Valverde Capital Corp.
TSX VENTURE : VLV.P

November 09, 2007 13:03 ET

Valverde Capital Corp. Announces Proposed Qualifying Transaction; Acquisition of Americas Petrogas Inc.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 9, 2007) - Valverde Capital Corp. (TSX VENTURE:VLV.P) (the "Company") reports that it has negotiated the general terms of a share exchange agreement (the "Agreement") to acquire all the issued and outstanding shares of Americas Petrogas Inc. ("API") from the shareholders thereof (the "Transaction") to complete a going public transaction by a reverse take over. API is a private Alberta company, with head offices in Calgary, focused on the acquisition, exploration and development of oil and gas properties in Argentina. The acquisition of API is intended to be the Company's Qualifying Transaction ("QT") under TSX Venture Exchange ("the "Exchange") Policy 2.4.

Under the terms of the Agreement, the Board of Directors representing the shareholders of API (the "Vendors") have agreed that the Company will, subject to the adjustment discussed below, acquire all of the issued and outstanding shares of API in consideration of the Company issuing to the Vendors 67,601,640 of its post consolidated common shares (the "Payment Shares"). In addition the Company will issue to the holders of 24,305,450 full share purchase warrants, 1,533,272 broker's warrants and 6,760,000 stock options of API (collectively the "API Share Rights") 24,305,450 share purchase warrants, 1,533,272 broker's warrants and 6,760,000 stock options of the Company entitling the holders upon exercise thereof to acquire one post consolidated common share of the Company on the same terms as each of the API Share Rights.

API is currently negotiating a brokered private placement which financing is anticipated to close prior to the close of this Transaction. There are currently no agreements in place for such financings and therefore the terms and conditions have not been determined but in the event such financing does close the consideration payable by the Company will be adjusted accordingly.

The share purchase warrants and stock options of the Company will be allocated to the current holders of stock options and share purchase warrants of API in proportion to their holdings.

Certain of the Payment Shares and share purchase warrants of the Company will be subject to such escrow requirements as may be imposed by the Exchange and will be subject to the hold period imposed by the Securities Act (British Columbia).

The Agreement was negotiated at arm's length.

The Transaction may be effected by way of share exchange, amalgamation, merger, plan of arrangement or such other means as the Company, API and their respective counsel agree; with a view to ensuring that the Payment Shares and Payment Warrants are not subject to resale restrictions, minimizing tax liability of the parties and the costs of the Transaction.

About API

API is a private Alberta company focused on the acquisition, exploration and development of oil and gas properties in Latin America. Through its wholly owned Argentinean subsidiary, API has, through various joint venture agreements, acquired varying working interests, ranging from 40% to 75% in a number of concessions totalling approximately 1,367,543 acres in Argentina. National Instrument 51-101 reports by Chapman Petroleum Engineering Ltd. of Calgary, Alberta have or are currently being completed on API's material blocks and will be filed on SEDAR upon closing of the Transaction (the "Closing").

Terms of the Agreement

The purchase and sale of API by the Company is subject to, among other things, the following conditions precedent:

(1) the change of corporate name of the Company to Americas Petrogas Inc. or such other name acceptable to API, the Exchange and the British Columbia Registrar of Companies;

(2) the completion of due diligence, to the satisfaction of the Company, with respect to API which due diligence must be completed no later than November 30, 2007;

(3) the completion of due diligence, to the satisfaction of the Vendors, with respect to the Company which due diligence must be completed no later than November 30, 2007;

(4) the execution and delivery of formal transaction documentation acceptable to the Company and API;

(5) the change of domicile of the Company from the Province of British Columbia to Alberta;

(6) the tendering of resignations at Closing of all of the Company's current directors and officers; and the appointment of API's replacement representatives, these being the current directors and officers of API, to the Company's board of directors and the appointment of replacement officers;

(7) if necessary, the passing of resolutions by the shareholders of the Company approving the transactions contemplated hereby;

(8) the consolidation of the Company's issued and outstanding share capital on the basis of one new share for every two outstanding shares; and

(9) receipt of written notice from the Exchange that it has accepted for filing all material amounting to a QT.

Upon satisfactory completion of legal and technical due diligence, the Company will enter into a formal purchase agreement with API and the Vendors at which time more particulars of the Transaction will be disclosed.

