EMM Energy and SkyWest announce entering into of arrangement agreement,
completion of financings and filing of 2009 annual financial statements and
reserves report

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES./

CALGARY, May 11 /CNW/ - EMM ENERGY INC. ("EMM") (TSX Venture Exchange: M) and SKYWEST ENERGY CORP. ("SkyWest") are pleased to announce that they have entered into an arrangement agreement dated April 28, 2010 (the "Arrangement Agreement") pursuant to which SkyWest will acquire all of the issued and outstanding common shares in the capital of EMM (each an "EMM Share") in consideration for: (i) $1.05 cash for each EMM Share for an aggregate cash payment of approximately $6.7 million; and (i) the issuance of an aggregate of 12,600,000 common shares of SkyWest (each a "SkyWest Share") at a deemed price of $0.30 per share. The Arrangement Agreement supersedes the binding letter of intent dated April 12, 2010, the terms and conditions of which were previously announced by the parties on April 13, 2010.

The arm's length business combination of EMM and SkyWest is proposed to be effected by way of a plan of arrangement (the "Arrangement"), the details of which are set forth in the Arrangement Agreement. Under the Arrangement, after SkyWest has acquired all of the EMM Shares from the EMM shareholders, SkyWest and EMM will amalgamate to form a new entity ("Amalco"). Pursuant to the Arrangement, each SkyWest Share will be exchanged for one Amalco common share (each an "Amalco Common Share") and the outstanding EMM Shares will be cancelled.

Fairness Opinion

Prior to executing the Arrangement Agreement, the board of directors of EMM obtained a verbal opinion from Sayer Energy Advisors ("Sayer") that the consideration to be received by EMM shareholders pursuant to the Arrangement is fair, from a financial point of view, to the EMM shareholders. The effective date of the Arrangement is expected to occur in June 2010.

Shareholder and Court Approval

An annual and special meeting of EMM Shareholders is set to be held on June 21, 2010 (the "Meeting"). At the Meeting, among other things, the EMM Shareholders will be asked to consider and, if thought fit, approve the Arrangement. The EMM Board, based upon its own investigations and its consideration of the fairness opinion of Sayer, has unanimously concluded that the Arrangement is fair to EMM Shareholders and is recommending that EMM Shareholders vote in favour of the Arrangement at the Meeting. Officers, directors and certain insiders of EMM who collectively own approximately 78% of the EMM Shares have entered into lock-up agreements to support the transactions contemplated by the Arrangement. In order for the Arrangement to proceed, a special resolution approving the Arrangement must be passed by at least 66 2/3% of the votes cast by EMM Shareholders at the Meeting, either in person or by proxy. In addition, the Arrangement resolution must also be passed by a simple majority of the votes cast by the EMM Shareholders, present in person or represented by proxy, at the Meeting, excluding the votes of an aggregate of 610,667 EMM Shares held by Mr. Brian Boulton, an interested party to the Arrangement, and any joint actor (i.e. by "minority approval"). Completion of the Arrangement is also subject to the approval of the Court of Queen's Bench of Alberta and the TSX Venture Exchange and the receipt of all other necessary regulatory and third party approvals. It is a condition of completion of the Arrangement that the TSX Venture Exchange shall have approved the listing of the Amalco Common Shares, including the Amalco Common Shares issuable as partial consideration for the EMM Shares. The Arrangement Agreement provides for reciprocal termination fees payable by either EMM or SkyWest in certain circumstances.

Proposed Directors and Officers

Upon completion of the Arrangement, the board of directors of Amalco will consist of Don Garner, R.D. (Bob) Steele, Dennis Feuchuk, Larry Urichuk and Gary Warner and the Amalco management team will consist of Larry Urichuk as President and Chief Executive Officer, Joel MacLeod as Vice President and Chief Financial Officer, Greg Davidson as Vice President, Exploration and Corporate Development, Gary Warner as Vice President Engineering, and Steve Holyoake as Manager of Operations. For additional information regarding the background of these individuals, please refer to the joint news release dated April 13, 2010.

About EMM

EMM is a junior oil and gas company formed to generate and develop its own prospects, acquire oil and gas properties and participate with joint venture partners in oil and gas exploration and development in the Western Canadian Sedimentary Basin. All of EMM's operations are currently in Alberta. The following table discloses, in the aggregate, EMM's gross and net proved reserves, estimated using forecast prices and costs, by product type. The figures are derived from the reserves report on EMM's oil, natural gas liquids and natural gas interests prepared by Sproule Associates Limited ("Sproule"), independent engineering evaluators. The Sproule report was effective December 31, 2009 and dated March 9, 2010 and was prepared in compliance with NI 51-101. "Forecast prices and costs" means future prices and costs used by Sproule that are generally accepted as being a reasonable outlook of the future.

