Merger News
Ranger Energy, Blackhawk Resource sign merger
Ticker Symbol: C:RGGC:BLR
Ranger Energy, Blackhawk Resource sign merger
Ranger Energy Ltd (C:RGG)
Shares Issued 41,611,810
Last Close10/14/2010
.18
Friday October 15 2010 - News Release
Also Blackhawk Resource Corp (C:BLR) News Release
Mr. Dave Antony of Ranger reports
RANGER ENERGY LTD. AND BLACKHAWK RESOURCE CORP. ANNOUNCESIGNING OF ARRANGEMENT AGREEMENT AND SUBSCRIPTION RECEIPT FINANCING
Ranger Energy Ltd. and Blackhawk Resource Corp. have enteredinto an arrangement agreement dated Oct. 12, 2010, pursuant to which Ranger andBlackhawk will amalgamate and form a new corporation to be called BruinResources Corp. The Arrangement Agreement supersedes the non-binding letter ofintent dated July 19, 2010 between Ranger and Blackhawk, the terms andconditions of which were previously announced by the parties on July 20, 2010,in Stockwatch.
The Amalgamation is proposed to be effected by way of a planof arrangement (the "Arrangement"), the details of which are set forth in theArrangement Agreement. Under the Arrangement, each holder of Ranger commonshares ("Ranger Shares") will receive one Amalco common share for each RangerShare held, and each holder of Blackhawk common shares ("Blackhawk Shares") willreceive one Amalco common share for each Blackhawk Share held.
An annual and special meeting (the "Ranger Meeting") of Rangershareholders and a special meeting (the "Blackhawk Meeting", and together withthe Ranger Meeting, the "Meetings") of Blackhawk shareholders is set to be heldon November 12, 2010. At the Meetings, among other things, the Rangershareholders and Blackhawk shareholders will be asked to consider and, ifthought fit, approve the Arrangement. The Ranger board of directors and theBlackhawk board of directors, based upon the recommendations of their respectiveindependent committees, have each unanimously concluded that the Arrangement isfair to Ranger shareholders and Blackhawk shareholders, respectively, and arerecommending that Ranger shareholders and Blackhawk shareholders vote in favourof the Arrangement at the Meetings.
Officers and directors of each of Ranger and Blackhawk haveentered into lock-up agreements to support the transactions contemplated by theArrangement. In order for the Arrangement to proceed, a special resolutionapproving the Arrangement must be passed by at least 662/3% of the votes cast bythe Ranger shareholders at the Ranger Meeting and 662/3% of the votes cast bythe Blackhawk shareholders at the Blackhawk Meeting, in each case either inperson or by proxy.
Completion of the Arrangement is also subject to the approvalof the Court of Queen's Bench of Alberta and the TSX Venture Exchange and thereceipt of all other necessary regulatory and third party approvals. It is acondition of completion of the Arrangement that the TSX Venture Exchange shallhave approved the listing of the Amalco common shares. The Arrangement Agreementprovides for a reciprocal termination fee payable by either Ranger or Blackhawkin certain circumstances.
Upon completion of the Arrangement, the board of directors ofAmalco will consist of David Antony, Scott Price, Raymond Antony, Dale Owen,Michael Bowie and John McLeod and the Amalco management team will consist ofDavid Antony as Chief Executive Officer, Marc Melnic as President, CharidyLazorko as Chief Financial Officer, James Schneider as Vice PresidentEngineering, Mark Lenson as Vice President Exploration, George Hardisty as VicePresident Land and Business Development and Trevor Wong-Chor as CorporateSecretary. For additional information regarding the background of theseindividuals, please refer to the joint news release dated July 20, 2010.
Upon completion of the Arrangement, Amalco intends to continuecarrying on the business of an Alberta based oil and gas exploration andproduction company focused on petroleum and natural gas exploration, developmentand production in Western Canada. Amalco will be focused on the exploitation anddevelopment of its properties in its two core areas of Bodo and Crystal,Alberta. In addition, Amalco will focus on identifying key acquisitions anddevelopment opportunities in Western Canada.
In connection with the Arrangement, Ranger has also enteredinto an agreement with Haywood Securities Inc. and Macquarie Capital MarketsCanada Ltd. to act as co-lead agents, along with Byron Capital Markets andCasimir Capital LP, in respect of a brokered, commercially reasonable effortsprivate placement (the "Ranger Financing") of a minimum of 88,236,000subscription receipts ("Subscription Receipts") at a price of
.17 perSubscription Receipt for aggregate minimum gross proceeds of approximately$15,000,120. Ranger and the co-agents may elect to increase the size of theRanger Financing to $25,000,000. The proceeds of the Ranger Financing will beheld in escrow pending completion of the Arrangement and the satisfaction ofcertain other conditions. Under the terms of the Arrangement, each SubscriptionReceipt will be exchanged for one Ranger Share and one Ranger Share purchasewarrant (each a "Subscription Receipt Warrant") without payment of additionalconsideration. Each Subscription Receipt Warrant shall be exercisable into oneRanger Share at a price of
.20 for a period of three years from the date ofthe conversion of the subscription receipts, subject to acceleration in certainevents. Following the exchange of the Subscription Receipts for Ranger Sharesand Subscription Receipt Warrants,, all of the outstanding Ranger Shares will beexchanged for Amalco common shares on a one-for-one basis. In addition,following the Arrangement, each Subscription Receipt Warrant will represent theright to receive one (1) Amalco common share rather than a Ranger Share. If theArrangement is not completed and the conditions to the release of the proceedsfrom the Ranger Financing are not satisfied on or before November 30, 2010, eachholder of Subscription Receipts will be reimbursed the original subscriptionprice, together with interest accrued thereon. The proceeds of the RangerFinancing are expected to be used to carry on Amalco's business plan and forgeneral corporate purposes, The Ranger Financing is anticipated to close on orabout November 11, 2010.
Blackhawk also announces that the Corporation has filed itsAnnual Financials and Management Discussion and Analysis for the year ended June30, 2010. The Corporation has also filed its Form 51-101F1 - Statement ofReserves Data and Other Oil and Gas Information, Form 51-101F2 - Report onReserves Data by Independent Qualified Reserves Evaluator, and Form 51-101F3 -Report of Management and Directors on Oil and Gas Disclosure, under NationalInstrument 51-101 Standards of Disclosure for Oil and Gas Activities. Suchfilings can be accessed electronically from the SEDAR website atwww.sedar.com.
Investors are cautioned that, except as disclosed in themanagement information circular to be prepared in connection with theArrangement, any information released or received with respect to theArrangement may not be accurate or complete and should not be relied upon.Trading in the securities of Ranger and Blackhawk should be considered highlyspeculative.