BRS Resources Ltd. V.BRS.H

Friendly analysis and news release

[MikeRocap]

I just recieved this from a friend of mine that seems to be close to the company As I understand this from the company, Bonanza was only able to report the 12 month AVERAGE production of 166 barrels a day, not what it is now producing. The company seems confident that this number will double over the next 12 months to 350 bbl a day. So, this is quite a bit sexier than what initially meets the eye. Either way the purchase is done at .40c which seems like good value to me considering they (Karl Oil) paid $2.7 Million cash for the Ranchgate Properties recently, and are now taking an equivalent of $2 Million in stock... If they were to be paid in stock the purchase price equivalent it would be 52c a share. i.e.. ( .52c X 5.15M = $2.7M ) ..so everyone involved must believe the stock is worth dramatically more than where it is presently trading.... and given that I am a follower...so do I ! Anyway here is the news release... make of it what you may. Mr. Byron Coulthard reports Bonanza Resources has entered into a letter of intent (LOI) with Karl Oil & Gas Ltd. (KOG) whereby Bonanza will acquire all of the issued and outstanding shares of KOG in exchange for the issuance of 5.15 million common shares of Bonanza to the shareholders of KOG at a deemed price of 40 cents per share. Closing of the acquisition is subject to the completion of due diligence (including an evaluation of the oil and gas assets of KOG), the approval of the TSX Venture Exchange and the entering into of a formal share purchase agreement between Bonanza and the shareholders of KOG. KOG is a privately held company involved in the exploration for, development and production of, petroleum and natural gas reserves in Western Canada. KOG's principal assets are located in central and Southern Alberta (the Ranchgate properties) and were recently purchased from Ranchgate Energy Inc. and Geodyne Energy Production Inc. for approximately $2.7-million cash. The Ranchgate properties have been averaging production of 166 barrels of oil equivalent for the past 12 months with a net operating income of approximately $1.25-million (unaudited). KOG plans on drilling numerous wells in the second quarter and third quarter of this year as well as a deep gas well in late third quarter. KOG was founded by Bryce Karl. Mr. Karl has been involved in various aspects of the oil and gas industry for the past 25 years and has worked for and operated several successful companies in the Alberta area. Upon exchange acceptance, Mr. Karl will join the board of Bonanza as a director as well as becoming its chief operating officer. Michael Atkinson, a director of Bonanza, is also a director of KOG. Quest Capital Corporation of Vancouver, B.C., will be paid a finder's fee in respect of the transaction consisting of 275,000 common shares of Bonanza.