Spartan Exploration Ltd.

Spartan Exploration Ltd.
Aztek Energy Ltd.
TSX VENTURE : AZT.H

December 09, 2009 15:55 ET

Spartan Exploration Ltd. and Aztek Energy Ltd. Announce Bought Deal Financing and Strategic Cardium Farmin in Pembina Area

CALGARY, ALBERTA--(Marketwire - Dec. 9, 2009) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Spartan Exploration Ltd. ("Spartan"), a private oil and gas company with operations in Saskatchewan and Alberta, and Aztek Energy Ltd. ("Aztek") (TSX VENTURE:AZT.H) are pleased to announce that Aztek and Spartan have entered into an agreement, on a bought deal private placement basis, with a syndicate of underwriters co-led by GMP Securities L.P. and Clarus Securities Inc., and including CIBC World Markets Inc., Research Capital Corporation, Macquarie Capital Markets Canada Ltd., FirstEnergy Capital Corp. and Captus Partners Ltd. (collectively, the "Underwriters") for an offering of 59,000,000 subscription receipts ("Subscription Receipts") of Aztek at a price of $0.17 per Subscription Receipt (the "Offering"). In addition, Aztek has also granted the Underwriters an option (the "Over-Allotment Option"), exercisable up to 48 hours prior to the closing of the Offering, to purchase an additional 8,850,000 Subscription Receipts at a price of $0.17 per Subscription Receipt. If the Over-Allotment Option is exercised in full, the aggregate gross proceeds from the Offering will be approximately $11.5 million.

As previously announced, Spartan and Aztek have entered into an arrangement agreement (the "Arrangement Agreement") pursuant to which Spartan will acquire all of the issued and outstanding common shares ("Aztek Shares") of Aztek on the basis of 0.0805 of a common share of Spartan (a "Spartan Share") for each 1.0 Aztek Share by way of a plan of arrangement (the "Arrangement").

The gross proceeds of the Offering will be held in escrow pending the completion of the Arrangement. If the Arrangement is completed and certain other conditions are satisfied on or before February 1, 2010, the proceeds will be released to Aztek (or as otherwise directed by Aztek). If the Arrangement is not completed by February 1, 2010, the Arrangement Agreement is terminated at an earlier time or it is otherwise determined that the Arrangement will not be completed, holders of Subscription Receipts will receive a cash payment equal to the aggregate subscription price of the Subscription Receipts and any interest that was earned thereon during the term of the escrow.

Closing of the Offering is expected to occur on or about December 22, 2009 and is subject to customary conditions and regulatory approvals. The net proceeds of the Offering will be used by Spartan upon completion of the Arrangement to fund ongoing exploration and development activities and for general corporate purposes.

Provided that the Arrangement is completed on or before February 1, 2010 and certain other conditions have been satisfied, each Subscription Receipt will entitle the holder thereof to receive, without the payment of any additional consideration and without any further action on the part of the holder thereof, one Aztek Share immediately prior to the effective time of the Arrangement, which Aztek Shares shall be exchanged under the Arrangement for Spartan Shares on the basis of 0.0805 of a Spartan Share for each Aztek Share.

It is a condition to completion of the Arrangement that the Spartan Shares be listed on the facilities of a recognized Canadian stock exchange in conjunction therewith. In connection with the completion of the Arrangement, the Aztek Shares shall be delisted.

Completion of the Arrangement is also subject to receipt of the approval of 66 2/3% of the Aztek shareholders voting in person or by proxy at a meeting of the Aztek shareholders to be held to consider the Arrangement, as well as customary court, regulatory and exchange approvals. The information circular to be mailed to Aztek shareholders will contain detailed information in respect of the Arrangement, Spartan and Aztek.

Pembina Farm in Adds Cardium Drilling Inventory

Spartan is also pleased to announce that it has entered into a farm in agreement in the Pembina area of central Alberta. The farm in agreement provides Spartan with access to an additional 6.0 net sections of mineral rights that are prospective for horizontal development in the Cardium.

The farm in allows Spartan to augment its existing Cardium development program. With the addition of the farm in lands, Spartan now has access to 13.5 net sections of land in the Cardium area and an inventory of 57 net horizontal drilling locations targeting the Cardium. Any farm in lands earned by Spartan under the agreement will be at a 100% working interest. In certain cases the farmor has the right to elect to participate for up to a 20% working interest. Under the terms of the farm in agreement, Spartan has committed to drill one horizontal well targeting the Cardium formation and will thereafter have a rolling option on the remaining lands. Assuming Spartan exercises all of its options under the farm in agreement, Spartan would have to drill a total of 7 horizontal wells in order to earn all the lands under the agreement.

About Spartan

Spartan, a privately held corporation based in Calgary, Alberta, has been engaged in the business of acquiring crude oil and natural gas properties and exploring for, developing and producing oil and natural gas in western Canada since mid 2008. Upon completion of the Arrangement, Spartan will be uniquely positioned with a significant position in each of the three leading oil resource plays in western Canada, being the Bakken light oil resource play in southeast Saskatchewan, the Lower Shaunavon medium gravity oil resource play in southwest Saskatchewan and the Cardium light oil play in central Alberta.

About Aztek

Aztek Energy Ltd. is a junior oil and gas company formed to generate and develop its own prospects, acquire oil and gas properties and participate with joint venture partners in oil and gas exploration and development in the Western Canadian Sedimentary Basin. The Aztek Shares trade on the NEX board of the TSX Venture Exchange under the symbol AZT.H.

READER ADVISORY

Statements in this joint press release contain forward-looking information including, without limitation, timing and completion of the Arrangement and the Offering, estimated potential of the Bakken, Lower Shaunavon or Cardium resource plays, the listing of the Spartan Shares on a recognized Canadian stock exchange and ongoing corporate strategy, benefits of the Arrangement and the use of proceeds of the Offering. Readers are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Spartan and Aztek. These risks include, but are not limited to; the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses and access to capital. The risks outlined above should not be construed as exhaustive. The reader is cautioned not to place undue reliance on this forward-looking information. Neither Spartan or Aztek undertakes any obligation to update or revise any forward-looking statements except as expressly required by applicable securities laws.

Certain of the information contained in this joint press release assumes that Spartan has completed the Arrangement on the anticipated basis and times set forth herein. The Arrangement is subject to the receipt of the approval of the shareholders of Aztek, the approval of the Court of Queen's Bench for the province of Alberta as well as all other necessary regulatory approvals. The anticipated listing of the Spartan Shares on a recognized Canadian stock exchange is subject to the conditional approval of that stock exchange and Spartan satisfying the listing requirements and all other requirements of such exchange.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

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

  • Spartan Exploration Ltd.
    Richard F. McHardy
    President & CEO
    (403) 294-9196
    (403) 294-9126 (FAX)
    or
    Spartan Exploration Ltd.
    1000, 606 - 4th Street SW,
    Calgary, Alberta
    or
    Aztek Energy Ltd.
    Raymond J. Hodgkinson
    COO & Director
    (403) 662-2028
    (403) 299-9601 (FAX)
    or
    Aztek Energy Ltd.
    2800, 715 - 5th Avenue SW,
    Calgary, Alberta