Mart Resources Inc. (MMT.T) has entered into an arrangement agreement with Midwestern Oil & Gas Co. Ltd., San Leon Energy PLC and 1038221 B.C. Ltd. Under the terms of the Arrangement Agreement, Acquireco, a wholly owned subsidiary of Midwestern, will acquire all of the issued and outstanding common shares of Mart by way of a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”). Each Mart shareholder will receive CAD$0.25 in exchange for each Mart common share held (the “Per Share Consideration”) for aggregate consideration of all Mart shares of approximately CAD$89.2 million. At closing, Mart and its subsidiaries are expected to have approximately US$200.5 million of outstanding bank debt resulting in an overall transaction value of approximately US$263 million. The Arrangement is subject to customary terms and conditions, including a Financing Condition.

The Per Share Consideration represents a 194% premium to the closing price and a 191% premium to the 20 day VWAP price of Mart’s common shares on the Toronto Stock Exchange (“TSX”) on January 21, 2016, the last trading day for Mart’s common shares prior to the date of this announcement.

The board of directors of Mart, following receipt of a unanimous recommendation by a special committee of independent directors of Mart constituted to review strategic alternatives (the “Special Committee”), has unanimously determined that the Arrangement is fair to Mart shareholders and optionholders and that the Arrangement is in the best interests of the Company and its securityholders and recommends that shareholders and optionholders vote in favour of the Arrangement. FirstEnergy Capital LLP has provided the Special Committee with a verbal opinion that the Per Share Consideration under the Arrangement is fair, from a financial point of view, to Mart shareholders.

While the offer price of CAD$0.25 to be paid to Mart shareholders pursuant to the Arrangement is lower than the price offered to shareholders under the two previously terminated transactions, it is considered to be fair by the board of directors of Mart because of (i) the continued and significant worsening of the broader macro-environment for emerging market exploration and development companies, including forecast oil prices being US$15 to US$40 per barrel lower than when the previous offers were made; (ii) increased volatility and significant reduction of net cash flows from Mart’s current operations; and (iii) significant constraints on available cash and working capital due to Mart’s ongoing obligations to service the Company’s significant level of debt.

The Arrangement Agreement

The Arrangement is subject to customary conditions for a transaction of this nature, which include court approvals, applicable third party approvals, including consent of Mart’s lenders to the change of control, applicable regulatory and stock exchange approvals, the approval of 66 2/3% of Mart shareholders and 66 2/3% of Mart shareholders and optionholders (voting together as a single class) represented in person or by proxy at a special meeting of Mart shareholders and optionholders to be called to consider the Arrangement.

The Arrangement Agreement includes customary non-solicitation covenants by Mart and provides Mart with the ability to respond to unsolicited proposals considered superior to the Arrangement in accordance with the terms of the Arrangement Agreement. In the event Mart accepts a superior proposal, Mart will be required to pay a break fee of US$2.2 million to Acquireco. Acquireco has a right to match any such superior proposal.

The Arrangement is subject to a financing condition (the “Financing Condition”). San Leon has agreed to complete a financing and advance sufficient funds to Acquireco in order for Acquireco to deposit the aggregate Per Share Consideration and certain amounts relating to Mart’s transaction costs with a depository on or before February 17, 2016. Acquireco has agreed to use commercial reasonable efforts to satisfy the Financing Condition on or before February 17, 2016 and to keep Mart informed as to the status and timing of the satisfaction of the Financing Condition. If the Financing Condition is not met, Acquireco shall have the right to terminate the Arrangement Agreement upon the payment by San Leon to Mart of a reverse break fee of US$2.2 million (“San Leon Reverse Break Fee”). If the aggregate Per Share Consideration and amounts relating to Mart’s transactions costs are not paid to the depository on or before February 17, 2016, Mart shall have the right to terminate the Arrangement Agreement and San Leon will be required to pay to Mart the San Leon Reverse Break Fee.

An information circular regarding the Arrangement is expected to be mailed to Mart securityholders in early February for a special meeting of the holders of common shares and options to consider the Arrangement currently anticipated to take place in early March, with closing expected to occur shortly thereafter.

A copy of the Arrangement Agreement will be made available under the Company’s profile on SEDAR at

All of the members of Mart’s board of directors and certain senior officers, who collectively own approximately 1.6% of the outstanding Mart common shares and 73.7% of the outstanding Mart options have agreed to vote their shares and options in favour of the Arrangement.