Symbol: BOG: TSX Venture
CALGARY, May 20, 2011 /CNW/ - Base Oil and Gas Ltd. ("Base Oil and Gas" or the "Company") is pleased to announce it has entered into a Recapitalization
Agreement (the "Agreement") with Mr. Richard Thompson and Mr. Hany Beshry, which provides for two
non-brokered private placements (the "Private Placements") by the Company for aggregate gross proceeds of at least $1.25 million
and up to $1.4 million, and the appointment of Mr. Thompson and
Mr. Beshry as executive officers of the Company and Mr. Thompson as a
director of the Company (collectively, "New Management", and with the Private Placements, the "Transaction").
Pursuant to the Agreement, Mr. Thompson will be appointed President and
Chief Executive Officer and a director of the Company, Mr. Beshry will
be appointed Executive Vice-President, Exploration of the Company and
Ms. Elizabeth M. Burke-Gaffney will be appointed Vice-President, Land.
Mr. Thompson is a geophysicist with over 30 years of industry
experience. Previously he was Executive VP and a director of Cequence
Energy (2009-2010), VP Exploration of Cyries Energy Inc. (2004-2008),
Manager Geophysics of Cequel Energy (2001-2004) and Chief Geophysicist
of Cypress Energy (1997-2000). Prior to Cypress Energy, Mr. Thompson
held increasingly senior capacities in both public and private oil and
gas exploration companies. Mr. Thompson graduated from the University
of Manitoba in 1979 with a B.SC in Geophysics (with honours).
Mr. Beshry is a geologist with over 14 years of industry experience.
Previously, he was VP Exploration of Cequence Energy (2009-2010),
Manager Geology of Cyries Energy Inc. (2004-2008), Senior Geologist of
Cequel Energy (2001-2004) and a geologist with Cypress Energy
(1997-2000). Mr. Beshry graduated from the University of Calgary in
1997 with a Bachelor of Science in Geology.
Mr. Thompson and Mr. Beshry were key team members responsible for growth
creation in several profitable junior oil and gas companies. They
represent a focused technical team that consistently achieved strong
production and reserve growth through prudent acquisitions and
Ms. Burke-Gaffney is a Landman with more than 24 years of industry
experience. Since May 2008, Ms. Burke-Gaffney has been retained by
various companies on an ongoing basis to provide land expertise. From
February, 2006 to April, 2008, Ms. Burke-Gaffney held positions of
Vice-President, Land, Chief Financial Officer and Director of Paris
Energy Ltd. and subsequently President and Chief Executive Officer of
Paris Energy Inc. From December 2003 to January 2006, Ms.
Burke-Gaffney was Vice-President, Land and Director of KVR Resources
Ltd. From 2001 until 2003, Ms. Burke-Gaffney was Manager, Land with
Nycan Energy Corp. Prior thereto Ms. Burke-Gaffney was employed by
Baytex Energy Ltd. from 1996 until 2000, initially as a Senior Landman,
and subsequently as Chief Landman. Prior to Baytex, Ms. Burke-Gaffney
worked for various large, intermediate and small companies in land.
Ms. Burke-Gaffney graduated from the University of Toronto in 1984 with
a Bachelor of Arts Degree. She is an active member of the Canadian
Association of Petroleum Landmen and former member of the Board of
Directors of the CAPL.
Upon closing of the Transaction, Mr. Henry Sykes and Mr. Don Cameron
will resign as Directors of the Company and Mr. Don Cameron, Vice
President Exploration and Mr. Don Van Tetering, Vice President
Operations will resign as officers of the Company. Also at that time,
Mr. Thompson will be appointed as a Director of the Company.
After completion of the Transaction:
senior management of the Company will consist of Richard Thompson -
President and Chief Executive Officer, Hany Beshry - Executive
Vice-President, Exploration, Ms. Burke-Gaffney - Vice-President, Land
and Roy Evans - Vice-President, Finance and Chief Financial Officer;
the Board of Directors of the Company will consist of Mr. Thompson and
some of the current Directors of the Company, those being Dennis
Feuchuk (Chairman), Bruce Hammond, Rick Alexander and Don Van Tetering.
Following completion of the Transaction, the Company will focus
predominately on light oil and liquids-rich gas opportunities in
Alberta and Northeast B.C. The Company will supplement its exploration
and development program with a focused acquisition and consolidation
strategy. The acquisition and consolidation strategy will expand the
Company's suite of assets and provide a platform for sustainable
Pursuant to the Agreement, the Company will complete two private
placements, one a private placement of units of the Company (the "Units") and the other a private placement of common shares of the Company ("Common Shares").
