Antler Creek Energy Corp.
TSX VENTURE : AFE

April 26, 2010 09:39 ET

Antler Creek Energy Corp. Announces Recapitalization Financing and New Management Team

CALGARY, ALBERTA--(Marketwire - April 26, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Antler Creek Energy Corp. (TSX VENTURE:AFE) ("Antler" or the "Corporation") is pleased to announce that it has entered into a definitive reorganization and investment agreement (the "Agreement") with Wade Becker, Dan Toews, Bill Turko and Korby Zimmerman, (the "Initial Investor Group") which provides for a non-brokered private placement of up to an aggregate of approximately $20 million (the "Private Placement") and the appointment of a new management team and board of directors (collectively, the "New Management Team"), (the "Transaction").

The New Management Team will be led by Wade Becker as President & Chief Executive Officer, Dan Toews as Vice President, Finance and Chief Financial Officer, Bill Turko as Vice President, Engineering and Korby Zimmerman as Vice President, Business Development and Land. The New Management Team is also complemented by a full team of experienced professionals including Joe Sobochan, Manager, Geology. The New Management Team is comprised mostly of individuals who formerly led the successful Peerless Energy Inc. ("Peerless"), a light oil producer focused primarily in the Bakken light oil resource play in southeast Saskatchewan. At Peerless, the management group grew production from 0 boepd to 5,800 boepd prior to its sale to Petrobank Energy and Resources Ltd. in February 2008 for approximately $338 million.

Upon closing of the Transaction, the new board of directors will be comprised of Wade Becker, Korby Zimmerman, John Brussa, Rob Zakresky, David Fitzpatrick and David Johnson. Jay Reid will act as corporate secretary.

New Management Team

The New Management Team has significant expertise and a proven track record of creating shareholder value through an integrated strategy of acquiring, exploiting and exploring, including most recently at Peerless. Peerless was an A/B IPO structure that grew from 0 boepd to approximately 5,800 boepd in under 3 years through the successful execution of several strategic acquisitions combined with a low risk development and exploration drilling program.

The New Management Team will apply its past experience to grow the recapitalized Antler through a combination of organic growth and acquisitions. The New Management Team has assembled a full team of professionals that possess the skills, experience and desire to repeat their previous success.

Wade Becker, President and Chief Executive Officer

Wade Becker has extensive experience in leadership roles at public oil and gas companies. Mr. Becker was President, CEO and Director at Peerless. Previously Mr. Becker was VP Land and co-founder of both Crescent Point Energy Trust and its predecessor Crescent Point Energy Ltd. Mr. Becker has over 18 years experience in the oil and gas industry.

Dan Toews, Vice President, Finance and Chief Financial Officer

Dan Toews is a professional Accountant with over 21 years experience.  Previously Mr. Toews was VP Finance and CFO at a private oil and gas company.  Prior to that he was VP Finance and CFO at Peerless and co-founder of both Crescent Point Energy Trust and its predecessor Crescent Point Energy Ltd.

Bill Turko, Vice President, Engineering  

Bill Turko is a professional Engineer with over 19 years experience in the oil and gas industry. Previously Mr. Turko was VP Engineering at Peerless.

Korby Zimmerman, Vice President, Business Development and Land 

Korby Zimmerman brings over 18 years oil and gas experience specializing in land and acquisition negotiations. Previously Mr. Zimmerman was Group Leader at EnCana Corporation. Prior to that he was VP Land and Business Development at Ketch Energy Trust.    

Joe Sobochan, Manager, Geology

Joe Sobochan has held progressively senior positions over the prior 20 years in the oil and gas industry. Previously Mr. Sobochan was a Senior Geologist at PetroBakken Energy Ltd. Prior to that Mr. Sobochan was a Senior Geologist at Peerless.

New Board of Directors

The new board of directors will be comprised of individuals with strong track records and distinguished careers in both the oil and gas industry and capital markets. The directors have held prominent lead positions within a range of successful companies, and their combined experience and expertise will provide the New Management Team with invaluable advice, guidance and support. In addition to Mr. Becker and Mr. Zimmerman, the new board of directors will consist of John Brussa, Rob Zakresky, David Fitzpatrick and David Johnson.

John Brussa  

Mr. Brussa is a partner of Burnet, Duckworth & Palmer LLP since 1987 and is presently the head of its Tax Department. Mr. Brussa currently serves as a director of a number of publicly listed resource corporations and several non-profit or charitable organizations.

