/R E P E A T -- Result Energy Inc. announces recapitalization transaction and
new management team/
The New Management Team will be led by
Upon completion of the Transaction, the new Board of Directors will be comprised of John Brussa,
New Management Team
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The New Management Team has a successful track record of creating shareholder value through an integrated strategy of acquiring, exploiting and exploring, most recently at TriStar. TriStar grew from 1,000 Boepd to more than 25,000 Boepd in just over 3 1/2 years through the successful execution of several strategic acquisitions combined with a low risk development drilling program and an exploration program that helped expand and define the prolific Bakken resource play in southeast Saskatchewan.
Brett Herman Brett Herman has extensive oil and gas experience
President & CEO in leadership roles at public oil and gas
companies. Mr. Herman was the President & CEO of
TriStar. Previously, Mr. Herman was the Vice
President, Finance & CFO of StarPoint Energy Trust
("StarPoint").
Jason Zabinsky Jason Zabinsky has experience in both oil
VP Finance & CFO and gas and capital markets roles and was most
recently the VP Finance & CFO of TriStar and prior
thereto was a Director with a major Canadian
Investment & Corporate Bank.
Graham Kidd Graham Kidd is a professional engineer with over
VP Engineering 25 years of experience most recently as VP
Engineering with TriStar and previously, VP
Corporate Development of StarPoint.
Eric Strachan Eric Strachan has held progressively senior
VP Exploration positions over a 15 year period in the oil and
gas sector most recently as VP Exploration with
TriStar and prior thereto, StarPoint.
Jeremy Wallis Jeremy Wallis brings oil and gas experience
VP Land specializing in land and acquisition negotiations,
most recently as VP Land with TriStar and
previously, StarPoint.
Mike Wihak Mike Wihak is a professional engineer with over
VP Operations 20 years of oil and gas experience, most
recently as VP Operations with TriStar and COO of
Ultima Energy Trust.
Filippo Angelini Filippo Angelini is a chartered accountant and
Controller most recently held the position of Controller
at TriStar and prior thereto, StarPoint.
In addition to the management team, the new Board of Directors has a track record of building, financing and directing oil and gas companies and brings a wide range of experience, knowledge and innovation to the recapitalized entity.
Corporate Strategy
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The New Management Team has worked closely together for several years building two successful companies and has an established track record of achieving its goal of cost effective per share growth in reserves, production and cash flow. The New Management Team will implement its proven strategy of acquiring, exploiting and exploring while focussing on large resource-in-place assets. The combined technical expertise of the New Management Team, particularly with drilling horizontal wells with multi-stage completions will be invaluable as this experience will be transferable to other emerging resource plays. The recapitalized entity is expected to have a net cash position of more than
Private Placement
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Pursuant to the Private Placement, the New Management Team, together with additional subscribers identified by the New Management Team, will subscribe for up to 58,823,529 units (the "Units") of Result at a price of
Each Unit will consist of 3 Common Shares, 1 Common Share issued on a flow-through basis, and 4 Common Share purchase warrants (the "Warrants"), each Warrant entitling the holder to purchase one Common Share at a price of
The Units issued under the Private Placement will be subject to contractual escrow with one-third of such Units released on the 12th, 18th and 24th month following the closing date of the Private Placement. It is anticipated that the members of the New Management Team along with certain service providers will purchase an aggregate of 58,823,529 Units under the Private Placement representing approximately 60 percent of the basic outstanding Common Shares and approximately 74 percent of the outstanding Common Shares on a fully-diluted basis following the completion of the Private Placement and giving effect to the Rights Offering, assuming that 100% of the potential rights issued thereunder are exercised.
The Common Shares issued to third party investors under the Private Placement will be subject to contractual escrow with one-half of such Common Shares released each six months following the closing date of the Private Placement.
Rights Offering
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The Agreement also provides that, subject to Result receiving the Written Consent (as defined below) on or before
Shareholder and Stock Exchange Approvals
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Completion of the Private Placement is subject to a number of conditions and approvals including, but not limited to, the approval of the TSXV. Under the policies of the TSXV, the completion of the Private Placement would result in the creation of a Control Person and accordingly, unless such requirement is waived by the TSXV, is subject to the approval of the shareholders of Result. The required disinterested shareholder approval may be obtained by Result either by receipt of written consents by holders of more than 50% of the issued and outstanding voting shares of Result (the "Written Consent") or by approval of a resolution at a special meeting of shareholders (the "Result Meeting"). Pursuant to the Agreement, Result has agreed to obtain the Written Consent on or before
Board of Directors' Recommendation
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The Board of Directors of Result has determined that the transactions contemplated by the Agreement are in the best interests of its shareholders, has unanimously approved such transactions and recommends that the shareholders approve the Private Placement and execute the Written Consent. Any shareholder of Result wishing to obtain and execute the Written Consent should contact Result as set out below.
The Board of Directors and officers of Result, who, in the aggregate, control approximately 5.1% of the Common Shares of Result, have entered into support agreements or agreed to enter into support agreements pursuant to which they have agreed, among other things, to approve the Private Placement.
The Agreement
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The Agreement contains a number of customary representations, warranties and conditions and provides for a reciprocal non-completion fee of
Financial Advisors
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FirstEnergy Capital Corp. is acting as financial advisor to Result with respect to the Transaction. Cormark Securities Inc. and Bolder Investment Partners, Ltd. acted as strategic advisors to Result.
Macquarie Capital Markets
About Result Energy Inc.
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Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western
Note Regarding Forward Looking Statements
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This press release contains forward-looking statements. More particularly, this press release contains statements concerning the completion of the transactions contemplated by the Agreement.
The forward-looking statements are based on certain key expectations and assumptions made by Result, including expectations and assumptions concerning timing of receipt of required shareholder and regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the transactions.
Although Result believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Result can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required shareholder, regulatory and third party approvals and consents are not obtained on terms satisfactory to the parties within the timelines provided for in the Agreement and risks that other conditions to the completion of the transactions are not satisfied on the timelines set forth in the Agreement or at all.
The forward-looking statements contained in this press release are made as of the date hereof and Result undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Boe
---
The term "Boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
For further information: William Matheson, President & CEO, Result Energy Inc., (403) 777-0007; or Brett Herman, (403) 777-0007; Jason Zabinsky, (403) 777-0007
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