Probe Resources Ltd.
TSX VENTURE : PBR.H

Probe Resources Ltd.
Rooster Probe GOM Oil & Gas Ltd.

April 16, 2012 18:22 ET

Probe Resources Ltd. Provides an Update Respecting Its Proposed Transaction With Rooster Probe GOM Oil & Gas Ltd.

CALGARY, ALBERTA--(Marketwire - April 17, 2012) - Probe Resources Ltd. ("Probe") (TSX VENTURE:PBR.H) -

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

Probe and Rooster Probe GOM Oil & Gas Ltd. ("Canco") announce the following update with respect to the previously announced plan of arrangement involving Probe and Canco (the "Transaction").

Pursuant to the Transaction, as previously announced, Probe will acquire all of the issued and outstanding common shares of Canco (the "Canco Shares") in exchange for, at the election of each holder of Canco Shares, either: (i) one common share of Probe ("Probe Shares") (issued at an adjusted deemed price of $0.60 per Probe Share, subject to acceptance by the TSX Venture Exchange (the "TSXV") for each Canco Share held or (ii) one-thousandth of one Probe proportionate voting share ("Proportionate Voting Shares") (issued at an adjusted deemed price of $600.00 per Proportionate Voting Share, subject to TSXV acceptance) for each Canco Share held (the "Transaction Price").

Probe and Canco intend to reduce the offering price of the previously announced subscription receipt financing of Canco (the "Canco Offering") to $0.60 per subscription receipt. The Canco Offering will continue to be conducted on a best efforts basis by a syndicate of agents led by Macquarie Capital Markets Canada Ltd. Canco will seek to raise gross proceeds of between $20 million and $24 million pursuant to the Canco Offering by offering between 33,333,333 and 40,000,000 subscription receipts. Further information regarding the Canco Offering will be included in the comprehensive press release, as described below.

Probe will reconvene its previously adjourned annual general and special meeting of shareholders on Friday, April 20th, 2012 at 2:30 p.m. (Calgary time) in the Viking A Room of The Petroleum Club, 319 - 5th Avenue S.W., Calgary, Alberta. At the reconvened meeting, the shareholders of Probe will be asked to vote on the proposed resolution authorizing the creation of the Proportionate Voting Shares, the proposed resolution authorizing a new stock option plan for Probe following the Transaction, the election of directors and the appointment of auditors. Given that proposed changes to the Canco Offering and Transaction have only recently been determined, the shareholders will not be asked to vote on the resolutions approving the Transaction and the pricing of the securities issuable thereunder at the reconvened meeting. Instead, and subject to TSXV approval, Probe intends to seek, as soon as practicable, the written approval of its shareholders with respect to the Transaction as well as written shareholder approval for the adjusted Transaction Price. Before doing so, Probe will issue a further comprehensive press release and a material change report providing additional information respecting the changes to the Canco Offering and Transaction and their impact on the combined company following the completion of the Transaction.

Both K2 Principle Fund L.P. and Chester F. Morrison, Jr. intend to participate in the Canco Offering for proceeds of approximately $5 million each (being $10 million in the aggregate). As such, $10 million of the proceeds of the Canco Offering will be contributed by non-arm's length parties to the Transaction with the remaining funds to be contributed by arms-length subscribers under the Canco Offering. Therefore, Probe intends to seek approval from the majority of the disinterested shareholders of Probe for the approval of the Transaction.

The adjusted Transaction Price, the offering price under the Canco Offering, the comprehensive press release, and the completion of the Transaction remains subject to the approval of the TSXV.

The common shares of Probe will remain suspended from trading pending completion of the Transaction.

United States Securities Matters

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities of Probe and Rooster Probe GOM Oil & Gas Ltd. have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act) or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Caution

Completion of the Transaction is subject to a number of conditions, including TSXV acceptance and approval of the Probe Shareholders. The Transaction cannot close until the required Probe Shareholder approvals are obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the circular of Probe prepared in connection with the Transaction, and as supplemented from time to time, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Probe should be considered highly speculative.

The TSXV has in no way passed upon the merits of the Transaction or the Canco Offering and has neither approved nor disapproved the contents of this press release.

Forward Looking Statements

This press release contains forward-looking statements. More particularly, this press release contains statements concerning the completion of the Transaction, the completion of the Canco Offering and the release of further information regarding the Canco Offering.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Probe, including expectations and assumptions concerning timing of receipt of required regulatory and shareholder approvals and the satisfaction of other conditions to the completion of the Transaction and Canco Offering and the holding of the Meeting.

Although Probe believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Probe can give no assurance that they will prove to be correct. Neither the Transaction nor Canco Offering may be completed on the terms described or at all.

The forward-looking statements contained in this document are made as of the date hereof and Probe undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

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

Contact Information

  • Probe Resources Ltd.
    David Elgie
    President and Chief Executive Officer
    (250) 816-3297

    Rooster Resources, LLC
    Robert Murphy
    Chief Executive Officer
    (832) 772-6313