Brimm Energy Corp. Enters Into Letter Of Intent with Odyssey International Petroleum Inc.; U.S. $21 million Offshore Private Placement Proposed.VANCOUVER, British Columbia--(BUSINESS WIRE)--Oct. 31, 1996-- Brimm Energy Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BRIMF), a distributor and producer of ethanol in the western United States Noun 1. western United States - the region of the United States lying to the west of the Mississippi River West Santa Fe Trail - a trail that extends from Missouri to New Mexico; an important route for settlers moving west in the 19th century , today announced the company has entered into a Letter of Intent dated Oct. 30, 1996 with Odyssey International Petroleum Inc., a private oil and gas exploration company with headquarters in the British Virgin Islands British Virgin Islands A British colony in the eastern Caribbean east of Puerto Rico and the U.S. Virgin Islands. Road Town, on Tortola Island, is the capital. Population: 21,700. Noun 1. , which contemplates the acquisition by the Company of certain oil and gas interests from Odyssey and/or Odyssey's wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. . Odyssey is engaged in the business of acquiring working interest in international oil and gas exploration and development projects. Through its wholly-owned subsidiary, Odyssey Turkmenistan Inc., Odyssey has a contractual right to acquire from Larmag Energy N.V. of Amsterdam, The Netherlands, a net 5% beneficial interest in Block II Turkmenistan, (the "Turkmenistan Project"). Odyssey is investigating and has conditional rights to acquire working and/or beneficial interest in other major international petroleum projects, located in Africa, The Caspian Sea Caspian Sea (kăs`pēən), Lat. Mare Caspium or Mare Hyrcanium, salt lake, c.144,000 sq mi (373,000 sq km), between Europe and Asia; the largest lake in the world. , and the Middle East. The Letter of Intent contemplates Brimm, (i) acquiring Odyssey's interest in the Turkmenistan Project in exchange for up to a maximum of 40 million common shares of the Company's capital stock based on an independent petroleum evaluation for all of the issued and outstanding shares of Odyssey Turkmenistan Inc. and (ii) being granted an irrevocable option by Odyssey exercisable through Dec. 31, 2001 to acquire all of Odyssey's right, title, and interest in any and all international oil and gas exploration projects currently owned or to be acquired by Odyssey. The Letter of Intent confirms the parties' mutual intent to complete their current negotiations and to enter into the definitive agreements contemplated by the Letter of Intent. The Letter of Intent does not constitute a legally enforceable agreement between Brimm and Odyssey. "There can be no assurance that such definitive agreements will be finalized and executed," Daniel J. Brimm, the Company's president, stated. Finalization of definitive agreements will be subject to a number of conditions, including but not limited to the satisfactory completion of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , favorable legal and accounting opinions, valuation by independent engineers, a fairness opinion Fairness Opinion A report put together by qualified analysts or advisors providing to key decision makers an evaluation of and facts about a merger or acquisition. Notes: A fairness opinion serves as a document used for guidance in a merger, takeover, or acquisition. by the Company's financial advisors, approval by the board of directors of both Brimm and Odyssey, and approval by the Company's shareholders. If the transactions contemplated by the Letter of Intent are consummated, a finder's fee Finder's fee A fee a person or company charges for service as an intermediary in a transaction. finder's fee The charge levied by a person or firm for putting together a deal. of up to US$3 million shall be payable in Brimm's common shares to those persons and entities designated by Brimm and Odyssey. It is anticipated that the transactions contemplated by the Letter of Intent will be consummated by Dec. 31, 1996. Proposed US$21 Million Offshore Private Placement In order to satisfy in part, its obligations under the terms of the Letter of Intent, Brimm will offer for sale to certain qualified offshore investors, who are not "U.S. Persons," up to 210 Series X Units as described at a net purchase price of US$80,000 per Series X Unit or up to net US$16.8 million in the aggregate pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended, afforded by Regulation S thereunder. The Series X Debentures will not be registered or qualified under applicable United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or Canadian securities laws and certain restrictions on sale and resale will apply. Approximately US$15 million of the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering shall be lent by Brimm to Odyssey; it is anticipated that Odyssey will use approximately US$9 million to be advanced as equity to Odyssey Turkmenistan Inc. in payment of its expense obligations and commitments. Net proceeds may also be used by Odyssey for the acquisition of other international petroleum projects, subject to the Company's approval. However, pending such cash requirements, the proceeds will be placed in an escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account. The balance of the net proceeds from the offering of the Series X Units estimated at approximately US$1.8 million will be used by Brimm for working capital and expenses of the transactions contemplated by the Letter of Intent. Description of Series X Units Each Series X Unit consists of 4% convertible debentures due Dec. 31, 2001 in the aggregate principal amount of US$100,000 and a share purchase warrant entitling the warrant holder to acquire up to 40,000 shares of Brimm's common stock at a price of US$1.25 per share in the first six months and US$1.75 during the second six months. The Series X Debentures will be secured by Brimm's interest in the shares of Odyssey Turkmenistan Inc. The Series X Debentures can only be converted and the Series X Warrants exercised after approval of the Brimm shareholders at an extraordinary general meeting to be called before Dec. 31, 1996. Failure to obtain such approval constitutes an Event of Default under the terms of the Series X Debentures. About Brimm Energy Corp. Brimm Energy Corp. is engaged in the manufacturing and distribution of fuel grade ethanol for use as a gasoline additive Gasoline additives increase gasoline's octane rating or act as corrosion inhibitors or lubricators, thus allowing the use of higher compression ratios for greater efficiency and power, however some carry heavy environmental risks. in the Rocky Mountain and Northwestern regions of the United States. Ethanol is an alcohol, primarily distilled from corn or other grains. A 10% ethanol blend with gasoline serves to reduce the carbon monoxide carbon monoxide, chemical compound, CO, a colorless, odorless, tasteless, extremely poisonous gas that is less dense than air under ordinary conditions. It is very slightly soluble in water and burns in air with a characteristic blue flame, producing carbon dioxide; and hydrocarbon particulate par·tic·u·late adj. Of or occurring in the form of fine particles. n. A particulate substance. particulate composed of separate particles. emissions of combustion by up to 25% while, at the same time, increasing the octane rating Noun 1. octane rating - a measure of the antiknock properties of gasoline octane number quantity, measure, amount - how much there is or how many there are of something that you can quantify of the fuel. Ordinary gasoline engines can use ethanol without modifications. Ethanol-blended gasolines are approved by all major domestic and foreign automobile manufacturers under the terms of their new car warranty agreements. However, following its acquisition of Odyssey's interest in the Turkmenistan Project, the Company intends to focus its resources more fully on oil and gas exploration and development activities. The Company's common shares trade on the NASDAQ Small Cap Market. -0- Note to Editors: The contents of this news release have neither been approved nor disapproved by NASDAQ. CONTACT: Brimm Energy Corp. Daniel J. Brimm, 604/684-4830 |
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