/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION
IN THE UNITED STATES/
CALGARY, AB and LONDON, UK, Nov. 19 /CNW/ - Solana Resources Limited (TSX-V: SOR; AIM: SORL), the Colombia focussed independent oil and gas exploration and production company, today announces that, in connection with its "bought deal" financing previously announced on October 25, 2007, it has filed a final short form prospectus to issue 24,330,000 common shares at a price of C$2.20 per common share for gross proceeds of C$53,526,000. The financing is being led by Tristone Capital Inc. and includes Orion Securities Inc., Westwind Partners Inc., and Toll Cross Securities Inc., collectively (the "Underwriters"). In addition, the Company has granted the Underwriters an over-allotment option to acquire up to an additional 2,970,000 common shares at a price of C$2.20 per common share at any time within 30 days of the closing date. If the over-allotment option is exercised in full, additional gross proceeds will be C$6,534,000 for total gross proceeds of C$60,060,000. The offering is scheduled to close on or about November 26, 2007.
Application will be made to the London Stock Exchange for the common shares to be admitted to trading on AIM and admission is expected to take place on November 27, 2007.
Solana plans to use the net proceeds of this offering to fund exploration and development of its Colombian oil and gas assets and for general corporate purposes.
This news release shall not constitute an offer to sell or the solicitation of any offer to buy the securities in any jurisdiction. The common shares may be offered or sold in other eligible foreign jurisdictions and to U.S. buyers on a private placement basis pursuant to an applicable exemption from registration requirements in Rule 144-A or Regulation D of the United States Securities Act of 1933, as amended.
The Company also announces that it has restated its financial results for each of the year ended December 31, 2006, the three month period ended March 31, 2007 and the six month period ended June 30, 2007.
The Company originally recorded as intangible assets the value of shares issued to the former principals of Breakaway Energy Inc. ("Breakaway") in exchange for all the outstanding shares of Breakaway. The Company has concluded that the value of these shares should be expensed through earnings and recorded as share capital over the vesting period of these shares, being two years from October 1, 2006. The financial reports for the year ended December 31, 2006 have therefore been restated to reduce intangible assets by $8,036,403 and share capital and warrants by $8,036,403 as at December 31, 2006, and to decrease depletion, depreciation, accretion and impairment expense by $1,516,892 and increase stock-based compensation expense by $1,516,892 for the year ended December 31, 2006, with no effect on the net loss for the year.
The financial reports for the three month period ended March 31, 2007 have been restated to reduce intangible assets by $6,888,346 and share capital by $6,888,346 as at March 31, 2007, and to decrease amortization of intangible assets expense by $1,148,058 and increase stock-based compensation expense by $1,148,058 for the three month period ended March 31, 2007. In addition, these reports have been restated to reduce depletion, depreciation and accretion expense by $800,000 which results in a decrease in the net loss for the three month period ended March 31, 2007 of $800,000, from $3,932,598 to $3,132,598, and a decrease in the net loss per share from $0.04 to $0.03 for the same period.
The financial reports for the six month period ended June 30, 2007 have been restated to reduce intangible assets by $5,750,626 and share capital by $5,750,626 as at June 30, 2007, and to decrease amortization of intangible assets expense by $1,148,058 and $2,296,116, respectively for the three and six months ended June 30, 2007 and increase stock-based compensation expense by $1,148,058 and $2,296,116, respectively, for the three and six months ended June 30, 2007. In addition, as previously announced on October 31, 2007, these reports have been restated to reduce depletion, depreciation and accretion expense by $800,000 and $1,600,000, respectively, for the three and six month periods ended June 30, 2007, which results in a decrease in the net loss from $3,602,217 to $2,802,217; and from $7,534,815 to $5,934,815, respectively for the three and six month periods ended June 30, 2007. Net loss per share decreased from $0.05 to $0.03, and from $0.08 to $0.06, for the three and six month periods ended June 30, 2007, respectively.
The restated financial reports for each of the year ended December 31, 2006, the three month period ended March 31, 2007 and the six month period ended June 30, 2007 are available in their entirety on the Company's website at www.solanaresources.com or on the SEDAR website at www.sedar.com.
All numbers in these reports are expressed in US dollars unless otherwise indicated.
Please note that the commentary accompanying the restated figures has not otherwise been updated for events subsequently announced following publication of the original financial reports.
Forward Looking Statements
Certain information regarding the Company, including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, mechanical problems, equipment limitations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated.
Solana Resources Limited
Solana (www.solanaresources.com) is an international resource company engaged in the acquisition, exploration, development and production of oil and natural gas. The Company's properties are located in Colombia, South America and are held through its wholly owned subsidiary, Solana Petroleum Exploration (Colombia) Limited. The company is headquartered in Calgary, Alberta Canada.
Additional information (which does not form part of this announcement) is available on the Company's website at www.solanaresources.com or the Sedar website at www.sedar.com.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
RELEASE. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE