Equus Energy Corporation

August 15, 2007 09:00 ET

Equus Energy Corporation Subsidiary to Have Dual Listing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2007) - Mr. Stanley Lanzet reports that Equus Energy Corporation (TSX VENTURE:EQE) has begun the process of taking public its 100%-owned subsidiary, Equus Energy Financial Corporation (EEFC). EQE plans to list EEFC in Canada on the CNQ and in the United States on the OTC Bulletin Board.

EEFC will function as EQE's financing arm.

EEFC's primary objectives are:

1. To secure financing for resource exploration and development projects undertaken by EQE and others through sale of limited partnerships in these projects. Limited partnerships may be structured to provide favorable tax consequences for investors, on a project-by-project basis. Limited partnership sales will be conducted by EEFC's in-house sales force to accredited investors.

2. To provide EEFC with a significant revenue source. EEFC will receive a 40% share of net revenues (after royalties) generated from sales of limited partnerships plus a 2% fee on assets under management.

3. Set up a real estate hedge fund designed for sophisticated investors interested in direct partnerships in emerging markets. This will comprise the purchase of existing and startup projects to which EEFC will add value. EEFC will earn a 3% fee on assets under management and a 20% fee on net realized capital gains (less capital losses). EEFC will own the hedge fund management company.

EQE will contribute $US50,000 to the venture in addition to 28 wholly owned US property leases.

EQE plans to develop these projects through the sale of limited partnerships and through joint venture participation with small and medium-sized energy and resource development companies.

EEFC plans an initial public offering of 2.0 million shares at $1.00 per share. The proposed capitalization of EEFC will be 4.5 million shares owned directly by EQE shareholders, 22.5 million shares to be held by EQE, 3.0 million shares to be sold to the public. EEFC plans to complete the offering in the first half of 2008.

EQE shareholders at record date of Sept. 21 2007 will be provided with a direct participation in this subsidiary through receipt of EEFC shares as a special dividend, equivalent to approximately 7.5 shares of EEFC for each 1,000 EQE shares held. A $250,000 pre-IPO offering is planned at $0.25 per share. After the special dividend and offering, EQE will hold 75% of EEFC.

"We have designed this structure to provide maximum value for both Equus and its subsidiary, Equus Financial, while minimizing risk exposure and dilution to shareholders in both entities. We believe this to be an innovative financing method that will offer shareholders a unique opportunity to boost their exposure to resource exploration and development, as well as promising energy projects," said Company president John Denton.

STANLEY LANZET, Chairman of the Board

Forward Looking Statements

This news release contains forward-looking statements about Equus Energy Corporation that are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this news release are forward-looking statements. Forward-looking statements may prove to not be accurate and readers are cautioned to not place undue reliance on them.

The forward-looking statements included in this news release represent Equus' views as of the date hereof. While Equus anticipates that subsequent events and developments may cause Equus views to change, Equus specifically disclaims any obligation to update any forward-looking statements contained in this news release or any other forward-looking statement, whether written or oral, that may be made from time to time by Equus or on its behalf. The forward-looking statements contained in this news release should not be relied upon as representing Equus views as of any date other than the date hereof.

Contact Information

  • Equus Energy Corporation
    Stanley Lanzet
    Chairman of the Board
    (604) 218-2677
    Website: www.equusenergy.com