Last updated on April 24, 2014 at 10:25 EDT

DNO International proposes an all-cash offer to acquire Calvalley Petroleum Inc. for CAD 2.30 per share

July 5, 2012

        --  Fully funded all-cash offer represents approximately 60 percent
            premium to Calvalley shareholders
        --  Strategic bolt-on to DNO International's existing Yemen asset
            base consistent with stated Middle East-North Africa expansion
        --  Provides Calvalley shareholders immediate liquidity and
            certainty of value

OSLO, July 5, 2012 /CNW/ – DNO International ASA (“DNO International”),
the Norwegian oil and gas company, announced today that it intends to
make an all-cash offer, through an acquisition entity, to acquire
Calgary-based Calvalley Petroleum Inc. (“Calvalley”) (TSX: CVI.A) at a
price of CAD 2.30 per Class A common share (the “Shares”).

DNO International’s offer represents a premium of approximately 60
percent to the CAD 1.43 closing price of Calvalley Shares on the
Toronto Stock Exchange (the “TSX”) on 4 July 2012 and approximately 55 percent to the volume weighted average trading price of Calvalley’s
Shares on the TSX for the past 30 trading days. The proposed
transaction represents a market capitalization value of approximately
CAD 215 million.

“This offer provides Calvalley shareholders with significant, immediate
and certain value for the company’s existing assets, as well as
recognizing its future growth potential,” said Bijan Mossavar-Rahmani,
DNO International’s Executive Chairman. “We also believe our own
shareholders and other stakeholders would be very well-served by the
combination of these two businesses.”

“For DNO International, this transaction is complementary to our
existing Yemen asset base and fits well with our strategy of continuing
to build a balanced portfolio of production, development and
exploration assets in the Middle East and North Africa,” said Mr.
Mossavar-Rahmani. “We believe the combination of Calvalley’s portfolio
and DNO International’s operational capabilities and strong balance
sheet position us to enhance value in Yemen through increased
production and reserves.”

Calvalley’s principal assets and operations relate to its 50 percent
working interest in the Production Sharing Agreement for Block 9, which
consists of a 2,234 square kilometre (552,000 acre) area within the
prolific Sayun-Masila Basin in the Republic of Yemen.

Calvalley also owns a 100 percent working interest in a Production
Sharing Contract in the Republic of Ethiopia for the Metema and Gimbi
blocks covering a total area of 46,470 square kilometres (11.5 million

DNO International currently holds working interests in five assets in
Yemen, three of which are in production with Company Working Interest
of 4,169 barrels of oil per day (“bopd”) in Q1 2012 (approximately 10
percent of DNO International’s production) and proved plus probable
(“2P”) reserves of 10.5 million barrels (approximately 2 percent of DNO
International’s 2P reserves). On a combined basis, Calvalley would add
production of 1,942 bopd (based on Q1 2012 data) and 2P reserves of
29.3 million barrels (as at year end 2011). Block 9 is located within
the same area as DNO International’s current Yemen assets and

The all-cash offer will not be subject to any financing condition. 
Macquarie Capital is DNO International’s financial advisor and Stikeman
Elliott LLP is DNO International’s legal advisor.

DNO International first approached Calvalley in late May with the aim of
reaching a negotiated transaction to combine the two companies. Written
offers to acquire all currently issued and outstanding Shares for CAD
2.30 per share followed with the last letter on 7th June 2012. Despite
continued discussion between the companies and DNO International’s best
efforts, after a month, the Company has not to date received any
meaningful engagement from Calvalley’s board of directors or senior
management. Given the size of the premium on offer and the potential
benefits of the transaction to Calvalley, DNO International felt
compelled to bring this offer directly to shareholders.

DNO International expects to commence the offer on or about July 12,
2012 by way of publication of an advertisement and filing of a formal
take-over bid circular. The offer will be open for acceptance for a
period of 35 days and will expire on or about August 16, 2012 unless
extended or withdrawn. Full details of the offer will be included in
the formal offer and take-over bid circular to be publicly filed and
subsequently mailed to Calvalley’s shareholders.

