The gross proceeds of the subscription receipts will be held by an escrow agent and invested in approved interest-bearing instruments pending closing of the previously announced acquisition by Pacific Stratus of Sipetrol Colombia.
Upon closing of the acquisition, each common share subscription receipt will automatically convert into one common share of Pacific Stratus and each unit subscription receipt will automatically convert into one $1,000 principal amount senior unsecured note and 100 warrants, as further described above, without any additional consideration. If closing of the acquisition does not occur on or before July 31, 2006, Pacific Stratus will repay to holders of common share subscription receipts and unit subscription receipts their original subscription price plus accrued interest.
The private placement remains subject to regulatory approval and is expected to close on or about June 13, 2006. In connection with the private placement, the agents will be paid a cash commission.
In addition, the company also announces that at its recently held annual and special general meeting, shareholders approved the consolidation of the issued and outstanding common shares of Pacific Stratus on a one-for-ten basis. The share consolidation is effective as of May 26, 2006.
Pacific Stratus Energy is an oil and gas company with interests in the Doima block and Ortega-Pacande oil fields, as well as in the La Creciente, Moriche and Puli-B exploration blocks in Colombia. The company is focused on identifying acquisition opportunities primarily within the upstream Sub Andean basins, initially in Colombia. The company has offices in Toronto, Caracas and Bogota.
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