Triwood Capital Corp.
TSX VENTURE : TRD

March 24, 2010 09:00 ET

Triwood Capital Corp. Announces Financing and Letter of Intent for the Acquisition of Red Stag Resources Inc.

CALGARY, ALBERTA--(Marketwire - March 24, 2010) -

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Triwood Capital Corp. (the "Corporation") (TSX VENTURE:TRD) is pleased to announce that it has entered into a letter of intent dated March 17, 2010 (the "Letter of Intent") with Red Stag Resources Inc. ("RSR"), whereby the Corporation has agreed to acquire all of the issued and outstanding securities of RSR ("RSR Shares"), via the issuance of approximately 88,100,000 common shares or other securities convertible into common shares of the Corporation ("Triwood Shares"), such that RSR will become a wholly-owned subsidiary of the Corporation (the "Proposed Acquisition"). Triwood Shares will be issued on the basis of one (1) Triwood Share for every one (1) RSR Share.

The Corporation is incorporated under the provisions of the Business Corporations Act (Alberta) with its registered office in Calgary, Alberta. It is a capital pool company and intends for the Proposed Acquisition to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the TSX Venture Exchange (the "Exchange"). The Corporation is a "reporting issuer" within the meaning of the Securities Act (Alberta), Securities Act (British Columbia), Securities Act (Saskatchewan).

RSR is a private corporation incorporated under the provisions of the Canada Business Corporations Act with its registered office in Calgary, Alberta and its head office in Toronto, Ontario. RSR is engaged in the exploration and development of oil and gas interests located in Thailand. RSR is not a reporting issuer in any jurisdiction in Canada or the equivalent in the United States. The Qualifying Transaction will be carried out by parties dealing at arm's length to one another and therefore will not be considered to be a Non-Arm's Length Qualifying Transaction, as such term is defined under the policies of the Exchange.

It is expected that upon completion of the Qualifying Transaction, the Corporation will be classified as a Tier 2 oil and gas issuer under the policies of the Exchange and will be engaged in the exploration and development of prospective oil and gas properties.

Description of the Properties

RSR's assets consist of four (4) onshore petroleum exploration blocks in Thailand comprised of approximately three (3) million net acres (the "Properties"). The four (4) onshore petroleum blocks are Block L9/48, L17/48, L3/50 and L14/50. Blocks L9/48 and L17/48 are joint ventured with an Australian Stock Exchange listed issuer, with RSR holding a 50% joint venture interest. Block L3/50 and Block L14/50 are controlled 100% by RSR.

The Proposed Acquisition

Pursuant to the terms of the Letter of Intent, it is intended that the Corporation will acquire RSR pursuant to a reverse take-over transaction which will be effected by way of an amalgamation, arrangement, share exchange or other similar form of transaction.

There are currently 88,100,000 RSR Shares issued and outstanding. The Corporation currently has 3,000,000 Triwood Shares issued and outstanding and has granted options to acquire up to an additional 450,000 Triwood Shares. As consideration for their securities, each RSR shareholder will receive one (1) Triwood Share in exchange for each RSR Share that they own. The Triwood Shares to be issued to certain principals of RSR in connection with the Proposed Acquisition may be subject to the escrow requirements of the Exchange, if applicable.

Upon completion of the Proposed Acquisition and assuming completion of the Brokered Financing (as defined below), the Corporation will continue to conduct the business of RSR as currently carried on.

Insiders and Board of Directors of the Resulting Issuer

In connection with the completion of the Proposed Acquisition, it is intended that Kevin Blanchette will resign as President and Chief Executive Officer of the Corporation. Upon the resignation of Mr. Blanchette, David Little, currently Chief Executive Officer of RSR, will be appointed as Chief Executive Officer of the Corporation and Mr. Luc Desmarais, currently President of RSR, will be appointed President of the Corporation.

The following is a brief description of the background and experience of the proposed directors, officers and insiders of the Corporation upon completion of the Proposed Acquisition:

David Little - Proposed Chief Executive Officer and Director

Mr. Little is the founder of RSR. In 2002 he founded Avery Resources Inc. ("Avery") and by 2008 had built Avery into a TSX-listed oil and gas producer and explorer in both Australia and Canada with nearly one million net acres of prospective lands under exclusive license. For twenty years prior to founding Avery, Mr. Little worked with several national Canadian investment firms and was directly involved in the start-up and mezzanine financing of numerous public companies. Mr. Little earned his B.Sc. from the University of Western Ontario in 1972 and an MBA from York University in 12975. Mr. Little currently serves on the boards of several corporations and not-for profit organizations.