The offer will be subject to certain conditions, including acceptance of
the offer by holders of at least 66 (2/3) percent of Calvalley’s shares (including those held by DNO
International and its affiliates) calculated on a fully-diluted basis
and at least a majority of the Shares calculated on a fully-diluted
basis the votes attached to which would be included in the minority
approval of a second-step business combination under applicable
securities laws, no change having occurred that is, may be or would
have a material adverse effect in relation to Calvalley and receipt of
all necessary regulatory approvals.

DNO International ASA is an Oslo-listed, Middle East and North Africa
focused oil and gas company holding stakes in 17 licenses in various
stages of exploration, development and production both onshore and
offshore in the Kurdistan Region of Iraq, the Republic of Yemen, the
Sultanate of Oman, the United Arab Emirates and the Tunisian Republic.


Oslo, 5 July 2012

DNO International ASA
Corporate Communications

This information is subject of the disclosure requirements acc. to §5-12
vphl (Norwegian Securities Trading Act)

This news release contains statements that constitute “forward-looking
information” or “forward-looking statements” (collectively
“forward-looking information”) within the meaning of applicable
securities legislation. This forward-looking information includes,
among others, statements regarding the proposed offer to acquire all of
the issued and outstanding Shares of Calvalley, including the timing
and terms thereof and management’s assessment of the effects of the
successful completion of the transaction on DNO International. This
forward-looking information is subject to numerous risks and
uncertainties, certain of which are beyond DNO International’s control
including, without limitation, uncertainty related to the completion of
the transaction and the effects of the transaction on DNO
International, the impact of legislative or regulatory developments,
competition, global capital markets activity, changes in prevailing
interest rates, currency exchange rates, inflation levels and general
economic conditions in geographic areas where DNO International
operates. Readers are cautioned that the foregoing list of risk factors
is not exhaustive. DNO International’s actual results, performance or
achievements may differ materially from those expressed in, or implied
by this forward-looking information and, accordingly, no assurance can
be given that any events anticipated by the forward-looking information
will transpire or occur, or if any of them do so, what benefits that
DNO International will derive therefrom.

Forward-looking information is based on the estimates and opinions of
DNO International’s management at the time the information is released
and DNO International does not undertake any obligation to update
publicly or to revise any of the forward-looking statements, whether as
a result of new information, future events or otherwise, except as may
be required by applicable securities laws.

Information in this news release concerning Calvalley is based entirely
on publicly available sources and has not been independently verified
by DNO International. DNO International assumes no responsibility for
the accuracy or completeness of such information.

Note: All financial figures are in Canadian dollars unless noted

DNO International and its affiliates have not yet commenced the offer
referred to in this news release. The offer (as it may be varied or
extended in accordance with applicable law) will be made exclusively by
means of, and subject to the terms and conditions set out in, the offer
to purchase and take-over bid circular to be delivered to Calvalley and
filed with applicable Canadian provincial securities regulators and to
be mailed to Calvalley shareholders by the offeror. The offer to
purchase and take-over bid circular will contain important information
about the offer, including the terms and conditions of the offer, and
should be read carefully by Calvalley shareholders. When the offer is
commenced, a Calvalley shareholder will be able to obtain at no charge
the offer to purchase, take-over bid circular and all other documents
when they become available on the system for electronic document
analysis and retrieval (SEDAR) at www.sedar.com. Accordingly, this
announcement is for informational purposes only and does not constitute
or form part of any offer or invitation to purchase, otherwise acquire,
subscribe for, sell, otherwise dispose of or issue, or any solicitation
of any offer to sell, otherwise dispose of, issue, purchase, otherwise
acquire or subscribe for, any security. The release, publication and
distribution of this announcement in certain jurisdictions may be
restricted by law and therefore persons in such jurisdictions into
which this announcement is released, published and distributed should
inform themselves about and observe such restrictions.

The offer is not being made in, nor will deposits of securities be
accepted in, any jurisdiction in which the making or acceptance thereof
would not be in compliance with the laws of such jurisdiction. However,
DNO International may, in its sole discretion, take such action as it
deems necessary to extend the offer in any such jurisdiction.

In addition, this news release does not constitute an offer to sell or
the solicitation of an offer to buy any securities. No offering of
securities will be made absent registration under, or an exemption from
the registration requirements of, applicable securities laws.

SOURCE DNO International ASA

Source: PR Newswire