For the Unit private placement, Mr. Thompson and Mr. Beshry will
subscribe for an aggregate of 6,415,095 Units and Mr. Thompson and Mr.
Beshry or other persons identified by Messrs. Thompson and Beshry may
subscribe for up to an additional 1,132,075 Units, at a price of
$0.1325 per Unit for aggregate proceeds to the Company of at least
$850,000 and up to $1,000,000. Each Unit will be comprised of one
Common Share and one Common Share purchase warrant (a "Warrant")
Each Warrant will entitle the holder thereof to purchase one Common
Share at a price of $0.20 over the next five years with 1/3 of the
Warrants vesting when the five day weighted average closing share price
(the "Market Price") meets or exceeds $0.26 per Common Share, 1/3 of the Warrants vesting
when Market Price equals or exceeds $0.325 per Common Share and the
final 1/3 of the Warrants vesting when the Market Price equals or
exceeds $0.39 per Common Share.
For the Common Share private placement, Mr. Thompson and Mr. Beshry,
together with additional subscribers identified by Mr. Thompson and Mr.
Beshry, will subscribe for an aggregate of 2,666,666 Common Shares at a
price of $0.15 per Common Share for aggregate gross proceeds to the
Company of approximately $400,000.
Proceeds from the Private Placements will be used to fund the Company's
capital program, as well as for current working capital purposes.
Mr. Thompson and Mr. Beshry will each be required, at closing of the
Transaction, to enter into an escrow agreement which will provide that
any Common Shares acquired pursuant to the Private Placements, and any
Common Shares issued upon exercise of the Warrants, shall be subject to
a 24 month escrow wherein 25% of such securities shall be released on
each of the 6, 12, 18 and 24 month anniversaries of closing of the
Shareholder and Stock Exchange Approvals
Completion of the Transaction is subject to a number of conditions and
approvals including, but not limited to, the approval of the TSX
Venture Exchange and, if required by the TSX Venture Exchange,
Pursuant to the Agreement, if shareholder consent is required by the TSX
Venture Exchange, the Company has agreed to obtain written consent from
shareholders holding Common Shares representing in excess of 50.1% of
the Company's issued and outstanding Common Shares (the "Written Consent") on or before June 7, 2011. In the event that the Written Consent is
not obtained on or before June 7, 2011, the Company has agreed to
convene and hold a meeting of shareholders of the Company for
consideration of the Transaction by the shareholders of the Company on
or before July 29, 2011.
Board of Directors' Recommendation
The Board of Directors of the Company has unanimously approved the
Transaction and recommends that the Company's shareholders approve the
Agreement and the Transaction and execute a Written Consent. Any
shareholder of the Company wishing to obtain and execute a Written
Consent should contact the Company as set out below.
Dundee Securities has acted as financial advisor to New Management in
respect of the Transaction.
The Agreement contains a number of customary representations, warranties
and conditions. The complete Agreement will be accessible on the
Company's SEDAR profile at www.sedar.com.
Appointment of Interim President and Chief Executive Officer
Base Oil & Gas Ltd. further announces that effective immediately, Mr.
Dennis Feuchuk has resigned his position as President and Chief
Executive Officer of the Company. Mr. Roy Evans, Vice President
Finance and Chief Financial Officer of the Company has been appointed
to serve as interim Chief Executive Officer until the closing of the
Transaction. Mr. Feuchuk will continue in his role as Chairman of the
Board of Directors.
Base Oil and Gas Ltd. is a Calgary based emerging oil and gas company,
focused on the development of light oil & liquids-rich gas reserves in
the Western Canadian Sedimentary basin.
Forward Looking and Cautionary Statements
This press release contains forward-looking statements. More
particularly, this document contains statements concerning: the
completion of the transactions contemplated by the Agreement, including
both completion of the Private Placements and the future directors and
officers of the Company and the use of proceeds from the Private
The forward-looking statements are based on certain key expectations and
assumptions made by the Company or by New Management, as applicable,
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
Although the Company and the New Management, as applicable, believe that
the expectations and assumptions on which the forward-looking
statements made by such party are based are reasonable, undue reliance
should not be placed on the forward-looking statements because no
assurance can be provided 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, or at all, and
risks that other conditions to the completion of the Transaction are
not satisfied on the timelines set forth in the Agreement or at all;
the risks associated with the oil and gas industry in general; the
ability to implement corporate strategies, the state of domestic
capital markets, the ability to obtain financing, changes in general
market conditions and other factors more fully described from time to
time in the reports and filings made by the Company with securities
The forward-looking statements contained in this press release are made
as of the date hereof and the Company 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.
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.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY
CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.
SOURCE Base Oil
For further information:
Base Oil & Gas Ltd.
or visit the Company's website at www.baseoilandgas.ca.