OphiraVencap Inc.

November 29, 2007 13:40 ET

OphiraVencap Inc. Announces Details of Proposed Qualifying Transaction With North Sea Energy Inc.


OphiraVencap Inc. ("Ophira" or the "Issuer") (TSX VENTURE:OPV.P) - Ophira announced in a press release dated July 27, 2007, that it had entered into a letter of intent to complete a business combination transaction (the "Business Combination" or the "QT") with North Sea Energy Inc. ("North Sea") (as amended by a letter dated October 24, 2007, hereinafter collectively referred to as the "Letter of Intent"). The following is a more comprehensive news release describing the details of the Business Combination.

Pursuant to the Letter of Intent, it is anticipated that (i) a wholly owned subsidiary of the Issuer will amalgamate with North Sea; and (ii) as consideration for the foregoing transaction, Ophira will issue to shareholders of North Sea one (1) common share of Ophira for each one (1) North Sea common share. The agreed value to be attributed to each North Sea common share for the purposes of the Business Combination will be $1.495, on the basis of a deemed price of $0.43 per common share of Ophira. The Business Combination is conditional upon, among other things, Ophira consolidating its issued and outstanding common shares on a 3.476744 to 1 basis (hereinafter, the "Consolidated Shares") and North Sea completing a private placement of its equity securities. The Business Combination is intended to constitute the Qualifying Transaction of Ophira, as such term is defined in the Policy 2.4 of the TSXV.

Upon completion of the QT, it is anticipated that the directors and officers of North Sea will be the directors and officers of Ophira (further details set forth below) and that all of the current directors and officers of Ophira will resign.

After giving effect to the QT, Ophira will carry on the business of North Sea under the name "North Sea Energy Ltd." (or such other name as may be acceptable to the proper regulatory authorities and North Sea) and the common shares of Ophira are expected to be listed on the TSXV under a new trading symbol.

About Ophira

Ophira was incorporated under the Canada Business Corporations Act on January 21, 2004. The registered office and head office of the Issuer is located at 50 Berlioz St., Suite 602, Verdun, Quebec, H3E 1M2. The Issuer is a CPC, as such term is defined under the policies of the TSXV, and to date has not carried on any operations. The principal business of the Issuer has been to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction and, having identified and evaluated such opportunities, to negotiate an acquisition or participation subject to acceptance by the TSXV.

About North Sea

North Sea Energy Inc. was incorporated on February 13, 2007, under the Business Corporations Act (Ontario). North Sea's registered and head office is located at Royal Bank Plaza, South Tower, Suite 3220, 200 Bay Street, P.O. Box 173 Toronto, Ontario, M5J 2J4. The internet address of North Sea is www.northseaenergy.ca.

North Sea is a Canadian private company focused on oil and gas development and exploration in the United Kingdom's North Sea. North Sea's principal property is the Jacky discovery in Block 12/21c, UK North Sea (formerly known as the Basil prospect). In April 2007, North Sea entered into a letter agreement dated April 12, 2007 with Ithaca Energy (UK) Limited, a company incorporated in Scotland (The "Ithaca Letter Agreement"). Under the terms of the Ithaca Letter Agreement, North Sea acquired the right to earn a 10 per cent legal and beneficial interest in Block 12/21c which is governed under United Kingdom Seaward Production License P.1392 (the "Jacky Field"). In order to earn this interest, North Sea agreed to pay 15 per cent of all past and future costs associated with drilling, testing, evaluating and completing or abandoning of a well (the "Jacky Test Well") in the Jacky Field. The Jacky Test Well has been suspended for future entry and production. Total drilling cost of the Jacky Test Well was CDN$28,156,160 of which North Sea paid CDN$4,223,424 representing 15% of the cost to earn a 10% interest in the Jacky Field.

North Sea Share Capital and Significant Shareholders of North Sea

The share capital of North Sea consists of an unlimited number of common shares and special shares, of which only 13,568,332 common shares are currently issued and outstanding, all of which are held by the North Sea Shareholders.

The North Sea shareholders who currently hold more than 10% of the outstanding shares of North Sea and the percentage of shares held by each of them on a fully diluted basis are as follows: Mr. Craig Anderson of Toronto, Ontario (18.8%), Mr. Mark Brennan of Toronto, Ontario (18.4%), and SPGP, a company created under the laws of France and controlled by Xavier Roulet (25.8%).

It is acknowledged that, as a condition of TSXV approving the listing of the Consolidated Shares, TSXV may require that certain shareholders of North Sea enter into escrow agreements in respect of the Consolidated Shares which they will receive pursuant to the QT.

Directors and Senior Management of Ophira after the QT

It is anticipated that the directors and senior management of North Sea will be the directors and senior managers of Ophira following completion of the QT.

The current directors and senior management of North Sea and their brief biographies are as follows:

Craig Anderson - President, CEO & Director

Craig has 15 years of experience in financial services having begun his career at Burns Fry in 1992 and has worked for BMO Nesbitt Burns and Merrill Lynch. He has extensive experience financing international oil & gas and resources companies in the early stages of their development. He carries the CFA (Chartered Financial Analyst) designation as well as the CIM (Canadian Investment Manager) and FCSI (Fellow of the Canadian Securities Institute).

