CALGARY, ALBERTA--(Marketwired - Oct. 29, 2015) -
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Rosa Capital Inc. ("Rosa") (TSX VENTURE:RSA.P) and Raimount Energy Inc. ("Raimount") (TSX VENTURE:RMT) are pleased to jointly announce that they have entered into a letter of intent dated October 9, 2015 with respect to a proposed business combination of Rosa and Raimount (the "Proposed Transaction"). If completed, the Proposed Transaction will constitute Rosa's Qualifying Transaction as set forth in Policy 2.4 of the TSX Venture Exchange (the "Exchange").
The Proposed Transaction
It is anticipated that the Proposed Transaction will be structured by way of a three cornered amalgamation, but may be conducted under another form of business combination. As part of the Proposed Transaction, Rosa and Raimount intend to combine their respective businesses and continue under the name of "Raimount Energy Inc." (the "Resulting Issuer") or such other name acceptable to Rosa, Raimount and the Exchange.
Pursuant to the Proposed Transaction, Raimount (or another entity owned or controlled by Raimount) shall acquire all of the issued and outstanding common shares in the capital of Rosa (the "Rosa Shares") and all of the other outstanding securities convertible into Rosa Shares for aggregate consideration of $2,396,250, to be paid by the issuance of shares of the Resulting Issuer with a deemed value per share of $2.25 (the "Share Consideration"). The Share Consideration will be issued upon closing of the Proposed Transaction to the shareholders of Rosa on the basis of 0.10 of a share of the Resulting Issuer for each Rosa Share held.
Mr. Gregory Peterson, of Alberta, a director of Rosa, owns less than 1% of the issued and outstanding common shares of Raimount.
Mr. Gregory A. Vavra, of Alberta, the President, Chief Executive Officer and a director of Raimount, beneficially owns, directly or indirectly, approximately 15.76% of the issued and outstanding common shares of Raimount. Mr. Steve Vavra, Alberta, a director of Raimount, beneficially owns, directly or indirectly, approximately 16.49% of the issued and outstanding common shares of Raimount and Kevin K. Tetreau of Alberta, a director of Raimount, beneficially owns, directly or indirectly, approximately 10.92% of the issued and outstanding common shares of Raimount.
The Proposed Transaction will be considered an arm's length transaction as none of Rosa, Raimount or their respective associates or affiliates are controlled by the same parties.
About Rosa
Rosa was incorporated under the provisions of the Business Corporations Act (Alberta) and has a head office in Calgary, Alberta. Rosa is a capital pool company under the policy 2.4 of the Exchange.
Financial Information of Rosa
The following is a summary of financial information of Rosa for the periods indicated:
| |
|
|
|
| |
As at and for the
9 months ended
July 31, 2015
(unaudited) |
As at and for the
year ended
October 31, 2014
(audited) |
As at and for the
year ended
October 31, 2013
(audited) |
| Interest |
16,030 |
21,543 |
8,680 |
| Expenses |
26,807 |
21,272 |
136,017 |
| Net Income (Loss) |
(10,777) |
271 |
(127,337) |
| Per share (basic) |
(0.00) |
0.00 |
(0.03) |
| Total assets |
1,596,476 |
1,606,706 |
1,607,096 |
| Total liabilities |
820 |
273 |
934 |
| Total shareholders' equity |
1,595,656 |
1,606,433 |
1,606,162 |
| |
|
|
|
About Raimount
Raimount is engaged in the exploration for, development of and production of oil and natural gas properties in Western Canada and is listed on the Exchange. Raimount was incorporated under the Canada Business Corporations Act and has a head office in Calgary, Alberta.
Summary of Reserves of Raimount
McDaniel and Associates Consultants Ltd. ("McDaniel") prepared an evaluation of Raimount's natural gas and natural gas liquids ("NGL") reserves of Raimount as of October 31, 2014. The tables below are a summary of the natural gas and NGL reserves of Raimount and the net present value of future net revenue attributable to such reserves as evaluated in the McDaniel Report based on forecast price and cost assumptions in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. The net present value of future net revenue attributable to the Corporation's reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, development costs, other income, future capital expenditures, and well abandonment costs for only those wells assigned reserves by McDaniel.
