Kristina Capital Corp.
TSX VENTURE : KCA

Black Marlin Energy Limited

December 01, 2009 20:00 ET

Business Combination of Kristina Capital and Black Marlin Energy Limited and Subscription Receipt Financing

CALGARY, ALBERTA AND DUBAI, UNITED ARAB EMIRATES--(Marketwire - Dec. 1, 2009) - Kristina Capital Corp. (the "Corporation" or "Kristina") (TSX VENTURE:KCA), and Black Marlin Energy Limited ("Black Marlin") are pleased to provide an update on the previously announced arm's length business combination (the "Proposed Transaction") that was subject to announcements made on August 10, 2009, October 21, 2009 and November 19, 2009.

On August 7, 2009, Kristina, and Black Marlin entered into a letter of intent, which sets out the terms and conditions of a business combination between Kristina and Black Marlin. The Proposed Transaction is to be effected in accordance with the terms of the merger agreement among Kristina and Black Marlin entered into on November 19, 2009 (the "Merger Agreement"). Pursuant to the Merger Agreement, Kristina will incorporate a wholly-owned subsidiary ("Subco") pursuant to the laws of the British Virgin Islands Business Companies Act. Once incorporated and subject to acceptance from the TSX Venture Exchange (the "Exchange") and approval from the Kristina shareholders and the Black Marlin shareholders, Subco will merge with Black Marlin such that Black Marlin will continue as the surviving entity and as a wholly-owned subsidiary of Kristina.

Prior to the Proposed Transaction and if approved by the shareholders of Kristina at the annual general and special meeting of shareholders of Kristina to be held on December 28, 2009 (the "Meeting"), the common shares of Kristina outstanding as at November 9, 2009 (the "Kristina Pre-Consolidation Shares") will be consolidated at a ratio of one (1) Kristina Share for each two (2) Kristina Shares held (the "Consolidation"). Among other things, at the Meeting, the shareholders of Kristina will also be asked to approve the following matters:



(a) the sale of all, or substantially all, of the assets of Kristina to a
non-arm's length purchaser in exchange for nominal cash consideration
(the "Asset Sale");
(b) changing the name of Kristina to "Black Marlin Energy Holdings" or such
other name as agreed to by Kristina and Black Marlin (the "Name
Change"); and
(c) the application by Kristina for the discontinuance of Kristina from the
Province of Alberta and the application to continue Kristina under the
laws of the British Virgin Islands (the "Continuance").


Pursuant to the Proposed Transaction, Kristina has agreed with Black Marlin to acquire from the Black Marlin shareholders all of the issued and outstanding shares of Black Marlin (the "Black Marlin Shares"). On the closing of the Proposed Transaction, each Black Marlin shareholder will receive one (1) common share of Kristina (a "Kristina Share") in exchange for each one (1) Black Marlin Share held by such Black Marlin shareholder, at a deemed price of $0.25 pre-Consolidation (or $0.50 post-Consolidation) per Kristina Share.

A total of 16,050,000 (8,025,000 post-Consolidation) Kristina Pre-Consolidation Shares, together with options to purchase an additional 1,500,000 (750,000 post-Consolidation) Kristina Pre-Consolidation Shares and 3,700,000 (1,850,000 post-Consolidation) Kristina Warrants, are presently issued and outstanding. Black Marlin has 134,252,458 Black Marlin Shares issued and outstanding, of which 113,972,458 are held by the Black Marlin Principals. Assuming completion of the Proposed Transaction, Kristina will issue 134,252,458 Kristina Shares to holders of Black Marlin Shares. After issuing such Kristina Shares to holders of Black Marlin Shares, a total of 150,302,458 pre-Consolidation (142,277,458 post-Consolidation) Kristina Shares will be issued and outstanding. A total of 5,350,000 Kristina Shares will be reserved for issuance pursuant to the exercise of the 750,000 post-Consolidation Kristina Options, the 1,850,000 post-Consolidation Kristina Warrants and the 2,625,000 Black Marlin Options to purchase Kristina Shares after giving effect to the Consolidation and the Proposed Transaction.

Prior to or concurrently with the Proposed Transaction and as a condition of the Proposed Transaction, Black Marlin is required to complete a brokered financing of subscription receipts ("Subscription Receipts") of Black Marlin at a price of $0.50 per Subscription Receipt (the "Private Placement"). Black Marlin has entered into an agreement with a syndicate of agents, led by GMP Securities L.P. and including Haywood Securities Inc. and Research Capital Corporation (the "Syndicate") wherein the syndicate has agreed to act as agent for and on behalf of Black Marlin to sell, on a commercially reasonable "best efforts" private placement basis, the Subscription Receipts for minimum gross proceeds of $30,000,000 (the "Minimum Offering") up to maximum gross proceeds of $50,000,000 (the "Maximum Offering"), with each Subscription Receipt being exchangeable for no additional consideration into one (1) Kristina Share upon completion of the Proposed Transaction. The Syndicate will receive a cash commission equal to 6.0% of the gross proceeds of the Private Placement.

Assuming completion of the Private Placement, Kristina will issue 60,000,000 Kristina Shares, assuming completion of the Minimum Offering, to subscribers of the Private Placement at a deemed price of $0.25 pre-Consolidation (or $0.50 post-Consolidation) per Kristina Share. After issuing such Kristina Shares pursuant to the Minimum Offering and pursuant to the Proposed Transaction, a total of 210,302,458 pre-Consolidation (202,277,458 post-Consolidation) Kristina Shares will be issued and outstanding.

Approximately 60,372,459 of the Kristina Shares to be issued by Kristina to certain Black Marlin Shareholders under the Proposed Transaction will be placed in escrow and will be released on terms to be set by the Exchange.

Upon completion of the Proposed Transaction, excluding Kristina Shares to be reserved for issuance pursuant to the Kristina Options, the Kristina Warrants and the Black Marlin Options, the former Black Marlin Shareholders will own approximately 96% of the Kristina Shares and the former Kristina Shareholders will hold approximately 3.97% of the Kristina Shares, assuming completion of the Minimum Offering, and the former Black Marlin Shareholders will own approximately 96.69% of the Kristina Shares and the former Kristina Shareholders will hold approximately 3.31% of the Kristina Shares, assuming completion of the Maximum Offering. Accordingly, the Proposed Transaction will constitute a "reverse take-over" of Kristina for accounting purposes.

