JCP-MAJOR TRANSACTION / Drilcorp Slimhole Technologies Announces
Proposed Major Transaction
CALGARY, Nov. 6 /CNW/ - Drilcorp Slimhole Technologies Ltd.
(''Drilcorp''), a junior capital pool corporation, is pleased to announce the
signing of a Letter of Intent for the non-arms length acquisition of all of
the issued and outstanding shares of Torpedo Petroleum Corporation
(''Torpedo'') and the arms length acquisition of all of the issued and
outstanding shares of Alsask Energy Services Inc. (''Alsask''), both of which
are private oil and gas companies, in exchange for common shares of Drilcorp
at a deemed value of $0.25 per share (the ''Proposed Acquisitions'').
The Proposed Acquisitions, which are expected to be completed by way of
either a take-over bid or exempt take-over bid, are subject to a number of
conditions including: (i) at least 90% of the shares of each of Torpedo and
Alsask being validly deposited under the bid and not withdrawn; (ii) receipt
of satisfactory engineering evaluations; (iii) obtaining all necessary
regulatory approvals including the qualification of the Proposed Acquisitions
as Drilcorp's ''major transaction''; and (iv) a majority of the minority of
shareholders of Drilcorp approving the Proposed Acquisitions and the issuance
of common shares in connection with the offer.
The Proposed Acquisitions, if completed, will not result in a change of
control and are expected to qualify as Drilcorp's ''Major Transaction'' under
Rule 46-501 of the Alberta Securities Commission.
Drilcorp currently has 7,000,000 common shares outstanding and 950,000
common shares under option, 700,000 of which options have been granted to the
directors and officers of Drilcorp and will be canceled on completion of the
Proposed Acquisition. There are currently 1,400,000 shares of Torpedo
outstanding and 900,000 shares of Alsask outstanding. If all the currently
outstanding shares of Torpedo and Alsask are tendered under the bid, subject
to adjustment of the exchange ratios based on independent engineering reports,
Drilcorp expects to issue up to 12,000,000 common shares and as a result,
Drilcorp will have outstanding 19,000,000 common shares. The common shares of
Drilcorp will be issued at a deemed value of $0.25 per share for a total value
of approximately $3,000,000. Drilcorp does not currently own any securities of
Torpedo or Alsask.
If the Proposed Acquisitions are completed, Drilcorp expects to acquire
the following interests:
1. combined production of approximately 400 Mcf/d and 10 bopd, or 50
BOE/d;
2. combined proven reserves estimated to be in excess of 125,000 bbls oil
and 2,000 Mmcf gas from the following properties;
- a 25% working interest in a gas and NGL property near Wildmint,
British Columbia;
- an approximate 90% working interest in an operated gas property near
Bruce, Alberta;
- a 100% operated working interest in a producing oil well near
Cygnet, Alberta;
- a 100% working interest in a gas and NGL exploration property near
Altares, British Columbia;
- operatorship of two high working interest, horizontal re-entry
prospects at Crossfield and Deer Mountain, Alberta; and
- miscellaneous interests in minor properties at Caroline, Lochend and
Cynthia.
During The Alberta Stock Exchange approval process, Drilcorp has agreed
to allow the present operator, Torpedo, to proceed with an intended private
flow through offering of a minimum of 1,000,000 and a maximum of 4,000,000
shares, thereby increasing the number of Drilcorp shares issuable pursuant to
the bid, and to complete testing and restoration of gas production in three
wells at Bruce, Alberta.
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