Artek Exploration Ltd.

COSTA Energy Inc.

December 17, 2009 14:26 ET

COSTA Energy Inc. and Artek Exploration Ltd. Announce Mailing of Meeting Materials in Connection With Reverse Takeover of COSTA and Artek's Closing of Bought Deal Private Placement

CALGARY, ALBERTA--(Marketwire - Dec. 17, 2009) -


COSTA Energy Inc. (TSX VENTURE:CEQ.H) ("COSTA") and Artek Exploration Ltd. ("Artek"), a private Alberta based oil and natural gas exploration company, are pleased to announce that the parties have mailed to their respective shareholders (collectively, "Shareholders") a joint information circular and proxy statement (the "Information Circular") and related materials in connection with the meetings of the respective Shareholders to be held on January 14, 2010 (the "Meetings"). At the Meetings, Shareholders will consider the proposed transaction outlined in the November 26, 2009 press release pursuant to which Artek will, subject to satisfaction of conditions, complete a reverse takeover of COSTA pursuant to a plan of arrangement (the "Arrangement"). 

The Arrangement is an arm's length transaction pursuant to which COSTA and Artek will be amalgamated to form a new corporation (the "Resulting Issuer") that will carry on Artek's current business and operations under the name "Artek Exploration Ltd". The current directors and management of Artek will form the board of directors and management of the Resulting Issuer. The Arrangement will constitute a reverse takeover and change of control of COSTA within the meaning of Policy 5.2 of the TSX Venture Exchange (the "TSXV"). 

Under the terms of the Arrangement, holders of common shares of Artek ("Artek Shares") will be entitled to receive five common shares ("New Artek Shares") of the Resulting Issuer for each one Artek Share held and holders of common shares of COSTA ("COSTA Shares") will be entitled to receive 0.028947 of a New Artek Share for each one COSTA Share held. The respective exchange ratios are based upon a deemed price per COSTA Share of $0.11 and a deemed price per Artek Share of $19.00. Former shareholders of Artek and COSTA will hold approximately 99% and 1% of the outstanding New Artek Shares, on a non-diluted basis, respectively. 

The specific details of the Arrangement as well as detailed information in respect of Artek, COSTA and the Resulting Issuer, including operational, historical and pro forma financial information, is contained within the Information Circular, which is available for viewing electronically under COSTA's profile on SEDAR at

The TSXV has conditionally approved the listing of the New Artek Shares to be issued pursuant to the Arrangement, subject to the Resulting Issuer fulfilling the requirements of the TSXV. The Resulting Issuer will be listed with Tier 1 status on the TSXV. Subject to all conditions precedent to the Arrangement being satisfied or waived by the appropriate party, the parties expect that the effective date (the "Effective Date") of completion of the Arrangement will be on or about January 14, 2010. The trading symbol of "RTK" has been reserved by the TSXV for the New Artek Shares. Trading of the New Artek Shares is expected to commence shortly following the Effective Date. Trading of the COSTA Shares will remain halted indefinitely. 

Artek is also pleased to announce that it has closed its bought deal private placement of 319,000 common shares on a "flow-through" basis at a price of $22.00 per share for total gross proceeds to Artek of approximately $7 million. The financing, which was oversubscribed, was completed through an underwriting syndicate led by National Bank Financial Inc., and including Peters & Co. Limited, Haywood Securities Inc. and Cormark Securities Inc. Gross proceeds from the private placement will be used to fund Artek's ongoing exploration activities eligible for Canadian exploration expenses which will be renounced in favour of the subscribers effective on or before December 31, 2009. 

Cautionary Statements

Completion of the Arrangement is subject to a number of conditions, including TSX Venture Exchange acceptance and shareholder approvals. The Arrangement cannot close until the required shareholder approvals are obtained. There can be no assurance that the Arrangement will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular, any information released or received with respect to the Arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of either COSTA Energy Inc. or Artek Exploration Ltd. should be considered highly speculative.

Certain statements contained in this press release constitute forward-looking statements, including, without limitation, the anticipated completion of the Arrangement, receipt of all required approvals thereto and the timing thereof. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the party's control including the impact of general economic conditions, satisfaction of conditions to completion of the Arrangement, inability to meet or continue to meet listing requirements, the inability to obtain required consents, permits or approvals, including, without limitation, shareholder and court approval of the Arrangement and failure to realize the anticipated benefits of the Arrangement and the risk that actual results will vary from the results forecasted and such variations may be material. 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. There is no assurance that the necessary approvals for completion of the Arrangement will be obtained or that some other condition to the closing of the Arrangement will not be satisfied. Even if such conditions are satisfied, there is risk that closing of the Arrangement could be delayed and may not meet the timelines planned. 

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, COSTA and Artek disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Additionally, COSTA and Artek undertake no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. 

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

  • COSTA Energy Inc.
    David Campbell
    President and Chief Executive Officer
    (403) 242-5676
    Artek Exploration Ltd.
    Darryl Metcalfe
    President and Chief Executive Officer
    (403) 296-4799
    Artek Exploration Ltd.
    Darcy Anderson
    Vice President Finance and Chief Financial Officer
    (403) 296-4775