Vancouver, BC – TheNewswire – March 1, 2023 – Samurai Capital Corp. (TSXV:SSS.P) (“Samurai” or the “Company”) is pleased to announce that, further to its news release dated December 13, 2022, it has entered into a definitive amalgamation agreement dated March 1, 2023 (the “Amalgamation Agreement”) with Home Run Oil & Gas Inc. (“Home Run”) in connection with the proposed business combination of Samurai and Home Run, which transaction (the “Qualifying Transaction”) is intended to constitute Samurai’s “Qualifying Transaction” (within the meaning of Policy 2.4 – Capital Pool Companies (the “CPC Policy”) of the TSX Venture Exchange (the “TSXV”).
The Amalgamation Agreement provides for, among other things, a three-cornered amalgamation (the “Amalgamation”) pursuant to which, among other things: (a) Home Run will amalgamate with 2486366 Alberta Ltd. (“Subco”), a wholly-owned subsidiary of Samurai and incorporated by Samurai pursuant to the laws of Province of Alberta for the purposes of the Qualifying Transaction, pursuant to the provisions of the Business Corporations Act (Alberta), (b) all of the outstanding common shares of Home Run (each, a “Home Run Share”) will be cancelled and, in consideration therefor, the holders thereof will receive common shares of Samurai (each, a “Samurai Share”) on the basis of 1.8923 Samurai Shares for each Home Run Share (the “Exchange Ratio”), and (c) the amalgamated corporation will be a wholly-owned subsidiary of Samurai. After giving effect to the Qualifying Transaction, the shareholders of Home Run will collectively exercise control over Samurai.
In connection with the Qualifying Transaction, it is intended that Samurai will change its name to “Canadian Home Run Energy Corporation” or such other name as agreed to by Samurai and Home Run and accepted by the applicable regulatory authorities (the “Name Change”).
Completion of the proposed Qualifying Transaction is subject to, among other things, receipt of all necessary regulatory and shareholder approvals.
The Amalgamation Agreement
The Amalgamation Agreement contemplates that, among others, the following conditions precedent be met prior to the closing of the Amalgamation, including, but not limited to, (a) acceptance by the TSXV and receipt of other applicable regulatory approvals; (b) the concurrent completion of the Samurai Private Placement (as defined below) for gross proceeds of at least $200,000; (c) the concurrent issuance of the Samurai Debentures for aggregate gross proceeds of not less than $1,350,000 (including the assumption of not more than $350,000 of Home Run promissory notes outstanding (“Home Run Debt”)); (d) receipt of the requisite approvals and completion of the Name Change and the reconstitution of the Samurai board of directors to consist of four (4) directors as further described below (the “Board Reconstitution”); (e) no adverse material change in the business, affairs, financial condition or operations of Samurai or Home Run has occurred between the date of entering into the Amalgamation Agreement and the closing date of the Qualifying Transaction; (f) Home Run Shares (the “Home Run Shareholders”) holding no more than 5% of the issued and outstanding common shares of Home Run (“Dissenting Home Run Shareholders”) shall have exercised dissent rights; and (g) receipt of the requisite approval of Home Run Shareholders of the Amalgamation. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
The Amalgamation will not constitute a Non-Arm’s Length Qualifying Transaction (as such term is defined in the policies of the TSXV). No person who or which is a Non-Arm’s Length Party (as such term is defined in the policies of the TSXV) of Samurai has any direct or indirect beneficial interest in Home Run or its assets prior to giving effect to the Amalgamation and no such person is an insider of Home Run. Similarly, there is no known relationship between or among any person who or which is a Non-Arm’s Length Party of Samurai and any person who or which is a Non-Arm’s Length Party to Home Run.
