VANCOUVER, BC, June 16, 2020 /CNW/ - Renaissance Oil Corp.
("Renaissance" or the "Company") (TSX-V: ROE)
(OTCQB: RNSFF) is pleased to announce that it has entered into a
binding letter agreement (the "Letter Agreement") to acquire
an option for a 50% working interest, in all rights from surface to
basement, in a large Petroleum Licence, comprising 2.45 million
acres in the Kavango sedimentary basin, in Botswana, Africa (the "Licence").
Due to political and regulatory changes in Mexico, the Board of Directors of Renaissance
has determined that until government policies become more
favorable, it is in the best interest of shareholders for
management to diversify the Company's interests outside of
Mexico. The Company will maintain
its existing, high potential assets, within Mexico.
Pursuant to the Letter Agreement, a private company controlled
by Mr. Steinke, CEO of Renaissance. has agreed to assign its
interest in a farm-out option agreement (the "Option
Agreement") with a subsidiary of Reconnaissance Energy Africa
Ltd. (TSXV: RECO) ("ReconAfrica"), for C$100,000 cash and the issuance of 30 million
common shares of the Company at a deemed price of $0.04 per share (using the 30 day volume weighted
trading average) for an aggregate purchase price of C$1.3 million.
The Option Agreement will provide Renaissance with the option to
acquire a 50% working interest in the Licence, exercisable at any
time for up to a period of 36 months upon: (i) payment of
C$1 M, if exercised within 18 months,
or C$1.5 M if exercised after 18
months; and (ii) the approval of the Botswana Department of Mines
and Ministry of Mineral Resources, Green Technology and Energy
Security.
"The option will provide Renaissance with an important and
potentially high impact oil and gas play, through the opening of
the Kavango basin, a previously unrecognized, deep sedimentary
basin in northwestern Botswana and
northeastern Namibia. Botswana is considered a stable, industry
friendly jurisdiction which offers some of the most attractive
fiscal terms worldwide. This low cost three year option provides
excellent value for Renaissance shareholders," said Ian Telfer, director of Renaissance.
The Botswana Petroleum Licence
The key terms of Licence are as follows:
- A 100% working interest in all petroleum rights from surface to
basement covering 2.45 million acres in northwestern Botswana. The deep Kavango Basin offers both
large scale conventional and non-conventional play types.
- An initial 4-year exploration period, with renewals up to an
additional 10 years, in accordance with the Botswana Petroleum
(Exploration and Production) Act.
- Upon declaration of commercial production, the licence
holder(s) have the right to enter into a 25-year production licence
with a 20-year renewal period, in accordance with the Botswana
Petroleum (Exploration and Production) Act.
Royalties associated with the production licence will be subject
to negotiation, in accordance with the Botswana Petroleum
(Exploration and Production) Act, and generally range from 3 to 10%
of gross revenue from production.
By the terms of the Licence the operator, ReconAfrica, is
committed to a minimum work program of US$432,000 over the first 4-year exploration
period.
The Letter Agreement
The proposed assignment of the Option Agreement (the
"Proposed Transaction") is not an "arms-length transaction"
and therefore constitutes a "reviewable transaction" pursuant to
the policies of the TSXV Exchange (the "Exchange").
The Proposed Transaction is subject to, among other things: (i) the
receipt of all necessary approvals and authorizations including any
applicable security holder approval; (2) Exchange approval, which
will require submission of evidence of value, an independent
geological report and satisfaction of any other Exchange
requirements; (3) the parties settling the terms of an assignment,
assumption and novation agreement; and (4) the consent of
Recon-Africa. The Letter Agreement may be terminated by
either party in certain circumstances including if the Proposed
Transaction is not completed by August
17, 2020.
The Proposed Transaction also constitutes a "related party
transaction" as such term is defined by Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special
Transactions ("MI 61-101"), requiring the Company,
in the absence of exemptions, to obtain a formal valuation for, and
minority shareholder approval. The Company is relying on an
exemption from the formal valuation and minority shareholder
approval requirements of MI 61-101 on the basis that the fair
market value of the consideration payable to the related party does
not exceed 25% of the Company's market capitalization, as
determined in accordance with MI 61-101. The Proposed
Transaction was approved by those directors of the Company who are
independent in connection with such transaction.
Upon completion of the Proposed Transaction, Mr. Steinke, will
directly or indirectly, owns, controls or exercises direction over,
an aggregate of 40,459,479 common shares of the Company, increasing
his shareholdings from 3.3% to 11.7%.
Other than Mr. Steinke all other parties to the Proposed
Transaction are arm's length to the Company. No finder's fee
is payable in respect of the Proposed Transaction.
About Renaissance Oil Corp.
Renaissance, was established in 2014 for the sole purpose of
focusing on the liberation of Mexico's undeveloped hydrocarbon resources,
officially inaugurated by the Mexican government, December, 2013.
The Company is now a well-established operator in Mexico with 100% working interest in onshore
production of over 1200 boe/day and joint partners with LUKOIL and
PEMEX in the development of the prolific upper Jurassic shales.
RENAISSANCE OIL CORP.
The Board of Directors
Cautionary Note Regarding Forward-Looking Statements and
Information
Certain information and statements contained herein
constitutes "forward-looking information" or "Forward looking
statements", respectively, under Canadian securities legislation.
Generally, forward-looking information can be identified by the use
of forward-looking terminology such as "expects", "believes", "aims
to", "plans to" or "intends to" or variations of such
words and phrases or statements that certain actions, events or
results "will" occur. Such statements include, without limitation,
statements with respect to the completion of the Proposed
Transaction including receipt of acceptance by the TSX Venture
Exchange.
Forward-looking statements are based on the opinions,
assumptions and estimates of management as of the date such
statements are made, including among others, that
regulatory approval to the Proposed Transaction will be obtained,
that general business and economic conditions will not change in a
material adverse manner, that financing will be available if and
when needed and on reasonable terms, and that governmental and
other approvals required to complete the exercise of the Option
will be obtained and that the Option Agreement will not be
terminated. Although the assumptions made by the Company in
providing forward-looking information or making forward-looking
statements are considered reasonable by management at the time,
there can be no assurance that such assumptions will prove to be
accurate.
Forward-looking statements and information also involve known
and unknown risks, uncertainties and other factors that may cause
the actual events or results, level of activity, performance or
achievements of the Company to be materially different from those
predicted by such forward-looking statements or forward-looking
information, including the speculative nature of oil and gas
exploration and development, fluctuating commodity prices,
competitive risks, and delay, inability to complete a
financing or failure to receive regulatory approvals.
Although management of the Company has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements or
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements and
forward-looking information. The Company does not undertake to
update any forward-looking statements or forward-looking
information that are incorporated by reference herein, except as
required by applicable securities laws.
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 news release.
SOURCE Renaissance Oil Corp.