Aspen Group Resources moves to acquire Endeavour Resources in Canada

By the OGJ Online Staff

HOUSTON, Oct. 24 -- Directors of both companies unanimously approved an agreement for Aspen Group Resources Corp. of Oklahoma City, to acquire Canadian-based Endeavour Resources Inc. through an exchange of stocks and warrants, officials said Wednesday.

"The acquisition of Endeavour is by far our most significant to date and we anticipate that it will increase our daily production by almost 60%," said Aspen Chairman and CEO Jack Wheeler.

"It will complement our business model by adding a strong exploration and development

program in Canada. Endeavour's management team has built an outstanding gas-weighted production platform with quality exploration potential in multiple areas. We see the acquisition of Endeavour as accretive to our cash flow and earnings immediately following closing," he said.

Under the acquisition agreement, Endeavour shareholders would receive 0.2375 share of Aspen common stock and 0.11875 of a warrant to purchase additional Aspen stock for each share of Endeavour stock held.

Each whole warrant entitles the holder to purchase one common share of Aspen for $1.25 until Sept. 30, 2002 or $1.75 thereafter until June 30, 2003.

If all Endeavour shares were tendered, Aspen would issue up to 11.5 million common shares from treasury.

Some Endeavour shareholders, including the company's management, have already signed a lock-up agreement to support the proposed acquisition. That group represents up to 49% of Endeavour's outstanding shares, said company officials.

Endeavour agreed to pay a $500,000 breakup fee to Aspen if it accepts a competing bid.

Aspen also agreed to pay a like amount to Endeavour if more than 50% of that company's shares are tendered but not acquired by Aspen or if a third party acquires more than 50% of Aspen.

Based in Calgary, Endeavour has operations in Alberta and Texas, with average net daily production of 750 boe/d. About 75% of its production is natural gas. Its proven oil and gas reserves totaled 186,000 bbl of oil and 4.3 bcf of gas at the start of this year.