VGS Seismic Canada Inc.
NEX BOARD : VGS.H

VGS Seismic Canada Inc.

December 20, 2006 09:54 ET

VGS Seismic Completes Amalgamation and is to Resume Trading

CALGARY, ALBERTA--(CCNMatthews - Dec. 20, 2006) -

THIS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

VGS Seismic Canada Inc. (the "Corporation") (NEX BOARD:VGS.H) announced today that the amalgamation among 1273151 Alberta Ltd., a wholly owned subsidiary of the Corporation, VGS Database International Inc. ("VGS Database") and VGS Capital Ltd. ("VGS Capital") was completed effective December 15, 2006 (the "Amalgamation"). The Amalgamation was previously announced on November 24, 2006. Joint management information circulars (the "Circular") were mailed to the shareholders of each of VGS Database and VGS Capital and the Circular was filed as the filing statement of the Corporation on SEDAR on December 4, 2006.

Pursuant to the Amalgamation, each holder of Class A common shares of VGS Capital received a Class A common share of the Corporation (a "Seismic Share") in exchange for their shares in VGS Capital. Each Class A common share of VGS Database was exchanged for 0.75 of a Seismic Share and 0.25 of a Class B non-voting share of the Corporation (a "Seismic Non-Voting Share"). Each Class D non-voting share of VGS Database was exchanged for a Seismic Non-Voting Share. A total of 10,872,445 Seismic Shares were issued to former holders of common shares of VGS Capital (an increase of 25,337 from the total in the Circular as 25,337 additional common shares of VGS Capital were issued prior to the Amalgamation). A total of 12,493,540 Seismic Shares were issued to former holders of common shares of VGS Database and a total of 5,038,785 Seismic Non-Voting Shares were issued to holders of non-voting shares of VGS Database (an increase of 800,000 from the total of Seismic Non-Voting Shares in the Circular as 800,000 options to purchase non-voting shares of VGS Database were exercised prior to the Amalgamation).

The Corporation now has 25,940,986 Seismic Shares issued and outstanding and 5,038,785 Seismic Non-Voting Shares issued and outstanding. In addition, 600,000 options to purchase Seismic Shares and 3,675,101 warrants to purchase Seismic Shares are outstanding (an increase of 237,500 warrants from the total in the Circular as additional warrants were issued to Plainfield Special Situations Master Fund Limited or its affiliates ("Plainfield") in order to compensate for decreasing the expiry of the original warrants to five years as required by the TSX Venture Exchange). Finally, pursuant to a support agreement with Plainfield, the Corporation has reserved and allotted for issuance 13,333,333 Seismic Shares on conversion of a note in principal amount of $10,00,000 issued by the amalgamated entity for which the conversion right has vested and a further 6,666,667 Seismic Shares on conversion of a second note in principal amount of $10,000,00 issued by the amalgamated entity for which the conversion right has not yet vested (collectively the "Notes").

Graduation and Resumption of Trading

The TSX Venture Exchange has issued a bulletin advising that the Corporation has met the requirements to be listed as a TSX Venture Exchange Tier 1 company and that trading in the Seismic Shares will resume at the opening on December 20, 2006 under the trading symbol VGS.

Early Warning

Pursuant to the Amalgamation, Plainfield now holds 4,166,667 Seismic Shares (16%). In addition, Plainfield holds warrants to purchase 1,587,500 Seismic Shares, a right which has vested to purchase 13,333,333 Seismic Shares on conversion of Notes and a right which has not vested to purchase an additional 6,666,667 Seismic Shares on conversion of Notes. On a fully diluted basis, including the exercise of warrants and conversion of Notes for which such rights have vested, Plainfield would hold 44% of the Seismic Shares.

About the Corporation

The Corporation carries on the business of pursuing opportunities in the creation, acquisition and marketing of seismic data for use in the oil and natural gas industry.

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

Contact Information

  • VGS Seismic Canada Inc.
    Scott Milroy
    Chief Financial Officer
    (403) 263-6050