Antler Hill Oil & Gas Ltd.
TSX VENTURE : AHO.H

February 18, 2014 13:15 ET

Antler Hill Announces Qualifying Transaction

CALGARY, ALBERTA--(Marketwired - Feb. 18, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Antler Hill Oil & Gas Ltd. (the "Corporation" or "Antler Hill") (TSX VENTURE:AHO.H), a capital pool company listed on the NEX, announces it has executed a purchase and sale agreement ("P&SA") dated February 12, 2014 regarding a proposed transaction (the "Transaction") with Silver Peak Industries Ltd. ("Vendor"), a privately held company incorporated under the Business Corporations Act (Alberta) and controlled by Mr. Dwayne Tyrkalo, President of Silver Peak Industries Ltd., whereby the Corporation has agreed to acquire certain gas reserves, lands, leases and miscellaneous interests held by the Vendor (the "Assets"). It is intended that the Transaction will constitute the Corporation's Qualifying Transaction for the purposes of Policy 2.4 of the TSX Venture Exchange Inc. ("Exchange"). Subject to any regulatory, shareholder, director or other approvals that may be required, the completion of satisfactory due diligence by the Corporation and other conditions contained in the P&SA, it is anticipated that the Corporation will be classified as a Tier 2 Industrial issuer. The transaction is arm's length and is not expected to result in a change of control.

The Transaction

The Transaction includes the purchase of a 100% working interest in petroleum and natural gas reserves owned by the Vendor underlying Section 10-13-069-20-W5, located southeast of Valleyview, Alberta, and also includes a suspended well ("Well") on the subject section and a pipeline. Management estimates that the Well has internally proved reserves of 1.2 Bcf and proved plus probable reserves of 1.3 Bcf. After the closing of the Transaction, Mr. Dwayne Tyrkalo will be appointed Vice President, Chief Operating Officer and a director of the Corporation.

The resulting issuer intends to use production of natural gas from the Well to generate and sell electricity into the Alberta electricity power grid.

Pursuant to the P&SA and subject to any adjustments therein, the Corporation will acquire the Assets for an aggregate purchase price of $700,000, which shall be payable as follows:

  1. $150,000 upon closing of the Transaction.
  1. $200,000 via the issuance to the Vendor upon closing of the Transaction of 2,000,000 common shares of the Corporation at a deemed issue price of $0.10 per common share.
  1. $350,000 in the form of a gross overriding royalty on the monthly sales revenue generated from the sale of electricity generated from the production of natural gas from the Well, to a maximum of $50,000 per year and a cumulative total of $350,000.

The Corporation's broader objective, over the medium to long term, after completion of the Transaction, is to complete multiple acquisitions of shut-in natural gas reserves, installation of power generators, utilizing the production from gas reserves as fuel to generate electricity, and selling the generated electricity into the Alberta power grid. The Transaction is the first project by which the Corporation will install a two megawatt (2MW) generator and use natural gas production from the Well to drive the generator and sell the produced electricity into the Alberta power grid at the prevailing Alberta pool price. The Corporation is evaluating a number of similar opportunities to generate and sell electricity.

Proposed Offering

Prior to the closing of the Transaction, the Corporation expects to complete a non-brokered private placement financing for minimum gross proceeds of $1,200,000 (the "Offering"). The Offering will consist of the issuance of a minimum of 12,000,000 units of the Corporation ("Units"), at an issue price of $0.10 per Unit. Each Unit will consist of one common share in the capital of the Corporation and one-half common share purchase warrant, with each whole warrant entitling the holder thereof to purchase, for a period of 24 months from the date of issuance, one additional common share of the Corporation at a price of $0.20 per share.

The proceeds from the Offering will be used for funding the cash portion of the Transaction, funding the costs of acquiring and installing a generator to produce electricity, funding the evaluation of future projects, and for general working capital requirements. Additional amounts have been allocated for expenses related to the completion of the Transaction and the Offering. Any securities issued pursuant to the Offering shall be subject to applicable statutory hold periods. After giving effect to the closing of the Transaction and after giving effect to the Offering, the Corporation expects to have approximately 25,000,000 Common Shares outstanding. The Corporation will pay finder's fees in accordance with Exchange policies.

Insiders and Board of Directors of the Resulting Issuer

The current management and directors of the Corporation will remain following the completion of the Transaction and one additional director and officer will be appointed. The following is a description of the proposed directors and officers of the Resulting Issuer.

Victor Luhowy - Priddis, Alberta - President and Director of the Corporation

Mr. Luhowy has over 40 years of experience in the petroleum industry. He graduated from the University of Alberta with a B.Sc. in Engineering in 1971 and obtained an MBA from the University of Calgary in 1992. Most recently he has been President and Chief Executive Officer of BelAir Petroleum Management Ltd. (2011-Present) and President and Chief Executive Officer of Mystique Energy Inc. (2004-2009).

