Bear Ridge Resources Ltd.
TSX : BER

Bear Ridge Resources Ltd.

June 11, 2007 10:56 ET

Bear Ridge Resources Announces Strategic Merger and Asset Sale

CALGARY, ALBERTA--(Marketwire - June 11, 2007) -

NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Bear Ridge Resources Ltd. (TSX:BER) ("Bear Ridge"), is pleased to announce that its Board of Directors has unanimously approved a strategic merger with Sabretooth Energy Ltd. ("Sabretooth"), an Alberta-based oil & gas company, pursuant to a plan of arrangement (the "Arrangement"). The combined entity ("New Sabretooth") will continue to operate under the name Sabretooth Energy Ltd.

Under the terms of the Arrangement, each Bear Ridge share will be exchanged for 0.5250 of a Sabretooth common share, up to a maximum of 19.1 million Sabretooth shares, or $2.10 in cash, to a maximum of $56 million in cash, subject to prorating. Bear Ridge shareholders will own approximately 48% of New Sabretooth. The Arrangement is subject to approval by the shareholders of Bear Ridge as well as court and regulatory approvals.

Bear Ridge is also pleased to announce that it has entered into a definitive agreement to sell its assets in the Tupper region of North East British Columbia (the "Tupper Assets") for cash consideration of C$155 million. The sale is expected to close later today. Proceeds from the sale will be used to repay all of Bear Ridge's outstanding debt, to redeem 10,030,000 outstanding flow-through warrants for aggregate consideration of approximately C$7.5 million and to pay transaction costs, with the balance (being approximately equal to the amount of cash consideration available to Bear Ridge shareholders under the Arrangement) available for general corporate purposes. The transaction is subject to customary post-closing adjustments.

The Tupper Assets are composed of 34 sections of net undeveloped land on which Bear Ridge has drilled five net wells to date, four of which are completed and tested in the Montney zone with the fifth awaiting completion and testing. None of the Tupper Assets are currently producing. Bear Ridge has cumulatively spent approximately C$33.5 million on the Tupper Assets. This sale allows Bear Ridge to monetize the Tupper Assets at an attractive valuation for Bear Ridge shareholders.

New Sabretooth Management and Board of Directors:

New Sabretooth will be led by the existing Sabretooth management team with Marshall Abbott as Chief Executive Officer, Joe McFarlane as Chief Financial Officer, Christine Robertson as Chief Operating Officer and Mike Ponto as Vice President, Land. Bear Ridge is pleased to announce that Vincent Chahley will join Hank Swartout, Tom Brinkerhoff, S. Will VanLoh, Jr., John Campbell, Jr. and Marshall Abbott on the New Sabretooth Board of Directors on completion of the transaction.

Sabretooth Energy Ltd.

Sabretooth is an oil and gas company focused in the Peace River Arch of the Western Canadian Sedimentary Basin. Since its formation in June 2005, Sabretooth has established a focused and operated production base with low operating costs and assembled a portfolio of high quality development and exploration opportunities. Sabretooth's tax pools at December 31, 2006 are estimated to be approximately C$105 million, which will provide shelter for future earnings.

New Sabretooth Highlights

The merger of Bear Ridge and Sabretooth will create a natural gas leveraged company with high working interests and an extensive suite of drillable locations on a large prospective undeveloped land base. The merged entity will have a strong presence in its core area in the Peace River Arch and will provide significant economies of scale with its existing infrastructure and compatible land base. Upon closing of the Arrangement, New Sabretooth will have:

- Approximately 7 million boe of Proven and Probable (company interest) reserves based on December 31, 2006 NI 51-101 compliant reserve reports;

- Estimated production at closing of 3,000 boe/d comprised of 450 bbls/d of oil and natural gas liquids and 15.3 mmcf/d of natural gas (85% weighted to natural gas);

- A land base of approximately 155,000 net undeveloped acres, providing multi-year drilling inventory;

- An expanded and diversified portfolio of low risk multi-zone drilling and completion opportunities in the Peace River Arch in Alberta and British Columbia;

- A strong balance sheet, low leverage and financial flexibility. At closing, New Sabretooth expects to have approximately $15 million of debt ( less than 0.5x debt/cash flow) on a bank line of C$55 million. New Sabretooth will continue Sabretooth's strong financial discipline in managing its balance sheet;

- An opportunity to realize administrative and operating efficiencies through considerable overlap of the asset bases and economies of scale;

- A production base that is 70% operated;

- Increased size allowing the combined company to be more competitive and active in the acquisition market while at the same time retaining an attractive suite of assets that will allow for ongoing optimization, consolidation and rationalization of both its core and non-core properties;

- Approximately 42.9 million shares outstanding on a fully diluted basis with a broad distribution and blue-chip shareholder base.

Arrangement

An information circular detailing the Arrangement is anticipated to be mailed to Bear Ridge shareholders by mid-July for a shareholder meeting to approve the transaction to be held in late August. The Arrangement will require approval by at least 66 2/3% of the votes cast by the Bear Ridge shareholders voting at such meeting. Closing of the Arrangement will also be subject to, among other things, approval of the Court of Queen's Bench of Alberta, receipt of all necessary regulatory approvals, and the listing of the New Sabretooth common shares on the Toronto Stock Exchange.

Subject to certain exceptions, the Board of Directors of Bear Ridge has agreed that they will not solicit or initiate discussions or negotiations with any third party for any business combination involving Bear Ridge, and under defined circumstances Sabretooth and Bear Ridge have each agreed to a reciprocal non-completion fee of C$2 million. Subject to the satisfaction of customary closing conditions and the receipt of applicable regulatory and other approvals, it is anticipated that the closing of the transaction will occur shortly after the shareholder meeting.

Tristone Capital Inc. is acting as financial advisor to Bear Ridge with respect to the transaction and has advised the Bear Ridge Board of Directors that, subject to review of the final forms and documents effecting the transaction, the consideration to be received by Bear Ridge shareholders as a result of the completion of the Arrangement is fair from a financial point of view.

Cautionary Statements:

Disclosure provided herein in respect of BOE units may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf to 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. All BOE conversions in this document are derived by converting gas to oil according to this 6 Mcf to 1 Bbl ratio.

Certain information set forth in this document, including management's assessment of Bear Ridge's and Sabretooth's future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Bear Ridge's and Sabretooth's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Bear Ridge and Sabretooth will derive therefrom. Bear Ridge and Sabretooth each disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities within the United States. The securities to be offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act or other laws.

Contact Information

  • Bear Ridge Resources Ltd.
    R. Alan Steele
    Chief Financial Officer and Interim Chief Executive Officer
    (403) 537-8440
    (403) 537-8450 (FAX)
    or
    Bear Ridge Resources Ltd.
    2200, 330 - 5th Avenue S.W.
    Calgary, Alberta T2P 0L4
    or
    Sabretooth Energy Ltd.
    Marshall Abbott
    Chief Executive Officer
    (403) 229-3050 (ext 239)
    (403) 229-0603 (FAX)
    or
    Sabretooth Energy Ltd.
    702, 2303 - 4th Street S.W.
    Calgary, Alberta T2P 0L4