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Longreach Oil and Gas Limited LOI
TORONTO, ONTARIO and JERSEY, CHANNEL ISLANDS–(Marketwire – Nov. 1, 2012) –
NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.
Longreach Oil and Gas Limited (TSX VENTURE:LOI) (“Longreach”) and APIC Petroleum Corporation (TSX VENTURE:API) (“APIC”) are pleased to announce that further to the press releases dated October 2, 2012 and October 24, 2012, APIC has completed its non-brokered offering (“Offering”) of subscription receipts (“Subscription Receipts”). An aggregate of 230,786,918 Subscription Receipts were sold under the Offering at a price of $0.13 per Subscription Receipt for total gross proceeds of $30,002,299.73.
Dennis A. Sharp, Chairman and CEO of APIC, commented:
“Longreach has an outstanding portfolio of assets in a politically stable and fiscally favourable environment. Morocco, as a significant importer of energy, offers a strong domestic market with gas prices in the order of $10 per MCF. Longreach`s operated Sidi Moktar Licence presents a unique opportunity; a proven and producing natural gas basin with well defined undrilled potential and access to an existing and underutilized gas pipeline which provides direct access to the phosphate mines and ready market. APIC brings an important technical appreciation of developing onshore projects together with the necessary capital to ensure project execution. This is an exciting time for both companies and we look forward to building shareholder value through a well conceived and exciting drilling program.”
Commenting, Bryan Benitz, Chairman and CEO of Longreach, said:
“We are delighted with the successful conclusion of this financing. We have a very exciting multi well work programme ahead of us and upon conclusion of the proposed business combination, we will be fully capitalised to execute this.”
Upon completion of the Proposed Transaction, Longreach, as the resulting issuer, intends to use the funds on a near term drill programme on Longreach’s onshore licenses in Morocco, with particular focus on its operated Sidi Moktar acreage, and for general corporate purposes.
The gross proceeds of the Offering are being held in escrow by Computershare Trust Company of Canada (“Computershare”), pursuant to a subscription receipt agreement between Computershare and APIC and will be released, if certain conditions are satisfied by December 21, 2012, including completion of the proposed plan of arrangement transaction between Longreach and APIC (the “Proposed Transaction”). The Subscription Receipts are subject to a 4 month hold period expiring on March 1, 2013. However, upon release of the escrowed funds each Subscription Receipt will be converted into one common share of APIC which will then be immediately exchanged for common shares of Longreach on the basis of 5.3846 APIC shares for one common share of Longreach upon completion of the Proposed Transaction. Longreach shares issued to holders of Subscription Receipts will not bear any restrictive legends, and will be freely tradable other than (i) as may be required by securities law and/or the rules of the TSX Venture Exchange, and (ii) shares held by affiliates of Longreach or APIC will be subject to resale restrictions under U.S. securities laws. In connection with the release of the escrowed funds, certain finders will be entitled to receive a cash commission of 5% of the funds that were identified by such finder.
Four insiders of APIC or their associates participated in the Offering on the same terms as follows:
Insider Insider Status Number of Subscription Receipts Purchased % of the Offering
Dundee Corporation Major APIC shareholder 56,182,907 24.34 %
Sheldon Inwentash Major APIC shareholder 3,500,000 1.52 %
Dennis A. Sharp APIC Director 5,407,692 2.34 %
Khaled Chehabi APIC Director 2,307,692 1.00 %
TOTAL 67,398,291 29.20 %
APIC Shareholders Meeting
A special meeting of shareholders of APIC is scheduled to be held on Tuesday, December 4, 2012 to, among other things, ratify the Offering and issuance of Subscription Receipts to APIC insiders, and to approve the Proposed Transaction.
About Longreach
Longreach is an independent oil and gas exploration company focused on exploration and development within Morocco. Longreach holds directly an operating interest in one onshore exploration licence in Central Morocco, and through its wholly-owned subsidiary Longreach Oil and Gas Ventures Limited (“Ventures”), Longreach holds non-operating interests in four oil and gas exploration licences in southern onshore and offshore Morocco. In aggregate, Longreach’s direct and indirect interests in such exploration licences cover approximately 52,706 km2 (gross interest) / 11,238 km2 (net interest) or approximately 13.0 million acres (gross interest) / 2.7 million acres (net interest).
Longreach’s operating interest comprises a 50% interest in the onshore Sidi Moktar exploration licences referred to as Sidi Moktar West, Sidi Moktar South and Sidi Moktar North located in the Essaouira Basin in Central Morocco. Maghreb Petroleum Exploration S.A. (“MPE”) and the ONHYM each hold 25% non-operating interests in the Sidi Moktar exploration licences. The ONHYM is an independent financially autonomous public institution representing the interests of the Kingdom of Morocco in the field of exploration and production of hydrocarbons and mining resources.
Longreach’s four non-operating licences and its interest in each include: (i) the Zag exploration licence (22.5% interest), (ii) the Tarfaya exploration licence (22.5% interest), (iii) the Sidi Moussa exploration licence (7.5% interest) and (iv) the Foum Draa exploration licence (7.5% interest). Longreach believes that the Sidi Moktar exploration licences, together with these four non-operating exploration licences, represent approximately 11% of Morocco’s total licence area.
Additional information on Longreach Oil and Gas Limited can be found at www.longreachoilandgas.com and at www.sedar.com.
About APIC
APIC Petroleum Corporation, a company incorporated under the laws of Canada, is an oil and gas exploration and development company seeking to acquire oil and gas properties in Europe and elsewhere.
Additional information on APIC Petroleum Corporation can be found at www.apiccorp.com, and at www.sedar.com.
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