Montana Exploration Corp. announces McIntyre Partners approval of seismic and amends terms of warrants to be issued to former preferred shareholders upon conversion of preferred shares


CALGARY, March 8, 2013 /CNW/ - Montana Exploration Corp. ("Montana") is pleased to announce that it has received notice from Wolseley Ventures Ltd., an affiliate of McIntyre Partners ("McIntyre"), that Montana has satisfied the condition in the Investment Agreement dated January 29, 2013 that the Investor be satisfied in its sole discretion with the results of a 3-D seismic survey and potential well locations.  Montana recently received processed seismic from a 45 square mile 3-D seismic program completed on the Company's lands over the Shaunavon trend. The survey shows many drilling targets on multiple play types. Further processing and interpretation of the seismic will occur over the coming weeks.

The 3-D seismic was conducted in conjunction with a private Denver based oil and gas company with a senior team of technical experts backstopped by a large New York based private equity firm under a farm-in participation agreement. The recent 3-D survey brings the total region surveyed under the agreement to 54 square miles.

In order to pay its portion of the 54 square miles of 3D Seismic, renew land leases and certain other expenses prior to the anticipated closing the McIntyre financing, Montana entered into a Second Amending Agreement dated February 12, 2013 with Rioco Partners, Ltd. ("Rioco") extending the principal amount from $2,860,677.93 to $4,310,677.93. Montana intends to use $1.45 million of the net proceeds of the previously announced proposed private placement to McIntyre to repay $1.45 million of its indebtedness to Rioco. Mr. Collins, a director and a controlling shareholder of Montana, is the principal shareholder of Rioco.

As previously announced, one of the conditions of the private placement  to McIntyre is that that Montana amend the terms of its Series A Convertible First Preferred Shares, Series B Convertible First Preferred Shares and Series C Convertible First Preferred Shares (collectively, the "Preferred Shares") to deem the conversion of the Preferred Shares into units, each unit consisting of one common share and one warrant ("Warrants") to purchase an additional common share at an exercise price of  $0.50 (reduced from $0.80) expiring on the date that is one year from the closing date of the private placement to McIntyre (an extension of approximately one year).

In order approve the re-pricing of the Warrants from $0.80 to $0.50, the TSX Venture Exchange requires that, in accordance with TSX Venture Exchange policies, the exercise period of the Warrants be amended to 30 days if, for any ten consecutive trading days during the unexpired term of the Warrants, the closing price of the common shares exceeds $0.625 (the "Reduced Exercise Period"). The Reduced Exercise Period will begin seven calendar days after the tenth consecutive trading day.

The deemed conversion of the Preferred Shares, including the reduction the exercise price of the Warrants and the extension the expiry of date of the Warrants, will be put before shareholders of Montana at the special meeting of shareholders to be held on March 14, 2013 (the "Article Amendment Resolution"). At that time, a motion will be put forward to the shareholders to amend the Article Amendment Resolution to give effect to the Reduced Exercise Period.


Caution Regarding Forward Looking Information

Certain statements contained in this document constitute "forward-looking statements" and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as forward-looking statements). Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should", "could", "estimate", "predict" "propose" or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements in this press release include, but are not limited to completion of the Private Placement to McIntyre, and the amendment of the articles of Montana to convert the preferred shares into units and extension and re-pricing of the warrants issuable to the former holders of preferred shares upon the exchange of their preferred shares for units;  the seismic and the selection of initial drilling locations; and the holding of a special meeting of shareholders.

In addition, the proposed transactions are subject to Montana receiving regulatory approval from the Exchange and approval at a meeting of the holders of common shares and preferred shares of Montana.

Forward-looking statements and information contained in this press release are based on our current beliefs as well as assumptions made by, and information currently available to, us. Although we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.

By their very nature, the forward-looking statements included in this press release involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the volatility of oil and gas prices; production and development costs and capital expenditures; the imprecision of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids; Montana's ability to replace and expand oil and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; inadequate insurance coverage; compliance with environmental laws and regulations; changes in tax and royalty laws; Montana's ability to access external sources of debt and equity capital; and Montana's ability to obtain equipment in a timely manner to carry out development activities. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Montana, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this press release are made as of the date of this document and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE: Montana Exploration Corp.

For further information:

Charles Selby, Chairman & CEO
Telephone: (403) 265 9091 (ext 247)
Fax: (403) 265 9021

Don Foulkes, President
Telephone: (403) 265 9091 (ext 248)
Fax: (403) 265 9021

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