CALGARY, ALBERTA -- (Marketwired) -- 05/17/13 -- Tuscany Energy Ltd. ("Tuscany") (TSX VENTURE: TUS) and Diaz Resources Ltd. ("Diaz") (TSX VENTURE: DZR) are pleased to jointly announce that they have entered into a definitive arrangement agreement in connection with a proposed business combination (the "Transaction") whereby Tuscany will acquire, subject to certain conditions, all of Diaz's issued and outstanding common shares on the basis of 0.31 of a common share of Tuscany for each one (1) Diaz common share pursuant to a Plan of Arrangement under the Alberta Business Corporations Act. Following completion of the Transaction and a proposed consolidation of Tuscany's common shares on an 8 for 1 basis to be completed subsequent thereto, Tuscany will have approximately 18.6 million common shares outstanding, of which approximately 80.3% will be held by current shareholders of Tuscany and approximately 19.7% of which will be held by former shareholders of Diaz. Based on independent reserve evaluations with an effective date of December 31, 2012 the combined entity will have total proved plus probable reserves of approximately 2.5 million barrels of oil equivalent ("BOE"). The companies hold approximately 85,000 net acres of undeveloped land. Combined production levels of the companies totalled approximately 635 BOE per day (405 bopd, 1.38 mcfpd) for the month of May, 2013.
Closing is expected to occur on or about July 15, 2013, subject to satisfaction of certain conditions including standard stock exchange, court and regulatory approvals and the requisite two-thirds majority approval of Diaz's shareholders and majority of minority approvals of both Tuscany's and Diaz's shareholders. An information circular, to be prepared jointly by the parties, will be mailed to shareholders of both Tuscany and Diaz in connection with the shareholder meetings of each company to consider and approve the Transaction which are expected to be held on July 15, 2013.
The Board of Directors of both Tuscany and Diaz each established a Special Committee comprised of independent directors with a mandate, among other things, to consider the Transaction and to make a recommendation to the respective Boards of Directors in respect thereof. The Special Committee of the Board of Directors of each of Tuscany and Diaz recommended that the respective Boards of Directors approve the Transaction. Based on the recommendation of their respective Special Committee, the Boards of Directors of each of Tuscany and Diaz, with certain directors abstaining, in accordance with ABCA, approved the Transaction. The Boards of Directors have concluded that the Transaction is in the best interest of their respective shareholders and company and have resolved to recommend that its shareholders vote their shares in favour of the Transaction.
Acumen Capital Finance Partners Limited ("Acumen") was engaged to act as Tuscany's exclusive financial advisor with respect to the Transaction. Acumen has advised the Board of Directors of Tuscany and its Special Committee that, in its opinion, subject to review of final documentation, the Transaction is fair, from a financial point of view, to Tuscany shareholders.
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