CALGARY, ALBERTA--(Marketwire - Aug. 2, 2012) - Solara Exploration Ltd. ("Solara" or the "Company") (TSX VENTURE:SAA.A) announces that it has completed the acquisition of a 60% working interest in its heavy oil Marwayne Dewberry property (the "Transaction"). The interest acquired by Solara was held by the Marwayne Production Limited Partnership (the "Partnership") and included a 60% working interest in existing leases, petroleum and natural gas rights, tangibles and wells in Section 16-53-4 W4M. Solara now has a 100% working interest in its Marwayne Dewberry property. The purchase price for the Transaction is $4.3 million which was paid or satisfied by the extinguishment of $3.3 million of a receivable owing to Solara by the Partnership together with the issuance of 20,000,000 Class A Common Shares of the Company at a deemed price of $0.05 per share. The Transaction was conditional on a number of factors, including, the Partnership receiving approval of its Unitholders and the approval of the TSX Venture Exchange (the "TSXV"). There were no finders fees paid in the Transaction.
Solara owns all of the issued and outstanding shares of Marwayne Resources Inc. (the "GP") which is the general partner of the Partnership. Solara and the GP share the following Directors and Officers, who are considered Non-Arm's Length Parties (as such term is defined in TSXV policies), Donald R. Holding, Alfred F. Fischer, John D. Boyd, Ross O. Drysdale and Brian D. Skinner. In accordance with TSXV Policy 5.4, the Non-Arm's Length Parties as a group will receive such number of Class A Common Shares that does not exceed 10% of the issued and outstanding Class A Common Shares of the Company. Solara and the Partnership are "related parties" as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") and the Transaction would constitute a "related party transaction" save for the fact that the Transaction falls within the "downstream transaction" exemption contained in MI 61-101.
The Company also advises that it is entering into an amended Term Sheet with its principal lender which provides for a loan extension to October, 2012, which may be further extended, a revised credit facility reducing the Company's Revolving Operating Demand Loan by $150,000 per month commencing on August 26, 2012 and an increased rate of interest on the Loan of prime plus 3% per annum. The Company advises that the Lender is working cooperatively with the Company in order to assist the Company in reducing its credit facility with the Lender.
The Company also advises that it issued a proposal to its trade creditors and has been receiving positive responses to the proposal. The proposal is comprised of a combination of cash, Class A Common Shares of the Company and Convertible Debentures.
The Company also announces that the Board of Directors cancelled all outstanding stock options to purchase shares of the Company held by officers, directors and employees of the Company.
Solara is a junior oil and gas company focused on the exploration, development and acquisition of oil and natural gas in the Buck Lake (Pembina) and Dewberry areas of Alberta. Solara is publicly traded on the TSXV under the trading symbol SAA.A. More information is available on the Company's website at www.solaraexploration.com.
This news release may contain certain forward-looking statements, including management's assessment of future plans, acquisitions and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
88,710,732 Class A Common Shares
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.