CALGARY, ALBERTA--(Marketwired - Feb. 10, 2017) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES NEWS RELEASE
Petrocapita Income Trust (CSE:PCE.UN)(CSE:PCE.UN.CN) ("Petrocapita" or the "Trust") announces that it has closed a Purchase and Sale Agreement ("PSA") on February 9, 2017 for all of the Canadian oil and gas properties and assets of Maha Energy Inc. ('Maha") for $1,650,000 (plus or minus any adjustments pursuant to the PSA post-closing). The effective date of the transaction is January 1, 2017. The assets were acquired by issuance to Maha of cash due within the year and a convertible debenture secured by the assets acquired in the total amount of $1,650,000.00. The term of the debenture is 7 years, carries an interest rate of 6%, is amortized over 7 years beginning on March 15, 2017, and is convertible into common trust units of Petrocapita on or after December 31, 2017 at the volume weighted average trading price of such unit on the principal market for such units for each of the last 20 trading days prior to the date of conversion set by the exercise of the option to convert.
About the Transaction
The acquisition of the Maha assets results in the Trust's increasing its working interest in 20 heavy oil wells, 2 produced water disposal wells, and a produced water disposal facility with associated produced water disposal flowlines to 100% from approximately 58%.
Details related to the Trust's reserves and facilities valuations and secured convertible debenture closings to date related to the acquisition and development capital have been filed with the Canadian Securities Exchange (www.theCSE.com).
Petrocapita Income Trust is a Specified Investment Flow Through trust developing and acquiring heavy oil production and infrastructure assets in the Lloydminster area of east central Alberta and west central Saskatchewan through its wholly owned subsidiary, Petrocapita Oil and Gas LP. Petrocapita owns or has interest in 435 gross (416.3 net) oil wells, 89 gross (20 net) gas wells, 19 produced water disposal facilities, 3 custom oil processing facilities, 3 natural gas compressor stations, 72.75 km in pipelines, oilwell service rigs, fluid haul tractors and trailers, motor graders, and wellsite processing equipment. It is seeking accretive opportunities to acquire both oil production and complimentary midstream assets during a cyclical low in the oil and gas markets.
Forward-Looking Information and Statements
This news release contains certain forward-looking information as defined under applicable securities legislation. All statements, other than statements of historical facts, with respect to activities, circumstances, events, outcomes and other matters that Petrocapita forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information. In particular, forward-looking information contained in this news release includes, but is not limited to, information and statements concerning the Offering; the securities to be issued pursuant to the Offering and the timing of such issuance; the use of proceeds from the Offering; the completion of potential acquisitions, including the cost and timing of completion of same; the magnitude of obligations and liabilities assumed in connection with acquisitions; the degree to which potential acquisitions may be debt funded; and the estimate of follow-on capital expenditure requirements in respect to potential acquisitions of oil and gas properties.
The forward-looking information provided in this news release is based on management's current beliefs, expectations and assumptions, based on currently available information as to future events (including the outcome and timing thereof). Petrocapita cautions that assumptions have been made regarding, the use of proceeds, liquidity, plans for future operations, the ability of Petrocapita to complete acquisitions, the magnitude of obligations and liabilities assumed in connection with acquisitions, timing and amount of future capital expenditures, and Petrocapita's investment objectives and strategies, all of which are subject to all of the risks and uncertainties normally incident to the acquisition, development, production and sale of oil and gas. These risks include, but are not limited to: the inability to raise capital on the terms of the Offering in a timely manner or at all; the inability to source and complete acquisitions; unanticipated operational and development issues which escalate capital expenditure requirements; volatility in market prices and demand for crude oil; general economic, market and business conditions; the loss of key personnel; the failure to realize the benefits of acquisitions made; the inability to generate sufficient cash flow from operations to meet current and future obligations; unforeseen liabilities and obligations; the inability to obtain required debt and/or equity capital on acceptable terms or at all; adverse regulatory, royalty or tax changes; diversion of management to manage unforeseen business or operating issues; risks related to the acquisition, exploration, development and production of oil and natural gas reserves; and other risks as described in documents and reports that Petrocapita files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Petrocapita's actual results and plans to differ materially from those contained in the forward-looking information.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current estimates, assumptions and projections are valid. All forward-looking information speaks only as of the date of this news release, and Petrocapita assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Petrocapita's periodic filings on SEDAR (www.sedar.com) that discuss in further detail the factors that could cause future results to be different than contemplated in this news release.