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Share Name | Share Symbol | Market | Type |
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Benz Capital Corp | TSXV:BCC | TSX Venture | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.07 | 0.07 | 0.10 | 0 | 01:00:00 |
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES Latigo Capital Corporation ("Latigo") (TSX VENTURE:LTG), Warnic 1 Enterprises Ltd. ("Warnic") (TSX VENTURE:WNCP), Valentine Ventures Corp. ("Valentine") (TSX VENTURE:VVN), Blackwater Capital Corp. ("Blackwater") (TSX VENTURE:BCC), all capital pool companies and Cumberland Oil & Gas Ltd., a privately held oil and gas company, are pleased to announce that they have signed an amalgamation agreement dated December 18, 2009 (the "Amalgamation Agreement") whereby each of the companies has agreed to combine their respective businesses by way of amalgamation (the "Amalgamation"). The Amalgamation is an arm's length transaction and is expected to constitute the Qualifying Transaction (as such term is defined in the policies of the TSX Venture Exchange Inc. ("TSXV")) for each of Latigo, Warnic, Valentine and Blackwater (collectively the "CPCs"). The Amalgamation and all related transactions remain subject to the approval of the TSXV. It is anticipated that the corporation to be formed on completion of the Amalgamation will be classified as a Tier 2 Oil and Gas Issuer on the TSXV. The Amalgamation Pursuant to the terms of the Amalgamation Agreement, Warnic will be continued from British Columbia to Alberta, and upon completion of the continuance, the CPCs and Cumberland (collectively the "Amalgamating Companies") will combine their respective businesses by way of an amalgamation under the provisions of the Business Corporations Act (Alberta). Cumberland Oil & Gas Ltd., the company to be formed on completion of the Amalgamation ("Amalco"), will carry on Cumberland's current business and operations. The current directors and management of Cumberland and a director of Latigo will form the board of directors and management of Amalco. The shares in the capital of each of the Amalgamating Companies that are issued and outstanding immediately prior to the time of the Amalgamation will be exchanged for common shares of Amalco ("Amalco Shares") at a deemed price of $0.33 per Amalco Share on the following basis: holders of common shares of Latigo will receive 0.3879 of an Amalco Share for each Latigo share; holders of common shares of Warnic will receive 0.3032 of an Amalco Share for each Warnic share; holders of common shares of Valentine will receive either 0.3037 of an Amalco Share for each Valentine share, or, in the event that the TSXV requires Valentine to cancel 675,000 Valentine shares issued to founders of Valentine as a result of Valentine's failure to complete a Qualifying Transaction by January 11, 2010, 0.3474 of an Amalco Share for each Valentine share; holders of common shares of Blackwater will receive 0.2875 of an Amalco Share for each Blackwater share; and holders of common shares of Cumberland will receive one Amalco Share for each Cumberland share. Based upon the number of shares of each of the Amalgamating Companies outstanding as at the date hereof, prior to giving effect to the Cumberland Financing (as defined below), assuming that all of the outstanding options in the CPCs are cancelled unexercised and assuming that Warnic's and Blackwater's outstanding agent warrants are exchanged for warrants of Amalco, there will be approximately 28.8 million Amalco Shares issued and outstanding following completion of the Amalgamation, with shareholders of Latigo, Warnic, Valentine, Blackwater and Cumberland holding approximately 9.9%, 9.1%, 5.7%, 3.2% and 72.1% of the outstanding shares, on a non-diluted basis, respectively. Assuming the Cumberland Financing are fully subscribed, all of the outstanding options in the CPCs and Warnic's and Blackwater's outstanding agent warrants are exercised prior to the completion of the Amalgamation, there will be approximately 33.2 million Amalco Shares issued and outstanding following completion of the Amalgamation. Each of the CPCs have agreed that all of their outstanding share options shall either be exercised or cancelled prior to the completion of the Amalgamation. Cumberland's outstanding share options will be exchanged for share options in Amalco pursuant to the Amalgamation Agreement. The exercise price, vesting dates and the expiry times of the outstanding Cumberland options will remain unchanged. It is anticipated that upon completion of the Amalgamation, Amalco will have the following convertible securities issued and outstanding: warrants to purchase an aggregate of 51,750 Amalco Shares at an exercise price of $0.70 per share and 202,522 Amalco Shares at an exercise price of $0.49 per share; options to purchase 737,500 Amalco Shares