The completion of the Proposed Transaction is subject to, among other things, obtaining all necessary regulatory approvals, including the acceptance from the Exchange, Kristina shareholder approval, shareholder approval of Subco, Black Marlin shareholder approval and completion of the Minimum Offering prior to or concurrently with the Proposed Transaction. The Proposed Transaction involves: (a) the Asset Sale; (b) the Consolidation; (c) the Name Change; (d) the Continuation; and (e) the acquisition of the voting Black Marlin Shares by Kristina.

It is a further condition precedent that the principal shareholders of Black Marlin enter into support agreements thereby agreeing to vote their Black Marlin Shares in favour of the Proposed Transaction. Collectively, the principal shareholders of Black Marlin own approximately 82.4% of the issued and outstanding Black Marlin Shares.

Description of Black Marlin

Black Marlin, a British Virgin Islands company, has five wholly-owned subsidiaries: East Africa Exploration Limited ("EAX") explores for hydrocarbons in East Africa and represents Black Marlin's exploration and production interests; Upstream Petroleum Services Limited ("UPSL") is the seismic survey subsidiary of Black Marlin; Black Marlin Energy DMCC ("DMCC") is registered in Dubai for the purposes of carrying out business in Dubai; East African Exploration Madagascar Limited is incorporated in the British Virgin Islands; and Black Marlin Exploration Limited is inactive. EAX, UPSL, East African Exploration Madagascar Limited and Black Marlin Exploration Limited are incorporated in the British Virgin Islands. EAX has a further three subsidiaries (East Africa Exploration (Seychelles) Limited, East Africa Exploration (Kenya) Limited and East Africa Exploration (Ethiopia) Limited). UPSL has one further subsidiary, UPS (Tanzania) Limited. Africa Exploration (Seychelles) Limited and East Africa Exploration (Ethiopia) Limited are incorporated in the British Virgin Islands; East Africa Exploration (Kenya) Limited is incorporated in Kenya; and UPS (Tanzania) Limited is incorporated in Tanzania.

Black Marlin was incorporated on November 8, 2001 and commenced operations shortly thereafter. Black Marlin's principal business activities are petroleum and natural gas exploration, development and production in Africa (through its EAX subsidiary) and the provision of seismic services (through its UPSL subsidiary). Black Marlin's business model is based on the seismic services subsidiary generating cash flow sufficient to pay for the general and administrative costs of the EAX subsidiary, such that EAX becomes an exploration and production company with revenue. UPSL also provides a competitive advantage for Black Marlin, allowing EAX to take positions in areas of interest in exchange for the provision of seismic services.

UPSL

In 2007 UPSL was engaged in a series of projects in East Africa for EAX, Artumas Group Inc., RAKGAS International FZ, Etablissements Maurel et Prom and Dominion Petroleum Limited.

EAX

In 2007, EAX acquired equity in concessions in Tanzania (the Nyuni concession), Kenya (L17/L18), Madagascar (Block 1101) and retained an option to farm in to a license in the Seychelles (the Petroquest option). In 2008, EAX further expanded its interests in East Africa with a farm-in to Block 1 in Kenya (50% equity plus an option to earn a further 30%), a farm-in to Blocks 2, 6, 7 and 8 in Ethiopia's Ogaden Basin (30%) and a license award in the Seychelles (75%). In 2009, EAX grew further with a farm-in to Africa Oil Corporation's Block 10A in Kenya (20%).

Principal Shareholders of Black Marlin

The following table lists those persons who own 10% or more of the issued and outstanding Black Marlin Shares.



----------------------------------------------------------------------------
Number of Percentage of
Name and Municipality of Black Marlin Black Marlin
Residence of Shareholder Type of Ownership Shares Owned(4) Shares Owned
----------------------------------------------------------------------------

Jeffrey Hume, United Registered and
Arab Emirates Beneficial 20,542,058 15.30%

PSI Energy Holdings
Company B.S.C. (C), Registered and
Bahrain(1) Beneficial 17,083,333 12.72%


Thaddea Enterprises Company Registered and
Limited, Cyprus(2) Beneficial 14,166,666 10.55%

RAKGAS International FZ, Registered and
United Arab Emirates(3) Beneficial 37,780,401 28.14%



Notes:
(1) A company beneficially owned by Mr. Ryan Cornelius.
(2) A company beneficially owned by Mr. Timothy Isden.
(3) A company beneficially owned by the Government of the Emirate of
Ras Al-Khaimah.
(4) Assuming 134,252,458 Black Marlin Shares issued and outstanding.


Description of the Business of Black Marlin

Black Marlin has targeted growth in the under-explored but highly-prospective region of East Africa. Its strategy is to use its UPSL subsidiary to generate third-party revenues to underpin the G&A costs of its EAX subsidiary and to generate farm-in opportunities for EAX. This strategy has resulted in the company currently owning equity in assets in Seychelles, Madagascar, Kenya and Ethiopia. EAX will continue to grow in East Africa; UPSL has the ability to conduct seismic surveys elsewhere in Africa and is not constrained to the East African region.

The table below shows EAX's current land holdings (net and gross) in East Africa.



