Exito Energy Inc.
TSX VENTURE : EXG.P

November 02, 2012 14:36 ET

Exito Energy Files Filing Statement For Its Qualifying Transaction and Announces Bentley Oil & Gas Private Placement

CALGARY, ALBERTA--(Marketwire - Nov. 2, 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), a capital pool company (a "CPC"), and Bentley Oil & Gas Ltd. ("Bentley") are pleased to announce that further to Exito's news releases dated April 9, 2012 and July 3, 2012, Exito has filed its filing statement dated October 30, 2012 (the "Filing Statement") in connection with its qualifying transaction (the "Qualifying Transaction"). The Qualifying Transaction is expected to close on or before November 28, 2012.

On October 29, 2012, the Corporation received conditional approval from the TSX Venture Exchange (the "Exchange") for the completion of the Qualifying Transaction, which will be effected pursuant to an amalgamation agreement (the "Amalgamation Agreement") among the Corporation, 1687027 Alberta Ltd., a wholly-owned subsidiary of Exito ("Exito Subco"), and Bentley. Pursuant to the Amalgamation Agreement Exito will acquire all of the issued and outstanding common shares of Bentley ("Bentley Shares") by way of amalgamation between Exito Subco and Bentley, following which the amalgamated company will be a wholly- owned subsidiary of Exito (the "Amalgamation").

Pursuant to the Amalgamation Agreement, all of the outstanding Bentley Shares will be exchanged for common shares of Exito ("Exito Shares") on a five for one basis, such that former shareholders of Bentley will continue as shareholders of Exito. In addition, immediately prior to completion of the Amalgamation, each Exito Share will be consolidated on a one for two basis ("Consolidation"), resulting in 5,000,000 Exito Shares outstanding.

Conditions to Completion of the Amalgamation

Completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to: (a) completion by Bentley of a non-brokered private placement (the "Private Placement") of aggregate gross proceeds of a minimum of $2,600,000 and a maximum of $4,000,000 (the "Offering"); (b) approval of the Amalgamation by the shareholders of Bentley; and (c) Exchange approval.

Private Placement

Bentley has agreed to complete a non-brokered private placement of a minimum of 2,080,000 common share subscription receipts ("Common Share Subscription Receipts") and up to a maximum of 3,200,000 Common Share Subscription Receipts at a price of $1.25 (minimum of 10,400,000 Resulting Issuer Shares (as defined below) and maximum of 16,000,000 Resulting Issuer Shares at a price of $0.25 per share post- Amalgamation) per Common Share Subscription Receipt, for aggregate gross proceeds of a minimum of $2,600,000 (the "Minimum Financing") and up to a maximum of $4,000,000 (the "Maximum Financing") . A portion of the maximum issuance of subscription receipts may be completed through the sale of common share subscription receipts issued on a "flow-through" basis under the Income Tax Act (Canada) (the "Flow- Through Subscription Receipts") at a price of $1.50 ($0.30 per share post-Amalgamation) per Flow- Through Subscription Receipt.

The Common Share Subscription Receipts and Flow-Through Subscription Receipts (collectively, the "Subscription Receipts") will not be registered under the U.S Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release is not an offer for sale, or solicitation of an offer to buy, in the United States of any Subscription Receipts, equity shares or any other securities of Exito or Bentley.

Each Common Share Subscription Receipt will entitle the holder to receive, for no additional consideration, and subject to the satisfaction of certain conditions, one (1) Bentley Share at the time described herein. Each Flow-Through Subscription Receipt will entitle the holder to receive, for no additional consideration, and subject to the satisfaction of certain conditions, one (1) flow-through share ("Bentley FT Share") in the capital of Bentley at the time described herein. Bentley may pay a cash commission of 6.5% in relation to certain subscriptions introduced to Bentley by eligible arm's length parties.

It is currently anticipated that the Offering will close late-November, 2012 (the "Closing Date"). The gross proceeds of the Offering (the "Escrowed Proceeds") will be held in escrow by an escrow agent acceptable to Bentley. The Subscription Receipts will be subject to a four-month hold period from the Closing Date in accordance with applicable securities legislation, however it is expected that if the Escrow Release Notice (as defined below) is delivered and Bentley Shares and Bentley FT Shares are issued to the holders of Subscription Receipts (in the circumstances described below), such persons will receive Exito Shares upon consummation of the Amalgamation, and such Exito Shares shall be freely tradeable.

