Wild Stream Exploration Inc.
TSX VENTURE : WSX

November 25, 2009 16:49 ET

Wild Stream Exploration Inc. Announces Acquisitions- Garrington, Alberta

CALGARY, ALBERTA--(Marketwire - Nov. 25, 2009) - Wild Stream Exploration Inc. (TSX VENTURE:WSX) ("Wild Stream") is pleased to announce it has entered into an agreement to acquire a private company (the "Private Company Acquisition") as well as completed the acquisition of additional assets (the "Asset Acquisition"), all of which are primarily located in the Garrington region of Alberta (collectively, the "Acquisitions").

SUMMARY OF THE ACQUISITIONS

Through the Acquisitions, Wild Stream is acquiring approximately 16 net sections in the highly prospective Garrington area of Alberta. The Acquisitions provide Wild Stream with a significant position in the west central Alberta area. Total consideration for the Acquisitions consists of approximately $10 million in cash and the issuance of approximately 4.5 million common shares of Wild Stream ("Wild Stream Shares"). The properties are predominately operated with high working interests and contain key producing infrastructure.



The combined assets have the following characteristics

Current Production: 300 Boepd (65% light oil and NGL's)
Proved Plus Probable Reserves(i): 1.3 mmstb (70% light oil and NGL's)
Proved Plus Probable RLI: 12 years
Undeveloped Land: 35,000 net acres
Cardium Horizontal Drilling Locations: 23 gross, 17 net
Viking Horizontal Drilling Locations: 52 gross, 42 net

(i) Private Company Acquisition evaluated as at September 1, 2009 by Fekete
Associates Inc. and Martin & Brusset Associates and the Asset
Acquisition evaluated by AJM Petroleum Consultants Ltd.


ACQUISITION METRICS

Net of the 35,000 net acres of undeveloped land, valued at $6.6 million (based on internal estimates and the sale prices of recent land sales in the area), the key Acquisitions metrics are based on $80,000 per flowing barrel and $18.25 per proven plus probable Boe.

PRIVATE COMPANY ACQUISITION

Wild Stream has entered into an arrangement agreement dated November 24, 2009 (the "Arrangement Agreement") with Dorado Energy Inc. ("Dorado"), pursuant to which Wild Stream has agreed to acquire all of the outstanding common shares of Dorado by way of plan of arrangement under the Business Corporations Act (Alberta). Under the terms of the Arrangement Agreement, Wild Stream will issue 0.2 of a Wild Stream Share for each common share of Dorado, resulting in the issuance of an aggregate of approximately 4.5 million Wild Stream Shares. Wild Stream will also assume Dorado's existing net debt of approximately $6.7 million.

The Private Company Acquisition is subject to the approval of the shareholders of Dorado, the TSX Venture Exchange and the Court of Queen's Bench of Alberta. Certain Dorado shareholders, including certain members of the Board of Directors and officers of Dorado, representing approximately 50.5% percent of the outstanding Dorado Shares, have entered into lock-up agreements pursuant to which they have agreed to vote their shares in favor of the Private Company Acquisition, subject to certain exceptions. Dorado has agreed that it will not solicit or initiate discussions regarding any other business combination or sale of material assets. Dorado has also granted Wild Stream a right to match competing unsolicited proposals. The Arrangement Agreement provides for a $1.4 million termination fee payable to Wild Stream by Dorado in certain circumstances if the Private Company Acquisition is not completed.

The boards of directors of both Wild Stream and Dorado have both unanimously approved the Private Company Acquisition. Additionally, Dorado's Board of Directors has concluded that the Private Company Acquisition is in the best interests of its shareholders, and has resolved to recommend that Dorado shareholders vote in favour of the Private Company Acquisition at a special meeting of shareholders scheduled for January 28, 2010. Closing is expected to occur immediately thereafter.

FINANCIAL ADVISORS

GMP Securities L.P. and Paradigm Capital Inc. acted as financial advisors to Wild Stream with respect to the Private Company Acquisition.

AGS Capital Corp. is acting as financial advisor to Dorado.

