Jomar Capital Corp.
TSX VENTURE : JOE.P

September 24, 2010 19:02 ET

Jomar Capital Corp. Announces Proposed Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - Sept. 24, 2010) - Jomar Capital Corp. (TSX VENTURE:JOE.P) ("Jomar" or the "Corporation") today announced details concerning its proposed qualifying transaction involving a business combination with Online Energy Inc. ("Online"). Online is a private company that was formed to explore for oil and gas in Western Canada.

Jomar has entered into a letter agreement with Online dated September 10, 2010 (the "Letter Agreement"), pursuant to which Jomar and Online intend to complete a business combination (the "Transaction") by way of an amalgamation to form a new company called Online Energy Inc. Jomar proposes to acquire all of the issued and outstanding common shares of Online (the "Online Common Shares") for consideration consisting of common shares (the "Jomar Common Shares") of Jomar pursuant to a "three-cornered" amalgamation in which a new wholly-owned subsidiary ("Jomar Subco") of Jomar and Online shall carry out a statutory amalgamation whereby shareholders of Online shall receive Jomar Common Shares in consideration of the acquisition of their Online Common Shares. Pursuant to the terms of the Transaction, the shareholders of Online will receive 16.25 Jomar Common Shares for each Online Common Share held with a deemed value of $1.30 per share for each Online Common Share owned, resulting in the issuance of between 8,970,049 and 11,570,049 Jomar Common Shares (and potentially increasing further if Online issues additional Online Common Shares pursuant to certain proposed financings described herein) at a deemed value of $0.08 per share The Transaction, when completed, will constitute the qualifying transaction of the Corporation pursuant to Policy 2.4 of TSX Venture Exchange Inc. (the "TSX Venture") Corporate Finance Manual.

The Transaction is subject to the policies of TSX Venture relating to qualifying transactions, as well as shareholder approval of Online. Upon completion of the Transaction, Jomar will be a company focused on oil and gas exploration in Western Canada.

Further information concerning the properties of Online will be included in a subsequent press release.

About Online and the Online Properties

Online was originally created to pursue oil and gas exploration opportunities in Alberta through grassroots prospecting, posting of prospective Crown mineral rights, and subsequent bidding at Alberta Crown landsales. To date, Online has successfully acquired prospective acreage on two oil projects. The first is a Montney oil property on the Peace River Arch in northern Alberta where Online has leased 3,840 acres at 100% working interest. The second is a Viking oil property in central Alberta where Online has leased 1,920 acres at 100% working interest.

Online expects to drill both properties in 2011 and continues to seek additional oil and gas projects through grassroots exploration. Online is also evaluating oil and gas acquisition opportunities and will attempt to execute those that meet financial and operational thresholds and are complementary to its existing properties.

Financial Information of Online

As Online has not yet conducted operations, other than to raise capital and complete land acquisitions, no initial financial information is available or relevant at this time.

Financial information regarding Online will be included in a subsequent press release.

Online Corporate History and Structure

Online was incorporated under the Business Corporations Act (Alberta) on April 22, 2009. The registered office and head office of Online are both located in Chestermere, Alberta.

Online has 552,003 Online Common Shares issued and outstanding, and no stock options, warrants, anti-dilution or other rights to purchase Online Common Shares issued or outstanding. Online may issue up to 160,000 additional Online Common Shares, which would result in 712,003 Online Common Shares being outstanding.

The principal shareholders of Online are Steve Dabner of Chestermere, Alberta, Tom Selkirk of Surrey, British Columbia and Jim Reimer of Calgary, Alberta, who own or control, directly or indirectly, 16.77%, 16.77% and 11.64% of the outstanding Online Common Shares, respectively.

Summary of the Proposed Qualifying Transaction

Jomar has entered into the arm's length Letter Agreement, pursuant to which Jomar and Online have agreed to complete the Transaction.

Pursuant to the Letter Agreement, the parties have agreed that Online may, in its sole discretion, complete a non-brokered private placement of securities of Online at a price of $1.30 per security for gross proceeds of up to $1,000,000 (the "Non-Brokered Private Placement").

Online also intends to engage an investment dealer or a syndicate of investment dealers to act as agent (the "Agents") on a "commercially reasonable efforts" basis for a private placement (the "Brokered Private Placement") of a minimum of $5.0 million and a maximum of $10.0 million of securities of Online at a price of $1.30 per security (the "Offering Price"). Online intends to use the net proceeds of the Non-Brokered Private Placement and the Brokered Private Placement to shoot 3D seismic, to pay the cost to drill, case, complete, test and equip for production three oil targeted wells in Online's two core operating areas and for general corporate purposes. Further information concerning the Brokered Private Placement and the engaged investment dealers will be included in a subsequent press release.