    
    -------------------------------------------------------------------------
                             Light &
                           Medium Oil         Heavy Oil        Natural Gas
                       ------------------------------------------------------
    Reserves             Gross     Net     Gross     Net     Gross     Net
    Category             (Mbbl)   (Mbbl)   (Mbbl)   (Mbbl)   (MMcf)   (MMcf)
    -------------------------------------------------------------------------
    Proved
      Developed
       Producing           63.7     55.5      0.0      0.0    513.4    445.4
      Developed
       Non-Producing        0.0      0.0      0.0      0.0  1,146.8    742.1
      Undeveloped          94.8     81.6     10.0      8.6     75.8     70.1
      Total Proved        158.5    137.1     10.0      8.6  1,736.0  1,257.7
    -------------------------------------------------------------------------
    Probable              356.1    295.7      5.0      4.0  2,036.2  1,499.4
    -------------------------------------------------------------------------
    Total Proved
     + Probable           514.6    432.7     15.0     12.5  3,772.2  2,757.1
    -------------------------------------------------------------------------


    -------------------------------------------------------
                           Natural Gas
                             Liquids           Total
                       ------------------------------------
    Reserves             Gross     Net     Gross    Net
    Category             (Mbbl)   (Mbbl)   (Mboe)  (Mboe)
    -------------------------------------------------------
    Proved
      Developed
       Producing            5.6      3.9    154.9    133.6
      Developed
       Non-Producing        4.0      2.3    195.1    126.0
      Undeveloped           1.4      1.1    118.8    102.9
      Total Proved         11.0      7.4    468.9    362.6
    -------------------------------------------------------
    Probable               13.2      9.3    713.6    558.8
    -------------------------------------------------------
    Total Proved
     + Probable            24.2     16.6  1,182.5    921.4
    -------------------------------------------------------
    

About SkyWest

SkyWest, an Alberta corporation, has been engaged in the business of acquiring Cardium crude oil and natural gas properties and exploring for, developing and producing oil and natural gas in western Canada since its incorporation in September 2009. For the three and one-half month period from incorporation until December 31, 2009, SkyWest's activities were focused on financing efforts and business development. Based on the audited financial statements for SkyWest for the period ended December 31, 2009, SkyWest had total assets of $1,272,975 and a positive working capital position of $687,871. The following table discloses, in the aggregate, SkyWest's gross and net proved reserves, estimated using forecast prices and costs, by product type. The figures are derived from the reserves report on SkyWest's oil, natural gas liquids and natural gas interests prepared by Paddock Lindstrom & Associates Ltd. ("Paddock"), independent engineering evaluators. This Paddock report was effective December 31, 2009 and dated February 5, 2010 and was prepared in compliance with NI 51-101. "Forecast prices and costs" means future prices and costs used by Paddock that are generally accepted as being a reasonable outlook of the future.

    
    -------------------------------------------------------------------------
                 Light &                               Natural
                 Medium                    Natural       Gas
                   Oil      Heavy Oil        Gas       Liquids      Total
              ---------------------------------------------------------------
    Reserves   Gross  Net  Gross  Net   Gross   Net  Gross  Net  Gross  Net
    Category   (Mbbl)(Mbbl)(Mbbl)(Mbbl) (MMcf) (MMcf)(Mbbl)(Mbbl)(Mboe)(Mboe)
    -------------------------------------------------------------------------
    Proved
      Developed
       Producing 0.0   0.0   0.0   0.0    0.0    0.0   0.0   0.0   0.0   0.0
      Developed
       Non-Prod-
        ucing   11.4   8.3   0.0   0.0  113.1   79.6   4.1   2.2  34.4  23.8
      Undevel-
       oped      0.0   0.0   0.0   0.0    0.0    0.0   0.0   0.0   0.0   0.0
      Total
       Proved   11.4   8.3   0.0   0.0  113.1   79.6   4.1   2.2  34.4  23.8
    -------------------------------------------------------------------------
    Probable    11.4   6.8   0.0   0.0  113.1   61.7   4.1   2.2  34.4  19.2
    -------------------------------------------------------------------------
    Total
     Proved +
     Probable   22.9  15.0   0.0   0.0  226.3  141.3   8.3   4.4  68.9  43.0
    -------------------------------------------------------------------------
    

