Algonquin Oil & Gas Limited
TSX VENTURE : AQX

January 18, 2008 16:01 ET

Algonquin Announces Proposed Private Placement of Up to $4.0 Million, Offer to Exchange Debt, Appointment of Additional Board Members and Change of Corporate Name

CALGARY, ALBERTA--(Marketwire - Jan. 18, 2008) - Algonquin Oil & Gas Limited ("Algonquin" or the "Corporation") (TSX VENTURE:AQX) is pleased to announce that it will hold its annual and special meeting (the "Meeting") of the shareholders of the Corporation on February 29, 2008. At the Meeting, shareholders will be asked to approve, among other things, a non-brokered private placement ("Private Placement") of a minimum of 29 units ("Units") and a maximum of 40 Units at a price of $100,000 per Unit for gross proceeds of up to $4,000,000. Each Unit will consist of 400,000 common shares to be issued on a "flow-through" basis ("Common Shares") and $60,000 principal amount of secured, non-convertible debentures ("Debentures") for an aggregate of up to 16,000,000 Common Shares at a price of $0.10 per Common Share and $2,400,000 principal amount of Debentures. The Private Placement is expected to close in two tranches with the first tranche closing on or about March 21, 2008 subject to, among other things, shareholder approval and approval from the TSX Venture Exchange (the "Exchange").

If all regulatory and shareholder approvals are received in connection with the Private Placement, and assuming the Private Placement is fully subscribed for, Mr. Greg Stewart ("Greg Stewart"), a director of the Corporation, will hold 4,367,025 Common Shares, Mr. Russell Stewart ("Russ Stewart"), a brother of Greg Stewart, will hold 1,200,000 Common Shares, Belvedere Parkway Capital Management ("Belvedere"), a general partnership controlled by Greg Stewart and Russ Stewart, will hold 5,100,375 Common Shares and Hardisty Investments Ltd. ("Hardisty"), a private family corporation controlled by Greg Stewart and Russ Stewart, will hold 1,000,000 Common Shares (Greg Stewart, Russ Stewart, Belvedere and Hardisty collectively referred to as the "Insiders") representing an aggregate of 11,667,400 Common Shares or 46.68% of the total issued and outstanding Common Shares in the capital of the Corporation and accordingly, the Insiders will collectively become a "Control Person" of the Corporation. In the event of the minimum offering, the Insiders will collectively hold 8,467,400 Common Shares or 41.12%.

The net proceeds received from the Private Placement will be used by the Corporation to fund future exploration and development of the Corporation's oil and gas properties in Ontario. In addition, $500,000 of the net proceeds received pursuant to the Private Placement will be used by the Corporation to repay current indebtedness owing by the Corporation to Mr. James Fair, the Chief Executive Officer of the Corporation.

In addition, the Corporation is proposing the conversion of an aggregate of $100,000 of debt (the "Debt Conversion Transaction") currently owed by the Corporation to Montrichard Oil & Gas Ltd. ("Montrichard"), a corporation controlled by Mr. Peter Bower, a director of the Corporation, into Units. Under the terms of the Debt Conversion Transaction, the Corporation would issue Montrichard one (1) Unit in the capital of the Corporation in satisfaction of the debt. The closing of the Debt Conversion Transaction is also expected to close on or about March 21, 2008, subject to shareholder and Exchange approval.

The securities issued pursuant to the Private Placement and the Debt Conversion Transaction will be subject to a four month hold period. Assuming the Private Placement is fully subscribed for and the Debt Conversion Transaction is accepted, the Corporation will issue an aggregate of 16,400,000 Common Shares resulting in 24,993,735 Common Shares issued and outstanding, after completion of the Private Placement and Debt Conversion Transaction.

Algonquin is pleased to announce that Mr. Russell Stewart will be nominated for election to the board of directors of the Corporation at the Meeting. It is anticipated that two additional independent directors will be nominated for election to the board of directors in the near future.

Russ Stewart is currently employed by TD Meloche Monnex with 28 years insurance industry experience and 12 years in management. Russ is also a founding shareholder and past Chief Financial Officer of Grandin Green, a high rise housing co-operative in Edmonton, Alberta. In addition, Russ participates in a number of private investment partnerships and companies.

Messrs. George Leitch, Edward McNally and Leo Gaiswinkler will not be standing for re-election at the Meeting and the Corporation wishes to extend its appreciation to them for their valuable contributions to the board over the past several years.

Finally, it is also anticipated that Algonquin will change its name to Belvedere Parkway Inc., or such other name acceptable to the directors and the Exchange, and will seek shareholder approval in connection with the name change at the Meeting.

Certain information regarding the Company contained herein may constitute forward looking statements. Forward looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward looking statements. The Company is under no obligation to update or alter any forward looking statement. These risks include operational and geological risks and the ability of the Company to raise necessary funds for exploration. The Company's forward looking statements are expressly qualified in their entirety by this cautionary statement.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Algonquin Oil & Gas Limited
    James Fair
    (313) 823-9737