Canadian Oil Recovery & Remediation Enterprises Ltd.

Canadian Oil Recovery & Remediation Enterprises Ltd.

May 22, 2013 07:54 ET

CORRE Enters Into Loan Agreements to Partially Fund SAR-CORRE MENA 2013 Operating Budget, Ongoing Equity Financing

TORONTO, ONTARIO--(Marketwired - May 22, 2013) - Canadian Oil Recovery and Remediation Enterprises Ltd. (TSX VENTURE:CVR) ("CORRE" or the "Company") is pleased to announce that the Company has entered into formal loan agreements in connection with the previously announced funding of the SAR-CORRE MENA ("SCM") partnership's $2.5 million operating budget for 2013. SCM is a private company that operates independently of CORRE, executing on oil services contracts employing CORRE's suite of oil waste management solutions in the MENA region. With a 45% interest in SCM, CORRE's proportional contribution to SCM for the 2013 operating budget is $1,125,000, which is being advanced to SCM by way of shareholder's loan. The two loan agreements entered into by CORRE are with Ahmed Al-Hamdan (in respect of the advance of $562,500) and with Hassan Dahlawi, a director and Insider of CORRE (in respect of the advance of $100,000). The foregoing transactions are subject to the review and approval of the Board of Directors and the TSX Venture Exchange.

The loan contributed by Mr. Al-Hamdan will partially fund CORRE's shareholder loan to SCM. The Al- Hamdan loan is unsecured and bears no interest and is repayable upon the earlier of: (i) five (5) years from the date of the Agreement; and (ii) the repayment by SCM of the shareholder's loan to CORRE. As further consideration for the foregoing loan, CORRE has agreed to transfer 5% of its 45% interest in SCM to Mr. Al-Hamdan. Funds to be advanced under this loan are deliverable in stages, from now through December 31.

The loan agreement with Mr. Dahlawi represents his proportionate contribution to the SCM operating budget in his capacity as an owner of 40% of the corporate entity that owns 10% of SCM. This obligation of Mr. Dahlawi is being funded through CORRE primarily for administrative ease. The loan through CORRE is also unsecured, and bears no interest and is repayable upon the earlier of: (i) two and one half (2 1/2) years from the date of the Agreement; and (ii) the repayment by SCM of all shareholders' loans to shareholders of SCM. As Mr. Dahlawi is a director and Insider of the Company, the foregoing loan is considered to be a related party transaction and is therefore subject to the provisions of Multilateral Instrument 61-101 - "Protection of Minority Security Holders in Special Transactions", however exemptions are available from the minority shareholder approval and valuation requirements set forth in the foregoing Multilateral Instrument.

The Corporation also confirms that its previously announced private placement financing of units (each an "Equity Unit"), for total proceeds of $750,000 is ongoing. Investors under the equity financing will be issued up to 5,000,000 Equity Units at a price of $0.15 per Equity Unit, with each Equity Unit consisting of one common share of CORRE (a "Common Share") and one-half of one common share purchase warrant. Each whole warrant issued from the equity financing will entitle the holder to acquire one additional Common Share at a price of $0.25 for a period of 3 years from closing. All of the Common Shares and warrants issued in connection with this financing will be subject to a statutory four-month hold period in accordance with applicable securities laws. The capital raised under this financing will be utilized by CORRE to fund the balance of its shareholder loan obligations to SCM and for working capital. It should be noted that funds secured to the Equity Financing to date are sufficient to fund balance of the Company's shareholder loan obligations to SCM.

CORRE also would like to announce that Mr. Alex Gress is stepping down as Senior Vice President and CFO. Mr. Gress will continue with the Company as a Director. Mrs. Ying Chen Young is replacing Mr. Alex Gress in the interim as CFO with a mandate to organize the accounting department of SCM in Dubai.


CORRE is a Canadian-based oil services company which trades on the TSX Venture Exchange under the symbol CVR. CORRE provides full cycle oil waste management solutions to the petroleum industry. CORRE's customers are primarily in the upstream petroleum sector (oil production and drilling companies) and downstream petroleum sector (oil refinery, transportation and distribution companies). CORRE's operating lines include remediating oil-contaminated soil; treating sludge, oil based muds and drilling waste, oil recovery; automated oil storage tank cleaning, oil and gas engineering, and project management. CORRE provides its advanced environmental solutions through strategic operating partnerships with some of the most distinguished companies throughout the world.

Forward-Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

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 the release.

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