SKANA Capital Corp.

SKANA Capital Corp.

April 03, 2007 09:00 ET

SKANA Invests $8,500,000 in Heartland Resources Inc.

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 3, 2007) - SKANA Capital Corp. (TSX VENTURE:SKN) ("SKANA") is pleased to announce that it has entered into a subscription agreement with Heartland Resources Inc. ("Heartland"), a public company listed on the TSX Venture Exchange, to acquire 10,000,000 units to be issued by Heartland at $0.85 per unit ($8,500,000) pursuant a financing announced by Heartland on March 1, 2007. At that time, Heartland announced a non-brokered private placement of up to 58,823,529 units at CDN$0.85 per unit for total gross proceeds of up to CDN$50 million. Each unit consists of one common share and one share purchase warrant entitling the holder to acquire one additional common share of Heartland at the exercise price of CDN$1.50 for a period of 12 months following closing; provided that if, after the 4 month hold period expires on the warrants and the underlying shares, the weighted average trading price of the Heartland's shares is CDN$2.50 or more for a period of 20 consecutive trading days, Heartland may at its option require that the warrant holders exercise their warrants within 30 days, failing which the warrants will expire.

Heartland stated that it intends to use approximately $18.5 million of the proposed financing to purchase all the issued and outstanding shares of Pebble Petroleum Inc. ("Pebble Petroleum"), to fund repayment of Pebble Petroleum's outstanding convertible debt of $17.2 million to Emerald Bay Holdings Ltd. ("Emerald Bay"), and for transaction costs. An additional $25 million will be allocated to a proposed four well pilot drilling program on the PNG licenses owned by Pebble Petroleum. Pebble Petroleum is a privately owned British Columbia corporation which, directly and through its wholly owned US subsidiary Rover Resources Inc., holds the petroleum and natural gas exploration rights to approximately 150,000 gross and net acres of property in western Canada and the western United States. Pebble Petroleum acquired its PNG leases pursuant to an agreement with Eternal Energy, Fairway Exploration LLC ("Fairway"), a private US corporation controlled by Steven Swanson, and Prospector Oil Corp. ("POI"), a private US corporation controlled by Mr. Richard Findley, who together identified and provided initial analysis of the potential of the prospects. Fairway and POI have agreed to provide consulting services to Pebble Petroleum on an as needed basis for a period of two years.

Gregory Clarkes and Brian Tingle, directors of SKANA, are significant shareholders of Heartland. Brian Tingle is also a director of Heartland. Messrs. Clarkes and Tingle were not members of the independent committee of directors of SKANA which approved the Heartland investment.

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.

The TSX Venture Exchange has in no way passed upon the merits of the transaction and has neither approved nor disapproved the contents of this press release.

This news release contains certain statements that may be deemed "forward-looking statements". All statements, other than statements of historical fact, that address events or developments that SKANA expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although SKANA believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration and production successes or failures, continued availability of capital and financing, inability to obtain required shareholder or regulatory approvals, and general economic market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of SKANA's management on the date the statements are made.

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

Contact Information

  • SKANA Capital Corp.
    Neil Halldorson
    President and CEO
    (604) 669-4899