Lion Energy Corp. (TSX-V: LEO), Southern Star Energy Inc. (OTC BB: SSEY) and
Gold Star Resources Corp. (TSX-V: GXX) Announce Proposed Business Combination
HOUSTON, Nov. 6 /PRNewswire-FirstCall/ -- Lion Energy Corp. ("Lion")(TSX-V:
LEO), a Canadian exploration company focused on acquiring, exploring and
developing oil and gas reserves in Central and East Africa, Southern Star
Energy Inc. ("Southern")(OTC Bulletin Board: SSEY), a U.S.- based oil and gas
exploration company with lease acreage properties in Louisiana, and Gold Star
Resources Corp. ("Gold Star")(TSX-V: GXX), a Canadian resource exploration
company focused on the strategic acquisition and advancement of prospective
oil and gas projects in West Africa, are pleased to announce that they have
signed a non-binding letter of intent to complete a proposed business
combination (the "Transaction"). Upon completion of the Transaction, the
combined entity will be a mid-sized, well-capitalized company with domestic
and international exploration operations, a seasoned management team, and a
strong board of directors.
"The collaboration of Lion, Southern and Gold Star combines an excellent
portfolio of diverse African exploratory opportunities and a solid platform
for growth in North America. This acquisition also brings significant talent
to continue adding opportunity and value for our shareholders," said David
Gibbs, President and CEO of Southern. "The combined company will be focused
on the acquisition of additional strategic assets in North America so we can
build a strong foundation of cash flow and stable growth opportunities. This
will provide solid returns and fund and expand the combined company's high
potential exploration programs in Africa."
It is anticipated that Lion will issue approximately 40 million of its common
shares, with approximately 26 million being issued to the shareholders of
Southern and approximately 14 million being issued to the shareholders of Gold
Star in exchange for all of the outstanding shares of Southern and Gold Star.
The Transaction is subject to the completion of confirmatory financial and
legal due diligence, definitive documentation, regulatory approvals, court
approval and approval of the shareholders of each of Lion, Gold Star and
Southern.
The securities offered will not be registered under the United States
Securities Act of 1933, as amended (the "Act") and may not be offered or sold
in the United States absent registration or an applicable exemption from the
registration requirements of the Act.
About Lion Energy Corp. (TSX-V: LEO)
Lion is a well-financed, Canadian exploration company with a vision to develop
a significant presence in the developing oil and gas industry in Africa.
Recently, Lion signed an agreement with Africa Oil Corp. (TSX-V: AOI) that
grants Lion the right to earn an interest in five petroleum blocks located in
the Republic of Kenya and in Puntland, Somalia. Lion also holds 14.76%
interest in Encanto Potash Corp., a junior potash exploration company and a
20% interest in Sulphur Solutions Inc., an emerging fertilizer company
developing state-of-the-art patented technology for the production of
micronized sulphur fertilizer. For further information, please visit:
www.lionenergycorp.com.
About Southern Star Energy Inc. (OTC BB: SSEY)
Southern, based in Houston, Texas, owns and operates a 40% interest in
approximately 5,000 acres in the Haynesville Shale Play in Northwest
Louisiana. Southern's acreage contains excellent Haynesville Shale potential,
as well as a successful Cotton Valley Sandstone development project. The
Bossier Shale is also indicated productive on this acreage. To date, Southern
has drilled 7 successful wells into the Cotton Valley. Three exploratory wells
have also been drilled and successfully encountered substantial gas-bearing
sections in the Haynesville and Bossier Shales. For further information,
please visit: www.ssenergyinc.com.
About Gold Star Resources Corp. (TSX-V: GXX)
Gold Star is a Canadian exploration company focused on high-impact onshore
opportunities in the petroleum systems of West Africa, with its key strategic
presence in Liberia and the Ivory Coast. For further information, please
visit: www.goldstarresources.com.
Neither 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.
Cautionary Statements to Shareholders - Forward Looking Statements
This news release contains certain "forward-looking statements" and
"forward-looking information" under applicable securities laws, and include
any statements regarding beliefs, plans, expectations or intentions regarding
the future. Such forward looking statements include, among others, that the
proposed Transaction will be completed, that the combined entity will add
opportunity and value for its shareholders, that the combined entity will
identify and acquire additional strategic assets in North America, that the
combined entity will provide a foundation of cash flow, stable growth
opportunities and solid returns and that the combined entity will expand its
high potential exploration programs in Africa. Forward-looking statements are
based on the opinions and estimates of management at the date the statements
are made, and are based on a number of assumptions and subject to a variety of
risks and uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the forward-looking
statements. Assumptions upon which such forward-looking statements are based
include that Lion, Gold Star and Southern will be able to negotiate and
execute definitive transaction documentation, that the due diligence
investigations by each of Lion, Gold Star and Southern will not identify any
materially adverse facts or circumstances, that all required approvals will be
obtained from the shareholders of each of Lion, Gold Star and Southern, that
all required third party regulatory and governmental approvals to the
Transaction will be obtained and all other conditions to completion of the
Transaction will be satisfied or waived. It is important to note that actual
outcomes and actual results could differ materially from those in such
forward-looking statements. Factors that could cause actual results to vary
materially from results anticipated by such forward-looking statements
include: (1) the failure to complete the Transaction for whatever reason; (2)
the failure to identify, acquire and develop additional exploration or
production assets in North America or Africa; (3) the combined entity's
ability to raise the necessary financing for operations and to complete any
acquisitions or pursue any further exploration and development opportunities;
(4) the combined entity's ability to navigate through the challenging economy
while moving forward; (5) risks inherent in the oil and gas industry; (6) the
number of competitors in the oil and gas industry with greater technical,
financial and operations resources and personnel; (7) fluctuations and
volatility in world prices and markets for oil and gas due to domestic,
international, political, social, economic and environmental factors beyond
the combined entity's control; (8) the uncertainty of the requirements
demanded by environmental agencies; (9) the combined entity's ability to hire
and retain qualified employees and consultants; and (10) the fact that there
is no certainty that any commercial quantities of oil and gas will be found or
recoverable on any of its current and future exploration targets or that any
such resources will be commercially viable to produce.
Each of Lion, Gold Star and Southern undertake no obligation to update
publicly or revise any forward-looking statements or information, whether as a
result of new information, future events, changes in management's estimates or
opinions or otherwise, unless so required by applicable laws or regulatory
policies. For additional discussion of risks and uncertainties, readers
should also refer to the annual Management's Discussion and Analysis and other
filings for each of Lion and Gold Star filed with the securities regulatory
authorities in Canada and available at www.sedar.com and the annual report and
other filings for Southern filed with the securities regulatory authorities in
the United States and available at www.sec.gov. The reader is cautioned not
to place undue reliance on forward-looking statements.
SOURCE Southern Star Energy
Brian Thurston, President and CEO of Lion Energy Corp., +1-604-688-6410; or
David Gibbs, President and CEO of Southern Star Energy Inc., +1-832-375-0330;
or Robert Dinning, Director of Gold Star Resources Corp., +1-604-641-4450
