Primewest Exploration Inc. Announces Letter of Intent for the Acquisition of Assets from Windfire Resources Ltd. and an Update of Corporate Affairs.
PRESS RELEASE
Primewest Exploration Inc. Announces Letter of Intent for the Acquisition of Assets from Windfire Resources Ltd. and an Update of Corporate Affairs.
March 21, 2012 - Calgary Alberta – Primewest Exploration Inc. (the “Corporation”) (TSXV: “PWI.P”) is pleased to announce that the Corporation has entered into a letter of intent dated March 3, 2012 (the “Letter of Intent”) with Windfire Resources Ltd. (“Windfire”), whereby the Corporation has agreed to acquire a 20% working interest in Windfire’s Davey Lake oil property (the “Proposed Acquisition”).
The Corporation is incorporated under the provisions of the Business Corporations Act (Alberta) and has a registered office in Calgary, Alberta. It is a “capital pool company” (the “CPC”) under the policies of TSX Venture Exchange (the “Exchange”). As such it intends for the Proposed Acquisition to constitute the “Qualifying Transaction” of the Corporation as such term is defined in the policies of the Exchange.
Windfire is a Canadian private corporation incorporated under the provisions of the Business Corporations Act (Alberta) with its registered office in Calgary, Alberta.
The Qualifying Transaction will be carried out by parties dealing at arm’s length to one another and therefore will not be considered to be a Non-Arm’s Length Qualifying Transaction, as such term is defined under the policies of the Exchange.
It is expected that upon completion of the Qualifying Transaction, the Corporation will meet Initial Listing Requirements for an oil and gas issuer under the policies of the Exchange and will be engaged in the exploration and development of prospective oil and gas properties.
As disclosed in the Corporation’s November 26, 2010 dated news release, on August 31, 2010 the Corporation made a successful offer to International Sovereign Energy Corp. to purchase a 2.7934% working interest in the Wildmere Lloydminster “A” Pool Unit No. 1. The Corporation was not able to close this acquisition due to delays caused by the review conducted by the Exchange of the Corporation’s compliance with Exchange Policy in the completion of certain transactions involving a corporate entity controlled by a former Officer and Director. This review has now been completed and prior to reinstatement to trading, a news release will be issued by the Corporation disclosing all of the Exchange’s findings.
Description of the Property
The Corporation’s Proposed Acquisition is comprised of a 20% working interest in Windfire’s Davey Lake Basal Belly River oil property located on six sections (3840 acres, 1536 ha.) of contiguous lands in central Alberta near Red Deer. The property contains twenty-three oil wells, six of which are currently producing, two water injection wells and one shut in gas well. Production is tied in to an excellent central facility including a treater, test separator, gas compression (gas conservation), tankage and a water injection facility.
Many of the shut-in wells are planned to be reactivated for significant uplift in production. Additionally, the property offers the potential of infill horizontal wells to increase recovery from the pool and an eventual pool extension to the north where new wells could be drilled into virgin reservoir.
A National Instrument 51-101 compliant Reserve and Economic Evaluation report is being prepared and will be submitted to the Exchange for review and the detailed results will be disclosed in a subsequent press release.
The Proposed Acquisition
Subject to any regulatory, shareholder, director or other approval that may be required, the completion of satisfactory due diligence by the Corporation and other terms and conditions of the Letter of Intent, it is intended that the Corporation will acquire the asset from Windfire at a purchase price of $1,000,000 in Canadian funds (the “Purchase Price”). The Corporation will pay Windfire a $25,000 non-refundable deposit to preserve the assets, to be applied against the Purchase Price.
Upon completion of the Proposed Acquisition, the Corporation will conduct the business of oil and gas exploration and development.
A Filing Statement in respect of the proposed Qualifying Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less than 7 business days prior to the closing of the proposed Qualifying Transaction. A press release will be issued once the filing statement has been filed as required pursuant to Exchange policies.
Resignation of Mr. Ross Jones
Mr. Ross Jones resigned as interim President effective November 1, 2011 and Chief Financial Officer of the Corporation effective January 4, 2012. The Board thanks Mr. Jones for his contribution to the Corporation and wishes him all the best with his future endeavours. Mr. Harris Dvorkin has been assigned the position as acting CEO and Corporate Secretary and Mr. Charles Chapman has been appointed as acting CFO.
Board of Directors
The Corporation's current board and management will continue with the Corporation upon completion of the Qualifying Transaction. The following are brief descriptions of the current directors and officers that will, collectively, continue to bear management responsibility for the Corporation upon completion of the Qualifying Transaction.
Harris L. Dvorkin - Calgary, Alberta - Director
Mr. Harris Dvorkin has over 47 years experience in the restaurant, hospitality and entertainment industries. Mr. Dvorkin has founded and currently manages a number of private companies. These include the Ranchman's Cookhouse and Dancehall Inc. (1972-Present), of which Mr. Dvorkin is a co-founder. Mr. Dvorkin is also the President and Chief Executive Officer of Ranchman's Hospitality Group Inc. (1989-present), which serves as the operating entity for a number of companies, including Ranchman's Classic Catering Inc., a catering company servicing the province of Alberta, Ranchman's Overland Express Inc., a limousine and luxury transportation company, Ranchman's Rodeo Stock Company Inc., a rodeo event production company, Am-Can International Talent Inc., an entertainment booking agency, and Ranchman's Renegades Inc., a nonprofit organization which is raising money for various charities.