If all conditions to the implementation of the Amalgamation have been satisfied or waived, Samurai and Home Run will carry out the Amalgamation. Pursuant to the terms of the Amalgamation, it is expected that the following security conversions, exercise and issuances will occur among Samurai, Home Run and Home Run Shareholders immediately prior to completion of the Amalgamation:
-
a)Home Run and Subco will amalgamate and continue as one corporation (Amalco”) under the provisions of the Business Corporations Act (Alberta) and, as a result, the property and liabilities of Subco and Home Run will become the property and liabilities of Amalco;
-
b)each Home Run Share shall be cancelled and the holder thereof shall receive that number of Samurai Shares as is equal to the number of Home Run Shares held by such Home Run Shareholder immediately prior to Amalgamation multiplied by the Exchange Ratio; and
-
c)each common shares of Samurai (each, a Subco Share”) shall be cancelled and, after the Amalgamation, Amalco shall issue one share to the Issuer in respect of every Subco Share so cancelled.
Based on the number of Home Run Shares outstanding as of the date hereof, there will be approximately 60,100,000 Samurai Shares outstanding upon completion of the Qualifying Transaction, on a non-diluted basis. On completion of the Qualifying Transaction, the current Samurai Shareholders will hold an aggregate of approximately 4,400,000 Samurai Shares, representing approximately 7.7.32% of the Samurai Shares. The current Home Run Shareholders will hold an aggregate of 47,000,000 Samurai Shares, representing approximately 78.20% Samurai Shares. Investors in the Samurai Private Placement are expected to hold an aggregate of approximately 4,000,000 Samurai Shares, representing approximately 6.66% of the Samurai Shares (assuming a minimum raise of $200,000). Holders of Samurai Debentures (including holders of those Samurai Debentures granted upon the assumption of the Home Run Debt) which are expected to hold an aggregate of approximately 2,025,000 Samurai Shares (assuming loans in the aggregate amount of $1,350,000), representing approximately 3.37% of the Samurai Shares and issued in connection with the Loan Bonus (as defined below). The Finder (as defined below) is expected to hold 2,675,000 Samurai Shares, representing approximately 4.45% of the Samurai Shares and payable in connection with the Finder’s Fee (as defined below).
Upon completion of the Qualifying Transaction, it is expected that Samurai will be a Tier 2 Oil & Gas Issuer on the TSXV.
Trading in the Samurai Shares is currently suspended and will remain suspended until completion of the Qualifying Transaction. Samurai does not intend to apply to the TSXV for reinstatement of trading of the Samurai Shares at this time.
General Information on Samurai
Samurai was incorporated under the Business Corporations Act (British Columbia) and is a capital pool company within the meaning of the policies of the TSXV. Samurai has not commenced operations and has no assets other than cash. Samurai’s principal business is the identification and evaluation of assets or businesses with a view to completing a “Qualifying Transaction” under the CPC Policy.
General Information on Home Run
Home Run was incorporated under the Business Corporations Act (Alberta) on August 5, 2021. Home Run’s head office is located at Suite 610, 1414 8th Street SW, Calgary AB, T2R 1J6. Home Run is a private junior oil and gas exploration and development company currently active in west central Alberta, specifically in the Ante Creek N. Area. Home Run currently owns a 100% working interest in 29.5 sections of lands, leases and licenses (18,880 acres/7,552 hectares) in the Ante Creek N. Area, Ante Creek Area, Simonette Area and the Kaybob S. Area of West Central Alberta. Home Run will, subject to the completion of the Qualifying Transaction, continue to be active in the west central Alberta Area upgrading its land and reserve position through the purchase and reprocessing of existing 2-D seismic lines, in particular covering the eight section block in Township 65 Range 24W5 as recommended in the Reserves Report (as defined below). Home Run plans to seek out a joint venture to drill its first well on a proven reserve location at Ante Creek N., before the end of the second quarter 2023 with drilling and completion costs expected to be carried by the joint venture partner.
