Pendulum Capital Corporation
TSX VENTURE : PND.P

December 31, 2010 13:38 ET

Pendulum Capital Corporation and Australia Energy Corp. Complete Amalgamation to Form PetroFrontier Corp.

CALGARY, ALBERTA--(Marketwire - Dec. 31, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

PetroFrontier Corp. ("PetroFrontier") today announced the completion of the amalgamation of Australia Energy Corp. ("AEC") and Pendulum Capital Corporation ("Pendulum") (TSX VENTURE:PND.P), a capital pool company, to form the amalgamated company named PetroFrontier Corp. (the "Amalgamation"). The Amalgamation constitutes the Qualifying Transaction of Pendulum pursuant to Policy 2.4 of the TSX Venture Exchange Inc. ("TSX Venture").

At the annual and special meetings of the shareholders of Pendulum and AEC held on December 29, 2010, the shareholders of each of Pendulum and AEC approved the terms of the Amalgamation and related transactions.

The Amalgamation became effective on December 31, 2010, the date the Certificate of Amalgamation was issued in respect of the Amalgamation under the Business Corporations Act (Alberta). Pursuant to the Amalgamation: (i) every twelve (12) common shares of Pendulum will be exchanged for one (1) common share of PetroFrontier ("PetroFrontier Share") upon receipt of the required documentation from each shareholder; (ii) each Class "A" common share of AEC ("AEC Share") was exchanged for one (1) PetroFrontier Share; (iii) every twelve (12) agent options of Pendulum were replaced with/continued into one (1) agent option of PetroFrontier; (iv) every twelve (12) stock options of Pendulum were replaced/continued into one (1) stock option of PetroFrontier, each with an exercise price of $1.20 per PetroFrontier Share; and (v) each stock option of AEC was replaced/continued into one (1) stock option of PetroFrontier with identical terms.

In connection with the completion of the Amalgamation, the 26,500,000 subscription receipts of AEC that were issued at a price of $2.00 per subscription receipt by way of brokered private placement on December 8, 2010 (the "Brokered Private Placement") were exchanged, for no additional consideration, into one AEC Share and then into one PetroFrontier Share pursuant to the Amalgamation. The net proceeds of the Broker Private Placement were also released from escrow to PetroFrontier today. The Brokered Private Placement was completed by a syndicate of Agents led by Macquarie Capital Markets Canada Ltd. and which included Haywood Securities Inc.

AEC also closed the second tranche of its non-brokered private placement (the "Non-Brokered Private Placement") of AEC Shares which resulted in the sale of 476,750 AEC Shares at a price of $2.00 per AEC Share for gross proceeds of $953,500. The total number of AEC Shares sold pursuant to the Non-Brokered Private Placement was 2,750,000 for aggregate gross proceeds of $5,500,000. Pursuant to the Amalgamation, each AEC Share was exchanged for one PetroFrontier Share.

As announced on November 17, 2010, AEC issued 500,000 AEC Shares to Northern Territory Oil Ltd. ("NTO") at a deemed price of $2.00 per share in connection with the purchase and sale agreement (the "NTO Agreement") between NTO and AEC, through its wholly owned Australian subsidiary, Georgina Basin Energy Pty. Ltd., effective October 7, 2010, whereby AEC agreed to purchase NTO's entire 25% working interest in exploration permits ("EPs") EP 127 and EP 128, which EP's cover approximately 7.8 million gross acres of undeveloped land. Pursuant to the Amalgamation, the 500,000 AEC Shares issued to NTO were exchanged for 500,000 PetroFrontier Shares.

PetroFrontier's Board of Directors is comprised of Robert J. Iverach, Paul J. Bennett, James W. Buckee, Matthew P. Philipchuk, Al J. Kroontje, C. Kent Jespersen, Martin P. McGoldrick and Donald J. Rae.

The completion of the Amalgamation has received conditional approval of TSX Venture and is subject to its final approval, which PetroFrontier expects to receive after completion of the required filings.

The PetroFrontier Shares are expected to commence trading under the symbol "PFC" after TSX Venture issues its final bulletin, at which time the common shares of Pendulum will cease trading. After giving effect to the Amalgamation, the Brokered Private Placement, the Non-Brokered Private Placement and the NTO Agreement, there will be approximately 47,730,134 PetroFrontier Shares issued and outstanding (calculated on a non-diluted basis).

About PetroFrontier

PetroFrontier is an oil and gas exploration company headquartered in Calgary, Alberta, with an office in Adelaide, South Australia, Australia, focusing on oil and gas exploration in Australia.

Investors are cautioned that, except as disclosed in the joint information circular of AEC and Pendulum prepared in connection with the Amalgamation, any information released or received with respect to the Amalgamation may not be accurate or complete and should not be relied upon. Trading in the securities of PetroFrontier should be considered highly speculative.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially. Except as required pursuant to applicable securities legislation, PetroFrontier will not update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by PetroFrontier.

The securities of PetroFrontier being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States

Neither TSX Venture nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • PetroFrontier
    Shane J. Kozak
    Vice President Finance and Chief Financial Officer
    (403) 718-3877
    or
    Brookline Public Relations
    Shauna MacDonald
    (403) 538-5645
    smacdonald@brooklinepr.com