Battleford Capital Inc.

November 01, 2005 17:59 ET

Battleford Capital Inc. Announces Reorganization and Private Placement

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2005) - Battleford Capital Inc. (TSX VENTURE:BAT.P) ("Battleford" or the "Corporation") is pleased to announce that substantial progress toward the completion of its previously announced Qualifying Transaction (see press release of August 26, 2005) with Captain Energy Inc. ("Captain") has been made and, subject to conditional approval of the TSX Venture Exchange (the "Exchange"), expects to close the Qualifying Transaction by or near the end of November 2005.

The Corporation has entered into a letter agreement (the "Agreement") dated October 11, 2005 with Peter Boswell ("Boswell") which provides for the reorganization of the Board of Directors and management of the Corporation (the "Reorganization") and private placement financing. The Corporation is a capital pool company and intends for the proposed acquisition of Captain, the Reorganization and private placement financing to be the qualifying transaction of the Corporation as such term is defined by the policies of the Exchange.


The Corporation and Boswell have agreed to the Reorganization and for Boswell to arrange of the private placement financing, which when combined with the acquisition of Captain will result in a new, well financed oil and natural gas company with proven management.

Battleford and Captain have entered into an Amalgamation Agreement dated September 29, 2005 (the "Agreement"), which provides that the business combination of Battleford and Captain will be conducted by amalgamating Battleford and Captain (the "Amalgamation"). Pursuant to the Agreement, the shareholders of Battleford and Captain will exchange their common shares for common shares of a newly amalgamated corporation to be called "Sahara Energy Ltd." ("Amalco"), or such other name as approved by shareholders of Battleford and Captain and the TSX Venture Exchange ("Exchange"). The Agreement sets out the proposed terms of the transaction between Battleford and Captain, which is intended to qualify as the "qualifying transaction" for Battleford in accordance with the policies of the Exchange. Battleford and Captain have agreed that: (a) holders of common shares of Battleford will receive one (1) common share of Amalco in exchange for one (1) common share of Battleford held; and (b) holders of common shares of Captain will receive one (1) common share of Amalco for every one (1) Captain common shares held.

Amalco intends to adopt a stock option plan permitting the granting of incentive stock options up to 20% of the issued and outstanding common shares of Amalco of which 390,000 stock options will be exchanged for outstanding Battleford stock options (issued to certain Battleford directors and officers) (the "Battleford Options"), as consideration for the Battleford Options being cancelled. All of the options to be issued by Amalco will have an exercise price equal to the lowest available price, subject to regulatory approval.


Sponsorship of a qualifying transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies. The Corporation has applied for a wavier from the sponsorship requirements on the basis that Amalco will not a foreign issuer, the proposed directors and officers meet the higher standard of the Exchange and Amalco will meet the Tier 2 Minimum Listing Requirements for Oil and Gas Issuers. However, there is no assurance that the Corporation will obtain this exemption.

Insiders and Board of Directors of Battleford and Resulting Issuer

Mark Wilson has resigned as a Director and officer of the Corporation and Kerry Lyons and Curtis R. Stewart have resigned as Directors of the Corporation. Effective October 11, 2005 and continuing upon completion of the proposed acquisition of Captain and the Reorganization, Messrs. Peter Boswell, Michael Williamson, Michael S. Vandale, William Petrie and Ross O. Drysdale comprise the Corporation's board of directors. The officers of the Corporation are Peter Boswell as President and Chief Executive Officer, Michael Williamson as Vice-President, Operations and Donald B. Edwards as Corporate Secretary.

The following is a summary of the principal occupations for the last five years of the proposed directors, officers and promoters of the Corporation:

Peter Boswell - President, CEO, Director and Promoter

Peter Boswell has twenty-six years of oil and gas industry experience. He was a founder and Vice President of Crozet Exploration Ltd., from 1980 to 1987. He was Land Manager for Crozet Oil & Gas Ltd., from 1987 to 1989 and Land Manager of Hardy Oil & Gas Canada from 1989 to 1991. From 1991 to 1996, he was President of Stateside Oil Corporation, when it was sold. (public VSE) Mr. Boswell is founder and owner of Brolandar Holdings Ltd. a private oil and gas company from 1996 to 2005. From March 2001 to November 2001 he was Vice President, Land for Innovative Energy Ltd (when it was sold). From December 2003 to August 2005 he was a founder, Director and Vice President of Wave Energy Ltd., where he played a vital role in the creation and development of Wave's large asset base. Mr Boswell remains a major shareholder of Wave. He has been a member of Canadian Association of Petroleum Landmen since 1982. In 1979 Mr. Boswell graduated from the University of Washington with a BA in Economics.

