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CALGARY, AB, Feb. 9, 2022 /CNW/ - Petro-Victory Energy Corp.
("Petro-Victory" or the "Company") (TSXV: VRY.V) is pleased to
announce that it has commitments for a private placement offering
of subscription receipts ("Subscription Receipts") for gross
proceeds of approximately CAD$10.6
million (USD$8.3 million) (the
"Placing").
Highlights
- Fundraise is planned to deliver a drilling program of 4 wells
at Andorinha field, and 3 workovers at the SãoJoão field
- Work is in advanced stages to secure a rig to deliver the
drilling program
- The Company will deliver a broader 2022 work program including
geological and geophysical work on its wider licence portfolio
targeting further drilling activity and reserve growth
- Funds will provide optionality to participate in upcoming
Brazilian onshore oil and gas licensing rounds
- Broadening of shareholder base with introduction of industry
and blue-chip institutional investors, including a strategic
investment by ACAM LP
- The Placing is subject to TSXV approvals, and is expected to
close on or about February 15,
2022
Use of Proceeds of the Placing
The net proceeds from the Placing are expected to be used to
execute a program of work to focus on commercializing the Company's
significant asset base in the highly petroliferous Potiguar Basin,
onshore Brazil. The Company is in
advanced stages of contractual negotiations with rig providers to
support delivery of a 4-well campaign at the Andorinha field and
additional workovers, including at São João. The program, which
represents approximately CAD$4
million of the Placing proceeds, is expected to commence in
Q2 2022 with the initial contract covering a period of a year.
These activities are associated with estimated production
profiles in GLJ's 31 December 2020
reserve report that, when combined with the Company's current
production, target a post drilling production level in excess 1,000
barrels of oil per day (net to Petro-Victory) and represent the
first phase of development drilling at Andorinha, associated with
unlocking US$64 million of 2P
NPV10.
The Company also intends to utilize the funding to progress the
geological and geophysical work on its broader licence portfolio.
This work is intended to identify a broader drilling inventory of
targets associated with the historical well stock across the
acreage and utilizing the reprocessed 3D seismic coverage to
high-grade drilling opportunities and target reserve growth.
Furthermore, the funds will provide optionality to participate
in additional ANP permanent offer rounds, as well as being used for
general corporate purposes, including retirement of the outstanding
debenture to Global Energy Transition Fund I, due 24 August 2022.
Structure of the Placing
Pursuant to the Placing, the Company intends to issue up to 5.5
million Subscription Receipts at a price of CAD$2.00, for gross proceeds of up to
CAD$11 million.
Each Subscription Receipt will entitle the holder thereof to
receive one unit of the Company (a "Unit") consisting of:
(i) one common share in the capital of the Company ("Common
Share"), (ii) one-half of one (1/2) transferable share purchase
warrant entitling the holder thereof to acquire one Common Share
at a price of CAD$2.25 per share ,
and (iii) one-half of one (1/2) transferable share purchase warrant
entitling the holder thereof to acquire one Common Share at a
price of CAD$2.75 per share
(collectively the "Warrants"). The rights under the Warrants will
last for a period of twenty-four (24) months following the closing
date.
The Subscription Receipts will provide the holders with Units
following satisfaction of the Escrow Release Conditions (as defined
below) prior to the Termination Time (as defined below), without
payment of any additional consideration and without further action
on the part of the holder.
The Placing is expected to close on or about February 15, 2022. It remains subject to final
documentation and to TSX Venture final acceptance.
Institutional Investor
The Placing is being led by a cornerstone investment from ACAM
LP ("ACAM" or the "Lead Investor"), a long-term investment vehicle
owned by two blue-chip fund managers. ACAM specializes in global
natural resource investments with a focus on Africa and South
America. ACAM, which did not previously have a stake in the
Company, will acquire ownership of 3,200,000 Subscription Receipts
and will own approximately 18.1% of the issued and outstanding
voting securities of the Company on a non-diluted basis after
closing of the placing.
