Mesa Energy and Armada Oil Execute Definitive Agreement for Business Combination Business Wire HOUSTON & DALLAS -- November 15, 2012 Armada Oil, Inc. (OTCBB: AOIL) (“Armada Oil”) and Mesa Energy Holdings, Inc. (OTCBB: MSEH) (“Mesa Energy”) today announced that they have entered into a definitive asset purchase agreement and plan of reorganization pursuant to which Armada Oil will acquire substantially all of the assets of Mesa Energy and in return assume the liabilities of Mesa Energy specified in the purchase agreement and issue and distribute, in connection with Mesa Energy’s contemplated plan of dissolution and liquidation, 0.40 shares of its common stock to the stockholders of Mesa Energy for each Mesa Energy common share owned by such stockholder as of the closing of the transaction (collectively, the “Proposed Transaction”). The Proposed Transaction is intended to qualify as a “reorganization” within the meaning of Section 368(a)(1)(C) of the Code and to constitute a “plan of reorganization” within the meaning of Treasury Regulations Sections 1.368-2(g) and 1.368-3. On October 3^rd, 2012, Armada Oil and Mesa Energy announced their execution of a non-binding letter of intent to pursue a possible business combination, with a share distribution ratio of 0.325 shares of Armada Oil common stock for each Mesa Energy common share. The distribution ratio increased from 0.325 to 0.40 shares of Armada Oil common stock for every share of Mesa Energy due to further due diligence by and negotiations between the companies. The modified distribution ratio of 0.40 represents an approximately 135% premium to Mesa Energy’s closing price of $0.14 on November 14^th, 2012 (and based on the closing of price of Armada Oil’s common stock on that date) and a 188% premium to Mesa’s Energy’s closing price of $0.168 on October 3^rd, 2012 (and based on the closing of price of Armada Oil’s common stock on that date). Upon completion of the Proposed Transaction, the stockholders of Mesa Energy will own approximately 62.4% and stockholders of Armada Oil will own approximately 37.6% of the combined company common stock (each on an actual basis, without giving effect to exercise or vesting of any options, warrants or employee restricted stock awards). Armada Oil will assume all outstanding Mesa Energy options, warrants and employee restricted stock awards adjusted by the same distribution ratio. Following the closing of the Proposed Transaction, Mesa Energy will be dissolved and Armada Oil will relocate its headquarters to Dallas, Texas. Management of each of Mesa Energy and Armada Oil believes that the combination of two companies through the Proposed Transaction will result in enhanced stockholder value as a result of post-Proposed Transaction Armada Oil having: *Strong conventional, producing assets that will provide underlying value to stockholders as well as facilitate the exploitation of its unconventional assets; *A sound, proven management team with both operational and public company experience; and *Critical mass to help raise capital efficiently, facilitate liquidity, spur growth, and more fully and effectively exploit: *The opportunities that arise from its agreement with Anadarko Petroleum Corporation in the Niobrara play; *Its current drilling programs in the Mississippian Lime play in Oklahoma; and *The exploration and development of its 26,000 acre + position with both Niobrara and multiple underlying conventional prospects. In addition, the definitive agreement provides that upon consummation of the Proposed Transaction: *The executive management will consist of three senior management members from Mesa Energy (Mr. Randy M. Griffin, Chief Executive Officer; Mr. Ray L. Unruh, Chief Operating Officer; and Ms. Rachel L. Dillard, Chief Financial Officer) and one senior management member from Armada Oil (Mr. James J. Cerna, Jr., President). *The new Board of Directors will consist of five legacy directors: Mr. Randy M. Griffin (Chairman), Mr. Ray L. Unruh, Mr. James J. Cerna, Jr., Mr. David J. Moss and Mr. Kenneth T. Hern, plus two additional independent members to be mutually agreed on and selected prior to closing. *It is anticipated that following the filing of an S-4 registration statement to register under the Securities Act the Armada shares to be issued to Mesa shareholders, the company will apply for the listing of Armada Oil’s common shares on the NYSE MKT (formerly the NYSE-AMEX). Randy M. Griffin, Chairman and Chief Executive Officer of Mesa Energy commented: “We are extremely pleased with the outcome of the due diligence and negotiations that led to this definitive agreement. The addition of Armada Oil’s assets and its team’s expertise to our own will provide an outstanding platform for future growth that will benefit all of our stockholders.” James J. Cerna, Jr., President and Chief Executive Officer of Armada Oil commented: “Upon completion of the Proposed Transaction and the approval of our NYSE MKT listing application, the new Armada Oil will be a diversified, nationally listed company with strong cash flow and significant upside in two rapidly developing unconventional oil plays. We look forward to a prosperous 2013 with the integration of Mesa Energy and the beginning of our Niobrara drilling program.” Financial Advisor C. K. Cooper & Company is acting as the financial advisor for the Proposed Transaction. Approvals The Board of Directors of each of Mesa Energy and Armada Oil have unanimously approved the definitive asset purchase agreement and the transactions contemplated by the agreement; however, the completion of the Proposed Transaction is conditioned on, among other things, each party obtaining all required consents and approvals, including all legal and regulatory approvals and Mesa Energy stockholder approval and any necessary approvals from third parties, and there having occurred no material adverse change in the business or condition, financial or otherwise, of either party. Armada Oil and Mesa Energy can provide no assurances that these conditions will be satisfied. Stockholders and investors are strongly cautioned against making investment decisions based on any expectation that the Proposed Transaction will be consummated. Investor Conference Call Armada Oil and Mesa Energy will host a joint conference call shortly