Seaview Energy Inc.
TSX VENTURE : CVU.A
TSX VENTURE : CVU.B

Seaview Energy Inc.

February 27, 2008 13:04 ET

Seaview Energy Inc. Announces Strategic Corporate Acquisition

CALGARY, ALBERTA--(Marketwire - Feb. 27, 2008) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS.

Seaview Energy Inc. (TSX VENTURE:CVU.A) (TSX VENTURE:CVU.B) ("Seaview" or "the Company") is pleased to announce that it has entered into a letter agreement with 1332915 Alberta Ltd., ("1332915") a private oil and gas company, to effect a business combination (the "Transaction") whereby Seaview will acquire all of the outstanding securities and liabilities of 1332915.

Consideration for the acquisition of 1332915 will comprise of the following:

(i) The security holders of 1332915 shall receive in aggregate 7,941,314 Class A Shares ("Seaview Shares") valued at $1.00 per Seaview Share.

(ii) Under the terms of the Transaction, Seaview will assume 1332915's estimated net debt of $19.5 MM.

(iii) Total consideration of the Transaction is approximately $27.4 MM

The independent directors of Seaview and 1332915 have unanimously approved the Transaction.

The assets of 1332915 are focused within Seaview's Peace River Arch core area with current production estimated at 550 Boe/d (92% natural gas weighted). The Transaction significantly expands Seaview's production, reserves, land and drilling inventory and establishes the Company as an emerging junior oil and gas exploration and production company.

The Transaction is highly accretive to Seaview on production, reserves and cash flow per share basis.

The Transaction is expected to close on or about March 31, 2008 and will be conditional upon: (i) the execution of a definitive agreement in respect of the Transaction by no later than March 14, 2008; (ii) 100% of the 1332915 securityholders tendering to the offer; and (iii) customary regulatory approvals and other typical conditions for this type of transaction.

The parties intend to carry out the Transaction by way of an exempt take-over bid. The Seaview shares issued pursuant to the Transaction will be subject to a 4 month hold period from the date of closing of the Transaction. The Transaction will provide 1332915 shareholders continued participation in the upside of 1332915's asset base through their significant equity stake in Seaview.

Strategic Rationale:

Seaview's business plan is based upon delivering growth in reserves, production and cash flow per share with a balanced strategy of acquiring, exploiting and exploring for high quality light oil and natural gas assets in Western Canada. The proposed acquisition of 1332915 significantly expands the Company's production, reserves, land base, infrastructure ownership and drilling inventory within the Company's Peace River Arch core area. The assets to be acquired from 1332915 pursuant to the Transaction (the "Assets") offer operating synergies with Seaview's existing core areas through facility ownership and are consistent with management's exploration skill set.

Pursuant to the Transaction, Seaview will acquire approximately 550 Boe/d consisting of 2,950 mcf/d of natural gas, 17 Bbl/d of natural gas liquids and 40 Bbl/d of crude oil. Total Proven Reserves of 1,277 MBoe and Total Proven plus Probable reserves of 1,753 MBoe have been assigned to 1332915, with an effective date of December 31, 2007, by Sproule Associates Limited in a NI 51-101 compliant report "Evaluation of the P&NG Reserves of 1332915 Alberta Ltd."

The Assets are high quality, long life reserves with a current reserve life index of 8.7 years on a Total Proven plus Probable basis at current production rates. The combined Proven Developed Producing and Probable Developed Producing reserves are 1,656 MBoe representing 94% of the Total Proved plus Probable reserves being acquired. As such, forecast $1.1 MM of future development capital is required to develop the Probable reserves at a cost of $2.32/Boe.

In addition to the estimated Proven and Probable reserves, Seaview management has identified 17 drilling locations and 7 recompletions providing future growth opportunities.



Acquisition Metrics

----------------------------------------------------------------------------
Including Land and Excluding Land and
Facility Value(1) Facility Value(1)
----------------------------------------------------------------------------
Estimated Purchase Price(1) $ 27.4 MM $ 24.9 MM
----------------------------------------------------------------------------
Cost per flowing Boe $ 49,800 $ 45,300
----------------------------------------------------------------------------
Reserves cost per Total Proven Boe (2) $ 21.77 $ 19.50
----------------------------------------------------------------------------
Reserves cost per Total Proven plus
Probable Boe (3) $ 16.26 $ 14.20
----------------------------------------------------------------------------

Notes:
(1) Land value estimated internally at $1 MM or $150/acre plus facilities
valued at $1.5 MM.
(2) Based on Sproule Associates Limited report and includes future
development capital of $0.4 MM.
(3) Based on Sproule Associates Limited report and includes future
development capital of $1.1 MM.


Financial and Operational Benefits of the Acquisition

Seaview expects to achieve a number of key financial and operational benefits from the Transaction, including:

- The acquisition is highly accretive to Seaview's net asset value per share, production per share and cash flow per share.

