FSC / Press Release RMS Systems Inc. Announces Receipt of Cad $4.9 Million from Australian Sale Calgary, Alberta CANADA, December 01, 2008 /FSC/ - RMS Systems Inc. (RMS - TSX Venture), ("RMS") announces that it has entered into a Variation Agreement with Santos Ltd. (the "Variation Agreement") pursuant to which RMS and Santos Ltd. ("Santos") have agreed to amend the amounts and time for payment of the remaining performance payments under the previously announced sale agreement entered into between them. As previously announced, in June 2007 Tiger-Cat completed the sale of its Australian wholly owned subsidiary, Bronco Energy Pty Ltd. (and thereby RMS (which was known as Tiger-Cat Energy Ltd. at the time) sold all of its interest in certain Australian lands) to Santos for a total sale price of AUD$10.53 million (the "Original Agreement"). This sale price was made up of three payments. The first payment in the amount of AUD$2,531,220 was paid on June 25, 2007. Pursuant to the Original Agreement, two performance payments totaling AUD$8 million were to be made subject to certain oil and gas reserves targets being met (the "Performance Payments"). RMS has agreed to vary the Original Agreement such that the Performance Payments will be reduced to AUD$6.15 million. Payment of the AUD$6.15 million (CAD$4,895,375) was received by RMS on December 1, 2008. Pursuant to the Original Agreement, the first Performance Payment in the amount of AUD$3 million was not payable unless and until Santos' share of production of the proven plus probable reserves from its interest in the lands would be 100 PJ. In addition, under the Original Agreement the second Performance Payment in the amount of AUD$5 million was not payable unless and until Santos' share of production of the proven plus probable reserves from its interest in the lands would be 200 PJ. In summary, the Original Agreement provided that Santos need not pay RMS the Performance Payments until the earlier of (i) 30 days after Santos first releasing to the Australian Securities Exchange its group annual report for the financial year in which Santos established the relevant requisite level of 2P Reserves and (ii) in the event that Santos should fail to deliver a statement setting out the level of established reserves within 30 days of Santos first releasing to the Australian Securities Exchange its group annual report at the end of its financial year and certain other conditions being satisfied, upon the completion of an Independent Engineers Report determining the reserves on the subject lands. By entering into the Variation Agreement, RMS has ensured itself that it will have access to the Performance Payment funds earlier than it would otherwise have been entitled pursuant to the Original Agreement. John Zang, Corporate Secretary (and former CEO of Tiger-Cat Energy Ltd.) stated that "although we are aware of certain successful development activities carried out by Santos on the subject lands in Australia, we believe that given the economic times we are currently in, and given the timing risk associated with the booking of the necessary reserves upon which the Performance Payments are contingent, we believe it was prudent that RMS secure the cash from the Performance Payments at this time, even though it would be at a discount from the amount originally agreed to". RMS continues to execute on its previously disclosed contract (the "Deployment Contract") with a major oil and gas exploration company which will see RMS place its RigManager Units on 25 drilling rigs. Each such RigManager Unit costs approximately US$100,000 to manufacture. Bob Webb, CEO of RMS, stated that "ensuring access to approximately CAD$5 million from this compromise of the Performance Payments ensures that RMS will be in a position to execute on its current contract and also will enable us to move quickly to execute on other potential contracts which may be entered into in the future". Company Summary RMS manufactures and supplies oil and gas drilling rig monitoring and communications equipment to the oil and gas industry. RMS has currently installed 6 RigManager Units pursuant to the Deployment Contract. Two additional units are anticipated to be installed by approximately December 5, 2008. Bringing the total RigManager Units to 8 by that time. RMS expects that by December 31, 2008 it will have at least 12 RigManager Units installed. Customers are billed on the basis of a day rate usage. On average, each RigManager Unit results in billings of approximately $10,000 per month. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. For Further Information Please Contact: Mr. Bob Webb RMS SYTEMS INC. Bay 10, 3419 12th Street NE Calgary, Alberta T2E 6S6 Tel: (403) 717 9694 Cautionary Statements The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although RMS Systems Inc. believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct. RMS Systems Inc. disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise, except as required pursuant to applicable securities laws. Source: RMS Systems Inc. (RMS - TSX-V) Maximum News Dissemination by Filing Services Canada Inc. * www.usetdas.com Provider ID: 00012707 -0- Dec/01/2008 22:00 GMT
RMS Systems Inc. Announces Receipt of Cad $4.9 Million from Aus
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