Richard Gonzalez,
Petro-Victory CEO commented:
"I'm delighted to announce a private placement of CAD$11 million, led by a significant cornerstone
investment from ACAM. This support by a blue-chip institution known
for international natural resource investments is a significant
endorsement and I welcome them to our register.
"Following completion, this funding will secure an ambitious
work program, expected to raise production rates to over 1,000
barrels of oil per day, according to profiles in our third-party
reserve report from GLJ. This will translate to significant
operating cash flow that can be reinvested in organic and inorganic
growth in our portfolio.
"The fundraise is at the top end of our target range, allowing
us to continue building our in-country team and accelerate well
planning across our extensive portfolio of 19 blocks. I look
forward to beginning to unlock the value of our significant onshore
Brazil asset base through this
work.
"The region is beginning to see transactions at much higher
multiples and as we confirm the reserves and resources across our
significant position, we are confident of being able to benefit
from market sentiment in-country.
"The structure of the deal includes warrants at a substantial
premium to our current share price. This shows the confidence in
Petro-Victory's short-term potential and provides a route to
further cash to come into the business for additional acceleration
of activity.
Details of the Placing
ACAM is acting as Lead Investor on the Placing. As a result of
the purchase, and assuming conversion of the Subscription Receipts,
ACAM will own and exercise control over an aggregate of 3,200,000
Common Shares, 3,200,000 Warrants and nil (0) Restricted Voting
Shares of the Company, representing approximately 18.1% of the
issued and outstanding voting securities of the Company on a
non-diluted basis and 28.0% of the issued and outstanding
securities of the Company, assuming conversion of the warrants and
Restricted Voting Shares (which are convertible on a 1:1 ratio into
Common Shares, at the holder's option).
The issuance to ACAM was completed for investment purposes, and
it may acquire additional securities either on the open market or
through the financing or private acquisitions and may sell the
securities they hold either on the open market or through private
dispositions in the future depending on market conditions,
reformulation of plans and/or other relevant factors, in each case
in accordance with applicable securities laws. A copy of an early
warning report for ACAM will be available under Petro-Victory's
profile on SEDAR following closing.
As this is ACAM's first holding on the TSX or TSXV in excess of
10%, TSXV approval is subject to approval of a Personal Information
Form for ACAM. The timeline for this clearance is the reason
for the Subscription Receipt structure.
The gross proceeds of the Subscription Receipts (the
"Escrowed Proceeds"), will be held in trust in a segregated
account to be held on behalf of the holders of Subscription
Receipts.
The Escrowed Proceeds, together with any accrued interest
thereon, will be released to the Company (or as it may direct) upon
delivery of a joint written notice (the "Escrow Release
Notice") from the Company and the Lead Investor indicating the
satisfaction of the Escrow Release Conditions on or before
5:00 p.m. Calgary time on
May 15, 2022 (the "Release
Deadline").
Each Subscription Receipt shall be automatically converted,
without any further action by the holder thereof and for no
additional consideration, into one Unit on the Release Event (as
defined herein).
"Release Event" means, collectively: (i) the satisfaction
of the Escrow Release Conditions; and (ii) the delivery of a notice
by the Company, acknowledged by Lead Investor, confirming that the
Escrow Release Conditions have been satisfied, in each case, prior
to the Release Deadline (the "Closing Notice").
The "Escrow Release Conditions" are the
following:
- the TSXV shall have provided confirmation to the Lead Investor
and the Company that the Personal Information Form of the Lead
Investor has been "cleared" by the TSXV;
- receipt by Lead Investor of an officer's certificate from the
Company certifying that it has irrevocably instructed its counsel
to, upon release of the Escrowed Funds to the Company, issue the
Common Shares and Warrants underlying the Subscription Receipts to
Lead Investor;
- the receipt of all necessary shareholder, third party and
regulatory approvals, if any, including approval of the TSXV, for
the Offering; and
- a certificate from the Company shall have been delivered to
Lead Investor certifying that all Escrow Release Conditions, other
than the delivery of the certificate, have been satisfied or
waived.
