QUÉBEC CITY, QUÉBEC–(Marketwired – Nov. 6, 2015) – Pétrolia Inc. (TSX VENTURE:PEA) (the “Corporation” or “Pétrolia“) is pleased to announce that it has closed the investment initially announced on September 1, 2015, in the total amount of $5,150,000, constituting the first phase of financing for the Bourque property. Ressources Québec Inc. (“Ressources Québec“) completed its private placement in the amount of $2,881,800. Ressources Québec also invested $918,200 in the Bourque property by way of a joint venture created by the Corporation, Ressources Québec and TUGLIQ Energy Corporation (“TUGLIQ Energy“). The investment of TUGLIQ Energy in the Bourque property by way of the same joint venture is in the amount of $1,350,000.
Certain directors of Pétrolia and members of their families are also participating in the private placement and these investments total $88,200.
This financing will allow the start-up of work on the first phase of the resource confirmation program on the Bourque property in the coming weeks. In line with this program, the Corporation has filed permit applications with the Ministère de l’Énergie et des Ressources naturelles. The program will allow Pétrolia, in collaboration with TUGLIQ Energy, to implement as early as next year a liquid natural gas (LNG) extraction and liquefaction pilot project. This pilot project could generate revenues for Pétrolia in 2016.
Pursuant to the private placement the Corporation has issued to Ressources Québec 8,005,000 units at a price of $0.36 per unit, for total gross proceeds of $2,881,800 and has issued to certain directors and members of their families 245,000 units at a price of $0.36 per unit, for total gross proceeds of $88,200. The units are comprised of one common share of the Corporation and one one-half warrant, each whole warrant entitling the holder to subscribe for one common share of the Corporation at an exercise price of $0.54 during the 36 months following the closing of this private placement. The proceeds of these investments will be used by the Corporation in 2015 and 2016 to carry out the Bourque property exploration program and for the Corporation’s general needs.
A joint venture was created by the Corporation, Ressources Québec and TUGLIQ Energy for the investments of Ressources Québec and TUGLIQ Energy in the Bourque property. For the purposes of this transaction, the value of the Bourque property is based on expenses incurred by the Corporation in the amount of $21.8 million. Ressources Québec invested $918,200 in the joint venture in exchange for a 4.8% participation in the Corporation’s permits on the Bourque property, while TUGLIQ Energy acquired a 5.29% participation in such permits in exchange for its investment of $1,350,000. The Corporation is also participating in the joint venture by way of an investment of $1,350,000 (see press release of November 4, 2015). The Corporation thereby holds 89.91% of the joint venture.
To date, taking into account this private placement, Ressources Québec exercises control or direction over 15,047,254 common shares of the Corporation, which represents approximately 16.29% of the Corporation’s issued and outstanding common shares. Taking into account this private placement and the potential exercise of the warrants issued to Ressources Québec pursuant to this private placement, Ressources Québec’s control or direction over the Corporation’s common shares is less than 20%.
Securities issued to Ressources Québec and to the directors of Pétrolia and the members of their families further to this private placement are subject to a hold period ending on March 7, 2016.
As a result of this issuance of securities, the Corporation has 92,420,195 common shares issued and outstanding.
The directors of the Corporation and members of their families participating in the private placement subscribed for an aggregate 245,000 units representing an aggregate amount of $88,200. Participation of insiders of the Corporation in the private placement constitutes a “related party transaction” as defined under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions in Quebec (“61-101“). The private placement is exempt from the formal valuation and minority shareholder approval requirements of 61-101 as neither the fair market value of securities being issued to insiders nor the consideration being paid by insiders will exceed 25% of the Corporation’s market capitalization. The Corporation did not file a material change report 21 days prior to the closing of the private placement as the details of the participation of insiders of the Corporation had not been confirmed at that time.
Pétrolia is a junior oil and gas exploration company which owns interests in oil and gas licenses covering 16,000 km² (4 million acres), which represents almost 23% of the Québec territory under lease. The closing of a partnership on Anticosti Island has led to the creation of Anticosti Hydrocarbons L.P., a limited partnership in which Pétrolia holds a 21.7% interest. In order to carry out the project’s operations, Pétrolia Anticosti Inc., a subsidiary of Pétrolia, was designated project operator. Pétrolia is a Quebec company whose objective is to develop oil from here, by the people here, for here. Pétrolia has 92,420,195 shares issued and outstanding.
Certain statements made herein may constitute forward-looking statements. These statements relate to future events or the future economic performance of Pétrolia and carry known and unknown risks, uncertainties and other factors that may appreciably affect their results, economic performance or accomplishments when considered in light of the content or implications or statements made by Pétrolia. Actual events or results could be significantly different. Accordingly, investors should not place undue reliance on forward-looking statements. Pétrolia does not intend and undertakes no obligation to update these forward-looking statements.
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.
For further information:
President and Chief Executive Officer
Director of Public and Government Affairs