Home Run currently has 24,837,500 Home Run Shares issued and outstanding and no other securities are issued and outstanding. The following persons own, control or direct 10% or more of the outstanding Home Run Shares:
|
Name |
Number of Home Run Shares |
Percentage of Home Run Shares |
|
Kinghorn Resources Ltd. (a corporation controlled by Jeffrey Standen) |
7,500,000 |
30.20% |
|
Advantage Energy Services Ltd. (a corporation controlled Earl Hickok) |
7,000,000 |
28.18% |
|
Deborah Leslie |
4,000,000 |
16.10% |
|
Eric M. Leslie |
3,500,000 |
14.09% |
Summary of Reserve Information
Pursuant to a National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities compliant report dated effective September 30, 2022 prepared by Chapman Petroleum Engineering Ltd. (“Chapman”), an independent qualified reserves evaluator (the “Reserves Report”), Home Run’s future net revenue (before income taxes, discounted at 10%), using forecast prices and costs, attributable to total proved reserves is $13.46MM, to proved plus probable reserves is $22.10MM and to proved plus probable plus possible is $24.23MM, with respect to the Ante Creek N. Area only (6,080 acres/2,432 has.) (the “Home Run Property”). The estimated future net revenues are presented before deducting future estimated site restoration costs, and are reduced for estimated future abandonment costs and future capital costs associated with non-producing, undeveloped and probable additional reserves. Estimated values disclosed do not necessarily represent fair market value.
The Reserves Report notes that the Home Run Property contains proved undeveloped reserves of 368 MSTB of oil and 331.2 MMscf of marketable solution gas at one historical well location, with proved plus probable reserves estimated at 490 MSTB for oil and 441 MMscf of marketable solution gas. Another well location contains probable undeveloped reserves calculated to be 176 MSTB of oil and 79 MMscf of marketable solution, with incremental possible reserves of 75 MSTB of oil and 147 MMscf of marketable solution gas.
|
Home Run Reserves |
||||
|
Light and Medium Oil |
Conventional Natural Gas |
|||
|
Reserves Category |
Gross MSTB |
Net MSTB |
Gross MMscf |
Net MMscf |
|
Proved(1) (Undeveloped)(2) |
368 |
225 |
331 |
321 |
|
Probable(3) |
298 |
203 |
189 |
183 |
|
Total Proved Plus Probable |
666 |
457 |
520 |
504 |
|
Possible(4) |
75 |
49 |
147 |
144 |
|
Total Proved Plus Probable Plus Possible |
741 |
507 |
667 |
647 |
Notes:
-
(1)Proved Reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
-
(2)Undeveloped Reserves are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the Reserves classification (Proved, Probable, Possible) to which they are assigned.
-
(3)Probable Reserves are those additional reserves that are less certain to be recovered than Proved Reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated Proved + Probable Reserves.
-
(4)Possible Reserves are those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated Proved + Probable + Possible Reserves.
Home Run will, subject to the closing of the proposed Qualifying Transaction, continue to be active in the west central Alberta Area upgrading its land and reserve position through the purchase and reprocessing of existing 2-D seismic lines, in particular covering the eight section block in Township 65 Range 24W5 as recommended in the Reserves Report. Home Run plans to seek out a joint venture to drill its first well on a proven reserve location at Ante Creek N., before the end of the second quarter 2023 with drilling and completion costs expected to be carried by the joint venture partner.
Pursuant to the Reserves Report, Home Run’s future net revenue (before income taxes, discounted at 10%), using forecast prices and costs, attributable to total proved reserves is $13.46M, total proved plus probable reserves is $22.10M and total proved plus probable plus possible is $24.23M.
|
Future Net Revenue |
|
|
Reserve Category |
Future Net Revenue Before Income Taxes Discounted at 10% per year |
|
Total Proved |
$13,458,000 |
|
Proved Plus Probable |
$22,101,000 |
|
Proved Plus Probable Plus Possible |
$24,229,000 |
The estimated future net revenues are presented before deducting future estimated site restoration costs, and are reduced for estimated future abandonment costs and future capital costs associated with non-producing, undeveloped and probable additional reserves. Estimated values disclosed do not necessarily represent fair market value.