About Stratosphere

As disclosed in the joint news release dated April 13, 2010, SkyWest has also entered into an acquisition agreement to acquire all of the common shares of Stratosphere Energy Corp. ("Stratosphere") in exchange for 1.2 SkyWest Shares (at a deemed price of $0.30 per share) for each Stratosphere common share or a total of approximately 5,073,910 SkyWest Shares. Stratosphere, an Alberta corporation, has been engaged in the business of acquiring, exploring for, developing and producing oil and natural gas in western Canada since 2007. For the year ended December 31, 2009, Stratosphere's activities were focused on the acquisition of petroleum and natural gas mineral rights. Based on the audited financial statements for Stratosphere for the year ended December 31, 2009, Stratosphere had total revenues of $71,753, total expenses of $2,335,738, total assets of $1,125,362, share capital of $3,829,704, a deficit of $3,098,337, and a positive working capital position of $299,893. The following table discloses, in the aggregate, Stratosphere's gross and net proved reserves, estimated using forecast prices and costs, by product type. The figures are derived from the reserves report on Stratosphere's oil, natural gas liquids and natural gas interests prepared by Paddock. This Paddock report was effective December 31, 2009 and dated February 10, 2010 and was prepared in compliance with NI 51-101. "Forecast prices and costs" means future prices and costs used by Paddock that are generally accepted as being a reasonable outlook of the future.

    
    -------------------------------------------------------------------------
                   Light &                             Natural
                   Medium                  Natural       Gas
                     Oil      Heavy Oil      Gas       Liquids      Total
              ---------------------------------------------------------------
    Reserves     Gross  Net  Gross  Net  Gross  Net  Gross  Net  Gross  Net
    Category     (Mbbl)(Mbbl)(Mbbl)(Mbbl)(MMcf)(MMcf)(Mbbl)(Mbbl)(Mboe)(Mboe)
    -------------------------------------------------------------------------
    Proved
      Developed
       Producing   0.0   0.0   0.0   0.0   2.2   1.9   0.0   0.0   0.4   0.3
      Developed
       Non-
       Producing   0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0
      Undeveloped  0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0   0.0
      Total
       Proved      0.0   0.0   0.0   0.0   2.2   1.9   0.0   0.0   0.4   0.3
    -------------------------------------------------------------------------
    Probable       0.0   0.0   0.0   0.0   6.2   5.3   0.1   0.1   1.2   1.0
    -------------------------------------------------------------------------
    Total Proved
     + Probable    0.0   0.0   0.0   0.0   8.4   7.2   0.2   0.1   1.6   1.3
    -------------------------------------------------------------------------
    

About Amalco

Upon completion of the Arrangement, Amalco will be uniquely positioned with a significant position in the Cardium resource play; Amalco will own more than 16 net sections throughout the Cardium fairway. Amalco will be one of the few publicly traded, Cardium oil focused companies in the Canadian junior oil and gas sector. The following table discloses, in the aggregate, the combined gross and net proved reserves, estimated using forecast prices and costs, by product type, for EMM, SkyWest and Stratosphere. The figures are derived from the Sproule report and Paddock reports described above.

    
    -------------------------------------------------------------------------
                             Light &
                           Medium Oil        Heavy Oil        Natural Gas
                       ------------------------------------------------------
    Reserves             Gross     Net     Gross     Net     Gross     Net
    Category             (Mbbl)   (Mbbl)   (Mbbl)   (Mbbl)   (MMcf)   (MMcf)
    -------------------------------------------------------------------------
    Proved
      Developed
       Producing           63.7     55.5      0.0      0.0    515.6    447.3
      Developed
       Non-Producing       11.4      8.3      0.0      0.0  1,259.9    821.7
      Undeveloped          94.8     81.6     10.0      8.6     75.8     70.1
      Total Proved        169.9    145.4     10.0      8.6  1,851.3  1,339.2
    -------------------------------------------------------------------------
    Probable              367.5    302.5      5.0      4.0  2,155.5  1,566.4
    -------------------------------------------------------------------------
    Total Proved +
     Probable             537.5    447.7     15.0     12.5  4,006.9  2,905.6
    -------------------------------------------------------------------------