Mr. Luhowy is also currently a Director of the Corporation as well as a Director of Black Pearl Resources Inc. and a Director of the Canadian Petroleum Hall of Fame Society. Mr. Luhowy is also the former President Chief Executive Officer of Mystique Energy Inc.

Ken MacRitchie - Invermere, British Columbia - Chief Financial Officer and Director of the Corporation

Mr. MacRitchie has over 30 years of wide ranging experience as a leader and decision maker in oil & gas, real estate and the financial industries. Mr. MacRitchie is a graduate of York University, Toronto, Ontario with a Bachelor of Arts (Honors) (1973) and holds an MBA from Dalhousie University, Halifax, Nova Scotia (1979). Most recently,
Mr. MacRitchie consulted as the Vice President, Finance and CFO for Glen Park Management Corporation, a private real estate development company in Fernie, British Columbia. Prior to that, Mr. MacRitchie was Vice President, Finance and CFO for a private oil & gas company, Columbus Exploration Ltd. (2003-2004), Vice President, Finance and CFO for a public oil & gas company, BelAir Energy Corporation (1996-2003) and President and consultant of Wildwood Energy Inc. (2004-Present).

Harris Dvorkin - Calgary, Alberta - Corporate Secretary and Director of the Corporation

Mr. Dvorkin founded and currently manages a number of private companies such as Ranchmans's Cookhouse and Dancehall Inc. He is also President and CEO of Ranchman's Hospitality Group Inc. which serves as the operating entity for a number of companies including Ranchman's Classic Catering Inc., Ranchman's Overland Express Inc., Ranchmans's Rodeo Stock Company Inc., Am-Can International Talent Inc. and Ranchman's Renegades Inc.

Dwayne Tyrkalo, Red Deer, Alberta - Proposed Vice President, COO and Director of the Corporation

Dwayne Tyrkalo is the President and Operations Manager of Silver Peak Industries Ltd. Prior to this, he was President and CEO of Sunridge Energy Corp. Mr. Tyrkalo has 32 years of oil & gas industry experience, with 27 years in a management capacity. He graduated from Southern Alberta Institute of Technology, Calgary, Alberta. Mr. Tyrkalo has specialized in oil and gas operations and management throughout North America with extensive experience in Alberta.

Sponsorship of Qualifying Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Corporation intends to apply for an exemption from the sponsorship requirements. There is no assurance that the Corporation will ultimately obtain an exemption from sponsorship.

Reinstatement to Trading

The common shares of the Corporation will remain halted pending receipt by the Exchange of certain required materials from the Corporation, including a business plan, and until the Corporation engages a sponsor or a sponsorship exemption is granted. The Corporation will issue a further press release when further updates on these items are available.

Additional Information and Description of Significant Conditions to Closing

The 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.

A Filing Statement in respect of the Transaction will be prepared and filed in accordance with Policy 2.4 of the Exchange on SEDAR at www.sedar.com no less than 7 business days prior to the closing of the proposed Transaction. A press release will be issued once the Filing Statement has been filed as required pursuant to Exchange policies.

Completion of the Transaction is subject to a number of conditions including, but not limited to, the closing of the Offering, the satisfaction of the Corporation and of the Vendor in respect of certain due diligence investigations to be undertaken by each party, closing conditions customary to transactions of the nature of the Transaction, Exchange acceptance and, if required by Exchange policies, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained and there can be no assurance that the Transaction will be completed as proposed or at all. The Corporation intends to obtain any requisite shareholder approval by written consent, and shall provide a copy of any applicable documentation with the written consent.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction 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.

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 press release.

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.

Cautionary and Forward-Looking Statements

This news release contains forwardlooking statements and forwardlooking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forwardlooking statements or information. Forwardlooking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.

More particularly and without limitation, this news release contains forwardlooking statements and information concerning the expected results of the Transaction; the Corporation's petroleum and natural gas production and reserves with respect to the assets owned by the Vendor; anticipated closing dates of the Transaction; the closing of the Offering and the anticipated timing thereof and the expected use of proceeds from the Offering. The forwardlooking statements and information are based on certain key expectations and assumptions made by management of the Corporation, including expectations and assumptions concerning well production rates and reserve volumes in respect of the assets owned by the Vendor; project development and overall business strategy. Although management of the Corporation believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forwardlooking statements and information since no assurance can be given that they will prove to be correct.

The forwardlooking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forwardlooking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the TSX Venture Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Contact Information

  • Antler Hill Oil & Gas Ltd.
    Vic Luhowy
    Interim President & CEO
    (403) 860-4225
    vic@davincibb.net