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Saccharum Energy Corp. Announces Business Combination with Oil Reserve Inc.


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2013-08-29 20:12:39 -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES


Calgary, Alberta CANADA, August 29, 2013 /FSC/ - Saccharum Energy Corp. (SHM - TSX Venture), (the "Corporation" or "Saccharum") a company listed on the TSX Venture Exchange (the "Exchange" or "TSXV") announced today that it has entered into a letter of intent dated effective July 26, 2013 (the "LOI") with Oil Reserve Inc.("ORI"), to combine all of the issued and outstanding securities of Saccharum and ORI pursuant to a share exchange, amalgamation, plan of arrangement or such other comparable form of transaction as Saccharum and ORI may agree to once all tax, corporate and securities law considerations have been reviewed in detail (the "Transaction").

The Transaction

Pursuant to the Transaction,

it is intended that all common shares in the capital of ORI ("ORI Shares") issued and outstanding immediately prior to the closing of the Transaction (and any other securities that are issued and outstanding immediately prior to the Closing) will be acquired from the holders thereof by Saccharum in exchange for the issuance of common shares in the capital of Saccharum ("Saccharum Common Shares"), on the basis of one Saccharum Common Share for each ORI Share held at the Closing. It is anticipated that the common shares of the resulting issuer (the "Resulting Issuer") shall be held by the former holders of Saccharum Common Shares as to approximately 14.81% and by the former ORI Shareholders as to approximately 85.19%, prior to taking into consideration the possible exercise of any outstanding options or warrants and the effects of a proposed Financing (as defined herein).

ORI is a private Alberta corporation with approximately 220 shareholders. Mr. Todd Montgomery, of Calgary, Alberta, owns or controls, directly or indirectly, approximately 40% of the shares of ORI. Other than Mr. Montgomery, to the knowledge of Saccharum, no other shareholder owns or controls 10% or more of the shares of ORI. Messrs. Johannes Kingma and David Pinkman, Insiders of Saccharum, own or control, directly or indirectly, an aggregate of approximately 2,000,000 shares of ORI representing less than 2% of the issued and outstanding shares of ORI.

It is intended that the Resulting Issuer will be a Tier 2 Oil & Gas Issuer listed on the TSXV upon completion of the Transaction.

About ORI

Oil Reserve is a private Alberta corporation focused on Western Canadian oil development with a land position in the carbonate trend of Northern Alberta. Within the carbonate trend ORI holds 297 sections (8.25 Townships/190,080 acres) in the Peace River area which include the Debolt, Elkton and Pekisko formations. Additionally, ORI holds 621 sections (17.25 Townships/397,440 acres) of land in the Athabasca area which includes the Grosmont and Nisku formations.

Previously, ORI and Saccharum had entered a farm-in agreement dated April 3, 2013 (the "Farm-in Agreement") pursuant to which Saccharum committed to a two well test and core program to be completed on or before October 31, 2013, subject to reasonable surface access, regulatory approval and drilling rig availability. The Farm-in Agreement provides that two wells be spudded on two separate sections of ORI land and to drill, cut and core through the Viking formation. By completing this initial well program, Saccharum would earn a 50% interest in the two sections drilled as well as a 50% interest in two additional adjacent or offsetting sections of Farmout Lands, such lands to be determined by Saccharum at its sole discretion. Saccharum has not conducted any activities in connection with the Farm-in Agreement to date. In the event that the Transaction is not completed, the Farm-in Agreement will remain in effect.

Financial and Resource Information of ORI

Financial information and Resource Information for ORI will be provided via a further press release in due course.

Material Conditions Precedent

The obligations of the Corporation and ORI to complete the Transaction are subject to the satisfaction of customary conditions precedent including, but not limited to: (i) the receipt of all third party consents and necessary regulatory and TSXV approval; (ii) the receipt of all necessary shareholder and board of director approvals; (iii) completion of the Financing (as defined herein); (iv) each party being satisfied with its due diligence review of the other; (v) the absence of any material breach of the representations, warranties and covenants made by each party to the other in the definitive agreement to be entered into by the parties; and (vi) other conditions which are customary for a transaction such as the Transaction.

Board of Directors and Management

As part of the Transaction, Johannes Kingma agreed to immediately resign as a director and officer of Saccharum. David Pinkman, CFO and a director of Saccharum since its founding, has agreed to act as and has been appointed interim CEO for the purpose of administering the affairs of Saccharum until the Closing of the Transaction.

The management of the Resulting Issuer will be determined jointly by ORI and Saccharum, subject to approval by the board of directors of the Resulting Issuer and the TSXV, and the Resulting Issuer's business operations will be a combination of Saccharum's existing business operations and the assumption of ORI's business interests.

A further press release will be issued in due course detailing the proposed board of directors and management of the Resulting Issuer.

Financing

In order to finance the Resulting Issuer, Saccharum and/or ORI intend to enter into an agreement with a registered investment banking firm, for the completion of an equity financing in an amount of at least $5,000,000, or such other amount as may be agreed to by the parties (the "Financing"). The Financing shall be subject to the requirements of the TSXV and shall close concurrently with the Proposed Transaction.

A further press release will be issued in due course detailing the Financing.

Name Change

Upon closing of the Transaction and subject to required shareholder and regulatory approvals, the Corporation proposes to change its name to "Oil Reserve Company" or such other name as is determined by the board of directors of the Resulting Issuer and approved by the Exchange.

Sponsorship

Sponsorship of a reverse take-over is required by the TSXV unless exempt in accordance with TSXV policies. Saccharum intends to apply for an exemption from the sponsorship requirements, however, there is no assurance that Saccharum will obtain this exemption.

Trading Halt

Trading in Corporation's shares on the Exchange is halted and will remain so until the documentation required by the Exchange has been reviewed and accepted by the Exchange.

The Corporation anticipates the proposed Transaction and the Financing will be completed prior to December 31, 2013.

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 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 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 junior 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.

All information contained in this press release with respect to the Corporation and ORI was supplied by Corporation and ORI, respectively, for inclusion herein. Saccharum and its directors and officers have relied exclusively on ORI for any information concerning ORI and its assets.

ADVISORY: This press release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", " expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects the Corporation's current beliefs and is based on information currently available to the Corporation and on assumptions the Corporation believes are reasonable. These assumptions include, but are not limited to, management's assumptions about the TSXV approval for the Transaction, closing of the Financing and closing of the Transaction announced above. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Corporation to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; commodity prices; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting the Corporation; timing and availability of external financing on acceptable terms. Although the Corporation has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are further 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 placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release represent the expectations of the Corporation as of the date of this press release and, accordingly, are subject to change after such date. However, the Corporation expressly disclaims 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 expressly required by applicable securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

For further information, please contact:

Saccharum Energy Corp.
Tel: (403) 863-6034
Email: pnk574@hotmail.com

Neither the 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.

To view the press release as a PDF file, please click on the following link:
www.usetdas.com/pr/sacccharum08292013.pdf


Source: Saccharum Energy Corp. (TSX-V)
Maximum News Dissemination by FSCwire. www.fscwire.com


Author:
Fred Gautreau
e-mail
Web: www.fscwire.com
Phone: 14037173898

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