Avatar Energy Ltd.
TSX VENTURE : AVG.P

November 19, 2010 12:00 ET

Avatar Energy Ltd. (Formerly Reviso Energy Ltd.) Announces Closing of Qualifying Transaction and Financing

CALGARY, ALBERTA--(Marketwire - Nov. 19, 2010) - Avatar Energy Ltd. ("Avatar" or the "Corporation") (TSX VENTURE:AVG.P), formerly Reviso Energy Ltd., is pleased to announce that it has completed its previously announced proposed qualifying transaction, subject to final approval of the TSX Venture Exchange (the "Exchange"), pursuant to which Rustler Petroleum Inc. ("Rustler") and 1529256 Alberta Ltd., a wholly-owned subsidiary of the Corporation, amalgamated pursuant to the provisions of the Business Corporations Act (Alberta) (the "ABCA") (the "Amalgamation"). Subsequent to the Amalgamation, the Corporation changed its name to "Avatar Energy Ltd." and completed a short-form amalgamation with the corporation continuing from the Amalgamation pursuant to the ABCA (which, together with the Amalgamation, is referred to herein as the "Transaction").

In connection with the Transaction, the Corporation completed a private placement of 3,508,595 common shares ("Common Shares") issued on a flow-through basis ("Flow-Through Shares") at a price of $0.57 per Flow-Through Share for gross proceeds of approximately $2 million and 4,992,305 Common Shares at a price of $0.50 per Common Share for gross proceeds of approximately $2.5 million (the "Private Placement"). Raymond James Ltd. led a syndicate of agents, including National Bank Financial Inc., Macquarie Capital Markets Canada Ltd. and Emerging Equities Inc. (the "Agents") to sell 3,103,193 Flow-Through Shares and 2,481,000 Common Shares under the Private Placement. The Agents received 7% cash commission on the portion of the Private Placement they sold. The net proceeds from the Private Placement of $4,285,399.25 will be used to reduce bank debt, to fund operations and for general administrative purposes. All Common Shares issued in connection with the Private Placement are subject to applicable resale restrictions. As part of the Transaction, management of Rustler agreed to waive all change of control entitlements it would have otherwise received.

The Corporation has 18,551,954 common shares issued and outstanding following the completion of the Transaction and the Private Placement.

Avatar is an emerging junior oil and gas company with production in Alberta. The Corporation's area of focus is on operated properties in the Pembina Cardium light oil play that have long life high quality reserves with repeatable drilling upside. Avatar has 4.5 gross sections of operated land in the Pembina Cardium region and plans to drill its first horizontal well for Cardium light oil prior to year end. It has also identified another 15 potential follow up locations.

Trading in the Common Shares of the Corporation has been halted on the Exchange since March 30, 2010. It is expected that the Corporation will commence trading under its new name "Avatar Energy Ltd." and its existing symbol upon final acceptance of the Transaction and the Private Placement by the Exchange.

For further information with respect to the Corporation, Rustler and the Transaction, including the board and management of the Corporation following completion of the Transaction, please see the Corporation's management proxy circular dated August 26, 2010 as amended September 2, 2010 (the "Information Circular") and as further modified by the form of Shareholder Consent available at www.sedar.com or contact the person listed below. Please refer to the press releases of the Corporation issued on June 9, 2010, October 1, 2010 and November 1, 2010 for previous announcements regarding the Transaction and the Private Placement.

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

Trading in the securities of a capital pool company should be considered highly speculative.

The securities of the Corporation being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

FORWARD LOOKING STATEMENTS

This press release contains forward looking statements. More particularly, this press release contains statements concerning the receipt of final approval of the Transaction by the Exchange and future drilling plans. Although the Corporation believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because the Corporation 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. The Common Shares will not begin trading until final approval from the Exchange is obtained. The forward looking statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligations 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.

The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction. 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

  • Avatar Energy Ltd.
    Alan D. Jack, P. Eng
    President & Chief Executive Officer
    (403) 517-8818
    (403) 517-8815 (FAX)
    or
    Avatar Energy Ltd.
    Lorie J Hynes, CA
    Chief Financial Officer
    (403) 517-8818
    (403) 517-8815 (FAX)