VANCOUVER, B.C., June 9 /CNW Telbec/ - Exxel Energy Corp. (TSX-V: EXX)
(the "Company") announces a non-brokered private placement of 2,000,000 units
at US$5.00 for total proceeds of US$10,000,000. Each unit will be comprised of
one common share and one share purchase warrant. Each warrant will entitle the
holder to purchase one additional common share of the Company at a price of
US$5.00 per share, unless the Company enters into a signed agreement(s) to
raise an additional US$10,000,000 in equity financing on or before July 29,
2005, and subsequently closes such financing within 90 days of signing, in
which event each warrant will be exercisable at US$6.00 per share. The Company
has agreed to employ its best efforts to obtain TSX Venture Exchange approval
to a five year term for the warrants. If such approval is not obtained, the
warrants will be exercisable for a period of two years from the date of issue.
The private placement will be conducted with a single investor, Gemini Energy
Corp. ("Gemini"), a reporting issuer listed on the Toronto Stock Exchange.
The Company has given notice of the exercise of its option to acquire
additional acreage interests in the Piceance Basin, Colorado, and is therefore
obligated to pay into escrow US$2,000,000 by July 1, 2005 and a further
US$5,000,000 by August 1, 2005, under its Assignment Agreement with Marc
Bruner originally announced March 17, 2005 (the "Assignment Agreement"). A
portion of the proceeds from the private placement will be employed to make
these payments. The remaining US$3,000,000 will be employed to make the
property acquisition payments referred to hereafter in connection with the
acquisition of new acreage, and for working capital. Gemini has agreed to make
a US$500,000 subscription advance to fund the Company's initial property
payment referred to hereafter.
Pooling Agreement
-----------------
The Company's principal holders of common shares are John Hislop
("Hislop"), Marc Bruner ("Bruner") and Q Investments Ltd. ("Q Investments").
As an incentive to Gemini in connection with the private placement financing
referred to in the forgoing, Bruner has agreed to pool all of his shares and
warrants in the Company and Hislop and Q Investments have agreed to pool
3,250,000 shares and 1,000,000 shares, respectively. This pooling agreement is
in addition to the existing escrow agreement with respect to shares and
warrants held by Bruner. The securities subject to the pooling agreement will
be released from pool if the following two conditions are met:
1) if the Company's shares close for 10 consecutive trading days at
a price of US$10.00 or higher after the Gemini private placement
units become free trading; and
2) if the Company raises an additional US$15,000,000 in equity
financing at a price of US$5.00 per share or higher from sources
other than Gemini, Q Investments, the directors and officers of
Gemini and Q Investments, or the current insiders of the Company
other than Bruner.
In the event that the foregoing conditions are not met, the pooled
securities may still be released from pool if the holders of a majority of the
shares subject to the pooling agreement agree, conditional upon the approval
of Gemini's Board of Directors, if Gemini then holds at least 1,000,000 shares
of the Company. If Gemini has less than 1,000,000 shares at the relevant time,
then the pooling agreement can be dissolved if the holders of a majority of
the shares subject to the pooling agreement agree to do so.
Unless the securities subject to the pool have been previously released
in accordance with the foregoing, all of the securities subject to the pool
will be released on the expiry of five years from the date of the pooling
agreement.
Property Acquisition
--------------------
The Company has entered into an agreement (the "Acquisition Agreement")
with Chamberlain Exploration Development and Research Stratigraphic
Corporation ("Cedar Strat"), a private Nevada corporation. Under the
Acquisition Agreement, the Company will acquire initially a 100% working
interest in oil and gas leases covering approximately 33,000 net mineral acres
(the "Initial Leases") in the Nevada Oil and Gas Fairway. Cedar Strat will
continue to assemble acreage within two areas of interest, with the goal of
assembling an additional 120,000 net mineral acres (the "Additional Leases")
for the Company's benefit. No reserves have been assigned to any of the
interests subject to the agreement.
As consideration, the Company will pay US$500,000 within 10 days of TSX
Venture Exchange approval of the Acquisition Agreement, to acquire its
interest in the Initial Leases. Thereafter, the Company will pay US$1,300,000
by August 29, 2005, US$1,000,000 by November 28, 2005, and US$800,000 by
November 30, 2006, in each case to acquire such of the Additional Leases as
have been assembled by the date of payment. Cedar Strat is obligated, without
further consideration, to continue to assemble acreage and transfer it to the
Company until all the target acreage is acquired.
