June 03, 2005 13:36 ET

Colonia Announces Change of Control and Financing

CALGARY, ALBERTA--(CCNMatthews - June 3, 2005) -

(Not for dissemination in the United States of America)

COLONIA CORPORATION (NEX:CRP.H) (the "Corporation") announces that pursuant to a share purchase agreement dated June 2, 2005 (the "Share Purchase Agreement") among Donald Campbell and George Bowley (collectively, the "Purchasers"); Gordon Bowerman and James G. Evaskevich (collectively, the "Vendors"); and the Corporation, the Purchasers have agreed to purchase (the "Acquisition") from the Vendors an aggregate of 5,000,000 common shares of the Corporation (the "Common Shares") for $0.05 per share aggregating $250,000. The proposed sale of the Shares (the "Change of Control") is expected to be completed no later than June 15, 2005.

The completion of the Acquisition is subject to the receipt of all necessary regulatory approval, as well as certain other conditions, including the completion by the Corporation of a private placement of 5,833,333 units ("Units") at a price of $0.06 per unit (the "Private Placement") for gross proceeds of $350,000. Each Unit will consist of one Common Share and one share purchase warrant, with each warrant entitling the holder to purchase one Common Share at a price of $0.10 per share for a period of one year (the "Warrants"). The Corporation intends to use the proceeds from the Private Placement as general working capital.

After completion of the Acquisition, the parties have agreed the board of directors of the Corporation will consist of Gordon Bowerman, an existing Director of the Corporation, as well as Donald Campbell, George Bowley and one additional nominee with senior experience in the oil and gas industry acceptable to the Purchasers and Vendors. The parties have also agreed after completion of the Acquisition, Mr. Campbell will be appointed the President and Chief Executive Officer of the Corporation.

Donald Campbell was the Senior Vice-President of International Sovereign Energy Corp., a public company listed on the Toronto Stock Exchange, from September 1998 to May 2005. Prior to that, Mr. Campbell was the President of Monterey Energy Corp. a public company listed on the TSX Venture Exchange Inc. ("TSX Venture") from April 1997 to September 1998. He was the Manager, Engineering of Cube Energy Corp. a public oil and gas company listed on the TSX Venture from April 1995 to April 1997. Mr. Campbell holds the Professional Engineer designation, as well as a Bachelor of Civil Engineering degree from the Technical University of Nova Scotia. Mr. Campbell also has a Master of Business Administration degree, Finance Major, from the University of Calgary.

George Bowley is currently the Senior Vice-President, Exploration and Development of International Sovereign Energy Corp. and has been since September 1998. From April 1997 to September 1998 he was the Vice-President, Exploration of Monterey Energy Corp and prior to that he was Manager, Exploration of Cube Energy Corp. from April 1995 to April 1997. Mr. Bowley holds the Professional Geologist designation, as well as a Bachelor of Science degree in geology from the University of Alberta.

Mr. Campbell and Mr. Bowley were founding principals of the junior capital pool company Crestview Petroleum Corporation in September 1992 which became part of Cube Energy Corp. and was sold in April 1997 for $58.1 million to Barrington Petroleum Ltd. Subsequently, Mssrs. Campbell and Bowley founded the junior capital pool company Monterey Energy Corp., which combined with Constellation Oil & Gas Ltd. to form International Sovereign Energy Corp., which currently has a market capitalization in excess of $40 million.

In connection with the Private Placement, Mr. Campbell has agreed to purchase 1,066,667 Units and his spouse has agreed to purchase 1,850,000 Units. Mr. Bowley intends to purchase 1,250,000 Units and his spouse intends to purchase 1,666,666 Units.

The Corporation has reserved a price of $0.06 per share for the 5,833,333 Common Shares to be issued pursuant to the Private Placement and a price of $0.10 per share for up to 5,833,333 Common Shares to be issued upon exercise of the Warrants. The Private Placement is subject to regulatory approval and the Corporation is required to file a formal application with the NEX board of the TSX Venture to maintain this price reservation. The Purchasers intend to purchase Units pursuant to the Private Placement.

Concurrent with the closing of the Acquisition, Mr. Don Poruchny will be paid a finder's fee of $12,000 payable by the issuance of 200,000 Common Shares at a deemed price of $0.06 per share.

After completion of the Acquisition, the Corporation also announces it intends to grant options to purchase up to 886,833 Common Shares at a price of $0.10 per share to directors and officers of the Corporation.

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

Contact Information

  • Colonia Corporation
    Gordon Bowerman
    President and CEO
    (403) 237-2361
    For information regarding the Purchasers
    Donald Campbell
    (403) 540-2003