Business
Sprott Resource Corp. announces agreement to acquire outstanding shares of Auriga Energy Inc.
Sprott Resource Corp. announces agreement to acquire outstanding shares of Auriga Energy Inc.
About this update from Winchester Equity Corporation
[{"type":"text","content":"\n\n\n\nSep. 28, 2009 (Canada NewsWire Group) -- TORONTO, Sept. 28 /CNW/ -- (TSX:SCP) - Sprott Resource Corp. (\"SRC\") is pleased to announce that it has entered into an agreement (the \"Acquisition Agreement\") to purchase, through a newly formed subsidiary (\"Acquireco\"), all of the issued and outstanding common shares of Auriga Energy Inc. (\"Auriga\") a private oil and gas company operating in Alberta (the \"Acquisition\") by way of an exempt take-over bid. Acquireco has also completed a private placement by purchasing a total of 7,954,545 common shares in the capital of Auriga (\"Auriga Shares\") at a price of $0.44 per share for aggregate proceeds of $3.5 million.Acquireco will be led by Gary Guidry, who most recently served as CEO of Tanganyika Oil Company Ltd. (\"Tanganyika\"), which under Gary's leadership between May 2005 and December 2008, grew production to approximately 25,000 bbl/d with share price increasing from 6.50 to 31.50 C$/share at the time of its sale to Sinopec International Petroleum Exploration and Production Corporation (\"Sinopec\") in December 2008 for over $2.0 billion. The Acquireco management team intends not only to move quickly to capture the value in Auriga, but also to aggressively pursue new business development opportunities. International development projects where Acquireco management has an exceptional performance record will be an area of particular emphasis.Auriga was identified as an initial platform with a very concentrated portfolio of high quality assets and growth opportunities limited to date by a lack of capital and low commodity prices. The primary asset is the condensate rich Kaybob South Beaverhill Lake Gas Unit No. 1 (\"Kaybob\"), which is material in size, geologically well-defined and has proven performance from significant prior development across the Kaybob structure. Kaybob has significant infrastructure in place to optimize free cash flow over the next five years. With significant technical analysis and appraisal drilling, Kaybob provides a material portfolio asset for Acquireco in the near term.To capitalize on Auriga's high quality portfolio of assets, Acquireco will be completing a $61.5 million private placement (the \"Private Placement\") immediately following the closing of the Acquisition (the \"Closing\"). \"With the injection of new capital we expect to be ab...