Current Report Filing (8-k)
June 05 2020 - 6:04AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): May 29, 2020
Petrolia
Energy Corporation
(Exact
name of registrant as specified in its charter)
Texas
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000-52690
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86-1061005
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(State
or other jurisdiction
of incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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710
N. Post Oak Rd., Ste. 512, Houston, Texas
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77024
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: 832-941-0011
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Shares
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BBLS
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OTC
Pink
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item
1.01 Entry into a Material Definitive Agreement.
On
May 29, 2020, Petrolia Energy Corporation (the “Company”, “we” and “us”),
acquired a 50% working interest in approximately 28,000 acres located in the Utikuma Lake area in Alberta, Canada (the “Canadian
Property” and the “Working Interest”). The Canadian Property is an oil-weighted asset currently producing
approximately 565 bopd of low decline light oil (~7%), with 76% of the low risk reserves and value coming from producing assets.
Total 2P reserves are 4.7 MMboe with NPV10 of $68 MM. Upside potential includes low cost recompletion, workover and tighter pay
opportunities. The facilities and gathering infrastructure are owned and operated, including a treatment facility with adequate
capacity to accommodate growth. 3D seismic coverage over asset area helps support drilling and pool extension potential.
The
Working Interest was acquired from Blue Sky Resources Ltd. (“Blue Sky”) in an affiliated party transaction
as Zel C. Khan, the Company’s Chief Executive Officer, is related to the ownership of Blue Sky.
Blue
Sky acquired a 100% working interest in the Canadian Property from Vermilion Energy Inc. (“Vermilion”) via Vermilion’s
subsidiary Vermilion Resources. The effective date of the acquisition was May 1, 2020.
The
acquisition of the Canadian Property was evidenced and documented by a Letter Agreement between the Company and Blue Sky dated
December 16, 2019 and a Conveyance between the parties dated as May 29, 2020, pursuant to which the Company agreed to acquire
the 50% Working Interest in consideration for $2,700,000 in Canadian dollars (“CAD”) (approximately $2,000,000
in U.S. dollars “USD”).
The
Cash Payment was made with funds borrowed by the Company pursuant to the terms of certain Amended and Restated Loan Agreements
(the “Loan Agreements” and the “Lenders”). The Company utilized an existing line of credit
to borrow approximately $1,000,000 USD and an additional $1,000,000 USD was raised via short term bridge loan with a maturity
date of January 30, 2021.
The
Working Interest is held in the name of the Petrolia Canada Corporation, a wholly owned subsidiary of Petrolia Energy Corporation.
The
foregoing description of the Letter Agreement and Conveyance, do not purport to be complete and are qualified in their entirety
by reference to the Letter Agreement and Conveyance, copies of which are attached as Exhibits 10.1 and 10.2, respectively,
to this Current Report on Form 8-K and incorporated herein by reference.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
description of the Loan Agreements above in Item 1.01 is incorporated by reference into this Item 2.03 in its entirety.
Item
9.01 Financial Statements and Exhibits
*
Filed herewith.
**
Furnished herewith.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Petrolia
Energy Corporation
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/s/
Zel C. Khan
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Zel
C. Khan
CEO
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Date:
June 4, 2020
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EXHIBIT
INDEX
*
Filed herewith.
**
Furnished herewith.
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