Lion Energy Corp. (LEO-TSXV)

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February 5, 2010 Issue

The Most Powerful Name In Corporate News and Information


Still A Young company, Lion Energy Corp. Has Refocused On Oil And Gas Exploration In Africa, With A New Name And A Deal With The Lundin Groupís African Oil Corp. Positioning Them For Future Growth

Company Profile:

Lion Energy Corp. is a well financed Canadian exploration company based in Vancouver, BC, that is focused on acquiring, exploring and developing oil and gas reserves in Central & East Africa. Lion Energy initially partnered with Africa Oil Corp., a Canadian oil and gas exploration company with assets in Kenya, Somalia and Ethiopia, and a member of The Lundin Group of Companies. Lion Energy has agreements with African Oil for entry into the Production Sharing Agreements (PSAs) on blocks in Republic of Kenya and the State of Puntland, Somalia. The Company also holds several strategic investments in Potash, Sulphur Fertilizer, Iron Ore and Uranium. Lion Energy's shares are listed on the TSX Venture Exchange under the symbol "LEO".

Brian G. Thurston

President, CEO & Director

During his two years at the helm, Brian Thurston has advanced Lion Energy Corp. through a change of business into the mineral exploration sector, raised over $32-million and acquired quality assets for the company. Mr. Thurston brings over 18 years of exploration management and operational experience in Canadian and Latin American projects. He was part of the initial geological exploration team that evaluated the current land holdings of Aurelian Resources Inc. in Ecuador in 2002, and held the position of Country Manager for Aurelian in 2004 and 2005. Aurelian was taken over by Kinross Gold Corp. in a transaction valued at $1.2 billion.

Oil & Gas Exploration

Lion Energy Corp.
Suite 1810 -
999 West Hastings Street
Vancouver, BC
V6C 2W2

Interview conducted by: Walter Banks, Publisher,, Published - February 2010


CEOCFO: Mr. Thurston, how did you become associated with Lion Energy and what is your vision?

Mr. Thurston: Lion Energy is a relatively young company. Lion Energy went through a change of business in July 2007 and in November of 2007 became a trading company in the exploration industry. We started out exploring for commodities such as iron ore, uranium and then moved into the fertilizer industry with potash and sulfur fertilizers. We raised over $30 million in July of 2008, just before the financial crisis hit the world markets. Both uranium and iron ore as well as potash all seemed to be out of favor at that time, so our directors decided that we needed to change the companyís focus. We searched for several months for a new flagship property and in May 2009, we ended up making a deal with Africa Oil Corp. a member of the Lundin Group of Companies. We then took our potash project, the previous flagship asset of the company, and sold it to Encanto Potash Corp., which is a company focused solely on potash. This deal allowed our shareholders continued exposure to potash through share ownership of Encanto, but as far as the focus of Lion Energy is concerned, we are focused on oil and gas exploration.

CEOCFO: You also recently did a name change; would you tell us the reason for that?

Mr. Thurston: Originally, the company was Raytec Metals Corp. and we underwent a name change to Lion Energy Corp. to show our new focus on oil and gas exploration and in particular, oil and gas exploration in Africa.

CEOCFO: Would you tell us about Africa, the area that you are in and why you like that area?

Mr. Thurston: We are in Eastern Africa. Our partner Africa Oil Corp. is in Kenya, Ethiopia, and Somalia and we have elected to farm-in to properties both in Kenya and in Somalia. Eastern Africa has many promising basins that have seen little exploration over the last 20 years due to civil unrest. The Lundin Group is well known for going into these less desirable countries that have very good geological potential. They have a track record for making discoveries and turning these properties into large resources, then selling them off to the majors. We decided that the geological potential in Eastern Africa is so great that it really mitigates a lot of the percieved political risk within the region. In recent times, especially in Northern Somalia where some of our projects are located, the region has been quite stable and in fact, recent work programs by Africa Oil Corp. personnel within the area have gone smoothly. We have had a successful seismic program there and we continue to move forward and advance the projects toward drilling. Currently we are drilling in Kenya on our Block 9 prospect; it has been a big deal and has received a lot of media attention. CNOOC, the Chinese National Offshore Oil Corporation, is the operator on the well so we have a good operating partner in that respect. This is the first well I believe in the last 20 years that has been drilled in Kenya so there is a lot of excitement and anticipation in that Country. As I said earlier, we have very good operating partners who have excellent track records.

