Shoal Point Energy Ltd.

Shoal Point Energy Ltd.

November 11, 2010 11:11 ET

Shoal Point Energy Ltd. Announces Completion of Going Public Transaction and Financing for $6,156,233

TORONTO, ONTARIO--(Marketwire - Nov. 11, 2010) - Shoal Point Energy Ltd. ("Shoal Point") announces that it has today completed an amalgamation with Allied Northern Capital Corp. ("Allied"), a reporting issuer in Ontario and the ongoing public company is now called Shoal Point Energy Ltd.

Shoal Point is an oil and gas exploration company with a 61.5 % interest in an oil-in-shale play contained in the shallow rights of Exploration Licence 1070 (EL 1070) on the west coast of Newfoundland, and a 6% - 14% interest in a 40,000 acre shale gas and oil play in the Moncton Basin of New Brunswick. See below for further details of the exploration properties and rights.

At the time of the amalgamation, Allied had a total of 7,705,268 common shares issued and outstanding, cash in the bank of $300,000 and no liabilities.

The amalgamation was accomplished with all of the common shares and warrants and the convertible debentures in Shoal Point Energy Ltd., the private company being exchanged for shares, warrants and debentures of Allied on the same terms as existed immediately prior to the amalgamation. This included the proceeds of the unit financing that closed immediately prior to the amalgamation for proceeds of $6,156,233.

The financing was comprised of 27,982,881 units at $0.22 where each unit included a common share and one warrant entitling the holder to acquire an additional common share at $0.28 for 2 years. In connection with the financing, the commissions were paid to registered agents totaling $400,014 and broker warrants totaling 1,818,247 were issued with a two year term and an exercise price of $0.22.

The capitalization of the amalgamated company is as follows:

Common shares 114,910,421
 
Warrants – Exercisable at prices from $0.15 to $0.50 with expiry dates from June 30, 2011 to November 9, 2012 55,932,242
 
Convertible debentures $2,618,639

In addition, Shoal Point has granted stock options to officers, directors, and consultants totaling 11,990,000 options, all of which are exercisable at $0.25 for terms ranging from 1 year to 5 years.

West Newfoundland Oil-in-Shale Play

Title to the shallow rights of EL 1070 is held 61.5% by Shoal Point and 38.5% by Canadian Imperial Venture Corp (CIVC). Immediately preceding the above noted going public transaction, Shoal Point and CIVC signed an agreement with McLaren Resources Inc. to terminate a previously announced purchase and sale agreement wherein McLaren had the right to buy a 5% interest in EL 1070 and the right to continue to participate in an area of mutual interest (AMI) agreement with Shoal Point and CIVC. Under the agreement, McLaren is being reimbursed $150,000 that had previously been paid to Shoal Point and it will receive 750,000 shares and 250,000 warrants of Shoal Point. Based on the above noted financing, the 750,000 shares issued to McLaren Resources Inc. have a deemed value of $165,000 and CIVC will re-imburse Shoal Point 38.5% of this amount ($63,525). The warrants have a 2-year term and are exercisable at $0.28.

As a result of the termination of the deal with McLaren, Shoal Point and CIVC are now the only participants in the AMI agreement covering the additional lands in West Newfoundland. The participation rights under this agreement are now 60% for Shoal Point and 40% for CIVC.

In addition to the above, Shoal Point and CIVC have an agreement with Dragon Lance Management Corp. (DLMC) whereby DLMC has committed to spend up to $6.5 million for the drilling of the 3K39 well and the application for a significant discovery licence (SDL) on EL 1070. Following the drilling of the 3K39 well, the interests in the shallow rights of EL 1070 will be as follows:

DLMC 50.00%
Shoal Point 30.75%
CIVC 19.25%

The management and directors of Shoal Point are currently as follows:

George Langdon, President
Donald R Sheldon, Director
Norman Davidson Kelly, Director
Howard Hanick, Director
John Clarke, Director
R. Brian Murray, Director and CFO

Visit our website at www.shoalpointenergy.com

Except for historical information contained herein, this news release contains forward- looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. The forward-looking statements contained in this press release are made as of the date hereof and Shoal Point Energy Ltd. undertakes no obligation 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.

Contact Information

  • Shoal Point Energy Ltd.
    George Langdon
    (403)-973-1378
    or
    Shoal Point Energy Ltd.
    R. Brian Murray
    (416)-985-7810
    www.shoalpointenergy.com