Cold Creek Capital Inc.

Cold Creek Capital Inc.

April 26, 2007 14:21 ET

Cold Creek Capital Inc. Announces New Qualifying Transaction and Letter of Intent With Gaucho Exploration (SA) Ltd.

CALGARY, ALBERTA--(CCNMatthews - April 26, 2007) - Cold Creek Capital Inc. (TSX VENTURE:CCC.P) ("Cold Creek" or the "Corporation") announces today that it will not be proceeding with its previously announced qualifying transaction (see press release dated July 31, 2006) to acquire Sherwood International Petroleum Ltd. as certain conditions of the transaction were not met by the required dates.

Cold Creek is pleased to announce that it has entered into a letter of intent dated April 26, 2007 (the "Gaucho Agreement"), for the acquisition, directly or indirectly, of all the issued and outstanding shares (the "Gaucho Shares") of Gaucho Exploration (SA) Ltd. ("Gaucho"), a private corporation incorporated under the laws of Alberta. Gaucho is a recently incorporated company and its operations-to-date consist of the negotiation of an option agreement (the "CEE Option Agreement") for the purchase of Canadian Energy Enterprise SRL (Bolivia) ("CEE"). CEE owns a 50% working interest in certain oil and natural gas properties located in the Warnes Field in the Santa Cruz Department of Bolivia.

Cold Creek is a capital pool company and intends for the acquisition of Gaucho and exercise of the option to acquire CEE to constitute the Qualifying Transaction of the Corporation (the "Qualifying Transaction") as such term is defined in the policies of the TSX Venture Exchange (the "TSXV").

Michael S. Vandale of Calgary, Alberta is a shareholder and the sole director and officer of Gaucho. As Mr. Vandale is a director of Cold Creek, the Qualifying Transaction will be subject to approval by the shareholders of Cold Creek as it is a non-arm's length transaction as defined by the policies of the TSXV.

Pursuant to the terms of the Gaucho Agreement, subject to completion of satisfactory due diligence, a definitive purchase agreement and receipt of applicable shareholder and regulatory approvals, Cold Creek intends to acquire 100% of the Gaucho Shares such that Gaucho would be a wholly-owned subsidiary of Cold Creek, in consideration of: (i) 500,000 common shares in the capital of Cold Creek at a deemed price of $1.00 per share; (ii) $500,000 cash; and (iii) the assumption and repayment of the debt of Gaucho in the principal amount of $1,000,000 (the "Gaucho Debt") for an aggregate deemed consideration of approximately $2,000,000. The consideration was negotiated between Mr. Vandale, a director of Cold Creek and the independent members of the board of directors of Cold Creek. Mr. Vandale is the holder of the Gaucho Debt. Prior to the closing of the Qualifying Transaction, Gaucho intends to complete a private placement of up to 2,000,000 Gaucho Shares at a price of $0.50 per share for total proceeds of up to $1,000,000. Gaucho intends that the proceeds from such private placement will be used for financing Gaucho's obligations under the CEE Option Agreement, exploring other Latin American oil and gas opportunities and for general working capital requirements. Pursuant to the terms of the Gaucho Agreement, the additional Gaucho Shares issued under the private placement will be acquired by Cold Creek by the issuance of one common share in the capital of Cold Creek at a deemed price of $0.50 per share for each additional Gaucho Share issued under the private placement.

All geological information provided in this press release, including all information on the CEE assets, has been provided by management of Gaucho and has not been independently verified by management of Cold Creek.

The Corporation is a Capital Pool Company ("CPC"). It has not commenced commercial operations and has no assets other than a minimum amount of cash. Except as specifically contemplated in the CPC policy of the TSXV, until the completion of the Qualifying Transaction, the Corporation will not carry on any business other than the identification and evaluation of assets or businesses with a view to completing a proposed Qualifying Transaction. After the Qualifying Transaction, Cold Creek, through its wholly owned subsidiary, will be involved in the exploration for and the production of oil and natural gas in Bolivia.

