VANCOUVER, May 15, 2013 /PRNewswire/ - TAG Oil Ltd. (TSX: TAO; OTCQX: TAOIF), reports that it has agreed to sell its 90% stake in Opunake Hydro Limited ("OHL"), an established electricity generator and supplier in New Zealand, to Coronado Resources Ltd. (TSX-V: CRD; OTCQX: CRDAF) in exchange for common shares of Coronado valued at approximately CDN$5,000,000. The common shares of Coronado being issued to TAG Oil and the vendor of the remaing 10% interest represents full consideration paid by Coronado to acquire 100% of the issued and outstanding shares of OHL.
OHL is an active power generation company based in New Zealand, and is poised to rapidly expand its generation capabilities. Upon completion of this transaction, OHL will have working capital of approximately CDN$8 million allowing the company to acquire additional gas fired electricity generation equipment, while securing natural gas supply through TAG. This will enable both TAG and OHL to benefit from increased generation of electricity for sale into thriving retail, industrial and commercial markets.
The transaction is being completed pursuant to the terms of a definitive share purchase agreement dated May 13, 2013 between TAG Oil, Coronado and the vendor of the remaining 10% interest in OHL. Under the terms of the share purchase agreement, TAG will receive 13,015,410 common shares of Coronado valued at CDN$0.39 per share. The Coronado share price is based on the volume weighted average closing price of Coronado's common shares on the TSX Venture Exchange ("TSX-V") for the 20 consecutive trading days ending on May 10, 2013.
TAG currently holds 25,975,000 common shares, or 40.08%, of Coronado and upon completion of the transaction, TAG will hold 38,990,410 common shares, or 49.18%. The common shares will be held for investment purposes and TAG may, depending on market and other conditions, increase or decrease its beneficial ownership of common shares or other securities of Coronado whether in the open market, by privately negotiated agreement or otherwise. Completion of the transaction is subject to a number of conditions, including approval of the Transaction by Coronado shareholders, the TSX-V and under the New Zealand Overseas Investment Act.
This press release is issued pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, which also requires a report to be filed with regulatory authorities in each of the jurisdictions containing additional information with respect to the foregoing matters (the "Early Warning Report"). To obtain a copy of the Early Warning Report filed in connection with the Transaction, please see Coronado's profile on the SEDAR website at www.sedar.com.
TAG Oil Ltd.
TAG Oil Ltd. (http://www.tagoil.com/) is a Canadian-based production and exploration company with operations focused exclusively in New Zealand. With 100% ownership over all its core assets, including extensive oil and gas production infrastructure, TAG is enjoying substantial oil and gas production and reserve growth through development of several light oil and gas discoveries. TAG is also actively drilling high-impact exploration prospects identified across more than 2,984,171 net acres of land in New Zealand.
In the East Coast Basin, TAG is exploring the major unconventional resource potential believed to exist in the source-rock formations that are widespread over the Company's acreage. These oil-rich and naturally fractured formations have many similarities to North America's Bakken source-rock formation in the successful Williston Basin.
Cautionary Note Regarding Forward-Looking Statements:
Statements contained in this news release that are not historical facts are forward-looking statements that involve various risks and uncertainty affecting the business of TAG. Such statements can generally, but not always, be identified by words such as "expects", "plans", "anticipates", "intends", "estimates", "forecasts", "schedules", "prepares", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur.
Forward-looking statements and information concerning anticipated financial performance are based on management's assumptions using information currently available. Forward-looking statements in this news release include TAG's expectations regarding the completion and anticipated results of the Transaction. Completion of the Transaction is subject to the satisfaction of a number of conditions which are beyond the control of TAG. There is no assurance that such conditions will be satisfied. In such event the Transaction may not complete. There may also be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information 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 information.
TAG undertakes no obligation, except as otherwise required by law, to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors change.
SOURCE TAG Oil Ltd.