Marksmen Energy Inc.

October 20, 2010 13:04 ET

Marksmen Announces Proposed Transaction

CALGARY, ALBERTA--(Marketwire - Oct. 20, 2010) - Marksmen Energy Inc. ("Marksmen") (TSX VENTURE:MAH) is pleased to announce that it has entered into a non-binding letter of intent (the "Letter of Intent") with MAR Oil Company ("MAR"), a private US corporation, and the private Alberta corporation that controls MAR, to pursue a proposed transaction (the "Transaction") whereby MAR will grant Marksmen an option (the "Option") to purchase 49.5% of the common shares of MAR in consideration for $10.00 US. In order for Marksmen to exercise the Option, Marksmen must provide $2,000,000 US for a two well horizontal light oil test on existing producing MAR lands in Eastern United States as well as seismic, land acquisition and other related oil and gas activities (the "Oil and Gas Activities").

Pursuant to the Option, MAR must spend $2,000,000 US on or before October 31, 2011 on mutually agreeable Oil and Gas Activities. Once the $2,000,000 US has been spent by MAR on the Oil and Gas Activities, Marksmen may exercise the Option and the $2,000,000 US provided by Marksmen will become a loan repayable to Marksmen by MAR without interest or a fixed repayment schedule (the "Loan"). In the event MAR has not spent the $2,000,000 US by October 31, 2011, Marksmen may deem the funds spent, exercise the Option and the $2,000,000 US provided by Marksmen will become a Loan. Marksmen may terminate the Option by written notice at which time the Option will be automatically cancelled, Marksmen will receive any portion of the funds not spent or obligated to be spent on the Oil and Gas Activities, and MAR will have no obligation to pay back to Marksmen any of the funds spent or obligated to be spent to the date of the notice.

The terms and conditions of the Transaction will be set out in a definitive agreement to be executed by the parties on or before November 15, 2010. Completion of the Transaction is expected to occur no later than November 30, 2010 and is subject to several conditions, including but not limited to:

  1. satisfactory due diligence by the parties;
  1. approval of the board of directors of the parties;
  1. closing of a private placement by Marksmen for gross proceeds of not less than $2,500,000 on or before November 30, 2010 on terms to be determined by Marksmen; and
  1. the requisite government and regulatory approvals including, without limitation, the TSX Venture Exchange.

This news release may contain certain forward-looking information. All statements included herein, other than statements of historical fact, is forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Marksmen's disclosure documents on the SEDAR website at Marksmen does not undertake to update any forward-looking information except in accordance with applicable securities laws.

Neither the 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 news release.

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