Ranger Energy Ltd.

Blackhawk Resource Corp.

Blackhawk Resource Corp.

October 15, 2010 09:02 ET

Ranger Energy Ltd. and Blackhawk Resource Corp. Announce Signing of Arrangement Agreement and Subscription Receipt Financing

CALGARY, ALBERTA--(Marketwire - Oct. 15, 2010) -


RANGER ENERGY LTD. ("Ranger") (TSX VENTURE:RGG) and BLACKHAWK RESOURCE CORP. ("Blackhawk") (TSX VENTURE:BLR) are pleased to announce that they have entered into an arrangement agreement dated October 12, 2010 (the "Arrangement Agreement") pursuant to which Ranger and Blackhawk will amalgamate (the "Amalgamation") and form a new corporation to be called "Bruin Resources Corp." ("Amalco"). The Arrangement Agreement supersedes the non-binding letter of intent dated July 19, 2010 between Ranger and Blackhawk, the terms and conditions of which were previously announced by the parties on July 20, 2010.

The Amalgamation is proposed to be effected by way of a plan of arrangement (the "Arrangement"), the details of which are set forth in the Arrangement Agreement. Under the Arrangement, each holder of Ranger common shares ("Ranger Shares") will receive one Amalco common share for each Ranger Share held, and each holder of Blackhawk common shares ("Blackhawk Shares") will receive one Amalco common share for each Blackhawk Share held.

An annual and special meeting (the "Ranger Meeting") of Ranger shareholders and a special meeting (the "Blackhawk Meeting", and together with the Ranger Meeting, the "Meetings") of Blackhawk shareholders is set to be held on November 12, 2010. At the Meetings, among other things, the Ranger shareholders and Blackhawk shareholders will be asked to consider and, if thought fit, approve the Arrangement. The Ranger board of directors and the Blackhawk board of directors, based upon the recommendations of their respective independent committees, have each unanimously concluded that the Arrangement is fair to Ranger shareholders and Blackhawk shareholders, respectively, and are recommending that Ranger shareholders and Blackhawk shareholders vote in favour of the Arrangement at the Meetings. 

Officers and directors of each of Ranger and Blackhawk have entered into lock-up agreements to support the transactions contemplated by the Arrangement. In order for the Arrangement to proceed, a special resolution approving the Arrangement must be passed by at least 66â…”% of the votes cast by the Ranger shareholders at the Ranger Meeting and 66â…”% of the votes cast by the Blackhawk shareholders at the Blackhawk Meeting, in each case either in person or by proxy. 

Completion of the Arrangement is also subject to the approval of the Court of Queen's Bench of Alberta and the TSX Venture Exchange and the receipt of all other necessary regulatory and third party approvals. It is a condition of completion of the Arrangement that the TSX Venture Exchange shall have approved the listing of the Amalco common shares. The Arrangement Agreement provides for a reciprocal termination fee payable by either Ranger or Blackhawk in certain circumstances.

Upon completion of the Arrangement, the board of directors of Amalco will consist of David Antony, Scott Price, Raymond Antony, Dale Owen, Michael Bowie and John McLeod and the Amalco management team will consist of David Antony as Chief Executive Officer, Marc Melnic as President, Charidy Lazorko as Chief Financial Officer, James Schneider as Vice President Engineering, Mark Lenson as Vice President Exploration, George Hardisty as Vice President Land and Business Development and Trevor Wong-Chor as Corporate Secretary. For additional information regarding the background of these individuals, please refer to the joint news release dated July 20, 2010.

Upon completion of the Arrangement, Amalco intends to continue carrying on the business of an Alberta based oil and gas exploration and production company focused on petroleum and natural gas exploration, development and production in Western Canada. Amalco will be focused on the exploitation and development of its properties in its two core areas of Bodo and Crystal, Alberta. In addition, Amalco will focus on identifying key acquisitions and development opportunities in Western Canada.

In connection with the Arrangement, Ranger has also entered into an agreement with Haywood Securities Inc. and Macquarie Capital Markets Canada Ltd. to act as co-lead agents, along with Byron Capital Markets and Casimir Capital LP, in respect of a brokered, commercially reasonable efforts private placement (the "Ranger Financing") of a minimum of 88,236,000 subscription receipts ("Subscription Receipts") at a price of $0.17 per Subscription Receipt for aggregate minimum gross proceeds of approximately $15,000,120. Ranger and the co-agents may elect to increase the size of the Ranger Financing to $25,000,000. The proceeds of the Ranger Financing will be held in escrow pending completion of the Arrangement and the satisfaction of certain other conditions. Under the terms of the Arrangement, each Subscription Receipt will be exchanged for one Ranger Share and one Ranger Share purchase warrant (each a "Subscription Receipt Warrant") without payment of additional consideration. Each Subscription Receipt Warrant shall be exercisable into one Ranger Share at a price of $0.20 for a period of three years from the date of the conversion of the subscription receipts, subject to acceleration in certain events. Following the exchange of the Subscription Receipts for Ranger Shares and Subscription Receipt Warrants,, all of the outstanding Ranger Shares will be exchanged for Amalco common shares on a one-for-one basis. In addition, following the Arrangement, each Subscription Receipt Warrant will represent the right to receive one (1) Amalco common share rather than a Ranger Share. If the Arrangement is not completed and the conditions to the release of the proceeds from the Ranger Financing are not satisfied on or before November 30, 2010, each holder of Subscription Receipts will be reimbursed the original subscription price, together with interest accrued thereon. The proceeds of the Ranger Financing are expected to be used to carry on Amalco's business plan and for general corporate purposes, The Ranger Financing is anticipated to close on or about November 11, 2010.

Blackhawk also announces that the Corporation has filed its Annual Financials and Management Discussion and Analysis for the year ended June 30, 2010. The Corporation has also filed its Form 51-101F1 - Statement of Reserves Data and Other Oil and Gas Information, Form 51-101F2 - Report on Reserves Data by Independent Qualified Reserves Evaluator, and Form 51-101F3 - Report of Management and Directors on Oil and Gas Disclosure, under National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Such filings can be accessed electronically from the SEDAR website at www.sedar.com.

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

Statements in this joint press release contain forward-looking information within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, without limitation, statements with respect to: timing and completion of the Arrangement and the Ranger Financing, the proposed Meeting, receipt of all necessary court, shareholder, regulatory and third party approvals, the listing of the Amalco common shares, the composition of the board of directors and management of Amalco, strategic rationale and corporate strategy and the use of proceeds from the Private Placement. Readers are cautioned that assumptions used in the preparation of forward-looking information may prove to be incorrect. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, level of activity, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. Neither Ranger nor Blackhawk undertakes any obligation to update or revise any forward-looking statements to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

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

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 release.

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