Pricing Assumptions
The forecast cost and price assumptions in this news release are as per the Reserves Report prepared by Chapman, who conducts continual surveillance and monitoring on a number of benchmark product prices locally and internationally. Prices are based on historical data, current conditions, and Chapman’s view of relevant political and economic trends. The price assumptions also assumes input from operating companies, consulting firms, oil and gas marketing companies, and financial institutions. The prices and forecasts are presented as at October 1, 2022, as follows:
|
CRUDE OIL HISTORICAL, CONSTANT, CURRENT AND FUTURE PRICES |
|||||
|
Date |
WTI(1) $US/STB |
Brent Spot (ICE)(2) |
Date |
WTI (1) $US/STB |
Brent Spot (ICE)(2) |
|
HISTORICAL PRICES |
|||||
|
2012 |
94.05 |
111.63 |
92.56 |
71.70 |
1.00 |
|
2013 |
97.98 |
108.56 |
100.17 |
75.76 |
0.97 |
|
2014 |
93,12 |
99.43 |
101.07 |
82.07 |
0.91 |
|
2015 |
48,69 |
53.32 |
62.17 |
46.23 |
0.78 |
|
2016 |
43.17 |
45.06 |
57.98 |
38,90 |
0.76 |
|
2017 |
50.86 |
54.75 |
67.75 |
49.63 |
0.77 |
|
2018 |
64.92 |
71.64 |
75.06 |
50.17 |
0.77 |
|
2019 |
57,00 |
64.11 |
75.28 |
57.86 |
0.75 |
|
2020 |
39.54 |
43.40 |
48.78 |
37.05 |
0.75 |
|
2021 |
67.89 |
70.39 |
83.73 |
68.00 |
0.80 |
|
2022 (9 Months) |
98,77 |
104.59 |
127.62 |
106.11 |
0.78 |
|
CONSTANT PRICES (The average of the first-day-of-the-month price for the preceding 12 months-SEC) |
|||||
|
92.30 |
97.13 |
117.62 |
97.84 |
0.79 |
|
|
FORECAST PRICES |
|||||
|
2022 (3 months) |
84,65 |
91.04 |
112.47 |
93,35 |
0.75 |
|
2023 |
78,79 |
79.09 |
104.66 |
86.87 |
0.75 |
|
2024 |
75.98 |
77.15 |
100.92 |
83.76 |
0.75 |
|
2025 |
74.96 |
76.93 |
99.55 |
82.63 |
0.75 |
|
2026 |
76.46 |
78.47 |
101.55 |
84,29 |
0.75 |
|
2027 |
77.99 |
80.04 |
103.59 |
85.98 |
0.75 |
|
2028 |
79.55 |
81.64 |
105.67 |
87.71 |
0.75 |
|
2029 |
81.14 |
83.28 |
107.79 |
89.47 |
0.75 |
|
2030 |
82,76 |
84.94 |
109.96 |
91.26 |
0.75 |
|
2031 |
84.41 |
86.64 |
112.16 |
93.10 |
0.75 |
|
2032 |
86.10 |
88.37 |
114.41 |
94.96 |
0.75 |
|
2033 |
87.82 |
90.14 |
116.71 |
96.87 |
0.75 |
|
2034 |
89.58 |
91.94 |
119.05 |
98.81 |
0.75 |
|
2035 |
91.37 |
93.78 |
121.44 |
100.80 |
0.75 |
|
2036 |
93.20 |
95.66 |
123.88 |
102.82 |
0.75 |
|
Escalated 2% thereafter |
|||||
Notes:
-
(1)West Texas Intermediate quality (D2/S2) crude (40API) landed in Cushing, Oklahoma.
-
(2)(Actual WTI strip oil prices are: $US84.65/STB in 2022; $US78.79/STB in 2023; $US72.36/STB in 2024 and $US68.14/STB in 2025)
-
(3)The Brent Spot price is estimated based on historic data.
