SOURCE: CHAMA Technologaes Inc.
LAS VEGAS, NV--(Marketwire - Oct 9, 2012) - Chama Technologaes, Inc., a private company, announced today that it has executed a binding letter of intent with High Plains Gas, Inc. (OTCQB: HPGS) for the purchase of a controlling stock interest in High Plains.
The terms of the proposed acquisition are substantially as follows:
In consideration for a total of $15,000,000 in cash and 658,289 shares of Chama stock, High Plains Gas will issue a fully diluted 90% of its common stock to Chama at Closing. The letter of intent requires that Chama place into an escrow account for the payment to the creditors of HPGS prior to the acquisition a total of $10,000,000, deliverable in increments. The increments are that in 10 working days from execution of the letter of intent, CHAMA is to deposit $1,000,000 and in 20 working days after the initial million, CHAMA is to deposit an additional $9,000,000. Prior to closing, CHAMA will then continue to fund the remaining $5,000,000 into escrow to finish creditor payments. The Letter of Intent includes other terms including funding the termination of an outstanding class of preferred stock and buyout at a discount of any and all outstanding options and warrants.
The letter of intent also requires the divestiture of Miller Fabrication, LLC, the oil and gas servicing subsidiary of High Plains.
Immediately subsequent to entering into the Letter of Intent, the parties are negotiating the final terms of a Definitive Stock Exchange Agreement to effectuate the transaction.
The letter of intent requires that the definitive Stock Exchange Agreement include a significant reverse split of High Plains Gas common stock which will provide sufficient authorized capital to issue to CHAMA 90% of the outstanding equity of HPGS.
High Plains Gas has experienced difficulty in maintaining profitability due, in large part, to the decline curve typical of coal bed methane wells. CHAMA, along with MCF Energy, LLC, own the patent on a device that solves this problem and will bring profitability back to these wells.
Along with the recent signing of a Special Private Placement Agreement (SPPA) for USD $50,000,000 of equity line funding with Lambert Private Equity LLC (LAMBERT) with terms that give CHAMA the right to increase the amount of the equity line funding up to $200,000,000, management of Chama is confident that Chama will have the resources necessary to make this acquisition a success for all parties.
About CHAMA TECHNOLOGAES INC. (CHAMA)
CHAMA is a Natural Gas and Oil exploration and development company with a device that utilizes the water in CBM wells for the extraction of Natural Gas. We have wells and property commitments in Wyoming in the area called the Powder River Basin. We also are negotiating offshore interests in the South China Sea as well as oil interests in Central America. For further information about CHAMA, please go to www.chamatech.com and www.chamaenergy.com.
Disclaimer: There can be no assurance that CHAMA can successfully raise the capital required to complete this acquisition or that issues relating to Chama's due diligence review may occur, and thus, all of the above terms, including the reverse stock split, may not occur.
Forward Looking Statements
The information in this press release contains "forward-looking statements" and are inherently susceptible to uncertainty and changes in circumstances. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as "anticipates," "estimates," "expects," "intends," "objective," "believes" and words and terms of similar substance in connection with discussions of future operating or financial performance. The Company's forward-looking statements are based on management's current expectations and assumptions regarding the Company's business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. The Company's actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Company's actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and Associated factors.