/NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS
RESTRICTION MAY CONSTITUE A VIOLATION OF UNITED STATES SECURITIES LAW/
CALGARY, Nov. 9, 2011 /CNW/ - Triple Crown Petroleum Ltd. ("Triple Crown") (TSX Venture: TPP.P) is pleased to announce that it has entered into
a business combination agreement with First Mountain Exploration Ltd.
and has engaged Macquarie Capital Markets Canada Ltd. to lead a
commercially reasonable efforts equity financing of approximately CDN
$10 million, approximately 50% of which is intended to be issued on a
flow-through basis pursuant to the Income Tax Act (Canada). The transaction will create First Mountain Exploration Ltd., a
public Alberta-based oil and gas exploration, development and
acquisition company (the "Resulting Issuer") holding 75.5 contiguous sections of exploration acreage in the Slave
Point area of Alberta.
Triple Crown intends for the proposed transaction (the "Transaction") with First Mountain Exploration Ltd. ("First Mountain") to constitute its "Qualifying Transaction", as such term is defined
in the policies of the TSX Venture Exchange (the "Exchange"). The Transaction is subject to the approval of the Exchange.
The Transaction will be a "Non-Arm's Length Qualifying Transaction", as
such term is defined in the policies of the Exchange. First Mountain
and Triple Crown share control persons, namely William (Bill) Ambrose,
President, Chief Executive Officer and a director of Triple Crown is
also the sole director and the President of First Mountain and Janet
Scase, Chief Financial Officer of Triple Crown is also the Chief
Financial Officer of First Mountain. Mr. Ambrose controls, directly or
indirectly, 679,000 common shares of Triple Crown (being approximately
22.6% of the issued and outstanding common shares of Triple Crown) and
1.2 million common shares of First Mountain (being approximately 7.5%
of the issued and outstanding common shares of First Mountain). Ms.
Scase does not hold any shares in First Mountain and holds 100,000
common shares of Triple Crown (approximately 3.33% of the issued and
outstanding common shares of Triple Crown).
In connection with the Transaction, Triple Crown has entered into an
engagement letter dated November 8, 2011 (the "Engagement Letter") with Macquarie Capital Markets Canada Ltd. acting as agent, pursuant
to which Triple Crown intends to complete a brokered private placement
of unit subscription receipts (the "Unit Subscription Receipts") and flow-through subscription receipts (the "Flow-Through Subscription Receipts") for aggregate gross proceeds of up to CDN $10 million (the "Financing"). Up to $5 million of the Financing will be raised through the
issuance of 10 million Unit Subscription Receipts at a price of $0.50
per Unit Subscription Receipt and up to approximately $5 million of the
Financing, or such other amount as the parties may agree to in writing,
will be raised through the issuance of approximately 8.3 million
Flow-Through Subscription Receipts at a price of $0.60 per Flow-Through
Subscription Receipt, which subscription receipts will be issued on a
flow-through basis pursuant to the Income Tax Act (Canada). The agent will also be granted an option to increase the size
of the Financing by up to 15%. As a step in the Transaction, the
Flow-Through Subscription Receipts will be automatically exchanged for
common shares of the Resulting Issuer and the Unit Subscription
Receipts will be automatically exchange for units of the Resulting
Issuer (the "Units"). Each Unit will be comprised of one common share of the Resulting
Issuer and one half of one warrant (each whole warrant, a "Warrant") where each Warrant shall be exercisable for a common share of the
Resulting Issuer at a price of $0.65 per share for a period of 18
months from the effective date of the Transaction. The gross proceeds
of the Financing will be held in escrow until closing of the
The Resulting Issuer intends to use the net proceeds of the Financing to
drill three wells to test five targets. It is anticipated these wells
will be drilled in the first or second quarter of 2012. Upon review of
the results of the first three wells, the Resulting Issuer will
evaluate opportunities for follow up drilling and seismic data
Triple Crown will pay the agent a cash commission equal to 6% of the
gross proceeds of the Financing payable upon the closing of the
Transaction. In addition, Triple Crown will grant the Agent an option
to acquire that number of common shares of the Resulting Issuer equal
to 6% of the total number of Unit Subscription Receipts and 6% of the
total number of Flow-Through Subscription Receipts sold under the
Financing (the "Agent's Option"), exercisable at a price of $0.50 per Agent's Option for a period of
12 months from the date of the closing of the Transaction.
Summary of the Transaction
Triple Crown and First Mountain have entered into an arrangement
agreement (the "Agreement") dated November 8, 2011. The Agreement provides that the Transaction
will include a court-approved plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). Under the Arrangement, holders of First Mountain common shares will
receive common shares in the capital of Triple Crown on a one-for-one
basis. Holders of First Mountain's currently outstanding common shares
will have the right to vote on the Transaction at a special meeting of
the First Mountain shareholders anticipated to be held on December 20,
2011. Upon completion of the Transaction, which is currently
anticipated to occur on or about December 20, 2011, shareholders of
First Mountain and the subscribers to the Financing will own a majority
of the issued and outstanding shares of the Resulting Issuer.