----------------------------------------------------------------------------
October 2009 AREA IN KM(2) AREA IN ACRES
----------------------------------------------------------------------------
LICENCES EQUITY GROSS NET GROSS NET
----------------------------------------------------------------------------
Seychelles A 75.00% 14964 km(2) 11223 km(2) 3.7 million 2.8 million
----------------------------------------------------------------------------
Ethiopia 30.00% 47582 km(2) 14275 km(2) 11.8 million 3.5 million
----------------------------------------------------------------------------
Kenya 10A 20.00% 14747 km(2) 2949 km(2) 3.6 million 0.7 million
----------------------------------------------------------------------------
Kenya 01 50.00% 31850 km(2) 15925 km(2) 7.9 million 3.9 million
----------------------------------------------------------------------------
Kenya L17/L18 65.00% 4844 km(2) 3149 km(2) 1.2 million 0.8 million
----------------------------------------------------------------------------
Madagascar 40.00% 14900 km(2) 5960 km(2) 3.7 million 1.5 million
----------------------------------------------------------------------------
128887 km(2) 53481 km(2) 31.8 million 13.2 million
----------------------------------------------------------------------------


The following information is a summary of resource data and related information contained in the independent resource report prepared by Gaffney, Cline & Associates in relation to the crude oil and natural gas resources of Black Marlin with an effective date of October 31, 2009 (the "GSA Report") and the independent resource report dated November 25, 2009 prepared by McDaniel & Associates Consultants Ltd. in relation to the crude oil and natural gas resources of Black Marlin with an effective date of August 31, 2009 (the "McDaniel Report"). All of the oil and gas properties to which resources have been attributed are located in East Africa. Assumptions and qualifications relating to costs, prices for future production and other matters are summarized in the notes to the following tables. The resource estimates have been prepared in accordance with the resource definitions and standards set out in National Instrument 51-101 and Canadian Oil and Gas Evaluation Handbook ("COGEH").

"Prospective Resources" are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.

The estimation of Prospective Resource volumes for high-risk and poorly calibrated basins can be subject to large variation from the introduction of new information. The estimates presented in the GCA Report and the McDaniel Report are based on all of the information available; however, new data or information is likely to have a material effect on the resource assessment values. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

While COGEH specifically defines Petroleum Initially-In-Place (PIIP), the use of OIIP and GIIP in the tables below is consistent with the COGEH Glossary that provides for defining products (oil and gas) in place in the same manner as PIIP.

Property Description and Location

Ethiopia

Blocks 2, 6, 7 and 8 are located in the Ogaden basin, in southern Ethiopia (Figure 2). Blocks 2 and 6 are part of the same production sharing contract ("PSC") which encompasses a combined area of 24,420km(2). Blocks 7 and 8 are part of a separate PSC covering an overall area of 23,162km(2). The operator for both PSCs is Africa Oil Corporation (55%, formerly Lundin East Africa BV); Black Marlin has farmed in for a 30% interest and New Age (African Global Energy) Limited holds the balance of 15%. The combined total gross area is 47,582km(2) (11.8 million acres) and Black Marlin's net area under licence is 14,209km(2) (3.5 million acres).

Exploration in the Ethiopia area began in the 1970's with Tenneco discovering the Calub and Hilal gas fields approximately 200 kilometers to the east of Block 6. Exploration continued into the 1980's but then effectively ceased until 2007. Three wells have been drilled within the blocks and all were subsequently plugged and abandoned: El Kuran-1, El Kuran-2 and Bodle-1. Both of the El Kuran wells gave indications of hydrocarbons and a small amount of oil was reportedly recovered from the Jurassic, Hamanlei formation. The main potential reservoirs in the basin are clastic sediments of the Carboniferous age Calub formation and the Triassic age Adigrat formation. In addition some permeable Jurassic carbonate rocks in the Hamanlei formation can be considered potential reservoirs.

Blocks 2, 6, 7 and 8 are located on the edge of the Paleozoic - Mesozoic Ogaden Basin. The Ogaden basin has a proven hydrocarbon system as confirmed by the Calub and Hilal discoveries and a number of oil and gas shows reported in the exploration wells drilled in the area. Petronas is currently progressing appraisal and development drilling plans to commercialize the field, with one well being due for drilling later this year.



Table 2A: Ethiopia. Oil Prospective Resources

Gross Best Black Marlin Net Best
Estimate Working Estimate
Licence Lead Reservoir (MMBbI) Interest% (MMBbI) GCoS

Upper Hamanlei 88 30 26.4 0.14
Block 07 Lead A Adigrat 83 30 24.9 0.09
Calub 106 30 31.8 0.12

Upper Hamanlei 50 30 15.0 0.12
Block 07 Lead B Adigrat 52 30 15.6 0.08
Calub 98 30 29.4 0.10

Upper Hamanlei 103 30 31.0 0.12
Block 07 Lead C Adigrat 112 30 33.6 0.08
Calub 86 30 25.8 0.10

Upper Hamanlei 40 30 12.0 0.13
Block 06 Lead D Adigrat 112 30 33.6 0.09
Calub 34 30 10.2 0.11

Notes:
(1) Source: GCA Report.
(2) Net Prospective Resources are stated herein in terms of Black Marlin's
net Working Interest (WI) in the properties and, due to the very
immature nature of these Prospective Resources, have not been computed
as net entitlement volumes under the PSA. In this regard these volumes
stated herein will exceed the volumes which will arise to Black Marlin
under the terms of the PSA.
(3) It is inappropriate to report summed-up Prospective Resource volumes or
to otherwise focus upon those of other than the 'Best Estimate'.
(4) The Geologic Chance of Success (GCoS) reported here represents an
indicative estimate of the probability that the drilling of this
prospect would result in a discovery which would warrant the
recategorization of that volume as a Contingent Resource. These GCoS
percentage values have not been arithmetically applied within this
assessment.
(5) The Oil Prospective Resource volumes are for Oil or Gas, not Oil and
Gas.


Table 2B: Ethiopia. Gas Prospective Resources

Gross Best Black Marlin Net Best
Estimate Working Estimate
Licence Lead Reservoir (BCF) Interest% (BCF) GCoS

Block 07 Lead A Adigrat 525 30 157.5 0.09
Calub 1,129 30 338.7 012

Block 07 Lead B Adigrat 326 30 97.8 0.08
Calub 1,120 30 336.0 0.10

Block 07 Lead C Adigrat 724 30 217.2 0.08
Calub 1,010 30 303.0 0.10

Block 06 Lead D Adigrat 221 30 66.3 0.09
Calub 394 30 118.2 0.11

Notes:
(1) Source: GSA Report.
(2) Net Prospective Resources are stated herein in terms of Black Marlin's
net Working Interest (WI) in the properties and, due to the very
immature nature of these Prospective Resources, have not been computed
as net entitlement volumes under the PSA. In this regard these volumes
stated herein will exceed the volumes which will arise to Black Marlin
under the terms of the PSA.
(3) It is inappropriate to report summed-up Prospective Resource volumes or
to otherwise focus upon those of other than the 'Best Estimate'.
(4) The Geologic Chance of Success (GCoS) reported here represents an
indicative estimate of the probability that the drilling of this
prospect would result in a discovery which would warrant the
recategorization of that volume as a Contingent Resource. These GCoS
percentage values have not been arithmetically applied within this
assessment.
(5) The Oil Prospective Resource volumes are for Oil or Gas, not Oil and
Gas.


