provinces of Alberta and Ontario under National Policy 11-206 – Process for Cease to be a Reporting Issuer Applications promptly upon the delisting of the Common Shares.

For details of the voting results on the sole matter considered at the Meeting, see Hammerhead's Report of Voting Results filed pursuant to Section 11.3 of National Instrument 51-102 – Continuous Disclosure Obligations on www.sedarplus.ca.

In order for Shareholders to receive the consideration to which they are entitled pursuant to the Arrangement, registered Shareholders are required to deposit the certificate(s) or direct registration statement ("DRS") advice(s) (if any) representing the Common Shares held by them along with the letter of transmittal, validly completed and duly executed, and all other documents required by the terms of the Arrangement and the letter of transmittal, with Computershare Investor Services Inc. (the "Depositary") at the address indicated on the last page of the letter of transmittal. Registered Shareholders who do not deposit a validly completed and duly executed letter of transmittal, together with the certificate(s) or DRS advice(s) representing their Common Shares and the other relevant documents, will not receive the consideration to which they are otherwise entitled pursuant to the Arrangement until the deposit of such materials is made. Letters of transmittal were previously sent to registered Shareholders with the materials of the Meeting. Beneficial Shareholders (i.e. Shareholders whose Common Share are held by an intermediary/broker) will receive the consideration through their intermediary/broker. All questions, including any request for another letter of transmittal, should be directed to the Depositary, which can be contacted at 1-800-564-6253 (toll free) or 1-514-982-7555 (outside North America) or corporateactions@computershare.com.

The Information Circular is available on Hammerhead's profile on SEDAR+ at www.sedarplus.ca, on Hammerhead's profile on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR) at www.sec.gov and on Hammerhead's website at www.hhres.com.

Hammerhead is a Calgary, Canada-based energy company, with assets and operations in Alberta targeting the Montney formation. Hammerhead Resources Inc., the predecessor entity to Hammerhead Resources ULC, a wholly owned subsidiary of Hammerhead, was formed in 2009.

Contacts:

For further information, please contact:

Scott Sobie
President & CEO
Hammerhead Energy Inc.
403-930-0560

Mike Kohut
Senior Vice President & CFO
Hammerhead Energy Inc.
403-930-0560

Kurt Molnar
Vice President Capital Markets & Corporate Planning
Hammerhead Energy Inc.
403-930-0560

Reader Advisory

Currency

All amounts in this press release are stated in Canadian dollars (C$) unless otherwise specified.

Forward-Looking Statements

Certain information contained herein may constitute forward-looking statements and information (collectively, "forward-looking statements") within the meaning of applicable securities legislation, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve known and unknown risks, assumptions, uncertainties and other factors. Undue reliance should not be placed on any forward-looking statements. Forward-looking statements may be identified by words like "expects", "may", "should", "will", "target", and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this press release include but are not limited to, statements regarding: the expected acquisition of the Common Shares by Crescent Point; the expected closing date of the Arrangement; the anticipated timing of when the Common Shares will be delisted from the NASDAQ and TSX; and the ability of the parties to satisfy the other conditions to, and to complete, the Arrangement.

Such forward-looking statements reflect the current views of the Corporation with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause results to differ materially from those expressed in the forward-looking statements. These risks and uncertainties include but are not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreements relating to the Arrangement; the inability to complete the Arrangement due to the failure to meet the conditions to closing; and other matters. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

With respect to forward-looking statements contained in this press release, Hammerhead has made assumptions regarding, among other things: that the parties will complete the Arrangement on the terms and on the timing contemplated by management of Hammerhead; that the Common Shares will be delisted from the NASDAQ and the TSX following closing of the Arrangement; and that all necessary conditions will be met for the completion of the Arrangement. Although the Corporation believes that the expectations reflected in the forward-looking statements contained in this press release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not an exhaustive list of all assumptions which have been considered. The forward-looking statements contained in this press release are made as of the date hereof and Hammerhead does not undertake any obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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SOURCE Hammerhead Energy Inc.

FAQ

What is the latest announcement from Hammerhead Energy Inc. (HHRS)?

Hammerhead Energy Inc. (HHRS) announced that Crescent Point Energy Corp. will acquire all of its issued and outstanding Common Shares in a deal where shareholders will receive $15.50 in cash and 0.5340 of a Crescent Point common share.

What was the result of the special meeting of Hammerhead Energy Inc. (HHRS) shareholders?

The special resolution approving the plan of arrangement under Section 193 of the Business Corporations Act (Alberta) was passed by 100.00% of the votes cast by shareholders, representing approximately 88.02% of the issued and outstanding Common Shares.

When is the expected closing of the Arrangement between Hammerhead Energy Inc. (HHRS) and Crescent Point Energy Corp.?

The closing of the Arrangement is expected to occur on or before a specific date, which should be mentioned in the PR.