Great Pacific International Inc.
PINK SHEETS : GPIPF
TSX VENTURE : GPI

Great Pacific International Inc.

November 01, 2006 09:15 ET

Great Pacific International, Inc.: Change of Business

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 1, 2006) - Great Pacific International, Inc. ("GPI") (TSX VENTURE:GPI)(PINK SHEETS:GPIPF) is pleased to announce a proposed change of business to the oil and gas industry. GPI has entered into an agreement dated October 27, 2006, with Mistahiya Resources Ltd. ("Mistahiya") to acquire interests in certain oil and gas properties located within the province of Alberta. GPI will purchase from Mistahiya 36% of Mistahiya's interests in the Properties for a purchase price of $600,000, which will be paid by issuance of 500,000 Common Shares of GPI at a price of $0.50 per share, and a cash payment of $350,000. GPI paid Mistahiya a deposit of $25,000 upon execution of the agreement. If this transaction closes then this deposit shall be applied to the purchase price. If this transaction does not close then this deposit shall be applied to payment of GPI's obligation to contribute to the costs of the updated engineering valuation and the balance shall be forfeited to Mistahiya as a break fee for the non-completion of this agreement.

The interest purchased by GPI will represent a working interest in the Properties and GPI acknowledges that it will be required to contribute its proportionate share of exploration and development expenditures and abandonment costs on the Properties in which it has an interest. Mistahiya shall be responsible for funding its proportionate share of such expenditures based upon the interest in the Properties that it retains. Similarly, GPI and Mistahiya will be entitled to their respective share of revenues from the Properties as of the effective date of the transfer of the purchased interest.

Mistahiya is at arms' length to GPI. Mistahiya is a private company controlled by Jon Axford of Calgary, Alberta, and owned by Mr. Axford and members of his family. On the completion of this transaction, and the proposed private placement described below, Mistahiya will own approximately 3% of the outstanding shares of the GPI. A finder's fee of 2% will be paid in cash in connection with the above acquisition.

This agreement shall be subject to obtaining all required regulatory approvals including, but not limited to, the approval of the TSX Venture Exchange. The Corporation is seeking an exemption from the requirements to provide a sponsorship report to the Exchange, but there is no assurance that such exemption will be granted. Until the Exchange approves the sponsorship exemption, or a sponsor is approved, trading in the shares of the Company will remain halted.

Based upon an independent report prepared by Martin & Brusset Associates, the net present value, before income tax, of the anticipated net cash flows from the property interest being acquired by the Corporation, based on constant dollar pricing and using a discount rate of 15%, will be as follows:



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Type of Reserves Net present value ($1,000) Before Tax
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Discounted Discounted an Value for
15% additional 50% COB purposes
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Proved Developed Producing 513 - 513
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Probable Developed 259 129.5 129.5
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Probable Undeveloped 514 257 257
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Possible 385 - -
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Total 1,671 386.5 899.5
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Upon completion of the proposed Change of Business, the Company intends to employ Mr. Jon Axford as Vice President of Exploration and Development. Mr. Axford has over 25 years experience as a Director and Senior Officer with several Canadian and US public and private exploration and production companies including Mistahiya Resources Ltd., Marauder East Coast Exploration Inc., Endless Energy Corp. Trax Petroleums and Columbia Basin Energy Corporation. He has consulted extensively with several Junior and Major Oil and Gas Corporations.

An Audited Statement of Operating Results is currently being prepared and a summary of that statement will be released when it becomes available.

The Corporation plans to sell off its existing loyalty card business or, alternatively, wind down these operations. It is expected that these operations will be sold or wound down within three months.

The Corporation proposes to carry out a non-brokered private placement of up to 2,000,000 units at a price of $0.50 per unit, each unit consisting of one common share and one common share purchase warrant. Each full warrant will entitle the holder to purchase one additional common share at a price of $0.60 per share, with a term of two years. If fully subscribed, the Corporation will raise up to $1,000,000. The proceeds from this placement will be used to pay the cash commitments under the acquisition, to fund exploration and development costs and for general working capital. This placement is subject to exchange approval. The Corporation may pay a finder's fee in cash and/or shares with respect to this placement. There is no assurance that this proposed private placement will be completed either in whole or in part. Three Directors of GPI will participate in the Private Placement for a total of 1,220,000 units.

The closing of the property acquisition is conditional on the Corporation substantially completing the above Private Placement.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. 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 to be prepared in accordance with the transaction, any information released or received with respect to the COB may not be accurate or complete and should not be relied upon. Trading in the securities of Great Pacific International Inc. should be considered highly speculative.

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.

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