Exito Energy Inc.
TSX VENTURE : EXG.P

July 03, 2012 09:00 ET

Exito Energy Announces Execution of Amalgamation Agreement with Bentley Oil & Gas

CALGARY, ALBERTA--(Marketwire - July 3, 2012) - Exito Energy Inc. (TSX VENTURE:EXG.P) ("Exito" or the "Corporation"), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange (the "Exchange")), is pleased to announce that further to its news release dated April 9, 2012, it has entered into a formal amalgamation agreement dated June 29, 2012 (the "Amalgamation Agreement") with Bentley Oil & Gas Ltd. ("Bentley") pursuant to which Exito will complete a "three-cornered amalgamation" (the "Amalgamation") whereby it will acquire all of the issued and outstanding common shares of Bentley (each a "Bentley Share"). The Amalgamation, when completed, is expected to constitute the Corporation's Qualifying Transaction pursuant to the CPC Policy.

Pursuant to the Amalgamation Agreement, Exito has incorporated a wholly-owned subsidiary, 1687027 Alberta Ltd., under the laws of the Province of Alberta, which will amalgamate with Bentley to form an amalgamated entity ("Amalco"), and all of the shareholders of Bentley will exchange all of their Bentley Shares for common shares of Exito (each an "Exito Share") on a five-for-one basis. Upon completion of the Amalgamation, Amalco will be a wholly-owned subsidiary of Exito. In accordance with the terms and conditions of the Amalgamation Agreement, Exito will issue approximately 39,247,420 Exito Shares in exchange for all of the issued and outstanding Bentley Shares. In addition, immediately prior to completion of the Amalgamation, each Exito Share will be consolidated on a 1-for-2 basis, and as a result there will be 5,000,000 Exito Shares outstanding immediately prior to completion of the Amalgamation and 44,247,420 Exito Shares outstanding upon completion of the Amalgamation.

Assuming that no additional Exito Shares are issued in connection with completion of the Amalgamation, former Bentley shareholders will own 88.7% of the Exito Shares. The Amalgamation is expected to be accounted for as a reverse take-over. It is also anticipated that the name of the combined company will be changed to "Artisan Energy Corporation".

About Bentley

Bentley is a private oil and gas company incorporated under the laws of Alberta, that has a 100% working interest in 21,680 net acres in two core areas in Central and SE Alberta, with an inventory of 71, development focused, drilling locations. Bentley also has varied working interests in an additional 24,036 gross acres (14,731 net acres) of oil and gas properties in Alberta. Bentley's current oil and gas production is approximately 31 barrels of oil equivalent per day, consisting of approximately 58% light oil. There are currently 7,849,484 Bentley Shares outstanding which are held by approximately 50 shareholders. As at June 29, 2012 Bentley had working capital of approximately $1.3 million and no debt.

Bentley obtained a reserve report dated February 29, 2012, from GLJ Petroleum Consultants for its three principle properties, prepared in accordance with National Instrument 51-101. The report ascribes a net present value for the proved plus probable reserves on these properties of $14.5 million discounted at 10%.

As at June 29, 2012, TBird Oil Ltd., a Saskatchewan company controlled by Ron Wanner, owns or has control or direction over 2,909,091 Bentley Shares (37.1%) (32.9% of the Exito Shares upon completion of the Amalgamation).

Minimum Financing

As a condition to completion of the Amalgamation, in addition to any working capital that Bentley may have at the time of closing, Bentley must secure financing of at least $2 million in either debt, equity or a combination thereof.

Sponsorship

Exito intends to make an application to the Exchange for an exemption from the CPC Policy mandated sponsorship requirements in connection with the Amalgamation. There is no assurance that such an exemption will be granted.

Conditions to Completion of the Amalgamation

Completion of the Amalgamation is subject to satisfaction or waiver of terms and conditions, customary or otherwise, including but not limited to, acceptance by the Exchange of the Amalgamation, requisite shareholder approval of Bentley and other applicable approvals. There can be no assurance that the Amalgamation will be completed as proposed or at all.

Exito and Bentley will provide further disclosure by way of press releases and updates as such additional information becomes available. The Exito Shares will remain halted until completion of the Amalgamation.

Exito and Bentley anticipate that completion of the Amalgamation will occur on or before September 14, 2012.

Termination

The Amalgamation Agreement provides for certain payments in the event either party wishes to accept a superior transaction. In addition, should the Amalgamation not be completed as anticipated, Exito has a right of first refusal to participate in a transaction should Bentley enter into an alternative "going public" transaction prior to December 31, 2012.

All information contained in this news release with respect to Exito and Bentley was supplied by the parties respectively, for inclusion herein, and Exito and its directors and officers have relied on Bentley for any information concerning Bentley.

A copy of the Amalgamation Agreement will be filed in due course on SEDAR at www.sedar.com.

About Exito

Exito is a Capital Pool Company created to identify and evaluate potential acquisitions of commercially viable businesses and assets that have the potential to generate profits and add shareholder value.

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.

Barrels of oil equivalents may be misleading, particularly if used in isolation. A barrel of oil equivalent 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.

Forward Looking Statements

This news release contains forward-looking statements relating to the timing and completion of the Proposed Transaction, the future operations of Exito and other statements that are not historical facts. Forward-looking statements are often identified by terms such as "will", "may", "should", "anticipate", "expects" and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Proposed Transaction and the future plans and objectives of Exito, are forward looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Exito's expectations are risks detailed from time to time in the filings made by Exito with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Exito. As a result, Exito cannot guarantee that the Proposed Transaction will be completed and that any forward-looking statement will materialize and the reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and Exito will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Exito Energy Inc.
    Brad Docherty
    President, CEO & CFO
    (403) 472-5767

    Bentley Oil & Gas Ltd.
    Rick Ironside
    President & CEO
    (403) 453-0051