Canext Energy Ltd.

Canext Energy Ltd.
Trimox Energy Inc.

Trimox Energy Inc.
Tasman Exploration Ltd.

April 19, 2007 21:39 ET

Canext Energy Ltd., Trimox Energy Inc. and Tasman Exploration Ltd. Announce Proposed Business Combination

CALGARY, ALBERTA--(CCNMatthews - April 19, 2007) - Canext Energy Ltd. ("Canext") (TSX VENTURE:CXT), Trimox Energy Inc. ("Trimox") (TSX VENTURE:TRM.A)(TSX VENTURE:TRM.B) and Tasman Exploration Ltd. ("Tasman") are pleased to announce they have signed a letter of intent to complete a business combination (the "Transaction") to form a new company ("New Canext"). The Transaction is subject to regulatory and shareholder approval.

Under the terms of the Transaction, shareholders of Tasman will receive one common share ("New Canext Share") of New Canext for each common share of Tasman held, shareholders of Canext will receive one New Canext Share for each common share of Canext held, and Class A shareholders of Trimox will receive 1.05 New Canext Shares for each Class A Share of Trimox held. The holders of Class B shares of Trimox will receive the lesser of 10.5 New Canext Shares and $10.00 divided by the five day weighted average trading price of the Canext common shares ending on the second last day immediately preceding the effective date of the Transaction, for each Class B share of Trimox held. Prior to giving effect to the Transaction, certain assets of Tasman (the "SpinCo Assets") will be transferred to a new company ("SpinCo").

Upon completion of the Transaction, New Canext will have approximately 75,908,000 shares outstanding, of which former Tasman shareholders will own 36.9%, former Canext shareholders will own 36.3%, and former Trimox shareholders will own 26.8%.

Key Highlights

New Canext is expected to have the following key attributes:

- Production of approximately 1,600 boepd (approximately 90% gas)
- Proven and Probable reserves of 3,020 mstboe as at March 31, 2007
- Reserve life index of 5.2 years
- Proforma debt of approximately $7,000,000 (after transaction costs)
- Projected annualized cash flow of approximately $16,000,000
- Undeveloped Land of 105,000 net acres
- 110 square miles of proprietary 3D seismic, most of which has been shot
in the last two years
- Approximately $95,000,000 of tax pools (depending on the final structure
of the Transaction)
- Drilling inventory of 80 (40 net) locations
- Core areas as follows:
- Peace River Arch - 780 boepd and 76,000 net undeveloped acres
- West Central Alberta - 200 boepd and 10,000 net undeveloped acres
- Eastern Alberta - 360 boepd and 4,000 net undeveloped acres
- Southern Alberta - 330 boepd and 5,000 net undeveloped acres
- Minor Properties - 30 boepd and 10,000 net undeveloped acres

Management and Board of Directors

New Canext will be run by the management team from Canext as follows:

Stephen Kapusta - President and Chief Executive Officer

Lesley Miller - Chief Financial Officer

Mark Birchard - Vice President of Exploration

Lawrence Backmeyer - Vice President of Business Development

Michael Woloschuk - Vice President of Operations

Neil Holmes - Vice President of Land

The board of directors of New Canext will be comprised of three nominees of Canext, two nominees of Trimox, and two nominees of Tasman.

Transaction Rationale

Management of Canext, Tasman and Trimox believe the Transaction will create a stronger junior oil and gas exploration company taking advantage of significant operational synergies. New Canext will have an impressive inventory of high impact exploration prospects on the north side of the Peace River Arch and in West Central Alberta. In addition, New Canext will have several development and optimization projects in these areas, as well as in southern and eastern Alberta. New Canext will control its assets operating approximately 88% of its production.

Management of Canext, Tasman and Trimox believe the Transaction will result in significant savings in general and administrative expenses providing New Canext with the ability to fund the drilling of one to two additional net wells per year.

New Canext will also have a stronger balance sheet and greater cash flow providing it with the ability to pursue an aggressive growth strategy.

Management of Canext expects capital spending will be approximately $10,000,000 for the last six months of 2007, subject to board approval.

Tasman SpinCo

Prior to the Transaction, Tasman will transfer the SpinCo Assets, which consist of certain mineral titles, overriding royalties, minor properties and undeveloped land owned by Tasman into SpinCo. At the time of the Transaction, Tasman will own the current assets of Tasman other than the SpinCo Assets ("Pro Forma Tasman Assets"). Shareholders of Tasman will receive one common share of SpinCo for each common share of Tasman held.

Financial Advisors and Fairness Opinions

Tristone Capital Inc. is acting as a financial advisor to Canext and has advised the Canext board of directors that, subject to final documentation, the proposed Transaction is fair, from a financial point of view, to Canext shareholders. FirstEnergy Capital Corp. is acting as a financial advisor to Trimox and has advised the Trimox board of directors that, subject to final documentation, the proposed Transaction is fair, from a financial point of view, to Trimox shareholders. Canaccord Enermarket Ltd. and Cormark Securities Inc. ("Cormark") are acting as financial advisors to Tasman. Cormark has advised the Tasman board of directors that, subject to final documentation, the consideration to be received by Tasman shareholders for the Pro Forma Tasman Assets is fair, from a financial point of view, to Tasman shareholders.

Board Recommendations

The respective boards of directors and special committees of the boards of each of Canext, Tasman and Trimox, as the case may be, have unanimously approved the Transaction. The respective boards and special committees, as the case may be, have all concluded the Transaction is in the best interests of their respective shareholders and have resolved to recommend the shareholders vote in favour of the Transaction. Each of the companies have agreed to not solicit or initiate any discussions concerning the sale of material assets or any other business combination. The Transaction contains a mutual non-completion fee in the amount of $1,000,000 which is payable in certain circumstance if the Transaction is not completed.

Shareholder Support

Certain directors and officers of Canext holding approximately 33.8% of the issued and outstanding common shares of Canext have agreed to vote in favour of the Transaction. Certain directors and officers of Trimox holding approximately 25.7% of the issued and outstanding Class A shares and 2.7% of the outstanding Class B shares of Trimox have agreed to vote in favour of the Transaction. Certain directors, officers and shareholders of Tasman holding approximately 27.4% of the issued and outstanding shares of Tasman have agreed to vote in favour of the Transaction.

Anticipated Closing

The Transaction is subject to the entering into of a definitive agreement among the parties, the preparation and mailing of a joint information circular, and the holding of special shareholder meetings. The parties expect to complete and mail the joint information circular prior to May 30, 2007 and plan to hold the special meetings prior to June 30, 2007.

Reader advisory:

The term "BOE" may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Investors are cautioned that the preceding statements of the companies may include certain estimates, assumptions and other forward-looking information. The actual future performance, developments and/or results of the companies may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the companies, including natural gas/oil prices, reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development and production of gas and oil hedging, financing availability and other risks related to financial activities.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canext Energy Ltd.
    Stephen Kapusta
    President & CEO
    (403) 263-3232
    (403) 234-8773 (FAX)
    Trimox Energy Inc.
    Steve Dabner
    President and CEO
    (403) 216-1721
    Tasman Exploration Ltd.
    Randall Green
    (403) 514-8010