Primeline Energy Holdings Inc.
TSX VENTURE : PEH

Primeline Energy Holdings Inc.

June 29, 2015 14:54 ET

Primeline Energy Holdings Inc.: Release of 2015 Financial Statements and Binding Agreement for Acquisition of Primeline Petroleum Corporation

HONG KONG, CHINA--(Marketwired - June 29, 2015) -

NOT FOR DISTRIBUTION TO THE U.S. NEWS WIRES SERVICES, OR DISSEMINATION IN THE UNITED STATES.

Primeline Energy Holdings Inc. ("Primeline") (TSX VENTURE:PEH) announces it has filed its audited financial statements relating to the year ended March 31, 2015. The key highlight of the results is cash flow generated from LS36-1, including trial production revenue for the financial year totalling CAD$53,075,524 (RMB 260,016,991).

The financial disclosure and reports include management discussion and analysis and consolidated financial statements for the financial year. Copies of these documents may be obtained at www.SEDAR.com under Primeline's profile or on Primeline's website at www.pehi.com.

Further to its press releases of May 11, 2015, June 5, 2015 and June 11, 2015, Primeline has now entered into a binding agreement (the "Sale and Purchase Agreement") dated June 26, 2015 with Mr. Victor Hwang, Primeline's Chairman, President and majority shareholder, and Primeline Holdings International Inc. ("PIHI"), a private company wholly-owned by Mr. Hwang, to acquire the one issued and outstanding share of Primeline Petroleum Corporation ("PPC"), and the right to be repaid the shareholders loan owed by PPC to PIHI of RMB 204,046,326, or approximately CAD$41,650,657 as of March 31, 2015 (the "Acquisition"). PPC is a private company beneficially owned by Mr. Hwang. PPC's only operating assets are its 12.25% interest in Petroleum Contract 25/34 and its 25% interest in Petroleum Contract 33/07, in which Primeline holds 36.75% and 75% interests respectively. Such interests constitute Primeline's only operating assets. The Acquisition will, if completed, increase Primeline's asset base by one-third, as it will then own 49% of Block 25/34 (in which LS36-1 is located) and 100% of the exploration rights in Block 33/07. Accordingly, the consideration to be paid for PPC under the Sale and Purchase Agreement is the issuance of one-third of Primeline's issued and outstanding shares, being 44,669,851 ordinary shares of Primeline. Conditions precedent to the Acquisition include receipt of disinterested shareholder approval, and approval of the TSX Venture Exchange (the "TSX-V"). Primeline has received preliminary approval for the Acquisition from the TSX-V.

Under TSX-V Policy 5.9 and Multilateral Instrument 61-101 the Acquisition is subject to disinterested shareholder approval. A meeting of shareholders has been called for July 30, 2015 to consider the Acquisition. Primeline has formed a special committee ("Special Committee") comprised of its independent non-executive directors, Messrs. Alan Johnson, Peter Kelty and Vincent Lien, to evaluate the Acquisition. Primeline has engaged Blair Franklin Capital Partners Inc. ("Blair Franklin") of Toronto, Canada to advise the Special Committee and to provide an opinion to the Special Committee as to whether or not the issuance of the Primeline shares pursuant to the Acquisition was fair from a financial point of view to the shareholders of Primeline other than Mr. Hwang and PIHI. On June 26, 2015 Blair Franklin provided the Special Committee with an opinion that stated, based upon and subject to the assumptions, limitations and qualifications set forth therein, as of June 26, 2015, the Primeline shares to be issued pursuant to the Acquisition was fair from a financial point of view to the shareholders of Primeline other than Mr. Hwang and PIHI. Completion of the Acquisition is one of the conditions precedents to the completion of the issue of US$20 million principal amount of bonds to GEMS, which is intended to provide funds to fulfil Primeline's exploration drilling obligations under the Petroleum Contract for Block 33/07, announced on June 5, 2015.

Dr. Ming Wang, Chief Executive Officer, commented: "2015 was a momentous year for Primeline - with strong production performance and over CAD$53 million of cash flow from the LS36-1, and securing the project financing for 100% of our shares of the development costs to production. We look forward to progressing our corporate transactions and our exciting and imminent plans for exploration activity under Petroleum Contract for Block 33/07. Results from our 3D seismic programme have been encouraging and we plan to spud two exploration wells in order to capitalize on the infrastructure we built for the first phase with CNOOC."

About Primeline Energy Holdings Inc.

Primeline is an exploration and production company focusing exclusively on China's resources to become a major supplier of gas and oil to the East China market. Primeline has a 75% Contractor's interest in and is the operator of the Petroleum Contract with CNOOC Limited for Block 33/07 (5,877 sq km) in the East China Sea, and a 36.75% interest in the producing LS36-1 Gas Field in Block 25/34, together with CNOOC Limited (51% interest and acting as Operator for the field development and production) and PPC (12.25% interest). Shares of Primeline are listed for trading on the TSX Venture Exchange (the "TSX-V") under the symbol PEH.

ON BEHALF OF PRIMELINE ENERGY HOLDINGS INC.

Dr. Ming Wang, Chief Executive Officer

Please visit the Company's website at www.pehi.com. Should you wish to receive Company news via email, please email cathy@chfir.com and specify "Primeline Energy" in the subject line.

Forward-Looking Statements

Some of the statements in this news release contain forward-looking information, which involves inherent risk and uncertainty affecting the business of Primeline. These statements relate to Primeline's expectations that it will complete the Acquisition. Although these statements are based on assumptions management believes to be reasonable, actual results may vary from those anticipated in such statements. Conditions to completion of the Acquisition may not be fulfilled, and if they are the Acquisition may nevertheless not be completed. Exploration for oil and gas is subject to the inherent risk that it will not result in a commercial discovery.

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.

Contact Information

  • Primeline Energy Holdings Inc.
    Dr. Ming Wang
    CEO
    +44 207.499.8888 or Toll Free: 1.877.818.0688
    +44 207.499.2288 (FAX)
    IR@pehi.com
    www.pehi.com

    CHF Investor Relations
    Cathy Hume
    CEO
    +1 416.868.1079
    +1 416.868.6198 (FAX)
    cathy@chfir.com

    VSA Capital Limited
    Andrew Raca
    Head of Corporate Finance
    +44 203 005 5000
    ARaca@vsacapital.com