CALGARY, ALBERTA--(Marketwired - Nov. 14, 2016) -
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Blacksteel Energy Inc. (TSX VENTURE:BEY) ("Blacksteel" or the "Corporation") is pleased to announce that it has entered into an agreement to acquire (the "Proposed Transaction") a 30% working interest in certain oil and gas assets around Girouxville in Northwest Alberta (the "Assets").
Drakkar Energy Ltd. ("Drakkar") has entered into a purchase agreement with the appointed receiver-manager of the owner (the "Vendor") of the Assets. As part of this transaction, Blacksteel has entered into an arm's length agreement (the "Agreement") with Drakkar to jointly acquire the Assets. Drakkar is a privately owned oil & gas company located in Calgary, Alberta. Under the terms of the Agreement, Blacksteel will acquire a 30% working interest in the Assets for a purchase price of $600,000 and also provide a $400,000 loan (the "Loan") to Drakkar. The Loan matures six months from completion of the acquisition of the Assets from the Vendor, accrues interest at a rate of 12% per annum and is secured by a 20% working interest in the Assets. Under the terms of the Loan, Blacksteel has the option, 60 days from closing of Drakkar's acquisition of the Assets, to convert any or all of the Loan into additional working interests in the Assets, at a cost of $100,000 for each additional 5% working interest.
The light oil Assets are comprised of 18 sections of contiguous land on which six horizontal wells have been drilled. Five of the wells had previously been on production and a sixth was completed but has not been equipped. All wells have been shut-in since the Vendor was placed in receivership in late January 2016. The operator plans to place up to four of the wells on production post-closing.
The terms of the Agreement also contemplate that Drakkar and Blacksteel will enter into a joint operating agreement (the "JOA") incorporating the CAPL 2015 operating procedure and that Drakkar will be appointed as the initial operator of the Assets under the JOA. There are a number of conditions precedent to the Proposed Transaction including but not limited to customary due diligence, regulatory and board approvals.
The Proposed Transaction constitutes a Fundamental Acquisition as defined under the policies of the TSX Venture Exchange ("TSX VENTURE"). Trading in the common shares of Blacksteel will remain halted pending approval of the Proposed Transaction by the TSX Venture Exchange.
The TSX Venture Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
Blacksteel Energy Inc.
Blacksteel is a junior oil and gas company involved in the exploration, exploitation, development and production of petroleum and natural gas resources.
This news release may contain forward-looking statements relating to the Proposed Transaction, including statements regarding the anticipated acquisition of the Assets, the receipt of all necessary regulatory approvals and satisfaction of all other closing conditions in connection with the Proposed Transaction and other statements that are not historical facts. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things: the risk that the Proposed Transaction will not be completed if the necessary approvals and/or exemptions are not obtained or some other condition to the closing of the Proposed Transaction is not satisfied; the risk that closing of the Proposed Transaction could be delayed if Drakkar is not able to obtain the necessary approvals on the timelines planned; the timing of obtaining required approvals and satisfying closing conditions for the Proposed Transaction, state of the economy in general and capital markets in particular, investor interest in the business and future prospects of Blacksteel.
The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Blacksteel and Drakkar disclaim any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities law. Additionally, Blacksteel and Drakkar undertake no obligation to comment on the expectations of, or statements made, by third parties in respect of the matters discussed above.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.