Kramer Capital Corp.

TSX VENTURE : KRM.P


April 23, 2012 13:52 ET

Kramer Capital Corp. Announces Letter of Intent for the Acquisition of Oil and Gas Properties in the Ingoldsby Area of Saskatchewan

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 23, 2012) -

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Kramer Capital Corp. (TSX VENTURE:KRM.P) (the "Corporation" or "Kramer") is pleased to announce that the Corporation has entered into a letter of intent dated April 19, 2012 (the "Letter of Intent") with Villanova Oil Corp. (the "Vendor"), whereby the Corporation has agreed to acquire certain oil and gas properties (the "Significant Assets") in the Ingoldsby Area of Saskatchewan (the "Proposed Acquisition").

The Corporation was incorporated under the provisions of the Business Corporations Act (Alberta) and has a head office in Vancouver, British Columbia. Kramer is a "capital pool company" under the policies of TSX Venture Exchange (the "Exchange") and it is intended that the Proposed Acquisition will constitute the "Qualifying Transaction" of the Corporation, as such term is defined in the policies of the Exchange. The Corporation is a "reporting issuer" in the provinces of British Columbia, Alberta and Ontario.

The Vendor is a private corporation incorporated under the provisions of the Business Corporations Act (Saskatchewan) with its registered and head office in Regina, Saskatchewan. The Vendor owns and operates an asset base of producing oil and gas properties in Western Canada.

The Qualifying Transaction will be carried out by parties dealing at arm's length to one another and therefore will not be considered to be a Non-Arm's Length Qualifying Transaction, as such term is defined under the policies of the Exchange.

It is expected that upon completion of the Qualifying Transaction, the Corporation will meet Initial Listing Requirements for a Tier 2 oil and gas issuer under the policies of the Exchange.

The Proposed Acquisition

Subject to any regulatory, shareholder, director or other approval that may be required, the completion of satisfactory due diligence by the Corporation and other terms and conditions contained in the Letter of Intent, it is intended that the Corporation will acquire the Significant Assets from the Vendor at a purchase price of $934,250, inclusive of applicable taxes and in Canadian funds (the "Purchase Price"), payable by way of cash.

A technical report compliant with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities will be submitted to the Exchange for review and detailed information on the Significant Assets will be included in a subsequent press release.

Management of the Resulting Issuer

It is a condition precedent of the Letter of Intent that the management team of the Corporation be comprised of the individuals outlined below. The following is a brief description of the proposed position with the Corporation, background and experience of the proposed officers of the Corporation (the "Proposed Management Team") upon completion of the Proposed Acquisition.

Corbin Blume - Calgary, Alberta - President and Chief Executive Officer

  • 18 years of oil and gas industry experience in senior business development roles at Canadian 88 Energy and Canadian Superior Energy and consulting roles at Pengrowth and Reliable Energy.

Brent Defosse - Calgary, Alberta - Chief Operating Officer

  • Professional engineer with over 30 years of experience in drilling, production and exploitation
  • Former VP Drilling and Completions, Pengrowth Energy Trust and COO, Acclaim Energy Trust, Manager of Production and Operations for a number of Chevron's Western Canada properties.

Grant Henschel - Calgary, Alberta - Vice President Business Development

  • Professional engineer with 25 years of oil and gas experience at Schlumberger, Texaco, ICG Resources and as a senior partner and associate at Sproule Associates Limited
  • Former VP, Acquisition and Divestments, Pengrowth Energy Trust

The board composition of Kramer following completion of the Proposed Acquisition will be announced in a subsequent press release.

Proposed Financing

The Letter of Intent contains a condition that a financing for minimum gross proceeds of a minimum of CDN$3,000,000 (the "Financing") be completed. Kramer will issue subscription receipts ("Subscription Receipts") at a price of $0.20 per Subscription Receipt. Each Subscription Receipt will be exercised, upon completion of certain conditions including the completion of the Proposed Acquisition, into one common share of Kramer. Any securities issued pursuant to the Financing may be subject to regulatory escrow. The net proceeds of the Financing will be used: (a) to fund the business plan of Kramer; (b) for payment of the Purchase Price; (c) for expenses related to the Proposed Acquisition; and (d) for general working capital purposes. Additional terms of the Financing, including the issue price per security and the number of securities to be issued, will be announced in a subsequent press release of the Corporation. It is expected that the gross proceeds of the Financing will be escrowed with a third party escrow agent and the net proceeds of the Financing will be released immediately prior to the completion of the Proposed Acquisition.

The Qualifying Transaction

Under the terms of the Letter of Intent, Kramer and the Vendor will negotiate and enter into a definitive agreement incorporating the principal terms of the contemplated transaction set forth herein and, in addition, such other terms and provisions of a more detailed nature as the parties may agree upon.

Sponsorship of Qualifying Transaction

The Corporation intends to apply for an exemption from the sponsorship requirements of the Exchange in connection with the Proposed Acquisition. There is no assurance that such exemption will be granted.

Trading Halt

In accordance with the policies of the Exchange, the Common Shares of the Corporation are currently halted from trading. The common shares of the Corporation will remain halted until further notice.

Additional Information

Kramer and the Vendor and the Proposed Management Team will provide further details in respect of the Proposed Acquisition, in due course once available, by way of press releases.

Completion of the Proposed Acquisition will be subject to the closing of the Financing (and satisfaction of the conditions to the release of the proceeds thereof from escrow); the completion of a definitive agreement in respect of the Proposed Acquisition; the appointment of the Proposed Management Team; and closing conditions customary to transactions of the nature of the Proposed Acquisition and approvals of all regulatory bodies having jurisdiction in connection with the Proposed Acquisition.

If and when a definitive agreement between the Corporation and the Vendor is executed, the Corporation will issue a subsequent press release in accordance with the policies of the Exchange containing the details of the definitive agreement and additional terms of the Proposed Acquisition, including information relating to sponsorship, summary financial information in respect of the Significant Assets, and to the extent not contained in this press release, additional information with respect to the Financing and the proposed directors, officers, and insiders of the resulting issuer upon completion of the Proposed Acquisition.

Completion of the transaction is subject to a number of conditions including, but not limited to, Exchange acceptance and, if required by the Exchange policies, 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.

Cautionary statements

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the Proposed Acquisition and associated transactions, including statements regarding the terms and conditions of the Proposed Acquisition, the Financing, and the use of proceeds of the Financing. Readers are cautioned to not place undue reliance on forward-looking information. 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 Acquisition, the Financing and associated transactions, that the ultimate terms of the Proposed Acquisition, the Financing and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition, the Financing and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this press release are made as of the date of this release. The Corporation undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Corporation, the Vendor, their securities, or their respective financial or operating results or (as applicable).

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved or 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

  • Kramer Capital Corp.
    Brian E. Bayley
    President, Chief Executive Officer,
    Chief Financial Officer, Corporate Secretary and Director
    (604) 689-1428