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CALGARY, Sept. 24 /CNW/ - Coral Sea Resources Inc. ("Coral Sea") (TSXV: CSX) and Sagres Energy Inc. ("Sagres"), an international oil and gas exploration company with an offshore exploration portfolio in Jamaica, are pleased to announce that they have entered into a non-binding letter of intent today for the acquisition by Coral Sea of all the outstanding shares of Sagres (the "Acquisition"). Prior to or concurrent with the Acquisition, Coral Sea proposes to complete a brokered private placement offering of subscription receipts for gross proceeds of not less than $2.4 million (the "Coral Sea Private Placement").
Overview of the Acquisition
Under the letter of intent, each outstanding common share of Sagres will be exchanged for one common share of Coral. It is currently contemplated that the Acquisition will occur by way of a three-cornered amalgamation and will result in a reverse take-over of Coral Sea by Sagres. There are currently outstanding 1,333,334 common shares of Coral Sea and approximately 30 million common shares of Sagres. It is expected that not less than 7.5 million common shares of Sagres will be issued pursuant to the Sagres brokered private placement offering described below.
The letter of intent is non-binding except for obligations relating to a period of exclusive dealing, confidentiality and other non-material matters. If a definitive agreement is reached (including the entering into of lock-up agreements with directors and officers of Coral Sea and the requisite number of Coral Sea shareholders), the parties expect to complete the Acquisition as soon as possible and by no later than January 2010 subject to the receipt of all necessary regulatory and other approvals and satisfaction of all other customary closing conditions, including the completion by Coral Sea of the Coral Sea Private Placement. To proceed, the Acquisition must be approved by the TSX Venture Exchange and Coral Sea shareholders at a meeting which is expected to be held in the fourth quarter of 2009 and by no later than the end of January 2010. Further details concerning the Acquisition and other matters referred to in this news release will be announced if and when a definitive agreement is reached.
Overview of the Coral Sea Private Placement
Prior to or concurrent with the Acquisition, Coral Sea proposes to complete the Coral Sea Private Placement for gross proceeds of not less than $2.4 million at a price to be determined in the context of the market at that time, subject to the requirements of the TSX Venture Exchange and consent of Sagres. Each subscription receipt will entitle the holder to receive one common share of Coral Sea without additional payment or further action by the holder upon completion of the Acquisition. The gross proceeds of the Coral Sea Private Placement will be held in escrow pending completion of the Acquisition. If the Acquisition closes on or before a specified date, the net proceeds of the offering will be released to Coral Sea.
About Sagres Energy
Sagres, a privately-held Alberta corporation based in Calgary, is an international oil and gas exploration company with an offshore exploration portfolio in Jamaica. Sagres holds three production sharing contracts covering the right to explore an area of approximately 8,864 sq/kms offshore Jamaica.
Management of the combined company
The combined company will be led by an experienced management team with a track record in developing and managing international start-up oil and gas companies. Upon completion of the Acquisition, the combined company will include the following management team:
Dr. David Johnson, President, and Chief Executive Officer: David Johnson has over 20 years of experience in the international oil and gas exploration business. Dr. Johnson has been the President and Chief Executive Officer and a Director of Sagres since June 2009. Prior to joining Sagres, Dr. Johnson was the Manager International Exploration and Development at Husky Energy (2006-2008) and Manager International and Frontier Exploration at Husky Energy (2003-2006). Prior to that Dr. Johnson was a Senior Exploration Geologist with ExxonMobil Exploration Company (1998-2002) and a Senior Research Geologist with Exxon Production Research Company (1994-1998). Dr. Johnson obtained his B.Sc. Geology from the University of Calgary in 1980 whereafter he worked with Shell Canada Resources Limited (1980-1985). Dr. Johnson obtained his Ph.D. Geological Oceanography from Dalhousie University, Halifax in 1994.
Jason Bednar (B. Comm., CA) Chief Financial Officer: Mr. Bednar has been the Chief Financial Officer and a director of Sagres since June 2009. Prior to joining Sagres, Jason Bednar was the founding Chief Financial Officer, VP Finance and Corporate Secretary of Pan Orient Energy Corp. from November 2004 to April 2009. Prior to that, Mr. Bednar was Controller of both Canadian 88 Energy Corp. (1998-2002) and Canadian Superior Energy Inc. (2002-2004). Mr. Bednar received his Bachelor of Commerce degree from the University of Saskatchewan in 1993 and his Chartered Accountant designation in 1996.
