Kulczyk Oil Ventures Inc.
January 09, 2009 14:40 ET
Kulczyk Oil Ventures Inc.: Adjusted Cost Base of KOV and Loon Corp Shares
CALGARY, ALBERTA--(Marketwire - Jan. 9, 2009) - A plan of arrangement under the Business Corporation Act (Alberta) (the "Arrangement") of Loon Energy Inc. was approved by securityholders on December 9, 2008 and was implemented on December 10, 2008. Under the Arrangement, the assets of Loon Energy Inc. in Colombia and Peru were transferred to Loon Energy Corporation ("Loon Corp"), a new company set up for the purpose of receiving the assets, and the name of Loon Energy Inc. was changed to Kulczyk Oil Ventures Inc. ("KOV"). KOV was halted from trading on the TSX Venture Exchange on December 10, 2008 and was delisted on December 19, 2008, the day upon which the common shares of Loon Corp commenced trading on the TSX Venture Exchange under the trading symbol "LNE". It is the intention of KOV to apply to list its common shares on the Warsaw Stock Exchange in 2009.
Loon Energy Inc. stated in its information circular for the Arrangement that it would advise Canadian shareholders of a proportionate allocation of the aggregate adjusted cost base ("ACB") of the KOV common shares and Loon Corp common shares relative to their fair market values. Effective as of the implementation of the Arrangement, KOV took up and paid $0.25 per share for 18,565,759 common shares of KOV, that were put to KOV by shareholders pursuant to the Arrangement. The shares of Loon Corp commenced trading on December 19, 2008 and during the four trading days ended December 24, 2008, a total volume of 774,740 shares traded at an average price of $0.055 per share.
The relevant provisions of the Income Tax Act (Canada) require that the ACB for the Loon Energy Inc. shares prior to the Arrangement be allocated to the KOV shares and the Loon Corp shares on a pro rata basis based on their relative fair market value on the date of the Arrangement. Based on the values set out above ($0.25 per KOV share and $0.055 per Loon Corp share), the management of Loon Corp and of KOV believe that it would be reasonable for a shareholders to allocate 82% of such ACB to KOV shares and 18% of such ACB to Loon Corp shares.
The above information is intended as guidance only and is provided solely for the convenience of Canadian shareholders. Neither KOV nor Loon Corp provide any representation or warranty with respect to the acceptability to the Canada Revenue Agency of the ACB allocation suggested above. KOV and Loon Corp strongly recommend that shareholders seek their own professional advice when determining the appropriate ACB.
Some of the statements contained in this release may be forward-looking statements. Forward-looking statements may include, but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, statements relating to the continued advancement of the Company's projects and other statements which are not historical facts. When used in this document, and in other published information of the Company, the words such as "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are indicative of a forward-looking statement. Although the Company believes that its expectations reflected in the forward-looking statements are reasonable, the potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors, which could cause actual results to differ from these forward-looking statements, include the potential that the Company's projects will experience technical and mechanical problems, geological conditions in the reservoir which may negatively impact levels of oil and gas production and changes in product prices and other risks not anticipated by the Company or disclosed in the Company's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.
The TSX Venture Exchange neither approves nor disapproves of the information contained herein.