Petro-Victory Energy Corp.

July 22, 2014 10:34 ET

Petro-Victory Energy Corp. Closes Initial Public Offering

ROAD TOWN, BRITISH VIRGIN ISLANDS--(Marketwired - July 22, 2014) -

THIS RELEASE IS INTENDED FOR DISTRIBUTION OUTSIDE THE UNITED STATES ONLY AND IS NOT AUTHORIZED FOR DISTRIBUTION WITHIN THE UNITED STATES

Petro-Victory Energy Corp. ("Petro-Victory" or the "Company") is pleased to announce that it has completed its initial public offering. The Company's common shares are conditionally approved for listing on the TSX Venture Exchange under the symbol "VRY" and are expected to commence trading on, or about, July 24, 2014.

Petro-Victory completed its initial public offering of units ("Units") at a price of CDN$0.40 per Unit (the "Offering Price") for gross proceeds of CDN$25,000,000 (the "Offering"). Each Unit comprising the Offering consists of one Class A common share in the capital of Petro-Victory (a "Common Share") and one-half of one warrant (each whole warrant, a "Warrant"). Each Warrant entitles the holder thereof to purchase one Common Share at a price of CDN$0.50 per Warrant Share for a period of two years from the closing of the Offering.

Proceeds of the Offering are expected to be used for: (a) the drilling of two wells in Paraguay, the first of which is underway; (b) the repayment of all, or a portion, of approximately a CDN$5,400,000 debenture (if not converted); (c) approximately CDN$600,000 in outstanding short term notes; (d) general and administrative costs; (e) Offering expenses; and (f) unallocated working capital.

Canaccord Genuity Corp. (the "Lead Agent"), on behalf of itself and GMP Securities L.P. and CIBC (together with the Lead Agent, the "Agents") acted as the Company's agents in connection with the Offering. The Agents received a commission equal to 6.0% of the aggregate gross proceeds of the Offering. The Company has granted to the Agents an option (the "Over-Allotment Option"), exercisable at the Agents' discretion at any time, in whole or in part, until 30 days following closing of the Offering, to purchase, at the Offering Price, up to an additional 15 percent of the Units issued pursuant to the Offering to cover over-allotments, if any, and for market stabilization purposes.

In connection with the Offering, the Company acquired 100% of the membership interests in Petro-Victory LLC (the "Reorganization"). In connection with the Reorganization, the Company issued a total of 78,265,000 Common Shares and 50,535,000 Restricted Voting Shares (128,800,000 counting both the Common Shares and the Restricted Voting Shares).

The Restricted Voting Shares are being issued to certain former holders of Petro-Victory LLC membership units that are residents of the United States so that, upon completion of the Offering, less than 50 percent of the Company's Common Shares were directly or indirectly held of record by residents of the United States and the Company therefore, qualifies as a Foreign Private Issuer in the United States. The Restricted Voting Shares are convertible on a 1:1 ratio into Common Shares, at the holder's option.

As a result of the Reorganization of Petro-Victory LLC, Harvison Capital Management, LLC acquired 30,479,857 Common Shares and 27,511,254 Restricted Voting Shares of the Company in exchange for the Petro-Victory LLC membership units.

Accordingly, Harvison Capital Management, LLC, of Fort Worth, Texas beneficially owns 30,479,857 Common Shares and 27,511,254 Restricted Voting Shares of the Company, representing approximately 17.7% of the issued and outstanding voting securities of the Company on a non-diluted basis and 26% of the issued and outstanding securities of the Company, assuming conversion of the Restricted Voting Shares.

As a result of the Reorganization of Petro-Victory LLC, Richard F. Gonzalez, Chief Executive Officer of the Company, acquired 25,509,588 Common Shares and 23,023,746 Restricted Voting Shares of the Company in exchange for his Petro-Victory LLC membership units. Mr. Gonzalez was also granted options to acquire 5,052,056 Common Shares at a price of $0.40 per Common Share.

Accordingly, Richard F. Gonzalez, of Dallas, Texas, beneficially owns 25,509,588 Common Shares and 23,023,746 Restricted Voting Shares of the Company, representing approximately 14.8% of the issued and outstanding voting securities of the Company on a non-diluted basis and 21.8% of the issued and outstanding securities of the Company, assuming conversion of the Restricted Voting Shares. Mr. Gonzalez also holds options to acquire 5,052,056 Common Shares at a price of $0.40 per Common Share.

