CALGARY, ALBERTA--(Marketwire - Sept. 12, 2012) -


Tilting Capital Corp. (the "Corporation" or "Tilting Capital") (TSX VENTURE:TLL.H), today announced the execution of revised definitive agreements for the previously announced proposed transaction involving the purchase of certain Colombian oil and gas assets (the "Proposed Transaction").

Summary of the Proposed Transaction

The previously announced definitive agreements had terminated prior to completion of the transaction. Tilting Capital has now entered into revised definitive agreements with Canacol Energy Ltd. (the "Vendor") for the following:

  • Tilting Capital will acquire a 100% interest in the Production Sharing Contract, which is forecast to result in a 39% net interest in the operated Entrerrios producing block in Colombia (the "Entrerrios Block"). The prior agreement provided for the purchase of a 60% interest. The Entrerrios Block currently has production of approximately 184 net barrels of oil per day (gross approximately 500 barrels of oil per day). The purchase price will be $1,250,000 in cash and also includes the issue to the Vendor of 5,000,000 preferred shares which convert to common shares in the event the Entrerrios Block is extended by Ecopetrol to the end of the life of the field;
  • Tilting Capital would acquire all of the Vendor's (15%) interest in the exploration block Morichito in Colombia (the "Morichito Block") for a purchase price of $2,000,000 cash; and
  • the letter of intent pursuant to which Tilting Capital may farm into Block 170, Brazil ("Brazil Block") in the future and also enter into an area of mutual interest agreement for Brazil in the future remains unchanged. Tilting Capital will have no obligations or commitments on Brazil Block at the closing of the Proposed Transaction.

About Tilting Capital Corp.

Tilting Capital is a corporation under the Canada Business Corporations Act with no active business. Tilting Capital is listed on the NEX board of the Exchange. The NEX board accepts companies previously listed as Tier 1 or Tier 2 issuers on the Exchange which have failed to maintain compliance with the ongoing financial listing standards of the Exchange. The NEX board allows inactive companies to maintain a listing while they complete their reorganizations. In order to qualify for the NEX board, the Corporation must, among other conditions, be a reporting issuer in good standing with all relevant securities regulatory authorities and under corporate law.

At the Corporation's request, trading in its common shares has been halted by the Exchange. Trading is expected to remain halted until (i) the TSX Venture Exchange is satisfied with the material submitted in connection with the Proposed Transaction; and (ii) a sponsor is engaged or a sponsorship exemption is obtained.

Closing of the Proposed Transaction

It is contemplated that closing of the Proposed Transaction would be subject to a number of terms and conditions including:

  1. to the extent necessary, receipt of any and all necessary court approvals, stock exchange approvals, shareholder approvals, governmental consents, notifications, and any necessary contractual consents and rights of first refusal for the Proposed Transaction, including the TSXV and the working interest partners in Colombia;
  2. completion of a $4,500,000 private placement of units of the Corporation at $0.15 per unit, each unit to be comprised of one common share and one warrant exercisable for one additional common share at $0.30 expiring five years from closing;
  3. Tilting Capital will use commercially reasonable efforts to close at the earliest possible date, with closing to occur no later than October 31, 2012; and
  4. approval of the Proposed Transaction by the shareholders of Tilting Capital either by written consent or by shareholder meeting, as required by the Exchange.

About the Entrerrios Block

All information in this Press Release relating to the assets to be acquired from the Vendor is based upon information provided to the Corporation by the Vendor. Management of Tilting Capital has not yet independently reviewed this disclosure nor has Tilting Capital hired any third party consultants or contractors to verify such information.

The Entrerrios Block assets comprise the Vendor's various working interests in 14,920 acres of lands in Colombia on which there are currently three producing oil wells and one abandoned well. Current net production is 184 barrels per day of heavy oil.

A summary of the Vendors' share of reserves and future net revenue for the Entrerrios Block from a report dated as of June 30, 2012 prepared by DeGolyer and MacNaughton Canada Limited, independent qualified reserves evaluators, (the "DeGolyer and MacNaughton Report") is presented below. The DeGolyer and MacNaughton Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). The estimated net present values do not represent a fair market value.

Gross Working Interest Remaining Reserves Future Net Revenue Before Income Tax
Reserve Category Light Crude Oil Heavy Crude Oil Natural Gas NGLs at 5% at 10% at 15% at 20%
Mbbl Mbbl Mbbl Mbbl M U.S.$ M U.S.$ M U.S.$ M U.S.$ M U.S.$
Proved Developed
Producing 77 - - - 1,410 1,366 1,323 1,282 1,243
Probable 7 - - - 333 318 304 291 279
Total Proved + Probable 84 - - - 1,743 1,684 1,627 1,573 1,522
Possible (1) 4 - - - 197 188 180 172 164
Total 88 - - - 1,940 1,872 1,807 1,745 1,686

(1) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.

