Yonge Street Capital Corp. Has Signed LOI With Endeavour Energy Ltd.
28 August 2009 - 6:30AM
Marketwired
Yonge Street Capital Corp. ("Yonge Street" or the "Company") (NEX
BOARD: YSC.H) is pleased to announce that it has entered into a
letter of intent with Endeavour Energy Ltd. ("Endeavour") dated as
at July 14, 2009 (the "LOI") to complete an arm's-length reverse
take-over (the "Proposed Transaction") to acquire all of the shares
of Endeavour Energy (Bengkulu) Pty Ltd. ("EEBPL") to continue
EEBPL's oil and gas exploration business in Indonesia.
About the Proposed Transaction
The Proposed Transaction would result in Yonge Street and EEBPL
combining pursuant to a reverse take-over transaction (the "RTO")
by an acquisition of 100% of EEBPL by Yonge Street from Endeavour.
The resulting issuer would be renamed Kew Energy Limited.
Yonge Street has approximately 2,503,750 common shares issued
and outstanding. The Company's shares are currently listed for
trading on the NEX board of the TSX Venture Exchange (the
"Exchange"). The Company has a stock option plan and there are
302,875 exercisable options outstanding under such plan with an
exercise price of $0.20 per share. There are no other exercisable
rights, warrants or options currently outstanding to acquire shares
of the Company.
As part of the completion of the RTO, it is proposed that
Endeavour (or its nominees) receive 36,105,936 common shares of
Yonge Street (approximately 92.7% of the outstanding shares, or
approximately 92% fully diluted, before dilution to a financing) in
exchange for the shares of EEBPL. Endeavour is a reporting,
unlisted Australian company.
The Proposed Transaction is conditional upon due diligence by
each party, the raising of adequate financing for listing,
regulatory and stock exchange approvals. As well, completion of the
transaction is subject to such other approvals as may be required
by applicable corporate or securities laws.
GordAu Investment Management Inc., of Vancouver, B.C. has acted
as a consultant to Endeavour in respect of this and other matters,
and will be entitled to receive 300,000 common shares of Yonge
Street upon completion of the Proposed Transaction.
On completion of the Proposed Transaction, the resulting issuer
will be an oil and gas company with current ongoing exploration in
Indonesia. Further information on the business of EEBPL is detailed
below.
About Yonge Street
Yonge Street is a company incorporated under the Canada Business
Corporations Act. It is a reporting issuer in the Provinces of
Alberta, British Columbia, Manitoba, and Ontario.
Further information concerning Yonge Street can be found in the
prospectus of Yonge Street dated March 27, 2006 and is available at
www.sedar.com.
About EEBPL
The following information relating to EEBPL has been provided to
the Company by EEBPL.
EEBPL is a company incorporated in Australia with an operational
main office in Jakarta Indonesia. It is a wholly owned subsidiary
of Endeavour.
Business of EEBPL
EEBPL owns a 100% working interest in the Bengkulu PSC
("Production Sharing Contract") in Sumatra, Indonesia which allows
it the rights to expore and exploit the hydrocarbons within the
PSC. The original Bengkulu PSC covered 6,310.65 km2 ( 1,559,387
acres) since 35 % of the area has been relinquished, as required by
the PSC, the current area is now 4,101.92.94 km2 (1,013,602 acres).
The Bengkulu PSC consists of both onshore and offshore
portions.
Two prospects and one lead have been identified onshore as well
as several more structures of interest offshore. The current work
program is to drill 3 onshore wells in early 2010 and to identify
offshore well locations to drill in 2011. The expected product from
successful wells is light crude oil, although gas and NGLs are
possible.
The PSC contract was awarded in October 2005. The exploration
phase of the contract is 6 years, extendable to 10 years. If
commercial production is developed, rights will extend to October
2035.
An Independent Technical Expert report was prepared on the
Bengkulu PSC by Chapman Petroleum Engineering Ltd. Of Calgary AB
Canada, in July 2009 in compliance with Canadian National
Instrument 51-101 required for public reporting Issuers in Canada.
The Independent NI 51-101 report estimates an undiscounted risked
value of US$311 million subject to probability estimates.
Management and Board of Directors of the Resulting Issuer
Upon completion of the Proposed Transaction, the board of
directors will be replaced with directors nominated by Endeavour,
and reasonably acceptable to the applicable stock exchange.
General Qualifications
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance and
if applicable pursuant to Exchange Requirements, majority of the
minority shareholder approval. Where applicable, the transaction
cannot close until 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
management information circular or filing statement to be prepared
in connection with the Proposed Transaction, any information
released or received with respect to the 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 TSX Venture Exchange Inc. has in no way passed upon the
merits of the Proposed Transaction and has neither approved nor
disapproved the contents of this press release.
Contacts: Yonge Street Capital Corp. Gerald Ruth President &
CEO (416) 899-3304
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