SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of Earliest Event
Reported): August 31,
2007
TRUE
NORTH ENERGY CORPORATION
(Exact
name of registrant as specified in its charter)
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000-51519
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98-043482
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(State
or other jurisdiction
of
incorporation)
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(Commission
File Number)
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(I.R.S.
Employer
Identification
No.)
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2
Allen Center, 1200 Smith Street
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77002
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(Zip
Code)
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(Address
of principal executive offices)
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(Registrant’s
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last
report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
August
31, 2007 our newly formed, wholly owned subsidiary, ICF Energy Corporation
(“ICF”) entered into a Purchase and Sale Agreement (the “Agreement”) with Prime
Natural Resources, Inc., a Texas corporation (“Prime”) whereby ICF agreed to
acquire certain oil and gas properties and related assets (the property and
assets are hereinafter collectively referred to as the “Assets”) of Prime
located in Brazoria County, Texas for $3,500,000 (the “Purchase Price”). The
Assets include the Devon Fee Gas Unit and the O’Leary Unit No. 1 and cover an
aggregate of approximately 1,150 acres. The Assets include 2 producing wells
with an estimated 2 BCF of recoverable gas and also include 3 additional
exploration prospects in the Old Ocean Unit in Brazoria County, Texas. The
properties are currently producing approximately 1 million standard cubic feet
per day of gas and 10 barrels of oil per day, net to the Asset owner. Present
cash flow from the Assets is approximately $200,000 per month after taxes,
royalties and operating expenses. The Purchase Price is payable $2,800,000
in
cash and $700,000 in shares of our restricted common stock (the “Shares”) valued
at the average closing trading price of our common stock for the 10 trading
days
immediately preceding August 31, 2007. Under such valuation, we will be required
to issue 1,928,375 Shares to Prime. Prime has been granted piggyback
registration rights with respect to the Shares. Upon closing, the Agreement
will
be given retroactive effect to July 1, 2007 (the “Effective Time”).
The
cash
portion of the Purchase Price is subject to upward adjustment based upon the
amount of all costs and expenses paid by Prime that are directly attributable
to
the ownership, maintenance, development, production or operation for the Assets
during the period of time between the Effective Time and the closing date.
The
cash portion of the Purchase Price is subject to downward adjustment in an
amount equal to the sum of (i) the amount of all proceeds received by Prime
that
are directly attributable to the ownership, maintenance, production, development
or operation of the Assets after the Effective Time excluding proceeds from
any
sale subsequent to the Effective Time of merchantable hydrocarbons in storage
above the pipeline connection at the Effective Time, and (ii) the aggregate
amount of all suspended funds as may be increased or decreased by Prime prior
to
the closing in accordance with Prime’s accounting practices consistently
applied. The Purchase Price is also subject to adjustment by an amount equal
to
any net gas imbalance (including production, sales, processing and
transportation imbalances) existing as of the Effective Time and to adjustment
for property and other taxes. The maximum permitted downward adjustment to
the
Purchase Price is $350,000.
Subject
to the conditions stated in the Agreement and unless the parties agree
otherwise, closing of the Asset acquisition must occur no later than September
21, 2007 provided that if all of the closing conditions have not been satisfied
or waived by such date or any extended date, the party whose obligation to
close
is subject to the conditions that have not been satisfied or waived has the
right to extend the date of closing for successive periods of up to 5 business
days each until such conditions have been satisfied or waived or until the
Agreement has been terminated. Notwithstanding the foregoing, either party
may
terminate the agreement at any time after September 30, 2007 if the closing
has
not occurred by such date. We are currently negotiating funding that will allow
us to close the Asset acquisition although no assurance can be given that we
will be successful in this endeavor.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
Exhibits
filed as part of this Report are as follows:
| Exhibit
10.1 |
Purchase
and Sale Agreement dated August 31, 2007 between ICF Energy Corp.
and
Prime Natural Resources, Inc.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly cause this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
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TRUE
NORTH ENERGY
CORPORATION |
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| Dated: September
6, 2007 |
By: |
/s/
John
Folnovic |
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Name:
John I. Folnovic |
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Title:
President and Chief Executive
Officer
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