JERSEY, CHANNEL ISLANDS--(Marketwire - Nov 8, 2012) -
TSX-V: LOI
8 November 2012
Not for distribution to United States wire services or dissemination in
the United States. This news release does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities in the
United States. 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 U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws or
an exemption from such registration is available.
JOINT PRESS RELEASE - FOR IMMEDIATE RELEASE
LONGREACH AND APIC SIGN ARRANGEMENT AGREEMENT AND
OBTAIN INTERIM COURT ORDER
Toronto, Ontario and Jersey, Channel Islands - 8 November, 2012 -
Longreach Oil and Gas Limited (TSXV: LOI) ("Longreach") and APIC
Petroleum Corporation (TSXV: API) ("APIC") are pleased to announce that
APIC, Longreach and a wholly owned subsidiary of APIC incorporated in
Jersey, Channel Islands ("Jersey") have entered into an arrangement
agreement dated November 7, 2012 (the "Arrangement Agreement") and APIC
has obtained an interim court order from the Royal Court of Jersey,
Channel Islands, Samedi Division (the "Royal Court") with respect to a
proposed scheme of arrangement (the "Arrangement") between APIC and
Longreach in accordance with the laws of Jersey.
Arrangement Agreement
The Arrangement Agreement was entered into to provide for the
Arrangement which will involve, among other things, the transfer of the
whole of the undertaking, property and liabilities of APIC to
Longreach, with Longreach being the surviving legal entity and APIC
dissolving and de-listing from the TSXV.
The terms of the Arrangement Agreement will be summarized in APIC's
management information circular (the "Circular") which will be filed
and mailed to APIC's shareholders in connection with its special
meeting referred to below.
In connection with entering into the Arrangement Agreement, all of the
directors of APIC, together with certain significant shareholders of
APIC who together own or control an aggregate of approximately 33
million shares of APIC ("APIC Shares") representing approximately 42%
of the issued and outstanding APIC Shares, entered into a voting
agreement with Longreach in respect of the Arrangement, pursuant to
which, among other things, such directors and shareholders agreed to
vote their shares in favour of any resolutions as may be required to
approve or implement the Arrangement.
Interim Court Order and Special Meeting of APIC Shareholders
On November 2, 2012, APIC received an interim order from the Royal
Court ordering, among other things, that APIC hold a meeting of
shareholders to approve the Arrangement. A special meeting of
shareholders of APIC is scheduled to be held on Tuesday, December 4,
2012 at 8:00 a.m. (Toronto time), to approve, among other things, the
continuance of APIC into Jersey and the Arrangement. Should the
Arrangement be approved by the requisite majority at the special
meeting of shareholders, APIC will seek the sanction of the Royal Court
of the Arrangement in a final court hearing described below.
Court Hearing for Final Order
A hearing of the application (the "Final Hearing") to seek a final
order (the "Final Order") sanctioning the Arrangement will be held on
December 19, 2012 at 10:00 a.m. (Jersey, Channel Islands time) at the
Royal Court, located at the Royal Court Building, Royal Square, St.
Helier, Jersey, Channel Islands JE1 1BA. An earlier court date was
requested to hear the Final Order application, however due to
scheduling issues outside the control of APIC, the earliest date which
the Royal Court could hear the matter was December 19, 2012. The
closing of the Arrangement is expected to occur on or about December
20, 2012.
APIC shareholders have a right to appear and be heard at the Final
Hearing provided that they have filed with the Royal Court and served
upon the Jersey advocates for APIC and Longreach their written
materials, on or before the close of business on the December 17, 2012
(Jersey, Channel Islands time). Details of the requirements for APIC
shareholders appearing at the Final Hearing are set out in the Circular
and in the Chairman's letter accompanying the Circular.
Subscription Receipts Financing
In connection with the Arrangement, as previously disclosed by press
release on November 1, 2012, APIC completed a non-brokered offering
("Offering") of subscription receipts ("Subscription Receipts") on
October 31, 2012. An aggregate of 230,786,918 Subscription Receipts
were sold under the Offering at a price of C$0.13 per Subscription
Receipt for total gross proceeds of C$30,002,299.73. At the special
meeting, APIC shareholders will be asked to ratify the Offering and the
participation of certain APIC insiders in the Offering.
The joint press release of APIC and Longreach dated November 1, 2012
stated that Mr. Sheldon Inwentash had subscribed for 3,500,000
Subscription Receipts, when in fact he has control and direction over a
total of 7,000,000 Subscription Receipts, with 3,500,000 Subscription
Receipts owned by an associate of Mr. Inwentash and 3,500,000
Subscription Receipts owned by Pinetree Resources Partnership.
Details of Arrangement
The Arrangement will result in: (i) each holder of APIC Shares being
issued one (1) share of Longreach ("Longreach Share") for every 5.3846
APIC Shares (the "Exchange Ratio"); (ii) each holder of options to
purchase APIC Shares ("APIC Options") being issued one (1) option to
purchase Longreach Shares pursuant to the Longreach's stock option plan
("Replacement Options") in exchange for every 5.3846 APIC Options in
accordance with the Exchange Ratio (and the price of each Replacement
Option being the price of the former APIC Option exchanged therefor
multiplied by the Exchange Ratio); and (iii) each holder of warrants to
purchase APIC Shares ("APIC Warrants") being issued one (1) warrant to
purchase Longreach Shares ("Replacement Warrants") in exchange for
every 5.3846 APIC Warrants in accordance with the Exchange Ratio (and
the price of each Replacement Warrant being the price of the former
APIC Warrant exchange therefor multiplied by the Exchange Ratio). The
Arrangement is subject to the satisfaction or waiver of the conditions
set out in the Arrangement Agreement, including, among other things,
the continuance of APIC as a corporation from Canada to Jersey, and
obtaining all regulatory and shareholder approvals.
