10:25 AM EST - Pan Orient Energy Corp. : reports that its subsidiary, Andora Energy Corp.is merging with privately held Signet Energy Inc. to further develop the Sawn Lake heavy oil project near Peace River, Alta. As part of the proposed deal, Signet shareholders will receive 17.5 million common shares of Andora valued at $50 million. If approved, Pan Orient will hold about 47.5 per cent of the issued and outstanding shares of Andora, compared to its current 67 per cent. Pan Orient also has warrants to purchase additional common shares of Andora which, if exercised, would push its ownership to 49.4 per cent. The merger agreement is subject to the completion of a definitive arrangement agreement. As well, the companies have agreed not to discuss or negotiate with any third party. There is a break fee of $750,000. Signet holders will meet to vote on the proposed merger before August 15th. If approved, the combined company will focus on further developing the south and central Sawn Lake heavy oil pool area. Pan Orient Energy Corp.
shares POE:CA are trading up five cents at $4.30.
