VANCOUVER, BRITISH COLUMBIA–(Marketwire – Nov. 6, 2012) –
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
Dakar Resource Corp. (“Dakar”) (TSX VENTURE:DKR) announces that it has entered into a letter agreement dated November 2, 2012 to acquire all the issued and outstanding share capital of Proteus Energy Corporation (“Proteus”), a private company incorporated in Delaware with oil and gas assets located in California, by way of a reverse takeover (the “Transaction”).
Dakar will issue to the shareholders of Proteus 5.9 common shares of Dakar for each one Proteus common share and each one Proteus Series A preferred share which is issued and outstanding. Proteus is a closely held Delaware corporation with 12,566,963 issued common shares and 1,771,501 issued Series A preferred shares. On closing of the Transaction, Dakar will issue 84,596,937 common shares to Proteus shareholders and will have a pre-financing total issued share capital of 99,821,937 common shares.
Proteus’ principal assets are working interests in oil and gas properties in California. The properties and working interests are the subject of a recently completed 51-101F1 report which will be filed with regulators as part of the Transaction. Proteus is primarily focused on field redevelopment and recovery of undeveloped reserves with a focus on oil producing assets. Proteus currently owns a 100% working interest in 2,400 acres of oil and gas leases located on the Northwest Lost Hills field in Kern County, California (the “Lost Hills Asset”). The Northwest Lost Hills field is located approximately 60 miles northeast of Bakersfield, California on a major anticline on the west side of the San Joaquin Basin. The Lost Hills Asset produced approximately 10.6 barrels of oil equivalent per day (for the period January – September 2012) from 16 wells that were in production when Proteus acquired the property in 2008. Most of this production is from the Monterey Shale formation at approximately 4,100 feet. Proteus recently drilled two new wells on the Lost Hills Asset in the Etchegoin Sands formation at approximately 2,900 feet, and expects to complete hydraulic fracturing and to place these wells on production in November and December 2012. Proteus has also identified two existing wells that it intends to recomplete into the Etchegoin Sands zone in December 2012 and plans to drill a number of additional vertical and, possibly, horizontal Etchegoin Sands wells in 2013.
In addition, Proteus owns a 2.7% non-operated working interest in oil and gas leases located on the Lynch Canyon field in Monterey County, California, a heavy oil field with 30 horizontal and 3 vertical wells. This property currently produces approximately 500 barrels of oil per day from cyclic steaming. The field is currently being converted to a steam flood with a view to increasing production beginning in 2013.
Concurrent Brokered Private Placement
Dakar has engaged Haywood Securities Inc. (“Haywood”) and Emerson Equity LLC (“Emerson”) to act as agents in connection with a brokered private placement offering of subscription receipts for a minimum of $4 million and a maximum of $6 million (the “Offering”) on a commercially reasonable efforts basis. Pricing of the Offering will be determined between the agents, Dakar and Proteus after initial marketing. Proceeds of the Offering will be used to fund the resulting issuer’s operations, anticipated acquisitions and working capital. Funds underlying the subscription receipts will be held in escrow until the earlier of April 1, 2013 or the satisfaction of certain release conditions, which include, but are not limited to the completion of the Transaction.
Closing of the Transaction
The Transaction will result in a change of control of Dakar. Dakar and Proteus are to conclude a definitive acquisition agreement on or before November 30, 2012. The Transaction is considered an arm’s length transaction. A finder’s fee may be paid in connection with the Transaction. Closing of the Transaction is subject to Proteus and Dakar entering into a definitive acquisition agreement, the completion of a 51-101 compliant technical report on the Lost Hills Asset, approval of the TSX Venture Exchange (“TSX-V”) and approval of Dakar shareholders.
Completion of the transaction is subject to a number of conditions, including TSX-V acceptance and shareholder approval. The transaction cannot close until, among other conditions, the parties execute a definitive agreement, conclude their respective due diligence review and the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Dakar Resource Corp. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
ON BEHALF OF THE BOARD
Allen Wilson, President, C.E.O. and Director
This release includes certain statements that may be deemed forward-looking statements. All statements in this release, other than statements of historical facts, that address future events or developments that Dakar expects are forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. In particular, forward-looking statements in this press release include, but are not limited to, statements with respect to timing and completion of the Transaction of the common and preferred shares of Proteus.
Forward-looking statements are 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 that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. Some of the risks and other factors could cause results to differ materially from those expressed in the forward-looking statements include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in commodity prices; governmental regulation of the oil and gas industry, including environmental regulation; geological, technical and drilling problems; unanticipated operating events; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for commodities; liabilities inherent in oil and gas operations; changes in tax laws and incentive programs relating to the oil and gas industry; and the other factors described in our public filings available at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
Although Dakar believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under applicable securities laws, Dakar does not assume a duty to update these forward-looking statements. For more information on Dakar, Investors should review Dakar’s filings that are available at www.sedar.com.
Neither 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.