Directors and Officers

After completion of the Transaction, the Board of Directors of Jomar will consist of four (4) directors, all of whom are nominees of Online, namely Steve Dabner, Thomas Love, Gregory Turnbull and John Stankiewicz, provided the TSX Venture does not object to such nominations and such persons are eligible to act as directors pursuant to the requirements of the Business Corporations Act (Alberta). Contemporaneous with the completion of the Transaction, the officers of Jomar will be appointed by the Board of Directors of Jomar and will include Steve Dabner as President and Chief Executive Officer, Thomas Love as Chief Financial Officer, Rob Stanton as Vice President, Operations, Brent Foster as Vice-President, Engineering and Sanjib Gill as Corporate Secretary. The biographies of each of the proposed directors and officers of Jomar upon completion of the Transaction are detailed below.

Steve Dabner P. Geol – Director, President and Chief Executive Officer

Steve Dabner has more than 26 years of experience in the oil and gas industry. Mr. Dabner spent 16 months at Home Oil Company Limited as a co-op student prior to joining the company as an exploration geologist in 1985. From 1991 to 1997, Mr. Dabner worked as a senior geologist with Cimarron Petroleum Ltd. In 1992, Mr. Dabner founded Jardex Petroleum Ltd., a private oil and gas exploration and production company that participated in joint ventures with Cimarron Petroleum Ltd. Mr. Dabner sold Jardex Petroleum Ltd. in April 1997 to Newport Petroleum Corporation. In August 1997, Mr. Dabner was co-founder of Moxie Petroleum Ltd., a public oil and gas company and served as its Vice-President, Exploration, Chief Financial Officer and a director until December 1999 when the company was sold to Richland Petroleum Corporation. From December 1999 to May 2001, Mr. Dabner served as Vice-President, Exploration, Chief Financial Officer and a director of Moxie Exploration Ltd. and from May 2001 until July 2003 (when the company was sold to Endev Energy Inc.) Mr. Dabner served as the President, Chief Executive Officer and a director. Mr. Dabner was the President, Chief Executive Officer and a director of Trimox Energy Inc., a public oil and gas company that he co-founded, from December 2004 until the company was sold to Canext Energy Ltd. in June 2007. Mr Dabner served as an independent director of Canex Energy Inc., a public oil and gas company, from April 2004 to May 2006. He subsequently served as an independent director of Canext Energy Ltd., a public oil and gas company, from May 2006 to April 2010. Mr. Dabner is currently President and a director of Rustmount Properties Inc., a private real estate development company that he founded in June 2007. He is also President and a Director of Online, a private oil and gas exploration company that he co-founded in April 2009.

Mr. Dabner holds a Bachelor of Science Honours Degree in Applied Earth Sciences - Co-operative Program from the University of Waterloo and is a registered Professional Geologist in the province of Alberta.

Thomas Love – Chief Financial Officer

Mr. Love has 33 years of experience in the oil and gas industry. Mr. Love was educated at McGill University where he graduated with a Bachelor of Commerce Degree. Mr. Love articled with Clarkson, Gordon & Co. (now Ernst & Young LLP) and obtained his professional designation as a Chartered Accountant in 1975. In 1977, Mr. Love started a financial consulting company which provided financial and administrative services to the oil and gas industry. In 1982, Mr. Love became a Vice-President and a director of Charterhall Oil Canada, a subsidiary of a U.K. based oil and gas exploration company. From 1987 to 1991, Mr. Love advised small and medium-sized oil and gas companies in the areas of financing, mergers and acquisitions. In 1992, Mr. Love was a co-founder of Westward Energy Ltd., a public oil and gas company of which he was Vice-President, Finance, Chief Financial Officer and a Director until November 1996. In August 1997, Mr. Love was a co-founder of Moxie Petroleum Ltd., a public oil and gas company of which he was the President, Chief Executive Officer and a Director until its sale to Richland Petroleum Corporation in December 1999. From December 1999 to May 2001, Mr. Love was the Chairman, President and a Director of Moxie Exploration Ltd.; subsequently Mr. Love was the Chairman, Chief Financial Officer and a Director of Moxie Exploration Ltd., a public oil and gas company listed on TSX Venture, until its sale to Endev Energy Inc. in July 2003. Mr. Love was the Chairman, Chief Financial Officer and a Director of Trimox Energy Inc., a junior oil and gas company that he co-founded, from December 2004 until its sale to Canext Energy Ltd. in June 2007. Mr. Love served as an independent director of Kensington Energy Ltd. from February 2004 to February 2005, Castle Rock Petroleum Ltd. from October 2004 to September 2007, and Canext Energy Ltd. from June 2007 to April 2010. Mr. Love has been an independent businessman since June 2007.

