Saxon Oil Announces Signing of Binding Letter of Intent with Energy (CG) Ltd. and Non-Brokered Private Placement

    DALLAS, Sept. 8 /CNW/ - Saxon Oil Company Ltd ("Saxon") (TSX VENTURE:
SXN) (FRANKFURT:SXN) (BERLIN:SXN) today announced it has entered into a
binding letter of intent ("LOI") dated September 5, 2008, with Energy (CG)
Ltd. ("Energy"), a private British Virgin Island company, to purchase 100% of
the issued and outstanding shares (the "Proposed Acquisition") of Picogina
Holdings BV ("Picogina"), a private Dutch company and a wholly-owned
subsidiary of Energy. The assets of Picogina consist of 100% of the
participations (shares) of Hidrocarburos del Cantabrico S.L. ("HDC"), a
private company incorporated under the laws of Spain, which holds a 100%
interest in five hydrocarbon exploration licences (the "Licences") covering
approximately 237,000 acres in the Asturias region of Spain. Saxon also wishes
to announce a non-brokered private placement to raise gross proceeds of a
minimum of $4,050,000 to a maximum of $6,000,000 (the "Offering") as discussed
    The areas covered by the Licences are the subject of a National
Instrument 51-101 ("NI 51-101") compliant report concerning their prospective
resources prepared by Chapman Petroleum Engineering, Ltd. ("Chapman") of
Calgary, Alberta. The purpose of their report was to independently determine
the feasibility of HDC undertaking the development of the prospective
resources in the Central Asturian Coal Basin and to determine the magnitude of
the prospective resources and the economic value before and after the
consideration of risk. The project area was deemed to have sufficient
potential to justify the expenditure to seal the existing coal mines and begin
the extraction of methane to be used for the generation of electricity.
Chapman's report assigns a best estimate unrisked potential resource of 27,020
MMscf yielding an estimated present value discounted at 10% of US$66,389,000
($2.12/share fully diluted by warrants). Under risk the present value
discounted at 10% is estimated at $34,141,000 ($1.20/share fully diluted by
warrants). The best estimate of future net revenue unrisked was US$189,138,000
and US$122,428,000 under risk. Chapman, an independent engineering firm, is
independent to Saxon and responsible for the preparation of the technical
disclosure and has reviewed and approved the contents of this news release.
    Richard G. Green, President and CEO of Saxon stated "The Spanish coal
mine methane project adds another very large, economically attractive venture
to the diverse Saxon portfolio in the European market. This is complimentary
to Saxon's existing exploration operations for natural gas in Italy and comes
with a seasoned operational team in Spain to develop and manage this large,
but relatively low risk project. This increases Saxon's natural gas focus in
Europe at a time when international tensions are focusing European governments
on the need for internal supplies instead of relying on potentially risky
Eastern European supply sources."
    Pursuant to the terms of the LOI, as consideration for the Proposed
Acquisition, Saxon intends to issue a total of 17.5 million units of Saxon
(the "Acquisition Units") to Energy. Each Acquisition Unit will be comprised
of one common share of Saxon and one common share purchase warrant of Saxon.
Each warrant will be exercisable to acquire one additional common share of
Saxon at a price of $0.45 per share for a period of 24 months from the date of
the closing of the Proposed Acquisition. Completion of the Proposed
Acquisition is subject to due diligence by the parties, execution of a
definitive purchase and sale agreement, approval by the TSX Venture Exchange
and shareholder approval. Upon the completion of the Proposed Acquisition, the
board of directors of Saxon will be re-structured so that it shall consist of
nine directors of which six will be nominees of Saxon and three will be
nominees of ECG.
    Saxon also today announced that it is proposing to sell a minimum of 13.5
million units ("Offering Units") and up to a maximum of 20 million Offering
Units at a purchase price of $0.30 per Offering Unit for gross proceeds of a
minimum of $4,050,000 and up to a maximum of $6,000,000 (the "Offering") by
way of a non-brokered private placement. Each Offering Unit will be comprised
of one common share of Saxon and one half of one common share purchase warrant
of Saxon. A full warrant will be exercisable to acquire one additional common
share of Saxon at a price of $0.45 per share for a period of 24 months from
the date of the closing of the private placement. It is intended that the
Offering will close in one or more tranches. Up to US$2,000,000 of the net
proceeds of the Offering will be released to Saxon upon execution of the
definitive purchase and sale agreement and the balance will be released to
Saxon upon completion of the Proposed Acquisition.
    Under no circumstances shall this press release constitute an offer to
purchase or the solicitation of an offer to sell the Offering Units or any
other securities of Saxon. It also is not a solicitation of consents to the
proposed transaction. No recommendation is made as to whether holders of Saxon
securities should give their consent to this transaction. This press release
does not constitute an offer to sell or the solicitation of an offer to buy
any security and shall not constitute an offer, solicitation or sale of any
securities in any jurisdiction in which such offering, solicitation or sale
would be unlawful.
    All securities to be issued in conjunction with the proposed acquisition
and offering, will be subject to a standard four-month hold period. In
addition the securities that comprise the Acquisition Units may also be
subject to escrow requirements and or other resale restrictions of the TSX
Venture Exchange.

    The following cautionary language is required under the NI 51-101
guidelines in regards to the definition of prospective resources. Prospective
resources are defined as those quantities of oil and gas estimated on a given
date to be potentially recoverable from undiscovered accumulations. There is
no certainty that prospective resources will be discovered. If discovered,
there is no certainty that any discovery will be technically or economically
viable to produce. The potential resource values stated are estimates only and
not statements of fact. The estimated values disclosed do not represent a fair
market value.

    About Saxon Oil Company Ltd:
    Saxon Oil Company is a Tier One Texas-based Canadian company, trading on
the TSX Venture Exchange under the symbol SXN. The Company is an independent
oil and gas company engaged in the acquisition, development and production of
oil and natural gas reserves. The Company seeks to deliver strong shareholder
returns through an effective exploration and development program that
incorporates sound business practices with the latest oil field technologies.
The goal is to steadily increase proven reserves of oil and natural gas -
which, in turn, will lead to enhanced cash flows and earnings per share.

    This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding plans for
completion, production potential, other targeted areas and expansion and
development plans and objectives of Saxon Oil Company Ltd. are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy and accuracy of this Release.

    %SEDAR: 00005554E

For further information:

For further information: Richard G. Green, President and CEO, Tel: (214)
234-0552, or by fax, (214) 361-5084; Saxon Oil Company Ltd., Patrice Nazareno,
Toll Free: 1-866-515-7708, Email:

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