after a Registration Statement on Form S-4 is filed with the U.S. Securities and Exchange Commission. About Mesa Energy Holdings, Inc. Headquartered in Dallas, TX, Mesa Energy Holdings, Inc. (OTCBB: MSEH) is a growth-oriented Exploration and Production (E&P) company with a definitive focus on growing reserves and net asset value per share, primarily through the acquisition and enhancement of high quality producing properties and the development of highly diversified developmental drilling opportunities. Mesa Energy currently owns producing oil and natural gas properties in Plaquemines and Lafourche Parishes in Louisiana as well as producing and developmental properties in Garfield and Major Counties, OK and Wyoming County, NY. More information about Mesa Energy may be found at http://www.mesaenergy.us. About Armada Oil, Inc. Houston, Texas-based Armada Oil, Inc. (OTCBB: AOIL) is an independent oil and gas company focused on discovering, acquiring and developing multiple objective onshore oil and natural gas resources in prolific and productive geological formations in North America. Armada Oil holds strategic acreage positions in and around the Laramie and Hanna Basins in Southern Wyoming that includes a contiguous 26,000+ acre site near existing infrastructure in the liquids-rich Niobrara formation and a footprint in the Eagle Ford shale play in Texas. More information about Armada Oil may be found at http://www.armadaoilinc.com. Forward-Looking Statements This press release contains forward-looking statements, including with respect to the Proposed Transaction, including the expected timetable for completing the Proposed Transaction; the potential value created by the Proposed Transaction for Mesa Energy’s and Armada Oil’s stockholders; the potential of the combined companies' resource properties; the respective or combined ability of the companies to raise capital to fund the combined operations and business plan; the listing of Armada’s securities on the NYSE MKT; the management and board of directors of Armada Oil following the consummation of the Proposed Transaction; and any other statements about Mesa Energy’s and Armada’s management teams' future expectations, beliefs, goals, plans or prospects. Those statements and statements made in this release that are not historical in nature, including those related to future synergies, competitive advantages and profitability, constitute forward-looking statements. Forward-looking statements can be identified by the use of words such as “expects,” “projects,” “plans,” “will,” “may,” “anticipates,” believes,” “should,” “intends,” “estimates,” and other words of similar meaning. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. These statements are subject to risks and uncertainties that cannot be predicted or quantified, and Mesa Energy’s or Armada Oil’s actual results may differ materially from those expressed or implied by such forward-looking statements. These statements are subject to the risks and uncertainties, including: difficulties, delays, unexpected costs or the inability to reach definitive documents with respect to, or consummate, the Proposed Transaction and other transactions referred to in this press release and those described in the documents we file with the U. S. Securities and Exchange Commission, and risks associated with the inherent uncertainty of Mesa Energy’s and Armada Oil’s future financial results, Mesa Energy’s or Armada Oil’s ability to locate and acquire suitable interests in oil and gas properties on terms acceptable to them and to integrate and successfully exploit any resulting acquisitions, the availability and pricing of additional capital to finance their respective operations and leasehold acquisitions, their respective ability to build and maintain successful operations infrastructures, the intensity of competition, changes and volatility in energy prices and general economic conditions, and, Armada Oil’s ability to effect a listing of its securities on the NYSE MKT. All forward-looking statements included in this release are made as of the date of this press release, and neither Mesa Energy nor Armada Oil assumes any obligation to update any such forward-looking statements. Statement Regarding Additional Information That May Become Available This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Armada Oil or Mesa Energy or the solicitation of any vote or consent for the approval of the Proposed Transaction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The Proposed Transaction will be proposed to the stockholders of Mesa Energy for approval by written consent without a stockholder meeting. Mesa Energy and Armada Oil will file with the U.S. Securities and Exchange Commission and distribute a Registration Statement on Form S-4 covering the securities to be issued and distributed to the Mesa Energy stockholders in the Proposed Transaction. It is expected that Mesa Energy stockholders will receive a prospectus and proxy statement in connection with the Proposed Transaction. A copy of the definitive acquisition agreement will be filed along with the prospectus and proxy statement. Mesa Energy stockholders are urged to read these and any other related documents Mesa Energy may issue with respect to the Proposed Transaction. When these documents are filed, they will be available for free at the SEC’s website, www.sec.gov. Additional information on how to obtain these documents from Mesa Energy will be made available to stockholders when the prospectus and proxy statement are filed. Such documents are not currently available. Mesa Energy, its directors and its executive officers may be deemed to be participants in the solicitation of consents from Mesa Energy’s stockholders in connection with the Proposed Transaction that will be proposed to such stockholders. Information about the directors and executive officers of Mesa Energy and their ownership of Mesa Energy and Armada Oil stock will be included in the prospectuses and proxy/consent solicitation statements when they become available. Contact: Mesa Energy Holdings, Inc. 972-490-9595 IR@mesaenergy.us or Armada Oil, Inc. Briana Erickson, 800-676-1006
Mesa Energy and Armada Oil Execute Definitive Agreement for Business Combination
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