Zodiac Exploration Announces Strategic Asset Acquisition and Acceleration of Release of Common Shares from Escrow
November 03 2010 - 4:25PM
Marketwired
Zodiac Exploration Inc. ("Zodiac" or the "Company") (TSX VENTURE:
ZEX) announces the following developments:
-- the Company has entered into an agreement with Bayswater Exploration &
Production, LLC ("Bayswater") pursuant to which Zodiac will acquire
through farm-in 74.5% of Bayswater's net revenue interest in
approximately 22,000 acres (the "Assets") located in Kings and Kern
Counties in California in the heart of the San Joaquin basin (the
"Acquisition")
-- the Board of Directors of the Company has approved the acceleration of
the release from escrow of common shares of the Company which escrow
conditions were imposed on the shareholders of Zodiac Exploration Corp.
("Old Zodiac") in connection with the acquisition (the "RTO
Transaction") of Old Zodiac by Peninsula Resources Inc. ("Peninsula")
Bayswater Acquisition
Upon successful completion of the Acquisition, Zodiac will
acquire 74.5% of Bayswater's approximate 80.5% net revenue interest
in the Assets. Total consideration to be paid by Zodiac for the
Assets will be US $8.6 million which will be comprised of US $5.7
million in cash, US $1.9 million in common shares of Zodiac and a
US $1 million credit to Bayswater in respect of future cash calls
made by Zodiac to Bayswater in connection with joint operating
agreements in place between Zodiac and Bayswater. In addition to
the upfront cash payment, Zodiac is required to pay 92% of the
costs to drill two wells to test the Monterey and Kreyenhagen
formations. The first well will complete Zodiac's earning
requirements on approximately 11,000 acres (net 8,195), and must be
drilled by January 1, 2013. The second well will complete Zodiac's
earning requirements on approximately an additional 11,000 acres
(net 8,195), and must be drilled by January 1, 2014. In addition,
Bayswater and Zodiac have also agreed to pool their respective
lands within an Area of Mutual interest which encompasses the
Assets and have also established a separate 50 township Area of
Mutual Interest where they will pursue land acquisitions and
prospects jointly on a 75:25 (Zodiac, Bayswater) basis. Closing of
the transaction is expected to occur on or before January 31, 2011
and remains subject to completion of standard due diligence and the
receipt by Zodiac of all required regulatory approvals, including
the approval of the TSX Venture Exchange.
Murray Rodgers, President and CEO stated, "this transaction
increases our land position in Kings County to approximately 80,000
net acres, which we believe are prospective for Monterey, Vaqueros,
Kreyenhagen light oil resource plays as well as conventional
plays."
Zodiac is scheduled to spud its first evaluation well to test
the Vaqueros formation on the Jaguar play in mid December.
Accelerated Escrow Release
The Board of Directors of the Company has approved the
acceleration of the release from escrow of common shares of the
Company which escrow conditions were imposed on the shareholders of
Old Zodiac in connection with the acquisition of Old Zodiac by
Peninsula in connection with the RTO Transaction. Each of the
applicable dates for the release from escrow as described in the
Company's joint information circular dated August 27, 2010 and
letter of transmittal forwarded to shareholders in connection with
the RTO Transaction will be moved ahead by three months such that
the final escrow release date will occur on October 5, 2011,
subject to further acceleration by the Board of Directors of the
Company.
Zodiac plans to post a corporate presentation to its website
(www.zodiacexploration.ca) on November 3, 2010.
Forward Looking Statements
This press release contains certain forward-looking statements
and forward-looking information (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities laws. All statements other than statements of historical
fact are forward-looking statements. Forward-looking information
typically contains statements with words such as "anticipate",
"believe", "plan", "continuous", "estimate", "expect", "may",
"will", "project", "should", or similar words suggesting future
outcomes. In particular, this press release contains
forward-looking statements pertaining to the closing of the
Acquisition. In particular, this press release contains
forward-looking statements with respect to the Acquisition and
Zodiac's obligations thereunder; closing of the Acquisition; the
expected receipt of required regulatory approvals; and the spudding
of the first well by Zodiac to test the Vaqueros formation on the
Jaguar play.
Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other
factors (many of which are beyond the control of Zodiac) that could
cause actual events or results to differ materially from those
anticipated in the forward-looking information. Some of the risks
and other factors could cause results to differ materially from
those expressed in the forward-looking information include, but are
not limited to: general economic conditions in Canada, the United
States and globally, the risks associated with the oil and gas
industry, commodity prices and exchange rate changes. Industry
related risks could include, but are not limited to: operational
risks in exploration, development and production; delays or changes
in plans; competition for and/or inability to retain drilling rigs
and other services; competition for, among other things, capital,
acquisitions of reserves, undeveloped lands, skilled personnel and
supplies; risks associated to the uncertainty of reserve estimates;
governmental regulation of the oil and gas industry, including
environmental regulation; geological, technical, drilling and
processing problems and other difficulties in producing reserves;
the uncertainty of estimates and projections of production, costs
and expenses; unanticipated operating events or performance which
can reduce production or cause production to be shut in or delayed;
incorrect assessments of the value of acquisitions; the need to
obtain required approvals from regulatory authorities; stock market
volatility; volatility in market prices for oil and natural gas;
liabilities inherent in oil and natural gas operations; access to
capital; and other factors. Readers are cautioned that this list of
risk factors should not be construed as exhaustive.
In addition to other factors and assumptions which may be
identified in this press release, assumptions have been made
regarding, among other things: that the Company will receive the
required regulatory approvals, including the approval of the TSX
Venture Exchange on a reasonable timeline; currency, exchange and
interest rates; the regulatory framework regarding royalties, taxes
and environmental matters in the jurisdictions in which the Company
operates and the general stability of the economic and political
environment in which the Company operates. Readers are cautioned
that the foregoing list of factors is not exhaustive.
The forward-looking information contained in this news release
is expressly qualified by this cautionary statement. Zodiac does
not undertake any obligation to update or revise any
forward-looking statements to conform such information to actual
results or to changes in our expectations except as otherwise
required by applicable securities legislation. Readers are
cautioned not to place undue reliance on forward-looking
information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Zodiac Exploration Inc. Murray Rodgers President &
CEO (403) 444-7844 Zodiac Exploration Inc. Randy Neely Chief
Financial Officer (403) 444-7848 www.zodiacexploration.ca
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