Pursuant to the Arrangement, approximately 854,288 Replacement Options
with an exercise price of approximately $1.18 will be issued to holders
of APIC Options in exchange for 4,600,000 APIC Options with an exercise
price of $0.22 and approximately 579,430 "in-the-money" Replacement
Options with an exercise price of approximately $0.54 will be issued to
holders of APIC Options in exchange for 3,120,000 "in-the money" APIC
Options with an exercise price of $0.10. In addition, pursuant to the
Arrangement, approximately 580,358 Replacement Warrants with an
exercise price of approximately $0.65 will be issued to holders of APIC
Warrants in exchange for 3,125,000 APIC Warrants with an exercise price
of $0.12.
On completion of the Arrangement, current holders of Longreach Shares
will hold approximately 23,465,398 Longreach Shares, current holders of
APIC shares will hold approximately 14,503,197 Longreach Shares and
holders of Subscription Receipts will hold approximately 42,860,550
Longreach Shares, representing approximately 29.03%, 17.94% and 53.02%,
respectively, of the outstanding Longreach Shares on a non-diluted
basis.
The Exchange Ratio of 5.3846 was negotiated at arm's length between the
parties and it was based on the prevailing market prices of each of
Longreach and APIC's share prices over a significant period of time.
The fair market value of the parties' share prices of $0.70 for the
Company and $0.13 for APIC was determined by Longreach and APIC by
looking to a number of variables including the volume-weighted average
price of the shares of APIC and the Company over different periods of
time.
On completion of the Arrangement, Dennis A. Sharp will be named
Executive Chairman of the board of Longreach, Andrew Benitz, currently
Chief Operating Officer of Longreach, will be named Chief Executive
Officer of Longreach and Thomas Vukovich will be appointed to the board
of Longreach (and within 30 days from the date of the completion of the
Arrangement, one director on the board of Longreach will resign
resulting in a board of eight directors).
CAUTIONARY STATEMENTS RE FORWARD LOOKING INFORMATION
Statements in this press release contain forward-looking information
within the meaning of applicable securities law. Forward-looking
information is frequently characterized by words such as"contemplates",
"intends", "plan", "expect", "project", "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 completion of the Arrangement,
the receipt of APIC shareholder approval, the continuance of APIC into
Jersey and the Final Hearing and granting of the Final Order. Readers
are cautioned that assumptions used in the preparation of
forward-looking information may prove to be incorrect. Although
Longreach and APIC each believes that the expectations reflected in the
forward-looking information is reasonable, there can be no assurance
that such expectations will prove to be correct. Neither Longreach nor
APIC can guarantee future results, level of activity, or performance of
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.
Forward-looking information is based on the opinions and estimates of
management at the date the statements are made, and are subject to a
variety of risks and uncertainties and other factors (many of which are
beyond the control of Longreach and APIC) that could cause actual
events or results to differ materially from those anticipated in the
forward-looking information. Some of the risks and other factors could
cause results to differ materially from those expressed in the
forward-looking information include, but are not limited to, the risks
that the parties will not proceed with the Arrangement and associated
transactions, that the ultimate terms of the Arrangement and associated
transactions will differ from those that currently are contemplated,
and that the Arrangement and associated transactions will not be
successfully completed for any reason (including the failure to obtain
the required approvals or clearances from regulatory authorities).
Industry related risks could include, but are not limited to:
operations with foreign entities; delays or changes in plans;
competition for, among other things, capital, acquisitions, skilled
personnel and supplies; governmental regulation of the oil and gas
industry; technical problems; the uncertainty of estimates and
projections of costs and expenses; unanticipated operating events or
performance which can reduce productivity; the need to obtain required
approvals from regulatory authorities; stock market volatility;
liabilities inherent in oil and gas operations; access to capital; and
other factors. Readers are cautioned that this list of risk factors
should not be construed as exhaustive.
The statements in this news release are made as of the date of this
release. Neither Longreach nor APIC undertakes any obligation to
comment on analyses, expectations or statements made by third parties
in respect of either of them, or their respective financial or
operating results or (as applicable), their securities.
For additional information, please contact:
For Longreach Oil and Gas Limited For APIC Petroleum Corporation
Bryan Benitz, Chairman & Chief Dennis A. Sharp, Chairman and Chief
Executive Officer Executive Officer
(416) 367-0150 - (416) 367-0165
+44 20 3137 7756 (FAX)
Pelham Bell Pottinger or
Mark Antelme / Philip Dennis /
Rollo Crichton-Stuart John Clark, Chief Financial Officer
(416) 367-0150 - (416) 367-0165
+44 207 861 3232 (FAX)
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ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This information is provided by RNS
The company news service from the London Stock Exchange
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