VenPath Investments Inc. to Acquire 100% of OPE Group from Houston, Texas. Transaction Will Constitute Reverse Take-Over and Result in Change of Business and Corporate Reorganization for VenPath



    CALGARY, March 1 /CNW/ - VenPath Investments Inc. ("VenPath") is pleased
to announce that it has executed a binding letter of intent (the "RTO
Agreement") with the shareholders of OPE, Inc. and the partners of OPE
International, LP (collectively, "OPE" or the "OPE Entities") to acquire 100%
of the outstanding securities of OPE (the "OPE Transaction"). OPE is a
privately-held engineering consulting group based in Houston, Texas focused on
offshore oil and gas drilling, production and transportation. OPE has
developed a variety of proprietary products that it is in the process of
commercializing. OPE's principal objective in pursuing a public listing
through the transaction with VenPath is to gain access to growth capital to be
used to focus its commercialization efforts on key proprietary technologies.
    VenPath Investments Inc. is a public company listed under the symbol
"VPN" on the TSX Venture Exchange (the "TSXV"). The RTO Agreement was executed
on February 13, 2007, at which time VenPath requested a trading halt for its
common shares on the TSX Venture Exchange to allow for dissemination of
information with respect to the OPE Transaction. Reinstatement of trading of
VenPath shares will be at the discretion of the TSXV at such time as the TSXV
is satisfied that VenPath has met all conditions set forth in TSXV Policy 5.2
"Change of Business and Reverse Take-Overs" with respect to interim trading
pending completion of the OPE Transaction.

    Details of OPE Transaction

    Ownership of Entities Being Acquired and Payment of Purchase Price: The
RTO Agreement provides that VenPath will acquire 100% of the outstanding
securities of OPE, Inc. and OPE International, LP. Currently, both of these
entities are owned jointly by three parties: Gary Quenan, Richard Haun and
Cameron International Corporation ("Cameron"). Gary Quenan and Richard Haun
are professional engineers and are the founders and principals of OPE. Cameron
is a NYSE-listed public company that is a leading provider of flow equipment
products, systems and services to worldwide oil, gas and process industries.
Each of the three shareholders currently owns 1/3 the outstanding equity of
OPE, Ltd. and 33% of OPE International, LP as limited partners, with OPE, Ltd.
holding 1% of OPE International, LP as the general partner. Gary O'Neal Quenan
and Richard D. Haun both live in Houston, Texas and Cameron's head office is
also based in Houston. Cameron is incorporated under the laws of the State of
Delaware. The OPE Entities are both organized under the laws of the State of
Texas.
    OPE has entered into an assignable option agreement with Cameron which
entitles them to acquire Cameron's interest in the each of OPE Entities. Upon
assignment of the option agreement to VenPath as contemplated in the RTO
Agreement, VenPath will be entitled to acquire Cameron's interest in the OPE
Entities through the payment of $3,000,000 (USD) cash and the issuance of
295,909 treasury common shares of VenPath at closing (representing an
approximate 0.5% interest in VenPath after completion of the OPE Transaction).
    The RTO Agreement provides that VenPath will acquire Gary Quenan's and
Richard Haun's interest in the OPE Entities through the payment of a total of
$4,750,000 (USD) cash and the issuance of 31,926,406 treasury common shares of
VenPath. A significant component of the cash payment will be used by Mr.
Quenan and Mr. Haun to pay U.S. capital gains taxes assessable on the
transaction.
    The parties have agreed to value the VenPath treasury common shares to be
issued in the OPE Transaction at a price of $0.462 (USD) per share based
principally on existing net tangible assets of VenPath. Utilizing the deemed
issue price of the VenPath shares, total consideration to be paid for the
acquisition of 100% of the two OPE Entities from the three vendors is
$22,636,709.53 (USD).

    Private Placement: The RTO Agreement also requires that VenPath complete
a private placement financing contemporaneous with the closing of the OPE
Transaction. The private placement will be completed at a minimum price of
$0.462 (USD) per common share. Completion of the private placement in a
minimum amount of $9,250,000 (USD) is a condition of the RTO Agreement, with
the ability to increase the size of the private placement by mutual agreement
of the parties. It is currently anticipated that the private placement will be
completed under applicable securities exemptions to high net worth individuals
and institutions in Canada, the United States and Europe.