The PSC for Blocks 2 and 6 has an effective date of November 7, 2006; that for Blocks 7 and 8 has an effective date of July 11, 2007. Both PSCs have an initial exploration period of four years, followed by two additional exploration periods each lasting a further two years before entering an exploitation phase lasting up to 25 years. The Government of Ethiopia retains a 10% back-in right into successful exploration and contractors are allowed to recover all their costs out of 60% of the production. Oil royalty rates range from 7.5% for the first 20Mbopd to 15% for production above 100Mbopd and gas royalty rates range from 7% for the first 50MMscfd to 12.5% for production above 200MMscfd. The government's share of profit oil ranges from 37.5% for the first 20Mbopd to 72.5% for production above 100Mbopd; its share of profit gas ranges from 35.5% for the first 50MMscfd to 62.5% for production above 200MMscfd.

In May 2009, Black Marlin entered into a farm-in agreement with the operator of Blocks 2, 6, 7 and 8. Under the terms of this farm-in agreement, Black Marlin was required to contribute to the past costs of the licence and to the acquisition of 500km of 2D seismic at an estimated cost of US$3.7 million.

During the first exploration period, the partners of the farm-in are obligated to obtain 25,000km(2) of airborne gravity and magnetic data; 2,500km(2) of 3D seismic; and to drill one exploration well. To date, the airborne commitment has been satisfied and UPSL will commence an initial 500km(2) seismic survey in the fourth quarter of 2009.

During the second exploration period, the partners of the farm-in are obligated to acquire 2,600km of seismic and to drill one exploration well. During the third exploration period, the partners of the farm-in are obligated to acquire 200km of seismic and to drill a total of four wells (one appraisal and three exploration).

Kenya

Black Marlin has equity interests in three licences in Kenya: L17/L18 (where it operates with a 65% equity interest), Block 1 (where it operates with a 50% equity interest) and Block 10A (where it has a non-operated 20% equity interest).

Block 1

Block 1 is located on the western margin of the Mandera-Lugh basin in northeastern Kenya bordering both Somalia and Ethiopia. The block covers an area of 31,850km(2) (7.9 million acres). The operator is Black Marlin (50%), with Lion Petroleum Corporation owning the remaining 50%. Black Marlin's net area under licence is 15,891km(2) (3.9 million acres).

Early exploration occurred during the 1970's when Burmah Oil conducted gravity and seismic surveys over Block 1. This was followed during the 1980's when Amoco and Total acquired a combined 850 kilometers of 2-D seismic data. After this exploration effectively ceased until Lion Petroleum Corporation was awarded the block in November 2007. Black Marlin farmed into the block in January 2009 taking a 50% interest and becoming operator of the block pursuant to the joint operating agreement with Lion Petroleum Corporation. The main exploration potential in Block 1 is believed to lie in the Jurassic and Upper Triassic section by analogy with the Ogaden basin. Gas is the most likely hydrocarbon type if present in the Mansa Guda reservoirs as the Elgal shales (the source rock) are likely to be within the gas window or over mature. The Jurassic reservoirs are more likely to be oil bearing as there is a separate potential source rock which may not have been buried so deep. An oil seep close to the well Tarbaj-1 in the southwest corner of the block confirms the presence of hydrocarbons.

The Mandera-Lugh sedimentary basin is located in north-eastern Kenya and continues partly into Somalia and Ethiopia where it is connected to the much larger and extensive Ogaden basin (see description of the Black Marlin Ethiopian assets). Analogies with the Ogaden basin also suggest there may be other potential source rocks and reservoirs. The Bur Mayo and the Kalicha-Seir formations in the Mandera-Lugh basin appear comparable to the Lower and Upper Hamanlei (Jurassic) formations in the Ogaden basin. If analogous these formations should have high total organic content ("TOC") source rocks and in addition permeable reservoirs.

The PSC for Block 1 has an effective date of November 19, 2007. The PSC has an initial exploration period of three years, followed by two additional exploration periods each lasting a further two years before entering an exploitation phase lasting up to 25 years. The Government of Kenya retains an 18% back-in right into successful exploration and contractors are permitted to recover their costs at a rate of 20% per annum from 55% of the production. The government's share of profit oil ranges from 55% for the first 20Mbopd to 78% for rates above 100Mbopd; its share of profit gas ranges from 50% for the first 120MMscfd to 75% on production above 600MMscfd; and oil profits are subject to an additional profits tax if the price of oil exceeds US$50/bbl.

In November 2008, Black Marlin entered into a farm-in agreement with the operator of Block 1. Under the terms of this agreement, Black Marlin acquired a 50% equity stake in exchange for a contribution to the costs of a seismic programme and the acquisition and processing of other data. Black Marlin also has the option under the farm-in to acquire a further 30% equity interest in Block 1 in exchange for a contribution to the costs of either an exploration well or a seismic programme in the second exploration phase (at the election of Black Marlin).

During the first exploration period, the PSC partners are obligated to obtain 1,200km of 2D seismic, 100km(2) of 3D seismic and drill one exploration well. It is anticipated that this will be completed in 2010. During the second exploration period, the partners farm-in are obligated to acquire 25km(2) of 3D seismic and to drill one exploration well. During the third exploration period, the partners of the farm-in are obligated to acquire 25km(2) of 3D seismic and to drill a further exploration well.

Block 10A

Block 10A is located in the northern region of the Anza Basin in northern Kenya. The block covers a total of 14,747km(2) (3.6 million acres) and is north-west from the adjacent Block 9 where the operator, CNOOC (the Chinese National Oil Company), is currently drilling. The operator is Africa Oil Corporation (55%); its partners are Black Marlin (20%) and Lion Energy (25%). Black Marlin's net area under licence is 2,950km(2) (0.7 million acres).

