Petrox Resources
TSX VENTURE : PTC

August 20, 2013 09:15 ET

Petrox Announces Proposed Development and Acquisition Secured Loan Facility, Concurrent Non-Brokered Private Placement and Resignation of Director

CALGARY, ALBERTA--(Marketwired - Aug. 20, 2013) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH UNITED STATES WIRE SERVICES.

Petrox Resources Corp. (TSX VENTURE:PTC) ("Petrox" or the "Corporation") today announced that it has signed a Conditional Commitment Letter with Macquarie Bank Limited ("Macquarie") for a Development and Acquisition Secured Loan Facility. Upon closing, the loan facility is intended to be funded in tranches, with the first tranche of $3,000,000 to be used to drill and complete two Viking horizontal wells, the second tranche of $2,000,000 to be used to drill and complete an additional two Viking horizontal wells (dependent upon the success of the first two new Viking wells) and the third tranche of up to $70,000,000 to be applied towards future development capital and/or acquisitions. All funding under the third tranche will be at Macquarie's sole discretion.

The funded amounts under the loan facility will bear interest at a rate of 9% over Canadian LIBOR. The loan facility will mature 36 months from closing. Petrox will pay 100 bps on funded amounts.

At closing, Petrox will assign to Macquarie a Net Profit Interest ("NPI") equal to 75% of Petrox's working interest in all oil and gas properties during the period for which the facility is outstanding, stepping down to 25% once Petrox achieves a 25% cash-on-cash IRR to Macquarie (inclusive of all interest payments, fees, and NPI proceeds). The NPI shall be convertible into common shares of Petrox, at Macquarie's option, using an appropriate equity valuation methodology.

Concurrently, Petrox will undertake a non-brokered private placement of flow-through shares at a price of $0.11/share and common shares at a price of $0.10/share, for aggregate net proceeds of a minimum of $1,500,000 and a maximum of $2,000,000. Proceeds from the private placement will be directed towards drilling a Viking core test and a Viking horizontal well. Cash commissions of up to 8% may be payable on some or all of the gross proceeds of the private placement. The closing of the Macquarie loan facility and the funding of the first tranche therof are subject to certain conditions precedent including, without limitation, the private placement.

Proceeds of the Proposed Transactions will be used to fund the exploitation and development plans for Petrox's P&NG properties in Central Alberta. Specifically, Petrox intends to use the funds to drill a Viking core test and four or five Viking horizontal wells on its properties, as well as for general corporate purposes.

Additionally, the Corporation announces that Kelly Lo has resigned as a director of the Corporation. The Corporation thanks Ms. Lo for her contributions to the Corporation and wishes her success in her future endeavours.

READER ADVISORY

Statements included in this press release that are not historical facts may be considered "forward looking statements". All estimates and statements that describe the Corporation's objectives, goals or future plans are forward looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Petrox Resources Corp.
    Glenn Cartier
    President and CEO
    (403) 270-2290 or (403) 237-8330

    Petrox Resources Corp.
    Alan Chan
    CFO Telephone
    (403) 270-2290 or (403) 237-8330
    (403) 270-2292 (FAX)
    www.petroxresources.ca