    Changes to Composition of Board of Directors: The RTO Agreement provides
that Dan Wilson and Ian Dundas will remain as members of the Board of
Directors of VenPath subsequent to the transaction. Richard Tingle has
indicated that he will remain as a director of VenPath until completion of the
OPE Transaction, at which time he will resign to be replaced by a nominee of
OPE. Douglas Love and Paul Gurtler have tendered their resignations as members
of the Board of Directors effective immediately prior to execution of the RTO
Agreement at the request of VenPath's largest shareholder (with whom Messrs.
Love and Gurtler are affiliated) to ensure that such shareholder retains
independence from VenPath during the course of the OPE Transaction. The RTO
Agreement provides that Gary Quenan and Richard Haun will be appointed to the
Board of Directors to replace Douglas Love and Paul Gurtler. Joseph Lahey, a
Houston-based businessman with significant public company experience, will
also be appointed to the Board of Directors along with one additional nominee
of OPE yet to be finalized. Subsequent to completion of the OPE Transaction,
the RTO Agreement contemplates that Paul Gurtler shall also be eligible for
re-appointment to the Board of Directors.

    Changes to Management Team: The RTO Agreement contemplates that Dan
Wilson will remain as an officer of VenPath subsequent to the OPE Transaction
in the capacity of Executive Vice President and Secretary. The remainder of
the management team will be appointed from the OPE ranks with Gary Quenan
assuming the responsibilities of President and CEO and Richard Haun serving as
Executive Vice President and Chief Technology Officer. Larry Aertker will
assume the responsibility of Chief Financial Officer, the same role he
currently serves in OPE. Additional officers of VenPath will be Nico
Vandenworm as Vice President of Business Development and William Lamport as
Vice President of Operations.

    Change of Corporate Name: The RTO Agreement provides that VenPath will
change its name to "OPE, Ltd." at closing of the OPE Transaction. VenPath has
scheduled an Annual and Special Shareholders' Meeting to be held on March 30,
2007 at which meeting a resolution relating to the change of name will be
proposed.

    Support of Majority Shareholder: VenPath has executed an agreement with
Andover Capital SPC, Ltd. ("Andover"), a shareholder holding the majority of
shares in VenPath, pursuant to which Andover has agreed to support the OPE
Transaction. As such, VenPath will utilize a written shareholder consent to
satisfy the shareholder ratification requirements of TSXV Policy 5.2. Andover
has also covenanted to vote in favour of all resolutions presented at the
Shareholder Meeting relating to the OPE Transaction consistent with the RTO
Agreement. The OPE Entities and their shareholders and partners are completely
at arms' length both to VenPath and to Andover. In the course of the OPE
Transaction, VenPath will not deliver any information to Andover except
information which is simultaneously disseminated to the public. The RTO
Agreement provides that, should Andover decide to sell a portion of its
existing shareholding, VenPath will facilitate such transfer as part of the
private placement.

    Sponsorship of Transaction: VenPath has retained Canaccord Capital
Corporation ("Canaccord") of Calgary, Alberta to provide a sponsorship of the
OPE Transaction in accordance with TSXV Policy 5.2. The sponsorship
obligations of Canaccord are subject to completion of satisfactory due
diligence.

    Timing for Completion of Transaction: The parties have undertaken to
utilize their best efforts to complete the transaction at the earliest
possible date. Completion of the transaction is subject to, and conditional
upon, the satisfaction of a number of conditions as set out below. The RTO
Agreement provides an outside date of 120 days from February 13, 2007 for
completion of the deal, although the parties intend that the transaction be
closed significantly in advance of that date.

    Conditions for Closing of Transaction: Completion of the OPE Transaction
is subject to the fulfillment of a number of conditions. The principal
conditions include the following: (i) receipt of approval of the TSXV for the
transaction and fulfillment of all conditions established by the TSXV; (ii)
successful completion of the private placement (including placement of any
Andover shares to be added to the private placement); (iii) no material
adverse changes in the business or prospects of VenPath or OPE prior to
closing; (iv) management agreements to be executed with Messrs. Quenan, Haun
and Wilson; and (v) minimum working capital in VenPath of $4,500,000 (USD)
following completion of the transaction.

    Categorization of Resulting Entity: VenPath is currently categorized as a
Tier 1 Investment Issuer on the TSXV. Following completion of OPE Transaction,
it is anticipated that VenPath (then OPE, Ltd.) will be categorized as a Tier
1 Industrial Issuer.

    Escrow and Trading Restrictions: It is anticipated that a portion of the
VenPath shares issued to Gary Quenan and Richard Haun in conjunction with the
OPE Transaction will be subject to escrow. Final terms of the escrow will be
established by the TSXV in the course of its review of the OPE Transaction.

    Appointment of New Auditors: In conjunction with the OPE Transaction,
VenPath is proposing that its auditors be changed to Deloitte Touche, LLP
("Deloitte"). Due to the international nature of OPE's operations, the
management of VenPath and OPE determined that Deloitte is better positioned to
service the audit need of VenPath on an ongoing basis. A resolution for the
appointment of Deloitte as auditors will be tabled at the Annual and Special
Shareholder's meeting on March 30, 2007.