-
(4)(Actual Brent strip oil prices are: $US91.04/STB in 2022; $US79.09/STB in 2023; $US73.48/STB in 2024 and $US69.94/STB in 2025)
|
NATURAL GAS & BY-PRODUCTS HISTORICAL, CONSTANT, CURRENT AND FUTURE PRICES |
|||||||
|
Date |
Alberta GRP(1) |
AECO Spot Gas(2) |
Henry Hub Gas (3) |
Propane C3 (4) |
Butane C4 (4) |
Condensate (Pentanes Plus)(5) C5 |
|
|
$CDN/MMBTU |
$CDN/GJ |
$CDN/MMBTU |
$US/MMBTU |
$CDN/BBL |
$CDN/BBL |
$CDN/BBL |
|
|
HISTORICAL PRICES |
|||||||
|
2012 |
2.25 |
2.13 |
2.39 |
2.75 |
47.40 |
64.48 |
96.26 |
|
2013 |
2.98 |
2.82 |
3.17 |
3.73 |
50.09 |
91.43 |
100.72 |
|
2014 |
4.22 |
4.00 |
4.51 |
4.35 |
46.85 |
62.26 |
108.28 |
|
2015 |
2.62 |
2.48 |
2.71 |
2.76 |
6.17 |
36.81 |
59.14 |
|
2016 |
2.03 |
1.93 |
2.18 |
2.50 |
6.71 |
29.81 |
55.62 |
|
2017 |
2.05 |
1.94 |
2,50 |
2.96 |
25.55 |
39.62 |
67.15 |
|
2018 |
1.38 |
1.31 |
1.51 |
3.18 |
30.47 |
48.97 |
77.19 |
|
2019 |
1.31 |
1.24 |
1.81 |
2.57 |
14.98 |
21.39 |
70.46 |
|
2020 |
1,85 |
1,75 |
2.25 |
2.02 |
20.62 |
24.74 |
50.06 |
|
2021 |
2.80 |
2.66 |
3.58 |
3.91 |
42.31 |
38.12 |
70.39 |
|
2022 (9 months) |
4.90 |
4.65 |
5.20 |
6.85 |
56.64 |
62.80 |
124.28 |
|
CONSTANT PRICES (The average of the first-day-of-the-month price for the preceding 12 months-SEC) |
|||||||
|
4.65 |
4.41 |
5.00 |
6.13 |
57.09 |
58.66 |
115.23 |
|
|
FORECAST PRICES |
|||||||
|
2022 (3 months) |
4.89 |
4.64 |
5.26 |
7.22 |
47.30 |
57.10 |
111.35 |
|
2023 |
4.33 |
4.11 |
4.66 |
5.44 |
44.71 |
54.34 |
103.62 |
|
2024 |
4.00 |
3.79 |
4.30 |
4.77 |
43.85 |
54.67 |
99.91 |
|
2025 |
170 |
3.51 |
3.98 |
4.29 |
43.02 |
54.11 |
98.56 |
|
2026 |
3.77 |
3.58 |
4.06 |
4.38 |
43.86 |
55.14 |
100.54 |
|
2027 |
3.85 |
3.65 |
4.14 |
4.47 |
44.73 |
56.19 |
102.56 |
|
2028 |
3.93 |
3.72 |
4.22 |
4.55 |
45.62 |
57.32 |
104.61 |
|
2029 |
4.01 |
3.80 |
4.31 |
4.65 |
46.54 |
58.47 |
106.71 |
|
2030 |
4.09 |
3.88 |
4.39 |
4.74 |
47.48 |
59.65 |
108.86 |
|
2031 |
4.17 |
3.95 |
4.48 |
4.83 |
48.43 |
60.84 |
111.04 |
|
2032 |
4.25 |
4.03 |
4.57 |
4.93 |
49.40 |
62.06 |
113.27 |
|
2033 |
4.34 |
4.11 |
4.66 |
5.03 |
50.39 |
63.31 |
115.54 |
|
2034 |
4.42 |
4.19 |
4.76 |
5.13 |
51.40 |
64.58 |
117.86 |
|
2035 |
4.51 |
4.28 |
4.85 |
5.23 |
52.44 |
65.87 |
120.23 |
|
2036 |
4,60 |
4.36 |
4.95 |
5.34 |
53.49 |
67.20 |
122.64 |
|
2037 |
4.69 |
4.45 |
5.05 |
5.44 |
54.56 |
68.54 |
125.09 |
|
Escalated 2% thereafter |
|||||||
Notes:
-
(1)Alberta Gas Reference Price (GRP) represents the average of all system and direct (spot and firm) sales.