In March of 1985, Amoco signed the Block 10 PSC which covered approximately 84,500km(2) of north-western Kenya and encompassed the northern region of the Anza Basin. In 1990, Amoco relinquished 50% of the block and the remaining portion was divided into three separate blocks: Block A, Block B and Block C. Later that year, Shell farmed-in for a 50% interest and became operator of all three blocks. Three exploration wells were drilled by Amoco in Block 10A (Sirius-1, Bellatrix-1 and Chalbi-3) but abandoned throughout 1988 and 1989. The Sirius-1 well gave indications of migratory hydrocarbons in the Upper Cretaceous but in 1993-94 both Amoco and Shell relinquished the blocks. No exploration was conducted on Block 10A until Africa Oil Corporation was awarded the PSC in October of 2007.

Block 10A is located in the northern part of the Anza graben which in turn is part of Central-African Mesozoic rift system that also includes the Muglad graben in Sudan, and the Lamu graben in Kenya. The southern part of Block 10A has been interpreted to provide the best exploration potential. This is supported by the presence of oil and gas shows and the high maturity level of organic rocks in wells Bellatrix-1 and Sirius-1. The latter well establishes the presence of an Upper Cretaceous lacustrine source rock that may have generated low-sulphur/paraffinic oil.

The PSC for Block 10A has an effective date of January 2, 2008. The PSC has an initial exploration period of four years, followed by two additional exploration periods each lasting a further eighteen months before entering an exploitation phase lasting up to 25 years. The Government of Kenya retains a 13% back-in right into successful exploration and contractors are permitted to recover their costs at a rate of 20% per annum from 60% of the production. The government's share of profit oil ranges from 55% for the first 10Mbopd to 77.5% for rates above 140Mbopd; its share of profit gas is to be determined on an oil-equivalent basis; and oil profits are subject to an additional profits tax if the price of oil exceeds US$50/bbl.



Table 3: Kenya. Summary of Prospective Resources

Gross Best Black Marlin Net Best
Estimate Working Estimate
Licence Lead (MMBbI) Interest(%) (MMBbI) GCoS
---------- -------- ------------- --------------- ----------- -------
---------- -------- ------------- --------------- ----------- -------

Block 10A Lead A 103 20 20.6 0.08
---------- -------- ------------- --------------- ----------- -------
---------- -------- ------------- --------------- ----------- -------

Block 10A Lead B 82 20 16.4 0.09
---------- -------- ------------- --------------- ----------- -------
---------- -------- ------------- --------------- ----------- -------

Block 10A Lead C 12 20 2.4 0.10
---------- -------- ------------- --------------- ----------- -------
---------- -------- ------------- --------------- ----------- -------

Block 10A Lead D 53 20 10.6 0.08
---------- -------- ------------- --------------- ----------- -------
---------- -------- ------------- --------------- ----------- -------

Notes:

(1) Source: GSA Report.
(2) Net Prospective Resources are stated herein in terms of Black Marlin's
net Working Interest (WI) in the properties and, due to the very
immature nature of these Prospective Resources, have not been computed
as net entitlement volumes under the PSC. In this regard these volumes
stated herein will exceed the volumes which will arise to Black Marlin
under the terms of the PSC.
(3) It is inappropriate to report summed-up Prospective Resource volumes or
to otherwise focus upon those of other than the 'Best Estimate'.
(4) The Geologic Chance of Success (GCoS) reported here represents an
indicative estimate of the probability that the drilling of this
prospect would result in a discovery which would warrant the
recategorization of that volume as a Contingent Resource. These GcoS
percentage values have not been arithmetically applied within this
assessment.


In May 2009 Black Marlin entered into a farm-in agreement with the operator of Block 10A. Under the terms of this farm-in agreement, Black Marlin was required to contribute to the past costs of the licence and to the acquisition of 750km of 2D seismic at an estimated cost of US$3 million.

During the first exploration period, the PSC partners are obligated to obtain 750km of seismic and to drill one exploration well. During the second exploration period, the PSC partners are obligated to drill one exploration well. During the third exploration period, the PSC partners are obligated to drill one further exploration well.

L17/L18

The Block L17/L18 PSC area is located in the Lamu coastal basin, in southern offshore Kenya. The individual blocks L17 and L18 cover an area of approximately 1,275 and 3,630km(2) respectively and are situated in water depths varying from a few meters along the shoreline up to around 500 metres. Black Marlin (65%) is the operator; Somken holds the remaining 35% working interest. The combined total gross area is 4,844km(2) (1.2 million acres) and Black Marlin's net area under licence is 3,250km(2) (0.8 million acres).

Block L17/L18 was originally part of Block L10 awarded to Dana Petroleum and Pancontinental in 2000. Woodside Energy farmed into Block L10 in 2003 and after an extensive 2-D marine survey relinquished the shallow water part of the block, which was re-designated as Block L17/L18 and re-awarded in October 2007. There are several potential source rocks for the Cretaceous in the southern Lamu basin including the Permo-Triassic Karoo interval and sections within the Lower to Middle Jurassic, and there are oil seeps in the Lamu Basin and Pemba Island linked to a Jurassic source which implies that the structures in Block L17/L18 might be oil bearing. The main reservoir targets are in the Upper Cretaceous although there may be additional potential in clastic reservoirs within the Tertiary. The hydrocarbons are expected to have been generated in the deep Pemba trough south of Block L18 and have been assumed to be gas for the purposes of this report.

The PSC for L17/L18 has an effective date of January 24, 2008. The PSC has an initial exploration period of two years, followed by two additional exploration periods (the first lasting two years and the second lasting three years) before entering an exploitation phase lasting up to 25 years. The Government retains a 15% back-in right into successful exploration and contractors are permitted to recover their costs at a rate of 20% per annum from 55% of the production. The government's share of profit oil ranges from 50% for the first 10Mbopd to 75% for rates above 100Mbopd; its share of profit gas ranges from 50% for the first 60MMscfd to 75% on production above 600MMscfd; and oil profits are subject to an additional profits tax if the price of oil exceeds US$50/bbl.



