Cypress Energy to acquire Ranchero Energy

Cypress Energy Inc. has signed a letter of intent to acquire Ranchero Energy Inc. Both companies are based in Calgary.

Under the proposed arrangement, shareholders of Ranchero will receive $1.50 (Can.)/share in cash or, at their election, 0.1538 of a Cypress Class A share. In addition, shareholders of Ranchero will also receive one share of a new public oil and gas company that will own two of Ranchero's existing minor properties, Provost and Fox Creek.

The companies intend to enter into a definitive agreement by Feb. 16. The deal is subject to shareholder and regulatory approval.

Ranchero has agreed to pay to Cypress a noncompletion fee of $1.6 million under certain circumstances.

Ranchero's production and undeveloped land base is concentrated close to Cypress' core property of near Dawson in Northwestern Alberta.