EnQuest Recommends Aquisition of Stratic Energy Corporation

IRJ Aug 3 - Independent oil and gas production & development company, EnQuest PLC (“EnQuest”, the “Group” or the “Company”) is pleased to announce that it has entered into an Arrangement Agreement (the “Arrangement Agreement”) to acquire the entire issued share capital of Stratic Energy Corporation (“Stratic”) (the “Acquisition”).

Stratic shareholders shall be entitled to receive 0.089626 EnQuest shares per Stratic share. Based on EnQuest’s average closing price on the London Stock Exchange between 28 July to 2 August 2010, this equates to an offer of 17.00 Canadian cents (the “Offer Price”) for each existing Stratic share, valuing the issued and to be issued share capital of Stratic at approximately US$45.7 million (the “Offer Value”). The Offer Price represents a 70% premium to Stratic’s closing price on Friday 30 July (the Toronto Stock Exchange was closed on Monday 2 August) and a 9% premium to Stratic’s three month volume weighted average price of 15.56 Canadian cents. This purchase price is the equivalent, adjusted for tax, to paying approximately US$11.2 per barrel for 2P reserves. All amounts are in US dollars, unless otherwise stated.

As part of the transaction EnQuest will refinance Stratic’s US$74.7 million net debt (as at 30 June), consisting of bank debt of US$18.9 million, convertible bonds of US$66.7 million and cash of US$10.9 million. EnQuest has agreed with the providers of its existing $280 million committed banking facility to increase the facility size by $70 million.