C. Brent Austin - Executive Chairman & Director

Brent has been active in the domestic and international oil and gas industry for over 35 years, initially as a petrophysical engineer with Shell Canada and later as a consultant with Intercomp on the reservoir evaluation and simulation of most of the major oilfields in the Middle East including Ghawar, Kirkuk and Dahra Hofra. In the late 1990's as GM International E&P for PanCanadian Petroleum Brent led the teams that secured PCP's first operated concessions in Venezuela and offshore Brazil and drilled the company's first wells, as an operator, in the Dutch sector of the North Sea and off the Northwest Shelf of Australia. In 2000-2001 his UK team discovered the billion barrel Buzzard Field in addition to securing a very favourable acquisition of a large interest in the Scott-Telford production complex. Brent also acts as the Chairman of North Sea Energy's Technical Oversight Committee.

Bill Powers - Senior Vice President, Operations

Bill has been active in both international and domestic oil and gas upstream operations for over 30 years; initially as a Geophysicist with Shell Canada and then with Sarawak Shell. Subsequently as a consultant he supplied technical, operational, and financial project management for offshore programs to Chevron, Amoco, ExxonMobil, BHPBilliton, PetroCanada, Sherritt International, and EnCana. Bill has held senior management positions for Geosignal Exploration in Calgary and for Enertec Geophysical where he established the Houston office and conducted a large 3-D, 3000 channel transition zone acquisition program for Conoco. Additionally, he has participated on teams that have drilled and evaluated wells located offshore Venezuela, in the South China Sea, offshore Gabon, in the Gulf of Suez, the Gulf of Mexico and offshore Eastern Canada.

Eric Szustak - Chief Financial Officer

Eric has been a Chartered Accountant for over 23 years. He is an honours graduate from the University of Waterloo. Eric has had extensive experience with both small and large public accounting firms advising corporate clients. Eric has spent the last 14 years with major brokerage firms of Midland Walwyn, Merill Lynch and BMO Nesbitt Burns in various positions including sales, management and compliance.

Maria Sanchez-Rico - Manager, Geology & Geophysics

Maria has been with North Sea Energy since its inception. Upon completion of her reservoir engineering studies in France she worked for Intevep (PDVSA) in Venezuela doing sequence stratigraphy studies. Subsequently she worked for Fugro-Robertson in the U.K. doing both petroleum geology and reservoir engineering for clients in Pakistan. After two years she moved to Canada, where she's worked as a geologist on CBM projects in the U.S. and has conducted technical reviews for Linear Capital Corp. on domestic and international ventures.

Mark Brennan - Chairman

Mark is currently Co-Executive Chairman of Brazoil Corporation and President & CEO of Largo Resources. He was a founding member of Desert Sun Mining and has over 20 years financing experience in North American & European financial markets. He is also the founder and principal of Linear Capital Corp.

Hubert-Lance Huet - Director

Hubert-Lance Huet is the CEO of Huet & Cie., a Geneva-based Bank that specialized in natural resources and alternative asset management. Hubert, a graduate of Oxford, is a member of the Geneva Petroleum Club and a director of Artic Oil and Manych Oil. He is also the chairman of Asian Property Investments and Destination Properties.

Ian Lambert - Director

Ian has over thirty years of experience in the management and financing of public companies His current positions include: President/Director, Trade Winds Ventures Inc., (mineral exploration) April 1990 to present; President/Director, LiteWave Corp., (oil & gas production) February 1999 to present; Director, Monarch Energy Ltd., (oil and gas exploration), April 1990 to present; Director, Sunorca Development Corp. (energy, oil & gas projects) December, 2000 to present: Director, Aquarian Coal Corporation (coal development) March, 2005 to present.

Other Information Relating to the QT

North Sea and Ophira and their respective directors, officers and insiders deal with each other at arm's length and consequently, the QT will be an arm's length transaction.

The QT does not require shareholder approval; however, in connection with the QT, the Issuer will be amending its articles, changing its name, consolidating its outstanding share capital and will seek approval of a new share option plan.

As a result of corporate or regulatory considerations, it may be preferable to effect the QT in a manner different from the procedure outlined above, provided that the end result of the QT is that Ophira shall acquire all of the issued and outstanding common shares of North Sea.

A finder's fee comprised of CDN$100,000 in cash and 266,666 Ophira common shares at a deemed value of $1.50 will be paid on the closing date of the QT to Dresden Capital Inc., a third party advisor that provided services in connection with the transaction, for measurable benefit received.

Trading of common shares of Ophira will remain halted pending the issuance by Ophira of a more detailed press release.

Completion of the QT is subject to a number of conditions, including but not limited to, approval of the QT by the shareholders of North Sea, satisfactory due diligence investigations, regulatory approvals, the completion of a definitive business combination agreement and the completion of a financing. In addition, no adverse change in the affairs of North Sea shall have occurred prior to the closing of the QT. The QT may not close until the required regulatory approvals are obtained and the financing is completed. There can be no assurance that the QT will be completed as proposed or at all. Investors are cautioned that any information released or received with respect to the QT 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 the interests of providing shareholders and potential investors with information regarding North Sea, including North Sea's assessment of its and its subsidiary's future plans and operations, certain statements included in this press release may constitute forward-looking information or forward looking statements (collectively, "forward-looking statements"). All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate", "believe", "expect", "estimate" and similar expressions are generally intended to identify forward-looking statements. Such statements represent the North Sea's internal projections, estimates or beliefs. These statements are only predictions. Actual events or results may differ materially. Although North Sea believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause North Sea's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, North Sea and the foregoing list of important factors is not exhaustive. These forward-looking statements are made as of the date hereof and except as required by applicable law, North Sea disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the QT and has neither approved nor disapproved the contents of this press release.

Contact Information

  • OphiraVencap Inc.
    Mr. Guy L'Africain
    North Sea Energy Inc
    Mr. Craig Anderson