JCP - MAJOR TRANSACTION / Powermax Announces Closing of Initial
Public Offering and Acquisition of Oil & Gas Interests
CALGARY, ALBERTA--Powermax Energy Inc. announces that, on
September 3, 1998, it completed its initial public offering, being
1,000,000 treasury shares at $0.20 per share for gross proceeds of
$200,000. The Corporation will be listed November 5, 1998.
Powermax further announces that, on October 23, 1998, it entered
into two letters of intent to acquire oil and gas interests. The
first letter of intent is to acquire the shares of 756453 Alberta
Ltd. (a privately owned oil & gas corporation) whereby Powermax
will acquire an interest in approximately 1,440 gross acres (1,040
net) of oil and gas producing, exploration and development lands
in the Morrinville and Pembina areas of Alberta. The company's
share of reserves is 90,000 BOEs of gas and light oil (proven and
probable). The consideration for the transaction will be
1,000,000 shares of Powermax (at a deemed value of $0.35/share)
and Powermax will assume bank debt of approximately $60,000
associated with the assets. Robin Luetke, a director of Powermax,
holds shares in 756453 and, as such, will receive Powermax shares
on closing.
The second letter of intent is to acquire certain working
interests from Cephalon Resources Corporation and certain
debenture holders of Cephalon who must convert their debentures
into working interests of certain Cephalon properties prior to
completion of the major transaction. The working interests are in
the Fenn West area of Alberta contain estimated reserves of 51,000
BOEs of oil (proven and probable). Wytze Kingma and Robin Luetke,
two of the directors of Powermax, are beneficial debenture holders
and, as such, will receive Powermax shares on closing. The
consideration for this transaction is also 1,000,000 shares of
Powermax (at a deemed value of $0.35/share). In addition, Cephalon
will be allowed to nominate one director to the Powermax board.
As Powermax is a new junior capital pool corporation, these two
transactions will constitute its Major Transaction as defined
under the Alberta Securities Commission Rule 46-501. Such
transaction is subject to regulatory and shareholder approval.
Powermax intends to call a shareholders meeting shortly to seek
the necessary minority shareholder approval as well as approval
for private or public placements to finance working capital and
equipment needs.
The acquisitions are conditional on valuations establishing
minimum threshold values of $350,000 per transaction. Both
transactions are scheduled to close prior to January 31, 1999.
Powermax is committed to building a Canadian corporation seeking
opportunities in the energy fields.
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