As the Transaction constitutes a Non-Arm's Length Qualifying Transaction
pursuant to the polices of the Exchange, Triple Crown must seek
Majority of the Minority Approval (as such term is defined in the
policies of the Exchange). Such approval is intended to be sought at a
meeting of the shareholders of Triple Crown anticipated to be held on
December 20, 2011 (the "Triple Crown Meeting"). At the Triple Crown Meeting, shareholders of Triple Crown will also
consider for approval the election of the proposed directors and
officers of the Resulting Issuer, the adoption of a new incentive stock
option plan in connection with the Arrangement and the changing of the
name of Triple Crown to "First Mountain Exploration Ltd.".
A joint information circular outlining the Transaction will be mailed to
Triple Crown and First Mountain shareholders. All of the directors of
Triple Crown have agreed to vote in favour of the Transaction, with the
exception of Mr. Ambrose, the sole director of First Mountain, who
abstained from voting on the Transaction. In addition, a committee of
independent directors of Triple Crown reviewed the Transaction and have
unanimously recommended the approval of the Transaction.
At Triple Crown's request, trading in the Triple Crown common shares has
been halted by the Exchange pending satisfactory receipt and review of
all documents requested by the Exchange.
Triple Crown intends to apply for an exemption from the sponsorship
requirements pursuant to the policies of the Exchange. If the exemption
is not granted by the Exchange, Triple Crown will be required to engage
The Resulting Issuer
Upon completion of the Transaction and subject to Exchange acceptance,
the Resulting Issuer will be listed on the Exchange as a Tier 2 oil and
gas company focused on oil and gas exploration in Western Canada.
It is estimated that there will be approximately 37.3 million common
shares of the Resulting Issuer issued and outstanding immediately
following closing of the Transaction consisting of: (i) 3,000,000
common shares issued to the former holders of Triple Crown common
shares; (ii) 15,917,969 common shares issued to the former holders of
common shares of First Mountain; and (iii) 18,333,333 common shares issued pursuant to the Financing (upon the conversion of
the Unit Subscription Receipts and Flow-Through Subscription Receipts)
assuming the maximum of 10 million Unit Subscription Receipts and 8.3
million Flow-Through Subscription Receipts are issued pursuant to the
Financing. In addition, it is anticipated that the Resulting Issuer
will also have Warrants exercisable for 5 million Resulting Issuer
common shares and options exercisable for 440,000 Resulting Issuer
common shares (140,000 of which were issued to the agent in connection
with Triple Crown's initial public offering).
Upon the completion of the Transaction, it is anticipated that all of
the existing directors and officers of Triple Crown and First Mountain
will continue in their current positions and that management of the
Resulting Issuer will include the following persons:
William Ambrose - President, Chief Executive Officer and Director
Mr. Ambrose has 37 years' experience in the oil and gas industry. From
1972, Mr. Ambrose has held various positions with public companies in
the oil and gas industry, including with Rocky Mountain Energy Corp.,
Firesteel Resources Inc., Consolidated Global Minerals Ltd., Renegade
Oil & Gas Ltd., Renegade Petroleum Ltd. and Petro Uno Resources Ltd.
In these roles, Mr. Ambrose has acquired significant experience with
and exposure to accounting and financial reporting issues, as well as
capital markets procedure, policies and rules.
Janet Scase - Vice President, Finance and Chief Financial Officer
Ms. Scase has been a chartered accountant of Alberta for over 10 years.
Ms. Scase has held various positions with companies in the oil and gas
industry, including with ProspEx Resources Ltd., Esprit Exploration
Ltd. and Canadian Hunter Exploration Ltd., as well as with
Brad Barton - Vice President, Engineering, Chief Operating Officer and
Mr. Barton is a Professional Engineer and holds a Bachelor of
Administration Degree (1992) and a Bachelor of Applied Science Degree
(1996), both from the University of Regina. Mr. Barton has had varied
experience in petroleum engineering including day-to-day operations and
management functions. Most recently Mr. Barton was consultant to
various companies in a variety of technical and management roles
including engineering manager at Petro Uno Resources Ltd. Prior to
that Mr. Barton was Vice President of Engineering at Glamis Resources
Ltd. During his tenure at Glamis the company grew, mainly through
drilling, from a start-up to a company that produced 500 boe per day.
As Vice President of Engineering Mr. Barton oversaw all of Glamis'
field operations and was responsible for managing its reserves and
regulatory compliance. In the past Mr. Barton has also worked for
Milagro Energy Inc., Petrofund Energy Trust, Crestar Energy Inc. and
Marathon Canada Ltd.