It is proposed that following the Qualifying Transaction the current Board of Directors and Officers of the Corporation will continue in such capacity.

Cold Creek and Gaucho are currently identifying individuals to fulfill the role of Chief Financial Officer of the Corporation.

Upon completion of the Qualifying Transaction the Corporation intends to issue up to 620,000 options at an exercise price of $1.00 pursuant to the stock option plan of the Corporation.

Conditions of Closing

The closing of the Qualifying Transaction is subject to the following conditions, among others:

a) the completion of satisfactory due diligence on Gaucho and CEE by Cold Creek and receipt of satisfactory tax advice;

b) the preparation of a satisfactory engineering evaluation, title and/or legal opinion(s) on the Warnes Field assets and financial statements, as required by the TSXV;

c) the entering into a formal share purchase agreement and related documentation, between Cold Creek, Gaucho and Michael S. Vandale in form and content satisfactory to each of them;

d) the approval or consent of any third party whose consent is required by Gaucho to complete the Acquisition;

e) the engagement of a sponsor, as required by the TSXV; and

f) any regulatory, shareholder, director or other approvals as may be required.

It is intended that the Offer will be made by way of exempt take-over bid in the Province of Alberta and such other jurisdictions in which holders of the Offered Shares reside where such bid may lawfully be made; provided however, that final determination of the structure will be based on the securities and tax aspects of the transaction and will be made in the most legally and tax effective manner as agreed to by the parties.


Upon the completion of the Qualifying Transaction, the Corporation is anticipated to have a 50% working interest in certain oil and natural gas properties in the Warnes Field in the Santa Cruz Department of Bolivia. In addition, the Corporation is anticipated to have a work program and minimum cash of CDN$2,000,000.

Private Placement

Concurrent with the closing of the Qualifying Transaction, Cold Creek expects to complete a private placement of up to 3,000,000 common shares at a price of $1.00 per share for total proceeds of up to $3,000,000. Cold Creek intends that the proceeds from such private placement will be used for financing Cold Creek's obligations under the Gaucho Agreement, Cold Creek's general working capital requirements and, provided that the Qualifying Transaction is completed, for exploring other Latin American oil and gas opportunities.

Cold Creek currently has 4,700,000 Cold Creek shares outstanding. Upon closing of the Qualifying Transaction and assuming the maximum offerings under the private placements, Cold Creek will have approximately 10,200,000 shares issued and outstanding.

Sponsorship of Qualifying Transaction

Sponsorship of a qualifying transaction of a capital pool company is required by the TSXV unless exempt in accordance with TSXV policies. Cold Creek and Gaucho are currently reviewing the TSXV requirements for sponsorship and intend to comply with the policies of the TSXV after discussions with the TSXV regarding sponsorship.

The shares of Cold Creek have been halted from trading since the announcement of Cold Creek's letter of intent with Sherwood International Petroleum Ltd. on July 31, 2006 and will remain halted from trading until the TSXV receives certain required documentation in respect of the Qualifying Transaction.

A further press release will be issued at the time when, among other things, the following occur:

(i) a Chief Financial Officer has been selected for the Corporation;

(ii) an engineering firm has completed an evaluation of the oil and gas interests and work program relating to the Warnes Field;

(iii) further details relating to the Qualifying Transaction have been determined;

(iv) further details relating to the private placement have been determined;

(v) Cold Creek is required by applicable law to disclose information that has occurred subsequent to this press release;

(vi) financial statements of Gaucho or CEE have been received; or

(vii) a sponsor has been engaged by the Corporation.

Completion of the transaction is 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 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 or filing statement 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 a capital pool company 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.

Certain statements in this material may be "forward-looking statements" including outlook on oil and gas prices, estimates of future production, estimated completion dates of acquisitions and construction and development projects, business plans for drilling and exploration, estimated amount and timing of capital expenditures and anticipated future debt levels and royalty rates. Information concerning reserves contained in this material may also be deemed forward-looking statements as such estimates involve the implied assessment that the resources described can be profitably produced in the future. These statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated by the Corporation.

The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

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

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