Newton Energy Corporation

Newton Energy Corporation

October 02, 2014 18:12 ET

Newton Energy Corporation Announces Execution of a Definitive Agreement With Respect to the Sale of Newton UK

CALGARY, ALBERTA--(Marketwired - Oct. 2, 2014) - Newton Energy Corporation (the "Company" or "Newton") announces that further to its press release dated July 3, 2014, it has entered into a definitive agreement (the "Definitive Agreement") with Hutton Energy Plc ("Hutton") to sell all of its securities in its wholly-owned subsidiary, Newton Energy UK Limited ("Newton UK"). Pursuant to the Definitive Agreement, Newton has sold Newton UK for: (i) £500,000, less £45,000 for working capital adjustments, payable upon closing of the transaction; and (ii) £250,000 payable on June 30, 2015. In addition, (i) Hutton has granted the Company a 5% gross overriding royalty on any hydrocarbons sold under the licences to a maximum of £2,000,000; (ii) Hutton will fund 100% of the costs to drill and complete or abandon one well on the Newton UK licences; (iii) Hutton will fund 100% of the costs of maintaining the licenses through June 30, 2015; (iv) Newton will receive 75% of the proceeds from a farmin by a third party on the Newton UK licences prior to June 30, 2015 originated by Newton; and (v) Newton will receive 25% of the proceeds from a farmin by a third party on the Newton UK licenses prior to June 30, 2015 originated by Hutton. The funds received by Newton pursuant to clause (v) above will be deducted from the £250,000 payment on June 30, 2015.

Closing of the transaction is subject to several conditions set out in the Definitive Agreement, all applicable corporate and regulatory approvals and approval of Newton's shareholders. The sale of Newton UK constitutes the sale of all of the oil and gas properties of the Company owned in the UK and most of the Company's assets.

Once the transaction is completed, the Company plans to use its available funds to embark on new opportunities. If the Company cannot maintain the continuous listing requirements of the TSX Venture Exchange, the Company intends to list its shares on the NEX board of the TSX Venture Exchange.

About Hutton

Hutton Energy Plc was established by first movers in the Marcellus shale to develop hydrocarbon resources in Europe and has built a large position in a number of different plays in Poland.

About Newton

Newton holds UK East Midlands assets and is an emerging exploration and production company.


Neither the 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.

This news release may contain certain forward-looking information and statements, including without limitation, statements pertaining to the closing of the sale of Newton UK to Hutton and the consideration to be received by Newton. Statements included herein, other than statements of historical fact, including, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Newton's disclosure documents on the SEDAR website at Newton does not undertake to update any forward-looking information except in accordance with applicable securities laws.

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