Rob Zakresky

Mr. Zakresky has held the position of President and Chief Executive Officer of Crocotta Energy Inc. since November 2006. From 1993 to October 2006, Mr. Zakresky has sequentially held the position of President, CEO and a director of Bellator Exploration Inc., Viracocha Energy Inc., Chamaelo Energy Inc. and Chamaelo Exploration Ltd. Mr. Zakresky was a director of Peerless.    

David Fitzpatrick  

Mr. Fitzpatrick is currently an independent businessman. From 1996 to 2007 Mr. Fitzpatrick was the President, CEO and Director of Shiningbank Energy Ltd. (acquired by PrimeWest Energy Trust ("PrimeWest"), an oil and gas royalty trust). Mr. Fitzpatrick serves or has served as a Director of Compton Petroleum Corporation, PrimeWest, Shiningbank Energy Income Fund, Platform Energy and Twin Butte Energy Ltd., each of which is or was an oil and gas company or trust.

David Johnson

Mr. David D. Johnson is currently the Executive Chairman of Progress Energy Resources Corp. ("Progress"). Prior thereto, Mr. Johnson was the President and Chief Executive Officer of Progress from July 2004 to January 2009. Mr. Johnson was the President and Chief Executive Officer of Progress Energy Ltd. from November 2001 to July 2004 and the President and Chief Executive Officer of Encal Energy Ltd. from July 1994 to April 2001. Mr. Johnson has over 30 years of diverse experience in the oil and gas industry including a background in production, reservoir evaluation and operations.

Corporate Strategy

The New Management Team has extensive experience in creating shareholder value through a focused full-cycle business plan and believes the current market environment provides an excellent opportunity to position Antler as a strong player in large resource-in-place assets. The New Management Team will implement its proven strategy of acquiring, exploiting and exploring these large resource-in-place assets while trying to achieve its goal of cost effective per share growth in reserves, production and cash flow. The New Management Team believes their previous experience in expanding and defining the Bakken resource play in southeast Saskatchewan through horizontal well drilling and multi-stage completions will be invaluable and transferrable in the development of other emerging resource plays. Upon completion of the Transaction, the recapitalized Antler is expected to have a net cash position of approximately $18 million. Management believes that this starting point will provide them with a platform for aggressive growth through strategic acquisition and internally generated prospects.

Upon completion of the Transaction and subject to all regulatory and shareholder approvals, it is anticipated that the New Management Team with change the name of the Corporation from "Antler Creek Energy Corp." to "Pinecrest Energy Inc."

Private Placement

Pursuant to the Private Placement, the Initial Investor Group, together with additional subscribers identified by Mr. Becker, will subscribe for up to a maximum of 53.5 million common shares of Antler (the "Common Shares"). Of the maximum 53.5 million Common Shares, up to 35.7 million Common Shares will be issued as forming part of 35.7 million units (the "Units") with up to 13,375,000 of such Units being issued on a flow-through basis, (the "FT Units"). The remaining Common Shares, not forming part of a Unit or a FT Unit will be issued as stand alone Common Shares. Each of the Units, the FT Units and the Common Shares will be issued at a price of $0.375 per security for gross aggregate proceeds of approximately $20 million. Each Unit shall be comprised of one Common Share and one Common Share purchase warrant (a "Warrant") and each FT Unit shall be comprised of one Common Share being issued on a flow-through basis pursuant to the provisions of the Income Tax Act (Canada), and one Warrant. In any combination of the Common Shares, Units and FT Units, no more than 53.5 million Common Shares and no more than 35.7 million Warrants will be issued pursuant to the Private Placement. In the event that the 35.7 million Warrants are not issued as part of subscription for Units or FT Units, such Warrants will be issued to the subscribers of Units on a prorated basis.

Each Warrant will entitle the holder to purchase one Common Share at a price of $0.50 over the next five years with 1/3 of the Warrants vesting when the 20 day weighted average share price (the "Market Price") meets or exceeds $0.65 per Common Share, 1/3 of the Warrants vesting when Market Price equals or exceeds $0.85 per Common Share and the final 1/3 of the Warrants vesting when the Market Price equals or exceeds $1.00 per Common Share. 

Proceeds from the Private Placement will initially be applied to the reduction of bank debt and other debt of Antler. All other monies will be used for general corporate purposes. Gross proceeds from the sale of the flow-through shares will be used to incur expenditures that will be renounced to subscribers as Canadian development expenses.