Brian Watts -Exploration Manager
Mr. Watts has 40 years of experience working in various geological and
management roles in the oil and gas industry. Mr. Watts has had an
active role in exploration and development evaluations, operations and
evaluation of property and corporate acquisitions and divestitures at a
number of private and public companies including Camel Oil & Gas Ltd.,
Tarragon Oil and Gas Limited, Spire Energy Ltd. and Quintana Minerals
At the meeting of the shareholders of Triple Crown, the shareholders
will be asked to increase the number of directors to five and elect the
board of directors of the Resulting Issuer. Of the proposed directors
of the Resulting Issuer, three will be considered independent of
management, and Bill Ambrose and Brad Barton will be considered not
independent by virtue of their roles as officers of the Resulting
Issuer. The independent directors of the Resulting Issuer will be as
Arthur Halleran, Director
Mr. Halleran received his B.Sc. degree in Geology and M.Sc. degree in
Geology from the University of British Columbia, and his Ph.D. in
Geology from the University of Calgary. Mr. Halleran has 31 years'
technical experience in the oil and gas industry. He has held various
positions with companies in the oil and gas industry, including Canacol
Energy Inc., Hygait Resources Ltd., Rally Energy Corp., Rocky Mountain
Energy Corp., Canoro Resources Ltd., Chevron Canada Capital Co.,
Trivalence Mining Corporation and Petro Uno Resources Ltd. In these
roles, Mr. Halleran has acquired significant experience with and
exposure to accounting and financial reporting issues, as well as
capital markets procedures, policies and rules.
Sara Pettigrew, Director
Ms. Pettigrew, P. Eng received a B.Sc in Engineering from the University
of Calgary in 1998. She has 13 years' experience in oil and gas
reservoir engineering in various basins around the world. Ms.
Pettigrew is currently working as a reservoir engineer with Apache
Corporation (an international oil and gas company).
Wayne Murphy, Director
Mr. Murphy received a BBA, majoring in accounting from Acadia University
in 1980. For the next 15 years he was engaged in public practice with
HR Doane and Company and as a sole proprietor. Since 1995, Mr. Murphy
has been the driving force behind several successful privately held
companies including Lobo Music Corp., Global Webwalkers Inc., Alberta
Business Directory Inc., and Shaka Gear Inc. Mr Murphy has focused on
the oil and gas industry for the past 7 years and is a principal and
director of numerous privately held corporations including Brooklyn
Alta Inc., Hames Energy Inc., International Cleaning Facilities Red
Deer Inc., International Cleaning Facilities Edson Inc. and Score
Equipment Rentals Inc.
New Incentive Stock Option Plan
As part of the Transaction, the Resulting Issuer intends to implement a
new incentive stock option plan, the terms and conditions of which will
be implemented and determined by the board of directors of the
Resulting Issuer, but will not allow for the issuance of options to
acquire in excess of 10% of the issued and outstanding shares of the
About First Mountain
First Mountain is an Alberta-based oil and gas exploration, development
and acquisition company incorporated under the Business Corporations Act (Alberta). Management of First Mountain is all located in Calgary,
Alberta and is comprised of Ms. Scase as the Chief Financial Officer,
Mr. Ambrose as President and Mr. Barton as Vice President Exploration.
First Mountain was incorporated in December 2010 and has completed
various private financings for a total of $3.8 million.
In October 2011 First Mountain purchased 75.5 contiguous sections of
conventional exploration acreage in the Slave Lake area of Alberta for
a purchase price of $1,500,000.00 cash and 4 million common shares of
First Mountain at a deemed value of $0.375 per common share. In this
area of Alberta there are many prospective horizons. To date, five
seismically defined exploration targets have been identified on this
exploration block. Given the fact that the exploration targets overlay
each other, it is possible to test all five of the targets with three
wells. If any of the targets result in a satisfactory discovery, First
Mountain will have a new pool to develop. Additional drilling and
seismic would be required to delineate the extent of the pools.
However, current geological mapping and seismic indicate the
possibility of hydrocarbon pools. Each discovered pool would require a
significant number of development wells. Any of the oil pools may also
provide the opportunity for water flood and tertiary recovery.
In addition to the Slave Point acreage, First Mountain has the
opportunity to earn a 50% working interest in ¾ of a section of Cardium
rights in the Buck Lake area of Alberta. A non-operated well is planned
in this area for the fourth quarter of 2011.
Financial Information and Resource Report
A resource report is currently being prepared in respect of the Slave
Lake acreage by GLJ Petroleum Consultants ("GLJ") and will be effective as of November 1, 2011.
Triple Crown will prepare and disseminate a subsequent press release
including summary financial information and oil and gas resource data
of First Mountain.
