Attached files
| file | filename |
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| EX-99.1 - AMERICAN EAGLE ENERGY Corp | v178897_ex99-1.htm |
| EX-10.29 - AMERICAN EAGLE ENERGY Corp | v178897_ex10-29.htm |
| EX-10.28 - AMERICAN EAGLE ENERGY Corp | v178897_ex10-28.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported) March 29, 2010
ETERNAL ENERGY
CORP.
(Exact
name of registrant as specified in its charter)
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Nevada
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0-50906
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20-0237026
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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2549
West Main Street, Suite 202, Littleton,
CO 80120
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(Address
of principal executive
offices) (Zip
Code)
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Registrant’s
telephone number, including area code: (303) 798-5235
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(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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SECTION
8 – OTHER EVENTS
ITEM
8.01 Other Events.
On
November 25, 2009, we executed a letter agreement (the “Letter Agreement”) with
Ryland Oil Corporation, an Ontario, Canada domiciled corporation, whose common
shares are listed on the TSX Venture Exchange (“Ryland”), pursuant to which
Ryland would acquire all of our issued and outstanding shares of common stock at
the closing in exchange for an aggregate of approximately 17.8 million shares of
Ryland’s common stock at an exchange ratio of one of our common shares for 0.352
of one of Ryland’s common shares. At that ratio, assuming that, at
the closing of the proposed transaction, Ryland’s common stock is valued at not
less than CDN$0.39 per share, which was the closing price of Ryland’s common
stock on the date that the Letter Agreement was executed, and assuming that the
currency exchange ratio between the United States and Canada is not materially
different at closing than at November 25, 2009, the value of the proposed
transaction would be in excess of US$6.5 million.
The
closing of the proposed transaction was subject to various conditions including
the following:
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·
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Ryland
and we having negotiated and executed a mutually acceptable definitive
agreement on or before June 30,
2010;
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·
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Approval
by the holders of a majority of our issued and outstanding capital stock
at a special meeting of our stockholders to consider the proposed
transaction. As of the date of this Current Report, the special
meeting date has not yet been established;
and
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·
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Successful
conclusion of the review process by the US Securities and Exchange
Commission and approval from various US state and Canadian regulatory
agencies.
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Subsequent
to the date of execution of the Letter Agreement and the press release, both
Ryland and we obtained fairness opinions from separate independent business
valuation firms stating the economic conditions under which the proposed
transaction would be fair, from a financial perspective, to our respective
stockholders.
On March
26, 2010, Ryland and we mutually terminated the Letter Agreement, pursuant to
its terms, and executed two new purchase and sale agreements, pursuant to which
we have agreed to sell to Ryland our interest in certain acreage located in
North Dakota, as well as our gross overriding royalty interest in certain lands
located in Saskatchewan. The material terms of each agreement are as
follows:
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1.
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Purchase
and Sale Agreement – Effective April 1, 2010, we will sell our ten percent
working interest in approximately 700 net acres located in North Dakota to
Ryland’s US-based wholly-owned subsidiary, Rover Resources, Inc., for US$1
million cash. The transaction is expected to close on April 7,
2010. The closing of this transaction is contingent on the
concurrent closing of the Purchase of Royalty Agreement, as outlined
below.
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2.
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Purchase
of Royalty Agreement – Effective April 1, 2010 we will sell all of our
gross overriding royalty interest in approximately 264,000 net acres
within an area of mutual interest located in southeastern Saskatchewan to
Ryland for US$3 million in cash, 2,145,883 shares of Ryland’s common
stock, which were valued at approximately CDN$772,500 as of March 26,
2010, and an assignment of all of Ryland’s working interest in
approximately 4,500 net acres located in Saskatchewan (the “Hardy
Prospect”). The transferred interest constitutes 100% of the
working interest in the Hardy Prospect. This transaction is
expected to close on April 7, 2010 with the payment of the cash
consideration due on June 1, 2010. The closing of this
transaction is contingent on the concurrent closing of the Purchase and
Sale Agreement, as outlined above. Upon closing, 60% of the
gross overriding royalty interest being sold will be placed in escrow
pending receipt of the US$3 million cash payment. If that
payment is not received by June 1, 2010, the escrowed gross overriding
royalty interest will revert to us.
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The
closing of these transactions is subject to various conditions, including
approval of the transactions by the TSX Venture Exchange.
1
At any time prior to closing, the
Purchase and Sale Agreement and the Purchase of Royalty Agreement (collectively,
the “Asset Purchase Agreements”) may be terminated by mutual written agreement
of Ryland and us. Until terminated in accordance with their terms,
the Asset Purchase Agreements are binding on the
parties. Additionally, the Asset Purchase Agreements shall terminate without further notice
or agreement of Ryland and us in the event that:
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1.
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the
proposed transactions are not accepted and approved by the TSX Venture
Exchange; or
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2.
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any
conditions precedent set out in the Asset Purchase Agreements are not
satisfied, released or waived on or before the Closing Date or such
earlier date, as relevant.
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As of
March 29, 2010, the date of this Current Report and the date of the press
release announcing the termination of the Letter Agreement, dated November 25,
2009, and the execution of the Asset Purchase and Sale Agreement and the
Purchase of Royalty Agreement, we cannot provide any assurance that all of the
conditions to closing the proposed asset purchase transactions will be met or
waived or that the proposed transactions themselves will ultimately be
completed.
Also on
March 26, 2010, our Board of Directors authorized the adoption of a “stock
repurchase program,” pursuant to which we may repurchase up to US$500,000 of our
currently outstanding common stock at prevailing market prices. The
time period during which the repurchasing activities may occur will be dependent
on future market volume. The stock repurchase agreement is subject to
various trading restrictions as established in Rule 10(b)-18 of the Securities
Exchange Act of 1934.
On March
29, 2010, we issued a press release announcing the transactions and the stock
repurchase program described in this Current Report. A copy of the
press release is included with this filing as Exhibit 99.1.
SECTION
9 – FINANCIAL STATEMENTS AND EXHIBITS
Item 9.01 Financial Statements and
Exhibits.
(d) Exhibits
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Exhibit
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Description of
Exhibit
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| 10.26 | Form Of Letter Agreement dated November 25, 2009, between Eternal Energy Corp. and Ryland Oil Corporation (Incorporated by reference to Exhibit 10.26 to our Current Report on Form 8-K dated March 10, 2010). | |
| 10.28* | Purchase and Sale Agreement by and between Eternal Energy Corp. and Ryland Oil Corporation dated March 26, 2010. | |
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10.29*
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Purchase
of Royalty Agreement by and between Eternal Energy Corp. and Ryland Oil
Corporation dated March 26, 2010.
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99.1*
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Press
Release dated March 29, 2010, announcing the proposed asset purchases
transactions by Ryland Oil Corporation.
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| ___________ | ||
| * Filed herewith. | ||
2
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Date: March
29, 2010
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ETERNAL
ENERGY CORP.
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By:
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/s/ Bradley M. Colby
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Bradley
M. Colby
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President
and Chief Executive Officer
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