The Common Shares and Restricted Shares were acquired for investment purposes and the holders may increase or decrease their beneficial ownership or control depending on market or other conditions.

The Company has also issued 31,200,000 Common Shares in connection with two Purchase and Sale Agreements with respect to the acquisition of certain assets in Brazil (the "Brazil Acquisition") and the certain assets in Guyana (the "Guyana Acquisition"). All of such Common Shares are held in escrow, pending the successful completion of the each of the Brazil Acquisition and the Guyana Acquisition.

In connection with the closing of the Offering and the Reorganization the Company has also granted 11,913,294 stock options to directors and officers of the Corporation. The options were granted at an exercise price of CDN$0.40 per Common Share and, subject to the terms of the Option Plan, will expire ten years from the date of grant. The Corporation has determined that exemptions from the various requirements of TSX Venture Exchange Policies are available for the granting of the options.

For further information regarding Petro-Victory readers are directed to the Final Prospectus dated July 11, 2014 filed on www.sedar.com.

About Petro-Victory

Petro-Victory is a South American focussed oil and gas company with significant exploration and development opportunities in Paraguay and potential acquisitions in Brazil and Guyana.

The Company holds a 36 percent working interest in the Pirity Concession, which is approximately two million acres in size and located in western Paraguay's underexplored Pirity Sub-basin, near the Argentinian-Paraguayan border. The Pirity Sub-basin is a contiguous extension of Argentina's prolific Olmedo Sub-basin, which has demonstrated production, and is structurally positioned similar to the nearby Palmar Largo fields with reported reserves. The Pirity Concession is one of only eight exploration concessions granted under the laws of Paraguay.

Upon successful completion of the Guyana Acquisition, which is subject to several conditions precedent, the Company will have a 100 percent working interest on the property and the resources which is subject to a ten percent private carried working interest regarding the first well, which is held by a third party. The Company expects to form a subsidiary in Guyana to hold these assets.

Upon successful completion of the Brazil Acquisition, which is subject to several conditions precedent, the Company will have a 50 percent working interest in the shallow formations and a ten percent working interest in the deep formations. A third party has a five percent gross overriding royalty interest. The Company expects to form a subsidiary in Brazil to hold these assets.

There is no assurance the Brazil Acquisition or the Guyana Acquisition will close.

Cautionary Note

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 press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States unless an exemption from such registration is available.

Advisory Regarding Forward-Looking Statements

In the interest of providing Petro-Victory's shareholders and potential investors with information regarding Petro-Victory, including management's assessment of Petro-Victory's future plans and operations, certain statements in this press release are "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). In some cases, forward-looking statements can be identified by terminology such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "may", "objective", "ongoing", "outlook", "potential", "project", "plan", "should", "target", "would", "will" or similar words suggesting future outcomes, events or performance. The forward-looking statements contained in this press release speak only as of the date thereof and are expressly qualified by this cautionary statement.

Specifically, this press release contains forward-looking statements relating to but not limited to: our business strategies, plans and objectives, drilling and exploration expectations, the Brazil Acquisition and Guyana Acquisition, the anticipated use of proceeds of the Offering, and the expected listing date for the Petro-Victory Common Shares. These forward-looking statements are based on certain key assumptions regarding, among other things: our ability to add production and reserves through our exploration activities; the receipt, in a timely manner, of regulatory and other required approvals for our operating activities; the availability and cost of labour and other industry services; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; and current industry conditions, laws and regulations continuing in effect (or, where changes are proposed, such changes being adopted as anticipated). Readers are cautioned that such assumptions, although considered reasonable by Petro-Victory at the time of preparation, may prove to be incorrect.

Actual results achieved will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. These and additional risk factors are discussed in our Final Prospectus dated July 11, 2014, as filed with Canadian securities regulatory authorities at www.sedar.com.

The above summary of assumptions and risks related to forward-looking statements in this press release has been provided in order to provide shareholders and potential investors with a more complete perspective on Petro-Victory's current and future operations and such information may not be appropriate for other purposes. There is no representation by Petro-Victory that actual results achieved will be the same in whole or in part as those referenced in the forward-looking statements and Petro-Victory does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities law.

All amounts are in Canadian dollars unless otherwise noted.

Not for distribution to U.S. newswire services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws.

Contact Information

  • Petro-Victory Energy Corp.
    Richard F. Gonzalez
    CEO
    972-239-3084

    Petro-Victory Energy Corp.
    Mark Bronson
    CFO and Corporate Secretary
    817-838-4744