BRS Resources Announces $6.0 Million Conversion of Notes to Shares; Upside in the Po Valley

BRS Resources (TSX.V: BRS) announced that it has completed the conversion of two convertible notes in the aggregate principal amount of $6,000,000 into an aggregate of 20,000,000 common shares of BRS at a conversion price of $0.30 per share. Subscribers of the convertible notes and recipients of the common shares are two hedge funds managed by Carlson Capital L.P.

Carlson Capital, L.P. is an alternative asset management firm. Founded in 1993, the firm currently manages over six billion dollars across multiple hedge fund products. Based in Dallas, Carlson is an independently owned registered investment advisor with offices located in New York, Greenwich CT, London, and Houston.

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OAG360 Comments:

This announcement directly follows BRS’s October 6, 2011 announcement that the company had jointly acquired an additional 20% interest in AleAnna Resources LLC, increasing BRS’ interest after payout in the Po Valley to approximately 25%. BRS contributed cash and 750,000 shares to AleAnna Energy as part of its pro rata share of the additional interest purchased on October 6, 2011.

BRS is still carried on the first well to be drilled in the Po Valley; however, by purchasing additional interest in AleAnna Resources (which was Saxon Oil Company’s remaining interest in AleAnna), BRS acquired working interests that were not carried. Today’s $6,000,000 conversion will be used by BRS, in part, to repay the bridge loan that was made by Bluescape Resources to BRS for the cash portion of the additional interest acquisition, as well as fund the interest obligations BRS Resources absorbed with the acquisition of Saxon’s interests in the partnership. Additionally, BRS plans to use remaining proceeds to fund its share of the cost to drill AleAnna’s first well and two new 3D seismic surveys, all of which are scheduled for 2012.

AleAnna Energy LLC is owned 49% by BRS and 51% by Bluescape Resources Company LLC. This partnership acquired the additional 20% membership interest in AleAnna Resources from Saxon Oil Company on October 6, 2011. This partnership is unique and holds significant upside for shareholders since BRS is one of three companies, and the only publicly traded company, that owns AleAnna Resources, which holds more than 800,000 acres in eight permitted areas and three application areas in the core producing provinces of Italy.

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