SASKATOON, SASKATCHEWAN–(Marketwired – July 14, 2015) – WESTCORE ENERGY LTD. (TSX VENTURE:WTR) (“Westcore” or the “Company”) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) with 49 North Resources Inc. (“FNR”) and its wholly-owned subsidiary, Allstar Energy Limited (“Allstar”) regarding the acquisition of a 100% working interest in the oil and gas properties of FNR and Allstar, in addition to the subsequent acquisition of all associated oil and gas property and equipment of FNR and Allstar (the “Transaction”). Pursuant to the Letter Agreement, Westcore will obtain a 100% working interest in all of Allstar and FNR’s oil and gas properties and title to all associated property and equipment for an aggregate purchase price of $3,000,000. The purchase price payable under the Letter Agreement will be paid via the issuance upon closing of an aggregate of 15,000,000 common shares of Westcore at a price of $0.10 per share (after giving effect to a five-for-one consolidation of Westcore’s common shares (the “Consolidation”)), in addition to the delivery of a promissory note in the aggregate principal amount of $1,500,000 (the “Promissory Note”). The Promissory Note will bear interest at a rate of 5% per annum, maturing on the date that is two years from the date of issuance and re-payable from the cashflows of operations. Upon repayment of all amounts outstanding under the Promissory Note, title to the associated property and equipment will be conveyed from Allstar and FNR to Westcore.
Allstar currently holds approximately 43,000 acres of heavy oil and gas properties in west central Saskatchewan. With six wells currently producing, total field production is approximately 55 barrels of oil per day. Allstar also has a number of standing wells that can be reinitiated to increase production at a minimal incremental cost per barrel produced. The oil and gas properties subject to the transaction are summarized as follows:
In addition to the Transaction (and as a condition to the completion thereof), Westcore announces a non-brokered private placement (the “Private Placement”) of up to 25,000,000 units at a subscription price of $0.02 per unit (pre-Consolidation) for gross proceeds of a minimum of $200,000 and a maximum of $500,000, subject to TSX Venture Exchange approval. Each Unit shall consist of one common share of the Corporation and one common share purchase warrant, with each warrant entitling the holder thereof to acquire one common share at a price of $0.05 per common share (pre-Consolidation) until the date that is twenty-four (24) months from the date of issuance. The proceeds of the Private Placement will be used to advance Westcore’s existing oil and gas assets (to fulfill Westcore’s obligations in connection therewith and via a loan to Allstar (to an aggregate maximum of $250,000) for the purposes of advancing such properties (provided that the minimum offering has been completed)) and for servicing the existing trade creditors of the Company, as well as to provide general working capital for 2015.
As FNR is the holder of 8,233,000 common shares of Westcore (approximately 23% of the total number of issued and outstanding shares) and certain officers and/or directors of FNR also serve as officers and/or directors of Westcore, the Transaction is considered a “related party transaction” and, unless exemptions are determined to be available, will therefore be subject to the minority shareholder approval and valuation requirements of Multilateral Instrument 61-101- “Protection of Minority Security Holders in Special Transactions” (“MI 61-101”).
Completion of the Transaction is subject to a number of conditions including, but not limited to, completion of satisfactory due diligence, execution of a definitive agreement, completion of the Private Placement, receipt of shareholder approval in respect of the Consolidation and in respect of the Transaction and receipt of approval from the TSX Venture Exchange. There are no finder’s fees nor any other similar compensation payable in connection with the Transaction. There can be no assurance that the Transaction will be completed as proposed or at all.
[expand title=”Advisories & Contact”]
We seek Safe Harbor
Reader Advisory
Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. In particular, forward-looking information in this press release includes, but is not limited to, the potential Transaction, the completion thereof and receipt of required approvals and the potential future production of petroleum products from the properties that are the subject of the Transaction. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, governmental regulation, including environmental regulation; commodity prices; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
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.
Westcore Energy Ltd.
Andrew Davidson
Vice President and Chief Operating Officer
Phone: (306) 653-2692
[/expand]