Robert D. Stanton – Vice President, Operations

Mr. Stanton is a Professional Engineer who has acquired over 27 years of well rounded engineering experience in the WCSB oil and gas industry within British Columbia, Alberta and Saskatchewan. He has been exposed to many facets of engineering responsibilities within the drilling, completions, production, reservoir, operations and facilities disciplines. Prior to obtaining his B.Sc. in Engineering, Mr. Stanton was employed as a relief operator for Chevron Standard Ltd. during the summer months between 1980 and 1981. During the period from 1982 to 1984, Mr. Stanton was employed by Petro-Canada Inc. as a drilling engineer (EIT) within both the land and east coast offshore departments. From 1985 to 1997, Mr. Stanton was exposed to continually increasing levels of responsibilities while working for Canadian Worldwide Energy Ltd., Triton Canada Resources Ltd. and Transwest Energy Inc. For the last five years with Transwest, Mr. Stanton held the position of Senior Drilling and Production Engineer. Transwest Energy was sold to Jordan Petroleum Ltd. in 1997 and Mr. Stanton stayed on with Jordan for six months to facilitate the post acquisition transition process. From 1997 to 1998, Mr. Stanton was employed by Pinnacle Resources Ltd. as Senior Operations Engineer. During the period from 1998 to 2004, Mr. Stanton was employed by the junior exploration and production company, Oiltec Resources Ltd., as Operations Manager until was sold in June 2004. Mr. Stanton was retained as a consulting engineer with Result Energy Inc. in September 2004 and was employed as Vice-President, Engineering and Operations from January 2005 to November 2009 where an arrangement to recapitalize Result Energy was approved. Mr. Stanton has been pursuing other opportunities since November 2009.

Mr. Stanton holds a B.Sc. Civil Engineering from the University of Calgary and is a member in good standing of APEGGA and SPE.

Brent Foster P. Eng. – Vice President, Engineering

Mr. Foster is a registered Professional Engineer, with 30 years of experience in exploitation and development of oil and gas pools in the Western Canadian Sedimentary Basin and the Cooper Basin in South Australia. From 2007 to September 2010, Mr. Foster has been consulting to the oil and gas industry, primarily performing acquisition and disposition evaluations for Intrepid Energy Corp. and EdgeStone Capital Partners. Previously he was a co-founder, Vice-President, Engineering and COO of Blue Mountain Energy Ltd., a publicly listed company, which grew from initial capital of $23.0 million in 2002 to an enterprise value of $142 million when it was sold in 2006. Prior to Blue Mountain, Mr. Foster was Vice-President, Engineering at Hadrian Energy Corp., a private oil and gas company, from 1999 to 2002. He was employed by Rigel Oil and Gas Ltd. from 1988 to 1999 in various engineering and business capacities culminating in 1999, as the Vice-President, Business Development, when the company was sold to Talisman Energy Inc. From 1985 to 1988, Mr. Foster worked in Adelaide, Australia for Delhi Petroleum Pty. Ltd., as a senior reservoir engineer in the gas units of the Cooper Basin. In 1979, following graduation, Mr. Foster was employed by Home Oil Company Ltd., as a reservoir engineer, until 1985.

Mr. Foster obtained a Bachelor of Applied Science Degree in Geological Engineering from the University of British Columbia in 1979.

Gregory G. Turnbull – Director

Mr. Turnbull is the Regional Managing Partner of the Calgary office of the law firm McCarthy Tétrault LLP. Throughout his career, he has dealt with all aspects of a public company's creation, growth, change and value maximization. He has extensive experience in corporate finance and securities transactions, including public and private share and debt financings, takeover bids, initial public offerings, business combinations, corporate governance, regulatory matters both domestic and internationally. He provides advice on various corporate finance transactions and has been actively involved in the initial public offerings of more than 40 companies. He has acted as a director or officer for more than 35. Mr. Turnbull is currently a director of Storm Resources Ltd., Triple 8 Energy Ltd., Heritage Oil Limited, Hawk Exploration Ltd., Sonde Resources Corp. and Crescent Point Energy Corp., and a former director of BNP Resources Inc., all publicly traded entities listed on TSX or TSX Venture.