The following table summarizes Raimount's oil and gas reserves as of October 31, 2014 based on forecast price and cost assumptions:
| |
|
|
| |
NATURAL GAS |
NATURAL GAS LIQUIDS |
| RESERVES CATEGORY |
Gross
(MMcf) |
Net
(MMcf) |
Gross
(Mbbl) |
Net
(Mbbl) |
| Proved |
|
|
|
|
| |
Developed Producing |
261.5 |
234.9 |
18.8 |
13.1 |
| |
Developed Non-Producing |
- |
- |
- |
- |
| |
Undeveloped |
- |
- |
- |
- |
| Total Proved |
261.5 |
234.9 |
18.8 |
13.1 |
| |
|
|
|
|
| PROBABLE |
76.9 |
69.1 |
5.6 |
3.9 |
| Total Proved Plus Probable |
338.4 |
303.9 |
24.3 |
17.0 |
| |
|
|
|
|
The following tables summarize the undiscounted value and the present value, discounted at 5%, 10%, 15% and 20%, of Raimount's estimated future net revenue based on forecast price and cost assumptions as of October 31, 2014. The estimated values disclosed do not represent fair market value:
| |
SUMMARY OF NET VALUES OF
FUTURE NET REVENUE
as of October 31, 2014
BASED OF FORECAST PRICES AND COSTS |
| |
BEFORE DEDUCTING
INCOME TAXES DISCOUNTED AT |
AFTER DEDUCTING
INCOME TAXES DISCOUNTED AT |
| Reserves Category |
0%
($000) |
5%
($000) |
10%
($000) |
15%
($000) |
20%
($000) |
0%
($000) |
5%
($000) |
10%
($000) |
15%
($000) |
20%
($000) |
| Proved Developed Producing |
726.4 |
650.4 |
587.6 |
533.3 |
488.6 |
726.4 |
650.4 |
586.7 |
533.3 |
488.6 |
| Proved Developed Non-Producing |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Proved Un-developed |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
| Total Proved |
726.4 |
650.4 |
587.6 |
533.3 |
488.6 |
726.4 |
650.4 |
586.7 |
533.3 |
488.6 |
| Total Probable |
259.7 |
198.3 |
154.2 |
122.3 |
98.9 |
259.7 |
198.3 |
154.2 |
122.3 |
98.9 |
| Total Proved Plus Probable |
986.2 |
848.7 |
740.9 |
655.7 |
587.5 |
986.2 |
848.7 |
740.9 |
655.7 |
587.5 |
| |
|
|
|
|
|
|
|
|
|
|
Financial Information of Raimount
The following is a summary of financial information of Raimount for the periods indicated:
| |
|
|
|
| |
As at and for the
9 months ended
July 31, 2015
(unaudited) |
As at and for the
year ended
October 31, 2014
(audited) |
As at and for the
year ended
October 31, 2013
(audited) |
| Revenue |
221,767 |
512,258 |
346,725 |
| Expenses |
1,021,824 |
703,139 |
865,866 |
| (Net Loss and Comprehensive Loss) |
(1,977,059) |
(145,271) |
(391,761) |
| Per share (basic) |
(0.45) |
(0.03) |
(0.09) |
| Total assets |
9,135,428 |
9,737,612 |
9,952,349 |
| Total liabilities |
2,067,191 |
660,781 |
638,961 |
| Total shareholders' equity |
7,068,237 |
9,076,831 |
9,313,388 |
| |
|
|
|
Additional information regarding Raimount may also be accessed on SEDAR at www.sedar.com.
Trading Halt
Trading in the Rosa Shares may remain halted pending the review of the Proposed Transaction by the Exchange. There can be no assurance that trading in the Rosa Shares will resume prior to the completion of the Qualifying Transaction.
Resulting Issuer
Upon completion of the Proposed Transaction, it is expected that the Resulting Issuer will have 5,436,133 shares issued and outstanding, being the aggregate of: (i) 1,065,000 shares of the Resulting Issuer to be issued for all of the issued and outstanding Rosa Shares; and (ii) 4,371,133 being the current issued and outstanding shares of Raimount. Upon completion of the Qualifying Transaction, subject to Exchange acceptance, it is expected that the Resulting Issuer will be listed on the Exchange as an Oil and Gas Issuer.
Directors and Officers of Resulting Issuer
The proposed directors and officers of the Resulting Issuer will be jointly announced by Raimount and Rosa in due course.
Sponsorship of the Qualifying Transaction
Rosa may apply to the Exchange for a waiver from the requirement to retain a Sponsor in connection with the Proposed Transaction, but there is no assurance that, if Rosa applies for a waiver, such waiver will be granted.
Significant Conditions to Completion of the Proposed Transaction
Completion of the Proposed Transaction is subject to the approval of the Exchange and all other necessary regulatory approvals. The completion of the Proposed Transaction is also subject to additional conditions precedent, including shareholder approval of each of Rosa and Raimount, satisfactory completion of due diligence by the parties, board of directors approval of each of Rosa and Raimount, the entering into of a formal definitive agreement and certain other customary conditions for a transaction of this nature.
This news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Other than as required by law, Rosa and Raimount will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Rosa and Raimount.
Completion of the transaction is subject to a number of conditions, including, but not limited to, Exchange acceptance and, if applicable, pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction 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 transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Rosa Capital Inc. should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