Upon delivery of a notice (the "Escrow Release Notice") by Bentley to the escrow agent to the effect that the following conditions have been satisfied, the Escrowed Proceeds will be released to Bentley and the Subscription Receipts will be deemed to be converted into Bentley Shares or Bentley FT Shares, as applicable: (i) all conditions, undertakings and other matters to be satisfied, completed and otherwise met prior to the completion of the Amalgamation have been satisfied, completed or otherwise met; (ii) the receipt of all required shareholder and regulatory approvals (including without limitation, the conditional approval of the Exchange for the Amalgamation and the listing of the Exito Shares) and (iii) the receipt of any third party consents necessary to consummate the Amalgamation. In the event that the Escrow Release Notice is not delivered to the escrow agent on or before December 30, 2012, the funds from the Offering will be reimbursed to the holders of Subscription Receipts.

Assuming completion of the Minimum Financing, upon completion of the Amalgamation Exito will issue up to 49,647,420 Exito Shares in exchange for all of the issued and outstanding Bentley Shares and the Resulting Issuer (as defined below) will have 54,647,420 Resulting Issuer Shares issued and outstanding. Assuming completion of the Maximum Financing, upon completion of the Amalgamation Exito will issue up to 55,247,420 Exito Shares in exchange for all of the issued and outstanding Bentley Shares and the Resulting Issuer will have 60,247,420 Resulting Issuer Shares issued and outstanding.

Bentley intends to use the net proceeds from the Offering to fund the continued exploration and development of its prospective oil and gas properties.

Resulting Issuer

In connection with completion of the Qualifying Transaction, Exito will change its name ("Name Change") to "Artisan Energy Corporation" (the "Resulting Issuer").

The management and board of directors of Bentley will be the management and board of directors of the Resulting Issuer. Details regarding Bentley's management and board of directors can be found in Exito's news release dated April 9, 2012 and in the Filing Statement, which describes the terms of the Amalgamation Agreement and provides details relating to the business of Bentley and the Resulting Issuer. The Filing statement has been filed under Exito's profile on SEDAR at www.sedar.com.

Assuming completion of the Minimum Financing, Bentley's management and board of directors will, as a group, own, directly or indirectly, 24,232,501 common shares of the Resulting Issuer ("Resulting Issuer Shares"), representing 44.34% of the outstanding Resulting Issuer Shares. Assuming completion of the Maximum Financing, Bentley's management and board of directors will, as a group, own, directly or indirectly, 40.22% of the outstanding Resulting Issuer Shares.

BMW Oil Ltd., a Saskatchewan-based company controlled by Ron Wanner, a director of Bentley, owns or exercises control or direction over 2,909,091 Bentley Shares, representing 37.1% of the outstanding Bentley Shares. Assuming completion of the Minimum Financing or the Maximum Financing, Mr. Wanner will own or exercise control or direction over 26.62% or 24.14% of the outstanding Resulting Issuer Shares, respectively.

Bentley Shareholder Approval

Completion of the Amalgamation is conditional upon approval by Bentley's shareholders. Bentley will hold a shareholder meeting on November 23, 2012 to consider and, if deemed advisable, approve the Amalgamation.

About Bentley

Bentley is an Alberta-based 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 70, 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 55 barrels of oil equivalent per day, consisting of approximately 73% light oil. There are currently 7,849,484 Bentley Shares outstanding which are held by approximately 50 shareholders.

Bentley obtained a reserve report dated 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 discounted at 10%. It is expected that upon closing of the Qualifying Transaction, the Resulting Issuer will be classified as a Tier 1 issuer on the Exchange.

About Exito

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

Shareholders of Exito approved the Consolidation and Name Change at a meeting of Exito shareholders held on May 22, 2012.

There is no assurance that the Qualifying Transaction will be completed as proposed or at all.

Non-GAAP Measures

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 and information ("forward-looking statements") within the meaning of applicable securities laws relating to the proposal to complete the proposed Qualifying Transaction and the Offering, including statements regarding the terms and conditions of the proposed Qualifying Transaction and the terms, timing, and completion of the Offering. 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 parties will not proceed with the proposed Qualifying Transaction, that the Offering will not be completed, that the ultimate terms of the proposed Qualifying Transaction will differ from those that currently are contemplated, and that the proposed Qualifying Transaction will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities and shareholders). The statements in this press release are made as of the date of this release. Neither Exito nor Bentley undertakes any 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.

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.

Contact Information

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

    Bentley Oil & Gas Ltd.
    Rick Ironside
    President & CEO
    (403) 984-9275