CALGARY, ALBERTA--(Marketwire - Nov. 30, 2012) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Exito Energy Inc. "EXG.P" ("Exito" or the "Corporation") (TSX VENTURE:EXG.P) is pleased to announce that on November 29, 2012 the Corporation closed its qualifying transaction (the "Qualifying Transaction"), which was effected pursuant to an amalgamation agreement (the "Amalgamation Agreement") among the Corporation, its wholly-owned subsidiary, 1687027 Alberta Ltd. ("Exito Subco"), and Bentley Oil and Gas Ltd. ("Bentley"). Pursuant to the Amalgamation Agreement, the Corporation acquired all of the issued and outstanding common shares of Bentley ("Bentley Shares") by way of amalgamation between Exito Subco and Bentley (the "Amalgamation"). The amalgamated company became a wholly-owned subsidiary of the Corporation, and former holders of Bentley Shares received five (5) New Exito Shares (as defined below) for each one (1) Bentley Share. In addition, immediately prior to completion of the Amalgamation, each common share of the Corporation was consolidated on a two to one basis into post-consolidated common shares ("New Exito Shares") and the Corporation changed its name to "Artisan Energy Corporation" ("Artisan").
On October 30, 2012, the TSX Venture Exchange (the "TSXV") issued its conditional approval for the Qualifying Transaction and listing of the Corporation on the TSXV as a Tier 1 Issuer. Completion of the Qualifying Transaction was subject to a number of conditions, including, but not limited to: (a) approval of the Amalgamation by the shareholders of Bentley; and (b) completion by Bentley of a non-brokered private placement for aggregate gross proceeds of a minimum of $2,600,000 and a maximum of $4,000,000.
Holders of Bentley Shares that voted at the annual and special Bentley shareholder meeting unanimously approved the Amalgamation Agreement on November 23, 2012. In addition, on November 28, 2012, Bentley completed a private placement of 2,349,000 common share subscription receipts ($0.25 effective price post- Qualifying Transaction per subscription receipt) and 1,684,358 flow-through subscription receipts ($0.30 effective price post-Qualifying Transaction per subscription receipt), for gross proceeds of $3,441,557 (the "Private Placements"). In connection with the Private Placements, Bentley paid commissions to eligible arm's length parties totaling $163,755, resulting in net proceeds from the Private Placements of $3,277,802. Each common share subscription receipt issued by Bentley was exchanged for one Bentley Share immediately prior to the Amalgamation, which pursuant to the Amalgamation Agreement was then exchanged into New Exito Shares on a 5 for 1 basis. In connection with closing of the Qualifying Transaction, Artisan issued a total of 52,676,788 New Exito Shares to former holders of Bentley Shares and subscription receipts, in exchange for acquiring 10,198,486 Bentley Shares and 1,684,358 flow-through subscription receipts which were exchangeable into New Exito Shares on a one-for-one basis. Additionally, in conjunction with the Amalgamation: (i) 1,000,000 stock options of Exito were exchanged for 500,000 stock options to purchase New Exito Shares at a price of $0.20 with an expiry date of November 29, 2013; and (ii) 350,000 broker options of Exito were exchanged for 175,000 broker options to purchase New Exito Shares at a price of $0.20 with an expiry date of August 9, 2013.
In addition, on November 29, 2012, each of the current directors and officers of the Corporation resigned, and Rick Ironside was appointed President & Chief Executive Officer, John Bell was appointed Chief Financial Officer, Rick Young was appointed Chief Operating Officer, David Evans was appointed Chairman of the Board, and Rick Ironside, Rick Young, Ron Wanner, Tim Dunne, Warren Waldegger and Richard Cooper were appointed to the Board of Directors of the Corporation. Options to purchase 2,800,000 New Exito Shares at a price of $0.25 with an expiry date of November 29, 2017, were granted to the directors and officers of the Corporation upon completion of the Qualifying Transaction. Additional details regarding Artisan's management and Board of Directors can be found in the Filing Statement relating to the Qualifying Transaction filed on SEDAR at www.sedar.com. In connection with the Qualifying Transaction, Artisan's financial year-end has also changed from December 31st to February 28th.
The completion of the Qualifying Transaction is subject to final approval of the TSXV. As a result of completing the Qualifying Transaction, the Corporation has 57,676,788 New Exito Shares issued and outstanding on a non-diluted basis. The New Exito Shares will commence trading on the TSXV under the ticker symbol "AEC" after the TSXV issues its final exchange bulletin confirming the completion of the Qualifying Transaction and its final approval of the listing which is expected next week. The Corporation will issue a news release once the TSXV confirms satisfaction of its listing conditions and will then advise of the listing date of the New Exito Shares.
Artisan has a 100% working interest in 21,680 net acres in two core areas in Central and SE Alberta, with an inventory of 70, development focused, drilling locations. Artisan also has varied working interests in an additional 24,036 gross acres (14,731 net acres) of oil and gas properties in Alberta. Artisan's current oil and gas production is approximately 55 barrels of oil equivalent per day, consisting of approximately 73% light oil.
Artisan obtained a reserve report dated effective October 1, 2012, from GLJ Petroleum Consultants Ltd. for its three principle properties, prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. The report ascribes a before tax net present value for the proved reserves on these properties of $9.3 million and proved plus probable reserves on these properties of $24.8 million, both discounted at 10%.
In recent months Artisan has drilled two horizontal oil wells in two of the company's three developmental oil projects. The first at Ferrybank has indicated an economic oil cut but is awaiting drill out of multi-frac balls and seats to establish its true potential. The second at Chip Lake is currently undergoing completion operations with a multi-fracture stimulation to occur in the next couple of days. The Company will be providing more detail about both projects in the near future.
Near term capital plans include the drilling of additional wells at Chip Lake, an exploratory well at Bigoray and the drill-out at Ferrybank.
Upon closing of the Qualifying Transaction, as a group, Artisan's management and board of directors own, directly or indirectly, 26,439,780 New Exito Shares, representing 45.8% of the Corporation's outstanding shares.
BMW Oil Ltd., a Saskatchewan-based company controlled by Ron Wanner, a director of Artisan, owns or exercises control or direction over 15,945,455 New Exito Shares, representing 27.6% of the Corporation's 57,676,788 outstanding shares (non-diluted).
Note Regarding Oil and Gas Disclosures
Barrels of oil equivalents may be misleading, particularly if used in isolation. A barrel of oil equivalent ("boe") conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. It should not be assumed that the present worth of estimated future net revenue represents the fair market value of the reserves disclosed in this press release. The reserve and related revenue estimates set forth in this press release are estimates only and the actual reserves and realized revenue may be greater or less than those calculated.
Forward Looking Statements
This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws relating to the expected completion of the Qualifying Transaction and estimates of the quantities of proved reserves, probable reserves, and related net present value of future net revenue of proved reserves and probable reserves of Artisan's properties. Readers are cautioned to not place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the TSXV does not grant final approval for the Qualifying Transaction or that the listing of the New Exito Shares on the TSXV is delayed for any reason. The statements in this press release are made as of the date of this release. Artisan undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Exito or Bentley or their respective financial or operating results or (as applicable), their securities, except as otherwise required by applicable securities law.
The TSX Venture Exchange has in no way passed upon the merits of the Qualifying Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this Release.