Iteration Energy Ltd. have entered into a definitive arrangement agreement pursuant to which Iteration and SVI have agreed to complete a strategic business combination pursuant to a statutory plan of arrangement (the "Arrangement"). The combination will create a new, growth oriented company named Chinook Energy Inc. ("Chinook") with current production in excess of 20,000 boe/d and a deep inventory of repeatable drilling opportunities in both Western Canada and Tunisia. It is a condition under the Arrangement Agreement that the Toronto Stock Exchange shall have approved, subject only to customary conditions, the listing of the outstanding SVI shares and the SVI shares issuable pursuant to the Arrangement, such that Chinook shall be a public company.

Under the terms of the Arrangement, Iteration shareholders may elect to receive: (a) $1.83 cash for each Iteration share held, subject to a minimum aggregate cash payment of $50 million and a maximum aggregate cash payment of $225 million, or (b) 0.5631 of a common share of SVI for each Iteration share held, subject to pro ration, if required, based on cash elections described above; or (c) any combination of the foregoing, subject to the cash restrictions set out above.

If the maximum cash is elected, Iteration shareholders will receive approximately $1.05 of cash and 0.2400 of a common share of SVI for each Iteration share held. If the minimum cash is elected, Iteration shareholders will receive approximately $0.23 of cash and 0.4923 of a SVI share for each Iteration share held. The Arrangement contemplates a $3.25 per share value for SVI.

Tags: Iteration Energy Ltd., Storm Ventures