Bayshore Petroleum Corp.
TSX VENTURE : BSH.P

March 08, 2007 18:44 ET

Bayshore Petroleum Corp. Announces Proposed Acquisition of Oil and Gas Operations as Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - March 8, 2007) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Bayshore Petroleum Corp. ("Bayshore" or the "Corporation") (TSX VENTURE:BSH.P), a capital pool company, under rules and policies of the TSX Venture Exchange Inc. (the "TSXV") has entered into an agreement dated March 8, 2007 (the "Letter Agreement") with WATT Energy Limited Partnership III ("WATT") (a limited partnership formed under the laws of the Province of Ontario), to acquire all of the outstanding shares of 1074532 Alberta Ltd. ("1074532") (the "Acquisition"). 1074532 is the owner of certain oil and gas producing assets and properties (the "Assets") and WATT is the sole shareholder of 1074532. Pursuant to the terms of the Letter Agreement, subject to completion of satisfactory due diligence and receipt of applicable regulatory approvals, Bayshore intends to acquire all of the outstanding shares of 1074532 for total aggregate consideration of $1,200,000 consisting of a cash payment of $720,000.00 and issuance 1,920,000 common shares at a deemed price of $0.25 per share (the "Proposed Qualifying Transaction").

WATT and 1074532 are arms length to the Corporation and the Proposed Qualifying Transaction is therefore not an "Non-Arm's Length Qualifying Transaction" as defined under TSXV Policy 2.4 - Capital Pool Companies (the "CPC Policy"), and as such, does not require shareholder approval.

Bayshore intends to make this proposed acquisition of the Assets its "Qualifying Transaction" under Policy 2.4 of the TSXV. The Proposed Qualifying Transaction, if completed, will not result in a change of control of Bayshore.

Prior to or concurrent with the closing of the Proposed Qualifying Transaction, Bayshore intends to complete a financing (the "Financing") on a non-brokered private placement basis of up to 1,000,000 common shares at a price of $0.25 per share for aggregate gross proceeds of $250,000.00.

On the basis of the 1074532's unaudited financial statements for the fiscal year ended December 31, 2006, 1074532 had total revenue of $288,695, total assets of $3,505,548, total liabilities of $807,066, working capital of $635,606, and a net profit of $68,390. On the basis of Bayshore's unaudited financial statements ended December 31, 2006, Bayshore had total revenue of $10,980, total assets of $426,394, total liabilities of $4,434, working capital of $421,960 and a net loss of $4,586.

Pro Forma Information

Following the completion of the Proposed Qualifying Transaction and the Financing, the Corporation will have:



1. issued and outstanding a maximum of 6,570,000 common shares, as well as
share purchase options to acquire an additional 350,000 common shares,
each at an exercise price of $0.20 per share;

2. daily production of approximately 25 boe/d, comprised of 90 percent
natural gas and 10 percent light oil and NGL's;

3. the subject acquisition will be funded by the cash available in the
corporation and future Financing;

4. based on the report of an independent third party reserves evaluator,
the Assets have total Proved reserves of 40,000 boe and total Proved
plus Probable reserves of 57,000 boe;

5. in excess of 900 net developed and undeveloped acres of lands; and

6. core operations in Bigstone, Alberta and Kaybob, Alberta.


The Bigstone property is located in Township 61, Range 22 W5M in central Alberta. Bayshore is acquiring a 12 percent working interest in one flowing gas well and a 1.5 % Gross Overriding Royalty on a second gas well on the lease. The net production to the Corporation from this property is approximately 20 boe per day.

The Kaybob property is located in Township 59, Range 18 W5M in central Alberta. Bayshore is acquiring a 21 percent working interest in a flowing gas well producing at approximately 5 boe per day net to the Corporation.

The completion of the Proposed Qualifying Transaction is conditional upon, among other things, the completion of the Financing and final TSXV acceptance of the Proposed Qualifying Transaction. Upon completion of the Proposed Qualifying Transaction, the Corporation is expected to meet all minimum listing requirements for a Tier 2 Oil and Gas Issuer. Bayshore intends to seek an exemption from the TSXV's sponsorship requirements in connection with the Proposed Qualifying Transaction. The CPC Policy prescribes that the Corporation has 24 months from the date of its original listing to complete a qualifying transaction. March 8, 2007 is the Corporation's deadline to complete its qualifying transaction. As such, trading in Bayshore's common shares on the TSXV will remain halted until such time as Bayshore has completed its Qualifying Transaction or it has received shareholder approval to list on the NEX board of the TSXV.

