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Polar Resources Corporation (RSN.H-X)
VANCOUVER, Mar 25, 2011 (Canada NewsWire via COMTEX) -- Robert Constantine Grey, President and Director of the Company is pleased to announce that Polar Resources Corporation has entered into a written Participation and Joint Development Agreement with Topaz Resources, Inc. a publicly traded corporation (OTCBB: TOPZ) and RMJ, Inc. to participate in the development of an existing oil and gas lease consisting of approximately 1187 acres in the Barnett Shale Oil play, located just North of Fort Worth Texas in Montague County.
The agreement with Topaz provides Polar with the opportunity to purchase a 62.9883% working interest in an initial vertical Barnett Well that has been drilled and cased and is awaiting fracture treatment. Polar will also acquire a 62.9883% working interest in the 40 acres surrounding the well. Polar will have a 71.875% cost obligation of the completion costs of this well through the tie-in to gas pipeline and the installation of Oil Storage tanks. The agreement calls for the purchase of the working interest in this initial Barnett Well with a cash payment to Topaz of $1 Million USD. Topaz will be the operator of the well.
As part of the agreement, Polar will earn the right to participate in the drilling of an additional two horizontal wells and by doing so to earn a 52.6855% working interest in these wells and their surrounding unit acreage. Upon completion of the two additional wells, Polar also earn the right to participate with Topaz and RMJ in the drilling of additional wells with a 52.6855% working interest and a cost obligation of 64.8348%.
In concert with the purchase of the working interest in the well from Topaz, Polar has agreed to an initial purchase of 600,000 shares (for $300,000 USD) of RMJ, a private Nevada company and working interest participant in the Barnett project. The agreement allows Polar to acquire 4 Million common shares of RMJ at a price of 50 cents US per share for a total investment of $ 2 Million USD in stages. This will represent a 24% equity interest in RMJ when completed. RMJ has minority working interests in other producing wells with additional development acreage in prospective regions of the Texas.
Polar is in the process of concluding a private placement of up to 1,333,333 common shares at 15 cents per share for an aggregate acquisition cost of $200,000. The Use of Proceeds is for general corporate purposes. The Company intends to finance the participation in this oil and gas prospect by the issuance of a 5 year term Redeemable Convertible Debenture in the aggregate amount of $2,000,000 with an interest rate of 8% per annum. The conversion price will be set at $1.00 per share.
It is intended that this series of transactions will constitute a Reactivation of the Corporation under TSX Exchange Policy 2.6. Subject to the completion of these transactions and receipt of regulatory approvals, it is anticipated that the Corporation will graduate to Tier 2 of the TSX Venture Exchange as an oil and gas issuer.
The transactions contemplated by the Corporation are subject to receipt of any and all required regulatory approvals and the acceptance of the NEX and the TSX Venture Exchange.
The NEX or TSX Venture Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
Except for the historical information contained herein, this press release contains statements that constitute forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statement inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that may cause or contribute to such differences include, among other things, the Corporation's ability to close the proposed transaction. Other risks and uncertainties include changes in business conditions and the economy in general, changes in governmental regulations, unforeseen litigation and other risk factors identified in the Corporation's public filings under "Risk Factors". The Corporation undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this press release.
On behalf of POLAR RESOURCES CORPORATION
"Robert C. Grey" Robert C. Grey, President