    Business of OPE

    Overview

    OPE is engaged in the engineering consulting industry focused on offshore
oil and gas drilling, production and transportation.
    OPE was founded in 1994 by Gary Quenan and Richard Haun with an initial
expertise in offshore pipeline design, fabrication and installation
engineering. During its thirteen years of operation, OPE's expertise has
expanded to include current capabilities in the following areas:

    
    -   offshore and onshore pipeline and facilities design;
    -   steel catenary riser technology;
    -   flow assurance engineering;
    -   marine loading terminals;
    -   deepwater subsea engineering;
    -   deepwater pipeline and riser design and analysis;
    -   deepwater floating production and storage;
    -   tanker mooring systems;
    -   inspection and project management services;
    -   offshore installation engineering; and
    -   offshore structural engineering.
    

    The strength of OPE has historically been its ability to recruit, train
and retain engineering and design professionals with strong experience and
high technical proficiency. OPE currently has approximately 85 employees, of
which approximately 73 work in its Houston head offices. Among its employees,
OPE has approximately 30 professional engineers, 18 CAD designers with
technical designations and 32 administrative, managerial and support staff.
Amongst the engineering professionals, OPE has 13 engineers with PhD's and
another 11 engineers with master's degrees.
    OPE has an engineering office located in Trinidad and Tobago with three
professional engineers on staff and two CAD designers and has recently opened
a Malaysian office with two professional engineers and two CAD designers on
staff to better serve one of its key clients operating in the area. Three new
professional engineers will be starting in the Malaysian office in March 2007.
    OPE's ongoing client list includes a variety of large and well-recognized
companies operating in the energy sector. No single client currently accounts
for greater than 20% of OPE's annual revenues and OPE's ongoing projects
extend throughout the world. Currently, OPE has a significant order backlog
for new projects that indicate OPE will continue to experience revenue growth
in fiscal 2007. The principal limitation in the growth of OPE's core
engineering design business at the current time is OPE's ability to recruit
and train professional staff with the capacity to deliver work product to
OPE's standard. Recently, OPE has focused on developing relationships and
expanding its networks for recruiting in Asia where there is a greater
availability of qualified engineers. New professionals will continue to be
hired internationally and relocated to OPE's Houston head office in addition
to being placed in the company's Malaysian and Trinidadian operations.

    Development of Intellectual Property

    In addition to the ongoing engineering consulting business, management of
VenPath and OPE believe that OPE's technology portfolio possesses significant
economic potential. During the course of its history, OPE's engineers have
identified a variety of novel solutions to problems identified in the course
of servicing OPE's clients. Over the years, OPE has developed a corporate
culture that encourages innovation from its employees and continues to
evaluate commercial applications for new technologies developed internally.
    Currently, OPE has obtained a number of international patents for a
variety of technologies with other patent applications in process. The
majority of these technologies provide OPE with the ability to deliver more
efficient solutions to its customers, but do not possess broad commercial
applications independent of the company's engineering consulting business. OPE
has, however, developed two technologies that have commercial potential
significantly beyond OPE's engineering consulting business.
    The first of these technologies is a unique design for a Floating
Platform for Storage and Offloading ("FPSO") of hydrocarbons designated by OPE
as the Satellite Services Platform ("SSP(R)"). A number of unique design
components associated with the SSP(R) have been patented by OPE, and OPE
believes that these elements provide significant performance and economic
advantages of the SSP(R) over other forms of FPSO's currently available on the
market. In particular, the unique retractable keel design of the SSP(R)
provides for enhanced stability of the platform and the geometric shape
provides for significantly reduced manufacturing costs compared to its
principal competitors. Moreover, the SSP(R) does not require a shipyard for
manufacture. In addition to application as an FPSO, the SSP(R) can be adapted
for a variety of applications including utilization as a control buoy for
offshore wells. Currently, the SSP(R) is in the final design and engineering
stages. Pending completion of the transaction with VenPath, management of OPE
believes that final engineering design and certification will occur during the
2007 calendar year. As such, OPE anticipates that it will be in position to
begin marketing the SSP(R) within the upcoming months.
    The current business model of OPE will be to build and lease the SSP(R)'s
to customers through long-term leases. Based on current lease rates for
comparable FPSO's, the pro forma return on investment for SSP(R)'s built and
leased is very attractive and OPE believes that the SSP(R) technology
possesses significant commercial potential.
    The second key technology currently being commercialized by OPE is a
patented pipe-in-pipe technology designed for pipeline applications with
extreme thermal operating requirements. The OPE application is designed to
transport liquid natural gas and hot oil products and will operate in extreme
hot and cold environments utilizing the high insulating characteristics of the
OPE design. The design also reduces fabrication and installation time. OPE is
currently completing field testing of the pipe-in-pipe technology and has
entered into discussions with various potential joint venture partners
interested in working with OPE in commercializing the technology.
    In addition to the proprietary technologies referenced above, OPE has
developed a number of sophisticated computer programs that are utilized
internally in its engineering consulting business. Although OPE does not have
any current intention to market these programs independently, access to these
programs by OPE engineers in the design process does provide a significant
advantage to OPE in delivering the best product to its clients.
    Management of OPE believes that it will continue to develop innovative
technologies as a natural byproduct of its engineering consulting business. As
such technologies are identified, OPE will continue to evaluate the commercial
potential of each and determine whether to attempt to commercialize the
technology by itself, joint venture with partners or sell or license the
technology to third parties.