-
(2)The AECO C Spot price, which is the Alberta gas trading price. (Actual AECO C spot gas prices are: $US5.26/MMBTU in 2022; $US4.66/MMBTU in 2023; $US4.30/MMBTU in 2024 and $US4.43/MMBTU in 2025).
-
(3)Henry Hub Spot is natural gas traded on the New York Mercantile Exchange (NYMEX). (Actual Henry Hub strip gas prices are: $US7.22/MMBTU in 2022; $US5.44/MMBTU in 2023; $US4.77/MMBTU in 2024 and $US4.59/MMBTU in 2025).
-
(4)Alberta average field price for Propane and Butane purchased at field locations.
-
(5)Edmonton condensate from Gas Alberta Inc.
Summary of Financial Information
A summary of certain financial information for Home Run, disclosed in accordance with TSXV policies, is included in the tables below.
|
Six Months Ended December 31, 2022 (unaudited) (CDN $) |
From Incorporation on August 5, 2021 to June 30, 2022 (audited) (CDN $) |
|
|
Total Revenue |
$ Nil |
$ Nil |
|
Operating Expenses |
$ 202,309 |
$532,730 |
|
Loss from continuing operations |
$ 202,309 |
$532,730 |
|
Net Loss |
$ 202,309 |
$532,730 |
|
Total Assets |
$ 433,762 |
$279,307 |
|
Total Long Term Financial Liabilities |
$ 100,000 |
$ Nil |
|
Cash Dividends Declared |
$ Nil |
$ Nil |
Further financial information will be included in the filing statement to be prepared in connection with the Qualifying Transaction.
Proposed Directors and Senior Management Team
Upon the closing of the Qualifying Transaction, it is anticipated that Jeffrey Standen, Owen Pinnell, Jim Silye and Anthony Zelen will constitute the board of directors of Samurai. It is also anticipated that the new senior management team of Samurai will be comprised of Jeffry Standen (President, Chief Executive Officer and Corporate Secretary) and Robert Gillies (Chief Financial Officer).
The following are brief resumes of the currently proposed directors and senior officers of Samurai following the Qualifying Transaction:
Jeffrey L. Standen – Director, President, Chief Executive Officer and Corporate Secretary
Mr. Standen is a petroleum landman with over 45 years of industry related experience as senior management, executive, director and founder positions with numerous private and public energy companies, including Renaissance Resources, Canadian Leader Energy, Centurion Energy International, Extreme Energy, Charger Energy and Vital Energy. Mr. Standen expects to devote approximately 100% of his time to the Resulting Issuer.
Robert Gillies – Chief Financial Officer
Mr. Gillies has been a Chartered Professional Accountant for approximately 45 years and for the past five years has been the a permanent part-time CFO of numerous public companies listed on the TSXV.
Mr. Gillies expects to devote as much of his time as the position requires to the affairs of the Resulting Issuer.
Owen C. Pinnell – Director
Mr. Pinnell has over 40 years of experience in the oil & as industry. Mr. Pinnell has acted as a founder, member of management, an executive and director of numerous private and public energy companies, including Newalta, Anadime, i3 Capital and White Owl Energy Services . Mr. Pinnell expects to devote the time necessary to fulfil his duties as a director of the Resulting Issuer.
Jim Silye – Director
Mr. Silye has over 40 years of experience in the oil & gas industry. Mr. Silye has acted as a founder, director and officer of many public energy companies, including Stampeder, Predator and Eagle Rock. Mr. Silye was a Reform Party M.P. from 1993-1997, and a member of the Calgary Stampeders from 1969-1974. Mr. Silye expects to devote the time necessary to fulfil his duties as a director of the Resulting Issuer.
