Roadrunner Oil & Gas has entered into a letter of intent dated October 28, 2009 (the "LOI") with Bowood Energy Corp. ("Bowood") pursuant to which Roadrunner is expected to complete an arm's length acquisition (the "Acquisition") of all of Bowood's issued and outstanding common shares (each, a "Bowood Share").
Summary of the Proposed Acquisition
The LOI contemplates that Roadrunner will issue 5.667 common shares (each, a "Roadrunner Share") for each Bowood Share it acquires. The exchange ratio is based on a deemed value of $0.15 per Roadrunner Share and a deemed value of $0.85 per Bowood Share. There are currently 71,028,330 Roadrunner Shares issued and outstanding (prior to completion of the Private Placement discussed below) and, after completion of the Acquisition, Bowood shareholders are expected to own approximately 85 million Roadrunner Shares. After completion of the Acquisition, Roadrunner will continue to operate in oil and gas exploration, development and production and, as a result, will continue to be classified as an Oil and Gas Issuer on the TSX Venture Exchange ("TSX-V").
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