    Financial Summary

    OPE's financial statements have been audited for the past several years,
with a financial year end of December 31. Audits for the financial year ending
December 31, 2006 are currently being completed and will be filed with the
TSXV in conjunction with the Filing Statement and made available to the public
prior to completion of the RTO. The following numbers from the 2006 financial
year are based on management prepared statements and are subject to revision
during the audit process based on input from the company's auditors.
    OPE's revenue for the year ended December 31, 2006 was approximately
$17,500,000, up from $11,403,544 in the year ended December 31, 2005. EBITDA
for fiscal 2006 (earnings prior to interest, taxes depreciation and
amortization while adding back special charges and shareholder bonuses) was
approximately $1,242,412. Normalized EBITDA (with additional add-backs for
one-time settlement charges of litigation and special bonuses to shareholders)
was $1,940,000, up from $734,629 in fiscal 2005. After-tax earnings numbers
for 2006 for OPE are not yet available as tax obligation calculations are
currently being finalized.
    At December 31, 2006, OPE's consolidated balance sheet demonstrated net
working capital (current assets minus liabilities) of approximately
$2,790,000. OPE did not have any long term debt at December 31, 2006.
    Based on the projects currently in process and order backlogs, management
of OPE anticipates that consulting revenues and operating profits will
continue to increase in fiscal 2007. The ongoing engineering consulting
business is expected to continue to provide positive cash flow and will be
able to grow without any outside capital.
    Development and commercialization of OPE's technologies, however, will
require additional capital expenditures. Although these development projects
could be funded through internal cash flows generated by OPE's engineering
consulting business over a period of time, management of OPE believes that it
is important to focus on commercializing its key technologies in the upcoming
months to take advantage of current market conditions. As such, management of
OPE identified the transaction with VenPath as an ideal opportunity to gain
access to growth capital immediately in the private placement in addition to
positioning the company to access future capital based on the successful
development and marketing of the OPE technologies. Particularly with respect
to the SSP(R) FPSO platform, if OPE is successful in selling units it will
require significant growth capital to finance the construction costs. By
undertaking the transaction with Venpath at the current time, management of
OPE believes that it will be optimally placed to access such further capital
in the most efficient manner.

    Completion of the transaction is subject to a number of conditions,
including TSXV acceptance and shareholder approval. 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 Filing Statement
to be prepared in connection with the transaction, any information released or
received with respect to the RTO may not be accurate or complete and should
not be relied upon. Trading of the securities of VenPath Investments Inc.
should be considered highly speculative.

    The TSXV has in no way passed upon the merits of the proposed transaction
    and has neither approved nor disapproved of this press release.

    Canaccord Capital Corporation., subject to completion of satisfactory due
diligence, has agreed to act as sponsor to VenPath Investments Inc. in
connection with the transaction. An agreement to sponsor should not be
construed as any assurance with respect to the merits of the transaction or
the likelihood of completion.

    Certain statements contained herein constitute forward-looking
statements. Although the company believes the statements are reasonable, it
can give no assurance that such expectations will prove to be correct. The
company cautions investors that any forward-looking statements made by the
company are not guarantees of the future performance, and that the actual
results may differ materially from those in the forward-looking statements as
a result of various factors.

    %SEDAR: 00013876E




For further information:

For further information: L. Daniel Wilson, President and CEO of VenPath
at (403) 358-1110 (phone), (403) 887-7666 (fax) or dan@groupwilson.com; or
Gary Quenan, President and CEO of OPE at (713) 461-0044 (phone), (713)
465-4673(fax) or gquenan@opeinc.com

Organization Profile

VENPATH INVESTMENTS INC.

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