    -------------------------------------------------------
                           Natural Gas
                             Liquids           Total
                       ------------------------------------
    Reserves             Gross     Net     Gross    Net
    Category             (Mbbl)   (Mbbl)   (Mboe)  (Mboe)
    -------------------------------------------------------
    Proved
      Developed
       Producing            5.6      3.9    155.3    133.9
      Developed
       Non-Producing        8.1      4.5    229.5    149.8
      Undeveloped           1.4      1.1    118.8    102.9
      Total Proved         15.1      9.6    503.7    386.7
    -------------------------------------------------------
    Probable               17.4     11.6    749.2    579.0
    -------------------------------------------------------
    Total Proved +
     Probable              32.7     21.1  1,253.0    965.7
    -------------------------------------------------------
    

Price Schedule Adjustments and Assumptions

As noted above, EMM's reserves were evaluated by Sproule while the reserves of SkyWest and Stratosphere were evaluated by Paddock. Oil, condensate, and NGL prices used in the evaluations were adjusted by both Sproule and Paddock from the December 31, 2009 reference price forecast for quality and transportation; gas prices were adjusted for heating value and transportation. These factors vary from property to property and geologic formation to formation. Neither EMM, SkyWest nor Stratosphere have any production hedged, so an adjustment for this factor was not necessary.

The engineering evaluation of each of EMM, SkyWest and Stratosphere required the evaluation of numerous different properties, often producing several components from more than one formation. Therefore, numerous prices were needed to properly evaluate each company's properties. Where sufficient production history exists, financial statements are used to determine the historical price differential to the historical reference price. This historic differential is used going forward to forecast the adjusted future price received for each production component.

The following table summarizes the adjusted prices forecast by Sproule and Paddock, as applicable, to be received by EMM, SkyWest and Stratosphere, which vary from company to company primarily due to production coming from different fields and formations.

    
    -------------------------------------------------------------------------

         Forecast Corporate Prices For 2010, Proved + Probable Case
         ----------------------------------------------------------
    -------------------------------------------------------------------------
                            Natural
                    Oil       Gas    Condensate   Ethane    Propane   Butane
      Company      $/Bbl     $/Mcf      $/Boe     $/Boe      $/Boe     $/Boe
    -------------------------------------------------------------------------
    EMM            82.45      5.29      86.28     24.66      51.24     68.52
    -------------------------------------------------------------------------
    Stratosphere       -      6.13      79.09         -      44.51     55.64
    -------------------------------------------------------------------------
    SkyWest        82.43      6.37      83.25         -      49.46     61.82
    -------------------------------------------------------------------------
    

For additional information regarding the Arrangement, EMM, SkyWest, Stratosphere and Amalco, please refer to the joint news release dated April 13, 2010.

Financings

As contemplated by the joint news release dated April 13, 2010, SkyWest has now completed the brokered private placement (the "Private Placement") of 70,000,000 subscription receipts ("Subscription Receipts") at a price of $0.30 per Subscription Receipt for aggregate gross proceeds of $21,000,000. The Private Placement was brokered by Wellington West Capital Markets Inc. ("WWM") acting as agent for SkyWest. The gross proceeds of the Private Placement will be held in escrow pending completion of the Arrangement. Upon the satisfaction or waiver of all conditions precedent with respect to the Arrangement, each Subscription Receipt will entitle the holder to receive one SkyWest Share without payment of additional consideration immediately preceding the closing of the Arrangement. In addition, upon the satisfaction or waiver of all conditions precedent with respect to the Arrangement, the gross proceeds of the Private Placement will be released from escrow and WWM will receive a commission of 6% of the gross proceeds of the Private Placement. In accordance with the terms of the Arrangement Agreement, immediately subsequent thereto, all of the SkyWest Shares, including those underlying the Subscription Receipts, will be exchanged for Amalco Common Shares on a one-for-one basis. If the conditions are not met on or before June 30, 2010, each holder of Subscription Receipts will be reimbursed the original subscription price, plus such holder's pro rata portion of any interest earned thereon. The net proceeds of the Private Placement are expected to be used to satisfy the cash portion of the purchase price under the Arrangement, to carry on Amalco's business plan and for general corporate purposes.

In connection with the Private Placement, SkyWest and Stratosphere management and employees also subscribed for a total of 2,166,667 SkyWest Shares at a price of $0.30 per SkyWest Share comprising aggregate gross proceeds of $650,000 (the "Insider Private Placement"). WWM received a commission of 6% of the gross proceeds of the Insider Private Placement.