CEOCFO: Do you consider yourself an exploration company?

Mr. Thurston: Yes, we are an exploration company. Our shareholders are high-risk investors, because when you invest in these junior markets it is very risky. Our biggest expenditures are definitely on exploration. However, future plans may include the acquisition of lower risk assets to help offset some of the higher risk that we currently have.

CEOCFO: Would you say your East African Assets are high-risk, but with greater potential?

Mr. Thurston: Absolutely, high risk with very, very high rewards if you are successful. Recent billion barrel discoveries by Heritage Oil, along with Tullow Oil in Uganda have definitely sparked a renewed interest in these East African Basins. To go along with this you have very large oil producing basins to the west in Sudan and to the north across the gulf of Aden in Yemen. We are definitely in elephant country as we are surrounded by multi-billion barrel oil fields.

CEOCFO: Would you tell us about the team that you have in Africa and why we should have confidence that they could make these discoveries?

Mr. Thurston: The operating partner on the well that we are currently drilling in Kenya on block 9 is CNOOC, Chinaís biggest offshore oil producer. CNOOC made headlines in 2008 for its Bohai Bay deepwater discovery off the coast of China. Specifically, our operating partner in the other Kenyan blocks and in Somalia is Africa Oil Corp., whose management played an integral role in Tanganyika Oil Co. oil and gas discoveries in Syria. Tanganyika Oil was acquired by Chinese refiner Sinopec for $2 billion in 2008. So we have all of the faith in them as operators on these assets. We also recently appointed John R. Nelson as our new vice-president of exploration. He has a tremendous amount of experience as an exploration geologist and project manager throughout the world, including East African rift basins.

CEOCFO: Your part then is as a farm-in, is that correct?

Mr. Thurston: Yes. We do have some technical people on staff that oversee the work that is being done, but essentially we are more of a funding partner. This allows us to focus on other potential opportunities.

CEOCFO: Have you transitioned your board to members that have oil and gas backgrounds?

Mr. Thurston: We are currently looking to add some oil expertise on our board, and have been in discussions with several parties in this regard.

CEOCFO: What is the financial picture of the company; will you have to go to the Street to raise more capital or get loans?

Mr. Thurston: Currently, our African exploration will require approximately $22 million over the next year and a half. We have approximately $16.5 million in cash and investments in the range of $13 million. So depending on what the directors decide we may need to go out and look for more money unless we decide to vend off some non-oil assets to convert to cash to pay for this African opportunity.

CEOCFO: What plans do you have to reach out to the investment community and will it include road shows?

Mr. Thurston: Absolutely, we are always keen to go on the road and inform potential investors about the opportunities associated with investing in our company. We will be very aggressive in the new year talking with some of our existing major shareholders as well as speaking with some of the larger institutions that we know have interest in financing African oil exploration.

CEOCFO: In closing, why should potential investors be interested in Lion Energy?

Mr. Thurston: Lion Energy is an African oil exploration company, and oil seems to be quite a hot commodity right now. There seems to be a large amount of investment going towards African oil exploration for the reasons I mentioned previously. Those include A, excellent geological potential to host large oil discoveries and B, the political stability in these regions seems quite amenable to foreign investment. As an investor if you were interested in African Oil Corp. for these reasons, and if you looked at Africa Oil Corp. as an investment, and then if you looked at investing in Lion Energy Corp. as a vehicle to invest into Africa Oil Corp.ís properties, I believe it would make sense to invest in Lion Energy. We are trading below the cash value that we have in the bank and we are getting no value for our over $13-million in investments. In that respect, purchasing Lion Energy would seem to be a great hedge on Africa Oil Corp. Finally, Lionís management is exploring the opportunity of spinning off all or a portion of the Companyís non-oil and gas assets into a NewCo in an effort to unlock the value of these assets. This presents a tremendous opportunity for potential investors as the Company plans to distribute all or a portion of those Newco securities to the Company's existing shareholders.


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