Change in Management

It is proposed that Messrs. Carlos Lau, Barclay Hambrook, Dr. Easton Wren, Ross McCutcheon, Gordon Neal and Douglas Yee will be appointed to the Company's Board of Directors in place of the current board. The following provides information regarding the members of the Company's proposed Board of Directors and new executives:

Barclay W. Hambrook, B.Sc/.P.Eng. MBA - Proposed Director, President & CEO

Mr. Hambrook has over 30 years of domestic and international oil and gas experience, in the areas of corporate finance, strategic planning, joint ventures, negotiations, management and oil and gas investing. He has made acquisitions, managed and divested several hundred million dollars of oil and gas assets. He negotiated the acquisition of the control block of shares in Penn West Petroleum Ltd., a Toronto Stock Exchange listed oil and gas company. Mr. Hambrook became Chairman/President/CEO and nominated and elected a new Board of Directors and implemented the initial restructuring and a new drilling program. He directed a private equity firm that has directly invested in exploration and development drilling, gas processing facilities and gas transportation. He acted as financial advisor to a large Asian Investment Trust in their first, oil and gas investment in Chauvco Resources Ltd., which included an extensive seismic and drilling program. He is member of the Association of Professional Engineers, Geologists and Geophysicists of Alberta (APEGGA). He received his B.Sc. (Eng.) from the University of Calgary and his MBA from the University of Toronto.

Carlos Lau - Proposed Director

Mr. Lau is an international Businessman, originating from Peru, South America and has resided in Canada for over 30 years. He has extensive business dealings throughout North & South America, as well as Europe and Asia. Mr. Lau's experienced oil and gas investor group have made successful investments in various oil and gas projects for over a decade. Mr. Lau has experience investing in exploration & development drilling and in rehabilitation of mature fields. He owned several natural gas processing facilities, which gathered and processed gas for Amoco, BP and other oil companies. He has negotiated numerous natural resource acquisitions & concessions in South America. Mr. Lau has 30 years experience in investment, acquisitions & corporate finance oil and gas, telecommunications, manufacturing, packaging & processing, real estate development and management and international trade. He was a Member of several Team Canada Trade Missions which included the Prime Minister. He is an affiliated member of the Edmonton and Calgary Petroleum Club. He is completely fluent in Spanish and English.

Dr. Easton Wren B.Sc., Ph.D. - Proposed Director

Dr. Wren is well-known in Canada and recognized internationally as an innovative geophysicist who is a leader in the application of new seismic techniques and who has an aptitude for conveying concepts. With over 30 years experience he is current in state-of-the-art seismic interpretation, processing and modeling methods, has lectured at many Canadian and U.S. universities and has presented numerous petroleum industry-oriented courses to a wide variety of audiences. Dr. Wren has a B.Sc. (Hons) Geology and Ph.D Geophysics from the University of Glasgow, Scotland.

Ross McCutcheon B.Sc., LLB - Proposed Director

Mr. McCutcheon has practised law in Vancouver, B.C. since 1976 and is the managing partner of Maitland & Company, Barristers and Solicitors. Throughout his career his practise has emphasized international business matters. Mr. McCutcheon has a B.Sc. and LLB from the University of British Columbia.

Douglas Yee B.Comm., C.A. - Proposed Director

Mr. Yee has been a full-time instructor at the British Columbia Institute of Technology since January 2003 where he has taught business courses in various subjects, including accounting and auditing. He has periodically taught, as a session instructor, classes in accounting and auditing at the University of British Columbia since May 2004. He was the CFO and a director of PC-Ephone, Inc. (200-2002), Director of Finance for Conor Pacific Environmental Technologies Inc. (1997-2000) and Corporate Controller of Triton Mining Corporation (1996-1997). He also held various corporate finance positions with Royal Oak Mines Inc. (1992-1996).

Mr. Yee is a Chartered Accountant and has a B.Comm. from the University of British Columbia.

Gordon Neal B.Sc. -Proposed Director

Gordon Neal has more than twenty years experience Corporate Finance and Investor Relations. He has helped public companies raise more than $4 billion in funding over his career. He is the president of Neal & Company Consultants and is currently the Vice President of Corporate Development for MAG Silver Corp. He is the founder of Neal McInerney Investor Relations that grew to be the second largest investor relations firm in Canada. Mr. Neal has B.Sc. in Biochemistry from Dalhousie University

In accordance with Exchange policy, the Company's shares are currently halted from trading. Trading will resume upon completion of the QT.

ON BEHALF OF THE BOARD

David Patterson, Chief Executive Officer

Completion of this transaction is subject to a number of conditions, including but not limited to Exchange acceptance. The transaction cannot close until the required Exchange approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular expected to be prepared in connection with the 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 Valverde Capital Corp. should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

Contact Information

  • Valverde Capital Corp.
    David Patterson
    Chief Executive Officer
    (604) 684-6535
    (604) 602-9311 (FAX)