CALGARY, Alberta, Aug. 23 /PRNewswire-FirstCall/ -- The following was
released on behalf of the Board of Forum Energy Corporation, by David R.
Robinson, President and CEO:
FORUM ENERGY CORPORATION (OTCBB: FRUEF, Frankfurt/Munich: FE8) ("Forum" or
"The Company") announced today it has entered into a Stock Purchase Agreement
("SPA") with a London based investment fund ("London Fund"), pursuant to
which, in exchange for 27,000,000 shares (the "Consideration Shares") of the
Company's common stock at US$0.203 for a total deemed value of US$5.481
million, the Company will receive 3,018,172 ordinary shares of 1p each in the
capital of the London Fund ("London Fund Consideration Shares") at a price of
1.00 pounds Sterling per share credited as fully paid and on the terms of the
SPA. The consideration shares and London Fund consideration shares will be
held in escrow pending the occurrence of certain events as detailed below.
The London Based Investment Fund was established specifically to invest in
US small cap companies with long term growth potential; it expects to have its
common stock listed for trading on the London Stock Exchange by the end of
September 2004. If the London Fund Shares are not listed for trading by such
date, the Company may, in its discretion, terminate and void the SPA. Upon
listing of the London Fund Shares for trading on the LSE, approximately 50% or
1,509,086 shares will be released from escrow to the Company; the balance will
remain in escrow for a period of two years and, subject to possible downward
adjustment based upon the then public price of the Company's common stock,
will then be released to the Company.
In accordance with the terms of the SPA the Consideration Shares will be
restricted and may not be resold for a period of 2 years following the closing
date.
Upon the initial release of the London Fund Shares to Forum, the Company
has agreed to pay a finder's fee to a third party equal to 10% of the London
Fund Shares. The proceeds which the Company may receive from the sale of the
London Fund Consideration Shares will be based on the market price of the
London Fund Shares at that time and cannot be presently ascertained; such
market price may be affected by numerous factors beyond the Company's control.
"We are pleased to have executed this SPA; upon the consummation of the
transaction, we anticipate that it will provide the company with access to the
necessary capital to continue its active exploration, development and
acquisition programme," stated David Robinson, President & CEO.
This release contains "forward looking statements" as per Section 21E of
the US Securities and Exchange Act of 1934, as amended. Although the Company
believes that the expectations reflected in such forward looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Management is currently reviewing many options and there is
no assurance that they will not make decisions other than those now
contemplated. The Company is subject to political risks and operational risks
identified in documents filed with the Securities and Exchange Commission,
including changing and depressed oil prices, unsuccessful drilling results,
change of government and political unrest in its main area of operations
For more information please contact David Robinson at (403) 290-1676
e-mail enquiries@forumenergy.com or visit the Forum Energy website at
http://www.forumenergy.com
SOURCE Forum Energy Corporation
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Related links:
http://www.forumenergy.com
CONTACT:
David Robinson of Forum Energy Corporation,
+1-403-290-1676 or enquiries@forumenergy.com
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