Luc Desmarais – Proposed President and Director

Mr. Desmarais has over 20 years of international business experience in Asia. As Managing Director of several Thai resource companies, he has ensured full compliance with relevant government regulations and has managed operations by dealing directly with geologists, drilling contractors, seismic companies and field personnel. Mr. Desmarais' experience in the oil and gas industry includes experience in the areas of permitting, exploration, drilling, completions and production. Mr. Desmarais earned an MBA from the University of Ottawa's executive program in 1996.

Kevin Blanchette – Proposed Director

Mr. Blanchette worked as a senior manager with the Solicitor General and Justice Division of the Government of Alberta from 1995 to 2004. Mr. Blanchette has served as Director (2004-2006), Chief Operating Officer (2004-2005), and President and Chief Executive Officer (2005-2006) of International Health Partners Inc., a publicly traded dental and medical practice management company listed on the Exchange. Mr. Blanchette is currently the managing partner of Evolve Capital Group Inc., a private investment corporation.

Paul Kroshko - Proposed Director

Kr. Kroshko is the President and Chief Executive Officer of TSX-listed PetroAmerica Oil Corp. ("PetroAmerica"), a Columbia-focused oil and gas explorer. Prior to Mr. Kroshko's involvement with PetroAmerica he was VP Exploration with Petrominerales in Colombia from May 2006 until May 2008. Prior thereto he was Latin America Exploration Manager for Petrobank since March 2005. During his tenure leading the exploration initiative, Petrominerales discovered several new fields including Corcel and Mapache. Petrominerales currently produces approximately 30,000 barrels of oil per day in Colombia. Mr. Kroshko has held various technical and managerial positions both domestic and international, including Indonesia, North Africa and South America.

Kevin Rooney - Proposed Director

Mr. Rooney is a partner at Heenan Blaikie LLP, practises in the area of corporate and securities law and has been involved in numerous offerings of equity securities, both by prospectus and private placement. He has also been involved in a number of corporate reorganizations and restructurings, take-over bids, acquisitions and dissident proxy solicitations. Mr. Rooney has accumulated experience in a wide variety of financing transactions for issuers in various industries, such as mining, financial services, biotechnology and medical devices, software development, gaming and alternative energy.

Proposed Brokered Financing

Prior to or concurrent with the closing of the Proposed Acquisition, the Corporation expects to complete a brokered financing in a minimum amount of $3,000,000 (the "Brokered Financing"). Any securities issued pursuant to the Brokered Financing may be subject to escrow and applicable statutory hold periods. The net proceeds of the Brokered Financing will be used by the Corporation to finance the exploration and development of prospective oil and gas properties.

Sponsorship of Qualifying Transaction

Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless an exemption from this requirement can be obtained in accordance with the policies of the Exchange. The Corporation has not yet retained a sponsor in connection with the Proposed Acquisition, and there is no assurance that an exemption from this requirement will be obtained.

Additional Information

Completion of the Proposed Acquisition is subject to a number of conditions including, but not limited to, the closing of the Brokered Financing, the satisfaction of the Corporation and of RSR in respect of certain due diligence investigations to be undertaken by each party, the completion of a definitive agreement setting forth the terms and conditions set out in the Letter of Intent, closing conditions customary to transactions of the nature of the Proposed Acquisition, Exchange acceptance and, if required by Exchange policies, majority of the minority shareholder approval. Where applicable, the Proposed Acquisition cannot close until the required shareholder approval is obtained and there can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

If and when a definitive agreement between Triwood and RSR is executed, in accordance with the policies of the Exchange, Triwood will issue a subsequent press release containing the details of the definitive agreement and additional terms of the Proposed Acquisition, including information relating to sponsorship, summary financial information in respect of RSR, reserves information relating to the properties of RSR and to the extent not contained in this press release, additional information with respect to the Brokered Financing and the proposed directors, officers, and insiders of the Corporation upon completion of the Proposed Acquisition.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Proposed Acquisition, any information released or received with respect to the Proposed Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Captus Partners LLP has acted as financial advisors to RSR in respect of this transaction.

Cautionary Statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Acquisition and associated transactions, including statements regarding the terms and conditions of the Proposed Acquisition and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the Proposed Acquisition and associated transactions, that the ultimate terms of the Proposed Acquisition and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Corporation, RSR, the Properties or their respective financial or operating results or (as applicable), their securities.

The TSX Venture Exchange, Inc. has in no way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Triwood Capital Corp.
    Kevin Blanchette
    President, Chief Executive Officer, and Secretary
    (403) 241-8477