NiMin Energy Corp.
TSX : NNN

NiMin Energy Corp.

May 27, 2009 09:00 ET

NiMin Capital Corp. Announces Letter of Intent to Acquire All of the Issued and Outstanding Securities of Legacy Energy, Inc.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 27, 2009) -

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

NiMin Capital Corp. (TSX VENTURE:NNI.P) ("NiMin" or the "Corporation") is pleased to announce that it has entered into a letter of intent with Legacy Energy, Inc. ("Legacy") dated May 25, 2009 (the "Letter of Intent"), whereby the Corporation has agreed to acquire all of the issued and outstanding securities of Legacy (the "Proposed Acquisition"), such that Legacy will become a wholly-owned subsidiary of the Corporation upon completion of the Proposed Acquisition.

Legacy is a private corporation incorporated under the laws of the State of Delaware, engaged in the exploration for and development of oil and natural gas interests located in the United States of America. NiMin is a "capital pool company" and intends for the Proposed Acquisition to constitute the "Qualifying Transaction" of the Corporation as such terms are defined in the policies of the TSX Venture Exchange (the "Exchange"). The Proposed Acquisition was negotiated at arm's length.

The Proposed Acquisition

Subject to any regulatory, shareholder, director or other approvals that may be required, the completion of satisfactory due diligence by NiMin and other conditions contained in the Letter of Intent, it is intended that NiMin will acquire Legacy in a reverse take-over transaction which will be effected by way of a merger under the corporation law of the State of Delaware, in a transaction sometimes referred to as a "reverse triangular merger" (the "Merger").

Pursuant to the Merger, a wholly-owned subsidiary of NiMin to be incorporated under the laws of the State of Delaware, and Legacy, will amalgamate and continue as one corporation. The holders of common shares of Legacy ("Legacy Shares") will receive one (1) Post-Consolidation Share (as such term is defined below) for each one (1) Legacy Share held. In connection with the foregoing, any outstanding options and similar rights to acquire Legacy Shares will be exchanged for analogous options and similar rights to acquire Post-Consolidation Shares. In addition, all shareholders of Legacy who are resident in Canada, will be provided with an option to enter into a share exchange agreement directly with NiMin prior to the completion of the Merger, on the same terms as the Merger, in order to provide such shareholders with a tax rollover on the exchange of their Legacy Shares for common shares of NiMin ("Common Shares").

In connection with the Proposed Acquisition and prior to the completion of the Merger, NiMin intends to effect a consolidation (the "Consolidation") of the Common Shares on the basis of one (1) new Common Share (a "Post-Consolidation Share") for each three (3) existing Common Shares. In addition, it is intended that NiMin will change its name to "Legacy Energy Inc." or such other name as may be approved by the board of directors of the Corporation (the "Name Change"). In accordance with applicable laws, the Consolidation and the Name Change are subject to the approval of the shareholders of the Corporation.

There are currently 37,301,656 Legacy Shares and options and warrants to acquire an additional 6,585,329 Legacy Shares issued and outstanding. The Corporation currently has 3,200,000 Common Shares and options and agent's warrants to acquire up to 250,000 Common Shares issued and outstanding. Upon completion of the Consolidation and the Proposed Acquisition, it is anticipated that the current holders of Legacy Shares and the current NiMin shareholders, will own approximately 97.22% and 2.78%, respectively, of the issued and outstanding Post-Consolidation Shares on a non-diluted basis. The Post-Consolidation Shares to be issued pursuant to the Proposed Acquisition will be subject to the escrow requirements of the Exchange, if applicable.

Upon completion of the Proposed Acquisition, the Corporation will continue to carry out the business of Legacy as currently constituted.

Summary Information Relating to Legacy

The following information relating to Legacy has been provided to the Corporation by Legacy.

Legacy was founded in October 2005 as "Legacy Energy LLC" and formed by amalgamation under the laws of the State of Delaware in July 2007. Legacy is headquartered in Carpinteria, California and is an independent oil and natural gas company with drilling and production operations in the States of California and Louisiana.

In the State of California, Legacy is engaged in the exploration and development of the Pleito Creek Field in southern Kern County and controls and is pursuing several additional enhanced oil recovery projects. Legacy owns a 100% working interest in the Pleito Creek Field from the surface to 6,500 feet total vertical depth ("Subsea TVD") and is actively developing a shallow oil reservoir (approximately 3,500 feet total vertical depth) with horizontal completions. In addition, Legacy has recently discovered deeper pay (approximately 5,000 feet total vertical depth) within the Pleito Creek Field boundary which it also owns 100%. Legacy is also a party to a joint venture with a large California-based oil and natural gas company, whereby Legacy owns a 33% working interest in the deep rights (below 6,500 Subsea TVD) of the Pleito Creek Field. Legacy has implemented an enhanced oil recovery project on the shallow portion of the Pleito Creek Field.

In the State of Louisiana, Legacy is a 30% partner in a joint venture with Coastline Energy of Houston, Texas. Additionally, Legacy holds a 48% non-operated working interest in the Krotz Springs Field in St. Landry Parish, Louisiana, where Legacy has an active development program currently underway. Legacy holds numerous other non-operated interests in producing properties and prospects located in the southern region of the State of Louisiana.

Legacy is in receipt of an independent audited reserve report (the "Reserve Report") relating to the above-noted oil and natural gas interests, effective as of January 1, 2009, prepared by Huddleston & Co., Inc. ("Huddleston"). Huddleston is currently updating the Reserve Report such that it will be fully compliant with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Description of Significant Conditions to Closing

Completion of the Proposed Acquisition is subject to the satisfaction of a number of conditions, including, but not limited to, Exchange acceptance. Other necessary conditions to the closing of the Proposed Acquisition, include obtaining all other necessary regulatory and third-party approvals and authorizations, the completion of a definitive agreement setting forth the terms and conditions set out in the Letter of Intent and the completion of due diligence. As the Proposed Acquisition is an arm's-length transaction, shareholder approval will not be required. There can be no assurance that the Proposed Acquisition will be completed as proposed or at all.

If and when a definitive agreement between NiMin and Legacy is reached, in accordance with the policies of the Exchange, NiMin will issue a subsequent press release containing the details of the Proposed Acquisition, including information relating to sponsorship, summary financial information in respect of Legacy and details with respect to the proposed insiders of the Corporation upon completion of the Proposed Acquisition.

Investors are cautioned that, except as disclosed in the filing statement or other disclosure document to be prepared in connection with the Proposed Acquisition and associated transactions, any information released or received with respect to the Proposed Acquisition and associated transactions, 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.

In accordance with Exchange policy, the Common Shares are currently halted from trading and will remain halted until further notice.

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 to not 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 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, Legacy or their respective financial or operating results or (as applicable), their securities.

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

Contact Information

  • NiMin Capital Corp.
    Narinder Nagra
    Director
    (604) 689-1428
    (604) 681-4692 (FAX)
    or
    Legacy Energy, Inc.
    Clancy Cottman
    President
    (805) 566-2900
    or
    Legacy Energy, Inc.
    Jon Wimbish
    Chief Financial Officer
    (805) 566-2900