SKANA Capital Corp.

SKANA Capital Corp.

February 20, 2009 16:07 ET

SKANA Capital Signs Letter Agreement With Impact Petroleum

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 20, 2009) - SKANA Capital Corp. ("SKANA") (TSX VENTURE:SKN) is pleased to announce that SKANA and its wholly owned subsidiary, Raven Wing Resources Inc. ("Raven Wing") have entered into an agreement (the "Letter Agreement") with Impact Petroleum (US) Corp. ("Impact"), a private Nevada corporation, dated February 19, 2009 for the sale of 3 oil and gas exploration properties owned by Raven Wing and located in Montana and Wyoming known as Lewis & Clark, Donkey Creek, and Raven Creek, and assignment to Impact of the Exploration Projects Acquisition Services Agreement between Raven Wing and Thomasson Partner Associates Inc. (the "Priority Contract") dated December 29, 2006. The Letter Agreement replaces the agreement dated April 17, 2008 between SKANA and Impact announced in SKANA's press release of April 18, 2008 (the "Original Agreement").

SKANA will assign the Lewis & Clark, Donkey Creek and Raven Creek leases to Impact within 15 days of the date of the Letter Agreement. Impact must then raise a minimum of US $2 million as a drilling fund on or before July 31, 2009. If it does not do so, it must forthwith reassign such leases to SKANA, and SKANA will have the right to terminate the Letter Agreement.

The consideration for the assignment of the leases to Impact will be as follows: CDN $1,950,000 already paid by Impact to SKANA under the Original Agreement plus CDN $1,700,000 plus US $450,000 plus the costs paid by SKANA in renewing certain of the Raven Creek and Donkey Creek leases. The latter 2 payments will be funded from production from 18% of the net revenue attributable to Impact's working interest in wells which Impact drills or participates in drilling using proceeds of the drilling fund, and 10% of the net revenue attributable to all wells drilled on Lewis & Clark using any funds, and wells drilled on Raven Creek or Donkey Creek using any funds, but only if proceeds of the drilling fund have previously been used to drill on those properties. Impact must make such payments to SKANA on or before July 14, 2014 regardless of whether production is sufficient to fund payment. If Impact makes such payments to SKANA on or before such date, it will have the option (the "Option") to acquire the Wasatch and Black Thunder properties in Utah and Wyoming for no additional consideration.

Raven Wing will retain a 2.5% Overriding Royalty Interest ("ORRI") in Impact's working interest in the Lewis and Clark property, and an interest equal to 2% of the net profit revenue attributable to Impact's working interest in oil and gas produced from Lewis & Clark, Donkey Creek and Raven Creek. If Impact exercises the Option, Raven Wing will retain a 2.5% ORRI in Black Thunder, and an ORRI in Wasatch between 2.5% and 5% depending on the amount of gas sold.

No finder's fee is payable in connection with the transaction. William Daily, who is a director of Impact and the beneficial holder of less than 10% of the issued and outstanding shares of Impact, is one of 7 directors of SKANA.

Completion is subject to acceptance of the transaction by the TSX Venture Exchange.

About SKANA Capital Corp.

SKANA is listed on the TSX Venture Exchange as an Investment Issuer and carries on business as a merchant bank. It makes strategic investments in oil and gas and other resource-based opportunities that it believes will offer excellent returns through its financial involvement and management expertise.

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.

Contact Information

  • SKANA Capital Corp.
    Greg Clarkes
    Chairman of the Board
    (604) 669-4899