Table 4: Prospectivity of Block L17/18.

----------------------------------------------------------------------------
Number Unrisked Risked Risked
of leads In place resources Resources resources
Block considered (gross) (gross) (gross) (net)
----------------------------------------------------------------------------
L17/L18(1) 11 811 Bcf 563 Bcf 30 Bcf 20 Bcf
----------------------------------------------------------------------------

Note:
(1) Source: McDaniel Report.


During the first exploration period, the PSC partners are obligated to process available seismic; to acquire 25 geochemical cores; and to acquire 1,000km of marine 2D seismic. The commitment to acquire cores has been satisfied and UPSL will be acquiring the 1,000km of seismic in the fourth quarter of 2009. During the second exploration period, the partners of the farm-in are obligated to acquire 1,000km of seismic and to drill one exploration well. During the third exploration period, the partners of the farm-in are obligated to acquire 1250km of seismic and to drill a further two exploration wells. Note that the seismic can be marine, terrestrial or transition-zone seismic, with the required commitment changing accordingly; the minimum monetary commitment does not change.

Madagascar

Block 1101 is located on the eastern flank of the Ambilobe basin in northern Madagascar. The Block encompasses an area of approximately 14,900km(2) (3.7 million acres) onshore and lies adjacent to Exxon's Ampasindava Block and Sterling Energy's Ambilobe Block. The operator is Candax Energy (60%) with Black Marlin retaining the remaining 40%. Black Marlin's net area under licence is 5,960km(2) (1.5 million acres).

There has to date been limited exploration activity in the block with one well drilled in 1901 near the village of Ankaramy (to 193 metres) and a second well drilled in 1963. The block was held by Maxus and Triton Energy in the 1990's. Triton's interest was later acquired by Amerada Hess Corporation, before the latter relinquished the Malagasy offshore acreage that was later to be acquired by Sterling Energy Plc. Recently, 220km of 2D seismic has been acquired over the southern area of the block. The main exploration target are sands of the Isalo formation. There are proven heavy oil accumulations in the Isalo formation in Central Madagascar such as Bermolanga and Tsimiroro, indicating good reservoir conditions.

The PSC for Block 1101 has an effective date of 24th July 2007. The PSC has an initial exploration period of two years followed by two additional exploration periods each lasting a further two years before entering an exploitation phase lasting up to 25 years. The Government of Madagascar has no back-in rights into successful exploration and contractors are allowed to recover their entire costs from 60% of the production. Oil royalty rates range from 8% for the first 20Mbopd to 20% for rates above 130Mbopd; gas royalty rates range from 6% for the first 424MMscfd to 10% on production over 847MMscfd. The government's share of profit oil ranges from 20% for the first 10Mbopd to 70% for production above 130Mbopd; its share of profit gas ranges from 5% for the first 424MMscfd to 45% for production above 1,695MMscfd.



Table 5: Prospectivity of Block 1101.

----------------------------------------------------------------------------
Number Unrisked Risked
of leads resources Resources Risked
considered In place (gross) (gross) (gross) resources (net)
----------------------------------------------------------------------------
3 959 MMbbls 191 MMbbls 9 MMbbls 4 MMbbls
----------------------------------------------------------------------------

Source: McDaniel Report.


During the first exploration period, the PSC partners are obligated to perform a geochemical survey; carry out field mapping; and drill an exploration well to a minimum of 800m. The geochemical survey has been completed and the exploration well is anticipated for 4Q 2010. During the second exploration period, the PSC partners are obligated to acquire 300km of seismic and to drill two exploration wells to a minimum of 800m each.

Seychelles

Areas A, B and C are located in the Seychelles micro-continent covering a combined area of approximately 14,964km(2) (3.7 million acres). Areas A and B are located in mainly shallow water in the northern half of the Seychelles plateau while Area C is in shallow water to the south. The operator is Black Marlin (75%); Avana Petroleum has a 25% working interest. Black Marlin's net area under licence is 11,249km(2) (2.8 million acres).

The bulk of exploration activity commenced in 1977 when three separate PSCs were signed by a consortium led by Oxoco, Siebens and Burmah Oil (later acquired by Amoco). Between 1977 and 1979 this consortium acquired a total of 6,400 kilometers of seismic which revealed several structural and stratigraphic leads. Between 1980 and 1981 Amoco drilled three wells (Owen Bank A-1, Reith Bank-1 and Seagull Shoals-1); all were plugged and abandoned with indications of hydrocarbons shows. Amoco commissioned a further 27,900 kilometers of aeromagnetic survey and 7,100 kilometers of seismic as well as other gravity and geochemical surveys but relinquished the acreage in 1986 following the collapse of oil prices. In 1985, Enterprise Oil (later acquired by Shell) signed an Agreement for the South-Eastern Shelf plus Constant, Coetivy and Fortune Banks with an option to later include Platte Banks. It surveyed a total of 4,870 kilometers of seismic and in 1990 it drilled the Constant Bank-1 well which was plugged and abandoned. A further consortium of Texaco, Ultramar (now ENI) and Enterprise Oil conducted a group-shoot acquisition programme in 1991 but later relinquished their areas. The main exploration target is the Permo-Triassic Karoo interval which comprises non-marine sands inter-bedded with shales. The Karoo formation contains both the source rock and the reservoir. Other potential reservoirs in the volcanic rocks and Jurassic clastic sediments may exist although further exploration work is needed.

The complexity of the tectonic evolution of the Seychelles plateau is due to the imposition of three phases of rifting and drifting that isolated the micro-continent from the centre of Gondwana. The first sedimentary rocks of Seychelles began forming during the Permo-Carboniferous time as part of the early Karoo section on the Gondwana paleo-continent. The western Seychelles margin can be reconstructed to a position adjacent to Somalia and as a northern extension of Madagascar prior to drifting from Africa in the Upper Jurassic. A second phase of rifting occurred during the mid Cretaceous when India and Seychelles separated from Madagascar. The Madagascar landmass acted as a major sediment source for the Seychelles micro-continent during this period. During this time a significant part of Seychelles was covered by basalts and volcanic rocks. The third and final rift phase occurred in the late Cretaceous with the drift between Seychelles and India initiating during the early Paleocene.

