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MENA Hydrocarbons Announces Private Placement Financing
By: Marketwired .
Dec. 14, 2012 01:43 PM
CALGARY, ALBERTA -- (Marketwire) -- 12/14/12 -- MENA Hydrocarbons Inc. ("MENA" or the "Company") (TSX VENTURE:MNH) announced today that it is proceeding with a non-brokered private placement (the "Offering") of up to 25,000,000 million units at a price of $0.02 per unit for gross proceeds of $500,000. Each Unit will consist of one common share and one-half of one share purchase warrant. Each whole warrant is exercisable at a price of $0.05 at any time within 12 months from the date of issue, and at a price of $0.10 thereafter until two years from date of issue. The Offering is being made pursuant to the Bulletin of the TSX Venture Exchange ("TSXV") dated August 17, 2012 which provides for temporary relief from certain pricing requirements. Mr. Magdy Bassaly is expected to subscribe for 25% of the Offering ($125,000 or 6,250,000 units) with the balance of the Offering to be subscribed for by arm's length third parties.
The net proceeds of the financing will be used to fund the maintenance and development of the Company's assets in Egypt, to repay amounts owing to arm's length third party creditors in Egypt and Canada and for working capital purposes. The Offering is necessary to support existing operations, activities and assets, and none of the proceeds will be used to fund the purchase or pursuit of new businesses, operations or activities, or to compensate, settle indebtedness with, or otherwise satisfy obligations to, any person who is a Related Party (as such term is defined in Policy 1.1 of the TSX Venture Exchange Corporate Finance Manual).
Mr. Bassaly's participation in the Offering is considered a related party transaction for the purposes of TSXV Policy 5.9 which incorporates the requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Mr. Bassaly's participation in the Offering is exempt from the valuation and minority approval requirements of MI 61-101 due to, amongst other available exemptions, the financial hardship exemptions set out in sections 5.5(g) and 5.7(1)(e) of MI 61-101. A committee of independent directors of the Company reviewed Mr. Bassaly's participation in the Offering and determined that MENA is in serious financial difficulty, Mr. Bassaly's participation in the Offering is designed to improve the financial position of MENA, and the terms of the Offering related to his participation are reasonable in the circumstances of MENA. Accordingly, the Offering is exempt from minority shareholder approval and formal valuation requirements of M1 61-101.
Proceeding with the Offering is subject to the approval of the TSXV.
About MENA Hydrocarbons
MENA Hydrocarbons is an international oil and gas company focused on growing an asset base of production, development and high impact exploration in the Middle East and North Africa region. In Egypt, MENA owns and operates the development lease for the Lagia oil field, a 32 square kilometre onshore block located on the Sinai Peninsula, directly adjacent to the Gulf of Suez. In Syria, MENA owns a 30% participating interest in Block 9 in Syria, a 10,032 square kilometre onshore block prospective for crude oil, natural gas and condensate. In the United States, MENA owns 6,242 gross acres (with an 81.2% average working interest) in Northwestern Montana with light/medium oil reserves. MENA's shares currently trade on the TSX Venture Exchange under the symbol "MNH".
Forward looking information
This news release contains forward-looking information relating to the Offering and use of proceeds of the Offering and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking information.
Forward-looking information is based on certain factors and assumptions regarding, among other things, the Company maintaining its stock exchange listing; the availability of capital on acceptable terms or at all and the timing such capital is needed; the impact of increasing competition; the general stability of the economic and political environments in which the Company operates or owns interests; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with the Company's ability to successfully maintain its stock exchange listing, the availability of capital on acceptable terms or at all and the timing such capital is needed, instability of the economic and political environments in which the Company operates or owns interests, 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, incorrect assessment of the value of acquisitions, the inability to settle the definitive terms of the farmout arrangements, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.
You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.
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.
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