Mr. Turnbull received his Bachelor of Arts (Honours) Degree from Queen's University in 1976 and his Bachelor of Laws Degree from the University of Toronto in 1979. He was called to the Alberta bar in 1980. Mr. Turnbull is a member of the Law Society of Alberta, the Canadian Bar Association and the Calgary Bar Association.

John R. Stankiewicz - Director

Mr. Stankiewicz is a Fellow Chartered Accountant. In 2005, he retired after a 35 year career with Ernst & Young LLP. He had been a partner since 1981 and his public accounting experience focused on public and private energy sector companies. He served as an independent director of Trimox Energy Inc. from July 2005 to June 2007. He is currently a director of several private oil & gas companies.

Mr. Stankiewicz received his Bachelor of Commerce (Honours) Degree from Queen's University in 1970. He became a member of the Ontario Institute of of Chartered Accountants in 1973 and the Alberta Institute in 1981.

Sanjib Gill – Corporate Secretary

Mr. Gill is a partner at the law firm McCarthy Tétrault LLP practicing primarily in the areas of corporate finance, mergers and acquisitions. Mr. Gill has dealt with all aspects of a public company's creation, growth, change and termination. Mr. Gill provides advice on various corporate finance transactions and has been actively involved in the initial public offerings of numerous companies. Mr. Gill acts as counsel to, and has been instrumental in the organization of, and the provision of advice to, a wide range of clients, including oil and gas exploration and production companies and energy trusts. Mr. Gill advises underwriters and investment dealers on a broad range of matters, including financings, take-over bids, plans of arrangement and corporate assignments. Mr. Gill has been involved in the negotiation and documentation of a wide range of transactions for both public and private companies, including asset and share transactions, corporate re-organizations, debt financings and various other tax motivated transactions. Mr. Gill is a current and past corporate secretary of a number of private and public (listed on TSX Venture and TSX) oil and gas companies.

Mr. Gill has a Bachelor of Laws from the University of Alberta and a Bachelor of Arts in Economics (with Distinction) from the University of Calgary. Mr. Gill is a member of the Law Society of Alberta.

Escrow Transfer

Concurrent with the closing of the Transaction, the existing directors of Jomar will transfer within escrow an aggregate of 2,000,000 Jomar Common Shares at a price of $0.08 per share to the directors and officers of Online, or as they may direct, subject to the receipt of all necessary regulatory approval (the "Escrow Transfer").

Conditions for Completion of Transaction

The completion of the Transaction is subject to the approval of TSX Venture and all other necessary regulatory approvals. The completion of the Transaction is also subject to additional conditions precedent, including shareholder approval of Online, satisfactory completion of due diligence reviews by the parties, board of directors approval of Jomar and Online, completion of the Escrow Transfer, completion of the Non-Brokered Private Placement and completion of the Brokered Private Placement for minimum gross proceeds of $5.0 million, and certain other usual conditions.

Other Matters

The Transaction will be an arm's length transaction as none of the directors, officers or insiders of Jomar own any interest in Online.

Jomar has agreed to pay a small finder's fee of $5,000 to an arm's length party.

Jomar also announces it has reserved, subject to TSX Venture approval, a price of $0.08 per Jomar Common Share for the grant of stock options (the "Stock Options") and performance warrants (the "Performance Warrants") to acquire up to a fixed number of Jomar Common Shares constituting no more than 20% of the issued and outstanding Jomar Common Shares upon completion of the Transaction, the Online Non-Brokered Private Placement and the Online Brokered Private Placement. The grant of the Stock Options and Performance Warrants is subject to regulatory approval. The Stock Options and Performance Warrants will be granted to directors, officers, employees and consultants of Jomar, as determined by the Board of Directors of Jomar, concurrent with the completion of the Transaction.

The Corporation has made an application to TSX Venture for an exemption from the sponsorship requirements of TSX Venture, but there is no assurance that such an exemption will be available.

Trading of the Common Shares will not resume until TSX Venture has reviewed a resource report regarding the Online Properties and all other documents required by TSX Venture have been filed. Jomar will issue a further news release when TSX Venture has received the necessary documentation and trading of the Common Shares is to resume.

As indicated above, completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture acceptance and 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 Information Circular or Filing Statement, as applicable, of the Corporation 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 the Corporation should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Neither Online nor Jomar will update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by Jomar and Online.

The securities of Jomar being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

Neither the TSX Venture nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Jomar Capital Corp.
    Theodore Rousseau
    President
    (403) 816-1947
    or
    Online Energy Inc.
    Steve Dabner
    President
    (403) 510-0155