Vermilion Energy Trust says that Verenex Energy, in which Vermilion holds 18,760,540 common shares representing a 41.9% equity ownership position (38.0% on a fully diluted basis), has entered into a definitive arrangement agreement with the Libyan Investment Authority pursuant to which the LIA, through a subsidiary, has agreed to acquire all of the Verenex shares issued and outstanding upon completion of the transaction at a price per share in cash equal to $7.09 plus an additional amount per share (the "Working Capital Amount" and, together with the $7.09 offer price, the "Cash Purchase Consideration") to be determined by the Board of Directors of Verenex and the LIA at the time of completion of the transaction based on the aggregate amount, if any, of positive net working capital in Verenex at such time (determined on a pro-forma basis in accordance with the provisions of the Agreement).

It is a condition to the completion of the transaction that such pro-forma closing working capital amount not be negative. Based on preliminary estimates agreed to by the LIA, Verenex expects the Working Capital Amount to be a nominal amount of approximately $0.15 per share, assuming completion of the transaction in mid-December. The final determination of the Working Capital Amount is subject to a number of factors, primarily the period of time for completion of the transaction, the rate of ongoing expenditures (primarily general and administrative expenses) and closing costs.

Holders of Verenex in-the-money options and performance warrants who have properly elected in a manner acceptable to Verenex will surrender such options and performance warrants under the arrangement in exchange for a cash payment equal to the in-the-money amounts thereof determined with reference to the per share Cash Purchase Consideration being paid for the Verenex Shares.

An irrevocable letter of credit in the amount of $350 million, the aggregate purchase consideration payable by the LIA to acquire Verenex, has been deposited in escrow on behalf of the LIA as security for the availability of the aggregate purchase funds upon satisfaction or waiver of the conditions set out in the Agreement.

Tags: Verenex Energy Inc.