In the event that: (i) the Release Event does not occur on or
before the Release Deadline; or (ii) the Company advises or
announces to the public that it does not intend to proceed with
the Offering (a "Termination Event"), the Company shall
forthwith provide notice thereof to Lead Investor and the
holders of Subscription Receipts, without any further action on
the part of the holders of Subscription Receipts, that they will
receive an amount per Subscription Receipt equal to the full
purchase price of the Subscription Receipt together with their pro
rata portion of the income earned thereon (less any applicable
withholdings) from, and including, the Closing Date to, but
excluding, the date of the Termination Event. To the extent that
the Escrowed Funds are insufficient to refund each holder of
Subscription Receipts of the full purchase price of the
Subscription Receipt together with their pro rata portion of the
income earned thereon (less any applicable withholdings), the
Company shall be liable for and will contribute such amounts as
are necessary to satisfy any shortfall.
All securities issued in connection with the Placing will not be
able to be traded in Canada, or
through the facilities of the TSX Venture Exchange, for a period of
four months and one day from the date of closing.
Gneiss Energy Limited, a corporate financial adviser based in
the United Kingdom, acted as sole
financial adviser on the Placing. Gneiss will be paid a
commission of 6% of the proceeds and 6% finder's warrants on a
portion of the placement. The finder's warrants will have an
exercise price of CAD$2.00 per Common
Shares and expiry date of 24 months from the Closing Date.
About Petro-Victory Energy Corp.
Petro-Victory Energy Corp. is engaged in the acquisition,
development, and production of crude oil and natural gas resources
in Brazil. The company holds 100%
operating and working interests in nineteen (19) licenses totaling
129,524 acres in two (2) different producing basins in Brazil. Petro-Victory generates accretive
shareholder value through disciplined investments in high impact,
low risk assets. The Company's Common Shares trade on the TSX
Venture Exchange ("TSXV") under the ticker symbol VRY.V.
Cautionary Note
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of
the
TSXV) 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
Disclosure of Oil and Gas Information
Reserves Disclosure. All reserves information in this press
release are prepared by GLJ reserve evaluators prepared
December 31, 2020 in accordance with
NI 51-101 and the COGEH. The estimates of reserves are based on
the price deck at December 31,
2020.
All reserve references in this press release are "gross
reserves". Gross reserves are a company's total working interest
reserves before the deduction of any royalties payable by such
company and before the consideration of such company's royalty
interests. It should not be assumed that the present worth of
estimated future cash flow of net revenue presented herein
represents the fair market value of the reserves. There is no
assurance that the forecast prices and costs assumptions will be
attained and variances could be material. The recovery and reserve
estimates of the Company's reserves, provided herein are estimates
only and there is no guarantee that the estimated reserves will be
recovered. Actual crude oil and reserves may be greater than or
less than the estimates provided herein.
Well Program. This press release discloses well program
locations in the following categories: (i) proved locations; and
(ii) probable locations. Proved locations and probable locations
are derived from the Company's reserve report in accordance with
NI 51-101 and the most recent publication of the COGEH.
The drilling locations considered for future development will
ultimately depend upon the availability of drilling services,
landowner approvals, capital, regulatory approvals, seasonal
restrictions, oil and natural gas prices, costs, actual drilling
results, additional reservoir information that is obtained and
other factors.
Advisory
Regarding Forward-Looking Statements
In the interest of providing Petro-Victory's shareholders and
potential investors with information regarding 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: the Company offerings,
our business strategies, plans and objectives, and drilling,
testing and exploration expectations. 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 labor 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.
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.
SOURCE Petro-Victory Energy Corp.