Lateral Capital Corp.
TSX VENTURE : LCP.P

October 18, 2012 16:42 ET

Lateral Capital Corp. Provides an Update on Its Qualifying Transaction

CALGARY, ALBERTA--(Marketwire - Oct. 18, 2012) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Lateral Capital Corp. (the "Corporation") (TSX VENTURE:LCP.P) announces the TSX Venture Exchange (the "Exchange") has conditionally approved the Corporation's proposed Qualifying Transaction as previously described in news releases dated July 27, 2012 and August 28, 2012. The Corporation previously executed a definitive asset purchase agreement on August 7, 2012 which was subsequently amended on August 31, 2012, September 27, 2012, and October 12, 2012 to extend the closing date and increase the purchase price from $1,350,000 to $1,490,000. The purchase price is payable as to $1,459,200 in cash and $30,800 by issuance of 220,000 common shares of the Corporation at a deemed issue price of $0.14 per Common Share (the "Proposed Acquisition"). The Proposed Acquisition is intended to constitute the Qualifying Transaction of the Corporation in accordance with Policy 2.4 of the Exchange, subject to the Exchange's approval.

The Corporation's filing statement dated as of October 16, 2012 (the "Filing Statement"), as approved by the Exchange and has been filed on SEDAR and may be viewed at www.sedar.com. The Filing Statement describes the Corporation's proposed Qualifying Transaction, as required by Exchange Policy 2.4. The Corporation anticipates completing the Qualifying Transaction on or before October 26, 2012.

On closing of the Qualifying Transaction, the Corporation is expected to commence trading on the Exchange as a Tier 2 Oil and Gas issuer under the trading symbol "LCP", at which time the Corporation will no longer be considered a capital pool company.

Reserve and Financial Disclosure

The P&NG assets to be acquired include a 100 per cent working interest in 576 hectares of oil and gas mineral rights in the Medicine Hat area of Southeast Alberta (the "Medicine Hat Assets"). Production from the Medicine Hat Assets is comprised of approximately 30 bbls/d of sweet, 20 degree API oil from five Sunburst oil wells.

A National Instrument 51-101 Reserve and Economic Evaluation Report has been prepared by Chapman Petroleum Engineering Ltd. with an effective date of May 31, 2012. The Report has assigned 101,000 barrels of proven and probable heavy oil reserves (net of royalties) with an indicated value of $2,862,000, inclusive of proved developed producing reserves of $1,423,000, discounted at 10 per cent (before income tax) using Chapman Petroleum's June 1, 2012 escalated price deck.

Based on the audited statements of revenues, royalties, and operating expenses of the vendor's interest in the Medicine Hat Assets for the year ended December 31, 2011, the vendor had production revenue of $450,001, royalty payments of $21,953, operating expenses of $218,261, and excess of revenue over operating expenses of $209,787.

Other Information

Completion of the Proposed Acquisition is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. The Proposed Acquisition is also subject to completion of a minimum private placement of $2,002,000 in subscription receipts, as previously announced. 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.

About the Corporation

The Corporation is incorporated under the provisions of the Business Corporations Act (Alberta) and has a registered office in Calgary, Alberta. It is a "capital pool company" under the policies of Exchange. As such it intends for the Proposed Acquisition to constitute the "Qualifying Transaction" of the Corporation as such term is defined in the policies of the Exchange.

Cautionary Statements:

This news release contains "forward-looking statements" 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 and associated transactions. Readers are cautioned not to place undue reliance on forward-looking statements. 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 and associated transactions, that the ultimate terms of the Proposed Acquisition and associated transactions will differ from those that currently are contemplated, and that the Proposed Acquisition 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 news 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, RSR, the Properties or their respective financial or operating results or (as applicable), their securities. Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

This press release does not constitute and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any "U.S Person" (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the "1933 Act")) of any equity or other securities of the Corporation. The securities of the Corporation have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.

Neither the TSX Venture Exchange, Inc. nor its Regulation Service Provider (as that term is defined under the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Contact Information

  • Lateral Capital Corp.
    Ken Leigh
    President and Chief Executive Officer
    (604) 318-4106