Calgary, Alberta – December 2, 2024

Gear Energy Ltd. (TSX: GXE) (OTCQX: GENGF) has made headlines with an exciting arrangement to enhance shareholder value and establish a new company dedicated to growth in the oil sector. The Canadian energy firm has signed a significant agreement with a prominent publicly traded company, termed the "Purchaser," which entails the acquisition of all Gear's outstanding common shares for an estimated $110 million in cash. Notably, this deal strategically excludes Gear’s valuable properties in Central Alberta, Southeast Saskatchewan, and Tucker Lake, which are set to be transferred to a newly established entity called "Newco."

Each Gear shareholder is poised to receive $0.607 per share as part of the transaction, with options to choose between cash, shares in Newco, or a mix of both, all while adhering to specified caps outlined in the agreement. Kevin Johnson, President and CEO of Gear, expressed enthusiasm over the deal, highlighting its potential to provide immediate cash and form a new entity focused on organic growth in the oil market.

Key Transaction Details:

The arrangement is structured under Alberta's Business Corporations Act, with the closing anticipated in late January or February 2025, depending on the receipt of necessary approvals. Shareholder approval at a special meeting, expected to be convened early next year, is a crucial requirement, needing support from at least two-thirds of shareholders present.

This transaction hints at an exciting future for both Gear and Newco, with expectations that Newco will lead in leveraging a high-quality and opportunity-rich asset base to increase shareholder value significantly.

Shareholder Benefits and Newco's Strategy:

Not only will shareholders gain immediate cash benefits, but they will also have stakes in Newco, a firm expected to hone in on fully funded growth opportunities. Newco plans to capitalize on existing assets that are projected to allow for substantial production increases. With approximately 3,700 boe/d currently situated within Gear's portfolio, Newco will retain around 31% of this production post-transaction.

The strengths of the Newco Assets include centralized operations in Alberta, targeting established regions with low decline rates and emerging development projects like those in Southeast Saskatchewan. Additionally, Newco will manage assets in the widely recognized Cold Lake oil sands area.

Market Impact and Future Prospects:

This strategic move is seen as a bold step forward for Gear as it aligns with its commitment to maximizing value for its shareholders. Both the incoming and existing management teams are set to create robust strategies aimed at exploration and increased production efficiency.

While the energy market faces challenges driven by geopolitical tensions, supply chain disruptions, and economic fluctuations, Gear Energy Ltd.’s strategic decision positions it competitively. As this transformative deal unfolds, market watch will be crucial for understanding its impact on shareholder value and sector performance.

Upcoming Developments:

Keep an eye out for further announcements detailing Newco’s operational strategies and 2025 capital programs, which are expected to be announced shortly after the meeting of shareholders scheduled for early 2025. This is definitely a pivotal moment for Gear Energy, and individuals tracking the oil market should stay alert!

In related news, Gear has confirmed a minor dividend payment of $0.005 per share is to be issued on December 31, representing one of the final distributions before the transaction is executed.

Join us in following these developments closely, as they hold the key to unlocking future opportunities for shareholders and establishing a dynamic new force in the oil sector!