Solana Resources Acquires Breakaway Energy
Solana Resources has appointed Scott Price as President, Chief Executive Officer and Director and Glenn Van Doorne as Chief Operating Officer, effective immediately. The appointments of Mr. Price and Mr. Van Doorne were made in connection with the acquisition by Solana of Breakaway Energy Inc., a privately held international oil and gas exploration company.
Scott and Glenn comprise a highly experienced senior management team with over 50 years involvement in the oil and gas industry. The team has a solid track record of value creation, having been involved in the development and subsequent successful sale of a number of public and private oil and gas companies.
Scott, the founding director and President of Breakaway, has 22 years of diverse global experience. Concurrent with his Breakaway initiatives, he co-founded, and is currently the non-executive chairman of, Virgin Resources Limited, a private international exploration company with activities in the Middle East.
Prior to Breakaway, Scott was President and Chief Executive officer of Aventura Energy Inc., an internationally focused Canadian public E&P company. Under his guidance Aventura grew from a market capitalization of $12 million to $220 million. Aventura was subsequently sold to British Gas for $228 million. Prior to Aventura, Scott held a number of senior positions within Ocelot International Inc., most recently as the Vice President Finance and Chief Financial Officer based in the United Kingdom.
Scott has oil and gas experience in North and South America, Africa, Middle East, the former Soviet Union and Canada. He started his career as a production, operations and drilling engineer in Canada and holds a Bachelor of Science degree in Chemical Engineering and a Masters of Business Administration degree, both from the University of Calgary.
Glenn, also a founder of Breakaway, has over 30 years of worldwide oil & gas experience including eight years in Canada. He previously founded IbrizOil Inc and during 2002 he identified exploration and development opportunities in Kazakhstan which were subsequently acquired by Big Sky Energy Corp. Prior to that, he was Vice President, Exploration and Production for Hurricane Hydrocarbons Ltd, which subsequently changed its name to PetroKazakhstan. Over a span of five years, the company grew from a production level of 50 bopd to over 70,000 bopd and increased its reserves from less than one million bbls to over 400 million bbls. The company was subsequently sold to China National Petroleum Corporation for over US $4.0 billion.
Glenn started his career with the International Energy Agency in London, U.K. Subsequently, he held increasingly senior positions during his activities in Canada for large integrated oil companies.
Glenn has a Bachelor's and Master's Degrees in Geological and Mineralogical Sciences from Belgian Universities. He has experience in the oil & gas industry in Europe, North Africa, Middle East, Indonesia and Argentina.
In conjunction with this transaction, Mr. Stephen Newton has resigned as President and CEO of Solana and from the Solana board of directors. Mr. Newton will continue to be primarily responsible for Solana's Colombian operations as President and a director of Solana Petroleum Exploration (Colombia) Limited and will be based in Bogota, Colombia.
Acquisition of Breakaway Energy Inc.
Pursuant to a share purchase agreement, Solana has purchased all of the issued and outstanding shares of Breakaway in exchange for the issuance of 10 million shares of Solana and 10 million performance warrants. Of the 10 million Solana shares, 2/3 are to be issued subject to a voluntary escrow agreement with Solana and will be released as to one-half of the escrowed shares on each of October 2, 2007 and 2008, respectively.
The performance warrants have a term of 42 months, an exercise price of $2.00 per share, and are exercisable only if Solana's share price trades above $2.75 per share for a period of more than 45 consecutive days. The 10 million performance warrants are also subject to a voluntary escrow agreement with Solana and will be released as to one-half of the performance warrants on each of October 2, 2007 and 2008 respectively.
Both the escrowed shares and performance warrants issued to Scott and Glenn are subject to certain vesting provisions over the 24 month period following completion of the acquisition, including immediate vesting in the event of a change of control or in the event that Solana's share price trades above $2.75 per share for a period of more than 45 consecutive days.
As of July 31, 2006, Breakaway had (unaudited) net assets of approximately $215,000 and reported a net loss of $131,000 for the seven months then ended. Scott and Glenn have executed two year employment agreements with the Company at a salary of $250,000 per annum per person and have also each been granted 200,000 stock options pursuant to the Company's stock option plan exercisable at a price of $1.15 per share until October 4, 2011, with one-half of the options vesting on October 4, 2007 and the remaining options vesting on October 4, 2008. The stock option grant is subject to regulatory approval. The Corporation has determined that exemptions from the various requirements of the TSX Venture Exchange Policy 5.9 are available for the grant of options.
These arrangements have been approved by Solana's Board of Directors as being in the best interests of the Company and its shareholders. In reaching this conclusion the Board of Directors has taken account of the Company's location and the need to attract, retain and incentivize top quality management in present market circumstances.
Subsequent to this transaction, the new team will focus on Solana's extensive Colombian portfolio, with a view to consolidating and streamlining the Company's current assets in order to maximize the inherent value within its wide ranging asset portfolio. It is intended that additional Colombian assets will be added to the portfolio over time.
While Colombia will be the core focus, new management is a strong proponent of geographic and political diversification as a key measure of risk mitigation. Accordingly, as a secondary focus, Solana will look to add at least one accretive opportunity in a second international jurisdiction over the next 12 to 24 months.
Commenting, Raymond Antony, Chairman, said:
"We are delighted that Scott and Glenn have agreed to join Solana. As a management team they have excellent international oil and gas industry experience and a very strong record of developing companies. Solana's asset portfolio was central in attracting Scott and Glenn to the company".
"I would also like to take this opportunity to thank Stephen for the tremendous contribution he has made to Solana as President and look forward to his continued assistance managing the Company's Colombian operations".
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