Mr. Dvorkin is also a member of a number of associations including the Calgary Chamber of Commerce, the Canadian Restaurant & Food Services Association, the Calgary Stampede Rodeo Committee Alumni, the Canadian Country Music Association, the Alberta Safer Bars Council and the Rotary Club of Calgary South and is Vice President of the Chevra Kadisha.
Francis J. Reinhardt Jr. - Kinnelon, New Jersey - Director
Mr. Francis J. Reinhardt, Jr. is Managing Director of the energy consulting firm, EnergyInput LLC, which advises clients on conditions and developments in the oil and gas industry. He started his career in 1956 at Carl H. Pforzheimer & Co., an investment banking and securities brokerage firm in New York, as an equities analyst. In 1966 he became a partner and made his first trip to Calgary. From there he became aware of the potential growth in the Canadian energy sector, which developed into one of his areas of specialization. In 2005, after 49 years at Pforzheimer, he left to join Burnham Securities Inc., a unit of Burnham Financial Group in New York, where he was a managing director. In 2008, he founded EnergyInput. Mr. Reinhardt graduated from Seton Hall University in New Jersey and has an MBA from New York University. He is a past president of NAPIA (the National Association of Petroleum Investment Analysts) and the Oil Analysts Group of New York, and is a member of the New York Society of Securities Analysts.
Charles W. Chapman - Calgary, Alberta - Director
Mr. Charles W. Chapman is President of Chapman Petroleum Engineering Ltd. (April 1985-present), and is responsible for all of the diversified professional services of Chapman Petroleum Engineering Ltd., domestically and internationally. Mr. Chapman is also a co-founder and President of TransAction Oil & Gas Ventures Inc., a project management company, which operates drilling ventures and oil and gas production in the Western Canadian Provinces on behalf of client companies (March 2002-present). He is also Co-Chairman of Caspian Integrated Technologies LLP (CIT) which is a joint venture engineering consulting firm owned 50/50 by Chapman Petroleum Engineering Ltd. and Caspian Energy Research LLP, an active Kazakhstan consulting firm located in Atyrau, RoK (January 2004-present). Chapman provides management assistance for several private and public companies through consulting arrangements. Mr. Chapman is a professional engineer and received his Bachelor of Mechanical Engineering from the University of Alberta in 1971.
Resignation of Michael E. Coolen - Halifax, Nova Scotia
Mr. Michael Coolen has tendered his resignation as a director in order to concentrate on other personal matters. We thank Mr Coolen for his faithful service to the Corporation and wish him well.
The Corporation is planning to add three new board members to the resulting issuer concurrently with closing of the Qualifying Transaction, subject to customary TSXV approval, which new board members will be announced in a future news release.
Proposed Financing
Prior to or concurrent with the closing of the Proposed Acquisition, the Corporation expects to complete a brokered financing in a minimum amount of $1,5000,000 in Canadian funds (the "Financing"). Additional terms of the Financing, including the
price per share and the number of shares to be issued, will be announced in a subsequent press release. Any securities issued pursuant to the Financing may be subject to escrow and shall be subject to applicable statutory hold periods. The net proceeds of the Financing, together with the Corporation's existing funds and any necessary debt financing (the details of which will be disclosed in any subsequent press release), will be used by the Corporation to finance the Proposed Acquisition.
Sponsorship
The Corporation intends to apply to the Exchange for an exemption from sponsorship requirements. There is no assurance that such exemption will be granted.
Reinstatement to Trading
The common shares of the Corporation will remain halted pending receipt by the Exchange of certain required materials from the Corporation. The Corporation will issue a further press release upon finalization and filing of the aforementioned report pursuant to NI 51-101. The Corporation anticipates holding a shareholders meeting in the near future.
Per Exchange Policy 2.4 the Corporation has until April 20, 2012 to complete a QT or be suspended from trading. Should the Corporation be suspended, it will be given a further 90 days to either complete a QT or seek shareholder approval to cancel 50% of the seed shares and obtain shareholder approval to transfer its listing to the NEX trading board of the Exchange. If a QT is not completed or the listing transferred to NEX within this 90 day period, the shares of the Corporation will be delisted.
Additional Information
Completion of the Proposed Acquisition is subject to a number of conditions including, but not limited to, the closing of the Financing, the satisfaction of the Corporation and of Windfire in respect of certain due diligence investigations to be undertaken by each party, the completion of a definitive agreement setting forth the terms and conditions set out in the Letter of Intent, closing conditions customary to transactions of the nature of the Proposed Acquisition, Exchange acceptance and, if required by Exchange policies, majority of the minority shareholder approval. Where applicable, the Proposed Acquisition cannot close until the required shareholder approval is obtained and there can be no assurance that the Proposed Acquisition will be completed as proposed or at all.
If and when a definitive agreement between the Corporation and Windfire is executed, in accordance with the policies of the Exchange, the Corporation will issue a subsequent press release containing the details of the definitive agreement and additional terms of the Proposed Acquisition, including information relating to sponsorship, summary financial information in respect of the Assets, and to the extent not contained in this press release, additional information with respect to the Financing, history of the Assets and the proposed directors, officers, and insiders, of the Corporation upon completion of the Proposed Acquisition.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction 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.
For further information please contact:
Primewest Exploration Inc.
Charles Chapman
Chairman of the Board (403) 266-4141
Neither the TSX Venture Exchange, Inc. nor its Regulation Service Provider (as that term is defined under the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.
Cautionary Statements:
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Acquisition and associated transactions, including statements regarding the terms and conditions of the Proposed Acquisition and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Acquisition and associated transactions, that the ultimate terms of the Proposed Acquisition and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, RSR, the Properties or their respective financial or operating results or (as applicable), their securities.
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.