/NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES./
CALGARY, Dec. 21 /CNW/ - One Exploration Inc. ("OneEx" - TSXV:OE.A or TSXV:OE.B) is pleased to announce that it has entered into a reorganization and investment agreement (the "Agreement") with TriOil Resources Ltd. ("TriOil") and the current management thereof (the "TriOil Group") which provides for (i) a non-brokered private placement of approximately $10.0 million (the "Private Placement"), (ii) the appointment of a new management team (the "New Management Group") and board of directors (the "New Board"), (iii) a rights offering (the "Rights Offering") to current holders of OneEx class A shares (the "Class A Shares") and (iv) the acquisition (the "TriOil Acquisition") of TriOil by OneEx (collectively, the "Transaction"). Completion of the Transaction is subject to standard closing conditions, including the approval by the TSX Venture Exchange (the "TSXV"). Upon completion of the Transaction, it is anticipated that the shareholders of OneEx will be asked to approve a change of the company's name to "TriOil Resources Ltd."
The New Management Group will be headed by Russell J. Tripp as President & Chief Executive Officer, Andrew Z. Wiacek as VP Exploration, Craig Haavardsrud as VP Business Development and Land, Vance Blydo as VP Operations, Keith Mychaluk as Chief Geologist and Cheryne Johnson as Controller.
Upon completion of the Transaction, it is anticipated the New Board will be comprised of Fred Woods, Glenn Hockley, Paul McGarvey, Andy Mah, Korby Zimmerman, Glen Gretzky and Russell J. Tripp. Cameron Proctor will act as corporate secretary.
Assuming the completion of the TriOil Acquisition, the recapitalized
entity will have:
Current Production 530 boepd
Proved Reserves 1.36 MMboe(1)
Proved plus Probable Reserves 2.23 MMboe(1)
Undeveloped Lands 57,000 net acres
Balance Sheet $4.0 million net cash
(1) Independent Engineering Report, Dec. 31, 2008; Sproule, Nov. 30,
2009; Paddock Lindstrom & Associates Ltd., Oct. 31, 2009 roll-up
Corporate Strategy & TriOil Acquisition
Following completion of the Transaction, OneEx expects to focus on predominantly light oil opportunities in Alberta and Saskatchewan, growing through a targeted acquisition strategy coupled with development and exploitation drilling. The New Management Group has been successful at acquiring substantial land positions on early stage resource opportunities and intends to capitalize on horizontal drilling and multi-stage fracture stimulation opportunities that target the Pekisko, Viking and Cardium trends in Alberta and the Bakken/Sanish trend in southeast Saskatchewan.
The TriOil Acquisition includes 100% operated production of 130 boepd of predominantly light oil at Coronation in Southern Alberta and Tableland in Southeast Saskatchewan. The acquisition also includes 12,000 net undeveloped acres of prospective Bakken/Sanish land at Tableland, Saskatchewan, 1,100 net acres of Cardium rights at Lochend, Alberta, farm-in options to earn 4,800 net acres prospective for Pekisko light oil at Queenstown, Alberta and 3,550 net acres prospective for Bakken/Sanish light oil at Tableland.
The recapitalized entity is expected to have a net cash position of more than $4.0 million upon completion of the Private Placement, the TriOil Acquisition, and the Rights Offering (assuming that all of the rights issued thereunder are exercised), an existing production base of approximately 530 boepd, and significant new land positions and farm in opportunities on emerging light oil resource plays. This improved cash, production and undeveloped land position, combined with a management team experienced in capturing opportunities, will provide a platform for aggressive growth through strategic acquisitions and internally generated prospects focusing on the exploitation of these light oil resource plays.
TriOil is currently a private company with agreements to acquire producing assets from SecondWave Petroleum Inc. (the "Second Wave"). Pursuant to the Agreement, the acquisition from Second Wave will occur immediately prior to or concurrently with the closing of the Transaction. Through the TriOil Acquisition, OneEx will acquire producing assets in Coronation, Alberta and Tableland, Saskatchewan, and approximately 13,000 net undeveloped acres of land, for approximately $5.0 million in cash and 2.55 million TriOil common shares at a deemed price of $1.00 per TriOil common share. Accordingly, the aggregate purchase price for TriOil (to be paid in OneEx Class A Shares) will be approximately $7.55 million, subject to the number of TriOil common shares issued and outstanding at the time of acquisition. The acquisition of Second Wave has the following characteristics:
Purchase Price: $7.55 million
Production: 130 boepd
Commodity mix: 85% light oil
Proved reserves: 257 Mboe(1)
P+P reserves: 327 Mboe(1)
Net Undeveloped land: 13,000 acres
(1) Independent Engineering Report, Dec. 31, 2008
Pursuant to the Agreement, the parties have agreed that TriOil may complete a private placement of TriOil common shares at a price of $1.00 per share prior to completion of the Transaction the ("TriOil Private Placement"), which TriOil shares shall be exchanged for OneEx Class A Shares pursuant to the TriOil Acquisition on the basis of 5.8824 Class A Shares for each TriOil common share. The aggregate $10 million to be raised pursuant to the Private Placement shall be reduced, on a dollar for dollar basis, by the amount of funds raised by TriOil through the TriOil Private Placement.