at an exercise price of $0.25 per share; and options to purchase 750,000 Amalco Shares at an exercise price of $0.33 per share. Cumberland Financing The CPCs have agreed that Cumberland may, prior to the completion of the Amalgamation, complete the non-brokered private placement of up to 3,636,364 subscription receipts (the "Subscription Receipts") at a price of $0.33 per Subscription Receipt for gross proceeds of up to $1.2 million (the "Cumberland Financing"). Each Subscription Receipt will, upon conversion for no additional consideration in accordance with their terms, be exchanged for one common share of Cumberland immediately prior to the completion of the Amalgamation and subsequently exchanged for one Amalco Share pursuant to the Amalgamation. The proceeds from the Cumberland Financing will be deposited with an escrow agent prior to the completion of the Amalgamation at which time they will be releasable to Amalco and applied to its 2010 capital expenditure program and for general working capital purposes. The completion of the Cumberland Financing is not a condition precedent to the completion of the Amalgamation. Highlights of the Amalgamation and Amalco Upon completion of the Amalgamation, Amalco will be a publicly listed entity positioned for future growth with the following: -- an experienced management team with extensive technical oil and gas experience; -- estimated production at closing, assuming normal declines and including the volumes anticipated from current operations, of approximately 60 Boe/d, 100% weighted to natural gas; -- an undeveloped land base of approximately 12,000 net acres; -- a portfolio of development and optimization opportunities in the Peace River Arch area of Alberta; -- tax pool balances of approximately $5.9 million; -- a production base that is 100% operated; and -- no debt and working capital of approximately $4.1 million, assuming all of the CPCs' dilutive securities are either cancelled, exercised or exchanged and prior to the completion of the Cumberland Financing. Pursuant to the Amalgamation Agreement, the initial directors and officers of Amalco will be: Name and Title Residence Background During the Five Preceding Years ---------------------------------------------------------------------------- Steven Calgary, Independent businessman, Executive Chairman and Cloutier, Alberta director of Cumberland since January 2008. President Chairman and and Chief Executive Officer of Rockyview Energy Inc. Director (a public oil and gas company) from June 2005 until January 2008. Prior thereto, President and Chief Operating Officer of APF Energy Inc. (a wholly-owned subsidiary of APF Energy Trust, a public oil and gas trust) and prior thereto Executive Vice President and Chief Operating Officer of APF Energy Inc. Martin Calgary, Independent businessman since June 2005 including a Hislop, Alberta director of Cumberland since March 2008. Prior Director thereto, Chief Executive Officer of APF Energy Inc. (a wholly-owned subsidiary of APF Energy Trust, a public oil and gas trust). Daniel Allan, Calgary, President, Chief Executive Officer and a director of President Alberta Cumberland since January 2008. Chief Operating and Chief Officer of Rockyview Energy Inc. (a public oil and Executive gas company) from June 2005 until January 2008. Officer and Prior thereto, Vice-President Exploration and Director Production of APF Energy Inc. (a wholly-owned subsidiary of APF Energy Trust, a public oil and gas trust) and prior thereto President and Chief Executive Officer of CanScot Resources Ltd. (a public oil and gas company). Richard Calgary, Independent businessman since July 2008. From 2005 Charron, Alberta until July 2008, Mr. Charron held roles of increasing Director responsibility at Xtreme Coil Drilling Corp. (a public oil and gas services company) including the role of Chief Executive Officer. Prior thereto, Chief Financial Officer of Itres Research Inc. (a private investment and service company) from 2003 to 2005. From 2000 to 2003, President and Chief Financial Officer of Wrangler West Energy Corp. (a public oil and gas company). Alan Calgary, Vice President, Finance and Chief Financial Officer MacDonald, Alberta of Cumberland since March 2008. Vice President, Vice- Finance and Chief Financial Officer of Rockyview President, Energy Inc. (a public oil and gas company) from June Finance and 2005 until January 2008. Prior thereto, Vice Chief President, Finance and Chief Financial Officer of APF Financial Energy Inc. (a wholly-owned subsidiary of APF Energy Officer Trust, a public oil and gas trust). David Calgary, Vice President, Engineering of Cumberland since Oginski, Alberta September 2009. Prior thereto, Chief Operating Vice- Officer of Welton Energy Corporation (a pubic oil and President, gas company) from 2004 until 2009. Engineering Fred Calgary, Partner, Burnet, Duckworth & Palmer LLP (law firm). Davidson, Alberta Corporate Secretary Conditions to Completion of the Amalgamation The obligations of the CPCs and Cumberland to complete the Amalgamation are subject to, among other things: (i) receipt of all necessary Amalgamating Company shareholder approvals of the Amalgamation and, in the case of Warnic, the continuance from British Columbia to Alberta; and (ii) other conditions precedent customary for a transaction such as the Amalgamation and a Qualifying Transaction. A joint management information circular (the "Information Circular") for the shareholder meetings of each of the Amalgamating Companies is expected to be mailed to the respective shareholders in mid January 2010 in connection with shareholder meetings expected to be held in mid February 2010. Closing of the Amalgamation is anticipated to occur shortly following the meetings and in any event before March 31, 2010. The Information Circular will contain detailed information in respect of each of the Amalgamating Companies and Amalco, including operational, historical and pro-forma financial information, and will be accessible on the SEDAR profiles for each of the CPCs at www.sedar.com shortly following mailing of the Information Circular to the respective shareholders of each of the Amalgamating Companies. The Amalgamation Agreement contains customary representations, warranties and conditions, and includes non-solicitation covenants and mutual non-completion expenses payable in certain circumstances. A copy of the Amalgamation Agreement will also be accessible on the SEDAR profiles for each of the CPCs at www.sedar.com. Completion of the Amalgamation is subject to a number of conditions, including TSX Venture Exchange acceptance and shareholder approvals (including on a disinterested basis to the extent required). The Amalgamation cannot close until the required shareholder approvals are obtained. There can be no assurance that the Amalgamation will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Information Circular to be prepared in connection with the Amalgamation, any information released or received with respect to the Amalgamation may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative. Recommendations of the Boards of Directors of the Amalgamating Companies The Board of Directors of each of the Amalgamating Companies have determined that the Amalgamation is in the best interests of their respective companies and shareholders and have unanimously determined to recommend approval of the Amalgamation to their respective shareholders. Application for Exemption from Sponsorship Requirements The CPCs have jointly requested that the TSXV waive the requirement for a Sponsorship Report in connection with the Qualifying Transaction. There are no guarantees that the TSXV will accept such a request to waive the Sponsorship Report requirement, in which case the CPCs will engage a Sponsor to prepare such a report. Trading Halt of Shares of CPCs Trading of the shares of the CPCs has been halted and will not resume until the TSXV has accepted all requisite documentation in connection with the proposed Qualifying Transaction. It is currently anticipated that trading in the shares of Latigo, Warnic and Blackwater will remain halted until such time as the Information Circular, which will contain detailed disclosure on Cumberland, its operations and Amalco, is filed and accessible on the SEDAR profiles for each of the CPCs at www.sedar.com. It is currently anticipated that trading in the shares of Valentine will remain suspended due to its failure to complete a Qualifying Transaction within the requisite time required by the TSXV. Subject to all necessary regulatory approvals, including approval of the TSXV, upon completion of the Amalgamation, it is anticipated that the Amalco Shares will be listed and posted for trading on the TSXV. A more comprehensive joint news release which will contain more detailed disclosure on Cumberland, its operations and Amalco will be issued concurrently with the mailing of the Information Circular to the shareholders of the Amalgamating Companies. About Cumberland Oil & Gas Ltd. Cumberland, a privately held Alberta corporation, has been engaged in the business of exploring for, developing and producing and, acquiring oil and natural gas properties in western Canada since it commenced operations in October 2008. It has concentrated on the exploitation and development of drilling prospects in its core areas in the Province of Alberta, including south-east Alberta and the Peace River Arch. Cumberland's exploration and development projects are currently directed towards both natural gas and light oil prospects. The Cumberland management team most recently led Rockyview Energy Inc., a TSX-listed oil and gas company that grew to approximately 3,000 BOE/d when it was sold to Direct