It is anticipated that there will be no changes to the insiders of the Corporation as a result of the Proposed Qualifying Transaction. The sole officer of the Corporation is Mr. Alan M. Tang, President and Chief Executive Officer. The directors of the Corporation are Messrs. Alan M. Tang, Stuart Y. Chow and Mark N. Woolstencroft.

Alan M. Tang, President, Chief Executive Officer and Director

Mr. Tang is also the President and Chief Executive Officer of New Century Petroleum Corporation, which he founded in 1993. New Century is a private oil and gas company actively involved in oil and gas exploration and exploitation in the Western Canadian Sedimentary Basin. After graduating with a Master of Science Degree, Geophysics, from the University of Manitoba, he joined Texaco Exploration Canada Ltd. in 1975 as a geophysicist. Mr. Tang subsequently moved to General American Oils Ltd. and Canada Northwest Energy Limited where he held various senior positions. He joined Corexcal Inc. / Corexcana Ltd. in 1986 and held various management positions until he became Vice President of Exploration in 1993. Mr. Tang has extensive experience in all aspects of the oil and gas industry, including operations, land and economics. Mr. Tang was a director of Fox Energy Corporation, an Alberta Stock Exchange (a predecessor to the TSXV) listed company, from 2000 until EOG Resources Ltd. acquired it in 2002. Mr. Tang is a member of APEGGA, SEG and AAPG.

Stuart Y. Chow, Director

Mr. Chow is President of Bravo Energy Inc., a private oil and gas company, which he founded in February, 2003. Prior to forming Bravo, Mr. Chow was the founder and past President of Onward Energy Inc., a publicly traded junior oil and gas company, from 1993 until Onward was acquired by Avenir Diversified Income Trust in January, 2003. Prior to forming Onward, Mr. Chow was the founder and President of Ryanda Resources Ltd. from 1990 until Ryanda was amalgamated with Onward in 1994. Mr. Chow was the Engineering Manager of Orbit Oil & Gas Ltd. from 1985 to 1990. Mr. Chow was also the Senior Reservoir Engineer for Tricentrol Oils Limited from 1982 to 1985 and was employed as a Petroleum Engineer with Dome Petroleum Ltd. and predecessor companies (Kaiser Oils Limited and Ashland Oil & Gas Ltd.) from 1978 to 1982. Mr. Chow graduated with a Bachelor of Science degree in Mechanical Engineering from the University of Calgary in 1978.

Mark N. Woolstencroft, Director

Mr. Woolstencroft was a partner until July of 2003 with a national law firm in Calgary with a practice restricted to business law, including corporate, commercial and securities law. In July of 2003, with a former partner, he formed Eeson & Woolstencroft LLP in Calgary, which firm's practice is restricted to advising international, national and regional clients on business law matters. Mr. Woolstencroft graduated from the University of Calgary and subsequently from the University of Alberta with an LLB in 1977. He is a member of the Calgary Bar Association and the Canadian Bar Association.

Upon completion of the Proposed Qualifying Transaction, and prior to distribution of securities to the unit holders of Watt, Watt would control 1,920,000 common shares of the Corporation representing approximately 30% of the issued and outstanding shares of the Corporation.

Watt is an Ontario limited partnership which participate as a minority partner in joint venture oil and gas exploration and development projects. Watt invests in flow-through shares of companies that are established as joint venture subsidiaries to participate in oil and gas ventures and whose principal business will be oil and gas exploration and development including drilling for or production of petroleum or natural gas. Further information regarding Watt is available on SEDAR at www.sedar.com. The Corporation understands that Watt intends to distribute the consideration for the Acquisition out to its security holders.

1074532 is an Alberta corporation which was incorporated by Watt in 2003 for the purpose of entering into certain joint venture agreements in the oil and gas industry.

Disclosure provided herein in respect of boe units may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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.

Investors are cautioned that, except as disclosed in filing statement of Bayshore to be prepared in connection with the transaction, any information released or received with respect to the Proposed Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Bayshore should be considered highly speculative.

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

Contact Information

  • Bayshore Petroleum Corp.
    Alan M. Tang
    President
    (403) 269-2823