Rain Resources Inc.
TSX VENTURE : RAN.H

March 02, 2012 20:52 ET

Rain Resources Inc. Announces Update on Qualifying Transaction With Octant Energy Ltd. and Propel Energy Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 2, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW

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. and Propel Energy Corp. ("Propel")(collectively the "Target Companies") initially announced and described in the Corporation's news releases dated September 6, 2011, October 19, 2011 and February 24, 2012.

Annual and Special Meeting of Shareholders

The Annual and Special Meeting of Rain will be held at Davis LLP, 10th Floor, Livingston Place, 250 - 2nd Street SW, Calgary, Alberta on Friday, March 9, 2012 at 10:00 a.m. (Calgary time), for the following purposes:

1. to consider the audited financial statements of Rain for the fiscal year ended January 31, 2011, together with the auditors' report thereon;

2. to fix the number of directors of Rain to be elected at the Rain Meeting at five (5);

3. to elect the Rain board of directors for the ensuing year;

4. to appoint Collins Barrow Calgary LLP, Chartered Accountants as the auditors of Rain for the ensuing year and authorizing the Rain Board to fix their remuneration as such;

5. to consider and, if deemed advisable, approve, with or without variation, a special resolution to approve, among other things: (i) the share purchase agreement made as of January 31, 2012 (the "Share Purchase Agreement") between Rain and the shareholders of Octant Energy Ltd. ("Octant") pursuant to which Rain will acquire all of the issued and outstanding common shares of Octant (the "Share Purchase"); (ii) the amalgamation agreement made as of January 31, 2012 (the "Amalgamation Agreement") between Rain, a wholly owned subsidiary of Rain ("Subco") and Propel Energy Corp. ("Propel"), pursuant to which it is proposed that Subco and Propel will amalgamate (the "Amalgamation") and continue as a wholly owned subsidiary of Rain; and (iii) the Share Purchase and the Amalgamation, and the consummation of the transactions contemplated thereby;

6. to consider, and if deemed advisable, approve, with or without variation, by special resolution, and conditional upon the Share Purchase and the Amalgamation becoming effective, the change of name of the Corporation to Octant Energy Corp.;

7. to consider, and if deemed advisable, approve, with or without variations, by ordinary resolution, the re-approval and ratification of the stock option plan of the Corporation; and

8. to transact such further or other business as may properly come before the Rain Meeting or any adjournments or postponements thereof.

Rain Shareholders are encouraged to submit their proxies to vote their shares at the meeting. Any shareholder requiring a proxy can contact their broker dealer or the Corporation's counsel at 403-698-8711.

Details about the Transaction and the rest of the matters presented for approval at the shareholders Meeting can be found in the Corporation's Information Circular dated February 10, 2012, as filed on SEDAR (www.sedar.com).

Updates and Amendments to the Information Circular

The following table sets out the number of securities of the Resulting Issuer which shall be subject to escrow:

Prior to Giving Effect to the Transaction After Giving Effect to the Transaction
Name and Municipality of Residence of Securityholder Designation of class Number of securities held in escrow Percentage of class Number of securities to be held in escrow Percentage of class(1)
J. Christopher McLean,Dewinton, AB Common Shares Nil Nil 5,000,000 7.84%
CMM Hydrocarbon Consulting Ltd.Dubai, UAE Common Shares Nil Nil 10,000,000(2) 15.69%
Rick Schmitt, Calgary, AB Common Shares Nil Nil 5,000,000(3) 7.84%
William Evaroa,Dubai, UAE Common Shares Nil Nil 1,500,000 2.35%
Murray Atkins,Calgary, AB Common Shares 350,000(5)(7) 8.5% 6,443,939(5)(6)(7) 10.10%

Notes:

(1) Based on 63,729,559 Rain Common Shares issued and outstanding after giving effect to the Transaction.

(2) CMM Hydrocarbon Consulting Ltd. is beneficially owned by Chris Bake. These Common Shares will be voted by Chris McLean so long as the holdings exceed 10% of the Common Shares, or the TSXV consents otherwise.

(3) These shares will be held in the name of Scotia Capital Inc. in trust for Rick Schmitt.

(4) 336,364 of these shares will be held in the name of Blur Investments Ltd., and 157,575 of these shares will be held in the name of Amden Investments Ltd.

(5) Includes 50,000 shares held by Mr. Atkins' spouse.

(6) This figure includes the maximum number or shares issuable upon conversion of the Rain Convertible Debenture

(7) 125,000 of the shares are held in the name of Blur Investments Ltd.

Updated Financial Statement Disclosure

Subsequent to the Corporation's Information Circular, the Corporation filed the audited Propel Financials Statements for the years ended at December 31, 2010 and 2009 and the statements of income, comprehensive income and deficit and cash flows for each of the years in the two-year period ended December 31, 2010 and the balance sheet of Propel Energy Corp. as at December 31, 2008 and the statements of loss and deficit and cash flows for the year ended December 31, 2008. All of the above fillings can be found, as filed on SEDAR (www.sedar.com).

Halt in Trading

The Common Shares of the Corporation will remain halted pending the completion of the Qualifying Transaction and the receipt of the Final Exchange Bulletin in that regard.

ON BEHALF OF THE BOARD OF DIRECTORS:

Murray Atkins, Director

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.

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