In addition to the Private Placement and the Insider Private Placement, on a non-brokered basis, certain proposed independent directors of Amalco subscribed for an aggregate of 3,250,000 units of SkyWest ("Units") at a price of $0.25 per Unit comprising aggregate gross proceeds of $812,500. Each Unit is comprised of one SkyWest Share and one SkyWest warrant. Each SkyWest warrant is exercisable into one SkyWest Share at a price of $0.35 per SkyWest Share until April 27, 2015. One third of the SkyWest warrants will vest and be exercisable if the 20-day weighted average trading price of the SkyWest Shares is equal to or greater than $0.55 at any time before the expiry date; one third will be vest and exercisable if the 20-day weighted average trading price of the SkyWest Shares is equal to or greater than $0.75 at any time before the expiry date; and one third will vest and be exercisable if the 20-day weighted average trading price of the SkyWest Shares is equal to or greater than $0.95 at any time before the expiry date. The net proceeds of this non-brokered private placement and the Insider Private Placement are expected to be used to fund operations through closing of the Arrangement and to fund the remainder of the 2010 capital program.

Sponsorship

EMM has requested that the TSX Venture Exchange exempt the requirement for a Sponsorship Report in connection with the Arrangement. There are no assurances that the TSX Venture Exchange will accept EMM's request to exempt the Sponsorship Report requirement, in which case EMM will engage a Sponsor to prepare such a report.

Resumption of Trading

Trading of the EMM Shares will not resume until EMM has satisfied certain TSX Venture Exchange requirements including, the acceptance of EMM's request to exempt the Sponsorship Report requirement or the engagement by EMM of a Sponsor to prepare such a report. EMM will issue a further new release as soon as further details are available regarding the resumption of trading.

Annual Financial Statement and NI 51-101 Reports

In addition to the foregoing, EMM is also pleased to announce the filing of its financial statements for the year ended December 31, 2009, its management's discussion and analysis ("MD&A") dated April 30, 2010 and its disclosure and reports relating to its reserves data and other oil and gas information as required by the Canadian Securities Administrators National Instrument 51-101- Standards of Disclosure for Oil and Gas Activities. An electronic copy of these documents may be obtained on EMM's SEDAR profile at www.sedar.com. To the extent investors do not have access to the internet, copies of the materials can be obtained on request without charge by contacting EMM.

Completion of the Arrangement is subject to a number of conditions, including TSX Venture Exchange approval acceptance and disinterested EMM Shareholder approval. The Arrangement cannot close until the required EMM Shareholder approval is obtained. There can be no assurance that the Arrangement will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Arrangement, any information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of EMM should be considered highly speculative.

Statements in this joint press release contain forward-looking information within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, without limitation, statements with respect to: timing and completion of the Arrangement, the proposed Meeting, receipt of all necessary court, shareholder, regulatory and third party approvals, the listing of the Amalco Common Shares, the composition of the board of directors and management of Amalco, strategic rationale and corporate strategy, reserves disclosure, the use of proceeds from the private placements, the requirement for a Sponsor and the resumption of trading. Readers are cautioned that assumptions used in the preparation of forward-looking information may prove to be incorrect. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, level of activity, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors (many of which are beyond the control of SkyWest and EMM) that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally, the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to: operational risks in exploration, development and production; delays or changes in plans; competition for and/or inability to retain drilling rigs and other services; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; risks associated to the uncertainty of reserve estimates; governmental regulation of the oil and gas industry, including environmental regulation; geological, technical, drilling and processing problems and other difficulties in producing reserves; the uncertainty of estimates and projections of production, costs and expenses; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; incorrect assessments of the value of acquisitions; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; access to capital; and other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Neither SkyWest nor EMM undertakes any obligation to update or revise any forward-looking statements to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

Certain of the information contained in this joint press release assumes that the Arrangement has been completed on the anticipated basis and times set forth herein. The Arrangement is subject to the receipt of the approval of the shareholders of EMM, the approval of the Court of Queen's Bench for the province of Alberta as well as all other necessary regulatory approvals. The anticipated listing of the SkyWest Shares on a recognized Canadian stock exchange is subject to the conditional approval of that stock exchange and SkyWest satisfying the listing requirements and all other requirements of such exchange.

Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion factor is an industry accepted norm and is not based on either energy content or current prices.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

%SEDAR: 00014953E

SOURCE EMM ENERGY INC.

For further information: For further information: EMM Energy Inc., Brian Boulton, President & CEO, T: (403) 213-3339; or SkyWest Energy Corp., Lawrence Urichuk, President & CEO, T: (403) 265-0071; or SkyWest Energy Corp., Joel MacLeod, Vice President and Chief Financial Officer, T: (403) 265-0071

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