Dakar Resource Corp.

TSX VENTURE : DKR


December 20, 2012 16:30 ET

Dakar Signs Definitive Agreement to Acquire Proteus Energy

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 20, 2012) -

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

Dakar Resource Corp. ("Dakar") (TSX VENTURE:DKR) announces that it has signed a definitive share purchase agreement dated December 18, 2012 to acquire all the issued and outstanding share capital of Proteus Energy Corporation ("Proteus"), a private company incorporated in Delaware with oil and gas assets located in California, by way of a reverse takeover (the "Transaction"). The Transaction was initially announced by Dakar on November 6, 2012. Dakar's shares have been halted pending completion of the Transaction.

The Transaction

Dakar will issue Proteus shareholders 5.71660275 common shares of Dakar for each one Proteus common share which is issued and outstanding on closing of the Transaction. Proteus is a closely held Delaware corporation with 14,406,963 issued common shares and 1,771,501 issued Series A preferred shares. Prior to closing of the Transaction, Proteus' issued Series A preferred shares will be converted into 1,771,501 common shares and 1,380,000 Proteus escrowed common shares will be cancelled such that a total of 14,798,464 Proteus common shares will be acquired by Dakar in consideration for 84,596,940 Dakar common shares. Dakar will have a pre-financing total issued share capital of 99,821,940 common shares subject to adjustment for the exercise of any options to purchase common shares of Proteus prior to closing of the Transaction.

Dakar will seek shareholder approval at its annual and special meeting of shareholders scheduled for January 24, 2013 for a change of name to "Proteus Energy Corporation". Dakar will also seek to increase its Board of Directors to six members. On closing of the Transaction the Dakar Board of Directors will be comprised of Allen Wilson (current Dakar director and President), Bennett Yankowitz (current Proteus director and CEO), Paul Hughes (Proteus/Dakar nominee), J. Roger Howard (Proteus nominee), James Thomson (Proteus nominee) and Daniel Franchi (Proteus nominee).

About Proteus

Proteus' principal assets are working interests in oil and gas properties in California. The properties and working interests are the subject of a recently completed 51-101F1 report which will be filed with regulators as part of the Transaction. Proteus is primarily focused on field redevelopment and recovery of undeveloped reserves with a focus on oil producing assets. Proteus currently owns a 100% working interest in 2,400 acres of oil and gas leases located on the Northwest Lost Hills field in Kern County, California (the "Lost Hills Asset"). The Northwest Lost Hills field is located approximately 60 miles northeast of Bakersfield, California on a major anticline on the west side of the San Joaquin Basin. The Lost Hills Asset produced approximately 10.6 barrels of oil equivalent per day (for the period January - September 2012) from 16 wells that were in production when Proteus acquired the property in 2008. Most of this production is from the Monterey Shale formation at approximately 4,100 feet. Proteus recently drilled two new wells on the Lost Hills Asset in the Etchegoin Sands formation at approximately 2,900 feet, and completed hydraulic fracturing to place these wells on production in November and December 2012. Proteus has also identified two existing wells that it intends to recomplete into the Etchegoin Sands zone in early 2013 and plans to drill a number of additional vertical and, possibly, horizontal Etchegoin Sands wells in 2013.

In addition, Proteus owns a 2.7% non-operated working interest in oil and gas leases located on the Lynch Canyon field in Monterey County, California, a heavy oil field with 30 horizontal and 3 vertical wells. This property currently produces approximately 500 barrels of oil per day from cyclic steaming. The field is currently being converted to a steam flood with a view to increasing production beginning in 2013.

Proteus has a $10 million (US) secured line of credit with Platinum Partners Credit Opportunities Fund ("PPCO"), a private investment fund managed by New York based Platinum Partners. Funds advanced under this line of credit are being used for the drilling of new wells at the Lost Hills Asset and for Proteus' share of the costs related to continued development of the Lynch Canyon field. As of September 30, 2012 Proteus had received advances of $3.0 million (US) under the PPCO line of credit. For the nine months ended September 30, 2012 Proteus had oil and gas revenue of $473,364 (US) and a net loss of $1,410,887 (US). All financial information relating to Proteus is as presented in Proteus' unaudited financial statements for the nine months ended September 30, 2012.

Concurrent Brokered Private Placement

Dakar and Proteus have engaged Haywood Securities Inc. ("Haywood") and Emerson Equity LLC ("Emerson") to act as agents in connection with a brokered private placement offering of subscription receipts and units. Dakar will offer units ("Dakar Units") at a price of $0.325 per unit and Proteus will offer subscription receipts ("Proteus Sub Receipts") at an effective price of $0.325 Cdn. per subscription receipt for a minimum of $5 million and a maximum of $6 million (the "Offering") on a commercially reasonable efforts basis. The Dakar Units will be comprised of one Dakar share (a "Dakar Share") and one-half share purchase warrant (a "Dakar Warrant") with each whole Dakar Warrant being exercisable into one Dakar Share for two years from closing at an exercise price of $0.50. The Proteus Sub Receipts will be exercised into Proteus units ("Proteus Units") immediately prior to Dakar's acquisition of Proteus. Each Proteus Unit will be comprised of one Proteus share (a "Proteus Share") and one-half share purchase warrant (a "Proteus Warrant") with each whole Proteus Warrant being exercisable into one Proteus Share for two years from closing at an effective exercise price of $0.50 Cdn. Following exercise of the Proteus Sub Receipts into Proteus Units, each Proteus Share and Proteus Warrant will be exchanged for 5.71660275 Dakar Shares and Dakar Warrants respectively. Proceeds of the Offering will be used to fund the resulting issuer's operations, anticipated acquisitions and working capital. Funds underlying the subscription receipts will be held in escrow until the earlier of April 1, 2013 or the satisfaction of certain release conditions, which include, but are not limited to the completion of the Transaction.

Closing of the Transaction

The Transaction will result in a change of control of Dakar. The Transaction is considered an arm's length transaction. A finder's fee may be paid in connection with the Transaction. Closing of the Transaction is subject to certain closing conditions, including approval of the TSX Venture Exchange ("TSX-V"), approval of Dakar shareholders and Proteus shareholders holding at least 90% of the issued and outstanding Proteus shares being parties to the definitive share purchase agreement.

Completion of the transaction is subject to a number of conditions, including TSX-V acceptance, Dakar shareholder approval and Proteus shareholders holding at least 90% of the issued and outstanding Proteus shares being parties to the definitive share purchase agreement. The transaction cannot close until, among other conditions, 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 Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Dakar Resource Corp. 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.

ON BEHALF OF THE BOARD

Allen Wilson, President, C.E.O. and Director

Reader Advisory

This release includes certain statements that may be deemed forward-looking statements. All statements in this release, other than statements of historical facts, that address future events or developments that Dakar expects are forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking statements in this press release include, but are not limited to, statements with respect to timing and completion of the Transaction of the common and preferred shares of Proteus.

Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in commodity prices; governmental regulation of the oil and gas industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for commodities; liabilities inherent in oil and gas operations; changes in tax laws and incentive programs relating to the oil and gas industry; and the other factors described in our public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

Although Dakar believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under applicable securities laws, Dakar does not assume a duty to update these forward-looking statements. For more information on Dakar, Investors should review Dakar's filings that are available at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Dakar Resource Corp.
    Allen Wilson
    President, C.E.O. and Director
    (604) 240-4349
    (604) 681-4760 (FAX)