Touchstone Exploration Inc.
TSX VENTURE : TAB

Touchstone Exploration Inc.

July 11, 2011 17:37 ET

Touchstone Announces Signing of Definitive Share Purchase Agreement for Primera Group

CALGARY, ALBERTA--(Marketwire - July 11, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Touchstone Exploration Inc. (TSX VENTURE:TAB) ("Touchstone" or the"Company") is pleased to announce that it has, through its indirect wholly-owned subsidiary Territorial Services Limited, concluded negotiations and has entered into a definitive share purchase agreement with respect to the previously announced acquisition (the"Primera Acquisition") of all of the issued and outstanding shares of Primera Oil & Gas Ltd., Primera Oilfield Management Services Ltd. and Primera East Brighton Ltd. (the"Primera Group") from C L Financial Ltd.

The Primera Group consists of equity interests in three privately owned Trinidad-based companies engaged in the exploration for and development and production of oil and gas reserves in Trinidad and Tobago. The underlying assets associated with the Primera Group consists of 16 oil and gas properties comprising 7 on-shore producing oil and gas properties, 1 on-shore exploration property, 1 offshore exploration property and 7 undeveloped properties. All of the properties are located within the Southern Sedimentary and Columbus Basins of Trinidad and Tobago which have a long production history. Touchstone will also acquire technical support, equipment and equipment rentals as well as various administrative and management services with respect to the exploration, development and production of crude oil and natural gas resources in the Trinidad & Tobago region.

The total purchase price, net of liabilities assumed, is (US)$50,700,000. A deposit of (US)$1,000,000.00 has been paid into escrow concurrent with the execution of the share purchase agreement, and the balance of US$4,070,000.00 shall be paid within seven (7) days of the execution of the share purchase agreement. The cash consideration payable will be paid by the Company from proceeds from the recently completed debenture unit offering and subscription receipt offering. An aggregate of (US)$23.3 million of the purchase price will be financed by way of vendor take-back notes due two (2) years from closing bearing coupon interest at a rate of 8% per annum and secured exclusively against the Primera Group assets to be acquired. Certain assets of the Primera Group are subject to contractual rights of first refusal or non-binding post-completion arrangements for sale, the proceeds from which will be used to firstly pay-down the vender take-back notes, and any amount in excess of the vendor take back notes shall be paid to the benefit of the vendor.

The parties are seeking to close the Primera Acquisition prior to August 15th. However, completion of the transactions described above remains subject to a number of conditions, including but not limited to: Trinidad regulatory consents and the filing and acceptance of all required documentation from the TSX Venture Exchange. There can be no assurance that the proposed transactions will be completed as proposed or at all. Investors are referred to the specific risks and uncertainties applicable to the oil and gas industry generally, and Touchstone's operations in Trinidad and its securities specifically, as set out in Touchstone's Annual Information Form and the most recent management discussion and analysis, which may be viewed with other Touchstone disclosure documents through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

This news release is not for distribution to United States newswire services, should not be disseminated in the United States and 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 of Touchstone Exploration Inc. have not been 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.

The companies in which Touchstone Exploration Inc. directly and indirectly owns investments or assets are separate entities. In this news release "Touchstone" is sometimes used for convenience where references are made to Touchstone Exploration Inc. and its subsidiaries in general.

Cautionary Note Regarding Forward-looking Statements: Information in this news release that involves Touchstone's expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. Touchstone generally uses words such as "outlook", "will", "could", "would", "might", "remains", "to be", "plans", "believes", "may", "expects", "intends", "anticipates", "estimate", "future", "plan", "positioned", "potential", "project", "remain", "scheduled", "set to", "subject to", "upcoming", and similar expressions to help identify forward-looking statements. Forward-looking information in this news release may include, but is not limited to, information with respect to the timing for and completion of the proposed Primera Acquisition. The forward-looking statements in this news release are based upon information available to Touchstone as of the date of this news release. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of Touchstone and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding and are implicit in, among other things, the ability of Touchstone to complete the proposed Primera Acquisition as described in this news release and, once completed, to realize the anticipated benefits of such acquisition and the timely receipt of any required regulatory approvals. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. For further information regarding specific risks and uncertainties applicable to Touchstone please see Touchstone's Annual Information Form and the most recent management discussion and analysis, which may be viewed with other Touchstone disclosure documents through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. Touchstone does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.

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 news release.

Contact Information

  • Touchstone Exploration Inc.
    Mr. Paul Baay
    Chairman & Chief Executive Officer
    (403) 992-8407
    (403) 514-0383 (FAX)