Canadian Shells

[Tackler]

Lamplighter formalizes Blackdog deal

2005-10-12 20:57 ET - News Release

Mr. Alykhan Mamdani reports

LAMPLIGHTER ENERGY LTD. AND BLACKDOG RESOURCES LTD. ENTER INTO AMALGAMATION AGREEMENT

Lamplighter Energy Ltd. has entered into an amalgamation agreement with Blackdog Resources Ltd., a private oil and gas company, providing for a reverse takeover of Lamplighter by Blackdog pursuant to TSX Venture Exchange Policy 5.2.

Pursuant to the amalgamation agreement, the securityholders of each company will exchange their shares, stock options and share purchase warrants of Lamplighter and Blackdog, respectively, into equivalent securities of the new amalgamated company (Amalco) on a 1:1 basis, at a deemed value of 20 cents per Amalco share. The name of Amalco will be Blackdog Resources Ltd.

Concurrently with the closing of the RTO, Blackdog intends to raise an additional $2-million to $3-million. It is anticipated that even if the RTO is not completed, Blackdog will proceed with the private placement. Subject to market conditions, Blackdog anticipates issuing a combination of flow-through and non-flow-through shares under its private placement, with pricing between 35 cents to 50 cents per share. It is intended that the proceeds of the private placement will be used for the acquisition of oil and gas production and drilling prospects in Western Canada. It is expected that it will be necessary for Blackdog or Amalco to complete the acquisition of additional oil and gas properties in order for Amalco to meet the minimum listing requirements of the TSX-V and complete the RTO. There is no assurance that the acquisition of the necessary oil and gas properties will occur prior to the shareholders meetings of Lamplighter and Blackdog or at all.

The board of directors of Amalco shall comprise five nominees of Blackdog and one representative from the present Lamplighter board. The RTO is expected to be completed by Dec. 9, 2005, subject to receipt of applicable shareholder and regulatory approval.

It is expected that meetings of the shareholders of both companies will be held on or about Dec. 8, 2005, to consider and approve the proposed amalgamation. Management of Lamplighter and Blackdog will be preparing a joint information circular outlining the proposed RTO to be mailed to shareholders of both companies in conjunction with the meetings. The amalgamation must be approved by at least two-thirds of the shareholders of Lamplighter and Blackdog who vote at the meetings. There can be no guarantee that both companies' shareholders will approve the amalgamation.

Not including any securities to be issued under the private placement, Amalco will have approximately 9,405,175 common shares, 2,438,928 warrants and 854,632 options outstanding. The combined company will have approximately $300,000 in debt, usable tax losses of approximately $2.5-million, $925,000 in cash and production of approximately 28 barrels of oil per day of light crude. The 15-per-cent discounted value of Amalco's main asset, which is a five-well field in Whitebear, Sask., is approximately $339,668 (based on a wellhead price of $41.47 per barrel). This value is before income tax and based on forecast pricing as assigned to the corporation's reserves by Dobson Resource Management Ltd. as of Jan. 1, 2005, in its National Instrument 51-101 compliant report. Amalco will also have an interest in a gas well in Manyberries, Alta., for which the report has assigned no reserves.

The common shares of Lamplighter will remain halted until the TSX-V has received its initial filing pursuant to the RTO.

Completion of the RTO is subject to a number of conditions, including but not limited to TSX-V acceptance and Lamplighter and Blackdog shareholder approval. There can be no assurance that the transaction will be completed as proposed or at all.