STRATEGIC RATIONALE

The Acquisitions continue Wild Stream's business strategy of acquiring significant positions on currently developing resource oil plays. The culmination of these acquisitions will see Wild Stream with in excess of 33,000 net acres in the Lower Shaunavon, Viking and Cardium resource oil plays.

The strategic entry into the third core resource oil play positions Wild Stream with an enviable oil drilling inventory that continues its definition as a premier high growth junior oil and gas producer. With the completion of the Acquisitions, Wild Stream will have a multi year drilling inventory of in excess of 200 light and medium gravity crude oil development locations of which 85% are located on the three key resource oil plays.

In Garrington, the results of industry peers are providing positive results that indicate that horizontal drilling and multi-stage fracture stimulation of the Cardium and Viking will result appreciable reserves growth in the area. Initial results from recent mutlti stage frac'd horizontals in the Garrington area are showing initial production rates in excess of 200 bbls/d.

Based on Wild Stream's estimates, the lands acquired with the Acquisitions have petroleum initially in place ("PIIP") of in excess of 185 mmstb with a current recovery factor of less than 2%(1). In capturing this opportunity it is Wild Stream's belief that it can unlock the resource potential through continued improvements in technology including the drilling of horizontal wells in addition to secondary recovery schemes such as waterfloods.

The Acquisitions result in significant increase to Wild Stream's production base. Pro-forma production for Wild Stream will be approximately 1,000 boepd of which 90% is light and medium crude oil. Pro-forma proved plus probable reserves will be approximately 5.3 mmstb and undeveloped land will be approximately 90,000 acres with approximately 33,000 acres of land on the three key resource oil plays. The Acquisitions are expected to be accretive to 2010 forecast cash flow and production per share. Upon close it is anticipated that Wild Stream will have approximately 30.6 million Wild Stream Shares outstanding and be in a surplus working capital position of approximately $7 million.

WARNING

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated dates for the closing of the disclosed transactions and the anticipated accretive impact of the transactions on Wild Stream, the potential exploration and development opportunities existing with respect to Wild Stream and the acquired assets, the potential results of wells drilled and Wild Stream's anticipated capital position.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Wild Stream, including: (i) with respect to the anticipated closing dates of the transactions, expectations and assumptions concerning timing of receipt of required shareholder, court and regulatory approvals and third party consents and the satisfaction of other conditions to the completion of the transactions and (ii) with respect to the remaining forward-looking statements, expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells, the successful application of technology and prevailing commodity prices. Although Wild Stream believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Wild Stream can give no assurance that they will prove to be correct.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the transactions, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Wild Stream's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and the name of Wild Stream's predecessor "Eagle Rock Exploration Ltd."

The forward-looking statements contained in this document are made as of the date hereof and Wild Stream undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

MEANING OF BOE

When used in this press release, boe means a barrel of oil equivalent on the basis of 1 boe to 6 thousand cubic feet of natural gas. Boepd means a barrel of oil equivalent per day.

Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

MEANING OF PIIP

PIIP is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered.

Discovered PIIP is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production.

Undiscovered PIIP is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered.

Investors should be cautioned that: (i) there is no certainty that any portion of the Undiscovered PIIP will be discovered and (ii) there is no certainty that any portion of Discovered PIIP will be economically viable or technically feasible to recover or produce. Accordingly, undue reliance should not be placed on PIIP as a measure of Wild Stream's prospects.

(1) There is no certainty that any portion of the undiscovered resource will be discovered. In addition, no recovery assessment has been conducted at this time and Wild Stream does not make any representation as to whether any of the PIIP is commercially recoverable.

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

  • Wild Stream Exploration Inc.
    Neil Roszell, P.Eng.
    President and CEO
    (403) 767-1250
    (403) 232-8083 (FAX)
    or
    Wild Stream Exploration Inc.
    Jerry Sapieha, CA
    Vice-President, Finance and CFO
    (403) 767-1265
    (403) 232-8083 (FAX)
    or
    Wild Stream Exploration Inc.
    Suite 710, 400-5th Ave SW
    Calgary, AB T2P 0L6