The PSC for Areas A, B and C has an effective date of November 28, 2008. The PSC has an initial exploration period of two years, followed by two additional exploration periods (the first lasting two years and the second lasting three years) before entering an exploitation phase lasting up to 25 years. The Government of Seychelles has no back-in rights into successful exploration and contractors are allowed to recover 100% of their costs from 100% of the production. Oil and gas royalty rates are both flat at 5%; revenues incur an Additional Petroleum Profit Tax that ranges from 30% to 45% depending on previous production revenues.



Table 6: Prospectivity of Areas A, B and C in Seychelles (oil in MMbbls;
gas in bcf).

----------------------------------------------------------------------------
Unrisked Risked Risked
Number of leads In place resources Resources resources
considered (gross) (gross) (gross) (net)

OIIP GIIP Oil Gas Oil Gas Oil Gas
----------------------------------------------------------------------------
9 1,464 1,492 291 1,035 25 86 19 65
----------------------------------------------------------------------------

Source: McDaniel Report.



During the first exploration period, the PSC partners in are obligated to obtain 2,000km of 2D seismic and 150km(2) of 3D seismic. The partners have acquired 1,100km of 2D seismic to date in an ongoing programme. During the second exploration period, the PSC partners are obligated to acquire 1,500km of 2D seismic and to drill one exploration well. During the third exploration period, the partners of the farm-in are obligated to acquire 1,000km of 2D seismic and to drill two further exploration wells.

Selected Financial Information of Black Marlin

The following tables set out selected audited financial information for Black Marlin as at and for the financial years ended December 31, 2007 and December 31, 2008 and the unaudited financial information for the six month period ended June 30, 2009.



----------------------------------------------------------------------------
As at June 30,
2009 for the
As at December 31, As at December 31, six month
2007 and for the 2008 and for the period ended
year ended year ended June 30, 2009
Category 2007 (audited) 2008 (audited) (unaudited)
----------------------------------------------------------------------------

Total Assets US$18,152,249 US$26,066,847 US$21,270,048

Current
Liabilities US$5,872,882 US$4,254,969 US$4,842,321

Long term
Liabilities US$278,245 US$712,525 US$823,723

Shareholders'
Equity US$12,001,121 US$21,099,353 US$15,604,004

Net income US$1,464,118 (US$10,935,953) (US$5,459,349)

----------------------------------------------------------------------------


Description of the Resulting Issuer

Upon completion of the Proposed Transaction, the Resulting Issuer intends to continue carrying on the business of an African-focused oil and gas exploration and production company focused on petroleum and natural gas exploration, development and production in Africa. The business of the Resulting Issuer will be the same as the business of Black Marlin. Following the completion of the Proposed Transaction, the Resulting Issuer anticipates that it will drill approximately eight wells and conduct a seismic program on its properties in 2010 and 2011.



Principal Purposes of Funds

In order of priority, the Resulting Issuer intends to allocate its estimated
available funds as follows:

Available Funds Available Funds
Assuming Assuming
Completion Completion
of the Minimum of the Maximum
Offering U.S.($) Percentage Offering U.S.($) Percentage
-----------------------------------------------------------

Drilling - Phase 1 4,950,000 21.6% 4,950,000 12.1%

Seismic - Phase 1 8,470,000 36.9% 8,470,000 20.7%

Drilling - Phase 2 5,750,000 25.1% 12,250,000 29.9%

Working Capital 254,465 1.1% 11,334,465 27.5%

General and
Administrative 3,500,000 15.3% 4,000,000 9.8%

-----------------------------------------------------------
Total 22,924,465 100% 41,004,465 100%
-----------------------------------------------------------
-----------------------------------------------------------

Note:
(1) Assuming the Resulting Issuer generates enough revenue from the business
of UPSL, then the Resulting Issuer will drill the Kenya Black L17/L18
well with the available funds from the completion of the Minimum
Offering. If the business of UPSL does not, however, generate enough
revenue, then the Resulting Issuer will drill the Kenya Black L17/L18
well only upon completion of the Maximum Offering.


Management

The following is a brief description of the key management of the Resulting Issuer.

Richard Schmitt - Proposed President, Chief Executive Officer and a Director - Richard Schmitt holds a B.Sc. in Geological Sciences from the University of Aston in Birmingham, England. Richard has over 32 years of diverse international experience in the upstream oil and gas industry with expertise in exploration, exploitation, operations and new ventures. A significant part of his career has been spent managing and developing projects in Yemen, culminating in five years as Occidental's President and General Manager in that country. Richard was appointed President and CEO of Africa Oil Corp. in October, 2006 and held this position until October, 2009. He has presided over Africa Oil Corp. while an extensive portfolio of exploration assets was assembled in Somalia, Kenya and Ethiopia and operations are ongoing in all 3 countries. Mr. Schmitt will dedicate 100% of his time to the business and affairs of the Resulting Issuer.

Jeffrey Hume - Proposed Chief Operating Officer and a Director - Jeffrey Hume holds a degree of B. Sc. (Hons.) in Exploration Science from University of Nottingham, UK. Mr. Hume has over 30 years experience in the areas of geophysical & survey services and consulting to the Oil & Gas, Hydrographic Surveying, Geodetic Surveying and Geotechnical industries. Mr. Hume worked with Marinav Corporation, a Canada based marine navigation company during 1979 to 1983. In 1986, Mr. Hume founded Energy Innovation Inc., a Houston based geophysical consultancy company specializing in the design and supervision of 3D surveys. Mr. Hume is the founder of Black Marlin Energy Limited and currently acts as Chief Operating Officer and a Director of the company. Mr. Hume will dedicate 100% of his time to the business and affairs of the Resulting Issuer.

Manoj Agarwala - Proposed Chief Financial Officer - Mr. Agarwala is the Chief Financial Officer of Black Marlin Energy Limited, a position he has held since 2007. Mr. Agarwala is a Chartered Accountant as well as a Cost Accountant from India. Previous work experience and positions include Chief Financial Officer of SeaBird Exploration, a marine seismic survey company listed in Oslo Bors (2003-2006), Group finance controller of SeaSpray Aluminium Boats Emirates LLC, an aluminum ship building company based in the UAE (1999-2003) and Group Accounts Manager of NICO International, a ship repair company listed on the Muscat Securities Market (1992-1999). Mr. Agarwala will dedicate 100% of his time to the business and affairs of the Resulting Issuer.