Escrow

Each director, officer or employee of Antler who subscribed for Units and/or FT Units will be required, at closing of the Transaction, to enter into an escrow agreement which will provide that the Common Shares comprising the Units and FT Units, and any Common Shares issued upon exercise of the Warrants, shall be subject to a 24 month escrow wherein 25% of such securities shall be released on each of the 6, 12, 18 and 24 month anniversaries of closing of the Private Placement.

Shareholder and Stock Exchange Approvals

Completion of the Transaction is subject to a number of conditions and approvals including, but not limited to, the approval of the TSXV and shareholder approval. As of the date hereof, shareholders holding shares representing in excess of 50.1% of the Corporation's issued and outstanding Common Shares have given their written consent to the Transaction (the "Written Consent").

The Corporation

Antler consists of 45 boepd of light oil production from the Bakken formation in southeast Saskatchewan and has approximately 5.3 million Common Shares outstanding on a fully diluted basis and net debt of approximately $1.5 million. Upon completion of the Private Placement, Antler will have approximately 58.6 million Common Shares, and assuming the exercise of all Warrants issued in connection with the Private Placement, there will be approximately 93.3 million Common Shares outstanding on a fully diluted basis.

Board of Directors' Recommendation

The board of directors of Antler has unanimously approved the Transaction and recommends that Antler's shareholders approve the Agreement and the Transaction and execute a Written Consent. Any shareholder of Antler wishing to obtain and execute a Written Consent should contact Antler as set out below.

Directors and officers of Antler who, in aggregate, own, directly or indirectly or exercise control or direction over approximately 42.9% of the Common Shares, have entered into support agreements or agreed to enter into support agreements pursuant to which they have agreed or will agree, among other things, to execute a Written Consent.

The Agreement

The Agreement contains a number of customary representations, warranties and conditions. The complete Agreement will be accessible on Antler's SEDAR profile at www.sedar.com.

Financial Advisors

Cormark Securities Inc. and Clarus Securities Inc. are acting as financial advisors, and Genuity Capital Markets Inc. is acting as strategic advisor to the Initial Investor Group.

Peters & Co. Limited is acting as strategic advisor to Antler.

About Antler

Antler Creek Energy Corp. is a Calgary, Alberta based company engaged in the oil and gas exploration and development industry. The Corporation's Common Shares are listed on the TSX Venture Exchange under the trading symbol "AFE".

Forward Looking and Cautionary Statements

This news release may include forward-looking statements including opinions, assumptions, estimates, the New Management Team's assessment of future plans and operations, and, more particularly, statements concerning the completion of the Transaction contemplated by the Agreement, the number of securities issued by way of the Private Placement, the business plan of the New Management Team, the change of name of the Corporation, use of proceeds, debt levels and production following completion of the Transaction.

When used in this document, the Words "will," "anticipate," "believe," "estimate," "expect," "intent," "may," "project," "should," and similar expressions are intended to be among the statements that identify forward-looking statements.

The forward-looking statements are founded on the basis of expectations and assumptions made by Antler and the Initial Investor Group which include, but are not limited to, the timing of the receipt of the required shareholder, regulatory and third party approvals, the future operations of, and transactions completed by Antler as well as the satisfaction of other conditions pertaining to the completion of the Transaction.

Forward-looking statements are subject to a wide range of risks and uncertainties, and although Antler and the Initial Investor Group believe that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. 

Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, shareholder, regulatory and third party approvals not being obtained in the manner or timing set forth in the Agreement, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in general market conditions and other factors more fully described from time to time in the reports and filings made by Antler with securities regulatory authorities. 

Except as required by applicable laws, neither Antler nor the Initial Investor Group undertake any obligation to publicly update or revise any forward-looking statements.

The term "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 1 bbl is based upon an energy equivalency conversion method primarily applicable at the burner tip and it does not represent a value equivalency at the well head.

Neither the 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 news release.

Contact Information

  • Wade Becker
    (403) 230-6129 or 1-866-574-7931
    Suite 1400, 350 - 7th Avenue SW
    Calgary, Alberta T2P 3N9
    or
    Antler Creek Energy Corp.
    Gregory Leia
    CFO
    (403) 265-4122
    (403) 265-4138 (FAX)
    or
    Antler Creek Energy Corp.
    1510, 777 - 8th Avenue SW
    Calgary, Alberta T2P 3R5