Anthony Zelen – Director
Anthony Zelen has over 23 years of experience in finance, investor relations, start-ups and corporate development. He has served as a director and officer for a number of public companies listed both in the United States and Canada in roles relating to investor relations, public relations, financing and strategic marketing for companies in the technology, mining and oil and gas sectors. Mr. Zelen received an undergraduate degree from Simon Fraser University. Mr. Zelen expects to devote the time necessary to fulfil his duties as a director of the Resulting Issuer.
Proposed Qualifying Transaction
As the proposed Qualifying Transaction is not a “Non-Arm’s Length Qualifying Transaction” (within the meaning of the CPC Policy), the Qualifying Transaction does not require approval of Samurai Shareholders.
Samurai Private Placement
Concurrently with the completion of the Qualifying Transaction, Samurai is expected to complete a non-brokered private placement of not less than an aggregate 4,000,000 Samurai Shares at a price of $0.05 per Samurai Shares (the “Offering Price”) for aggregate gross proceeds to Samurai of at least $200,000 (the “Samurai Private Placement”).
The net proceeds from the Samurai Private Placement will be used to satisfy the Initial Listing Requirements (as defined in the Policies of the TSXV) related to working capital and financial resources, in accordance with Section 9.5 of the CPC Policy.
All securities issued under the Samurai Private Placement will be subject to hold periods expiring four months and one day after the date of issuance. Additional restrictions may apply under the rules of the TSXV and applicable securities laws. No commission or finders’ fees will be paid in connection with the Samurai Private Placement.
Samurai Debentures
Concurrently with the completion of the Qualifying Transaction, Samurai is expected to enter into certain loan arrangements with creditors to Samurai in the aggregate principal amount of at least $1,350,000 (including the assumption of the Home Run Debt) and pursuant to which Samurai will evidence the outstanding loans by way of secured non-convertible debentures (the “Samurai Debentures”). Each Samurai Debenture will bear interest at 12.0% per annum and be secured against all of Samurai’s present and after-acquired personal property. The Samurai Debentures will mature 24 months from the date of issuance and will be redeemable by Samurai after a period of 12 months and one day from the date of issuance.
In addition, Samurai will issue to the holders of the Samurai Debentures, as a loan bonus and for every $5,000 principal amount of Samurai Debentures held: (i) 7,500 Samurai Shares (being an amount equal to 15% of the value of the Samurai Debentures held, at a deemed price of $0.10 per Samurai Share and which, based on $1,350,000 of Samurai Capital Debentures, would be 2,025,000 Samurai Shares); and (ii) 7,500 common share purchase warrants (each whole common share purchase warrants, a “Samurai Warrant”), which, based on $1,350,000 of Samurai Debentures would be 2,025,000 Samurai Warrants).
Each whole Samurai Warrant shall entitle the holder to purchase a Samurai Share at an exercise price of $0.25 for a period of 2 years from the date of issuance and in accordance with its terms.
In connection with the Samurai Debentures, Samurai, in its discretion, may pay a cash commission of up to 8.0% of the gross proceeds from the sale of the Samurai Debentures and issue such number of broker warrants (the “Samurai Debenture Broker Warrants”) that is equal to up to 8.0% of the value of the Samurai Debentures divided by $0.25. Each Samurai Debenture Broker Warrant will entitle the holder to one Samurai Common Share and is exercisable at a price of $0.25 per Samurai Common Share for a period of 24 months from the date of issuance, subject to the requirements of the TSXV.
The net proceeds from the Samurai Debentures will be used by Samurai (upon completion of the Qualifying Transaction) for upgrading its land and reserve position through the purchase and reprocessing of existing 2-D seismic lines, in particular covering the eight section block in Township 65 Range 24W5 as further described in the Reserves Report and general working capital.
