Ultra Holdings Inc. (UHI), Vancouver, said Friday it will vote against Ultra Petroleum Corp.'s proposed acquisition of Houston-based Pendaries Petroleum Ltd. at a general shareholders meeting Dec. 15. It cited concerns about funding Pendaries' Chinese project in addition to Ultra's existing Wyoming Green River basin undertakings.
Ultra Petroleum agreed in October to acquire the company through a stock swap that would leave Pendaries shareholders owning 21% of Ultra (OGJ Online, Oct. 18, 2000).
The offer calls for Ultra to issue 1.58 shares of its common stock for each share of Pendaries common stock. If the deal is completed, Pendaries will become a wholly owned subsidiary of Ultra.
UHI said the proposed acquisition cost will be insufficient to cover the estimated capital expenditures of $90 million (US) or more needed to develop Pendaries' 05/36 Block in Bohai Bay, China. Pendaries holds a 15% interest in the block through its Sino-American Energy subsidiary.
UHI said the cost would prevent Ultra from developing its existing interest in Wyoming's Green River basin and identifying and developing additional natural gas interests in North America. UHI also noted that Bohai production is unlikely to come online before 2003, and expressed concern that the companies' diverse E&P focus areas of North America and China.
UHI owns 13,230,600 shares, or 23%, of the issued and outstanding shares of Houston-based Ultra.