Cedar Strat will retain an overriding royalty interest in the acquired
acreage equivalent to the difference between existing third party royalties
and 22%, yielding a 78% net revenue interest to the Company. Also, Cedar Strat
will receive a 20% working interest in the leases assigned to the Company,
after the Company has recovered its project costs. The Company has the right
to buy back up to 50% of Cedar Strat's working interest, to be exercised upon
commencement of drilling in specified areas identified in the Acquisition
Agreement. Third party finders will receive from the Company the sum of
$100,000 and a 1% overriding royalty interest in the project, reducing the
Company's net revenue interest to 77%.
The Company is committed to drill four wells on the project: the first by
May 31, 2007, the second by May 31, 2008, the third by May 31, 2009 and the
fourth by May 31, 2011. Default penalties for failure to drill the commitment
wells range from US$100,000 to US$500,000. The Company will be the initial
project operator.
Board and Advisory Board Appointments
-------------------------------------
Following the closing of the private placement with Gemini referred to in
the foregoing, Mr. Gordon Nielsen, the President and CEO of Gemini, will be
appointed to the Company's Board as an outside director. Mr. Nielsen has
17 years of experience in the investment industry, most recently and formerly
as an investment advisor with Canaccord Capital Corp. Mr. Nielsen holds
Bachelor of Science degrees in Geology and Chemistry from the University of
Saskatchewan.
The Company will appoint an Advisory Board comprised of persons
knowledgeable in the oil & gas industry, particularly in the geographic areas
where the Company's properties are located, to provide advice to the Board of
Directors with respect to the Company's development of its oil and gas assets
and related matters. The first member of the Advisory Board will be Dr. Alan
Chamberlain, the President of Cedar Strat. Dr. Chamberlain received his
doctorate in stratigraphy from the Colorado School of Mines in 1999. Beginning
in 1980, he has been involved in mapping geology, measuring geological
formations throughout Nevada and Utah, and developing the method of gamma ray
correlation, which has become a valuable tool in identifying potentially
productive oil and gas formations. He has mapped hundreds of miles of thrust
traces not identified before, and prepared extensive source rock and reservoir
rock studies pertaining to properties throughout the Great Basin. He has
received various awards for his innovative ideas and methods.
Amendment to Assignment Agreement
---------------------------------
Under the Assignment Agreement with Marc Bruner with respect to the
Piceance Basin acreage as referred to in the foregoing, the Company
contributed an initial US$5,000,000 and has exercised its option to contribute
additional payments totaling US$7,000,000 to acquire additional acreage, which
additional payments will be made from the proceeds of the private placement
referred to in the foregoing. The Company also has the right to contribute up
to an additional US$18,000,000 to acquire additional project acreage, which
would bring the Company's total contribution to US$30,000,000. By agreement
between the parties, the original deadline for contributing the final
US$18,000,000 has been moved from August 1, 2005 to December 1, 2005. Also,
the deadline for commencing the first test well has been changed from
November 1, 2005 to December 31, 2005.
Investor Relations Arrangements
-------------------------------
Renmark Financial Communications Inc. ("Renmark") has been retained to
provide investor relations services for the Company in Canada and Europe.
Renmark is a retail investor relations firm with offices located at 2080
Rene-Levesque Blvd. West, Montreal, Quebec, H3H 1R6, Canada. Renmark was
founded in 1999 and is a full service investor relations firm that offers a
wide range of integrated investor and financial communication services. Their
team of 25 personnel handle a client base which includes over 50 public
companies. The Company and Renmark act at arm's length, and Renmark has
advised that it has no present interest, directly or indirectly, in the
Company or its securities, or any right or intent to acquire such an interest.
The initial, written agreement between the parties is for a 12 month
period commencing June 1, 2005. Renmark will initially receive $5,000 per
month for its services, which will increase to $7,500 per month effective
December 1, 2005, plus expenses, such payments to be made from the Company's
working capital. The Company's contacts at Renmark will be Mr. Neil Murray-
Lyon and Ms. Christine Stewart at (514) 939-3989.
The foregoing transactions are subject to the approval of the TSX Venture
Exchange.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
Mogelijk gemaakt door 
Translate
Translate