The following is the price deck table used in preparation of the DeGolyer and MacNaughton Report. There was no use of CAPEX in the evaluation of the Entrerrios Block by DeGolyer and MacNaughton. WTI oil price forecast was used for the Entrerrios Block. Operating expenses and operating-expense forecasts have been determined by DeGolyer and MacNaughton based on information provided by the Vendor, public information available on the analog field, Rubiales, and public information on operations of similar projects. In certain situations, future expenses, either higher or lower than current expenses, may have been used because of anticipated changes in operating conditions. Escalation has been applied to operating expenses to account for inflation. The Vendor's obligation for operating expenses is based on 100% in the Entrerrios Block. For the Entrerrios Block, there is a U.S. $0.30 per barrel abandonment liability obligation that is included into the variable cost of the evaluation. Future capital costs were estimated using current capital cost forecasts provided by the Vendor. Where necessary, these costs were scaled and adjusted to fit the scenario being evaluated. Escalation has been applied to capital costs to account for inflation. There is no capital cost for the Entrerrios Block at this time, but the Vendors' obligation is 100%. There is an 8% royalty for the Entrerrios Block. This royalty is a function of the forecast WTI price. At the request of the Vendor, Colombian corporation taxes were assessed on a consolidated basis taking into account the tax basis of the properties as of June 30, 2012, and additional taxes were assessed for each property that is included in the DeGolyer and MacNaughton Report separately. The Colombian corporate income tax is 33%. The depreciation of 30% for development, drilling and completion costs, 25% for gathering system and 20% for surface facility were applied to the assessment of the Entrerrios Block

2001 2.4 0.646 - 25.82
2002 2.4 0.637 - 26.04
2003 2.5 0.716 - 30.99
2004 1.7 0.770 - 41.39
2005 2.0 0.826 - 56.48
2006 1.9 0.882 - 66.02
2007 2.1 0.936 - 72.19
2008 2.1 0.944 - 99.90
2009 1.2 0.880 - 61.68
2010 1.7 0.971 - 79.50
2011 2.3 1.012 95.15 95.15
2012 6 mo Act. 1.6 0.994 98.22 98.02
2012 6 mo Est. 0.0 0.980 90.00 90.00
2013 2.0 0.980 95.00 96.90
2014 2.0 0.980 100.00 104.04
2015 2.0 0.980 100.00 106.12
2016 2.0 0.980 100.00 108.24
2017 2.0 0.980 100.00 110.41
2018 2.0 0.980 100.00 112.62
2019 2.0 0.980 100.00 114.87
2020 2.0 0.980 100.00 117.17
2021 2.0 0.980 100.00 119.51
2022 2.0 0.980 100.00 121.90
2023 2.0 0.980 100.00 124.34
2024+ 2.0 escalate oil, gas and product prices at 2.0% per year thereafter

About the Morichito Block

There are no further updates on the Morichito Block. Information regarding this property is included in the press release of the Corporation dated June 11, 2012.

Sponsorship of the Qualifying Transaction

Sponsorship of a "Change of Business" transaction is required by the Exchange unless exempt therefrom in accordance with the Exchange's policies. Tilting Capital is reviewing the requirement for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the Exchange. If the exemption is not granted by the Exchange, then Tilting Capital would be required to engage a sponsor.

Cautionary Note

As noted above, completion of the Proposed Transaction is subject to a number of conditions including, without limitation, approval of the Exchange and approval of the shareholders of Tilting Capital. The Proposed Transaction cannot close until the required approvals have been obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the continuous disclosure document containing full, true and plain disclosure regarding the Proposed Transaction, required to be filed with the securities regulatory authorities having jurisdiction over the affairs of the Corporation, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. The trading in the securities of Tilting Capital on the Exchange, if reinstated prior to completion of the Proposed Transaction, should be considered highly speculative.

This press release contains forward-looking information. More particularly, this press release contains statements concerning the Proposed Transaction. The information about the target assets contained in the press release has not been independently verified by the Corporation. Although the Corporation believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Forward-looking information involves known and unknown risks, uncertainties, assumptions (including, but not limited to, assumptions on the performance and financial results of the target assets) and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the Proposed Transaction may change based on the Corporation's due diligence on the assets, regulatory and third party comments, consents and approvals and the ability to meet the conditions of the Proposed Transaction in the required timeframes. The forward-looking statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Investors are cautioned that, except as disclosed in the management information circular, filing statement or other continuous disclosure document to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Tilting Capital should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.

Neither the NEX Board, TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

Contact Information:

Tilting Capital Corp.
Alan Abrams
CEO of the Resulting Issuer
(403) 263-3613

Tilting Capital Corp.
Lee Pettigrew
(403) 770-1351