CALGARY, April 12 /CNW/ - PanWestern Energy Inc. ("PanWestern" or the "Corporation") (TSX-V: "PW") is pleased to announce that the previously disclosed reorganization and recapitalization transactions have closed. The transactions included, among other things:
- the appointment of a new management team led by Jim McFarland as
President & Chief Executive Officer, Steve Bjornson as Chief
Financial Officer, Lyle Martinson as VP Operations and Don Shepherd
as VP Engineering (the "New Management Team");
- the appointment of a new board of directors comprised of Bill Fanagan
(Chairman), Abby Badwi, Claudio Ghersinich, Ken McKay and Johannes
Kingma (the Chief Executive Officer and a director of PanWestern
prior to the transactions), with Jim McFarland and Ron Royal proposed
to be elected as directors at the next meeting of PanWestern's
- the recapitalization of the Corporation through a non-brokered equity
private placement of $6.0 million (the "Private Placement"); and
- the acquisition of all of the issued and outstanding shares of a
private oil and gas company, Northern Hunter Energy Inc. ("Northern
Hunter"), by way of a plan of arrangement (the "Arrangement").
The Arrangement was approved by the shareholders of Northern Hunter at a special meeting of shareholders and by the Court of Queen's Bench of Alberta. The transactions were approved by PanWestern shareholders who hold or exercise control over more than 50% of the PanWestern shares by way of a written consent. The TSX Venture Exchange (the "TSXV") has conditionally approved the transactions and the Corporation expects to satisfy the TSXV's final conditions in due course, which include the receipt by the TSXV of standard post-approval documentation.
At the next annual general meeting of shareholders, the Corporation will seek shareholder approval to change its name to Valeura Energy Inc.
On March 24, 2010 PanWestern entered into a letter agreement with a syndicate of underwriters co-led by National Bank Financial Inc. and Cormark Securities Inc. and including GMP Securities L.P., Canaccord Capital Corporation and FirstEnergy Capital Corp. (collectively the "Underwriters") which was subsequently amended on March 25, 2010, pursuant to which the Underwriters agreed to purchase, on a bought deal basis, 51.1 million special warrants of PanWestern ("Special Warrants") at a price of $0.47 per Special Warrant, for aggregate gross proceeds of approximately $24.0 million (the "Special Warrant Offering"). Closing of the Special Warrant Offering is conditional upon the successful closing of the reorganization and recapitalization transactions, as well as the customary conditions for offerings of this type, including the receipt of all necessary regulatory and third party approvals, including the approval of the TSXV. If all conditions are met, the closing of the Special Warrant Offering is anticipated to occur on April 16, 2010. The net proceeds of the Special Warrant Offering are expected to be used for the Corporation's 2010 drilling program and general corporate purposes.
Following the closing of the Special Warrant Offering and assuming each Special Warrant is converted to one common share of the Corporation as contemplated, it is expected that there will be approximately 196.8 million common shares of the Corporation outstanding. On a fully diluted basis, giving effect to performance warrants and options granted to the New Management team, new directors and other employees and consultants in connection with the transactions, the number of shares issued would increase to 234.3 million.
With the closing of the reorganization and recapitalization transactions and the expected funds from the Special Warrant Offering, the Corporation will be debt-free with a cash balance of approximately $28.0 million. The Corporation will therefore be well positioned to aggressively pursue its previously disclosed new international oil and gas exploitation and development growth strategy, underpinned by the limited expansion of the Canadian operations to provide a base level of domestic cash flow and portfolio diversity. The New Management Team is continuing to evaluate a number of potential second stage international and domestic transactions consistent with this new corporate strategy. To support this effort, the Corporation has increased its complement of senior professionals to include two geoscientists and a consulting reservoir engineer with extensive international and domestic business development experience.
At closing, the auditors of PanWestern will be changed to KPMG LLP, the current auditors of Northern Hunter, whose offices are located at 2700-205 5 Avenue S.W., Calgary, AB T2P 2V7.
PanWestern Energy Inc. is a Calgary, Alberta based public company engaged in the exploitation, development and production of petroleum and natural gas. The Corporation's common shares are listed on the TSXV under the trading symbol "PW".
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release includes but is not limited to, information with respect to the Corporation's: growth strategy; operational decisions and the timing thereof; development and exploration plans and the timing thereof; future production levels; and, completion of, and use of net proceeds from, the Special Warrant Offering. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although the Corporation believes that the expectations reflected in such forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Corporation can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of the Corporation to secure adequate product transportation; the impact of increasing competition in or near the Corporation's plays; the timely receipt of any required regulatory approvals, both domestically and internationally; the ability of the Corporation to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; the Corporation's ability to operate properties in a safe, efficient and effective manner; the ability of the Corporation to obtain financing on acceptable terms; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the state of the capital markets; the regulatory framework regarding royalties, taxes and environmental matters; the ability of the Corporation to successfully manage the political and economic risks inherent in pursuing oil and gas opportunities in foreign countries; and the ability of the Corporation to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been relied upon.
Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Corporation and described in the forward-looking information. The material risk factors affecting the Corporation and its business are similar to those of other companies engaged in the business of exploring for and producing oil and gas, both domestically and in foreign countries.
The forward-looking information contained in this press release is made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.
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 news release.
SOURCE PANWESTERN ENERGY INC.
For further information: For further information: Jim McFarland, President and CEO, PanWestern Energy Inc., (403) 237-7102, firstname.lastname@example.org; Steve Bjornson, CFO, PanWestern Energy Inc., (403) 237-7102, email@example.com, www.panwesternenergy.ca