Rain Resources Inc.

February 24, 2012 14:01 ET

Rain Resources Inc. Announces Further Details of Qualifying Transaction With Octant Energy Ltd. and Propel Energy Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 24, 2012) -


Rain Resources Inc. (the "Corporation" or "Rain") (TSX VENTURE:RAN.H), today announced additional details concerning its proposed qualifying transaction (the "Transaction") with Octant Energy Ltd. ("Octant") and Propel Energy Corp. ("Propel") (Octant and Propel collectively referred to herein as the "Target Companies") initially announced and described in the Corporation's news releases dated September 6, 2011 and October 19, 2011.

Definitive Agreements

On January 31, 2012 Rain and the shareholders of Octant entered into a share purchase agreement (the "Share Purchase Agreement") pursuant to which Rain will purchase all of the issued and outstanding shares of Octant at a price of $0.00000005 per Octant common share. On January 31, 2012 Rain, a wholly owned subsidiary of Rain ("Subco") and Propel, entered into an amalgamation agreement (the "Amalgamation Agreement") pursuant to which, among other things, Subco and Propel will amalgamate to form an amalgamated entity ("Amalco") which entity will continue as a wholly owned subsidiary of Rain (the "Amalgamation"). Pursuant to the Amalgamation Agreement, holders of Propel common shares will receive one (1) Rain Common Share for each one (1) common share of Propel.

Updated Propel Reserves Report

Degolyer and MacNaughton Canada Limited, independent reserves evaluators, have prepared an updated report in relation to the crude oil and natural gas reserves of Propel with an effective date of December 31, 2011. The updated reserves report will be available in its entirety on the SEDAR website under Rain's profile at www.sedar.com prior to the annual and special shareholder meeting of Rain to be held on March 9, 2012 (the "Rain Meeting"), and is incorporated by reference into the Information Circular.

Conditional Listing Approval on TSX Venture Exchange

On February 13, 2012 Rain obtained conditional approval from the TSX Venture Exchange (the "Exchange") to list up to an additional 66,155,815 common shares of Rain pursuant to the Transaction. The listing of the additional Rain shares is subject to Rain fulfilling certain customary requirements of the Exchange in accordance with the terms of its conditional approval letter dated February 13, 2012 (the "Conditional Approval Letter"). Rain is proceeding to satisfy these requirements.

Rain Shareholders Meeting

Rain announces that it will hold the Rain Meeting so that the shareholders of Rain may vote on the Transaction. The Rain management information circular and proxy statement dated February 10, 2012 in respect of the Transaction (the "Information Circular") has been distributed to shareholders of Rain and a copy has also been filed on SEDAR under Rain's profile. Upon successful completion of the Transaction and Exchange approval, it is anticipated that the resulting issuer will resume trading as Octant Energy Corp. shortly thereafter.

Closing of the Transaction

The closing of the Transaction will be subject to a number of terms and conditions including:

(a) compliance with all of the terms of the Conditional Approval Letter;

(b) receipt of all required third party approvals for the Transaction, including final approval of the Exchange;

(c) the absence of a material adverse change, material litigation, claims, investigations or other matters affecting Rain, Octant or Propel;

(d) approval of the Transaction by the shareholders of Rain including, but not limited to, the change of name of the Resulting Issuer to Octant Energy Corp.; and

(e) approval of the Amalgamation by the shareholders of Propel.

Cautionary Note

As noted above, completion of the Transaction is subject to a number of conditions including, without limitation, final approval of the Exchange and approval of the shareholders of Rain. The Transaction cannot close until the required approvals have been 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 continuous disclosure document containing full, true and plain disclosure regarding the Transaction, required to be filed with the securities regulatory authorities having jurisdiction over the affairs of the Corporation, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. The trading in the securities of Rain on the Exchange, if reinstated prior to completion of the Transaction, should be considered highly speculative.


Ryan Spong, President

This press release contains forward-looking information. More particularly, this press release contains statements concerning the proposed Qualifying Transaction of the Corporation. The information about the Target Companies contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Forward-looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the performance and financial results of the Target Companies) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the proposed Qualifying Transaction may change based on regulatory and third party comments, consents and approvals and the ability to meet the conditions of the Qualifying Transaction in the required timeframes. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligations 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.

Completion of the Transaction is subject to a number of conditions, including but not limited to final Exchange acceptance. There can be no assurance that the Transaction will be completed as proposed or at all.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Investors are cautioned that, except as disclosed in the Information Circular or other continuous disclosure document prepared in connection with the Transaction, 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 a capital pool company should be considered highly speculative.

Neither the 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 press release.

Contact Information