HAO: TSX Venture Exchange
HBNRF: Pink Sheets
HRJ: Frankfurt Stock Exchange
VANCOUVER, May 30 /CNW/ - Habanero Resources Inc. ("Habanero") wishes to report that Andora Energy Corporation ("Andora") (private Alberta oil sands company of which Habanero owns 700,000 shares) has executed a letter of intent with Signet Energy Inc. (Signet") setting forth the principal terms and conditions upon which Andora and Signet have agreed to enter into a business combination, according to a Pan Orient Energy Corp. ("Pan Orient") news release dated May 25, 2007.
The combination will be effected by way of a plan of arrangement under the Business Corporations Act (Alberta) whereby the security holders of Signet will receive, in total, 17.5 million common shares of Andora (subject to adjustment) valued at $50-million. Signet's assets currently include the potential to contribute up to approximately $14-million cash to the combined company and a 40% interest in six sections of oil sand leases in the Sawn Lake heavy oil project area in Alberta in addition to the rights to a 40% working interest in an additional 12 sections of oil sands leases.
Upon completion of the transaction contemplated herein, the combined company will be focused on development of the South and Central Sawn Lake heavy oil pool area, holding the majority of the known probable and possible reserves based on a recently completed N1-51-101-compliant reserve report undertaken by independent reserve engineers Degolyer and MacNaughten, as news released by Pan Orient in Stockwatch on February 6, 2007. According to this report, the probable Sawn Lake recoverable reserves are 97.4 million barrels of oil after government royalty, an increase of 276% from 25.9 million barrels in prior year. Additionally, probable and possible recoverable reserves of 179 million barrels of oil after government royalty, an increase of 85% from 97 million barrels in prior year representing a net present value (discounted 10% before tax - forecast prices) of $830 million attributed to Sawn Lake probable + possible reserves.
Andora currently (prior to Signet deal closing) holds an unencumbered (no GORR) 10% working interest in 69.5 sections of Sawn Lake oil sand leases ("North Block") plus an additional unencumbered (no GORR) 100% working interest in oil sand leases and related assets covering 16 sections of land ("South Block") located immediately south of, and adjacent to the northern 69.5 sections. Additionally, as outlined in a February 5, 2007 Pan Orient press release, Andora has purchased a gross overriding royalty ("GORR") of 3% on 36.5 (of the northern 69.5 to be paid by Deep Well) sections of Sawn Lake oil sands leases.
Jason Gigliotti, President of Habanero Resources stated, "Based on this proposed combination, our investment in Andora is continuing to grow in value. We purchased our shares for $0.50 per share and now they are being deemed at $2.86 less than two years later, based on this proposed combination. When you factor in the size (85.5 contiguous sections) and the latest reserve report that also shows a 276% increase in recoverable reserves over this property, it is a very exciting prospect to be involved in."
Habanero is proposing a non-brokered private placement of up to 2,000,000 units at $0.30 per unit for total proceeds of $600,000, subject to regulatory approval. Each unit will consist of one common share and one share purchase warrants, each warrant entitles the holder to purchase one common share for a period of two years from closing at $0.40 per share. The proceeds will be used for anticipated upcoming oil sands acquisitions and for general working capital. A finder's fee in accordance with TSX Venture Exchange guidelines may be paid.
Habanero is an emerging junior oil and gas company focused on developing and acquiring Alberta Oil Sands Prospects. Habanero has an interest in 20.5 gross and 10.75 net Alberta Oil Sands sections, as well as having exposure to approximately 55,000 acres of oil sands interests though its equity ownership in Andora Energy Corporation ("Andora"). Habanero owns 700,000 common shares of Andora.
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BY ORDER OF THE BOARD OF DIRECTORS
"Jason Gigliotti"
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Jason Gigliotti, President
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
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