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Quebec’s Junex Says Utica Offer “Not Superior” – Merger in Doubt

MDN told you in June that Canada’s Quebec Province announced it will commit fracking suicide by implementing a permanent frack ban (see Quebec to Ban Utica Shale Drilling, Most Other Drilling Too). Quebec’s announcement is a virtual death sentence for oil and gas companies in the province. The shale fracking ban is coupled with new drilling standards so tight that even conventional drillers will have a difficult, almost impossible time. The result was immediate. Junex, a driller headquartered in Quebec with 1 million leased acres in the St. Lawrence lowlands (where there is Utica Shale), announced it would sell out to/merge with Cuda Energy, headquartered in Calgary, Alberta. Except now the merger is in doubt. It seems the merger was Cuda’s idea and was “unsolicited.” But hey, what’s a oil/gas driller going to do if they can’t horizontally drill and frack? Junex looked the offer over in detail and says it “does not constitute a ‘Superior Proposal’.” Oh oh. Is this a negotiating tactic for a higher price/better terms? What’s Plan B for Junex if they don’t sell out to Cuda? Here’s the latest on the Cuda/Junex potential merger…
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Quebec’s Utica Frack Ban Forces Junex to Merge with Cuda Energy

Last week the Canadian province of Quebec announced it plans to commit fracking suicide (see Quebec to Ban Utica Shale Drilling, Most Other Drilling Too). Quebec’s announcement is a virtual death sentence for oil and gas companies in the province. How? By saying they will ban shale fracking, and by making drilling standards so tight for everyone that even conventional drillers will have a difficult, almost impossible time. We are already seeing the results of Quebec’s announcement. And the result isn’t pretty. Junex, a driller headquartered in Quebec with 1 million leased acres in the St. Lawrence lowlands (where there is Utica Shale), has just announced it is selling out to/merging with Cuda Energy, headquartered in Calgary, Alberta. It was either sell out/merge, or go out of business. Thanks Quebec! You’re so “business friendly” (NOT). Quebec is quickly becoming a pariah among all the Canadian provinces, like New York State is on the other side of the border…
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Canadian Driller Gets Permit for 1st Horizontal Well in Quebec

Devonian layer shale and limestone layers don’t stop at our border with Canada. In fact, some of the Utica Shale lies north of the border, in Quebec. The problem in Canada, as in New York State, is that the government largely prevents active shale drilling. However, a sliver of sanity poked through in Quebec and in July a “junior” oil and gas exploration company, Junex, announced they’ve been granted a permit to drill their first horizontal well in a rural area 20 kilometers (12.4 miles) from the town of Gaspé. The well targets the Forillon Formation–a limestone formation in the Devonian layer (where the Marcellus and Utica are found). Apparently the “junior” Junex thinks they may have a tiger by the tail, because their board has just adopted a shareholder rights plan that puts a speed bump on any attempts at a hostile takeover of the company…
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