CALGARY, ALBERTA–(Marketwired – Nov. 14, 2016) – Blacksteel Energy Inc. (TSX VENTURE:BEY) (“Blacksteel” or the “Corporation“) is pleased to announce that it has entered into an agreement to acquire (the “Proposed Transaction“) a 30% working interest in certain oil and gas assets around Girouxville in Northwest Alberta (the “Assets“).
Drakkar Energy Ltd. (“Drakkar“) has entered into a purchase agreement with the appointed receiver-manager of the owner (the “Vendor“) of the Assets. As part of this transaction, Blacksteel has entered into an arm’s length agreement (the “Agreement“) with Drakkar to jointly acquire the Assets. Drakkar is a privately owned oil & gas company located in Calgary, Alberta. Under the terms of the Agreement, Blacksteel will acquire a 30% working interest in the Assets for a purchase price of $600,000 and also provide a $400,000 loan (the “Loan“) to Drakkar. The Loan matures six months from completion of the acquisition of the Assets from the Vendor, accrues interest at a rate of 12% per annum and is secured by a 20% working interest in the Assets. Under the terms of the Loan, Blacksteel has the option, 60 days from closing of Drakkar’s acquisition of the Assets, to convert any or all of the Loan into additional working interests in the Assets, at a cost of $100,000 for each additional 5% working interest.
The light oil Assets are comprised of 18 sections of contiguous land on which six horizontal wells have been drilled. Five of the wells had previously been on production and a sixth was completed but has not been equipped. All wells have been shut-in since the Vendor was placed in receivership in late January 2016. The operator plans to place up to four of the wells on production post-closing.
The terms of the Agreement also contemplate that Drakkar and Blacksteel will enter into a joint operating agreement (the “JOA“) incorporating the CAPL 2015 operating procedure and that Drakkar will be appointed as the initial operator of the Assets under the JOA. There are a number of conditions precedent to the Proposed Transaction including but not limited to customary due diligence, regulatory and board approvals.
The Proposed Transaction constitutes a Fundamental Acquisition as defined under the policies of the TSX Venture Exchange (“TSX VENTURE“). Trading in the common shares of Blacksteel will remain halted pending approval of the Proposed Transaction by the TSX Venture Exchange.
The TSX Venture Exchange has in no way passed upon the merits of the Proposed Transaction and has neither approved nor disapproved the contents of this press release.
Blacksteel Energy Inc.
Blacksteel is a junior oil and gas company involved in the exploration, exploitation, development and production of petroleum and natural gas resources.