SAN FRANCISCO, CALIFORNIA and TORONTO, ONTARIO -- (Marketwire) -- 03/01/13 -- MCW Energy Group Limited ("MCW") (TSX VENTURE: MCW) (MCW.V) (TSX Venture Exchange) and GeoPetro Resources Company ("GeoPetro") (NYSE MKT: GPR)(NYSE Amex: GPR) announced today that their respective boards of directors have each unanimously approved a definitive merger agreement whereby MCW has agreed, subject to the terms and conditions set forth therein, to acquire GeoPetro and GeoPetro will continue as a subsidiary of MCW.
At the effective time of the merger, each outstanding common share of GeoPetro will be converted into the right to receive 0.07840916 common shares of MCW and 0.138485 Class B Preferred Shares of MCW, and each outstanding share of Series B Preferred Stock of GeoPetro will be converted into the right to receive 0.07840916 Class A Shares of MCW. The MCW Class A Preferred Shares will have the same substantive terms as the GeoPetro Series B Preferred Shares with respect to voting rights, the right to receive dividends and the right to receive distributions upon liquidation. The MCW Class B Preferred Shares will not have the right to vote or to receive dividends, nor will the holders thereof have the right to receive distributions upon any liquidation. During the five years following the merger, should GeoPetro achieve certain EBITDA targets, the MCW Class B Preferred Shares shall be automatically converted into common shares of MCW.
Completion of the transaction is contingent upon, among other things, shareholder and regulatory approvals, and it is expected to close in the Summer of 2013. The parties intend to request a hearing before the California Commissioner of Corporations and the approval of the Commissioner of the terms and conditions of the merger. Obtaining such an approval from the Commissioner would qualify the MCW share issuances for an exemption from the registration thereof under the U.S. Securities Act of 1933, as amended, and such approval is a condition to the obligations of the parties to consummate the merger.
One of the conditions to the obligation of MCW to consummate the merger is that GeoPetro shall have secured, on or before March 29, 2013 (unless extended by MCW, in its sole discretion) $1,900,000 in equity financing. The merger agreement includes additional customary representations, warranties and covenants of GeoPetro and MCW.
Stuart J. Doshi, President, Chief Executive Officer and Chairman of GeoPetro, commented: "We are pleased to be partnering with the MCW Energy Group. This strategic business combination significantly enhances our abilities to access capital and develop our portfolio of projects. This is a highly attractive alignment and represents a decisive initiative on the part of GeoPetro Resources Company to enhance shareholder value and create exciting and promising new opportunities. We look forward to a successful and prosperous relationship with the MCW Energy Group."
Alex Blyumkin, Chairman of MCW, said: "We are very pleased with this transaction and are excited about the prospects of GeoPetro's projects."
GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California. GeoPetro currently has projects in the United States and Canada. GeoPetro has developed an oil and gas property in its Madisonville Field Project in Texas. Elsewhere, GeoPetro has assembled a geographically-diversified portfolio of exploratory and appraisal prospects.
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