Charlotte Resources, Tanglewood Energy To Combine

To merge, creating company with assets in Toole County, MT.

Charlotte Resources Ltd., Calgary, (CNSX: CHT) and privately held, Calgary-based Tanglewood Energy Inc. have revised terms for a proposed business combination for approximately C$18 million in stock.

Charlotte plans to issue 60 million shares valued at approximately C$0.30 each in exchange for all issued and outstanding shares of Tanglewood. The acquisition would be completed by way of an exempt take-over bid or other mutually acceptable transaction structure as soon as practicable following the satisfaction of certain conditions precedent.

The deal is contingent on two additional agreements between Charlotte and Tanglewood. Charlotte (or its affiliate) plans to purchase certain oil and gas properties of Tanglewood in Montana for US$2.8 million. Also, Charlotte plans to enter a joint venture with Tanglewood to jointly develop certain other oil and gas properties comprising 27,034 net acres (Tanglewood owns 100% working interest in approximately 3,500 net acres) in exchange for a US$6-million funding from Charlotte.

The acquisition involves 100% working interest in 15,204 net acres in Toole County, Montana. The proceeds of the sale would be used by Tanglewood to pay certain debt incurred in connection with the original acquisition of the Toole County properties.

The joint venture includes Tanglewood assigning 50% of its working interest to Charlotte in exchange for Charlotte funding up to US$6 million of the exploration and development plan for such properties on behalf of Tanglewood and Charlotte after which joint venture expenditures would be made according to the parties' respective working interests.

Completion of the assignment is conditional on Charlotte becoming a party to the existing joint operating agreement for the joint venture properties.