Energy in January 2008. Prior to that, they were the management group at APF Energy Trust, a TSX-listed income trust with daily production of 18,000 BOE/d, which was sold to StarPoint Energy Trust in 2005. As at the date hereof, there is no person who directly or indirectly beneficially holds a controlling interest in or who otherwise controls or directs Cumberland, other than Steven Cloutier who resides in Calgary, Alberta, who beneficially owns and controls approximately 19% of the issued and outstanding common shares of Cumberland. Latigo Capital Corp. Latigo, a capital pool company within the meaning of the policies of the TSXV, was incorporated on April 9, 2007 and was listed on the TSXV on October 10, 2007. Latigo does not have any operations and has no assets other than cash. Latigo's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV. Warnic 1 Enterprises Ltd. Warnic, a capital pool company within the meaning of the policies of the TSXV, was incorporated on November 16, 2007 and was listed on the TSXV on December 15, 2008. Warnic does not have any operations and has no assets other than cash. Warnic's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV. Valentine Ventures Corp. Valentine, a capital pool company within the meaning of the policies of the TSXV, was incorporated on November 28, 2006 and was listed on the TSXV on April 9, 2007. The shares of Valentine have been suspended from trading on the TSXV due to its failure to complete a Qualifying Transaction within the requisite time required by the TSXV. If Valentine does not complete a Qualifying Transaction by January 11, 2010, its shares will be delisted from the TSXV and/or transferred to the NEX. Valentine does not have any operations and has no assets other than cash and cash equivalents. Valentine's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV. Blackwater Capital Corp. Blackwater, a capital pool company within the meaning of the policies of the TSXV, was incorporated on October 4, 2007 and was listed on the TSXV on July 30, 2008. Blackwater does not have any operations and has no assets other than cash. Blackwater's business is to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction under the policies of the TSXV. Cautionary Statements Disclosure provided herein in respect of BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in this joint news release are derived by converting gas to oil according to this 6 Mcf to 1 Bbl ratio. Certain statements contained in this joint news release constitute forward-looking statements, including, without limitation, Cumberland's management's assessment of future plans and operations, future financial position, the performance characteristics of Cumberland's oil and natural gas properties, potential of resource plays, oil and natural gas production estimates, expectations of future production rates, drilling programs and drilling efficiencies, the quantity of undeveloped land and drilling locations and inventory, operating costs and capital costs, expectations regarding the ability to raise capital and to continually add to reserves, expectations of debt levels and credit facilities, Amalco's future plans, operations and objectives, completion of the Amalgamation and receipt of all required approvals thereto and the timing thereof, and the completion and use of proceeds of the Cumberland Financing. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the party's control including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals, including, without limitation, shareholder of the Amalgamation, failure to realize the anticipated benefits of the Amalgamation and the risk that actual results will vary from the results forecasted and such variations may be material. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Amalco's actual results, performance or achievement could differ materially from those expressed in or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Amalco will derive therefrom. There is no assurance that the necessary approvals for completion of the Amalgamation will be obtained or that some other condition to the closing of the Amalgamation or the Cumberland Financing will not be satisfied. Even if such conditions are satisfied, there is risk that closing of the Amalgamation or the Cumberland Financing could be delayed and may not meet the timelines anticipated. The forward-looking statements contained in this joint news release are made as of the date of this joint news release. Except as required by law, the Amalgamating Companies 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, except as required by applicable securities laws. The TSX Venture Exchange has in no way passed upon the merits of the proposed Amalgamation and has neither approved nor disapproved the contents of this joint news release.
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