Gerold Fong (B.Sc., P.Geoph) Director: Mr. Fong is a director of Sagres. Gerold Fong is currently the President, CEO and Director of Voyager Energy Ltd., a company he co-founded in December 2004. Prior to founding Voyager Energy, Mr. Fong was Exploration Manager with Canadian Superior Energy Inc from 2001-2004. Mr. Fong is currently also a director of Petrolympic Ltd., a Quebec based oil and gas exploration company. Mr. Fong graduated in 1982 with a B.Sc. in Geophysics from the University of Calgary and has over of 25 years of diversified experience in the international oil and gas exploration business.
Private placement offering of Sagres Energy
Sagres expects to complete by not earlier than Tuesday, September 29, 2009 a brokered private placement offering of Sagres common shares at a price of $0.20 per share for gross proceeds of not less than $1.5 million. The net proceeds of this offering will be used by Sagres to expand its international exploration portfolio.
In light of this announcement, investors proposing to subscribe to that offering are entitled to rescind their subscriptions by sending written notice to Sagres Energy Inc., 405-505 3rd Street SW, Calgary, AB T2P 3E6 Attention: Jason Bednar, Chief Financial Officer (firstname.lastname@example.org) prior to 5:00 p.m. (Calgary time) on Monday, September 28, 2009.
About Coral Sea
Coral Sea Resources Inc. is a publicly traded company listed on the TSX Venture Exchange and trading under the symbol "CSX". The Company owns petroleum and natural gas assets in the Nevis area of Alberta.
The parties expect to apply for an exemption from the sponsorship requirements of the TSX Venture Exchange in connection with the Acquisition. There can be no assurances that such exemption will be granted or be granted on terms satisfactory to the parties.
In accordance with the policies of the TSX Venture Exchange, trading in Coral shares is currently halted and will remain halted until further notice. Coral Sea expects to appoint the agent(s) for the Coral Sea Private Placement prior to resuming trading.
Coral Sea and Sagres caution that no definitive agreement has been entered into and accordingly no assurance can be given that the process contemplated by the letter of intent will lead to a definitive agreement relating to the Acquisition on the terms contemplated by the letter of intent or otherwise or any other transaction. Neither Coral Sea nor Sagres intend to make any further announcements or communications regarding these potential transactions until either a definitive agreement has been reached or discussions are terminated without such an agreement being reached.
Completion of the Acquisition is subject to a number of conditions, including TSX Venture Exchange acceptance and shareholder approval (including on a disinterested basis to the extent required). The Acquisition cannot close until the required shareholder approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of Coral Sea Resources Inc. should be considered highly speculative.
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.
This news release contains forward-looking statements relating to the Acquisition, Coral Sea Private Placement and Sagres Private Placement, including statements regarding the exchange ratio for the Acquisition, the anticipated reverse take-over of Coral Sea, the anticipated closing date of the Acquisition, Coral Sea Private Placement and Sagres Private Placement, the anticipated date for holding the meeting of Coral shareholders to approve the Acquisition and other related matters, issuing further announcements concerning the Acquisition and other matters, the terms and conditions of the Coral Sea Private Placement, the anticipated minimum proceeds of the offerings, minimum pricings of the offerings and the number of shares to be issued under such offerings, the use of proceeds of the Sagres offering, projected timing of closing the offerings and the receipt of all necessary regulatory approvals and satisfaction of all other customary closing conditions in connection with the Acquisition and offerings, and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Acquisition will not be completed if a definitive agreement is not reached or that the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Acquisition is not satisfied; the risk that the terms of the Coral Sea Private Placement will be changed; the risk that closing of the Acquisition and Coral Sea Private Placement could be delayed if Coral Sea is not able to obtain the necessary approvals on the timelines it has planned; the risk that the intended use of the net proceeds of the Sagres offering might change if the board of directors of Sagres determines that it would be in the best interests of Sagres to deploy the proceeds for some other purpose; risks that the marketing efforts will not result in the completion of the Coral Sea Private Placement and Sagres Private Placement or the realization of the anticipated proceeds under the offerings; the assumptions relating to the parties entering into the definitive agreements in respect of the Acquisition and the timing thereof, the timing of obtaining required approvals and satisfying closing conditions for the Acquisition and offerings, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of Coral Sea and Sagres, the ability of the agents under the offerings to successfully market the proposed offerings.
The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Coral Sea and Sagres disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coral Sea and Sagres undertake no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.
SOURCE CORAL SEA RESOURCES INC.
For further information: For further information: John Mackay, President, Coral Sea Resources Inc., (403) 218-6509; David Johnson, President, Sagres Energy Inc., (403) 978-9878; Jason Bednar, Chief Financial Officer, Sagres Energy Inc., (403) 607-4607