CALGARY and WICKLOW, Ireland, Aug. 29, 2011 /CNW/ - Sinogas West Inc. (the "Corporation" or "Sinogas") (trading symbol "GZW.P" TSXV), and Blackstairs Energy plc ("Blackstairs") are pleased to announce that they have entered into an arm's length letter of intent (the "LOI") dated August 26, 2009, where the parties have agreed to negotiate a definitive agreement relating to a combination transaction (the "Transaction") pursuant to which Sinogas and Blackstairs will combine (the combined entity hereinafter referred to as the "Resulting Issuer") and the management of Backstairs will become the management of the Resulting Issuer. Pursuant to the LOI, the parties have agreed to the essential terms of the Transaction which will be disclosed in a subsequent press release once the TSX Venture Exchange (the "Exchange") has received and reviewed certain information in accordance with their Policies. The trading of the common shares of the Corporation will remained halted until such future date as the Exchange may determine.
About Blackstairs
Blackstairs Energy plc is an Irish-registered petroleum exploration and production company. The company was founded in 2006 by Gerry Sheehan (Managing Director) and Bob Hamilton (Finance Director). Mr. Sheehan is a geologist and geophysicist and has over 29 years' experience in the international oil sector. Mr. Hamilton is a chartered accountant. Both directors have previously held senior management positions in Tullow Oil plc.
Blackstairs Energy plc is the operator of Blocks 4, 5 and 6 in the Republic of Armenia. These large blocks cover an area of almost 14,000 square kilometres. An active exploration programme is underway, managed from the company's regional office in Yerevan, Armenia.
Blackstairs was awarded production blocks in the Romanian Eighth and Ninth Rounds of Licensing. The company has exclusive rights to redevelop eight oil and gas fields in onshore Romania; six of these are in the prolific Pannonian Basin, the other two fields are in the main southern Romania producing zone.
The company is pursuing an active business development policy, initially concentrating on greater Eastern Europe and Africa.
Blackstairs principal executive offices are located at 1 Bayswater Terrace, Greystones, Co. Wicklow, Ireland
Conditions
The proposed transaction is subject to a number of conditions including
the following:
| (a) | approval by the board of directors of both Sinogas and Blackstairs; |
| (b) | acceptance of the offer by holders of a sufficient proportion of the Blackstairs shares to enable compulsory acquisition of the shares of any minority Blackstairs shareholders; |
| (c) | satisfactory due diligence by both Sinogas and Blackstairs; |
| (d) | negotiation and execution of a definitive agreement; and |
| (e) | regulatory approval. |
Cautionary Statements
The Proposed Transaction is an arm's length transaction as the directors and officers of Sinogas have no ownership or other interest in Blackstairs. As part of the regulatory approval process, Sinogas anticipates submitting for review to the Exchange an information circular. The Sinogas Shares will remain halted until such time as permission to resume trading has been obtained from the Exchange and submission of required documentation to the Exchange. Prior to the commencement of trading an additional press release will be issued providing detailed information relating to the consideration for the Transaction, the NI 51-101 report on the oil and gas assets of Backstairs, financial information of Backstairs and the management of the Resulting Issuer.
Completion of the transaction is subject to a number of conditions including, but not limited to, the parties entering into a definitive agreement, Exchange acceptance and, if applicable pursuant to Exchange Requirements, Sinogas shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. For this purpose, acceptances of the offer by shareholders of Blackstairs must be at least at a level to enable compulsory acquisition of any non-accepting minority. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon.
All information contained in this news release with respect to Sinogas and Blackstairs was supplied by Sinogas and Blackstairs, respectively, for inclusion herein, and with respect to such information, Sinogas and its board of directors and officers have relied on Blackstairs with respect to information concerning Blackstairs.
Trading in the securities should be considered highly speculative.
The 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.
This news release may contain forward-looking statements based on assumptions and judgments of management of the Corporation and Blackstairs regarding future events or results. Such statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. The Corporation disclaims any intention or obligation to revise or update such statements except as may be required by law.
This new release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.