New Management Team
Russell J. Tripp, LLB. Mr. Tripp has over 30 years of oil
President, CEO & Director and gas experience, including
leadership roles with a number of
public companies. Mr. Tripp was the
founding CEO and Director of TriGas
Exploration Ltd., Bear Creek Energy
Ltd., Ketch Resources Trust, Bear
Ridge Resources Ltd. and TriOil
Andrew Z. Wiacek, M.Sc., P. Geoph. Mr. Wiacek was instrumental in the
Vice President, Exploration discovery of a number of significant
unconventional tight gas resource
plays while in a management role at
Rocor Resources Inc., Bear Ridge
Resources Ltd., Ketch Resources Trust
and Bear Creek Exploration Ltd.
Mr. Wiacek has over 20 years of
experience, was most recently Vice
President and Chief Geophysicist at
Rocor Resources Inc. and is a
founding executive of TriOil
Craig Haavardsrud, B. Comm. Mr. Haavardsrud has 12 years of
Vice President, Business corporate development and land
Development & Land experience. Most recently,
Mr. Haavardsrud was a founding member
and Vice President Land of Fairmount
Energy Inc., and prior thereto held
various land and property acquisition
roles with Crescent Point Energy
Trust, Vintage Petroleum and
Petro-Canada Oil and Gas Ltd.
Vance Blydo, P. Eng. Mr. Blydo has 18 years of varied
Vice President, Operations operational experience in Western
Canada, encompassing drilling,
completions, well equipping and
optimization, and facility and
infrastructure design and
installation. Mr. Blydo was most
recently Manager of Operations/
Production at One Exploration Inc.
Keith Mychaluk, MBA, P. Geol. Mr. Mychaluk has over 15 years of
Chief Geologist Western Canada exploration and
acquisition experience, predominantly
in tight gas resource plays with
start-up and junior companies,
including Birchcliff Energy Ltd.,
Blizzard Energy Ltd., Baytex Energy
Ltd. and Petromet Resources Ltd.
Cheryne Johnson, CA, MPAcc. Ms. Johnson has 8 years of experience
Controller in oil and gas, capital markets and
public accounting. Most recently,
Ms. Johnson was Manager, Financial
Reporting at Highpine Oil and Gas,
and prior thereto held progressively
senior roles at Anderson Energy,
Tristone Capital, Ketch Resources
Trust and KPMG LLP.
The new management team has a proven track record of capturing opportunities on early stage, large scale resource plays, and extensive experience in successfully starting and building both private and public junior oil and gas companies.
Pursuant to the Private Placement, OneEx will issue up to 58,825,000 Class A Shares at a price of $0.17 per Class A Share for total gross proceeds of $10,000,250 to the New Management Group and certain other third-party subscribers, less the amount of funds raised through the TriOil Private Placement. As part of the Transaction, OneEx will issue up to 24,000,000 performance warrants (the "Warrants") to the New Management Group and the New Board. Each Warrant will entitle the holder to purchase one Class A Share at a price of $0.20 for a period of 5 years. The Warrants will vest and become exercisable as to one-third upon the 20-day weighted average trading price of the Class A Shares ("Trading Price") equaling or exceeding $0.40, an additional one-third upon the Trading Price equaling or exceeding $0.60 and a final one-third upon the Trading Price equaling or exceeding $0.80.
The Class A Shares issued under the Private Placement to the New Management Group and the New Board, including any Class A Shares issued pursuant to the Warrants, will be subject to contractual escrow which shall provide that 1/2 of such Class A Shares shall be released on each of the the 6 and 12 month anniversaries following the closing date of the Transaction. The Agreement also contemplates that each member of the New Management Group who receives Warrants shall acknowledge and agree with OneEx that they shall not be granted, and shall not accept any grant of, options of OneEx for a period of four months from the closing of the Transaction.