About Triple Crown
Triple Crown is a capital pool company ("CPC") that has not commenced commercial operations and has no assets other
than cash. Except as specifically contemplated in the CPC policies of
the Exchange, until the completion of a Qualifying Transaction, Triple
Crown will not carry on business, other than the identification and
evaluation of companies, business or assets with a view to completing a
proposed qualifying transaction.
Neither the Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
The Exchange has in no way passed upon the merits of the proposed
transaction and has neither approved nor disapproved the contents of
this press release.
The Transaction is subject to a number of conditions, including, without
limitation, approval of the Exchange, approval of the Court of Queen's
Bench of Alberta, approval of the shareholders of First Mountain,
approval of the Majority of the Minority shareholders of Triple Crown
and completion of the Financing. The Transaction cannot close until all
required approvals have been obtained. There can be no assurance that
the Transaction will be completed as proposed, or at all.
Investors are cautioned that, except as disclosed in the information
circular of Triple Crown containing full, true and plain disclosure
regarding the Transaction, required to be filed with the securities
regulatory authorities having jurisdiction over the affairs of Triple
Crown, any information released or received with respect to the
Transaction may not be accurate or complete and should not be relied
upon. The trading in the securities of Triple Crown should be
considered highly speculative.
A Note Regarding Forward Looking Information
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities
laws. The use of any of the words "will", "expects", "believe",
"plans", "potential" and similar expressions are intended to identify
forward-looking statements or information. More particularly and
without limitation, this press release contains forward looking
statements and information concerning: the Transaction, the timing of
the Transaction, the date of shareholder meetings to approve the
Transaction, the Financing, the Resulting Issuer's anticipated work
program and future operations, the Resulting Issuer's planned capital
expenditures, drilling and development and the timing thereof. In
addition, this press release contains forward-looking statements and
information regarding the proposed Transaction, statements with regards
to the drilling targets of First Mountain, statements with respect to
the characteristics and anticipated growth and development potential of
the assets to be acquired as part of the Transaction; future drilling
and development plans of the Resulting Issuer with respect to the
assets to be acquired; the effect of the Transaction and the Financing
on the Resulting Issuer's share capital, the expected closing date of
the Transaction and the Financing; the use of proceeds of the
Financing; and the size of the Financing. In addition, statements
relating to "reserves" are deemed to be forward-looking statements as
they involve the implied assessment, based on certain estimates and
assumptions, of the extent to which the reserves described can be
profitably produced in the future. Readers should be cautioned that the
forgoing list of forward-looking statements and information contained
herein should not be considered exhaustive.
The forward-looking statements and information in this press release are
based on certain key expectations and assumptions made by Triple Crown
and First Mountain, including the satisfaction of the conditions of
closing of the Financing and the Transaction on the timing planned, and
the receipt, in a timely manner, of regulatory and other required
approvals. Although Triple Crown and First Mountain believe that the
expectations and assumptions on which such forward looking statements
and information are based are reasonable, undue reliance should not be
placed on the forward-looking statements and information because
neither Triple Crown nor First Mountain can give any assurance that
they will prove to be correct.
Since forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to, the risks associated with the oil and
gas industry in general such as operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
uncertainty of reserve and resource estimates; the uncertainty of
estimates and projections relating to reserves, resources, production,
costs and expenses; health, safety and environmental risks; commodity
price and exchange rate fluctuations; marketing and transportation;
loss of markets; environmental risks; competition; incorrect assessment
of the value of acquisitions; failure to realize the anticipated
benefits of acquisitions including the Transaction; ability to access
sufficient capital from internal and external sources; changes in
legislation, including but not limited to tax laws, royalties and
environmental regulations, actual production from the acquired assets
may be greater or less than estimates; failure to obtain the necessary
regulatory approval, stock exchange and other regulatory approvals,
including the Majority of the Minority Approval and on the timelines
planned; risks that conditions to closing of the Transaction or the
Financing are not satisfied. Management has included the above summary of assumptions and risks
related to forward looking information provided in this press release
in order to provide securityholders with a more complete perspective on
the Resulting Issuer's future operations and such information may not
be appropriate for other purposes.
The forward-looking statements and information contained in this press
release are made as of the date hereof and neither Triple Crown nor
First Mountain undertakes any obligation to update publicly or revise
any forward-looking statements or information, whether as a result of
new information, future events or otherwise, unless so required by
applicable securities laws.
Barrels of Oil Equivalent (boe)
Barrels of oil equivalent (boe) is calculated using the conversion
factor of 6 Mcf (thousand cubic feet) of natural gas being equivalent
to one barrel of oil. Boes may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf:1 bbl (barrel) is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the wellhead.
SOURCE Triple Crown Petroleum Ltd.
For further information:
President, Chief Executive Officer and Director
Triple Crown Petroleum Ltd.
Telephone: (403) 453-2266