MGM Energy Corp. has completed its formal search for a partner for its Canol shale oil lands. To date, the Company has not been successful in obtaining a partner to assist in the funding of further assessment of the Canol shale oil play and, as a result, the Company will not be drilling any additional wells in the Canol shale oil play in the upcoming winter of 2014/15.
As a result of the Company's inability to obtain a partner to assist it in funding its Canol shale play, the Company has had high level discussions with management of Paramount Resources Ltd. (“Paramount”), which owns 13.9% of MGM Energy's shares, regarding Paramount acquiring the MGM Energy shares not owned by it. Through such discussions, Paramount has indicated to MGM Energy that it is investigating potentially making a proposal to acquire all of the issued and outstanding shares of MGM Energy. However, there are no assurances that any such proposal will be made by Paramount and, if made, Paramount has indicated to MGM that such a proposal is currently expected to be at or below the current trading price of MGM Energy's shares. In addition, Paramount has indicated to the Company that it is supportive of MGM Energy searching for other strategic alternatives and if Paramount were to make a proposal, such proposal would also allow MGM Energy to search for strategic alternatives for a period of time after any definitive agreement was entered into regarding Paramount's acquisition of the Company's shares not owned by it.
The Company continues to have sufficient cash to fund its expected expenditures through to at least mid 2015.
MGM Energy also announces an update of its assessment of the shale oil initially-in-place (“OIIP”) within the Canol and Bluefish formations on the Company’s land holdings in the Central Mackenzie Valley, Northwest Territories.
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