Fox Resources Ltd.

August 23, 2011 09:00 ET

Fox Resources to Raise $8.5 Million for Montana Oil & Gas Company

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 23, 2011) - Fox Resources Ltd. (TSX VENTURE:FAX) is pleased to announce that in conjunction with the acquisition of a 100% interest in Big Sky Operating LLC. ("Big Sky") (the "Acquisition"), as previously announced on August 3, 2011, the Company will complete a non-brokered private placement (the "Financing") of subscription receipts (the "Subscription Receipts") at a price of $0.35 per Subscription Receipt to raise a minimum of $8,500,000.

Big Sky, a Montana limited liability company, is the legal and beneficial owner of certain oil and gas interests comprising approximately 100,000 net acres in Toole and Glacier counties, Montana, USA, of which Big Sky has a 33.3% working interest. Big Sky is focused primarily on the exploration and development of oil and gas in the Alberta Basin, commonly referred to as the Bakken source system.

The funds will be used to fund the development of Big Sky's property interests, retire a $4 million debt of Big Sky as well as provide the required working capital to Big Sky to fund the oil exploration in Montana through 2011-2012.

Big Sky has drilled two wells which have been cased and are awaiting fracture stimulation which is now underway on the first hole.

Fox will issue 27 million shares to the members of Big Sky and 1,350,000 common shares to the lenders of Big Sky, subject to applicable TSX Venture Exchange ("TSXV") escrow requirements and applicable hold periods pursuant to securities legislation.

Each Subscription Receipt will be deemed to be exchanged upon certain release conditions (the "Release Conditions") being met, without payment of any additional consideration, for one common share of Fox and one common share purchase warrant. Each warrant will entitle the holder to acquire one additional common share for a period of two years from the date of issuance of the Subscription Receipts at a price of $0.66 for the first year and $0.80 thereafter. Finder's fees may be paid on a portion of the offering.

The Release Conditions will include (i) the satisfaction of all of the conditions to the Acquisition, and (ii) receipt of the TSX Venture Exchange (the "Exchange") conditional approval of the Acquisition and the Financing. The gross proceeds received from the Financing will be deposited into escrow, with such escrowed funds to be released immediately after all of the Release Conditions are met. If the Release Conditions have not been satisfied before November 30, 2011, such escrowed funds plus interest will be returned pro rata to each holder of the Subscription Receipts. Finder's fees in accordance with the Exchange's rules may be payable on a portion of the funds raised.

On behalf of the Board,

Mark T. Brown, CA, Director and President

This press release contains "forward-looking information". Such forward-looking statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, including, the risks and uncertainties outlined in our most recent financial statements and reports and registration statement filed with the Canadian securities administrators (available at Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected.

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. 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

  • Fox Resources Ltd.
    Mark T. Brown
    (604) 687-3520