CALGARY, ALBERTA–(Marketwired – Aug. 25, 2015) – Gordon Creek Energy Inc. (TSX VENTURE:GDN) (the “Company”) is pleased to announce that it has closed an interim financing deal with Excalibur Partners XX, LP (“Excalibur”) whereby Excalibur has provided a bridge loan totaling US$3 million that will be focused on re-working and re-activating up to 14 previously drilled development wells (“PDNP Wells”) in order to increase cash flows and reserves. The first tranche of US$1.0 million was announced March 6, 2015 and closed March 2015. The second tranche of US$2.0 million closed in July 2015. This represents an increase to the total bridge loan by US$400,000 from the originally agreed upon US$2.6 million due to greater than initially anticipated interest from investors.
The Excalibur financing was sourced through Houston Merchant Advisory Partners (“HMEP”) and the Company is continuing to work with HMEP to source a new senior facility that would re-capitalize the Company, repay the Excalibur bridge financing and fund the continued development of the Gordon Creek field.
The Excalibur financing consists of a one year term subordinated debt carrying an interest rate of 15% (18% if the Company chooses to accrue interest payments). Excalibur will also receive a 6% gross over-riding royalty on production from the PDNP Wells, which will be expanded to cover all Gordon Creek production if the facility is not repaid within six months. The royalty can be repurchased by the Company at any time for US$1.68 million. Excalibur will also receive, subject to TSX-V approval and subject to anti-dilution adjustments, three year warrants to purchase up to 5,510,971 shares of the Company at a price of $0.06 per share. If the loan is not repaid within six months, Excalibur will receive, until the loan is repaid, an additional 60% gross over-riding royalty on the PDNP wells, the proceeds of which will be applied to the outstanding principal and interest. Each tranche of funding is subject to separate timelines.
The Company is also pleased to confirm that the previously announced termination of the commodity streaming agreement with Sandstorm Gold Inc., (“Sandstorm”), which provided Sandstorm with a streaming interest in 35% of all Gordon Creek production, was finalized in August 2015 and is effective July 31, 2015. In consideration for the termination of the interest, Sandstorm will receive a subordinated two year note for US$4.0 million and a 10% gross over-riding royalty on all Gordon Creek production. The Company will have the right, at any time, to purchase one half (5%) of the Sandstorm royalty for US$6.0 million. As a result of the termination of the Sandstorm streaming interest, the Company will effectively now own, subject to royalties, a 100% interest in the Gordon Creek field and the Company’s Gordon Creek reserves and cash flows will be calculated accordingly.
Since April 2015, the Company has commenced workovers on ten existing gas wells at the Gordon Creek field. While the work is ongoing, the Company is pleased to have seen improvements in the gas volumes from the worked over wells. The workovers have involved replacing worn equipment and installing larger pumps where needed. Some of the existing infrastructure has also been repaired.
Gordon Creek Energy Inc. is pleased to report it has filed its reserves data and other oil and gas information for the year ended January 31, 2015 in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. The Company’s proved plus probable pre-tax net future cash flows discounted at 10% were approximately US$37 million and calculated before the termination of the commodity streaming agreement with Sandstorm discussed above. The Company’s January 31, 2015 filings are available on the SEDAR website at www.sedar.com.
ANNUAL GENERAL MEETING RESULTS
The Company held its annual general and special meeting of shareholder (the “AGM”) on July 28, 2015 and all proposed resolutions were approved.
Gordon Creek Energy Inc. is an oil and gas exploration and production Company with interests in the US Rockies.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Caution Regarding Forward-looking information
Information in this news release, including information respecting the Company’s financing and capitalization plans, potential reserves and cash flows, constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company’s plans, expectations, or beliefs as to future events or results are believed to be reasonable based on the information currently available to the Company. The Company does not undertake to update any such forward-looking statements unless required by applicable securities legislation. Statements including forward-looking information involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements. There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.
Gordon Creek Energy Inc.
President & CEO
Gordon Creek Energy Inc.
Gordon Creek Energy Inc.
734 7th Avenue S.W.
Suite 1350, Calgary Alberta T2P 3P8