Compañía Española de Petróleos, S.A.U. (CEPSA) and Strategic Resources (Global) Limited (SRG) made an expression of interest to acquire Coastal Energy Company (TSX:CEN) from Ingalls & Snyder LLC and other shareholders for CAD 2.2 billion in cash on September 5, 2013. Compañía Española de Petróleos, S.A.U. and Strategic Resources (Global) Limited agreed in principle and entered into a definitive merger agreement to acquire Coastal Energy Company (TSX:CEN) from Ingalls & Snyder LLC and other shareholders on November 18, 2013. CEPSA and SRG will pay CAD 19 per Coastal Energy share. The transaction will be funded by CEPSA and SRG's available financial resources. CEPSA and SRG are entitled to a termination payment of $76 million (CAD 79.26 million). Certain directors, senior officers and other shareholders of Coastal, representing approximately 36.5 million of outstanding common shares, have entered into voting support agreements with CEPSA and SRG and have agreed to vote their shares in favor of the transaction.

The transaction has been unanimously recommended by the Board of Coastal Energy. Completion of the transaction is subject to customary closing conditions, including approval of two-thirds of the votes cast by holders of common shares in person or by proxy at the meeting of shareholders and by a majority of disinterested shareholders in accordance with applicable securities laws, and receipt of applicable government and other third party approvals. The transaction is not subject to any financing condition. The transaction will be completed by way of statutory merger.

In connection with or as a result of the merger: each unexercised option, whether vested or unvested, will be cancelled in exchange for a cash payment equal to an amount by which the consideration exceeds the applicable exercise price of such option, subject to withholding taxes where applicable; each outstanding RSU, whether vested or unvested, will be cancelled in exchange for a cash payment equal to the consideration; and the vesting of all outstanding SARs will be accelerated in full and the holders of SARs will receive the consideration in respect of each SAR outstanding. The extraordinary shareholder meeting will be held on January 6, 2014. The agreement is expected to be completed by January 15, 2014. The regulatory approval is expected by January 11, 2014.

The deal was approved by 97.56% of the votes cast at Coastal Energy's extraordinary meeting of shareholders held on January 6, 2014.

Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC acted as the financial advisors and Bill Groll and Aaron Meyers at Cleary Gottlieb Steen & Hamilton LLP, and Ramesh Maharaj and Terry-Ann Arch at Walkers acted as the legal advisors for Coastal Energy. Rory Murphy and Andrew Emmott from Strand Hanson Limited acted as nominated advisor for Coastal Energy. Edelman acted as PR advisor for Strategic Resources (Global) Limited. Goldman Sachs International acted as financial advisor for Compañía Española de Petróleos, S.A.U. PriceWaterhouseCoopers acted as financial advisor to both Compañía Española de Petróleos, S.A.U and Strategic Resources (Global) Limited. Freshfields Bruckhaus Deringer acted as legal advisor to Compañía Española de Petróleos, S.A.U. Blake, Cassels & Graydon LLP, Helen Bradley at Baker & McKenzie and Richard Fear, Robert Briant, Patrick Ormond and Sonia Xavier of Conyers Dill & Pearman, LLP acted as legal advisors to both Compañía Española de Petróleos, S.A.U and Strategic Resources (Global) Limited. Neville McClure, John Anderson, Alice Davidson and Kate DaSilva of Stikeman Elliott LLP acted as legal advisors to Coastal Energy.

Capita Asset Services acted as registrar and Computershare Investor Services Inc. as depository bank to Coastal Energy. The currency conversion was done through www.oanda.com as on November 19, 2013.

Compañía Española de Petróleos, S.A.U. (CEPSA) and Strategic Resources (Global) Limited (SRG) completed the acquisition of Coastal Energy Company (TSX:CEN) from Ingalls & Snyder LLC and other shareholders on January 17, 2014. The common shares of Coastal Energy are expected to be delisted from the Toronto Stock Exchange.