Border Petroleum Inc.

December 17, 2009 13:53 ET

Border Petroleum Inc. Announces Acqusition

CALGARY, ALBERTA--(Marketwire - Dec. 17, 2009) - Border Petroleum Inc. ("Border" or the "Corporation") (TSX VENTURE:BOP.H) announced today that it has entered into a letter of intent dated December 9, 2009 (the "LOI") to acquire Daredevil Energy Ltd. ("Daredevil"). Daredevil is a private company whose assets are primarily located in the Wetaskiwin/Leduc region in central Alberta (the "Acquisition").

Summary of the Acquisition

Pursuant to the LOI, Border will acquire all of the issued and outstanding common shares of Daredevil in exchange for up to 50,000,000 common shares in the capital of Border (the "Border Shares"). The Acquisition is subject to the policies of the NEX board of the TSX Venture Exchange Inc. (the "NEX").

The Daredevil Properties

Through the Acquisition, Border is to acquire various working interests ranging from 8.75% to 25% in approximately Eleven (11) sections (7,040 gross acres) in the multi-zone oil and gas prospective Wetaskiwin/Leduc area of central Alberta and a 50% interest in approximately 160.8 square kilometres of proprietary 3 dimensional seismic data covering those lands and surrounding prospective areas. The Wetaskiwin/Leduc area is located approximately 70 kilometres south of the City of Edmonton and establishes a new exploration base for Border in an area where members of the management team have had previous success. The area has good proximity to infrastructure and provides Border with the opportunity to leverage its seismic assets to expand its interests in the area through strategic acquisitions, land sales, farm-ins or joint ventures and to generate revenue through the marketing of its proprietary data to working interest owners in the area.

Financial Information of Daredevil

Based on audited financial statements for the year ended December 31, 2008, Daredevil had revenue of $19,032, operating expenses of $110,186 and incurred a net loss of $91,154. Based upon review engagement prepared financial statements for the financial period ended June 30, 2009, Daredevil had revenue of $8,355, operating expenses of $72,891 and incurred a net loss of $57,161. In addition, as at June 30, 2009, Daredevil had current assets of $4,170, petroleum and natural gas assets of $3.245 million, total assets of $3.3 million, current liabilities of $315,348, total liabilities of $333,363 and shareholders' equity of $3.3 million.

Daredevil Capital Structure

Daredevil has 40,291,115 common shares (the "Daredevil Shares") issued and outstanding, which are held by less than 50 shareholders and has no stock options, warrants or other dilutive securities outstanding as of the date hereof. Daredevil shareholders holding greater than 10% of the outstanding Daredevil Shares are Amethyst Petroleums Ltd. and 1260688 Alberta Ltd. both of Calgary, Alberta with 26% and 20%, respectively.

Post Acquisition

After completion of the Acquisition, the Board of Directors of Border will consist of six directors, including four existing Directors of Border, namely Tyler D. Cran, Thomas Jackson, Bryce Bonneville, and Kelly Kimbley as well as two nominees of Daredevil, Jeffrey L. Standen and Rodney Hope, provided the TSX Venture does not object to such nominations and such persons are eligible to act as directors pursuant to the requirements of the Business Corporations Act (Alberta). After the closing of the Acquisition, the officers of Border will be appointed by the Board of Directors of Border and will include Tyler Cran as Chairman of the Board, Jeffrey L. Standen as Vice Chairman of the Board, Kelly Kimbley as President & CEO, Gerry Mendyk as Chief Financial Officer, Ross Moulton as Vice-President Exploration, and Joseph Martini as Vice President Business Development & Corporate Secretary.

Jeffrey L. Standen is a Petroleum Landman with over 32 years of domestic and international oil industry experience. He began his career in 1977 with Pan Canadian Petroleum Limited, then Canada-Cities Service, Ltd. and was Land Manager for Renaissance Resources Ltd. before forming his own consulting company, Kinghorn Resources Ltd. Since 1982 he has served in a number of senior roles including as founder, Director, President and CEO with numerous public companies, including Spirit Energy Corporation, Targa Resource Corporation, Camrex Resources Ltd., Triple "8" Energy Corporation, Canadian Leader Energy Ltd., Charger Energy Corporation, Extreme Energy Corporation, and Arapahoe Energy Corporation. Most recently he was a co-founder of Andora Energy Corporation, Sentinel Rock Oil Corporation and Encanto Potash Corp.

Rodney Hope is a lawyer with over 39 years experience specializing in Aboriginal and commercial law with several First Nations. From 1976 to 1987, he was a legal and policy consultant to the Assembly of First Nations regarding relations between First Nations of Canada governing bodies and Federal and Provincial Governments as well as a legal and political consultant to the Metis National Council participating in First Ministers Conferences and negotiations leading up to the re-patriation of the Canadian Constitution in 1982. From 1984 to 1986, Mr. Hope was a legal consultant to the Meadow Lake District Chiefs and Tribal Council (Saskatchewan) establishing economic development initiatives. From 1986 to 1989, he acted as Executive Director and CEO of Sawridge Enterprises; Manager, Intergovernmental Relations for the Sawridge Cree Nation and as an advisor and consultant to Treaty Eight First Nations as members of Slave Lake Tribal Council in Alberta on economic, legal and political relations with the Provincial and Federal Government and Indian and Northern Affairs Canada ("INAC"). From 2003 to 2007, Mr Hope was ex-officio counsel to several Alberta First Nation settlements in Treaty Eight negotiating Reserve status with INAC. From 2007 to present, Mr. Hope acted as Director of Saskatchewan First Nations Business Development for Encanto Potash Corp., negotiating and concluding Exploration Participation Agreements with several Saskatchewan First Nations and multiple Potash Exploration Permits with INAC.

The completion of the Acquisition is subject to the approval of the NEX and all other necessary regulatory approval. The completion of the Acquisition is also subject to additional conditions precedent, including satisfactory completion of due diligence reviews by the parties, board of directors approval of the Corporation and Daredevil, the entering into of a formal agreement, as well as all other customary conditions for this type of transaction.

The Acquisition will be an arm's length transaction as the directors, officers and insiders of Border are not directors, officers or 10% shareholders of Daredevil. Tyler D. Cran and Bryce Bonneville, both directors of Border, and Ross Moulton, Vice-President Exploration, an officer of Border, all own Daredevil Shares either directly or indirectly through a holding company or trust, which individually and collectively, represent less than 10% of the outstanding Daredevil Shares.

Border announces it has reserved a price of $0.10 per share for the grant of stock options to acquire up to 10% of the number of issued and outstanding Border Shares (the "Stock Options") in the event the Acquisition is completed. The grant of the Stock Options is subject to regulatory approval. The Stock Options will be granted to directors, officers, employees and consultants of Border as determined by the Board of Directors of Border.

As indicated above, completion of the Acquisition is subject to a number of conditions, including but not limited to, NEX approval. The Acquisition cannot close until the required approval is obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in documentation to be prepared by the Corporation in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Daredevil nor Border will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Border and Daredevil.

The securities of Border being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

The NEX has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this press release. Neither 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 release.

Contact Information

  • Border Petroleum Inc.
    Tyler D. Cran
    Border Petroleum Inc.
    Kelly Kimbley
    President & CEO
    Daredevil Energy Ltd.
    Jeffrey L. Standen