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CALGARY, Feb. 23 /CNW/ - Avere Energy Inc. ("Avere" or the "Company") (TSX-V: AVO.H) announces that, further to the Company's news release of January 27, 2010, Avere and American Exploration Corp., a Nevada corporation (AEXP-OTCBB, "American") have entered into a verbal agreement to amend the terms to a farm-in letter agreement on an undeveloped Haynesville shale gas prospect located in the state of Mississippi. The letter agreement had stated that Avere will earn a 20% interest in the partnership's revenue interest in the play by paying 20% of the costs of the drilling and completion of an initial deep gas well (an estimated US$2 million) and will make payments aggregating US$850,000 to American, including a non-refundable US$75,000 deposit, which was paid on January 27, 2010.
The amendments to this letter agreement relate to the cash component to be revised to US$2,000,000 and that the Company, American, Mainland Resources Inc. and Guggenheim Energy Partners, LLC will enter into a novation agreement (the "Novation Agreement") pursuant to which American, Mainland and Guggenheim will acknowledge, consent to and agree that the Company will become a direct party to the Joint Operating Agreement (JOA). This Farm-in letter agreement, once revised and restated, would be subject to the execution of a formal Farm-In Agreement that once duly executed by American and the Company, will be enforceable and will supersede any enforceable provisions of this Letter Agreement.
"We remain confident that the Haynesville in Mississippi is a high-impact shale gas play for Avere," says Quinton Rafuse, President and CEO of Avere "As such, we feel that this increase to the cash component is required to remain competitive within the Haynesville play."
REVISION TO TERMS OF THE PRIVATE PLACEMENT
Avere is also pleased to announce that, further to the Company's news release of February 9, 2010, its private placement has been changed to an offering of subscription receipts, but is otherwise unchanged. Avere will issue up to 16,000,000 subscription receipts (the "Subscription Receipts") at a subscription price of $0.45 per Subscription Receipt to raise gross proceeds of up to $7,200,000 (the "Offering"). Each Subscription Receipt will entitle the holder thereof to acquire, for no additional consideration, one common share of the Company ("Share") and one-half of one warrant ("Warrant") to purchase one additional Share at a price of $0.56 per Share for a period of two years from the date the subscription receipts are issued.
On the closing of the Offering, the gross proceeds of the Offering will be held in escrow pursuant to the terms of an escrow agreement (the "Escrow Agreement") to be entered into between the Issuer and Computershare Trust Company of Canada (the "Escrow Agent"). Under the terms of the Subscription Receipts, the Subscription Receipts will automatically convert into Shares and Warrants on that date (the "Conversion Date") on which the Company provide notice to the Escrow Agent that:
(a) the parties to the revised Farm-in Agreement entered into between the
Company and American Exploration Corp. are ready, willing and able to
complete the transactions contemplated by the Farm-in Agreement in
all material respects in accordance with the terms of the Farm-in
Agreement without material amendment or waiver adverse to the
Company, considered as a whole; and
(b) the Exchange has granted conditional approval to the Change of
Business and to the Company becoming a Tier 2 Issuer.
On the Conversion Date, the Escrow Agent will release the proceeds with interest to the Corporation. If the Conversion Date does not occur on or before 4:00 p.m. (Vancouver Time) on May 31, 2010, all Subscription Receipts will be automatically cancelled and be null and void, and the proceeds held by the Escrow Agent will be returned to the Purchasers in the amounts of their subscriptions with any interest accrued.
Finders' fees will be payable in connection with the Offering.
The proceeds of the Offering will be used to pay for the farm-in and drilling obligations of the Company in connection with its farm-in on an undeveloped Haynesville shale gas prospect located in the state of Mississippi, to pay for at minimum a subsequent development well on the property and a seismic acquisition program. As well, the proceeds will provide the Company with sufficient working capital to complete its Reactivation and will be used for general corporate purposes.
Closing of the Offering is subject to the approval of the TSX Venture Exchange.
ABOUT AVERE ENERGY INC.
Avere Energy Inc. trades on the TSX Venture Exchange under the symbol AVO.H-V.
Avere is an emerging exploration and production company focused on unconventional natural gas resources such as shale gas, coalbed methane and tight sandstone reservoirs. Avere is aggressive in its exploration and evaluation of unconventional natural gas opportunities in North America, providing shareholders with exposure to the continent's future energy supply. This strategy will leverage new technologies with our innovative approach to prospect identification and characterization.
Forward Looking Statements: This Company's news release contains certain "forward looking" statements and information relating to the Company that are based on the beliefs of the Company's management as well as assumptions made by and information currently available to the Company's management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitations competitive factors, general economic conditions, customer relations, relationships with vendors and strategic partners, the interest rate, environment, governmental regulation and supervision, seasonality, technological change, changes in industry practices and one-time events. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein.
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.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The Units have not 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 many not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable states securities laws.
SOURCE AVERE ENERGY INC.
For further information: For further information: Quinton Rafuse, President and CEO, telephone: (403) 452-4910, fax: 1-888-236-6865, email: email@example.com, website: avereenergy.com