Long View Resources Corporation
TSX VENTURE : LRC

Long View Resources Corporation

June 27, 2005 14:22 ET

Long View Announces Letter of Intent to Acquire Wedona Energy Inc. and Wedona Energy II Inc.

CALGARY, ALBERTA--(CCNMatthews - June 27, 2005) - The Board of Directors of Long View Resources Corporation (TSX VENTURE:LRC) ("Long View" or the "Corporation"), are pleased to announce that it has entered into a Letter of Intent pursuant to which Long View has offered, subject to certain conditions, to acquire all of the outstanding common shares of Wedona Energy Inc. ("Wedona") and Wedona Energy II Inc. ("Wedona II") in exchange for 8,924,000 shares of Long View at a deemed share price of $0.50 per each Long View share (aggregate value of $4,462,000) and cash consideration of $2,139,000 for a total purchase price of $6,601,000 (Cdn.) (the "Acquisition"). Upon closing the Acquisition Long View will have 33,909,343 shares issued on a non-diluted basis. The Acquisition will be subject to certain conditions, including Long View shareholder approval and receipt of all required regulatory approvals and other customary conditions. The Acquisition has the unanimous support of the Board of Directors of Long View, Wedona and Wedona II. The Acquisition is non-arm's length in that Kevin Patterson and John Styles are founding shareholders, directors, and officers of Long View, Wedona, and Wedona II. The Acquisition, which is expected to close in August 2005, will not result in a change of control or management of Long View.

An information circular that will detail the Acquisition is anticipated to be mailed to shareholders of Long View in July 2005 with a shareholder meeting to be held in August 2005.

Long View management and directors, representing approximately 33% of the outstanding Long View common shares, have indicated, subject to certain exceptions, they intend to vote in favour of the Acquisition, subject to completion of a formal agreement, due diligence, and receipt of a formal valuation. Wedona and Wedona II management, directors and insiders, representing approximately 25% of the outstanding Wedona and Wedona II common shares, have indicated, subject to certain exceptions, they intend to vote in favour of the Acquisition, also subject to completion of a formal agreement, due diligence, and receipt of a formal valuation. In addition, the Board of Directors of Long View, Wedona, and Wedona II have agreed, subject to applicable law, not to solicit or initiate discussions or negotiations with any third party for any business combination involving Long View, Wedona, or Wedona II, as the case may be.

This transaction is a related-party transaction under OSC Rule 61-501. Thus Long View, Wedona and Wedona II have retained the firm of Sayer Securities Limited ("Sayer") as the qualified and independent valuator to prepare a formal independent valuation under OSC Rule 61-501. Sayer is a Calgary based corporate advisory firm, which specializes in providing fairness and valuation opinions for both private and public transactions. Sayer is also actively involved in the Canadian oil and natural gas merger and acquisition market.

Wedona and Wedona II are Regina, Saskatchewan based crude oil and natural gas exploration, development and production companies with 100% of its production coming from Saskatchewan. Both companies are reporting issuers in the Province of Saskatchewan but their respective common shares are not listed or posted for trading on any exchange.

Kevin Patterson, President and CEO of Long View stated, "The combination of the three companies results in an exploration and production company with greater financial strength, production volumes and greater flexibility to significantly expand future drilling programs." He added, "The resulting company is well positioned to take advantage of opportunities in the current market."

The key benefits of the amalgamation are outlined as:

- increase proved plus probable reserves to 897.1 Mboe (an increase of 103% - based on an independent Engineering Report prepared by Sproule Associates Limited as at December 31, 2004);

- combined production (as at March 31, 2005) of over 200 boe/d (an increase of 152%);

- increases net undeveloped acreage by 143% from 3,883 acres to 9,426 acres (exclusive of Long View's recently announced Indian Oil and Gas Canada 27,110 acre exploration permit);

- increases average working interest in Saskatchewan from approximately 41% to 45% (75% inclusive of the Indian Oil and Gas Canada permit);

- overall cost reductions through the elimination of redundant expenses associated with audits, engineering, legal and filing fees.

Upon completion of the transaction, Long View will have the following attributes (pro forma, as at December 31, 2004, except where indicated)



------------------------------------------------------------------------
Wedona/Wedona II Long View Pro Forma
------------------------------------------------------------------------
Proved plus Probable 454.1 443.0 897.1
Reserves (Mboe)(1)
------------------------------------------------------------------------
Production as at 123 81 204
March 31, 2005
(Boe/d)
------------------------------------------------------------------------
Shares Outstanding as
at closing of the
transaction
-Basic 859,703 24,985,343 33,909,343
-Fully Diluted 994,631 29,673,344 38,597,344

------------------------------------------------------------------------
Land Inventory as at 5,543 3,883 9,426
March 31, 2005
(net acres)
------------------------------------------------------------------------
Working Capital ($)(1) (242,959) (49,691) (292,650)
------------------------------------------------------------------------
Net Income (loss) ($)(1) 452,501 (3,551) 448,950

------------------------------------------------------------------------
Long Term Debt ($)(1) Nil Nil Nil

------------------------------------------------------------------------
Revenue (net of 1,385,423 726,290 2,114,713
royalties) ($)(1)
------------------------------------------------------------------------
Total Assets ($)(1) 5,165,915 2,589,210 7,755,125
------------------------------------------------------------------------
Shareholder 2,686,307 1,345,516 4,031,823
Equity ($)(1)
------------------------------------------------------------------------

(1) Based on audited financial statements for the year ended December
31, 2004. BOE's may be misleading, particularly if used in isolation. A
BOE conversion ratio of 6 Mcf:1bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.


The May 31, 2005 update of the December 31, 2004 Sproule Report (before taxes) on Wedona and Wedona II properties, constant pricing and escalated pricing, are as follows (the estimated values do not necessarily reflect the fair market value)



------------------------------------------------------------------------
Wedona & PV @ 5% PV @ 10% PV @ 15% PV @ 20%
Wedona II
Sproule
Reserves Values
($000)
(Constant
Pricing)
------------------------------------------------------------------------
Proved 2,050 1,908 1,791 1,691
Developed
Producing
------------------------------------------------------------------------
Proved 210 195 181 169
Developed Non-
Producing
------------------------------------------------------------------------
Proved 2,672 2,428 2,220 2,039
Undeveloped
------------------------------------------------------------------------
Total Proved 4,931 4,531 4,192 3,900
------------------------------------------------------------------------
Probable 7,159 6,124 5,343 4,735
------------------------------------------------------------------------
Proved Plus 12,092 10,655 9,535 8,635
Probable
------------------------------------------------------------------------


------------------------------------------------------------------------
Wedona & PV @ 5% PV @ 10% PV @ 15% PV @ 20%
Wedona II
Sproule
Reserves Values
($000)
(Escalated
Pricing)
------------------------------------------------------------------------
Proved 1,857 1,743 1,645 1,562
Developed
Producing
------------------------------------------------------------------------
Proved 170 159 150 141
Developed Non-
Producing
------------------------------------------------------------------------
Proved 2,366 2,158 1,977 1,820
Undeveloped
------------------------------------------------------------------------
Total Proved 4,393 4,059 3,773 3,524
------------------------------------------------------------------------
Probable 6,233 5,397 4,757 4,251
------------------------------------------------------------------------
Proved Plus 10,626 9,456 8,529 7,775
Probable
------------------------------------------------------------------------


About Long View

Long View Resources Corporation is a TSX Venture Exchange-listed public junior energy company with producing assets in Southeastern Saskatchewan. Long View trades under the symbol "LRC".

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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