Bayshore Petroleum Corp.
TSX VENTURE : BSH

March 02, 2016 17:43 ET

Bayshore Petroleum Corp. Update on Previously Announced Binding Letter of Intent With E-T Energy Ltd. and Closes Tranche of Private Placement Financing

CALGARY, ALBERTA--(Marketwired - March 2, 2016) -

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

Bayshore Petroleum Corp. ("Bayshore" or the "Company") (TSX VENTURE:BSH) announced originally on December 9, 2015, that it had entered into an arms-length Binding Letter of Intent (the "BLOI") to merge with E-T Energy Ltd. ("ET"), a private Alberta corporation with oil sands leases and past production in the Poplar Creek, Fort McMurray area of Alberta. The Company updated this process in a December 31, 2015, news release, and a January 29, 2016, news release.

Under the BLOI, Bayshore and ET (together the "Parties") intend to raise capital and enter into a transaction pursuant to which the Parties will combine their businesses and operations and continue as Bayshore. The Parties have conducted due diligence and shall enter into a definitive agreement (the "Definitive Agreement") to conclude the combination of the companies. Bayshore announced a $1.5 million CAD equity financing to pursue the transaction and it is pursuing potential financings at this time. Each of the parties possessing sufficient financial resources to meet their obligations and fund working capital in connection with the transaction are conditions of the closing of the contemplated transaction. At the conclusion of the financing activity the Company will be in a position to enter a Definitive Agreement.

Bayshore will also issue a filing statement or information circular in due course that provides all of the information required for shareholder review. One or more aspects of the final agreement may be subject to regulatory review and approval, and the transaction in total is subject to TSX Venture Exchange acceptance. Bayshore shares are halted from trading currently, and shall remain halted from trading pending receipt of applicable documentation by the TSX Venture Exchange.

Bayshore has closed a second tranche of its private placement financing announced November 26, 2015. The first tranche was closed in a news release dated December 31, 2015. The non-brokered private placement of securities consisted originally of 5 million common shares at $0.30 per share for $1.5 million, less any commissions or finders fees paid. The Company has re-priced this financing to $0.15 per share. Therefore, this private placement financing will potentially total 10 million common shares at $0.15 per share for $1.5 million. The first closed tranche consisted of 213,333 common shares for gross proceeds of $32,000. The second closed tranche consists of 256,287 common shares for gross proceeds of $38,443. Proceeds from the financing are devoted to expenses related to the closing of the announced merger with E-T Energy Ltd, and for general working capital, as more fully described in detail in the Company's December 9, 2015, news release. There is a hold period of four months during which the shares cannot be traded. Bayshore expects to close the remainder of the 10 million share financing in due course.

About Bayshore Petroleum Corp.

Bayshore is a Calgary, Alberta based corporation focused on the exploitation of technology that increases the productivity and profitability of heavy oil and bitumen. Cold catalytic Cracking (CCC) enables the upgrading of heavy crude oil and bitumen directly into diesel. This technology, and other technologies such as desulphurization using ultrasonic oxidation, increase the sales price quality adjustment, reduce the need for diluent and other costs in the transportation of heavy oil or dilbit, and expedite the end to end process of delivering fuels to the downstream user.

About E-T Energy Ltd.

ET is a private, Calgary-based company focused on bitumen extraction from the oil sands and heavy oil recovery through the use of a patented, proprietary, efficient, and environmentally friendly extraction process called "The Electro-Dynamic Stripping Process" ("ET-DSP™"). This process uses electricity to heat and mobilize the oil present in oil sands and heavy oil reservoirs so that it can be produced quickly, cost effectively and efficiently. ET-DSP™ offers several advantages that ET believes will make it the technology of choice for a significant quantity of bitumen and shallow heavy oil resources that currently do not have a suitable extraction method, including an established technology, minimal water use, rapid recovery of affected lands, lower energy use, and substantially reduced greenhouse gas emissions.

ET owns 3,200 hectares of bitumen rights in the Athabasca Oil Sands at Poplar Creek, Alberta, where it has field-tested its ET-DSP™ technology to May 2013. ET's third party engineering report estimates that, as of October 1st, 2011, ET's Poplar Creek property contained approximately 607 million barrels of bitumen in-place. ET currently holds Alberta Energy Regulator approval to produce 1,000 bbls/d of bitumen from its leases using ET-DSP™ and has the exclusive world-wide, royalty free right to use ET-DSP™ for the production of heavy oil and bitumen, as well as the exclusive right to sub-license the technology for use by third parties in this application. ET is controlled by its CEO Dr. Bruce C.W. McGee, who holds in excess of 20% of the common shares of ET, and is expected to be a new control person of Bayshore after the closing of this transaction.

On behalf of the Board of Directors, BAYSHORE PETROLEUM CORP.

Peter Ho, President and CEO

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities of the Company in the United States. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Statements

Statements in this press release may contain forward-looking information including expectations of future production, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. This press release may also contain forward-looking or subjective information regarding technology, processes, and the oil and gas industry. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company. These risks include, but are not limited to, the risks associated with the mining and oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, technology and technology implementation, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction 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 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 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.

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