Finder’s Fee
In connection with the Transaction, Samurai entered into a finder’s fee agreement with Circa Capital Corp. (the “Finder”), an arm’s length party, for the introduction of Samurai and Home Run. Samurai has agreed to issue the Finder 2,675,000 Samurai Shares (the “Finder’s Fee”) upon closing of the Qualifying Transaction, subject to the approval by the TSXV.
Sponsorship of Transaction
Sponsorship of the Amalgamation, as the Qualifying Transaction of Samurai, is required by the TSXV unless an exemption from this requirement can be obtained in accordance with the policies of the TSXV. Samurai intends to apply to the TSXV for an exemption from the sponsorship requirements for the Qualifying Transaction. There is no assurance that an exemption from this requirement will be obtained.
Additional Information
Samurai will provide further details in respect of the Qualifying Transaction, Samurai Private Placement and the issuance of Samurai Debentures in due course by way of a subsequent news release, however, Samurai will make available to TSXV, all information, including financial information, as may be requested or required by the TSXV.
All information contained in this news release with respect to Samurai and Home Run was supplied by the respective party, for inclusion herein, without independent review by the other party, and each party and its directors and officers have relied on the other party for any information concerning the other party. Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements. The Qualifying Transaction cannot close until the required Home Run shareholder approval is obtained. There can be no assurance that the Qualifying Transaction or the Home Run Private Placement will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular of Home Run or filing statement of Samurai to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Samurai should be considered highly speculative.
The TSXV has not in any way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this news release
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
For further information please contact:
|
Samurai Capital Corp. |
Home Run Oil & Gas Inc. |
Cautionary Note
Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a Capital Pool Company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.
Forward-Looking Statements
This news release contains “forward-looking information” within the meaning of applicable securities laws relating to Home Run’s expected drilling and development plans, the proposal to complete the Qualifying Transaction and associated transactions, including statements regarding the terms and conditions of the Qualifying Transaction, the Name Change, the Samurai Private Placement, the issuance of Samurai Debentures, including Loan Bonuses, the use of proceeds of the Samurai Private Placement, the use of proceeds upon the issuance of the Samurai Debentures, the proposed directors and officers of Samurai upon closing of the Qualifying Transaction, the business and operations of Samurai after the Qualifying Transaction, the Exchange Ratio, Samurai obtaining an exemption from the TSXV’s sponsorship requirement, the receipt of all necessary regulatory and other approvals and satisfaction of all other closing conditions in connection with the Qualifying Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; the price of crude oil, natural gas liquids and/or natural gas; and the results of Home Run’s drilling and development plans. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Samurai and Home Run disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
The statements in this press release are made as of the date of this press release. Samurai undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of Samurai, Home Run, their securities, or their respective financial or operating results (as applicable). The information about Home Run contained in the press release has not been independently verified by Samurai.
There can be no assurance that the Qualifying Transaction will be completed or, if completed, will be successful.
Oil & Gas Advisories
All reserve references in this press release are to gross reserves as at the effective date of the applicable evaluation. Gross reserves are Home Run’s total working interest reserves before the deduction of any royalties and including any royalty interests of Home Run. The recovery and reserve estimates of Home Run’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein. All estimates of reserves and future net revenue contained herein were derived from the Reserve Report, in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 – Standards for Disclosure for Oil and Gas Activities. It should not be assumed that the present worth of estimated future cash flow presented herein represents the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Home Run’s crude oil, natural gas liquids and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein.
“reserves” are estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on (a) analysis of drilling, geological, geophysical, and engineering data; (b) the use of established technology; and (c) specified economic conditions, which are generally accepted as being reasonable and shall be disclosed. Reserves are classified according to the degree of certainty associated with the estimates being “proved reserves”, “probable reserves” and “possible reserves”.
In this press release “proved reserves” means those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
In this press release “proved plus probable reserves” means probable reserves being additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
In this press release “proved plus probable plus possible reserves” means possible reserves being those additional reserves that are less certain to be recovered than probable reserves.
The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Not for distribution to United States newswire services or for dissemination in the United States
Copyright (c) 2023 TheNewswire – All rights reserved.