Upon completion of the Private Placement, OneEx shareholders will be entitled to participate in the Rights Offering, which is expected to be conducted by way of a Rights Offering Circular. Pursuant to the Rights Offering, each shareholder as of the record date for such offering (the "Record Date") will be issued one right ("Right") for each Class A Share held on the Record Date, entitling that holder to purchase one (1) Class A Share for each four (4) Rights held at a price of $0.17 per Class A Share at or before the expiry time of the Rights Offering, following which all outstanding Rights shall terminate and expire. The number of Class A Shares to be issued pursuant to the Rights Offering is the maximum permitted by applicable securities laws to be issued pursuant to a Rights Offering Circular. Subscribers of Class A Shares under the Private Placement, or TriOil Shareholders who receive Class A Shares pursuant to the TriOil Acquisition, will not be entitled to participate in the Rights Offering with respect to any securities acquired pursuant to the Private Placement and the TriOil Acquisition. The Rights Offering is subject to applicable regulatory approval, including the TSXV.
Shareholder and Stock Exchange Approvals
Completion of the Private Placement and the TriOil Acquisition are subject to a number of conditions and approvals including, but not limited to, the approval of the TSXV. Under the policies of the TSXV, the completion of the Private Placement is subject to the approval of the shareholders of OneEx. The required shareholder approval may be obtained by OneEx either by receipt of written consents by holders of more than 50% of the issued and outstanding voting shares of OneEx (the "Written Consent") or by approval of an ordinary resolution at a special meeting of shareholders (the "OneEx Meeting"). Pursuant to the Agreement, OneEx has agreed to call the OneEx Meeting, and has agreed to use reasonable best efforts to obtain the Written Consent on or before January 7, 2010. If Written Consent cannot be obtained, OneEx has agreed to proceed to hold the OneEx Meeting to seek the required approvals.
Board of Directors' Recommendation
The Board of Directors of OneEx has determined that the transactions contemplated by the Agreement are in the best interest of its shareholders, has unanimously approved such transactions and recommends that the shareholders approve the Agreement and execute the Written Consent. Any shareholder of OneEx wishing to obtain and execute the Written Consent should contact OneEx as set out below.
The Board of Directors and officers of OneEx and certain other shareholders, who, in aggregate, control approximately 33% of the Class A and Class B Shares of OneEx, have entered into support agreements or agreed to enter into support agreements pursuant to which they have agreed, among other things, to approve the Transaction.
The Agreement contains a number of customary representations, warranties and conditions and provides for a non-completion fee of $300,000 payable by OneEx to the TriOil Group, and a non-completion fee of $200,000 payable by the TriOil Group to OneEx, in certain circumstances. The Agreement also provides that the TriOil Group shall receive an expense reimbursement fee of up to $75,000 in the event the Written Consent is not obtained and OneEx shareholders do not approve the Transaction at the OneEx Meeting. The complete Agreement will be accessible on OneEx's SEDAR profile at www.sedar.com.
Peters & Co. Limited is acting as exclusive financial advisor to OneEx with respect to the transaction.
National Bank Financial Inc. is acting as exclusive financial advisor to the TriOil Group with respect to the transaction.
One Exploration Inc. is a Calgary, Alberta based company engaged in the exploration, development and production of petroleum and natural gas. OneEx has 44.4 million Class A shares that trade on the TSX Venture Exchange under the symbol OE.A, 1.3 million Class B shares that trade on the TSX Venture Exchange under the symbol OE.B.
Forward Looking Statements
This document contains forward-looking statements. More particularly, this document contains statements concerning the completion of the transactions contemplated by the Agreement, including the Private Placement, the TriOil Acquisition, the acquisition from Public Company, the TriOil Private Placement and certain other transactions.
The forward-looking statements are based on certain key expectations and assumptions made by OneEx, including expectations and assumptions concerning timing of receipt of required shareholder and regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the transactions. Although OneEx believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because OneEx can give no assurance that they will prove to be correct. Since forward-looking statements 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, risks that required shareholder, regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the Agreement and risks that other conditions to the completion of the transactions are not satisfied on the timelines set forth in the Agreement or at all.
The forward-looking statements contained in this press release are made as of the date hereof and OneEx undertakes no 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.
The term "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf:1 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.
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.
SOURCE ONE EXPLORATION INC.
For further information: For further information: Walter Vrataric, President & CEO, One Exploration Inc., Phone: (403) 781-2752; Russell J. Tripp, President & CEO, TriOil Resources Ltd., Phone: (403) 451-0178