Mike Watson - Proposed Chief Operating Officer of UPSL - Mr. Watson acts as Chief Operating Officer of Black Marlin with over 15 years of experience in the seismic exploration industry. A graduate in Electronic engineering, Mr. Watson started his career with Geophysical Services Incorporation (GSI) (1993) in the 3D multi streamer offshore data acquisition sector. Employment periods with A&B Geoscience (Canada) and SeaBird Exploration (2003-2006) has further allowed career advancement into management postings over the past five years. He joined Black Marlin in 2007. Mr. Watson will dedicate 100% of his time to the business and affairs of the Resulting Issuer.


Chris McLean - Proposed Corporate Secretary - Chris McLean has been involved with public companies for nearly 10 years. Most recently Chris was the Head of Capital Markets and Investment Banking at Wolverton Securities (2007-2009). Previous to that Chris was the Vice President of International Opportunities where he sourced international transactions for Research Capital Corporation. Much of his time was devoted to developing relationships with capital sources and issuers in Europe and the Middle East. Chris' current focus is working with public and private companies that have international assets to create effective strategies for accessing capital. Mr. McLean will devote his time as necessary to the affairs of the Resulting Issuer following completion of the Proposed Transaction.

Robert McBean - Proposed Director - Robert McBean holds a degree of Mechanical Engineering. Mr. McBean has over 40 years experience in Oil & Gas industry, both in Canada and in the Middle East. Previous experience includes Boulder Energy International Inc. (Chairman 1997-2001), Qatar Fuel Additives Company Limited - QAFAC (Managing Director 1990-1996). Mr. McBean also was a co-founder and a Director of two Toronto Stock Exchange listed oil exploration and production companies. Currently, Mr. McBean acts as President and Director of International Octane Limited (IOL), a petrochemical and marketing company. Mr. McBean will devote his time as necessary to the affairs of the Resulting Issuer following completion of the Proposed Transaction.

Murray Atkins - Proposed Director - Mr. Atkins is a principal of and has been President of a private company specializing in the acquisition, development and management of real estate, since 1996. Restoration Properties and its many subsidiaries presently have four residential subdivisions in various stages of development and approvals in the Calgary area and several revenue producing commercial properties that it owns and manages. Mr. Atkins has been instrumental in the assembling of management and assets, and the funding of many public and private companies. Mr. Atkins is also involved in several publicly traded capital pool companies which are listed on the Exchange or have pending listing applications. Mr. Atkins holds a B.A. degree from the University of Utah. Mr. Atkins will devote his time as necessary to the affairs of the Resulting Issuer following completion of the Proposed Transaction.

Ruurd Abma - Proposed Director - Ruurd Abma graduated from the University of Technology in Delft with a Master degree in Civil Engineering. Mr. Abma has worked with Shell in Exploration and Production during 25 years at various management levels in places like Brunei, Singapore, Oman, London, Aberdeen, Hague and Netherlands. Mr. Abma has been broadly developed, varying from leading large departments to leading small strategic teams, as well as being in charge of contractors. His responsibilities could be technical of nature, as well as in the Business Arena, being economic and strategic of nature. Currently Mr. Abma acts as Chief Operating Officer of the Ras Al Khaimah Gas Company since October, 2002, responsible for the technical, planning, operational and commercial divisions. Mr. Abma will devote his time as necessary to the affairs of the Resulting Issuer following completion of the Proposed Transaction.

Nigel Barker - Proposed Director - Nigel Barker holds a degree of BA in Economics from Manchester (1978). Mr. Barker has over 25 years experience in various positions with several oil & gas companies. He joined Vitol, a commodities trading company, in London as an Oil trader in 1983, subsequently transferring to Vitol Bahrain in 1996. He continues to be actively involved in a number of diversified business activities including property investments and telecommunications development in the UK and Europe. Currently, Mr. Barker is Chairman of Northern Energy DMCC, a Dubai based energy related consultancy. Mr. Barker will devote his time as necessary to the affairs of the Resulting Issuer following completion of the Proposed Transaction.

Sponsor and Terms

GMP has agreed to act as sponsor, subject to satisfactory due diligence, and Black Marlin has agreed to pay the GMP a financial advisory fee equal to 1% of the gross proceeds raised under the Private Placement and reasonable legal fees and expenses of GMP. Kristina has no relationship with GMP, other than the engagement by Kristina to act as the sponsor of the Proposed Transaction.

The halt of the Kristina Shares will continue until Kristina has filed the requisite documentation with the TSX Venture Exchange and a final bulletin is issued.

Cautionary Statements

The Proposed Transaction is an arm's length transaction as the directors and officers of Kristina have no ownership or other interest in Black Marlin. As part of the regulatory approval process, Kristina anticipates submitting for review to the Exchange a management information circular. The Kristina Shares will remain halted until such time as permission to resume trading has been obtained from the Exchange and submission of required documentation to the Exchange.

Completion of the Proposed Transaction is subject to a number of conditions including, but not limited to, the parties entering into a definitive agreement, Exchange acceptance and disinterested Shareholder approval. The Proposed Transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular prepared in connection with the Proposed Transaction, any information released or received with respect to the reverse take-over may not be accurate or complete and should not be relied upon. Trading in the securities of Kristina should be considered highly speculative.

All information contained in this news release with respect to Kristina and Black Marlin was supplied by Kristina and Black Marlin, respectively, for inclusion herein, and with respect to such information, Kristina and its board of directors and officers have relied on Black Marlin.

This news release may contain forward-looking statements based on assumptions and judgments of management of Kristina and Black Marlin regarding future events or results. Such statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. Kristina disclaims any intention or obligation to revise or update such statements except as may be required by law.

Sponsor

GMP Securities L.P., subject to completion of satisfactory due diligence, has agreed to act as sponsor to Kristina and Black Marlin in connection with the transaction. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

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 release.

Contact Information