- Key attributes of the acquisition based upon management's pro-forma estimates calculated as at December 31, 2007 are as follows:

-- Forecast annualized pro-forma cash flow of $9.25 MM$ ($0.34 per share), assuming 2008 average AECO gas price of $7.85/GJ ($8.28/mcf) representing a 79% increase in cash-flow per share (see comments in the forward looking statements).

-- 97% increase in Seaview's production per share.

-- 138% increase to Seaview's Total Proven plus Probable reserves per share.

- The Company will emerge from the Transaction as a significantly stronger entity, with improved liquidity in the market and a significantly larger market capitalization.

- Consolidation of land position in Seaview's Pouce Coupe Montney exploration play. With the acquisition of 1332915, will increase Seaview's current land position on the play, offering additional strategic upside.

- Access to a significant land base consisting of 53,315 gross acres (14,708 net acres) including 6,531 net acres of undeveloped land. Because of the mutli-zone nature of the asset base, Seaview has identified multiple development opportunities on both the undeveloped lands and developed lands currently producing from other horizons.

- Seaview has identified 17 gross drilling locations, plus 7 recompletion opportunities on 1332915 lands, further adding to Seaview's existing inventory of drilling prospects.

- 1332915's development and optimization opportunities will complement and diversify Seaview's existing exploration prospects, establishing a balanced portfolio of investment projects to provide a solid inventory for future growth.

- The major producing assets of 1332915 include working interests in four regional gas processing facilities and production infrastructure, supporting future growth plans without restrictions to processing capacity or extensive capital investments. The facility interests service the main producing properties of Boundary Lake, Bonanza, Doe and Pouce Coupe which are complimentary to Seaview's expanding prospect inventory.

The strategic merits of the Transaction are significant for Seaview shareholders. The larger, more diversified cash flow base will permit the combined company to embark upon a more aggressive exploration and development program in its Peace River Arch focus area. With an expanded inventory of both exploration and development locations, Seaview is well positioned for additional growth potential through a risk balanced capital program.

Outlook, 2008 Guidance

Upon closing of the Transaction, Seaview will have the following corporate pro-forma characteristics:

- Production levels of more than 800 Boe/d, including 4,450 mcf/d of natural gas, 43 Bbl/d of crude oil and 18 Bbl/d of natural gas liquids.

- Total Proven plus Probable reserves of over 2,250 MBoe (effective December 31, 2007 based on internal engineering estimates utilizing NI 51-101 reserve definitions and Sproule Associates Limited evaluation of 1332915's reserves).

- Land base consisting of 68,537 gross acres (21,554 net acres) of total land including 10,600 net acres of undeveloped land. In addition, Seaview has exposure to additional lands under a farm-out option totaling 31,786 gross acres (19,054 net acres) of undeveloped land.

- Debt to cash flow ratio of 1.1 times based on pro-forma annualized 2008 cash flow.

- Expanded drilling inventory of over 30 opportunities, offering a diversified portfolio of exploration, development and lower-risk optimization projects.

- Expanded land position and working interest infrastructure in Pouce Coupe targeting tight-gas potential from the Montney horizon.

- 27.02 million Class A shares outstanding and 1.054 million Class B shares outstanding.

Seaview will provide detailed 2008 guidance upon successful completion of the transaction. The Company commenced operations in October 2007 and in the subsequent 5 months has successfully established a significant reserve base and production platform to support the company's ongoing growth strategy of balanced acquisitions, exploitation drilling and exploration.

Seaview is a Calgary, Alberta based company engaged in the exploration, development and production of conventional crude oil and natural gas reserves in Canada. Seaview's strategy is to build shareholder value through a balance of exploration and development drilling complimented by a focused acquisition program. Seaview's initial core focus area is in the Peace River area of northwest Alberta.

1332915 is a private Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas.

Forward-Looking Statements

This press release may include forward-looking statements including opinions, assumptions, estimates and expectations of future production, cash flow and earnings. When used in this document, the words "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "plan", "will", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, the volatility of oil and gas prices, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in oil and gas acquisition and drilling programs, operating risks, production rates, reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by the Company with securities regulatory authorities. References to forecasted cash flow or cash flow per share disclosed herein do not represent fair market value.

Oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy the securities in any jurisdiction. The Class A shares of Seaview have not 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 in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Seaview Energy Inc.
    Michael Wuetherick
    President & CEO
    (403) 770-2961
    or
    Seaview Energy Inc.
    Stephanie Bunch
    VP - Finance & CFO
    (403) 770-9503
    or
    Seaview Energy Inc.
    Teresa Beets
    Investor Relations
    (403) 668-4492
    Email: info@seaviewenergy.com
    Website: www.seaviewenergy.com