Radius Resources Corp.

April 30, 2009 16:47 ET

Radius Resources Corp.: Proposed $11.0M Debenture Financing

CALGARY, ALBERTA--(Marketwire - April 30, 2009) -


Radius Resources Corp. ("Radius" or the "Corporation") (TSX VENTURE:RAX) announces today that it has entered into a non-binding letter of intent with a group of investors and a creditor of the Corporation with respect to a secured debenture offering by Radius for gross aggregate proceeds of up to $11.0M (the "Offering"). The Offering is being made part of, and subject to, completion of a proposed corporate financial restructuring (the "Restructuring"), and is conditional upon, among other things, applicable regulatory approvals (including the approval of the TSX Venture Exchange), agreement by certain creditors to participate in the Restructuring, applicable shareholder approvals to the Restructuring and agreement to final documentation to reflect the Offering and Restructuring. Particulars concerning the secured debentures to be issued under the Offering will be provided upon the parties reaching a definitive agreement.

Michael A. Steele of Steele Consulting Partnership and Avonlea Ventures Inc. has been retained under an agreement with Radius to work as a Chief Restructuring Consultant to review and evaluate strategic alternatives to maximize shareholder value in connection with the Restructuring.

The Corporation also announces that it has entered into an agreement with the Alberta Treasury Branches ("ATB"), pursuant to which, among other things, Radius has been provided with an extension on payment obligations under its existing credit facility until July 31, 2009, subject to certain conditions relating to the Restructuring and additional reporting requirements to the ATB.

Radius also announces that it has entered into a Settlement and Assignment Agreement dated April 28, 2009 (the "Settlement Agreement") with Kristina Capital Corp. ("Kristina") and Midway Gas Corp. ("Midway") settling among other things a dispute among the parties relating to the funding and development of oil and gas prospects in the Porcupine Forest of Central East Saskatchewan (the "Porcupine Property") under certain agreements relating thereto (the "Porcupine Agreements") among the parties. Under the Settlement Agreement, Radius paid $400,000 in cash to Midway with an additional $400,000 to be paid on the earlier of completion of the Restructuring and December 1, 2009 in full satisfaction of all current cash call obligations under the Porcupine Agreements. In addition, Radius assigned any and all interest it has, or may have to the Porcupine Property to Kristina. In exchange, Kristina shall assume and fulfill all the obligations and liabilities of Radius in relation to the Porcupine Property which might arise or accrue after the date of the Settlement Agreement.

This press release may contain forward looking statements which may include plans, expectations, forecasts, projections, guidance or other statements that are not statements of fact, including without the limiting the generality of the foregoing, statements concerning a proposal under a letter of intent relating to a prospective financing of the Corporation by way of the Offering, a proposed corporate financial restructuring in conjunction with the Offering, and the satisfaction of certain terms and conditions relating to the same, including without limitation applicable regulatory and shareholder approvals. Although Radius believes that the expectations reflected in such forward looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. Completion of the Offering as proposed under the letter of intent are subject to a number of conditions which Radius cannot give any assurance that such conditions will be met on a timely basis, or if at all, as certain as the conditions are in the control of other parties. As such, the future plans and objectives of Radius are forward looking statements that involve risks and uncertainties that may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in such statements. The foregoing list of risk factors is not exhaustive. Additional information on risk factors is included in the Corporation's Annual Information Form and other public documents available under the Corporation's profile on SEDAR. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. In making its forward looking statements, the Corporation used, among others, the following material factors or assumptions to develop a forward looking information enumerated above: the parties under the letter of intent will continue to negotiate their participation in the Offering in good faith; definitive agreements reflecting the terms of the letter of intent will be mutually agreed upon in a timely manner; and the economic and market conditions in the oil and gas industry shall remain sufficiently stable for the parties to continue with the financing contemplated under the Offering. The Corporation's forward looking statements are expressly qualified in there entirety by this cautionary statement. Unless otherwise required by applicable securities laws, the Corporation does not intend nor does it undertake any obligation to update or review any forward looking statements to reflect subsequent information, events, results or circumstances or otherwise.

Radius is a junior oil and gas company engaged in the exploration for, and development and production of, crude oil and natural gas focusing in the Peace River Arch region of central Alberta. The Corporation's shares trade on the TSX Venture Exchange under the symbol "RAX".

Neither 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 release.

Contact Information

  • Radius Resources Corp.
    Mr. David R.P. Mears
    Chairman & CEO
    (403) 265-9393
    (403) 265-9224 (FAX)
    Radius Resources Corp.
    Suite 650, 816 - 7th Avenue SW
    Calgary, Alberta T2P 1A1
    (403) 265-9393
    (403) 265-9224 (FAX)