Decision In Deer Creek Assesses Sales Process In Context Of Dissent And Valuation Litigation

On Friday, June 13, 2008 the Alberta Court of Queen's Bench dismissed the claims of dissenting shareholders in Deer Creek Energy Limited v. Paulson & Co. Inc. The claims arose from the 2005 acquisition of Deer Creek Energy Limited (Deer Creek) by a subsidiary of French super-major, Total Fina Elf (Total). The 133-page decision sanctions the Deer Creek board of directors' exercise of fiduciary duties and the sale process followed by Deer Creek in the circumstances and may represent a blow to transaction arbitrage in Alberta and elsewhere.

Total Acquires Deer Creek

Deer Creek was an emerging oil sands company with attractive mining and SAGD (steam assisted gravity drainage) assets at its Joslyn property. By 2005, it was pursuing its business plan to develop its properties and, at the same time, trying to raise the immense capital required to do so. It was actively considering all available financing