Sentinel Announces Proposed Financing and Proposed Issuance of Shares for Services
January 29 2009 - 7:00AM
Marketwired Canada
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED
STATES
Sentinel Rock Oil Corporation (TSX VENTURE:SEN) ("Sentinel" or the
"Corporation") is pleased to announce that it intends to use its commercially
reasonable efforts to complete a non-brokered private placement (the "Sentinel
Private Placement"), in one or more closings, of up to 28,000,000 common shares
of Sentinel (the "Common Shares") at a price of $0.05 per share for total gross
proceeds of up to $1,400,000.
In connection with the Sentinel Private Placement, the Corporation may pay a
cash commission of 5% to registered dealers or other qualified persons according
to applicable securities laws.
The net proceeds of the Sentinel Private Placement will be used by Sentinel to
pay outstanding payables and for general working capital purposes. The principal
reasons for the Corporation to complete the Sentinel Private Placement are that
the Corporation currently has a working capital deficiency of approximately
$350,000 and wishes to drill one or more vertical test wells on its property in
Poundmaker, Saskatchewan and complete a re-entry of one well on its Redford
property in South Central Saskatchewan.
Regulatory Requirements
The Sentinel Private Placement is a non-arm's length transaction as Tyler Cran,
Bryce Bonneville, Ross Moulton, Al Kroontje and Cam Vouri, directors and/or
officers of Sentinel, intend to subscribe for Common Shares pursuant to the
Sentinel Private Placement (collectively, the "Sentinel Related Parties"). The
Sentinel Related Parties will increase their shareholdings in Sentinel as
follows:
Expected Shareholdings
Current after Sentinel
Name of Sentinel Related Party Shareholdings Private Placement
----------------------------------------------------------------------------
Tyler D. Cran 1,450,000 2,450,000
Bryce Bonneville 2,190,000 3,190,000
Ross Moulton 2,050,000 2,450,000
Al J. Kroontje 875,588 7,420,588
Cameron G. Vouri 100,000 600,000
The Sentinel Private Placement is a "related party transaction" within the
meaning of TSX Venture Policy 5.9 (which incorporates Multi-lateral Instrument
61-101) ("Policy 5.9"), as certain of the subscribers are related parties. As a
result, Multi-lateral Instrument 61-101 ("MI 61-101") provides that a "related
party transaction", such as the Sentinel Private Placement, must be approved by
a majority of the votes cast by holders of securities, excluding holders of
securities whose votes cannot be included for the purposes of minority approval,
as that term is defined in MI 61-101. However, the Sentinel Private Placement is
exempt from the minority shareholder approval requirement pursuant to Section
5(c) of MI 61-101. Pursuant to this exemption, a transaction is exempt from MI
61-101 if it is a distribution of securities of an issuer to a related party for
cash consideration, and
(a) neither the issuer nor, to the knowledge of the issuer after reasonable
inquiry, the related party, has knowledge of any material information concerning
the issuer or its securities that has not been generally disclosed, and the
disclosure document for the transaction (which is this press release) includes a
statement to that effect, and
(b) the disclosure document for the transaction (which is this press release)
includes a description of the effect of the distribution on the direct or
indirect voting interest of the related party.
After concluding on the advice of its advisors that the Sentinel Private
Placement was exempt from certain of the requirements of MI 61-101, the Board of
Directors of Sentinel determined it was appropriate to have the non-interested
directors (the "Independent Directors") consider and approve the Sentinel
Private Placement and to determine if it would be in the best interests of
Sentinel and its shareholders.
Based on disclosures made by each Sentinel director respecting his relationship
to and interests in the Sentinel Private Placement, it was determined that
Robert Farquharson and Raymond Ludwig were the only directors of Sentinel
sufficiently independent and free from conflicts of interest with respect to the
Sentinel Private Placement.
After considering a variety of factors, including the reasons for the Sentinel
Private Placement described herein, the Independent Directors approved the
Sentinel Private Placement.
The Independent Directors have also authorized management of the Corporation to
commence a rights offering to the shareholders of the Corporation on the same
basis as the Sentinel Private Placement in order to provide all shareholders of
the Corporation with the opportunity to invest further in Sentinel.
Completion of the Sentinel Private Placement will be subject to certain
conditions precedent including, but not limited to, the receipt of all necessary
approvals, including the approval of TSX Venture Exchange Inc.
Other Matters
The Corporation announces that in an effort to preserve cash for operations and
capital expenditures, the Corporation has agreed to pay a portion of its monthly
salaries and consulting fees by the issue of Common Shares (the "Shares for
Services"). Pursuant to the proposed Shares for Services arrangement, the
$22,500 in monthly employment and consulting fees paid to Tyler Cran, Bryce
Bonneville and Ross Moulton, in aggregate, will be paid as to $9,000 in cash and
$13,500 by the issue of Common Shares on a monthly basis at a price per share to
be determined in the context of the market, subject to regulatory approval.
About Sentinel
Sentinel is a Calgary, Alberta based oil exploration company focusing on heavy
oil with operations in northern Alberta and western Saskatchewan.
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