Michael Williamson - Vice-President, Operations, and Director

Michael Williamson is the founder and President of Momentum Energy Corp. since 1993 and is a professional drilling/completions & production engineer with over 17 years experience. Throughout his tenure in the industry from 1988 he has provided his expertise in acquisitions and evaluations on a consulting basis. Prior to consulting Mr. Williamson held the Drilling and Completions manager position for Harbour Petroleum. In recent years of consulting he has assisted in the growth of such companies as Penn-West Petroleum, Gibraltar Exploration and E3 Energy. Mr. Williamson graduated from the University of Alberta in 1988 with a Bachelors degree in Petroleum Engineering. Following graduation he held various development/exploitation engineering positions at Dome Petroleum, Canadian Superior, Mobil Oil and Canadian Fracmaster, He is a member of APEGGA.

Michael S. Vandale - Director

A veteran of the oil industry, Michael Vandale has had a long list of successful oil and gas ventures. Mr. Vandale is the Chairman, President, Chief Executive Officer and a director of Arsenal Energy Inc., a public energy company listed on the Toronto Stock Exchange. Mr. Vandale was President of Sundance Resources Inc., which was listed on the TSX Venture Exchange and was a director of its successor company, True Energy Inc. listed on the Toronto Stock Exchange until the fall of 2002 when he started Battleford Energy Inc. From 1997 to 1999, Mr. Vandale was a director and major shareholder of Mutual Fund Direct Inc. until it was sold to Altamira Investment Services Inc. From 1992 to 1996, Mr. Vandale was President of Midwestern Energy Company Ltd. Mr. Vandale has more than 20 years experience in upstream oil and gas exploration and midstream operations in Canada, the United States and South America.

William (Bill) Petrie - Director

Mr. Petrie is a petroleum geologist with more than 30 years experience. He is currently the President of Marengo Petroleum Corp., (1979-2005), a private oil and gas company. Most recently, he was President of Montego Exploration Ltd., a private oil and gas company that was recently sold. Prior thereto, he was President of Marengo Exploration Ltd., (public, ASE, 1997-2001), and prior to that, was President of Stockmen Oil and Gas Ltd., (public, ASE, 1984-1989), and President of Torridon Resources Ltd., (private, 1980-1984). Mr. Petrie began his career with Mobil Oil Canada (1973-1977).

Mr. Petrie was a founding director of Peyto Development & Exploration Corp., (public, TSX), from 1997 through 2001; and is currently a director of Global Energy Services Ltd., (public, TSX), which provides communications services to the oil and gas industry in general, and down-hole pumping solutions, in particular to the emerging CBM industry. Mr. Petrie has spent nearly his entire career with junior oil and gas companies, generating, evaluating, and financing oil and gas exploration and exploitation drilling opportunities and has a strong background in all aspects of the junior sector.

Ross O. Drysdale - Director

Ross O. Drysdale is a lawyer and counsel to the law firm of Burstall Winger LLP in Calgary, Alberta. Mr. Drysdale has over thirty years of experience in the legal profession and specializes in corporate and business law with a particular focus on public companies. Mr. Drysdale was admitted to the New Brunswick bar in 1973 and the Alberta bar in 1978. Prior to moving to private practice in 1985, he spent over eight years working as legal counsel for two major oil and gas companies in Calgary, followed by seventeen years with McCarthy Tetrault LLP, a major Canadian law firm, of which Mr. Drysdale was a partner for 12 years and two and one half years with Baker & McKenzie LLP in Calgary, Alberta. Mr. Drysdale is a director and officer of a number of private and public companies.

Donald B. Edwards - Corporate Secretary

Donald B. Edwards is a partner with the law firm of Borden Ladner Gervais LLP in Calgary, Alberta and practices in the areas of securities, corporate finance, commercial transactions, natural resources and mergers and acquisitions. Mr. Edwards practices in the area of securities, corporate finance and venture capital matters and has acted for a broad range of domestic and foreign issuers, investment banks and securities dealers, with a particular emphasis in venture capital and mergers and acquisitions, both domestic and cross border transactions. Mr. Edwards is a member of the Law Society of Alberta and the Canadian Bar Association.

Concurrent Financing

Concurrent with the proposed acquisition of Captain, the Corporation intends to complete a non-brokered financing (the "Financing") of up to 6,000,000 flow through units ("Units") at an subscription price of $0.50 per Unit issued on a private placement basis for gross proceeds of up to $3,000,000. Each Unit of the Corporation shall consist of one (1) flow through common share ("Common Share") in the capital stock of the Corporation, and one-half of one (0.5) share purchase warrant ("Warrant"). Every one (1) whole Warrant shall entitle the holder to purchase one (1) additional flow through Common Share of the Corporation at a purchase price of $0.75 per Common Share exercisable on or before six (6) months from the initial closing date. The net proceeds of the Financing will be used to fund development of the Captain properties and incur and renounce qualifying expenditures to subscribers.

Description of Significant Conditions to Closing

Completion of the proposed acquisition and Financing are subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the proposed acquisition and Financing cannot close until the required shareholder approval is obtained. In addition, other conditions include all other necessary regulatory, court and third party approvals and authorizations, the completion of a definitive agreement and the completion of due diligence. There can be no assurance that the proposed acquisition or Financing will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular 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.

In accordance with Exchange policy, the Corporation's shares are currently halted from trading.

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.

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